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+DEF 14A
+1
+ddef14a.txt
+FORM DEF 14A
+SCHEDULE 14A INFORMATION
+Proxy Statement Pursuant to Section 14(a) of the Securities
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant [X]
+Filed by a Party other than the Registrant [_]
+Check the appropriate box:
+[_] Preliminary Proxy Statement [_] Confidential, for Use of the
+Commission Only (as permitted
+[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
+[_] Definitive Additional Materials
+[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
+ASTRO-MED, INC
+--------------------------------------------------------------------------------
+(Name of Registrant as Specified In Its Charter)
+--------------------------------------------------------------------------------
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
+Payment of Filing Fee (Check the appropriate box):
+[X] No fee required.
+[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
+(1) Title of each class of securities to which transaction applies:
+-------------------------------------------------------------------------
+(2) Aggregate number of securities to which transaction applies:
+-------------------------------------------------------------------------
+(3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which
+the filing fee is calculated and state how it was determined):
+-------------------------------------------------------------------------
+(4) Proposed maximum aggregate value of transaction:
+-------------------------------------------------------------------------
+(5) Total fee paid:
+-------------------------------------------------------------------------
+[_] Fee paid previously with preliminary materials.
+[_] Check box if any part of the fee is offset as provided by Exchange
+Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration statement
+number, or the Form or Schedule and the date of its filing.
+(1) Amount Previously Paid:
+-------------------------------------------------------------------------
+(2) Form, Schedule or Registration Statement No.:
+-------------------------------------------------------------------------
+(3) Filing Party:
+-------------------------------------------------------------------------
+(4) Date Filed:
+-------------------------------------------------------------------------
+Astro-Med, Inc.
+Astro-Med Industrial Park
+600 East Greenwich Avenue
+West Warwick, Rhode Island 02893
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
+May 15, 2001
+To the Shareholders of Astro-Med, Inc.:
+Notice is hereby given that the 2001 Annual Meeting of Shareholders of
+Astro-Med, Inc. (the "Company") will be held at the offices of the Company,
+Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode
+Island on Tuesday May 15, 2001, beginning at 10:00 a.m., for the purpose of
+considering and acting upon the following:
+(1) Electing five directors to serve until the next annual meeting of
+shareholders or until their successors are elected and have
+qualified.
+(2) Approving an increase in the maximum number of shares available under
+the Company's 1998 Non-Qualified Stock Option Plan by 600,000 shares
+to 1,000,000 shares in the aggregate.
+(3) Transacting such other business as may properly come before the
+meeting.
+The close of business on March 23, 2001 has been fixed as the record date
+for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof.
+By Order of the Board of Directors
+Margaret D. Farrell
+Margaret D. Farrell
+Secretary
+April 17, 2001
+Kindly fill in, date and sign the enclosed proxy and promptly return it in
+the enclosed addressed envelope, which requires no postage if mailed in the
+United States. If you are personally present at the meeting, the proxy will
+not be used without your consent.
+Astro-Med, Inc.
+PROXY STATEMENT
+ANNUAL MEETING OF SHAREHOLDERS
+May 15, 2001
+Solicitation and Revocation of Proxies
+The accompanying proxy is solicited by the Board of Directors of Astro-Med,
+Inc. (herein called the "Company") in connection with the annual meeting of the
+shareholders to be held May 15, 2001. The Company will bear the cost of such
+solicitation. It is expected that the solicitation of proxies will be primarily
+by mail. Proxies may also be solicited personally by regular employees of the
+Company at nominal cost. The Company may reimburse brokerage houses and other
+custodians, nominees and fiduciaries holding stock for others in their names,
+or in those of their nominees, for their reasonable out-of-pocket expenses in
+sending proxy material to their principals or beneficial owners and obtaining
+their proxies. Any shareholder giving a proxy has the power to revoke it at any
+time prior to its exercise, but the revocation of a proxy will not be effective
+until notice thereof has been given to the Secretary of the Company. Every
+properly signed proxy will be voted in accordance with the specification made
+thereon. This proxy statement and the accompanying proxy are expected to be
+first sent to shareholders on or about April 17, 2001.
+Election of Directors
+At the annual meeting, five directors are to be elected to hold office until
+the next annual meeting or until their respective successors are elected and
+qualified. The persons named in the accompanying proxy, who have been
+designated by the Board of Directors, intend to vote, unless otherwise
+instructed, for the election to the Board of Directors of the persons named
+below, all of whom are now directors of the Company. Certain information
+concerning such nominees is set forth below:
+Name and Age Business Experience During Past Five Years Director Since
+------------ ------------------------------------------ --------------
+Albert W. Ondis (75).... Chairman of the Company 1969
+Everett V. Pizzuti
+(64)................... President of the Company 1985
+Jacques V. Hopkins Former Partner, Hinckley, Allen & Snyder LLP
+(70)................... (Attorneys at Law) (Retired 1997) 1969
+Hermann Viets, Ph.D. President, Milwaukee School of Engineering
+(58)................... (since 1991) 1988
+Neil K. Robertson (63).. Independent investment research consultant 1991
+1
+Amendment of the 1998 Non-Qualified Stock Option Plan
+At the 1998 annual meeting, shareholders approved the 1998 Non-Qualified
+Stock Option Plan (the "Non-Qualified Plan") and reserved 400,000 shares of
+common stock for issuance thereunder.
+Options have been granted under the 1998 Non-Qualified Plan as follows:
+Number Average Exercise
+Grantee of Options Price Per Share
+------- ---------- ----------------
+Albert W. Ondis................................ 162,000 $5.88
+Chairman & Chief Executive Officer
+Everett V. Pizzuti............................. 162,000 $5.88
+President & Chief Operating Officer
+Joseph P. O'Connell,........................... 25,000 $7.50
+Vice President & Treasurer, Chief Financial
+Officer
+John B. Chatten................................ None N/A
+President, Grass-Telefactor
+Elias G. Deeb.................................. None N/A
+Vice President, Media Manufacturing
+All Executive Officers As A Group.............. 399,000 $5.88
+Of the 400,000 shares of common stock reserved for issuance under the Non-
+Qualified Plan, all options have been awarded, and the Board of Directors has
+concluded that it would be advisable to amend the 1998 Non-Qualified Plan for
+the reservation of an additional 600,000 shares for issuance thereunder
+pursuant to future option grants. The 1998 Non-Qualified Plan, as amended to
+reflect the above is attached as Exhibit A to this Proxy statement. Shareholder
+approval is required for the reservation of additional shares under the Plan.
+The following is a description of the Non-Qualified Plan as approved by the
+shareholders.
+Operation of the Non-Qualified Plan. The Non-Qualified Plan is administered
+by the Compensation Committee. None of the members of the Compensation
+Committee shall be an officer or other employee of the Company. Awards may be
+granted to executive officers and other key employees of the Company and its
+subsidiaries as well as other individuals who perform services for the Company
+and its subsidiaries. The Non-Qualified's Plan's eligibility criteria are
+intended to encompass a group which is currently estimated at less than 10
+individuals. The Compensation Committee bases its selection of award
+recipients, and its determination of the number of shares of common stock to be
+covered by each award, on the nature of employees' duties and present and
+potential contributions to the Company's success and other factors it deems
+relevant.
+Awards. The Non-Qualified Plan provides for the grant of non-qualified stock
+options which are not "incentive stock options" within the meaning of Section
+422 of the Internal Revenue Code of 1986, as amended (the "Code"). The option
+price of the stock options will not be less than fifty percent (50%) of the
+market price of common stock on the date of grant. The aggregate number of
+shares of common stock subject to grant hereunder to any one person during any
+one calendar year shall not exceed 200,000 shares. Shares covered by expired or
+terminated options may be available for subsequent awards. No options may be
+granted after May 19, 2008.
+2
+Options become exercisable as determined by the Compensation Committee. The
+Committee may, in its discretion, determine as a condition of any option, that
+all or a stated percentage of the options shall become exercisable in
+installments or otherwise, only after completion of a specified service
+requirement. The Committee may also accelerate the exercisability of any option
+at any time. An option may be exercised by payment of the option price in cash
+or, in the discretion of the Compensation Committee, in already owned shares of
+common stock or a combination thereof.
+Unless the Committee otherwise determines options will not be transferable
+otherwise than by will or the laws of descent and distribution and may be
+exercised during the holder's lifetime only by the holder or by the holder's
+guardian or legal representative. During the holder's lifetime, with the
+approval of the Committee and subject to such conditions as the Committee may
+prescribe, an optionee may, upon providing written notice to the Company, elect
+to transfer any or all such non-qualified stock options to members of his or
+her immediate family, or to trusts for the benefit of the optionee and/or the
+optionee's immediate family members or to partnerships in which the optionee
+and/or such family members are the only partners provided, however, that no
+such transfer by any optionee may be made in exchange for consideration.
+Under the Non-Qualified Plan, the Board of Directors may provide that, in
+the event it recommends that the Company sell substantially all of its assets
+or that the shareholders sell or exchange their shares or that the Company
+merge or consolidate with another corporation or be liquidated or dissolved,
+that a holder of any outstanding options must exercise such options by a
+specified date (not less than 60 days from the date of any notice to that
+effect) and any nonexercised options will expire on such date.
+Plan Amendment. The Board of Directors may modify, revise or terminate the
+Non-Qualified Plan at any time and from time to time, except that no action of
+the Board may, unless duly approved by the shareholders (i) increase the
+maximum number of shares subject to the Non-Qualified Plan, (ii) change the
+minimum option price, (iii) extend the period within which options may be
+granted, (iv) extend the termination date of the Non-Qualified Plan, or (v)
+change the class of persons eligible to receive options under the Non-Qualified
+Plan.
+New Plan Benefits. Since awards under the Non-Qualified Plan are
+discretionary, total awards that may be granted for the current fiscal year are
+not determinable until completion of the year.
+Anti-Takeover Effects. Unless the Compensation Committee determines
+otherwise, all outstanding options shall become immediately exercisable upon a
+Change of Control Event. A Change of Control Event includes (i) any purchase of
+common stock pursuant to a tender offer or exchange offer (other than by the
+Company), (ii) the acquisition of 30% or more of the beneficial ownership of
+the combined voting securities of the Company by any person or group other than
+the Company or any employee benefit plan of the Company or any current officer
+or director of the Company which person or group did not theretofore
+beneficially own 30% or more of the combined voting securities of the Company,
+(iii) approval by Company shareholders of a consolidation, a merger in which
+the Company does not survive, or the sale of substantially all of the Company's
+assets, or (iv) a change in the composition of a majority of the Company's
+Board over a two-year period unless the selection or nomination of each of the
+new members is approved by two-thirds of those remaining members of the Board
+who were members at the beginning of the two-year period. The provisions of the
+Non-Qualified Plan permitting acceleration of the exercise of outstanding
+options may have an anti-takeover effect.
+3
+Federal Income Tax Considerations. There will be no federal income tax
+consequences to either the optionee of the Company on the grant of a non-
+qualified option. Upon the exercise of a non-qualified the optionee has taxable
+ordinary income equal to the excess of the fair market value of the shares of
+common stock received on the exercise date (or the date on which any
+substantial risk of forfeiture lapses) over the option price of the shares. The
+Company will be entitled to a federal income tax deduction in an amount equal
+to such excess. Upon a subsequent sale or taxable exchange of shares acquired
+upon exercise of an option, an optionee will recognize long-term or short-term
+capital gain or loss equal to the difference between the amount realized on the
+sale and the tax basis of such shares.
+The exercise of any portion of an option that is accelerated as a result of
+a Change of Control Event, may cause payments with respect to such accelerated
+options to be treated as "parachute payments" as defined in the Code. Any such
+parachute payments may be non-deductible, in whole or in part, and may subject
+the employee to a non-deductible 20% federal excise tax on all or a portion of
+such payment (in addition to other taxes ordinarily payable).
+The Board of Directors recommends a vote FOR approval of the amendment of
+the 1998 Non-Qualified Stock Option Plan, as amended (item 2 on the proxy
+card).
+Voting at Meeting
+Only shareholders of record at the close of business on March 23, 2001 will
+be entitled to vote at the meeting. On the record date, there were 4,230,224
+shares of common stock of the Company outstanding. There was no other
+outstanding class of voting securities. Each shareholder has one vote for every
+share owned.
+4
+Security Ownership of Certain Beneficial Owners and Management
+The following table sets forth as of March 23, 2001 (except as noted) the
+record and beneficial ownership of the Company's outstanding shares of common
+stock by each person who is known to the Company to own of record or
+beneficially more than 5 percent of such stock, by each director of the
+Company, by each executive officer named in the Summary Compensation Table and
+by all directors and executive officers of the Company as a group:
+Number of Shares Percent
+Name of Beneficial Owner Beneficially Owned of Class
+------------------------ ------------------ --------
+Albert W. Ondis.................................. 1,299,384(1) 29.7%
+600 East Greenwich Avenue
+West Warwick, Rhode Island
+Everett V. Pizzuti............................... 500,243(2) 11.0%
+600 East Greenwich Avenue
+West Warwick, Rhode Island
+Dimensional Fund Advisors, Inc................... 346,850(3) 8.2%
+1299 Ocean Avenue
+Santa Monica, California
+Jacqueline B. Ondis.............................. 310,000 7.3%
+40 Oak Grove Street
+Warwick, Rhode Island
+Hermann Viets.................................... 131,212(4) 3.1%
+Jacques V. Hopkins............................... 90,321(5) 2.1%
+Joseph P. O'Connell.............................. 93,394(6) 2.1%
+Elias G. Deeb.................................... 68,763(7) 1.6%
+John B. Chatten.................................. 33,567(8) *
+Neil K. Robertson................................ 23,000(9) *
+All directors and executive officers of the
+Company as a group (13)......................... 2,349,232(10) 46.9%
+--------
+*Less than 1%
+(1) Includes 116,871 shares held in trust for children, 150,000 shares deemed
+to be beneficially owned because of exercisable options to acquire shares
+and 2,626 shares allocated to his account under the Company's Employee
+Stock Ownership Plan.
+(2) Includes 324,875 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 2,614 shares allocated to his
+account under the Company's Employee Stock Ownership Plan.
+(3) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor
+registered under Section 203 of the Investment Advisors Act of 1940, is
+deemed to have beneficial ownership of the number of shares shown as of
+December 31, 2000, all of which shares are held in portfolios of DFA
+Investment Dimensions Group Inc., a registered open-end investment company,
+or in a series of the DFA Investment Trust
+5
+Company, Delaware business trust, or the DFA Group Trust and DFA
+Participation Group Trust, investment vehicles for qualified employee
+benefit plans. Dimensional serves as investment advisor or manager to all of
+such entities. Dimensional disclaims beneficial ownership of all such
+shares.
+(4) Includes 112 shares held by Dr. Viets as custodian for a child and 5,000
+shares deemed to be beneficially owned because of exercisable options to
+acquire shares.
+(5) Includes 76,821 shares held as a trustee of a trust for the benefit of the
+children of Mr. Ondis, and 5,000 shares deemed to be beneficially owned
+because of exercisable options to acquire shares.
+(6) Includes 92,500 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 616 shares allocated to his
+account under the Company's Employee Stock Ownership Plan.
+(7) Includes 313 shares held by Mr. Deeb's wife, 57,250 shares deemed to be
+beneficially owned because of exercisable options to acquire shares and
+2,061 shares allocated to his account under the Company's Employee Stock
+Ownership Plan.
+(8) Includes 33,332 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 235 shares allocated to his
+account under the Company's Employee Stock Ownership Plan.
+(9) Includes 18,000 shares held by Mr. Robertson as trustee of a trust for his
+benefit and 5,000 shares deemed to be beneficially owned because of
+exercisable options to acquire shares.
+(10) Includes 777,207 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 11,450 shares allocated to the
+accounts of officers under the Company's Employee Stock Ownership Plan.
+Other Information Relating to Directors
+During the fiscal year ended January 31, 2001, the Board of Directors held
+four formal meetings and six meetings by telephone conference. The Board has an
+Audit Committee consisting of Mr. Robertson (Chairman), Dr. Viets and Mr.
+Hopkins, whose primary duties and responsibilities include recommending an
+accounting firm to be engaged as the Company's independent accountants and
+meeting with the Company's independent accountants to review the annual audit
+scope, the audit of financial statements, the adequacy of internal controls and
+other relevant matters. The Audit Committee held one formal committee meeting
+and one meeting by telephone conference during the fiscal year ended January
+31, 2001. The Board has a Compensation Committee comprised of Dr. Viets
+(Chairman), Mr. Robertson and Mr. Hopkins, which reviews and approves
+recommendations on executive compensation and administers the Company's stock
+option plans. The Compensation Committee held two formal meetings and one
+meeting by telephone conference during the fiscal year ended January 31, 2001.
+Dr. Viets, Mr. Robertson and Mr. Hopkins have been paid an annual retainer fee
+of $3,500 plus $500 for each Board meeting attended.
+Those directors who are not also officers and employees of the Company
+receive options to purchase common stock under the Company's Non-Employee
+Director Stock Option Plan (the "Director Plan") as compensation for their
+services to the Company. Under the Director Plan, each non-employee director
+received an initial non-qualified option to purchase 1,000 shares of common
+stock on May 21, 1996, the date the Company's shareholders approved the
+Director Plan. Non-employee directors who are elected after May 21, 1996 will
+receive an initial non-qualified option to purchase 1,000 shares of common
+stock on the date of the director's initial election to the Board of Directors.
+Beginning in 1997, each non-employee director (other than a director first
+elected after June 30 of the prior year) receives an annual non-qualified
+option to purchase 1,000
+6
+shares of common stock as of the first business day of January of each year.
+All options have an exercise price equal to the market price of the common
+stock on the day of the grant and are exercisable for a term of ten years.
+Options vest six months after the grant date, unless automatically accelerated
+in the event of death, disability, or a change of control. A total of 30,000
+shares have been reserved for issuance under the Director Plan. Messrs.
+Hopkins, Robertson and Viets each received options to acquire 1,000 shares at
+$3.75 per share on January 2, 2001. Options for an aggregate of 18,000 shares,
+with an exercise price ranging from $3.75 to $9.25 per share were outstanding
+at January 31, 2001.
+Directors who are also officers and employees of the Company are not
+entitled to receive any compensation in addition to their compensation for
+services as officers or employees.
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a
+retired partner, provides legal services to the Company.
+Other than as described under "Indebtedness of Management", no officer,
+director or nominee for director of the Company or any associate of any of the
+foregoing had during the fiscal year ended January 31, 2001 any material
+interest, direct or indirect, in any material transaction or any material
+proposed transaction to which the Company was or is to be a party.
+Report On Executive Compensation
+The Board of Directors has delegated to the Compensation Committee the
+authority to fix compensation (including stock options) for the Company's key
+employees. The Compensation Committee is comprised of the Company's three non-
+employee directors, Dr. Viets (Chairman), Mr. Robertson and Mr. Hopkins. Mr.
+Ondis meets with the Compensation Committee to review the compensation program
+and make recommendations for senior executive officers. Compensation consists
+of three principal elements (salary, bonus and stock options).
+Executive Compensation Philosophy. Compensation of the Company's executive
+officers should link management initiatives with the actual financial
+performance of the Company. Similarly, the compensation should attract, retain
+and motivate highly qualified individuals to achieve the Company's business
+goals and link their interests with shareholder interests.
+Salary. Base salaries for executive officers were established a number of
+years ago after reviewing compensation for competitive positions at
+manufacturing companies of comparable size and profitability operating in a
+similar industry. Base salaries have since been increased at annual rates which
+approximate the general rates of increase of compensation for all employees of
+the Company and for generally publicized competitive positions elsewhere in
+industry.
+Bonus. The Company maintains a bonus pool for the purpose of providing
+incentives in the form of a quarterly cash bonus to employees of the Company.
+Awards are intended to reflect Company profitability, achievement of overall
+Company objectives and individual performances, considered both in terms of
+effort and results. The size of the bonus pool and of individual awards may
+vary, up or down, from year to year. No bonus payments were made in fiscal year
+1999. Bonuses paid or accrued during fiscal years 2000 and 2001 amounted to
+$369,488 ($158,000 to executives) and $225,000 ($28,500 to executives),
+respectively.
+Stock Options. Total executive compensation includes long-term incentives
+afforded by stock options. Stock option grants are made by the Compensation
+Committee upon consideration of recommendations made
+7
+by senior management. The objectives of option grants are to align the long-
+term interests of executives and key employees with shareholder interest, by
+creating a strong and direct link between compensation and total shareholder
+return. In this connection, grants are intended to enable recipients to develop
+and maintain significant long-term stock ownership in the Company. Stock
+options are the principal vehicle for the payment of long-term compensation.
+Grants of stock options reflect subjective consideration of such matters as
+other compensation and the employee's position in the Company and contributions
+to the Company.
+Compensation of Chief Executive Officer. Mr. Ondis is eligible to
+participate in the same executive compensation plans available to other senior
+executives. Effective in August 2000, his base salary was increased from
+$240,000 to $247,200, representing a 3% increase, deemed consistent with salary
+increases among executives in comparable positions in similar industries. Non-
+qualified option grants for 75,000 common shares at an exercise price of $7.50
+were made to Mr. Ondis during fiscal year 2001.
+Deductibility of Compensation. Section 162(m) of the Internal Revenue Code
+limits the deductibility of compensation paid to a public company's five
+highest paid executive officers to the extent any such officer's annual
+compensation exceeds $1,000,000, subject to certain exceptions. The Board of
+Directors has deferred adopting a policy on this issue as it does not expect
+the compensation of these individuals to reach relevant levels in the near
+future.
+Conclusion. Through the program described above, the Compensation Committee
+firmly believes a direct link has been established between the Company's
+financial performance, executive compensation and resultant stock price
+performance.
+Compensation Committee
+Hermann Viets, Ph.D. (Chairman)
+Neil K. Robertson
+Jacques V. Hopkins
+8
+Executive Compensation
+The following table sets forth the total annual compensation paid or
+accrued, together with other information for the fiscal years ended January 31,
+2001, 2000 and 1999, for the Chief Executive Officer and each of the four most
+highly compensated executive officers of the Company whose total annual salary
+and bonus for the fiscal year ended January 31, 2001 exceeded $100,000.
+Summary Compensation Table
+Annual Compensation Securities
+------------------------------- Underlying
+Name and Principal Options All Other
+Position Year Salary($) Bonus($) Other ($)(a) Granted(#) Compensation($)(b)
+------------------ ---- --------- -------- ------------ ---------- ------------------
+Albert W. Ondis......... 2001 243,324 -- 48,970 75,000 4,561
+Chairman, Chief 2000 240,220 40,000 37,524 25,000 4,693
+Executive Officer 1999 232,865 -- 2,741 25,000 4,782
+Everett V. Pizzuti...... 2001 221,908 -- 38,152 75,000 4,739
+President, Chief 2000 203,737 40,000 44,561 25,000 4,824
+Operating Officer 1999 228,324 -- 8,957 25,000 4,782
+Joseph P. O'Connell.....
+Vice President and 2001 158,817 -- 6,812 50,000 4,289
+Treasurer, 2000 145,947 40,000 3,872 20,000 4,841
+Chief Financial Officer 1999 143,796 -- 3,713 10,000 4,488
+John B. Chatten(c)......
+President, Grass- 2001 150,000 -- -- 15,000 2,056
+Telefactor 2000 21,635 -- -- 35,000 --
+Product Group 1999 -- -- -- -- --
+Elias G. Deeb........... 2001 129,528 10,000 -- 15,000 3,955
+Vice President, Media 2000 122,603 19,375 -- 10,500 4,143
+Manufacturing 1999 119,500 -- -- 7,500 3,830
+--------
+(a) Represents imputed interest on indebtedness of management in the amount of
+$20,070 for Mr. Ondis and $8,213 for Mr. Pizzuti and reimbursement for
+taxes attributable to use of Company provided vehicles and cash
+compensation in lieu of Company provided vehicles.
+(b) Amounts consist of the Company's annual contributions, including matching
+contributions, to the Astro-Med, Inc. Retirement Savings Plan and $1,059
+for each individual to the Astro-Med, Inc. Employee Stock Ownership Plan.
+(c) Mr. Chatten joined the Company in December 1999.
+9
+Indebtedness of Management
+The following information describes loans to directors and executive
+officers of the Company whose indebtedness to the Company exceeded $60,000 at
+any time during the fiscal year ended January 31, 2001.
+Largest
+Amount of Indebtedness
+Indebtedness Amount of
+Outstanding Outstanding
+Name at Any Time at Year End
+---- ------------ ------------
+Albert W. Ondis, Chairman and Director................ $321,640 $321,640
+Everett V. Pizzuti, President and Director............ 131,624 131,624
+The indebtedness is comprised of unsecured non-interest bearing demand notes
+for loans made from time to time to the persons named.
+Profit-Sharing Plan
+The Company has a qualified Profit-Sharing Plan which provides retirement
+benefits to substantially all employees of the Company and provides for
+contributions into a trust fund in such amounts as the Board of Directors may
+annually determine. Each eligible employee shares in contributions on the basis
+of relative (limited to $170,000) compensation.
+In addition, participants are permitted to defer up to 15% of their cash
+compensation and make contributions of such deferral to this Plan through
+payroll deductions. The Company makes matching contributions equal to 50% of
+the first percent of compensation contributed and 25% of the second, third,
+fourth and fifth percent. The deferrals are made within the limits prescribed
+by Section 401(k) of the Internal Revenue Code.
+The Plan provides for the vesting of 100% of contributions made by the
+Company to the account of an employee after five years of service.
+Contributions by an employee are 100% vested immediately. The Company's
+contributions paid or accrued for the fiscal year ended January 31, 2001
+totaled $230,000.
+Employee Stock Ownership Plan
+The Company has an Employee Stock Ownership Plan which provides retirement
+benefits to substantially all employees of the Company. Contributions in such
+amounts as the Board of Directors may annually determine are allocated among
+eligible employees on the basis of relative (limited to $100,000) compensation.
+Participants are 100% vested in any and all allocations to their accounts.
+Contributions, which may be in cash or stock, are invested by the Plan's
+Trustees in shares of common stock of the Company. The Company's contributions
+paid or accrued for the fiscal year ended January 31, 2001 totaled $130,000.
+10
+Stock Option Plans
+The Company has a Non-Qualified Stock Option Plan adopted in the fiscal year
+ended January 31, 1999, under which options for an aggregate of 400,000 shares
+of common stock may be granted to officers and key employees as well as
+consultants or other persons who render services to the Company at an exercise
+price of not less than 50% of the market price on the date of grant. Options
+granted under this plan for an aggregate of 225,000 shares, with an exercise
+prices ranging from $5.00 to $7.50 were granted during the fiscal year ended
+January 31, 2001. Options granted under this plan for an aggregate of 276,000
+with exercise prices ranging from $4.94 to $7.50 per share were outstanding at
+January 31, 2001. Options were granted subsequent to January 31, 2001 for an
+aggregate of 124,000 shares with an exercise price of $4.31 per share. No
+shares remain eligible for option grants under this plan. Accordingly, the
+Company is recommending that the plan be amended to increase the number of
+shares authorized for issuance under the plan.
+The Company also has an Incentive Stock Option Plan adopted in the fiscal
+year ended January 31, 1994 under which options for an aggregate of 250,000
+shares of common stock may be granted to officers and key employees at an
+exercise price of not less than 100% of the market price on the date of grant.
+Options granted under this plan for an aggregate of 118,500 shares with an
+exercise price of $7.50 were granted during the fiscal year ended January 31,
+2001. Options granted under this plan for an aggregate of 204,000 shares with
+exercise prices ranging from $6.125 to $10.25 per share were outstanding at
+January 31, 2001. Options were granted subsequent to January 31, 2001 for an
+aggregate of 46,000 shares with an exercise price of $4.31 per share. No shares
+remain available for option grants under this plan.
+In addition, the Company has an Incentive Stock Option Plan adopted in the
+fiscal year ended January 31, 1998 and amended in the fiscal years ended
+January 31, 1999 and 2001, under which options for an aggregate of 1,250,000
+shares of common stock may be granted to officers and key employees at an
+exercise price of not less than 100% of the market price on the date of grant.
+Options granted under this plan for an aggregate of 222,000 shares with
+exercise prices ranging from $4.00 to $7.50 were granted during the fiscal year
+ended January 31, 2001. Options granted under this plan for an aggregate of
+492,200 shares with exercise prices ranging from $4.00 to $8.125 per share were
+outstanding at January 31, 2001. Options were granted subsequent to January 31,
+2001 for an aggregate of 192,000 shares with an exercise price of $4.31 per
+share. A total of 556,300 shares remain available for option grants under this
+plan.
+11
+The following tables present certain information concerning stock options
+granted and exercised by each executive officer named in the Summary
+Compensation Table during the fiscal year ended January 31, 2001, and the year-
+end value of unexercised options held by each of those officers.
+Aggregated Option Exercises in Fiscal Year Ended
+January 31, 2001 and Options Held at January 31, 2001
+Securities Underlying Value of Unexercised
+Unexercised Options at In-The-Money Options
+Shares Value Fiscal Year End(#) at Fiscal Year End($)(b)
+Acquired Realized ------------------------- -------------------------
+On Exercise(#) ($)(a) Exercisable Unexercisable Exercisable Unexercisable
+-------------- -------- ----------- ------------- ----------- -------------
+Albert W. Ondis......... -- -- 150,000 -- -- --
+Everett V. Pizzuti...... -- -- 324,875 31,000 19,688 --
+Joseph P. O'Connell..... -- -- 92,500 -- -- --
+John B. Chatten......... -- -- 33,332 16,668 -- --
+Elias G. Deeb........... 1,000 917 57,250 -- -- --
+--------
+(a) Amount represents excess of market value over exercise price on date of
+exercise. Income taxes which may have been payable by individual are not
+reflected.
+(b) Amount represents excess of market value as of January 31, 2001 over
+exercise price.
+Option Grants--Fiscal Year
+Ended January 31, 2001
+% Of Total
+Option Options Granted Per Share Grant Date
+Grants to Employees in Exercise Expiration Value
+Name (#)(a) Fiscal Year Price ($) Date ($)(d)
+---- ------ --------------- --------- ---------- ----------
+Albert W. Ondis ..... 75,000 13.3% 7.50 3/20/10 178,500
+Everett V. Pizzuti .. 75,000 13.3% 7.50 3/20/10 178,500
+Joseph P. O'Connell
+.................... 50,000(b) 8.8% 7.50 3/20/10 119,000
+John B. Chatten ..... 15,000(c) 2.7% 7.50 3/20/10 35,700
+Elias G. Deeb........ 15,000 2.7% 7.50 3/20/10 35,700
+--------
+(a) All options became exercisable on October 20, 2000, except as noted.
+(b) Options became exercisable on October 20, 2000 and January 1, 2001.
+(c) Options will became exercisable on January 1, 2002 and January 1, 2003.
+(d) Amounts represent the fair value of each option granted and were estimated
+as of the date of grant using the Black-Scholes option-pricing model with
+the following weighted average assumptions: expected volatility of 36%;
+expected life of 5 years; risk-free interest rate of 6.25% and dividend
+yield of 2.9%.
+12
+Performance Graph
+Set forth below is a line graph comparing the cumulative total return on
+the Company's common stock against the cumulative total return of a NASDAQ
+market index and a peer index for the period of five fiscal years ended
+January 31, 2001. The University of Chicago's Center for Research in Security
+Prices (CRSP) total return index for the NASDAQ Stock Market is calculated
+using all companies which trade on the NASDAQ National Market System (NMS) or
+on the NASDAQ supplemental listing. It includes both domestic and foreign
+companies. The index is weighted by the then current shares outstanding and
+assumes dividends reinvested. The return is calculated on a monthly basis. The
+peer group index, the CRSP Index for NASDAQ Electronic Components Stock
+designated below as the industry index, is comprised of companies classified
+as electronic equipment manufacturers. The total returns assume $100 invested
+on February 1, 1996 with reinvestment of dividends.
+ASSUMES $100 INVESTED ON FEBRUARY 1, 1996
+ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDING JANUARY 31, 2001
+Fiscal Years Ended January 31
+---------------------------------------
+1996 1997 1998 1999 2000 2001
+---- ------ ------ ------ ------ ------
+Astro-Med, Inc.......................... 100 92.95 88.54 68.73 75.13 55.83
+Peer Group Index........................ 100 206.25 202.21 325.98 604.79 489.54
+Nasdaq Market Index..................... 100 130.34 152.99 235.00 370.87 259.89
+13
+Audit Committee Report
+The Audit Committee of the Board is responsible for providing independent,
+objective oversight of the Company's accounting functions and internal
+controls. The Audit Committee is composed of three directors, each of whom is
+independent as defined by the National Association of Securities Dealers'
+listing standards. The Audit Committee operates under a written charter
+approved by the Board of Directors, a copy of which is attached to this Proxy
+Statement as Exhibit B.
+Management is responsible for the Company's internal controls and financial
+reporting process. The independent accountants are responsible for performing
+an independent audit of the Company's consolidated financial statements in
+accordance with generally accepted auditing standards and to issue a report
+thereon. The Audit Committee's responsibility is to monitor and oversee these
+processes.
+The Audit Committee's responsibilities focus on two primary areas: (1) the
+adequacy of the Company's internal controls and financial reporting process and
+the reliability of the Company's financial statements; and (2) the independence
+and performance of the Company's independent accountants.
+The Audit Committee has met with management and the Company's independent
+accountants, Arthur Andersen LLP, to review and discuss the January 31, 2001
+financial statements. Management represented to the Committee that the
+Company's consolidated financial statements were prepared in accordance with
+generally accepted accounting principles, and the Audit Committee has reviewed
+and discussed the consolidated financial statements with management and the
+independent accountants. The Audit Committee also discussed with the Arthur
+Andersen LLP the matters required by Statement on Auditing Standards No.61
+(Communication with Audit Committees). The Audit Committee also received from
+Arthur Andersen LLP written disclosures and the letter regarding independence
+as required by Independence Standards Board Standard No. 1 (Independence
+Discussions with Audit Committee) and has discussed with Arthur Andersen LLP
+that firm's independence.
+The Audit Committee received the following information concerning the fees
+of Arthur Andersen LLP for the year ended January 31, 2001, and has considered
+whether the provision of these services is compatible with maintaining the
+independence of the independent accountants:
+. Audit Fees (including review of interim financial statements
+included in Form 10-Qs)............................................ $119,000
+.Financial Information Systems Design and Implementation Fees....... $ 0
+.All Other Fees..................................................... $ 95,200
+The Audit Committee has determined that the provision of non-audit services
+by Arthur Andersen LLP is compatible with maintaining that firm's independence.
+Based upon the review and discussions referred to above, we recommended that
+the Board of Director's include the audited consolidated financial statements
+in the Company's Annual Report on Form 10-K for the year ended January 31,
+2001, to be filed with the Securities and Exchange Commission.
+Audit Committee
+Neil K. Robertson (Chairman)
+Hermann Viets, Ph.D.
+Jacques V. Hopkins
+14
+Independent Accountants
+The Company selected Arthur Andersen LLP as independent accountants to audit
+the financial statements of the Company for fiscal year ended January 31, 2001.
+This firm has audited the Company's financial statements annually since the
+fiscal year ended January 31, 1982. Although no accountants have yet been
+selected to audit the financial statements of the Company for the fiscal year
+ending January 31, 2002 it is expected that Arthur Andersen LLP will again be
+selected. It is further expected that a representative of Arthur Andersen LLP
+will be present at the annual meeting with the opportunity to make a statement,
+if he or she so desires, and that such representative will be available to
+respond to appropriate questions.
+Financial Reports
+A copy of the annual report of the Company for the fiscal year ended January
+31, 2001 including the Company's annual report to the Securities and Exchange
+Commission on Form 10-K, accompanies this proxy statement. Such report is not
+part of this proxy statement.
+Proposals For 2002 Annual Meeting
+The 2002 annual meeting of the shareholders of the Company is scheduled to
+be held on May 14, 2002. If a shareholder intending to present a proposal at
+that meeting wishes to have such a proposal included in the Company's proxy
+statement and form of proxy relating to the meeting, the shareholder must
+submit the proposal to the Company not later than December 16, 2001.
+Other Matters
+No business other than that set forth in the attached Notice of Meeting is
+expected to come before the annual meeting, but should any other matters
+requiring a vote of shareholders arise, including a question of adjourning the
+meeting, the persons named in the accompanying proxy will vote thereon
+according to their best judgment in the interests of the Company. In the event
+any of the nominees for the office of director should withdraw or otherwise
+become unavailable for reasons not presently known, the persons named as
+proxies will vote for other persons in their place in what they consider the
+best interests of the Company.
+You are urged to sign and return your proxy promptly to make certain your
+shares will be voted at the meeting. You may revoke your proxy at any time
+before it is voted.
+By Order of the Board of Directors
+/s/ Margaret D. Farrell
+Margaret D. Farrell
+Secretary
+Dated: April 17, 2001
+15
+EXHIBIT A
+ASTRO-MED, INC.
+1998 NON-QUALIFIED STOCK OPTION PLAN
+(As Proposed To Be Amended)
+1. Purpose. The purpose of this 1998 Non-Qualified Stock Option Plan (the
+"1998 Non-Qualified Plan") is to attract and retain key employees of Astro-Med,
+Inc. (the "Company") and to motivate them by providing an opportunity to
+acquire a proprietary stake in the Company and its future growth. It is the
+view of the Company that this goal may best be achieved by granting stock
+options.
+2. Administration. (a) The 1998 Non-Qualified Plan shall be administered by
+a committee of the Board of Directors (the "Board"), consisting of not less
+than two members (the "Compensation Committee"). It is the intention of the
+Company that so long as the Company has a class of securities registered under
+the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the 1998
+Non-Qualified Plan shall be administered by persons who shall be "non-employee
+directors" within the meaning of Rule 16b-3 under the Exchange Act but the
+authority and validity of any act taken or not taken by the Compensation
+Committee shall not be affected if any person administering the 1998 Non-
+Qualified Plan is not a non-employee director; and provided, that, with respect
+to individual participants who are not subject to Section 16(b) of the Exchange
+Act, the Compensation Committee may delegate authority to administer the 1998
+Non-Qualified Plan to another committee of directors (the "Employee Committee")
+which committee may include directors who are not non-employee directors.
+Unless the context otherwise required, the term "Committee" shall refer to both
+the Compensation Committee and the Employee Committee.
+(b) The Committee shall have plenary authority in its discretion,
+subject to and not inconsistent with the express provisions of the 1998
+Non-Qualified Plan to grant options, to determine the purchase price of the
+shares of common stock covered by each option, the term of each option, the
+persons to whom, and the time or times at which options shall be granted,
+and the number of shares to be covered by each option; to interpret the
+1998 Non-Qualified Plan; to prescribe, amend and rescind rules and
+regulations relating to the 1998 Non-Qualified Plan; to determine the terms
+and provisions of the option agreements (which need not be identical)
+entered into in connection with awards under the 1998 Non-Qualified Plan;
+and to make all other determinations deemed necessary or advisable for the
+administration of the 1998 Non-Qualified Plan. All actions taken and all
+interpretations and determinations made by the Committee in good faith
+shall be final and binding upon all persons who have received awards, the
+Company and all other interested persons. No member or agent of the
+Committee shall be personally liable for any action, determination or
+interpretation taken or made in good faith with respect to the 1998 Non-
+Qualified Plan or awards made thereunder, and all members and agents of the
+Committee shall be fully indemnified and protected by the Company in
+respect of any such action, determination or interpretation. No Committee
+member shall be liable for any action, determination or interpretation made
+in good faith and all members of the Committee shall be fully indemnified
+and protected by the Company in respect of any such action, determination
+or interpretation.
+3. Amount of Stock Subject to Plan. The amount of stock which may be issued
+under options pursuant to the 1998 Non-Qualified Plan is one million
+(1,000,000) shares of the Company's $.05 par value common stock (the "common
+stock"). If any options terminate or expire for any reason without having been
+exercised in full, the shares not purchased under the options may again be
+subjected to options granted under the 1998 Non-Qualified Plan to the extent
+not prohibited by Rule 16b-3.
+A-1
+4. Eligibility. Key employees of the Company or any subsidiary as well as
+consultants or other persons who render services to the company or any
+subsidiary (regardless of whether they are employees) shall be eligible to
+participate in the 1998 Non-Qualified Plan, except that directors who are not
+full time officers or employees shall not be eligible to participate. Key
+employees shall be those employees, including officers, who are deemed by the
+Committee to be of primary importance in the operation of the Company's
+business. The Committee may in its discretion from time to time grant options
+to any or all eligible persons to purchase such number of shares as the
+Committee shall determine. As used in the 1998 Non-Qualified Plan, the term
+"subsidiary" has the meaning ascribed to "subsidiary corporation" by (S)424(f)
+of the Internal Revenue Code of 1986, as amended (the "Code").
+5. Aggregate Annual Limit. The aggregate number of shares of common stock
+subject to granted hereunder to any one person during any one calendar year
+shall not exceed 200,000 shares.
+6. Option Price and Payment. The option price of the shares of common stock
+subject to each option will be fixed by the Committee but will not be less than
+fifty percent (50%) of fair market value of the common stock determined as of
+the date of the granting of the option. Upon the exercise of the option, the
+option price may be paid in one or more of the following ways, as the Committee
+in its discretion determines: (i) in full in cash; or (ii) by exchanging other
+shares of the Company's common stock owned by the owner of such option. The
+term "fair market value" shall be deemed to be the mean between the high and
+low selling prices on any exchange on which the stock is listed (or over-the-
+counter if such stock is not then listed on such exchange), on the date the
+option is granted or, if no sale has taken place, the mean between bid and
+asked prices on such date.
+7. Term of Option. (a) The term of each option shall be ten (10) years, or
+such shorter period as may be determined by the Committee, from the date of
+grant of the option, unless sooner terminated in accordance with its terms. The
+Committee may, in its sole discretion, determine, as a condition of any option
+that all or a stated percentage of the options shall become exercisable in
+installments or otherwise, only after completion of a specified service
+requirement and may accelerate the exercisability of any option at any time. No
+option shall be granted after the termination of the 1998 Non-Qualified Plan,
+but options theretofore granted may be exercised thereafter in accordance with
+their terms and the provisions of the 1998 Non-Qualified Plan.
+(b) Except as otherwise determined by the Committee or permitted under
+Paragraph 10 in the case of death of the holder of an option, in the event
+the employment of an employee to whom an option has been granted under the
+1998 Non-Qualified Plan shall be terminated (except as set forth in
+Paragraph 10) no option will be exercisable unless at the time of the
+exercise of the option the holder thereof is still employed by the Company
+or one or more subsidiaries; provided, however, that if the holder's
+employment has terminated not more than ninety (90) days before the
+exercise of such option under circumstances acceptable to the Committee
+(whose determination in this regard shall be final and conclusive), then
+the option will nevertheless be exercisable during the ninety (90) day
+period notwithstanding termination of employment; and provided, further,
+that if the holder's employment has terminated not more than one (1) year
+before the exercise of such option as a result of the holder becoming
+disabled (within the meaning of 22(e)(3) of the Code), then the option will
+nevertheless be exercisable during such one (1) year period.
+(c) Military or sick leave not exceeding ninety (90) days will not be
+deemed to interrupt or terminate employment for the purposes of this
+Paragraph 7. Whether military or sick leave in excess of ninety (90) days
+or other authorized leave of absence will be deemed to interrupt or
+terminate employment for the purposes of this Paragraph 7 will be
+determined by the Committee whose determination shall be final and
+conclusive.
+A-2
+8. Change of Control. Unless the Committee determines otherwise, all
+outstanding options shall become immediately exercisable upon a Change of
+Control Event. A Change of Control Event shall include (i) any purchase of
+common stock pursuant to a tender offer or exchange offer (other than by the
+Company), (ii) the acquisition of 30% or more of the beneficial ownership of
+the combined voting securities of the Company by any person or group (as such
+terms are used in Section 13(d) and 14(d) of the Exchange Act), other than the
+Company or its subsidiaries or any employee benefit plan of the Company or any
+person who was an officer or director of the Company on the effective date of
+the 1998 Non-Qualified Plan, which person or group did not theretofore
+beneficially own 30% or more of the combined voting securities of the Company,
+(iii) approval by Company shareholders of a consolidation, a merger in which
+the Company does not survive, or the sale of substantially all of the Company's
+assets, or (iv) a change in the composition of a majority of the Company's
+Board over a two-year period unless the selection or nomination of each of the
+new members is approved by two-thirds of those remaining members of the Board
+who were members at the beginning of the two-year period.
+9. Other Terms and Conditions; Waivers. Options will be evidenced by option
+agreements in such form and containing such terms and conditions as the
+Committee may determine (but not inconsistent with the provisions of the 1998
+Non-Qualified Plan) including, without being limited to, the following:
+(a) Each option will be granted on the condition that the purchase of
+stock thereunder will be for investment purposes and not with a view to
+resale or distribution, except that such condition will be inoperative if
+the stock subject to such option is registered under the Securities Act of
+1933, as amended, or if in the opinion of counsel for the Company such
+stock may be resold without registration;
+(b) Unless the Committee otherwise determines, no option will be
+transferable by the holder thereof otherwise than by will or by the laws of
+descent and distribution, and such option will be exercisable during the
+lifetime of the holder thereof only by the holder; provided, however, that
+during an optionee's lifetime, with the approval of the Committee and
+subject to such conditions as the Committee may prescribe, an optionee may,
+upon providing written notice to the Company, elect to transfer any or all
+such non-qualified stock options granted under the 1998 Non-Qualified Plan
+to members of his or her immediate family, including, but not limited to,
+the optionee's spouse, children, grandchildren and the spouses of children
+and grandchildren or to trusts for the benefit of the optionee and/or such
+immediate family members or to partnerships in which the optionee and/or
+such family members are the only partners ("Permitted Transferees");
+provided, however, that no such transfer by any optionee may be made in
+exchange for consideration; and
+(c) The Committee, in particular cases, before or after the issuance of
+stock options under the 1998 Non-Qualified Plan, may waive any of the
+conditions imposed by the 1998 Non-Qualified Plan upon the issuance or
+exercise of options.
+10. Termination of Employment upon Death. In the event an employee to whom
+an option has been granted under the 1998 Non-Qualified Plan dies while in the
+employ of the Company or any subsidiary, unless the Committee otherwise
+determines, his or her options shall end automatically six (6) months after
+such death, unless sooner ended by their terms. Prior to the expiration of such
+six (6) month period, during the term of such options, the executor or
+administrator of the estate of such eligible employee shall have the right to
+exercise any option previously granted to such employee hereunder.
+11. Readjustment of Stock or Recapitalization. Upon any recapitalization or
+readjustment of the Company's capital stock whereby the character of the
+present common stock shall be changed, appropriate
+A-3
+adjustments shall be made so that the stock to be purchased under the 1998 Non-
+Qualified Plan shall be the equivalent of the present common stock after such
+readjustment or recapitalization. In the event of a subdivision or combination
+of the shares of common stock, the Board will proportionately adjust number of
+shares that may be optioned and sold to an eligible person and the number of
+shares which are the subject of outstanding options and the price therefor. In
+case of reclassification or other change in the shares of common stock, such
+action will be taken as in the opinion of the Board will be appropriate under
+the circumstances. Accordingly, in such cases the maximum number of authorized
+but unissued shares, or shares held as treasury stock, which are subject to the
+1998 Non-Qualified Plan may be adjusted by the Board without shareholder or any
+other action.
+12. Sale of Assets, Stock Exchange, etc. If the Board recommends that the
+Company sell substantially all of its assets, or that the holders of
+substantially all of the shares of outstanding stock sell or exchange their
+shares to or with any person, firm or corporation, or that the Company merge or
+consolidate with another corporation, or that the Company be liquidated and
+dissolved, then in any such event, the Committee may by notice in writing
+mailed or delivered to each holder of an outstanding option set a date (which
+date shall be not less than sixty (60) days from the date of mailing or
+delivering of such written notice) on or before which such outstanding options
+may be exercised, and all such outstanding options which have not been
+exercised on or before such date will thereafter expire and be of no further
+force and effect.
+13. Term of the Plan. The 1998 Non-Qualified Plan shall become effective on
+the date of its approval by the shareholders, and subsequent adoption and
+ratification by the Board, and shall continue in effect until the expiration of
+ten (10) years from the date of such approval by the shareholders unless sooner
+terminated as provided herein. The powers of the Committee shall continue in
+effect after the termination of the 1998 Non-Qualified Plan, until exercise or
+expiration of all options then outstanding.
+14. Amendment and Termination. The Board at any time may amend, suspend or
+terminate the 1998 Non-Qualified Plan . No action of the Board, however, may
+without the written consent of the holder, alter or impair any option
+previously granted under the 1998 Non-Qualified Plan (except pursuant to
+Paragraph 11 or Paragraph 12 above). In addition, except as provided in the
+1998 Non-Qualified Plan, no action of the Board may, unless duly approved by
+the shareholders, (i) increase the maximum number of shares subject to the 1998
+Non-Qualified Plan; (ii) change the option price; (iii) extend the period
+within which options may be granted; (iv) extend the termination date of the
+1998 Non-Qualified Plan; (v) change the class of persons eligible to receive
+options under the 1998 Non-Qualified Plan.
+15. Obligation of the Company to Issue Shares. Notwithstanding any other
+provision of the 1998 Non-Qualified Plan, the Company shall not be obligated to
+issue any shares pursuant to any stock option unless or until:
+(a) the shares with respect to which the option is being exercised have
+been registered under the Securities Act of 1933, as amended, or are exempt
+from such registration;
+(b) the prior approval of such sale or issuance has been obtained from
+any state regulatory body having jurisdiction; and
+(c) in the event the stock has been listed on any stock exchange, the
+shares with respect to which the option is being exercised have been duly
+listed on such exchange in accordance with the procedure specified
+therefor.
+A-4
+EXHIBIT B
+ASTRO-MED, INC.
+Audit Committee Charter
+I.STATEMENT OF PURPOSE
+A. The Board of Directors (the "Board") of Astro-Med, Inc. (the "
+Company") has oversight responsibilities with respect to the Company's
+maintenance of an adequate system of internal control and financial
+reporting. Through this charter, the Board delegates certain duties and
+responsibilities to its Audit Committee (the "Committee") to assist it
+in fulfilling these responsibilities.
+B. The Board recognizes that an informed and vigilant Audit Committee
+represents an effective influence for ensuring adequate internal
+controls and accurate and complete financial reporting. The members of
+the Committee are expected to discharge their duties with the same good
+faith, diligence, care and skill exercised in performing their duties
+as Directors of the Company.
+II.ORGANIZATION and GENERAL
+A. The Committee shall be composed of three independent directors. To be
+considered independent, a member must be a non-management director,
+free from any relationship that, in the opinion of the Board, would
+interfere with the exercise of independent judgment as a Committee
+member.
+B. Each member shall be able to read and understand the Company's
+financial statements and at least one member of the Committee will have
+accounting or related financial management expertise.
+C. The Committee shall have a Chairman, appointed by the Board. A record
+of the Committee's proceedings will be kept.
+D. The Committee shall meet sufficiently often to review the annual
+financial statements, the activities and reports of the independent
+auditor, and other matters requiring consideration by the Committee
+including review of quarterly financial statements as deemed
+appropriate by the Committee consistent with its duties and obligations
+hereunder. The Committee's Chairman may call other meetings during the
+year as necessary.
+E. The Committee shall have the power to adopt its own operating rules and
+procedures and to call upon assistance from officers and employees of
+the Company. The Committee Chairman shall report its activities to the
+full Board following each meeting of the Committee to keep the Board
+informed of Committee activities and findings on a current basis.
+III.OBJECTIVES
+A. The primary responsibilities of the Committee are to:
+1. Oversee the financial reporting process and internal control systems.
+2. Oversee the audit function, both independent and internal.
+3. Recommend to the Board the appointment of independent auditors and
+annually evaluate their independence.
+4. Review compliance with the Corporate Policy on Ethics.
+5. Annually review and assess the adequacy of this charter, amend it as
+appropriate, and seek and receive Board approval of the proposed
+changes.
+B-1
+IV.AUTHORITY
+A. To discharge its oversight responsibilities effectively, the Committee
+will maintain open lines of communication with the Chief Financial
+Officer and with the Company's independent auditors, each of whom will
+have free and direct access to the Committee. The Committee has the
+authority to institute, at its discretion, investigations of suspected
+improprieties, including the standing authority to retain special
+counsel and experts.
+V.DUTIES AND RESPONSIBILITIES
+A. Oversight of Internal Controls
+The Committee shall provide supervisory oversight for and review the
+adequacy of the development and maintenance of the systems of internal
+controls. These controls should be designed to assure that assets are
+safeguarded, transactions are authorized, and that transactions are
+properly recorded. Senior management or the independent auditors may be
+called upon to discuss the control systems and changes thereto as may
+be needed.
+B. Independent Auditors
+Management shall recommend to the Committee the selection, retention,
+or change in the Company's independent auditor. The Committee shall,
+after due consideration of management's recommendations, make its
+recommendation to the Board concerning the selection, retention, or
+change of the independent auditor. The independent auditor is
+accountable to the Board and the Committee. The Board and the Committee
+are authorized and responsible for selecting, evaluating, and where
+appropriate, replacing the outside auditor.
+The independence and objectivity of the independent auditor shall be
+reviewed annually with management and with the independent auditor. To
+assist the Committee, management shall inform the Committee of all
+plans to engage the independent auditor to perform management advisory
+services or other non-audit services for the Company, when the annual
+costs of such services exceed or can reasonably be expected to exceed
+the limits established by the Committee.
+The Committee shall meet with the independent auditor subsequent to
+each audit to review any significant auditing or accounting issues
+encountered during the audit, and the level of support provided by the
+Company's finance department. The independent auditor will also review
+with the Committee any audit findings concerning the adequacy of the
+system of internal controls and compliance therewith, including the
+responses provided by management of any such findings.
+The Committee shall obtain from management a description of issues and
+responses whenever a second opinion is sought from another independent
+public accountant.
+The Committee will obtain an annual written statement from the
+independent auditor delineating all relationships between the auditor
+and the Company. The Committee will also discuss any relationships that
+may impair the auditor's independence and take such actions, or make
+recommendations to the Board regarding actions to be taken to remedy
+such impairment.
+C. Oversight of Financial Reporting
+The annual audited financial statements of the Company shall be
+reviewed by the Committee. The quarterly financial statements shall be
+reviewed by the Committee if the Company's independent
+B-2
+auditor has identified any matters that are required to be communicated
+to the Committee under the auditor's professional standards or as the
+Committee otherwise deems appropriate. The purposes of the reviews
+shall be to evaluate the financial reporting process to reasonably
+assure that the financial statements fairly present the financial
+position and results of operations of the Company in accordance with
+generally accepted accounting principles, consistently applied. The
+Committee shall inquire as to the following:
+. Significant variations in financial information between periods.
+. Changes in accounting standards or rules promulgated by the Financial
+. Accounting Standards Board or the U.S. Securities and Exchange
+Commission that have an impact on the financial statements.
+. Estimates made by management having a material impact on the
+financial statements.
+. Changes in accounting principles adopted by the Company, which have a
+significant impact on the financial statements.
+D. Other
+The Committee will comply with all regulations of the U.S. Securities
+and Exchange Commission and the NASDAQ Stock Market as they relate to
+disclosures and corporate governance.
+The Committee will prepare a report for the annual proxy statement that
+states whether the Committee has reviewed and discussed the audited
+financial statements with management, discuss with the independent
+auditors the matters required by Statement on Auditing Standard No. 61
+(Communication with Audit Committees), and received and discussed with
+the independent auditors the matters required by Independence Standards
+Board No. 1 (Independence Discussions with Audit Committees). The
+report must also state whether, based on the procedures performed, the
+members of the Committee recommended to the Board that the audited
+financial statements be included in the Company's Annual Report on Form
+10-K.
+The Committee shall review annually management's plan for determining
+compliance with the Corporate Policy on Ethics.
+The Committee shall review significant cases of employee conflict of
+interest, misconduct or fraud.
+Where appropriate to protect the assets of the Company and the
+interests of the shareholders, the Committee shall have the authority
+to engage adequate resources and have standing authority to initiate
+investigations, including the authority to retain counsel or other
+outside experts.
+Where appropriate the Company's outside counsel will be asked to meet
+with the Committee. At least annually, the Committee will review a
+report of outstanding litigation against the Company that may have a
+significant impact on the financial statements.
+The Committee will periodically review fees paid for external audit
+services and other consulting fees.
+May 16, 2000,
+as amended March 19, 2001
+B-3
+ASTRO-MED, INC.
+Annual Meeting of Shareholders--May 15, 2001
+The undersigned, whose signature appears on the reverse side of this proxy,
+hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Hermann
+Viets and Neil K. Robertson, or a majority of such of them as shall be present,
+attorneys with power of substitution and with all the powers the undersigned
+would possess if personally present, to vote the stock of the undersigned in
+ASTRO-MED, INC. at the annual meeting of shareholders to be held May 15, 2001,
+in West Warwick, Rhode Island, and at any adjournments thereof, as follows:
+1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY
+(except as marked to the to vote for all
+contrary below) _____________ nominees listed
+below ________________
+Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and
+Neil K. Robertson.
+(INSTRUCTION: to withhold authority to vote for any individual nominee, write
+the nominee's name in the space provided below).
+________________________________________________________________________________
+2. Approve an increase in the maximum number of shares available under the
+Company's 1998 Non-Qualified Stock Option Plan
+FOR ____________ AGAINST ____________ ABSTAIN ____________
+3. In their discretion, upon such other matters as may properly come before the
+meeting.
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
+THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
+FOR THE SPECIFIED NOMINEES IN PROPOSAL 1, AND FOR PROPOSAL 2.
+PLEASE DATE, SIGN AND RETURN THIS PROXY
+Dated _________________________ , 2001 Signed ______________________________
+====================================
+(Sign exactly as your name appears
+hereon. When signing as an attorney,
+executor, administrator, trustee,
+guardian or in a corporate capacity,
+please give full title as such. In case
+of joint tenants or multiple owners, each
+party must sign.)
+====================================
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0000927016-01-500247/proxy_rpt.txt b/raw/proxies/0000008146/0000927016-01-500247/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000008146/0000927016-02-002010/proxy.txt b/raw/proxies/0000008146/0000927016-02-002010/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..3826811e3ed87343374bf789d2c472ce3b209e12
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+++ b/raw/proxies/0000008146/0000927016-02-002010/proxy.txt
@@ -0,0 +1,646 @@
+DEF 14A
+1
+ddef14a.txt
+NOTICE AND PROXY STATEMENT
+--------------------------------
+\ OMB APPROVAL \
+-------------------------------\
+\ OMB Number: 3235-0059 \
+\ Expires: January 31, 2002 \
+\ Estimated average burden \
+\ hours per response....13.12 \
+--------------------------------
+UNITED STATES
+SECURITIES AND EXCHANGE COMMISSION
+WASHINGTON, D.C. 20549
+SCHEDULE 14A
+Proxy Statement Pursuant to Section 14(a) of the Securities
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant [_]
+Filed by a Party other than the Registrant [_]
+Check the appropriate box:
+[_] Preliminary Proxy Statement
+[_] CONFIDENTIAL, FOR USE OF THE
+COMMISSION ONLY (AS PERMITTED BY
+RULE 14A-6(E)(2))
+[X] Definitive Proxy Statement
+[_] Definitive Additional Materials
+[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
+Astro-Med, Inc.
+--------------------------------------------------------------------------------
+(Name of Registrant as Specified In Its Charter)
+--------------------------------------------------------------------------------
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
+Payment of Filing Fee (Check the appropriate box):
+[X] No fee required.
+[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
+(1) Title of each class of securities to which transaction applies:
+-------------------------------------------------------------------------
+(2) Aggregate number of securities to which transaction applies:
+-------------------------------------------------------------------------
+(3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which
+the filing fee is calculated and state how it was determined):
+-------------------------------------------------------------------------
+(4) Proposed maximum aggregate value of transaction:
+-------------------------------------------------------------------------
+(5) Total fee paid:
+-------------------------------------------------------------------------
+[_] Fee paid previously with preliminary materials.
+[_] Check box if any part of the fee is offset as provided by Exchange
+Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration statement
+number, or the Form or Schedule and the date of its filing.
+(1) Amount Previously Paid:
+-------------------------------------------------------------------------
+(2) Form, Schedule or Registration Statement No.:
+-------------------------------------------------------------------------
+(3) Filing Party:
+-------------------------------------------------------------------------
+(4) Date Filed:
+-------------------------------------------------------------------------
+Notes:
+Reg. (S) 240.14a-101.
+SEC 1913 (3-99)
+Astro-Med, Inc.
+Astro-Med Industrial Park
+600 East Greenwich Avenue
+West Warwick, Rhode Island 02893
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
+May 14, 2002
+To the Shareholders of Astro-Med, Inc.:
+Notice is hereby given that the 2002 Annual Meeting of Shareholders of
+Astro-Med, Inc. (the "Company") will be held at the offices of the Company,
+Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode
+Island on Tuesday May 14, 2002, beginning at 10:00 a.m., for the purpose of
+considering and acting upon the following:
+(1) Electing five directors to serve until the next annual meeting of
+shareholders or until their successors are elected and have qualified.
+(2) Transacting such other business as may properly come before the meeting.
+The close of business on March 22, 2002 has been fixed as the record date
+for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof.
+By Order of the Board of Directors
+/s/ Margaret D. Farrell
+Margaret D. Farrell
+Secretary
+April 12, 2002
+Kindly fill in, date and sign the enclosed proxy and promptly return it in
+the enclosed addressed envelope, which requires no postage if mailed in the
+United States. If you are personally present at the meeting, your proxy will
+be returned to you if you desire to vote in person.
+Astro-Med, Inc.
+PROXY STATEMENT
+ANNUAL MEETING OF SHAREHOLDERS
+May 14, 2002
+Solicitation and Revocation of Proxies
+The accompanying proxy is solicited by the Board of Directors of Astro-Med,
+Inc. (herein called the "Company") in connection with the annual meeting of the
+shareholders to be held May 14, 2002. The Company will bear the cost of such
+solicitation. It is expected that the solicitation of proxies will be primarily
+by mail. Proxies may also be solicited personally by regular employees of the
+Company at nominal cost. The Company may reimburse brokerage houses and other
+custodians, nominees and fiduciaries holding stock for others in their names,
+or in those of their nominees, for their reasonable out-of-pocket expenses in
+sending proxy material to their principals or beneficial owners and obtaining
+their proxies. Any shareholder giving a proxy has the power to revoke it at any
+time prior to its exercise, but the revocation of a proxy will not be effective
+until notice thereof has been given to the Secretary of the Company. Every
+properly signed proxy will be voted in accordance with the specification made
+thereon. This proxy statement and the accompanying proxy are expected to be
+first sent to shareholders on or about April 12, 2002.
+Election of Directors
+At the annual meeting, five directors are to be elected to hold office until
+the next annual meeting or until their respective successors are elected and
+qualified. The persons named in the accompanying proxy, who have been
+designated by the Board of Directors, intend to vote, unless otherwise
+instructed, for the election to the Board of Directors of the persons named
+below. Certain information concerning such nominees is set forth below:
+Director
+Name and Age Business Experience During Past Five Years Since
+------------ ------------------------------------------ --------
+Albert W. Ondis (76)..... Chairman of the Company 1969
+Everett V. Pizzuti (65).. President of the Company 1985
+Jacques V. Hopkins (71).. Former Partner, Hinckley, Allen & Snyder LLP
+(Attorneys at Law) (Retired 1997) 1969
+Hermann Viets, Ph.D. (59) President, Milwaukee School of Engineering
+(since 1991) 1988
+Graeme MacLetchie (64)... Director, Deutsche Bank Alex Brown (Private
+Client Division) --
+Mr. Neil Robertson who has so ably served the Company since 1991 has decided
+to retire. We thank Mr. Neil Robertson for his counsel and wisdom during his
+tenure as a Director.
+1
+Voting at Meeting
+Only shareholders of record at the close of business on March 22, 2002 will
+be entitled to vote at the meeting. On the record date, there were 4,267,373
+shares of common stock of the Company outstanding. There was no other
+outstanding class of voting securities. Each shareholder has one vote for every
+share owned.
+Security Ownership of Certain Beneficial Owners and Management
+The following table sets forth as of March 22, 2002 (except as noted) the
+record and beneficial ownership of the Company's outstanding shares of common
+stock by each person who is known to the Company to own of record or
+beneficially more than 5 percent of such stock, by each director of the
+Company, by each executive officer named in the Summary Compensation Table and
+by all directors and executive officers of the Company as a group:
+Number of Shares
+Beneficially Percent
+Name of Beneficial Owner Owned of Class
+------------------------ ---------------- --------
+Albert W. Ondis.................................................... 1,387,215(1) 31.0%
+600 East Greenwich Avenue
+West Warwick, Rhode Island
+Everett V. Pizzuti................................................. 552,407(2) 11.9%
+600 East Greenwich Avenue
+West Warwick, Rhode Island
+Dimensional Fund Advisors, Inc..................................... 346,850(3) 8.1%
+1299 Ocean Avenue
+Santa Monica, California
+Jacqueline B. Ondis................................................ 310,000 7.3%
+40 Oak Grove Street
+Warwick, Rhode Island
+Hermann Viets...................................................... 132,212(4) 3.1%
+Joseph P. O'Connell................................................ 93,593(5) 2.1%
+Terence J. Jones................................................... 68,000(6) 1.6%
+Jacques V. Hopkins................................................. 65,714(7) 1.5%
+John B. Chatten.................................................... 47,271(8) 1.1%
+Neil K. Robertson.................................................. 24,000(9) 1.0%
+Graeme MacLetchie.................................................. 55,000 1.3%
+All directors and executive officers of the Company as a group (13) 2,535,002(10) 48.5%
+--------
+(1) Includes 142,478 shares held in trust for children, 212,000 shares deemed
+to be beneficially owned because of exercisable options to acquire shares
+and 2,850 shares allocated to his account under the Company's Employee
+Stock Ownership Plan.
+(2) Includes 376,750 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 2,903 shares allocated to his
+account under the Company's Employee Stock Ownership Plan.
+2
+(3) Dimensional Fund Advisors Inc. ("Dimensional"), an investment advisor
+registered under Section 203 of the Investment Advisors Act of 1940, is
+deemed to have beneficial ownership of the number of shares shown as of
+December 31, 2001, all of which shares are held in portfolios of DFA
+Investment Dimensions Group Inc., a registered open-end investment company,
+or in a series of the DFA Investment Trust Company, Delaware business
+trust, or the DFA Group Trust and DFA Participation Group Trust, investment
+vehicles for qualified employee benefit plans. Dimensional serves as
+investment advisor or manager to all of such entities. Dimensional
+disclaims beneficial ownership of all such shares.
+(4) Includes 112 shares held by Dr. Viets as custodian for a child and 6,000
+shares deemed to be beneficially owned because of exercisable options to
+acquire shares.
+(5) Includes 92,500 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 815 shares allocated to his
+account under the Company's Employee Stock Ownership Plan.
+(6) Includes 68,000 shares deemed to be beneficially owned because of
+exercisable options to acquire shares.
+(7) Includes 51,214 shares held as a trustee of a trust for the benefit of the
+children of Mr. Ondis, and 6,000 shares deemed to be beneficially owned
+because of exercisable options to acquire shares.
+(8) Includes 46,998 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 273 shares allocated to his
+account under the Company's Employee Stock Ownership Plan.
+(9) Includes 18,000 shares held by Mr. Robertson as trustee of a trust for his
+benefit and 6,000 shares deemed to be beneficially owned because of
+exercisable options to acquire shares.
+(10) Includes 961,998 shares deemed to be beneficially owned because of
+exercisable options to acquire shares and 11,963 shares allocated to the
+accounts of officers under the Company's Employee Stock Ownership Plan.
+Other Information Relating to Directors
+During the fiscal year ended January 31, 2002, the Board of Directors held
+three formal meetings and six meetings by telephone conference. The Board has
+an Audit Committee consisting of Mr. Robertson (Chairman), Dr. Viets and Mr.
+Hopkins, whose primary duties and responsibilities include recommending an
+accounting firm to be engaged as the Company's independent accountants and
+meeting with the Company's independent accountants to review the annual audit
+scope, the audit of financial statements, the adequacy of internal controls and
+other relevant matters. The Audit Committee held one formal committee meeting
+and one meeting by telephone conference during the fiscal year ended January
+31, 2002. The Board has a Compensation Committee comprised of Dr. Viets
+(Chairman), Mr. Robertson and Mr. Hopkins, which reviews and approves
+recommendations on executive compensation and administers the Company's stock
+option plans. The Compensation Committee held two formal meetings during the
+fiscal year ended January 31, 2002. Messrs. Robertson, Hopkins and Viets have
+been paid an annual retainer fee of $3,500 plus $500 for each Board meeting
+attended.
+Those directors who are not also officers and employees of the Company
+receive options to purchase common stock under the Company's Non-Employee
+Director Stock Option Plan (the "Director Plan") as compensation for their
+services to the Company. Under the Director Plan, each non-employee director
+received an initial non-qualified option to purchase 1,000 shares of common
+stock on May 21, 1996, the date the Company's shareholders approved the
+Director Plan. Non-employee directors who are elected after May 21, 1996 will
+receive an initial non-qualified option to purchase 1,000 shares of common
+stock on the date of the director's initial election to the Board of Directors.
+Beginning in 1997, each non-employee director (other than a director first
+elected after June 30 of the prior year) receives an annual non-qualified
+option to purchase 1,000 shares of common stock as of the first business day of
+January of each year. All options have an exercise price
+3
+equal to the market price of the common stock on the day of the grant and are
+exercisable for a term of ten years. Options vest six months after the grant
+date, unless automatically accelerated in the event of death, disability, or a
+change of control. A total of 30,000 shares have been reserved for issuance
+under the Director Plan. Messrs. Hopkins, Robertson and Viets each received
+options to acquire 1,000 shares at $3.75 per share on January 2, 2002. Options
+for an aggregate of 21,000 shares, with an exercise price ranging from $3.75 to
+$9.25 per share were outstanding at January 31, 2002.
+Directors who are also officers and employees of the Company are not
+entitled to receive any compensation in addition to their compensation for
+services as officers or employees.
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a
+retired partner, provides legal services to the Company.
+Other than as described under "Indebtedness of Management", no officer,
+director or nominee for director of the Company or any associate of any of the
+foregoing had during the fiscal year ended January 31, 2002 any material
+interest, direct or indirect, in any material transaction or any material
+proposed transaction to which the Company was or is to be a party.
+Report On Executive Compensation
+The Board of Directors has delegated to the Compensation Committee the
+authority to fix compensation (including stock options) for the Company's key
+employees. The Compensation Committee is comprised of the Company's three
+non-employee directors, Dr. Viets (Chairman), Mr. Robertson and Mr. Hopkins.
+Mr. Ondis meets with the Compensation Committee to review the compensation
+program and make recommendations for senior executive officers. Compensation
+consists of three principal elements (salary, bonus and stock options).
+Executive Compensation Philosophy. Compensation of the Company's executive
+officers should link management initiatives with the actual financial
+performance of the Company. Similarly, the compensation should attract, retain
+and motivate highly qualified individuals to achieve the Company's business
+goals and link their interests with shareholder interests.
+Salary. Base salaries for executive officers were established a number of
+years ago after reviewing compensation for competitive positions at
+manufacturing companies of comparable size and profitability operating in a
+similar industry. Base salaries have since been increased at annual rates which
+approximate the general rates of increase of compensation for all employees of
+the Company and for generally publicized competitive positions elsewhere in
+industry.
+4
+Bonus. The Company maintains a bonus pool for the purpose of providing
+incentives in the form of a quarterly cash bonus to employees of the Company.
+Awards are intended to reflect Company profitability, achievement of overall
+Company objectives and individual performances, considered both in terms of
+effort and results. The size of the bonus pool and of individual awards may
+vary, up or down, from year to year. Bonuses paid or accrued during fiscal
+years 2000 and 2001 amounted to $369,488 ($158,000 to executives) and $225,000
+($28,500 to executives), respectively. No bonus payments were made in fiscal
+year 2002.
+Stock Options. Total executive compensation includes long-term incentives
+afforded by stock options. Stock option grants are made by the Compensation
+Committee upon consideration of recommendations made by senior management. The
+objectives of option grants are to align the long-term interests of executives
+and key employees with shareholder interest, by creating a strong and direct
+link between compensation and total shareholder return. In this connection,
+grants are intended to enable recipients to develop and maintain significant
+long-term stock ownership in the Company. Stock options are the principal
+vehicle for the payment of long-term compensation. Grants of stock options
+reflect subjective consideration of such matters as other compensation and the
+employee's position in the Company and contributions to the Company.
+Compensation of Chief Executive Officer. Mr. Ondis is eligible to
+participate in the same executive compensation plans available to other senior
+executives. Effective in August 2001, his base salary was increased from
+$247,200 to $255,000, representing a 3% increase, deemed consistent with salary
+increases among executives in comparable positions in similar industries.
+Effective in November 2001, his base salary was decreased from $255,000 to
+$229,500, a 10% decrease, as part of a general cost reduction program.
+Non-qualified option grants for 62,000 common shares at an exercise price of
+$4.31 were made to Mr. Ondis during fiscal year 2002.
+Deductibility of Compensation. Section 162(m) of the Internal Revenue Code
+limits the deductibility of compensation paid to a public company's five
+highest paid executive officers to the extent any such officer's annual
+compensation exceeds $1,000,000, subject to certain exceptions. The Board of
+Directors has deferred adopting a policy on this issue as it does not expect
+the compensation of these individuals to reach relevant levels in the near
+future.
+Conclusion. Through the program described above, the Compensation Committee
+firmly believes a direct link has been established between the Company's
+financial performance, executive compensation and resultant stock price
+performance.
+Compensation Committee
+Hermann Viets, Ph.D. (Chairman)
+Neil K. Robertson
+Jacques V. Hopkins
+5
+Executive Compensation
+The following table sets forth the total annual compensation paid or
+accrued, together with other information for the fiscal years ended January 31,
+2002, 2001 and 2000, for the Chief Executive Officer and each of the four most
+highly compensated executive officers of the Company whose total annual salary
+and bonus for the fiscal year ended January 31, 2002 exceeded $100,000.
+Summary Compensation Table
+Annual Compensation
+-------------------------------
+Securities
+Underlying
+Options All Other
+Name and Principal Position Year Salary($) Bonus($) Other ($)(a) Granted(#) Compensation($)(b)
+--------------------------- ---- --------- -------- ------------ ---------- ------------------
+Albert W. Ondis............... 2002 253,837 -- 42,360 62,000 878
+Chairman, Chief 2001 243,324 -- 48,970 75,000 4,561
+Executive Officer 2000 240,220 40,000 37,524 25,000 4,693
+Everett V. Pizzuti............ 2002 231,469 -- 31,820 62,000 2,605
+President, Chief 2001 221,908 -- 38,152 75,000 4,739
+Operating Officer 2000 203,737 40,000 44,561 25,000 4,824
+Terence J. Jones(c)........... 2002 231,079 -- 15,575 10,000 --
+Senior Vice President 2001 100,001 -- 4,200 150,000 --
+2000 -- -- -- -- --
+Joseph P. O'Connell........... 2002 173,304 -- 15,289 50,000 2,513
+Vice President and Treasurer, 2001 158,817 -- 6,812 50,000 4,289
+Chief Financial Officer 2000 145,947 40,000 3,872 20,000 4,841
+John B. Chatten (d)........... 2002 173,510 -- -- 5,000 --
+President, Grass-Telefactor 2001 150,000 -- -- 15,000 2,056
+Product Group 2000 21,635 -- -- 35,000 --
+--------
+(a) Represents imputed interest on indebtedness of management in the amount of
+$16,018 for Mr. Ondis and $6,555 for Mr. Pizzuti and reimbursement for
+taxes attributable to use of Company provided vehicles and cash
+compensation in lieu of Company provided vehicles.
+(b) Amounts consist of the Company's annual matching contributions to the
+Astro-Med, Inc. Retirement Savings Plan.
+(c) Mr. Jones joined the Company in July 2000.
+(d) Mr. Chatten joined the Company in December 1999.
+6
+Indebtedness of Management
+The following information describes loans to directors and executive
+officers of the Company whose indebtedness to the Company exceeded $60,000 at
+any time during the fiscal year ended January 31, 2002.
+Largest
+Amount of Amount of
+Indebtedness Indebtedness
+Outstanding at Outstanding
+Name Any Time at Year End
+---- -------------- ------------
+Albert W. Ondis, Chairman and Director.... $321,640 $321,640
+Everett V. Pizzuti, President and Director 131,624 131,624
+The indebtedness is comprised of unsecured non-interest bearing demand notes
+for loans made from time to time to the persons named.
+Profit-Sharing Plan
+The Company has a qualified Profit-Sharing Plan which provides retirement
+benefits to substantially all employees of the Company and provides for
+contributions into a trust fund in such amounts as the Board of Directors may
+annually determine. Each eligible employee shares in contributions on the basis
+of relative (limited to $170,000) compensation.
+In addition, participants are permitted to defer up to 15% of their cash
+compensation and make contributions of such deferral to this Plan through
+payroll deductions. The Company makes matching contributions equal to 50% of
+the first percent of compensation contributed and 25% of the second, third,
+fourth and fifth percent. The deferrals are made within the limits prescribed
+by Section 401(k) of the Internal Revenue Code.
+The Plan provides for the vesting of 100% of contributions made by the
+Company to the account of an employee after three years of service.
+Contributions by an employee are 100% vested immediately. The Company's
+contributions paid or accrued for the fiscal year ended January 31, 2002
+totaled $155,000.
+Employee Stock Ownership Plan
+The Company has an Employee Stock Ownership Plan which provides retirement
+benefits to substantially all employees of the Company. Contributions in such
+amounts as the Board of Directors may annually determine are allocated among
+eligible employees on the basis of relative (limited to $100,000) compensation.
+Participants are 100% vested in any and all allocations to their accounts.
+Contributions, which may be in cash or stock, are invested by the Plan's
+Trustees in shares of common stock of the Company. No contributions were paid
+or accrued for the fiscal year ended January 31, 2002.
+7
+Stock Option Plans
+The Company has a Non-Qualified Stock Option Plan adopted in the fiscal year
+ended January 31, 1999 and amended in the fiscal year ended January 31, 2002
+under which options for an aggregate of 1,000,000 shares of common stock may be
+granted to officers and key employees as well as consultants or other persons
+who render services to the Company at an exercise price of not less than 50% of
+the market price on the date of grant. Options granted under this plan for an
+aggregate of 124,000 shares, with an exercise price of $4.31 were granted
+during the fiscal year ended January 31, 2002. Options granted under this plan
+for an aggregate of 400,000 shares with exercise prices ranging from $4.31 to
+$7.50 per share were outstanding at January 31, 2002. Options were granted
+subsequent to January 31, 2002 for an aggregate of 172,500 shares with an
+exercise price of $3.70 per share. A total of 427,500 shares remain available
+for option grants under this plan.
+The Company also has an Incentive Stock Option Plan adopted in the fiscal
+year ended January 31, 1994 under which options for an aggregate of 250,000
+shares of common stock may be granted to officers and key employees at an
+exercise price of not less than 100% of the market price on the date of grant.
+Options granted under this plan for an aggregate of 41,000 shares with an
+exercise price of $4.31 were granted during the fiscal year ended January 31,
+2002. Options granted under this plan for an aggregate of 238,500 shares with
+exercise prices ranging from $4.31 to $10.25 per share were outstanding at
+January 31, 2002. Options were granted subsequent to January 31, 2002 for an
+aggregate of 11,500 shares with an exercise price of $3.70 per share. No shares
+remain available for option grants under this plan.
+In addition, the Company has an Incentive Stock Option Plan adopted in the
+fiscal year ended January 31, 1998 and amended in the fiscal years ended
+January 31, 1999 and 2001, under which options for an aggregate of 1,250,000
+shares of common stock may be granted to officers and key employees at an
+exercise price of not less than 100% of the market price on the date of grant.
+Options granted under this plan for an aggregate of 195,000 shares with
+exercise prices ranging from $4.00 to $4.31 were granted during the fiscal year
+ended January 31, 2002. Options granted under this plan for an aggregate of
+679,700 shares with exercise prices ranging from $4.00 to $8.13 per share were
+outstanding at January 31, 2002. Options were granted subsequent to January 31,
+2002 for an aggregate of 246,000 shares with an exercise price of $3.70 per
+share. A total of 314,800 shares remain available for option grants under this
+plan.
+8
+The following tables present certain information concerning stock options
+granted and exercised by each executive officer named in the Summary
+Compensation Table during the fiscal year ended January 31, 2002, and the
+year-end value of unexercised options held by each of those officers.
+Aggregated Options Held at January 31, 2002
+Securities Underlying Value of Unexercised In-The-
+Unexercised Options at Money Options at Fiscal Year
+Fiscal Year End(#) End($)(a)
+------------------------- ----------------------------
+Exercisable Unexercisable Exercisable Unexercisable
+----------- ------------- ----------- -------------
+Albert W. Ondis.... 212,000 -- -- --
+Everett V. Pizzuti. 376,750 23,125 7,031 --
+Terence J. Jones... 68,000 92,000 -- --
+Joseph P. O'Connell 92,500 23,915 -- --
+John B. Chatten.... 46,998 8,002 -- --
+--------
+(a) Amount represents excess of market value as of January 31, 2002 over
+exercise price.
+Option Grants -- Fiscal Year
+Ended January 31, 2002
+% Of Total
+Options Per
+Granted to Share Grant
+Option Employees Exercise Date
+Grants in Fiscal Price Expiration Value
+Name (#) Year ($) Date ($)(e)
+---- ------ ---------- -------- ---------- ------
+Albert W. Ondis.... 62,000(a) 17.2% 4.31 3/19/11 67,580
+Everett V. Pizzuti. 62,000(a) 17.2% 4.31 3/19/11 67,580
+Terence J. Jones... 10,000(b) 2.8% 4.31 3/19/11 10,900
+Joseph P. O'Connell 50,000(d) 13.9% 4.31 3/19/11 54,500
+John B. Chatten.... 5,000(c) 1.4% 4.31 3/19/11 5,450
+--------
+(a) Options became exercisable on October 19, 2001.
+(b) Options will become exercisable on July 31, 2006 and January 1, 2007.
+(c) Options will become exercisable on January 1, 2003.
+(d) Options will become exercisable between October 19, 2001 and January 1,
+2004.
+(e) Amounts represent the fair value of each option granted and were estimated
+as of the date of grant using the Black-Scholes option-pricing model with
+the following weighted average assumptions: expected volatility of 36%;
+expected life of 5 years; risk-free interest rate of 4.1% and dividend
+yield of 4%.
+9
+Performance Graph
+Set forth below is a line graph comparing the cumulative total return on the
+Company's common stock against the cumulative total return of a NASDAQ market
+index and a peer index for the period of five fiscal years ended January 31,
+2002. The University of Chicago's Center for Research in Security Prices (CRSP)
+total return index for the NASDAQ Stock Market is calculated using all
+companies which trade on the NASDAQ National Market System (NMS) or on the
+NASDAQ supplemental listing. It includes both domestic and foreign companies.
+The index is weighted by the then current shares outstanding and assumes
+dividends reinvested. The return is calculated on a monthly basis. The peer
+group index, the CRSP Index for NASDAQ Electronic Components Stock designated
+below as the industry index, is comprised of companies classified as electronic
+equipment manufacturers. The total returns assume $100 invested on February 1,
+1997 with reinvestment of dividends.
+COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
+ASTRO-MED, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX
+[CHART]
+Fiscal Years Ended January 31
+--------------------------------------------------
+1997 1998 1999 2000 2001 2002
+---- ---- ---- ---- ---- ----
+ASTRO-MED, INC. 100 95.26 97.55 75.98 83.42 62.52
+PEER GROUP INDEX 100 98.04 158.06 293.51 239.12 150.25
+NASDAQ MARKET INDEX 100 117.38 180.30 284.47 199.06 138.68
+ASSUMES $100 INVESTED ON FEBRUARY 1, 1997
+ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDING JANUARY 31, 2002
+Fiscal Years Ended January 31
+---------------------------------------
+1997 1998 1999 2000 2001 2002
+---- ------ ------ ------ ------ ------
+Astro-Med, Inc..... 100 95.26 97.55 75.98 83.42 62.52
+Peer Group Index... 100 98.04 158.06 293.51 239.12 150.25
+Nasdaq Market Index 100 117.38 180.30 284.47 199.06 138.68
+10
+Audit Committee Report
+The Audit Committee of the Board is responsible for providing independent,
+objective oversight of the Company's accounting functions and internal
+controls. The Audit Committee is composed of three directors, each of whom is
+independent as defined by the National Association of Securities Dealers'
+listing standards. The Audit Committee operates under a written charter
+approved by the Board of Directors.
+Management is responsible for the Company's internal controls and financial
+reporting process. The independent accountants are responsible for performing
+an independent audit of the Company's consolidated financial statements in
+accordance with generally accepted auditing standards and to issue a report
+thereon. The Audit Committee's responsibility is to monitor and oversee these
+processes.
+The Audit Committee's responsibilities focus on two primary areas: (1) the
+adequacy of the Company's internal controls and financial reporting process and
+the reliability of the Company's financial statements; and (2) the independence
+and performance of the Company's independent accountants.
+The Audit Committee has met with management and the Company's independent
+accountants, Arthur Andersen LLP, to review and discuss the January 31, 2002
+financial statements. Management represented to the Committee that the
+Company's consolidated financial statements were prepared in accordance with
+generally accepted accounting principles, and the Audit Committee has reviewed
+and discussed the consolidated financial statements with management and the
+independent accountants. The Audit Committee also discussed with the Arthur
+Andersen LLP the matters required by Statement on Auditing Standards No.61
+(Communication with Audit Committees). The Audit Committee also received from
+Arthur Andersen LLP written disclosures and the letter regarding independence
+as required by Independence Standards Board Standard No. 1 (Independence
+Discussions with Audit Committee) and has discussed with Arthur Andersen LLP
+that firm's independence.
+The Audit Committee received the following information concerning the fees
+of Arthur Andersen LLP for the year ended January 31, 2002, and has considered
+whether the provision of these services is compatible with maintaining the
+independence of the independent accountants:
+. Audit Fees (including review of interim financial statements included in
+Form 10-Qs)............................................................... $ 119,000
+. Financial Information Systems Design and Implementation Fees.............. $ 0
+. All Other Fees............................................................ $ 27,000
+The Audit Committee has determined that the provision of non-audit services
+by Arthur Andersen LLP is compatible with maintaining that firm's independence.
+Based upon the review and discussions referred to above, we recommended that
+the Board of Director's include the audited consolidated financial statements
+in the Company's Annual Report on Form 10-K for the year ended January 31,
+2002, to be filed with the Securities and Exchange Commission.
+Audit Committee
+Neil K. Robertson (Chairman)
+Hermann Viets, Ph.D.
+Jacques V. Hopkins
+11
+Independent Accountants
+The Company selected Arthur Andersen LLP as independent accountants to audit
+the financial statements of the Company for fiscal year ended January 31, 2002.
+This firm has audited the Company's financial statements annually since the
+fiscal year ended January 31, 1982. Although no accountants have yet been
+selected to audit the financial statements of the Company for the fiscal year
+ending January 31, 2003, the Audit Committee is expected to make its
+recommendation to the Board by April 30, 2002. It is further expected that a
+representative of Arthur Andersen LLP will be present at the annual meeting
+with the opportunity to make a statement, if he or she so desires, and that
+such representative will be available to respond to appropriate questions.
+Financial Reports
+A copy of the annual report of the Company for the fiscal year ended January
+31, 2002 including the Company's annual report to the Securities and Exchange
+Commission on Form 10-K, accompanies this proxy statement. Such report is not
+part of this proxy statement.
+Proposals For 2003 Annual Meeting
+The 2003 annual meeting of the shareholders of the Company is scheduled to
+be held on May 13, 2003. If a shareholder intending to present a proposal at
+that meeting wishes to have such proposal included in the Company's proxy
+statement and form of proxy relating to the meeting, the shareholder must
+submit the proposal to the Company not later than December 15, 2002.
+Other Matters
+No business other than that set forth in the attached Notice of Meeting is
+expected to come before the annual meeting, but should any other matters
+requiring a vote of shareholders arise, including a question of adjourning the
+meeting, the persons named in the accompanying proxy will vote thereon
+according to their best judgment in the interests of the Company. In the event
+any of the nominees for the office of director should withdraw or otherwise
+become unavailable for reasons not presently known, the persons named as
+proxies will vote for other persons in their place in what they consider the
+best interests of the Company.
+You are urged to sign and return your proxy promptly to make certain your
+shares will be voted at the meeting. You may revoke your proxy at any time
+before it is voted.
+By Order of the Board of Directors
+/s/ Margaret D. Farrell
+Margaret D. Farrell
+Secretary
+Dated: April 12, 2002
+12
+ASTRO-MED, INC.
+Annual Meeting of Shareholders--May 14, 2002
+The undersigned, whose signature appears on the reverse side of this proxy,
+hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins and
+Hermann Viets, or a majority of such of them as shall be present, attorneys
+with power of substitution and with all the powers the undersigned would
+possess if personally present, to vote the stock of the undersigned in
+ASTRO-MED, INC. at the annual meeting of shareholders to be held May 14, 2002,
+in West Warwick, Rhode Island, and at any adjournments thereof, as follows:
+1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHOLD AUTHORITY to
+(except asmarked to the vote for all nominees
+contrary below) listed below
+Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and
+Graeme MacLetchie.
+(INSTRUCTION: to withhold authority to vote for any individual nominee, write
+the nominee's name in the space provided below.)
+--------------------------------------------------------------------------------
+2. In their discretion, upon such other matters as may properly come before the
+meeting.
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
+BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
+VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1.
+PLEASE DATE, SIGN AND RETURN THIS PROXY
+Dated____________, 2002
+Signed__________________________________
+--
+(Sign exactly as your name appears hereon. When
+signing as attorney, executor, administrator, trustee,
+guardian or in a corporate capacity, please give full
+title as such. In case of joint tenants or multiple
+owners, each party must sign.)
+--
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
+2
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0000927016-02-002010/proxy_rpt.txt b/raw/proxies/0000008146/0000927016-02-002010/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000008146/0000927016-03-001788/proxy.txt b/raw/proxies/0000008146/0000927016-03-001788/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..fa2e6015041bd0ddcc3d1d55908ca66d94017a50
--- /dev/null
+++ b/raw/proxies/0000008146/0000927016-03-001788/proxy.txt
@@ -0,0 +1,675 @@
+DEF 14A
+1
+ddef14a.htm
+NOTICE & PROXY STATEMENT
+Notice & Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington,
+D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant ¨ 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule
+14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med,
+Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 13, 2003 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2003 Annual Meeting of
+Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode Island on Tuesday May 13, 2003, beginning at 10:00 a.m., for the purpose
+of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 21, 2003 has been fixed as the record date for determining shareholders
+entitled to vote at the Annual Meeting or any adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 11, 2003 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed addressed envelope, which requires no postage if
+mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person. 
+Astro-Med,
+Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 13, 2003 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors
+of Astro-Med, Inc. (herein called the “Company”) in connection with the annual meeting of the shareholders to be held May 13, 2003. The Company will bear the cost of such solicitation. It is expected that the solicitation of proxies will
+be primarily by mail. Proxies may also be solicited personally by regular employees of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in their names, or
+in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to
+its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement
+and the accompanying proxy are expected to be first sent to shareholders on or about April 11, 2003. 
+Election of Directors 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their respective successors are elected and qualified. The persons named in the
+accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons named below. Certain information concerning such nominees is set forth
+below: 
+Name and Age 
+Business Experience During Past Five Years 
+Director Since 
+Albert W. Ondis (77) 
+Chairman of the Company 
+1969 
+Everett V. Pizzuti (66) 
+President of the Company 
+1985 
+Jacques V. Hopkins (72) 
+Former Partner, Hinckley, Allen & Snyder LLP 
+(Attorneys at Law) (Retired 1997) 
+1969 
+Hermann Viets, Ph.D. (60) 
+President, Milwaukee School of Engineering (since 1991) 
+1988 
+Graeme MacLetchie (65) 
+Director, Deutsche Bank Alex Brown (Private Client Division) 
+2002 
+1 
+Voting at Meeting
+Only shareholders of record at the close of
+business on March 21, 2003 will be entitled to vote at the meeting. On the record date, there were 4,270,712 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote
+for every share owned. 
+Security Ownership of Certain
+Beneficial Owners and Management 
+The
+following table sets forth as of March 21, 2003 (except as noted) the record and beneficial ownership of the Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than 5
+percent of such stock, by each director of the Company, by each executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares Beneficially Owned 
+Percent of Class 
+Albert W. Ondis 
+600 East Greenwich Avenue 
+West Warwick,
+Rhode Island 
+1,474,822 
+(1) 
+32.5% 
+Everett V. Pizzuti 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+594,157 
+(2) 
+12.7% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue 
+Santa Monica, California 
+335,850 
+(3) 
+7.9% 
+Jacqueline B. Ondis 
+40 Oak Grove Street 
+Warwick, Rhode Island 
+310,000 
+7.3% 
+Hermann Viets 
+133,212 
+(4) 
+3.1% 
+Joseph P. O’Connell 
+191,366 
+(5) 
+4.3% 
+Elias G. Deeb 
+95,013 
+(6) 
+2.2% 
+Jacques V. Hopkins 
+41,107 
+(7) 
+1.0% 
+John B. Chatten 
+61,973 
+(8) 
+1.4% 
+Graeme MacLetchie 
+56,000 
+(9) 
+1.3% 
+All directors and executive officers of the Company as a group (12) 
+2,769,968 
+(10) 
+51.0% 
+(1) 
+Includes 142,478 shares held in trust for children, 274,000 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,850 shares
+allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(2) 
+Includes 418,500 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,903 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+2 
+(3) 
+Dimensional Fund Advisors Inc. (“Dimensional”), an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, is deemed to
+have beneficial ownership of the number of shares shown as of December 31, 2002, all of which shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in a series of the DFA Investment Trust
+Company, Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans. Dimensional serves as investment advisor or manager to all of such entities. Dimensional disclaims
+beneficial ownership of all such shares. 
+(4) 
+Includes 112 shares held by Dr. Viets as custodian for a child and 7,000 shares deemed to be beneficially owned because of exercisable options to acquire shares.
+(5) 
+Includes 190,273 shares deemed to be beneficially owned because of exercisable options to acquire shares and 815 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(6) 
+Includes 83,500 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,061 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(7) 
+Includes 25,607 shares held as a trustee of a trust for the benefit of a child of Mr. Ondis, and 7,000 shares deemed to be beneficially owned because of exercisable
+options to acquire shares. 
+(8) 
+Includes 60,000 shares deemed to be beneficially owned because of exercisable options to acquire shares and 273 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(9) 
+Includes 1,000 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(10) 
+Includes 1,158,023 shares deemed to be beneficially owned because of exercisable options to acquire shares and 12,670 shares allocated to the accounts of officers
+under the Company’s Employee Stock Ownership Plan. 
+Other Information Relating to Directors 
+During the fiscal year ended January 31, 2003, the Board of Directors held four formal meetings and five meetings by telephone conference. The Board has an Audit Committee consisting of Mr. Hopkins (Chairman), Dr. Viets and Mr.
+MacLetchie, whose primary duties and responsibilities include recommending an accounting firm to be engaged as the Company’s independent accountants and meeting with the Company’s independent accountants to review the annual audit scope,
+the audit of financial statements, the adequacy of internal controls and other relevant matters. The Audit Committee held three formal committee meeting and three meetings by telephone conference during the fiscal year ended January 31, 2003. The
+Board has a Compensation Committee comprised of Dr. Viets (Chairman), Mr. MacLetchie and Mr. Hopkins, which reviews and approves recommendations on executive compensation and administers the Company’s stock option plans. The Compensation
+Committee held one formal meeting during the fiscal year ended January 31, 2003. Messrs. MacLetchie, Hopkins and Viets have been paid an annual retainer fee of $3,500 plus $500 for each Board meeting attended. 
+Those directors who are not also officers and employees of the
+Company receive options to purchase common stock under the Company’s Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the Director Plan, Messrs. Hopkins and Viets
+each received non-qualified option to purchase 1,000 shares of common stock on May 21, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a non-qualified option to purchase 1,000 share of common
+stock upon his initial election to the Board of Director in May 2002, Any non-employee director who is elected in the future will receive non-qualified option to purchase 1,000 shares of common stock on the date of the director’s initial
+election to the Board of Directors. Each non-employee director (other than a director first elected after June 30 of the prior year) receives an annual non-qualified option to 
+3 
+purchase 1,000 shares of common stock as of the first business day of January of each year. All options have an exercise price equal to the
+market price of the common stock on the day of the grant and are exercisable for a term of ten years. Options vest six months after the grant date, unless automatically accelerated in the event of death, disability, or a change of control. A total
+of 30,000 shares have been reserved for issuance under the Director Plan. Mr MacLetchie received options to acquire 1,000 shares at $4.43 per share on May 14, 2002, the date of his initial election to the Board of Directors. Messrs. Hopkins,
+MacLetchie and Viets each received options to acquire 1,000 shares at $3.20 per share on January 2, 2003. Options for an aggregate of 24,000 shares, with exercise prices ranging from $3.20 to $9.25 per share were outstanding at January 31, 2003. On
+March 24, 2003, Messrs. Hopkins, MacLetchie and Viets agreed to cancel the options of January 2, 2003. 
+Directors who are also officers and employees of the Company are not entitled to receive any compensation in addition to their
+compensation for services as officers or employees. 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+Other than as described under “Indebtedness of Management”, no officer, director or nominee for director of the Company or any
+associate of any of the foregoing had during the fiscal year ended January 31, 2003 any material interest, direct or indirect, in any material transaction or any material proposed transaction to which the Company was or is to be a party.
+Report On Executive Compensation 
+The Board of Directors has delegated to the Compensation
+Committee the authority to fix compensation (including stock options) for the Company’s key employees. The Compensation Committee is comprised of the Company’s three non-employee directors, Dr. Viets (Chairman), Mr. MacLetchie and Mr.
+Hopkins. Mr. Ondis meets with the Compensation Committee to review the compensation program and make recommendations for senior executive officers. Compensation consists of three principal elements (salary, bonus and stock options). 
+Executive Compensation
+Philosophy. Compensation of the Company’s executive officers should link management initiatives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate
+highly qualified individuals to achieve the Company’s business goals and link their interests with shareholder interests. 
+Salary. Base salaries for executive officers were established a number of years ago after reviewing
+compensation for competitive positions at manufacturing companies of comparable size and profitability operating in a similar industry. Base salaries have since been increased at annual rates which approximate the general rates of increase of
+compensation for all employees of the Company and for generally publicized competitive positions elsewhere in industry. Effective November, 2001, the base salaries of executives were reduced as part of a general cost reduction program, with the
+results that base salaries for fiscal 2003 were at or below fiscal 2002 levels. 
+Bonus. The Compensation Committee adopted a management bonus plan for the purpose of providing incentive compensation to employees of the Company. Awards are based on the
+Company’s achieving specified financial objectives, such as net income and return on net assets, as well as each individual’s specific business objectives. The specified threshold and target financial objectives and business objectives and
+the related bonus payouts are established annually and, accordingly, individual awards may vary, up or down, from year to year. No bonus payments were made in fiscal years 2002 and 2003. 
+4 
+Stock
+Options. Total executive compensation includes long-term incentives afforded by stock options. Stock option grants are made by the Compensation Committee upon consideration of recommendations made by senior management. The
+objectives of option grants are to align the long-term interests of executives and key employees with shareholder interests, by creating a strong and direct link between compensation and total shareholder return. In this connection, grants are
+intended to enable recipients to develop and maintain significant long-term stock ownership in the Company. Stock options are the principal vehicle for the payment of long-term compensation. Grants of stock options reflect subjective consideration
+of such matters as other compensation and the employee’s position in the Company and contributions to the Company. 
+Compensation of Chief Executive Officer. Mr. Ondis is eligible to participate in the same executive
+compensation plans available to other senior executives. Effective in November 2001, his base salary was decreased from $255,000 to $229,500, a 10% decrease, as part of a general cost reduction program. Non-qualified option grants for 62,000 common
+shares at an exercise price of $3.70 were made to Mr. Ondis during fiscal year 2003. 
+Deductibility of Compensation . Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid to a public company’s five highest paid
+executive officers to the extent any such officer’s annual compensation exceeds $1,000,000, subject to certain exceptions. The Board of Directors has deferred adopting a policy on this issue, as it does not expect the compensation of these
+individuals to reach relevant levels in the near future. 
+Conclusion. Through the program described above, the Compensation Committee firmly believes a direct link has been established between the Company’s financial performance, executive compensation and
+resultant stock price performance. 
+Compensation Committee 
+Hermann Viets, Ph.D. (Chairman) 
+Graeme MacLetchie 
+Jacques V. Hopkins 
+5 
+Executive Compensation
+The following table sets forth the total
+annual compensation paid or accrued, together with other information for the fiscal years ended January 31, 2003, 2002 and 2001, for the Chief Executive Officer and each of the four most highly compensated executive officers of the Company whose
+total annual salary and bonus for the fiscal year ended January 31, 2003 exceeded $100,000. 
+Summary Compensation Table 
+Annual Compensation 
+Name and Principal Position 
+Year 
+Salary($) 
+Bonus($) 
+Other ($)(a) 
+Securities 
+Underlying 
+Options Granted(#) 
+All Other 
+Compensation($)(b) 
+Albert W. Ondis 
+Chairman, Chief 
+Executive Officer 
+2003 
+2002 
+2001 
+225,087 
+253,837 
+243,324 
+— 
+— 
+— 
+31,237 
+42,360 
+48,970 
+62,000 
+62,000 
+75,000 
+2,301 
+878 
+4,561 
+Everett V. Pizzuti 
+President, Chief 
+Operating Officer 
+2003 
+2002 
+2001 
+215,117 
+231,469 
+221,908 
+— 
+— 
+— 
+29,068 
+31,820 
+38,152 
+62,000 
+62,000 
+75,000 
+2,939 
+2,605 
+4,739 
+Joseph P. O’Connell 
+Vice President and Treasurer, 
+Chief Financial Officer 
+2003 
+2002 
+2001 
+158,395 
+173,304 
+158,817 
+— 
+— 
+— 
+15,434 
+15,289 
+6,812 
+48,500 
+50,000 
+50,000 
+2,376 
+2,513 
+4,289 
+John B. Chatten 
+President, Grass-Telefactor 
+Product Group 
+2003 
+2002 
+2001 
+140,222 
+173,510 
+150,000 
+— 
+— 
+— 
+— 
+— 
+— 
+5,000 
+5,000 
+15,000 
+— 
+— 
+2,056 
+Elias G. Deeb 
+Vice President, Media Products 
+2003 
+2002 
+2001 
+130,492 
+136,424 
+129,528 
+— 
+— 
+10,000 
+— 
+— 
+— 
+15,000 
+5,000 
+15,000 
+1,949 
+2,145 
+3,955 
+(a) 
+Represents imputed interest on indebtedness of management in the amount of $8,942 for Mr. Ondis and $3,659 for Mr. Pizzuti and reimbursement for taxes attributable
+to use of Company provided vehicles and cash compensation in lieu of Company provided vehicles. 
+(b) 
+Amounts consist of the Company’s annual matching contributions to the Astro-Med, Inc. Retirement Savings Plan. 
+Indebtedness of Management 
+The following information describes loans to directors and
+executive officers of the Company whose indebtedness to the Company exceeded $60,000 at any time during the fiscal year ended January 31, 2003. 
+Name 
+Largest 
+Amount of 
+Indebtedness 
+Outstanding at 
+Any Time 
+Amount of 
+Indebtedness 
+Outstanding at 
+Year End 
+Albert W. Ondis, Chairman and Director 
+$ 
+321,640 
+$ 
+321,640 
+Everett V. Pizzuti, President and Director 
+131,624 
+131,624 
+6 
+The
+indebtedness is comprised of unsecured non-interest bearing demand notes for loans made to the persons named prior to fiscal year 1992. 
+Profit-Sharing Plan 
+The Company has a qualified Profit-Sharing Plan which provides retirement benefits to substantially all employees of the Company and
+provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $200,000) compensation. 
+In addition, participants are permitted to defer up to 15% of
+their cash compensation and make contributions of such deferral to this Plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation contributed and 25% of the second, third, fourth and
+fifth percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code. 
+The Plan provides for the vesting of 100% of contributions made by the Company to the account of an employee after three years of service.
+Contributions by an employee are 100% vested immediately. The Company’s contributions paid or accrued for the fiscal year ended January 31, 2003 totaled $149,000. 
+Employee Stock Ownership Plan 
+The Company has an Employee Stock Ownership Plan which provides retirement benefits to substantially all
+employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all
+allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s Trustees in shares of common stock of the Company. No contributions were paid or accrued for the fiscal year ended January 31, 2003.
+Stock Option Plans 
+The Company has a Non-Qualified Stock Option Plan adopted in
+the fiscal year ended January 31, 1999 and amended in the fiscal year ended January 31, 2002 under which options for an aggregate of 1,000,000 shares of common stock may be granted to officers and key employees as well as consultants or other
+persons who render services to the Company at an exercise price of not less than 50% of the market price on the date of grant. Options granted under this plan for an aggregate of 172,500 shares, with an exercise price of $3.70 were granted during
+the fiscal year ended January 31, 2003. Options granted under this plan for an aggregate of 572,500 shares with exercise prices ranging from $3.70 to $7.50 per share were outstanding at January 31, 2003. Options were granted subsequent to January
+31, 2003 for an aggregate of 25,200 shares with an exercise price of $3.30 per share. A total of 402,300 shares remain available for option grants under this plan. 
+The Company also has an Incentive Stock Option Plan adopted in the fiscal year ended January 31, 1994 under
+which options for an aggregate of 250,000 shares of common stock may be granted to officers and key employees at an exercise price of not less than 100% of the market price on the date of grant. Options granted under this plan for an aggregate of
+11,500 shares with an exercise price of $3.70 were granted during the fiscal year ended January 31, 2003. Options granted under this plan for an aggregate of 238,000 shares with exercise prices ranging from $3.70 to $10.25 per share were outstanding
+at January 31, 2003. Options were granted subsequent to January 31, 2003 for an aggregate of 12,000 shares with an exercise price of $3.30 per share. No shares remain available for option grants under this plan. 
+7 
+In addition,
+the Company has an Incentive Stock Option Plan adopted in the fiscal year ended January 31, 1998 and amended in the fiscal years ended January 31, 1999 and 2001, under which options for an aggregate of 1,250,000 shares of common stock may be granted
+to officers and key employees at an exercise price of not less than 100% of the market price on the date of grant. Options granted under this plan for an aggregate of 246,000 shares with an exercise price of $3.70 were granted during the fiscal year
+ended January 31, 2003. Options granted under this plan for an aggregate of 905,200 shares with exercise prices ranging from $3.70 to $8.13 per share were outstanding at January 31, 2003. Options were granted subsequent to January 31, 2003 for an
+aggregate of 115,000 shares with an exercise price of $3.30 per share. A total of 220,300 shares remain available for option grants under this plan. 
+The following tables present certain information concerning stock options granted and exercised by each executive officer named in the
+Summary Compensation Table during the fiscal year ended January 31, 2003, and the year-end value of unexercised options held by each of those officers. No options were exercised by any of these executive officers during the fiscal year ended January
+31, 2003. 
+Aggregated Options Held at January
+31, 2003 
+Name 
+Securities Underlying 
+Unexercised Options at 
+Fiscal Year
+End(#) 
+Value of Unexercised In- 
+The-Money Options at 
+Fiscal Year
+End($)(a) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Albert W. Ondis 
+274,000 
+— 
+— 
+— 
+Everett V. Pizzuti 
+418,500 
+13,375 
+3,656 
+— 
+Joseph P. O’Connell 
+190,273 
+727 
+— 
+— 
+John B. Chatten 
+60,000 
+— 
+— 
+— 
+Elias G. Deeb 
+83,500 
+— 
+— 
+— 
+(a) 
+Amount represents excess of market value as of January 31, 2003 over exercise price. 
+Option Grants — Fiscal Year 
+Ended January 31, 2003 
+Name 
+Option Grants (#) 
+% Of Total 
+Options Granted to Employees in Fiscal Year 
+Per Share Exercise Price ($ 
+Expiration 
+Date 
+Grant Date 
+Value ($)(e) 
+Albert W. Ondis 
+62,000 
+(a) 
+14.4 
+% 
+3.70 
+3/18/12 
+68,200 
+Everett V. Pizzuti 
+62,000 
+(a) 
+14.4 
+% 
+3.70 
+3/18/12 
+68,200 
+Joseph P. O’Connell 
+48,500 
+(a) 
+11.3 
+% 
+3.70 
+3/18/12 
+53,350 
+John B. Chatten 
+5,000 
+(b) 
+1.2 
+% 
+3.70 
+3/18/12 
+5,500 
+Elias G. Deeb 
+15,000 
+(a) 
+3.5 
+% 
+3.70 
+3/18/12 
+16,500 
+(a) 
+Options became exercisable on October 18, 2002. 
+(b) 
+Options became exercisable on January 1, 2003. 
+(c) 
+Amounts represent the fair value of each option granted and were estimated as of the date of grant using the Black-Scholes option-pricing model with the following
+weighted average assumptions: expected volatility of 45%; expected life of 5 years; risk-free interest rate of 3.5% and dividend yield of 4.3%. 
+8 
+Performance Graph
+Set forth below is a line graph comparing
+the cumulative total return on the Company’s common stock against the cumulative total return of a NASDAQ market index and a peer index for the period of five fiscal years ended January 31, 2003. The University of Chicago’s Center for
+Research in Security Prices (CRSP) total return index for the NASDAQ Stock Market is calculated using all companies which trade on the NASDAQ National Market System (NMS) or on the NASDAQ supplemental listing. It includes both domestic and foreign
+companies. The index is weighted by the then current shares outstanding and assumes dividends reinvested. The return is calculated on a monthly basis. The peer group index, the CRSP Index for NASDAQ Electronic Components Stock designated below as
+the industry index, is comprised of companies classified as electronic equipment manufacturers. The total returns assume $100 invested on February 1, 1998 with reinvestment of dividends. 
+COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG 
+ASTRO-MED, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX 
+ASSUMES
+$100 INVESTED ON FEBRUARY 1, 1998 
+ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDING JANUARY 31, 2003 
+Fiscal Years Ended January 31 
+1998 
+1999 
+2000 
+2001 
+2002 
+2003 
+Astro-Med, Inc. 
+100 
+102.40 
+79.76 
+87.57 
+65.64 
+57.10 
+Peer Group Index 
+100 
+161.22 
+299.40 
+243.93 
+153.21 
+77.19 
+Nasdaq Market Index 
+100 
+156.49 
+244.12 
+171.06 
+120.13 
+82.78 
+9 
+Audit Committee Report
+The Audit Committee of the Board is
+responsible for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards.
+The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s
+consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two
+primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence and performance of the Company’s independent
+accountants. 
+The Audit Committee has met with
+management and the Company’s independent accountants, Ernst & Young LLP, to review and discuss the January 31, 2003 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were
+prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with
+the Ernst & Young LLP the matters required by Statement on Auditing Standards No. 61 ( Communication with Audit Committees ). The Audit Committee also received from Ernst & Young LLP written disclosures and the letter regarding
+independence as required by Independence Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Ernst & Young LLP that firm’s independence. 
+The Audit Committee received the following information
+concerning the fees of Ernst & Young LLP for the year ended January 31, 2003, and has considered whether the provision of these services is compatible with maintaining the independence of the independent accountants: 
+Ÿ Audit Fees (including review of interim financial statements included in Form 10-Qs) 
+$ 
+93,800 
+Ÿ Financial Information Systems Design and Implementation Fees 
+$ 
+0 
+Ÿ All Other Fees 
+$ 
+17,500 
+The
+Audit Committee has determined that the provision of non-audit services by Ernst & Young LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, we recommended that the Board of Director’s include the audited consolidated
+financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2003, to be filed with the Securities and Exchange Commission. 
+Audit Committee 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+10 
+Independent Accountants
+The Company selected Ernst & Young LLP
+as independent accountants to audit the financial statements of the Company for fiscal year ended January 31, 2003. Although no accountants have yet been selected to audit the financial statements of the Company for the fiscal year ending January
+31, 2004 it is expected that the Audit Committee will recommend Ernst & Young LLP to the Board. It is further expected that a representative of Ernst & Young LLP will be present at the annual meeting with the opportunity to make a statement,
+if he or she so desires, and that such representative will be available to respond to appropriate questions. 
+Financial Reports 
+A copy of the annual report of the Company for the fiscal year ended January 31, 2003 including the Company’s annual report to the Securities and Exchange Commission on Form 10-K, accompanies this proxy statement. Such
+report is not part of this proxy statement. 
+Proposals For
+2004 Annual Meeting 
+The 2004 annual meeting
+of the shareholders of the Company is scheduled to be held on May 12, 2004. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to
+the meeting, the shareholder must submit the proposal to the Company not later than December 15, 2003. 
+Other Matters 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a question of adjourning
+the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or otherwise become unavailable
+for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your shares will be voted at the
+meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+Dated: April 11, 2003 
+11 
+ASTRO-MED,
+INC. 
+Annual Meeting of Shareholders—May 13, 2003 
+The undersigned, whose signature appears on
+the reverse side of this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the
+powers the undersigned would possess if personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 13, 2003, in West Warwick, Rhode Island, and at any adjournments thereof, as
+follows: 
+1. ELECTION OF DIRECTORS 
+FOR all nominees listed below 
+(except as marked to the contrary below) 
+WITHHOLD AUTHORITY to vote for all nominees listed
+below 
+Albert
+W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Graeme MacLetchie. 
+(INSTRUCTION: to withhold authority
+to vote for any individual nominee, write the nominee’s name in the space provided below.) 
+2. In their discretion, upon such other matters as may properly come before the meeting. 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
+THIS PROXY WILL BE VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+PLEASE DATE,
+SIGN AND RETURN THIS PROXY 
+Dated 
+, 2003
+Signed 
+(Sign exactly as your name appears hereon. When signing as attorney, executor, administrator,
+trustee, guardian or in a corporate capacity, please give full title as such. In case of joint tenants or multiple owners, each party must sign.) 
+THIS
+PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0000927016-03-001788/proxy_rpt.txt b/raw/proxies/0000008146/0000927016-03-001788/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000008146/0001193125-04-059642/proxy.txt b/raw/proxies/0000008146/0001193125-04-059642/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ec8ceb3f32cd2330afadd55afba2c32e8e7ee58a
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-04-059642/proxy.txt
@@ -0,0 +1,958 @@
+DEF 14A
+1
+ddef14a.htm
+PROXY STATEMENT PURSUANT TO SECTION 14(A)
+PROXY STATEMENT PURSUANT TO SECTION 14(a) 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant ¨ 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing
+Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 11, 2004 
+To 
+the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2004 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the
+Company, Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode Island on Tuesday May 11, 2004, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 26, 2004 has been fixed as the record date for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof. 
+By Order of the Board
+of Directors 
+Margaret D. Farrell 
+Secretary 
+April 
+12, 2004 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the meeting, your
+proxy will be returned to you if you desire to vote in person. 
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 11, 2004 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual meeting of the shareholders to be held May 11, 2004. The Company
+will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by regular employees of the Company at nominal cost. The Company may reimburse brokerage
+houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and
+obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every
+properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders on or about April 12, 2004. 
+Election of Directors 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their
+respective successors are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons
+named below. Certain information concerning such nominees is set forth below: 
+Name and Age 
+Business Experience During Past Five Years 
+Director 
+Since 
+Albert W. Ondis (78) 
+Chairman of the Company 
+1969 
+Everett V. Pizzuti (67) 
+President of the Company 
+1985 
+Jacques V. Hopkins (73) 
+Former Partner, Hinckley, Allen & Snyder LLP (Attorneys at Law) (Retired 1997) 
+1969 
+Hermann Viets, Ph.D. (61) 
+President, Milwaukee School of Engineering (since 1991); Director, Gehl Company (farm equipment) 
+1988 
+Graeme MacLetchie (66) 
+Director, Deutsche Bank Alex Brown (Private Client Division) 
+2002 
+1 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 26, 2004 will be entitled to vote at the meeting. On the record date, there were 4,743,501
+shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of March 26, 2004 (except as noted) the record and beneficial ownership of the
+Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than 5 percent of such stock, by each director of the Company, by each executive officer named in the Summary
+Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned 
+Percent 
+of Class 
+Albert W. Ondis 
+1,474,911 
+(1) 
+29.4 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Everett V. Pizzuti 
+472,043 
+(2) 
+9.4 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Dimensional Fund Advisors, Inc. 
+245,100 
+(3) 
+5.2 
+% 
+1299 Ocean Avenue 
+Santa Monica, California 
+Jacqueline B. Ondis 
+310,000 
+6.5 
+% 
+40 Oak Grove Street 
+Warwick, Rhode Island 
+Hermann Viets 
+133,212 
+(4) 
+2.8 
+% 
+Joseph P. O’Connell 
+192,093 
+(5) 
+3.9 
+% 
+Elias G. Deeb 
+92,013 
+(6) 
+1.9 
+% 
+Jacques V. Hopkins 
+41,107 
+(7) 
+0.9 
+% 
+Michael J. Sullivan 
+43,007 
+(8) 
+0.9 
+% 
+Graeme MacLetchie 
+56,000 
+(9) 
+1.2 
+% 
+All directors and executive officers of the Company as a group (12) 
+2,613,220 
+(10) 
+45.5 
+% 
+(1) 
+Includes 142,478 shares held in trust for children, 274,000 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,850 shares allocated to his
+account under the Company’s Employee Stock Ownership Plan. 
+(2) 
+Includes 296,225 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,903 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(3) 
+Dimensional Fund Advisors Inc. (“Dimensional”), an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2003, all of which shares are held in portfolios of DFA Investment Dimensions Group Inc., a registered open-end investment company, or in a series of the DFA Investment Trust Company,
+Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans. Dimensional serves as investment advisor or manager to all of such entities. Dimensional disclaims
+beneficial ownership of all such shares. 
+2 
+(4) 
+Includes 112 shares held by Dr. Viets as custodian for a child and 7,000 shares deemed to be beneficially owned because of exercisable options to acquire shares.
+(5) 
+Includes 191,000 shares deemed to be beneficially owned because of exercisable options to acquire shares and 815 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(6) 
+Includes 80,500 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,061 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(7) 
+Includes 25,607 shares held as a trustee of a trust for the benefit of a child of Mr. Ondis, and 7,000 shares deemed to be beneficially owned because of exercisable options to
+acquire shares. 
+(8) 
+Includes 39,500 shares deemed to be beneficially owned because of exercisable options to acquire shares and 273 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(9) 
+Includes 1,000 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(10) 
+Includes 1,002,725 shares deemed to be beneficially owned because of exercisable options to acquire shares and 12,670 shares allocated to the accounts of officers under the
+Company’s Employee Stock Ownership Plan. 
+Meetings and
+Committees 
+During the fiscal year ended January 31, 2004,
+the Board of Directors held four formal meetings and two meetings by telephone conference. The Board of Directors has adopted a policy that requires members of the Board to make every effort to attend each annual shareholders meeting. All members of
+the Board of Directors attended the 2003 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee, which was formed in March 2004. The members and chairs of each of those committees are appointed each
+year. Membership of the Audit, Compensation or Nominating Committee is comprised of the Company’s three outside directors, Messrs. Hopkins and MacLetchie and Dr. Viets, all of whom are independent as defined under the applicable NASDAQ listing
+standards and Securities and Exchange Commission (“SEC”) rules. 
+Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board of Directors. A copy of each charter is available on the Company’s website at www.astromed.com under
+“Investor Relations – Corporate Governance”. Additionally, a copy of the Audit Committee Charter is included as Appendix A to this Proxy Statement. 
+Audit Committee . The Audit Committee’s primary duties and responsibilities include overseeing the integrity of
+the Company’s financial reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence and performance of the Company’s independent accountants and
+the adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the annual audit scope, the results of the audit and other relevant matters. Mr. Hopkins serves as
+Chairman of the Audit Committee, which held three in person meetings and one meeting by telephone conference during the fiscal year ended January 31, 2004. The Board of Directors has determined that all three members of the Audit Committee satisfy
+the financial literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that Graeme MacLetchie satisfies
+the “financial sophistication” requirement of the NASDAQ listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial expert” as defined by the SEC rules, which, in the view of the
+Board of Directors, require an advanced understanding of internal controls and procedures. However, the Board believes that the members of the Audit Committee have a thorough understanding of the Company’s business, the accounting issues
+relevant to the Company’s financial statements and audit committee functions and possess the requisite skills to perform effectively their oversight function. The Audit Committee members expect to increase their understanding of internal
+controls and procedures as the Company assesses and evaluates its internal control processes and procedures in order to provide the attestation report on internal control over financial reporting that the Company must file with respect to its fiscal
+year ending January 31, 2006. 
+3 
+Compensation Committee. The Compensation Committee assists the Board of Directors in discharging
+the Board’s responsibilities relating to director and executive compensation. The Compensation Committee’s responsibilities include establishing and reviewing the Company’s executive and director compensation philosophy, strategies,
+plans and policies, making recommendations with respect to the design of the Company’s incentive compensation plans and equity based plans, granting awards under such plans and overseeing generally the administration of such plans, evaluating
+the performance and determining the compensation of the Chief Executive Officer and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the Compensation Committee, which held one in person
+meeting and one meeting by telephone during the fiscal year ended January 31, 2004. 
+Nominating Committee . The Nominating Committee is responsible for: identifying individuals qualified to be members of the Board of Directors and recommending such individuals to be nominated by the Board of
+Directors for election to the Board of Directors by the shareholders. The Nominating Committee was formed in March 2004 and, accordingly, did not hold any meetings in the fiscal year ended January 31, 2004. Dr. Viets serves as chairman of the
+Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including
+shareholders, regarding possible candidates for director. The Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that
+reflects superior standards for themselves and others, have the ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the
+Company’s needs and advance the long-term interests of the shareholders. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. The Nominating Committee must also ensure that members of the Board of
+Directors as a group maintain the requisite qualifications under the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same
+manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees to the Nominating Committee at the Company’s offices at 600 East Greenwich, West Warwick, Rhode Island 02893. Submissions should include information regarding a
+candidate’s background, qualifications, experience and willingness to serve as a director. In addition, Section 10 of Article II of the Company’s By-Laws set forth specific procedures that, if followed, enable any shareholder entitled to
+vote in the election of directors to make nominations directly at an annual meeting of shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the
+name and certain information concerning the nominee and the Shareholders who support the nominee’s election. For the annual meeting to be held in 2005, the notice deadline under the By-Laws is March 11, 2005. A copy of this By-Law provision may
+be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department, 600 East Greenwich, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the
+individual chairman of standing committees. Any shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors
+by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich, West Warwick, Rhode Island 02893. The Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s corporate
+offices that is sent directly to an individual unless the Company believes the communication may pose a security risk. 
+4 
+Compensation of Directors 
+Messrs. Hopkins, MacLetchie and Viets are paid an annual retainer of $3,500 plus $500 for each Board meeting attended.
+Directors who are also officers or employees of the Company are not entitled to receive any compensation in addition to their compensation for services as officers or employees. 
+Those directors who are not also officers and employees of the Company receive options to purchase common stock under the
+Company’s Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the Director Plan, Messrs. Hopkins and Viets each received non-qualified option to purchase 1,000 shares
+of common stock on May 21, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a non-qualified option to purchase 1,000 share of common stock upon his initial election to the Board of Director in May
+2002, Any non-employee director who is elected in the future will receive non-qualified option to purchase 1,000 shares of common stock on the date of the director’s initial election to the Board of Directors. Each non-employee director (other
+than a director first elected after June 30 of the prior year) receives an annual non-qualified option to purchase 1,000 shares of common stock as of the first business day of January of each year. All options have an exercise price equal to the
+market price of the common stock on the day of the grant and are exercisable for a term of ten years. Options vest six months after the grant date, unless automatically accelerated in the event of death, disability, or a change of control. A total
+of 30,000 shares have been reserved for issuance under the Director Plan. Messrs. Hopkins, MacLetchie and Viets each received options to acquire 1,000 shares at $13.18 per share on January 2, 2004. Options for an aggregate of 24,000 shares, with
+exercise prices ranging from $3.75 to $13.18 per share were outstanding under the Director Plan at January 31, 2004. 
+Other Information Relating to Directors 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+Other than as described under “Indebtedness of Management”, no
+officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2004 any material interest, direct or indirect, in any material transaction or any material proposed
+transaction to which the Company was or is to be a party. 
+Report On
+Executive Compensation 
+The Board of Directors has
+delegated to the Compensation Committee the authority to fix compensation (including stock options) for the Company’s Chief Executive Officer and other key employees. The Compensation Committee is comprised of the Company’s three
+non-employee directors, Dr. Viets (Chairman), Mr. MacLetchie and Mr. Hopkins. Mr. Ondis meets with the Compensation Committee to review the compensation program and make recommendations for senior executive officers. Compensation consists of three
+principal elements (salary, bonus and stock options). 
+Executive Compensation Philosophy. Compensation of the Company’s executive officers should link management initiatives with the actual financial performance of the Company. Similarly, the compensation
+should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals and link their interests with shareholder interests. 
+Salary. Base salaries for executive officers were established a number of years ago after
+reviewing compensation for competitive positions at manufacturing companies of comparable size and profitability operating in a similar industry. Historically, base salaries have been increased at annual rates which approximate the general rates of
+increase of compensation for all employees of the Company and for generally publicized competitive positions elsewhere in industry. Effective November, 2001, the base salaries of executives were reduced as part of a general cost reduction program,
+with the results that base salaries for fiscal 2003 were at or below fiscal 2002 levels. Base salaries for executives were increased 3% from 2003 levels during fiscal 2004, which approximates the rate of increase for all employees at the
+Company. 
+5 
+Bonus. The Compensation Committee adopted a management bonus plan for the
+purpose of providing incentive compensation to employees of the Company. Awards are based on the Company’s achieving specified financial objectives, such as net income and return on net assets, as well as each individual’s specific
+business objectives. The specified threshold and target financial objectives and business objectives and the related bonus payouts are established annually and, accordingly, individual awards may vary, up or down, from year to year. No bonus
+payments were made in fiscal years 2002 and 2003. Bonuses paid or accrued during fiscal year 2004 amounted to $669,210 of which $297,058 was to executives. 
+Stock Options. Total executive compensation includes long-term incentives afforded by stock options. Stock option grants are
+made by the Compensation Committee upon consideration of recommendations made by senior management. The objectives of option grants are to align the long-term interests of executives and key employees with shareholder interests, by creating a strong
+and direct link between compensation and total shareholder return. In this connection, grants are intended to enable recipients to develop and maintain significant long-term stock ownership in the Company. Stock options are the principal vehicle for
+the payment of long-term compensation. Grants of stock options reflect subjective consideration of such matters as other compensation and the employee’s position in the Company and contributions to the Company. 
+Compensation of Chief Executive Officer. Mr.
+Ondis is eligible to participate in the same executive compensation plans available to other senior executives. Effective in February, 2004, his base salary was increased from $229,500 to $236,400, a 3% increase, deemed consistent with salary
+increases among executives in comparable position in similar industries. No option grants were made to Mr. Ondis during fiscal year 2004. 
+Deductibility of Compensation . Section 162(m) of the Internal Revenue Code limits the deductibility of compensation
+paid to a public company’s five highest paid executive officers to the extent any such officer’s annual compensation exceeds $1,000,000, subject to certain exceptions. The Board of Directors has deferred adopting a policy on this issue, as
+it does not expect the compensation of these individuals to reach relevant levels in the near future. 
+Conclusion. Through the program described above, the Compensation Committee firmly believes a direct link has been
+established between the Company’s financial performance, executive compensation and resultant stock price performance. 
+Compensation Committee 
+Hermann Viets, Ph.D. (Chairman) 
+Graeme MacLetchie 
+Jacques V. Hopkins 
+6 
+Executive Compensation 
+The following table sets forth the total annual compensation paid or accrued, together with other information for the fiscal years ended January 31,
+2004, 2003 and 2002, for the Chief Executive Officer and each of the four most highly compensated executive officers of the Company whose total annual salary and bonus for the fiscal year ended January 31, 2004 exceeded $100,000. 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Annual Compensation 
+Securities 
+Underlying 
+Options 
+Granted(#) 
+All Other 
+Compensation($)(b) 
+Salary($) 
+Bonus($) 
+Other ($)(a) 
+Albert W. Ondis 
+2004 
+235,373 
+69,249 
+26,219 
+— 
+4,538 
+Chairman, Chief 
+2003 
+225,087 
+— 
+31,237 
+62,000 
+2,301 
+Executive Officer 
+2002 
+253,837 
+— 
+42,360 
+62,000 
+878 
+Everett V. Pizzuti 
+2004 
+229,643 
+65,538 
+31,660 
+15,200 
+4,559 
+President, Chief 
+2003 
+215,117 
+— 
+29,068 
+62,000 
+2,939 
+Operating Officer 
+2002 
+231,469 
+— 
+31,820 
+62,000 
+2,605 
+Joseph P. O’Connell 
+2004 
+170,220 
+42,220 
+14,114 
+10,000 
+4,168 
+Vice President and Treasurer, 
+2003 
+158,395 
+— 
+15,434 
+48,500 
+2,376 
+Chief Financial Officer 
+2002 
+173,304 
+— 
+15,289 
+50,000 
+2,513 
+Elias G. Deeb 
+2004 
+136,239 
+34,553 
+— 
+10,000 
+3,407 
+Vice President, Media Products 
+2003 
+130,492 
+— 
+— 
+15,000 
+1,949 
+2002 
+136,424 
+— 
+— 
+5,000 
+2,145 
+Michael J. Sullivan 
+2004 
+133,475 
+32,675 
+— 
+10,000 
+3,353 
+Vice President and Chief 
+2003 
+127,945 
+— 
+— 
+15,000 
+1,919 
+Technology Officer 
+2002 
+132,825 
+— 
+— 
+5,000 
+2,082 
+(a) 
+Represents imputed interest on indebtedness of management in the amount of $4,889 for Mr. Ondis and $2,001 for Mr. Pizzuti and reimbursement for taxes attributable to use of Company
+provided vehicles and cash compensation in lieu of Company provided vehicles. 
+(b) 
+Amounts consist of the Company’s annual contributions, including matching contribution, to the Astro-Med, Inc. Retirement Savings Plan and $604 for each individual to the
+Astro-Med, Inc. Employee Stock Ownership Plan. 
+Indebtedness
+of Management 
+The following information describes loans
+to directors and executive officers of the Company whose indebtedness to the Company exceeded $60,000 at any time during the fiscal year ended January 31, 2004. 
+Name 
+Largest 
+Amount of 
+Indebtedness 
+Outstanding 
+at Any Time 
+Amount of 
+Indebtedness 
+Outstanding 
+at Year End 
+Albert W. Ondis, Chairman and Director 
+$ 
+321,640 
+$ 
+321,640 
+Everett V. Pizzuti, President and Director 
+131,624 
+131,624 
+The indebtedness is
+comprised of unsecured non-interest bearing demand notes for loans made to the persons named prior to fiscal year 1992. 
+7 
+Profit-Sharing Plan 
+The Company has a qualified Profit-Sharing Plan which provides retirement benefits to substantially all employees of the Company and provides for
+contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $200,000) compensation. 
+In addition, participants are permitted to defer up to 50% of their cash
+compensation and make contributions of such deferral to this Plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation contributed and 25% of the second, third, fourth and fifth
+percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code. 
+The Plan provides for the vesting of 100% of matching contributions made by the Company to the account of an employee after three years of service.
+Contributions by an employee are 100% vested immediately. The Company’s contributions paid or accrued for the fiscal year ended January 31, 2004 totaled $223,100. 
+Employee Stock Ownership Plan 
+The Company has an Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such
+amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions,
+which may be in cash or stock, are invested by the Plan’s Trustee in shares of common stock of the Company. The Company’s contributions paid or accrued for the fiscal year ended January 31, 2004 totaled $75,000. 
+Stock Option Plans 
+The Company has a Non-Qualified Stock Option Plan adopted in the fiscal year ended January 31, 1999 and amended in the
+fiscal year ended January 31, 2002 under which options for an aggregate of 1,000,000 shares of common stock may be granted to officers and key employees as well as consultants or other persons who render services to the Company at an exercise price
+of not less than 50% of the market price on the date of grant. Options granted under this plan for an aggregate of 25,200 shares, with an exercise price of $3.30 were granted during the fiscal year ended January 31, 2004. Options granted under this
+plan for an aggregate of 480,900 shares with exercise prices ranging from $3.30 to $7.50 per share were outstanding at January 31, 2004. A total of 452,300 shares remain available for option grants under this plan. 
+The Company also has an Incentive Stock Option Plan adopted in the fiscal
+year ended January 31, 1994 under which options for an aggregate of 250,000 shares of common stock may be granted to officers and key employees at an exercise price of not less than 100% of the market price on the date of grant. Options granted
+under this plan for an aggregate of 12,000 shares with an exercise price of $3.30 were granted during the fiscal year ended January 31, 2004. Options granted under this plan for an aggregate of 164,500 shares with exercise prices ranging from $3.30
+to $10.25 per share were outstanding at January 31, 2004. No shares remain available for option grants under this plan. 
+In addition, the Company has an Incentive Stock Option Plan adopted in the fiscal year ended January 31, 1998 and amended in the fiscal years ended
+January 31, 1999 and 2001, under which options for an aggregate of 1,250,000 shares of common stock may be granted to officers and key employees at an exercise price of not less than 100% of the market price on the date of grant. Options granted
+under this plan for an aggregate of 115,000 shares with an exercise price of $3.30 were granted during the fiscal year ended January 31, 2004. Options granted under this plan for an aggregate of 443,950 shares with exercise prices ranging from $3.30
+to $8.13 per share were outstanding at January 31, 2004. A total of 400,050 shares remain available for option grants under this plan. 
+8 
+The following tables present certain information concerning stock options granted and exercised by each
+executive officer named in the Summary Compensation Table during the fiscal year ended January 31, 2004, and the year-end value of unexercised options held by each of those officers. 
+Aggregated Option Exercises in Fiscal Year Ended 
+January 31, 2004 and Held at January 31, 2004 
+Name 
+Shares 
+Acquired 
+On Exercise 
+(#) 
+Value 
+Realized 
+($) (a) 
+Securities Underlying 
+Unexercised Options at 
+Fiscal Year End(#) 
+Value of Unexercised In- 
+The-Money Options at 
+Fiscal Year End($)(b) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Albert W. Ondis 
+— 
+— 
+274,000 
+— 
+2,496,723 
+— 
+Everett V. Pizzuti 
+66,800 
+840,803 
+296,225 
+175 
+2,395,153 
+1,521 
+Joseph P. O’Connell 
+10,000 
+109,775 
+191,000 
+— 
+1,808,728 
+— 
+Elias G. Deeb 
+10,000 
+89,900 
+80,500 
+— 
+695,989 
+— 
+Michael J. Sullivan 
+10,000 
+125,800 
+39,500 
+— 
+366,529 
+— 
+(a) 
+Amount represents excess of market value over exercise price on date of exercise. The table does not reflect income taxes which may have been payable by the individual in connection
+with the exercise of the options. 
+(b) 
+Amount represents excess of market value as of January 31, 2004 over exercise price. 
+Option Grants — Fiscal Year 
+Ended January 31, 2004 
+Name 
+Option 
+Grants 
+(#) (a) 
+% Of Total 
+Options 
+Granted to 
+Employees 
+in Fiscal 
+Year 
+Per Share 
+Exercise 
+Price ($) 
+Expiration 
+Date 
+Grant 
+Date 
+Value 
+($)(b) 
+Albert W. Ondis 
+— 
+— 
+% 
+— 
+— 
+— 
+Everett V. Pizzuti 
+15,200 
+10.0 
+% 
+3.30 
+3/31/13 
+14,896 
+Joseph P. O’Connell 
+10,000 
+6.6 
+% 
+3.30 
+3/31/13 
+9,800 
+Elias G. Deeb 
+10,000 
+6.6 
+% 
+3.30 
+3/31/13 
+9,800 
+Michael J. Sullivan 
+10,000 
+6.6 
+% 
+3.30 
+3/31/13 
+9,800 
+(a) 
+Options became exercisable on October 31,2004. 
+(b) 
+Amounts represent the fair value of each option granted and were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted average
+assumptions: expected volatility of 45%; expected life of 5 years; risk-free interest rate of 3.5% and dividend yield of 4.3%. 
+9 
+Performance Graph 
+Set forth below is a line graph comparing the cumulative total return on the Company’s common stock against the cumulative total return of a NASDAQ
+market index and a peer index for the period of five fiscal years ended January 31, 2004. The University of Chicago’s Center for Research in Security Prices (CRSP) total return index for the NASDAQ Stock Market is calculated using all companies
+which trade on the NASDAQ National Market System (NMS) or on the NASDAQ supplemental listing. It includes both domestic and foreign companies. The index is weighted by the then current shares outstanding and assumes dividends reinvested. The return
+is calculated on a monthly basis. The peer group index, the CRSP Index for NASDAQ Electronic Components Stock designated below as the industry index, is comprised of companies classified as electronic equipment manufacturers. The total returns
+assume $100 invested on February 1, 1999 with reinvestment of dividends. 
+COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG 
+ASTRO-MED, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX 
+ASSUMES $100 INVESTED ON FEBRUARY
+1, 1999 
+ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDING JANUARY 31, 2004 
+Fiscal Years Ended January 31 
+1999 
+2000 
+2001 
+2002 
+2003 
+2004 
+Astro-Med, Inc. 
+100 
+109.31 
+81.22 
+70.46 
+69.63 
+300.06 
+Peer Group Index 
+100 
+185.71 
+151.30 
+95.28 
+48.01 
+94.77 
+Nasdaq Market Index 
+100 
+157.77 
+110.59 
+77.06 
+52.90 
+83.27 
+The Board of Directors
+and its Compensation Committee recognize that the market price of stock is influenced by many factors, only one of which is issuer performance. The Company’s stock price may also be influenced by market perception of the Company in particular
+and the electronic equipment manufacturing industry in general, economic conditions and government regulation. The stock price performance shown in the graph is not necessarily indicative of future price performance. 
+10 
+Audit Committee Report 
+The Audit Committee of the Board is responsible for providing independent, objective oversight of the Company’s accounting functions and internal
+controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC rules. The Audit Committee operates under a written charter approved by the Board of Directors a copy of
+which is attached as Appendix A to this Proxy Statement. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in
+accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal
+controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence and performance of the Company’s independent accountants. The Audit Committee has sole authority to select,
+evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s independent accountants, Ernst & Young LLP, to review and discuss the January 31, 2004 financial statements. Management represented to the
+Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management
+and the independent accountants. The Audit Committee also discussed with the Ernst & Young LLP the matters required by Statement on Auditing Standards No.61 ( Communication with Audit Committees ). The Audit Committee also received from
+Ernst & Young LLP written disclosures and the letter regarding independence as required by Independence Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Ernst & Young LLP that
+firm’s independence. 
+The Audit Committee received the
+information concerning the fees of Ernst & Young LLP for the year ended January 31, 2004 set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of these non-audit services
+is compatible with maintaining the independence of the independent accountants and has determined that the provision of such services by Ernst & Young LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee
+recommended that the Board of Director’s include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2004, to be filed with the SEC. 
+Audit Committee 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+11 
+Independent Accountant Fees and Services 
+The Company selected Ernst & Young LLP as independent accountants to audit the financial statements of the Company for
+fiscal year ended January 31, 2004. The Company expects a representative of Ernst & Young LLP will be present at the annual meeting with the opportunity to make a statement, if he or she so desires, and that such representative will be available
+to respond to appropriate questions. 
+Aggregate fees for
+professional services rendered for the Company by Ernst & Young LLP as of or for the fiscal years ended January 31, 2004 and 2003 are set forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the
+audit of the Company’s annual financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed in the fiscal years.
+2004 
+2003 
+Audit Fees 
+$ 
+115,000 
+$ 
+93,800 
+Audit-Related Fees 
+$ 
+17,000 
+$ 
+10,000 
+Tax Fees 
+$ 
+9,500 
+$ 
+7,500 
+All Other Fees 
+$ 
+1,500 
+$ 
+-0- 
+Audit Fees for
+the fiscal years ended January 31, 2004 and 2003 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on Form
+10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Audit-Related Fees as of the fiscal years ended January 31, 2004 and 2003 were for employee benefit plan audits. 
+Tax Fees as of the fiscal years ended January 31, 2004 and 2003 were
+for services rendered for tax returns and estimates, tax advice and tax planning. 
+All Other Fees as of the fiscal year ended January 31, 2004 were for an online research database. 
+Policy on Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit services provided by the independent accountants
+prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimus exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X.
+Financial Reports 
+A copy of the annual report of the Company for the fiscal year ended January
+31, 2004 including the Company’s annual report to the Securities and Exchange Commission on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+Proposals For 2005 Annual Meeting 
+The 2005 annual meeting of the shareholders of the Company is scheduled to
+be held on May 10, 2005. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal
+to the Company not later than December 15, 2004. . Shareholder proposals that are to be considered at the 2005 annual meeting but not requested to be included in the Proxy Statement must be submitted no later than March 11, 2005 and no
+earlier than December 11, 2004. 
+12 
+Other Matters 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but should any other matters
+requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the event any of the nominees
+for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your
+shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+Dated: 
+April 12, 2004 
+13 
+Appendix A 
+ASTRO-MED, INC. 
+Audit Committee
+Charter 
+I. 
+STATEMENT OF PURPOSE 
+A. 
+The Board of Directors (the “Board”) of Astro-Med, Inc. (the “Company”) has oversight responsibilities with respect to the Company’s maintenance of an
+adequate system of internal control and financial reporting, the qualifications, independence and performance of the independent auditor and the Company’s compliance with legal and regulatory requirements. Through this charter, the Board
+delegates certain duties and responsibilities to its Audit Committee (the “Committee”) to assist it in fulfilling these responsibilities. 
+B. 
+The Board recognizes that an informed and vigilant Audit Committee represents an effective influence for ensuring adequate internal controls and accurate and complete financial
+reporting. The members of the Committee are expected to discharge their duties with the same good faith, diligence, care and skill exercised in performing their duties as Directors of the Company. 
+C. 
+The responsibility of the Committee is to oversee the Company’s financial reporting process on behalf of the Board and report the results of these activities to the Board.
+Management has primary responsibility to establish and maintain systems for accounting, reporting, internal control and ethical conduct and is responsible for preparing the Company’s financial statements and related disclosures. The
+Company’s independent auditors are responsible for auditing those financial statements in accordance with applicable professional standards. The Committee is not responsible for planning or conducting audits, certifying the Company’s
+financial statements or guaranteeing the auditor’s report. 
+II. 
+ORGANIZATION and GENERAL 
+A. 
+The Committee shall be composed of three non-management directors, each of whom shall meet the independence and experience requirements of The NASDAQ Stock Market
+(“NASDAQ”) and the Securities and Exchange Commission (“SEC”) and all other applicable legal requirements. Each member shall be free from any relationship that, in the opinion of the Board, would interfere with the exercise of
+independent judgment as a Committee member. 
+B. 
+Each member shall be financially literate and able to read and understand the Company’s financial statements and at least one member of the Committee will have accounting or
+related financial management expertise. The Board shall determine whether any members of the Committee are audit committee financial experts as defined by the SEC. 
+C. 
+Determinations of independence, audit committee financial expertise, financial literacy and accounting or related financial management expertise shall be made by the Board as the
+Board interprets such qualifications in its business judgment and in accordance with applicable law and the listing requirements of NASDAQ. 
+D. 
+The members of the Committee shall be appointed by the Board and shall serve until their successors are duly elected and qualified or until their earlier resignation or removal. The
+members of the Committee may be removed, with or without cause, by a majority vote of the Board. 
+E. 
+The Committee shall have a Chairman, appointed by the Board. The Chairman will chair all regular sessions of the Committee and set the agendas for Committee meetings.
+F. 
+The Committee shall meet at least quarterly, or more frequently as circumstances dictate. The agenda for each meeting will provide time during which the Committee can meet with the
+independent auditors and management in separate private sessions to discuss any matters that the Committee or these groups believe should be discussed. The Committee may also meet periodically in separate executive sessions. The Chairman of the
+Board or any member of the Committee may call meetings of the Committee. 
+A-1 
+G. 
+Meetings of the Committee may be held telephonically. A majority of Committee members will constitute a quorum for the transaction of business. The Committee shall maintain a
+written record of its proceedings. 
+H. 
+The Committee shall have the power to adopt its own operating rules and procedures and to call upon assistance from officers and employees of the Company and outside counsel and
+consultants without the consent of management. The Committee Chairman shall report its activities to the full Board following each meeting of the Committee to keep the Board informed of Committee activities and findings on a current basis.
+III. 
+RESOURCES AND AUTHORITY 
+A. 
+To discharge its oversight responsibilities effectively, the Committee will maintain open lines of communication with the Chief Financial Officer and with the Company’s
+independent auditors, each of whom will have free and direct access to the Committee. 
+B. 
+The Committee shall be given full access to the Company’s financial reporting staff, the Board, corporate executives and independent auditors, as necessary to carry out these
+responsibilities. While acting within the scope of its stated purpose, the Committee shall have the authority of the Board. 
+C. 
+The Committee has the authority to study or investigate any matter of interest or concern that it deems appropriate. The Committee shall have the authority to retain outside legal,
+accounting or other advisors for this purpose, including authority to approve the fees payable to such advisors and any other terms of retention. 
+D. 
+The Committee, and each member of the Committee in his or her capacity as such, shall be entitled to rely, in good faith, on information, opinions, reports or statements, or other
+information prepared or presented to them by officers and employees of the Company, whom such member believes to be reliable and competent in the matters presented and on counsel, public accountants or other persons as to matters which the member
+believes to be within the professional competence of such person. 
+IV. DUTIES AND RESPONSIBILITIES 
+A. 
+Oversight of Internal Controls 
+1. 
+The Committee shall provide supervisory oversight for and review the adequacy of the development and maintenance of the systems of internal controls. These controls should be
+designed to assure that assets are safeguarded, transactions are authorized, and that transactions are properly recorded. Senior management or the independent auditors may be called upon to discuss the control systems and changes thereto as may be
+needed. 
+2. 
+The Committee shall annually review with management and the independent auditor the basis for the disclosures made in the annual report to shareholders regarding the Company’s
+internal controls for financial reporting. 
+3. 
+The Committee shall review any deficiencies identified by management in the design and operation of internal control for financial reporting. At least annually, the Committee shall
+consider, in consultation with management and the independent auditor, the adequacy of the Company’s internal control for financial reporting, including the resolution of identified material weaknesses and reportable conditions, if any.
+B. 
+Retention and Oversight of Independent Auditors 
+1. 
+The Committee shall be directly responsible for the appointment, compensation, evaluation and termination of any accounting firm employed by the Company (including
+resolving any disagreements between management and the auditor) for purposes of preparing or issuing an audit 
+A-2 
+report and related work. The accounting firm shall report directly to the Committee. The Committee shall approve on an annual basis the estimated fees to be
+paid to the independent auditors for the annual audit of the consolidated financial statements of the Company and limited reviews of its quarterly financial statements. In this connection, the Committee shall also review the independent
+auditor’s engagement letter and discuss general audit approach. 
+2. 
+The Committee shall preapprove audit and non-audit services performed on behalf of the Company by the independent auditors that are not prohibited by law or regulation pursuant to
+such processes as the Committee determines to be advisable. The Committee may delegate pre-approval authority for any permissible non-audit service to one or more members of the Committee, provided that any pre-approval granted by such member or
+members pursuant to such delegated authority is presented to the Committee at its next scheduled meeting. 
+3. 
+The Committee shall review any non-audit services performed on behalf of the Company by the independent auditor that meet the de minimis exception under applicable law and
+regulations. 
+4. 
+The Committee shall ensure that retention of the independent auditors to perform audit and nonaudit services is properly disclosed in the Company’s proxy statement and filings
+with the SEC. 
+5. 
+The Committee shall review, at least annually, with management and with the independent auditor, the qualifications, performance and independence and objectivity of the independent
+auditor. In connection with such review and evaluation, the Committee should 
+· 
+Obtain and review a written report from the independent auditor at least annually regarding (i) the auditor’s internal quality-control procedures, (ii) any material issues
+raised by the most recent quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years concerning one or more independent audits carried out by
+the firm, and (iii) any steps taken to deal with any such issues; 
+· 
+Obtain an annual written statement from the independent auditor delineating all relationships, both direct and indirect, between the independent auditor and the Company, including
+each non-audit service provided to the Company and at least the matters set forth in Independence Standards Board No. 1; 
+· 
+Consider whether the provision of non-audit services is compatible with maintaining the auditor’s independence, taking into account the opinions of management;
+· 
+Discuss any relationships that may impair the auditor’s independence and take such actions as it deems appropriate or make recommendations to the Board regarding actions to be
+taken to remedy such impairment; and 
+· 
+Ensure appropriate audit and concurring partner rotation as required by law. 
+6. 
+The Committee shall meet with the independent auditor subsequent to each audit to review any significant auditing or accounting issues encountered during the audit, and the level of
+support provided by the Company’s finance department. The independent auditor will also review with the Committee any audit findings concerning the adequacy of the system of internal controls and compliance therewith, including the responses
+provided by management of any such findings. 
+7. 
+The Committee shall obtain from management a description of issues and responses whenever a second opinion is sought from another independent public accountant. The Committee shall
+discuss with the independent auditor issues on which the independent auditor communicated with its national office regarding auditing or accounting issues. 
+8. 
+The Committee shall recommend to the Board policies for the Company’s hiring of employees or former employees of the independent auditor who were engaged on the Company’s
+account. 
+A-3 
+C. 
+Oversight of Financial Reporting 
+1. 
+The Committee shall review and discuss with management and the independent auditor the annual audited financial statements of the Company prior to filing or distribution and
+recommend to the Board whether the audited financial statements should be included in the Company’s Form 10-K. The Committee shall review with financial management and the independent auditors the Company’s quarterly financial results
+prior to the release of earnings. The Committee shall review the Company’s quarterly financial statements prior to filing or distribution if the Company’s independent auditor has identified any matters that are required to be communicated
+to the Committee under the auditor’s professional standards or as the Committee otherwise deems appropriate. The purposes of the reviews shall be to evaluate the financial reporting process to reasonably assure that the financial statements
+fairly present the financial position and results of operations of the Company in accordance with generally accepted accounting principles, consistently applied. The Committee shall inquire regarding and discuss with the independent auditor the
+following: 
+· 
+Significant variations in financial information between periods. 
+· 
+Changes in accounting standards or rules promulgated by the Financial Accounting Standards Board or the SEC that have an impact on the financial statements.
+· 
+Estimates made by management having a material impact on the financial statements. 
+· 
+Analyses of the effect of alternative assumptions, estimates or GAAP methods on the Company’s financial statements. 
+· 
+Changes in accounting principles adopted by the Company, which have a significant impact on the financial statements and any significant changes in the Company’s selection or
+application of accounting principles. 
+· 
+Any major issues as to the adequacy of the company’s internal controls and any specific audit steps adopted in light of material control deficiencies. 
+· 
+Any material written communications between the independent auditor and the Company’s management, including any management letter provided by the independent auditor and the
+Company’s response to that letter. 
+· 
+Any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to requested information, or personnel and any
+significant disagreements with management. 
+2. 
+The Committee shall discuss with management the use of “pro forma”, “adjusted” or other non-GAAP information, as well as financial information and earnings
+guidance provided to analysts. 
+3. 
+The Committee shall discuss with management and the independent auditor the effect of accounting initiatives as well as off-balance sheet structures on the Company’s financial
+statements. 
+4. 
+The Committee shall discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the
+Company’s risk assessment and risk management policies. 
+D. 
+Other 
+1. 
+The Committee will comply with all regulations of the SEC and the NASDAQ Stock Market (“NASDAQ”) as they relate to disclosures and corporate governance, including, without
+limitation, review and approval of all related party transactions (as defined under applicable NASDAQ and SEC rules). 
+A-4 
+2. 
+The Committee will prepare a report for the annual proxy statement that states whether the Committee has reviewed and discussed the audited financial statements with management,
+discussed with the independent auditors the matters required by Statement on Auditing Standard No. 61 ( Communications with Audit Committees ), and received and discussed with the independent auditors the matters required by Independence
+Standards Board No. 1 ( Independence Discussions with Audit Committee ). The report must also state whether, based on the procedures performed, the members of the Committee recommended to the Board that the audited financial statements be
+included in the Company’s Annual Report on Form 10-K. 
+3. 
+The Committee shall review annually management’s plan for determining compliance with the Corporate Policy on Ethics. 
+4. 
+The Committee shall administer the Company’s Code of Conduct for Chief Executive Officer, Chief Operating Officer and Senior Financial Officers, including consideration of any
+waivers and investigation of any alleged violations thereof. 
+5. 
+The Committee shall review significant cases of employee conflict of interest, misconduct or fraud. 
+6. 
+The Committee shall ensure that there are procedures in place to facilitate (i) the receipt, retention and treatment of complaints from third parties regarding accounting, internal
+accounting controls or auditing matters and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding accounting, internal accounting controls or auditing matters. The Committee shall be responsible for
+designating the individual responsible for receiving such complaints, which shall be the Company’s legal counsel, Margaret D. Farrell, unless otherwise specified by the Committee. 
+7. 
+Where appropriate the Company’s outside counsel will be asked to meet with the Committee. At least annually, the Committee will review a report of outstanding litigation
+against the Company that may have a significant impact on the financial statements. 
+8. 
+The Committee shall annually review and assess the adequacy of this charter, amend it as appropriate, and seek and receive Board approval of the proposed changes.
+As adopted March 22, 2004 
+A-5 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders—May 11, 2004 
+The undersigned, whose signature appears on the reverse side of this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques
+V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned would possess if personally present, to vote the stock of the
+undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 11, 2004, in West Warwick, Rhode Island, and at any adjournments thereof, as follows: 
+1. ELECTION OF DIRECTORS 
+FOR all nominees listed below 
+(except as marked to the contrary below) 
+WITHHOLD AUTHORITY to vote for all nominees listed below 
+Albert W. Ondis,
+Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Graeme MacLetchie. 
+(INSTRUCTION: to withhold authority to vote for any individual
+nominee, write the nominee’s name in the space provided below.) 
+2. In their discretion, upon such other matters as may properly come before the meeting. 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
+VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+PLEASE DATE, SIGN AND RETURN THIS PROXY 
+Dated 
+, 2004
+Signed 
+(Sign exactly as your name appears hereon. When signing as attorney, executor, administrator, trustee, guardian or in
+a corporate capacity, please give full title as such. In case of joint tenants or multiple owners, each party must sign.) 
+THIS PROXY IS
+SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-04-059642/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-04-059642/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000008146/0001193125-05-080403/proxy.txt b/raw/proxies/0000008146/0001193125-05-080403/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..42004ba88224978f4cc0717308fe6964088e69c2
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-05-080403/proxy.txt
@@ -0,0 +1,759 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant ¨ 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing
+Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 10, 2005 
+To 
+the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2005 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the
+Company, Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode Island on Tuesday May 10, 2005, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 25, 2005 has been fixed as the record date for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary
+April 18, 2005 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in
+the enclosed addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person. 
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 10, 2005 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual meeting of the shareholders to be held May 10, 2005. The Company
+will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by regular employees of the Company at nominal cost. The Company may reimburse brokerage
+houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and
+obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every
+properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders on or about April 18, 2005. 
+Election of Directors 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their
+respective successors are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons
+named below. Certain information concerning such nominees is set forth below: 
+Name and Age 
+Business Experience During Past Five Years 
+Director 
+Since 
+Albert W. Ondis (79) 
+Chairman of the Company 
+1969 
+Everett V. Pizzuti (68) 
+President of the Company 
+1985 
+Jacques V. Hopkins (74) 
+Former Partner, Hinckley, Allen & Snyder LLP (Attorneys at Law) (Retired 1997) 
+1969 
+Hermann Viets, Ph.D. (62) 
+President, Milwaukee School of Engineering (since 1991); Director, Gehl Company (farm equipment) 
+1988 
+Graeme MacLetchie (67) 
+Director, Deutsche Bank Alex Brown (Private Client Division) 
+2002 
+1 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 25, 2005 will be entitled to vote at the meeting. On the record date, there were 5,278,336
+shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of March 25, 2005 (except as noted) the record and beneficial ownership of the
+Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than 5 percent of such stock, by each director of the Company, by each executive officer named in the Summary
+Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned 
+Percent 
+of Class 
+Albert W. Ondis 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+1,650,571(1) 
+29.6 
+% 
+Everett V. Pizzuti 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+502,938(2) 
+9.0 
+% 
+Eliot Rose Asset Management, LLC and Gary S. Siperstein. 
+10 Weybosset Street, Suite 401 
+Providence, Rhode Island 
+404,050(3) 
+7.7 
+% 
+Jacqueline B. Ondis 
+40 Oak Grove Street 
+Warwick, Rhode Island 
+302,500 
+5.7 
+% 
+Hermann Viets 
+147,785(4) 
+2.8 
+% 
+Joseph P. O’Connell 
+211,392(5) 
+3.9 
+% 
+Elias G. Deeb 
+93,415(6) 
+1.7 
+% 
+Jacques V. Hopkins 
+18,150(7) 
+.3 
+% 
+John B. Chatten 
+57,505(8) 
+1.1 
+% 
+Graeme MacLetchie 
+62,700(9) 
+1.2 
+% 
+All directors and executive officers of the Company as a group (12) 
+2,842,041(10) 
+44.8 
+% 
+(1) 
+Includes 245,989 shares held in trust for children, 301,400 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,238 shares allocated to his
+account under the Company’s Employee Stock Ownership Plan. 
+(2) 
+Includes 309,540 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,370 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(3) 
+Eliot Rose Asset Management, LLC a Rhode Island limited liability company, an investment advisor registered under Section 203 of the Investment Advisors Act of
+1940, is deemed to have beneficial 
+2 
+ownership of the number of shares shown as of February 28, 2005. Gary S. Siperstein is deemed to have beneficial ownership of the number of shares shown
+pursuant to his ownership interest in Eliot Rose Asset Management, LLC. 
+(4) 
+Includes 275 shares held by Dr. Viets as custodian for a child and 8,800 shares deemed to be beneficially owned because of exercisable options to acquire shares.
+(5) 
+Includes 210,100 shares deemed to be beneficially owned because of exercisable options to acquire shares and 987 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(6) 
+Includes 80,300 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,718 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(7) 
+Includes 8,800 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(8) 
+Includes 57,200 shares deemed to be beneficially owned because of exercisable options to acquire shares and 305 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(9) 
+Includes 2,200 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(10) 
+Includes 1,069,640 shares deemed to be beneficially owned because of exercisable options to acquire shares and 14,923 shares allocated to the accounts of officers under the
+Company’s Employee Stock Ownership Plan. 
+Meetings and
+Committees 
+During the fiscal year ended January 31, 2005,
+the Board of Directors held four formal meetings and three meetings by telephone conference. The Board of Directors has adopted a policy that requires members of the Board to make every effort to attend each annual shareholders meeting. All members
+of the Board of Directors attended the 2004 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee, which was formed in March 2004. The members and chairs of each of those
+committees are appointed each year. Membership of the Audit, Compensation and Nominating Committee is comprised of the Company’s three outside directors, Messrs. Hopkins and MacLetchie and Dr. Viets, all of whom are independent as defined under
+the applicable NASDAQ listing standards and Securities and Exchange Commission (“SEC”) rules. 
+Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board of Directors. A copy of each charter is available on
+the Company’s website at www.astromed.com under “Investor Relations – Corporate Governance”. 
+Audit Committee. The Audit Committee’s primary duties and responsibilities include overseeing the integrity of the Company’s financial
+reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence and performance of the Company’s independent accountants and the adequacy of internal
+controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the annual audit scope, the results of the audit and other relevant matters. Mr. Hopkins serves as Chairman of the Audit
+Committee, which held two in person meetings and two meetings by telephone conference during the fiscal year ended January 31, 2005. The Board of Directors has determined that all three members of the Audit Committee satisfy the financial literacy
+requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that Graeme MacLetchie satisfies the “financial
+sophistication” requirement of the NASDAQ listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial expert” as defined by the SEC 
+3 
+rules, which, in the view of the Board of Directors, require an advanced understanding of internal controls and procedures. However, the Board believes that
+the members of the Audit Committee have a thorough understanding of the Company’s business, the accounting issues relevant to the Company’s financial statements and audit committee functions and possess the requisite skills to perform
+effectively their oversight function. The Audit Committee members expect to increase their understanding of internal controls and procedures as the Company assesses and evaluates its internal control processes and procedures in order to provide the
+attestation report on internal control over financial reporting that the Company must file with respect to its fiscal year ending January 31, 2007. 
+Compensation Committee. The Compensation Committee assists the Board of Directors in discharging the Board’s responsibilities relating to
+director and executive compensation. The Compensation Committee’s responsibilities include establishing and reviewing the Company’s executive and director compensation philosophy, strategies, plans and policies, making recommendations with
+respect to the design of the Company’s incentive compensation plans and equity based plans, granting awards under such plans and overseeing generally the administration of such plans, evaluating the performance and determining the compensation
+of the Chief Executive Officer and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the Compensation Committee, which held one in person meeting during the fiscal year ended January 31,
+2005. 
+Nominating Committee . The Nominating Committee is
+responsible for identifying individuals qualified to be members of the Board of Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders. The Nominating
+Committee, formed in March 2004, did not hold any meetings in the fiscal year ended January 31, 2005. Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The Nominating
+Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the ability to
+provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the shareholders.
+All non-employee directors must be independent within the meaning of applicable NASDAQ rules. The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under the NASDAQ listing
+standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees to the Nominating
+Committee at the Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include information regarding a candidate’s background, qualifications, experience and willingness to serve as a
+director. In addition, Section 10 of Article II of the Company’s By-Laws set forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of
+shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the Shareholders who support
+the nominee’s election. For the annual meeting to be 
+4 
+held in 2006, the notice deadline under the By-Laws is March 10, 2006. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn:
+Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the individual chairman of standing committees. Any shareholder with a
+concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors by writing directly to those individuals c/o Astro-Med, Inc., 600
+East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s corporate offices that is sent directly to an individual unless the
+Company believes the communication may pose a security risk. 
+Compensation
+of Directors 
+Messrs. Hopkins, MacLetchie and Viets are
+paid an annual retainer of $3,500 plus $500 for each Board meeting attended. Directors who are also officers or employees of the Company are not entitled to receive any compensation in addition to their compensation for services as officers or
+employees. 
+Those directors who are not also officers and
+employees of the Company receive options to purchase common stock under the Company’s Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the Director Plan, Messrs.
+Hopkins and Viets each received non-qualified option to purchase 1,100 shares of common stock on May 21, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a non-qualified option to purchase 1,100
+share of common stock upon his initial election to the Board of Directors in May 2002. Any non-employee director who is elected in the future will receive non-qualified option to purchase 1,100 shares of common stock on the date of the
+director’s initial election to the Board of Directors. Each non-employee director (other than a director first elected after June 30 of the prior year) receives an annual non-qualified option to purchase 1,100 shares of common stock as of the
+first business day of January of each year. All options have an exercise price equal to the market price of the common stock on the day of the grant and are exercisable for a term of ten years. Options vest six months after the grant date, unless
+automatically accelerated in the event of death, disability, or a change of control. A total of 33,000 shares have been reserved for issuance under the Director Plan. Messrs. Hopkins, MacLetchie and Viets each received options to acquire 1,100
+shares at $8.83 per share on January 3, 2005. Options for an aggregate of 23,100 shares, with exercise prices ranging from $3.41 to $11.98 per share were outstanding under the Director Plan at January 31, 2005. 
+Report On Executive Compensation 
+The Board of Directors has delegated to the Compensation Committee the
+authority to fix compensation (including stock options) for the Company’s Chief Executive Officer and other key employees. The Compensation Committee is comprised of the Company’s three non-employee directors, Dr. Viets (Chairman), Mr.
+MacLetchie and Mr. Hopkins. Mr. Ondis meets with the Compensation Committee to review the compensation program and make recommendations for senior executive officers. Compensation consists of three principal elements (salary, bonus and stock
+options). 
+5 
+Executive Compensation Philosophy. Compensation of the Company’s
+executive officers should link management initiatives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals and
+link their interests with shareholder interests. 
+Salary. Base salaries for executive officers were established a number of years ago after reviewing compensation for competitive positions at manufacturing companies of comparable size and profitability
+operating in a similar industry. Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company and for generally publicized competitive positions
+elsewhere in the industry. Base salaries for executives were increased 2% from 2004 levels during fiscal 2005, which approximate the rate of increase for all employees at the Company. 
+Bonus. The Compensation Committee adopted a
+management bonus plan for the purpose of providing incentive compensation to employees of the Company. Awards are based on the Company’s achieving specified financial objectives, such as net income and return on net assets, as well as each
+individual’s specific business objectives. The specified threshold and target financial objectives and business objectives and the related bonus payouts are established annually and, accordingly, individual awards may vary, up or down, from
+year to year. No bonus payments were made in fiscal years 2005 and 2003. Bonuses paid or accrued during fiscal year 2004 amounted to $669,210 of which $297,058 was to executives. 
+Stock Options. Total executive compensation includes long-term incentives afforded by stock
+options. Stock option grants are made by the Compensation Committee upon consideration of recommendations made by senior management. The objectives of option grants are to align the long-term interests of executives and key employees with
+shareholder interests, by creating a strong and direct link between compensation and total shareholder return. In this connection, grants are intended to enable recipients to develop and maintain significant long-term stock ownership in the Company.
+Stock options are the principal vehicle for the payment of long-term compensation. Grants of stock options reflect subjective consideration of such matters as other compensation and the employee’s position in the Company and contributions to
+the Company. 
+Compensation of Chief Executive
+Officer. Mr. Ondis is eligible to participate in the executive compensation plans available to other senior executives. Effective in February 2005, his base salary was increased from $236,400 to $241,100, a 2% increase,
+deemed consistent with salary increases among executives in comparable position in similar industries. Non-qualified option grants for 33,000 shares of common stock at an exercise price of $10.91 were made to Mr. Ondis during fiscal year 2005.
+Deductibility of
+Compensation . Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid to a public company’s five highest paid executive officers to the extent any such officer’s annual
+compensation exceeds $1,000,000, subject to certain exceptions. The Board of Directors has deferred adopting a policy on this issue, as it does not expect the compensation of these individuals to reach relevant levels in the near future. 
+Conclusion. Through the program described
+above, the Compensation Committee firmly believes a direct link has been established between the Company’s financial performance, executive compensation and resultant stock price performance. 
+Compensation Committee 
+Hermann Viets, Ph.D. (Chairman) 
+Graeme MacLetchie 
+Jacques V. Hopkins 
+6 
+Executive Compensation 
+The following table sets forth the total annual compensation paid or accrued, together with other information for the fiscal years ended January 31,
+2005, 2004 and 2003, for the Chief Executive Officer and each of the four most highly compensated executive officers of the Company whose total annual salary and bonus for the fiscal year ended January 31, 2005 exceeded $100,000. 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Annual Compensation 
+Securities 
+Underlying 
+Options 
+Granted(#) 
+All Other 
+Compensation($)(b) 
+Salary($) 
+Bonus($) 
+Other($)(a) 
+Albert W. Ondis 
+Chairman, Chief 
+Executive Officer 
+2005 
+2004 
+2003 
+238,725 
+235,373 
+225,087 
+— 
+69,249 
+— 
+19,571 
+26,219 
+31,237 
+33,000 
+— 
+62,000 
+2,872 
+4,538 
+2,301 
+Everett V. Pizzuti 
+President, Chief 
+Operating Officer 
+2005 
+2004 
+2003 
+230,221 
+229,643 
+215,117 
+— 
+65,538 
+— 
+28,277 
+31,660 
+29,068 
+33,000 
+15,200 
+62,000 
+2,856 
+4,559 
+2,939 
+Joseph P. O’Connell 
+Vice President and Treasurer, 
+Chief Financial Officer 
+2005 
+2004 
+2003 
+173,276 
+170,220 
+158,395 
+— 
+42,220 
+— 
+11,246 
+14,114 
+15,434 
+16,500 
+10,000 
+48,500 
+2,843 
+4,168 
+2,376 
+John B. Chatten 
+President, Grass-Telefactor 
+Product Group 
+2005 
+2004 
+2003 
+144,000 
+142,187 
+140,222 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+2,000 
+5,000 
+— 
+1,397 
+— 
+Elias G. Deeb 
+Vice President, Media Products 
+2005 
+2004 
+2003 
+137,386 
+136,239 
+130,492 
+— 
+34,553 
+— 
+— 
+— 
+— 
+11,000 
+10,000 
+15,000 
+2,573 
+3,407 
+1,949 
+(a) 
+Represents imputed interest on indebtedness of management in the amount of $6,368 for Mr. Ondis and $2,606 for Mr. Pizzuti and reimbursement for taxes attributable to use of Company
+provided vehicles and cash compensation in lieu of Company provided vehicles. 
+(b) 
+Amounts consist of the Company’s annual matching contribution to the Astro-Med, Inc. Retirement Savings Plan. 
+Indebtedness of Management 
+The following information describes loans to directors and executive
+officers of the Company whose indebtedness to the Company exceeded $60,000 at any time during the fiscal year ended January 31, 2005. 
+Name 
+Largest 
+Amount of 
+Indebtedness 
+Outstanding 
+at Any Time 
+Amount of 
+Indebtedness 
+Outstanding 
+at Year End 
+Albert W. Ondis, Chairman and Director 
+$ 
+321,640 
+$ 
+321,640 
+Everett V. Pizzuti, President and Director 
+131,624 
+131,624 
+The indebtedness is
+comprised of unsecured non-interest bearing demand notes for loans made to the persons named prior to fiscal year 1992. 
+7 
+Profit-Sharing Plan 
+The Company has a qualified Profit-Sharing Plan which provides retirement benefits to substantially all employees of the Company and provides for
+contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $200,000) compensation. 
+In addition, participants are permitted to defer up to 50% of their cash
+compensation and make contributions of such deferral to this Plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation contributed and 25% of the second, third, fourth and fifth
+percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code. 
+The Plan provides for the vesting of 100% of matching contributions made by the Company to the account of an employee after three years of service.
+Contributions by an employee are 100% vested immediately. The Company’s contributions paid or accrued for the fiscal year ended January 31, 2005 totaled $154,227. 
+Employee Stock Ownership Plan 
+The Company has an Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such
+amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions,
+which may be in cash or stock, are invested by the Plan’s Trustee in shares of common stock of the Company. No contributions were paid or accrued for the fiscal year ended January 31, 2005. 
+Stock Option Plans 
+The Company has a Non-Qualified Stock Option Plan adopted in the fiscal year ended January 31, 1999 and amended in the
+fiscal year ended January 31, 2002 under which options for an aggregate of 1,100,000 shares of common stock may be granted to officers and key employees as well as consultants or other persons who render services to the Company at an exercise price
+of not less than 50% of the market price on the date of grant. Options granted under this plan for an aggregate of 82,500 shares, with an exercise price of $10.91 were granted during the fiscal year ended January 31, 2005. Options granted under this
+plan for an aggregate of 611,490 shares with exercise prices ranging from $3.00 to $10.91 per share were outstanding at January 31, 2005. A total of 415,030 shares remain available for option grants under this plan. 
+The Company also has an Incentive Stock Option Plan adopted in the fiscal
+year ended January 31, 1994 under which options for an aggregate of 250,000 shares of common stock may be granted to officers and key employees at an exercise price of not less than 100% of the market price on the date of grant. Options granted
+under this plan for an aggregate of 121,550 shares with exercise prices ranging from $3.00 to $7.67 per share were outstanding at January 31, 2005. No shares remain available for option grants under this plan. 
+In addition, the Company has an Incentive Stock Option Plan adopted in the
+fiscal year ended January 31, 1998 and amended in the fiscal years ended January 31, 1999 and 2001, under which options for an aggregate of 1,375,000 shares of common stock may be granted to officers and key employees at an exercise price of not
+less than 100% of the market price on the date of grant. Options granted under this plan for an aggregate of 166,650 shares with an exercise price of $10.91 were granted during the fiscal year ended January 31, 2005. Options granted under this plan
+for an aggregate of 574,475 shares with exercise prices ranging from $3.00 to $10.91 per share were outstanding at January 31, 2005. A total of 286,055 shares remain available for option grants under this plan. 
+8 
+The following tables present certain information concerning stock options granted and exercised by each
+executive officer named in the Summary Compensation Table during the fiscal year ended January 31, 2005, and the year-end value of unexercised options held by each of those officers. 
+Aggregated Option Exercises in Fiscal Year Ended 
+January 31, 2005 and Held at January 31, 2005 
+Name 
+Shares 
+Acquired 
+On Exercise 
+(#) 
+Value 
+Realized 
+($)(a) 
+Securities Underlying 
+Unexercised Options at 
+Fiscal Year End(#) 
+Value of Unexercised In- 
+The-Money Options at 
+Fiscal Year End($)(b) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Albert W. Ondis 
+— 
+— 
+301,400 
+33,000 
+1,257,419 
+— 
+Everett V. Pizzuti 
+— 
+— 
+309,540 
+33,000 
+1,103,550 
+— 
+Joseph P. O’Connell 
+— 
+— 
+210,100 
+16,500 
+949,834 
+— 
+John B. Chatten 
+10,000 
+75,938 
+57,200 
+— 
+188,398 
+— 
+Elias G. Deeb 
+— 
+— 
+80,300 
+11,000 
+330,634 
+— 
+(a) 
+Amount represents excess of market value over exercise price on date of exercise. The table does not reflect income taxes which may have been payable by the individual in connection
+with the exercise of the options. 
+(b) 
+Amount represents excess of market value as of January 31, 2005 over exercise price. 
+Option Grants — Fiscal Year 
+Ended January 31, 2005 
+Name 
+Option 
+Grants 
+(#)(a) 
+% Of Total 
+Options 
+Granted to 
+Employees 
+in Fiscal 
+Year 
+Per Share 
+Exercise 
+Price($) 
+Expiration 
+Date 
+Grant 
+Date 
+Value 
+($)(b) 
+Albert W. Ondis 
+33,000 
+13.2 
+% 
+10.91 
+4/19/14 
+189,190 
+Everett V. Pizzuti 
+33,000 
+13.2 
+% 
+10.91 
+4/19/14 
+189,190 
+Joseph P. O’Connell 
+16,500 
+6.6 
+% 
+10.91 
+4/19/14 
+94,545 
+John B. Chatten 
+— 
+— 
+% 
+— 
+— 
+— 
+Elias G. Deeb 
+11,000 
+4.4 
+% 
+10.91 
+4/19/14 
+63,030 
+(a) 
+Options will become exercisable over a 4 year period in equal annual installments. 
+(b) 
+Amounts represent the fair value of each option granted and were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted average
+assumptions: expected volatility of 59%; expected life of 5 years; risk-free interest rate of 3.1% and dividend yield of 1.4%. 
+Related Party Transactions 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+The Company employs a son-in-law of Mr. Ondis, Eric Menke, as Manager of
+International Dealer Sales, and during the fiscal year ended January 31, 2005 paid him $87,088 in salary and commissions. The Company also employs two sons of Mr. Pizzuti, Eric Pizzuti, as National Sales Manager (QuickLabel Systems), and William
+Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $102,257 and $119,163 respectively in salary and commissions during the fiscal year ended January 31, 2005. In addition, the Company made matching contributions for
+the fiscal year under its qualified Profit-Sharing Plan of $1,271 to Eric Menke, $1,823 to Eric Pizzuti and $1,714 to William Pizzuti. 
+9 
+Other than as described above or contained in the section entitled “Indebtedness of
+Management”, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2005 any material interest, direct or indirect, in any material transaction or any
+material proposed transaction to which the Company was or is to be a party. 
+Performance Graph 
+Set forth below is a line
+graph comparing the cumulative total return on the Company’s common stock against the cumulative total return of a NASDAQ market index and a peer index for the period of five fiscal years ended January 31, 2005. The University of Chicago’s
+Center for Research in Security Prices (CRSP) total return index for the NASDAQ Stock Market is calculated using all companies which trade on the NASDAQ National Market System (NMS) or on the NASDAQ supplemental listing. It includes both domestic
+and foreign companies. The index is weighted by the then current shares outstanding and assumes dividends reinvested. The return is calculated on a monthly basis. The peer group index, the CRSP Index for NASDAQ Electronic Components Stock designated
+below as the industry index, is comprised of companies classified as electronic equipment manufacturers. The total returns assume $100 invested on February 1, 2000 with reinvestment of dividends. 
+COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG 
+ASTRO-MED, INC., NASDAQ MARKET INDEX AND PEER GROUP INDEX 
+ASSUMES $100 INVESTED ON
+FEBRUARY 1, 2000 
+ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDING JANUARY 31, 2005 
+Fiscal Years Ended January 31 
+2000 
+2001 
+2002 
+2003 
+2004 
+2005 
+Astro-Med, Inc. 
+100 
+60.90 
+54.51 
+56.76 
+252.05 
+181.57 
+Peer Group Index 
+100 
+81.47 
+51.31 
+25.85 
+51.04 
+36.76 
+Nasdaq Market Index 
+100 
+70.04 
+48.81 
+33.51 
+52.76 
+52.70 
+10 
+The Board of Directors and its Compensation Committee recognize that the market price of stock is
+influenced by many factors, only one of which is issuer performance. The Company’s stock price may also be influenced by market perception of the Company in particular and the electronic equipment manufacturing industry in general, economic
+conditions and government regulation. The stock price performance shown in the graph is not necessarily indicative of future price performance. 
+Audit Committee Report 
+The Audit Committee of the Board is responsible for providing independent, objective oversight of the Company’s accounting functions and internal
+controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and
+financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report
+thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial
+statements; and (2) the independence and performance of the Company’s independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s
+independent accountants, Ernst & Young LLP, to review and discuss the January 31, 2005 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with
+generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Ernst & Young LLP the
+matters required by Statement on Auditing Standards No.61 ( Communication with Audit Committees ). The Audit Committee also received from Ernst & Young LLP written disclosures and the letter regarding independence as required by
+Independence Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Ernst & Young LLP that firm’s independence. 
+The Audit Committee received the information concerning the fees of Ernst & Young LLP for the year ended January 31,
+2005 set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of these non-audit services is compatible with maintaining the independence of the independent accountants and has
+determined that the provision of such services by Ernst & Young LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of Director’s include the audited
+consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2005, to be filed with the SEC. 
+Audit Committee 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+11 
+Independent Accountant Fees and Services 
+The Company selected Ernst & Young LLP as independent accountants to audit the financial statements of the Company for
+fiscal year ended January 31, 2005. The Company expects a representative of Ernst & Young LLP will be present at the annual meeting with the opportunity to make a statement, if he or she so desires, and that such representative will be available
+to respond to appropriate questions. 
+Aggregate fees for
+professional services rendered for the Company by Ernst & Young LLP as of or for the fiscal years ended January 31, 2005 and 2004 are set forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the
+audit of the Company’s annual financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed in the fiscal years.
+2005 
+2004 
+Audit Fees 
+$ 
+130,000 
+$ 
+115,000 
+Audit-Related Fees 
+$ 
+17,000 
+$ 
+17,000 
+Tax Fees 
+$ 
+8,000 
+$ 
+9,500 
+All Other Fees 
+$ 
+1,240 
+$ 
+1,500 
+Audit Fees for
+the fiscal years ended January 31, 2005 and 2004 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on Form
+10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Audit-Related Fees as of the fiscal years ended January 31, 2005 and 2004 were for employee benefit plan audits. 
+Tax Fees as of the fiscal years ended January 31, 2005 and 2004 were
+for services rendered for tax returns and estimates, tax advice and tax planning. 
+All Other Fees as of the fiscal year ended January 31, 2005 and 2004 were for an online research database. 
+Policy on Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit services provided by the independent accountants
+prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimus exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X.
+Financial Reports 
+A copy of the annual report of the Company for the fiscal year ended January
+31, 2005 including the Company’s annual report to the Securities and Exchange Commission on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+Proposals For 2006 Annual Meeting 
+The 2006 annual meeting of the shareholders of the Company is scheduled to
+be held on May 9, 2006. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal
+to the Company not later than December 14, 2005. Shareholder proposals that are to be considered at the 2006 annual meeting but not requested to be included in the Proxy Statement must be submitted no later than March 10, 2006 and no
+earlier than December 10, 2005. 
+12 
+Other Matters 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but should any other matters
+requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the event any of the nominees
+for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your
+shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+Dated: April 18, 2005
+13 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders—May 10, 2005 
+The undersigned, whose signature appears on the reverse side of this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques
+V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned would possess if personally present, to vote the stock of the
+undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 10, 2005, in West Warwick, Rhode Island, and at any adjournments thereof, as follows: 
+1. ELECTION OF DIRECTORS 
+FOR all nominees listed below 
+(except as marked to the contrary below) 
+WITHHOLD AUTHORITY to vote for all nominees listed below 
+Albert W. Ondis,
+Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Graeme MacLetchie. 
+(INSTRUCTION: to withhold authority to vote for any individual
+nominee, write the nominee’s name in the space provided below.) 
+2. In their discretion, upon such other matters as may properly come before the meeting. 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
+VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+PLEASE DATE, SIGN AND RETURN THIS PROXY 
+Dated 
+, 2005
+Signed 
+(Sign exactly as your name appears hereon. When signing as attorney, executor, administrator, trustee, guardian or in
+a corporate capacity, please give full title as such. In case of joint tenants or multiple owners, each party must sign.) 
+THIS PROXY IS
+SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-05-080403/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-05-080403/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..5a058c70f2de72f699e76a4a869dd0f52af7b901
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-05-080403/proxy_rpt.txt
@@ -0,0 +1,16 @@
+Related Party Transactions 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+The Company employs a son-in-law of Mr. Ondis, Eric Menke, as Manager of
+International Dealer Sales, and during the fiscal year ended January 31, 2005 paid him $87,088 in salary and commissions. The Company also employs two sons of Mr. Pizzuti, Eric Pizzuti, as National Sales Manager (QuickLabel Systems), and William
+Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $102,257 and $119,163 respectively in salary and commissions during the fiscal year ended January 31, 2005. In addition, the Company made matching contributions for
+the fiscal year under its qualified Profit-Sharing Plan of $1,271 to Eric Menke, $1,823 to Eric Pizzuti and $1,714 to William Pizzuti. 
+9 
+Other than as described above or contained in the section entitled “Indebtedness of
+Management”, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2005 any material interest, direct or indirect, in any material transaction or any
+material proposed transaction to which the Company was or is to be a party. 
+Performance Graph 
+Set forth below is a line
+graph comparing the cumulative total return on the Company’s common stock against the cumulative total return of a NASDAQ market index and a peer index for the period of five fiscal years ended January 31, 2005. The University of Chicago’s
+Center for Research in Security Prices (CRSP) total return index for the NASDAQ Stock Market is calculated using all companies which trade on the NASDAQ National Market System (NMS) or on the NASDAQ supplemental listing. It includes both domestic
+and foreign companies. The index is weighted by the then current shares outstanding and assumes dividends reinvested. The return is calculated on a monthly basis. The peer group index, the CRSP Index for NASDAQ Electronic Components Stock designated
+below as the industry index, is comprised of companies classified as electronic equipment manufacturers. The total returns assume $100 invested on February 1, 2000 with reinvestment of dividends.
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-06-086518/proxy.txt b/raw/proxies/0000008146/0001193125-06-086518/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d7dd875fd955dd557f80f19308554c47e9ef9554
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-06-086518/proxy.txt
@@ -0,0 +1,775 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant ¨ 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing
+Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 16, 2006 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2006 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode Island on
+Tuesday May 16, 2006, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 24, 2006 has been fixed as the record date for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 24, 2006 
+Kindly fill in, date and sign the
+enclosed proxy and promptly return it in the enclosed addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person.
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 16, 2006 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual
+meeting of the shareholders to be held May 16, 2006. The Company will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by regular employees
+of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending
+proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until notice
+thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders on or
+about April 24, 2006. 
+Election of Directors 
+At the annual meeting, five directors are to be elected to hold office until
+the next annual meeting or until their respective successors are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to
+the Board of Directors of the persons named below. Certain information concerning such nominees is set forth below: 
+Name and Age 
+Business Experience During Past Five Years 
+Director 
+Since 
+Albert W. Ondis (80) 
+Chairman of the Company 
+1969 
+Everett V. Pizzuti (69) 
+President of the Company 
+1985 
+Jacques V. Hopkins (75) 
+Former Partner, Hinckley, Allen & Snyder LLP (Attorneys at Law) (Retired 1997) 
+1969 
+Hermann Viets, Ph.D. (63) 
+President, Milwaukee School of Engineering (since 1991); Director, Gehl Company (farm equipment) 
+1988 
+Graeme MacLetchie (68) 
+Director, Deutsche Bank Alex Brown (Private Client Division) 
+2002 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 24, 2006 will be entitled to vote at the meeting. On the record date, there were
+5,394,877 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of March 24, 2006 (except as noted) the record and beneficial ownership of the
+Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than 5 percent of such stock, by each director of the Company, by each executive officer named in the Summary
+Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned 
+Percent 
+of Class 
+Albert W. Ondis 
+1,658,942 
+(1) 
+29.1 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Everett V. Pizzuti 
+511,350 
+(2) 
+9.0 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Eliot Rose Asset Management, LLC and Gary S. Siperstein 
+680,990 
+(3) 
+12.6 
+% 
+10 Weybosset Street, Suite 401 
+Providence, Rhode Island 
+Jacqueline B. Ondis 
+302,500 
+5.6 
+% 
+40 Oak Grove Street 
+Warwick, Rhode Island 
+Hermann Viets 
+147,785 
+(4) 
+2.7 
+% 
+Joseph P. O’Connell 
+217,184 
+(5) 
+3.9 
+% 
+Elias G. Deeb 
+94,608 
+(6) 
+1.7 
+% 
+Jacques V. Hopkins 
+18,150 
+(7) 
+.3 
+% 
+John B. Chatten 
+57,563 
+(8) 
+1.1 
+% 
+Graeme MacLetchie 
+62,700 
+(9) 
+1.2 
+% 
+All directors and executive officers of the Company as a group (12) 
+2,874,056 
+(10) 
+44.8 
+% 
+(1) 
+Includes 323,005 shares held in trust for children, 309,650 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,359 shares allocated to his
+account under the Company’s Employee Stock Ownership Plan. 
+(2) 
+Includes 262,790 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,532 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+2 
+(3) 
+Eliot Rose Asset Management, LLC, a Rhode Island limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2005. Gary S. Siperstein is deemed to have beneficial ownership of the number of shares shown due to his power to dispose of said shares through his ownership interest in Eliot Rose
+Asset Management, LLC. 
+(4) 
+Includes 275 shares held by Dr. Viets as custodian for a child and 7,700 shares deemed to be beneficially owned because of exercisable options to acquire shares.
+(5) 
+Includes 210,600 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,084 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(6) 
+Includes 78,800 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,856 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(7) 
+Includes 7,700 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(8) 
+Includes 57,200 shares deemed to be beneficially owned because of exercisable options to acquire shares and 363 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(9) 
+Includes 2,200 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(10) 
+Includes 1,031,540 shares deemed to be beneficially owned because of exercisable options to acquire shares and 15,868 shares allocated to the accounts of officers under the
+Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the directors and executive officers of the Company and any persons who own more than ten percent of the Company’s common stock to
+file with the Securities and Exchange Commission various reports of beneficial ownership and changes in beneficial ownership. The Company believes all of its directors and executive officers complied with all filing requirements applicable to them
+with respect to transactions during the fiscal year ended January 31, 2006. 
+Meetings and Committees 
+During the fiscal
+year ended January 31, 2006 the Board of Directors held four formal meetings and two meetings by telephone conference. The Board of Directors has adopted a policy that requires members of the Board to make every effort to attend each annual
+shareholders meeting. All members of the Board of Directors attended the 2005 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee. The members and
+chairs of each of those committees are appointed each year. Membership of the Audit, Compensation and Nominating Committee is comprised of the Company’s three outside directors, Messrs. Hopkins and MacLetchie and Dr. Viets, all of whom are
+independent as defined under the applicable NASDAQ listing standards and Securities and Exchange Commission (“SEC”) rules. 
+Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board of Directors. A copy of each charter is available on
+the Company’s website at www.astro-medinc.com under “Our Company – Corporate Governance”. 
+Audit Committee. The Audit Committee’s primary duties and responsibilities include overseeing the integrity of the Company’s financial
+reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence and performance of the Company’s 
+3 
+independent accountants and the adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly
+financial results, the annual audit scope, the results of the audit and other relevant matters. Mr. Hopkins serves as Chairman of the Audit Committee, which held four in person meetings and four meetings by telephone conference during the
+fiscal year ended January 31, 2006. The Board of Directors has determined that all three members of the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ
+listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that Graeme MacLetchie satisfies the “financial sophistication” requirement of the NASDAQ listing requirements, but that none of the Audit
+Committee members qualifies as an “audit committee financial expert” as defined by the SEC rules, which, in the view of the Board of Directors, require an advanced understanding of internal controls and procedures. However, the Board
+believes that the members of the Audit Committee have a thorough understanding of the Company’s business, the accounting issues relevant to the Company’s financial statements and audit committee functions and possess the requisite skills
+to perform effectively their oversight function. The Audit Committee members expect to increase their understanding of internal controls and procedures as the Company assesses and evaluates its internal control processes and procedures in order to
+provide the attestation report on internal control over financial reporting that the Company must file with respect to its fiscal year ending January 31, 2007. 
+Compensation Committee. The Compensation Committee assists the Board of Directors in discharging the Board’s
+responsibilities relating to director and executive compensation. The Compensation Committee’s responsibilities include establishing and reviewing the Company’s executive and director compensation philosophy, strategies, plans and
+policies, making recommendations with respect to the design of the Company’s incentive compensation plans and equity based plans, granting awards under such plans and overseeing generally the administration of such plans, evaluating the
+performance and determining the compensation of the Chief Executive Officer and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the Compensation Committee, which held two in person
+meetings during the fiscal year ended January 31, 2006. 
+Nominating Committee . The Nominating Committee is responsible for identifying individuals qualified to be members of the Board of Directors and recommending such individuals to be nominated by the Board of Directors for election to
+the Board of Directors by the shareholders. The Nominating Committee held one in-person meeting in the fiscal year ended January 31, 2006. Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for
+director. The Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others,
+have the ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests
+of the shareholders. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications
+under the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+4 
+Shareholders may send recommendations for director nominees to the Nominating Committee at the
+Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include information regarding a candidate’s background, qualifications, experience and willingness to serve as a director. In addition,
+Section 10 of Article II of the Company’s By-Laws set forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of shareholders.
+These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the Shareholders who support the
+nominee’s election. For the annual meeting to be held in 2007, the notice deadline under the By-Laws is March 15, 2007. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department, 600
+East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications
+with the Board of Directors 
+The Company’s Board of
+Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the individual chairman of standing committees. Any shareholder with a concern, question or complaint regarding our compliance with
+any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The
+Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s corporate offices that is sent directly to an individual unless the Company believes the communication may pose a security risk.
+Compensation of Directors 
+Messrs. Hopkins, MacLetchie and Viets are paid an annual retainer of $3,500
+plus $500 for each Board and committee meeting attended (including attendance through telephonic means). Directors who are also officers or employees of the Company are not entitled to receive any compensation in addition to their compensation for
+services as officers or employees. 
+Those directors who are not
+also officers and employees of the Company receive options to purchase common stock under the Company’s Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the
+Director Plan, Messrs. Hopkins and Viets each received non-qualified option to purchase 1,100 shares of common stock on May 21, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a
+non-qualified option to purchase 1,100 share of common stock upon his initial election to the Board of Directors on May 14, 2002. Any non-employee director who is elected in the future will receive non-qualified option to purchase 1,100 shares
+of common stock on the date of the director’s initial election to the Board of Directors. Each non-employee director (other than a director first elected after June 30 of the prior year) receives an annual non-qualified option to purchase
+1,100 shares of common stock as of the first business day of January of each year. All options have an exercise price equal to the market price of the common stock on the day of the grant and are exercisable for a term of ten years. Options vest six
+months after the grant date, unless automatically accelerated in the event of death, disability, or a change of control. A total of 33,000 shares have been reserved for issuance under the Director Plan. Messrs. Hopkins, MacLetchie and Viets each
+received options to acquire 1,100 shares at $10.91 per share on January 3, 2006. Options for an aggregate of 23,100 shares, with exercise prices ranging from $3.41 to $11.98 per share were outstanding under the Director Plan at January 31,
+2006. On March 21, 2005, the non-employee directors of the Company agreed to cancel options to purchase 3,300 shares of the Company’s common stock granted under the Director Plan to the non-employee directors on January 2, 2005.
+5 
+Report On Executive Compensation 
+The Board of Directors has delegated to the Compensation Committee the authority to fix compensation (including stock
+options) for the Company’s Chief Executive Officer and other key employees. The Compensation Committee is comprised of the Company’s three non-employee directors, Dr. Viets (Chairman), Mr. MacLetchie and Mr. Hopkins.
+Mr. Ondis meets with the Compensation Committee to review the compensation program and make recommendations for senior executive officers. Compensation consists of three principal elements (salary, bonus and stock options). 
+Executive Compensation Philosophy. Compensation
+of the Company’s executive officers should link management initiatives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the
+Company’s business goals and link their interests with shareholder interests. 
+Salary. Base salaries for executive officers were established a number of years ago after reviewing compensation for competitive positions at manufacturing companies of comparable size
+and profitability operating in a similar industry. Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company and for generally publicized
+competitive positions elsewhere in the industry. Base salaries for executives were increased 2% from 2005 levels during fiscal 2006, which approximate the rate of increase for all employees at the Company. 
+Bonus. The Compensation Committee adopted a
+management bonus plan for the purpose of providing incentive compensation to employees of the Company. Awards are based on the Company’s achieving specified financial objectives, such as net income and return on net assets, as well as each
+individual’s specific business objectives. The specified threshold and target financial objectives and business objectives and the related bonus payouts are established annually and, accordingly, individual awards may vary, up or down, from
+year to year. Bonuses accrued during fiscal year 2006 amounted to $20,000 none of which was to executives. No bonus payments were made in fiscal year 2005. Bonuses paid or accrued during fiscal year 2004 amounted to $669,210 of which $297,058 was to
+executives. 
+Stock Options. Total
+executive compensation includes long-term incentives afforded by stock options. Stock option grants are made by the Compensation Committee upon consideration of recommendations made by senior management. The objectives of option grants are to align
+the long-term interests of executives and key employees with shareholder interests, by creating a strong and direct link between compensation and total shareholder return. In this connection, grants are intended to enable recipients to develop and
+maintain significant long-term stock ownership in the Company. Stock options are the principal vehicle for the payment of long-term compensation. Grants of stock options reflect subjective consideration of such matters as other compensation and the
+employee’s position in the Company and contributions to the Company. 
+Compensation of Chief Executive Officer. Mr. Ondis is eligible to participate in the executive compensation plans available to other senior executives. Effective in February 2006, his
+base salary was increased from $241,100 to $245,900, a 2% increase, deemed consistent with salary increases among executives in comparable position in similar industries. No option grants were made to Mr. Ondis during fiscal year 2006.
+Deductibility of
+Compensation . Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid to a public company’s five highest paid executive officers to the extent any such officer’s annual
+compensation exceeds $1,000,000, subject to certain exceptions. The Board of Directors has deferred 
+6 
+adopting a policy on this issue, as it does not expect the compensation of these individuals to reach relevant levels in the near future. 
+Conclusion. Through the program described
+above, the Compensation Committee firmly believes a direct link has been established between the Company’s financial performance, executive compensation and resultant stock price performance. 
+Compensation Committee 
+Hermann Viets, Ph.D. (Chairman) 
+Graeme MacLetchie 
+Jacques V. Hopkins 
+7 
+Executive Compensation 
+The following table sets forth the total annual compensation paid or accrued, together with other information for the fiscal years ended
+January 31, 2006, 2005 and 2004, for the Chief Executive Officer and each of the four most highly compensated executive officers of the Company whose total annual salary and bonus for the fiscal year ended January 31, 2006 exceeded
+$100,000. 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Annual Compensation 
+Securities 
+Underlying 
+Options 
+Granted(#) 
+All Other 
+Compensation($)(b) 
+Salary($) 
+Bonus($) 
+Other($)(a) 
+Albert W. Ondis 
+2006 
+240,829 
+— 
+25,284 
+— 
+3,157 
+Chairman, Chief 
+2005 
+238,725 
+— 
+19,571 
+33,000 
+2,872 
+Executive Officer 
+2004 
+235,373 
+69,249 
+26,219 
+— 
+4,538 
+Everett V. Pizzuti 
+2006 
+233,473 
+— 
+30,196 
+— 
+3,157 
+President, Chief 
+2005 
+230,221 
+— 
+28,277 
+33,000 
+2,856 
+Operating Officer 
+2004 
+229,643 
+65,538 
+31,660 
+15,200 
+4,559 
+Joseph P. O’Connell 
+2006 
+179,972 
+— 
+14,391 
+7,500 
+2,615 
+Vice President and Treasurer, 
+2005 
+173,276 
+— 
+11,246 
+16,500 
+2,843 
+Chief Financial Officer 
+2004 
+170,220 
+42,220 
+14,114 
+10,000 
+4,168 
+John B. Chatten 
+2006 
+150,000 
+— 
+— 
+— 
+— 
+President, Grass-Telefactor 
+2005 
+144,000 
+— 
+— 
+— 
+— 
+Product Group 
+2004 
+142,187 
+— 
+— 
+2,000 
+1,397 
+Elias G. Deeb 
+2006 
+143,022 
+— 
+— 
+5,000 
+2,136 
+Vice President, Media Products 
+2005 
+137,386 
+— 
+— 
+11,000 
+2,573 
+2004 
+136,239 
+34,553 
+— 
+10,000 
+3,407 
+(a) 
+Represents imputed interest on indebtedness of management in the amount of $10,003 for Mr. Ondis and $4,094 for Mr. Pizzuti and reimbursement for taxes attributable to use
+of Company provided vehicles and cash compensation in lieu of Company provided vehicles. 
+(b) 
+Amounts consist of the Company’s annual matching contribution to the Astro-Med, Inc. Retirement Savings Plan. 
+Indebtedness of Management 
+The following information describes loans to directors and executive
+officers of the Company whose indebtedness to the Company exceeded $60,000 at any time during the fiscal year ended January 31, 2006. 
+Name 
+Largest 
+Amount of 
+Indebtedness 
+Outstanding at 
+Any Time 
+Amount of 
+Indebtedness 
+Outstanding 
+at Year End 
+Albert W. Ondis, Chairman and Director 
+$ 
+321,640 
+$ 
+321,640 
+Everett V. Pizzuti, President and Director 
+131,624 
+131,624 
+The indebtedness is
+comprised of unsecured non-interest bearing demand notes for loans made to the persons named prior to fiscal year 1992. 
+8 
+Profit-Sharing Plan 
+The Company has a qualified Profit-Sharing Plan which provides retirement benefits to substantially all employees of the Company and provides for
+contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $210,000) compensation. 
+In addition, participants are permitted to defer up to 50% of their cash
+compensation and make contributions of such deferral to this Plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation contributed and 25% of the second, third, fourth and fifth
+percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code. 
+The Plan provides for the vesting of 100% of matching contributions made by the Company to the account of an employee after three years of service.
+Contributions by an employee are 100% vested immediately. The Company’s contributions paid or accrued for the fiscal year ended January 31, 2006 totaled $152,500. 
+Employee Stock Ownership Plan 
+The Company has an Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such
+amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions,
+which may be in cash or stock, are invested by the Plan’s Trustee in shares of common stock of the Company. No contributions were paid or accrued for the fiscal year ended January 31, 2006. 
+Stock Option Plans 
+The Company has a Non-Qualified Stock Option Plan adopted in the fiscal year ended January 31, 1999 and amended in the
+fiscal year ended January 31, 2002 under which options for an aggregate of 1,100,000 shares of common stock may be granted to officers and key employees as well as consultants or other persons who render services to the Company at an exercise
+price of not less than 50% of the market price on the date of grant. Options granted under this plan for an aggregate of 25,000 shares, with an exercise price of $8.46 were granted during the fiscal year ended January 31, 2006. Options granted
+under this plan for an aggregate of 636,490 shares with exercise prices ranging from $3.00 to $10.91 per share were outstanding at January 31, 2006. A total of 390,030 shares remain available for option grants under this plan. 
+The Company also has an Incentive Stock Option Plan adopted in the fiscal
+year ended January 31, 1994 under which options for an aggregate of 250,000 shares of common stock may be granted to officers and key employees at an exercise price of not less than 100% of the market price on the date of grant. Options granted
+under this plan for an aggregate of 106,150 shares with exercise prices ranging from $3.00 to $7.67 per share were outstanding at January 31, 2006. No shares remain available for option grants under this plan. 
+In addition, the Company has an Incentive Stock Option Plan adopted in the
+fiscal year ended January 31, 1998 and amended in the fiscal years ended January 31, 1999 and 2001, under which options for an aggregate of 1,375,000 shares of common stock may be granted to officers and key employees at an exercise price
+of not less than 100% of the market price on the date of grant. Options granted under this plan for an aggregate of 59,500 
+9 
+shares with an exercise price of $8.46 were granted during the fiscal year ended January 31, 2006. Options granted under this plan for an aggregate of
+606,015 shares with exercise prices ranging from $3.00 to $10.91 per share were outstanding at January 31, 2006. A total of 235,155 shares remain available for option grants under this plan. 
+The following tables present certain information concerning stock options
+granted and exercised by each executive officer named in the Summary Compensation Table during the fiscal year ended January 31, 2006, and the year-end value of unexercised options held by each of those officers. 
+Aggregated Option Exercises in Fiscal Year Ended 
+January 31, 2006 and Held at January 31, 2006 
+Name 
+Shares 
+Acquired 
+On Exercise 
+(#) 
+Value 
+Realized 
+($)(a) 
+Securities Underlying 
+Unexercised Options at 
+Fiscal Year End(#) 
+Value of Unexercised In- 
+The-Money Options at 
+Fiscal Year End($)(b) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Albert W. Ondis 
+— 
+— 
+309,650 
+24,750 
+1,507,581 
+— 
+Everett V. Pizzuti 
+— 
+— 
+317,790 
+24,750 
+1,310,467 
+— 
+Joseph P. O’Connell 
+— 
+— 
+214,225 
+19,875 
+1,119,217 
+13,800 
+John B. Chatten 
+— 
+— 
+57,200 
+— 
+260,061 
+— 
+Elias G. Deeb 
+— 
+— 
+83,050 
+13,250 
+397,283 
+9,200 
+(a) 
+Amount represents excess of market value over exercise price on date of exercise. The table does not reflect income taxes which may have been payable by the individual in connection
+with the exercise of the options. 
+(b) 
+Amount represents excess of market value as of January 31, 2006 over exercise price. 
+Option Grants — Fiscal Year 
+Ended January 31, 2006 
+Name 
+Option 
+Grants 
+(#)(a) 
+% Of Total 
+Options 
+Granted to 
+Employees 
+in Fiscal 
+Year 
+Per Share 
+Exercise 
+Price($) 
+Expiration 
+Date 
+Grant 
+Date 
+Value 
+($)(b) 
+Albert W. Ondis 
+— 
+— 
+— 
+— 
+— 
+Everett V. Pizzuti 
+— 
+— 
+— 
+— 
+— 
+Joseph P. O’Connell 
+7,500 
+8.9 
+% 
+8.46 
+3/21/15 
+94,545 
+John B. Chatten 
+— 
+— 
+— 
+— 
+— 
+Elias G. Deeb 
+5,000 
+5.9 
+% 
+8.46 
+3/21/15 
+63,030 
+(a) 
+Options will become exercisable over a 4 year period in equal annual installments. 
+(b) 
+Amounts represent the fair value of each option granted and were estimated as of the date of grant using the Black-Scholes option-pricing model with the following weighted average
+assumptions: expected volatility of 57.9%; expected life of 5 years; risk-free interest rate of 3.43% and dividend yield of 1.7%. 
+10 
+Related Party Transactions 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal
+services to the Company. 
+The Company employs a son-in-law of
+Mr. Ondis, Eric Menke, as Manager of International Dealer Sales, and during the fiscal year ended January 31, 2006 paid him $82,319 in salary and commissions. The Company also employs three sons of Mr. Pizzuti: Eric Pizzuti, as
+National Sales Manager (QuickLabel Systems), William Pizzuti, as Regional Sales Manager (QuickLabel Systems), and Christopher Pizzuti, as Dealer Sales Manager (QuickLabel Systems), to whom the Company paid $95,863, $127,056 and $68,459,
+respectively, in salary and commissions during the fiscal year ended January 31, 2006. In addition, the Company made matching contributions for the fiscal year under its qualified Profit-Sharing Plan of $1,314 to Eric Menke, $1,494 to Eric
+Pizzuti, $1,952 to William Pizzuti and $498 to Christopher Pizzuti. 
+Other than as described above or contained in the section entitled “Indebtedness of Management”, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended
+January 31, 2006 any material interest, direct or indirect, in any material transaction or any material proposed transaction to which the Company was or is to be a party. 
+11 
+Performance Graph 
+Set forth below is a line graph comparing the cumulative total return on the Company’s common stock against the cumulative total return of a NASDAQ
+market index and a peer index for the period of five fiscal years ended January 31, 2006. The University of Chicago’s Center for Research in Security Prices (CRSP) total return index for the NASDAQ Stock Market is calculated using all
+companies which trade on the NASDAQ National Market System (NMS) or on the NASDAQ supplemental listing. It includes both domestic and foreign companies. The index is weighted by the then current shares outstanding and assumes dividends reinvested.
+The return is calculated on a monthly basis. The peer group index, the CRSP Index for NASDAQ Electronic Components Stock designated below as the industry index, is comprised of companies classified as electronic equipment manufacturers. The total
+returns assume $100 invested on February 1, 2001 with reinvestment of dividends. 
+COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG 
+ASTRO-MED, INC., NASDAQ MARKET INDEX AND PEER GROUP
+INDEX 
+ASSUMES $100 INVESTED ON
+FEBRUARY 1, 2001 
+ASSUMES DIVIDEND REINVESTED FISCAL YEAR ENDING JANUARY 31, 2006 
+Fiscal Years Ended January 31 
+2001 
+2002 
+2003 
+2004 
+2005 
+2006 
+Astro-Med, Inc. 
+100 
+97.98 
+97.62 
+431.94 
+309.32 
+341.91 
+Peer Group Index 
+100 
+62.98 
+31.73 
+62.64 
+45.11 
+50.02 
+Nasdaq Market Index 
+100 
+69.68 
+47.83 
+75.32 
+75.25 
+84.90 
+12 
+The Board of Directors and its Compensation Committee recognize that the market price of stock is
+influenced by many factors, only one of which is issuer performance. The Company’s stock price may also be influenced by market perception of the Company in particular and the electronic equipment manufacturing industry in general, economic
+conditions and government regulation. The stock price performance shown in the graph is not necessarily indicative of future price performance. 
+Audit Committee Report 
+The Audit Committee of the Board is responsible for providing independent, objective oversight of the Company’s accounting functions and internal
+controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and
+financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report
+thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial
+statements; and (2) the independence and performance of the Company’s independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s
+independent accountants, Grant Thornton LLP, to review and discuss the January 31, 2006 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with
+generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Grant Thornton LLP the
+matters required by Statement on Auditing Standards No.61 ( Communication with Audit Committees ). The Audit Committee also received from Grant Thornton LLP written disclosures and the letter regarding independence as required by Independence
+Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Grant Thornton LLP that firm’s independence. 
+The Audit Committee received the information concerning the fees of Grant Thornton LLP for the year ended January 31,
+2006 set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of these non-audit services is compatible with maintaining the independence of the independent accountants and has
+determined that the provision of such services by Grant Thornton LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of Director’s include the audited
+consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2006, to be filed with the SEC. 
+Audit Committee 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+13 
+Independent Accountant Fees and Services 
+On June 9, 2005, following the approval of the Audit Committee of the Board of Directors, the Company dismissed
+Ernst & Young LLP (“Ernst & Young”) as the Company’s independent auditors. During the two most recent fiscal years of the Company ended January 31, 2005 and 2004, and the subsequent interim period through
+June 9, 2005, there were no disagreements between the Company and Ernst & Young on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved
+to Ernst & Young’s satisfaction, would have caused Ernst & Young to make reference to the subject matter of the disagreement in connection with its reports; and there were no reportable events described under Item 304
+(a) (1) (v) of Regulation S-K. The audit reports of Ernst & Young on the consolidated financial statements of the Company as of and for the fiscal years ended January 31, 2005 and 2004 did not contain any adverse opinion
+or disclaimers of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the two most recent fiscal years of the Company ended January 31, 2005 and 2004 and the subsequent interim period
+through June 9, 2005, the Company did not consult any other firms regarding any of the matters or events set forth in Item 304 (a) (2) (i) and (ii) of Regulation S-K. 
+On June 24, 2005, following the approval of the Audit Committee of the
+Board of Directors, the Company engaged the services of Grant Thornton LLP (Grant Thornton”) as the Company’s principal independent accountant to audit the Company’s financial statements for fiscal year ended January 31, 2006.
+During the two most recent fiscal years of the Company ended January 31, 2005 and 2004 or any subsequent interim period prior to Grant Thornton’s engagement, the Company did not consult with Grant Thornton regarding any of the matters or
+events set forth in Item 304 (a) (2) (i) and (ii) of Regulation S-K. The Company provided Ernst & Young and Grant Thornton with a copy of the foregoing disclosure. 
+The Company expects a representative of Grant Thornton LLP will be present at
+the annual meeting with the opportunity to make a statement, if he or she so desires, and that such representative will be available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the Company for the fiscal year ended January 31, 2006 are set
+forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the audit of the Company’s annual financial statements and review of financial statements and statutory and regulatory filings or engagements.
+The aggregate fees included in each of the other categories are fees billed for the fiscal year. 
+2006 
+Grant Thornton LLP 
+Audit Fees 
+$ 
+112,500 
+Audit-Related Fees 
+$ 
+12,000 
+Tax Fees 
+$ 
+5,250 
+All Other Fees 
+Audit Fees for
+the fiscal years ended January 31, 2006 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on Form
+10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Audit-Related Fees as of the fiscal years ended January 31, 2006 and 2005 were for employee benefit plan audits. 
+14 
+Tax Fees as of the fiscal years ended January 31, 2006 and 2005 were for services rendered
+for tax returns and estimates, tax advice and tax planning. 
+All Other Fees as of the fiscal year ended January 31, 2006 and 2005 were for an online research database, preparation of an SEC Comment Letter response and fees paid in connection with the change in independent auditors.
+Policy on Audit Committee Pre-Approval . The Audit
+Committee pre-approves all audit and non-audit services provided by the independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit
+Committee under the de minimus exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X. 
+Financial Reports 
+A
+copy of the annual report of the Company for the fiscal year ended January 31, 2006 including the Company’s annual report to the Securities and Exchange Commission on Form 10-K, accompanies this proxy statement. Such report is not part of
+this proxy statement. 
+Proposals For 2007 Annual Meeting 
+The 2007 annual meeting of the shareholders of the Company is scheduled to
+be held on May 15, 2007. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the
+proposal to the Company not later than December 14, 2006. Shareholder proposals that are to be considered at the 2007 annual meeting but not requested to be included in the Proxy Statement must be submitted no later than March 16,
+2007 and no earlier than December 16, 2006. 
+Other Matters
+No business other than that set forth in the attached
+Notice of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon
+according to their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for
+other persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+Dated: April 24, 2006 
+15 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders—May 16, 2006 
+The undersigned, whose signature appears on the reverse side of this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques
+V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned would possess if personally present, to vote the stock of the
+undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 16, 2006, in West Warwick, Rhode Island, and at any adjournments thereof, as follows: 
+1. ELECTION OF DIRECTORS 
+FOR all nominees listed below (except as marked to the contrary
+below) 
+WITHHOLD AUTHORITY to vote for all nominees listed
+below 
+Albert W. Ondis,
+Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Graeme MacLetchie. 
+(INSTRUCTION: to withhold authority to vote for any individual
+nominee, write the nominee’s name in the space provided below.) 
+2. In their discretion, upon such other matters as may properly come before the meeting. 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
+VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+PLEASE DATE, SIGN AND RETURN THIS PROXY 
+Dated 
+, 2006
+Signed 
+(Sign exactly as your name appears hereon. When signing as attorney, executor, administrator, trustee, guardian or in
+a corporate capacity, please give full title as such. In case of joint tenants or multiple owners, each party must sign.) 
+THIS PROXY IS
+SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-06-086518/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-06-086518/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..6867b363afe9db59acd2e19dc2c845f18d642846
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-06-086518/proxy_rpt.txt
@@ -0,0 +1,17 @@
+Related Party Transactions 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal
+services to the Company. 
+The Company employs a son-in-law of
+Mr. Ondis, Eric Menke, as Manager of International Dealer Sales, and during the fiscal year ended January 31, 2006 paid him $82,319 in salary and commissions. The Company also employs three sons of Mr. Pizzuti: Eric Pizzuti, as
+National Sales Manager (QuickLabel Systems), William Pizzuti, as Regional Sales Manager (QuickLabel Systems), and Christopher Pizzuti, as Dealer Sales Manager (QuickLabel Systems), to whom the Company paid $95,863, $127,056 and $68,459,
+respectively, in salary and commissions during the fiscal year ended January 31, 2006. In addition, the Company made matching contributions for the fiscal year under its qualified Profit-Sharing Plan of $1,314 to Eric Menke, $1,494 to Eric
+Pizzuti, $1,952 to William Pizzuti and $498 to Christopher Pizzuti. 
+Other than as described above or contained in the section entitled “Indebtedness of Management”, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended
+January 31, 2006 any material interest, direct or indirect, in any material transaction or any material proposed transaction to which the Company was or is to be a party. 
+11 
+Performance Graph 
+Set forth below is a line graph comparing the cumulative total return on the Company’s common stock against the cumulative total return of a NASDAQ
+market index and a peer index for the period of five fiscal years ended January 31, 2006. The University of Chicago’s Center for Research in Security Prices (CRSP) total return index for the NASDAQ Stock Market is calculated using all
+companies which trade on the NASDAQ National Market System (NMS) or on the NASDAQ supplemental listing. It includes both domestic and foreign companies. The index is weighted by the then current shares outstanding and assumes dividends reinvested.
+The return is calculated on a monthly basis. The peer group index, the CRSP Index for NASDAQ Electronic Components Stock designated below as the industry index, is comprised of companies classified as electronic equipment manufacturers. The total
+returns assume $100 invested on February 1, 2001 with reinvestment of dividends.
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-07-089841/proxy.txt b/raw/proxies/0000008146/0001193125-07-089841/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..af7f81d8c8feb39493caa86a6da913a58aa8f0b5
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-07-089841/proxy.txt
@@ -0,0 +1,1929 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE NOTICE & PROXY
+DEFINITIVE NOTICE & PROXY 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant ¨ 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing
+Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 15, 2007 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2007 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode Island on
+Tuesday May 15, 2007, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Approving the adoption of the Company’s 2007 Equity Incentive Plan. 
+(3) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 23, 2007 has been fixed as the record date for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 25, 2007 
+Kindly fill in, date and sign the
+enclosed proxy and promptly return it in the enclosed addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person.
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 15, 2007 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual
+meeting of the shareholders to be held May 15, 2007. The Company will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by regular employees
+of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending
+proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until notice
+thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders on or
+about April 25, 2007. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their respective successors are elected and
+qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons named below. Certain information
+concerning such nominees is set forth below: 
+Name and Age 
+Business Experience During Past Five Years 
+Director 
+Since 
+Albert W. Ondis (81) 
+Chairman of the Company 
+1969 
+Everett V. Pizzuti (70) 
+President of the Company 
+1985 
+Jacques V. Hopkins (76) 
+Former Partner, Hinckley, Allen & Snyder LLP (Attorneys at Law) (Retired 1997) 
+1969 
+Hermann Viets, Ph.D. (64) 
+President, Milwaukee School of Engineering (since 1991); Director, Gehl Company (farm equipment) 
+1988 
+Graeme MacLetchie (69) 
+Director, Deutsche Bank Alex Brown (Private Client Division) 
+2002 
+The Board of Directors
+has determined that all of the directors of the Company, which include each of the nominees standing for election at the 2007 annual shareholders meeting, other than Albert W. Ondis and Everett V. Pizzuti, are independent of the Company in that such
+nominees have no material relationship with the Company either directly, or as a partner, shareholder or affiliate of an organization that has a relationship with the Company. The Board of Directors has made this determination in accordance with
+applicable Securities and Exchange Commission (“SEC”) rules and NASDAQ listing standards. 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 23, 2007 will be entitled to vote at the meeting. On the record date, there were
+6,872,867 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of March 23, 2007 (except as noted) the record and beneficial ownership of the
+Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than 5 percent of such stock, by each director of the Company, by each executive officer named in the Summary
+Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Albert W. Ondis 
+2,054,808 
+(b) 
+28.4 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Everett V. Pizzuti 
+519,054 
+(c) 
+7.2 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Eliot Rose Asset Management, LLC and Gary S. Siperstein 
+673,049 
+(d) 
+9.8 
+% 
+10 Weybosset Street, Suite 401 
+Providence, Rhode Island 
+Kern Capital Management, LLC 
+440,171 
+(e) 
+6.4 
+% 
+114 West 47 th Street, Suite 1926 
+New York, NY 10036 
+Hermann Viets 
+186,106 
+(f) 
+2.7 
+% 
+Joseph P. O’Connell 
+282,390 
+(g) 
+4.0 
+% 
+Elias G. Deeb 
+113,457 
+(h) 
+1.6 
+% 
+Jacques V. Hopkins 
+20,062 
+(i) 
+* 
+Graeme MacLetchie 
+79,750 
+(j) 
+1.2 
+% 
+Michael J. Sullivan 
+66,613 
+(k) 
+1.0 
+% 
+All directors and executive officers of the Company as a group (12) 
+3,404,551 
+(l) 
+42.2 
+% 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive officer, as
+well as shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable within 60 days of March 23, 2007. All
+information is based upon 
+2 
+ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under
+the Securities Exchange Act of 1934 or has been furnished by the respective directors and executive officers of the Company. 
+(b) 
+Includes 311,571 shares held in trust for children, 368,312 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,986 shares allocated to his
+account under the Company’s Employee Stock Ownership Plan. 
+(c) 
+Includes 309,737 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,512 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(d) 
+Eliot Rose Asset Management, LLC, a Rhode Island limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2006. Gary S. Siperstein is deemed to have beneficial ownership of the number of shares shown due to his power to dispose of said shares through his ownership interest in Eliot Rose
+Asset Management, LLC. 
+(e) 
+Kern Capital Management, LLC, a New York based investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial ownership of the number of
+shares shown as of December 31, 2006. Robert E. Kern, Jr. and David G. Kern are deemed to have beneficial ownership of the number of shares shown due to their power to dispose of said shares through their capacity as controlling members of Kern
+Capital Management, LLC. 
+(f) 
+Includes 275 shares held by Dr. Viets as custodian for a child and 9,625 shares deemed to be beneficially owned because of exercisable options to acquire shares.
+(g) 
+Includes 263,951 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,387 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(h) 
+Includes 98,967 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,650 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(i) 
+Includes 9,625 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(j) 
+Includes 4,125 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(k) 
+Includes 54,279 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,472 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(l) 
+Includes 1,191,508 shares deemed to be beneficially owned because of exercisable options to acquire shares and 19,509 shares allocated to the accounts of officers under the
+Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, requires the directors and executive officers of the Company and any persons who own more than ten percent of the
+Company’s common stock to file with the Securities and Exchange Commission various reports of beneficial ownership and changes in beneficial ownership. The Company believes all of its directors and executive officers complied with all filing
+requirements applicable to them with respect to transactions during the fiscal year ended January 31, 2007. 
+Meetings and Committees 
+During the fiscal year ended January 31, 2007, the Board of Directors held four formal meetings and one meeting by telephone conference. During
+fiscal year 2007, all directors attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of Directors has 
+3 
+adopted a policy that requires members of the Board to make every effort to attend each annual shareholders meeting. All members of the Board of Directors,
+other than Mr. Hopkins, attended the 2006 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee. The members and chairs of each of those committees are appointed each year.
+Membership of the Audit, Compensation and Nominating Committee is comprised of the Company’s three outside directors, Messrs. Hopkins and MacLetchie and Dr. Viets, all of whom are independent as defined under the applicable NASDAQ listing
+standards and SEC rules. 
+Each of the Audit, Compensation and
+Nominating Committees has a written charter approved by the Board of Directors. A copy of each charter is available on the Company’s website at www.astro-medinc.com under “Our Company – Corporate Governance”. 
+Audit Committee. The Audit Committee’s primary duties and
+responsibilities include overseeing the integrity of the Company’s financial reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence and
+performance of the Company’s independent accountants and the adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the annual audit scope, the results of
+the audit and other relevant matters. Mr. Hopkins serves as Chairman of the Audit Committee, which held four in person meetings and two meetings by telephone conference during the fiscal year ended January 31, 2007. The Board of Directors
+has determined that all three members of the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the
+Board of Directors has determined that Graeme MacLetchie satisfies the “financial sophistication” requirement of the NASDAQ listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial
+expert” as defined by the SEC rules, which, in the view of the Board of Directors, requires an advanced understanding of internal controls and procedures. However, the Board of Directors believes that the members of the Audit Committee have a
+thorough understanding of the Company’s business, the accounting issues relevant to the Company’s financial statements and audit committee functions and possess the requisite skills to perform effectively their oversight function. The
+Audit Committee members expect to increase their understanding of internal controls and procedures as the Company assesses and evaluates its internal control processes and procedures in order to provide the attestation report on internal control
+over financial reporting that the Company must file with respect to its fiscal year ending January 31, 2008. 
+Compensation Committee. The Compensation Committee assists the Board of Directors in discharging the Board’s responsibilities relating to
+director and executive compensation. The Compensation Committee’s responsibilities include establishing and reviewing the Company’s executive and director compensation philosophy, strategies, plans and policies, making recommendations with
+respect to the design of the Company’s incentive compensation plans and equity based plans, granting awards under such plans and overseeing generally the administration of such plans, evaluating the performance and determining the compensation
+of the Chief Executive Officer and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the Compensation Committee, which held one in person meeting during the fiscal year ended
+January 31, 2007. 
+Nominating Committee . The
+Nominating Committee is responsible for identifying individuals qualified to be members of the Board of Directors and recommending such individuals to be nominated by the Board of 
+4 
+Directors for election to the Board of Directors by the shareholders. The Nominating Committee held one in-person meeting in the fiscal year ended
+January 31, 2007. Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating
+Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical
+standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought
+and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the shareholders. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. The Nominating
+Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will
+consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees to the Nominating Committee at the Company’s offices at 600 East Greenwich Avenue, West
+Warwick, Rhode Island 02893. Submissions should include information regarding a candidate’s background, qualifications, experience and willingness to serve as a director. In addition, Section 10 of Article II of the Company’s By-Laws
+set forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of shareholders. These procedures include a requirement for written notice to the
+Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the shareholders who support the nominee’s election. For the annual meeting to be held in 2008, the
+notice deadline under the By-Laws is March 14, 2008. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to
+communicate directly with the members of the Board of Directors or the individual chairman of standing committees. Any shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to
+contact the Board of Directors may communicate directly with the directors by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy is to forward,
+and not to intentionally screen, any mail received at the Company’s corporate offices that is sent directly to an individual unless the Company believes the communication may pose a security risk. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and recommending to
+the Board of Directors the compensation of the directors of the Company. Messrs. Hopkins, MacLetchie and Viets are paid an annual retainer of $3,500 plus $500 for each Board and committee meeting attended (including attendance through 
+5 
+telephonic means). Directors who are also officers or employees of the Company are not entitled to receive any compensation in addition to their compensation
+for services as officers or employees. 
+Those directors who are
+not also officers and employees of the Company receive options to purchase common stock under the Company’s Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the
+Director Plan, Messrs. Hopkins and Viets each received non-qualified option to purchase 1,375 shares of common stock on May 21, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a
+non-qualified option to purchase 1,375 share of common stock upon his initial election to the Board of Directors on May 14, 2002. Options vest six months after the grant date, unless automatically accelerated in the event of death, disability,
+or a change of control. The Director Plan expired on May 31, 2006. 
+The following Director Compensation table provides information regarding the compensation paid or accrued by each individual who was a director during the 2007 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Jacques Hopkins 
+$ 
+10,209 
+$ 
+5,500 
+$ 
+4,709 
+$ 
+0 
+Graeme MacLetchie 
+10,709 
+6,000 
+4,709 
+0 
+Albert W. Ondis(c) 
+N/A 
+N/A 
+N/A 
+0 
+Everett V. Pizzuti(c) 
+N/A 
+N/A 
+N/A 
+0 
+Hermann Viets 
+10,709 
+6,000 
+4,709 
+0 
+(a) 
+The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended January 31, 2007, in accordance with SFAS 123R for stock
+options granted to directors pursuant to the Director Plan. Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2007, included
+in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 16, 2007. 
+(b) 
+As of January 31, 2007 each director had the following number of options outstanding: Jacques Hopkins: 9,625, Graeme MacLetchie: 4,125 and Hermann Viets: 9,625.
+(c) 
+See Summary Compensation Table and Outstanding Equity Awards at Fiscal Year End Table for disclosure relating to compensation and outstanding option awards of Messrs. Ondis and
+Pizzuti. 
+COMPENSATION DISCUSSION &
+ANALYSIS 
+The Compensation Committee of the Board of
+Directors of the Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel
+are effectively compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and recommending to the Board the compensation of directors. 
+Compensation Philosophy and Objectives. Our overall philosophy in terms of executive
+compensation is to link management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business 
+6 
+goals and link their interests with shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s
+performance, awards, if any, made during prior years and other relevant factors. We seek to have the long-term performance of our common stock reflected in executive compensation through our equity incentive programs. 
+Elements of Compensation. Our total
+compensation program for executive officers consists of the following: 
+• 
+salary; 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, historically in the form of stock options; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and provide
+incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while providing
+incentives to maximize long-term value for our shareholders. 
+Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity awards. The Committee annually
+reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our executive officers were established a number of years ago.
+Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. For fiscal year 2007, we increased the compensation of the Company’s employees and
+executive officers by 2%. Historically, annual salary adjustments were approved to be effective on the anniversary of the executive’s original date of hire. Commencing with fiscal 2008, annual salary adjustments will be made effective
+April 1 of each year. 
+Cash Incentive and Bonus
+Awards. The Committee has adopted a management bonus plan for the purpose of providing incentive compensation to employees of the Company. Awards under the management bonus plan are based on the Company’s achieving
+specified financial objectives, such as net income and return on net assets, as well as each individual’s specific business objectives. The specified threshold and target financial objectives and business objectives and the related bonus
+payouts are established annually by the Committee and, accordingly, individual awards may vary, up or down, from year to year. Bonuses paid or accrued for fiscal year 2007 under our management bonus plan to all executive officers was $168,010, which
+represented approximately 59.8% of their maximum bonus opportunity. Bonuses paid to our “Named Executive Officers” (as defined on page 8 below) under our management bonus plan are reflected in the “Non-Equity Incentive Plan
+Compensation” column of the Summary Compensation Table below. 
+In addition, to our management bonus plan, we have sometimes awarded cash bonus awards to our executive officers to reward their efforts in extraordinary circumstances. Such cash awards are made at the discretion of the Committee. In fiscal
+year 2007, the Committee awarded cash bonuses to Albert W. Ondis, Chief Executive Officer of the Company, Everett V. Pizzuti, President and Chief Operating Officer of the Company, 
+7 
+and Joseph P. O’Connell, Treasurer and Chief Financial Officer of the Company, in the amounts of $397,422, $162,578 and $20,000, respectively, in
+connection with these officers’ efforts in consummating the sale of the Company’s former facility located in Braintree, Massachusetts. These cash bonuses are reflected in the “Bonus” column of the Summary Compensation Table
+below. 
+Long-Term Incentive
+Compensation. Total compensation at the executive level also includes long-term incentive awards granted under the Company’s Non-Qualified Stock Option Plan and Incentive Stock Option Plan. The objectives of the
+equity incentive program are to align executive and shareholder long-term interests by creating a strong and direct link between executive pay and total shareholder return, and to enable executives to develop and maintain a significant, long-term
+stock ownership position in our common stock. Historically, all equity awards have been in the form of stock options which have generally been granted in March of each year at an exercise price of not less than 100% of the market price on the date
+of grant. Since 2004, all options granted vest in four equal annual installments commencing on the first anniversary of the date of grant. Prior to 2004, options vested seven months following the grant date. Under the Company’s proposed Equity
+Incentive Plan, the Company would be able to make equity awards in the form of restricted stock, restricted units and performance units in addition to stock options. 
+Retirement and Other Benefits. In order to attract and retain key executives, we offer
+retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including our executive officers. 
+Profit-Sharing Plan. We maintain a qualified Profit-Sharing Plan which provides retirement benefits to substantially all our employees and
+provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $220,000) compensation. In addition, participants are
+permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation contributed and 25%
+of the second, third, fourth and fifth percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code (the “Code”). The Profit-Sharing Plan provides for the vesting of 100% of matching
+contributions made by the Company to the account of the employee after three years of service. Contributions by an employee are 100% vested immediately. Effective April 1, 2007, we amended our Profit-Sharing Plan to increase the amount of our
+matching contributions to 50% of the first percent of compensation contributed and 25% of the second, third, fourth, fifth, sixth and seventh percent. 
+Employee Stock Ownership Plan. We also have an Employee Stock Ownership Plan which provides retirement benefits to substantially all
+employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all
+allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s Trustee in shares of common stock of the Company. 
+Perquisites. In addition to the benefits described above, we provide automobile allowances to certain of our executive officers.
+Furthermore, prior to the adoption of the Sarbanes-Oxley Act of 2002, we made interest free loans to certain of our executive officers. The largest aggregate amount of such loans outstanding at any one time during fiscal year 2007 totaled $473,264.
+As of January 31, 2007, $27,050 of such loans was outstanding and as of April 25, 2007, all such loans have been repaid in full. The amounts of any aforesaid automobile allowances and imputed interest on loans from the Company to our Named
+Executive Officers are reflected in the “All Other Compensation” column of the Summary Compensation Table below. 
+8 
+We have no employment agreements with any of our executive officers and we do not provide any severance
+benefits to our executives other than those provided to employees generally. Severance benefits will vary based upon salary levels and length of service. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis included above. Based on these
+reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included in the Company’s Proxy Statement for the fiscal year ended January 31, 2007 for
+filing with the SEC. 
+Compensation Committee:
+Hermann Viets (Chairman) 
+Jacques Hopkins 
+Graeme MacLetchie. 
+EXECUTIVE COMPENSATION
+The following table provides information regarding the
+total compensation paid or accrued by the Company to each of its Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and its three other highest paid executive officers other than the CEO and CFO (collectively, the
+“Named Executive Officers”). 
+Because the
+Company’s management bonus plan is based on achieving specified performance goals, awards under the plan are not considered “Bonuses” for purposes of SEC rules and are listed below as “Non-Equity Incentive Plan
+Compensation.” 
+Summary Compensation Table
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Stock 
+Awards 
+($) 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+Change in 
+Pension Value 
+and 
+Non-Qualified 
+Deferred 
+Compensation 
+Earnings ($) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Albert W. Ondis 
+Chairman and CEO 
+2007 
+245,624 
+397,422 
+— 
+37,554 
+40,574 
+— 
+34,124 
+(d) 
+755,298 
+Everett V. Pizzuti 
+President and COO 
+2007 
+238,733 
+168,332 
+— 
+37,554 
+38,412 
+— 
+33,641 
+(e) 
+516,672 
+Joseph P. O”Connell 
+Vice President, 
+Treasurer and CFO 
+2007 
+177,863 
+20,000 
+— 
+25,128 
+22,988 
+— 
+28,781 
+(f) 
+274,760 
+Elias G. Deeb 
+Vice President – 
+Media Products 
+2007 
+146,181 
+— 
+— 
+22,345 
+18,628 
+— 
+3,691 
+(g) 
+190,845 
+Michael J. Sullivan 
+Vice President – 
+2007 
+140,393 
+— 
+— 
+22,345 
+18,125 
+— 
+2,676 
+(g) 
+183,539 
+9 
+(a) 
+Reflects discretionary cash bonuses awarded in connection with the consummation of the sale of the Company’s former facility located in Braintree, Massachusetts.
+(b) 
+The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended January 31, 2007, in accordance with SFAS 123R for stock
+options granted pursuant to the Company’s Non-Qualified and Incentive Stock Option Plans. Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year
+ended January 31, 2007, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 16, 2007. 
+(c) 
+Reflects cash awards to the named individuals under the Company’s management bonus plan which is discussed in further detail under the heading “Compensation Discussion and
+Analysis” above. 
+(d) 
+Includes imputed interest calculated at 4.71% in the amount of $15,149 on loan from Company in original principal amount of $321,640, automobile allowance of $15,290, employer match
+under Profit Sharing Plan of $3,115 and employer contribution to Employee Stock Ownership Plan of $570. 
+(e) 
+Includes imputed interest calculated at 4.71% in the amount of $6,200 on loan from Company in original principal amount of $131,624, automobile allowance of $16,460, non-cash
+automobile income of $10,075, employer match under Profit Sharing Plan of $336 and employer contribution to Employee Stock Ownership Plan of $570. 
+(f) 
+Includes automobile allowance of $25,595, employer match under Profit Sharing Plan of $2,616 and employer contribution to Employee Stock Ownership Plan of $570.
+(g) 
+Includes imputed interest calculated at 4.71% in the amount of $942 on loan from Company in original principal amount of $20,000, employer match under Profit Sharing Plan of $2,179
+and employer contribution to Employee Stock Ownership Plan of $570. 
+(h) 
+Includes employer match under Profit Sharing Plan of $2,106 and employer contribution to Employee Stock Ownership Plan of $570. 
+10 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding equity awards
+held by each of the Named Executive Officers as of January 31, 2007. 
+Name 
+Option Grant 
+Date 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Exercisable 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Unexercisable(a) 
+Option 
+Exercise 
+Price($) 
+Option 
+Expiration 
+Date 
+Albert W. Ondis 
+03/24/1997 
+34,375 
+— 
+6.1382 
+03/24/2007 
+(b) 
+03/25/1998 
+34,375 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+34,375 
+— 
+3.5909 
+03/23/2009 
+(b) 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+85,250 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+20,625 
+20,625 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+0 
+21,250 
+7.9316 
+03/20/2016 
+(c) 
+Everett V. Pizzuti 
+03/24/1997 
+34,375 
+— 
+6.1382 
+03/24/2007 
+(b) 
+03/25/1998 
+34,375 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+34,375 
+— 
+3.5909 
+03/23/2009 
+(b) 
+11/27/1999 
+12,375 
+— 
+4.5455 
+11/27/2009 
+(b) 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+14,300 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+20,625 
+20,625 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+0 
+21,250 
+7.9316 
+03/20/2016 
+(c) 
+Joseph P. O’Connell 
+03/24/1997 
+10,312 
+— 
+6.1382 
+03/24/2007 
+(b) 
+03/25/1998 
+13,750 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+27,500 
+— 
+3.5909 
+03/23/2009 
+(b) 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+55,000 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+66,687 
+— 
+2.6909 
+03/18/2012 
+(b) 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(b) 
+04/19/2004 
+10,312 
+10,313 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+2,343 
+7,032 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+0 
+14,062 
+7.9316 
+03/20/2016 
+(c) 
+Elias G. Deeb 
+03/25/1998 
+10,312 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+10,312 
+— 
+3.5909 
+03/23/2009 
+(b) 
+11/27/1999 
+4,125 
+— 
+4.5455 
+11/27/2009 
+(b) 
+03/20/2000 
+20,625 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+20,625 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+6,875 
+— 
+2.6909 
+03/18/2012 
+(b) 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(b) 
+04/19/2004 
+6,875 
+6,875 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+1,562 
+4,688 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+0 
+9,375 
+7.9316 
+03/20/2016 
+(c) 
+Michael J. Sullivan 
+03/24/1997 
+2,062 
+— 
+6.1382 
+03/24/2007 
+(b) 
+03/25/1998 
+6,187 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+4,812 
+— 
+3.5909 
+03/23/2009 
+(b) 
+11/27/1999 
+2,062 
+— 
+4.5455 
+11/27/2009 
+(b) 
+03/20/2000 
+6,875 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+6,875 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+15,125 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+6,875 
+6,875 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+1,562 
+4,688 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+0 
+9,375 
+7.9316 
+03/20/2016 
+(c) 
+11 
+(a) 
+Option awards are adjusted to reflect Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Options vested in full on the seven month anniversary of the Option Grant Date. 
+(c) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+Grants of Plan Based Awards 
+The following table provides information on all plan based awards by the
+Company in fiscal year 2007 to each Named Executive Officer. 
+Name 
+Grant 
+Date 
+All Other Stock 
+Awards: Number 
+of Shares of Stock 
+or Units (#) 
+All Other Option 
+Awards: Number of 
+Securities Underlying 
+Options (#) 
+Exercise or Base 
+Price of Option 
+Awards ($/Sh) 
+Grant Date Fair Value 
+of Stock and Option 
+Awards(a) 
+Albert W. Ondis 
+03/20/06 
+— 
+21,250 
+$ 
+7.9136 
+$ 
+73,312.50 
+Everett V. Pizzuti 
+03/20/06 
+— 
+21,250 
+7.9136 
+73,312.50 
+Joseph P. O’Connell 
+03/20/06 
+— 
+14,062 
+7.9136 
+48,513.90 
+Elias G. Deeb 
+03/20/06 
+— 
+9,375 
+7.9136 
+32,343.75 
+Michael J. Sullivan 
+3/20/06 
+— 
+9,375 
+7.9136 
+32,343.75 
+(a) 
+Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2007,
+included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 16, 2007. 
+Option Exercises and Stock Vested 
+The following table provides information on all exercises of options by the Named Executive Officers during the Company’s 2007 fiscal year.
+Option Awards 
+Stock Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise ($)(b) 
+Number of 
+Shares Acquired 
+on Vesting (#) 
+Value Realized 
+on Vesting ($) 
+Albert W. Ondis 
+0 
+$ 
+0 
+— 
+— 
+Everett V. Pizzuti 
+68,750 
+173,976 
+— 
+— 
+Joseph P. O’Connell 
+6,875 
+13,163 
+— 
+— 
+Elias G. Deeb 
+6,875 
+16,540 
+— 
+— 
+200 
+772 
+6,675 
+26,445 
+Michael J. Sullivan 
+2,062 
+4,961 
+— 
+— 
+5,500 
+42,895 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise and the exercise price of the options. 
+12 
+Indebtedness of Management 
+The following information describes loans to directors and executive officers of the Company whose indebtedness to the
+Company exceeded $120,000 at any time during the fiscal year ended January 31, 2007. 
+Name 
+Largest 
+Amount of 
+Indebtedness 
+Outstanding at 
+Any Time 
+Amount of 
+Indebtedness 
+Outstanding 
+at Fiscal 
+Year End 
+Albert W. Ondis, Chairman and Director 
+$ 
+321,640 
+$ 
+0 
+Everett V. Pizzuti, President and Director 
+131,624 
+7,050 
+The indebtedness is
+comprised of unsecured non-interest bearing demand notes for loans made to the persons named prior to fiscal year 1992. As of April 25, 2007, all indebtedness indicated in the table above has been repaid in full. 
+PROPOSAL NO. 2 
+APPROVAL OF EQUITY INCENTIVE PLAN 
+This section summarizes the proposal to approve the Astro-Med, Inc. 2007 Equity Incentive Plan (the “Plan”) in the form included with this Proxy Statement as Appendix A. The Board of Directors adopted the
+Plan on March 26, 2007, subject to approval by the shareholders. 
+Purpose. The purpose of the Plan is to attract, retain and motivate key employees by providing them with the opportunity to acquire a proprietary interest in the Company and to link that interest with those of
+shareholders. 
+Authorized
+Shares. The maximum number of authorized but unissued or reacquired shares of common stock of the Company issuable under the Plan is 1,000,000. 
+If any award expires, lapses or otherwise terminates for any reason without having been exercised or settled in full, or if
+shares subject to forfeiture or repurchase are forfeited or repurchased by the Company, any such shares that are reacquired or subject to such a terminated award will again become available for issuance under the Plan. Upon any stock dividend, stock
+split, reverse stock split, recapitalization or similar change in our capital structure, appropriate adjustments will be made to the shares subject to the Plan, to the award grant limitations and to all outstanding awards. 
+Administration. The Plan will be administered
+by the Compensation Committee or other committee of the Board of Directors duly appointed to administer the Plan, or, in the absence of such committee, by the Board of Directors. In the case of awards intended to qualify for the performance-based
+compensation exemption under Section 162(m) of the Code, administration must be by a Committee comprised solely of two or more “outside directors” within the meaning of Section 162(m) of the Code. (For purposes of this summary,
+the term “Committee” will refer to either such duly appointed committee or the Board of Directors.) Subject to the provisions of the Plan, the Committee determines in its discretion the persons to whom and the times at which awards are
+granted, the types and sizes of such awards, and all of their terms and conditions. The Committee may, subject to certain limitations on the exercise of its discretion under Section 162(m) of the Code, amend, cancel, renew or grant a new award
+in substitution for, any award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or defer the vesting of any award. With respect to participation by any person whose transactions in the Company’s
+common stock are subject to Section 16 of the Exchange Act, 
+13 
+the Plan will be administered in compliance with the requirements, if any, of Rule 16b-3 of the Exchange Act. The Plan provides, subject to certain
+limitations, for indemnification by the Company of any director, officer or employee against all reasonable expenses, including attorneys’ fees, incurred in connection with any legal action arising from such person’s action or failure to
+act in administering the Plan. The Committee will interpret the Plan and awards granted thereunder, and all determinations of the Committee will be final and binding on all persons having an interest in the Plan or any award. 
+Eligibility. Awards under the Plan may be
+granted to executive officers and other key employees of the Company or any parent or subsidiary corporation of the Company. The Plan also provides that other individuals who perform services for, or act as directors of, the Company or any parent or
+subsidiary corporation of the Company may be granted awards. Incentive stock options may be granted only to employees who, as of the time of grant, are employees of the Company. The Plan’s eligibility criteria are intended to encompass a group
+which is currently estimated at approximately 95 individuals, which includes 8 executive officers. The Committee bases its selection of award recipients, and its determination of the number of shares of the Company’s common stock or units to be
+covered by each award, on the nature of the participant’s duties and present and potential contributions to the Company’s success and other factors it deems relevant. The actual number of individuals who will receive an award cannot be
+determined in advance because the Committee has discretion to select the participants. 
+Awards. The Committee currently intends to continue granting stock options as our principal form of award. However, awards under the Plan may be granted in the form of: 
+• 
+stock options; 
+• 
+stock appreciation rights; 
+• 
+restricted stock awards; 
+• 
+performance awards; or 
+• 
+other equity-based awards. 
+Shares reserved for issuance, but never issued, such as shares covered by expired or terminated options, may be available for subsequent awards.
+Stock Options. Each option
+granted under the Plan must be evidenced by a written agreement between the Company and the participant specifying the number of shares subject to the option and the other terms and conditions of the option, consistent with the requirements of the
+Plan. The exercise price of each stock option will be established in the discretion of the Committee, provided, however, that the exercise price for an incentive stock option may not be less than 100% of the fair market value of the Company’s
+common stock on the date of grant. Furthermore, any incentive stock option granted to a person, who at the time of grant owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any parent or
+subsidiary corporation of the Company (a “Ten Percent Owner”) must have an exercise price equal to at least 110% of the fair market value of the Company’s common stock on the date of grant. Subject to appropriate adjustment in the
+event of any change in the capital structure of the Company, no employee may be granted options for more than 50,000 shares in any fiscal year of the Company. 
+The Plan provides that the option exercise price may be paid in cash, by check, or in cash equivalent, by the assignment of the proceeds of a sale with
+respect to some or all of the shares being acquired upon the exercise of the option, to the extent legally permitted, by tender of Company’s common stock owned by the participant 
+14 
+having a fair market value not less than the exercise price, by such other lawful consideration as approved by the Committee, or by any combination of these.
+Nevertheless, the Committee may restrict the forms of payment permitted in connection with any option grant. No option may be exercised unless the participant has made adequate provision for federal, state, local and foreign taxes, if any, relating
+to the exercise of the option, including, if permitted or reacquired by the Company, through the participant’s surrender of a portion of the option shares to the Company. 
+Options will become vested and exercisable at such times or upon such events and subject to such terms, conditions,
+performance criteria or restrictions as specified by the Committee. The maximum term of any option granted under the Plan is ten years, provided that an incentive stock option granted to a participant owning more than ten percent of the
+Company’s common stock must have a term not exceeding five years. The Committee will specify in each written option agreement, and solely in its discretion, the period of post-termination exercise applicable to each option. 
+Stock options are nontransferable by the participant, other than by will or
+by the laws of descent and distribution, and are exercisable during the participant’s lifetime only by the participant. However, a nonstatutory stock option may be assigned or transferred to the extent permitted by the Committee and set forth
+in the option agreement. 
+Annual Directors’
+Options. Upon the adjournment of each annual meeting, the Plan provides to directors who are not employees of the Company or its affiliates non-qualified options to purchase 5,000 shares of stock. If a person is first
+elected to serve as director of the Company at any meeting of the shareholders other than an annual meeting, such person is granted an option to purchase 5,000 shares of stock upon election. Each of these options has an exercise price equal to the
+fair market value per share of the stock as of the date of the grant. The options granted to directors have a term of ten years and become exercisable immediately prior to the occurrence of the annual meeting following the date the option is
+granted. However, the Plan provides that all such options become immediately exercisable upon a change of control of the Company. If a director ceases to be a director of the Company or of an affiliate for any reason other than death or disability,
+all such options that are not exercisable terminate and any remaining options may be exercised within two years following the director’s termination. If a director ceases to be a director of the Company or an affiliate due to death or
+disability, all such options granted to such director become immediately exercisable, and may be exercised within two years following the date of death or disability. 
+Stock Appreciation Rights. Each stock appreciation right (“SAR”) granted under the
+Plan must be evidenced by a written agreement between the Company and the participant specifying the number of shares subject to the award and the other terms and conditions of the award, consistent with the requirements of the Plan. 
+A SAR gives a participant the right to receive the appreciation in the fair
+market value of the Company’s common stock between the date of grant of the award and the date of its exercise. The Company may pay the appreciation either in cash or in the Company’s common stock. The Committee may grant SARs under the
+Plan in tandem with a related stock option or as a freestanding award. A tandem SAR is exercisable only at the time and to the same extent that the related option is exercisable, and its exercise causes the related option to be canceled.
+Freestanding SARs vest and become exercisable at the times and on the terms established by the Committee. The maximum term of any SAR granted under the Plan is ten years. Subject to appropriate adjustment in the event of any change in the capital
+structure of the Company, no employee may be granted SARs for more than 50,000 shares in any fiscal year of the Company. 
+15 
+SARs are nontransferable by the participant, other than by will or by the laws of descent and
+distribution, and are exercisable during the participant’s lifetime only by the participant. 
+Restricted Stock Awards. The Committee may grant restricted stock awards under the Plan either in the form of a restricted
+stock purchase right, giving a participant an immediate right to purchase the Company’s common stock, or in the form of a restricted stock bonus, for which the participant furnishes consideration in the form of services to the Company. The
+Committee determines the purchase price payable under restricted stock purchase awards, which may be subject to vesting conditions based on such service or performance criteria as the Committee specifies, and the shares acquired may not be
+transferred by the participant until vested. Participants holding restricted stock will have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to the same
+restrictions as the original award. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted in any fiscal year of the Company, one or more restricted stock awards, subject to
+vesting conditions based on the attainment of performance goals, for more than 25,000 shares. 
+Restricted Stock Units. The Committee may grant restricted stock units under the Plan which represent a right to receive common stock of the Company at a future date determined in
+accordance with the participant’s award agreement. No monetary payment is required for receipt of restricted stock units or the shares issued in settlement of the award, the consideration for which is furnished in the form of the
+participant’s services to the Company. The Committee may grant restricted stock unit awards subject to the attainment of performance goals similar to those described below in connection with performance awards, or may make the awards subject to
+vesting conditions similar to those applicable to restricted stock awards. Participants have no voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of common stock are issued in settlement of
+such awards. However, the Committee may grant restricted stock units that entitle their holders to receive dividend equivalents, which are rights to receive additional restricted stock units for a number of shares whose value is equal to any cash
+dividends paid by the Company. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted in any fiscal year of the Company, one or more restricted stock or unit awards for more
+than 25,000 shares. 
+Performance
+Awards. The Committee may grant performance awards subject to such conditions and the attainment of such performance goals over such periods as the Committee determines in writing designated as performance shares or
+performance units. Performance shares and performance units are unfunded bookkeeping entries generally having initial values, respectively, equal to the fair market value determined on the grant date of the common stock. Performance awards will
+specify a predetermined amount of performance shares or performance units that may be earned by the participant to the extent that one or more predetermined performance goals are attained within a predetermined performance period. To the extent
+earned, performance awards may be settled in cash, common stock of the Company or any combination thereof. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, for each fiscal year of the Company
+contained in the applicable performance period, no employee may be granted performance shares that could result in the employee receiving more than 25,000 shares of the Company’s common stock or performance units that could result in the
+employee receiving more than $1,000,000 with respect to such units. A participant may receive only one performance award with respect to any performance period. 
+Prior to the beginning of the applicable performance period or such later date as permitted under Section 162(m) of the Code, the Committee will
+establish one or more performance goals applicable to the award. Performance goals will be based on the attainment of specified target levels with respect to one or more 
+16 
+measures of business or financial performance of the Company and each parent and subsidiary corporation consolidated therewith for financial reporting
+purposes, or such division or business unit of the Company as may be selected by the Committee. The Committee, in its discretion, may base performance goals on one or more of the following such measures: 
+• 
+revenue; 
+• 
+gross profit margin; 
+• 
+operating income; 
+• 
+operating margin; 
+• 
+income before income taxes; 
+• 
+net income; 
+• 
+earnings before interest, taxes, depreciation and/or amortization (EBITDA); 
+• 
+earnings per share (diluted); 
+• 
+cash flow from operations; 
+• 
+free cash flow; 
+• 
+return on equity; 
+• 
+return on assets; 
+• 
+return on sales; 
+• 
+market share; 
+• 
+one or more operating ratios; 
+• 
+stock price; 
+• 
+accomplishment of mergers, acquisitions, dispositions or similar extraordinary business transactions; 
+• 
+any individual performance objective that is measured solely in terms of quantitative targets related to the Company or the Company’s business; and
+• 
+any combination of the foregoing. 
+The performance goals selected in any case need not be applicable across the Company, but may be particular to an individual’s function or business
+unit. 
+Following completion of the applicable performance
+period, the Committee will certify in writing the extent to which the applicable performance goals have been attained and the resulting value to be paid to the participant. The Committee retains the discretion to eliminate or reduce, but not
+increase, the amount that would otherwise be payable to the participant on the basis of the performance goals attained. However, no such reduction may increase the amount paid to any other participant. In its discretion, the Committee may provide
+for the payment to a participant who is awarded performance shares of dividend equivalents with respect to cash dividends paid on the Company’s common stock. Performance award payments may be made in lump sum or in installments. If any payment
+is to be made on a deferred basis, the Committee may provide for the payment of dividend equivalents or interest during the deferral period. 
+17 
+Unless otherwise provided by the Committee, if a participant’s service terminates due to the
+participant’s death, disability or retirement prior to completion of the applicable performance period, the final award value will be determined at the end of the performance period on the basis of the performance goals attained during the
+entire performance period but will be prorated for the number of months of the participant’s service during the performance period. If a participant’s service terminates prior to completion of the applicable performance period for any
+other reason, the Plan provides that, unless otherwise determined by the Committee, the performance award will be forfeited. No performance award may be sold or transferred other than by will or the laws of descent and distribution prior to the end
+of the applicable performance period. 
+Other Equity-Based
+Awards. The Committee may, in its discretion, grant to eligible employees other equity-based awards, as deemed by the Committee to be consistent with the purposes of the Plan. 
+Effect of a Change in Control on Options. In
+brief, a Change in Control is an event, which changes the ownership of a majority of the voting securities of the Company. For purposes of the Plan, “Change in Control” means (i) any purchase of stock pursuant to a tender offer or
+exchange offer (other than by the Company), (ii) the acquisition of 30% or more of the ownership of the combined voting stock of the Company by any person or group other than the Company or its subsidiaries or any employee benefit plan of the
+Company or any person who was an officer or director of the Company on the effective date of the Plan, which person or group did not, before the such date, beneficially own 30% or more of the combined voting stock of the Company, (iii) approval
+by the Company’s shareholders of a consolidation, a merger in which the Company does not survive, or the sale of substantially all of the Company’s assets, or (iv) a change in the composition of a majority of the Board over a two-year
+period unless the selection or nomination of each of the new members is approved by two-thirds of those remaining members of the Board who were members at the beginning of the two-year period. If a Change in Control occurs, the surviving,
+continuing, successor or purchasing corporation or parent corporation thereof may either assume all outstanding awards or substitute new awards having an equivalent value. 
+In the event of a Change in Control, and in the event that the outstanding stock options are not assumed or substituted for
+by the acquiring corporation, nor exercised as of the date of the Change in Control, then all such options will terminate and cease to be outstanding effective as of the date of the Change in Control. 
+Effect of Change in Control on Restricted Stock
+Awards. In the event of a Change in Control, the lapsing of all vesting conditions and restrictions on any shares subject to any restricted stock award, restricted stock unit and restricted stock purchase right held by a
+participant whose service with the Company has not terminated prior to the Change in Control will be accelerated effective as of the date of the Change in Control. 
+Effect of Change in Control on SARs. In the event of a Change in Control and the outstanding
+SARs are not assumed or substituted for by the acquiring corporation, then all unexercised and/or unvested portions of such outstanding awards will become immediately exercisable and vested in full as of the date 30 days prior to the date of the
+Change in Control. In the event of a Change in Control and the outstanding SARs are not assumed or substituted for by the acquiring corporation, nor exercised as of the date of the Change in Control, then all such outstanding SARs will terminate and
+cease to be outstanding effective as of the date of the Change in Control. 
+Effect of Change in Control on Performance Awards. In the event of a Change in Control, any performance award held by a participant whose service has not yet terminated (unless terminated
+by death or disability) will become payable effective as of the date of the Change in Control. 
+18 
+Summary of U.S. Federal Income Tax Consequences. The following summary is
+intended only as a general guide to the U.S. federal income tax consequences of participation in the Plan and does not attempt to describe all possible federal or other tax consequences of such participation or tax consequences based on particular
+circumstances. 
+Incentive Stock Options. A participant
+recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under Section 422 of the Code. Participants who neither dispose of their shares within two years following
+the date the option was granted, nor within one year following the exercise of the option, will normally recognize a capital gain or loss equal to the difference, if any, between the sale price and the purchase price of the shares. If a participant
+satisfies such holding periods upon the sale of the shares, the Company will not be entitled to any deduction for federal income tax purposes. If a participant disposes of shares within two years after the date of grant, or within one year after the
+date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the determination date (see discussion under “Nonstatutory Stock Options” below) and the option exercise price (not
+to exceed the gain realized on the sale if the disposition is a transaction in which a loss, if sustained, would be recognized) will be taxed as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If
+a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the participant upon the disqualifying disposition of the shares generally will be deductible by the Company for federal
+income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code. 
+The difference between the option exercise price and the fair market value of the shares on the determination date of an incentive stock option (see
+discussion under “Nonstatutory Stock Options” below) is treated as an adjustment in computing the participant’s alternative minimum taxable income and may be subject to an alternative minimum tax which is paid if such tax exceeds the
+regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments for purposes of computing the alternative minimum taxable income on a subsequent sale
+of the shares and certain tax credits which may arise with respect to participants subject to the alternative minimum tax. 
+Nonstatutory Stock Options. Options not designated or qualifying as incentive stock options will be nonstatutory stock options having no special
+tax status. A participant generally recognizes no taxable income as the result of the grant of such an option, provided the exercise price of the option is no less than the fair market value of the common stock at the time of grant Upon exercise of
+a nonstatutory stock option, the participant normally recognizes ordinary income in the amount of the difference between the option exercise price and the fair market value of the shares on the determination date (as defined below). If the
+participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The “determination date” is the date on which the option is exercised, unless the shares are subject to a substantial risk
+of forfeiture (as in the case where a participant is permitted to exercise an unvested option and receive unvested shares which, until they vest, are subject to the Company’s right to repurchase them at the original exercise price upon the
+participant’s termination of service) and are not transferable, in which case the determination date is the earlier of (i) the date on which the shares become transferable, or (ii) the date on which the shares are no longer subject to
+a substantial risk of forfeiture. If the determination date is after the exercise date, the participant may elect, pursuant to Section 83(b) of the Code, to have the exercise date be the determination date by filing an election with the
+Internal Revenue Service no later than 30 days after the date the option is exercised, provided that no Section 83(b) election may be made unless permitted by the terms of the award agreement or approved in writing by the Committee. Upon the
+sale of stock acquired by the exercise of a nonstatutory stock option, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be 
+19 
+taxed as capital gain or loss. No tax deduction is available to the Company with respect to the grant of a nonstatutory stock option or the sale of the stock
+acquired pursuant to such grant. The Company generally will be entitled to a deduction equal to the amount of ordinary income recognized by the participant as a result of the exercise of a nonstatutory stock option, except to the extent such
+deduction is limited by applicable provisions of the Code. 
+Restricted Stock Awards. A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the “determination date” (as defined above under
+“Nonstatutory Stock Options”). If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the determination date is after the date on which the participant acquires the
+shares, the participant may elect, pursuant to Section 83(b) of the Code, to have the date of acquisition be the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date the shares are
+acquired, provided that no Section 83(b) election may be made unless permitted by the terms of the award agreement or approved in writing by the Committee. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss,
+based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. The Company generally will be entitled to a deduction equal to the amount of ordinary income recognized by the
+participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code. 
+Performance and Restricted Stock Units Awards. A participant generally will recognize no income upon the grant of a performance share, performance
+unit or restricted stock unit award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any nonrestricted shares
+received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the participant received shares of restricted stock, the participant generally will be taxed in the same manner
+as described above (see discussion under “Restricted Stock”). Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the “determination date” (as
+defined above under “Nonstatutory Stock Options”), will be taxed as capital gain or loss. The Company generally will be entitled to a deduction equal to the amount of ordinary income recognized by the participant on the determination date,
+except to the extent such deduction is limited by applicable provisions of the Code. 
+Section 162(m). Section 162(m) of the Code generally denies a corporate tax deduction for annual compensation exceeding $1 million paid to the chief executive officer, or to any of the four other most
+highly compensated officers of a publicly held company. However, certain types of compensation, including performance-based compensation, are generally excluded from this deductibility limit. To enable compensation in connection with stock options,
+certain restricted stock grants, performance shares and performance units awarded under the Plan to qualify as “performance-based” within the meaning of Section 162(m) of the Code, the Plan limits the sizes of such awards as described
+above. While the Company believes that compensation in connection with such awards under the Plan will be deductible by the Company for federal income tax purposes, under certain circumstances, such as a Change in Control, compensation paid in
+settlement of performance awards may not qualify as “performance-based.” By approving the Plan, the shareholders will be approving, among other things, eligibility requirements for participation in the Plan, financial performance measures
+upon which specific performance goals applicable to certain awards would be based, limits on the numbers of shares or level of compensation that could be made subject to certain awards, and the other material terms of the awards described above.
+Section 409A. Recently adopted, Section 409A
+of the Code has implications that affect traditional deferred compensation plans, as well as certain equity-based awards, such as stock options, restricted stock units, and 
+20 
+stock appreciation rights. Section 409A requires compliance with specific rules regarding the timing of exercise or settlement of equity-based awards
+and, unless explicitly set forth in a plan document or award agreement, no acceleration of payment is permitted. Under the preliminary guidance with respect to Section 409A provided by the U.S. Department of Treasury, individuals who hold
+equity awards are subject to the following penalties if the terms of such awards do not comply with the requirements of Section 409A: (i) appreciation is includible in the participant’s gross income for tax purposes once the awards
+are no longer subject to a “substantial risk of forfeiture” (e.g., upon vesting), (ii) the participant is required to pay interest at the tax underpayment rate plus one percentage point commencing on the date an award subject to
+Section 409A is no longer subject to a substantial risk of forfeiture, and (iii) the participant incurs a 20% penalty tax on the amount required to be included in income. Definitive guidance was provided by the U.S. Department of
+Treasury just prior to the completion of this proxy statement that may modify the treatment described above. 
+Awards to Participants Outside the United States. The Committee may modify the terms of any award under the Plan made to a
+participant who is a resident or primarily employed outside the United States in order that such award will conform to applicable laws and regulations or so that the value and other benefits of the award to the participant, as affected by foreign
+tax laws and other restrictions, shall be comparable to the value of such an award to a participant who is resident or primarily employed in the United States. 
+Termination or Amendment. The term of the Plan will be ten years. No award grant will be made after the tenth anniversary
+of the Effective Date. The Plan will continue in effect until the first to occur of (i) its termination by the Committee, (ii) the date on which all shares available for issuance under the Plan have been issued and all restrictions on such
+shares under the terms of the Plan and the agreements evidencing awards granted under the Plan have lapsed, or (iii) the tenth anniversary of the Effective Date. The Committee may terminate or amend the Plan at any time, provided that no
+amendment may be made without shareholder approval if the Committee deems such approval necessary for compliance with any applicable tax or market system on which the shares of the Company’s common stock are then listed. Furthermore, the
+provisions dealing with annual directors’ options may not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974 or the rules thereunder. No termination or
+amendment may affect any outstanding award unless expressly provided by the Committee, and in any event, may not adversely affect an outstanding award, without the consent of the participant, unless necessary to comply with any applicable law,
+regulation or rule. 
+Old Plan
+Benefits. The Company has a Non-Qualified Stock Option Plan adopted in the fiscal year ended January 31, 1999 and amended in the fiscal year ended January 31, 2002 under which options for an aggregate of
+1,375,000 shares of common stock could be granted to officers and key employees as well as consultants or other persons who render services to the Company. Options granted under this plan for an aggregate of 90,938 shares, with an exercise price of
+$7.93 were granted during the fiscal year ended January 31, 2007. Options granted under this plan for an aggregate of 1,024,050 shares with exercise prices ranging from $2.40 to $8.73 per share were outstanding at January 31, 2007. A total
+of 396,600 shares remain available for option grants under this plan. 
+The Company also has an Incentive Stock Option Plan adopted in the fiscal year ended January 31, 1998 and amended in the fiscal years ended January 31, 1999 and 2001, under which options for an aggregate of 1,718,750 shares of
+common stock could be granted to officers and key employees. Options granted under this plan for an aggregate of 41,562 shares with an exercise price of $7.93 were granted during the fiscal year ended January 31, 2007. Options granted under
+this plan for an aggregate of 782,653 shares with exercise prices 
+21 
+ranging from $2.40 to $8.73 per share were outstanding at January 31, 2007. A total of 265,740 shares remain available for option grants under this
+plan. This plan will expire on May 20, 2007 after which no options may be granted under this plan. 
+In addition, options for an aggregate of 106,150 shares with exercise prices ranging from $3.00 to $7.67 per share granted under an Incentive Stock Option
+Plan adopted fiscal year ended January 31, 1994 were outstanding at January 31, 2006. No shares remain available for option grants under this plan. 
+Options granted during fiscal year 2007 to the Named Executive Officers are set forth under “Grants of Plan Based Awards.” The closing price of
+Company’s common stock on March 30, 2007 was $11.90. 
+New Plan Benefits. No awards will be granted under the Plan prior to its approval by the shareholders. Awards under the Plan will be granted at the discretion of the Committee and, accordingly, are not yet
+determinable. In addition, benefits under the Plan will depend on a number of factors, including fair market value of the Company’s common stock on future dates, actual performance against performance goals established with respect to
+performance awards and decisions made by participants. Consequently, it is not currently possible to determine the benefits that might be received by participants under the Plan. 
+The Board of Directors recommends a vote “FOR” the approval of the adoption of the Plan. 
+Audit Committee Report 
+The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the
+Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC rules. The Audit Committee operates under a written charter
+approved by the Board of Directors. 
+Management is responsible
+for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted
+auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal controls and financial
+reporting process and the reliability of the Company’s financial statements; and (2) the independence and performance of the Company’s independent accountants. The Audit Committee has sole authority to select, evaluate and when
+appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s independent accountants, Grant Thornton LLP, to review and discuss the January 31, 2007 financial statements. Management represented to the Committee that the
+Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent
+accountants. The Audit Committee also discussed with Grant Thornton LLP the matters required by Statement on Auditing Standards No.61 ( Communication with Audit Committees ). The Audit Committee also received from Grant Thornton LLP written
+disclosures and the letter regarding independence as required by Independence Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Grant Thornton LLP that firm’s independence.
+22 
+The Audit Committee received the information concerning the fees of Grant Thornton LLP for the year ended
+January 31, 2007 set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the independence of the independent
+accountants and has determined that the provision of such services by Grant Thornton LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the audited consolidated
+financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2007, to be filed with the SEC. 
+Audit Committee: 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+Independent Accountant Fees and Services 
+The Audit Committee has sole authority to select, evaluate and when
+appropriate, to replace the Company’s independent auditors. The Audit Committee has appointed Grant Thornton LLP as the Company’s independent auditors for the 2008 fiscal year. 
+The Company expects a representative of Grant Thornton LLP will be present at the annual meeting with the opportunity to
+make a statement, if he or she so desires, and that such representative will be available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the Company by Grant Thornton LLP for the fiscal years ended January 31, 2007 and 2006 are set
+forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the audit of the Company’s annual financial statements and review of financial statements and statutory and regulatory filings or engagements.
+The aggregate fees included in each of the other categories are fees billed for the fiscal year. 
+2007 
+2006 
+Audit Fees 
+$ 
+175,175 
+$ 
+112,500 
+Audit-Related Fees 
+0 
+12,000 
+Tax Fees 
+5,145 
+5,250 
+All Other Fees 
+0 
+0 
+Audit Fees for
+the fiscal years ended January 31, 2007 and 2006 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on
+Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Audit-Related Fees as of the fiscal year ended January 31, 2006 were for employee benefit plan audits. 
+Tax Fees as of the fiscal years ended January 31, 2007 and 2006
+were for services rendered for tax returns and estimates, tax advice and tax planning. 
+23 
+Policy on Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit
+services provided by the independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimus exception provided
+by Rule 2-01(C)(7)(i)(c) under Regulation S-X. 
+Financial Reports
+A copy of the annual report of the Company for the fiscal
+year ended January 31, 2007 including the Company’s annual report to the SEC on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+Proposals For 2008 Annual Meeting 
+The 2008 annual meeting of the shareholders of the Company is scheduled to be held on May 13, 2008. If a shareholder intending to present a proposal
+at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal to the Company not later than December 14, 2007. Shareholder
+proposals that are to be considered at the 2008 annual meeting but not requested to be included in the Proxy Statement must be submitted no later than March 14, 2008 and no earlier than December 15, 2007. 
+Other Matters 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but
+should any other matters requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the
+event any of the nominees for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of
+the Company. 
+You are urged to sign and return your proxy
+promptly to make certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+24 
+Appendix A 
+ASTRO-MED, INC. 
+2007 EQUITY INCENTIVE PLAN 
+SECTION 1. PURPOSE 
+This 2007 Equity Incentive Plan (the “Plan”) is designed to attract and retain the best available talent and encourage the highest level of
+performance by, and provide additional incentive to executives and other key employees of the Company and any other member of the Participating Company Group, and for certain other individuals providing services to or acting as directors of the
+Company and any other member of the Participating Company Group. The Company intends that this purpose will be effected by providing for Awards in the form of Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Awards and Other
+Stock-Based Awards, which afford such executives, key employees, directors and other eligible individuals an opportunity to acquire or increase their proprietary interest in the Company through the acquisition of shares of its Stock. The terms of
+the Plan shall be interpreted in accordance with this intention. 
+SECTION
+2. DEFINITIONS AND CONSTRUCTION 
+2.1 Definitions . Whenever used herein, the following terms shall have their respective meanings set forth below: 
+“Acquiring Corporation” shall have the meaning set forth in Section 12.1 hereof. 
+“Award” means any Option, SAR, Restricted Stock Award, Performance
+Award or Other Stock-Based Award granted under the Plan. 
+“Award Agreement” means a written agreement between the Company and a Participant setting forth the terms, conditions and restrictions of the Award granted to the Participant. An Award Agreement may be an “Option
+Agreement,” a “SAR Agreement,” a “Restricted Stock Purchase Agreement,” a “Restricted Stock Bonus Agreement,” a “Restricted Stock Unit Agreement,” a “Performance Share Agreement,” or a
+“Performance Unit Agreement.” 
+“Board”
+means the Board of Directors of the Company. 
+“Calculation
+Date” shall have the meaning set forth in Section 4.2 hereof. 
+“Cashless Exercise” shall have the meaning set forth in Section 6.3 hereof. 
+“Cause” shall have the meaning given such term in the applicable Award Agreement and, in the absence of any such definition, means (x) any
+material breach by the Participant of any agreement to which the Participant and the Company are both parties, (y) any act or omission to act by the Participant which may have a material and adverse effect on the Company’s business or on
+the Participant’s ability to perform services for the Company, including, without limitation, the commission of any crime (other than ordinary traffic violations), or (z) any material misconduct or material neglect of duties by the
+Participant in connection with the business or affairs of the Company or any Participating Company. 
+A-1 
+“Change in Control” means (i) any purchase of Stock pursuant to a tender offer or exchange
+offer (other than by the Company), (ii) the acquisition of 30% or more of the beneficial ownership of the combined voting securities of the Company by any person or group (as such terms are used in Section 13(d) and 14(d) of the Exchange
+Act), other than the Company or its subsidiaries or any employee benefit plan of the Company or any person who was an officer or director of the Company on the Effective Date of the Plan, which person or group did not theretofore beneficially own
+30% or more of the combined voting securities of the Company, (iii) approval by Company shareholders of a consolidation, a merger in which the Company does not survive, or the sale of substantially all of the Company’s assets, or
+(iv) a change in the composition of a majority of the Board over a two-year period unless the selection or nomination of each of the new members is approved by two-thirds of those remaining members of the Board who were members at the beginning
+of the two-year period. 
+“Code” means the Internal
+Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder. 
+“Committee” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. If no committee of the Board has
+been appointed to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers. 
+“Company” means Astro-Med, Inc., a Rhode Island corporation, or any
+successor company thereto. 
+“Consultant” means a
+person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided
+would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on a Form S-8 Registration Statement under the Securities Act. 
+“Designated Beneficiary” means the beneficiary or beneficiaries
+designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require. 
+“Director” means a member of the Board or of the board of directors of any other Participating Company. 
+“Disability” means permanent and total disability as defined in
+Section 22(e)(3) of the Code. 
+“Dividend
+Equivalent” means a credit, made at the discretion of the Committee or as otherwise provided by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock represented by
+an Award of Restricted Stock Units or Performance Shares held by such Participant. 
+“Effective Date” shall have the meaning set forth in Section 20 hereof. 
+“Employee” means any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of a
+Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided , however , that neither service as a Director nor
+payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan. 
+A-2 
+“Exchange Act” means the Securities Exchange Act of 1934, as amended. 
+“Fair Market Value” means, as of any date, the value of a share of
+Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following: 
+(i) If, on such date, the Stock is listed on a national or
+regional securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock on such national or regional securities exchange or market system constituting the primary market for the Stock,
+as reported in the Eastern Edition of The Wall Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on
+which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion. 
+(ii) If, on such date, the Stock is not listed on a national
+or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse.
+“Freestanding SAR” means a SAR awarded by the
+Committee pursuant to Section 7.1 hereof other than in connection with an Option. 
+“Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an “incentive stock option” within the meaning of Section 422(b) of the
+Code or any successor provision thereto as in effect from time to time. 
+“Insider” means, at any time, any person whose transactions in Stock are subject to Section 15 of the Exchange Act or any successor rule or regulation thereto as in effect from time to time. 
+“New Shares” shall have the meaning set forth in Section 11.2
+hereof. 
+“Nonstatutory Stock Option” means an Option
+not intended to be (as set forth in the Award Agreement) or which does not qualify as an Incentive Stock Option. 
+“Option” means a right to purchase Stock (subject to adjustment as provided in Section 7 and 11 hereof) pursuant to the terms and
+conditions of the Plan. 
+“Option Expiration Date”
+shall have the meaning set forth in Section 6.4 hereof. 
+“Other Stock-Based Award” means any right granted under Section 10 hereof. 
+“Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.
+“Participant” means any eligible person selected by
+the Committee to receive an Award under the Plan. 
+“Participating Company” means the Company or any Parent Corporation or Subsidiary Corporation. 
+A-3 
+“Participating Company Group” means at any point in time, all corporations collectively which
+are then Participating Companies. 
+“Performance
+Award” means an Award of Performance Shares or Performance Units. 
+“Performance Goal” means a performance goal established by the Committee pursuant to Section 9.2 hereof. 
+“Performance Period” means a period established by the Committee pursuant to Section 9.2 hereof, at the end of which one or more
+Performance Goals are to be measured. 
+“Performance
+Share” means a bookkeeping entry representing a right granted to a Participant pursuant to the terms and conditions of Section 9 hereof to receive a payment equal to the value of a Performance Share, as determined by the Committee, based
+on performance. 
+“Performance Unit” means a
+bookkeeping entry representing a right granted to a Participant pursuant to the terms and conditions of Section 9 hereof to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based upon performance.
+“Plan” means the 2007 Equity Incentive Plan, as
+amended from time to time. 
+“Restricted Stock” means
+Stock granted to a Participant pursuant to the terms and conditions of Section 8 hereof. 
+“Restricted Stock Award” means an Award of Restricted Stock, a Restricted Stock Purchase Right or a Restricted Stock Unit. 
+“Restricted Stock Purchase Right” means a right to purchase Stock granted to a Participant pursuant to the terms
+and conditions of Section 8 hereof. 
+“Restricted
+Stock Unit” means a bookkeeping entry representing a right granted to a Participant to receive in cash or Stock the Fair Market Value of a share of Stock granted pursuant to the terms and conditions of Section 8 hereof. 
+“Restriction Period” means the period established in accordance
+with Section 8.4 hereof during which shares subject to a Restricted Stock Award are subject to Vesting Conditions. 
+“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation thereto. 
+“Section 162(m)” means Section 162(m) of the Code. 
+“Securities Act” means the Securities Act of 1933, as amended.
+“Service” means a Participant’s employment or
+service with a Participating Company, whether in the capacity of an Employee, a Director or a Consultant. A Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders
+Service to the 
+A-4 
+Participating Company or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or
+termination of the Participant’s Service. Furthermore, a Participant’s Service with a Participating Company may be deemed, as provided in the applicable Award Agreement, to have terminated if the Participant takes any military leave, sick
+leave, or other bona fide leave of absence approved by the Company; provided , however , that if any such leave exceeds ninety (90) days, on the one hundred eighty-first (181st) day of such leave any Incentive
+Stock Option held by such Participant shall cease to be treated as an Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory Stock Option unless the Participant’s right to return to Service with the Participating
+Company is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Participating Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under
+the Participant’s Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the Participating Company for which the Participant performs Service ceasing to be a
+Participating Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination. 
+“Stock” means the common stock of the Company, as adjusted from
+time to time in accordance with Section 7 and 11 hereof. 
+“Stock Appreciation Right” or “SAR” means a bookkeeping entry representing, for each share of Stock subject to such SAR, a right granted to a Participant pursuant to Section 7 hereof to receive payment of an amount
+equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. 
+“Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the
+Code. 
+“Tandem SAR” means a SAR awarded by the
+Committee in connection with an Option pursuant to Section 7.1 hereof. 
+“Ten Percent Owner” means a Participant who, at the time an Option is granted to the Participant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of
+stock of a Participating Company within the meaning of Section 422(b)(6) of the Code. 
+“Vesting Conditions” means those conditions established in accordance with Section 8.4 prior to the satisfaction of which shares subject to a Restricted Stock Award remain subject to forfeiture or a
+repurchase option in favor of the Company. 
+2.2 Construction . Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when
+otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular and the masculine shall include the feminine and neuter, as the context requires. Use of the term “or” is not intended to be
+exclusive, unless the context clearly requires otherwise. 
+A-5 
+SECTION 3. ADMINISTRATION 
+3.1 Administration by the Committee . 
+The Plan shall be administered by the Committee. All questions of
+interpretation of the Plan or of any Award shall be determined by the Committee, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Award. 
+3.2 Authority of
+Officers . Any officer of a Participating Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which
+is allocated to the Company herein, provided the officer has apparent authority with respect to such matter, right, obligation, determination or election. 
+3.3 Powers of the Committee . In addition to any other powers set forth in the Plan and
+subject to the provisions of the Plan, the Committee shall have the full and final power and authority, in its discretion: 
+(a) to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of Stock or units to be subject to
+each Award; 
+(b) to determine the type of Award granted and to
+designate Options as Incentive Stock Options or Nonstatutory Stock Options; 
+(c) to determine the Fair Market Value of shares of Stock or other property; 
+(d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto,
+including, without limitation, (i) the purchase price of any Stock, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding obligation arising in connection with
+any Award, including by the withholding or delivery of shares of Stock, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the Performance Goals applicable to
+any Award and the extent to which such Performance Goals have been attained, (vi) the time of the expiration of any Award, (vii) the effect of the Participant’s termination of Service on any of the foregoing, and (viii) all other
+terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan; 
+(e) to determine whether an Award of Restricted Stock Units, Performance Shares, Performance Units or Stock Appreciation Rights will be settled in shares
+of Stock, cash, or in any combination thereof; 
+(f) to approve
+one or more forms of Award Agreement; 
+(g) to amend, modify,
+extend, cancel or renew any Award or to waive any restrictions or conditions applicable to any Award or any shares acquired pursuant thereto; 
+(h) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto, including, without
+limitation, with respect to the period following a Participant’s termination of Service; 
+(i) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without limitation, as the Committee deems necessary
+or desirable to comply with the laws of, or to accommodate the tax policy or custom of, foreign jurisdictions whose citizens may be granted Awards; 
+A-6 
+(j) to authorize, in conjunction with any applicable Company deferred compensation plan, that the receipt
+of cash or Stock subject to any Award under this Plan, may be deferred under the terms and conditions of such Company deferred compensation plan; and 
+(k) to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement and to make all other determinations and
+take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law. 
+3.4 Administration with Respect to Insiders . With respect
+to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule
+16b-3. 
+3.5 Committee
+Complying with Section 162(m) . If the Company is a “publicly held corporation” within the meaning of Section 162(m), the Board may establish a Committee of “outside directors” within the
+meaning of Section 162(m) to approve the grant of any Award which might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax
+purposes pursuant to Section 162(m). 
+3.6 Indemnification . In addition to such other rights of indemnification as they may have as members of the Board, the Committee or as officers or employees of a
+Participating Company, members of the Board or of the Committee and any officers or employees of the Participating Company to whom authority to act for the Board, the Committee or the Company is delegated, shall be indemnified by the Company against
+all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by
+reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected
+by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence,
+bad faith or intentional misconduct in duties; provided , however , that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the
+opportunity at its own expense to handle and defend the same. 
+SECTION
+4. SHARES SUBJECT TO PLAN 
+4.1 Share Reserve . The total number of shares of Stock that may be issued pursuant to Awards granted under the Plan shall not exceed an aggregate of one million
+(1,000,000) shares; provided , however , that the class and aggregate number of shares which may be subject to Awards granted under the Plan shall be subject to adjustment as provided in Section 7 and 11 hereof. 
+4.2 Determination of Shares Issued and
+Issuable . Shares of Stock shall not be deemed to have been issued pursuant to the Plan (i) with respect to any portion of an Award that is settled in cash or (ii) to the extent such shares are withheld
+and/or attested to in satisfaction of tax withholding obligations pursuant to Section 14.2. Upon payment in shares of Stock pursuant to the exercise of a SAR, the number of shares available for issuance under the Plan shall be reduced only by
+the number of shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company, or attestation to the ownership, of shares of Stock owned by 
+A-7 
+the Participant, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the Option is exercised.
+4.4 Expiration,
+Cancellation or Termination of Award . Whenever any outstanding Award under the Plan expires for any reason, is canceled or is otherwise terminated without having been exercised or settled in full, the shares of Stock
+allocable to the unexercised portion of such Award may again be the subject of Awards under the Plan. 
+4.5 Source of Shares . The Stock subject to the Awards granted under the Plan shall be
+shares of the Company’s authorized but unissued Stock or shares of the Stock held in treasury. 
+SECTION 5. ELIGIBILITY 
+5.1 General . In determining the Participants to whom Awards shall be granted and the amount of Stock or units to be covered by each Award, the
+Committee shall take into account the nature of the Participant’s duties, the present and potential contributions to the success of the Company, and such other factors as it shall deem relevant in connection with accomplishing the purposes of
+the Plan. 
+5.2 Persons
+Eligible for Incentive Stock Options . Incentive Stock Options may be granted only to Employees. For purposes of the foregoing sentence, the term “Employees” shall include prospective Employees to whom
+Incentive Stock Options are granted in connection with written offers of employment with the Participating Companies; provided , however , that any such Incentive Stock Option shall be deemed granted effective on the date
+such person commences Service as an Employee, with an exercise price determined as of such date in accordance with Section 6.1 hereof. Eligible persons may be granted more than one (1) Incentive Stock Option. 
+5.3 Persons Eligible for Other
+Awards . Awards other than Incentive Stock Options may be granted only to Employees, Consultants and Directors. For purposes of the foregoing sentence, the terms “Employees,” “Consultants” and
+“Directors” shall include prospective Employees, prospective Consultants and prospective Directors to whom Awards are granted in connection with written offers of an employment or other service relationship with the Participating
+Companies; provided , however , that no Stock subject to any such Award shall vest, become exercisable or be issued prior to the date on which such person commences Service as an Employee, Consultant or Directors. Eligible
+persons may be granted more than one (1) Award. 
+5.4 Fair Market Value Limitation on Incentive Stock Options . To the extent that options designated as Incentive Stock Options (granted under all stock option plans of the
+Participating Companies, including the Plan) become exercisable by a Participant for the first time during any calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portions of such options
+which exceed such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section 5.4, Options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market
+Value of stock shall be determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 5.4, such different limitation shall be deemed
+incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason
+of the limitation set forth in this Section 5.4, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the 
+A-8 
+Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion
+shall be issued upon the exercise of the Option. 
+5.5 Section 162(m) Award Limits . The following limits shall apply to the grant of any Award if, at the time of grant, the Company is a “publicly held
+corporation within the meaning of Section 162(m): 
+(a)
+Options and SARs . Subject to adjustment as provided in Sections 7 and 11, no Employee shall be granted within any fiscal year of the Company one or more Options or Freestanding SARs (as defined in
+Section 7.1) which in the aggregate are for more than fifty thousand (50,000) shares of Stock. An Option which is canceled (or a Freestanding SAR as to which the exercise price is reduced to reflect a reduction in the Fair Market Value of
+the Stock) in the same fiscal year of the Company in which it was granted shall continue to be counted against such limit for such fiscal year. 
+(b) Restricted Stock Awards . Subject to adjustment as provided in Section 11, no Employee shall be granted
+within any fiscal year of the Company one or more Restricted Stock Awards, subject to Vesting Conditions based on the attainment of Performance Goals, for more than twenty-five thousand (25,000) shares of Stock. 
+5.6 Performance
+Awards . Subject to adjustment as provided in Section 11, no Employee shall be granted (a) Performance Shares which could result in such Employee receiving more than twenty-five thousand (25,000) shares
+of Stock for each full fiscal year of the Company contained in the Performance Period for such Award, or (b) Performance Units which could result in such Employee receiving more than One Million Dollars ($1,000,000) with respect to such
+Performance Units for each full fiscal year of the Company contained in the Performance Period for such Award. No Participant may be granted more than one Performance Award for the same Performance Period. 
+SECTION 6. TERMS AND CONDITIONS OF STOCK OPTIONS 
+Options shall be evidenced by Option Agreements specifying the number of
+shares of Stock covered thereby, in such form as the Committee shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Option Agreement. Option
+Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 
+6.1 Exercise Price . The exercise price for each Option shall be established in
+the discretion of the Committee; provided , however , that (a) the exercise price per share for an Incentive Stock Option shall be not less than the Fair Market Value of a share of Stock on the effective date of grant
+of the Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the
+Option. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner
+qualifying under the provisions of Section 424(a) of the Code. 
+6.2 Exercisability and Term of Options . Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions,
+performance criteria and restrictions as shall be determined by the Committee and set forth in the Option Agreement evidencing such Option; provided , however , that (a) no Option shall be exercisable after the
+expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the 
+A-9 
+expiration of five (5) years after the effective date of grant of such Option, (c) no Option granted to a prospective Employee, prospective
+Consultant or prospective Director may become exercisable prior to the date on which such person commences Service. Subject to the foregoing, unless otherwise specified by the Committee in the grant of an Option, any Option granted hereunder shall
+terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions. 
+6.3 Payment of Exercise Price . 
+(a) Forms of Consideration Authorized . Except as otherwise provided below, payment of
+the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of shares of Stock owned by
+the Participant having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a
+sale with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of
+Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (v) by any combination
+thereof. The Committee may at any time or from time to time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration.
+(b) Limitations on Forms of Consideration .
+(i) Tender of
+Stock . Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation
+of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. Unless otherwise provided by the Committee, an Option may not be exercised by tender to the Company, or attestation to the ownership, of
+shares of Stock unless such shares either have been owned by the Participant for more than six (6) months (and not used for another Option exercise by attestation during such period) or were not acquired, directly or indirectly, from the
+Company. 
+(ii) Cashless
+Exercise . The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options
+by means of a Cashless Exercise. 
+6.4 Effect of Termination of Service . 
+(a) Option Exercisability . An Option granted to a Participant shall be exercisable after the Participant’s termination of Service only during the applicable time period
+determined in accordance with the Option’s term as set forth in the Option Agreement evidencing such Option (the “Option Expiration Date”). 
+(b) Extension if Exercise Prevented by Law . Notwithstanding the foregoing, other than termination of a
+Participant’s Service for Cause if the exercise of an Option within the applicable time periods set forth in an Option Agreement is prevented by the provisions of Section 13 below, the Option shall remain exercisable until one
+(1) month (or such longer period of time as determined by the Committee, in its discretion) after the date the Participant is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.
+A-10 
+(c) Extension if Participant Subject to
+Section 16(b) . Notwithstanding the foregoing other than termination of a Participant’s Service for Cause if a sale within the applicable time periods set forth in an Option Agreement of shares acquired upon
+the exercise of the Option would subject the Participant to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale
+of such shares by the Participant would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Participant’s termination of Service, or (iii) the Option Expiration Date. 
+6.5 Transferability of
+Options . During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative. No Option shall be assignable or transferable by the
+Participant, except by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Option Agreement evidencing such Option, a Nonstatutory Stock
+Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under the Securities Act. 
+6.6 Annual Directors’
+Options . Upon the adjournment of each annual meeting or special meeting in lieu of an annual meeting of the shareholders of the Company (either, the “Annual Meeting”), each person who is not an employee of
+the Company or of an Affiliate who is serving as a Director of the Company upon the adjournment of such Annual Meeting shall be granted a Nonstatutory Stock Option to purchase 5,000 shares of Stock, provided, however, a person who is not an employee
+of the Company or of an Affiliate who is first elected to serve as a Director of the Company at any meeting of stockholders other than the Annual Meeting or at any meeting of the Board of Directors (or by the unanimous written consent of the
+Directors) pursuant to the Company’s Articles of Incorporation and its By-Laws shall be granted a Nonstatutory Stock Option to purchase 5,000 shares of Stock upon such election. Each such Option shall have an exercise price equal to the Fair
+Market Value per share of the Stock on the date of grant of the Option. 
+(a) Option Exercisability . Each Option granted pursuant to this Section 6.6, shall (i) have a term of ten (10) years and (ii) become exercisable immediately prior to the occurrence of
+the Annual Meeting following the date the Option is granted. Notwithstanding the foregoing, all such Options shall become immediately exercisable upon a Change of Control of the Company. 
+(b) Termination of Directorship . If a director fails to be re-elected to the Board,
+resigns or otherwise ceases to be a director of the Company for reasons other than death or Disability, all Options granted under this Section 6.6 to such director which are not exercisable on such date shall immediately terminate, and any such
+Options remaining shall terminate if not exercised before twenty-four (24) months following such termination, or at such earlier time as may be applicable under Section 6.6(a) above. 
+(c) Death or Disability . If a
+Participant ceases to be a director of the Company by reason of death or Disability, all Options granted under this Section 6.6 to such director which are not exercisable on such date shall become immediately exercisable, and may be exercised
+at any time before the expiration of twenty-four (24) months following the date of death or commencement of Disability, or such earlier time as may be applicable under Section 6.6(a) above. 
+(d) Amendments . Notwithstanding the
+provisions of Section 15 hereof concerning amendment of the Plan, the provisions of this Section 6.6 shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee Retirement Income
+Security Act, or the rules thereunder. ] 
+A-11 
+SECTION 7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS 
+SARs shall be evidenced by Award Agreements specifying the number of shares
+of Stock subject to the Award, in such form as the Committee shall from time to time establish. No SAR or purported SAR shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements
+evidencing SARs may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 
+7.1 Types of SARs Authorized . SARs may be granted in tandem with all or any portion of
+a related Option (a “Tandem SAR”) or may be granted independently of any Option (a “Freestanding SAR”). A Tandem SAR may be granted either concurrently with the grant of the related Option or at any time thereafter prior to the
+complete exercise, termination, expiration or cancellation of such related Option. 
+7.2 Exercise Price . The exercise price for each SAR shall be established in the discretion of the Committee; provided ,
+however , that (a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the exercise price per share subject to a Freestanding SAR shall be not less than
+the Fair Market Value of a share of Stock on the effective date of grant of the SAR. 
+7.3 Exercisability and Term of SARs . 
+(a) Tandem SARs . Tandem SARs shall be exercisable only at the time and to the extent that the related Option is
+exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with respect to less than the full number of shares of Stock subject to the related Option. The Committee may, in its discretion, provide in any
+Award Agreement evidencing a Tandem SAR that such SAR may not be exercised without the advance approval of the Company and, if such approval is not given, then the Option shall nevertheless remain exercisable in accordance with its terms. A Tandem
+SAR shall terminate and cease to be exercisable no later than the date on which the related Option expires or is terminated or canceled. Upon the exercise of a Tandem SAR with respect to some or all of the shares subject to such SAR, the related
+Option shall be canceled automatically as to the number of shares with respect to which the Tandem SAR was exercised. Upon the exercise of an Option related to a Tandem SAR as to some or all of the shares subject to such Option, the related Tandem
+SAR shall be canceled automatically as to the number of shares with respect to which the related Option was exercised. 
+(b) Freestanding SARs . Freestanding SARs shall be exercisable at such time or times, or upon such event or events,
+and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such SAR; provided , however , that no Freestanding SAR shall be
+exercisable after the expiration of ten (10) years after the effective date of grant of such SAR. 
+7.4 Exercise of SARs . Upon the exercise (or deemed exercise pursuant to
+Section 7.5) of a SAR, the Participant (or the Participant’s legal representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall be entitled to receive payment of an amount for
+each share with respect to which the SAR is exercised equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. Payment of such amount shall be made in cash, shares of
+Stock, or any combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing such SAR, payment shall be made in a lump sum as soon as practicable following the date of exercise of the SAR. The Award
+Agreement evidencing any SAR may provide for deferred payment in a lump sum or in 
+A-12 
+installments. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on the basis of the Fair Market Value of a
+share of Stock on the date of exercise of the SAR. For purposes of this Section 7, a SAR shall be deemed exercised on the date on which the Company receives notice of exercise from the Participant. 
+7.5 Deemed Exercise of
+SARs . If, on the date on which a SAR would otherwise terminate or expire, the SAR by its terms remains exercisable immediately prior to such termination or expiration and, if so exercised, would result in a payment to
+the holder of such SAR, then any portion of such SAR which has not previously been exercised shall automatically be deemed to be exercised as of such date with respect to such portion. 
+7.6 Effect of Termination of Service . A SAR shall be
+exercisable after a Participant’s termination of Service to such extent and during such period as determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such SAR. 
+7.7 Nontransferability of
+SARs . SARs may not be assigned or transferred in any manner except by will or the laws of descent and distribution, and, during the lifetime of the Participant, shall be exercisable only by the Participant or the
+Participant’s guardian or legal representative. 
+SECTION
+8. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS 
+The Committee may from time to time grant Restricted Stock Awards upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals described in
+Section 9.3. If either the grant of a Restricted Stock Award or the lapsing of the Restriction Period is to be contingent upon the attainment of one or more Performance Goals, the Committee shall follow procedures substantially equivalent to
+those set forth in Sections 9.2 through 9.4. Restricted Stock Awards may be in the form of a Restricted Stock Bonus, which shall be evidenced by a Restricted Stock Bonus Agreement, a Restricted Stock Purchase Right, which shall be evidenced by a
+Restricted Stock Purchase Agreement or a Restricted Stock Unit, which shall be evidenced by a Restricted Stock Unit Agreement. Each such Award Agreement shall specify the number of shares of Stock subject to and the other terms, conditions and
+restrictions of the Award, and shall be in such form as the Committee shall establish from time to time. No Restricted Stock Award or purported Restricted Stock Award shall be a valid and binding obligation of the Company unless evidenced by a fully
+executed Award Agreement. Restricted Stock Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply, as applicable, with and be subject to the following terms and conditions: 
+8.1 Purchase
+Price . The purchase price under each Restricted Stock Purchase Right shall be established by the Committee. No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving a
+Restricted Stock Bonus or Restricted Stock Unit, the consideration for which shall be services actually rendered to a Participating Company or for its benefit. 
+8.2 Purchase Period . A Restricted Stock Purchase Right shall be exercisable within a
+period established by the Committee, which shall in no event exceed thirty (30) days from the effective date of the grant of the Restricted Stock Purchase Right; provided , however , that no Restricted Stock Purchase
+Right granted to a prospective Employee, prospective Director or prospective Consultant may become exercisable prior to the date on which such person commences Service. 
+8.3 Payment of Purchase Price . Except as otherwise
+provided below, payment of the purchase price for the number of shares of Stock being purchased pursuant to any Restricted Stock Purchase Right shall be made 
+A-13 
+(i) in cash, by check, or cash equivalent, (ii) provided that the Participant is an Employee (unless otherwise not prohibited by law, including,
+without limitation, any regulation promulgated by the Board of Governors of the Federal Reserve System) and in the Company’s sole discretion at the time the Restricted Stock Purchase Right is exercised, by delivery of the Participant’s
+promissory note in a form approved by the Company for the aggregate purchase price, provided that the Participant shall pay in cash that portion of the aggregate purchase price as required by applicable law, (iii) by such other consideration as
+may be approved by the Committee from time to time to the extent permitted by applicable law, or (iv) by any combination thereof. Payment by means of the Participant’s promissory note shall be subject to the conditions described in
+Section 6.3(a). The Committee may at any time or from time to time grant Restricted Stock Purchase Rights which do not permit all of the foregoing forms of consideration to be used in payment of the purchase price or which otherwise restrict
+one or more forms of consideration. Restricted Stock Bonuses and Restricted Stock Units shall be issued in consideration for services actually rendered to a Participating Company or for its benefit. 
+8.4 Vesting and Restrictions on
+Transfer . Shares issued pursuant to any Restricted Stock Award may be made subject to vesting conditioned upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including,
+without limitation, Performance Goals as described in Section 8.3 (the “Vesting Conditions”), as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. During any period (the
+“Restriction Period”) in which shares acquired pursuant to a Restricted Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, hypothecated, assigned or otherwise disposed of other
+than pursuant to a Change in Control, or as provided in Section 8.7. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall
+promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. 
+8.5 Voting Rights;
+Dividends . Except as provided in this Section and Section 8.4, during the Restriction Period applicable to shares subject to a Restricted Stock Purchase Right and a Restricted Stock Bonus held by a Participant,
+the Participant shall have all of the rights of a shareholder of the Company holding shares of Stock, including the right to vote such shares and to receive all dividends and other distributions paid with respect to such shares;
+provided , however , that if any such dividends or distributions are paid in shares of Stock, such shares shall be subject to the same Vesting Conditions as the shares subject to the Restricted Stock Purchase Right and
+Restricted Stock Bonus with respect to which the dividends or distributions were paid. A Participant who is awarded a Restricted Stock Unit shall possess no incidents of ownership with respect to such a Restricted Stock Award; provided that the
+Award Agreement may provide for payments in lieu of dividends to such Participant. 
+8.6 Effect of Termination of Service . The effect of the Participant’s termination of Service on any Restricted Stock Award shall be determined by
+the Committee, in its discretion, and set forth in the Award Agreement evidencing such Restricted Stock Award. 
+8.7 Nontransferability of Restricted Stock Award Rights . Rights to acquire shares of
+Stock pursuant to a Restricted Stock Award may not be assigned or transferred in any manner except by will or the laws of descent and distribution, and, during the lifetime of the Participant, shall be exercisable only by the Participant.
+A-14 
+SECTION 9. TERMS AND CONDITIONS OF PERFORMANCE AWARDS 
+The Committee may from time to time grant Performance Awards upon such
+conditions as the Committee shall determine. Performance Awards may be in the form of either Performance Shares, which shall be evidenced by a Performance Share Agreement, or Performance Units, which shall be evidenced by a Performance Unit
+Agreement. Each such Award Agreement shall specify the number of Performance Shares or Performance Units subject thereto, the method of computing the value of each Performance Share or Performance Unit, the Performance Goals and Performance Period
+applicable to the Award, and the other terms, conditions and restrictions of the Award, and shall be in such form as the Committee shall establish from time to time. No Performance Award or purported Performance Award shall be a valid and binding
+obligation of the Company unless evidenced by a fully executed Award Agreement. Performance Share and Performance Unit Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following
+terms and conditions: 
+9.1 Initial Value of Performance Shares and Performance Units . Unless otherwise provided by the Committee in granting a Performance Award, each Performance Share shall have
+an initial value equal to the Fair Market Value of a share of Stock on the effective date of grant of the Performance Share, and each Performance Unit shall have an initial value of One Hundred Dollars ($100). The final value payable to the
+Participant in settlement of a Performance Award will depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the Committee. 
+9.2 Establishment of Performance Goals and
+Performance Period . The Committee shall establish in writing the Performance Period applicable to each Performance Award and one or more Performance Goals which, when measured at the end of the Performance Period,
+shall determine the final value of the Performance Award to be paid to the Participant (“Performance Goals”). Unless otherwise permitted in compliance with the requirements under Section 162(m) with respect to “performance-based
+compensation,” the Committee shall establish the Performance Goals applicable to each Performance Award no later than the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance Period or
+(b) the date on which twenty-five percent (25%) of the Performance Period has elapsed, and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain. Once established, the Performance Goals shall
+not be changed during the Performance Period. 
+9.3 Measurement of Performance Goals . For purposes of the Plan, the Performance Goals shall be determined by the Committee, according to criteria established by the Committee.
+Performance Goals may be based on any of the following criteria: (i) revenue, (ii) gross profit margin, (iii) operating income, (iv) operating margin, (v) income before income taxes, (vi) net income, (vii) earnings
+before interest, taxes depreciation and/or amortization (EBITDA), (viii) earnings per share (diluted), (ix) cash flow from operations, (x) free cash flow, (xi) return on equity, (xii) return on assets, (xiii) return on
+sales, (xiv) market share, (xv) one or more operating ratios, (xvi) stock price, (xvii) the accomplishment of mergers, acquisitions, dispositions or similar extraordinary business transactions, (xviii) any individual
+performance objective that is measured solely in terms of quantitative targets related to the Company or the Company’s business or (xix) any combination of the foregoing. The Performance Goals selected in any case need not be applicable
+across the Company, but may be particular to an individual’s function or business unit. The Committee shall determine whether such Performance Goals are attained and such determination shall be final and conclusive. In the event that the
+Performance Goals are not met, the Performance Award shall be forfeited and transferred to, and reacquired by, the Company at no cost to the Company. 
+A-15 
+The Committee may impose such other restrictions and conditions (in addition to the performance-based
+restrictions described above) on any Performance Award as the Committee deems appropriate and may waive any such additional restrictions and conditions, so long as such waiver does not waive any restriction described in the previous paragraph.
+Nothing herein shall limit the Committee’s ability to reduce the amount payable under an Award upon the attainment of the Performance Goal(s), provided , however , that the Committee shall have no right under any circumstance to
+increase the amount payable under, or waive compliance with, any applicable Performance Goal(s). 
+9.4 Determination of Final Value of Performance Awards . As soon as practicable following the
+completion of the Performance Period applicable to a Performance Award, the Committee shall certify in writing the extent to which the applicable Performance Goals have been attained and the resulting final value of the Award earned by the
+Participant and to be paid upon its settlement in accordance with the terms of the Award Agreement. The Committee shall have no discretion to increase the value of an Award payable upon its settlement in excess of the amount called for by the terms
+of the Award Agreement on the basis of the degree of attainment of the Performance Goals as certified by the Committee. However, notwithstanding the attainment of any Performance Goal, if permitted under a Participant’s Award Agreement, the
+Committee shall have the discretion, on the basis of such criteria as may be established by the Committee, to reduce some or all of the value of a Performance Award that would otherwise be paid upon its settlement. No such reduction may result in an
+increase in the amount payable upon settlement of another Participant’s Performance Award. As soon as practicable following the Committee’s certification, the Company shall notify the Participant of the determination of the Committee.
+9.5 Dividend
+Equivalents . In its discretion, the Committee may provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment
+of cash dividends on Stock having a record date prior to the date on which the Performance Shares are settled or forfeited. Dividend Equivalents may be paid currently or may be accumulated and paid to the extent that Performance Shares become
+nonforfeitable, as determined by the Committee. Settlement of Dividend Equivalents may be made in cash, shares of Stock, or a combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related
+Performance Share as provided in Section9.6. Dividend Equivalents shall not be paid with respect to Performance Units. 
+9.6 Payment in Settlement of Performance Awards . Payment of the final value of a Performance
+Award earned by a Participant as determined following the completion of the applicable Performance Period pursuant to Sections 9.4 and 9.5 may be made in cash, shares of Stock, or a combination thereof as determined by the Committee. If payment is
+made in shares of Stock, the number of such shares shall be determined by dividing the final value of the Performance Award by the Fair Market Value of a share of Stock on the settlement date. Payment may be made in a lump sum or installments as
+prescribed by the Committee. If any payment is to be made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the deferral period of Dividend Equivalents or a reasonable rate of interest within the
+meaning of Section 162(m). 
+9.7 Restrictions Applicable to Payment in Shares . Shares of Stock issued in payment of any Performance Award may be fully vested and freely transferable shares or may be shares of
+Stock subject to Vesting Conditions as provided in Section 8.4. Any shares subject to Vesting Conditions shall be evidenced by an appropriate Restricted Stock Bonus Agreement and shall be subject to the provisions of Sections 8.4 through 8.7
+above. 
+A-16 
+9.8 Effect of Termination of Service . The
+effect of the Participant’s termination of Service on any Performance Award shall be determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Performance Award. 
+9.9 Nontransferability of Performance
+Awards . Performance Shares and Performance Units may not be sold, exchanged, transferred, pledged, hypothecated, assigned, or otherwise disposed of other than by will or by the laws of descent and distribution until
+the completion of the applicable Performance Period. All rights with respect to Performance Shares and Performance Units granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant. 
+SECTION 10. OTHER STOCK-BASED AWARDS 
+The Committee shall have authority to grant to eligible Employees an
+“Other Stock-Based Award,” which shall consist of any right that is an Award of Stock or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Stock (including, without
+limitation, securities convertible into Stock), as deemed by the Committee to be consistent with the purposes of the Plan, other than an Award described in Sections 6 through 9 above. 
+SECTION 11. CHANGES IN THE COMPANY’S CAPITAL STRUCTURE 
+11.1 Rights of the
+Company . The existence of outstanding Awards shall not affect in any way the right or power of the Company or its shareholders to make or authorize, without limitation, any or all adjustments, recapitalizations,
+reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of Stock, or any issue of bonds, debentures, preferred or prior preference stock or other capital
+stock ahead of or affecting the Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar
+character or otherwise. 
+11.2 Adjustments for Changes in Capital Structure . In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar
+change in the capital structure of the Company, appropriate adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding Awards, in the limits on Incentive Stock Options set forth in Section 5.4, and in
+the exercise price per share of any outstanding Options and Restricted Stock Purchase Rights. If a majority of the shares which are of the same class as the shares that are subject to outstanding Awards are exchanged for, converted into, or
+otherwise become shares of another corporation (the “New Shares”), the Committee may unilaterally amend the outstanding Awards to provide that such Awards shall be for New Shares. In the event of any such amendment, the number of shares
+subject to outstanding Awards and the exercise price per share of outstanding Options and Restricted Stock Purchase Rights shall be adjusted in a fair and equitable manner as determined by the Committee, in its discretion. Notwithstanding the
+foregoing, any fractional share resulting from an adjustment pursuant to this Section 11.2 shall be rounded down to the nearest whole number, and in no event may the exercise price of any Option or Restricted Stock Purchase Right be decreased
+to an amount less than the par value, if any, of the stock subject to such Award. The adjustments determined by the Committee pursuant to this Section 11.2 shall be final, binding and conclusive. 
+A-17 
+SECTION 12. CHANGE IN CONTROL 
+12.1 Effect of Change in Control on
+Options . In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent corporation thereof, as the case may be (the “Acquiring
+Corporation”), may, without the consent of the Participant, either assume the Company’s rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for the Acquiring
+Corporation’s stock. In the event that the Acquiring Corporation elects not to assume or substitute for outstanding Options in connection with a Change in Control, the exercisability and vesting of each such outstanding Option and any shares
+acquired upon the exercise thereof held by a Participant whose Service has not terminated prior to such date shall be accelerated, effective as of the date ten (10) days prior to the date of the Change in Control. The exercise or vesting of any
+Option and any shares acquired upon the exercise thereof that was permissible solely by reason of this Section 12.1 and the provisions of such Option Agreement shall be conditioned upon the consummation of the Change in Control. Any Options
+which are neither assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the
+Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to
+all applicable provisions of the Option Agreement evidencing such Option except as otherwise provided in such Option Agreement. 
+12.2 Effect of Change in Control on SARs . In the event of a Change in Control, the Acquiring
+Corporation may, without the consent of any Participant, either assume the Company’s rights and obligations under outstanding SARs or substitute for outstanding SARs substantially equivalent SARs for the Acquiring Corporation’s stock. In
+the event the Acquiring Corporation elects not to assume or substitute for outstanding SARs in connection with a Change in Control, then any unexercised and/or unvested portions of outstanding SARs shall be immediately exercisable and vested in full
+as of the date thirty (30) days prior to the date of the Change in Control. The exercise and/or vesting of any SAR that was permissible solely by reason of this Section 12.2 shall be conditioned upon the consummation of the Change in
+Control. Any SARs which are not assumed by the Acquiring Corporation in connection with the Change in Control nor exercised as of the time of consummation of the Change in Control shall terminate and cease to be outstanding effective as of the time
+of consummation of the Change in Control. 
+12.3. Effect of Change in Control on Restricted Stock Awards . In the event of a Change in Control, the lapsing of the Vesting Conditions applicable to the shares subject to the
+Restricted Stock Award held by a Participant whose Service has not terminated prior to such date shall be accelerated effective as of the date of the Change in Control. Any acceleration of the lapsing of Vesting Conditions that was permissible
+solely by reason of this Section 12.3 and the provisions of such Award Agreement shall be conditioned upon the consummation of the Change in Control. 
+12.4 Effect of Change in Control on Performance Awards . In the event of a Change in Control,
+the Performance Award held by a Participant whose Service has not terminated prior to such date (unless the Participant’s Service terminated by reason of the Participant’s death or Disability) shall become payable effective as of the date
+of the Change in Control. For this purpose, the final value of the Performance Award shall be determined by the greater of (a) the extent to which the applicable Performance Goals have been attained during the Performance Period prior to the
+date of the Change in Control or (b) the pre-established 100% level with respect to each Performance Target comprising the applicable Performance Goals. Any acceleration of a 
+A-18 
+Performance Award that was permissible solely by reason of this Section 12.4 and the provisions of such Award Agreement shall be conditioned upon the
+consummation of the Change in Control. 
+SECTION
+13. COMPLIANCE WITH SECURITIES LAW 
+The grant of Awards and the issuance of shares of Stock pursuant to any Award shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any
+stock exchange or market system upon which the Stock may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award unless (a) a registration statement under the Securities Act shall at the time of such
+exercise or issuance be in effect with respect to the shares issuable pursuant to the Award or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an
+applicable exemption from the registration requirements of the Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to
+the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of
+any Stock, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as
+may be requested by the Company. 
+SECTION 14. TAX
+WITHHOLDING 
+14.1 Tax
+Withholding in General . The Company shall have the right to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise of an Option, to make adequate
+provision for the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have no obligation to deliver
+shares of Stock, to release shares of Stock from an escrow established pursuant to an Award Agreement, or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations have been satisfied by the
+Participant. 
+14.2 Withholding in
+Shares . The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender
+of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the Participating Company Group. The Fair Market Value of any shares of Stock withheld or
+tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates. 
+SECTION 15. TERMINATION OR AMENDMENT OF PLAN 
+The Committee may terminate or amend the Plan at any time. However, subject to changes in applicable law, regulations or rules that would permit
+otherwise, without the approval of the Company’s shareholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Section 7 and
+11), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s shareholders under any applicable law, regulation or rule. No
+termination or amendment of the Plan shall affect any then outstanding Award unless expressly provided by the Committee. In any event, no 
+A-19 
+termination or amendment of the Plan may adversely affect any then outstanding Award without the consent of the Participant, unless such termination or
+amendment is required to enable an Option designated as an Incentive Stock Option to qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule. 
+SECTION 16. STANDARD FORMS OF AWARD AGREEMENT 
+16.1 Award
+Agreements . Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate form of Award Agreement approved by the Committee from time to time. Any Award Agreement may consist of
+an appropriate form of Notice of Grant and a form of Agreement incorporated therein by reference, or such other form or forms as the Committee may approve from time to time. 
+16.2 Authority to Vary Terms . The Committee shall have the
+authority from time to time to vary the terms of any standard form of Award Agreement either in connection with the grant or amendment of an individual Award or in connection with the authorization of a new standard form or forms;
+provided , however , that the terms and conditions of any such new, revised or amended standard form or forms of Award Agreement are not inconsistent with the terms of the Plan. 
+SECTION 17. RIGHTS AND OBLIGATIONS OF THE PARTIES 
+17.1 Provision of
+Information . Each Participant shall be given access to information concerning the Company equivalent to that information generally made available to the Company’s common shareholders. 
+17.2 Rights as Employee, Consultant or
+Director . No person, even though eligible pursuant to Section 5, shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any
+Award granted under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director, or interfere with or limit in any way the right of a Participating Company to terminate the Participant’s Service at any time.
+17.3 Rights as a
+Shareholder . A Participant shall have no rights as a shareholder with respect to any shares covered by an Award until the date of the issuance of a certificate for such shares (as evidenced by the appropriate entry on
+the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided
+in Section 7 and 11 or another provision of the Plan. 
+17.4 Right of Setoff . The Company or any Participating Company may, to the extent permitted by applicable law, deduct from and set off against any amounts the Company or
+Participating Company may owe to the Participant from time to time, including amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant
+to the Company, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction
+or setoff under this Section 17. 
+17.5 Section 83(b) Election . No election under Section 83(b) of the Code (to include in gross income in the year of transfer the amounts specified in Code
+Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made, unless expressly permitted by the terms of the Award Agreement or by action of the Committee in writing before the making of such
+election. In any case in which a 
+A-20 
+Participant is permitted to make such an election in connection with an Award, the Participant shall notify the Company of such election within ten days
+after filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations issued under Code Section 83(b) or other applicable provision.
+17.6 Compliance with Section 409A
+of the Code . Except to the extent specifically provided otherwise by the Committee, Awards under the Plan are intended to satisfy the requirements of Section 409A of the Code (and the Treasury Department guidance and
+regulations issued thereunder) so as to avoid the imposition of any additional taxes or penalties under Section 409A of the Code. If the Committee determines that an Award, Award Agreement, payment, distribution, deferral election, transaction or
+any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section 409A of the Code, then unless the Committee specifically
+provides otherwise, such Award, Award Agreement, payment, distribution, deferral election, transaction, or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award
+Agreement will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Section 409A of the Code to the extent determined appropriate by the Committee, in each case without the consent of or notice to the
+Participant. 
+17.7 Disqualifying
+Disposition Notification . If any Participant shall make any disposition of Stock delivered pursuant to the exercise of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating
+to certain disqualifying dispositions), such Participant shall notify the Company of such disposition within ten days thereof. 
+17.7 Beneficiary Designation . Each Participant may file with the Company a written designation
+of a beneficiary who is to receive any benefit under the Plan to which the Participant is entitled in the event of such Participant’s death before he or she receives any or all of such benefit. Each designation will revoke all prior
+designations by the same Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. If a married Participant designates a
+beneficiary other than the Participant’s spouse, the effectiveness of such designation shall be subject to the consent of the Participant’s spouse. If a Participant dies without an effective designation of a beneficiary who is living at
+the time of the Participant’s death, the Company will pay any remaining unpaid benefits to the Participant’s legal representative. 
+SECTION 18. MISCELLANEOUS 
+18.1 Unfunded Obligation . Any amounts payable to Participants pursuant to the Plan shall be
+unfunded obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts,
+or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder.
+Any investments or the creation or maintenance of any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any
+vested or beneficial interest in any Participant or the Participant’s creditors in any assets of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value of any assets which
+may be invested or reinvested by the Company with respect to the Plan. 
+A-21 
+18.2 Awards to Participants Outside the United
+States . The Committee may modify the terms of any Award under the Plan made to or held by a Participant who is then resident or primarily employed outside of the United States in any manner deemed by the Committee to
+be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the
+Participant, as affected by foreign tax laws and other restrictions, applicable as a result of the Participant’s residence or employment abroad shall be comparable to the value of such an Award to a Participant who is resident or primarily
+employed in the United States. An Award may be modified under this Section 18.2 in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in
+actual liability under Section 16(b) of the Exchange Act for the Participant whose Award is modified. 
+18.3 Gender and Number; Headings . Except where otherwise indicated by the context, any
+masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. Headings are included for the convenience of reference only and shall not be used in the interpretation or
+construction of any such provision contained in the Plan. 
+18.4 Severability . In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the
+Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 
+18.5 Requirements of Law . The granting of Awards and the issuance of Shares under the Plan
+shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 
+18.6 Governing Law . To the extent not preempted by federal law,
+the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Rhode Island. 
+SECTION 19. NONEXCLUSIVITY OF THE PLAN 
+Neither the adoption of the Plan by the Board nor the submission of the Plan to the shareholders of the Company for approval shall be construed as
+creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either
+applicable generally or only in specific cases. 
+SECTION
+20. EFFECTIVE DATE AND DURATION OF PLAN 
+The Plan shall become effective (the “Effective Date”) upon the later of the approval of
+the Plan by the Board and the approval of the Plan by the shareholders of the Company in accordance with applicable laws and regulations. No Award may be granted under the Plan after the tenth (10 th ) anniversary of the Effective Date. The Plan shall terminate when the total amount of the Stock available for issuance under the Plan have been issued
+and all restrictions on such shares under the terms of the Plan and the agreements evidencing Awards granted under the Plan have lapsed. 
+A-22 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders—May 15, 2007 
+The undersigned, whose signature
+appears on the reverse side of this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with
+all the powers the undersigned would possess if personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 15, 2007, in West Warwick, Rhode Island, and at any adjournments
+thereof, as follows: 
+1. ELECTION OF DIRECTORS 
+FOR all nominees listed below (except as marked to the contrary below)
+WITHHOLD AUTHORITY to vote for all nominees listed below
+Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Graeme MacLetchie.
+(INSTRUCTION: to withhold authority to vote for any individual nominee, write the nominee’s name in the space provided below.)
+2. APPROVAL OF ADOPTION OF 2007 EQUITY INCENTIVE PLAN 
+FOR AGAINST
+ABSTAIN 
+3. In their discretion, upon such other matters as may properly come before the meeting. 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
+VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1 AND FOR PROPOSAL 2. 
+PLEASE DATE, SIGN AND RETURN THIS PROXY 
+Dated 
+, 2007
+Signed 
+(Sign exactly as your name appears hereon. When signing as attorney, executor, administrator, trustee, guardian or in
+a corporate capacity, please give full title as such. In case of joint tenants or multiple owners, each party must sign.) 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-07-089841/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-07-089841/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000008146/0001193125-08-088172/proxy.txt b/raw/proxies/0000008146/0001193125-08-088172/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..4067e3bae4e7e8ff96eabde2a5eacd9bc874e639
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-08-088172/proxy.txt
@@ -0,0 +1,1093 @@
+DEF 14A
+1
+ddef14a.htm
+DEF 14A
+DEF 14A 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing
+Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 13, 2008 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2008 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode Island on
+Tuesday May 13, 2008, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 21, 2008 has been fixed as the record date for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 25, 2008 
+Kindly fill in, date and sign the
+enclosed proxy and promptly return it in the enclosed addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person.
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 13, 2008 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual
+meeting of the shareholders to be held May 13, 2008. The Company will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by regular employees
+of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending
+proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until notice
+thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders on or
+about April 25, 2008. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their respective successors are elected and
+qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons named below. Certain information
+concerning such nominees is set forth below: 
+Name and Age 
+Business Experience During Past Five Years 
+Director 
+Since 
+Albert W. Ondis (82) 
+Chairman of the Company 
+1969 
+Everett V. Pizzuti (71) 
+President of the Company 
+1985 
+Jacques V. Hopkins (75) 
+Former Partner, Hinckley, Allen & Snyder LLP (Attorneys at Law) (Retired 1997) 
+1969 
+Hermann Viets, Ph.D. (65) 
+President, Milwaukee School of Engineering (since 1991); Director, Gehl Company (farm equipment) 
+1988 
+Graeme MacLetchie (70) 
+Director, Deutsche Bank Alex Brown (Private Client Division) 
+2002 
+The Board of Directors
+has determined that all of the directors of the Company, which include each of the nominees standing for election at the 2008 annual shareholders meeting, other than Albert W. Ondis and Everett V. Pizzuti, are independent of the Company in that such
+nominees have no material relationship with the Company either directly, or as a partner, shareholder or affiliate of an organization that has a relationship with 
+1 
+the Company. The Board of Directors has made this determination in accordance with applicable Securities and Exchange Commission (“SEC”) rules and
+NASDAQ listing standards. 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 21, 2008
+will be entitled to vote at the meeting. On the record date, there were 6,961,862 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned.
+Security Ownership of Certain Beneficial Owners and Management
+The following table sets forth as of March 21, 2008
+(except as noted) the record and beneficial ownership of the Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than 5 percent of such stock, by each director of the
+Company, by each executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Albert W. Ondis 
+2,036,059 
+(b) 
+27.8 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Everett V. Pizzuti 
+481,269 
+(c) 
+6.6 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Rutabaga Capital Management, LLC 
+749,128 
+(d) 
+10.8 
+% 
+64 Broad Street, 3 rd 
+Floor 
+Boston, MA 02109 
+Hermann Viets 
+191,106 
+(e) 
+2.7 
+% 
+Joseph P. O’Connell 
+283,095 
+(f) 
+3.9 
+% 
+Elias G. Deeb 
+106,053 
+(g) 
+1.5 
+% 
+Jacques V. Hopkins 
+23,687 
+(h) 
+* 
+Graeme MacLetchie 
+84,750 
+(i) 
+1.1 
+% 
+Michael Morawetz 
+4,781 
+(j) 
+* 
+All directors and executive officers of the Company as a group (12) 
+3,357,671 
+(k) 
+41.3 
+% 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive officer, as
+well as shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable within 60 days of March 21, 2008. All
+information is based upon 
+2 
+ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under the
+Securities Exchange Act of 1934 or has been furnished by the respective directors and executive officers of the Company. 
+(b) 
+Includes 311,571 shares held in trust for children, 349,563 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,986 shares allocated to his
+account under the Company’s Employee Stock Ownership Plan. 
+(c) 
+Includes 290,988 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,513 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(d) 
+Rutabaga Capital Management, LLC, a Massachusetts limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2007. 
+(e) 
+Includes 275 shares held by Dr. Viets as custodian for a child and 13,250 shares deemed to be beneficially owned because of exercisable options to acquire shares.
+(f) 
+Includes 274,968 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,387 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(g) 
+Includes 82,251 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,650 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(h) 
+Includes 13,250 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(i) 
+Includes 9,125 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(j) 
+Includes 2,719 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(k) 
+Includes 1,169,463 shares deemed to be beneficially owned because of exercisable options to acquire shares and 19,510 shares allocated to the accounts of officers under the
+Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, requires the directors and executive officers of the Company and any persons who own more than ten percent of the
+Company’s common stock to file with the Securities and Exchange Commission various reports of beneficial ownership and changes in beneficial ownership. The Company believes all of its directors and executive officers complied with all filing
+requirements applicable to them with respect to transactions during the fiscal year ended January 31, 2008; except that neither a Form 3 or Form 5 were timely filed for Gordon W. Bentley in connection with his appointment as Vice President
+– Information Technology of the Company. 
+Meetings and Committees 
+During the fiscal year ended January 31, 2008, the Board
+of Directors held eight meetings. During fiscal year 2008, all directors attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of Directors has adopted a policy that
+requires members of the Board to make every effort to attend each annual shareholders meeting. All members of the Board of Directors attended the 2007 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a
+Nominating Committee. The members and chairs of each of those committees are appointed each year. Membership of the Audit, Compensation and Nominating Committee is comprised of the Company’s three outside directors, Messrs. Hopkins and
+MacLetchie and Dr. Viets, all of whom are independent as defined under the applicable NASDAQ listing standards and SEC rules. 
+3 
+Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board of
+Directors. A copy of each charter is available on the Company’s website at www.astro-medinc.com under “Our Company – Corporate Governance”. 
+Audit Committee. The Audit Committee’s primary duties and responsibilities include overseeing the integrity of the Company’s financial
+reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence and performance of the Company’s independent accountants and the adequacy of internal
+controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the annual audit scope, the results of the audit and other relevant matters. Mr. Hopkins serves as Chairman of the Audit
+Committee, which held seven meetings during the fiscal year ended January 31, 2008. The Board of Directors has determined that all three members of the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards
+and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that Graeme MacLetchie satisfies the “financial sophistication” requirement of the NASDAQ
+listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial expert” as defined by the SEC rules, which, in the view of the Board of Directors, requires an advanced understanding of internal
+controls and procedures. However, the Board of Directors believes that the members of the Audit Committee have a thorough understanding of the Company’s business, the accounting issues relevant to the Company’s financial statements and
+audit committee functions and possess the requisite skills to perform effectively their oversight function. 
+Compensation Committee. The Compensation Committee assists the Board of Directors in discharging the Board’s responsibilities relating to
+director and executive compensation. The Compensation Committee’s responsibilities include establishing and reviewing the Company’s executive and director compensation philosophy, strategies, plans and policies, making recommendations with
+respect to the design of the Company’s incentive compensation plans and equity based plans, granting awards under such plans and overseeing generally the administration of such plans, evaluating the performance and determining the compensation
+of the Chief Executive Officer and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the Compensation Committee, which held three meetings during the fiscal year ended January 31,
+2008. 
+Nominating Committee . The Nominating Committee is
+responsible for identifying individuals qualified to be members of the Board of Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders. The Nominating
+Committee held one meeting in the fiscal year ended January 31, 2008. Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The Nominating
+Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the ability to
+provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the shareholders.
+All non-employee directors must be independent within the meaning of applicable NASDAQ rules. The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under 
+4 
+the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees
+for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees to the Nominating Committee at the Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include
+information regarding a candidate’s background, qualifications, experience and willingness to serve as a director. In addition, Section 10 of Article II of the Company’s By-Laws sets forth specific procedures that, if followed, enable
+any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual
+meeting and must contain the name and certain information concerning the nominee and the shareholders who support the nominee’s election. For the annual meeting to be held in 2009, the notice deadline under the By-Laws is March 20, 2009. A
+copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the
+individual chairman of standing committees. Any shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors
+by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s
+corporate offices that is sent directly to an individual unless the Company believes the communication may pose a security risk. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and recommending to the Board of Directors the compensation of the directors of the Company.
+Messrs. Hopkins, MacLetchie and Viets are paid an annual retainer of $3,500 plus $500 for each Board and committee meeting attended (including attendance through telephonic means). Directors who are also officers or employees of the Company are not
+entitled to receive any compensation in addition to their compensation for services as officers or employees. 
+Those directors who are not also officers and employees of the Company have received options to purchase common stock under the Company’s
+Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the Director Plan, Messrs. Hopkins and Viets each received non-qualified options to purchase 1,375 shares of common
+stock on May 20, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a non-qualified option to purchase 1,375 shares of common stock upon his initial election to the Board of Directors on
+May 14, 2002. These options vested six months after the grant date. The Director Plan expired on May 31, 2006. Under the Company’s 2007 Equity Incentive Plan, each non-employee director receives non-qualified options to purchase 5,000
+shares of the Company’s common stock upon the adjournment of each annual meeting or special meeting in lieu of an annual meeting of the shareholders of the Company. These options have a term of ten years and 
+5 
+become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is granted. 
+The following Director Compensation table provides information regarding the
+compensation paid or accrued by each individual who was a director during the 2008 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Jacques Hopkins 
+$ 
+25,032 
+$ 
+8,000 
+$ 
+17,032 
+$ 
+0 
+Graeme MacLetchie 
+25,032 
+8,000 
+17,032 
+0 
+Albert W. Ondis(c) 
+— 
+— 
+— 
+0 
+Everett V. Pizzuti(c) 
+— 
+— 
+— 
+0 
+Hermann Viets 
+25,032 
+8,000 
+17,032 
+0 
+(a) 
+The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended January 31, 2008, in accordance with SFAS 123R for stock
+options granted to directors pursuant to the Director Plan. Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2008, included
+in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 16, 2008. 
+(b) 
+As of January 31, 2008 each director had the following number of options outstanding: Jacques Hopkins 13,250, Graeme MacLetchie 9,125 and Hermann Viets 13,250.
+(c) 
+See Summary Compensation Table and Outstanding Equity Awards at Fiscal Year End Table for disclosure relating to compensation and outstanding option awards of Messrs. Ondis and
+Pizzuti. 
+COMPENSATION DISCUSSION &
+ANALYSIS 
+The Compensation Committee of the Board of
+Directors of the Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel
+are effectively compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and recommending to the Board the compensation of directors. 
+Compensation Philosophy and Objectives. Our overall philosophy in terms of executive compensation is to link
+management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals and link their interests with
+shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s performance, awards, if any, made during prior years and other relevant factors. We seek to have the long-term performance of our
+common stock reflected in executive compensation through our equity incentive programs. 
+Elements of Compensation. Our total compensation program for executive officers consists of the following: 
+• 
+salary; 
+6 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, historically in the form of stock options; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and provide
+incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while providing
+incentives to maximize long-term value for our shareholders. 
+Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity awards. The Committee annually
+reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our executive officers were established a number of years ago.
+Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. For fiscal year 2008, we increased the compensation of the Company’s employees and
+executive officers by 3%. Historically, annual salary adjustments were approved to be effective on the anniversary of the executive’s original date of hire. Commencing with fiscal 2009, annual salary adjustments have been made effective
+April 1 of each year. 
+Cash Incentive and Bonus
+Awards. The Committee has adopted a management bonus plan for the purpose of providing incentive compensation to employees of the Company. Awards under the management bonus plan are based on the Company’s achieving
+specified financial objectives, such as net income and return on net assets, as well as each individual’s specific business objectives. The specified threshold and target financial objectives and business objectives and the related bonus
+payouts are established annually by the Committee and, accordingly, individual awards may vary, up or down, from year to year. Bonuses paid or accrued for fiscal year 2008 under our management bonus plan to all executive officers was $169,976 which
+represented approximately 23% of their maximum bonus opportunity. Bonuses paid to our “Named Executive Officers” (as defined on page 8 below) under our management bonus plan, except for Michael Morawetz who is not a participant in the
+Company’s management bonus plan, are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below. 
+In addition, to our management bonus plan, we have sometimes awarded cash bonus awards to our executive officers to reward their efforts in extraordinary
+circumstances. Such cash awards are made at the discretion of the Committee. For fiscal year 2008, Michael Morawetz was awarded a cash bonus due to the performance of the Company’s international sales branches for the 2008 fiscal year. This
+bonus was awarded under a plan established by the Company which awards cash bonuses to the Company’s branch offices based on certain financial objectives to be obtained by those branches. Upon attainment of the objectives, bonuses awarded to
+any branch office are then allocated amongst a pool of individuals at such offices at the discretion of the CEO. 
+Long-Term Incentive Compensation. Total compensation at the executive level also includes long-term incentive awards granted
+under the Company’s Non-Qualified Stock Option Plan and 2007 Equity Incentive 
+7 
+Plan. The objectives of the equity incentive program are to align executive and shareholder long-term interests by creating a strong and direct link between
+executive pay and total shareholder return, and to enable executives to develop and maintain a long-term stock ownership position in our common stock. Historically, all equity awards have been in the form of stock options which have generally been
+granted in March of each year at an exercise price of not less than 100% of the market price on the date of grant. Under the 2007 Equity Incentive Plan, the exercise price of all stock options must be at least 100% of the market price on the date of
+grant, provided that the exercise price for incentive stock options (ISOs) granted to any ten percent beneficial owner of our stock, which includes Mr. Ondis, must be not less than 110% of the market price on the date of grant. Since 2004, all
+options granted vest in four equal annual installments commencing on the first anniversary of the date of grant. Prior to 2004, options vested seven months following the grant date. Under the Company’s 2007 Equity Incentive Plan, the Company is
+also able to make equity awards in the form of restricted stock, restricted units and performance units in addition to stock options, but has not done so to date. 
+Retirement and Other Benefits. In order to attract and retain key executives, we offer retirement benefits through a
+Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including our executive officers. 
+Profit-Sharing Plan. We maintain a qualified Profit-Sharing Plan which provides retirement benefits to substantially all our employees and
+provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $220,000) compensation. In addition, participants are
+permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation contributed and 25%
+of the second through fifth percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code (the “Code”). The Profit-Sharing Plan provides for the vesting of 100% of matching contributions
+made by the Company to the account of the employee after three years of service. Contributions by an employee are 100% vested immediately. Effective April 1, 2007, we amended our Profit-Sharing Plan to increase the amount of our matching
+contributions to 50% of the first percent of compensation contributed and 25% of the second through the seventh percent. 
+Employee Stock Ownership Plan. We also have an Employee Stock Ownership Plan which provides retirement benefits to substantially all
+employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all
+allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s Trustee in shares of common stock of the Company. 
+Perquisites . In addition to the benefits described above, we provide automobile allowances to certain of our executive officers.
+Furthermore, prior to the adoption of the Sarbanes-Oxley Act of 2002, we made interest free loans to certain of our executive officers. As of April 25, 2007, all such loans were repaid in full. The amounts of any aforesaid automobile allowances
+to our Named Executive Officers are reflected in the “All Other Compensation” column of the Summary Compensation Table below. 
+We have no employment agreements with any of our executive officers and we do not provide any severance benefits to our executives other than those
+provided to employees generally. Severance benefits will vary based upon salary levels and length of service. 
+8 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis
+included above. Based on these reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included in the Company’s Annual Report on Form 10-K for the
+fiscal year ended January 31, 2008 for filing with the SEC through incorporation by reference of this Proxy Statement. 
+Compensation Committee: 
+Hermann Viets (Chairman) 
+Jacques Hopkins 
+Graeme MacLetchie. 
+EXECUTIVE COMPENSATION 
+The following table
+provides information regarding the total compensation paid or accrued by the Company to each of its Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and its three other highest paid executive officers other than
+the CEO and CFO (collectively, the “Named Executive Officers”). 
+Because the Company’s management bonus plan is based on achieving specified performance goals, awards under the plan are not considered “Bonuses” for purposes of SEC rules and are listed below as
+“Non-Equity Incentive Plan Compensation.” 
+Summary
+Compensation Table 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Stock 
+Awards 
+($) 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+Change in 
+Pension Value 
+and 
+Non-Qualified 
+Deferred 
+Compensation 
+Earnings ($) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Albert W. Ondis 
+2008 
+297,259 
+— 
+— 
+46,557 
+33,983 
+— 
+16,407 
+(d) 
+394,206 
+Chairman and CEO 
+2007 
+245,624 
+397,422 
+— 
+37,554 
+40,574 
+— 
+34,124 
+(e) 
+755,298 
+Everett V. Pizzuti 
+2008 
+277,441 
+— 
+— 
+46,557 
+32,181 
+— 
+28,837 
+(f) 
+385,016 
+President and COO 
+2007 
+238,733 
+168,332 
+— 
+37,554 
+38,412 
+— 
+33,641 
+(g) 
+516,672 
+Joseph P. O’Connell 
+2008 
+222,662 
+— 
+— 
+31,482 
+28,400 
+— 
+23,733 
+(h) 
+306,277 
+Senior Vice President, Treasurer and CFO 
+2007 
+177,863 
+20,000 
+— 
+25,128 
+22,988 
+— 
+28,781 
+(i) 
+274,760 
+Elias G. Deeb 
+2008 
+168,233 
+— 
+— 
+27,201 
+20,810 
+— 
+2,764 
+(j) 
+219,008 
+Vice President – 
+Media Products 
+2007 
+146,181 
+— 
+— 
+22,345 
+18,628 
+— 
+3,691 
+(k) 
+190,845 
+Michael Morawetz 
+2008 
+175,708 
+52,582 
+— 
+5,884 
+— 
+— 
+24,706 
+(l) 
+258,880 
+Vice President – International Branches 
+2007 
+158,424 
+— 
+— 
+3,714 
+— 
+— 
+— 
+162,138 
+9 
+(a) 
+Reflects discretionary cash bonuses. 
+(b) 
+The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended January 31, 2008, in accordance with SFAS 123R for stock
+options granted pursuant to the Company’s stock plans. Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2008,
+included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 16, 2008. 
+(c) 
+Reflects cash awards to the named individuals under the Company’s management bonus plan which is discussed in further detail under the heading “Compensation Discussion and
+Analysis” above. 
+(d) 
+Includes automobile allowance of $13,865, employer match under Profit Sharing Plan of $2,011 and employer contribution to Employee Stock Ownership Plan of $531.
+(e) 
+Includes imputed interest calculated at 4.71% in the amount of $15,149 on loan from Company in original principal amount of $321,640, automobile allowance of $15,290, employer match
+under Profit Sharing Plan of $3,115 and employer contribution to Employee Stock Ownership Plan of $570. 
+(f) 
+Includes automobile allowance of $16,397, non-cash automobile income related to personal use of $9,910, employer match under Profit Sharing Plan of $1,999 and employer contribution
+to Employee Stock Ownership Plan of $531. 
+(g) 
+Includes imputed interest calculated at 4.71% in the amount of $6,200 on loan from Company in original principal amount of $131,624, automobile allowance of $16,460, non-cash
+automobile income related to personal use of $10,075, employer match under Profit Sharing Plan of $336 and employer contribution to Employee Stock Ownership Plan of $570. 
+(h) 
+Includes automobile allowance of $19,352, employer match under Profit Sharing Plan of $3,850 and employer contribution to Employee Stock Ownership Plan of $531.
+(i) 
+Includes automobile allowance of $25,595, employer match under Profit Sharing Plan of $2,616 and employer contribution to Employee Stock Ownership Plan of $570.
+(j) 
+Includes employer match under Profit Sharing Plan of $2,233 and employer contribution to Employee Stock Ownership Plan of $531. 
+(k) 
+Includes imputed interest calculated at 4.71% in the amount of $942 on loan from Company in original principal amount of $20,000, employer match under Profit Sharing Plan of $2,179
+and employer contribution to Employee Stock Ownership Plan of $570. 
+(l) 
+Reflects non-cash automobile income related to personal use. 
+10 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding equity awards
+held by each of the Named Executive Officers as of January 31, 2008. 
+Name 
+Option Grant 
+Date 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Exercisable 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Unexercisable(a) 
+Option 
+Exercise 
+Price($) 
+Option 
+Expiration 
+Date 
+Albert W. Ondis 
+03/25/1998 
+34,375 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+34,375 
+— 
+3.5909 
+03/23/2009 
+(b) 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+85,250 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+30,938 
+10,312 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+5,313 
+15,937 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+0 
+14,000 
+11.4450 
+04/12/2017 
+(c) 
+Everett V. Pizzuti 
+03/25/1998 
+34,375 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+34,375 
+— 
+3.5909 
+03/23/2009 
+(b) 
+11/27/1999 
+12,375 
+— 
+4.5455 
+11/27/2009 
+(b) 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+14,300 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+30,938 
+10,312 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+5,313 
+15,937 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+0 
+14,000 
+11.4450 
+04/12/2017 
+(c) 
+Joseph P. O’Connell 
+03/25/1998 
+13,750 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+27,500 
+— 
+3.5909 
+03/23/2009 
+(b) 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+55,000 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+66,687 
+— 
+2.6909 
+03/18/2012 
+(b) 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(b) 
+04/19/2004 
+15,469 
+5,156 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+4,688 
+4,687 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+3,516 
+10,546 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+0 
+10,000 
+11.4450 
+04/12/2017 
+(c) 
+Elias G. Deeb 
+03/25/1998 
+10,312 
+— 
+5.9091 
+03/25/2008 
+(b) 
+03/23/1999 
+10,312 
+— 
+3.5909 
+03/23/2009 
+(b) 
+11/27/1999 
+4,125 
+— 
+4.5455 
+11/27/2009 
+(b) 
+03/20/2000 
+20,625 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+20,625 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+6,875 
+— 
+2.6909 
+03/18/2012 
+(b) 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(b) 
+04/19/2004 
+10,313 
+3,437 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+3,125 
+3,125 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+2,344 
+7,031 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+0 
+10,000 
+11.4450 
+04/12/2017 
+(c) 
+Michael Morawetz 
+04/19/2004 
+1,546 
+516 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+469 
+468 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+234 
+703 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+0 
+3,500 
+11.4450 
+04/12/2017 
+(c) 
+11 
+(a) 
+Option awards are adjusted to reflect Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Options vested in full on the seven month anniversary of the Option Grant Date. 
+(c) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+Grants of Plan Based Awards 
+The following table provides information on all grants of plan based awards
+by the Company in fiscal year 2008 to each Named Executive Officer. 
+Name 
+Grant 
+Date 
+All Other Stock 
+Awards: Number 
+of Shares of Stock 
+or Units (#) 
+All Other Option 
+Awards: Number of 
+Securities Underlying 
+Options (#) 
+Exercise or Base 
+Price of Option 
+Awards ($/Sh) 
+Grant Date Fair Value 
+of Stock and Option 
+Awards ($) (a) 
+Albert W. Ondis 
+04/12/07 
+— 
+14,000 
+11.45 
+64,820 
+Everett V. Pizzuti 
+04/12/07 
+— 
+14,000 
+11.45 
+64,820 
+Joseph P. O’Connell 
+04/12/07 
+— 
+10,000 
+11.45 
+46,300 
+Elias G. Deeb 
+04/12/07 
+— 
+6,500 
+11.45 
+30,095 
+Michael Morawetz 
+04/12/07 
+— 
+3,500 
+11.45 
+16,205 
+(a) 
+Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2008,
+included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 16, 2008. 
+Option Exercises and Stock Vested 
+The following table provides information on all exercises of options by the Named Executive Officers during the Company’s 2008 fiscal year.
+Option Awards 
+Stock Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise ($)(b) 
+Number of 
+Shares Acquired 
+on Vesting (#) 
+Value Realized 
+on Vesting ($) 
+Albert W. Ondis 
+34,375 
+185,343 
+— 
+— 
+Everett V. Pizzuti 
+34,375 
+170,562 
+— 
+— 
+Joseph P. O’Connell 
+10,312 
+59,313 
+— 
+— 
+Elias G. Deeb 
+13,750 
+125,950 
+— 
+— 
+Michael Morawetz 
+— 
+— 
+— 
+— 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise and the exercise price of the options. 
+Related Party Transactions 
+Potential conflicts of interest and related party transactions are referred
+by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing standards and SEC rules as a
+guide. 
+12 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner,
+provides legal services to the Company. 
+The Company employs a
+son-in-law of Mr. Ondis, Eric Menke, as Manager of International Dealer Sales, and during the fiscal year ended January 31, 2008 paid him $96,026 in salary and commissions. The Company also employs two sons of Mr. Pizzuti, Eric
+Pizzuti, as National Sales Manager (QuickLabel Systems), and William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $161,392 and $154,977, respectively, in salary and commissions during the fiscal year ended
+January 31, 2008. In addition, the Company made matching contributions for the fiscal year 2008 under its qualified Profit-Sharing Plan of $1,940 to Eric Menke, $2,708 to Eric Pizzuti and $2,881 to William Pizzuti. The Company also made stock
+option grants during the 2008 fiscal year to Messrs. Menke, E. Pizzuti and W. Pizzuti with a fair market value at the date of grant equal to $7,382 to Mr. Menke, $13,805 to Mr. E. Pizzuti and $6,665 to Mr. W. Pizzuti. Mr. Menke
+also had disqualifying disposition income during fiscal year 2008 on the sale of incentive stock options granted by the Company in the amount of $23,119. 
+Other than as described above, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal
+year ended January 31, 2008 any material interest, direct or indirect, in any material transaction or any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+Audit Committee Report 
+The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the
+Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC rules. The Audit Committee operates under a written charter
+approved by the Board of Directors. 
+Management is responsible
+for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted
+auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal controls and financial
+reporting process and the reliability of the Company’s financial statements; and (2) the independence and performance of the Company’s independent accountants. The Audit Committee has sole authority to select, evaluate and when
+appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s independent accountants, Grant Thornton LLP, to review and discuss the January 31, 2008 financial statements. Management represented to the Committee that the
+Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent
+accountants. The Audit Committee also discussed with Grant Thornton LLP the matters required by Statement on Auditing Standards No.114 ( Communication with Audit Committees ). The Audit Committee also received from Grant Thornton LLP written
+disclosures and the letter regarding independence as required by Independence Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Grant Thornton LLP that firm’s independence.
+13 
+The Audit Committee received the information concerning the fees of Grant Thornton LLP for the year ended
+January 31, 2008 set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the independence of the independent
+accountants and has determined that the provision of such services by Grant Thornton LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the audited consolidated
+financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2008, to be filed with the SEC. 
+Audit Committee: 
+Jacques V. Hopkins (Chairman) 
+Hermann
+Viets, Ph.D. 
+Graeme MacLetchie 
+Independent Accountant Fees and Services 
+The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. The Audit Committee
+has appointed Grant Thornton LLP as the Company’s independent auditors for the 2009 fiscal year. 
+The Company expects a representative of Grant Thornton LLP will be present at the annual meeting with the opportunity to make a statement, if he or she so
+desires, and that such representative will be available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the Company by Grant Thornton LLP for the fiscal years ended January 31, 2008 and 2007 are set forth below. The aggregate fees included in the Audit category
+are billed for the fiscal years for the audit of the Company’s annual financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are
+fees billed for the fiscal year. 
+2008 
+2007 
+Audit Fees 
+$ 
+214,310 
+$ 
+175,175 
+Audit-Related Fees 
+0 
+0 
+Tax Fees 
+23,822 
+5,145 
+All Other Fees 
+0 
+0 
+Audit Fees for
+the fiscal years ended January 31, 2008 and 2007 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on
+Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Tax Fees as of the fiscal years ended January 31, 2008 and 2007 were for services rendered for tax returns and estimates, tax advice, tax
+planning and compliance with Financial Accounting Standards Board Interpretation No. 48 (FIN 48). 
+14 
+Policy on Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit
+services provided by the independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimus exception provided
+by Rule 2-01(C)(7)(i)(c) under Regulation S-X. 
+Financial Reports
+A copy of the annual report of the Company for the fiscal
+year ended January 31, 2008 including the Company’s annual report to the SEC on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+Proposals For 2009 Annual Meeting 
+The 2009 annual meeting of the shareholders of the Company is scheduled to be held on May 19, 2009. If a shareholder intending to present a proposal
+at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal to the Company not later than December 20, 2008. Shareholder
+proposals that are to be considered at the 2009 annual meeting but not requested to be included in the Proxy Statement must be submitted no later than March 20, 2009 and no earlier than December 20, 2008. 
+Other Matters 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but
+should any other matters requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the
+event any of the nominees for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of
+the Company. 
+You are urged to sign and return your proxy
+promptly to make certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+15 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders—May 13, 2008 
+The undersigned, whose signature appears on the reverse side of this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques
+V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned would possess if personally present, to vote the stock of the
+undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 13, 2008, in West Warwick, Rhode Island, and at any adjournments thereof, as follows: 
+1. ELECTION OF DIRECTORS 
+FOR all nominees listed below (except as marked to the contrary below)
+WITHHOLD AUTHORITY to vote for all nominees listed below
+Albert W. Ondis,
+Everett V. Pizzuti, Jacques V. Hopkins, Hermann Viets and Graeme MacLetchie. 
+(INSTRUCTION: to withhold authority to vote for any individual
+nominee, write the nominee’s name in the space provided below.) 
+2. In their discretion, upon such other matters as may properly come before the meeting. 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
+VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+PLEASE DATE, SIGN AND RETURN THIS PROXY 
+Dated
+, 2008
+Signed 
+(Sign exactly as your name appears hereon. When signing 
+as attorney, executor, administrator, trustee, guardian or 
+in a corporate capacity, please give full title as
+such. In 
+case of joint tenants or multiple owners, each party must 
+sign.) 
+THIS PROXY IS
+SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-08-088172/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-08-088172/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..dbb57fdc9822e360c1eaeb31c0f2f2fffd576e26
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-08-088172/proxy_rpt.txt
@@ -0,0 +1,15 @@
+Related Party Transactions 
+Potential conflicts of interest and related party transactions are referred
+by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing standards and SEC rules as a
+guide. 
+12 
+The law firm of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner,
+provides legal services to the Company. 
+The Company employs a
+son-in-law of Mr. Ondis, Eric Menke, as Manager of International Dealer Sales, and during the fiscal year ended January 31, 2008 paid him $96,026 in salary and commissions. The Company also employs two sons of Mr. Pizzuti, Eric
+Pizzuti, as National Sales Manager (QuickLabel Systems), and William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $161,392 and $154,977, respectively, in salary and commissions during the fiscal year ended
+January 31, 2008. In addition, the Company made matching contributions for the fiscal year 2008 under its qualified Profit-Sharing Plan of $1,940 to Eric Menke, $2,708 to Eric Pizzuti and $2,881 to William Pizzuti. The Company also made stock
+option grants during the 2008 fiscal year to Messrs. Menke, E. Pizzuti and W. Pizzuti with a fair market value at the date of grant equal to $7,382 to Mr. Menke, $13,805 to Mr. E. Pizzuti and $6,665 to Mr. W. Pizzuti. Mr. Menke
+also had disqualifying disposition income during fiscal year 2008 on the sale of incentive stock options granted by the Company in the amount of $23,119. 
+Other than as described above, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal
+year ended January 31, 2008 any material interest, direct or indirect, in any material transaction or any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party.
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-09-082151/proxy.txt b/raw/proxies/0000008146/0001193125-09-082151/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e72fd254de70af531802b61a50db8a3db6c90252
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-09-082151/proxy.txt
@@ -0,0 +1,1123 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing
+Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc.
+Astro-Med Industrial Park 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 19, 2009 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2009 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the
+Company, Astro-Med Industrial Park, 600 East Greenwich Avenue, West Warwick, Rhode Island on Tuesday May 19, 2009, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on April 3, 2009 has been fixed as the record date for determining shareholders entitled to vote at the Annual Meeting or any
+adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 20, 2009 
+Kindly fill in,
+date and sign the enclosed proxy and promptly return it in the enclosed addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to
+vote in person. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY
+OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 19, 2009. 
+The Company’s Proxy Statement, sample proxy card and Annual Report are available at: 
+http://www.proxyvote.com. 
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 19, 2009 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual
+meeting of the shareholders to be held May 19, 2009. The Company will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by regular employees
+of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending
+proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until notice
+thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders on or
+about April 20, 2009. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their respective successors are elected and
+qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons named below. Certain information
+concerning such nominees is set forth below: 
+Name and Age 
+Business Experience During Past Five Years 
+Director 
+Since 
+Albert W. Ondis (83) 
+Chairman of the Company 
+1969 
+Everett V. Pizzuti (72) 
+President of the Company 
+1985 
+Jacques V. Hopkins (78) 
+Former Partner, Hinckley, Allen & Snyder LLP 
+(Attorneys at Law) (Retired 1997) 
+1969 
+Hermann Viets, Ph.D. (66) 
+President, Milwaukee School of Engineering 
+(since 1991); Director, Gehl Company (farm 
+equipment) 
+1988 
+Graeme MacLetchie (71) 
+Director, Deutsche Bank Alex Brown (Private 
+Client Division) 
+2002 
+The Board of Directors
+has determined that all of the directors of the Company, which include each of the nominees standing for election at the 2009 annual shareholders meeting, other than Albert W. Ondis and Everett V. Pizzuti, are independent of the Company in that such
+nominees have no material relationship with the Company either directly, or as a partner, shareholder or affiliate of an organization that has a relationship with 
+1 
+the Company. The Board of Directors has made this determination in accordance with applicable Securities and Exchange Commission (“SEC”) rules and
+NASDAQ listing standards. 
+Voting at Meeting 
+Only shareholders of record at the close of business on April 3, 2009 will be entitled
+to vote at the meeting. On the record date, there were 7,146,603 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of April 3, 2009 (except as noted)
+the record and beneficial ownership of the Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than five percent of such stock, by each director of the Company, by each
+executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Albert W. Ondis 
+2,047,784 
+(b) 
+27.4 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Everett V. Pizzuti 
+499,183 
+(c) 
+6.7 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Rutabaga Capital Management, LLC 
+753,328 
+(d) 
+10.5 
+% 
+64 Broad Street, 3 rd 
+Floor 
+Boston, MA 02109 
+Hermann Viets 
+196,106 
+(e) 
+2.7 
+% 
+Joseph P. O’Connell 
+279,399 
+(f) 
+3.8 
+% 
+Elias G. Deeb 
+116,500 
+(g) 
+1.6 
+% 
+Jacques V. Hopkins 
+28,687 
+(h) 
+* 
+Graeme MacLetchie 
+92,250 
+(i) 
+1.3 
+% 
+Michael Morawetz 
+8,383 
+(j) 
+* 
+All directors and executive officers of the Company as a group (13) 
+3,435,883 
+(k) 
+41.4 
+% 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive officer, as
+well as shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable within 60 days of April 3, 2009. All
+information is based upon 
+2 
+ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under the
+Securities Exchange Act of 1934 or has been furnished by the respective directors and executive officers of the Company. 
+(b) 
+Includes 311,571 shares held in trust for children, 339,382 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,641 shares allocated to his
+account under the Company’s Employee Stock Ownership Plan. 
+(c) 
+Includes 280,807 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,378 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(d) 
+Rutabaga Capital Management, LLC, a Massachusetts limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2008. 
+(e) 
+Includes 275 shares held by Dr. Viets as custodian for a child and 16,875 shares deemed to be beneficially owned because of exercisable options to acquire shares.
+(f) 
+Includes 251,078 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,581 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(g) 
+Includes 82,025 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,886 shares allocated to his account under the Company’s Employee
+Stock Ownership Plan. 
+(h) 
+Includes 16,875 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(i) 
+Includes 14,125 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(j) 
+Includes 6,321 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(k) 
+Includes 1,157,894 shares deemed to be beneficially owned because of exercisable options to acquire shares and 20,267 shares allocated to the accounts of officers under the
+Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, requires the directors and executive officers of the Company and any persons who own more than ten percent of the
+Company’s common stock to file with the Securities and Exchange Commission various reports of beneficial ownership and changes in beneficial ownership. The Company believes all of its directors and executive officers complied with all filing
+requirements applicable to them with respect to transactions during the fiscal year ended January 31, 2009; except that a Form 3 was not timely filed for Gordon W. Bentley in connection with his appointment as Vice President – Information
+Technology of the Company. 
+Meetings and Committees 
+During the fiscal year ended January 31, 2009, the Board of Directors
+held eight meetings. During fiscal year 2009, all directors attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of Directors has adopted a policy that requires members
+of the Board to make every effort to attend each annual shareholders meeting. All members of the Board of Directors attended the 2008 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a
+Nominating Committee. The members and chairs of each of those committees are appointed each year. Membership of the Audit, Compensation and Nominating Committee is comprised of the Company’s three outside directors, Messrs. Hopkins and
+MacLetchie and Dr. Viets, all of whom are independent as defined under the applicable NASDAQ listing standards and SEC rules. 
+3 
+Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board of
+Directors. A copy of each charter is available on the Company’s website at www.astro-medinc.com under “Our Company – Corporate Governance”. 
+Audit Committee. The Audit Committee’s primary duties and responsibilities include overseeing the integrity of the Company’s financial
+reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence and performance of the Company’s independent accountants and the adequacy of internal
+controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the annual audit scope, the results of the audit and other relevant matters. Mr. Hopkins serves as Chairman of the Audit
+Committee, which held eight meetings during the fiscal year ended January 31, 2009. The Board of Directors has determined that all three members of the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards
+and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that Graeme MacLetchie satisfies the “financial sophistication” requirement of the NASDAQ
+listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial expert” as defined by the SEC rules, which, in the view of the Board of Directors, requires an advanced understanding of internal
+controls and procedures. However, the Board of Directors believes that the members of the Audit Committee have a thorough understanding of the Company’s business, the accounting issues relevant to the Company’s financial statements and
+audit committee functions and possess the requisite skills to perform effectively their oversight function. 
+Compensation Committee. The Compensation Committee assists the Board of Directors in discharging the Board’s responsibilities relating to
+director and executive compensation. The Compensation Committee’s responsibilities include: establishing and reviewing the Company’s executive and director compensation philosophy, strategies, plans and policies; making recommendations
+with respect to the design of the Company’s incentive compensation plans and equity based plans; granting awards under such plans and overseeing generally the administration of such plans; evaluating the performance and determining the
+compensation of the Chief Executive Officer; and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the Compensation Committee, which held three meetings during the fiscal year ended
+January 31, 2009. 
+Nominating Committee . The
+Nominating Committee is responsible for identifying individuals qualified to be members of the Board of Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders.
+The Nominating Committee held one meeting in the fiscal year ended January 31, 2009. Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The Nominating
+Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the ability to
+provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the shareholders.
+All non-employee directors must be independent within the meaning of applicable NASDAQ rules. The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under 
+4 
+the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees
+for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees to the Nominating Committee at the Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include
+information regarding a candidate’s background, qualifications, experience and willingness to serve as a director. In addition, Section 10 of Article II of the Company’s By-Laws sets forth specific procedures that, if followed, enable
+any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual
+meeting and must contain the name and certain information concerning the nominee and the shareholders who support the nominee’s election. For the annual meeting to be held in 2010, the notice deadline under the By-Laws is March 19, 2010. A
+copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the
+individual chairman of standing committees. Any shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors
+by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s
+corporate offices that is sent directly to an individual unless the Company believes the communication may pose a security risk. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and recommending to the Board of Directors the compensation of the directors of the Company.
+Messrs. Hopkins and MacLetchie and Dr. Viets are paid an annual retainer of $3,500 plus $500 for each Board and committee meeting attended (including attendance through telephonic means). Directors who are also officers or employees of the Company
+are not entitled to receive any compensation in addition to their compensation for services as officers or employees. 
+Those directors who are not also officers and employees of the Company have received options to purchase common stock under the Company’s
+Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the Director Plan, Mr. Hopkins and Dr. Viets each received non-qualified options to purchase 1,375 shares of common
+stock on May 20, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a non-qualified option to purchase 1,375 shares of common stock upon his initial election to the Board of Directors on
+May 14, 2002. These options vested six months after the grant date. The Director Plan expired on May 31, 2006. Under the Company’s 2007 Equity Incentive Plan, each non-employee director receives non-qualified options to purchase 5,000
+shares of the Company’s common stock upon the adjournment of each annual meeting or special meeting in lieu of an annual meeting of the shareholders of the Company. These options have a term of ten years and 
+5 
+become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is granted. 
+The following Director Compensation table provides information regarding the
+compensation paid or accrued by each individual who was a director during the 2009 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Jacques Hopkins 
+$ 
+30,181 
+$ 
+8,000 
+$ 
+19,998 
+— 
+Graeme MacLetchie 
+27,998 
+8,000 
+19,998 
+— 
+Albert W. Ondis(c) 
+— 
+— 
+— 
+— 
+Everett V. Pizzuti(c) 
+— 
+— 
+— 
+— 
+Hermann Viets 
+30,134 
+7,500 
+19,998 
+— 
+(a) 
+The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended January 31, 2009, in accordance with SFAS 123R for stock
+options granted to directors pursuant to the Director Plan. Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2009, included
+in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 13, 2009. 
+(b) 
+As of January 31, 2009 each director had the following number of options outstanding: Jacques Hopkins 16,875, Graeme MacLetchie 14,125 and Hermann Viets 16,875.
+(c) 
+See Summary Compensation Table and Outstanding Equity Awards at Fiscal Year End Table for disclosure relating to compensation and outstanding option awards of Messrs. Ondis and
+Pizzuti. 
+COMPENSATION DISCUSSION &
+ANALYSIS 
+The Compensation Committee of the Board of
+Directors of the Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel
+are effectively compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and recommending to the Board the compensation of directors. 
+Compensation Philosophy and Objectives. Our overall philosophy in terms of executive
+compensation is to link management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals and link
+their interests with shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s performance, awards, if any, made during prior years and other relevant factors. We seek to have the
+long-term performance of our common stock reflected in executive compensation through our equity incentive programs. 
+6 
+Elements of Compensation. Our total compensation program for executive
+officers consists of the following: 
+• 
+salary; 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, historically in the form of stock options; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and provide
+incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while providing
+incentives to maximize long-term value for our shareholders. 
+Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity awards. The Committee annually
+reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our executive officers were established a number of years ago.
+Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. For fiscal year 2009, we increased the compensation of the Company’s employees and
+executive officers by 3%. Historically, annual salary adjustments were approved to be effective on the anniversary of the executive’s original date of hire. Commencing with fiscal 2009, annual salary adjustments were made effective April 1
+of each year. 
+Cash Incentive and Bonus
+Awards. The Committee has adopted two separate management bonus plans applicable to executive officers of the Company for the purpose of providing incentive compensation to the Company’s executive officers. One plan
+is applicable to domestic employees of the Company (the “Domestic Plan”) and the other is applicable to the Vice President-International Branches, currently Michael Morawetz (the “International Branch Plan”). Awards to executive
+officers other than the Chief Executive Officer and President of the Company under the Domestic Plan are based on the Company’s achieving specified thresholds of annual operating income and return on net assets. Awards to the Chief Executive
+Officer and President of the Company under the Domestic Plan are predicated on achieving specified levels of annual operating income, return on net assets and annual sales thresholds. For fiscal year 2009, the Company’s Chief Executive Officer
+and President were eligible to receive bonuses under the Domestic Bonus Plan ranging from 12% to 27% of their base salaries while the Company’s other executive officers were eligible to receive bonuses ranging from 9% to 22% of their respective
+base salaries. 
+Awards under the International Branch Plan are
+based on the annual earned bonus pool available under the Company’s bonus plans applicable to the Company’s international branches located in Canada, the United Kingdom, France and Germany. These bonus pools are determined by comparing the
+annual sales achieved in the last fiscal year ended by each international branch to the respective volume of sales achieved during the prior fiscal year for each branch. Sales that surpass the prior year’s sales earn a 4% bonus on the
+incremental sales volume up to the specified target established by the Committee for that year. The bonus pool earned is then 
+7 
+adjusted (increased or decreased) by the branch’s achievement of specified profit margin and return on working capital thresholds as determined by the
+Committee. The amounts available under the branch bonus pools are then allocated amongst a pool of individuals at such offices at the discretion of the CEO. Under the International Branch Plan, the Vice President of International Branches is
+eligible to receive a bonus of up to 10% of the total earned bonus pool (local currency) of each of the Company’s international branches for fiscal year 2009 and up to 20% thereafter; provided that, no bonus will be paid to the Vice President
+of International Branches under the International Branch Plan unless the consolidated sales value of all the Company’s international branches meets the minimum threshold of sales value for each of the Company’s international branches as
+established annually by the Committee. 
+The specified threshold
+and target financial objectives and business objectives and the related bonus payouts under the Company’s bonus plans are established annually by the Committee and, accordingly, individual awards may vary, up or down, from year to year. For
+fiscal year 2009, we did not pay any bonuses to our executive officers under the Domestic Plan. We did, however, pay a bonus to Michael Morawetz under the International Branch Plan in the amount of $9,179 which represented approximately 9% of his
+maximum bonus opportunity under that plan. The bonus paid to Mr. Morawetz under the International Branch Plan is reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below. In addition to
+the bonus paid to Michael Morawetz under the International Branch Plan, Mr. Morawetz was awarded a cash bonus in the amount $11,038 due to the performance of the Company’s German subsidiary for the 2009 fiscal year. This bonus was awarded
+at the CEO’s discretion under the Company’s bonus plan applicable to its branch offices out of the bonus pool available for the Company’s German subsidiary. Commencing with fiscal year 2010, Mr. Morawetz will be entitled to
+receive a bonus only under the International Branch Plan. 
+In
+addition to our management bonus plans, from time-to-time we award cash bonuses to our executive officers to reward their efforts in extraordinary circumstances. Such awards are made at the discretion of the Committee. 
+Long-Term Incentive Compensation. Total
+compensation at the executive level also includes long-term incentive awards granted under the Company’s Non-Qualified Stock Option Plan and 2007 Equity Incentive Plan. The objectives of the equity incentive program are to align executive and
+shareholder long-term interests by creating a strong and direct link between executive pay and total shareholder return, and to enable executives to develop and maintain a long-term stock ownership position in our common stock. Historically, all
+equity awards have been in the form of stock options which have generally been granted in March of each year at an exercise price of not less than 100% of the market price on the date of grant. Under the 2007 Equity Incentive Plan, the exercise
+price of all stock options must be at least 100% of the market price on the date of grant, provided that the exercise price for incentive stock options (ISOs) granted to any ten percent beneficial owner of our stock, which includes Mr. Ondis,
+must be not less than 110% of the market price on the date of grant. Since 2004, all options granted vest in four equal annual installments commencing on the first anniversary of the date of grant. Prior to 2004, options vested seven months
+following the grant date. Under the Company’s 2007 Equity Incentive Plan, the Company is also able to make equity awards in the form of restricted stock, restricted units and performance units in addition to stock options, but has not done so
+to date. 
+Retirement and Other Benefits. In order to
+attract and retain key executives, we offer retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including our executive officers. 
+8 
+Profit-Sharing Plan. We maintain a qualified Profit-Sharing Plan which provides retirement
+benefits to substantially all our employees and provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to
+$220,000) compensation. In addition, participants are permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. Effective April 1, 2007, we amended our
+Profit-Sharing Plan to increase the amount of our matching contributions to 50% of the first percent of compensation contributed and 25% of the second through the seventh percent. Prior to this change, the Company made matching contributions equal
+to 50% of the first percent of compensation contributed and 25% of the second through fifth percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code (the “Code”). The Profit-Sharing
+Plan provides for the vesting of 100% of matching contributions made by the Company to the account of the employee after three years of service. Contributions by an employee are 100% vested immediately. 
+Employee Stock Ownership Plan. We also have an Employee Stock
+Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited
+to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s Trustee in shares of common stock of the Company. 
+Perquisites . In addition to the benefits described above, we
+provide automobile allowances to certain of our executive officers. Furthermore, prior to the adoption of the Sarbanes-Oxley Act of 2002, we made interest free loans to certain of our executive officers. As of April 25, 2007, all such loans
+were repaid in full. The amounts of any aforesaid automobile allowances to our Named Executive Officers are reflected in the “All Other Compensation” column of the Summary Compensation Table below. 
+We have no employment agreements with any of our executive officers and we do
+not provide any severance benefits to our executives other than those provided to employees generally. Severance benefits will vary based upon salary levels and length of service. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis included above. Based on these
+reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended
+January 31, 2009 for filing with the SEC through incorporation by reference of this Proxy Statement. 
+Compensation Committee: 
+Hermann Viets (Chairman) 
+Jacques Hopkins 
+Graeme MacLetchie 
+9 
+EXECUTIVE COMPENSATION 
+The following table provides information regarding the total compensation paid or accrued by the Company to each of its
+Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and its three other highest paid executive officers other than the CEO and CFO (collectively, the “Named Executive Officers”). 
+Because the Company’s management bonus plans are based on achieving
+specified performance goals, awards under these plans are not considered “Bonuses” for purposes of SEC rules and are listed below as “Non-Equity Incentive Plan Compensation.” 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Albert W. Ondis 
+2009 
+258,001 
+— 
+50,516 
+— 
+20,343 
+(d) 
+328,860 
+Chairman and CEO 
+2008 
+256,685 
+— 
+46,557 
+33,983 
+16,407 
+353,632 
+2007 
+245,624 
+397,422 
+37,554 
+40,574 
+34,124 
+755,298 
+Everett V. Pizzuti 
+2009 
+239,995 
+— 
+50,830 
+— 
+41,907 
+(e) 
+332,732 
+President and COO 
+2008 
+239,029 
+— 
+46,557 
+32,181 
+28,837 
+346,604 
+2007 
+238,733 
+168,332 
+37,554 
+38,412 
+33,641 
+516,672 
+Joseph P. O’Connell 
+2009 
+205,077 
+— 
+38,730 
+— 
+25,805 
+(f) 
+269,612 
+Senior Vice President, 
+2008 
+199,674 
+— 
+31,482 
+28,400 
+23,733 
+283,289 
+Treasurer and CFO 
+2007 
+177,863 
+20,000 
+25,128 
+22,988 
+28,781 
+274,760 
+Elias G. Deeb 
+2009 
+153,754 
+— 
+26,572 
+— 
+2,948 
+(g) 
+183,274 
+Vice President – 
+2008 
+149,605 
+— 
+27,201 
+20,810 
+2,764 
+200,380 
+Media Products 
+2007 
+146,181 
+— 
+22,345 
+18,628 
+3,691 
+190,845 
+Michael Morawetz 
+2009 
+191,365 
+11,038 
+8,731 
+9,179 
+17,617 
+(h) 
+237,930 
+Vice President – 
+2008 
+175,708 
+52,582 
+5,884 
+— 
+24,706 
+258,880 
+International Branches 
+2007 
+158,424 
+— 
+3,714 
+— 
+— 
+162,138 
+(a) 
+Reflects discretionary cash bonuses. 
+(b) 
+The amounts reflect the dollar amount recognized for financial statement reporting purposes for the fiscal year ended January 31, 2009, in accordance with SFAS 123R for stock
+options granted pursuant to the Company’s stock plans. Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2009, included
+in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 13, 2009. 
+(c) 
+Reflects cash awards to the named individuals under the Company’s management bonus plans which are discussed in further detail under the heading “Compensation Discussion
+and Analysis” above. 
+(d) 
+Includes automobile allowance of $15,215, employer match under Profit Sharing Plan of $4,611 and employer contribution to Employee Stock Ownership Plan of $517.
+10 
+(e) 
+Includes automobile allowance of $26,695, non-cash automobile income related to personal use of $10,076, employer match under Profit Sharing Plan of $4,619 and employer contribution
+to Employee Stock Ownership Plan of $517. 
+(f) 
+Includes automobile allowance of $21,136, employer match under Profit Sharing Plan of $4,152 and employer contribution to Employee Stock Ownership Plan of $517.
+(g) 
+Includes employer match under Profit Sharing Plan of $2,431 and employer contribution to Employee Stock Ownership Plan of $517. 
+(h) 
+Reflects automobile allowance. 
+11 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding equity awards
+held by each of the Named Executive Officers as of January 31, 2009. 
+Name 
+Option Grant 
+Date 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Exercisable 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Unexercisable(a) 
+Option 
+Exercise 
+Price($) 
+Option 
+Expiration 
+Date 
+Albert W. Ondis 
+03/23/1999 
+34,375 
+— 
+3.5909 
+03/23/2009 
+(b) 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+85,250 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+30,938 
+10,312 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+10,625 
+10,625 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+3,500 
+10,500 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+— 
+6,275 
+9.8450 
+04/01/2013 
+(c) 
+Everett V. Pizzuti 
+03/23/1999 
+34,375 
+— 
+3.5909 
+03/23/2009 
+(b) 
+11/27/1999 
+12,375 
+— 
+4.5455 
+11/27/2009 
+(b) 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+14,300 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+41,250 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+10,625 
+10,625 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+3,500 
+10,500 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+— 
+6,275 
+8.9500 
+04/01/2018 
+(c) 
+Joseph P. O’Connell 
+03/23/1999 
+27,500 
+— 
+3.5909 
+03/23/2009 
+(b) 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+55,000 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+66,687 
+— 
+2.6909 
+03/18/2012 
+(b) 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(b) 
+04/19/2004 
+20,625 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+7,031 
+2,344 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+7,031 
+7,031 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+2,500 
+7,500 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+— 
+5,375 
+8.9500 
+04/01/2018 
+(c) 
+Elias G. Deeb 
+03/23/1999 
+10,312 
+— 
+3.5909 
+03/23/2009 
+(b) 
+11/27/1999 
+4,125 
+— 
+4.5455 
+11/27/2009 
+(b) 
+03/20/2000 
+20,625 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+20,625 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+6,875 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+13,750 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+4,688 
+1,562 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+4,688 
+4,687 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+1,625 
+4,875 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+— 
+4,475 
+8.9500 
+04/01/2018 
+(c) 
+Michael Morawetz 
+04/19/2004 
+2,062 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+703 
+234 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+469 
+468 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+875 
+2,625 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+— 
+3,475 
+8.9500 
+04/01/2018 
+(c) 
+(a) 
+Option awards are adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Options vested in full on the seven month anniversary of the Option Grant Date. 
+(c) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+12 
+Grants of Plan Based Awards 
+The following table provides information on all grants of plan based awards by the Company in fiscal year 2009 to each Named
+Executive Officer. 
+Name 
+Grant 
+Date 
+All Other Option 
+Awards: Number of 
+Securities Underlying 
+Options (#) 
+Exercise or Base 
+Price of Option 
+Awards ($/Sh) 
+Grant Date Fair Value 
+of Stock and Option 
+Awards($) (a) 
+Albert W. Ondis 
+04/01/08 
+6,275 
+9.845 
+19,453 
+Everett V. Pizzuti 
+04/01/08 
+6,275 
+8.950 
+21,523 
+Joseph P. O’Connell 
+04/01/08 
+5,375 
+8.950 
+18,436 
+Elias G. Deeb 
+04/01/08 
+4,475 
+8.950 
+15,349 
+Michael Morawetz 
+04/01/08 
+3,475 
+8.950 
+11,919 
+(a) 
+Assumptions used in the calculation of these amounts are included in footnote 6 to the Company’s audited financial statements for the fiscal year ended January 31, 2009,
+included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 13, 2009. 
+Option Exercises and Stock Vested 
+The following table provides information on all exercises of options by the Named Executive Officers during the Company’s 2009 fiscal year.
+Option Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise($)(b) 
+Albert W. Ondis 
+34,375 
+125,156 
+Everett V. Pizzuti 
+34,375 
+125,156 
+Joseph P. O’Connell 
+9,500 
+30,694 
+Elias G. Deeb 
+10,312 
+37,029 
+Michael Morawetz 
+— 
+— 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise and the exercise price of the options. 
+Related Party Transactions 
+Potential conflicts of interest and related party transactions are referred
+by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing standards and SEC rules as a
+guide. 
+The law firm of Hinckley Allen & Snyder LLP,
+of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+13 
+The Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as National Sales Manager (QuickLabel
+Systems), and William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $114,289 and $158,610, respectively, in salary and commissions during the fiscal year ended January 31, 2009. In addition, the Company made
+matching contributions for the fiscal year 2009 under its qualified Profit-Sharing Plan of $2,711 to Eric Pizzuti and $3,100 to William Pizzuti. The Company also made stock option grants during the 2009 fiscal year to Messrs. E. Pizzuti and W.
+Pizzuti with a fair market value at the date of grant equal to $4,116 and $1,715, respectively. Mr. E. Pizzuti also had disqualifying disposition income during fiscal year 2009 on the sale of incentive stock options granted by the Company in
+the amount of $6,093. 
+Other than as described above, no
+officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2009 any material interest, direct or indirect, in any material transaction or any material proposed
+transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+Audit Committee Report 
+The Audit Committee of the Board of Directors is responsible for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom
+is independent as defined by the NASDAQ listing standards and SEC rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent
+accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility
+is to monitor and oversee these processes. 
+The Audit
+Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence
+and performance of the Company’s independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s
+independent accountants, Grant Thornton LLP, to review and discuss the January 31, 2009 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with
+generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Grant Thornton LLP the
+matters required by Statement on Auditing Standards No. 61 ( Communication with Audit Committees ). The Audit Committee also received from Grant Thornton LLP written disclosures and the letter regarding independence as required by
+Independence Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Grant Thornton LLP that firm’s independence. 
+The Audit Committee received the information concerning the fees of Grant Thornton LLP for the year ended January 31,
+2009 set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the independence of the independent accountants and has
+determined that the provision of such services by Grant Thornton LLP is compatible with maintaining that firm’s independence. 
+14 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board
+of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2009, to be filed with the SEC. 
+Audit Committee: 
+Jacques V. Hopkins (Chairman) 
+Hermann
+Viets, Ph.D. 
+Graeme MacLetchie 
+Independent Accountant Fees and Services 
+The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. The Audit Committee
+has appointed Grant Thornton LLP as the Company’s independent auditors for the 2010 fiscal year. 
+The Company expects a representative of Grant Thornton LLP will be present at the annual meeting with the opportunity to make a statement, if he or she so
+desires, and that such representative will be available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the Company by Grant Thornton LLP for the fiscal years ended January 31, 2009 and 2008 are set forth below. The aggregate fees included in the Audit category
+are billed for the fiscal years for the audit of the Company’s annual financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are
+fees billed for the fiscal year. 
+2009 
+2008 
+Audit Fees 
+$ 
+226,054 
+$ 
+214,310 
+Audit-Related Fees 
+0 
+0 
+Tax Fees 
+4,305 
+23,822 
+All Other Fees 
+0 
+0 
+Audit Fees for
+the fiscal years ended January 31, 2009 and 2008 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on
+Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Tax Fees as of the fiscal years ended January 31, 2009 and 2008 were for services rendered for tax returns and estimates, tax advice, tax
+planning and compliance with Financial Accounting Standards Board Interpretation No. 48 (FIN 48). 
+Policy on Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit services provided by the independent accountants
+prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimus exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X.
+15 
+Financial Reports 
+A copy of the annual report of the Company for the fiscal year ended January 31, 2009 including the Company’s annual report to the SEC on Form
+10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+Proposals For 2010 Annual Meeting 
+The 2010 annual meeting of the shareholders of the Company is scheduled to be held on May 18, 2010. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the
+Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal to the Company not later than December 19, 2009. Shareholder proposals that are to be considered at the 2010 annual meeting but
+not requested to be included in the Proxy Statement must be submitted no later than March 19, 2010 and no earlier than December 19, 2009. 
+Other Matters 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but should any other matters
+requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the event any of the nominees
+for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your
+shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+16 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Ave. 
+West Warwick, RI 02893 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your
+proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 
+Electronic Delivery of Future PROXY MATERIALS 
+If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports
+electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future
+years. 
+VOTE BY PHONE - 1-800-690-6903 
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call
+and then follow the instructions. 
+VOTE BY MAIL 
+Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
+11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+DETACH AND RETURN THIS PORTION ONLY 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+For 
+All 
+Withhold 
+All 
+For All 
+Except 
+To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the
+line below. 
+The Board of Directors makes no 
+recommendation for the following: 
+1. Election of Directors 
+¨ 
+¨ 
+¨ 
+Nominees 
+01 Albert W.
+Ondis 02 Everett V. Pizzuti 03 
+Jacques V. Hopkins 04 Hermann Viets 
+05 Graeme MacLetchie 
+NOTE:
+In their discretion, upon such other matters as may properly come before the meeting. 
+For address change/comments, mark here. 
+(see
+reverse for instructions) 
+¨ 
+Please sign exactly as your name(s) appear(s) hereon. When signing
+as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by
+authorized officer. 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K, Notice & Proxy
+Statement is/are available at www.proxyvote.com . 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders-May 19, 2009 
+The undersigned, whose signature appears on the reverse side of
+this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned
+would possess if personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 19, 2009, in West Warwick, Rhode Island, and at any adjournments thereof, as
+follows: 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
+DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
+OF DIRECTORS OF THE COMPANY 
+Address change/comments: 
+(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) 
+Continued and to
+be signed on reverse side
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-09-082151/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-09-082151/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d519a04f81fa42da9eb31de73562ce640d3b2428
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-09-082151/proxy_rpt.txt
@@ -0,0 +1,15 @@
+Related Party Transactions 
+Potential conflicts of interest and related party transactions are referred
+by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing standards and SEC rules as a
+guide. 
+The law firm of Hinckley Allen & Snyder LLP,
+of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+13 
+The Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as National Sales Manager (QuickLabel
+Systems), and William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $114,289 and $158,610, respectively, in salary and commissions during the fiscal year ended January 31, 2009. In addition, the Company made
+matching contributions for the fiscal year 2009 under its qualified Profit-Sharing Plan of $2,711 to Eric Pizzuti and $3,100 to William Pizzuti. The Company also made stock option grants during the 2009 fiscal year to Messrs. E. Pizzuti and W.
+Pizzuti with a fair market value at the date of grant equal to $4,116 and $1,715, respectively. Mr. E. Pizzuti also had disqualifying disposition income during fiscal year 2009 on the sale of incentive stock options granted by the Company in
+the amount of $6,093. 
+Other than as described above, no
+officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2009 any material interest, direct or indirect, in any material transaction or any material proposed
+transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party.
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-10-080521/proxy.txt b/raw/proxies/0000008146/0001193125-10-080521/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..561f067ef6020e305d8f42cfa34e0f80b3b08b1e
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-10-080521/proxy.txt
@@ -0,0 +1,1144 @@
+DEF 14A
+1
+ddef14a.htm
+DEF 14A
+DEF 14A 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C.
+20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the
+Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 18, 2010 
+To the Shareholders of Astro-Med, Inc.:
+Notice is hereby given that the 2010 Annual
+Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, 600 East Greenwich Avenue, West Warwick, Rhode Island on Tuesday May 18, 2010, beginning at 10:00 a.m., for the purpose of
+considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on April 1, 2010 has been fixed as the record date for determining shareholders entitled to vote at
+the Annual Meeting or any adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 16, 2010 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed
+addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
+FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 18, 2010. 
+The Company’s Proxy Statement, sample proxy card and Annual Report are available at: 
+http://www.proxyvote.com. 
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 18, 2010 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of Directors of Astro-Med, Inc. (herein called the “Company”) in connection with
+the annual meeting of the shareholders to be held May 18, 2010. The Company will bear the cost of such solicitation. It is expected that the solicitation of proxies will be primarily by mail. Proxies may also be solicited personally by regular
+employees of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in their names, or in those of their nominees, for their reasonable out-of-pocket expenses
+in sending proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any time prior to its exercise, but the revocation of a proxy will not be effective until
+notice thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This proxy statement and the accompanying proxy are expected to be first sent to shareholders
+on or about April 16, 2010. 
+Voting at Meeting
+Only shareholders of record at the close of
+business on April 1, 2010 will be entitled to vote at the meeting. On the record date, there were 7,204,216 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one
+vote for every share owned. 
+Votes Required to Transact
+Business At the Meeting 
+The holders of a
+majority of the shares entitled to vote, present in person or represented by proxy, will constitute a quorum for the transaction of business at the meeting. Please note that this year the rules that guide how brokers vote your shares have
+changed. Brokers may no longer vote your shares on the election of directors in the absence of your specific instructions as to how to vote. Also, since there are no discretionary matters to be acted on at the meeting on which brokers would be
+able to vote without specific instructions from the beneficial owners, in order to establish a quorum at the meeting, you will need to provide your broker with instructions on how to vote your shares. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their respective successors are
+elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons named below. The
+biographies below contain information regarding the person’s service as director, business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that
+caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. 
+Albert W. Ondis , 84, is a founder of the Company and has been its Chairman and Chief Executive Officer since 1969. Mr. Ondis
+served as the President, Chief Financial Officer and Treasurer of the Company from 1969
+1 
+to 1985. In addition Mr. Ondis has served as a Director of the Rhode Island Public Expenditure Council, a member of the Advisory Board of the College of Engineering at the University of
+Rhode Island and a Trustee of Bryant University. Mr. Ondis is the largest shareholder of the Company, which the Board of Directors believes aligns his interests with those of our shareholders. Based on Mr. Ondis’ significant
+involvement with the Company since inception and understanding of the financial, regulatory, corporate governance and other matters affecting public companies, we believe that Mr. Ondis is qualified to serve on our Board of Directors.
+Everett V. Pizzuti , 73, has been President
+and Chief Operating Officer of the Company since 1971 and a director since 1985. Previously, he served as General Sales Manager of the Recorder Division of Gulton Industries. Through his long service as the Chief Operating Officer of the Company,
+Mr. Pizzuti has an intimate knowledge of the Company’s products and markets and is able to provide our Board of Directors with insight and advice related to the Board’s decisions. Based on this experience, we believe that
+Mr. Pizzuti is qualified to serve on our Board of Directors. 
+Jacques V. Hopkins , 79, is a former partner at the law firm of Hinckley, Allen & Snyder LLP in Providence, Rhode Island. Before retiring, Mr. Hopkins practiced business law and served
+on the management committee of Hinckley, Allen & Snyder LLP and was actively involved in various community organizations. Mr. Hopkins has been a director of the Company since 1969 and serves as chairman of the Company’s Audit
+Committee. We believe that Mr. Hopkins long service as a corporate attorney and understanding of financial, regulatory, corporate governance and other matters affecting public companies qualify him to serve on our Board of Directors.
+Hermann Viets , Ph.D., 67, has been
+President and Chief Executive Officer of the Milwaukee School of Engineering, a University located in Milwaukee, Wisconsin focused primarily on engineering education, since 1991. Dr. Viets served as a Director of Gehl Co. from 1999 to 2008. He
+serves as a Director of Public Policy Forum for southeastern Wisconsin, an independent reviewer of public policy issues. Dr. Viets also serves as a Director of Competitive Wisconsin Inc., an association of business, education and labor leaders
+promoting the State of Wisconsin and serves as a Member of the Greater Milwaukee Committee, an organization of civic leaders promoting the economic development and social improvement of the City of Milwaukee. Dr. Viets was also a Trustee of
+Polytechnic University (a private engineering school located in Brooklyn, NY) until 2009. Dr. Viets has been a director of the Company since 1988 and serves as Chairman of Compensation and Nominating Committees. We believe that
+Dr. Viets’ executive experience as president of a university, his service on other public company boards and his understanding of the Company’s products as well as corporate governance matters qualify him to serve on our Board of
+Directors. 
+Graeme MacLetchie , 72, is a
+private investor and was a director of Deutsche Bank Alex Brown (Private Client Division), an investment banking and brokerage services company for private wealth and asset management, from November 1995 to March 2010. Prior to this,
+Mr. MacLetchie was Senior Vice President of C. J. Lawrence Deutsche Bank Securities Corporation from 1970 to 1995. He has been a director of the Company since 2002 and also served as a Director of E-Sync Networks Inc., a provider of managed
+enterprise services and solutions to medium and large businesses, from 1994 to 1999. We believe that Mr. MacLetchie’s substantial experience in the financial sector and knowledge of the financial, regulatory, corporate governance and other
+matters affecting public companies qualify him to serve on our Board of Directors. 
+The Board of Directors has determined that all of the directors of the Company, which include each of the nominees standing for election at the 2010 annual shareholders meeting, other than Albert W. Ondis
+and Everett V. Pizzuti, are independent of the Company in that such nominees have no material relationship with the
+2 
+Company either directly, or as a partner, shareholder or affiliate of an organization that has a relationship with the Company. The Board of Directors has made this determination in accordance
+with applicable Securities and Exchange Commission (“SEC”) rules and NASDAQ listing standards. 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of April 1, 2010 (except as noted) the record and beneficial ownership of the Company’s
+outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than five percent of such stock, by each director of the Company, by each executive officer named in the Summary Compensation Table
+and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Albert W. Ondis 
+1,654,866 
+(b) 
+22.2 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Everett V. Pizzuti 
+395,314 
+(c) 
+5.4 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Rutabaga Capital Management, LLC 
+675,258 
+(d) 
+9.4 
+% 
+64 Broad Street, 3 rd Floor 
+Boston, MA 02109 
+Hermann Viets 
+200,831 
+(e) 
+2.8 
+% 
+Joseph P. O’Connell 
+219,208 
+(f) 
+3.0 
+% 
+Elias G. Deeb 
+103,441 
+(g) 
+1.4 
+% 
+Jacques V. Hopkins 
+33,687 
+(h) 
+* 
+Graeme MacLetchie 
+97,250 
+(i) 
+1.3 
+% 
+Michael Morawetz 
+9,049 
+(j) 
+* 
+All directors and executive officers of the Company as a group (13) 
+2,867,645 
+(k) 
+35.4 
+% 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive officer, as well as
+shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable within 60 days of April 1, 2010. All information is
+based upon ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under the Securities Exchange Act of 1934 or has been furnished by the respective directors
+and executive officers of the Company. 
+(b) 
+Includes 244,388 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,641 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+3 
+(c) 
+Includes 173,438 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,378 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(d) 
+Rutabaga Capital Management, LLC, a Massachusetts limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to
+have beneficial ownership of the number of shares shown as of December 31, 2009. 
+(e) 
+Includes 15,500 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(f) 
+Includes 188,387 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,581 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(g) 
+Includes 64,463 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,886 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(h) 
+Includes 15,500 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(i) 
+Includes 19,125 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(j) 
+Includes 9,049 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(k) 
+Includes 885,164 shares deemed to be beneficially owned because of exercisable options to acquire shares and 20,267 shares allocated to the accounts of officers under
+the Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, requires the directors and executive officers of the Company and any persons who own more than ten
+percent of the Company’s common stock to file with the Securities and Exchange Commission various reports of beneficial ownership and changes in beneficial ownership. The Company believes all of its directors and executive officers complied
+with all filing requirements applicable to them with respect to transactions during the fiscal year ended January 31, 2010; except that a Form 4 was not timely filed for Michael Morawetz in connection with his sale of 2,062 shares of common
+stock on April 7, 2009. 
+Meetings and Committees
+During the fiscal year ended
+January 31, 2010, the Board of Directors held seven meetings. During fiscal year 2010, all directors attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of
+Directors has adopted a policy that requires members of the Board to make every effort to attend each annual shareholders meeting. All members of the Board of Directors attended the 2009 annual shareholders meeting. 
+The Board of Directors currently has three standing committees:
+an Audit Committee, a Compensation Committee and a Nominating Committee. The members and chairs of each of those committees are appointed each year. Membership of the Audit, Compensation and Nominating Committee is comprised of the Company’s
+three outside directors, Messrs. Hopkins and MacLetchie and Dr. Viets, all of whom are independent as defined under the applicable NASDAQ listing standards and SEC rules. Each of the Audit, Compensation and Nominating Committees has a written
+charter approved by the Board of Directors. A copy of each charter is available on the Company’s website at www.astro-medinc.com under “Our Company – Corporate Governance”. 
+Audit Committee. The Audit Committee’s primary
+duties and responsibilities include overseeing the integrity of the Company’s financial reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence
+and performance of the Company’s
+4 
+independent accountants and the adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the annual audit
+scope, the results of the audit and other relevant matters. Mr. Hopkins serves as Chairman of the Audit Committee, which held eight meetings during the fiscal year ended January 31, 2010. The Board of Directors has determined that all
+three members of the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has
+determined that Graeme MacLetchie satisfies the “financial sophistication” requirement of the NASDAQ listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial expert” as defined
+by the SEC rules, which, in the view of the Board of Directors, requires an advanced understanding of internal controls and procedures. However, the Board of Directors believes that the members of the Audit Committee have a thorough understanding of
+the Company’s business, the accounting issues relevant to the Company’s financial statements and audit committee functions and possess the requisite skills to perform effectively their oversight function. 
+Compensation Committee. The Compensation Committee
+assists the Board of Directors in discharging the Board’s responsibilities relating to director and executive compensation. The Compensation Committee’s responsibilities include: establishing and reviewing the Company’s executive and
+director compensation philosophy, strategies, plans and policies; making recommendations with respect to the design of the Company’s incentive compensation plans and equity based plans; granting awards under such plans and overseeing generally
+the administration of such plans; evaluating the performance and determining the compensation of the Chief Executive Officer; and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the
+Compensation Committee, which held four meetings during the fiscal year ended January 31, 2010. 
+Nominating Committee . The Nominating Committee is responsible for identifying individuals qualified to be members of the Board of
+Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders. The Nominating Committee held one meeting in the fiscal year ended January 31, 2010.
+Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The
+Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest
+ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of
+thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the shareholders. The Nominating Committee does not have a policy with respect to diversity and does not specifically
+consider issues of diversity, such as gender, race, origin or sex when determining whether to nominate any person to be a director of the Company. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. The
+Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating
+Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees to the Nominating Committee at the Company’s offices at 600 East Greenwich
+Avenue, West Warwick, Rhode Island 02893. Submissions should
+5 
+include information regarding a candidate’s background, qualifications, experience and willingness to serve as a director. In addition, Section 10 of Article II of the Company’s
+By-Laws sets forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of shareholders. These procedures include a requirement for written
+notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the shareholders who support the nominee’s election. For the annual meeting to be held in
+2011, the notice deadline under the By-Laws is March 18, 2011. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893.
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for
+shareholders to communicate directly with the members of the Board of Directors or the individual chairman of standing committees. Any shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would
+otherwise like to contact the Board of Directors may communicate directly with the directors by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy
+is to forward, and not to intentionally screen, any mail received at the Company’s corporate offices that is sent directly to an individual unless the Company believes the communication may pose a security risk. 
+Board Leadership Structure 
+Mr. Ondis serves as both the Chief Executive Officer and
+the Chairman of the Board of Directors. The Board of Directors believes that the Company’s Chief Executive Officer is best situated to serve as Chairman because he is the director most familiar with the Company’s business and industry, and
+most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. Independent directors and management have different perspectives and roles in strategy development. The Company’s independent
+directors bring experience, oversight and expertise from outside the company and industry, while the Chief Executive Officer brings company-specific experience and expertise. The Board of Directors believes that the combined role of Chairman and
+Chief Executive Officer promotes strategy development and execution, and facilitates information flow between management and the Board, which are essential to effective governance. Further, given the fact that all independent directors comprise each
+of the Audit, Compensation and Nominating Committees of the Board of Directors and that the majority of the Board of Directors is comprised of independent directors, the Board of Directors does not believe a lead independent director is necessary.
+Risk Oversight 
+The Board of Directors has an active role, as a whole and also
+at the committee level, in overseeing management of the Company’s risks through a program of sound policies, systems, processes, and reports. The Audit Committee of the Board of Directors has oversight responsibility over financial reporting
+and disclosure process, compliance and legal matters, and information security and fraud risk. The Audit Committee also monitors controls for material weaknesses in the audit function. The Audit Committee meets regularly with our Chief Financial
+Officer and Controller in carrying out these responsibilities, and with the Company’s independent auditors in executive session. 
+The Compensation Committee of the Board of Directors oversees risks as they relate to the Company’s compensation policies and practices
+as described under “Compensation Discussion and Analysis.” The Board’s
+6 
+Nominating Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to independence of board members and identification of individuals qualified to be
+members of the Board of Directors. 
+While each
+committee is responsible for evaluating the risks within their areas of responsibility and overseeing the management of such risks, all our committees report regularly to the full Board of Directors, which also considers the Company’s entire
+risk profile. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and
+recommending to the Board of Directors the compensation of the directors of the Company. Messrs. Hopkins and MacLetchie and Dr. Viets are paid an annual retainer of $3,500 plus $500 for each Board and committee meeting attended (including
+attendance through telephonic means). Directors who are also officers or employees of the Company are not entitled to receive any compensation in addition to their compensation for services as officers or employees. 
+Those directors who are not also officers and employees of the
+Company have received options to purchase common stock under the Company’s Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the Director Plan, Mr. Hopkins and
+Dr. Viets each received non-qualified options to purchase 1,375 shares of common stock on May 20, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a non-qualified option to purchase
+1,375 shares of common stock upon his initial election to the Board of Directors on May 14, 2002. These options vested six months after the grant date. The Director Plan expired on May 31, 2006. Under the Company’s 2007 Equity
+Incentive Plan, each non-employee director receives non-qualified options to purchase 5,000 shares of the Company’s common stock upon the adjournment of each annual meeting or special meeting in lieu of an annual meeting of the shareholders of
+the Company. These options have a term of ten years and become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is granted. 
+The following Director Compensation table provides information regarding the compensation paid or accrued by
+each individual who was a director during the 2010 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Jacques V. Hopkins 
+$ 
+16,042 
+$ 
+8,500 
+$ 
+7,542 
+$ 
+— 
+Graeme MacLetchie 
+16,042 
+8,500 
+7,542 
+— 
+Albert W. Ondis(c) 
+— 
+— 
+— 
+— 
+Everett V. Pizzuti(c) 
+— 
+— 
+— 
+— 
+Hermann Viets 
+15,542 
+8,000 
+7,542 
+— 
+(a) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to directors.
+Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended January 31, 2010, included in the Company’s Annual Report on Form 10-K filed with
+the SEC on or around April 9, 2010. 
+(b) 
+As of January 31, 2010 each director had the following number of options outstanding: Jacques V. Hopkins 20,500, Graeme MacLetchie 19,125 and Hermann Viets 20,500.
+(c) 
+See Summary Compensation Table and Outstanding Equity Awards at Fiscal Year End Table for disclosure relating to compensation and outstanding option awards of Messrs.
+Ondis and Pizzuti. 
+7 
+COMPENSATION DISCUSSION & ANALYSIS 
+The Compensation Committee of the Board of Directors of the
+Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel are effectively
+compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and recommending to the Board the compensation of directors. 
+Compensation Philosophy and Objectives. Our overall philosophy in terms of
+executive compensation is to link management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals
+and link their interests with shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s performance, awards, if any, made during prior years and other relevant factors. We seek to have
+the long-term performance of our common stock reflected in executive compensation through our equity incentive programs. 
+Elements of Compensation. Our total compensation program for executive officers consists of the following:
+• 
+salary; 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, historically in the form of stock options; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and
+provide incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while
+providing incentives to maximize long-term value for our shareholders. 
+Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity
+awards. The Committee annually reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our
+executive officers were established a number of years ago. Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. Annual salary adjustments
+are made effective April 1 of each year. For fiscal year 2010, no increases in compensation were made to the Company’s employees and executive officers. 
+Cash Incentive and Bonus Awards. The Committee has adopted two separate
+management bonus plans applicable to executive officers of the Company for the purpose of providing incentive compensation to the Company’s executive officers. One plan is applicable to domestic employees of the Company (the “Domestic
+Plan”) and the other is applicable to the Vice President-International Branches, currently Michael Morawetz (the “International Branch Plan”). Awards to executive officers other than the Chief Executive Officer and President of the
+Company under the Domestic Plan have been based on the Company’s achieving specified thresholds of
+8 
+annual operating income and return on net assets. Awards to the Chief Executive Officer and President of the Company under the Domestic Plan are predicated on achieving specified levels of annual
+operating income, return on net assets and annual sales thresholds. Effective March 15, 2010, the Domestic Plan was amended to provide that awards to all executive officers, including the Chief Executive Officer and President of the Company,
+will be based on achieving specified levels of annual operating income, return on net assets and annual sales thresholds, on a consolidated basis. For fiscal year 2010, the Company’s Chief Executive Officer and President were eligible to
+receive bonuses under the Domestic Bonus Plan ranging from 12% to 27% of their base salaries while the Company’s other executive officers were eligible to receive bonuses ranging from 9% to 22% of their respective base salaries. 
+Awards under the International Branch Plan are based on the
+annual earned bonus pool available under the Company’s bonus plans applicable to the Company’s international branches located in Canada, the United Kingdom, France and Germany. These bonus pools are determined by comparing the annual sales
+achieved in the last fiscal year ended by each international branch to the respective volume of sales achieved during the prior fiscal year for each branch. Sales that surpass the prior year’s sales earn a 4% bonus on the incremental sales
+volume up to the specified target established by the Committee for that year. The bonus pool earned is then adjusted (increased or decreased) by the branch’s achievement of specified profit margin and return on working capital thresholds as
+determined by the Committee. The amounts available under the branch bonus pools are then allocated amongst a pool of individuals at such offices at the discretion of the CEO. Under the International Branch Plan, the Vice President of International
+Branches was eligible to receive a bonus of up to 10% of the total earned bonus pool (local currency) of each of the Company’s international branches for fiscal year 2009 and up to 20% in fiscal year 2010 and thereafter; provided that, no bonus
+will be paid to the Vice President of International Branches under the International Branch Plan unless the consolidated sales value of all the Company’s international branches meets the minimum threshold of sales value for each of the
+Company’s international branches as established annually by the Committee. 
+The specified threshold and target financial objectives and business objectives and the related bonus payouts under the Company’s bonus plans are established annually by the Committee and,
+accordingly, individual awards may vary, up or down, from year to year. For fiscal year 2010, we did not pay any bonuses to our executive officers under the Domestic Plan or International Branches Plan. 
+In addition to our management bonus plans, from time-to-time we
+award cash bonuses to our executive officers to reward their efforts in extraordinary circumstances. Such awards are made at the discretion of the Committee. For fiscal year 2010, we paid a discretionary bonus to Michael Morawetz of $7,155. The
+bonus paid to Mr. Morawetz is reflected in the “Bonus” column of the Summary Compensation Table below. 
+Long-Term Incentive Compensation. Total compensation at the executive level also includes long-term incentive
+awards granted under the Company’s Non-Qualified Stock Option Plan and 2007 Equity Incentive Plan. The objectives of the equity incentive program are to align executive and shareholder long-term interests by creating a strong and direct link
+between executive pay and total shareholder return, and to enable executives to develop and maintain a long-term stock ownership position in our common stock. Historically, all equity awards have been in the form of stock options which have
+generally been granted in March of each year at an exercise price of not less than 100% of the market price on the date of grant. Under the 2007 Equity Incentive Plan, the exercise price of all stock options must be at least 100% of the market price
+on the date of grant, provided that the exercise price for incentive stock options (ISOs) granted to any ten percent beneficial owner of our stock, which includes Mr. Ondis, must be not less than 110% of the market price on the date of grant.
+Since 2004, all options granted vest in four equal annual installments commencing on the first anniversary of the date of grant.
+9 
+Under the Company’s 2007 Equity Incentive Plan, the Company is also able to make equity awards in the form of restricted stock, restricted units and performance units in addition to stock
+options, but has not done so to date. 
+Retirement and Other Benefits. In order to attract and retain key executives, we offer retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including our executive
+officers. 
+Profit-Sharing Plan. We
+maintain a qualified Profit-Sharing Plan which provides retirement benefits to substantially all our employees and provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee
+shares in contributions on the basis of relative (limited to $245,000) compensation. In addition, participants are permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll
+deductions. Effective April 1, 2007, we amended our Profit-Sharing Plan to increase the amount of our matching contributions to 50% of the first percent of compensation contributed and 25% of the second through the seventh percent. Prior to
+this change, the Company made matching contributions equal to 50% of the first percent of compensation contributed and 25% of the second through fifth percent. The deferrals are made within the limits prescribed by Section 401(k) of the
+Internal Revenue Code (the “Code”). The Profit-Sharing Plan provides for the vesting of 100% of matching contributions made by the Company to the account of the employee after three years of service. Contributions by an employee are 100%
+vested immediately. 
+Employee Stock
+Ownership Plan. We also have an Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated
+among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s trustee in
+shares of common stock of the Company. 
+Perquisites . In addition to the benefits described above, we provide automobile allowances to certain of our executive officers. The amounts of any aforesaid automobile allowances to our Named Executive Officers are reflected
+in the “All Other Compensation” column of the Summary Compensation Table below. 
+We have no employment agreements with any of our executive officers and we do not provide any severance benefits to our executives other than those provided to employees generally. Severance benefits will
+vary based upon salary levels and length of service. 
+COMPENSATION COMMITTEE REPORT 
+The
+Compensation Committee has reviewed and discussed with management the Compensation Discussion & Analysis included above. Based on these reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the
+Compensation Discussion & Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2010 for filing with the SEC through incorporation by reference of this Proxy Statement. 
+Compensation Committee: 
+Hermann Viets (Chairman) 
+Jacques V. Hopkins 
+Graeme MacLetchie 
+10 
+EXECUTIVE COMPENSATION 
+The following table provides information regarding the total compensation paid or accrued by the Company to
+each of its Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and its three other highest paid executive officers other than the CEO and CFO (collectively, the “Named Executive Officers”). 
+Because the Company’s Domestic Plan and International
+Branch Plan are based on achieving specified performance goals, awards under these plans are not considered “Bonuses” for purposes of SEC rules and are listed below as “Non-Equity Incentive Plan Compensation.” 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Albert W. Ondis 
+2010 
+259,310 
+— 
+7,575 
+— 
+27,748 
+(d) 
+294,633 
+Chairman and CEO 
+2009 
+258,001 
+— 
+20,017 
+— 
+20,343 
+298,361 
+2008 
+256,685 
+— 
+64,820 
+33,983 
+16,407 
+371,895 
+Everett V. Pizzuti 
+2010 
+245,556 
+— 
+8,324 
+— 
+38,771 
+(e) 
+292,651 
+President and COO 
+2009 
+244,869 
+— 
+21,523 
+— 
+37,034 
+303,426 
+2008 
+239,029 
+— 
+64,820 
+32,181 
+28,837 
+346,867 
+Joseph P. O’Connell 
+2010 
+206,000 
+— 
+7,991 
+— 
+20,735 
+(f) 
+234,726 
+Senior Vice President, 
+2009 
+205,077 
+— 
+18,436 
+— 
+25,805 
+249,318 
+Treasurer and CFO 
+2008 
+199,674 
+— 
+46,300 
+28,400 
+23,733 
+298,107 
+Elias G. Deeb 
+2010 
+150,947 
+— 
+7,325 
+— 
+5,928 
+(g) 
+164,200 
+Vice President – 
+2009 
+153,754 
+— 
+15,349 
+— 
+2,948 
+172,051 
+Media Products 
+2008 
+149,605 
+— 
+30,095 
+20,810 
+2,764 
+203,274 
+Michael Morawetz 
+2010 
+183,767 
+7,155 
+4,994 
+— 
+16,920 
+(h) 
+212,836 
+Vice President – 
+2009 
+191,365 
+11,038 
+11,919 
+9,179 
+17,617 
+241,118 
+International Branches 
+2008 
+175,708 
+52,582 
+16,205 
+— 
+24,706 
+269,201 
+(a) 
+Reflects discretionary cash bonuses. 
+(b) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to the Named
+Executive Officers. Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended January 31, 2010, included in the Company’s Annual Report on
+Form 10-K filed with the SEC on or around April 9, 2010. The 2009 and 2008 award values were recalculated from the amounts shown in prior Proxy Statements to reflect the grant date fair value, as required by SEC rules effective for 2010.
+(c) 
+Reflects cash awards to the named individuals under the Company’s management bonus plans which are discussed in further detail under the heading “Compensation
+Discussion and Analysis” above. 
+(d) 
+Includes pay-out of two weeks unused vacation of $9,974, automobile allowance of $15,108, employer match under Profit Sharing Plan of $2,138 and employer contribution
+to Employee Stock Ownership Plan of $528. 
+11 
+(e) 
+Includes pay-out of two weeks unused vacation of $9,445, automobile allowance of $18,109, non-cash automobile allowance of $8,517, employer match under Profit Sharing
+Plan of $2,172 and employer contribution to Employee Stock Ownership Plan of $528. 
+(f) 
+Includes pay-out of two weeks unused vacation of $7,923, automobile allowance of $8,500, employer match under Profit Sharing Plan of $3,783 and employer contribution to
+Employee Stock Ownership Plan of $528. 
+(g) 
+Includes pay-out of one week unused vacation of $2,903, employer match under Profit Sharing Plan of $2,497 and employer contribution to Employee Stock Ownership Plan of
+$528. 
+(h) 
+Reflects automobile allowance. 
+12 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding
+equity awards held by each of the Named Executive Officers as of January 31, 2010. 
+Name 
+Option Grant 
+Date 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Exercisable 
+Number of 
+securities 
+underlying 
+unexercised 
+options (#) 
+Unexercisable(a) 
+Option 
+Exercise 
+Price($) 
+Option 
+Expiration 
+Date 
+Albert W. Ondis 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+85,250 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+41,250 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+15,938 
+5,312 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+7,000 
+7,000 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+1,569 
+4,706 
+9.8450 
+04/01/2013 
+(c) 
+03/18/2009 
+— 
+5,000 
+6.8420 
+03/18/2014 
+(c) 
+Everett V. Pizzuti 
+03/20/2000 
+103,125 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+14,300 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+41,250 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+15,938 
+5,312 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+7,000 
+7,000 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+1,569 
+4,706 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+— 
+5,000 
+6.2900 
+03/18/2019 
+(c) 
+Joseph P. O’Connell 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/20/2000 
+34,375 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+55,000 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+66,687 
+— 
+2.6909 
+03/18/2012 
+(b) 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(b) 
+04/19/2004 
+20,625 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+9,375 
+— 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+10,547 
+3,515 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+5,000 
+5,000 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+1,344 
+4,031 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+— 
+4,800 
+6.2900 
+03/18/2019 
+(c) 
+Elias G. Deeb 
+03/20/2000 
+20,625 
+— 
+5.4546 
+03/20/2010 
+(b) 
+03/19/2001 
+20,625 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+6,875 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+13,750 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+6,250 
+— 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+7,031 
+2,344 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+3,250 
+3,250 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+1,119 
+3,356 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+— 
+4,400 
+6.2900 
+03/18/2019 
+(c) 
+Michael Morawetz 
+04/19/2004 
+2,062 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+937 
+— 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+703 
+234 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+1,750 
+1,750 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+869 
+2,606 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+— 
+3,000 
+6.2900 
+03,18,2019 
+(c) 
+(a) 
+Option awards are adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Options vested in full on the seven month anniversary of the Option Grant Date. 
+(c) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+13 
+Grants of Plan Based Awards 
+The following table provides information on all grants of plan
+based awards by the Company in fiscal year 2010 to each Named Executive Officer. 
+Name 
+Grant Date 
+All Other Option 
+Awards: Number of 
+Securities Underlying 
+Options (#) 
+Exercise or Base 
+Price of Option 
+Awards ($/Sh) 
+Grant Date Fair Value 
+of Stock and Option 
+Awards($) (a) 
+Albert W. Ondis 
+03/18/2009 
+5,000 
+6.842 
+7,575 
+Everett V. Pizzuti 
+03/18/2009 
+5,000 
+6.29 
+8,324 
+Joseph P. O’Connell 
+03/18/2009 
+4,800 
+6.29 
+7,991 
+Elias G. Deeb 
+03/18/2009 
+4,400 
+6.29 
+7,325 
+Michael Morawetz 
+03/18/2009 
+3,000 
+6.29 
+4,994 
+(a) 
+Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended
+January 31, 2010, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 9, 2010. 
+Option Exercises and Stock Vested 
+The following table provides information on all exercises of options by the Named Executive Officers during the
+Company’s 2010 fiscal year. 
+Option Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise ($)(b) 
+Albert W. Ondis 
+34,375 
+25,049 
+Everett V. Pizzuti 
+34,375 
+64,594 
+Joseph P. O’Connell 
+20,000 
+48,582 
+Elias G. Deeb 
+10,312 
+25,048 
+Michael Morawetz 
+— 
+— 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise and the exercise price of the options.
+Related Party Transactions 
+Potential conflicts of interest and related party transactions
+are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing standards and SEC
+rules as a guide. 
+The law firm of Hinckley
+Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+14 
+No officer, director or nominee for director of the Company or any associate of any of the
+foregoing had during the fiscal year ended January 31, 2010 any material interest, direct or indirect, in any material transaction or any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to
+be a party. 
+Audit Committee Report 
+The Audit Committee of the Board of Directors is responsible
+for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC
+rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are
+responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor
+and oversee these processes. 
+The Audit
+Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence
+and performance of the Company’s independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the
+Company’s independent accountants, Grant Thornton LLP, to review and discuss the January 31, 2010 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were prepared in
+accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Grant
+Thornton LLP the matters required by Statement on Auditing Standards No. 61 ( Communication with Audit Committees ). The Audit Committee also received from Grant Thornton LLP written disclosures and the letter regarding independence as
+required by Independence Standards Board Standard No. 1 ( Independence Discussions with Audit Committee ) and has discussed with Grant Thornton LLP that firm’s independence. 
+The Audit Committee received the information concerning the fees
+of Grant Thornton LLP for the year ended January 31, 2010 set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the
+independence of the independent accountants and has determined that the provision of such services by Grant Thornton LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of
+Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2010, to be filed with the SEC. 
+Audit Committee: 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+15 
+Independent Accountant Fees and Services 
+The Audit Committee has sole authority to select, evaluate and
+when appropriate, to replace the Company’s independent auditors. Grant Thornton LLP was the independent auditor for the 2010 fiscal year. The Audit Committee has not appointed an independent auditor for the 2011 fiscal year because it is
+currently in process of evaluating and interviewing potential independent audit firms for the 2011 fiscal year. 
+The Company expects a representative of Grant Thornton LLP will be present at the annual meeting with the opportunity to make a statement, if
+he or she so desires, and that such representative will be available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the Company by Grant Thornton LLP for the fiscal years ended January 31, 2010 and
+2009 are set forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the audit of the Company’s annual financial statements and review of financial statements and statutory and regulatory filings or
+engagements. The aggregate fees included in each of the other categories are fees billed for the fiscal year. 
+2010 
+2009 
+Audit Fees 
+$ 
+247,073 
+$ 
+226,054 
+Audit-Related Fees 
+0 
+0 
+Tax Fees 
+2,730 
+4,305 
+All Other Fees 
+0 
+0 
+Audit Fees for the fiscal years ended January 31, 2010 and 2009 were for professional services rendered for the audits of the
+financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial
+statements. 
+Tax Fees as of the fiscal
+years ended January 31, 2010 and 2009 were for services rendered for tax returns and estimates, tax advice, tax planning and compliance with Financial Accounting Standards Board Interpretation No. 48 (FIN 48). 
+Policy on Audit Committee Pre-Approval . The Audit
+Committee pre-approves all audit and non-audit services provided by the independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit
+Committee under the de minimus exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X. 
+Financial Reports 
+A copy of the annual report of the Company for the fiscal year ended January 31, 2010 including the Company’s annual report to the SEC on Form 10-K, accompanies this proxy statement. Such report
+is not part of this proxy statement. 
+Proposals For 2011 Annual
+Meeting 
+The 2011 annual meeting of the
+shareholders of the Company is scheduled to be held on May 17, 2011. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the
+meeting, the shareholder must submit the proposal
+16 
+to the Company not later than December 18, 2010. Shareholder proposals that are to be considered at the 2011 annual meeting but not requested to be included in the Proxy Statement
+must be submitted no later than March 18, 2011 and no earlier than December 18, 2010. 
+Other Matters 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a
+question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or
+otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make
+certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+17 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Ave. 
+West Warwick, RI 02893 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in
+hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 
+Electronic Delivery of Future PROXY MATERIALS 
+If you would like to reduce the costs incurred by our company in mailing proxy
+materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and,
+when prompted, indicate that you agree to receive or access proxy materials electronically in future years. 
+VOTE BY PHONE -
+1-800-690-6903 
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the
+cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. 
+VOTE BY MAIL 
+Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes
+Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
+— — — — — — — — — — 
+DETACH AND RETURN THIS PORTION ONLY 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+For All 
+Withhold All 
+For All Except 
+To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s)
+on the line below. 
+The Board of Directors makes no recommendation for the following: 
+1. 
+Election of Directors 
+¨ 
+¨ 
+¨ 
+_________________________________ 
+Nominees 
+01 Albert W. Ondis 02 Everett V.
+Pizzuti 03 Jacques V.
+Hopkins 04 Hermann
+Viets 05 Graeme MacLetchie 
+NOTE: In their discretion, upon such other matters as may properly come before the meeting. 
+For address change/comments, mark here. 
+(see reverse for instructions) 
+¨ 
+Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners
+should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+0000062752_1 R2.09.05.010 
+Important Notice Regarding the
+Availability of Proxy Materials for the Annual Meeting: The Form 10-K, Notice & Proxy Statement is/are available at www.proxyvote.com . 
+— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
+— — — — — — — — — 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders-May 18, 2010 
+The undersigned, whose signature appears on the reverse side of
+this proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the
+undersigned would possess if personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 18, 2010, in West Warwick, Rhode Island, and at any adjournments thereof, as
+follows: 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
+MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY 
+Address change/comments: 
+(If you
+noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) 
+Continued and to be signed on reverse side 
+0000062752_2 R2.09.05.010
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-10-080521/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-10-080521/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..86aa8e3056235777e94cfac8c1f859dc25a18515
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-10-080521/proxy_rpt.txt
@@ -0,0 +1,10 @@
+Related Party Transactions 
+Potential conflicts of interest and related party transactions
+are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing standards and SEC
+rules as a guide. 
+The law firm of Hinckley
+Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+14 
+No officer, director or nominee for director of the Company or any associate of any of the
+foregoing had during the fiscal year ended January 31, 2010 any material interest, direct or indirect, in any material transaction or any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to
+be a party.
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-11-102143/proxy.txt b/raw/proxies/0000008146/0001193125-11-102143/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..34f34b56552d62ca06f9454a7d2e8c02b931d1fa
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-11-102143/proxy.txt
@@ -0,0 +1,1173 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a)
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the
+Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 17, 2011 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2011 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, 600 East Greenwich Avenue, West Warwick, Rhode
+Island on Tuesday May 17, 2011, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on April 1, 2011 has been fixed as
+the record date for determining shareholders entitled to vote at the Annual Meeting or any adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 22, 2011 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed addressed envelope, which requires no postage if mailed in the United States. If you are personally present at the
+meeting, your proxy will be returned to you if you desire to vote in person. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 17, 2011. 
+The Company’s Proxy Statement, sample proxy card and Annual Report are available at: 
+http://www.proxyvote.com. 
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 17, 2011 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of
+Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual meeting of the shareholders to be held May 17, 2011. The Company will bear the cost of such solicitation. It is expected that the solicitation of
+proxies will be primarily by mail. Proxies may also be solicited personally by regular employees of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in
+their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any
+time prior to its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This
+proxy statement and the accompanying proxy are expected to be first sent to shareholders on or about April 22, 2011. 
+Voting at Meeting 
+Only shareholders of record at the close of business on April 1, 2011 will be entitled to vote at the meeting. On the record date,
+there were 7,288,712 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Votes Required to Transact Business At the Meeting 
+The holders of a majority of the shares entitled to vote,
+present in person or represented by proxy, will constitute a quorum for the transaction of business at the meeting. Please note that brokers may no longer vote your shares on the election of directors in the absence of your specific instructions
+as to how to vote. Also, since there are no discretionary matters to be acted on at the meeting on which brokers would be able to vote without specific instructions from the beneficial owners, in order to establish a quorum at the meeting, you
+will need to provide your broker with instructions on how to vote your shares. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, five directors are to be elected to
+hold office until the next annual meeting or until their respective successors are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed,
+for the election to the Board of Directors of the persons named below. The biographies below contain information regarding the person’s service as director, business experience, director positions held currently or at any time during the last
+five years, and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. 
+1 
+Albert W. Ondis , 85, is a founder of the Company and has been its Chairman and Chief
+Executive Officer since 1969. Mr. Ondis served as the President, Chief Financial Officer and Treasurer of the Company from 1969 to 1985. In addition Mr. Ondis has served as a Director of the Rhode Island Public Expenditure Council, a
+member of the Advisory Board of the College of Engineering at the University of Rhode Island and a Trustee of Bryant University. Mr. Ondis is the largest shareholder of the Company, which the Board of Directors believes aligns his interests
+with those of our shareholders. Based on Mr. Ondis’ significant involvement with the Company since inception and understanding of the financial, regulatory, corporate governance and other matters affecting public companies, we believe that
+Mr. Ondis is qualified to serve on our Board of Directors. 
+Everett V. Pizzuti , 74, has been President and Chief Operating Officer of the Company since 1971 and a director since 1985. Previously, he served as General Sales Manager of the Recorder Division
+of Gulton Industries. Through his long service as the Chief Operating Officer of the Company, Mr. Pizzuti has an intimate knowledge of the Company’s products and markets and is able to provide our Board of Directors with insight and advice
+related to the Board’s decisions. Based on this experience, we believe that Mr. Pizzuti is qualified to serve on our Board of Directors. 
+Jacques V. Hopkins , 80, is a former partner at the law firm of Hinckley, Allen & Snyder LLP in Providence, Rhode Island.
+Before retiring, Mr. Hopkins practiced business law and served on the management committee of Hinckley, Allen & Snyder LLP and was actively involved in various community organizations. Mr. Hopkins has been a director of the
+Company since 1969 and serves as chairman of the Company’s Audit Committee. We believe that Mr. Hopkins long service as a corporate attorney and understanding of financial, regulatory, corporate governance and other matters affecting
+public companies qualify him to serve on our Board of Directors. 
+Hermann Viets , Ph.D., 68, has been President and Chief Executive Officer of the Milwaukee School of Engineering, a University located in Milwaukee, Wisconsin focused primarily on engineering
+education, since 1991. Dr. Viets served as a Director of Gehl Co. from 1999 to 2008. He serves as a Director of Public Policy Forum for southeastern Wisconsin, an independent reviewer of public policy issues. Dr. Viets also serves as a
+Director of Competitive Wisconsin Inc., an association of business, education and labor leaders promoting the State of Wisconsin and serves as a Member of the Greater Milwaukee Committee, an organization of civic leaders promoting the economic
+development and social improvement of the City of Milwaukee. Dr. Viets was also a Trustee of Polytechnic University (a private engineering school located in Brooklyn, NY) until 2009. Dr. Viets has been a director of the Company since 1988
+and serves as Chairman of Compensation and Nominating Committees. We believe that Dr. Viets’ executive experience as president of a university, his service on other public company boards and his understanding of the Company’s products
+as well as corporate governance matters qualify him to serve on our Board of Directors. 
+Graeme MacLetchie , 73, is a private investor and was a director of Deutsche Bank Alex Brown (Private Client Division), an investment banking and brokerage services company for private wealth and
+asset management, from November 1995 to March 2010. Prior to this, Mr. MacLetchie was Senior Vice President of C. J. Lawrence Deutsche Bank Securities Corporation from 1970 to 1995. He has been a director of the Company since 2002 and also
+served as a Director of E-Sync Networks Inc., a provider of managed enterprise services and solutions to medium and large businesses, from 1994 to 1999. We believe that Mr. MacLetchie’s substantial experience in the financial sector and
+knowledge of the financial, regulatory, corporate governance and other matters affecting public companies qualify him to serve on our Board of Directors. 
+2 
+The Board of Directors has determined that all of the directors of the Company, which
+include each of the nominees standing for election at the 2011 annual shareholders meeting, other than Albert W. Ondis and Everett V. Pizzuti, are independent of the Company in that such nominees have no material relationship with the Company either
+directly, or as a partner, shareholder or affiliate of an organization that has a relationship with the Company. The Board of Directors has made this determination in accordance with applicable Securities and Exchange Commission (“SEC”)
+rules and NASDAQ listing standards. 
+Security Ownership of
+Certain Beneficial Owners and Management 
+The
+following table sets forth as of April 1, 2011 (except as noted) the record and beneficial ownership of the Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than
+five percent of such stock, by each director of the Company, by each executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Albert W. Ondis 
+1,601,325 
+(b) 
+21.5 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Everett V. Pizzuti 
+317,725 
+(c) 
+4.3 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Rutabaga Capital Management, LLC 
+723,424 
+(d) 
+9.9 
+% 
+64 Broad Street, 3 rd Floor 
+Boston, MA 02109 
+Perritt Capital Management, Inc. 
+389,200 
+(e) 
+5.3 
+% 
+300 South Wacker Drive, Suite 2880 
+Chicago, IL 60606 
+Hermann Viets 
+206,106 
+(f) 
+2.8 
+% 
+Joseph P. O’Connell 
+195,838 
+(g) 
+2.6 
+% 
+Elias G. Deeb 
+100,057 
+(h) 
+1.4 
+% 
+Jacques V. Hopkins 
+38,687 
+(i) 
+* 
+Graeme MacLetchie 
+102,250 
+(j) 
+1.4 
+% 
+Michael Morawetz 
+12,292 
+(k) 
+* 
+All directors and executive officers of the Company as a group (13) 
+2,715,888 
+(l) 
+34.1 
+% 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive
+officer, as well as shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable within 60 days of April 1,
+2011. All information is based upon 
+3 
+ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under the Securities Exchange Act of 1934 or has
+been furnished by the respective directors and executive officers of the Company. 
+(b) 
+Includes 170,206 shares deemed to be beneficially owned because of exercisable options to acquire shares and 3,653 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(c) 
+Includes 99,256 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,471 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(d) 
+Rutabaga Capital Management, LLC, a Massachusetts limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to
+have beneficial ownership of the number of shares shown as of March 31, 2011. 
+(e) 
+Perritt Capital Management, Inc., an Illinois corporation and investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2010. 
+(f) 
+Includes 24,125 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(g) 
+Includes 142,130 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,801 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(h) 
+Includes 49,406 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,196 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(i) 
+Includes 22,750 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(j) 
+Includes 24,125 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(k) 
+Includes 12,292 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(l) 
+Includes 665,833 shares deemed to be beneficially owned because of exercisable options to acquire shares and 21,795 shares allocated to the accounts of officers under
+the Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934
+(the “Exchange Act”), as amended, requires the directors and executive officers of the Company and any persons who own more than ten percent of the Company’s common stock to file with the Securities and Exchange Commission various
+reports of beneficial ownership and changes in beneficial ownership. The Company believes all of its directors and executive officers complied with all filing requirements applicable to them with respect to transactions during the fiscal year ended
+January 31, 2011. 
+Meetings and Committees 
+During the fiscal year ended January 31, 2011, the
+Board of Directors held seven meetings. During fiscal year 2011, all directors attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of Directors has adopted a policy that
+requires members of the Board to make every effort to attend each annual shareholders meeting. All members of the Board of Directors attended the 2010 annual shareholders meeting, other than Jacques V. Hopkins who was absent due to illness.
+The Board of Directors currently has three
+standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee. The members and chairs of each of those committees are appointed each year. Membership of the Audit, Compensation and Nominating Committee is comprised of
+the Company’s three outside directors, Messrs. Hopkins and MacLetchie and Dr. Viets, all of whom are independent as defined 
+4 
+under the applicable NASDAQ listing standards and SEC rules. Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board of Directors. A copy of each
+charter is available on the Company’s website at www.astro-medinc.com under “Our Company – Corporate Governance”. 
+Audit Committee. The Audit Committee’s primary duties and responsibilities include overseeing the integrity of the
+Company’s financial reports, appointing, setting the compensation and overseeing the Company’s independent accountants, and assessing the qualifications and independence and performance of the Company’s independent accountants and the
+adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the annual audit scope, the results of the audit and other relevant matters. Mr. Hopkins serves as
+Chairman of the Audit Committee, which held seven meetings during the fiscal year ended January 31, 2011. The Board of Directors has determined that all three members of the Audit Committee satisfy the financial literacy requirements of the
+NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that Graeme MacLetchie satisfies the “financial sophistication”
+requirement of the NASDAQ listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial expert” as defined by the SEC rules, which, in the view of the Board of Directors, requires an advanced
+understanding of internal controls and procedures. However, the Board of Directors believes that the members of the Audit Committee have a thorough understanding of the Company’s business, the accounting issues relevant to the Company’s
+financial statements and audit committee functions and possess the requisite skills to perform effectively their oversight function. 
+Compensation Committee. The Compensation Committee assists the Board of Directors in discharging the Board’s responsibilities
+relating to director and executive compensation. The Compensation Committee’s responsibilities include: establishing and reviewing the Company’s executive and director compensation philosophy, strategies, plans and policies; making
+recommendations with respect to the design of the Company’s incentive compensation plans and equity based plans; granting awards under such plans and overseeing generally the administration of such plans; evaluating the performance and
+determining the compensation of the Chief Executive Officer; and reviewing and approving recommendations on compensation of other executives. Dr. Viets serves as chairman of the Compensation Committee, which held three meetings during the
+fiscal year ended January 31, 2011. 
+Nominating Committee . The Nominating Committee is responsible for identifying individuals qualified to be members of the Board of
+Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders. The Nominating Committee held one meeting in the fiscal year ended January 31, 2011.
+Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The
+Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the
+ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the
+shareholders. The Nominating Committee does not have a policy with respect to diversity and does not specifically consider issues of diversity, such as gender, race, origin or sex when determining whether to nominate any person to be a director of
+the Company. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. 
+5 
+The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under the NASDAQ listing standards for populating the Audit,
+Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees
+to the Nominating Committee at the Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include information regarding a candidate’s background, qualifications, experience and willingness to
+serve as a director. In addition, Section 10 of Article II of the Company’s By-Laws sets forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an
+annual meeting of shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the
+shareholders who support the nominee’s election. For the annual meeting to be held in 2012, the notice deadline under the By-Laws is March 16, 2012. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn:
+Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the individual chairman of standing committees. Any
+shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors by writing directly to those individuals c/o
+Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s corporate offices that is sent directly to an
+individual unless the Company believes the communication may pose a security risk. 
+Board Leadership Structure 
+Mr. Ondis serves as both the Chief Executive Officer and the Chairman of the Board of Directors. The Board of Directors believes that the Company’s Chief Executive Officer is best situated to
+serve as Chairman because he is the director most familiar with the Company’s business and industry, and most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. Independent directors
+and management have different perspectives and roles in strategy development. The Company’s independent directors bring experience, oversight and expertise from outside the company and industry, while the Chief Executive Officer brings
+company-specific experience and expertise. The Board of Directors believes that the combined role of Chairman and Chief Executive Officer promotes strategy development and execution, and facilitates information flow between management and the Board,
+which are essential to effective governance. Further, given the fact that all independent directors comprise each of the Audit, Compensation and Nominating Committees of the Board of Directors and that the majority of the Board of Directors is
+comprised of independent directors, the Board of Directors does not believe a lead independent director is necessary. 
+Risk Oversight 
+The Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of the Company’s
+risks through a program of sound policies, systems, processes, and reports. The 
+6 
+Audit Committee of the Board of Directors has oversight responsibility over financial reporting and disclosure process, compliance and legal matters, and information security and fraud risk. The
+Audit Committee also monitors controls for material weaknesses in the audit function. The Audit Committee meets regularly with our Chief Financial Officer and Controller in carrying out these responsibilities, and with the Company’s independent
+auditors in executive session. 
+The Compensation
+Committee of the Board of Directors oversees risks as they relate to the Company’s compensation policies and practices as described under “Compensation Discussion and Analysis.” The Board’s Nominating Committee assists the Board
+of Directors in fulfilling its oversight responsibilities with respect to independence of board members and identification of individuals qualified to be members of the Board of Directors. 
+While each committee is responsible for evaluating the risks within their areas of responsibility and
+overseeing the management of such risks, all our committees report regularly to the full Board of Directors, which also considers the Company’s entire risk profile. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and
+recommending to the Board of Directors the compensation of the directors of the Company. Messrs. Hopkins and MacLetchie and Dr. Viets are paid an annual retainer of $3,500 plus $500 for each Board and committee meeting attended (including
+attendance through telephonic means). Directors who are also officers or employees of the Company are not entitled to receive any compensation in addition to their compensation for services as officers or employees. 
+Those directors who are not also officers and employees of
+the Company have received options to purchase common stock under the Company’s Non-Employee Director Stock Option Plan (the “Director Plan”) as compensation for their services to the Company. Under the Director Plan, Mr. Hopkins
+and Dr. Viets each received non-qualified options to purchase 1,375 shares of common stock on May 20, 1996, the date the Company’s shareholders approved the Director Plan and Mr. MacLetchie received a non-qualified option to
+purchase 1,375 shares of common stock upon his initial election to the Board of Directors on May 14, 2002. These options vested six months after the grant date. The Director Plan expired on May 31, 2006. Under the Company’s 2007
+Equity Incentive Plan, each non-employee director receives non-qualified options to purchase 5,000 shares of the Company’s common stock upon the adjournment of each annual meeting or special meeting in lieu of an annual meeting of the
+shareholders of the Company. These options have a term of ten years and become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is granted. 
+The following Director Compensation table provides
+information regarding the compensation paid or accrued by each individual who was a director during the 2011 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Jacques V. Hopkins 
+$ 
+18,808 
+$ 
+8,500 
+$ 
+10,308 
+$ 
+— 
+Graeme MacLetchie 
+19,308 
+9,000 
+10,308 
+— 
+Albert W. Ondis(c) 
+— 
+— 
+— 
+— 
+Everett V. Pizzuti(c) 
+— 
+— 
+— 
+— 
+Hermann Viets 
+19,308 
+9,000 
+10,308 
+— 
+7 
+(a) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to directors.
+Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended January 31, 2011, included in the Company’s Annual Report on Form 10-K filed with
+the SEC on or around April 18, 2011. 
+(b) 
+As of January 31, 2011 each director had the following number of options outstanding: Jacques V. Hopkins 22,750, Graeme MacLetchie 24,125 and Hermann Viets 24,125.
+(c) 
+See Summary Compensation Table and Outstanding Equity Awards at Fiscal Year End Table for disclosure relating to compensation and outstanding option awards of Messrs.
+Ondis and Pizzuti. 
+8 
+COMPENSATION DISCUSSION & ANALYSIS 
+The Compensation Committee of the Board of Directors of the
+Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel are effectively
+compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and recommending to the Board the compensation of directors. 
+Compensation Philosophy and
+Objectives. Our overall philosophy in terms of executive compensation is to link management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate
+highly qualified individuals to achieve the Company’s business goals and link their interests with shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s performance, awards, if
+any, made during prior years and other relevant factors. We seek to have the long-term performance of our common stock reflected in executive compensation through our equity incentive programs. 
+Elements of Compensation. Our
+total compensation program for executive officers consists of the following: 
+• 
+salary; 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, historically in the form of stock options; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and
+provide incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while
+providing incentives to maximize long-term value for our shareholders. 
+Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity
+awards. The Committee annually reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our
+executive officers were established a number of years ago. Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. Annual salary adjustments
+are made effective April 1 of each year. For fiscal year 2011, no increases in compensation were made to the Company’s employees and executive officers. 
+Cash Incentive and Bonus
+Awards. The Committee has adopted two separate management bonus plans applicable to executive officers of the Company for the purpose of providing incentive compensation to the Company’s executive officers. One plan
+is applicable to domestic employees of the Company (the “Domestic Plan”) and the other is applicable to the Vice President-International Branches, currently Michael Morawetz (the “International Branch Plan”). Awards to executive
+officers other than the Chief Executive Officer and President of the Company under the Domestic Plan have been based on the Company’s achieving specified thresholds of 
+9 
+annual operating income and return on net assets. Awards to the Chief Executive Officer and President of the Company under the Domestic Plan are predicated on achieving specified levels of annual
+operating income, return on net assets and annual sales thresholds. Effective March 15, 2010, the Domestic Plan was amended to provide that awards to all executive officers, including the Chief Executive Officer and President of the Company,
+will be based on achieving specified levels of annual operating income, return on net assets and annual sales thresholds, on a consolidated basis. For fiscal year 2011, the Company’s Chief Executive Officer and President were eligible to
+receive bonuses under the Domestic Bonus Plan ranging from 12% to 27% of their base salaries while the Company’s other executive officers were eligible to receive bonuses ranging from 9% to 22% of their respective base salaries. 
+Awards under the International Branch Plan are based on the
+annual earned bonus pool available under the Company’s bonus plans applicable to the Company’s international branches located in Canada, the United Kingdom, France and Germany. These bonus pools are determined by comparing the annual sales
+achieved in the last fiscal year ended by each international branch to the respective volume of sales achieved during the prior fiscal year for each branch. Sales that surpass the prior year’s sales earn a 4% bonus on the incremental sales
+volume up to the specified target established by the Committee for that year. The bonus pool earned is then adjusted (increased or decreased) by the branch’s achievement of specified profit margin and return on working capital thresholds as
+determined by the Committee. The amounts available under the branch bonus pools are then allocated amongst a pool of individuals at such offices at the discretion of the CEO. Under the International Branch Plan, the Vice President of International
+Branches was eligible to receive a bonus of up to 20%; provided that, no bonus will be paid to the Vice President of International Branches under the International Branch Plan unless the consolidated sales value of all the Company’s
+international branches meets the minimum threshold of sales value for each of the Company’s international branches as established annually by the Committee. 
+The specified threshold and target financial objectives and
+business objectives and the related bonus payouts under the Company’s bonus plans are established annually by the Committee and, accordingly, individual awards may vary, up or down, from year to year. For fiscal year 2011, we did not pay any
+bonuses to our executive officers under the Domestic Plan or International Branches Plan. 
+In addition to our management bonus plans, from time-to-time we award cash bonuses to our executive officers to reward their efforts in extraordinary circumstances. Such awards are made at the discretion
+of the Committee. 
+Long-Term Incentive
+Compensation. Total compensation at the executive level also includes long-term incentive awards granted under the Company’s Non-Qualified Stock Option Plan and 2007 Equity Incentive Plan. The objectives of the equity
+incentive program are to align executive and shareholder long-term interests by creating a strong and direct link between executive pay and total shareholder return, and to enable executives to develop and maintain a long-term stock ownership
+position in our common stock. Historically, all equity awards have been in the form of stock options which have generally been granted in March of each year at an exercise price of not less than 100% of the market price on the date of grant. Under
+the 2007 Equity Incentive Plan, the exercise price of all stock options must be at least 100% of the market price on the date of grant, provided that the exercise price for incentive stock options (ISOs) granted to any ten percent beneficial owner
+of our stock, which includes Mr. Ondis, must be not less than 110% of the market price on the date of grant. Since 2004, all options granted vest in four equal annual installments commencing on the first anniversary of the date of grant. Under
+the Company’s 2007 Equity Incentive Plan, the Company is also able to make equity awards in the form of restricted stock, restricted units and performance units in addition to stock options, but has not done so to date. 
+10 
+Retirement and Other Benefits. In order to attract and retain
+key executives, we offer retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including our executive officers. 
+Profit-Sharing Plan. We maintain a qualified Profit-Sharing Plan which provides retirement benefits to substantially all our
+employees and provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $245,000) compensation. In addition,
+participants are permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation
+contributed and 25% of the second through the seventh percent. Prior to this change, the Company made matching contributions equal to 50% of the first percent of compensation contributed and 25% of the second through fifth percent. The deferrals are
+made within the limits prescribed by Section 401(k) of the Internal Revenue Code (the “Code”). The Profit-Sharing Plan provides for the vesting of 100% of matching contributions made by the Company to the account of the employee after
+three years of service. Contributions by an employee are 100% vested immediately. 
+Employee Stock Ownership Plan. We also have an Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such amounts
+as the Board of Directors may annually determine are allocated among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions, which may
+be in cash or stock, are invested by the Plan’s trustee in shares of common stock of the Company. 
+Perquisites . In addition to the benefits described above, we provide automobile allowances to certain of our executive
+officers. The amounts of any aforesaid automobile allowances to our Named Executive Officers are reflected in the “All Other Compensation” column of the Summary Compensation Table below. 
+We have no employment agreements with any of our executive
+officers and we do not provide any severance benefits to our executives other than those provided to employees generally. Severance benefits will vary based upon salary levels and length of service. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed with
+management the Compensation Discussion & Analysis included above. Based on these reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included
+in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2011 for filing with the SEC through incorporation by reference of this Proxy Statement. 
+Compensation Committee: 
+Hermann Viets (Chairman) 
+Jacques V. Hopkins 
+Graeme MacLetchie 
+11 
+EXECUTIVE COMPENSATION 
+The following table provides information regarding the total compensation paid or accrued by the Company to
+each of its Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and its three other highest paid executive officers other than the CEO and CFO (collectively, the “Named Executive Officers”). 
+Because the Company’s Domestic Plan and International
+Branch Plan are based on achieving specified performance goals, awards under these plans are not considered “Bonuses” for purposes of SEC rules and are listed below as “Non-Equity Incentive Plan Compensation.” 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Albert W. Ondis 
+2011 
+259,310 
+— 
+9,720 
+— 
+12,398 
+(d) 
+281,428 
+Chairman and CEO 
+2010 
+259,310 
+— 
+7,575 
+— 
+27,748 
+294,633 
+2009 
+258,001 
+— 
+20,017 
+— 
+20,343 
+298,361 
+Everett V. Pizzuti 
+2011 
+245,556 
+— 
+10,652 
+— 
+39,983 
+(e) 
+296,191 
+President and COO 
+2010 
+245,556 
+— 
+8,324 
+— 
+38,771 
+292,651 
+2009 
+244,869 
+— 
+21,523 
+— 
+37,034 
+303,426 
+Joseph P. O’Connell 
+2011 
+206,000 
+— 
+10,226 
+— 
+30,049 
+(f) 
+246,275 
+Senior Vice President, 
+2010 
+206,000 
+— 
+7,991 
+— 
+20,735 
+234,726 
+Treasurer and CFO 
+2009 
+205,077 
+— 
+18,436 
+— 
+25,805 
+249,318 
+Elias G. Deeb 
+2011 
+150,947 
+— 
+9,374 
+— 
+4,196 
+(g) 
+164,517 
+Vice President – 
+2010 
+150,947 
+— 
+7,325 
+— 
+5,928 
+164,200 
+Media Products 
+2009 
+153,754 
+— 
+15,349 
+— 
+2,948 
+172,051 
+Michael Morawetz 
+2011 
+172,902 
+— 
+6,391 
+— 
+15,918 
+(h) 
+195,211 
+(i) 
+Vice President – 
+2010 
+183,767 
+7,155 
+4,994 
+— 
+16,920 
+212,836 
+International Branches 
+2009 
+191,365 
+11,038 
+11,919 
+9,179 
+17,617 
+241,118 
+(a) 
+Reflects discretionary cash bonuses. 
+(b) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to the Named
+Executive Officers. Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended January 31, 2011, included in the Company’s Annual Report on
+Form 10-K filed with the SEC on or around April 18, 2011. 
+(c) 
+Reflects cash awards to the named individuals under the Company’s management bonus plans which are discussed in further detail under the heading “Compensation
+Discussion and Analysis” above. 
+(d) 
+Includes pay-out of two weeks unused vacation of $9,973, employer match under Profit Sharing Plan of $1,939 and employer contribution to Employee Stock Ownership Plan
+of $486. 
+(e) 
+Includes pay-out of two weeks unused vacation of $9,444, automobile allowance of $17,995, non-cash automobile allowance of $10,075, employer match under Profit Sharing
+Plan of $1,983 and employer contribution to Employee Stock Ownership Plan of $486. 
+(f) 
+Includes pay-out of two weeks unused vacation of $6,338, automobile allowance of $19,771, employer match under Profit Sharing Plan of $3,454 and employer contribution
+to Employee Stock Ownership Plan of $486. 
+(g) 
+Includes pay-out of one week unused vacation of $1,161, employer match under Profit Sharing Plan of $2,549 and employer contribution to Employee Stock Ownership Plan of
+$486. 
+(h) 
+Reflects automobile allowance. 
+(i) 
+Mr. Morawetz’s salary is based on euro currency and is converted to U.S. dollars at the average monthly exchange rate. The exchange rate for the fiscal year ended
+January 31, 2011 was 1.32. 
+12 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding
+equity awards held by each of the Named Executive Officers as of January 31, 2011. 
+Name 
+Option Grant 
+Date 
+Number of 
+securities 
+underlying 
+unexercised 
+options
+(#) 
+Exercisable 
+Number of 
+securities 
+underlying 
+unexercised 
+options
+(#) 
+Unexercisable(a) 
+Option 
+Exercise 
+Price($) 
+Option 
+Expiration 
+Date 
+Albert W. Ondis 
+03/19/2001 
+85,250 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+85,250 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+41,250 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+21,250 
+— 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+10,500 
+3,500 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+3,138 
+3,137 
+9.8450 
+04/01/2013 
+(c) 
+03/18/2009 
+1,250 
+3,750 
+6.8420 
+03/18/2014 
+(c) 
+03/15/2010 
+— 
+5,000 
+8.0960 
+03/15/2015 
+(c) 
+Everett V. Pizzuti 
+03/18/2002 
+14,300 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+41,250 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/20/2006 
+21,250 
+— 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+10,500 
+3,500 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+3,138 
+3,137 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+1,250 
+3,750 
+6.2200 
+03/18/2019 
+(c) 
+03/15/2010 
+— 
+5,000 
+7.3600 
+03/15/2020 
+(c) 
+Joseph P. O’Connell 
+03/19/2001 
+9,407 
+— 
+3.1364 
+03/19/2011 
+(b) 
+03/18/2002 
+66,687 
+— 
+2.6909 
+03/18/2012 
+(b) 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(b) 
+04/19/2004 
+20,625 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+9,375 
+— 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+14,062 
+— 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+7,500 
+2,500 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+2,688 
+2,687 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+1,200 
+3,600 
+6.2200 
+03/18/2019 
+(c) 
+03/15/2010 
+— 
+4,800 
+7.3600 
+03/15/2020 
+(c) 
+Elias G. Deeb 
+03/18/2002 
+6,875 
+— 
+2.6909 
+03/18/2012 
+(b) 
+04/19/2004 
+13,750 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+6,250 
+— 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+9,375 
+— 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+4,875 
+1,625 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+2,238 
+2,237 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+1,100 
+3,300 
+6.2200 
+03/18/2019 
+(c) 
+03/15/2010 
+— 
+4,400 
+7.3600 
+03/15/2020 
+(c) 
+Michael Morawetz 
+04/19/2004 
+2,062 
+— 
+8.7273 
+04/19/2014 
+(c) 
+03/21/2005 
+937 
+— 
+6.7680 
+03/21/2015 
+(c) 
+03/20/2006 
+937 
+— 
+7.9316 
+03/20/2016 
+(c) 
+04/12/2007 
+2,625 
+875 
+11.4450 
+04/12/2017 
+(c) 
+04/01/2008 
+1,738 
+1,737 
+8.9500 
+04/01/2018 
+(c) 
+03/18/2009 
+750 
+2,250 
+6.2200 
+03/18/2019 
+(c) 
+03/15/2010 
+— 
+3,000 
+7.3600 
+03/15/2020 
+(c) 
+(a) 
+Option awards are adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Options vested in full on the seven month anniversary of the Option Grant Date. 
+(c) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+13 
+Grants of Plan Based Awards 
+The following table provides information on all grants of plan based awards by the Company in fiscal year 2011
+to each Named Executive Officer. 
+Name 
+Grant Date 
+All Other Option 
+Awards: Number of 
+Securities Underlying 
+Options
+(#) 
+Exercise or Base 
+Price of Option 
+Awards ($/Sh) 
+Grant Date Fair Value 
+of Stock and Option 
+Awards($)(a) 
+Albert W. Ondis 
+03/15/2010 
+5,000 
+8.096 
+9,720 
+Everett V. Pizzuti 
+03/15/2010 
+5,000 
+7.36 
+10,652 
+Joseph P. O’Connell 
+03/15/2010 
+4,800 
+7.36 
+10,226 
+Elias G. Deeb 
+03/15/2010 
+4,400 
+7.36 
+9,374 
+Michael Morawetz 
+03/15/2010 
+3,000 
+7.36 
+6,391 
+(a) 
+Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended
+January 31, 2011, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on or around April 18, 2011. 
+Option Exercises and Stock Vested 
+The following table provides information on all exercises of
+options by the Named Executive Officers during the Company’s 2011 fiscal year. 
+Option Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise ($) 
+Albert W. Ondis 
+103,125 
+205,776 
+(b) 
+Everett V. Pizzuti 
+85,250 
+396,719 
+(b) 
+103,125 
+(c) 
+131,732 
+(c) 
+Joseph P. O’Connell 
+45,593 
+182,536 
+(b) 
+68,750 
+(d) 
+87,821 
+(d) 
+Elias G. Deeb 
+20,625 
+39,299 
+(b) 
+Michael Morawetz 
+— 
+— 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise and the exercise price of the options.
+(c) 
+The stock options representing the number of shares acquired on exercise were sold to the Company for a purchase price of $131,732, representing the closing price for
+the Company’s common stock on March 3, 2010 less a 10% discount less the exercise price of the options. 
+(d) 
+The stock options representing the number of shares acquired on exercise were sold to the Company for a purchase price of $87,821, representing the closing price for
+the Company’s common stock on March 3, 2010 less a 10% discount less the exercise price of the options. 
+14 
+Related Party Transactions 
+Potential conflicts of interest and related party
+transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+The law firm
+of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+The Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as Vice President and World-Wide Sales Director of QuickLabel Systems, and
+William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $122,971 and $124,243, respectively, in salary during the fiscal year ended January 31, 2011. In addition, the Company made matching contributions for the
+fiscal year 2011 under its qualified Profit-Sharing Plan and Employee Stock Ownership Plan of $2,549 and $486 to Eric Pizzuti and $2,319 and $486 to William Pizzuti. The Company also made stock option grants during the 2011 fiscal year to Messrs. E.
+Pizzuti and W. Pizzuti with a fair market value at the date of grant equal to $2,557 and $1,065, respectively. Finally, the Company made cash pay-outs for unused vacation to both Eric Pizzuti and William Pizzuti of $4,453 and $1,697, respectively.
+Other than as described above, no officer,
+director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2011 any material interest, direct or indirect, in any material transaction or any material proposed
+transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+15 
+Audit Committee Report 
+The Audit Committee of the Board of Directors is responsible
+for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC
+rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s
+consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two
+primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence and performance of the Company’s
+independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s independent accountants, Ernst & Young LLP, to review and
+discuss the January 31, 2011 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit
+Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Grant Thornton LLP the matters required by Statement on Auditing Standards
+No. 61 ( Communication with Audit Committees ). The Audit Committee also received from Ernst & Young LLP written disclosures and the letter regarding independence as required by Independence Standards Board Standard No. 1
+( Independence Discussions with Audit Committee ) and has discussed with Ernst & Young LLP that firm’s independence. 
+The Audit Committee received the information concerning the fees of Ernst & Young LLP for the year ended January 31, 2011
+set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the independence of the independent accountants and has determined
+that the provision of such services by Ernst & Young LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the audited
+consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2011, to be filed with the SEC. 
+Audit Committee: 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+16 
+Independent Accountants’ Fees, Services and Other Matters 
+On April 13, 2010, the Audit Committee approved the
+dismissal of Grant Thornton LLP (“Grant Thornton”) as the Company’s independent registered public accounting firm. During the fiscal years ended January 31, 2010 and 2009, and the subsequent interim period through April 13,
+2010 (the date of dismissal), there were no disagreements between the Company and Grant Thornton on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not
+resolved to Grant Thornton’s satisfaction, would have caused Grant Thornton to make reference to the subject matter of the disagreement in connection with its reports on the financial statements; and there were no reportable events described
+under Item 304(a)(1)(v) of Regulation S-K. The reports of Grant Thornton on the consolidated financial statements of the Company as of and for the fiscal years ended January 31, 2010 and 2009 did not contain any adverse opinion or
+disclaimers of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended January 31, 2010 and 2009 and the subsequent interim period through April 13, 2010 (the date
+of dismissal), the Company did not consult any other firms regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K. 
+We requested that Grant Thornton furnish the Company with a
+letter addressed to the U.S. Securities and Exchange Commission stating whether Grant Thornton agreed with the foregoing disclosures. A copy of such letter is filed as Exhibit 16.1 to our Current Report on Form 8-K filed with the SEC on
+April 19, 2010. 
+On April 19, 2010,
+following the approval of its Audit Committee, the Company engaged the services of Ernst & Young LLP (“Ernst & Young”) as its independent registered public accounting firm to audit the Company’s consolidated
+financial statements for the fiscal year ending January 31, 2011. During the fiscal years ended January 31, 2010 and 2009 and through April 19, 2010, the Company did not consult with Ernst & Young regarding any of the matters
+or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K. 
+The Company expects a representative of Ernst & Young will be present at the annual meeting with the opportunity to make a statement, if he or she so desires, and that such representative will be
+available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the Company by Ernst & Young and Grant Thornton for the fiscal years ended
+January 31, 2011 and 2010 are set forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the audit of the Company’s annual financial statements and review of financial statements and statutory
+and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed for the fiscal year. 
+2011 
+2010 
+Audit Fees 
+$ 
+196,913 
+$ 
+247,073 
+Audit-Related Fees 
+0 
+0 
+Tax Fees 
+0 
+2,730 
+All Other Fees 
+20,000 
+0 
+Audit Fees for the fiscal years ended January 31, 2011 and 2010 were for professional services rendered for the audits of the
+financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial
+statements. 
+17 
+Tax Fees as of the fiscal year ended January 31, 2010 were for services rendered
+for tax returns and estimates, tax advice, tax planning and compliance with Financial Accounting Standards Board Interpretation No. 48 (FIN 48). 
+All Other Fees for the fiscal year ended January 31, 2011 were for additional year end work related to the audit of the
+Company’s financial statements. 
+Policy on
+Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit services provided by the independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services
+described above were approved by the Audit Committee under the de minimus exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X. 
+Financial Reports 
+A copy of the annual report of the Company for the fiscal year ended January 31, 2011 including the Company’s annual report to
+the SEC on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+Proposals For 2012 Annual Meeting 
+The 2012 annual meeting of the shareholders of the Company is scheduled to be held on May 15, 2012. If a shareholder intending to present a proposal at that meeting wishes to have such proposal
+included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal to the Company not later than December 20, 2011. Shareholder proposals that are to be considered at the 2012
+annual meeting but not requested to be included in the Proxy Statement must be submitted no later than March 16, 2012 and no earlier than December 20, 2011. 
+Other Matters 
+No business other than that set forth in the attached Notice
+of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to
+their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other
+persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+18 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in
+hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Ave. 
+West
+Warwick, RI 02893 
+Electronic Delivery of Future PROXY MATERIALS 
+If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail
+or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. 
+VOTE BY PHONE - 1-800-690-6903 
+Use any
+touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. 
+VOTE BY MAIL 
+Mark, sign and date your
+proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+— — — — — — — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
+DATED. 
+DETACH AND RETURN THIS PORTION ONLY 
+For 
+All 
+Withhold 
+All 
+For All 
+Except 
+To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 
+The Board of Directors does not have a recommendation for voting on the following: 
+¨ 
+¨ 
+¨ 
+1. 
+Election of Directors 
+Nominees 
+01 
+Albert W. Ondis 02 Everett 
+V. Pizzuti 03 Jacques V. Hopkins 04 
+Hermann Viets 05 Graeme MacLetchie 
+NOTE: In their discretion, upon such other
+matters as may properly come before the meeting. 
+For address change/comments, mark here. (see reverse for instructions) 
+¨ 
+Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint
+owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+0000105092_1 R1.0.0.11699 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K, Notice & Proxy Statement is/are available at www.proxyvote.com . 
+— — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — — — — — — 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders-May 17, 2011 
+The undersigned, whose signature appears on the reverse side of this
+proxy, hereby appoints Albert W. Ondis, Everett V. Pizzuti, Jacques V. Hopkins, Graeme MacLetchie and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned
+would possess if personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 17, 2011, at 600 East Greenwich Avenue, West Warwick, Rhode Island, and at any adjournments thereof, as
+follows: 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
+DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY 
+Address change/comments: 
+(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) 
+Continued and to be signed on reverse side 
+0000105092_2 R1.0.0.11699
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-11-102143/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-11-102143/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..4aacf58ff73bdf87d4603e2464b319a312ac998a
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-11-102143/proxy_rpt.txt
@@ -0,0 +1,14 @@
+Related Party Transactions 
+Potential conflicts of interest and related party
+transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+The law firm
+of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+The Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as Vice President and World-Wide Sales Director of QuickLabel Systems, and
+William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to whom the Company paid $122,971 and $124,243, respectively, in salary during the fiscal year ended January 31, 2011. In addition, the Company made matching contributions for the
+fiscal year 2011 under its qualified Profit-Sharing Plan and Employee Stock Ownership Plan of $2,549 and $486 to Eric Pizzuti and $2,319 and $486 to William Pizzuti. The Company also made stock option grants during the 2011 fiscal year to Messrs. E.
+Pizzuti and W. Pizzuti with a fair market value at the date of grant equal to $2,557 and $1,065, respectively. Finally, the Company made cash pay-outs for unused vacation to both Eric Pizzuti and William Pizzuti of $4,453 and $1,697, respectively.
+Other than as described above, no officer,
+director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2011 any material interest, direct or indirect, in any material transaction or any material proposed
+transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+15
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-12-161829/proxy.txt b/raw/proxies/0000008146/0001193125-12-161829/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..141161a301b9624b292620f850402d4a31adbde1
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-12-161829/proxy.txt
@@ -0,0 +1,1225 @@
+DEF 14A
+1
+d331105ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a)
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the
+Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc.
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 15, 2012 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2012 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, 600 East Greenwich Avenue, West Warwick, Rhode
+Island on Tuesday May 15, 2012, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 23, 2012 has been fixed
+as the record date for determining shareholders entitled to vote at the Annual Meeting or any adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 13, 2012 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed addressed envelope, which requires
+no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 15, 2012.
+The Company’s Proxy Statement, sample
+proxy card and Annual Report are available at: 
+http://www.proxyvote.com. 
+Astro-Med, Inc. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 15, 2012 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of
+Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual meeting of the shareholders to be held May 15, 2012. The Company will bear the cost of such solicitation. It is expected that the solicitation of
+proxies will be primarily by mail. Proxies may also be solicited personally by regular employees of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in
+their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any
+time prior to its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This
+proxy statement and the accompanying proxy are expected to be first sent to shareholders on or about April 13, 2012. 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 23, 2012 will be entitled to vote at the meeting. On the record date,
+there were 7,427,224 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Votes Required to Transact Business At the Meeting 
+The holders of a majority of the shares entitled to vote,
+present in person or represented by proxy, will constitute a quorum for the transaction of business at the meeting. Please note that brokers may no longer vote your shares on the election of directors in the absence of your specific instructions
+as to how to vote. Also, since there are no discretionary matters to be acted on at the meeting on which brokers would be able to vote without specific instructions from the beneficial owners, in order to establish a quorum at the meeting, you
+will need to provide your broker with instructions on how to vote your shares. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, five directors are to be elected to
+hold office until the next annual meeting or until their respective successors are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed,
+for the election to the Board of Directors of the persons named below. The biographies below contain information regarding the person’s service as director, business experience, director positions held currently or at any time during the last
+five years, and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. 
+1 
+Everett V. Pizzuti , 75, has been Chief Executive Officer of the Company since 2011
+and was formerly President and Chief Operating Officer of the Company since 1971. Mr. Pizzuti has also been a director of the Company since 1985. Prior to 1971, he served as General Sales Manager of the Recorder Division of Gulton Industries.
+Through his long service as the Chief Operating Officer of the Company and now Chief Executive Officer, Mr. Pizzuti has an intimate knowledge of the Company’s products and markets and is able to provide our Board of Directors with insight
+and advice related to the Board’s decisions. Based on this experience, we believe that Mr. Pizzuti is qualified to serve on our Board of Directors. 
+Graeme MacLetchie , 74, is a private investor and was a director of Deutsche Bank Alex Brown (Private Client Division), an
+investment banking and brokerage services company for private wealth and asset management, from November 1995 to March 2010. Prior to this, Mr. MacLetchie was Senior Vice President of C. J. Lawrence Deutsche Bank Securities Corporation from
+1970 to 1995. He has been a director of the Company since 2002 and also served as a Director of E-Sync Networks Inc., a provider of managed enterprise services and solutions to medium and large businesses, from 1994 to 1999. We believe that
+Mr. MacLetchie’s substantial experience in the financial sector and knowledge of the financial, regulatory, corporate governance and other matters affecting public companies qualify him to serve on our Board of Directors. 
+Mitchell I. Quain , 60, was appointed a director of the
+Company on August 22, 2011. Mr. Quain is a Senior Advisor at Carlyle Group, a private equity firm. From 2010 through 2011, Mr. Quain was a Partner at One Equity Partners, a private investment firm. From 2006 through 2009, he was
+a Senior Director of ACI Capital Corp. From 2002 through 2005, Mr. Quain served as Chairman of Register.Com, Inc., an internet services provider, and from 1997 to 2001 he was employed with ABN AMRO and its predecessors in several
+capacities, including Vice Chairman. Mr. Quain also serves as Chairman of the Board of Directors of MagneTek, Inc., a manufacturer of digital power and motion control systems and a director of Handy & Harman Ltd., a diversified global
+industrial company, Hardinge Inc., a global designer, manufacturer and distributor of machine tools, RBC Bearings, Inc., an international manufacturer and marketer of highly engineered precision plain, roller and ball bearings, and Titan
+International, Inc., a supplier of wheel and tire assemblies. Mr. Quain previously served as a director of DeCrane Aircraft Holdings, Inc., HEICO Corporation and Mechanical Dynamics, Inc. We believe that Mr. Quain’s extensive
+experience in the private equity sector and public company experience qualify him to serve on our Board of Directors. 
+Harold Schofield , 70, is the owner and manager of Schofield Imaging Association, LLC, in Narragansett, Rhode Island since 2004.
+Prior to this Mr. Schofield was Founder, President and CEO of Atlantek Incorporated, a leading company in the field of thermal printing and retired as Vice President and General Manger of Zebra-Atlantek following the acquisition of Atlantek
+Incorporated by Zebra Technologies in 2003. Prior to founding Atlantek Incorporated, Mr. Schofield was Design Engineering Manager at Gulton Industries where he was responsible for design and development of thermal printers, plotters and chart
+recorders. Mr. Schofield is an internationally recognized authority in the electronic printing field. We believe that Mr. Schofield’s long history and expertise in the printing and imaging field qualify him to serve on our Board of
+Directors. 
+Hermann Viets , Ph.D., 69, has
+been President and Chief Executive Officer of the Milwaukee School of Engineering, a University located in Milwaukee, Wisconsin focused primarily on engineering education, since 1991. Dr. Viets served as a Director of Gehl Co. from 1999 to
+2008. He serves as a Director of Public Policy Forum for southeastern Wisconsin, an independent reviewer of public policy issues. Dr. Viets also serves as a Director of Competitive Wisconsin Inc., an association of business, education and labor
+leaders promoting the State of Wisconsin and serves as a Member of the Greater Milwaukee Committee, an organization of civic 
+2 
+leaders promoting the economic development and social improvement of the City of Milwaukee. Dr. Viets was also a Trustee of Polytechnic University (a private engineering school located in
+Brooklyn, NY) until 2009. Dr. Viets has been a director of the Company since 1988 and serves as Chairman of Compensation and Nominating Committees. We believe that Dr. Viets’ executive experience as president of a university, his
+service on other public company boards and his understanding of the Company’s products as well as corporate governance matters qualify him to serve on our Board of Directors. 
+Jacques V. Hopkins, the current Chairman of the Board of
+Directors, has decided not to stand for re-election at the 2012 annual shareholders meeting. The Board of Directors has determined that all of the directors of the Company, including each of the nominees standing for election at the 2012 annual
+shareholders meeting and any director who served during the 2012 fiscal year, other than Albert W. Ondis and Everett V. Pizzuti, are independent of the Company in that such nominees have no material relationship with the Company either directly, or
+as a partner, shareholder or affiliate of an organization that has a relationship with the Company. The Board of Directors has made this determination in accordance with applicable Securities and Exchange Commission (“SEC”) rules and
+NASDAQ listing standards. 
+3 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of March 23, 2012
+(except as noted) the record and beneficial ownership of the Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than five percent of such stock, by each director of the
+Company, by each executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Albert W. Ondis 
+1,492,729 
+(b) 
+20.1 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Albert W. Ondis III 
+1,618,963 
+(c)(d) 
+21.8 
+% 
+600 East Greenwich Avenue 
+West Warwick, RI 02893 
+Alexis Ondis 
+1,620,439 
+(c) 
+21.8 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+April Ondis 
+1,627,747 
+(c)(e) 
+21.9 
+% 
+600 East Greenwich Avenue 
+West Warwick, RI 02893 
+Everett V. Pizzuti 
+314,076 
+(f) 
+4.2 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Rutabaga Capital Management, LLC 
+722,224 
+(g) 
+9.7 
+% 
+64 Broad Street, 3 rd Floor 
+Boston, MA 02109 
+Perritt Capital Management, Inc. 
+380,500 
+(h) 
+5.1 
+% 
+300 South Wacker Drive, Suite 2880 
+Chicago, IL 60606 
+Hermann Viets 
+211,325 
+(i) 
+2.8 
+% 
+Joseph P. O’Connell 
+161,472 
+(j) 
+2.2 
+% 
+Elias G. Deeb 
+97,660 
+(k) 
+1.3 
+% 
+Jacques V. Hopkins 
+43,906 
+(l) 
+* 
+Graeme MacLetchie 
+109,969 
+(m) 
+1.5 
+% 
+Michael Morawetz 
+14,661 
+(n) 
+* 
+Mitchell I. Quain 
+6,136 
+(o) 
+* 
+Michael J. Sullivan 
+70,765 
+(p) 
+* 
+All directors and executive officers of the Company as a group (15) 
+1,142,713 
+(q) 
+14.5 
+% 
+4 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive officer, as well as
+shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable within 60 days of March 23, 2012. All information
+is based upon ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under the Securities Exchange Act of 1934 or has been furnished by the respective
+directors and executive officers of the Company. 
+(b) 
+Indicates shares held by the estate of Mr. Ondis and includes 8,456 shares deemed to be beneficially owned because of exercisable options to acquire shares and
+3,731 shares allocated to Mr. Ondis’ account under the Company’s Employee Stock Ownership Plan. 
+(c) 
+Includes 1,492,729 shares held by the reporting person as co-executor of the Albert W. Ondis estate 
+(d) 
+Includes 2,225 shares deemed to be beneficially owned because of exercisable options to acquire shares and 254 shares allocated to his account under the Company’s
+Employee Stock Ownership Plan. 
+(e) 
+Includes 11,000 shares deemed to be beneficially owned because of exercisable options to acquire shares and 574 shares allocated to his account under the Company’s
+Employee Stock Ownership Plan. 
+(f) 
+Includes 89,025 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,646 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(g) 
+Rutabaga Capital Management, LLC, a Massachusetts limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to
+have beneficial ownership of the number of shares shown as of December 31, 2011. 
+(h) 
+Perritt Capital Management, Inc., an Illinois corporation and investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2011. 
+(i) 
+Includes 27,750 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(j) 
+Includes 79,187 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,932 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(k) 
+Includes 42,531 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,394 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(l) 
+Includes 27,750 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(m) 
+Includes 29,125 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(n) 
+Includes 14,661 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(o) 
+Includes 5,000 shares deemed to be beneficially owned because of exercisable options to acquire shares. 
+(p) 
+Includes 43,350 shares deemed to be beneficially owned because of exercisable options to acquire shares and 4,200 shares allocated to his account under the
+Company’s Employee Stock Ownership Plan. 
+(q) 
+Includes 455,878 shares deemed to be beneficially owned because of exercisable options to acquire shares and 21,044 shares allocated to the accounts of officers under
+the Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934
+(the “Exchange Act”), as amended, requires the directors and executive officers of the Company and any persons who own more than ten percent of the Company’s common stock to file with the Securities and Exchange Commission various
+reports of beneficial ownership and changes in beneficial ownership. The Company believes all of its directors and executive officers 
+5 
+complied with all filing requirements applicable to them with respect to transactions during the fiscal year ended January 31, 2012, except that a Form 4 was not timely filed on behalf of
+Joseph P. O’Connell in connection with his exercise of options on September 9, 2011 to purchase 66,687 shares of the Company’s common stock and delivery of 38,241 shares of the Company’s common stock to the Company to pay the
+exercise price on the aforementioned exercise of options. 
+Meetings and Committees 
+During the fiscal year ended January 31, 2012, the Board of Directors held ten meetings. During fiscal year 2012, all directors
+attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of Directors has adopted a policy that requires members of the Board to make every effort to attend each annual
+shareholders meeting. All members of the Board of Directors attended the 2011 annual shareholders meeting except for Mr. Ondis due to illness. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee.
+The members and chairs of each of those committees are appointed each year. The Audit Committee is comprised of three of the Company’s outside directors, Messrs. Hopkins and MacLetchie and Dr. Viets. The Compensation and Nominating
+Committees are comprised of all of our outside directors, Messrs. Hopkins, MacLetchie and Quain and Dr. Viets. Each of the members of our committees are independent as defined under the applicable NASDAQ listing standards and SEC rules. Each of
+the Audit, Compensation and Nominating Committees has a written charter approved by the Board of Directors. A copy of each charter is available on the Company’s website at www.astro-medinc.com under “Our Company – Corporate
+Governance.” 
+Audit Committee. The
+Audit Committee’s primary duties and responsibilities include overseeing the integrity of the Company’s financial reports; appointing, setting the compensation and overseeing the Company’s independent accountants; and assessing the
+qualifications and independence and performance of the Company’s independent accountants and the adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the
+results of the audit and other relevant matters. Mr. Hopkins serves as Chairman of the Audit Committee, which held five meetings during the fiscal year ended January 31, 2012. The Board of Directors has determined that all three members of
+the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that
+Graeme MacLetchie satisfies the “financial sophistication” requirement of the NASDAQ listing requirements, but that none of the Audit Committee members qualifies as an “audit committee financial expert” as defined by the SEC
+rules, which, in the view of the Board of Directors, requires an advanced understanding of internal controls and procedures. However, the Board of Directors believes that the members of the Audit Committee have a thorough understanding of the
+Company’s business, the accounting issues relevant to the Company’s financial statements and audit committee functions and possess the requisite skills to perform effectively their oversight function. 
+Compensation Committee. The Compensation Committee
+assists the Board of Directors in discharging the Board’s responsibilities relating to director and executive compensation. The Compensation Committee’s responsibilities include: establishing and reviewing the Company’s executive and
+director compensation philosophy, strategies, plans and policies; making recommendations with respect to the design of the Company’s incentive compensation plans and equity based plans; granting awards under such plans and overseeing generally
+6 
+the administration of such plans; evaluating the performance and determining the compensation of the Chief Executive Officer; and reviewing and approving recommendations on compensation of other
+executives. Dr. Viets serves as chairman of the Compensation Committee, which held seven meetings during the fiscal year ended January 31, 2012. 
+Nominating Committee . The Nominating Committee is responsible for identifying individuals qualified to be members of the Board of
+Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders. The Nominating Committee held four meetings in the fiscal year ended January 31, 2012.
+Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The
+Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the
+ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the
+shareholders. The Nominating Committee does not have a policy with respect to diversity and does not specifically consider issues of diversity, such as gender, race, origin or sex when determining whether to nominate any person to be a director of
+the Company. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. 
+The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under
+the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees
+to the Nominating Committee at the Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include information regarding a candidate’s background, qualifications, experience and willingness to
+serve as a director. In addition, Section 10 of Article II of the Company’s By-Laws sets forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an
+annual meeting of shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the
+shareholders who support the nominee’s election. For the annual meeting to be held in 2013, the notice deadline under the By-Laws is March 22, 2013. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn:
+Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the individual chairman of standing committees. Any
+shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors by writing directly to those individuals c/o
+Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The 
+7 
+Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s corporate offices that is sent directly to an individual unless the Company
+believes the communication may pose a security risk. 
+Board
+Leadership Structure 
+Prior to his
+resignation due to illness on June 29, 2011, Albert W. Ondis served as both the Chief Executive Officer and the Chairman of the Board of Directors. Following his resignation, the Board of Directors separated the positions of Chief Executive
+Officer and Chairman of the Board of Directors appointing Everett V. Pizzuti, Chief Executive Officer, and Jacques V. Hopkins, Chairman. The Board of Directors believes that separating the positions provides an independent viewpoint and focus at
+board meetings, and ensures that Mr. Pizzuti will be able to focus his entire energy on running the Company. 
+Risk Oversight 
+The Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks through a program of sound policies, systems, processes, and
+reports. The Audit Committee of the Board of Directors has oversight responsibility over financial reporting and disclosure process, compliance and legal matters, and information security and fraud risk. The Audit Committee also monitors controls
+for material weaknesses in the audit function. The Audit Committee meets regularly with our Chief Financial Officer and Controller in carrying out these responsibilities, and with the Company’s independent auditors in executive session.
+The Compensation Committee of the Board of
+Directors oversees risks as they relate to the Company’s compensation policies and practices as described under “Compensation Discussion and Analysis.” The Board’s Nominating Committee assists the Board of Directors in fulfilling
+its oversight responsibilities with respect to independence of board members and identification of individuals qualified to be members of the Board of Directors. 
+While each committee is responsible for evaluating the risks
+within their areas of responsibility and overseeing the management of such risks, all our committees report regularly to the full Board of Directors, which also considers the Company’s entire risk profile. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and
+establishing the compensation of the directors of the Company. For fiscal year 2012, Messrs. Hopkins, MacLetchie and Quain and Dr. Viets were paid an annual retainer of $3,500 (in quarterly installments) plus $500 for each Board and committee
+meeting attended (including attendance through telephonic means). Directors who are also officers or employees of the Company are not entitled to receive any compensation in addition to their compensation for services as officers or employees.
+Under the Company’s 2007 Equity Incentive
+Plan, each non-employee director receives non-qualified options to purchase 5,000 shares of the Company’s common stock upon initial election to the Board of Directors (if not at the annual meeting) and upon the adjournment of each annual
+meeting or special meeting in lieu of an annual meeting of the shareholders of the Company. These options have a term of ten years and become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is
+granted. 
+8 
+In addition to the 2007 Equity Incentive Plan, the Company adopted a Non-Employee Director
+Annual Compensation Program (the “Program”) on January 30, 2012 effective as of February 1, 2012. The Program provides that each non-employee director is entitled to an annual cash retainer of $7,000 (the “Cash
+Retainer”), plus $500 for each Board and committee meeting attended, provided that if more than one meeting occurs on the same day, no more than $500 shall be paid for such day. The non-employee director may elect for any fiscal year to receive
+all or a portion of the Cash Retainer in the form of common stock of the Company. 
+In addition, under the Program, commencing with the 2012 annual meeting, the non-employee director will receive a restricted stock award with a value equal to $20,000 (the “Equity
+Retainer”). If a non-employee director is first appointed or elected to the Board of Directors effective on a date other than at the annual shareholders meeting, on the date of such appointment or election the director shall receive a pro
+rata award of restricted common stock having a value based on the number of days remaining until the next annual meeting. The Equity Retainer will vest on the earlier of 12 months after the grant date or the date immediately prior to the next
+annual meeting (or special meeting in lieu of annual meeting) of the shareholders following the meeting at which such restricted stock award was granted. However, a non-employee director may not sell, transfer, assign, pledge or otherwise encumber
+the vested common stock prior to the second anniversary of the vesting date. In the event of the death or disability of a non-employee director, or a Change in Control (as such term is defined in the Company’s 2007 Equity Incentive Plan)
+of the Company, the restricted stock award shall immediately vest and shall no longer be subject to such restrictions on transfer. 
+Unless a non-employee director elects to receive all or a portion of the Cash Retainer in common stock (as described below), each
+non-employee director will receive the Cash Retainer in four equal quarterly installments on the first day of each fiscal quarter. 
+If a non-employee director elects to receive all or a portion of the Cash Retainer in the form of common stock, such shares shall be
+issued in four quarterly installments on the first day of each fiscal quarter, and the number of shares of common stock to be issued shall be based on the fair market value of such common stock on the date such installment is payable. The common
+stock received in lieu of such Cash Retainer will be fully vested. However, a non-employee director who receives common stock in lieu of all or a portion of the Cash Retainer may not sell, transfer, assign, pledge or otherwise encumber the common
+stock prior to the first anniversary of the date on which such shares were granted. In the event of the death or disability of a non-employee director, or a Change in Control (as such term is defined in the Company’s 2007 Equity Incentive Plan)
+of the Company, any shares of common stock issued in lieu of such Cash Retainer, shall no longer be subject to such restrictions on transfer. 
+The following Director Compensation table provides information regarding the compensation paid or accrued by each individual who was a
+director during the 2012 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Jacques V. Hopkins 
+$ 
+18,764 
+$ 
+8,500 
+$ 
+10,264 
+$ 
+— 
+Graeme MacLetchie 
+18,764 
+8,500 
+10,264 
+— 
+Everett V. Pizzuti(c) 
+— 
+— 
+— 
+— 
+Mitchell I. Quain 
+11,532 
+2,250 
+9,282 
+— 
+Hermann Viets 
+18,764 
+8,500 
+10,264 
+— 
+9 
+(a) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to directors.
+Assumptions used in the calculation of these amounts are included in footnote 7 in the Company’s audited financial statements for the fiscal year ended January 31, 2012, included in the Company’s Annual Report on Form 10-K filed with
+the SEC on April 4, 2012. 
+(b) 
+As of January 31, 2012, each non-employee director had the following number of options outstanding: Jacques V. Hopkins 27,750, Graeme MacLetchie 29,125, Mitchell
+I. Quain 5,000 and Hermann Viets 27,750. 
+(c) 
+See “Summary Compensation Table” and “Outstanding Equity Awards” at Fiscal Year End Table under “Executive Compensation” for disclosure
+relating to compensation and outstanding option awards of Mr. Pizzuti. 
+10 
+COMPENSATION DISCUSSION & ANALYSIS 
+The Compensation Committee of the Board of Directors of the
+Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel are effectively
+compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and establishing the compensation of directors. 
+Compensation Philosophy and Objectives. Our overall philosophy in terms of executive compensation is to link
+management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals and link their interests with
+shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s performance, awards, if any, made during prior years and other relevant factors. We seek to have the long-term performance of our
+common stock reflected in executive compensation through our equity incentive programs. 
+Elements of Compensation. Our total compensation program for executive officers consists of the following: 
+• 
+salary; 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, historically in the form of stock options; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and
+provide incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while
+providing incentives to maximize long-term value for our shareholders. 
+Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity
+awards. The Committee annually reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our executive officers were established a number of years ago.
+Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. Annual salary adjustments are made effective April 1 of each year. For fiscal year
+2012, we increased the compensation of the Company’s employees and executive officers by approximately 1 1 / 2 %. Everett V. Pizzuti received an additional salary increase of $20,671 in fiscal year 2012 in connection with his appointment as CEO which increased his salary from $249,329 to
+$270,000. 
+Cash Incentive and Bonus
+Awards. The Committee has adopted two separate management bonus plans applicable to executive officers of the Company for the purpose of providing incentive compensation to the Company’s executive officers. One plan
+is applicable to domestic employees of the Company (the “Domestic 
+11 
+Plan”) and the other is applicable to the Vice President-International Branches, currently Michael Morawetz (the “International Branch Plan”). Awards to executive officers other
+than the Chief Executive Officer of the Company under the Domestic Plan have been based on the Company’s achieving specified thresholds of annual operating income and return on net assets. Awards to the Chief Executive Officer of the Company
+under the Domestic Plan are predicated on achieving specified levels of annual operating income, return on net assets and annual sales thresholds. Effective March 15, 2010, the Domestic Plan was amended to provide that awards to all executive
+officers, including the Chief Executive Officer of the Company, will be based on achieving specified levels of annual operating income, return on net assets and annual sales thresholds, on a consolidated basis. For fiscal year 2012, the
+Company’s Chief Executive Officer was eligible to receive a bonus under the Domestic Bonus Plan ranging from 12% to 27% of his base salary while the Company’s other executive officers were eligible to receive bonuses ranging from 10.5% to
+25% of their respective base salaries. 
+Awards
+under the International Branch Plan are based on the annual earned bonus pool available under the Company’s bonus plans applicable to the Company’s international branches located in Canada, the United Kingdom, France and Germany. These
+bonus pools are determined by comparing the annual sales achieved in the last fiscal year ended by each international branch to the respective volume of sales achieved during the prior fiscal year for each branch. Sales that surpass the prior
+year’s sales earn a 4% bonus on the incremental sales volume up to the specified target established by the Committee for that year. The bonus pool earned is then adjusted (increased or decreased) by the branch’s achievement of specified
+profit margin thresholds as determined by the Committee. The amounts available under the branch bonus pools are then allocated amongst a pool of individuals at such offices at the discretion of the CEO. Under the International Branch Plan, the Vice
+President of International Branches was eligible to receive a bonus of up to 20%; provided that, no bonus will be paid to the Vice President of International Branches under the International Branch Plan unless the consolidated sales value of all the
+Company’s international branches meets the minimum threshold of sales value for each of the Company’s international branches as established annually by the Committee. 
+The specified threshold and target financial objectives and
+business objectives and the related bonus payouts under the Company’s bonus plans are established annually by the Committee and, accordingly, individual awards may vary, up or down, from year to year. Bonuses paid or accrued for fiscal year
+2012 under our management bonus plan to all executive officers was $328,653 which represented approximately 47% of their maximum bonus opportunity. Bonuses paid to our Named Executive Officers for fiscal year 2012 under the Domestic Plan were as
+follows: Everett V. Pizzuti: $73,891 representing approximately 46% of his maximum bonus opportunity under the plan; Joseph P. O’Connell: $53,000 representing approximately 42% of his maximum bonus opportunity under the plan; Elias G. Deeb:
+$38,835 representing approximately 42% of his maximum bonus opportunity under the plan; Michael J. Sullivan: $38,103 representing approximately 42% of his maximum bonus opportunity under the plan. We also paid a bonus to Michael Morawetz under
+the International Branch Plan in the amount of $4,420 which represented approximately 4% of his maximum bonus opportunity under that plan. The bonuses paid under the Domestic Plan and the International Branch Plan are reflected in the
+“Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below. 
+In addition to our management bonus plans, from time-to-time we award cash bonuses to our executive officers to reward their efforts in extraordinary circumstances. Such awards are made at the discretion
+of the Committee. 
+Long-Term Incentive
+Compensation. Total compensation at the executive level also includes long-term incentive awards granted under the Company’s Non-Qualified Stock Option Plan and 2007 Equity Incentive
+12 
+Plan. The objectives of the equity incentive program are to align executive and shareholder long-term interests by creating a strong and direct link between executive pay and total shareholder
+return, and to enable executives to develop and maintain a long-term stock ownership position in our common stock. Historically, all equity awards have been in the form of stock options which have generally been granted in March of each year at an
+exercise price of not less than 100% of the market price on the date of grant. Under the 2007 Equity Incentive Plan, the exercise price of all stock options must be at least 100% of the market price on the date of grant, provided that the exercise
+price for incentive stock options (ISOs) granted to any ten percent beneficial owner of our stock, must be not less than 110% of the market price on the date of grant. Since 2004, all options granted vest in four equal annual installments commencing
+on the first anniversary of the date of grant. Beginning in fiscal year 2013, a portion of the Company’s long-term incentive compensation will be awarded in the form of restricted stock units. Restricted stock units will be earned and vest
+based upon the Company achieving specified thresholds of annual net sales and operating income established under the Domestic Plan. Under the Company’s 2007 Equity Incentive Plan, the Company is also able to make equity awards in the form of
+restricted stock, restricted units and performance units in addition to stock options. 
+Retirement and Other Benefits. In order to attract and retain key executives, we offer retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for
+employees, including our executive officers. 
+Profit-Sharing Plan. We maintain a qualified Profit-Sharing Plan which provides retirement benefits to substantially all our
+employees and provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in contributions on the basis of relative (limited to $245,000) compensation. In addition,
+participants are permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. The Company makes matching contributions equal to 50% of the first percent of compensation
+contributed and 25% of the second through the seventh percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code (the “Code”). The Profit-Sharing Plan provides for the vesting of 100%
+of matching contributions made by the Company to the account of the employee after three years of service. Contributions by an employee are 100% vested immediately. 
+Employee Stock Ownership Plan. We also have an
+Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of
+relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s trustee in shares of common stock of the Company.
+Perquisites . In addition to the
+benefits described above, we provide automobile allowances to certain of our executive officers. The amounts of any aforesaid automobile allowances to our Named Executive Officers are reflected in the “All Other Compensation” column of the
+Summary Compensation Table below. 
+We have no
+employment agreements with any of our executive officers and, generally, we do not provide any severance benefits to our executives other than those provided to all employees. Severance benefits will vary based upon salary levels and length of
+service. 
+13 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed with management the Compensation Discussion &
+Analysis included above. Based on these reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included in the Company’s Annual Report on Form 10-K
+for the fiscal year ended January 31, 2012 for filing with the SEC through incorporation by reference of this Proxy Statement. 
+Compensation Committee: 
+Hermann Viets, Ph.D. (Chairman) 
+Jacques V. Hopkins 
+Graeme MacLetchie 
+Mitchell I. Quain 
+14 
+EXECUTIVE COMPENSATION 
+The following table provides information regarding the total compensation paid or accrued by the Company to
+each of its current Chief Executive Officer (“CEO”), Everett V. Pizzuti, and former CEO, Albert W. Ondis who resigned on June 29, 2011, its Chief Financial Officer (“CFO”) and its three other highest paid executive officers
+other than the CEO and CFO (collectively, the “Named Executive Officers”). 
+Because the Company’s Domestic Plan and International Branch Plan are based on achieving specified performance goals, awards under these plans are not considered “Bonuses” for purposes of
+SEC rules and are listed below as “Non-Equity Incentive Plan Compensation.” 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Albert W. Ondis 
+2012 
+110,681 
+— 
+— 
+30,013 
+37,182 
+(e) 
+177,876 
+Former Chairman and 
+2011 
+259,310 
+— 
+9,720 
+— 
+12,398 
+281,428 
+CEO(d) 
+2010 
+259,310 
+— 
+7,575 
+— 
+27,748 
+294,633 
+Everett V. Pizzuti 
+2012 
+262,789 
+— 
+— 
+73,891 
+40,131 
+(f) 
+376,811 
+President and CEO 
+2011 
+245,556 
+— 
+10,652 
+— 
+39,983 
+296,191 
+2010 
+245,556 
+— 
+8,324 
+— 
+38,771 
+292,651 
+Joseph P. O’Connell 
+2012 
+207,155 
+— 
+— 
+53,000 
+42,617 
+(g) 
+302,772 
+Senior Vice President, 
+2011 
+206,000 
+— 
+10,226 
+— 
+30,049 
+246,275 
+Treasurer and CFO 
+2010 
+206,000 
+— 
+7,991 
+— 
+20,735 
+234,726 
+Elias G. Deeb 
+2012 
+152,819 
+— 
+— 
+38,835 
+6,735 
+(i) 
+198,389 
+Vice President – 
+2011 
+150,947 
+— 
+9,374 
+— 
+4,196 
+164,517 
+Media Products(h) 
+2010 
+150,947 
+— 
+7,325 
+— 
+5,928 
+164,200 
+Michael Morawetz 
+2012 
+184,477 
+— 
+— 
+4,420 
+16,775 
+(j) 
+205,672 
+(k) 
+Vice President – 
+2011 
+172,902 
+— 
+6,391 
+— 
+15,918 
+195,211 
+International Branches 
+2010 
+183,767 
+7,155 
+4,994 
+— 
+16,920 
+212,836 
+Michael J. Sullivan 
+2012 
+149,936 
+— 
+— 
+38,103 
+4,348 
+(m) 
+192,387 
+Vice President and 
+Chief Technology Officer(l) 
+(a) 
+Reflects discretionary cash bonuses. 
+(b) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to the Named
+Executive Officers. Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended January 31, 2012, included in the Company’s Annual Report on
+Form 10-K filed with the SEC on April 4, 2012. 
+(c) 
+Reflects cash awards to the named individuals under the Company’s management bonus plans which are discussed in further detail under the heading “Compensation
+Discussion and Analysis” above. 
+(d) 
+Mr. Ondis retired as Chairman and CEO on June 29, 2011 and died on July 1, 2011. 
+15 
+(e) 
+Includes pay-out of four weeks unused vacation and three weeks accrued vacation equal to $35,431 and employer match under Profit Sharing Plan of $1,751.
+(f) 
+Includes pay-out of three weeks unused vacation of $14,384, automobile allowance of $12,444, non-cash automobile allowance of $10,343, employer match under Profit
+Sharing Plan of $2,328 and employer contribution to Employee Stock Ownership Plan of $632. 
+(g) 
+Includes pay-out of two weeks unused vacation of $10,455, automobile allowance of $28,223, employer match under Profit Sharing Plan of $3,307 and employer contribution
+to Employee Stock Ownership Plan of $632. 
+(h) 
+Mr. Deeb retired as Vice President-Media Products on March 9, 2012. 
+(i) 
+Includes pay-out of one week unused vacation of $3,536, employer match under Profit Sharing Plan of $2,567 and employer contribution to Employee Stock Ownership Plan of
+$632. 
+(j) 
+Reflects automobile allowance. 
+(k) 
+Mr. Morawetz’s salary is based on euro currency and is converted to U.S. dollars at the average monthly exchange rate. The exchange rate for the fiscal year
+ended January 31, 2012 was 1.2916. 
+(l) 
+Effective March 9, 2012, Mr. Sullivan relinquished his position as Vice President and Chief Technology Officer of the Company and assumed the position of
+Senior Research Fellow. 
+(m) 
+Includes pay-out of one day’s unused vacation of $1,445, employer match under Profit Sharing Plan of $2,271 and employer contribution to Employee Stock Ownership
+Plan of $632. 
+16 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding
+equity awards held by each of the Named Executive Officers as of January 31, 2012. 
+Name 
+Option Grant 
+Date 
+Number of 
+securities 
+underlying 
+unexercised 
+options
+(#) 
+Exercisable 
+Number of 
+securities 
+underlying 
+unexercised 
+options
+(#) 
+Unexercisable(a) 
+Option 
+Exercise 
+Price($) 
+Option 
+Expiration 
+Date 
+Albert W. Ondis (b) 
+04/01/2008 
+4,706 
+— 
+9.8450 
+06/29/2012 
+(c) 
+03/18/2009 
+2,500 
+— 
+6.8420 
+06/29/2012 
+(c) 
+03/15/2010 
+1,250 
+— 
+8.0960 
+06/29/2012 
+(c) 
+Everett V. Pizzuti 
+04/19/2004 
+41,250 
+— 
+8.7273 
+04/19/2014 
+(d) 
+03/20/2006 
+21,250 
+— 
+7.9316 
+03/20/2016 
+(d) 
+04/12/2007 
+14,000 
+— 
+11.4450 
+04/12/2017 
+(d) 
+04/01/2008 
+4,706 
+1,569 
+8.9500 
+04/01/2018 
+(d) 
+03/18/2009 
+2,500 
+2,500 
+6.2200 
+03/18/2019 
+(d) 
+03/15/2010 
+1,250 
+3,750 
+7.3600 
+03/15/2020 
+(d) 
+Joseph P. O’Connell 
+03/31/2003 
+13,750 
+— 
+2.4000 
+03/31/2013 
+(e) 
+04/19/2004 
+20,625 
+— 
+8.7273 
+04/19/2014 
+(d) 
+03/21/2005 
+9,375 
+— 
+6.7680 
+03/21/2015 
+(d) 
+03/20/2006 
+14,062 
+— 
+7.9316 
+03/20/2016 
+(d) 
+04/12/2007 
+10,000 
+— 
+11.4450 
+04/12/2017 
+(d) 
+04/01/2008 
+4,031 
+1,344 
+8.9500 
+04/01/2018 
+(d) 
+03/18/2009 
+2,400 
+2,400 
+6.2200 
+03/18/2019 
+(d) 
+03/15/2010 
+1,200 
+3,600 
+7.3600 
+03/15/2020 
+(d) 
+Elias G. Deeb 
+04/19/2004 
+13,750 
+— 
+8.7273 
+04/19/2014 
+(d) 
+03/21/2005 
+6,250 
+— 
+6.7680 
+03/21/2015 
+(d) 
+03/20/2006 
+9,375 
+— 
+7.9316 
+03/20/2016 
+(d) 
+04/12/2007 
+6,500 
+— 
+11.4450 
+04/12/2017 
+(d) 
+04/01/2008 
+3,356 
+1,119 
+8.9500 
+04/01/2018 
+(d) 
+03/18/2009 
+2,200 
+2,200 
+6.2200 
+03/18/2019 
+(d) 
+03/15/2010 
+1,100 
+3,300 
+7.3600 
+03/15/2020 
+(d) 
+Michael Morawetz 
+04/19/2004 
+2,062 
+— 
+8.7273 
+04/19/2014 
+(d) 
+03/21/2005 
+937 
+— 
+6.7680 
+03/21/2015 
+(d) 
+03/20/2006 
+937 
+— 
+7.9316 
+03/20/2016 
+(d) 
+04/12/2007 
+3,500 
+— 
+11.4450 
+04/12/2017 
+(d) 
+04/01/2008 
+2,606 
+869 
+8.9500 
+04/01/2018 
+(d) 
+03/18/2009 
+1,500 
+1,500 
+6.2200 
+03/18/2019 
+(d) 
+03/15/2010 
+750 
+2,250 
+7.3600 
+03/15/2020 
+(d) 
+Michael J. Sullivan 
+04/19/2004 
+13,750 
+— 
+8.7273 
+04/19/2014 
+(d) 
+03/21/2005 
+6,250 
+— 
+6.7680 
+03/21/2015 
+(d) 
+03/20/2006 
+9,375 
+— 
+7.9316 
+03/20/2016 
+(d) 
+04/12/2007 
+6,500 
+— 
+11.4450 
+04/12/2017 
+(d) 
+04/01/2008 
+2,606 
+869 
+8.9500 
+04/01/2018 
+(d) 
+03/18/2009 
+1,600 
+1,600 
+6.2200 
+03/18/2019 
+(d) 
+03/15/2010 
+800 
+2,400 
+7.3600 
+03/15/2020 
+(d) 
+(a) 
+Option awards are adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+All options are currently held by Mr. Ondis’ estate. 
+(c) 
+All options expire on the one year anniversary of Mr. Ondis’ resignation. 
+(d) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+(e) 
+Options vested in full on the seven month anniversary of the Option Grant Date. 
+17 
+Grants of Plan Based Awards 
+The Company did not make any grants of plan based awards in fiscal year 2012 to any Named Executive Officer.
+Option Exercises and Stock Vested
+The following table provides information on
+all exercises of options by the Named Executive Officers during the Company’s 2012 fiscal year. 
+Option Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise ($) 
+Albert W. Ondis 
+85,250 
+377,964 
+(b) 
+85,250 
+378,433 
+(c) 
+Everett V. Pizzuti 
+14,300 
+75,777 
+(d) 
+Joseph P. O’Connell 
+9,407 
+41,707 
+(e) 
+66,687 
+307,367 
+(f) 
+Elias G. Deeb 
+6,875 
+30,519 
+(g) 
+Michael J. Sullivan 
+7,562 
+40,072 
+(h) 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $7.57 per share and the exercise price of the options
+of $3.1364 per share. 
+(c) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $7.13 per share and the exercise price of the options
+of $2.6909 per share. 
+(d) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $7.99 per share and the exercise price of the options
+of $2.6909 per share. 
+(e) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $7.57 per share and the exercise price of the options
+of $3.1364 per share. 
+(f) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $7.30 per share and the exercise price of the options
+of $2.6909 per share. 
+(g) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $7.99 per share and the exercise price of the options
+of $2.6909 per share. 
+(h) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $7.99 per share and the exercise price of the options
+of $2.6909 per share. 
+RELATED PARTY TRANSACTIONS
+Potential conflicts of interest and related
+party transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+The law firm
+of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+18 
+Other than as described below, no officer, director or nominee for director of the Company
+or any associate of any of the foregoing had during the fiscal year ended January 31, 2012 any material interest, direct or indirect, in any material transaction or any material proposed transaction in which the amount exceeds $120,000 and to
+which the Company was or is to be a party. 
+The
+Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as Vice President and General Manager of QuickLabel Systems (formerly National Sales Manager (QuickLabel Systems)), and William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to
+whom the Company paid over $120,000 in compensation, including $157,470 and $177,399, respectively, in salary and commissions during the fiscal year ended January 31, 2012. In addition, the Company made matching contributions for the fiscal
+year 2012 under its qualified Profit-Sharing Plan of $2,591 to Eric Pizzuti and $3,415 to William Pizzuti. The Company also made vacation payouts to Messrs. E. Pizzuti and W. Pizzuti of $5,343 and $1,080 respectively. Messrs. E. Pizzuti and W.
+Pizzuti received employer contributions to their Employee Stock Ownership Plan accounts of $632 each. William Pizzuti also received stock option grants during the 2012 fiscal year with a fair market value at the date of grant equal to $1,623.
+The Company also employs a son-in-law of Albert
+W. Ondis, Eric Menke, as Manager of International Dealer Sales, and during the fiscal year ended January 31, 2012 paid him $107,495 in salary and commissions. He also received stock option grants during the 2012 fiscal year with a fair market
+value at the date of grant equal to $1,014 and matching contributions under the Company’s qualified Profit-Sharing Plan and Employee Stock Ownership Plan of $2,055 and $632, respectively. Mr. Menke also had disqualifying disposition income
+during fiscal year 2012 on the sale of incentive stock options granted by the Company in the amount of $19,419. 
+19 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Board of Directors is responsible
+for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC
+rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s
+consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two
+primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence and performance of the Company’s
+independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s independent accountants, Ernst & Young LLP, to review and
+discuss the January 31, 2012 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit
+Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Ernst & Young LLP the matters required by Statement on Auditing Standards
+No. 61 ( Communication with Audit Committees ). The Audit Committee also received from Ernst & Young LLP written disclosures and the letter regarding independence as required by Independence Standards Board Standard No. 1
+( Independence Discussions with Audit Committee ) and has discussed with Ernst & Young LLP that firm’s independence. 
+The Audit Committee received the information concerning the fees of Ernst & Young LLP for the year ended January 31, 2012
+set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the independence of the independent accountants and has determined
+that the provision of such services by Ernst & Young LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the audited
+consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2012, to be filed with the SEC. 
+Audit Committee: 
+Jacques V. Hopkins (Chairman) 
+Hermann Viets, Ph.D. 
+Graeme MacLetchie 
+20 
+Independent Accountants’ Fees, Services and Other Matters 
+The Audit Committee has sole authority to select, evaluate
+and when appropriate, to replace the Company’s independent auditors. Ernst & Young LLP was the independent auditor for the 2012 fiscal year. The Audit Committee has not appointed an independent auditor for the 2013 fiscal year.
+The Company expects a representative of
+Ernst & Young LLP will be present at the annual meeting with the opportunity to make a statement, if he or she so desires, and that such representative will be available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the
+Company by Ernst & Young LLP for the fiscal years ended January 31, 2012 and 2011 are set forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the audit of the Company’s annual
+financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed for the fiscal year. 
+2012 
+2011 
+Audit Fees 
+$ 
+214,392 
+$ 
+196,913 
+Audit-Related Fees 
+0 
+0 
+Tax Fees 
+0 
+0 
+All Other Fees 
+0 
+20,000 
+Audit Fees for the
+fiscal years ended January 31, 2012 and 2011 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on
+Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+All Other Fees for the fiscal year ended January 31, 2011 were for additional year end work related to the audit of the
+Company’s financial statements. 
+Policy on
+Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit services provided by the independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services
+described above were approved by the Audit Committee under the de minimus exception provided by Rule 2-01(C)(7)(i)(c) under Regulation S-X. 
+FINANCIAL REPORTS 
+A copy of the annual report of the Company for the fiscal year ended January 31, 2012 including the Company’s annual report to
+the SEC on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+PROPOSALS FOR 2013 ANNUAL MEETING 
+The 2013 annual meeting of the shareholders of the Company is scheduled to be held on May 21, 2013. If a shareholder intending to present a proposal at that meeting wishes to have such proposal
+included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal 
+21 
+to the Company not later than December 20, 2012. Shareholder proposals that are to be considered at the 2013 annual meeting but not requested to be included in the Proxy Statement must be
+submitted no later than March 22, 2013 and no earlier than December 20, 2012. 
+OTHER MATTERS 
+No business other than that set forth in the attached Notice of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a
+question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or
+otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your shares will be voted at the meeting.
+You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+22 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in
+hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Ave. 
+West
+Warwick, RI 02893 
+Electronic Delivery of Future PROXY MATERIALS 
+If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail
+or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. 
+VOTE BY PHONE - 1-800-690-6903 
+Use any
+touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. 
+VOTE BY MAIL 
+Mark, sign and date your
+proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+— — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — — — — — — 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
+DATED. 
+DETACH AND RETURN THIS PORTION ONLY 
+For 
+All 
+Withhold 
+All 
+For All 
+Except 
+To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 
+The Board of Directors does not have a recommendation for voting on the following: 
+¨ 
+¨ 
+¨ 
+1. 
+Election of Directors 
+Nominees 
+01 
+Everett V. Pizzuti 02 Graeme
+MacLetchie 03 Harold Schofield 
+04 Mitchell I.
+Quain 05 Hermann Viets 
+NOTE: In their discretion, upon such other
+matters as may properly come before the meeting. 
+For address change/comments, mark here. (see reverse for instructions) 
+¨ 
+Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint
+owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+0000105092_1 R1.0.0.11699 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Form 10-K, Notice & Proxy Statement is/are available at www.proxyvote.com . 
+— — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — — — — — — 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders-May 15, 2012 
+The undersigned, whose signature appears on the reverse side of this
+proxy, hereby appoints Everett V. Pizzuti, Graeme MacLetchie, Mitchell I. Quain and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned would possess if
+personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 15, 2012, at 600 East Greenwich Avenue, West Warwick, Rhode Island, and at any adjournments thereof, as
+follows: 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
+DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1. 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY 
+Address change/comments: 
+(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-12-161829/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-12-161829/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..5f898aa862699dec7e7ea1595595b2e6c235fc8f
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-12-161829/proxy_rpt.txt
@@ -0,0 +1,20 @@
+RELATED PARTY TRANSACTIONS
+Potential conflicts of interest and related
+party transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+The law firm
+of Hinckley Allen & Snyder LLP, of which Mr. Hopkins is a retired partner, provides legal services to the Company. 
+18 
+Other than as described below, no officer, director or nominee for director of the Company
+or any associate of any of the foregoing had during the fiscal year ended January 31, 2012 any material interest, direct or indirect, in any material transaction or any material proposed transaction in which the amount exceeds $120,000 and to
+which the Company was or is to be a party. 
+The
+Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as Vice President and General Manager of QuickLabel Systems (formerly National Sales Manager (QuickLabel Systems)), and William Pizzuti, as Regional Sales Manager (QuickLabel Systems), to
+whom the Company paid over $120,000 in compensation, including $157,470 and $177,399, respectively, in salary and commissions during the fiscal year ended January 31, 2012. In addition, the Company made matching contributions for the fiscal
+year 2012 under its qualified Profit-Sharing Plan of $2,591 to Eric Pizzuti and $3,415 to William Pizzuti. The Company also made vacation payouts to Messrs. E. Pizzuti and W. Pizzuti of $5,343 and $1,080 respectively. Messrs. E. Pizzuti and W.
+Pizzuti received employer contributions to their Employee Stock Ownership Plan accounts of $632 each. William Pizzuti also received stock option grants during the 2012 fiscal year with a fair market value at the date of grant equal to $1,623.
+The Company also employs a son-in-law of Albert
+W. Ondis, Eric Menke, as Manager of International Dealer Sales, and during the fiscal year ended January 31, 2012 paid him $107,495 in salary and commissions. He also received stock option grants during the 2012 fiscal year with a fair market
+value at the date of grant equal to $1,014 and matching contributions under the Company’s qualified Profit-Sharing Plan and Employee Stock Ownership Plan of $2,055 and $632, respectively. Mr. Menke also had disqualifying disposition income
+during fiscal year 2012 on the sale of incentive stock options granted by the Company in the amount of $19,419. 
+19
\ No newline at end of file
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index 0000000000000000000000000000000000000000..5da07f44f1bbf376fcc0452cc385079662c15820
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+++ b/raw/proxies/0000008146/0001193125-13-161710/proxy.txt
@@ -0,0 +1,1252 @@
+DEF 14A
+1
+d478576ddef14a.htm
+DEF 14A
+DEF 14A 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a)
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the
+Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc.
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 21, 2013 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2013 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, 600 East Greenwich Avenue, West Warwick, Rhode
+Island on Tuesday May 21, 2013, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing five directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+To consider and approve an advisory (non-binding) proposal on the Company’s executive compensation. 
+(3) 
+To consider and approve an advisory (non-binding) proposal on the frequency of submission of the vote regarding the Company’s executive compensation.
+(4) 
+To consider and act upon a proposal to ratify the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company.
+(5) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 25, 2013 has been fixed
+as the record date for determining shareholders entitled to vote at the annual meeting or any adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 19, 2013 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed addressed envelope, which requires
+no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 21, 2013.
+The Company’s Proxy Statement, sample
+proxy card and Annual Report are available at: 
+http://www.proxyvote.com. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 21, 2013 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of
+Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual meeting of the shareholders to be held May 21, 2013. The Company will bear the cost of such solicitation. It is expected that the solicitation of
+proxies will be primarily by mail. Proxies may also be solicited personally by regular employees of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in
+their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any
+time prior to its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This
+proxy statement and the accompanying proxy are expected to be first sent to shareholders on or about April 19, 2013. 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 25, 2013 will be entitled to vote at the meeting. On the record date,
+there were 7,390,906 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Votes Required to Transact Business At the Meeting 
+The holders of a majority of the shares entitled to vote,
+present in person or represented by proxy, will constitute a quorum for the transaction of business at the meeting. Abstentions and broker “non-votes” are counted as present and entitled to vote for purposes of determining a quorum.
+Please note that brokers may not vote your shares on the election of directors or on proposals 2 and 3 in the absence of your specific instructions as to how to vote. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, five directors are to be elected to hold office until the next annual meeting or until their respective successors
+are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons named below. The
+biographies below contain information regarding the person’s service as director, business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that
+caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. 
+Everett V. Pizzuti , 76, has been Chief Executive Officer of the Company since 2011 and was formerly President and Chief Operating
+Officer of the Company since 1971. Mr. Pizzuti has also been a director of the Company since 1985. Prior to 1971, he served as General Sales Manager of the Recorder Division of Gulton 
+1 
+Industries. Through his long service as the Chief Operating Officer of the Company and now Chief Executive Officer, Mr. Pizzuti has an intimate knowledge of the Company’s products and
+markets and is able to provide our Board of Directors with insight and advice related to the Board’s decisions. Based on this experience, we believe that Mr. Pizzuti is qualified to serve on our Board of Directors. 
+Graeme MacLetchie , 75, is a private investor and was a
+director of Deutsche Bank Alex Brown (Private Client Division), an investment banking and brokerage services company for private wealth and asset management, from November 1995 to March 2010. Prior to this, Mr. MacLetchie was Senior Vice
+President of C. J. Lawrence Deutsche Bank Securities Corporation from 1970 to 1995. He has been a director of the Company since 2002 and also served as a Director of E-Sync Networks Inc., a provider of managed enterprise services and solutions to
+medium and large businesses, from 1994 to 1999. We believe that Mr. MacLetchie’s substantial experience in the financial sector and knowledge of the financial, regulatory, corporate governance and other matters affecting public companies
+qualify him to serve on our Board of Directors. 
+Mitchell I. Quain , 61, has been a director since 2011. Mr. Quain is a Senior Advisor at Carlyle Group, a private equity firm.
+From 2010 through 2011, Mr. Quain was a Partner at One Equity Partners, a private investment firm. From 2006 through 2009, he was a Senior Director of ACI Capital Corp. From 2002 through 2005, Mr. Quain served as Chairman of Register.Com,
+Inc., an internet services provider, and from 1997 to 2001 he was employed with ABN AMRO and its predecessors in several capacities, including Vice Chairman. Mr. Quain also serves as Chairman of the Board of Directors of MagneTek, Inc., a
+manufacturer of digital power and motion control systems and a director of Hardinge Inc., a global designer, manufacturer and distributor of machine tools, RBC Bearings, Inc., an international manufacturer and marketer of highly engineered precision
+plain, roller and ball bearings, and Titan International, Inc., a supplier of wheel and tire assemblies. Mr. Quain previously served as a director of DeCrane Aircraft Holdings, Inc., Handy & Harman Ltd., HEICO Corporation, Mechanical
+Dynamics, Inc., and Register.com. We believe that Mr. Quain’s extensive experience in the private equity sector and public company experience qualify him to serve on our Board of Directors. 
+Harold Schofield , 71, is the owner and manager of
+Schofield Imaging Associates, LLC, in Narragansett, Rhode Island since 2004. Prior to this, Mr. Schofield was Founder, President and CEO of Atlantek Incorporated, a manufacturer of thermal printers and retired as Vice President and General
+Manger of Zebra-Atlantek following the acquisition of Atlantek Incorporated by Zebra Technologies in 2003. Prior to founding Atlantek Incorporated, Mr. Schofield was Design Engineering Manager at Gulton Industries where he was responsible for
+design and development of thermal printers, plotters and chart recorders. Mr. Schofield is an internationally recognized authority in the electronic printing field. We believe that Mr. Schofield’s long history and expertise in the
+printing and imaging field qualify him to serve on our Board of Directors. 
+Hermann Viets , Ph.D., 70, has been President and Chief Executive Officer of the Milwaukee School of Engineering, a university located in Milwaukee, Wisconsin focused primarily on engineering
+education, since 1991. Dr. Viets served as a Director of Gehl Co. from 1999 to 2008. He serves as a Director of Public Policy Forum for southeastern Wisconsin, an independent reviewer of public policy issues. Dr. Viets also serves as a
+director of Competitive Wisconsin Inc., an association of business, education and labor leaders promoting the State of Wisconsin and serves as a member of the Greater Milwaukee Committee, an organization of civic leaders promoting the economic
+development and social improvement of the City of Milwaukee. Dr. Viets was also a Trustee of Polytechnic University (a private engineering school located in Brooklyn, NY) until 2009. Dr. Viets has been a director of the Company since 1988.
+We believe that Dr. Viets’ executive experience as president of a university, his service on other public company boards and his understanding of the Company’s products as well as corporate governance matters qualify him to serve on
+our Board of Directors. 
+2 
+The Board of Directors has determined that all of the directors of the Company, including
+each of the nominees standing for election at the 2013 annual shareholders meeting, other than Everett V. Pizzuti, are independent of the Company in that such nominees have no material relationship with the Company either directly, or as a partner,
+shareholder or affiliate of an organization that has a relationship with the Company. The Board of Directors has made this determination in accordance with applicable Securities and Exchange Commission (“SEC”) rules and NASDAQ listing
+standards. 
+3 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of March 25, 2013
+(except as noted) the record and beneficial ownership of the Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than five percent of such stock, by each director of the
+Company, by each executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Estate of Albert W. Ondis 
+1,454,400 
+(b) 
+19.7 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Albert W. Ondis III 
+1,581,122 
+(c)(d) 
+21.4 
+% 
+600 East Greenwich Avenue 
+West Warwick, RI 02893 
+Alexis Ondis 
+1,582,110 
+(c) 
+21.4 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+April Ondis 
+1,588,231 
+(c)(e) 
+21.5 
+% 
+600 East Greenwich Avenue 
+West Warwick, RI 02893 
+Dimensional Fund Advisors LP 
+368,960 
+(f) 
+5.0 
+% 
+6300 Bee Cave Road, Building One 
+Austin, TX 78746 
+Rutabaga Capital Management, LLC 
+701,402 
+(g) 
+9.5 
+% 
+64 Broad Street, 3 rd Floor 
+Boston, MA 02109 
+Everett V. Pizzuti 
+321,898 
+(h) 
+4.3 
+% 
+Joseph P. O’Connell 
+160,773 
+(i) 
+2.2 
+% 
+Graeme MacLetchie 
+118,246 
+(j) 
+1.6 
+% 
+Michael Morawetz 
+18,673 
+(k) 
+* 
+Michael J. Natalizia 
+19,424 
+(l) 
+* 
+Harold Schofield 
+8,475 
+(m) 
+* 
+Mitchell I. Quain 
+25,514 
+(n) 
+* 
+Hermann Viets 
+219,602 
+(o) 
+3.0 
+% 
+Gregory A. Woods 
+50,000 
+(p) 
+* 
+All directors and executive officers of the Company as a group (14) 
+1,055,983 
+(q) 
+13.5 
+% 
+4 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive officer, as well as
+shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable or vest within 60 days of March 25, 2013. All
+information is based upon ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under the Securities Exchange Act of 1934 or has been furnished by the
+respective directors and executive officers of the Company. 
+(b) 
+Indicates shares held by the estate of Albert W. Ondis (the “Ondis Estate”) and includes 3,858shares allocated to the Ondis Estate under the Company’s
+Employee Stock Ownership Plan. 
+(c) 
+Includes 1,454,400 shares held by the reporting person as co-executor of the Ondis Estate. 
+(d) 
+Includes 2,650 shares deemed to be beneficially owned because of exercisable options to acquire shares and 317 shares allocated to his account under the Company’s
+Employee Stock Ownership Plan. 
+(e) 
+Includes 9,737 shares deemed to be beneficially owned because of exercisable options to acquire shares and 650 shares allocated to his account under the Company’s
+Employee Stock Ownership Plan. 
+(f) 
+Dimensional Fund Advisors, LP, a Delaware limited partnership, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2012. 
+(g) 
+Rutabaga Capital Management, LLC, a Massachusetts limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to
+have beneficial ownership of the number of shares shown as of December 31, 2012. 
+(h) 
+Includes 93,225 shares deemed to be beneficially owned because of exercisable options to acquire shares, 3,400 restricted stock units which vested March 29, 2013 and
+4,868 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(i) 
+Includes 69,130 shares deemed to be beneficially owned because of exercisable options to acquire shares, 2,587 restricted stock units which vested March 29, 2013 and
+2,068 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(j) 
+Includes 32,750 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,475 shares of restricted stock. 
+(k) 
+Includes 16,998 shares deemed to be beneficially owned because of exercisable options to acquire shares and 1,675 restricted stock units which vested March 29, 2013.
+(l) 
+Includes 9,992 shares deemed to be beneficially owned because of exercisable options to acquire shares, 1,787 restricted stock units which vested March 29, 2013 and 502
+shares allocated to his account under the Company’s Employee Stock Ownership Plan.. 
+(m) 
+Includes 5,000 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,475 shares of restricted stock. 
+(n) 
+Includes 10,000 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,475 shares of restricted stock. 
+(o) 
+Includes 32,750 shares deemed to be beneficially owned because of exercisable options to acquire shares and 2,475 shares of restricted stock. 
+(p) 
+Represents 50,000 shares of restricted stock. 
+(q) 
+Includes 367,593 shares deemed to be beneficially owned because of exercisable options to acquire shares, 15,948 restricted stock units, 59,900 shares of restricted
+stock and 13,344 shares allocated to the accounts of officers under the Company’s Employee Stock Ownership Plan. 
+5 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934
+(the “Exchange Act”), as amended, requires the directors and executive officers of the Company and any persons who own more than ten percent of the Company’s common stock to file with the SEC various reports of beneficial ownership
+and changes in beneficial ownership. The Company believes all of its directors and executive officers complied with all filing requirements applicable to them with respect to transactions during the fiscal year ended January 31, 2013.
+Meetings and Committees 
+During the fiscal year ended January 31, 2013, the
+Board of Directors held eleven meetings. During fiscal year 2013, all directors attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of Directors has adopted a policy
+that requires members of the Board to make every effort to attend each annual shareholders meeting. All members of the Board of Directors attended the 2012 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee
+and a Nominating Committee. The members and chairs of each of those committees are appointed each year. The Audit Committee is comprised of Messrs. MacLetchie, Quain and Schofield. The Nominating Committee is comprised of Messrs. MacLetchie, Quain
+and Viets. The Compensation Committee is comprised of all of our outside directors, Messrs. MacLetchie, Quain, Schofield and Viets. Each of the members of our committees are independent as defined under the applicable NASDAQ listing standards and
+SEC rules. Each of the Audit, Compensation and Nominating Committees has a written charter approved by the Board of Directors. A copy of each charter is available on the Company’s website at www.astro-medinc.com under “Our Company –
+Corporate Governance.” 
+Audit Committee.
+The Audit Committee’s primary duties and responsibilities include overseeing the integrity of the Company’s financial reports; appointing, setting the compensation and overseeing the Company’s independent accountants; and
+assessing the qualifications and independence and performance of the Company’s independent accountants and the adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly
+financial results, the results of the audit and other relevant matters. Mr. MacLetchie serves as Chairman of the Audit Committee, which held five meetings during the fiscal year ended January 31, 2013. The Board of Directors has determined
+that all three members of the Audit Committee satisfy the financial literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of
+Directors has determined that Graeme MacLetchie satisfies the “financial sophistication” requirement of the NASDAQ listing requirements, and that Mitchell Quain qualifies as an “audit committee financial expert” as defined by the
+SEC rules. 
+Compensation Committee. The
+Compensation Committee assists the Board of Directors in discharging the Board’s responsibilities relating to director and executive compensation. The Compensation Committee’s responsibilities include: establishing and reviewing the
+Company’s executive and director compensation philosophy, strategies, plans and policies; making recommendations with respect to the design of the Company’s incentive compensation plans and equity based plans; granting awards under such
+plans and overseeing generally the administration of such plans; evaluating the performance and determining the compensation of the Chief Executive Officer; and reviewing and approving recommendations on compensation of other executives. 
+6 
+Mr. Quain serves as chairman of the Compensation Committee, which held seven meetings during the fiscal year ended January 31, 2013. 
+Nominating Committee . The Nominating Committee is
+responsible for identifying individuals qualified to be members of the Board of Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders. The Nominating
+Committee held three meetings in the fiscal year ended January 31, 2013. Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The
+Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the
+ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the
+shareholders. The Nominating Committee does not have a policy with respect to diversity and does not specifically consider issues of diversity, such as gender, race, origin or sex when determining whether to nominate any person to be a director of
+the Company. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. 
+The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under
+the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+Shareholders may send recommendations for director nominees
+to the Nominating Committee at the Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include information regarding a candidate’s background, qualifications, experience and willingness to
+serve as a director. In addition, Section 10 of Article II of the Company’s By-Laws sets forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an
+annual meeting of shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the
+shareholders who support the nominee’s election. For the annual meeting to be held in 2014, the notice deadline under the By-Laws is March 21, 2014. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn:
+Investor Relations Department, 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of Directors or the individual chairman of standing committees. Any
+shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly with the directors by writing directly to those individuals c/o
+Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy is to forward, and not to intentionally screen, any mail received at the Company’s corporate offices that is sent directly to an
+individual unless the Company believes the communication may pose a security risk. 
+7 
+Board Leadership Structure 
+All members of the Board of Directors, other than
+Mr. Pizzuti, are independent and all our key committees – Audit, Compensation and Nominating – are comprised solely of independent directors. The non-management directors meet in executive session without Mr. Pizzuti at
+least quarterly. 
+The Board of Directors believes
+that separating the positions of Chief Executive Officer and Chairman of the Board of Directors is preferable and in the best interests of shareholders because it gives our independent directors a significant role in Board direction and agenda
+setting and enhances the Board of Directors’ ability to fulfill its oversight responsibilities, including of senior management. Separating the positions also provides an independent viewpoint and focus at Board meetings, and ensures that
+Mr. Pizzuti will be able to focus his energy on running the Company. We believe this structure provides strong leadership for the Board of Directors, while also positioning the chief executive officer as the leader of the Company in the eyes of
+our customers, employees and shareholders. 
+Risk Oversight
+The Board of Directors has an active role,
+as a whole and also at the committee level, in overseeing management of the Company’s risks through a program of sound policies, systems, processes, and reports. The Audit Committee of the Board of Directors has oversight responsibility over
+financial reporting and disclosure process, compliance and legal matters, and information security and fraud risk. The Audit Committee also monitors controls for material weaknesses in the audit function. The Audit Committee meets regularly with our
+Chief Financial Officer and Controller in carrying out these responsibilities, and with the Company’s independent auditors in executive session. 
+The Compensation Committee of the Board of Directors oversees risks as they relate to the Company’s compensation policies and
+practices as described under “Compensation Discussion and Analysis.” The Board’s Nominating Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to independence of Board members and
+identification of individuals qualified to be members of the Board of Directors. 
+While each committee is responsible for evaluating the risks within their areas of responsibility and overseeing the management of such risks, all our committees report regularly to the full Board of
+Directors, which also considers the Company’s entire risk profile. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and establishing the compensation of the directors of the Company. The Company adopted a Non-Employee Director Annual Compensation Program (the
+“Program”) on January 30, 2012 effective as of February 1, 2012. Under the Program, each non-employee director is entitled to an annual cash retainer of $7,000 (the “Cash Retainer”), plus $500 for each Board and
+committee meeting attended, provided that if more than one meeting occurs on the same day, no more than $500 shall be paid for such day. The non-employee director may elect for any fiscal year to receive all or a portion of the Cash Retainer in the
+form of common stock of the Company. 
+In addition,
+under the Program, each non-employee director will receive a restricted stock award with a value equal to $20,000 (the “Equity Retainer”) upon adjournment of each annual meeting (or special meeting in lieu of annual meeting) of
+shareholders. If a non-employee director is first appointed or elected to the Board of 
+8 
+Directors effective on a date other than at the annual shareholders meeting, on the date of such appointment or election the director shall receive a pro rata award of restricted common stock
+having a value based on the number of days remaining until the next annual meeting. The Equity Retainer will vest on the earlier of 12 months after the grant date or the date immediately prior to the next annual meeting (or special meeting in lieu
+of annual meeting) of the shareholders following the meeting at which such restricted stock award was granted. However, a non-employee director may not sell, transfer, assign, pledge or otherwise encumber the vested common stock prior to the second
+anniversary of the vesting date. In the event of the death or disability of a non-employee director, or a Change in Control (as such term is defined in the Company’s 2007 Equity Incentive Plan) of the Company, the restricted stock award shall
+immediately vest and shall no longer be subject to such restrictions on transfer. 
+Unless a non-employee director elects to receive all or a portion of the Cash Retainer in common stock (as described below), each non-employee director will receive the Cash Retainer in four equal
+quarterly installments on the first day of each fiscal quarter. 
+If a non-employee director elects to receive all or a portion of the Cash Retainer in the form of common stock, such shares shall be issued in four quarterly installments on the first day of each fiscal
+quarter, and the number of shares of common stock to be issued shall be based on the fair market value of such common stock on the date such installment is payable. The common stock received in lieu of such Cash Retainer will be fully vested.
+However, a non-employee director who receives common stock in lieu of all or a portion of the Cash Retainer may not sell, transfer, assign, pledge or otherwise encumber the common stock prior to the first anniversary of the date on which such shares
+were granted. In the event of the death or disability of a non-employee director, or a Change in Control (as such term is defined in the Company’s 2007 Equity Incentive Plan) of the Company, any shares of common stock issued in lieu of such
+Cash Retainer, shall no longer be subject to such restrictions on transfer. 
+In addition to the Program, under the Company’s 2007 Equity Incentive Plan, each non-employee director receives non-qualified options to purchase 5,000 shares of the Company’s common stock upon
+initial election to the Board of Directors (if not at the annual meeting) and upon the adjournment of each annual meeting or special meeting in lieu of an annual meeting of the shareholders of the Company. These options have a term of ten years and
+become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is granted. 
+The following Director Compensation table provides information regarding the compensation paid or accrued by each individual who was a
+director during the 2013 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Stock 
+Awards 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Graeme MacLetchie 
+$ 
+45,542 
+$ 
+8,508 
+$ 
+26,990 
+(d) 
+$ 
+10,044 
+— 
+Everett V. Pizzuti(c) 
+— 
+— 
+— 
+— 
+— 
+Mitchell I. Quain 
+45,542 
+8,508 
+26,990 
+(d) 
+10,044 
+— 
+Harold Schofield 
+38,042 
+8,000 
+19,998 
+(e) 
+10,044 
+— 
+Hermann Viets 
+45,542 
+8,508 
+26,990 
+(d) 
+10,044 
+— 
+(a) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted
+to directors. Assumptions used in the calculation of these amounts are included in footnote 7 in the Company’s audited financial statements for the fiscal year ended 
+9 
+January 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the SEC on April 8, 2013. 
+(b) 
+As of January 31, 2013, each non-employee director had the following number of options outstanding: Graeme MacLetchie 32,750, Mitchell I. Quain 10,000, Harold Schofield
+5,000 and Hermann Viets 32,750. 
+(c) 
+See “Summary Compensation Table” and “Outstanding Equity Awards” at Fiscal Year End Table under “Executive Compensation” for disclosure
+relating to compensation and outstanding option awards of Mr. Pizzuti. 
+(d) 
+Represents restricted stock award of 2,475 shares valued at $19,998 and 850 shares issued upon election to receive portion of annual retainer in shares of common stock.
+(e) 
+Represents restricted stock award of 2,475 shares valued at $19,998. 
+10 
+COMPENSATION DISCUSSION & ANALYSIS 
+The Compensation Committee of the Board of Directors of the
+Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel are effectively
+compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and establishing the compensation of directors. 
+Compensation Philosophy and Objectives. Our overall philosophy in terms of executive compensation is to link
+management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals and link their interests with
+shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s performance, awards, if any, made during prior years and other relevant factors. We seek to have the long-term performance of our
+common stock reflected in executive compensation through our equity incentive programs. 
+Elements of Compensation. Our total compensation program for executive officers consists of the following: 
+• 
+salary; 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, in the form of stock options and restricted stock; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and
+provide incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while
+providing incentives to maximize long-term value for our shareholders. 
+Setting Executive Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity
+awards. The Committee annually reviews the performance of the executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our
+executive officers were established a number of years ago. Historically, base salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. Annual salary adjustments
+are made effective April 1 of each year. For fiscal year 2013, we increased the compensation of the Company’s employees and executive officers by approximately 1 1/2%. 
+Cash Incentive and Bonus Awards. The Committee has adopted two separate
+management bonus plans applicable to executive officers of the Company for the purpose of providing incentive compensation to the Company’s executive officers. One plan is applicable to domestic employees of the Company (the “Domestic
+Plan”) and the other is applicable to the Vice President-International Branches, currently Michael Morawetz (the “International Branch Plan”). The Domestic Plan provides for cash incentive awards based upon achieving annual financial
+objectives established by the Committee and also allows the Committee to award bonuses based 
+11 
+upon achieving specified strategic and tactical objectives. Under the Domestic Plan, the total award may not exceed 60% of the executive’s base salary. Historically, awards to executive
+officers under the Domestic Plan have been based solely on the Company’s achieving specified financial objectives. Since adoption of the Domestic Plan, the financial objectives for executive officers have been specified thresholds of annual
+operating income and return on net assets and, in addition, for the Chief Executive Officer of the Company, an annual sales threshold. In fiscal year 2013, the Committee also approved strategic business objectives for each executive officer. Bonuses
+based on strategic business objectives were at the discretion of the Committee, subject to the requirement that the total bonus under the Domestic Plan cannot exceed 60% of the executive’s base salary. 
+Awards under the International Branch Plan are based on the
+annual earned bonus pool available under the Company’s bonus plans applicable to the Company’s international branches located in Canada, the United Kingdom, France and Germany. These bonus pools are determined by comparing the annual sales
+achieved in the last fiscal year ended by each international branch to the respective volume of sales achieved during the prior fiscal year for each branch. Sales that surpass the prior year’s sales earn a 4% bonus on the incremental sales
+volume up to the specified target established by the Committee for that year. The bonus pool earned is then adjusted (increased or decreased) by the branch’s achievement of specified profit margin thresholds as determined by the Committee. The
+amounts available under the branch bonus pools are then allocated amongst a pool of individuals at such offices at the discretion of the CEO. Under the International Branch Plan, the Vice President of International Branches was eligible to receive a
+bonus of up to 20%; provided that, no bonus will be paid to the Vice President of International Branches under the International Branch Plan unless the consolidated sales of all the Company’s international branches meets the minimum threshold
+of sales for each of the Company’s international branches as established annually by the Committee. 
+The specified threshold and target financial objectives and business objectives and the related bonus payouts under the Company’s
+bonus plans are established annually by the Committee and, accordingly, individual awards may vary, up or down, from year to year. Bonuses paid or accrued for fiscal year 2013 under our management bonus plan to all executive officers was $456,456
+which represented approximately 34% of their combined salaries, which included a bonus to CEO Everett V. Pizzuti of $147,378 representing approximately 54% of his base salary for 2012. The bonuses paid under the Domestic Plan and the International
+Branch Plan are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below. 
+In addition to our management bonus plans, from time-to-time we award cash bonuses to our executive officers to reward their efforts in
+extraordinary circumstances. Such awards are made at the discretion of the Committee. 
+Long-Term Incentive Compensation. Total compensation at the executive level also includes long-term incentive awards granted under the Company’s Non-Qualified Stock
+Option Plan and 2007 Equity Incentive Plan. The objectives of the equity incentive program are to align executive and shareholder long-term interests by creating a strong and direct link between executive pay and total shareholder return, and to
+enable executives to develop and maintain a long-term stock ownership position in our common stock. Prior to fiscal year 2013, all equity awards were in the form of stock options which have generally been granted in March of each year at an exercise
+price of not less than 100% of the market price on the date of grant. Under the 2007 Equity Incentive Plan, the exercise price of all stock options must be at least 100% of the market price on the date of grant, provided that the exercise price for
+incentive stock options (ISOs) granted to any ten percent beneficial owner of our stock, must be not less than 110% of the market price on the date of grant. Since 2004, all options granted vest in four equal annual installments commencing on the
+first anniversary of the date of grant. Under the 
+12 
+Company’s 2007 Equity Incentive Plan, the Committee may also make equity awards in the form of restricted stock, restricted units and performance units in addition to stock options. In
+fiscal year 2013, a portion of the Company’s long-term incentive compensation was awarded in the form of restricted stock units. These restricted stock unit awards are earned based upon the Company achieving specified thresholds of annual net
+sales and operating income established under the Domestic Plan and vest in two equal annual installments on the first and second anniversary of the grant date. For fiscal year 2013, executive officers were awarded restricted stock units as follows:
+Everett Pizzuti, 6,800 units; Joseph O’Connell, 5,175 units; Michael Morawetz, 3,350 units and Michael Natalizia, 3,575 units. All such restricted stock units were earned in fiscal year 2013. In addition, Gregory Woods was granted 50,000 shares
+of restricted stock and options to purchase 50,000 shares of common stock in connection with his appointment as Chief Operating Officer. Both the restricted stock and options vest in four equal annual installments commencing September 4, 2013.
+Retirement and Other
+Benefits. In order to attract and retain key executives, we offer retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including our executive officers. 
+Profit-Sharing Plan. We maintain a qualified
+Profit-Sharing Plan which provides retirement benefits to substantially all our employees and provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in
+contributions on the basis of relative (limited to $250,000) compensation. In addition, participants are permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. The
+Company makes matching contributions equal to 50% of the first percent of compensation contributed, 25% of the second through the seventh percent and 50% of the eighth and ninth percent. The deferrals are made within the limits prescribed by
+Section 401(k) of the Internal Revenue Code. The Profit-Sharing Plan provides for the vesting of 100% of matching contributions made by the Company to the account of the employee after three years of service. Contributions by an employee are
+100% vested immediately. 
+Employee Stock
+Ownership Plan. We also have an Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated
+among eligible employees on the basis of relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s trustee in
+shares of common stock of the Company. 
+Perquisites . In addition to the benefits described above, we provide automobile allowances to certain of our executive
+officers. The amounts of any aforesaid automobile allowances to our Named Executive Officers are reflected in the “All Other Compensation” column of the Summary Compensation Table below. 
+We have no employment agreements with any of our executive
+officers and, generally, we do not provide any severance benefits to our executives other than those provided to all employees. Severance benefits will vary based upon salary levels and length of service. 
+13 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed with management the Compensation Discussion &
+Analysis included above. Based on these reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included in the Company’s Annual Report on Form 10-K
+for the fiscal year ended January 31, 2013 for filing with the SEC through incorporation by reference of this Proxy Statement. 
+Compensation Committee: 
+Mitchell I. Quain (Chairman) 
+Graeme MacLetchie 
+Harold Schofield 
+Hermann Viets, Ph.D. 
+14 
+EXECUTIVE COMPENSATION 
+The following table provides information regarding the total compensation paid or accrued by the Company to
+each of its current Chief Executive Officer (“CEO”), Everett V. Pizzuti, its Chief Financial Officer (“CFO”) and its three other highest paid executive officers other than the CEO and CFO (collectively, the “Named Executive
+Officers”). 
+Because the Company’s
+Domestic Plan and International Branch Plan are based on achieving specified performance goals, awards under these plans are not considered “Bonuses” for purposes of SEC rules and are listed below as “Non-Equity Incentive Plan
+Compensation.” 
+Summary Compensation Table
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Stock 
+Award 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Everett V. Pizzuti 
+2013 
+278,619 
+— 
+56,780 
+14,341 
+147,378 
+45,975 
+(c) 
+543,093 
+President and CEO 
+2012 
+262,789 
+— 
+— 
+— 
+73,891 
+40,131 
+376,811 
+2011 
+245,556 
+— 
+— 
+10,652 
+— 
+39,983 
+296,191 
+Joseph P. O’Connell 
+2013 
+215,765 
+— 
+43,211 
+10,914 
+105,354 
+23,142 
+(d) 
+398,386 
+Senior Vice President, 
+2012 
+207,155 
+— 
+— 
+— 
+53,000 
+42,617 
+302,772 
+Treasurer and CFO 
+2011 
+206,000 
+— 
+— 
+10,226 
+— 
+30,049 
+246,275 
+Gregory A. Woods 
+2013 
+105,192 
+10,000 
+395,500 
+96,468 
+— 
+5,806 
+(e) 
+612,966 
+Executive Vice President – 
+Chief Operating Officer 
+Michael Morawetz 
+2013 
+183,455 
+— 
+27,973 
+7,065 
+11,541 
+15,773 
+(f) 
+245,807 
+(g) 
+Vice President – 
+2012 
+184,477 
+— 
+— 
+— 
+4,420 
+16,775 
+205,672 
+International Branches 
+2011 
+172,902 
+— 
+— 
+6,391 
+— 
+15,918 
+195,211 
+Michael J. Natalizia 
+2013 
+142,660 
+— 
+29,851 
+7,539 
+40,017 
+3,757 
+(g) 
+223,824 
+(h) 
+Vice President – 
+Chief Technology Officer 
+(a) 
+Reflects discretionary cash bonuses. 
+(b) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to the Named
+Executive Officers. Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended January 31, 2013, included in the Company’s Annual Report on Form
+10-K filed with the SEC on April 8, 2013. 
+(c) 
+Includes pay-out of three weeks unused vacation of $15,811, automobile allowance of $15,370, non-cash automobile allowance of $10,940, employer match under the Profit
+Sharing Plan of $3,201and employer contribution to the Employee Stock Ownership Plan of $653. 
+(d) 
+Includes pay-out of 1 week unused vacation of $4,898, automobile allowance of $13,848, employer match under the Profit Sharing Plan of $3,744 and employer contribution
+to the Employee Stock Ownership Plan of $653. 
+(e) 
+Includes automobile allowance of $5,077 and employer match under the Profit Sharing Plan of $729. 
+15 
+(f) 
+Represents automobile allowance. 
+(g) 
+Mr. Morawetz’s salary is based on euro currency and is converted to U.S. dollars at the average monthly exchange rate. The exchange rate for the fiscal year ended
+January 31, 2013 was 1.3262. 
+(h) 
+Includes employer match under the Profit Sharing Plan of $3,104 and employer contribution to the Employee Stock Ownership Plan of $653. 
+16 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding
+equity awards held by each of the Named Executive Officers as of January 31, 2013. 
+OPTION AWARDS 
+STOCK AWARDS 
+Name 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options (#) 
+Exercisable 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options (#) 
+Unexercisable 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date (a) 
+Number of 
+Shares or 
+Units of 
+Stock That 
+Have Not 
+Vested
+(#) 
+Market 
+Value of 
+Shares or 
+Units of 
+Stock That 
+Have Not 
+Vested
+($) 
+Equity 
+Incentive 
+Plan 
+Awards: 
+Number of 
+Unearned 
+Shares, 
+Units or 
+Other 
+Rights That 
+Have Not 
+Vested
+(#) 
+Equity 
+Incentive 
+Plan 
+Awards: 
+Market or 
+Payout 
+Value of 
+Unearned 
+Shares, 
+Units or 
+Other 
+Rights That 
+Have Not 
+Vested
+($) 
+Everett V. Pizzuti 
+41,250 
+8.72 
+04/19/2014 
+21,250 
+7.93 
+03/20/2016 
+14,000 
+11.44 
+04/12/2017 
+6,275 
+8.95 
+04/01/2018 
+3,750 
+1,250 
+6.22 
+03/18/2019 
+2,500 
+2,500 
+7.36 
+03/15/2020 
+6,800 
+8.35 
+03/29/2022 
+6,800 
+(b) 
+68,000 
+Joseph P. O’Connell 
+41,250 
+8.72 
+04/19/2014 
+21,250 
+7.93 
+03/20/2016 
+14,000 
+11.44 
+04/12/2017 
+6,275 
+8.95 
+04/01/2018 
+3,750 
+1,250 
+6.22 
+03/18/2019 
+2,500 
+2,500 
+7.36 
+03/15/2020 
+6,800 
+8.35 
+03/29/2022 
+5,175 
+(b) 
+51,750 
+Gregory A. Woods 
+25,000 
+7.91 
+25,000 
+7.91 
+50,000 
+(c) 
+500,000 
+Michael Morawetz 
+2,062 
+8.72 
+04/19/2014 
+937 
+6.76 
+03/21/2015 
+937 
+7.93 
+03/20/2016 
+3,500 
+11.44 
+04/12/2017 
+3,475 
+8.95 
+04/01/2018 
+2,250 
+750 
+6.22 
+03/18/2019 
+1,500 
+1,500 
+7.36 
+03/15/2020 
+3,350 
+7.95 
+03/29/2022 
+3,350 
+(b) 
+33,500 
+Michael J. Natalizia 
+2,062 
+8.7273 
+04/19/2014 
+937 
+6.7680 
+03/21/2015 
+1,250 
+7.9316 
+03/20/2016 
+1,600 
+11.4450 
+04/12/2017 
+1,000 
+8.9500 
+04/01/2018 
+750 
+250 
+6.2200 
+03/18/2019 
+500 
+500 
+7.3600 
+03/15/2020 
+250 
+750 
+7.9500 
+03/14/2021 
+3,575 
+8.3500 
+03/29/2022 
+3,575 
+(b) 
+35,750 
+(a) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+(b) 
+Reflects restricted stock units which were earned as of January 31, 2013 upon the achievement of certain specified goals relating to the 2013 fiscal year net sales and
+operating income. Fifty percent of such restricted stock units vested on March 29, 2013 and the remaining fifty percent vest on March 29, 2014. 
+(c) 
+Reflects restricted stock awarded in connection with Mr. Woods’ appointment as Chief Operating Officer which vest in four equal annual installments commencing
+September 4, 2013. 
+17 
+Grants of Plan Based Awards 
+The following table provides information on all plan-based awards by the Company for the fiscal year ended
+January 31, 2013 to each Named Executive Officer. 
+Estimated Possible Payouts Under 
+Equity Incentive Plan Awards(a) 
+All Other 
+Stock 
+Awards: 
+Number of 
+Shares of 
+Stock
+or 
+Units(#) 
+All Other 
+Option 
+Awards: 
+Number
+of 
+Securities 
+Underlying 
+Options(#) 
+Exercise 
+or Base 
+Price of 
+Option 
+Awards 
+($/Sh) 
+Grant 
+Date Fair 
+Value
+of 
+Stock 
+and 
+Option 
+Awards 
+($)(b) 
+Grant 
+Date 
+Threshold 
+(#) 
+Target 
+(#) 
+Maximum 
+(#) 
+Name 
+Everett V. Pizzuti 
+03/29/2012 
+2,720 
+6,800 
+6,800 
+56,780 
+03/29/2012 
+6,800 
+8.35 
+14,341 
+Joseph P. O’Connell 
+03/29/2012 
+2,070 
+5,175 
+5,175 
+43,211 
+03/29/2012 
+5,175 
+8.35 
+10,914 
+Gregory A. Woods 
+09/04/2012 
+50,000 
+(c) 
+395,500 
+09/04/2012 
+50,000 
+7.91 
+96,648 
+Michael Morawetz 
+03/29/2012 
+1,340 
+3,350 
+3,350 
+27,973 
+03/29/2012 
+3,350 
+8.35 
+7,065 
+Michael J. Natalizia 
+03/29/2012 
+1,430 
+3,575 
+3,575 
+29,851 
+03/29/2012 
+3,575 
+8.35 
+7,539 
+(a) 
+Represents the potential threshold and target award with respect to the restricted stock units granted on March 29, 2012. The awards were contingent upon the
+Company achieving specified thresholds of annual net sales and operating income established under the Domestic Plan for the period February 1, 2012 to January 31, 2013. All such restricted stock units were earned at the target levels.
+(b) 
+Assumptions used in the calculation of these amounts are included in footnote 7 to the Company’s audited financial statements for the fiscal year ended January 31,
+2013, included in the Company’s Annual Report on Form 10-K filed with the SEC on or around April 8, 2013. 
+(c) 
+Represents restricted stock award granted to Mr. Woods in connection with his apponitment as Chief Operating Officer. The restricted stock vests in four equal annual
+installments commencing September 4, 2013. 
+Option Exercises and Stock Vested 
+The following table provides information on all exercises of options by the Named Executive Officers during the Company’s 2013 fiscal year. 
+Option Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise ($)(b) 
+Everett V. Pizzuti 
+— 
+— 
+Joseph P. O’Connell 
+13,750 
+82,500 
+Gregory A. Woods 
+— 
+— 
+Michael Morawetz 
+— 
+— 
+Michael J. Natalizia 
+— 
+— 
+18 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise of $8.40 per share and the exercise price of the options
+of $2.40 per share 
+RELATED PARTY TRANSACTIONS
+Potential conflicts of interest and related
+party transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+Other than as
+described below, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2013 any material interest, direct or indirect, in any material transaction or
+any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+The Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as Vice President and General Manager of QuickLabel Systems (formerly
+National Sales Manager for QuickLabel Systems), and William Pizzuti, as National Sales Manager (QuickLabel Systems), to whom the Company paid or accrued over $120,000 in compensation, including $177,123 and $179,382, respectively, in salary and
+commissions during the fiscal year ended January 31, 2013. In addition, the Company made matching contributions for the fiscal year 2013 under its qualified Profit-Sharing Plan of $3,644 to Eric Pizzuti and $3,504 to William Pizzuti. The
+Company also made vacation payouts to Messrs. E. Pizzuti and W. Pizzuti of $2,654 and $1,234, respectively. Messrs. E. Pizzuti and W. Pizzuti received employer contributions to their Employee Stock Ownership Plan accounts of $653 each. The Company
+made stock option grants during the 2013 fiscal year to Messrs. E. Pizzuti and W. Pizzuti with a fair market value at the date of grant equal to $7,329 and 1,656, respectively. 
+PROPOSAL NO. 2 
+ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION 
+As required by the Section 14A(a)(2) of the Exchange
+Act, the Board of Directors is providing shareholders with the opportunity to cast an advisory vote on its executive compensation at the annual meeting through the following resolution: 
+“RESOLVED, that the shareholders approve the Company’s executive compensation, as described in the
+Compensation Discussion and Analysis and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in this Proxy Statement.” 
+We believe that our compensation policies and procedures,
+which are described more fully in the “Compensation Discussion and Analysis” section of this Proxy Statement and in the tables and narrative in the “Executive Compensation” section, are strongly aligned with the long-term
+interests of shareholders. These policies and procedures balance short-term and longer-term compensation opportunities to ensure that the Company meets short-term objectives while continuing to produce value for our shareholders over the long term.
+Approval of this proposal will require the
+affirmative vote of a majority of our common stock represented in person or by proxy at the annual meeting. This vote will not be binding on or overrule any decisions by the Board 
+19 
+of Directors, will not create or imply any additional fiduciary duty on the part of the Board of Directors, and will not restrict or limit the ability of our shareholders to make proposals for
+inclusion in proxy materials related to executive compensation. The Compensation Committee and the Board of Directors will, however, take into account the outcome of the vote when considering future executive compensation arrangements. 
+The Board of Directors recommends a vote “FOR”
+approval of the Company’s executive compensation, as described in the Compensation Discussion and Analysis, and the tabular disclosure regarding named executive officer compensation (together with accompanying narrative disclosure) in this
+Proxy Statement. 
+PROPOSAL NO. 3
+ADVISORY (NON-BINDING) VOTE ON THE FREQUENCY OF EXECUTIVE COMPENSATION VOTES 
+As further required by the Section 14A(a)(2) of the
+Exchange Act, we are providing shareholders the opportunity to advise on how frequently we should include in our Proxy Statement a vote on our executive compensation similar to Proposal No. 2 of this Proxy Statement. We are required to hold
+this advisory vote on the frequency of the executive compensation proposal at least once every six years. The Board of Directors will consider carefully the results of shareholder voting upon the frequency of inclusion of our proposal regarding
+approval of our executive compensation, but the final vote is advisory in nature and not binding upon the Board of Directors. By voting on this proposal, shareholders may indicate whether they prefer an advisory vote on named executive compensation
+once every one, two, or three years. We ask that you support a frequency period of every three years (a triennial vote) for future non-binding shareholder votes on executive compensation. 
+A triennial vote will allow shareholders to better judge our executive compensation program in relation to our
+long-term performance. Additionally, a triennial vote will provide us with the time to respond thoughtfully to the views of our shareholders and implement any necessary changes. We carefully review changes to our executive compensation program to
+ensure that the program appropriately aligns our executive’s interests with the long-term interests of our shareholders and to ensure that the program appropriately balances risk and reward. We therefore believe that a vote every three years is
+an appropriate frequency to provide sufficient time to consider thoughtfully shareholders’ input and to implement any appropriate changes to our executive compensation program, in light of the timing that would be required to implement any
+decisions related to such changes. 
+Any voting
+frequency option that receives an affirmative vote of a majority of our common stock represented in person or by proxy at the annual meeting will be the frequency for the advisory vote on executive compensation that has been selected by
+shareholders. However, because this vote is advisory and not binding on the Board of Directors or the Company in any way, the Board of Directors may decide that it is in the best interests of our shareholders and the Company to hold an advisory vote
+on executive compensation more or less frequently than the option approved by our shareholders. 
+The Board of Directors recommends a vote for every “THREE YEARS” on the frequency of our submission of a vote of shareholders for approval of the Company’s executive compensation.
+20 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Board of Directors is responsible
+for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ listing standards and SEC
+rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s
+consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. 
+The Audit Committee’s responsibilities focus on two
+primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence and performance of the Company’s
+independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the Company’s independent accountants, Ernst & Young LLP, to review and
+discuss the January 31, 2013 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit
+Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with Ernst & Young LLP the matters required by Statement on Auditing Standards
+No. 61 ( Communication with Audit Committees ), as amended and as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule 3200T. The Audit Committee also received from Ernst & Young LLP the written
+disclosures and the letter from Ernst & Young LLP pursuant to applicable requirements of the PCAOB regarding Ernst & Young LLP’s communications with the Audit Committee concerning independence, and has discussed with
+Ernst & Young, LLP its independence from the Company. 
+The Audit Committee received the information concerning the fees of Ernst & Young LLP for the year ended January 31, 2013 set forth below under “Independent Accountant Fees and
+Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the independence of the independent accountants and has determined that the provision of such services by Ernst &
+Young LLP is compatible with maintaining that firm’s independence. 
+Based upon the review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual
+Report on Form 10-K for the year ended January 31, 2013, to be filed with the SEC. 
+Audit Committee: 
+Graeme MacLetchie (Chairman) 
+Harold Schofield 
+Mitchell I. Quain 
+21 
+PROPOSAL NO. 4 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
+FIRM 
+The Audit Committee has sole authority
+to select, evaluate and when appropriate, to replace the Company’s independent auditors. Ernst & Young LLP was the independent auditor for the 2013 fiscal year. The Audit Committee has appointed Ernst & Young LLP as the
+Company’s independent registered public accounting firm for the 2014 fiscal year. Although action by our shareholders on this matter is not required, the Audit Committee believes it is appropriate to seek shareholder ratification in light of
+the critical role played by the independent auditors in maintaining the integrity of Company financial controls and reporting and hereby requests the shareholders to ratify such appointment. 
+The Board of Directors recommends a vote “FOR” the ratification of the appointment of
+Ernst & Young LLP as the Company’s independent registered public accounting firm. 
+The Company expects a representative of Ernst & Young LLP will be present at the annual meeting with the opportunity to make a statement, if he or she so desires, and that such representative
+will be available to respond to appropriate questions. 
+Independent Accountants’ Fees, Services and Other Matters 
+Aggregate fees for professional services rendered for the
+Company by Ernst & Young LLP for the fiscal years ended January 31, 2013 and 2012 are set forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the audit of the Company’s annual
+financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed for the fiscal year. 
+2013 
+2012 
+Audit Fees 
+$ 
+250,000 
+$ 
+214,392 
+Audit-Related Fees 
+0 
+0 
+Tax Fees 
+0 
+0 
+All Other Fees 
+0 
+0 
+Audit Fees for the
+fiscal years ended January 31, 2013 and 2012 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on
+Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Policy on Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit services provided by the
+independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimus exception provided by Rule
+2-01(C)(7)(i)(c) under Regulation S-X. 
+FINANCIAL REPORTS
+A copy of the annual report of the Company
+for the fiscal year ended January 31, 2013 including the Company’s annual report to the SEC on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+22 
+PROPOSALS FOR 2013 ANNUAL MEETING 
+The 2014 annual meeting of the shareholders of the Company is scheduled to be held on May 20, 2014. If a
+shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder must submit the proposal to the Company not later than
+December 20, 2013. Shareholder proposals that are to be considered at the 2014 annual meeting but not requested to be included in the proxy statement must be submitted no later than March 21, 2014 and no earlier than December 20,
+2013. 
+OTHER MATTERS 
+No business other than that set forth in the attached Notice
+of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to
+their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other
+persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+23 
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Ave. 
+West Warwick, RI
+02893 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the
+cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 
+Electronic Delivery of Future PROXY MATERIALS 
+If you would like to reduce the costs incurred by our company in mailing proxy
+materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and,
+when prompted, indicate that you agree to receive or access proxy materials electronically in future years. 
+VOTE BY PHONE - 1-800-690-6903 
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then
+follow the instructions. 
+VOTE BY MAIL 
+Mark, sign and date your proxy card and return it in the postage-paid envelope we
+have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+— — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — — — — — — 
+DETACH AND RETURN THIS PORTION ONLY 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+1. 
+FOR 
+WITHHOLD 
+FOR all except 
+(01) Everett V. Pizzuti 
+¨ 
+¨ 
+¨ 
+(02) Graeme MacLetchie 
+¨ 
+¨ 
+(03) Mitchell I. Quain 
+¨ 
+¨ 
+(04) Harold Schofield 
+¨ 
+¨ 
+(05) Hermann Viets, Ph.D. 
+¨ 
+¨ 
+INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “For All Except” and write that nominee(s’) name(s) or number(s) in the space provided
+below. 
+FOR 
+AGAINST 
+ABSTAIN 
+2. To consider and approve an advisory (non-binding) proposal on the Company’s executive compensation. 
+¨ 
+¨ 
+¨ 
+THREE YEARS 
+TWO YEARS 
+ONE YEAR 
+ABSTAIN 
+3. To consider and approve an advisory (non-binding) proposal on the frequency of submission of the vote regarding the Company’s executive compensation. 
+¨ 
+¨ 
+¨ 
+¨ 
+FOR 
+AGAINST 
+ABSTAIN 
+4. Ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm. 
+¨ 
+¨ 
+¨ 
+5. In their discretion, upon such other matters as may properly come before the meeting 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
+The Form 10-K, Notice & Proxy Statement is/are available at www.proxyvote.com . 
+— — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — — — — — — 
+ASTRO-MED, INC. 
+Annual Meeting of Shareholders-May 21, 2013 
+The undersigned, whose
+signature appears on the reverse side of this proxy, hereby appoints Everett V. Pizzuti, Graeme MacLetchie, Mitchell I. Quain, Harold Schofield and Hermann Viets, or a majority of such of them as shall be present, attorneys with power of
+substitution and with all the powers the undersigned would possess if personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 21, 2013, at 600 East Greenwich Avenue, West
+Warwick, Rhode Island, and at any adjournments thereof, as follows: 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
+MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1, FOR PROPOSALS 2 AND 4, AND FOR “THREE YEARS” FOR PROPOSAL 3. 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY 
+Address change/comments: 
+(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse
+side.)
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-13-161710/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-13-161710/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..02f53e9e474cd21651eaf3341c41e5b7c192da75
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-13-161710/proxy_rpt.txt
@@ -0,0 +1,12 @@
+RELATED PARTY TRANSACTIONS
+Potential conflicts of interest and related
+party transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+Other than as
+described below, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2013 any material interest, direct or indirect, in any material transaction or
+any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+The Company employs two sons of Mr. Pizzuti, Eric Pizzuti, as Vice President and General Manager of QuickLabel Systems (formerly
+National Sales Manager for QuickLabel Systems), and William Pizzuti, as National Sales Manager (QuickLabel Systems), to whom the Company paid or accrued over $120,000 in compensation, including $177,123 and $179,382, respectively, in salary and
+commissions during the fiscal year ended January 31, 2013. In addition, the Company made matching contributions for the fiscal year 2013 under its qualified Profit-Sharing Plan of $3,644 to Eric Pizzuti and $3,504 to William Pizzuti. The
+Company also made vacation payouts to Messrs. E. Pizzuti and W. Pizzuti of $2,654 and $1,234, respectively. Messrs. E. Pizzuti and W. Pizzuti received employer contributions to their Employee Stock Ownership Plan accounts of $653 each. The Company
+made stock option grants during the 2013 fiscal year to Messrs. E. Pizzuti and W. Pizzuti with a fair market value at the date of grant equal to $7,329 and 1,656, respectively.
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-14-152000/proxy.txt b/raw/proxies/0000008146/0001193125-14-152000/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a86ebdb8b645079d1f16a00118e3ff44beb369ee
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-14-152000/proxy.txt
@@ -0,0 +1,2386 @@
+DEF 14A
+1
+d639176ddef14a.htm
+DEF 14A
+DEF 14A 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a)
+of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the
+Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Astro-Med, Inc.
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
+which the filing fee is calculated and state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
+offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Astro-Med, Inc. 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 02893 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+May 22, 2014 
+To the Shareholders of Astro-Med, Inc.: 
+Notice is hereby given that the 2014 Annual Meeting of Shareholders of Astro-Med, Inc. (the “Company”) will be held at the offices of the Company, 600 East Greenwich Avenue, West Warwick, Rhode
+Island on Thursday May 22, 2014, beginning at 10:00 a.m., for the purpose of considering and acting upon the following: 
+(1) 
+Electing six directors to serve until the next annual meeting of shareholders or until their successors are elected and have qualified. 
+(2) 
+To consider and approve an advisory (non-binding) proposal on the Company’s executive compensation. 
+(3) 
+To consider and approve an amendment and extension of the Company’s 2007 Equity Incentive Plan. 
+(4) 
+To consider and act upon a proposal to ratify the appointment of Wolf & Company, P.C. as independent registered public accounting firm for the Company.
+(5) 
+Transacting such other business as may properly come before the meeting. 
+The close of business on March 28, 2014 has been fixed
+as the record date for determining shareholders entitled to vote at the annual meeting or any adjournment thereof. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+April 22, 2014 
+Kindly fill in, date and sign the enclosed proxy and promptly return it in the enclosed addressed envelope, which requires
+no postage if mailed in the United States. If you are personally present at the meeting, your proxy will be returned to you if you desire to vote in person. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 22, 2014.
+The Company’s Proxy Statement, sample
+proxy card and Annual Report are available at: 
+http://www.proxyvote.com. 
+PROXY STATEMENT 
+ANNUAL MEETING OF SHAREHOLDERS 
+May 22, 2014 
+Solicitation and Revocation of Proxies 
+The accompanying proxy is solicited by the Board of
+Directors of Astro-Med, Inc. (herein called the “Company”) in connection with the annual meeting of the shareholders to be held May 22, 2014. The Company will bear the cost of such solicitation. It is expected that the solicitation of
+proxies will be primarily by mail. Proxies may also be solicited personally by regular employees of the Company at nominal cost. The Company may reimburse brokerage houses and other custodians, nominees and fiduciaries holding stock for others in
+their names, or in those of their nominees, for their reasonable out-of-pocket expenses in sending proxy material to their principals or beneficial owners and obtaining their proxies. Any shareholder giving a proxy has the power to revoke it at any
+time prior to its exercise, but the revocation of a proxy will not be effective until notice thereof has been given to the Secretary of the Company. Every properly signed proxy will be voted in accordance with the specification made thereon. This
+proxy statement and the accompanying proxy are expected to be first sent to shareholders on or about April 22, 2014. 
+Voting at Meeting 
+Only shareholders of record at the close of business on March 28, 2014 will be entitled to vote at the meeting. On the record date,
+there were 7,604,734 shares of common stock of the Company outstanding. There was no other outstanding class of voting securities. Each shareholder has one vote for every share owned. 
+Votes Required to Transact Business At the Meeting 
+The holders of a majority of the shares entitled to vote,
+present in person or represented by proxy, will constitute a quorum for the transaction of business at the meeting. Abstentions and broker “non-votes” are counted as present and entitled to vote for purposes of determining a quorum.
+Please note that brokers may not vote your shares on the election of directors or on proposals 2 and 3 in the absence of your specific instructions as to how to vote. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+At the annual meeting, six directors are to be elected to hold office until the next annual meeting or until their respective successors
+are elected and qualified. The persons named in the accompanying proxy, who have been designated by the Board of Directors, intend to vote, unless otherwise instructed, for the election to the Board of Directors of the persons named below. The
+biographies below contain information regarding the person’s service as director, business experience, director positions held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that
+caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. 
+Everett V. Pizzuti , 77, served as Chief Executive Officer of the Company from 2011 to January 31, 2014. Prior to serving as
+Chief Executive Officer of the Company, Mr. Pizzuti was President and Chief Operating 
+1 
+Officer from 1971 to 2011. Mr. Pizzuti has also been a director of the Company since 1985. Prior to 1971, he served as General Sales Manager of the Recorder Division of Gulton Industries.
+Through his long service with the Company, Mr. Pizzuti has an intimate knowledge of the Company’s products and markets and is able to provide our Board of Directors with insight and advice related to the Board’s decisions. Based on
+this experience, we believe that Mr. Pizzuti is qualified to serve on our Board of Directors. 
+Graeme MacLetchie , 76, is a private investor and was a director of Deutsche Bank Alex Brown (Private Client Division), an investment banking and brokerage services company for private wealth and
+asset management, from November 1995 to March 2010. Prior to this, Mr. MacLetchie was Senior Vice President of C. J. Lawrence Deutsche Bank Securities Corporation from 1970 to 1995. He has been a director of the Company since 2002 and also
+served as a director of E-Sync Networks Inc., a provider of managed enterprise services and solutions to medium and large businesses, from 1994 to 1999. We believe that Mr. MacLetchie’s substantial experience in the financial sector and
+knowledge of the financial, regulatory, corporate governance and other matters affecting public companies qualify him to serve on our Board of Directors. 
+Mitchell I. Quain , 62, has been a director since 2011. Mr. Quain is a Senior Advisor at Carlyle Group, a private equity firm.
+From 2010 through 2011, Mr. Quain was a Partner at One Equity Partners, a private investment firm. From 2006 through 2009, he was a Senior Director of ACI Capital Corp. From 2002 through 2005, Mr. Quain served as Chairman of Register.Com,
+Inc., an internet services provider, and from 1997 to 2001 he was employed with ABN AMRO and its predecessors in several capacities, including Vice Chairman. Mr. Quain also serves as Chairman of the Board of Directors of MagneTek, Inc., a
+manufacturer of digital power and motion control systems, and a director of Hardinge Inc., a global designer, manufacturer and distributor of machine tools, and RBC Bearings, Inc., an international manufacturer and marketer of highly engineered
+precision plain, roller and ball bearings. Mr. Quain previously served as a director of DeCrane Aircraft Holdings, Inc., Handy & Harman Ltd., HEICO Corporation, Mechanical Dynamics, Inc., Register.com and Titan International, Inc. We
+believe that Mr. Quain’s extensive experience in the private equity sector and public company experience qualify him to serve on our Board of Directors. 
+Harold Schofield , 72, is the owner and manager of
+Schofield Imaging Associates, LLC, in Narragansett, Rhode Island since 2004. Prior to this, Mr. Schofield was Founder, President and CEO of Atlantek Incorporated (“Atlantek”), a manufacturer of thermal printers and retired as Vice
+President and General Manager of Zebra-Atlantek following the acquisition of Atlantek by Zebra Technologies in 2003. Prior to founding Atlantek, Mr. Schofield was Design Engineering Manager at Gulton
+Industries where he was responsible for design and development of thermal printers, plotters and chart recorders. Mr. Schofield is an internationally recognized authority in the electronic printing field. We believe that
+Mr. Schofield’s long history and expertise in the printing and imaging field qualify him to serve on our Board of Directors. 
+Hermann Viets , Ph.D., 71, has been President and Chief Executive Officer of the Milwaukee School of Engineering, a university
+located in Milwaukee, Wisconsin focused primarily on engineering education, since 1991. Dr. Viets served as a director of Gehl Co. from 1999 to 2008. He serves as a Director of Public Policy Forum for southeastern Wisconsin, an independent
+reviewer of public policy issues. Dr. Viets also serves as a director of Competitive Wisconsin Inc., an association of business, education and labor leaders promoting the State of Wisconsin and serves as a member of the Greater Milwaukee
+Committee, an organization of civic leaders promoting the economic development and social improvement of the City of Milwaukee. Dr. Viets was also a trustee of Polytechnic University (a private engineering school located in Brooklyn, NY) until
+2009. Dr. Viets has been a director of the Company since 1988. We believe that Dr. Viets’ executive experience as 
+2 
+president of a university, his service on other public company boards and his understanding of the Company’s products as well as corporate governance matters qualify him to serve on our
+Board of Directors. 
+Gregory A. Woods , 54,
+has served as Chief Executive Officer of the Company since February 1, 2014. Mr. Woods joined the Company in September 2012 as Executive Vice President and Chief Operating Officer and was appointed President and Chief Operating Officer on
+August 29, 2013. Prior to joining the Company, Mr. Woods served as Managing Director of Medfield Advisors, LLC, an advisory firm located in Medfield, Massachusetts focused on providing corporate development and strategy guidance to
+technology driven manufacturing firms. From 2008 to 2010, Mr. Woods served as President of Performance Motion Devices, a specialty semiconductor and electronics manufacturer located in Lincoln, Massachusetts. Through his work experience,
+Mr. Woods has extensive knowledge of the technology and electronics industries, as well as lean manufacturing processes. Based on this experience and his position as Chief Executive Officer of the Company, we believe that Mr. Woods is
+qualified to serve on our Board of Directors. 
+The
+Board of Directors has determined that all of the directors of the Company, including each of the nominees standing for election at the 2014 annual shareholders meeting, other than Gregory A. Woods and Everett V. Pizzuti, are independent of the
+Company in that such nominees have no material relationship with the Company either directly, or as a partner, shareholder or affiliate of an organization that has a relationship with the Company. The Board of Directors has made this determination
+in accordance with applicable Securities and Exchange Commission (“SEC”) rules and NASDAQ listing standards. 
+3 
+Security Ownership of Certain Beneficial Owners and Management 
+The following table sets forth as of March 28, 2014
+(except as noted) the record and beneficial ownership of the Company’s outstanding shares of common stock by each person who is known to the Company to own of record or beneficially more than five percent of such stock, by each director of the
+Company, by each executive officer named in the Summary Compensation Table and by all directors and executive officers of the Company as a group: 
+Name of Beneficial Owner 
+Number of Shares 
+Beneficially 
+Owned(a) 
+Percent 
+of Class 
+Estate of Albert W. Ondis 
+1,454,400 
+(b) 
+19.1 
+% 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+Albert W. Ondis III 
+1,581,872 
+(c)(d) 
+21.0 
+%(c) 
+600 East Greenwich Avenue 
+West Warwick, RI 02893 
+Alexis Ondis 
+1,582,110 
+(c) 
+21.0 
+%(c) 
+600 East Greenwich Avenue 
+West Warwick, Rhode Island 
+April Ondis 
+1,589,032 
+(c)(e) 
+21.0 
+%(c) 
+600 East Greenwich Avenue 
+West Warwick, RI 02893 
+Ariel Investments, LLC 
+916,509 
+(f) 
+12.1 
+% 
+200 E. Randolph Drive, Suite 2900 
+Chicago, IL 60601 
+Dimensional Fund Advisors LP 
+503,691 
+(g) 
+6.16 
+% 
+6300 Bee Cave Road, Building One 
+Austin, TX 78746 
+Rutabaga Capital Management, LLC 
+681,823 
+(h) 
+9.0 
+% 
+64 Broad Street, 3 rd Floor 
+Boston, MA 02109 
+Gordon Bentley 
+28,695 
+(i) 
+* 
+Erik J. Mancyak 
+16,785 
+(j) 
+* 
+Stephen Petrarca 
+55,790 
+(k) 
+* 
+Eric E. Pizzuti 
+25,369 
+(l) 
+* 
+Everett V. Pizzuti 
+323,831 
+(m) 
+4.2 
+% 
+Joseph P. O’Connell 
+152,326 
+(n) 
+2.0 
+% 
+Graeme MacLetchie 
+125,724 
+(o) 
+1.6 
+% 
+Michael Morawetz 
+20,262 
+(p) 
+* 
+Michael J. Natalizia 
+20,940 
+(q) 
+* 
+Harold Schofield 
+15,953 
+(r) 
+* 
+Mitchell I. Quain 
+32,992 
+(s) 
+* 
+Hermann Viets 
+225,705 
+(t) 
+3.0 
+% 
+Gregory A. Woods 
+62,500 
+(u) 
+* 
+All directors and executive officers of the Company as a group (14) 
+1,106,872 
+(v) 
+13.7 
+% 
+4 
+* 
+Indicates less than 1.0%. 
+(a) 
+If applicable, beneficially owned shares include shares owned by the spouse, minor children and certain other relatives of the director or executive officer, as well as
+shares held by trusts of which the person is a trustee or in which he or she has a beneficial interest, and shares acquirable pursuant to options which are presently or will become exercisable or vest within 60 days of March 28, 2014. All
+information is based upon ownership of record as reflected on the stock transfer books of the Company or as reported on Schedule 13G or Schedule 13D filed under Rule 13d-1 under the Securities Exchange Act of 1934 or has been furnished by the
+respective directors and executive officers of the Company. 
+(b) 
+Indicates shares held by the estate of Albert W. Ondis (the “Ondis Estate”) and includes 3,858 shares allocated to the Ondis Estate under the Company’s
+Employee Stock Ownership Plan. 
+(c) 
+Includes 1,454,400 shares held by the reporting person as co-executor of the Ondis Estate. 
+(d) 
+Includes 3,400 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014 and 317
+shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(e) 
+Includes 10,538 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014 and 650
+shares allocated to her account under the Company’s Employee Stock Ownership Plan. 
+(f) 
+Ariel Investments, LLC, a Delaware limited partnership, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to have beneficial
+ownership of the number of shares shown as of December 31, 2013. 
+(g) 
+Dimensional Fund Advisors, LP, a Delaware limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to have
+beneficial ownership of the number of shares shown as of December 31, 2013. 
+(h) 
+Rutabaga Capital Management, LLC, a Massachusetts limited liability company, an investment adviser registered under the Investment Advisers Act of 1940, is deemed to
+have beneficial ownership of the number of shares shown as of December 31, 2013. 
+(i) 
+Includes 24,924 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014, 1,575
+restricted stock units and 564 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(j) 
+Includes 13,325 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014, 1,500
+restricted stock units and 460 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(k) 
+Includes 47,436 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014, 1,688
+restricted stock units and 3,326 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(l) 
+Includes 18,811 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014, 1,738
+restricted stock units and 1,556 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(m) 
+Includes 58,325 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014, and
+4,868 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+(n) 
+Includes 46,200 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014, 2,588
+restricted stock units and 2,068 shares allocated to his account under the Company’s Employee Stock Ownership Plan. 
+5 
+(o) 
+Includes 36,375 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014 and
+1,886 shares of restricted stock. 
+(p) 
+Includes 18,587 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014
+shares and 1,675 restricted stock units. 
+(q) 
+Includes 8,386 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014,
+1,788 restricted stock units and 502 shares allocated to his account under the Company’s Employee Stock Ownership Plan.. 
+(r) 
+Includes 10,000 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014 and
+1,886 shares of restricted stock. 
+(s) 
+Includes 15,000 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014 and
+1,886 shares of restricted stock. 
+(t) 
+Includes 36,375 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014 and
+1,886 shares of restricted stock. 
+(u) 
+Includes 12,500 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014 and
+37,500 shares of restricted stock. 
+(v) 
+Includes 346,244 shares deemed to be beneficially owned because of options which are presently or will become exercisable within 60 days of March 28, 2014,
+12,552 restricted stock units, 7,544 shares of restricted stock and 13,344 shares allocated to the accounts of officers under the Company’s Employee Stock Ownership Plan. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, requires
+the directors and executive officers of the Company and any persons who own more than ten percent of the Company’s common stock to file with the SEC various reports of beneficial ownership and changes in beneficial ownership. The Company
+believes all of its directors and executive officers complied with all filing requirements applicable to them with respect to transactions during the fiscal year ended January 31, 2014. 
+Meetings and Committees 
+During the fiscal year ended January 31, 2014, the Board of Directors held nine meetings. During fiscal year 2014, all directors
+attended at least 75% of the meetings of the Board of Directors and meetings of committees on which such director serves. The Board of Directors has adopted a policy that requires members of the Board of Directors to make every effort to attend each
+annual shareholders meeting. All members of the Board of Directors attended the 2013 annual shareholders meeting. 
+The Board of Directors currently has three standing committees: an Audit Committee, a Compensation Committee and a Nominating Committee.
+The members and chairs of each of those committees are appointed each year. The Audit Committee is comprised of Messrs. MacLetchie, Quain and Schofield. The Nominating Committee is comprised of Messrs. MacLetchie, Quain and Viets. The Compensation
+Committee is comprised of all of our outside directors, Messrs. MacLetchie, Quain, Schofield and Viets. Each of the members of our committees are independent as defined under the applicable NASDAQ listing standards and SEC rules. Each of the Audit,
+Compensation and Nominating Committees has a written charter approved by the Board of Directors. A copy of each charter is available on the Company’s website at www.astro-medinc.com under “Our Company – Corporate Governance.”
+6 
+Audit Committee. The Audit Committee’s primary duties and responsibilities
+include overseeing the integrity of the Company’s financial reports; appointing, setting the compensation and overseeing the Company’s independent accountants; and assessing the qualifications and independence and performance of the
+Company’s independent accountants and the adequacy of internal controls. The Audit Committee meets with the Company’s independent accountants to review quarterly financial results, the results of the audit and other relevant matters.
+Mr. MacLetchie serves as Chairman of the Audit Committee, which held eight meetings during the fiscal year ended January 31, 2014. The Board of Directors has determined that all three members of the Audit Committee satisfy the financial
+literacy requirements of the NASDAQ listing standards and are independent as defined under the NASDAQ listing requirements and applicable SEC rules. Additionally, the Board of Directors has determined that Graeme MacLetchie satisfies the
+“financial sophistication” requirement of the NASDAQ listing requirements, and that Mitchell Quain qualifies as an “audit committee financial expert” as defined by the SEC rules. 
+Compensation Committee. The Compensation Committee
+assists the Board of Directors in discharging the Board’s responsibilities relating to director and executive compensation. The Compensation Committee’s responsibilities include: establishing and reviewing the Company’s executive and
+director compensation philosophy, strategies, plans and policies; making recommendations with respect to the design of the Company’s incentive compensation plans and equity based plans; granting awards under such plans and overseeing generally
+the administration of such plans; evaluating the performance and determining the compensation of the Chief Executive Officer; and reviewing and approving recommendations on compensation of other executives. Mr. Quain serves as chairman of the
+Compensation Committee, which held nine meetings during the fiscal year ended January 31, 2014. 
+Nominating Committee . The Nominating Committee is responsible for identifying individuals qualified to be members of the Board of
+Directors and recommending such individuals to be nominated by the Board of Directors for election to the Board of Directors by the shareholders. The Nominating Committee held two meetings in the fiscal year ended January 31, 2014.
+Dr. Viets serves as chairman of the Nominating Committee. 
+Nomination of Directors 
+The Nominating Committee considers suggestions from many sources, including shareholders, regarding possible candidates for director. The
+Nominating Committee does not set specific criteria for directors but seeks individuals who possess the highest ethical standards and integrity, have a history of achievement that reflects superior standards for themselves and others, have the
+ability to provide wise, informed and thoughtful counsel to management on a range of issues, exercise independence of thought and possess skills and expertise appropriate to meet the Company’s needs and advance the long-term interests of the
+shareholders. The Nominating Committee does not have a policy with respect to diversity and does not specifically consider issues of diversity, such as gender, race, origin or sex when determining whether to nominate any person to be a director of
+the Company. All non-employee directors must be independent within the meaning of applicable NASDAQ rules. 
+The Nominating Committee must also ensure that members of the Board of Directors as a group maintain the requisite qualifications under
+the NASDAQ listing standards for populating the Audit, Compensation and Nominating Committees. The Nominating Committee will consider shareholder nominees for director in the same manner as nominees for director from other sources. 
+7 
+Shareholders may send recommendations for director nominees to the Nominating Committee at
+the Company’s offices at 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. Submissions should include information regarding a candidate’s background, qualifications, experience and willingness to serve as a director. In
+addition, Section 10 of Article II of the Company’s By-Laws sets forth specific procedures that, if followed, enable any shareholder entitled to vote in the election of directors to make nominations directly at an annual meeting of
+shareholders. These procedures include a requirement for written notice to the Company at least 60 days prior to the scheduled annual meeting and must contain the name and certain information concerning the nominee and the shareholders who support
+the nominee’s election. For the annual meeting to be held in 2015, the notice deadline under the By-Laws is March 20, 2015. A copy of this By-Law provision may be obtained by writing to Astro-Med, Inc., Attn: Investor Relations Department,
+600 East Greenwich Avenue, West Warwick, Rhode Island 02893. 
+Communications with the Board of Directors 
+The Company’s Board of Directors provides a process for shareholders to communicate directly with the members of the Board of
+Directors or the individual chairman of standing committees. Any shareholder with a concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board of Directors may communicate directly
+with the directors by writing directly to those individuals c/o Astro-Med, Inc., 600 East Greenwich Avenue, West Warwick, Rhode Island 02893. The Company’s general policy is to forward, and not to intentionally screen, any mail received at the
+Company’s corporate offices that is sent directly to an individual unless the Company believes the communication may pose a security risk. 
+Board Leadership Structure 
+All members of the Board of Directors, other than Gregory A. Woods and Everett V. Pizzuti, are independent and all our key
+committees – Audit, Compensation and Nominating – are comprised solely of independent directors. The non-management directors meet in executive session without Messrs. Woods and Pizzuti at least quarterly. 
+The Board of Directors believes that separating the positions
+of Chief Executive Officer and Chairman of the Board of Directors is preferable and in the best interests of shareholders because it gives our independent directors a significant role in Board direction and agenda setting and enhances the Board of
+Directors’ ability to fulfill its oversight responsibilities, including of senior management. Separating the positions also provides an independent viewpoint and focus at Board meetings, and ensures that our Chief Executive Officer will be able
+to focus his energy on running the Company. We believe this structure provides strong leadership for the Board of Directors, while also positioning the chief executive officer as the leader of the Company in the eyes of our customers, employees and
+shareholders. 
+Risk Oversight 
+The Board of Directors has an active role, as a whole and
+also at the committee level, in overseeing management of the Company’s risks through a program of sound policies, systems, processes, and reports. The Audit Committee of the Board of Directors has oversight responsibility over financial
+reporting and disclosure process, compliance and legal matters, and information security and fraud risk. The Audit Committee also monitors controls for material weaknesses in the audit function. The Audit Committee meets regularly with our
+8 
+Chief Financial Officer and Controller in carrying out these responsibilities, and with the Company’s independent auditors in executive session. 
+The Compensation Committee of the Board of Directors oversees
+risks as they relate to the Company’s compensation policies and practices as described under “Compensation Discussion and Analysis.” The Board’s Nominating Committee assists the Board of Directors in fulfilling its oversight
+responsibilities with respect to independence of Board members and identification of individuals qualified to be members of the Board of Directors. 
+While each committee is responsible for evaluating the risks within their areas of responsibility and overseeing the management of such
+risks, all our committees report regularly to the full Board of Directors, which also considers the Company’s entire risk profile. 
+Compensation of Directors 
+The Compensation Committee is responsible for reviewing and establishing the compensation of the directors of the Company. The Company
+adopted a Non-Employee Director Annual Compensation Program (the “Program”) on January 30, 2012 effective as of February 1, 2012, which Program was amended and restated as of February 1, 2014. Under the Program, each
+non-employee director is entitled to an annual cash retainer of $7,000 (the “Cash Retainer”), plus $500 for each Board and committee meeting attended. In addition, effective as of August 1, 2014, the Chairman of the Board of
+Directors, if a non-employee director, will receive an annual retainer of $6,000, and the Chair of the Audit Committee and Chair of the Compensation Committee will each receive an annual retainer of $4,000 (each a “Chair Retainer”). Any
+non-employee director who is first elected or appointed to such position after February 1 of any fiscal year will receive a pro rata portion of any Cash Retainer and Chair Retainer payable. The non-employee director may elect for any fiscal
+year to receive all or a portion of the Cash Retainer or Chair Retainer in the form of common stock of the Company. 
+In addition, under the Program, each non-employee director will receive a restricted stock award with a value equal to $20,000 (the
+“Equity Retainer”) upon adjournment of each annual meeting (or special meeting in lieu of annual meeting) of shareholders. If a non-employee director is first appointed or elected to the Board of Directors effective on a date other than at
+the annual shareholders meeting, on the date of such appointment or election the director shall receive a pro rata award of restricted common stock having a value based on the number of days remaining until the next annual meeting. The Equity
+Retainer will vest on the earlier of 12 months after the grant date or the date immediately prior to the next annual meeting (or special meeting in lieu of annual meeting) of the shareholders following the meeting at which such restricted stock
+award was granted. However, a non-employee director may not sell, transfer, assign, pledge or otherwise encumber the vested common stock prior to the second anniversary of the vesting date. In the event of the death or disability of a non-employee
+director, or a Change in Control (as such term is defined in the Company’s 2007 Equity Incentive Plan) of the Company, the restricted stock award shall immediately vest and shall no longer be subject to such restrictions on transfer.
+Unless a non-employee director elects to receive
+all or a portion of the Cash Retainer or Chair Retainer in common stock (as described below), each non-employee director will receive the Cash Retainer and Chair Retainer in four equal quarterly installments on the first day of each fiscal quarter.
+If a non-employee director elects to receive all
+or a portion of the Cash Retainer or Chair Retainer in the form of common stock, such shares shall be issued in four quarterly installments on the first day of each fiscal 
+9 
+quarter, and the number of shares of common stock to be issued shall be based on the fair market value of such common stock on the date such installment is payable. The common stock received in
+lieu of such Cash Retainer or Chair Retainer will be fully vested. However, a non-employee director who receives common stock in lieu of all or a portion of the Cash Retainer or Chair Retainer may not sell, transfer, assign, pledge or otherwise
+encumber the common stock prior to the first anniversary of the date on which such shares were granted. In the event of the death or disability of a non-employee director, or a Change in Control (as such term is defined in the Company’s 2007
+Equity Incentive Plan) of the Company, any shares of common stock issued in lieu of such Cash Retainer or Chair Retainer, shall no longer be subject to such restrictions on transfer. 
+In addition to the Program, under the Company’s 2007 Equity Incentive Plan, each non-employee director
+receives non-qualified options to purchase 5,000 shares of the Company’s common stock upon initial election to the Board of Directors (if not at the annual meeting) and upon the adjournment of each annual meeting or special meeting in lieu of
+an annual meeting of the shareholders of the Company. These options have a term of ten years and become exercisable immediately prior to the occurrence of the next annual meeting following the date the option is granted. 
+The following Director Compensation table provides
+information regarding the compensation paid or accrued by each individual who was a director during the 2014 fiscal year. 
+Name 
+Total ($) 
+Fees Earned 
+or Paid in 
+Cash ($) 
+Stock 
+Awards 
+Option 
+Awards 
+($)(a)(b) 
+All Other 
+Compensation 
+Graeme MacLetchie 
+$ 
+49,932 
+$ 
+9,020 
+$ 
+26,972 
+(d) 
+$ 
+13,940 
+— 
+Everett V. Pizzuti(c) 
+— 
+— 
+— 
+— 
+— 
+Mitchell I. Quain 
+49,432 
+8,520 
+26,972 
+(d) 
+13,940 
+— 
+Harold Schofield 
+48,432 
+9,266 
+25,226 
+(e) 
+13,940 
+— 
+Hermann Viets 
+47,932 
+7,020 
+26,972 
+(d) 
+13,940 
+— 
+(a) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to directors.
+Assumptions used in the calculation of these amounts are included in footnote 9 in the Company’s audited financial statements for the fiscal year ended January 31, 2014, included in the Company’s Annual Report on Form 10-K filed with
+the SEC on April 7, 2014. 
+(b) 
+As of January 31, 2014, each non-employee director had the following number of options outstanding: Graeme MacLetchie 36,375, Mitchell I. Quain 15,000, Harold Schofield
+10,000, and Hermann Viets 36,375. 
+(c) 
+See “Summary Compensation Table” and “Outstanding Equity Awards” at Fiscal Year End Table under “Executive Compensation” for disclosure
+relating to compensation and outstanding option awards of Mr. Pizzuti. 
+(d) 
+Represents restricted stock award of 1,886 shares valued at $19,992 and 634 shares issued upon election to receive portion of annual retainer in shares of common stock.
+(e) 
+Represents restricted stock award of 1,886 shares valued at $19,992 and 463 shares issued upon election to receive portion of annual retainer in shares of common stock.
+10 
+COMPENSATION DISCUSSION & ANALYSIS 
+The Compensation Committee of the Board of Directors of the
+Company (the “Committee”) is charged with the responsibility for establishing, implementing and monitoring adherence to the Company’s compensation philosophy and assuring that executives and key management personnel are effectively
+compensated in a manner which is internally equitable. The Committee also is responsible for reviewing and establishing the compensation of directors. 
+Compensation Philosophy and Objectives. Our overall philosophy in terms of executive compensation is to link
+management incentives with the actual financial performance of the Company. Similarly, the compensation should attract, retain and motivate highly qualified individuals to achieve the Company’s business goals and link their interests with
+shareholder interests. In setting compensation for our executive officers, the Committee considers the executive’s performance, awards, if any, made during prior years and other relevant factors. We seek to have the long-term performance of our
+common stock reflected in executive compensation through our equity incentive programs. 
+Elements of Compensation. Our total compensation program for executive officers consists of the following: 
+• 
+salary; 
+• 
+cash incentive and bonus awards tied to the Company’s and employee’s annual performance; 
+• 
+long-term incentive compensation, in the form of stock options and restricted stock; and 
+• 
+retirement and other benefits. 
+We choose to pay each element of compensation in order to attract and retain the necessary executive talent, reward annual performance and
+provide incentive for both long-term strategic goals as well as short-term performance. Our policy for allocating between currently paid and long-term compensation is to ensure adequate base compensation to attract and retain personnel, while
+providing incentives to maximize long-term value for our shareholders. 
+Say on Pay Consideration. In accordance with SEC rules, we solicited shareholder “say on pay” and “say on pay frequency” (recommended three years)
+advisory votes in our proxy statement to shareholders in 2013. Our shareholders showed support (63%) of our compensation practices during last year’s vote and recommended a “say on pay” vote every year rather than every three
+years. After considering the preferences expressed at by our shareholders, the Board of Directors determined to hold future non-binding, advisory votes on executive compensation every year and have included an advisory vote on executive compensation
+in this Proxy Statement. 
+Setting Executive
+Compensation. The Committee is responsible for establishing and periodically reviewing the compensation of our executive officers and approving all equity awards. The Committee annually reviews the performance of the
+executive officers and, based on these reviews, the Committee determines salary adjustments and annual award amounts of our executive officers. 
+Salary. Base salaries for our executive officers were established a number of years ago. Historically, base
+salaries have been increased at annual rates which approximate the general rates of increase of compensation for all employees of the Company. Annual salary adjustments are made effective April 1 of each year. For fiscal year 2014, we increased
+the compensation of the Company’s employees and executive officers by approximately 2%. 
+11 
+Cash Incentive and Bonus Awards. The Committee has adopted two
+separate management bonus plans applicable to executive officers of the Company for the purpose of providing incentive compensation to the Company’s executive officers. One plan is applicable to domestic employees of the Company (the
+“Domestic Plan”) and the other is applicable to the Vice President-International Branches, currently Michael Morawetz (the “International Branch Plan”). The Domestic Plan provides for cash incentive awards based upon achieving
+annual financial objectives established by the Committee and also allows the Committee to award bonuses based upon achieving specified strategic and tactical objectives. Under the Domestic Plan, the total award may not exceed 60% of the
+executive’s base salary. Historically, awards to executive officers under the Domestic Plan have been based solely on the Company’s achieving specified financial objectives. The financial objectives for executive officers under the
+Domestic Plan are specified thresholds of net sales, annual operating income and return on net assets. In fiscal year 2014, the Committee also approved strategic business objectives for each executive officer. Bonuses based on strategic business
+objectives were at the discretion of the Committee, subject to the requirement that the total bonus under the Domestic Plan cannot exceed 60% of the executive’s base salary. 
+Awards under the International Branch Plan are based on the
+annual earned bonus pool available under the Company’s bonus plans applicable to the Company’s international branches located in Canada, the United Kingdom, France and Germany. These bonus pools are determined by comparing the annual
+sales achieved in the last fiscal year ended by each international branch to the respective volume of sales achieved during the prior fiscal year for each branch. Actual sales that surpass the prior year’s sales earn an incremental bonus on the
+sales volume up to the specified target established by the Committee for that year. The bonus pool earned is then adjusted (increased or decreased) by the branch’s achievement of specified profit margin thresholds as determined by the
+Committee. The amounts available under the branch bonus pools are then allocated amongst a pool of individuals at such offices at the discretion of the CEO. Under the International Branch Plan, the Vice President of International Branches was
+eligible to receive a bonus of up to 20%; provided that, no bonus will be paid to the Vice President of International Branches under the International Branch Plan unless the consolidated sales of all the Company’s international branches meets
+the minimum threshold of sales for each of the Company’s international branches as established annually by the Committee. 
+The specified threshold and target financial objectives and business objectives and the related bonus payouts under the Company’s
+bonus plans are established annually by the Committee and, accordingly, individual awards may vary, up or down, from year to year. Bonuses paid or accrued for fiscal year 2014 under our management bonus plan to all executive officers was $421,593
+which represented approximately 26% of their combined salaries, which included a bonus to our former CEO Everett V. Pizzuti of $83,859, representing approximately 30% of his base salary for calendar year 2013. The bonuses paid under the Domestic
+Plan and the International Branch Plan are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table below. 
+In addition to our management bonus plans, from time-to-time we award cash bonuses to our executive officers to reward their efforts in
+extraordinary circumstances. Such awards are made at the discretion of the Committee. 
+Long-Term Incentive Compensation. Total compensation at the executive level also includes long-term incentive awards granted under the Company’s Non-Qualified Stock
+Option Plan and 2007 Equity Incentive Plan. The objectives of the equity incentive program are to align executive and shareholder long-term interests by creating a strong and direct link between executive pay and total shareholder return, and to
+enable executives to 
+12 
+develop and maintain a long-term stock ownership position in our common stock. Prior to fiscal year 2013, all equity awards were in the form of stock options which have generally been granted in
+March of each year at an exercise price of not less than 100% of the market price on the date of grant. Under the 2007 Equity Incentive Plan, the exercise price of all stock options must be at least 100% of the market price on the date of grant,
+provided that the exercise price for incentive stock options (ISOs) granted to any ten percent beneficial owner of our stock, must be not less than 110% of the market price on the date of grant. Since 2004, all options granted vest in four equal
+annual installments commencing on the first anniversary of the date of grant. Under the Company’s 2007 Equity Incentive Plan, the Committee may also make equity awards in the form of restricted stock, restricted units and performance units in
+addition to stock options. In fiscal year 2014, the Company made long-term incentive compensation awards solely in the form of restricted stock units. These restricted stock unit awards vest 25% on the third anniversary of the grant date; 50% upon
+the achievement of certain specified goals relating to cumulative budgeted sales targets for the fiscal years 2014 through 2016; and 25% upon the achievement of certain specified goals relating to operating income return on net assets for the fiscal
+years 2014 through 2016. For fiscal year 2014, executive officers were awarded restricted stock units as follows: Everett Pizzuti, 10,000 units; Gregory A. Woods, 7,500 units; Joseph O’Connell, 7,500 units; Michael Morawetz, 3,900 units; and
+Michael Natalizia, 4,000 units. Mr. Woods was appointed Chief Executive Officer of the Company effective February 1, 2014 and in connection with such appointment, the Compensation Committee intends to award Mr. Woods an option to
+purchase 200,000 shares of the Company’s common stock, which award will vest in four equal annual installments commencing on the fifth anniversary of the date of grant and expire on the tenth anniversary of the date of grant. Such award is
+contingent upon shareholder approval of the amendment to the Company’s 2007 Equity Incentive Plan as further described in this Proxy Statement. 
+On January 22, 2014, in connection with the retirement of Everett V. Pizzuti as Chief Executive Officer of the Company, the
+Compensation Committee approved the following actions: 
+• 
+Accelerated vesting of options to purchase 6,350 shares of Company common stock held by Mr. Pizzuti, effective January 31, 2014, which
+options represent all of the unvested stock options then held by Mr. Pizzuti; 
+• 
+Accelerated vesting of 3,400 restricted stock units (“RSUs”) granted in March 2012 and earned in March 2013, which, by their terms, would
+otherwise have vested on March 29, 2014; 
+• 
+Accelerated vesting of 2,500 RSUs granted in April 2013, which, by their terms, would otherwise have vested on April 3, 2016; and
+• 
+Accelerated vesting of 1,666 RSUs (representing 1/3 of the 5,000 Net Sales RSUs granted to Mr. Pizzuti in April 2013).
+Retirement and Other
+Benefits. In order to attract and retain key executives, we offer retirement benefits through a Profit-Sharing Plan and Employee Stock Ownership Plan for employees, including our executive officers. 
+Profit-Sharing Plan. We maintain a qualified
+Profit-Sharing Plan which provides retirement benefits to substantially all our employees and provides for contributions into a trust fund in such amounts as the Board of Directors may annually determine. Each eligible employee shares in
+contributions on the basis of relative (limited to $255,000) compensation. In addition, participants are permitted to defer up to 50% of their cash compensation and make contributions of such deferral to this plan through payroll deductions. The
+Company makes matching contributions equal to 50% of the first percent of compensation contributed, 25% of the second 
+13 
+through the seventh percent and 50% of the eighth and ninth percent. The deferrals are made within the limits prescribed by Section 401(k) of the Internal Revenue Code. The Profit-Sharing
+Plan provides for the vesting of 100% of matching contributions made by the Company to the account of the employee after three years of service. Contributions by an employee are 100% vested immediately. 
+Employee Stock Ownership Plan. We also have an
+Employee Stock Ownership Plan which provides retirement benefits to substantially all employees of the Company. Contributions in such amounts as the Board of Directors may annually determine are allocated among eligible employees on the basis of
+relative (limited to $100,000) compensation. Participants are 100% vested in any and all allocations to their accounts. Contributions, which may be in cash or stock, are invested by the Plan’s trustee in shares of common stock of the Company.
+Perquisites . In addition to the
+benefits described above, we provide automobile allowances to certain of our executive officers. The amounts of any aforesaid automobile allowances to our Named Executive Officers are reflected in the “All Other Compensation” column of the
+Summary Compensation Table below. 
+We have no
+employment agreements with any of our executive officers and, generally, we do not provide any severance benefits to our executives other than those provided to all employees. Severance benefits will vary based upon salary levels and length of
+service. On January 22, 2014, the Compensation Committee did approve the entry into of a Release and Non-Competition Agreement with Everett V. Pizzuti in connection with his retirement as Chief Executive Officer pursuant to which
+Mr. Pizzuti will be paid $500,000 in 24 equal monthly installments during the term of such agreement in consideration of his non-competition and non-solicitation obligations. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed with
+management the Compensation Discussion & Analysis included above. Based on these reviews and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included
+in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2014 for filing with the SEC through incorporation by reference of this Proxy Statement. 
+Compensation Committee: 
+Mitchell I. Quain (Chairman) 
+Graeme MacLetchie 
+Harold Schofield 
+Hermann Viets, Ph.D. 
+14 
+EXECUTIVE COMPENSATION 
+The following table provides information regarding the total compensation paid or accrued by the Company to
+each of its Chief Executive Officer (“CEO”), Everett V. Pizzuti, its Chief Financial Officer (“CFO”) and its three other highest paid executive officers other than the CEO and CFO for the fiscal year ended January 31, 2014
+(collectively, the “Named Executive Officers”). 
+Because the Company’s Domestic Plan and International Branch Plan are based on achieving specified performance goals, awards under these plans are not considered “Bonuses” for purposes of
+SEC rules and are listed below as “Non-Equity Incentive Plan Compensation.” 
+Summary Compensation Table 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($)(a) 
+Stock 
+Award 
+Option 
+Awards 
+($)(b) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(c) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Everett V. Pizzuti(d) 
+2014 
+278,688 
+— 
+100,700 
+— 
+83,859 
+113,474 
+(e) 
+576,721 
+CEO 
+2013 
+278,619 
+— 
+56,780 
+14,341 
+147,378 
+45,975 
+543,093 
+2012 
+262,789 
+— 
+— 
+— 
+73,891 
+40,131 
+376,811 
+Gregory A. Woods(f) 
+2014 
+235,366 
+— 
+75,525 
+— 
+73,500 
+16,143 
+(g) 
+400,534 
+President and COO 
+2013 
+105,192 
+10,000 
+395,500 
+96,468 
+— 
+5,806 
+612,966 
+Joseph P. O’Connell 
+2014 
+215,818 
+— 
+75,525 
+— 
+60,612 
+36,693 
+(h) 
+388,648 
+Senior Vice President, 
+2013 
+215,765 
+— 
+43,211 
+10,914 
+105,354 
+23,142 
+398,386 
+Treasurer and CFO 
+2012 
+207,155 
+— 
+— 
+— 
+53,000 
+42,617 
+302,772 
+Michael Morawetz 
+2014 
+191,411 
+— 
+39,273 
+— 
+17,867 
+16,059 
+(i) 
+264,610 
+(j) 
+Vice President – 
+2013 
+183,455 
+— 
+27,973 
+7,065 
+11,541 
+15,773 
+245,807 
+International Branches 
+2012 
+184,477 
+— 
+— 
+— 
+4,420 
+16,775 
+205,672 
+Michael J. Natalizia 
+2014 
+148,923 
+— 
+40,280 
+— 
+40,615 
+11,312 
+(k) 
+241,130 
+Vice President – 
+2013 
+142,660 
+— 
+29,851 
+7,539 
+40,017 
+3,757 
+223,824 
+Chief Technology Officer 
+(a) 
+Reflects discretionary cash bonuses. 
+(b) 
+The amounts reflect the aggregate fair value of the awards on the grant date under FASB ASC Topic 718 (formerly FAS 123(R)) for stock options granted to the Named
+Executive Officers. Assumptions used in the calculation of these amounts are included in footnote 9 to the Company’s audited financial statements for the fiscal year ended January 31, 2014, included in the Company’s Annual Report on
+Form 10-K filed with the SEC on April 7, 2014. 
+(c) 
+Reflects cash awards to the named individuals under the Company’s management bonus plan which is discussed in further detail under the heading “Compensation
+Discussion and Analysis” above. 
+(d) 
+Mr. Pizzuti retired as CEO of the Company as of January 31, 2014. 
+(e) 
+Includes pay-out of unused vacation of $55,545, automobile allowance of $41,691, non-cash automobile allowance of $11,300, employer match under the Profit Sharing Plan
+of $4,184, and employer contribution to the Employee Stock Ownership Plan of $754. 
+15 
+(f) 
+Mr. Woods was appointed President and CEO of the Company as of February 1, 2014. During the fiscal year ended January 31, 2014, Mr. Woods served as
+Chief Operating Officer and was appointed President on August 28, 2013. 
+(g) 
+Includes automobile allowance of $12,000, employer match under the Profit Sharing Plan of $3,389, and employer contribution to the Employee Stock Ownership Plan of
+$754. 
+(h) 
+Includes pay-out of unused vacation of $14,154, automobile allowance of $16,520, employer match under the Profit Sharing Plan of $5,265, and employer contribution to
+the Employee Stock Ownership Plan of $754. 
+(i) 
+Represents automobile allowance. 
+(j) 
+Mr. Morawetz’s salary is based on euro currency and is converted to U.S. dollars at the average monthly exchange rate. The exchange rate for the fiscal year
+ended January 31, 2014 was 1.3643. 
+(k) 
+Includes pay-out of unused vacation of $6,153, employer match under the Profit Sharing Plan of $4,405, and employer contribution to the Employee Stock Ownership Plan of
+$754. 
+16 
+Outstanding Equity Awards at Fiscal Year-End 
+The following table provides information on all outstanding
+equity awards held by each of the Named Executive Officers as of January 31, 2014. 
+OPTION AWARDS 
+STOCK AWARDS 
+Name 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options (#) 
+Exercisable 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options (#) 
+Unexercisable 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date (a) 
+Number of 
+Shares or 
+Units of 
+Stock That 
+Have Not 
+Vested (#) 
+Market 
+Value of 
+Shares or 
+Units of 
+Stock That 
+Have Not 
+Vested
+($) 
+Equity 
+Incentive 
+Plan 
+Awards: 
+Number of 
+Unearned 
+Shares, 
+Units or 
+Other 
+Rights That 
+Have Not 
+Vested
+(#) 
+Equity 
+Incentive 
+Plan 
+Awards: 
+Market or 
+Payout 
+Value of 
+Unearned 
+Shares, 
+Units or 
+Other 
+Rights That 
+Have
+Not 
+Vested ($) 
+Everett V. Pizzuti 
+21,250 
+7.9316 
+03/20/16 
+14,000 
+11.4450 
+04/12/17 
+6,275 
+8.9500 
+04/01/18 
+5,000 
+6.2200 
+03/18/19 
+5,000 
+7.3600 
+03/15/20 
+6,800 
+8.3500 
+03/29/22 
+Gregory A. Woods 
+12,500 
+37,500 
+7.91 
+09/04/22 
+37,500 
+512,250 
+7,500 
+102,450.00 
+Joseph P. O’Connell 
+9,375 
+6.7680 
+03/21/15 
+14,062 
+7.9316 
+03/20/16 
+10,000 
+11.4450 
+04/12/17 
+5,375 
+8.9500 
+04/01/18 
+3,600 
+1,200 
+7.3600 
+03/15/20 
+1,294 
+3,881 
+8.3500 
+03/29/22 
+2,588 
+35,352.08 
+7,500 
+102,450.00 
+Michael Morawetz 
+2,062 
+8.7273 
+04/19/14 
+937 
+6.7680 
+03/21/15 
+937 
+7.9316 
+03/20/16 
+3,500 
+11.4450 
+04/12/17 
+3,475 
+8.9500 
+04/01/18 
+3,000 
+6.2200 
+03/18/19 
+2,250 
+750 
+7.3600 
+03/15/20 
+838 
+2,512 
+8.3500 
+03/29/22 
+1,675 
+22,880.50 
+3,900 
+53,274.00 
+Michael J. Natalizia 
+1,250 
+7.9316 
+03/20/16 
+1,600 
+11.4450 
+04/12/17 
+1,000 
+8.9500 
+04/01/18 
+1,000 
+6.2200 
+03/18/19 
+750 
+250 
+7.3600 
+03/15/20 
+500 
+500 
+7.9500 
+03/14/21 
+894 
+2,681 
+8.3500 
+03/29/22 
+1,788 
+17,880.00 
+4,000 
+54,640.00 
+(a) 
+Options vest in four equal annual installments commencing on the first anniversary of the Option Grant Date. 
+17 
+Grants of Plan Based Awards 
+The following table provides information on all plan-based awards by the Company for the fiscal year ended
+January 31, 2014 to each Named Executive Officer. 
+Estimated Possible Payouts Under 
+Equity Incentive Plan Awards(a) 
+All Other 
+Stock 
+Awards: 
+Number of 
+Shares of 
+Stock
+or 
+Units(#)(b) 
+All
+Other 
+Option 
+Awards: 
+Number of 
+Securities 
+Underlying 
+Options(#) 
+Exercise 
+or Base 
+Price of 
+Option 
+Awards 
+($/Sh) 
+Grant 
+Date Fair 
+Value 
+of 
+Stock 
+and 
+Option 
+Awards 
+($)(c) 
+Grant 
+Date 
+Threshold 
+(#) 
+Target 
+(#) 
+Maximum 
+(#) 
+Name 
+Everett V. Pizzuti 
+04/03/2013 
+7,500 
+7,500 
+7,500 
+75,525 
+(d) 
+04/03/2013 
+2,500 
+25,175 
+Gregory A. Woods 
+04/03/2013 
+5,625 
+5,625 
+5,625 
+56,644 
+04/03/2013 
+1,875 
+18,881 
+Joseph P. O’Connell 
+04/03/2013 
+5,625 
+5,625 
+5,625 
+56,644 
+04/03/2013 
+1,875 
+18,881 
+Michael Morawetz 
+04/03/2013 
+2,925 
+2,925 
+2,925 
+29,455 
+04/03/2013 
+975 
+9,818 
+Michael J. Natalizia 
+04/03/2013 
+3,000 
+3,000 
+3,000 
+30,210 
+04/03/2013 
+1,000 
+10,070 
+(a) 
+Represents the potential threshold and target award with respect to the restricted stock units granted on April 3, 2013. Two-thirds of the units vest upon the
+achievement of certain specified goals relating to cumulative budgeted sales targets for the fiscal years 2014 through 2016 and the remainder vest upon the achievement of certain specified goals relating to operating income return on net assets for
+the fiscal years 2014 through 2016. 
+(b) 
+Represents restricted stock awards which vests on the third anniversary of the grant date. 
+(c) 
+Assumptions used in the calculation of these amounts are included in footnote 9 to the Company’s audited financial statements for the fiscal year ended
+January 31, 2014, included in the Company’s Annual Report on Form 10-K filed with the SEC on or around April 7, 2014. 
+(d) 
+The vesting of 4,166 shares was accelerated in connection with Mr. Pizzuti’s retirement as CEO and the balance of the award was forfeited.
+18 
+Option Exercises and Stock Vested 
+The following table provides information on all exercises of
+options by the Named Executive Officers during the Company’s 2014 fiscal year. 
+Option Awards 
+Stock Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#)(a) 
+Value Realized 
+on Exercise ($)(b) 
+Number of 
+Shares Acquired 
+on Vesting (#) 
+Value Realized 
+On Vesting ($)(c) 
+Everett V. Pizzuti 
+41,250 
+129,636 
+10,966 
+135,924 
+Gregory A. Woods 
+— 
+— 
+12,500 
+148,375 
+Joseph P. O’Connell 
+25,425 
+86,658 
+2,587 
+24,783 
+Michael Morawetz 
+— 
+— 
+1,675 
+16,047 
+Michael J. Natalizia 
+3,001 
+7,968 
+1,787 
+17,119 
+(a) 
+Number of shares acquired on exercise have been adjusted to reflect the Company’s May 2004 stock dividend and June 2006 stock split. 
+(b) 
+Based on difference between the closing market price of the Company’s common stock on the date of exercise and the exercise price of the options
+(c) 
+The amounts shown are calculated based on the closing market price of the Company’s common stock on the date of vesting multiplied by the number of shares that
+vested. 
+RELATED PARTY TRANSACTIONS
+Potential conflicts of interest and related
+party transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+Other than as
+described below, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2014 any material interest, direct or indirect, in any material transaction or
+any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+The Company employs two sons of Everett V. Pizzuti, Eric Pizzuti, as Vice President and General Manager of QuickLabel Systems, and Kevin
+Pizzuti, as District Manager, QuickLabel Systems, to whom the Company paid or accrued over $120,000 in compensation, including $140,336 and $120,021, respectively, in salary and commissions during the fiscal year ended January 31, 2014. Eric
+Pizzuti also received a bonus under the Company’s management bonus plan in the amount of $38,005 and an award of restricted stock units valued at $41,287. In addition, the Company made matching contributions for the fiscal year 2014 under its
+qualified Profit-Sharing Plan of $5,260 to Eric Pizzuti and $1,224 to Kevin Pizzuti. The Company also made vacation payouts to Messrs. E. Pizzuti and K. Pizzuti of $2,707 and $1,077, respectively. Messrs. E. Pizzuti and K. Pizzuti received employer
+contributions to their Employee Stock Ownership Plan accounts of $754 each. Kevin Pizzuti also received an automobile allowance of $7,500. 
+19 
+PROPOSAL NO. 2 
+ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION 
+As required by the Section 14A(a)(2) of the Exchange Act, the Board of Directors is providing shareholders with the opportunity to
+cast an advisory vote on its executive compensation at the annual meeting through the following resolution: 
+“RESOLVED, that the shareholders approve the Company’s executive compensation, as described in the Compensation Discussion and
+Analysis and the tabular disclosure regarding named executive officer compensation (together with the accompanying narrative disclosure) in this Proxy Statement.” 
+We believe that our compensation policies and procedures,
+which are described more fully in the “Compensation Discussion and Analysis” section of this Proxy Statement and in the tables and narrative in the “Executive Compensation” section, are strongly aligned with the long-term
+interests of shareholders. These policies and procedures balance short-term and longer-term compensation opportunities to ensure that the Company meets short-term objectives while continuing to produce value for our shareholders over the long term.
+Approval of this proposal will require the
+affirmative vote of a majority of our common stock represented in person or by proxy at the annual meeting. This vote will not be binding on or overrule any decisions by the Board of Directors, will not create or imply any additional fiduciary duty
+on the part of the Board of Directors, and will not restrict or limit the ability of our shareholders to make proposals for inclusion in proxy materials related to executive compensation. The Compensation Committee and the Board of Directors will,
+however, take into account the outcome of the vote when considering future executive compensation arrangements. 
+The Board of Directors recommends a vote “FOR” approval of the Company’s executive compensation, as described in the
+Compensation Discussion and Analysis, and the tabular disclosure regarding named executive officer compensation (together with accompanying narrative disclosure) in this Proxy Statement. 
+PROPOSAL NO. 3 
+APPROVAL OF AMENDMENTS TO 2007 EQUITY INCENTIVE PLAN 
+This section summarizes the proposal to approve certain amendments to the Astro-Med, Inc. 2007 Equity Incentive Plan (the “Amended
+Plan”) in the form included with this Proxy Statement as Appendix A. The Amended Plan was recommended to the Board of Directors by its Compensation Committee (the “Committee”) and the Board of Directors approved the Amended Plan on
+March 16, 2014, subject to approval by the shareholders. 
+Our shareholders originally approved the 2007 Equity Incentive Plan on May 15, 2007 (the “Original Plan”). The Original Plan initially reserved 1,000,000 shares of common stock of issuance
+under the Original Plan. As of January 31, 2014, approximately 359,475 shares remained available for new awards under the Original Plan. The closing market price for Company’s common stock on January 31, 2014 was $13.66. The Original
+Plan is currently scheduled to expire on May 15, 2017. 
+20 
+We are asking our shareholders to approve the Amended Plan which provides for the following
+amendments to the Original Plan: 
+• 
+Increases the number of shares of common stock that may be granted to any employee as options and stock appreciation rights in any one fiscal year from
+50,000 shares to 200,000 shares of common stock; 
+• 
+Increases the number of shares of common stock that may be granted to any employee as restricted stock awards and restricted stock units subject to
+vesting based on attaining performance goals in any one fiscal year from 25,000 shares to 100,000 shares; 
+• 
+Increases the total number of shares of common stock available for grant under the Amended Plan by 500,000 shares from 1,000,000 shares to 1,500,000
+shares (representing 20% of the total number of shares of the Company’s common stock outstanding as of January 31, 2014); and 
+• 
+Extends the expiration date of the Original Plan from May 15, 2017 to May 22, 2024. 
+If our shareholders fail to approve the foregoing amendments
+to the Original Plan, the amendments will not be given effect, and the Original Plan will continue as in effect prior to amendment. Shareholder approval of the Amended Plan will also constitute approval of the material terms of the performance goals
+contained in the Amended Plan for purposes of enabling the Company to meet the requirements under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) for tax deductibility of amounts paid under the Plan to certain of the
+Company’s executive officers. 
+The
+affirmative vote of a majority of the shares present in person or by proxy and entitled to vote at the meeting is required to approve the Amended Plan. A copy of the Amended Plan is attached as Appendix A to this Proxy Statement. The description
+that follows is qualified in its entirety by reference to the full text of the Amended Plan as set forth in Appendix A. 
+PRINCIPAL FEATURES OF THE AMENDED PLAN 
+Purpose. The purpose of the Amended Plan is to attract, retain and motivate key employees by providing them
+with the opportunity to acquire a proprietary interest in the Company and to link that interest with those of shareholders. 
+Authorized Shares. The maximum number of authorized shares of common stock of the Company issuable under the
+Amended Plan is 1,500,000. As of January 31, 2014, there were 645,025 shares of common stock of the Company issued or otherwise issuable pursuant to outstanding equity grants under the Original Plan. 
+If any award expires, lapses or otherwise terminates for any
+reason without having been exercised or settled in full, or if shares subject to forfeiture or repurchase are forfeited or repurchased by the Company, any such shares that are reacquired or subject to such a terminated award will again become
+available for issuance under the Amended Plan. Upon any stock dividend, stock split, reverse stock split, recapitalization or similar change in our capital structure, appropriate adjustments will be made to the shares subject to the Amended Plan, to
+the award grant limitations and to all outstanding awards. 
+Administration. The Amended Plan will be administered by the Compensation Committee or other committee of the Board of Directors duly appointed to administer the Amended
+Plan, or, in the absence of such committee, by the Board of Directors. In the case of awards intended to qualify for the performance-based 
+21 
+compensation exemption under Section 162(m) of the Code, administration must be by a Committee comprised solely of two or more “outside directors” within the meaning of
+Section 162(m) of the Code. (For purposes of this summary, the term “Committee” will refer to either such duly appointed committee or the Board of Directors.) Subject to the provisions of the Amended Plan, the Committee determines in
+its discretion the persons to whom and the times at which awards are granted, the types and sizes of such awards, and all of their terms and conditions. The Committee may, subject to certain limitations on the exercise of its discretion under
+Section 162(m) of the Code, amend, cancel, renew or grant a new award in substitution for, any award, waive any restrictions or conditions applicable to any award, and accelerate, continue, extend or defer the vesting of any award. With respect
+to participation by any person whose transactions in the Company’s common stock are subject to Section 16 of the Exchange Act, the Amended Plan will be administered in compliance with the requirements, if any, of Rule 16b-3 of the Exchange
+Act. The Amended Plan provides, subject to certain limitations, for indemnification by the Company of any director, officer or employee against all reasonable expenses, including attorneys’ fees, incurred in connection with any legal action
+arising from such person’s action or failure to act in administering the Amended Plan. The Committee will interpret the Amended Plan and awards granted thereunder, and all determinations of the Committee will be final and binding on all persons
+having an interest in the Amended Plan or any award. 
+Eligibility. Awards under the Amended Plan may be granted to executive officers and other key employees of the Company or any parent or subsidiary corporation of the Company.
+The Amended Plan also provides that other individuals who perform services for, or act as directors of, the Company or any parent or subsidiary corporation of the Company may be granted awards. Incentive stock options may be granted only to
+employees who, as of the time of grant, are employees of the Company. The Amended Plan’s eligibility criteria are intended to encompass a group which is currently estimated at approximately 71 individuals, which includes 8 executive officers.
+The Committee bases its selection of award recipients, and its determination of the number of shares of the Company’s common stock or units to be covered by each award, on the nature of the participant’s duties and present and potential
+contributions to the Company’s success and other factors it deems relevant. The actual number of individuals who will receive an award cannot be determined in advance because the Committee has discretion to select the participants. 
+Awards. The Amended Plan allows
+for a range of equity-type awards to the Company’s directors, executive officers and other key employees based on or related to the Company’s common stock, including stock options, stock appreciation rights, restricted stock or stock
+units, performance awards and other equity-based awards. Employees may lose certain of their awards unless they meet performance goals or restrictions are removed. We may use previously unissued common stock or common stock held in treasury for
+awards under the Plan. 
+Stock
+Options. Each option granted under the Amended Plan must be evidenced by a written agreement between the Company and the participant specifying the number of shares subject to the option and the other terms and conditions
+of the option, consistent with the requirements of the Amended Plan. The exercise price of each stock option will be established in the discretion of the Committee, provided, however, that the exercise price for an incentive stock option may not be
+less than 100% of the fair market value of the Company’s common stock on the date of grant. Furthermore, any incentive stock option granted to a person, who at the time of grant owns stock possessing more than 10% of the total combined voting
+power of all classes of stock of the Company or any parent or subsidiary corporation of the Company (a “Ten Percent Owner”) must have an exercise price equal to at least 110% of the fair market value of the Company’s common stock on
+the date of grant. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted options for more than 200,000 shares in any fiscal year of the Company under the Amended Plan.
+22 
+The Amended Plan provides that the option exercise price may be paid in cash, by check, or
+in cash equivalent, by the assignment of the proceeds of a sale with respect to some or all of the shares being acquired upon the exercise of the option, to the extent legally permitted, by tender of Company’s common stock owned by the
+participant having a fair market value not less than the exercise price, by such other lawful consideration as approved by the Committee, or by any combination of these. Nevertheless, the Committee may restrict the forms of payment permitted in
+connection with any option grant. No option may be exercised unless the participant has made adequate provision for federal, state, local and foreign taxes, if any, relating to the exercise of the option, including, if permitted or reacquired by the
+Company, through the participant’s surrender of a portion of the option shares to the Company. 
+Options will become vested and exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the Committee. The maximum term of
+any option granted under the Amended Plan is ten years, provided that an incentive stock option granted to a participant owning more than ten percent of the Company’s common stock must have a term not exceeding five years. The Committee will
+specify in each written option agreement, and solely in its discretion, the period of post-termination exercise applicable to each option. 
+Stock options are nontransferable by the participant, other than by will or by the laws of descent and distribution, and are exercisable
+during the participant’s lifetime only by the participant. However, a nonstatutory stock option may be assigned or transferred to the extent permitted by the Committee and set forth in the option agreement. 
+Annual Directors’
+Options. Upon the adjournment of each annual meeting, the Amended Plan provides to directors who are not employees of the Company or its affiliates non-qualified options to purchase 5,000 shares of stock. If a person is
+first elected to serve as director of the Company at any meeting of the shareholders other than an annual meeting, such person is granted an option to purchase 5,000 shares of stock upon election. Each of these options has an exercise price equal to
+the fair market value per share of the stock as of the date of the grant. The options granted to directors have a term of ten years and become exercisable on the earlier of 12 months after the grant date or immediately prior to the occurrence of the
+annual meeting following the date the option is granted. However, the Amended Plan provides that all such options become immediately exercisable upon a change of control of the Company. If a director ceases to be a director of the Company or of an
+affiliate for any reason other than death or disability, all such options that are not exercisable terminate and any remaining options may be exercised within two years following the director’s termination. If a director ceases to be a director
+of the Company or an affiliate due to death or disability, all such options granted to such director become immediately exercisable, and may be exercised within two years following the date of death or disability. 
+Stock Appreciation Rights. Each
+stock appreciation right (“SAR”) granted under the Amended Plan must be evidenced by a written agreement between the Company and the participant specifying the number of shares subject to the award and the other terms and conditions of the
+award, consistent with the requirements of the Amended Plan. 
+A SAR gives a participant the right to receive the appreciation in the fair market value of the Company’s common stock between the date of grant of the award and the date of its exercise. The Company
+may pay the appreciation either in cash or in the Company’s common stock. The Committee may grant SARs under the Amended Plan in tandem with a related stock option or as a freestanding award. A tandem SAR is exercisable only at the time and to
+the same extent that the related option is exercisable, and its exercise causes the related 
+23 
+option to be canceled. Freestanding SARs vest and become exercisable at the times and on the terms established by the Committee. The maximum term of any SAR granted under the Amended Plan is ten
+years. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted SARs for more than 200,000 shares in any fiscal year of the Company under the Amended Plan. SARs are
+nontransferable by the participant, other than by will or by the laws of descent and distribution, and are exercisable during the participant’s lifetime only by the participant. 
+Restricted Stock Awards. The Committee may grant restricted stock awards under
+the Amended Plan either in the form of a restricted stock purchase right, giving a participant an immediate right to purchase the Company’s common stock, or in the form of a restricted stock bonus, for which the participant furnishes
+consideration in the form of services to the Company. The Committee determines the purchase price payable under restricted stock purchase awards, which may be subject to vesting conditions based on such service or performance criteria as the
+Committee specifies, and the shares acquired may not be transferred by the participant until vested. Participants holding restricted stock will have the right to vote the shares and to receive any dividends paid, except that dividends or other
+distributions paid in shares will be subject to the same restrictions as the original award. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, no employee may be granted in any fiscal year of the
+Company, one or more restricted stock awards, subject to vesting conditions based on the attainment of performance goals, for more than 100,000 shares under the Amended Plan. 
+Restricted Stock Units. The
+Committee may grant restricted stock units under the Amended Plan which represent a right to receive common stock of the Company at a future date determined in accordance with the participant’s award agreement. No monetary payment is required
+for receipt of restricted stock units or the shares issued in settlement of the award, the consideration for which is furnished in the form of the participant’s services to the Company. The Committee may grant restricted stock unit awards
+subject to the attainment of performance goals similar to those described below in connection with performance awards, or may make the awards subject to vesting conditions similar to those applicable to restricted stock awards. Participants have no
+voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of common stock are issued in settlement of such awards. However, the Committee may grant restricted stock units that entitle their holders
+to receive dividend equivalents, which are rights to receive additional restricted stock units for a number of shares whose value is equal to any cash dividends paid by the Company. Subject to appropriate adjustment in the event of any change in the
+capital structure of the Company, no employee may be granted in any fiscal year of the Company, one or more restricted stock or unit awards, subject to vesting conditions based on the attainment of performance goals, for more than 100,000 shares
+under the Amended Plan. 
+Performance
+Awards. The Committee may grant performance awards subject to such conditions and the attainment of such performance goals over such periods as the Committee determines in writing designated as performance shares or
+performance units. Performance shares and performance units are unfunded bookkeeping entries generally having initial values, respectively, equal to the fair market value determined on the grant date of the common stock. Performance awards will
+specify a predetermined amount of performance shares or performance units that may be earned by the participant to the extent that one or more predetermined performance goals are attained within a predetermined performance period. To the extent
+earned, performance awards may be settled in cash, common stock of the Company or any combination thereof. Subject to appropriate adjustment in the event of any change in the capital structure of the Company, under the Amended Plan, for each fiscal
+year of the Company contained in the applicable performance period, no employee may be granted performance shares that could result in the employee receiving more than 100,000 shares of the Company’s
+24 
+common stock or performance units that could result in the employee receiving more than $1,000,000 with respect to such units. 
+Prior to the beginning of the applicable performance period
+or such later date as permitted under Section 162(m) of the Code, the Committee will establish one or more performance goals applicable to the award. Performance goals will be based on the attainment of specified target levels with respect to
+one or more measures of business or financial performance of the Company and each parent and subsidiary corporation consolidated therewith for financial reporting purposes, or such division or business unit of the Company as may be selected by the
+Committee. The Committee, in its discretion, may base performance goals on one or more of the following such measures: 
+• 
+revenue; 
+• 
+gross profit margin; 
+• 
+operating income; 
+• 
+operating margin; 
+• 
+income before income taxes; 
+• 
+net income; 
+• 
+earnings before interest, taxes, depreciation and/or amortization (EBITDA); 
+• 
+earnings per share (diluted); 
+• 
+cash flow from operations; 
+• 
+free cash flow; 
+• 
+return on equity; 
+• 
+return on assets; 
+• 
+return on sales; 
+• 
+market share; 
+• 
+one or more operating ratios; 
+• 
+stock price; 
+• 
+accomplishment of mergers, acquisitions, dispositions or similar extraordinary business transactions; 
+• 
+any individual performance objective that is measured solely in terms of quantitative targets related to the Company or the Company’s business;
+and 
+• 
+any combination of the foregoing. 
+The performance goals selected in any case need not be applicable across the Company, but may be particular to an individual’s
+function or business unit. 
+Following completion
+of the applicable performance period, the Committee will certify in writing the extent to which the applicable performance goals have been attained and the resulting value to be paid to the participant. The Committee retains the discretion to
+eliminate or reduce, but not increase, the amount that would otherwise be 
+25 
+payable to the participant on the basis of the performance goals attained. However, no such reduction may increase the amount paid to any other participant. In its discretion, the Committee may
+provide for the payment to a participant who is awarded performance shares of dividend equivalents with respect to cash dividends paid on the Company’s common stock. Performance award payments may be made in lump sum or in installments. If any
+payment is to be made on a deferred basis, the Committee may provide for the payment of dividend equivalents or interest during the deferral period. 
+Unless otherwise provided by the Committee, if a participant’s service terminates due to the participant’s death, disability or
+retirement prior to completion of the applicable performance period, the final award value will be determined at the end of the performance period on the basis of the performance goals attained during the entire performance period but will be
+prorated for the number of months of the participant’s service during the performance period. If a participant’s service terminates prior to completion of the applicable performance period for any other reason, the Amended Plan provides
+that, unless otherwise determined by the Committee, the performance award will be forfeited. No performance award may be sold or transferred other than by will or the laws of descent and distribution prior to the end of the applicable performance
+period. 
+Other Equity-Based
+Awards. The Committee may, in its discretion, grant to eligible employees other equity-based awards, as deemed by the Committee to be consistent with the purposes of the Amended Plan. 
+Effect of a Change in Control on
+Options. In brief, a Change in Control is an event, which changes the ownership of a majority of the voting securities of the Company. For purposes of the Amended Plan, “Change in Control” means (i) any
+purchase of stock pursuant to a tender offer or exchange offer (other than by the Company), (ii) the acquisition of 30% or more of the ownership of the combined voting stock of the Company by any person or group other than the Company or its
+subsidiaries or any employee benefit Amended Plan of the Company or any person who was an officer or director of the Company on the effective date of the Amended Plan, which person or group did not, before the such date, beneficially own 30% or more
+of the combined voting stock of the Company, (iii) approval by the Company’s shareholders of a consolidation, a merger in which the Company does not survive, or the sale of substantially all of the Company’s assets, or (iv) a
+change in the composition of a majority of the Board over a two-year period unless the selection or nomination of each of the new members is approved by two-thirds of those remaining members of the Board who were members at the beginning of the
+two-year period. If a Change in Control occurs, the surviving, continuing, successor or purchasing corporation or parent corporation thereof may either assume all outstanding awards or substitute new awards having an equivalent value. 
+In the event of a Change in Control, and in the event that
+the outstanding stock options are not assumed or substituted for by the acquiring corporation, nor exercised as of the date of the Change in Control, then all such options will terminate and cease to be outstanding effective as of the date of the
+Change in Control. 
+Effect of Change in Control
+on Restricted Stock Awards. In the event of a Change in Control, the lapsing of all vesting conditions and restrictions on any shares subject to any restricted stock award, restricted stock unit and restricted stock
+purchase right held by a participant whose service with the Company has not terminated prior to the Change in Control will be accelerated effective as of the date of the Change in Control. 
+Effect of Change in Control on SARs. In the event of a Change in Control and the
+outstanding SARs are not assumed or substituted for by the acquiring corporation, then all unexercised and/or unvested portions of such outstanding awards will become immediately exercisable and vested in full as of the date 30 days prior to the
+26 
+date of the Change in Control. In the event of a Change in Control and the outstanding SARs are not assumed or substituted for by the acquiring corporation, nor exercised as of the date of the
+Change in Control, then all such outstanding SARs will terminate and cease to be outstanding effective as of the date of the Change in Control. 
+Effect of Change in Control on Performance Awards. In the event of a Change in Control, any performance
+award held by a participant whose service has not yet terminated (unless terminated by death or disability) will become payable effective as of the date of the Change in Control. 
+Summary of U.S. Federal Income Tax
+Consequences. The following summary is intended only as a general guide to the U.S. federal income tax consequences of participation in the Amended Plan and does not attempt to describe all possible federal or other tax
+consequences of such participation or tax consequences based on particular circumstances. 
+Incentive Stock Options. A participant recognizes no taxable income for regular income tax purposes as a result of the grant or exercise of an incentive stock option qualifying under
+Section 422 of the Code. Participants who neither dispose of their shares within two years following the date the option was granted, nor within one year following the exercise of the option, will normally recognize a capital gain or loss equal
+to the difference, if any, between the sale price and the purchase price of the shares. If a participant satisfies such holding periods upon the sale of the shares, the Company will not be entitled to any deduction for federal income tax purposes.
+If a participant disposes of shares within two years after the date of grant, or within one year after the date of exercise (a “disqualifying disposition”), the difference between the fair market value of the shares on the determination
+date (see discussion under “Nonstatutory Stock Options” below) and the option exercise price (not to exceed the gain realized on the sale if the disposition is a transaction in which a loss, if sustained, would be recognized) will be taxed
+as ordinary income at the time of disposition. Any gain in excess of that amount will be a capital gain. If a loss is recognized, there will be no ordinary income, and such loss will be a capital loss. Any ordinary income recognized by the
+participant upon the disqualifying disposition of the shares generally will be deductible by the Company for federal income tax purposes, except to the extent such deduction is limited by applicable provisions of the Code. 
+The difference between the option exercise price and the fair
+market value of the shares on the determination date of an incentive stock option (see discussion under “Nonstatutory Stock Options” below) is treated as an adjustment in computing the participant’s alternative minimum taxable income
+and may be subject to an alternative minimum tax which is paid if such tax exceeds the regular tax for the year. Special rules may apply with respect to certain subsequent sales of the shares in a disqualifying disposition, certain basis adjustments
+for purposes of computing the alternative minimum taxable income on a subsequent sale of the shares and certain tax credits which may arise with respect to participants subject to the alternative minimum tax. 
+Nonstatutory Stock Options. Options not designated or
+qualifying as incentive stock options will be nonstatutory stock options having no special tax status. A participant generally recognizes no taxable income as the result of the grant of such an option, provided the exercise price of the option is no
+less than the fair market value of the common stock at the time of grant Upon exercise of a nonstatutory stock option, the participant normally recognizes ordinary income in the amount of the difference between the option exercise price and the fair
+market value of the shares on the determination date (as defined below). If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. The “determination date” is the date on
+which the option is exercised, unless the shares are subject to a substantial risk of forfeiture (as in the case where a participant is permitted to exercise an unvested option and receive unvested shares which,
+27 
+until they vest, are subject to the Company’s right to repurchase them at the original exercise price upon the participant’s termination of service) and are not transferable, in which
+case the determination date is the earlier of (i) the date on which the shares become transferable, or (ii) the date on which the shares are no longer subject to a substantial risk of forfeiture. If the determination date is after the
+exercise date, the participant may elect, pursuant to Section 83(b) of the Code, to have the exercise date be the determination date by filing an election with the Internal Revenue Service no later than 30 days after the date the option is
+exercised, provided that no Section 83(b) election may be made unless permitted by the terms of the award agreement or approved in writing by the Committee. Upon the sale of stock acquired by the exercise of a nonstatutory stock option, any
+gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. No tax deduction is available to the Company with respect to the grant of a nonstatutory stock
+option or the sale of the stock acquired pursuant to such grant. The Company generally will be entitled to a deduction equal to the amount of ordinary income recognized by the participant as a result of the exercise of a nonstatutory stock option,
+except to the extent such deduction is limited by applicable provisions of the Code. 
+Restricted Stock Awards. A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the “determination date” (as
+defined above under “Nonstatutory Stock Options”). If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the determination date is after the date on which the
+participant acquires the shares, the participant may elect, pursuant to Section 83(b) of the Code, to have the date of acquisition be the determination date by filing an election with the Internal Revenue Service no later than 30 days after the
+date the shares are acquired, provided that no Section 83(b) election may be made unless permitted by the terms of the award agreement or approved in writing by the Committee. Upon the sale of shares acquired pursuant to a restricted stock
+award, any gain or loss, based on the difference between the sale price and the fair market value on the determination date, will be taxed as capital gain or loss. The Company generally will be entitled to a deduction equal to the amount of ordinary
+income recognized by the participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code. 
+Performance and Restricted Stock Units Awards. A participant generally will recognize no income upon the grant of a performance
+share, performance unit or restricted stock unit award. Upon the settlement of such awards, participants normally will recognize ordinary income in the year of receipt in an amount equal to the cash received and the fair market value of any
+nonrestricted shares received. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes. If the participant received shares of restricted stock, the participant generally will be
+taxed in the same manner as described above (see discussion under “Restricted Stock”). Upon the sale of any shares received, any gain or loss, based on the difference between the sale price and the fair market value on the
+“determination date” (as defined above under “Nonstatutory Stock Options”), will be taxed as capital gain or loss. The Company generally will be entitled to a deduction equal to the amount of ordinary income recognized by the
+participant on the determination date, except to the extent such deduction is limited by applicable provisions of the Code. 
+Section 162(m). Section 162(m) of the Code generally denies a corporate tax deduction for annual compensation exceeding
+$1 million paid to the chief executive officer, or to any of the four other most highly compensated officers of a publicly held company. However, certain types of compensation, including performance-based compensation, are generally excluded from
+this deductibility limit. To enable compensation in connection with stock options, certain restricted stock grants, performance shares and performance units awarded under the Amended Plan to qualify as “performance-based” within the
+meaning of Section 162(m) of 
+28 
+the Code, the Amended Plan limits the sizes of such awards as described above. While the Company believes that compensation in connection with such awards under the Amended Plan will be
+deductible by the Company for federal income tax purposes, under certain circumstances, such as a Change in Control, compensation paid in settlement of performance awards may not qualify as “performance-based.” By approving the Amended
+Plan, the shareholders will be approving, among other things, eligibility requirements for participation in the Amended Plan, financial performance measures upon which specific performance goals applicable to certain awards would be based, limits on
+the numbers of shares or level of compensation that could be made subject to certain awards, and the other material terms of the awards described above. 
+Section 409A. Recently adopted, Section 409A of the Code has implications that affect traditional deferred compensation
+plans, as well as certain equity-based awards, such as stock options, restricted stock units, and stock appreciation rights. Section 409A requires compliance with specific rules regarding the timing of exercise or settlement of equity-based
+awards and, unless explicitly set forth in a plan document or award agreement, no acceleration of payment is permitted. Under the preliminary guidance with respect to Section 409A provided by the U.S. Department of Treasury, individuals who
+hold equity awards are subject to the following penalties if the terms of such awards do not comply with the requirements of Section 409A: (i) appreciation is includible in the participant’s gross income for tax purposes once the
+awards are no longer subject to a “substantial risk of forfeiture” (e.g., upon vesting), (ii) the participant is required to pay interest at the tax underpayment rate plus one percentage point commencing on the date an award subject
+to Section 409A is no longer subject to a substantial risk of forfeiture, and (iii) the participant incurs a 20% penalty tax on the amount required to be included in income. Definitive guidance was provided by the U.S. Department of
+Treasury just prior to the completion of this proxy statement that may modify the treatment described above. 
+Awards to Participants Outside the United States. The Committee may modify the terms of any award under the
+Amended Plan made to a participant who is a resident or primarily employed outside the United States in order that such award will conform to applicable laws and regulations or so that the value and other benefits of the award to the participant, as
+affected by foreign tax laws and other restrictions, shall be comparable to the value of such an award to a participant who is resident or primarily employed in the United States. 
+Termination or Amendment. The
+term of the Amended Plan will expire on May 22, 2024. No award grant will be made after such date. The Amended Plan will continue in effect until the first to occur of (i) its termination by the Committee, (ii) the date on which all
+shares available for issuance under the Amended Plan have been issued and all restrictions on such shares under the terms of the Amended Plan and the agreements evidencing awards granted under the Amended Plan have lapsed, or (iii) May 22,
+2024 if the Amended Plan is approved by shareholders. The Committee may terminate or amend the Amended Plan at any time, provided that no amendment may be made without shareholder approval if the Committee deems such approval necessary for
+compliance with any applicable tax requirement or any market system on which the shares of the Company’s common stock are then listed. Furthermore, the provisions dealing with annual directors’ options may not be amended more than once
+every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974 or the rules thereunder. No termination or amendment may affect any outstanding award unless expressly provided by the Committee,
+and in any event, may not adversely affect an outstanding award, without the consent of the participant, unless necessary to comply with any applicable law, regulation or rule. 
+29 
+New Plan Benefits 
+Equity Awards Made in Fiscal Year 2014 . We cannot
+currently determine the benefits or number of shares subject to awards that may be granted in the future to participants under the Amended Plan; therefore, the following table sets forth information with respect to equity awards made in fiscal year
+ended January 31, 2014 under the Original Plan as if the Amended Plan was in effect to each of (i) the named executive officers identified in the “Executive Compensation—Summary Compensation Table” contained in this proxy
+statement, (ii) all current executive officers as a group, (iii) our current non-executive officer directors as a group, and (iv) all employees other than executive officers as a group. 
+Stock 
+Options(#) 
+Restricted 
+Stock 
+Units 
+(#) 
+Performance
+Shares 
+Name 
+Threshold 
+(#) 
+Target 
+(#) 
+Maximum 
+(#) 
+Everett V. Pizzuti, Former Chief Executive Officer 
+— 
+2,500 
+7,500 
+7,500 
+7,500 
+Gregory A. Woods, President and Chief Executive Officer 
+— 
+1,875 
+5,625 
+5,625 
+5,625 
+Joseph P. O’Connell, Senior Vice President, Chief Financial Officer 
+— 
+1,875 
+5,625 
+5,625 
+5,625 
+Michael Morawetz, Vice President, International Branches 
+— 
+975 
+2,925 
+2,925 
+2,925 
+Michael J. Natalizia, Vice President, Chief Technology Officer 
+— 
+1,000 
+3,000 
+3,000 
+3,000 
+Executive Group (9 persons) 
+— 
+46,800 
+Non-Executive Director Group (4 persons) 
+20,000 
+9,901 
+Non-Executive Officer Employee Group (63 persons as of fiscal year end) 
+36,800 
+3,200 
+Equity Awards Made in
+Fiscal Year 2015 and Future Equity Awards. Although we cannot currently determine the benefits or number of shares subject to awards that may be granted during the remainder of the 2015 fiscal year to participants under the Plan, we did award
+our annual equity grants for fiscal year 2015 on March 17, 2014 to our employees, including our executive officers, under the Original Plan. The largest portion of our grants under the Original Plan are typically made during this annual March
+grant process, and if the proposed increase in the share limit for the Amended Plan had been in effect in March 2014, we believe that the awards granted to our executive officers and employees would not have been different, except that the Committee
+intends to award options to purchase 200,000 shares of the Company’s common stock to Gregory A. Woods in connection with his appointment as CEO, which award is subject to approval of the Amended Plan by shareholders. These options will vest in
+four equal annual installments commencing on the fifth anniversary of the date of grant and expire on the ten year anniversary of the date of grant. In addition, pursuant to the terms of the Non-Employee Director Annual Compensation Program, each
+non-employee director will receive, immediately following the adjournment of the 2014 Annual Meeting of Shareholders, the following annual equity grants: (i) an option to acquire 5,000 shares, which will vest immediately prior to the 2015
+annual meeting of shareholders and (ii) restricted stock with a market value (on the date of grant) of $20,000, which will vest on the earlier of May 22, 2015 or the day immediately preceding our next annual meeting of shareholders.
+The following table sets forth information with
+respect to grants made in fiscal year 2015 through March 28, 2014 under the Original Plan to each of (i) the named executive officers identified in the “Executive Compensation—Summary Compensation Table” contained in this
+proxy statement, (ii) all current executive 
+30 
+officers as a group, and (iii) all current employees, other than executive officers, as a group. It also includes the anticipated grant to Gregory A. Woods of options to purchase 200,000
+shares of the Company’s common stock, the option awards to the non-employee directors and the dollar value of the anticipated restricted stock awards to be made to our non-executive officer directors immediately following the adjournment of the
+2014 Annual Meeting of Shareholders. 
+Stock 
+Options(#) 
+Restricted 
+Stock 
+Units 
+(#) 
+Non Executive 
+Director 
+Award Dollar 
+Value
+($) 
+Name 
+Gregory A. Woods, President and Chief Executive Officer 
+200,000 
+— 
+Joseph P. O’Connell, Senior Vice President, Chief Financial Officer 
+7,500 
+— 
+Michael Morawetz, Vice President, International Branches 
+4,700 
+— 
+Michael J. Natalizia, Vice President, Chief Technology Officer 
+5,000 
+— 
+Executive Group (8 persons) 
+32,800 
+— 
+Non-Executive Director Group (5 persons) 
+25,000 
+7,320 
+(a) 
+100,000 
+(b) 
+Non-Executive Officer Employee Group (67 persons as of fiscal year end) 
+42,800 
+(a) 
+Estimated number of shares to be issued to non-employee directors following 2014 annual meeting of shareholders based on a value of $13.66 (the market value of the
+Company’s common stock as of January 31, 2014). 
+(b) 
+Reflects the value of the annual restricted stock awards to non-employee directors. The value does not include the value of any options or stock a director will receive
+pursuant to a director’s election to receive stock in lieu of any cash retainer. 
+Equity Compensation Plan Information 
+The following table provides information as of January 31, 2014, regarding shares outstanding and available for issuance under all equity compensation plans of the Company: 
+Plan Category 
+Number of Securities to 
+be Issued Upon Exercise 
+of Outstanding Options, 
+Warrants and
+Rights 
+Weighted- 
+Average Exercise 
+Price of 
+Outstanding 
+Options, 
+Warrants
+and 
+Rights 
+Number of Securities 
+Remaining Available for 
+Future Issuances Under 
+Equity
+Compensation 
+Plans 
+Equity Compensation Plans Approved by Security Holders 
+780,099 
+(a) 
+$ 
+8.63 
+(b) 
+359,475 
+(c) 
+Equity Compensation Plans Not Approved by Security Holders 
+— 
+— 
+60,242 
+(d) 
+Total 
+780,099 
+(a) 
+$ 
+8.63 
+(b) 
+419,717 
+(a) 
+Includes 167,659 shares issuable upon exercise of outstanding options granted under the Company’s incentive stock option plans, 116,438 shares
+issuable upon exercise of outstanding options granted under the Company’s non-qualified stock option plans under which options may be granted to officers and key employees, 4,125 shares issuable upon exercise of outstanding stock options
+granted under the Astro-Med, 
+31 
+Inc. Non-Employee Director Stock Option Plan, 448,425 shares issuable upon exercise of outstanding options granted and 61,452 restricted stock units outstanding under the Company’s 2007
+Equity Incentive Plan (refer to Note 9 “Shareholders’ Equity” in the audited financial statements for the fiscal year ended January 31, 2014 included in the Company’s Annual Report on Form 10-K filed with the SEC on
+April 7, 2014 for a further discussion). 
+(b) 
+Does not include restricted stock units. 
+(c) 
+Represents shares available for grant under the Astro-Med, Inc. 2007 Equity Incentive Plan. Excludes 45,044 shares issued pursuant to outstanding unvested restricted
+stock awards which are subject to forfeiture. 
+(d) 
+Represent shares available for purchase under the Employee Stock Purchase Plan. 
+The Board of Directors recommends a vote “FOR”
+the approval of the Amended Plan. 
+AUDIT COMMITTEE REPORT
+The Audit Committee of the Board of
+Directors is responsible for providing independent, objective oversight of the Company’s accounting functions and internal controls. The Audit Committee is composed of three directors, each of whom is independent as defined by the NASDAQ
+listing standards and SEC rules. The Audit Committee operates under a written charter approved by the Board of Directors. 
+Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are
+responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor
+and oversee these processes. 
+The Audit
+Committee’s responsibilities focus on two primary areas: (1) the adequacy of the Company’s internal controls and financial reporting process and the reliability of the Company’s financial statements; and (2) the independence
+and performance of the Company’s independent accountants. The Audit Committee has sole authority to select, evaluate and when appropriate, to replace the Company’s independent auditors. 
+The Audit Committee has met with management and the
+Company’s independent accountants, Wolf & Company, P.C., to review and discuss the January 31, 2014 financial statements. Management represented to the Committee that the Company’s consolidated financial statements were
+prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee also discussed with
+Wolf & Company, P.C.the matters required by Statement on Auditing Standards No. 61 ( Communication with Audit Committees ), as amended and as adopted by the Public Company Accounting Oversight Board (“PCAOB”) in Rule
+3200T. The Audit Committee also received from Wolf & Company, P.C. the written disclosures and the letter from Wolf & Company, P.C. pursuant to applicable requirements of the PCAOB regarding Wolf & Company, P.C.’s
+communications with the Audit Committee concerning independence, and has discussed with Wolf & Company, P.C. its independence from the Company. 
+The Audit Committee received the information concerning the fees of Wolf & Company, P.C. for the year ended January 31, 2014
+set forth below under “Independent Accountant Fees and Services.” The Audit Committee considered whether the provision of non-audit services is compatible with maintaining the 
+32 
+independence of the independent accountants and has determined that the provision of such services by Wolf & Company, P.C. is compatible with maintaining that firm’s independence.
+Based upon the review and discussions referred to
+above, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2014, to be filed with the SEC. 
+Audit Committee: 
+Graeme MacLetchie (Chairman) 
+Harold Schofield 
+Mitchell I. Quain 
+PROPOSAL NO. 4 
+RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee has sole authority to select, evaluate
+and when appropriate, to replace the Company’s independent auditors. The Audit Committee has appointed Wolf & Company, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending January 31,
+2015. Although action by our shareholders on this matter is not required, the Audit Committee believes it is appropriate to seek shareholder ratification in light of the critical role played by the independent auditors in maintaining the integrity
+of Company financial controls and reporting and hereby requests the shareholders to ratify such appointment. 
+The Board of Directors recommends a vote “FOR” the ratification of the appointment of Wolf & Company, P.C. as the
+Company’s independent registered public accounting firm. 
+Independent Accountants’ Fees, Services and Other Matters 
+On July 10, 2013, the Audit Committee approved the
+dismissal of Ernst & Young LLP (“E&Y”) as the Company’s independent registered public accounting firm. During the fiscal years of the Company ended January 31, 2013 and 2012, and the subsequent interim period through
+July 10, 2013 (the date of dismissal), there were no disagreements between the Company and EY on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not
+resolved to EY’s satisfaction, would have caused EY to make reference to the subject matter of the disagreement in connection with its reports; and there were no reportable events described under Item 304(a)(1)(v) of Regulation S-K.
+The audit reports of EY on the consolidated
+financial statements of the Company as of and for the fiscal years ended January 31, 2013 and 2012 did not contain any adverse opinion or disclaimers of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting
+principles. 
+We requested that E&Y to furnish
+the Company with a letter addressed to the U.S. Securities and Exchange Commission stating whether E&Y agreed with the foregoing disclosures. A copy of such letter is filed as Exhibit 16.1 to our Current Report on Form 8-K filed with the SEC on
+July 16, 2013. 
+On July 10, 2013,
+following the approval of its Audit Committee, the Company engaged the services of Wolf & Company, P.C. as its principal accountant to audit the Company’s financial statements. During the two
+33 
+most recent fiscal years ended January 31, 2013 and 2012 or any subsequent interim period prior to Wolf & Company, P.C’s engagement, the Company did not consult with
+Wolf & Company, P.C. regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K. 
+The Company expects a representative of Wolf & Company, P.C. will be present at the annual meeting with the opportunity to make a
+statement, if he or she so desires, and that such representative will be available to respond to appropriate questions. 
+Aggregate fees for professional services rendered for the Company by Wolf & Company, P.C. and E&Y for the fiscal years ended
+January 31, 2014 and 2013 are set forth below. The aggregate fees included in the Audit category are billed for the fiscal years for the audit of the Company’s annual financial statements and review of financial statements and statutory
+and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed for the fiscal year. 
+2014 
+2013 
+Audit Fees 
+$ 
+153,378 
+$ 
+250,000 
+Audit-Related Fees 
+0 
+0 
+Tax Fees 
+0 
+0 
+All Other Fees 
+0 
+0 
+Audit Fees for the
+fiscal years ended January 31, 2014 and 2013 were for professional services rendered for the audits of the financial statements of the Company, quarterly review of the financial statements included in the Company’s Quarterly Reports on
+Form 10-Q, consents and other assistance required to complete the year end audit of the consolidated financial statements. 
+Policy on Audit Committee Pre-Approval . The Audit Committee pre-approves all audit and non-audit services provided by the
+independent accountants prior to the engagement of the independent accountants with respect to such services. None of the services described above were approved by the Audit Committee under the de minimus exception provided by Rule
+2-01(C)(7)(i)(c) under Regulation S-X. 
+FINANCIAL REPORTS
+A copy of the annual report of the Company
+for the fiscal year ended January 31, 2014 including the Company’s annual report to the SEC on Form 10-K, accompanies this proxy statement. Such report is not part of this proxy statement. 
+PROPOSALS FOR 2015 ANNUAL MEETING 
+The 2015 annual meeting of the shareholders of the Company
+is scheduled to be held on May 19, 2015. If a shareholder intending to present a proposal at that meeting wishes to have such proposal included in the Company’s proxy statement and form of proxy relating to the meeting, the shareholder
+must submit the proposal to the Company not later than December 22, 2014. Shareholder proposals that are to be considered at the 2015 annual meeting but not requested to be included in the proxy statement must be submitted no later than
+March 20, 2015 and no earlier than December 22, 2014. 
+34 
+OTHER MATTERS 
+No business other than that set forth in the attached Notice
+of Meeting is expected to come before the annual meeting, but should any other matters requiring a vote of shareholders arise, including a question of adjourning the meeting, the persons named in the accompanying proxy will vote thereon according to
+their best judgment in the interests of the Company. In the event any of the nominees for the office of director should withdraw or otherwise become unavailable for reasons not presently known, the persons named as proxies will vote for other
+persons in their place in what they consider the best interests of the Company. 
+You are urged to sign and return your proxy promptly to make certain your shares will be voted at the meeting. You may revoke your proxy at any time before it is voted. 
+By Order of the Board of Directors 
+Margaret D. Farrell 
+Secretary 
+35 
+Appendix A 
+AMENDMENT TO ASTRO-MED, INC. 2007 EQUITY INCENTIVE PLAN
+All capitalized terms used in this Amendment to the
+Astro-Med, Inc. 2007 Equity Incentive Plan (this “Amendment”) shall have the meanings ascribed to them in the Astro-Med, Inc. 2007 Equity Incentive Plan (the “Plan”). 
+This Amendment shall become effective on the date of approval by the shareholders of Astro-Med, Inc. (the “Company”),
+currently anticipated on May 22, 2014 (the “Effective Date”). Unless provided for in this Amendment, all provisions of the Plan shall remain in effect, unchanged by this Amendment. 
+1. 
+Section 4.1 is hereby amended by deleting current Section 4.1 and restating and replacing it with the following: 
+4.1 Share
+Reserve . The total number of shares of Stock that may be issued pursuant to Awards granted under the Plan shall not exceed an aggregate of one million (1,500,000) shares; provided ,
+however , that the class and aggregate number of shares which may be subject to Awards granted under the Plan shall be subject to adjustment as provided in Section 7 and 11 hereof. 
+2. 
+Section 5.5 is hereby amended by deleting current Section 5.5 and restating and replacing it with the following: 
+5.5 Section
+162(m) Award Limits. The following limits shall apply to the grant of any Award if, at the time of grant, the Company is a “publicly held corporation within the meaning of Section 162(m): 
+(a) Options and
+SARs . Subject to adjustment as provided in Sections 7 and 11, no Employee shall be granted within any fiscal year of the Company one or more Options or Freestanding SARs (as defined in Section 7.1) which in the aggregate are for more
+than two hundred thousand (200,000) shares of Stock. An Option which is canceled (or a Freestanding SAR as to which the exercise price is reduced to reflect a reduction in the Fair Market Value of the Stock) in the same fiscal year of the
+Company in which it was granted shall continue to be counted against such limit for such fiscal year. 
+(b) Restricted Stock Awards . Subject to adjustment as provided in Section 11, no
+Employee shall be granted within any fiscal year of the Company one or more Restricted Stock Awards, subject to Vesting Conditions based on the attainment of Performance Goals, for more than one hundred thousand (100,000) shares of Stock.
+3. 
+Section 20 is hereby amended by deleting current Section 20 and restating and replacing it with the following: 
+SECTION 20. EFFECTIVE DATE AND
+DURATION OF PLAN 
+The Plan,
+as amended, shall become effective on the Effective Date. No Award may be granted under the Plan after the May 22, 2024. The Plan shall terminate when the total amount of the Stock available for issuance under the Plan have been issued and all
+restrictions on such shares under the terms of the Plan and the agreements evidencing Awards granted under the Plan have lapsed. 
+End of Amendment 
+A-1
+ASTRO-MED, INC. 
+2007 EQUITY INCENTIVE PLAN 
+SECTION 1. PURPOSE 
+This 2007 Equity Incentive Plan (the “Plan”) is
+designed to attract and retain the best available talent and encourage the highest level of performance by, and provide additional incentive to executives and other key employees of the Company and any other member of the Participating Company
+Group, and for certain other individuals providing services to or acting as directors of the Company and any other member of the Participating Company Group. The Company intends that this purpose will be effected by providing for Awards in the form
+of Options, Stock Appreciation Rights, Restricted Stock Awards, Performance Awards and Other Stock-Based Awards, which afford such executives, key employees, directors and other eligible individuals an opportunity to acquire or increase their
+proprietary interest in the Company through the acquisition of shares of its Stock. The terms of the Plan shall be interpreted in accordance with this intention. 
+SECTION 2. DEFINITIONS AND CONSTRUCTION
+2.1 
+Definitions . Whenever used herein, the following terms shall have their respective meanings set forth below: 
+“Acquiring Corporation” shall have the meaning set forth in Section 12.1 hereof. 
+“Award” means any Option, SAR, Restricted Stock
+Award, Performance Award or Other Stock-Based Award granted under the Plan. 
+“Award Agreement” means a written agreement between the Company and a Participant setting forth the terms, conditions and restrictions of the Award granted to the Participant. An Award Agreement
+may be an “Option Agreement,” a “SAR Agreement,” a “Restricted Stock Purchase Agreement,” a “Restricted Stock Bonus Agreement,” a “Restricted Stock Unit Agreement,” a “Performance Share
+Agreement,” or a “Performance Unit Agreement.” 
+“Board” means the Board of Directors of the Company. 
+“Calculation Date” shall have the meaning set forth in Section 4.2 hereof. 
+“Cashless Exercise” shall have the meaning set
+forth in Section 6.3 hereof. 
+“Cause” shall have the meaning given such term in the applicable Award Agreement and, in the absence of any such definition,
+means (x) any material breach by the Participant of any agreement to which the Participant and the Company are both parties, (y) any act or omission to act by the Participant which may have a material and adverse effect on the
+Company’s business or on the Participant’s ability to perform services for the Company, including, without limitation, the commission of any crime (other than ordinary traffic violations), or (z) any material misconduct or material
+neglect of duties by the Participant in connection with the business or affairs of the Company or any Participating Company. 
+“Change in Control” means (i) any purchase of Stock pursuant to a tender offer or exchange offer (other than by the
+Company), (ii) the acquisition of 30% or more of the beneficial ownership of the combined voting 
+A-2
+securities of the Company by any person or group (as such terms are used in Section 13(d) and 14(d) of the Exchange Act), other than the Company or its subsidiaries or any employee benefit
+plan of the Company or any person who was an officer or director of the Company on the Effective Date of the Plan, which person or group did not theretofore beneficially own 30% or more of the combined voting securities of the Company,
+(iii) approval by Company shareholders of a consolidation, a merger in which the Company does not survive, or the sale of substantially all of the Company’s assets, or (iv) a change in the composition of a majority of the Board over a
+two-year period unless the selection or nomination of each of the new members is approved by two-thirds of those remaining members of the Board who were members at the beginning of the two-year period. 
+“Code” means the Internal Revenue Code of 1986, as
+amended, and any applicable regulations promulgated thereunder. 
+“Committee” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board. If no committee of
+the Board has been appointed to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers. 
+“Company” means Astro-Med, Inc., a Rhode Island
+corporation, or any successor company thereto. 
+“Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a
+Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in
+reliance on registration on a Form S-8 Registration Statement under the Securities Act. 
+“Designated Beneficiary” means the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require.
+“Director” means a member of the Board
+or of the board of directors of any other Participating Company. 
+“Disability” means permanent and total disability as defined in Section 22(e)(3) of the Code. 
+“Dividend Equivalent” means a credit, made at the discretion of the Committee or as otherwise provided by the Plan, to the
+account of a Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock represented by an Award of Restricted Stock Units or Performance Shares held by such Participant. 
+“Effective Date” shall have the meaning set forth
+in Section 20 hereof. 
+“Employee”
+means any person treated as an employee (including an officer or a Director who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for
+purposes of Section 422 of the Code; provided , however , that neither service as a Director nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan. 
+“Exchange Act” means the Securities Exchange Act of
+1934, as amended. 
+A-3
+“Fair Market Value” means, as of any date, the value of a share of Stock or other
+property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following: 
+(i) If, on such date, the Stock is listed on a national or regional securities exchange or market system, the
+Fair Market Value of a share of Stock shall be the closing price of a share of Stock on such national or regional securities exchange or market system constituting the primary market for the Stock, as reported in the Eastern Edition of The Wall
+Street Journal or such other source as the Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established
+shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion. 
+(ii) If, on such date, the Stock is not listed on a national
+or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse.
+“Freestanding SAR” means a SAR awarded
+by the Committee pursuant to Section 7.1 hereof other than in connection with an Option. 
+“Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an “incentive stock option” within the meaning of
+Section 422(b) of the Code or any successor provision thereto as in effect from time to time. 
+“Insider” means, at any time, any person whose transactions in Stock are subject to Section 15 of the Exchange Act or any successor rule or regulation thereto as in effect from time to
+time. 
+“New Shares” shall have the
+meaning set forth in Section 11.2 hereof. 
+“Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Award Agreement) or which does not qualify
+as an Incentive Stock Option. 
+“Option”
+means a right to purchase Stock (subject to adjustment as provided in Section 7 and 11 hereof) pursuant to the terms and conditions of the Plan. 
+“Option Expiration Date” shall have the meaning set forth in Section 6.4 hereof. 
+“Other Stock-Based Award” means any right granted
+under Section 10 hereof. 
+“Parent
+Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code. 
+“Participant” means any eligible person selected by the Committee to receive an Award under the Plan. 
+“Participating Company” means the Company or any
+Parent Corporation or Subsidiary Corporation. 
+“Participating Company Group” means at any point in time, all corporations collectively which are then Participating Companies.
+A-4
+“Performance Award” means an Award of Performance Shares or Performance Units.
+“Performance Goal” means a performance
+goal established by the Committee pursuant to Section 9.2 hereof. 
+“Performance Period” means a period established by the Committee pursuant to Section 9.2 hereof, at the end of which one or more Performance Goals are to be measured. 
+“Performance Share” means a bookkeeping entry
+representing a right granted to a Participant pursuant to the terms and conditions of Section 9 hereof to receive a payment equal to the value of a Performance Share, as determined by the Committee, based on performance. 
+“Performance Unit” means a bookkeeping entry
+representing a right granted to a Participant pursuant to the terms and conditions of Section 9 hereof to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based upon performance. 
+“Plan” means the 2007 Equity Incentive Plan, as
+amended from time to time. 
+“Restricted
+Stock” means Stock granted to a Participant pursuant to the terms and conditions of Section 8 hereof. 
+“Restricted Stock Award” means an Award of Restricted Stock, a Restricted Stock Purchase Right or a Restricted Stock Unit.
+“Restricted Stock Purchase Right” means
+a right to purchase Stock granted to a Participant pursuant to the terms and conditions of Section 8 hereof. 
+“Restricted Stock Unit” means a bookkeeping entry representing a right granted to a Participant to receive in cash or Stock the
+Fair Market Value of a share of Stock granted pursuant to the terms and conditions of Section 8 hereof. 
+“Restriction Period” means the period established in accordance with Section 8.4 hereof during which shares subject to a
+Restricted Stock Award are subject to Vesting Conditions. 
+“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation thereto. 
+“Section 162(m)” means Section 162(m) of the Code. 
+“Securities Act” means the Securities Act of 1933,
+as amended. 
+“Service” means a
+Participant’s employment or service with a Participating Company, whether in the capacity of an Employee, a Director or a Consultant. A Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity
+in which the Participant renders Service to the Participating Company or a change in the Participating Company for which the Participant renders such Service, provided that there is no interruption or termination of the Participant’s Service.
+Furthermore, a Participant’s 
+A-5
+Service with a Participating Company may be deemed, as provided in the applicable Award Agreement, to have terminated if the Participant takes any military leave, sick leave, or other bona fide
+leave of absence approved by the Company; provided , however , that if any such leave exceeds ninety (90) days, on the one hundred eighty-first (181st) day of such leave any Incentive Stock Option held by such
+Participant shall cease to be treated as an Incentive Stock Option and instead shall be treated thereafter as a Nonstatutory Stock Option unless the Participant’s right to return to Service with the Participating Company is guaranteed by
+statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Participating Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Participant’s
+Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the Participating Company for which the Participant performs Service ceasing to be a Participating Company. Subject
+to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination. 
+“Stock” means the common stock of the Company, as
+adjusted from time to time in accordance with Section 7 and 11 hereof. 
+“Stock Appreciation Right” or “SAR” means a bookkeeping entry representing, for each share of Stock subject to such SAR, a right granted to a Participant pursuant to Section 7
+hereof to receive payment of an amount equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. 
+“Subsidiary Corporation” means any present or
+future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code. 
+“Tandem SAR” means a SAR awarded by the Committee in connection with an Option pursuant to Section 7.1 hereof. 
+“Ten Percent Owner” means a Participant who, at the
+time an Option is granted to the Participant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning of Section 422(b)(6) of the Code.
+“Vesting Conditions” means those
+conditions established in accordance with Section 8.4 prior to the satisfaction of which shares subject to a Restricted Stock Award remain subject to forfeiture or a repurchase option in favor of the Company. 
+2.2 Construction . Captions and titles contained herein are for convenience only and shall not
+affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural, the plural shall include the singular and the masculine shall include the feminine and neuter,
+as the context requires. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise. 
+SECTION 3. ADMINISTRATION 
+3.1 Administration by the Committee. 
+The Plan shall be administered by the Committee. All
+questions of interpretation of the Plan or of any Award shall be determined by the Committee, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Award. 
+A-6
+3.2 Authority of Officers . Any officer of a
+Participating Company shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the officer
+has apparent authority with respect to such matter, right, obligation, determination or election. 
+3.3 Powers of the Committee . In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Committee
+shall have the full and final power and authority, in its discretion: 
+(a) to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of Stock or units to be subject to each Award; 
+(b) to determine the type of Award
+granted and to designate Options as Incentive Stock Options or Nonstatutory Stock Options; 
+(c) to determine the Fair Market Value of shares of Stock or other property; 
+(d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and
+any shares acquired pursuant thereto, including, without limitation, (i) the purchase price of any Stock, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding
+obligation arising in connection with any Award, including by the withholding or delivery of shares of Stock, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto,
+(v) the Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (vi) the time of the expiration of any Award, (vii) the effect of the Participant’s termination of Service on
+any of the foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan; 
+(e) to determine whether an Award of Restricted Stock Units, Performance Shares,
+Performance Units or Stock Appreciation Rights will be settled in shares of Stock, cash, or in any combination thereof; 
+(f) to approve one or more forms of Award Agreement; 
+(g) to amend, modify, extend, cancel or renew any Award or to waive any restrictions or
+conditions applicable to any Award or any shares acquired pursuant thereto; 
+(h) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto, including, without limitation, with respect to the
+period following a Participant’s termination of Service; 
+(i) to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without
+limitation, as the Committee deems necessary or desirable to comply with the laws of, or to accommodate the tax policy or custom of, foreign jurisdictions whose citizens may be granted Awards; 
+(j) to authorize, in conjunction with any applicable Company deferred compensation plan,
+that the receipt of cash or Stock subject to any Award under this Plan, may be deferred under the terms and conditions of such Company deferred compensation plan; and 
+A-7
+(k) to correct any defect, supply any omission or reconcile any
+inconsistency in the Plan or any Award Agreement and to make all other determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of the
+Plan or applicable law. 
+3.4 Administration with Respect to Insiders . With respect to participation by Insiders in the
+Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3. 
+3.5 Committee Complying with
+Section 162(m). If the Company is a “publicly held corporation” within the meaning of Section 162(m), the Board may establish a Committee of “outside directors” within the meaning of
+Section 162(m) to approve the grant of any Award which might reasonably be anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax purposes pursuant
+to Section 162(m). 
+3.6 Indemnification . In addition to such other rights of indemnification as they may have as
+members of the Board, the Committee or as officers or employees of a Participating Company, members of the Board or of the Committee and any officers or employees of the Participating Company to whom authority to act for the Board, the Committee or
+the Company is delegated, shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with
+any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof
+(provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such
+action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided , however , that within sixty (60) days after the institution of such action, suit or
+proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. 
+SECTION 4. SHARES SUBJECT TO PLAN 
+4.1 Share Reserve . The total number of shares of Stock that may be issued pursuant to
+Awards granted under the Plan shall not exceed an aggregate of one million (1,000,000) shares; provided , however , that the class and aggregate number of shares which may be subject to Awards granted under the Plan
+shall be subject to adjustment as provided in Section 7 and 11 hereof. 
+4.2 Determination of Shares Issued and Issuable . Shares of Stock shall not be deemed to have been issued pursuant to the Plan (i) with
+respect to any portion of an Award that is settled in cash or (ii) to the extent such shares are withheld and/or attested to in satisfaction of tax withholding obligations pursuant to Section 14.2. Upon payment in shares of Stock pursuant
+to the exercise of a SAR, the number of shares available for issuance under the Plan shall be reduced only by the number of shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company, or attestation
+to the ownership, of shares of Stock owned by the Participant, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the Option is exercised. 
+A-8
+4.4 Expiration, Cancellation or Termination of
+Award . Whenever any outstanding Award under the Plan expires for any reason, is canceled or is otherwise terminated without having been exercised or settled in full, the shares of Stock allocable to the unexercised
+portion of such Award may again be the subject of Awards under the Plan. 
+4.5 Source of Shares . The Stock subject to the Awards granted under the Plan shall be shares of the Company’s authorized but unissued Stock
+or shares of the Stock held in treasury. 
+SECTION
+5. ELIGIBILITY 
+5.1 General . In determining the Participants to whom Awards shall be granted and the
+amount of Stock or units to be covered by each Award, the Committee shall take into account the nature of the Participant’s duties, the present and potential contributions to the success of the Company, and such other factors as it shall deem
+relevant in connection with accomplishing the purposes of the Plan. 
+5.2 Persons Eligible for Incentive Stock Options . Incentive Stock Options may be granted only
+to Employees. For purposes of the foregoing sentence, the term “Employees” shall include prospective Employees to whom Incentive Stock Options are granted in connection with written offers of employment with the Participating Companies;
+provided , however , that any such Incentive Stock Option shall be deemed granted effective on the date such person commences Service as an Employee, with an exercise price determined as of such date in accordance with
+Section 6.1 hereof. Eligible persons may be granted more than one (1) Incentive Stock Option. 
+5.3 Persons Eligible for Other Awards . Awards other than Incentive Stock Options may be granted only to Employees, Consultants and Directors.
+For purposes of the foregoing sentence, the terms “Employees,” “Consultants” and “Directors” shall include prospective Employees, prospective Consultants and prospective Directors to whom Awards are granted in
+connection with written offers of an employment or other service relationship with the Participating Companies; provided , however , that no Stock subject to any such Award shall vest, become exercisable or be issued prior
+to the date on which such person commences Service as an Employee, Consultant or Directors. Eligible persons may be granted more than one (1) Award. 
+5.4 Fair Market Value Limitation on Incentive Stock Options . To the extent that options
+designated as Incentive Stock Options (granted under all stock option plans of the Participating Companies, including the Plan) become exercisable by a Participant for the first time during any calendar year for stock having a Fair Market Value
+greater than One Hundred Thousand Dollars ($100,000), the portions of such options which exceed such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section 5.4, Options designated as Incentive Stock Options shall be
+taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from
+that set forth in this Section 5.4, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code. If an Option is treated as an
+Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 5.4, the Participant may designate which portion of such Option the Participant is exercising. In the absence of
+such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. 
+A-9
+5.5 Section 162(m) Award Limits . The
+following limits shall apply to the grant of any Award if, at the time of grant, the Company is a “publicly held corporation within the meaning of Section 162(m): 
+(c) Options and SARs .
+Subject to adjustment as provided in Sections 7 and 11, no Employee shall be granted within any fiscal year of the Company one or more Options or Freestanding SARs (as defined in Section 7.1) which in the aggregate are for more than fifty
+thousand (50,000) shares of Stock. An Option which is canceled (or a Freestanding SAR as to which the exercise price is reduced to reflect a reduction in the Fair Market Value of the Stock) in the same fiscal year of the Company in which it was
+granted shall continue to be counted against such limit for such fiscal year. 
+(d) Restricted Stock Awards . Subject to adjustment as provided in Section 11, no Employee shall be granted within any fiscal year of the Company one or more
+Restricted Stock Awards, subject to Vesting Conditions based on the attainment of Performance Goals, for more than twenty-five thousand (25,000) shares of Stock. 
+5.6 Performance
+Awards . Subject to adjustment as provided in Section 11, no Employee shall be granted (a) Performance Shares which could result in such Employee receiving more than twenty-five thousand (25,000) shares
+of Stock for each full fiscal year of the Company contained in the Performance Period for such Award, or (b) Performance Units which could result in such Employee receiving more than One Million Dollars ($1,000,000) with respect to such
+Performance Units for each full fiscal year of the Company contained in the Performance Period for such Award. No Participant may be granted more than one Performance Award for the same Performance Period. 
+SECTION 6. TERMS AND CONDITIONS OF STOCK OPTIONS
+Options shall be evidenced by Option
+Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee shall from time to time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully
+executed Option Agreement. Option Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 
+6.1 Exercise Price . The exercise price for each Option shall be
+established in the discretion of the Committee; provided , however , that (a) the exercise price per share for an Incentive Stock Option shall be not less than the Fair Market Value of a share of Stock on the effective
+date of grant of the Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date of
+grant of the Option. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a
+manner qualifying under the provisions of Section 424(a) of the Code. 
+6.2 Exercisability and Term of Options . Options shall be exercisable at such time or times, or upon such event or events, and subject to such
+terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Option Agreement evidencing such Option; provided , however , that (a) no Option shall be
+exercisable after the expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the expiration of five (5) years after the
+effective date of grant of such Option, (c) no Option granted to a prospective 
+A-10
+Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such person commences Service. Subject to the foregoing, unless otherwise specified by
+the Committee in the grant of an Option, any Option granted hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions. 
+6.3 Payment of Exercise Price .
+(a) Forms of
+Consideration Authorized . Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by
+tender to the Company, or attestation to the ownership, of shares of Stock owned by the Participant having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice together with irrevocable
+instructions to a broker providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying
+with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) by such other consideration as may be approved by the Committee from time to
+time to the extent permitted by applicable law, or (v) by any combination thereof. The Committee may at any time or from time to time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the
+exercise price or which otherwise restrict one or more forms of consideration. 
+(b) Limitations on Forms of Consideration . 
+(i) Tender of Stock . Notwithstanding the foregoing, an Option may not be exercised by tender to the Company,
+or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock. Unless otherwise
+provided by the Committee, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for more than six (6) months (and not used for
+another Option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company. 
+(ii) Cashless Exercise . The Company reserves, at any and all times, the right, in the Company’s sole
+and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. 
+6.4 Effect of Termination of Service . 
+(a) Option
+Exercisability . An Option granted to a Participant shall be exercisable after the Participant’s termination of Service only during the applicable time period determined in accordance with the Option’s term as set forth in the
+Option Agreement evidencing such Option (the “Option Expiration Date”). 
+(b) Extension if Exercise Prevented by Law . Notwithstanding the foregoing, other than termination of a Participant’s Service for Cause if the exercise of an
+Option within the applicable time periods set forth in an Option Agreement is prevented by the provisions of Section 13 below, the Option shall remain exercisable until one (1) month (or such longer period of time as determined by the
+Committee, in its discretion) after the date the Participant is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date. 
+A-11
+(c) Extension if Participant Subject to
+Section 16(b) . Notwithstanding the foregoing other than termination of a Participant’s Service for Cause if a sale within the applicable time periods set forth in an Option Agreement of shares acquired upon the exercise of the
+Option would subject the Participant to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the
+Participant would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Participant’s termination of Service, or (iii) the Option Expiration Date. 
+6.5 Transferability of
+Options . During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative. No Option shall be assignable or transferable by the
+Participant, except by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the Committee, in its discretion, and set forth in the Option Agreement evidencing such Option, a Nonstatutory Stock
+Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration Statement under the Securities Act. 
+6.6 Annual Directors’ Options . Upon the adjournment of each
+annual meeting or special meeting in lieu of an annual meeting of the shareholders of the Company (either, the “Annual Meeting”), each person who is not an employee of the Company or of an Affiliate who is serving as a Director of the
+Company upon the adjournment of such Annual Meeting shall be granted a Nonstatutory Stock Option to purchase 5,000 shares of Stock, provided, however, a person who is not an employee of the Company or of an Affiliate who is first elected to serve as
+a Director of the Company at any meeting of stockholders other than the Annual Meeting or at any meeting of the Board of Directors (or by the unanimous written consent of the Directors) pursuant to the Company’s Articles of Incorporation and
+its By-Laws shall be granted a Nonstatutory Stock Option to purchase 5,000 shares of Stock upon such election. Each such Option shall have an exercise price equal to the Fair Market Value per share of the Stock on the date of grant of the Option.
+(a) Option
+Exercisability . Each Option granted pursuant to this Section 6.6, shall (i) have a term of ten (10) years and (ii) become exercisable immediately prior to the occurrence of the Annual Meeting following the date the Option
+is granted. Notwithstanding the foregoing, all such Options shall become immediately exercisable upon a Change of Control of the Company. 
+(b) Termination of Directorship . If a director fails to be re-elected to the Board, resigns or
+otherwise ceases to be a director of the Company for reasons other than death or Disability, all Options granted under this Section 6.6 to such director which are not exercisable on such date shall immediately terminate, and any such Options
+remaining shall terminate if not exercised before twenty-four (24) months following such termination, or at such earlier time as may be applicable under Section 6.6(a) above. 
+(c) Death or Disability . If a Participant ceases to be a director of the
+Company by reason of death or Disability, all Options granted under this Section 6.6 to such director which are not exercisable on such date shall become immediately exercisable, and may be exercised at any time before the expiration of
+twenty-four (24) months following the date of death or commencement of Disability, or such earlier time as may be applicable under Section 6.6(a) above. 
+(d) Amendments .
+Notwithstanding the provisions of Section 15 hereof concerning amendment of the Plan, the provisions of this Section 6.6 shall not be amended more than once every six months, other than to comport with changes in the Code, the Employee
+Retirement Income Security Act, or the rules thereunder. ] 
+A-12
+SECTION 7. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS 
+SARs shall be evidenced by Award Agreements specifying the
+number of shares of Stock subject to the Award, in such form as the Committee shall from time to time establish. No SAR or purported SAR shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement.
+Award Agreements evidencing SARs may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions: 
+7.1 Types of SARs
+Authorized . SARs may be granted in tandem with all or any portion of a related Option (a “Tandem SAR”) or may be granted independently of any Option (a “Freestanding SAR”). A Tandem SAR may be
+granted either concurrently with the grant of the related Option or at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such related Option. 
+7.2 Exercise Price . The exercise price for each SAR shall be
+established in the discretion of the Committee; provided , however , that (a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the
+exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the SAR. 
+7.3 Exercisability and Term of SARs .
+(a) Tandem
+SARs . Tandem SARs shall be exercisable only at the time and to the extent that the related Option is exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with respect to less than the full
+number of shares of Stock subject to the related Option. The Committee may, in its discretion, provide in any Award Agreement evidencing a Tandem SAR that such SAR may not be exercised without the advance approval of the Company and, if such
+approval is not given, then the Option shall nevertheless remain exercisable in accordance with its terms. A Tandem SAR shall terminate and cease to be exercisable no later than the date on which the related Option expires or is terminated or
+canceled. Upon the exercise of a Tandem SAR with respect to some or all of the shares subject to such SAR, the related Option shall be canceled automatically as to the number of shares with respect to which the Tandem SAR was exercised. Upon the
+exercise of an Option related to a Tandem SAR as to some or all of the shares subject to such Option, the related Tandem SAR shall be canceled automatically as to the number of shares with respect to which the related Option was exercised.
+(b) Freestanding
+SARs . Freestanding SARs shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award
+Agreement evidencing such SAR; provided , however , that no Freestanding SAR shall be exercisable after the expiration of ten (10) years after the effective date of grant of such SAR. 
+7.4 Exercise of
+SARs . Upon the exercise (or deemed exercise pursuant to Section 7.5) of a SAR, the Participant (or the Participant’s legal representative or other person who acquired the right to exercise the SAR by reason
+of the Participant’s death) shall be entitled to receive payment of an amount for each share with respect to which the SAR is exercised equal to the excess, if any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR
+over the exercise price. Payment of such amount shall be made in cash, shares of Stock, or any combination thereof as determined by the Committee. Unless otherwise provided in the Award Agreement evidencing such SAR, payment shall be made in a lump
+sum as soon as practicable following the date of exercise of the SAR. The Award Agreement evidencing any SAR may provide for deferred payment in a lump sum or in 
+A-13
+installments. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on the basis of the Fair Market Value of a share of Stock on the date of
+exercise of the SAR. For purposes of this Section 7, a SAR shall be deemed exercised on the date on which the Company receives notice of exercise from the Participant. 
+7.5 Deemed Exercise of
+SARs . If, on the date on which a SAR would otherwise terminate or expire, the SAR by its terms remains exercisable immediately prior to such termination or expiration and, if so exercised, would result in a payment to
+the holder of such SAR, then any portion of such SAR which has not previously been exercised shall automatically be deemed to be exercised as of such date with respect to such portion. 
+7.6 Effect of Termination of Service . A SAR shall be exercisable
+after a Participant’s termination of Service to such extent and during such period as determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such SAR. 
+7.7 Nontransferability of
+SARs . SARs may not be assigned or transferred in any manner except by will or the laws of descent and distribution, and, during the lifetime of the Participant, shall be exercisable only by the Participant or the
+Participant’s guardian or legal representative. 
+SECTION
+8. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS 
+The Committee may from time to time grant Restricted Stock Awards upon such conditions as the Committee shall determine, including, without limitation, upon the attainment of one or more Performance Goals
+described in Section 9.3. If either the grant of a Restricted Stock Award or the lapsing of the Restriction Period is to be contingent upon the attainment of one or more Performance Goals, the Committee shall follow procedures substantially
+equivalent to those set forth in Sections 9.2 through 9.4. Restricted Stock Awards may be in the form of a Restricted Stock Bonus, which shall be evidenced by a Restricted Stock Bonus Agreement, a Restricted Stock Purchase Right, which shall be
+evidenced by a Restricted Stock Purchase Agreement or a Restricted Stock Unit, which shall be evidenced by a Restricted Stock Unit Agreement. Each such Award Agreement shall specify the number of shares of Stock subject to and the other terms,
+conditions and restrictions of the Award, and shall be in such form as the Committee shall establish from time to time. No Restricted Stock Award or purported Restricted Stock Award shall be a valid and binding obligation of the Company unless
+evidenced by a fully executed Award Agreement. Restricted Stock Award Agreements may incorporate all or any of the terms of the Plan by reference and shall comply, as applicable, with and be subject to the following terms and conditions: 
+8.1 Purchase
+Price . The purchase price under each Restricted Stock Purchase Right shall be established by the Committee. No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving a
+Restricted Stock Bonus or Restricted Stock Unit, the consideration for which shall be services actually rendered to a Participating Company or for its benefit. 
+8.2 Purchase Period . A Restricted Stock Purchase Right shall be exercisable within a period
+established by the Committee, which shall in no event exceed thirty (30) days from the effective date of the grant of the Restricted Stock Purchase Right; provided , however , that no Restricted Stock Purchase Right
+granted to a prospective Employee, prospective Director or prospective Consultant may become exercisable prior to the date on which such person commences Service. 
+8.3 Payment of Purchase
+Price . Except as otherwise provided below, payment of the purchase price for the number of shares of Stock being purchased pursuant to any Restricted Stock Purchase Right shall be made (i) in
+A-14
+cash, by check, or cash equivalent, (ii) provided that the Participant is an Employee (unless otherwise not prohibited by law, including, without limitation, any regulation promulgated by
+the Board of Governors of the Federal Reserve System) and in the Company’s sole discretion at the time the Restricted Stock Purchase Right is exercised, by delivery of the Participant’s promissory note in a form approved by the Company for
+the aggregate purchase price, provided that the Participant shall pay in cash that portion of the aggregate purchase price as required by applicable law, (iii) by such other consideration as may be approved by the Committee from time to time to
+the extent permitted by applicable law, or (iv) by any combination thereof. Payment by means of the Participant’s promissory note shall be subject to the conditions described in Section 6.3(a). The Committee may at any time or from
+time to time grant Restricted Stock Purchase Rights which do not permit all of the foregoing forms of consideration to be used in payment of the purchase price or which otherwise restrict one or more forms of consideration. Restricted Stock Bonuses
+and Restricted Stock Units shall be issued in consideration for services actually rendered to a Participating Company or for its benefit. 
+8.4 Vesting and Restrictions on Transfer . Shares issued pursuant to any Restricted Stock Award
+may be made subject to vesting conditioned upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 8.3 (the “Vesting
+Conditions”), as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. During any period (the “Restriction Period”) in which shares acquired pursuant to a Restricted Stock Award remain
+subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, hypothecated, assigned or otherwise disposed of other than pursuant to a Change in Control, or as provided in Section 8.7. Upon request by the Company,
+each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder
+for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. 
+8.5 Voting Rights; Dividends . Except as provided in this Section and Section 8.4, during the Restriction Period applicable to shares
+subject to a Restricted Stock Purchase Right and a Restricted Stock Bonus held by a Participant, the Participant shall have all of the rights of a shareholder of the Company holding shares of Stock, including the right to vote such shares and to
+receive all dividends and other distributions paid with respect to such shares; provided , however , that if any such dividends or distributions are paid in shares of Stock, such shares shall be subject to the same Vesting
+Conditions as the shares subject to the Restricted Stock Purchase Right and Restricted Stock Bonus with respect to which the dividends or distributions were paid. A Participant who is awarded a Restricted Stock Unit shall possess no incidents of
+ownership with respect to such a Restricted Stock Award; provided that the Award Agreement may provide for payments in lieu of dividends to such Participant. 
+8.6 Effect of Termination of Service . The effect of the Participant’s termination of
+Service on any Restricted Stock Award shall be determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Restricted Stock Award. 
+8.7 Nontransferability of Restricted Stock Award
+Rights . Rights to acquire shares of Stock pursuant to a Restricted Stock Award may not be assigned or transferred in any manner except by will or the laws of descent and distribution, and, during the lifetime of the
+Participant, shall be exercisable only by the Participant. 
+A-15
+SECTION 9. TERMS AND CONDITIONS OF PERFORMANCE AWARDS 
+The Committee may from time to time grant Performance Awards
+upon such conditions as the Committee shall determine. Performance Awards may be in the form of either Performance Shares, which shall be evidenced by a Performance Share Agreement, or Performance Units, which shall be evidenced by a Performance
+Unit Agreement. Each such Award Agreement shall specify the number of Performance Shares or Performance Units subject thereto, the method of computing the value of each Performance Share or Performance Unit, the Performance Goals and Performance
+Period applicable to the Award, and the other terms, conditions and restrictions of the Award, and shall be in such form as the Committee shall establish from time to time. No Performance Award or purported Performance Award shall be a valid and
+binding obligation of the Company unless evidenced by a fully executed Award Agreement. Performance Share and Performance Unit Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the
+following terms and conditions: 
+9.1 Initial Value of Performance Shares and Performance Units . Unless otherwise provided by
+the Committee in granting a Performance Award, each Performance Share shall have an initial value equal to the Fair Market Value of a share of Stock on the effective date of grant of the Performance Share, and each Performance Unit shall have an
+initial value of One Hundred Dollars ($100). The final value payable to the Participant in settlement of a Performance Award will depend on the extent to which Performance Goals established by the Committee are attained within the applicable
+Performance Period established by the Committee. 
+9.2 Establishment of Performance Goals and Performance Period . The Committee shall establish
+in writing the Performance Period applicable to each Performance Award and one or more Performance Goals which, when measured at the end of the Performance Period, shall determine the final value of the Performance Award to be paid to the
+Participant (“Performance Goals”). Unless otherwise permitted in compliance with the requirements under Section 162(m) with respect to “performance-based compensation,” the Committee shall establish the Performance Goals
+applicable to each Performance Award no later than the earlier of (a) the date ninety (90) days after the commencement of the applicable Performance Period or (b) the date on which twenty-five percent (25%) of the Performance
+Period has elapsed, and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain. Once established, the Performance Goals shall not be changed during the Performance Period. 
+9.3 Measurement of Performance
+Goals . For purposes of the Plan, the Performance Goals shall be determined by the Committee, according to criteria established by the Committee. Performance Goals may be based on any of the following criteria:
+(i) revenue, (ii) gross profit margin, (iii) operating income, (iv) operating margin, (v) income before income taxes, (vi) net income, (vii) earnings before interest, taxes depreciation and/or amortization
+(EBITDA), (viii) earnings per share (diluted), (ix) cash flow from operations, (x) free cash flow, (xi) return on equity, (xii) return on assets, (xiii) return on sales, (xiv) market share, (xv) one or more
+operating ratios, (xvi) stock price, (xvii) the accomplishment of mergers, acquisitions, dispositions or similar extraordinary business transactions, (xviii) any individual performance objective that is measured solely in terms of
+quantitative targets related to the Company or the Company’s business or (xix) any combination of the foregoing. The Performance Goals selected in any case need not be applicable across the Company, but may be particular to an
+individual’s function or business unit. The Committee shall determine whether such Performance Goals are attained and such determination shall be final and conclusive. In the event that the Performance Goals are not met, the Performance Award
+shall be forfeited and transferred to, and reacquired by, the Company at no cost to the Company. 
+A-16
+The Committee may impose such other restrictions and conditions (in addition to the
+performance-based restrictions described above) on any Performance Award as the Committee deems appropriate and may waive any such additional restrictions and conditions, so long as such waiver does not waive any restriction described in the
+previous paragraph. Nothing herein shall limit the Committee’s ability to reduce the amount payable under an Award upon the attainment of the Performance Goal(s), provided , however , that the Committee shall have no
+right under any circumstance to increase the amount payable under, or waive compliance with, any applicable Performance Goal(s). 
+9.4 Determination of Final Value of Performance Awards . As soon as practicable following the
+completion of the Performance Period applicable to a Performance Award, the Committee shall certify in writing the extent to which the applicable Performance Goals have been attained and the resulting final value of the Award earned by the
+Participant and to be paid upon its settlement in accordance with the terms of the Award Agreement. The Committee shall have no discretion to increase the value of an Award payable upon its settlement in excess of the amount called for by the terms
+of the Award Agreement on the basis of the degree of attainment of the Performance Goals as certified by the Committee. However, notwithstanding the attainment of any Performance Goal, if permitted under a Participant’s Award Agreement, the
+Committee shall have the discretion, on the basis of such criteria as may be established by the Committee, to reduce some or all of the value of a Performance Award that would otherwise be paid upon its settlement. No such reduction may result in an
+increase in the amount payable upon settlement of another Participant’s Performance Award. As soon as practicable following the Committee’s certification, the Company shall notify the Participant of the determination of the Committee.
+9.5 Dividend
+Equivalents . In its discretion, the Committee may provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment
+of cash dividends on Stock having a record date prior to the date on which the Performance Shares are settled or forfeited. Dividend Equivalents may be paid currently or may be accumulated and paid to the extent that Performance Shares become
+nonforfeitable, as determined by the Committee. Settlement of Dividend Equivalents may be made in cash, shares of Stock, or a combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related
+Performance Share as provided in Section9.6. Dividend Equivalents shall not be paid with respect to Performance Units. 
+9.6 Payment in Settlement of Performance Awards . Payment of the final value of a Performance
+Award earned by a Participant as determined following the completion of the applicable Performance Period pursuant to Sections 9.4 and 9.5 may be made in cash, shares of Stock, or a combination thereof as determined by the Committee. If payment is
+made in shares of Stock, the number of such shares shall be determined by dividing the final value of the Performance Award by the Fair Market Value of a share of Stock on the settlement date. Payment may be made in a lump sum or installments as
+prescribed by the Committee. If any payment is to be made on a deferred basis, the Committee may, but shall not be obligated to, provide for the payment during the deferral period of Dividend Equivalents or a reasonable rate of interest within the
+meaning of Section 162(m). 
+9.7 Restrictions Applicable to Payment in Shares . Shares of Stock issued in payment of any
+Performance Award may be fully vested and freely transferable shares or may be shares of Stock subject to Vesting Conditions as provided in Section 8.4. Any shares subject to Vesting Conditions shall be evidenced by an appropriate Restricted
+Stock Bonus Agreement and shall be subject to the provisions of Sections 8.4 through 8.7 above. 
+A-17
+9.8 Effect of Termination of Service . The effect
+of the Participant’s termination of Service on any Performance Award shall be determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Performance Award. 
+9.9 Nontransferability of Performance
+Awards . Performance Shares and Performance Units may not be sold, exchanged, transferred, pledged, hypothecated, assigned, or otherwise disposed of other than by will or by the laws of descent and distribution until
+the completion of the applicable Performance Period. All rights with respect to Performance Shares and Performance Units granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant. 
+SECTION 10. OTHER STOCK-BASED AWARDS
+The Committee shall have authority to grant
+to eligible Employees an “Other Stock-Based Award,” which shall consist of any right that is an Award of Stock or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Stock
+(including, without limitation, securities convertible into Stock), as deemed by the Committee to be consistent with the purposes of the Plan, other than an Award described in Sections 6 through 9 above. 
+SECTION 11. CHANGES IN THE COMPANY’S CAPITAL
+STRUCTURE 
+11.1 Rights of the
+Company . The existence of outstanding Awards shall not affect in any way the right or power of the Company or its shareholders to make or authorize, without limitation, any or all adjustments, recapitalizations,
+reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of Stock, or any issue of bonds, debentures, preferred or prior preference stock or other capital
+stock ahead of or affecting the Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar
+character or otherwise. 
+11.2 Adjustments for Changes in Capital Structure . In the event of any stock dividend, stock
+split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding
+Awards, in the limits on Incentive Stock Options set forth in Section 5.4, and in the exercise price per share of any outstanding Options and Restricted Stock Purchase Rights. If a majority of the shares which are of the same class as the
+shares that are subject to outstanding Awards are exchanged for, converted into, or otherwise become shares of another corporation (the “New Shares”), the Committee may unilaterally amend the outstanding Awards to provide that such Awards
+shall be for New Shares. In the event of any such amendment, the number of shares subject to outstanding Awards and the exercise price per share of outstanding Options and Restricted Stock Purchase Rights shall be adjusted in a fair and equitable
+manner as determined by the Committee, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 11.2 shall be rounded down to the nearest whole number, and in no event may the
+exercise price of any Option or Restricted Stock Purchase Right be decreased to an amount less than the par value, if any, of the stock subject to such Award. The adjustments determined by the Committee pursuant to this Section 11.2 shall be
+final, binding and conclusive. 
+A-18
+SECTION 12. CHANGE IN CONTROL 
+12.1 Effect of Change in Control on
+Options . In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent corporation thereof, as the case may be (the “Acquiring
+Corporation”), may, without the consent of the Participant, either assume the Company’s rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for the Acquiring
+Corporation’s stock. In the event that the Acquiring Corporation elects not to assume or substitute for outstanding Options in connection with a Change in Control, the exercisability and vesting of each such outstanding Option and any shares
+acquired upon the exercise thereof held by a Participant whose Service has not terminated prior to such date shall be accelerated, effective as of the date ten (10) days prior to the date of the Change in Control. The exercise or vesting of any
+Option and any shares acquired upon the exercise thereof that was permissible solely by reason of this Section 12.1 and the provisions of such Option Agreement shall be conditioned upon the consummation of the Change in Control. Any Options
+which are neither assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the
+Change in Control. Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to
+all applicable provisions of the Option Agreement evidencing such Option except as otherwise provided in such Option Agreement. 
+12.2 Effect of Change in Control on SARs . In the event of a Change in Control, the Acquiring
+Corporation may, without the consent of any Participant, either assume the Company’s rights and obligations under outstanding SARs or substitute for outstanding SARs substantially equivalent SARs for the Acquiring Corporation’s stock. In
+the event the Acquiring Corporation elects not to assume or substitute for outstanding SARs in connection with a Change in Control, then any unexercised and/or unvested portions of outstanding SARs shall be immediately exercisable and vested in full
+as of the date thirty (30) days prior to the date of the Change in Control. The exercise and/or vesting of any SAR that was permissible solely by reason of this Section 12.2 shall be conditioned upon the consummation of the Change in
+Control. Any SARs which are not assumed by the Acquiring Corporation in connection with the Change in Control nor exercised as of the time of consummation of the Change in Control shall terminate and cease to be outstanding effective as of the time
+of consummation of the Change in Control. 
+12.3. Effect of Change in Control on Restricted Stock Awards . In the event of a Change in
+Control, the lapsing of the Vesting Conditions applicable to the shares subject to the Restricted Stock Award held by a Participant whose Service has not terminated prior to such date shall be accelerated effective as of the date of the Change in
+Control. Any acceleration of the lapsing of Vesting Conditions that was permissible solely by reason of this Section 12.3 and the provisions of such Award Agreement shall be conditioned upon the consummation of the Change in Control.
+12.4 Effect of Change in Control on
+Performance Awards . In the event of a Change in Control, the Performance Award held by a Participant whose Service has not terminated prior to such date (unless the Participant’s Service terminated by reason of
+the Participant’s death or Disability) shall become payable effective as of the date of the Change in Control. For this purpose, the final value of the Performance Award shall be determined by the greater of (a) the extent to which the
+applicable Performance Goals have been attained during the Performance Period prior to the date of the Change in Control or (b) the pre-established 100% level with respect to each Performance Target comprising the applicable Performance Goals.
+Any acceleration of a 
+A-19
+Performance Award that was permissible solely by reason of this Section 12.4 and the provisions of such Award Agreement shall be conditioned upon the consummation of the Change in Control.
+SECTION 13. COMPLIANCE WITH SECURITIES
+LAW 
+The grant of Awards and the issuance of
+shares of Stock pursuant to any Award shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock
+may then be listed. In addition, no Award may be exercised or shares issued pursuant to an Award unless (a) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares
+issuable pursuant to the Award or (b) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the
+Securities Act. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall
+relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to issuance of any Stock, the Company may require the Participant to
+satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 
+SECTION 14. TAX WITHHOLDING 
+14.1 Tax Withholding in
+General . The Company shall have the right to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise of an Option, to make adequate provision for the
+federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have no obligation to deliver shares of Stock, to
+release shares of Stock from an escrow established pursuant to an Award Agreement, or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations have been satisfied by the Participant.
+14.2 Withholding in
+Shares . The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender
+of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the Participating Company Group. The Fair Market Value of any shares of Stock withheld or
+tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates. 
+SECTION 15. TERMINATION OR AMENDMENT OF PLAN 
+The Committee may terminate or amend the Plan at any time.
+However, subject to changes in applicable law, regulations or rules that would permit otherwise, without the approval of the Company’s shareholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may
+be issued under the Plan (except by operation of the provisions of Section 7 and 11), (b) no change in the class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require
+approval of the Company’s shareholders under any applicable law, regulation or rule. No termination or amendment of the Plan shall affect any then outstanding Award unless expressly provided by the Committee. In any event, no
+A-20
+termination or amendment of the Plan may adversely affect any then outstanding Award without the consent of the Participant, unless such termination or amendment is required to enable an Option
+designated as an Incentive Stock Option to qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule. 
+SECTION 16. STANDARD FORMS OF AWARD AGREEMENT 
+16.1 Award
+Agreements . Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate form of Award Agreement approved by the Committee from time to time. Any Award Agreement may consist of
+an appropriate form of Notice of Grant and a form of Agreement incorporated therein by reference, or such other form or forms as the Committee may approve from time to time. 
+16.2 Authority to Vary
+Terms . The Committee shall have the authority from time to time to vary the terms of any standard form of Award Agreement either in connection with the grant or amendment of an individual Award or in connection with
+the authorization of a new standard form or forms; provided , however , that the terms and conditions of any such new, revised or amended standard form or forms of Award Agreement are not inconsistent with the terms of the
+Plan. 
+SECTION 17. RIGHTS AND
+OBLIGATIONS OF THE PARTIES 
+17.1 Provision of Information . Each Participant shall be given access to information
+concerning the Company equivalent to that information generally made available to the Company’s common shareholders. 
+17.2 Rights as Employee, Consultant or Director . No person, even though eligible pursuant to
+Section 5, shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the Plan shall confer on any Participant a right to remain an
+Employee, Consultant or Director, or interfere with or limit in any way the right of a Participating Company to terminate the Participant’s Service at any time. 
+17.3 Rights as a
+Shareholder . A Participant shall have no rights as a shareholder with respect to any shares covered by an Award until the date of the issuance of a certificate for such shares (as evidenced by the appropriate entry on
+the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided
+in Section 7 and 11 or another provision of the Plan. 
+17.4 Right of Setoff . The Company or any Participating Company may, to the extent permitted by
+applicable law, deduct from and set off against any amounts the Company or Participating Company may owe to the Participant from time to time, including amounts payable in connection with any Award, owed as wages, fringe benefits, or other
+compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and
+setoff. By accepting any Award granted hereunder, the Participant agrees to any deduction or setoff under this Section 17. 
+17.5 Section 83(b) Election . No election under Section 83(b) of the Code (to include
+in gross income in the year of transfer the amounts specified in Code Section 83(b)) or under a similar provision of the laws of a jurisdiction outside the United States may be made, unless expressly permitted by the terms of the Award
+A-21
+Agreement or by action of the Committee in writing before the making of such election. In any case in which a Participant is permitted to make such an election in connection with an Award, the
+Participant shall notify the Company of such election within ten days after filing notice of the election with the Internal Revenue Service or other governmental authority, in addition to any filing and notification required pursuant to regulations
+issued under Code Section 83(b) or other applicable provision. 
+17.6 Compliance with Section 409A of the Code . Except to the extent specifically provided
+otherwise by the Committee, Awards under the Plan are intended to satisfy the requirements of Section 409A of the Code (and the Treasury Department guidance and regulations issued thereunder) so as to avoid the imposition of any additional
+taxes or penalties under Section 409A of the Code. If the Committee determines that an Award, Award Agreement, payment, distribution, deferral election, transaction or any other action or arrangement contemplated by the provisions of the Plan
+would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Section 409A of the Code, then unless the Committee specifically provides otherwise, such Award, Award Agreement, payment,
+distribution, deferral election, transaction or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan and/or Award Agreement will be deemed modified, or, if necessary,
+suspended in order to comply with the requirements of Section 409A of the Code to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Participant. 
+17.7 Disqualifying Disposition
+Notification . If any Participant shall make any disposition of Stock delivered pursuant to the exercise of an Incentive Stock Option under the circumstances described in Code Section 421(b) (relating to certain
+disqualifying dispositions), such Participant shall notify the Company of such disposition within ten days thereof. 
+17.8 Beneficiary Designation . Each Participant may file with the Company a written designation of a beneficiary who is to receive any benefit
+under the Plan to which the Participant is entitled in the event of such Participant’s death before he or she receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form
+prescribed by the Company, and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. If a married Participant designates a beneficiary other than the Participant’s spouse, the
+effectiveness of such designation shall be subject to the consent of the Participant’s spouse. If a Participant dies without an effective designation of a beneficiary who is living at the time of the Participant’s death, the Company will
+pay any remaining unpaid benefits to the Participant’s legal representative. 
+SECTION 18. MISCELLANEOUS 
+18.1 Unfunded Obligation . Any amounts payable to Participants pursuant to the Plan shall be unfunded obligations for all purposes, including,
+without limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to
+such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of
+any trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or
+the Participant’s creditors in any assets of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested or reinvested by the Company with
+respect to the Plan. 
+A-22
+18.2 Awards to Participants Outside the United
+States . The Committee may modify the terms of any Award under the Plan made to or held by a Participant who is then resident or primarily employed outside of the United States in any manner deemed by the Committee to
+be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the
+Participant, as affected by foreign tax laws and other restrictions, applicable as a result of the Participant’s residence or employment abroad shall be comparable to the value of such an Award to a Participant who is resident or primarily
+employed in the United States. An Award may be modified under this Section 18.2 in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in
+actual liability under Section 16(b) of the Exchange Act for the Participant whose Award is modified. 
+18.3 Gender and Number; Headings . Except where otherwise indicated by the context, any masculine term used herein also shall include the
+feminine; the plural shall include the singular and the singular shall include the plural. Headings are included for the convenience of reference only and shall not be used in the interpretation or construction of any such provision contained in the
+Plan. 
+18.4 Severability . In the event any provision of the Plan shall be held illegal or invalid for
+any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included. 
+18.5 Requirements of
+Law . The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges
+as may be required. 
+18.6 Governing
+Law . To the extent not preempted by federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Rhode Island. 
+SECTION 19. NONEXCLUSIVITY OF THE PLAN
+Neither the adoption of the Plan by the
+Board nor the submission of the Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without
+limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases. 
+SECTION 20. EFFECTIVE DATE AND DURATION OF PLAN 
+The Plan shall become effective (the
+“Effective Date”) upon the later of the approval of the Plan by the Board and the approval of the Plan by the shareholders of the Company in accordance with applicable laws and regulations. No Award may be granted under the Plan after the
+tenth (10 th ) anniversary of the Effective Date. The
+Plan shall terminate when the total amount of the Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing Awards granted under the Plan have lapsed.
+A-23
+IN WITNESS WHEREOF, the Company has caused this 2007 Equity Incentive
+Plan to be executed by its duly authorized officer as of the 15 th day of May, 2007. 
+ASTRO-MED, INC. 
+By: 
+/s/ Albert W. Ondis 
+Name: 
+Albert W. Ondis 
+Title: 
+Chief Executive Officer 
+Attest: 
+/s/ Margaret D. Farrell 
+Margaret D. Farrell 
+Secretary 
+A-24
+Astro-Med, Inc. 
+Astro-Med Industrial Park 
+600 East Greenwich Ave. 
+West Warwick, RI 02893 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off
+date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 
+Electronic Delivery of Future PROXY MATERIALS 
+If you would like to reduce the costs incurred by our company in mailing proxy materials,
+you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when
+prompted, indicate that you agree to receive or access proxy materials electronically in future years. 
+VOTE BY PHONE - 1-800-690-6903 
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your
+proxy card in hand when you call and then follow the instructions. 
+VOTE BY
+MAIL 
+Mark, sign and date your proxy card and return it in the postage-paid
+envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+DETACH AND RETURN THIS PORTION ONLY 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+1. 
+FOR 
+WITHHOLD 
+FOR all 
+except 
+(01) Everett V. Pizzuti 
+¨ 
+¨ 
+¨ 
+(02) Graeme MacLetchie 
+¨ 
+¨ 
+(03) Mitchell I. Quain 
+¨ 
+¨ 
+(04) Harold Schofield 
+¨ 
+¨ 
+(05) Hermann Viets, Ph.D. 
+¨ 
+¨ 
+(06) Gregory A. Woods 
+¨ 
+¨ 
+INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “For All Except” and write that nominee(s’) name(s) or number(s) in the space provided below. 
+FOR 
+AGAINST 
+ABSTAIN 
+2. To consider and approve an advisory (non-binding) proposal on the Company’s executive compensation. 
+¨ 
+¨ 
+¨ 
+FOR 
+AGAINST 
+ABSTAIN 
+3. To consider and approve an amendment and extension of the Company’s 2007 Equity Incentive Plan. 
+¨ 
+¨ 
+¨ 
+FOR 
+AGAINST 
+ABSTAIN 
+4. Ratify the appointment of Wolf & Company, P.C. as the Company’s independent registered public accounting firm. 
+¨ 
+¨ 
+¨ 
+5. In their discretion, upon such other matters as may properly come before the meeting 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+1 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The
+Form 10-K, 
+Notice & Proxy Statement is/are available at www.proxyvote.com . 
+ASTRO-MED, INC. 
+Annual
+Meeting of Shareholders-May 22, 2014 
+The undersigned, whose signature appears on the reverse side of this proxy, hereby appoints
+Everett V. Pizzuti, Graeme MacLetchie, Mitchell I. Quain, Harold Schofield, Hermann Viets and Gregory A. Woods, or a majority of such of them as shall be present, attorneys with power of substitution and with all the powers the undersigned would
+possess if personally present, to vote the stock of the undersigned in ASTRO-MED, INC. at the annual meeting of shareholders to be held May 22, 2014, at 600 East Greenwich Avenue, West Warwick, Rhode Island, and at any adjournments thereof, as
+follows: 
+THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
+MADE, THIS PROXY WILL BE VOTED FOR THE NOMINEES SPECIFIED IN PROPOSAL 1, AND FOR PROPOSALS 2, 3 AND 4. 
+THIS PROXY IS SOLICITED ON
+BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY 
+Address change/comments: 
+(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.) 
+2
\ No newline at end of file
diff --git a/raw/proxies/0000008146/0001193125-14-152000/proxy_rpt.txt b/raw/proxies/0000008146/0001193125-14-152000/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a144cc693aff7f01520b10bfe38e6a58afc1d899
--- /dev/null
+++ b/raw/proxies/0000008146/0001193125-14-152000/proxy_rpt.txt
@@ -0,0 +1,13 @@
+RELATED PARTY TRANSACTIONS
+Potential conflicts of interest and related
+party transactions are referred by the Board of Directors to the Audit Committee for review and approval. In reviewing and evaluating potential conflicts of interest and related party transactions, the Audit Committee uses applicable NASDAQ listing
+standards and SEC rules as a guide. 
+Other than as
+described below, no officer, director or nominee for director of the Company or any associate of any of the foregoing had during the fiscal year ended January 31, 2014 any material interest, direct or indirect, in any material transaction or
+any material proposed transaction in which the amount exceeds $120,000 and to which the Company was or is to be a party. 
+The Company employs two sons of Everett V. Pizzuti, Eric Pizzuti, as Vice President and General Manager of QuickLabel Systems, and Kevin
+Pizzuti, as District Manager, QuickLabel Systems, to whom the Company paid or accrued over $120,000 in compensation, including $140,336 and $120,021, respectively, in salary and commissions during the fiscal year ended January 31, 2014. Eric
+Pizzuti also received a bonus under the Company’s management bonus plan in the amount of $38,005 and an award of restricted stock units valued at $41,287. In addition, the Company made matching contributions for the fiscal year 2014 under its
+qualified Profit-Sharing Plan of $5,260 to Eric Pizzuti and $1,224 to Kevin Pizzuti. The Company also made vacation payouts to Messrs. E. Pizzuti and K. Pizzuti of $2,707 and $1,077, respectively. Messrs. E. Pizzuti and K. Pizzuti received employer
+contributions to their Employee Stock Ownership Plan accounts of $754 each. Kevin Pizzuti also received an automobile allowance of $7,500. 
+19
\ No newline at end of file
diff --git a/raw/proxies/0000077877/0000077877-02-000004/proxy.txt b/raw/proxies/0000077877/0000077877-02-000004/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..146040f825c9a8700280f8bd7ab163a58d3a3522
--- /dev/null
+++ b/raw/proxies/0000077877/0000077877-02-000004/proxy.txt
@@ -0,0 +1,894 @@
+DEF 14A
+1
+proxy2002.htm
+2002 DEF 14A PROXY
+PETROLEUM DEVELOPMENT CORPORATION 
+103 East Main Street 
+Bridgeport, West Virginia 26330 
+NOTICE OF ANNUAL MEETING OF STOCKHOLDERS 
+July 12, 2002 
+To the Stockholders of 
+PETROLEUM DEVELOPMENT CORPORATION: 
+Notice is hereby given that the Annual Meeting of Stockholders of Petroleum Development Corporation (the "Company") will be held at the office of the Company at 103 East Main Street, Bridgeport, West Virginia 26330, on July 12, 2002 at 10:00 A.M., West Virginia time, for the following purposes, all as more fully described in the accompanying Proxy Statement: 
+(1) To elect two directors to serve a term of three years or until their successors shall be elected and shall qualify; 
+(2) To ratify and approve the selection of independent public accountants for the Company for the fiscal year ending December 31, 2002. 
+The Board of Directors has fixed the close of business on May 31, 2002 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. The presence in person or by proxy of the holders of a majority of the outstanding shares of the Company's Common Stock is required to constitute a quorum. 
+EACH STOCKHOLDER IS CORDIALLY INVITED TO BE PRESENT AND TO VOTE AT THIS MEETING IN PERSON. STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND ARE REQUESTED TO SIGN AND DATE THE ACCOMPANYING PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTPAID ENVELOPE. 
+By Order of the Board of Directors, 
+James N. Ryan 
+Chairman 
+Bridgeport, West Virginia 
+June 3, 2002 
+PETROLEUM DEVELOPMENT CORPORATION 
+PROXY STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+July 12, 2002 
+INTRODUCTORY STATEMENT 
+This Proxy Statement is furnished in connection with the solicitation by the Board of Directors of proxies for use at the Annual Meeting of Stockholders of Petroleum Development Corporation (the "Company") to be held on July 12, 2002, notice of which is attached, and at any adjournment thereof. 
+Any stockholder giving the accompanying proxy has the power to revoke it prior to its exercise by filing with the Secretary of the Company a written notice of revocation or a duly executed proxy bearing a later date. Giving the accompanying proxy will not affect your right to vote in person should you find it convenient to attend the Annual Meeting. Shares represented by proxy will be voted by the proxy holders in accordance with your instructions unless you revoke your proxy or attend the meeting and elect to vote in person. This Proxy Statement and the proxy were first mailed to stockholders on June 3, 2002. The mailing address of the principal executive offices of the Company is Petroleum Development Corporation, P.O. Box 26, Bridgeport, West Virginia 26330. 
+The Annual Report to Stockholders for 2001, containing certified financial and other information about the Company, accompanies this Proxy Statement. 
+VOTING SECURITIES 
+The outstanding voting securities of the Company as of April 30, 2002, consisted of 15,734,767 shares of $0.01 par value common stock ("Common Stock"). Stockholders of record as of the close of business on May 31, 2002 are entitled to vote. Each stockholder is entitled to one vote for each share of Common Stock held of record on this date. Stockholders are not permitted to cumulate their votes for the election of directors. Abstentions and broker non-votes will be counted in the number of shares present in person or represented by proxy for purposes of determining whether a quorum is present. 
+PROPOSAL #1 
+ELECTION OF DIRECTORS 
+The Company's By-Laws provide that the directors of the Company shall be divided into three classes and that, at each annual meeting of stockholders of the Company, successors to the class of directors whose term expires at the annual meeting will be elected for a three-year term. The classes are staggered so that the term of one class expires each year. Mr. Rettinger and Mr. Swoveland are members of the class whose term expires in 2002; Mr. Morgan, Mr. Nestor and Mr. Williams are members of the class whose term expires in 2003; and Mr. D'Annunzio and Mr. Ryan are members of class whose term expires in 2004. There is no family relationship between any director or executive officer and any other director or executive officer of the Company. There are no arrangements or understandings between any director or officer and any other person pursuant to which such person was selected as an officer. Votes pursuant to the enclosed proxy will be cast, unless authority is withheld, for the election of the two persons named under "Nominees for Terms Expiring 2005" below, each of whom are members of the present Board and each of whom are expected to be able to serve on the Board to be elected at this meeting. If any of such persons is unwilling or unable to act in such capacity, an event which is not now anticipated, the enclosed proxy will be voted for such person or persons as the Board of Directors may designate. During 2001, the Board of Directors held six meetings. No director attended fewer than 75% of the aggregate of all meetings of the Board and the committees, if any, upon which such director served. 
+Vote Required 
+A plurality of the votes cast at the Annual Meeting in person or by proxy, is required for the election of directors. Abstentions and broker non-votes will not be considered as votes cast with respect to the election of directors, and therefore any abstentions or broker non-votes will not affect the election of the candidates receiving a majority of the votes cast. 
+THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL #1 
+DIRECTORS OF THE COMPANY 
+NOMINEES FOR TERMS EXPIRING 2005 
+The following persons, each of whom is
+currently serving as director, have been nominated to serve as
+directors: 
+Name and Principal
+Occupation Past Five Years 
+and Other Directorships
+Age 
+Year First 
+Elected 
+Director 
+DALE G. RETTINGER has served as
+Vice President and Treasurer of PDC since July 1980, and was appointed
+Chief Financial Officer in September 1997. Mr. Rettinger was elected
+Director in 1985. Previously Mr. Rettinger was a partner with Main
+Hurdman, Certified Public Accountants, having served in that capactiy
+since 1976. 
+57 
+1985 
+JEFFREY C. SWOVELAND has served
+as Chief Financial Officer of Body Media since September, 2000. Prior
+thereto, Mr. Swoveland was Vice President-Finance and Treasurer of
+Equitable Resources Inc since 1994. 
+46 
+1991 
+CONTINUING DIRECTORS TERMS EXPIRING IN 2003 
+STEVEN R. WILLIAMS has served as
+President and Director of PDC since March 1983. Prior to joining PDC, Mr.
+Williams was employed by Exxon until 1979 and attended Stanford Graduate
+School of Business, graduating in 1981. He then worked with Texas Oil and
+Gas until July 1982, when he joined Exco Enterprises, an oil and gas
+investment company as manager of operations. 
+51 
+1983 
+ROGER J. MORGAN has been a member
+of the law firm of Young, Morgan & Cann, Clarksburg, West Virginia
+since 1955. Mr. Morgan is not active in the day-to-day business of PDC,
+but his law firm provides legal services to PDC. 
+75 
+1969 
+DONALD B. NESTOR elected as a
+director in March, 2000, is a Certified Public Accountant and a Partner in
+the CPA firm of Toothman Rice, P.L.L.C. and is in charge of the firm's
+Buckhannon, West Virginia office. Mr. Nestor has served in that capacity
+since 1975. 
+53 
+2000 
+CONTINUING DIRECTORS TERMS EXPIRING IN 2004 
+JAMES N. RYAN has served as
+President and Director of PDC from 1969 to 1983 and was elected Chairman
+and Chief Executive Officer in March 1983 
+70 
+1969 
+VINCENT F. D'ANNUNZIO has served
+as president of Beverage Distributors, Inc. located in Clarksburg, West
+Virginia since 1985. 
+49 
+1989 
+Committees of the Board of
+Directors 
+The Company has three standing committees
+of the Board of Directors: the Executive Committee; the Audit Committee; and the
+Stock Option and Executive Compensation Committee. The Executive Committee is
+comprised of Messrs. Ryan, Williams, and Rettinger. The Audit Committee is
+comprised of Messrs. D'Annunzio, Nestor, and Swoveland. The Stock Option and
+Executive Compensation Committee is comprised of Messrs. D'Annunzio, Nestor and
+Swoveland. The Company does not have a formal Nominating Committee, the full
+Board of Directors handles these responsibilities. 
+The functions performed by the Executive
+Committee include handling important Board of Directors matters that arise
+between Board of Directors meetings, serving as a liaison between the Board of
+Directors and senior management on important matters requiring Board of
+Directors attention and recommending to the Board of Directors nominations for
+election of new and existing members of the Board of Directors. 
+The Audit Committee is comprised entirely
+of outside Directors of the Company. The functions performed by the Audit
+Committee include recommending the selection of independent accountants,
+reviewing with the Company's independent accountants the results of audits
+performed by them and overseeing and reviewing monthly and quarterly unaudited
+financial statements. These reviews include the adequacy of cash flow and the
+status of credit arrangements of the Company. The Board of Directors has adopted
+the Charter of the Audit Committee attached to this Proxy as Exhibit A. 
+The Stock Option and Executive
+Compensation Committee is comprised entirely of outside Directors of the
+Company. The functions performed by this committee include recommending to the
+Board of Directors compensation levels of senior management and directing and
+recommending levels of corporate stock options and other benefit plans of the
+Company. In this regard, the committee monitors trends to ensure the Company's
+compensation levels are competitive in the oil and natural gas industry. 
+Compensation Committee Interlocks and
+Insider Participation 
+The members of the Stock Option and
+Executive Compensation Committee are Messrs. D'Annunzio, Nestor and Swoveland.
+There are no Stock Option and Executive Compensation Committee interlocks.
+Indemnification of Directors and
+Officers 
+The Company's By-Laws provide that the
+Company shall indemnify any director, officer, employee, or other agent of the
+Company who is or was a party, or is threatened to be made a party, to any
+proceeding (other than an action by or in the right of the Company to procure a
+judgment in its favor) by reason of the fact that such person is or was an agent
+of the Company against expenses, judgments, fines, settlements, and other
+amounts actually and reasonably incurred in connection with such proceeding, if
+that person acted in good faith and in a manner that person reasonably believed
+to be in the best interest of the Company, and in the case of a criminal
+proceeding, had no reasonable cause to believe the conduct of that person was
+unlawful. 
+The Company has entered into separate
+indemnification agreements with each of its directors and officers whereby the
+Company has agreed to indemnify the director or officer against all expenses,
+including attorneys' fees, and other amounts reasonably incurred by the officer
+or director in connection with any threatened, pending or completed civil,
+criminal, administrative or investigative action or proceeding to which such
+person is party by reason of the fact that he is or was a director or officer,
+as the case may be, of the Company, if the person acted in good faith and in a
+manner reasonably believed to be in or not opposed to the best interests of the
+Company, and, with respect to any criminal action or proceeding, the person had
+no reasonable cause to believe such conduct to be unlawful. The agreements
+provide for the advancement of expenses and that the Company has the right to
+purchase and maintain insurance on behalf of the director or officer against any
+liability or liabilities asserted against him, whether or not the Company would
+have the power to indemnify the person against such liability under any
+provision of the agreement. The Company has agreed to indemnify such person
+against expenses actually and reasonably incurred in connection with any action
+in which the person has been successful on the merits or otherwise.
+Indemnification must also be provided by the Company (unless ordered otherwise
+by a court) only as authorized in the specific case upon a determination that
+the indemnification of the person is appropriate because he has met the
+applicable standard of conduct described in the agreement made by (i) the Board
+of Directors, by a majority vote of a quorum consisting of directors who are not
+parties to such action or proceeding, (ii) by independent legal counsel in a
+written opinion or (iii) the shareholders of the Company. 
+Director Compensation 
+Each non-salaried employee director and
+outside director of the Company is paid an annual fee of $20,000. Each inside
+director is paid an annual fee of $10,000. 
+EXECUTIVE COMPENSATION 
+The following table sets forth in summary
+form the compensation received during each of the Company's last three fiscal
+years by the Chief Executive Officer and by each other executive officer of the
+Company whose salary and bonus exceeded $100,000 in 2001 (the "Named
+Executives"). 
+Summary Compensation
+Table 
+Annual
+Compensation 
+Long Term
+Compensation 
+Other 
+Securities 
+Annual 
+underlying 
+All Other 
+Name and 
+Compen- 
+Options 
+Compen- 
+Principal Position 
+Year 
+Salary($) 
+Bonus (1)($) 
+sation($)(2) 
+(#)(3) 
+sation($)(3) 
+James N. Ryan 
+2001 
+192,435 
+712,332 
+10,000 
+18,346 
+Chairman and Chief 
+2000 
+182,715 
+514,830 
+10,000 
+10,500 
+Executive Officer 
+1999 
+178,200 
+470,436 
+10,000 
+12,157 
+Steven R. Williams 
+2001 
+154,035 
+712,332 
+10,000 
+18,346 
+President 
+2000 
+144,315 
+514,830 
+10,000 
+10,500 
+and Director 
+1999 
+139,800 
+470,436 
+10,000 
+12,157 
+Dale G. Rettinger 
+2001 
+154,035 
+712,332 
+10,000 
+18,346 
+Executive Vice 
+President, 
+2000 
+144,315 
+514,830 
+10,000 
+10,500 
+Treasurer, and Director
+1999 
+139,800 
+470,436 
+10,000 
+12,157 
+(1) In 1994, the Board of Directors
+approved a deferred compensation arrangement for the Named Executives. See
+"Employment and Other Agreements and Arrangements." Under the arrangements, each
+Named Executive may choose to defer any portion of his bonus compensation until
+retirement or separation from the Company. Included are deferred bonuses the
+Named Executives voluntarily deferred of $50,000 for Mr. Ryan and $150,000 each
+for Messrs. Williams and Rettinger in 2001, $150,000 each in 2000 and $130,000
+each in 1999. In 2001, 2000 and 1999, $30,000 of the deferred bonus compensation
+of Messrs. Williams and Rettinger was utilized to pay the premiums of
+split-dollar life insurance policies for Messrs. Williams and Rettinger. Also
+included in the bonus for each of the three named executives is a tax
+reimbursement authorized by the Board of Directors in January of 2000 to offset
+taxes generated by the exercise of stock options. The bonus was paid at the time
+the taxes became due in 2001. 
+(2) The respective Named Executives
+receive fees as directors of the Company in the amount of $10,000 per year. 
+(3) This amount includes contributions
+made by the Company under the Company's Employee Profit Sharing Plan and 401(k)
+plan. In 2001 and 1999 the Company contributed $200,000 and $47,000,
+respectively, to the Employee Profit Sharing Plan. Of these contributions, each
+of the Named Executives was credited $7,846 in 2001 and $2,157 in 1999. The
+Company provided a matching of 401(k) contribution based upon all employees
+respective contributions. Of the total Company matching contribution of
+$260,800, $252,600 and $217,400 in 2001, 2000 and 1999 each of the Named
+Executives were credited with matching contributions of $10,500 in 2001 and 2000
+and $10,000 in 1999. 
+Compensation Committee Report 
+The Compensation Committee is composed of
+three outside directors. The committee's primary responsibility is to develop
+the Company's compensation policy to enable the Company to hire, retain and
+motivate high performing employees. The committee also administers the Company's
+Savings and Protection Plan (the "401(k) Plan"), various Employee Stock Option
+Plans, and the Company's Profit Sharing Plan. The committee reviews the
+performance and compensation of the 
+Chief Executive Officer, and the two
+executive officers of the Company. Final approval of all contracts with company
+executives is reserved to the full Board of Directors. 
+During 2001, and over the past five years,
+the company has posted excellent operating reports. During 2001 the company
+posted records for revenue, net income, cash flow, production and reserves,
+among other accomplishments. Over the past five years, the company's stock has
+significantly out-performed the oil and gas industry as a whole. The
+compensation committee also believes that the management has positioned the
+company to continue its exemplary performance in the future with a strong
+balance sheet, strong cash flow, and diverse development opportunities. It is
+the opinion of this committee that the management team of the company merits
+compensation at the very top of its peer group. 
+Compensation paid to the CEO, Mr. Ryan,
+and to the executive officers of the Company is based on several factors,
+including the terms of their employment contracts, the earnings of the Company,
+the evaluation of the Board of the performance of the employees, as well as
+compensation paid to similarly situated employees with other similar firms. 
+As CEO, Mr. Ryan received a salary of
+$192,439 in 2001, which reflected cost of living increases from his salary in
+2000. Also during 2001 Mr. Ryan earned a cash bonus of $712,332 based on Company
+earnings, including $147,000 to partially offset the taxes associated with an
+exercise of stock options during 2000. This tax reimbursement was approved by
+the Board prior to the exercise of the options in January of 2000, and paid when
+the taxes became due in 2001. The Board, at the recommendation of the
+Compensation Committee, has subsequently adopted a policy prohibiting future tax
+reimbursement bonuses. Under the terms of his employment contract, Mr. Ryan's
+bonus is based on the company's cash flow (pre-tax earnings plus depreciation,
+depletion and amortization). The compensation committee believe that the long
+term valuation of the company is closely related to the company's cash flow. 
+As a condition of the tax reimbursement
+Mr. Ryan agreed not to sell the shares received in the exercise for a period of
+two years. The company's income tax savings associated the stock exercise were
+greater than the reimbursement made to Mr. Ryan. Limiting the need for an
+executive to sell stock to meet tax obligations can prevent the negative impact
+on the stock price of stock sales by executive managers, to the benefit of all
+shareholders. 
+The Company also contributed $10,500 in
+2001 to Mr. Ryan's 401(k) account in accordance with the plan's matching
+provisions to all participating employees. 
+The compensation of the two executive
+officers of the Company is also comprised of a salary, a performance based
+bonus, and a tax reimbursement associated with the exercise of stock options.
+Like Mr. Ryan, the executive's performance bonuses are based on the cash flow of
+the company. The executives also received a tax reimbursement estimated to
+partially offset the tax liability associated with the option exercise, and
+agreed to a two year sale restriction on stock obtained in the option exercise
+associated with the tax reimbursement. Salaries of both were increased by a cost
+of living adjustment and performance bonuses were paid based on the Company's
+earnings, both as provided in the executive's employment agreements. Both
+executives also received a share of Company matching contributions to the
+Company 401(k) plan. 
+During 2001 the Company reviewed the
+employment contracts of the CEO and the executive officers of the Company, and
+determined that no changes were required. The Compensation Committee believes
+the Company has made substantial progress over the past several years through
+varying industry and economic conditions, and that the progress is attributable
+in large measure to the efforts of the CEO and the executive officers. 
+The Company has retained a nationally
+recognized compensation consulting firm to help identify an appropriate peer
+group, determine competitive compensation, to review the current employment
+contracts and to assist the committee in developing compensation guidelines for
+the executive officers of the company. The committee will use this information
+to recommend contract changes and compensation levels and structures when the
+current employment contracts of the executive employees expire at the end of
+2003. 
+Compensation Committee 
+Vincent F. D'Annunzio, Chair 
+Donald B. Nestor 
+Jeffrey C.
+Swoveland 
+Aggregated Option Exercises in Last Fiscal
+Year 
+and Fiscal Year-End Option Values 
+The following table provides certain
+information with respect to options exercised during 2001 by the persons named
+in the summary compensation under the Company's stock option plans. The table
+also represents information as to the number of options outstanding as of
+December 31, 2001 with respect to options granted pursuant to the Company's
+Employee Stock Option Plans. No options were granted in the last fiscal
+year. 
+Number 
+of Shares 
+Exercised 
+Value 
+Realized ($) 
+Number of Unexercised Options 
+at Year-end 
+Value of Unexercised 
+In-The-Money Options 
+at Year-End(1)($)
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+James N. Ryan 
+- 
+- 
+178,000 
+- 
+456,010 
+- 
+Steven R. Williams 
+- 
+- 
+178,000 
+- 
+456,010 
+- 
+Dale G. Rettinger 
+- 
+- 
+178,000 
+- 
+456,010 
+- 
+(1) On December 31, 2001, the closing
+sales price of the Common Stock was $6.17 per share. 
+Employment and Other Agreements and
+Arrangements 
+The Company has entered into employment
+agreements with each of the Named Executives, each of which has a term ending
+December 31, 2003. Pursuant to the respective terms of the employment
+agreements, each of the Named Executives is entitled to receive the basic annual
+salary set forth therein that is subject to increase, but not decrease (unless
+dire economic circumstances as declared by the Board of Directors requires a
+reduction for all senior executive employees of the Company), as the Board of
+Directors may determine to reflect changes in the cost of living, the financial
+success of the Company and the performance of such Named Executive. For 2001,
+the basic salary has been set by the Board of Directors under the respective
+agreements as $192,435 for Mr. Ryan, $154,035 for Mr. Williams and $154,035 for
+Mr. Rettinger. Each Named Executive is also entitled to be paid an annual bonus
+equal to 2.5% of the Company's annual earnings in excess of $300,000 without
+deduction for Depreciation, depletion, and amortization and income taxes. In
+January of 2000, the Compensation Committee also awarded a bonus of $147,000 to
+each named executive officer to defray the income tax effect of the exercise of
+stock options. This bonus was payable at the time the tax became due in 2001. In
+exchange, the exercised shares cannot be sold in the open market for a period of
+two years from date of exercise. The bonus is tax deductible for the company.
+The Company has been required to establish a deferred compensation plan,
+described below, for the Named Executives and to fund such plan with an annual
+contribution of $30,000 commencing in 1994. Commencing January 1, 2004, each of
+the three executive officers will vest and be entitled to receive an annual
+payment equal to $60,000 for Mr. Ryan and $40,000 for Mr. Rettinger and Mr.
+Williams per year upon retirement from the company and continuing for 10 years
+payable on July 1st of each year. 
+In the event of a change in control of the
+Company, each Named Executive has the right within six months after such change
+of control to elect to terminate his employment under his employment agreement
+and receive severance compensation equal to the sum of his basic salary plus an
+amount equal to the average bonus paid to him over the preceding three years as
+provided in the agreement multiplied by the remaining years of the employment
+agreement, provided, however, that the minimum severance compensation must not
+be less than the amount equal to three years of basic compensation plus an
+amount equal to three times the average bonus paid to such person over the
+preceding three-year period. 
+Each employment agreement also provides
+that if the Company obtains the right to sell working interests in any drilling
+program, the Named Executive is entitled to participate as an investor in such
+oil and gas drilling project subject to the prior approval by the Board of
+Directors of the terms of any such participation. 
+Each employment agreement contains a
+standard non-disclosure covenant. Each employment agreement also provides that
+the Named Executive is prohibited during the term of his employment and for a
+period of one year following his termination from engaging in any business that
+is competitive with the Company's oil and gas drilling business, unless his
+termination results from a change of control of the Company. During any period
+for which the non-competition provision prohibits the officer from pursuing
+activities that would compete with the Company's business as provided in the
+agreement following termination of the agreement, the Company is required to pay
+the officer his basic salary and bonus as provided in the agreement. 
+In the event of termination under the
+terms of the agreement, the Company will be required to loan to the officer
+funds equal to the exercise price of all options held by the Named Executive
+under the Company's stock option plans, which loan, if made, must be repaid
+within nine months and will bear interest at the prime rate then in effect. 
+Each employment agreement may be
+terminated for cause for willful misfeasance or malfeasance, disregard of the
+Named Executive's duties or negligence related to the performance of his duties,
+if so determined by a court of competent jurisdiction. Also, the Company may
+terminate the employment agreement without cause, in which case the Company must
+either (i) reassign the Named Executive to a comparable executive position or
+designate him as a consultant for the remaining term of his agreement (ii) pay
+him liquidated damages in an amount equal to his then basic salary for the
+remaining term of the employment agreement, with a minimum payment equal to
+twelve months of basic salary. 
+The Company has entered into stock
+redemption agreements with each of the Named Executives. The agreements require
+the Company to maintain life insurance policies on each of them in the amount of
+$1 million. At the election of the Named Executive's estate or heirs made within
+one year of such person's death, the Company must utilize the proceeds from such
+insurance policies to purchase from his estate or heirs all or a portion of his
+shares of the Company's Common Stock owned by him, including shares subject to
+outstanding stock options or warrants owned by such Named Executive at the time
+of his death, up to an aggregate sale price of $1 million. The purchase price
+for such shares of Common Stock will be based upon the average closing asked
+price for the Company's Common Stock as quoted by Nasdaq during a specified
+period. The Company is not required to purchase any shares in excess of the
+amount provided by such insurance policies. If the Named Executive's estate or
+heirs elect not to sell any or all of the shares to the Company, the estate or
+heirs will be precluded from selling the shares to anyone for a period of two
+years after the date of the person's death, except that the shares may be
+transferred into the names of the decedent's heirs and beneficiaries and the
+stock sold pursuant to Rule 144 under the Securities Act. If the Named Executive
+terminates his employment with the Company or disposes of all or substantially
+all of his shares of Common Stock in the Company, the Named Executive has the
+right to purchase his respective insurance policy for a price equal to the cash
+surrender value of the policy as of the date of such event. If the Named
+Executive fails to purchase the policy within ninety days after such event, the
+Company may cancel all policies covering the life of the Name Executive. The
+stock redemption agreements will terminate upon bankruptcy or cessation of
+business by the Company. 
+Mr. Ryan, Mr. Williams and Mr. Rettinger
+are also the participants in the Company's deferred bonus compensation plan.
+Under this plan, the Company's Board of Directors must declare a year-end bonus
+for each participant, the receipt of which is automatically deferred pursuant to
+the plan, unless prior to the beginning of a particular year, the participant
+enters into a voluntary bonus compensation agreement under which he irrevocably
+elects to receive his year-end bonus as cash compensation, payable as soon as
+practicable following the end of the year. The amount of the participant's
+year-end bonus is a minimum of $30,000 or such greater amount as may be declared
+by the Board of Directors. The participant also has the right to elect to defer
+receipt of his other bonus compensation under this plan. Any bonus compensation
+deferred under this plan will not be paid until such participant's retirement,
+or upon termination of employment, disability or death or upon hardship, as
+provided in the plan. A trustee selected by the Board of Directors maintains
+accounts for each participant under the plan. The Company has reserved the right
+to terminate the deferred bonus compensation plan, in whole or in part, at any
+time and without liability for such termination or discontinuance. 
+Stock Option Plans 
+Under the Company's incentive stock option
+plans, options to purchase shares of Common Stock of the Company may be granted
+to certain officers and key employees of the Company, which options are intended
+to qualify as incentive stock options under the provisions of the Internal
+Revenue Code. Under the plan adopted in 1999, the Company granted options during
+2001 for an aggregate of 150,000 shares of Common Stock at an exercise price of
+100% of the fair market value per share of the Company's Common Stock on the
+date of grant. None of the 150,000 options were granted to the three executive
+officers of the Company. The options may be exercised six months after the date
+of grant. Options will expire ten years from the date of grant if not exercised.
+A dissolution or liquidation of the Company or a merger or consolidation in
+which the Company is not the surviving corporation will cause each outstanding
+option to terminate, provided that each optionee, in such event, will have the
+right immediately prior to said dissolution or liquidation or merger or
+consolidation to exercise his option in whole or in part without regard to any
+installment vesting provisions with respect to such options. 
+The following table shows the number of
+outstanding options and the weighted average exercise price of those
+options. 
+Plan 
+Number of securities to be
+issued upon exercise of outstanding options. 
+(a) 
+Weighted-average exercise price of outstanding
+options (b) 
+Number of securities remaining available for
+future issuance under equity compensation plans (excluding securities
+reflected in column (a) ) 
+(c) 
+Equity compensation 
+plans approved by 
+security holders 
+1,160,000 
+$4.29 
+- 
+Equity compensation 
+plans not approved by 
+security holders 
+- 
+- 
+- 
+Total 
+1,160,000 
+$4.29 
+- 
+Key-Man Life Insurance 
+The Company maintains key-man life
+insurance policies on the lives of Messrs. Ryan, Williams and Rettinger in the
+amounts of $5.0 million, $1.0 million, and $1.0 million, respectively. The
+Company is the beneficiary of each policy. 
+Employee 401k and Profit Sharing
+Plan 
+In 1987, the Company established a
+retirement plan qualified under Section 401(k) of the Internal Revenue Code. The
+plan is funded by employee contributions and a company matching contribution.
+Administrative costs of the plan are borne by the Company. The employees choose
+from eight investment programs and, therefore, the amount of an individual's
+plan assets depends on the amount of their contributions and the performance by
+their chosen investments. 
+In 1992, the Company began a Profit
+Sharing Retirement plan to supplement the 401(k) Plan. Contributions are
+dependent on corporate profitability and are at the discretion of the Board of
+Directors of the Company. The Company filed and qualified the plan with the
+Internal Revenue Service. 
+Stockholder Performance Graph 
+The following graph illustrates the
+performance of Petroleum Development Corporation common stock over a five year
+period compared to the performance of the S&P 500 Index and a peer group
+index. The peer group index consists of 194 Crude Petroleum and Natural Gas
+Companies. The table includes the cumulative shareholder return assuming the
+reinvestment of dividends. 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
+OWNERS AND MANAGEMENT 
+The following table sets forth certain
+information regarding ownership of the Company's Common Stock as of April 15,
+2002 by (a) each person known by the Company to own beneficially more than 5% of
+the outstanding shares of Common Stock; (b) each director of the Company; (c)
+each Named Executive; (d) all directors and executive officers as a group. 
+Name and Address 
+Beneficial Ownership
+(1) 
+Number 
+Percent 
+Fidelity Management 
+82 Devonshire Street 
+Boston, MA 02109 
+1,624,500 
+10.3 
+Dimensional Fund Advisors Inc. 
+1299 Ocean Avenue 
+Santa Monica, CA 90401 
+1,160,800 
+7.4 
+Steven R. Williams(2) 
+103 East Main Street 
+Bridgeport, WV 26330 
+554,476 
+3.5 
+Dale G. Rettinger(2) 
+103 East Main Street 
+Bridgeport, WV 26330 
+472,016 
+3.0 
+James N. Ryan(3)(5) 
+103 East Main Street 
+Bridgeport, WV 26330 
+266,079 
+1.7 
+Roger J. Morgan 
+96,244 
+* 
+Vincent F. D'Annunzio 
+37,899 
+* 
+Jeffrey C. Swoveland 
+16,728 
+* 
+Donald B. Nestor 
+1,000 
+* 
+All directors and executive officers
+as a 
+group (7 persons)(4) 
+1,444,442 
+8.9 
+* Less than 1% 
+(1) Includes shares over which the person
+currently holds or shares voting or investment power. Unless otherwise indicated
+in the footnotes to this table, the persons named in this table have sole voting
+and investment power with respect to the shares beneficially owned. 
+(2) Includes options to purchase 178,000
+shares that such person can currently exercise within 60 days. 
+(3) Includes options to purchase 108,000
+shares that such person can currently exercise within 60 days. 
+(4) Includes options to purchase 464,000
+shares that such persons can currently exercise within 60 days. 
+(5) On April 4, 2002, the company
+purchased 578,000 shares from Mr. Ryan for $6.37 per share, the closing market
+less and allowance for brokerage fees. The purchase was made to accommodate Mr.
+Ryan's need to diversify his portfolio in anticipation of his retirement at the
+end of his current contract. The Board received a fairness opinion with respect
+to the purchase price from an investment banking firm. The shares were retired
+by the Company. 
+Section 16(a) Beneficial
+Ownership Reporting Compliance
+Section 16(a) of the Exchange Act requires
+the Company's officers and directors, and persons who own more than 10% of a
+Company's equity securities, to file reports of ownership and changes in
+ownership with the Securities and Exchange Commission. Officers, directors and
+holders of more than 10% of the Common Stock are required by regulations
+promulgated by the Commission pursuant to the Exchange Act to furnish the
+Company with copies of all Section 16(a) forms they file. The Company assists
+officers and directors, and will assist beneficial owners, if any, of more than
+10% of the Common Stock, in complying with the reporting requirements of Section
+16(a) of the Exchange Act. 
+Based solely on its review of the copies
+of such forms received by it, the Company believes that since January 1, 2001,
+all Section 16(a) filing requirements applicable to its directors, officers and
+greater than 10% beneficial owners were met. 
+Audit Committee Report 
+Audit Committee Report to
+Shareholders 
+The Audit Committee of the Board is
+responsible for providing independent, objective oversight of the Company's
+accounting functions and internal controls. The Audit Committee is composed of
+three directors, each of whom is independent as defined by the National
+Association of Securities Dealers' listing standards. The Audit Committee
+operates under a written charter approved by the Board of Directors. A copy of
+the charter is attached to this Proxy Statement as Exhibit A. 
+Management is responsible for the
+Company's internal controls and financial reporting process. The independent
+accountants are responsible for performing an independent audit of the Company's
+consolidated financial statements in accordance with generally accepted auditing
+standards and to issue a report thereon. The Audit Committee's responsibility is
+to monitor and oversee these processes. 
+In connection with these responsibilities,
+the Audit Committee met with management to review and discuss the December 31,
+2001 financial statements. The Audit Committee also discussed with the
+independent accountants the matters required by Statement on Auditing Standards
+No. 61, Communication with Audit Committees . The
+Audit Committee also received written disclosures from the independent
+accountants required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and the
+Audit Committee discussed with the independent accountants that firm's
+independence. 
+Based upon the Audit Committee's
+discussions with management and the independent accountants, and the Audit
+Committee's review of the representations of management and the independent
+accountants, the Audit Committee recommended that the Board of Directors include
+the audited consolidated financial statements in the Company's Annual Report on
+Form 10-K for the year ended December 31, 2001, to be filed with the Securities
+and Exchange Commission. 
+Respectfully, 
+THE AUDIT COMMITTEE 
+Vincent F. D'Annunzio,
+Chair 
+Donald B. Nestor 
+Jeffrey C.
+Swoveland 
+Audit Fees 
+The aggregate audit fees billed for
+professional services rendered by KPMG LLP for the audit of our annual financial
+statements for the year ended December 31, 2001, including reviews of the
+condensed financial statements included in our quarterly reports on Form 10-Q
+for the year ended December 31, 2001, were $101,945. 
+Other non-audit related fees include
+annual audits on the financial statements of 50 limited partnerships for which
+the Company acts as managing general partner. The aggregate billing for those
+professional services was $210,560 for the year ended December 31, 2001. In
+addition, other miscellaneous fees of $6,100 were billed during the year ended
+December 31, 2001. 
+PROPOSAL #2 
+RATIFICATION OF SELECTION OF INDEPENDENT
+ACCOUNTANTS 
+At the Meeting, the Stockholders of the
+Company will be asked to ratify the Board of Directors' selection of KPMG LLP as
+the Company's certified public accountants for the fiscal year ended December
+31, 2002. KPMG LLP conducted the audit for the fiscal year ended December 31,
+2001. A representative of KPMG LLP will be present at the Meeting, will have an
+opportunity to make statements if he so desires, and will be available to
+respond to appropriate questions. 
+Vote Required 
+A majority of the votes cast at the Annual
+Meeting, in person or by proxy, is required for the ratification of the Board of
+Directors' selection of independent accountants. Abstentions and broker
+non-votes will not be considered as votes cast with respect to the ratification
+of the Board of Directors' selection of independent accountants. 
+THE BOARD OF DIRECTORS RECOMMEND A VOTE
+"FOR" PROPOSAL #2 
+OTHER BUSINESS 
+As of the date of this Proxy Statement,
+management of the Company is not aware of any matters to be brought before the
+Annual Meeting other than the matters set forth in this Proxy Statement.
+However, if other matters properly come before the Meeting, it is the intention
+of the proxy holders named in the enclosed form of proxy to vote in accordance
+with their discretion on such matters pursuant to such proxy. 
+General 
+The enclosed Proxy is solicited by the
+Company's Board of Directors. The Company expects to solicit proxies primarily
+by mail, but solicitation may also be made personally, by telephone or by
+telegraph, by regularly employed officers and employees of the Company who will
+receive no extra compensation for doing so. 
+The Company will request brokers and other
+custodians, nominees and fiduciaries to forward proxy soliciting material to,
+and obtain instructions from, the beneficial owners of shares held by record by
+such persons and will reimburse reasonable out-of-pocket expenses. The Company
+will bear all costs of proxy solicitation. 
+Stockholder Proposals for 2003 Annual
+Meeting 
+Stockholder proposals must be received by
+the Company at its principal executive office on or prior to March 1, 2003 in
+order to be included in the Company's proxy statement for the 2003 annual
+meeting of stockholders. 
+By Order Of The Board of
+Directors 
+James N. Ryan 
+Chairman 
+Dated: June 3, 2002 
+THE COMPANY WILL PROVIDE WITHOUT CHARGE TO
+ANY PERSON WHO IS A RECORD OR BENEFICIAL HOLDER OF COMMON STOCK OF THE COMPANY,
+ON WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
+10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 INCLUDING FINANCIAL STATEMENTS
+AND SCHEDULES THERETO, WHICH THE COMPANY FILED WITH THE SECURITIES AND EXCHANGE
+COMMISSION. COPIES MAY BE OBTAINED BY WRITING TO CORPORATE COMMUNICATIONS
+DEPARTMENT, PETROLEUM DEVELOPMENT CORPORATION, P.O. BOX 26, BRIDGEPORT, WEST
+VIRGINIA 26330. 
+Exhibit A 
+PETROLEUM DEVELOPMENT CORPORATION 
+Charter of the Audit Committee of the Board
+of Directors 
+I. Audit
+Committee Purpose 
+The Audit Committee is appointed by the
+Board of Directors to assist the Board in fulfilling its oversight
+responsibilities. The Audit Committee's primary duties and responsibilities are
+to: 
+- Monitor the integrity of the Company's
+financial reporting process and systems of internal controls regarding finance,
+accounting, and legal compliance. 
+- Monitor the independence and performance
+of the Company's independent auditors. 
+- Provide an avenue of communication among
+the independent auditors, management and the Board of Directors. 
+The Audit Committee has the authority to
+conduct any investigation appropriate to fulfilling its responsibilities, and it
+has direct access to the independent auditors as well as anyone in the
+organization. The Audit Committee has the ability to retain, at the Company's
+expense, special legal, accounting, or other consultants or experts it deems
+necessary in the performance of its duties. 
+II. Audit Committee Composition and
+Meetings 
+Audit Committee members shall meet the
+requirements of the NASDAQ Exchange. The Audit Committee shall be comprised of
+three or more directors as determined by the Board, each of whom shall be
+independent nonexecutive directors, free from any relationship that would
+interfere with the exercise of his or her independent judgment. All members of
+the Committee shall have a basic understanding of finance and accounting and be
+able to read and understand fundamental financial statements, and at least one
+member of the Committee shall have accounting or related financial management
+expertise. 
+Audit Committee members shall be appointed
+by the Board on recommendation of the Board of Directors. If an audit committee
+Chair is not designated or present, the members of the Committee may designate a
+Chair by majority vote of the Committee membership. 
+The Committee shall meet at least two
+times annually, or more frequently as circumstances dictate. The Audit Committee
+Chair shall prepare and/or approve an agenda in advance of each meeting. The
+Committee should meet privately in executive session at least annually with
+management, the independent auditors, and as a committee to discuss any matters
+that the Committee or each of these groups believe should be discussed. 
+Ill. Audit Committee Responsibilities and
+Duties 
+Review
+Procedures 
+1. Review and reassess the adequacy of
+this Charter at least annually. Submit the charter to the Board of Directors for
+approval and have the document published at least every three years in
+accordance with SEC regulations. 
+2. Review the Company's annual audited
+financial statements. Review should include discussion with management and
+independent auditors of significant issues regarding accounting principles,
+practices, and judgments. 
+3. In consultation with the management and
+the independent auditors, consider the integrity of the Company's financial
+reporting processes and controls. Discuss significant financial risk exposures
+and the steps management has taken to monitor, control, and report such
+exposures. Review significant findings prepared by the independent auditors
+together with management's responses. 
+4. Review with financial management the
+company's quarterly financial results. Discuss any significant changes to the
+Company's accounting principles and any items required to be communicated by the
+independent auditors in accordance with SAS 61 (see item 9). The Chair of the
+Committee may represent the entire Audit Committee for purposes of this
+review. 
+Independent
+Auditors 
+5. The independent auditors are ultimately
+accountable to the Audit Committee and the Board of Directors. The Audit
+Committee shall review the independence and performance of the auditors and
+annually recommend to the Board of Directors the appointment of the independent
+auditors or approve any discharge of auditors when circumstances warrant. 
+6. Approve the fees and other significant
+compensation to be paid to the independent auditors. 
+7. On an annual basis, the Committee
+should review and discuss with the independent auditors all significant
+relationships they have with the Company that could impair the auditors'
+independence. 
+8. Review the independent auditors audit
+plan - discuss scope, staffing, reliance upon management, and general audit
+approach. 
+9. Discuss the results of the audit with
+the independent auditors. Discuss certain matters required to be communicated to
+audit committees in accordance with AICPA SAS 61. 
+10. Consider the independent auditors'
+judgments about the quality and appropriateness of the Company's accounting
+principles as applied in its financial reporting. 
+Legal
+Compliance 
+11. On at least an annual basis, review
+with the Company's counsel, any legal matters that could have a significant
+impact on the organization's financial statements, the Company's compliance with
+applicable laws and regulations, and inquiries received from regulators or
+governmental agencies. 
+Other Audit
+Committee Responsibilities 
+12. Annually prepare a report to
+shareholders as required by the Securities and Exchange Commission. 
+13. Perform any other activities
+consistent with this Charter, the Company's by-laws, and governing law, as the
+Committee or the Board deems necessary or appropriate. 
+14. Maintain minutes of meetings and
+periodically report to the Board of Directors on significant results of the
+foregoing activities. 
+ADOPTED MARCH 21, 2000
\ No newline at end of file
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@@ -0,0 +1,3739 @@
+DEF 14A
+1
+d700925ddef14a.htm
+DEF 14A
+DEF 14A 
+Table of Contents 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the
+Securities Exchange Act of 1934 
+Filed by the
+Registrant þ Filed by a
+Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+þ 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+PDC ENERGY, INC. 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+þ 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify
+the previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement no.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Table of Contents 
+PDC ENERGY, INC. 
+1775 Sherman Street, Suite 3000 
+Denver, Colorado 80203 
+(303) 860-5800 
+April 22, 2014 
+Dear Stockholder of PDC Energy, Inc.: 
+You are cordially invited to attend the 2014 Annual Meeting of Stockholders of PDC Energy, Inc. to be held on June 5, 2014, at 11:30
+a.m. Central Time at The Houstonian Hotel, 111 North Post Oak Lane, Houston, Texas 77024. 
+The accompanying Notice of Annual
+Meeting of Stockholders and Proxy Statement provide information concerning the matters to be considered at the meeting. 
+We
+hope you will join us at the Annual Meeting. Whether or not you plan to attend personally, it is important that your shares be represented at the Annual Meeting. We value your opinion and encourage you to participate in the Annual Meeting by voting
+your proxy. You may vote your shares by using the telephone or Internet voting options described in the attached Notice of Annual Meeting and proxy card. If you receive a proxy card by mail, you may cast your vote by completing, signing and
+returning it promptly. This will ensure that your shares are represented at the Annual Meeting even if you cannot attend in person. 
+Sincerely, 
+James M. Trimble 
+Chief Executive Officer and President 
+Table of Contents 
+PDC ENERGY, INC. 
+NOTICE OF ANNUAL MEETING OF STOCKHOLDERS 
+TO BE HELD ON 
+THURSDAY, JUNE 5, 2014 
+To the Stockholders of PDC Energy, Inc.: 
+The 2014 Annual Meeting
+of Stockholders of PDC Energy, Inc. (the “Company”) will be held on June 5, 2014, at 11:30 a.m. Central Time at The Houstonian Hotel, 111 North Post Oak Lane, Houston, Texas 77024, for the following purposes: 
+• 
+To elect the three nominees named in the accompanying Proxy Statement as Class I Directors of the Company, each for a term of three years;
+• 
+To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year
+ending December 31, 2014; 
+• 
+To approve, on an advisory basis, the compensation of the Company’s named executive officers; 
+• 
+To approve and adopt the Fourth Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock from
+100,000,000 to 150,000,000; and 
+• 
+To transact any other business that may properly come before the meeting and at any and all adjournments or postponements thereof.
+The Board of Directors has fixed the close of business on April 14, 2014, as the
+record date for determining the stockholders having the right to receive notice of, to attend and to vote at the Annual Meeting or any adjournment or postponement thereof. The presence in person or by proxy of the holders of a majority of the
+outstanding shares of the Company’s common stock entitled to vote is required to constitute a quorum. 
+Please vote by using the telephone or Internet voting options described in the accompanying Notice of Internet
+Availability of Proxy Materials or, if the attached Proxy Statement and a proxy card were mailed to you, please sign, date and return the proxy card in the enclosed envelope as soon as possible. 
+By Order of the Board of Directors, 
+Daniel W. Amidon 
+Senior Vice President, General Counsel and Secretary 
+April 22, 2014 
+Table of Contents 
+PDC ENERGY, INC. 
+PROXY STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held on
+June 5, 2014 at 
+The Houstonian Hotel 
+111 North Post Oak Lane 
+Houston, Texas 77024 
+The accompanying proxy is solicited by the Board of Directors (“Board”) of PDC Energy, Inc. (“PDC,”
+the “Company,” “we,” “us” or “our”) for use at the Annual Meeting of Stockholders of the Company (the “Annual Meeting”) to be held on June 5, 2014, at 11:30 a.m. Central Time and at any and all
+adjournments or postponements of the meeting, for the purposes set forth in this Proxy Statement and the accompanying Notice of Annual Meeting of Stockholders. On or about April 22, 2014 we began mailing notices containing instructions for
+accessing this Proxy Statement and our annual report online, and we began mailing proxy materials to stockholders who had previously requested delivery of the materials in paper form. For information on how to vote your shares, see the instructions
+included on the proxy card or instruction form under “Information About Voting and the Meeting” herein. 
+IMPORTANT
+NOTICE REGARDING THE INTERNET AVAILABILITY 
+OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS 
+TO BE HELD ON JUNE 5, 2014 
+The Notice of Annual Meeting of Stockholders, the Proxy Statement for the 2014 Annual Meeting of Stockholders, and the 2013 Annual Report to Stockholders, which includes the Company’s Annual
+Report on Form 10-K for the fiscal year ended December 31, 2013, are available at www.envisionreports.com/PDCE . 
+Table of Contents 
+TABLE OF CONTENTS 
+INFORMATION ABOUT VOTING AND THE MEETING 
+3 
+Who May Vote 
+3 
+How Proxies Work 
+3 
+Voting 401(k) and Profit Sharing Plan Shares 
+3 
+Revoking a Proxy 
+3 
+Quorum 
+4 
+Votes Needed 
+4 
+Attending in Person 
+4 
+Conduct of the Meeting 
+5 
+Solicitation of Proxies 
+5 
+Appraisal Rights 
+5 
+Contact Information 
+5 
+PROPOSALS REQUIRING STOCKHOLDER VOTE 
+6 
+PROPOSAL NO. 1 — ELECT THREE CLASS I DIRECTORS 
+6 
+Name, Principal Occupation for Past Five Years and Other Directorships 
+7 
+REPORT OF THE AUDIT COMMITTEE 
+9 
+PROPOSAL NO. 2 — RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
+FIRM 
+10 
+PROPOSAL NO. 3 — 
+APPROVE, ON ADVISORY BASIS, THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS 
+11 
+PROPOSAL NO. 4 — 
+APPROVE AND ADOPT THE FOURTH AMENDED AND RESTATED ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 100,000,000 TO 150,000,000 
+12 
+ALL OTHER BUSINESS THAT MAY COME BEFORE THE 2014 ANNUAL MEETING 
+13 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
+MATTERS 
+14 
+CORPORATE GOVERNANCE 
+16 
+STANDING COMMITTEES OF THE BOARD 
+18 
+DIRECTOR COMPENSATION 
+20 
+DIRECTOR QUALIFICATIONS AND SELECTION 
+22 
+STOCKHOLDER RECOMMENDATIONS AND NOMINATIONS 
+22 
+THE BOARD’S ROLE IN RISK MANAGEMENT 
+23 
+COMMUNICATION WITH DIRECTORS BY STOCKHOLDERS 
+24 
+CODE OF BUSINESS CONDUCT AND ETHICS 
+24 
+TRANSACTIONS WITH RELATED PERSONS 
+24 
+ADDITIONAL INFORMATION 
+25 
+NAMED EXECUTIVE OFFICERS 
+25 
+COMPENSATION COMMITTEE REPORT 
+26 
+COMPENSATION DISCUSSION AND ANALYSIS 
+26 
+SUMMARY COMPENSATION TABLE 
+41 
+2013 ALL OTHER COMPENSATION 
+42 
+2013 GRANTS OF PLAN-BASED AWARDS 
+43 
+ADDITIONAL DISCUSSION OF TABLES RELATED TO SUMMARY COMPENSATION AND 2013 GRANTS OF PLAN-BASED
+AWARDS 
+44 
+OUTSTANDING EQUITY AWARDS AT 2013 FISCAL YEAR-END 
+46 
+2013 OPTION EXERCISES AND STOCK VESTED 
+46 
+POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 
+47 
+EQUITY COMPENSATION PLAN INFORMATION 
+52 
+STOCKHOLDER NOMINATIONS AND PROPOSALS 
+52 
+HOUSEHOLDING INFORMATION 
+53 
+APPENDIX A — Proposed Fourth Amended and Restated Articles of
+Incorporation 
+A-1 
+Table of Contents 
+INFORMATION ABOUT VOTING AND THE MEETING 
+Who May Vote 
+Stockholders of PDC, as recorded in the Company’s stock register on the record date of April 14, 2014, may vote at the Annual Meeting. The outstanding voting securities of the Company as of
+April 14, 2014 consisted of 35,798,743 shares of common stock. Each share of common stock is entitled to one vote on each matter considered at the meeting. 
+How Proxies Work 
+The Board is
+asking for your proxy. Giving the Board your proxy means that you authorize the Board to vote your shares at the meeting in the manner you direct. We will vote your shares as you specify. You may vote for or withhold your vote from one or more Class
+I Director nominees. You may also vote for or against the other proposals, or abstain from voting. If your shares are held in your name, you can vote by completing, signing and dating your proxy card and returning it in the enclosed envelope. If you
+give the Board your signed proxy but do not specify how to vote, your shares will be voted (1) in favor of approval of all three of the Class I Director nominees named in the proxy; (2) in favor of ratification of the appointment of
+PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014; (3) to approve, on an advisory basis, the compensation of the Company’s
+named executive officers; and (4) in favor of adoption of the Company’s Fourth Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 150,000,000. 
+If you hold shares through someone else, such as a stockbroker, you will receive material from that firm asking how you
+want to vote and instructing you of the procedures to follow in order for you to vote your shares. If the broker does not receive voting instructions from you, the broker may vote only on proposals that are considered “routine” matters
+under applicable rules. Without your instruction, your broker may vote only on the ratification of the appointment of PwC as our independent registered public accounting firm for 2014. A broker’s inability to vote because it lacks discretionary
+authority to do so is commonly referred to as a “broker non-vote.” The effect of broker non-votes may be different for the various proposals to be voted upon at the Annual Meeting. For a description of the effect of broker non-votes on
+each proposal, see “Votes Needed” below. 
+Voting 401(k) and Profit Sharing Plan Shares 
+If you are a participant in PDC’s 401(k) and Profit Sharing Plan and have shares of PDC common stock credited to your
+plan account as of the record date, you have the right to direct the plan trustee how to vote those shares. The trustee will vote the shares in your plan account in accordance with your instructions. Your vote may not be counted if your proxy card
+is not received by May 30, 2014. You cannot vote such shares at the Annual Meeting or change your vote. 
+Revoking a Proxy 
+You may revoke your proxy before it is voted by: 
+• 
+Submitting a new signed proxy with a later date; 
+• 
+Notifying PDC’s Corporate Secretary in writing before the meeting that you wish to revoke your proxy; or 
+• 
+Appearing at the meeting, notifying the inspector of the election that you wish to revoke your proxy, and voting in person at the meeting. Merely
+attending the meeting will not result in revocation of your proxy. 
+If you hold your shares
+through a broker, bank or other nominee, you must follow their instructions to revoke your voting instructions or otherwise vote at the meeting. 
+3 
+Table of Contents 
+Quorum 
+In order to carry on the business of the meeting, there must be a quorum. This means that at least a majority of the
+outstanding shares eligible to vote must be represented at the meeting, either by proxy or in person. Treasury shares, which are shares owned by PDC itself, are not voted and do not count for this purpose. Abstentions and broker non-votes will count
+for quorum purposes. 
+Votes Needed 
+The following table presents the voting requirements for electing the three Class I Director nominees and approving the
+other proposals presented in this Proxy Statement. Under the “Uncontested Elections Policy” contained in Section 3(e) of our Corporate Governance Guidelines, which may be viewed on our website at www.pdce.com , any nominee who
+receives a greater number of “withhold” votes than “for” votes is required to submit to the Board a letter of resignation for consideration by the Nominating and Governance Committee. For more information about our Uncontested
+Elections Policy, see “Corporate Governance — Uncontested Elections Policy” below. 
+PROPOSAL 
+VOTE REQUIRED TO ELECT OR APPROVE 
+Proposal No. 1 
+Elect three Class I Directors. 
+The three nominees who receive the greatest number of votes will be elected Directors for the three-year term ending in 2017. There is no cumulative voting for Directors.
+Abstentions and broker non-votes will have no effect on the election of Directors. 
+Proposal No. 2 
+Ratify the appointment of PwC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014. 
+A majority of votes cast is required for ratification. Abstentions and broker non-votes will not be counted as votes cast or shares voting on Proposal No. 2 and will have no
+effect on the vote. 
+Proposal No. 3 
+Approve, on an advisory basis, the compensation of the Company’s Named Executive Officers (as defined herein). 
+A majority of votes cast is required for approval. Abstentions and broker non-votes will not be counted as votes cast or shares voting on Proposal No. 3 and will have no effect
+on the vote. 
+Proposal No. 4 
+Approve and adopt the Fourth Amended and Restated Articles of Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 150,000,000. 
+The affirmative vote of a majority of outstanding shares of common stock is required for approval. Abstentions and broker non-votes will be counted as votes against
+Proposal No. 4. 
+Attending in Person 
+Only stockholders or their proxy holders and PDC guests may attend the Annual Meeting. For safety and security reasons, no
+cameras, audio or video recording equipment, large bags, briefcases or packages will be permitted in the meeting. In addition, each stockholder and guest may be asked to present valid, government-issued picture identification, such as a
+driver’s license, before being admitted to the meeting. 
+4 
+Table of Contents 
+If your shares are held in the name of your broker, bank, or other nominee,
+you must bring to the meeting an account statement or letter from the nominee indicating that you beneficially owned the shares on April 14, 2014, the record date for receiving notice of, attending and voting at the Annual Meeting. 
+Conduct of the Meeting 
+The Chairman has broad authority to conduct the Annual Meeting in an orderly and timely manner. This authority includes establishing rules for stockholders who wish to speak at the meeting. The Chairman
+may also exercise broad discretion in recognizing stockholders who wish to speak and in determining the extent of discussion on each item of business. In light of the need to conclude the meeting within a reasonable period of time, there can be no
+assurance that every stockholder who wishes to speak on an item of business will be able to do so. The Chairman may also rely on applicable law regarding disruptions or disorderly conduct to ensure that the meeting is conducted in a manner that is
+fair to all stockholders. 
+Solicitation of Proxies 
+The Company will bear all costs related to the solicitation of proxies. The Company will reimburse brokerage firms and
+other custodians, nominees and fiduciaries for reasonable and appropriate expenses incurred by them in sending the Notice of Internet Availability of Proxy Materials to the beneficial owners of the Company’s common stock. In addition to
+solicitations by mail, Directors, officers and employees of the Company may solicit proxies by telephone and, to the extent necessary, other electronic communication and personal interviews, without additional compensation. The Company has entered
+into an agreement with Morrow & Co., LLC, 470 West Avenue, 3rd Floor, Stamford, CT 06902, as its proxy solicitor and anticipates paying approximately $8,500 for such services. 
+Appraisal Rights 
+No action is
+proposed at the Annual Meeting for which the laws of the State of Nevada or our By-Laws provide a right of our stockholders to dissent and obtain appraisal of or payment for such stockholders’ common stock. 
+Contact Information 
+If you have questions or need more information about the Annual Meeting, you may write to or call: 
+Corporate Secretary 
+PDC Energy, Inc. 
+1775 Sherman Street, Suite 3000 
+Denver, CO 80203 
+(303) 860-5800 
+corpsecretary@pdce.com 
+For information about shares registered in your name, call PDC at (800) 624-3821. You are also invited to visit PDC’s website at www.pdce.com . The Company’s website materials are not
+incorporated by reference into this Proxy Statement. 
+5 
+Table of Contents 
+PROPOSALS REQUIRING STOCKHOLDER VOTE 
+PROPOSAL NO. 1 — ELECT THREE CLASS I DIRECTORS 
+(Proposal 1 on the Proxy Card) 
+As of the date of this Proxy Statement and as permitted by the Company’s By-Laws, the Board consists of seven members divided into three classes (“Directors”). Directors are usually elected
+for three-year terms. The terms for members of each class end in successive years. 
+The Board has nominated
+three continuing Class I Directors, Joseph E. Casabona, David C. Parke and Jeffrey C. Swoveland, whose terms expire in 2014 at the Annual Meeting, to stand for re-election to the Board for a three-year term expiring in 2017. Mr. Casabona joined
+the Board in 2007 and currently serves on the Audit Committee, which he chairs. Mr. Parke joined the Board in 2003 and currently serves on the Compensation Committee and the Nominating and Governance Committee. Mr. Swoveland joined the
+Board in 1991 and currently serves as the Non-Executive Chairman of the Board and as a member of the Audit Committee and the Compensation Committee. 
+The appointed proxies will vote your shares in accordance with your instructions and for the election of the three Class I Director nominees unless you withhold your authority to vote for one or more of
+them. The Board does not contemplate that any of the Director nominees will become unavailable for any reason; however, if any Director is unable to stand for election, the Board may reduce its size or select a substitute. Your proxy cannot be
+otherwise voted for a person who is not named in this Proxy Statement as a candidate for Director or for a greater number of persons than the number of Director nominees named. 
+Board of Directors 
+As of March 30, 2014, the
+composition of the Board and the term of each Director was as follows: 
+NOMINEES 
+FIRST ELECTED 
+DIRECTOR 
+EXPIRATION OF 
+CURRENT TERM 
+CLASS I: 
+Joseph E. Casabona 
+2007 
+2014 
+David C. Parke 
+2003 
+2014 
+Jeffrey C. Swoveland 
+1991 
+2014 
+CLASS II: 
+Anthony J. Crisafio 
+2006 
+2015 
+Kimberly Luff Wakim 
+2003 
+2015 
+CLASS III: 
+Larry F. Mazza 
+2007 
+2016 
+James M. Trimble 
+2009 
+2016 
+6 
+Table of Contents 
+Name, Principal Occupation for Past Five Years 
+and Other Directorships 
+First 
+Elected 
+Director 
+NOMINEES FOR TERM EXPIRING IN 2017 — CLASS I 
+JOSEPH E. CASABONA, 70, served as Executive Vice President and as a member of the Board of Directors of Denver-based Energy Corporation of America
+(“ECA”) from 1985 until his retirement in May 2007. ECA is a privately-held energy company that owns and operates assets both in the U.S. and around the world, including approximately 4,600 wells, 5,000 miles of pipeline and 1,000,000
+acres in North America. As the primary direct report to the Chief Executive Officer of ECA, Mr. Casabona’s major responsibilities included strategic planning/forecasting, acquisitions, capital transactions, corporate policy, and executive
+oversight in operational and drilling activities in the continental U.S. and internationally. From 1968 until 1985, Mr. Casabona was employed at KPMG or its predecessors with various titles including audit partner in the Pittsburgh, Pennsylvania
+office, where he primarily served public clients in the oil and gas industry. From 2008 until the beginning of 2011, Mr. Casabona served as Chief Executive Officer of Paramax Resources Ltd., a junior public Canadian oil and gas company engaged in
+the business of acquiring and exploring oil and gas prospects, primarily in Canada and Idaho. In determining Mr. Casabona’s qualifications to serve on our Board, the Board has considered, among other things, that Mr. Casabona brings to the
+Board extensive first-hand experience in all aspects of the oil and gas industry, including natural gas exploration, development, acquisitions, operations and strategic planning, as well as experience in the Company’s primary areas of
+operations, the Rocky Mountain Region and the Appalachian Basin. Mr. Casabona holds a BSBA from the University of Pittsburgh and a Master of Science-Mineral Economics from the Colorado School of Mines. 
+2007 
+DAVID C. PARKE, 47, has served as a Managing Director with Burrill Securities LLC since June 2011. From 2006 until 2011, he was Managing Director in the
+investment banking group of Boenning & Scattergood, Inc., a regional investment bank. Prior to joining Boenning & Scattergood from October 2003 to November 2006, he was a Director with the investment banking firm Mufson Howe Hunter &
+Company LLC. From 1992 through 2003, Mr. Parke was Director of Corporate Finance of Investec, Inc. and its predecessor, Pennsylvania Merchant Group Ltd., both investment banking companies. Prior to joining Pennsylvania Merchant Group, Mr. Parke
+served in the corporate finance departments of Wheat First Butcher & Singer, now part of Wells Fargo, and Legg Mason, Inc., now part of Stifel Nicolaus. In determining Mr. Parke’s qualifications to serve on our Board, the Board has
+considered, among other things, that Mr. Parke has extensive investment banking experience, including experience in the oil and gas area, allowing him to contribute broad financial and investment banking expertise to the Board and to provide
+guidance on capital markets and acquisition matters. 
+2003 
+JEFFREY C. SWOVELAND, 59, was elected Non-Executive Chairman of the Board in June 2011, having served on the Board since 1991. From 2006 until January 2014, Mr.
+Swoveland was first Chief Operating Officer and later President and Chief Executive Officer of ReGear Life Sciences, Inc. in Pittsburgh, Pennsylvania (previously named Coventina Healthcare Enterprises), which develops and markets medical device
+products. From 2000 until 2007, Mr. Swoveland served as Chief Financial Officer of Body Media, Inc., a life-science company specializing in the design and development of wearable body monitoring products and services. Prior thereto, from 1994 to
+September 2000, Mr. Swoveland held various positions including Vice President of Finance, Treasurer and interim Chief Financial Officer with Equitable Resources, Inc., a diversified natural gas company. Mr. Swoveland also has worked as a geologist
+and exploratory geophysicist for both major and independent oil and gas companies. Mr. Swoveland serves as a member of the Board of Directors of Linn Energy, LLC, a public independent oil and natural gas company. In determining Mr. Swoveland’s
+qualifications to serve on our Board, the Board has considered, among other things, that Mr. Swoveland brings to the Board extensive corporate management, accounting and finance experience, and oil and gas industry expertise. Additionally, his
+service as a director of another public energy company provides leadership and knowledge of best practices that benefit the Company and his guidance and understanding of management processes of larger oil and gas companies benefits the Company as it
+grows. 
+1991 
+7 
+Table of Contents 
+Name, Principal Occupation for Past Five Years 
+and Other Directorships 
+First 
+Elected 
+Director 
+CONTINUING DIRECTORS WITH TERM EXPIRING IN 2015 — CLASS II 
+ANTHONY J. CRISAFIO, 61, a Certified Public Accountant, has served as an independent business consultant for more than 19 years, providing financial and
+operational advice to businesses in a variety of industries and stages of development. He is currently serving as a consultant to Empire Energy USA, LLC, which has operations in the Central Kansas Uplift and the shallow Appalachian Basin primarily
+in the State of New York, and is currently seeking and has pursued acquisitions in a variety of other basins in the United States. Mr. Crisafio also serves as the Interim Chief Financial Officer for MDS Energy, a part-time position. Mr. Crisafio
+also serves as an Advisory Board member for a number of privately held companies and has been a Certified Public Accountant for more than 30 years. Mr. Crisafio served as Chief Operating Officer, Treasurer and member of the Board of Directors of
+Cinema World, Inc. from 1989 until 1993. From 1975 until 1989, he was employed by Ernst & Young, last serving as a partner from 1986 to 1989. He was responsible for several Securities and Exchange Commission (“SEC”) registered client
+engagements and gained significant experience with oil and gas industry clients and mergers and acquisitions. In determining Mr. Crisafio’s qualifications to serve on our Board, the Board has considered, among other things, that Mr. Crisafio
+brings to the Board more than 30 years of financial accounting and management expertise, with demonstrated business management and accounting experience. 
+2006 
+KIMBERLY LUFF WAKIM, 56, an attorney and a Certified Public Accountant, is a Partner with the law firm Clark Hill PLC (formerly Thorp, Reed & Armstrong LLP),
+where she is the co-chair of the Corporate Restructuring and Bankruptcy Practice Group. She has practiced law with the firm since 1990. Ms. Wakim was previously an auditor with Main Hurdman (now KPMG) and was Assistant Controller for PDC from 1982
+to 1985. She has been a member of the American Institute of Certified Public Accountants and the West Virginia Society of CPAs for more than 19 years. In determining Ms. Wakim’s qualifications to serve on our Board, the Board has considered,
+among other things, that Ms. Wakim brings to the Board a combination of strong legal background and expertise in accounting oversight. 
+2003 
+CONTINUING DIRECTORS WITH TERM EXPIRING IN 2016 — CLASS III 
+LARRY F. MAZZA, 53, is President and Chief Executive Officer of MVB Financial Corp (“MVB”), a growing financial services company with banking,
+mortgage, insurance and wealth management operations in West Virginia and Northern Virginia. He has more than 26 years of experience in both large banks and small community banks. Mr. Mazza is one of seven members of the West Virginia Board of
+Banking and Financial Institutions. This Board oversees the operation of financial institutions throughout West Virginia and advises the state Commissioner of Banking on banking matters. Mr. Mazza is also an entrepreneur and is co-owner of
+nationally-recognized sports media business Football Talk, LLC, a pro football website and content provider for NBC SportsTalk. Prior to joining MVB in 2005 to lead its geographic expansion and growth, Mr. Mazza was Senior Vice President &
+Retail Banking Manager for BB&T Bank’s West Virginia North region, consisting of 33 financial centers and more than 300 employees. Mr. Mazza was employed by BB&T and its predecessors from 1986 to 2005. Prior thereto, Mr. Mazza was
+President of Empire National Bank, and later served as Regional President of One Valley Bank, a state-wide financial institution. Upon graduation from West Virginia University in Business Administration, he worked for KPMG (or its predecessors) as a
+Certified Public Accountant with a focus on auditing. In determining Mr. Mazza’s qualifications to serve on our Board, the Board has considered Mr. Mazza’s extensive leadership and banking experience. Banking relationships and experience
+have become particularly important to the Company in recent years. The Company benefits from Mr. Mazza’s first-hand continuing experience as a chief executive officer, a specific attribute sought by the Board when he initially became a Director
+in 2007. Mr. Mazza also provides an important link to community and employee stakeholders, demonstrating a continuing commitment to our workforce located in Bridgeport, West Virginia. 
+2007 
+8 
+Table of Contents 
+Name, Principal Occupation for Past Five Years 
+and Other Directorships 
+First 
+Elected 
+Director 
+JAMES M. TRIMBLE, 65, was appointed Chief Executive Officer and President of the Company in June 2011, having served on the Board since 2009. From August 2005
+until November 2010, Mr. Trimble served as Managing Director of Grand Gulf Energy, Limited (ASX: GGE) (“Grand Gulf”), a public company traded on the Australian Securities Exchange, and retired from the Board of Directors of Grand Gulf in
+November 2011. In January 2005, Mr. Trimble founded and served until November 2010 as President and Chief Executive Officer of Grand Gulf’s U.S. subsidiary Grand Gulf Energy Company LLC, an exploration and development company focused primarily
+on drilling in mature basins in Texas, Louisiana and Oklahoma. From 2000 through 2004, Mr. Trimble was Chief Executive Officer of Elysium Energy and then TexCal Energy LLC, both of which were privately held oil and gas companies that he managed
+through troubled workout solutions. Prior thereto, he was Senior Vice President of Exploration and Production for Cabot Oil and Gas (NYSE: COG). Mr. Trimble was hired in July 2002 as CEO of TexCal (formerly Tri-Union Development) to manage a
+distressed oil and gas company through bankruptcy. He successfully managed the company through its exit from bankruptcy in 2004. From November 2002 until May 2006, he also served as a director of Blue Dolphin Energy (NASDAQ: BDCO), an independent
+oil and gas company with operations in the Gulf of Mexico. Mr. Trimble currently serves on the Board of Directors of Callon Petroleum Company (NYSE: CPE) and Seisgen Exploration LLC, a small private exploration and production company operating in
+southern Texas. In determining Mr. Trimble’s qualifications to serve on our Board, in addition to his status as CEO of the Company, the Board has considered, among other things, that Mr. Trimble is a Registered Professional Engineer who brings
+many years of broad oil and gas industry executive management experience to the Board, including experience as a chief operating officer, and knowledge of current developments and best practices in the industry. 
+2009 
+The election of the Class I Directors will be effected by an affirmative vote of a
+plurality of the outstanding common shares. Abstentions and broker non-votes will have no effect on the election of Directors. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE CLASS I NOMINEES TO THE BOARD OF DIRECTORS SET FORTH IN THIS PROPOSAL NO. 1. PROXIES SOLICITED BY THE BOARD WILL BE SO
+VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE. 
+REPORT OF THE AUDIT COMMITTEE
+The Audit Committee of the Board is comprised of three Directors and operates under a written charter
+adopted by the Board. Each member of the Audit Committee meets the independence requirements of Rule 5605(a)(2) of the NASDAQ listing standards and other applicable standards. The duties of the Audit Committee are summarized in this Proxy Statement
+under “Standing Committees of the Board” and are more fully described in its charter, which can be viewed on the Company’s website at www.pdce.com under “Corporate Governance.” 
+Management is responsible for the Company’s internal controls and preparation of the consolidated financial
+statements in accordance with generally accepted accounting principles. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in
+accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and issuing a report thereon. The Audit Committee’s responsibilities include monitoring and overseeing these processes.
+The Audit Committee met 12 times during 2013. In addition, the Audit Committee has authorized Audit Committee
+member Joseph E. Casabona to serve as a sub-committee of the Audit Committee to review and approve SEC periodic financial filings and other actions of the partnerships for which the Company serves as managing general partner. The sub-committee
+met five times during 2013 to review such partnership filings. 
+9 
+Table of Contents 
+The Audit Committee reviewed and discussed the Company’s audited
+consolidated financial statements for the year ended December 31, 2013 (the “Audited Financial Statements”) with the Company’s management and PwC, the Company’s independent registered public accounting firm. The Audit
+Committee also discussed with PwC the matters required to be discussed by Statement of Auditing Standards No. 61 (Codification of Statements of Auditing Standards AU § 380) as adopted by the PCAOB in Rule 3200T, as amended. PwC directly
+provided reports on significant matters to the Audit Committee. The Audit Committee has received the written disclosures and the letter from PwC required by PCAOB Rule 3526 and has discussed with PwC its independence from the Company. The Audit
+Committee has discussed with management and PwC such other matters and received such assurances from them as the Audit Committee deemed appropriate. 
+Based on the foregoing review and discussions and relying thereon, the Audit Committee has recommended that the Board include the Audited Financial Statements in the Company’s Annual Report on Form
+10-K for the fiscal year ended December 31, 2013. 
+Joseph E. Casabona, Chair 
+Jeffrey C. Swoveland 
+Kimberly Luff Wakim 
+AUDIT COMMITTEE OF THE BOARD OF DIRECTORS 
+PROPOSAL NO. 2 — RATIFY THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
+(Proposal 2 on the Proxy Card) 
+The Audit Committee has appointed PwC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014 and the Company is submitting the appointment of
+PwC to the stockholders for ratification. If the appointment of PwC is not ratified, the Audit Committee will reconsider its selection. A representative of PwC is expected to attend the meeting and will have an opportunity to make a statement if he
+or she so desires, and will be available to respond to appropriate questions. 
+PRINCIPAL ACCOUNTANT FEES AND SERVICES 
+2013 
+2012 
+Audit Fees (1) 
+$ 
+1,800,000 
+$ 
+1,807,000 
+Audit-Related Fees (2) 
+117,111 
+169,872 
+Tax Fees (3) 
+64,134 
+189,692 
+Other Fees (4) 
+— 
+5,794 
+Total Fees 
+$ 
+1,981,245 
+$ 
+2,172,358 
+(1) 
+Audit Fees consist of the aggregate fees billed for professional services rendered for audit procedures performed with regard to the Company’s
+annual consolidated financial statements and the report on management’s assessment of internal controls over financial reporting and the effectiveness of the Company’s internal controls over financial reporting, including reviews of the
+consolidated financial statements included in our Quarterly Reports on Form 10-Q, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements,
+including fees related to comfort letters and consents issued in conjunction with our debt and equity offerings. 
+(2) 
+Audit-Related Fees consist of the aggregate fees billed for assurance and related services that are reasonably related to the performance of the
+audit or review of the Company’s annual consolidated financial statements and are not reported under “Audit Fees.” Fees billed primarily include our proportionate share of amounts billed to the Company-sponsored partnerships for the
+audits of their annual financial statements. Total amounts billed to the Company-sponsored partnerships in 2013 and 2012 were $309,000 and $340,000, respectively. 
+(3) 
+Tax Fees consist of the aggregate fees billed for professional services rendered for tax compliance, tax advice and tax planning for the Company and
+its proportionately consolidated entities. 
+(4) 
+Other Fees consist of aggregate fees billed for products and services other than the services reported above. 
+10 
+Table of Contents 
+Audit Committee Pre-Approval Policies and Procedures 
+The Sarbanes-Oxley Act of 2002 requires that all services provided to the Company by its independent registered public
+accounting firm be subject to pre-approval by the Audit Committee or authorized Audit Committee members. The Audit Committee has adopted policies and procedures for pre-approval of all audit services and non-audit services to be provided by the
+Company’s independent registered public accounting firm. Services necessary to conduct the annual audit must be pre-approved by the Audit Committee annually. Permissible non-audit services to be performed by the independent accountant may also
+be approved on an annual basis by the Audit Committee if they are of a recurring nature. Permissible non-audit services which are not eligible for annual pre-approval to be conducted by the independent accountant must be pre-approved individually by
+the full Audit Committee or by an authorized Audit Committee member. Actual fees incurred for all services performed by the independent accountant will be reported to the Audit Committee after the services are fully performed. All of the services
+described in “Principal Accountant Fees and Services” were approved by the Audit Committee pursuant to its pre-approval policies in effect at the time. The duties of the Audit Committee are described in the Audit Committee Charter, which
+can be viewed on the Company’s website under “Corporate Governance.” 
+This proposal will be
+approved if it receives the affirmative vote of a majority of shares of common stock of the Company cast at the Annual Meeting and entitled to vote on this proposal. Broker non-votes and abstentions will not affect the outcome of this proposal.
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THIS PROPOSAL NO. 2. PROXIES
+SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE. 
+PROPOSAL
+NO. 3 — APPROVE, ON ADVISORY BASIS, THE COMPENSATION 
+OF THE COMPANY’S NAMED EXECUTIVE OFFICERS 
+(Proposal 3 on the Proxy Card) 
+The stockholders of the Company are entitled to cast an advisory non-binding vote at the Annual Meeting on the compensation of the Company’s Named Executive Officers (as defined below). While this
+vote is non-binding, the Board and the Compensation Committee value the opinions of our stockholders and will take into consideration the outcome of the vote in connection with their ongoing evaluation of the Company’s compensation program. In
+2011, based on the stockholder vote at the 2011 Annual Meeting of Stockholders and engagement with some of the Company’s largest stockholders, the Company determined to hold a “say-on-pay” vote annually, consistent with the majority
+of votes cast in favor of an annual advisory vote. The next non-binding advisory vote regarding such frequency will be held no later than the Company’s 2017 Annual Meeting of Stockholders, in accordance with SEC rules. 
+As described more fully under “Compensation Discussion and Analysis” below, the Company’s executive
+compensation program is designed to attract, motivate and retain individuals with the skills required to formulate and drive the Company’s strategic direction and achieve the annual and long-term performance necessary to create stockholder
+value. The program also seeks to align executive compensation with stockholder value on an annual and long-term basis through a combination of base pay, annual incentives and long-term incentives. 
+The Company’s practice of targeting the median in compensation and placing a significant portion of each Named
+Executive Officer’s compensation at risk demonstrates its pay-for-performance philosophy. Approximately 78% of the target 2013 compensation for our Named Executive Officers other than the CEO was in the form of variable compensation which was
+“at risk” (i.e., incentive cash compensation, performance-based equity, stock appreciation rights (“SARs”) and restricted stock). For the Company’s CEO, this figure was 85%. 
+11 
+Table of Contents 
+Each of the Named Executive Officers has been granted significant equity to
+provide him a stake in the Company’s long-term success. The Company also has significant stock ownership guidelines applicable to its senior executives. The Company believes that this “tone at the top” guides the Company’s other
+officers and management personnel to obtain and maintain meaningful ownership stakes in the Company. 
+The
+Compensation Committee considers the results of the non-binding “say-on-pay” vote of our stockholders concerning the compensation of our Named Executive Officers. At our 2013 annual meeting of stockholders, an overwhelming majority
+(98%) of the votes cast approved the compensation of our Named Executive Officers. Accordingly, the Compensation Committee concluded that our executive compensation programs generally meet the expectations of our stockholders. We did not make
+any material changes to our executive compensation programs in 2013. 
+In light of the above, the Company
+believes that the compensation of its Named Executive Officers for 2013 was appropriate and reasonable, and that its compensation programs and practices are sound and in the best interests of the Company and its stockholders. Stockholders are being
+asked to vote on the following resolution: 
+RESOLVED, that the Company’s stockholders approve, on an
+advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis,” compensation tables and narrative disclosure
+in this Proxy Statement for the Company’s 2014 Annual Meeting of Stockholders. 
+This advisory vote will
+be approved if it receives the affirmative vote of a majority of shares of common stock of the Company cast at the Annual Meeting and entitled to vote on this proposal. Broker non-votes will not affect the outcome of this proposal. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RESOLUTION SET FORTH IN THIS PROPOSAL NO. 3.
+PROXIES SOLICITED BY THE BOARD WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE. 
+PROPOSAL NO. 4 — APPROVE AND ADOPT THE FOURTH AMENDED AND RESTATED 
+ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF 
+COMMON STOCK FROM 100,000,000 TO 150,000,000. 
+(Proposal 4 on the Proxy Card) 
+On April 2, 2014, the
+Board, believing it to be in the best interests of the Company and its stockholders, authorized, subject to approval of the stockholders, the Fourth Amended and Restated Articles of Incorporation (“Articles”) to increase the number of
+authorized shares of common stock from 100,000,000 to 150,000,000. This summary is qualified in its entirety by reference to the full text of the Articles, which appear as Appendix A to this document. 
+As of April 14, 2014, a total of 35,798,743 of the Company’s currently authorized 100,000,000 shares of
+common stock were outstanding. The increase in the number of authorized but unissued shares of common stock would enable the Company, without further stockholder approval, to issue shares from time to time as may be required for proper business
+purposes such as raising additional capital for ongoing operations, business and asset acquisitions, stock splits and dividends, present and future employee benefit programs and other corporate purposes. The Company has issued a significant number
+of shares in recent years to finance its rapid growth. This has reduced the number of remaining available shares to a level the Board believes to be undesirable. 
+The proposed amendment to the Articles would not change the terms of the common stock and the additional shares of common
+stock to be authorized pursuant to the amendment would have rights identical to the currently outstanding common stock. Except for shares to be issued under the Company’s equity compensation
+12 
+Table of Contents 
+plans, the Company has no current intention to issue additional shares of common stock. The Board has not proposed an increase in the number of authorized shares of common stock with the
+intention of discouraging tender offers or takeover attempts relating to the Company. However, the availability of additional authorized shares for issuance may have the effect of discouraging a merger, tender offer, proxy contest or other attempt
+to obtain control of the Company. 
+The Board recognizes that the issuance of additional shares of common stock
+may adversely affect the interests of the holders of our common stock. For example, in the absence of a proportionate increase in the Company’s earnings and book value, an increase in the aggregate number of outstanding shares caused by the
+issuance of additional shares would dilute the earnings per share and book value per share of all of the existing outstanding shares of common stock. However, the Board believes that these potential risks are outweighed by the benefit that an
+increase in the number of available shares would provide in terms of additional financing flexibility. In reaching this conclusion, the Board noted that the Company’s issuance of common stock in the last two years to finance acquisition and
+other growth initiatives has been accompanied by a significant increase in the trading price of our common stock. The Board believes that retaining the ability to act quickly on future opportunities that may require or be facilitated by
+additional stock issuances will benefit existing stockholders. 
+For the above reasons, our stockholders are
+being asked to vote on the following resolution: 
+RESOLVED, that the Fourth Amended and Restated Articles of
+Incorporation increasing the number of authorized shares of common stock from 100,000,000 to 150,000,000 are hereby approved and adopted. 
+This proposal will be approved if it receives the affirmative vote of a majority of the outstanding common shares of the Company. Broker non-votes and abstentions will have the effect of votes against
+this proposal. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RESOLUTION SET
+FORTH IN THIS PROPOSAL NO. 4. 
+ALL OTHER BUSINESS THAT MAY COME BEFORE THE 2014 ANNUAL MEETING
+As of the date of this Proxy Statement, the Board is not aware of any matters to be brought before the
+Annual Meeting other than the matters set forth in this Proxy Statement. However, if other matters properly come before the meeting in accordance with our By-Laws and SEC rules, it is the intention of the proxy holders named in the enclosed form of
+proxy to vote in accordance with their discretion on such matters pursuant to such proxy. 
+13 
+Table of Contents 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
+AND RELATED STOCKHOLDER MATTERS 
+The following table sets forth certain information regarding beneficial ownership of the Company’s common stock as
+of April 14, 2014, by (1) each person known by the Company to own beneficially more than 5% of the outstanding shares of common stock; (2) each Director of the Company; (3) each Named Executive Officer; and (4) all Directors
+and executive officers as a group. Except as otherwise indicated, each person has sole voting and investment power with respect to all shares shown as beneficially owned, subject to community property laws where applicable. As of April 14,
+2014, 35,798,743 shares of common stock of the Company were outstanding. Except as otherwise indicated, the address for each of the named security holders is c/o 1775 Sherman Street, Suite 3000, Denver, Colorado 80203. 
+Name and Address of Beneficial Owner 
+Number of 
+Shares 
+Beneficially 
+Owned 
+Percentage of 
+Shares 
+Beneficially 
+Owned 
+BlackRock, Inc. 
+40 East 52nd Street 
+New York, NY 10022 
+3,708,215 
+(1) 
+10.4 
+% 
+FMR LLC 
+245 Summer Street 
+Boston, MA 02210 
+3,580,249 
+(2) 
+10.0 
+% 
+The Vanguard Group 
+100 Vanguard Blvd. 
+Malvern, PA 19355 
+2,325,385 
+(3) 
+6.5 
+% 
+Citadel Advisors LLC 
+131 S. Dearborn St., 32nd Floor 
+Chicago, IL 60603 
+2,310,757 
+(4) 
+6.5 
+% 
+Dimensional Fund Advisors LP 
+Palisades West, Building One 
+6300 Bee Cave Road 
+Austin, Texas 78746 
+2,089,260 
+(5) 
+5.8 
+% 
+T. Rowe Price Associates, Inc. 
+100 East Pratt St. 
+Baltimore, MD 21202 
+1,984,103 
+(6) 
+5.5 
+% 
+James M. Trimble 
+149,388 
+(7) 
+* 
+Gysle R. Shellum 
+41,376 
+(8) 
+* 
+Barton R. Brookman, Jr. 
+90,303 
+(9) 
+* 
+Lance A. Lauck 
+69,622 
+(10) 
+* 
+Daniel W. Amidon 
+49,507 
+(11) 
+* 
+Kimberly Luff Wakim 
+16,640 
+(12) 
+* 
+David C. Parke 
+21,011 
+(13) 
+* 
+Jeffrey C. Swoveland 
+28,236 
+(14) 
+* 
+Anthony J. Crisafio 
+20,653 
+* 
+Joseph E. Casabona 
+27,335 
+* 
+Larry F. Mazza 
+20,885 
+* 
+All Directors and executive officers as a group (11 persons) 
+534,766 
+(15) 
+* Represents less than 1% of the outstanding shares of common stock. 
+14 
+Table of Contents 
+(1) 
+As reported on a Schedule 13G/A filed with the SEC by BlackRock, Inc. on April 8, 2014, BlackRock, Inc. holds sole voting power as to 3,596,368
+shares and sole dispositive power as to 3,708,215 shares. 
+(2) 
+As reported on a Schedule 13G/A filed with the SEC by FMR LLC on February 14, 2014, FMR LLC is a parent holding company in accordance with SEC
+Rule 13d-1(b)(ii)(G) and holds sole voting power as to 13,358 shares and sole dispositive power as to 3,580,249 shares. 
+(3) 
+As reported on a Schedule 13G/A filed with the SEC by The Vanguard Group on February 12, 2014, The Vanguard Group is an investment advisor in
+accordance with SEC Rule 13d-1(b)(1)(ii)(E) and holds sole voting power as to 52,927 shares, sole dispositive power as to 2,274,458 shares and shared dispositive power as to 50,927 shares. 
+(4) 
+As reported on a Schedule 13G/A jointly filed with the SEC on February 14, 2014 by Citadel Advisors LLC (“Citadel”), Citadel Advisors
+Holdings II LP (“CAH2”), Citadel GP LLC and Kenneth Griffin, Citadel and CAH2 each holds shared voting and dispositive power as to 2,298,857 shares, and Citadel GP LLC and Kenneth Griffin each hold shared voting and dispositive power as to
+2,310,757 shares. 
+(5) 
+As reported on a Schedule 13G/A filed with the SEC by Dimensional Fund Advisors LP (“Dimensional Advisors”) on February 10, 2014,
+Dimensional Advisors is an investment adviser in accordance with SEC Rule 13d-1(b)(1)(ii)(E) and holds sole voting power as to 2,039,019 shares and sole dispositive power as to 2,089,260 shares. These securities are owned by various investment
+companies, commingled group trusts and separate accounts (“Funds”). In its role as investment adviser, sub-adviser and/or manager, Dimensional Advisors or its subsidiaries (collectively, “Dimensional”) possess voting and/or
+investment power over the securities of the shares and may be deemed to be the beneficial owner of the shares; however, all such securities are owned by the Funds and Dimensional disclaims beneficial ownership of such securities.
+(6) 
+As reported on a Schedule 13G/A filed with the SEC by T. Rowe Price Associates, Inc. (“Price Associates”) on February 11, 2014, Price
+Associates is an investment adviser registered under the Investment Advisers Act of 1940 and holds sole voting power as to 512,112 shares and sole dispositive power as to 1,984,103 shares. These securities are owned by various individual and
+institutional investors for which Price Associates serves as an investment adviser with power to direct investments and/or sole power to vote the securities. For the purposes of the reporting requirements of the Securities Exchange Act of 1934,
+Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities. 
+(7) 
+Excludes 94,979 restricted shares subject to vesting more than 60 days after April 14, 2014; includes 35,854 shares subject to SARs exercisable
+within 60 days of April 14, 2014. Each SAR entitles the executive officer the right to receive the difference between the fair market value of a share of our common stock on the date of exercise and the grant date fair value, payable in shares
+only. 
+(8) 
+Excludes 31,497 restricted shares subject to vesting more than 60 days after April 14, 2014; includes 9,163 shares subject to SARs exercisable
+within 60 days of April 14, 2014. Each SAR entitles the executive officer the right to receive the difference between the fair market value of a share of our common stock on the date of exercise and the grant date fair value, payable in shares
+only. 
+(9) 
+Excludes 30,114 restricted shares subject to vesting more than 60 days after April 14, 2014; includes 24,115 shares subject to SARs exercisable
+within 60 days of April 14, 2014. Each SAR entitles the executive officer the right to receive the difference between the fair market value of a share of our common stock on the date of exercise and the grant date fair value, payable in shares
+only. 
+(10) 
+Excludes 23,005 restricted shares subject to vesting more than 60 days after April 14, 2014; includes 20,150 shares subject to SARs exercisable
+within 60 days of April 14, 2014. Each SAR entitles the executive officer the right to receive the difference between the fair market value of a share of our common stock on the date of exercise and the grant date fair value, payable in shares
+only. 
+(11) 
+Excludes 23,005 restricted shares subject to vesting more than 60 days after April 14, 2014; includes 20,638 shares subject to SARs exercisable
+within 60 days of April 14, 2014. Each SAR entitles the executive officer the right to receive the difference between the fair market value of a share of our common stock on the date of exercise and the grant date fair value, payable in shares
+only. Mr. Lauck shares voting and dispositive power with his wife held in joint account. 
+(12) 
+Excludes 2,065 shares of deferred common stock units granted pursuant to the Non-Employee Director Deferred Compensation Plan.
+(13) 
+Excludes 571 shares of deferred common stock units granted pursuant to the Non-Employee Director Deferred Compensation Plan.
+(14) 
+Excludes 2,504 shares of deferred common stock units granted pursuant to the Non-Employee Director Deferred Compensation Plan.
+(15) 
+Excludes 202,600 restricted shares subject to vesting more than 60 days after April 14, 2014, and 5,140 shares of common stock purchased
+pursuant to the Non-Employee Director Deferred Compensation Plan; includes 109,920 SARs exercisable within 60 days of April 14, 2014. Each SAR entitles the executive officer the right to receive the difference between the fair market value of a
+share of our common stock on the date of exercise and the grant date fair value, payable in shares only. 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires the Company’s
+officers and Directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to 
+15 
+Table of Contents 
+file reports of ownership and changes in ownership with the SEC. Officers, Directors and holders of more than 10% of the common stock are required by SEC rules to furnish the Company with copies
+of all Section 16(a) reports they file. If requested, the Company assists its officers and Directors in complying with the reporting requirements of Section 16(a) of the Exchange Act. 
+Based solely on a review of the reports furnished to the Company or on written representations from reporting persons
+that all reportable transactions were reported, the Company believes that, during the fiscal year ended December 31, 2013, the Company’s officers and Directors and owners of more than 10% of the Company’s common stock timely filed all
+reports they were required to file under Section 16(a) of the Exchange Act, with the exception of one Form 4 reporting a single transaction which was inadvertently filed late by us on behalf of Mr. Mazza. 
+CORPORATE GOVERNANCE 
+Corporate Governance Guidelines 
+The Board has adopted
+Corporate Governance Guidelines that govern the structure and function of the Board and establish the Board’s policies on a number of corporate governance issues. The Corporate Governance Guidelines were most recently amended on
+December 5, 2013. 
+Uncontested Elections Policy 
+The Corporate Governance Guidelines include an Uncontested Elections Policy (the “Policy”). Under the Policy,
+any nominee for Director in an uncontested election who receives a greater number of “withhold” votes than “for” votes will submit to the Board a letter of resignation for consideration by the Nominating and Governance Committee
+(“N&G Committee”). The N&G Committee will promptly consider the tendered resignation and will recommend to the Board whether or not to accept the tendered resignation or to take other action, such as rejecting the tendered
+resignation and addressing the apparent underlying causes of the “withhold” votes in a different way. 
+In making this recommendation, the N&G Committee will consider all factors deemed relevant by its members. These
+factors may include the underlying reasons for stockholders’ withholding of votes from such Director nominee (if ascertainable), the length of service and qualifications of the Director whose resignation has been tendered, the Director’s
+contributions to the Company, whether the Company will remain in compliance with applicable laws, rules, regulations and governing documents if it accepts the resignation and, generally, whether or not accepting the resignation is in the best
+interests of the Company and our stockholders. In considering the N&G Committee’s recommendation, the Board will take into account the factors considered by the N&G Committee and such additional information and factors as the Board
+believes to be relevant. If such an event were to occur, we would promptly and publicly disclose the Board’s decision and process in a report filed with the SEC. 
+Other Corporate Governance Documents 
+The
+Company’s website includes the Corporate Governance Guidelines and the following governance documents: 
+Director Nomination Procedures 
+Director Stock Ownership Guidelines 
+Insider Trading Policy
+Shareholder Communication Policy 
+Audit Committee Charter 
+Compensation Committee Charter 
+Nominating and Governance
+Committee Charter 
+16 
+Table of Contents 
+Non-Executive Chairman Charter 
+Code of Business Conduct and Ethics 
+Waivers of Potential Conflicts of Interest 
+Board of Directors 
+The Company’s By-Laws provide that
+the number of members of the Board shall be designated from time to time by a resolution of the Board. Currently, the designated number of Directors is seven. Under the By-Laws, the Board is divided into three separate classes of Directors which are
+required to be as nearly equal in number as practicable. At each annual meeting of stockholders, one class of Directors whose term has expired may be elected to a new term of three years. The classes are staggered so that the term of one class
+expires each year. 
+There is no family relationship between any Director or executive officer or the Company.
+There are no arrangements or understandings between any Director or officer and any other person pursuant to which the person was selected as an officer or Director of the Company. 
+Director Independence 
+In affirmatively determining whether
+a Director is “independent,” the Board analyzes and reviews the NASDAQ listing standards, which set forth certain circumstances under which a director is not considered independent. As CEO and President of the Company, Mr. Trimble is
+not independent under such standards. Audit Committee and Compensation Committee members are subject to additional, more stringent NASDAQ and Exchange Act requirements. 
+The Board has reviewed the business and charitable relationships between the Company and each non-employee Director
+(“Non-Employee Director”) to determine compliance with the NASDAQ listing standards and to evaluate whether there are any other facts or circumstances that might impair a Non-Employee Director’s independence. The Board has
+affirmatively determined that each of the Non-Employee Directors (i.e., Messrs. Casabona, Crisafio, Mazza, Parke and Swoveland, and Ms. Wakim) is independent under NASDAQ Listing Rule 5605, the Exchange Act and our Board committee charter
+requirements. 
+Board Meetings and Attendance 
+The Board has a standing Audit Committee, Compensation Committee and N&G Committee. Actions taken by these committees are reported to the Board at its next meeting. During 2013, each Director attended
+at least 75% of all meetings of the Board and committees of which he or she was a member. As specified in the Corporate Governance Guidelines, Directors are strongly encouraged, but not required, to attend the annual meeting of stockholders. All of
+the Directors attended the 2013 annual meeting on June 6, 2013. 
+The following table identifies the
+members of each committee of the Board, the chair of each committee, and the number of meetings held in 2013. 
+17 
+Table of Contents 
+2013 BOARD AND COMMITTEE MEMBERSHIPS 
+Director 
+Board of 
+Directors 
+Audit 
+Committee 
+Compensation 
+Committee 
+Nominating 
+and 
+Governance 
+Committee 
+Joseph E. Casabona 
+x 
+x (1) 
+Anthony J. Crisafio 
+x 
+x 
+Larry F. Mazza 
+x 
+x 
+x (1) 
+David C. Parke 
+x 
+x 
+x 
+Jeffrey C. Swoveland 
+x 
+x 
+x 
+James M. Trimble 
+x 
+Kimberly Luff Wakim 
+x 
+x 
+x (1) 
+x 
+Number of Meetings in 2013 
+7 
+12 (2) 
+9 
+4 
+(1) 
+Chair 
+(2) 
+A sub-committee of the Audit Committee held five additional meetings in 2013 related to partnership SEC filings. 
+The Non-Employee Directors generally meet in “executive session” in connection with each regularly scheduled
+Board meeting without the employee Director (the CEO) present. Mr. Swoveland chairs these sessions; however, the other Non-Employee Directors may, in the event of his absence, select another Director to preside over the executive session.
+STANDING COMMITTEES OF THE BOARD 
+Audit Committee 
+The Audit Committee is composed entirely
+of persons whom the Board has determined to be independent under NASDAQ Listing Rule 5605(a)(2), Section 301 of the Sarbanes-Oxley Act of 2002, Section 10A(m)(3) of the Exchange Act and the relevant provisions of the Audit Committee
+Charter. The Board has adopted the Audit Committee Charter, which is posted on the Company’s website. The Board assesses the adequacy of the Audit Committee Charter on an annual basis and revises it as necessary. The Audit Committee Charter was
+most recently amended on March 13, 2013. The Board has determined that all members of the Audit Committee qualify as “financial experts” as defined by SEC regulations. The Audit Committee’s primary purpose is to assist the Board
+in monitoring the integrity of the Company’s financial reporting process, systems of internal controls and financial statements, and compliance with legal and regulatory requirements. Additionally, the Audit Committee is directly responsible
+for the appointment, compensation and oversight of the independent auditors engaged by the Company for the purpose of preparing or issuing an audit report or related work. In performing its responsibilities, the Audit Committee: 
+• 
+Monitors the integrity of the Company’s financial reporting process and systems of internal controls regarding finance, accounting and legal
+compliance; 
+• 
+Monitors the independence of the independent registered public accounting firm; and 
+• 
+Provides an avenue for communications among the independent registered public accounting firm, management and the Board.
+Compensation Committee 
+The Board has determined that all members of the Compensation Committee are independent of the Company under Rules 5605(a)(2) and 5605(d)(2) of the NASDAQ listing standards. The Board has adopted a
+Compensation Committee Charter which is posted on the Company’s website. In performing its responsibilities, the Compensation Committee: 
+• 
+Oversees the development of a compensation strategy for the Company’s Named Executive Officers; 
+• 
+Evaluates the performance of and establishes the compensation of the CEO; 
+18 
+Table of Contents 
+• 
+Reviews and approves the elements of compensation for other senior executive officers of the Company; 
+• 
+Negotiates and approves the terms of employment and severance agreements with executive officers of the Company and approves all Company change in
+control plans; 
+• 
+Reviews the Directors’ compensation for their Board and committee work and recommends to the Board any Company changes in such compensation;
+• 
+Reviews and approves performance criteria and results for bonus and performance-based equity awards for senior executive officers and approves
+awards to those officers; 
+• 
+Recommends to the Board equity-based incentive plans necessary to implement the Company’s compensation strategy, approves all equity grants
+under the plans and administers all equity-based incentive programs of the Company, which may include specific delegation to management to grant awards to non-executive officers; and 
+• 
+Reviews and approves Company contributions to Company-sponsored retirement plans. 
+Compensation Committee Interlocks and Insider Participation 
+There were no Compensation Committee interlocks during fiscal year 2013. 
+Nominating and Governance Committee 
+The Board has determined that all members of the N&G Committee are independent of the Company under Rule 5605(a)(2) of the NASDAQ listing standards. The Board has adopted a Nominating and Governance
+Committee Charter which can be viewed on the Company’s website. In performing its responsibilities, the N&G Committee: 
+• 
+Assists the Board by identifying individuals qualified to become Board members, recommends nominees for election at the next annual meeting of
+stockholders, or otherwise fills any vacancies; 
+• 
+Recommends to the Board corporate governance guidelines applicable to the Company; 
+• 
+Leads the Board in its annual review of the Board’s performance; and 
+• 
+Recommends to the Board the nominees for membership on each committee. 
+Board Leadership Structure 
+Although the Board has no
+specific policy with respect to the separation of the offices of Chairman and CEO, the Board believes that our current leadership structure, under which Mr. Trimble serves as CEO and President and Mr. Swoveland serves as Non-Executive
+Chairman of the Board, is the optimal structure for our Board at this time. Since June 2011, the roles of Chairman and CEO have been held by separate individuals. We believe that as directors continue to have increasing oversight responsibilities,
+it is beneficial to have an independent, separate Chairman who has the responsibility of leading the Board, allowing the CEO to focus on leading the Company. We believe our CEO and Chairman have an excellent working relationship which, given the
+separation of their positions, provides strong Board leadership while positioning our CEO as the leader of the Company in the eyes of our employees and stockholders. The Board reconsiders this structure annually as it elects its Chairman or as
+circumstances arise that may require such determination. 
+As Non-Executive Chairman, Mr. Swoveland
+generally chairs the meetings of executive sessions of our Non-Employee Directors. The Non-Executive Chairman, in consultation with the CEO, establishes the agenda for each Board meeting. 
+19 
+Table of Contents 
+DIRECTOR COMPENSATION 
+The compensation of our Non-Employee Directors is reviewed annually by the Compensation Committee and is approved by the
+Board. We use a combination of cash and stock-based incentive compensation to attract and retain qualified candidates to serve on our Board. In determining Director compensation, we consider the significant amount of time the Directors spend
+fulfilling their duties, as well as the competitive market for skilled directors. In addition, we recognize that our Directors are also responsible for the oversight of four partnerships for which the Company is the managing general partner. No
+compensation is paid to our CEO for his service on the Board. 
+In 2013, the Compensation Committee directly
+engaged Towers Watson & Co. (the “Consultant”) as compensation consultant to review executive compensation and to conduct an annual review of the total compensation of our Non-Employee Directors. Specifically, the Consultant
+evaluated retainer fees, potential meeting fees and stock-based long-term incentives using, as the competitive benchmark, total compensation paid to the directors of the energy companies which comprise the Company’s peer group used in
+determining 2013 executive compensation. Historically, compensation was adjusted in July, coincident with the commencement of the Board term; however, in 2014 the Compensation Committee elected to change to a calendar year award cycle to be
+consistent with the timing of equity grants to our Named Executive Officers. 
+No changes were made to our
+Directors’ compensation for 2014. Below is a summary of the compensation paid to our Non-Employee Directors in 2013. All Board and committee retainers are paid in quarterly installments. 
+Cash Compensation 
+Annual Board Retainer 
+In January 2013, the annual cash retainer for service on the Board and for attendance at all Board meetings was $60,000.
+In July 2013, this annual retainer was increased to $70,000. The Non-Executive Chairman received an additional cash retainer of $100,000 in 2013. 
+Annual Committee Retainers 
+Each Non-Employee
+Director receives an annual cash retainer for service on each committee on which he or she serves. The Chair of each Committee receives an additional annual retainer for his or her services as Chair. The following table shows the Committee and Chair
+retainers in effect for 2013: 
+COMMITTEE RETAINERS 
+Committee 
+Committee 
+Retainer 
+Committee 
+Chair 
+Retainer 
+Audit 
+$ 
+15,000 
+$ 
+17,500 
+Compensation 
+10,000 
+10,000 
+Nominating and Governance 
+6,000 
+7,500 
+In addition: 
+• 
+A Special Committee consisting of Messrs. Crisafio, Mazza, Parke and Swoveland was created in 2008 to consider the potential repurchase of certain
+partnerships for which the Company is the managing general partner (each a “Partnership”). Since the majority of the Partnerships have been repurchased, no compensation was paid to the Special Committee members in 2013.
+20 
+Table of Contents 
+• 
+A sub-committee of the Audit Committee, of which Mr. Casabona is the sole member, reviews and approves SEC financial filings for the
+Partnerships. Mr. Casabona received a cash retainer of $10,000 for serving in this capacity in 2013. 
+Equity
+Compensation 
+Each year the Non-Employee Directors are awarded shares of restricted stock for their service
+on the Board. In June 2013, the Non-Executive Chairman received the equivalent of $170,000 (3,431 shares) and the remaining Non-Employee Directors each received the equivalent of $135,000 (2,725 shares) of restricted stock. These shares vesting
+ratably over three years were granted under the Company’s 2010 Long-Term Equity Compensation Plan, which was approved by stockholders in 2010 (the “2010 LTI Plan”). 
+Deferred Compensation 
+Each Non-Employee Director may
+choose to defer all or a portion of his or her annual cash compensation by participating in the Non-Employee Director Deferred Compensation Plan. All compensation deferred into this program is credited with hypothetical earnings and losses as if
+invested in common stock of the Company. Other than Mr. Swoveland, none of the Non-Employee Directors deferred compensation in 2013. 
+Company Stock Ownership Requirements 
+The Company’s Director Stock Ownership Guidelines require each Non-Employee Director to hold shares of Company stock in an amount equal to at least five times his or her annual Board retainer.
+Compliance with ownership requirements is measured annually. Qualifying stock holdings include directly-owned and unvested restricted Company stock. Directors are required to comply with the ownership guidelines within five years of their election
+to the Board. As of December 31, 2013, all of the Directors met the current requirements under the guidelines. 
+The Company’s Insider Trading Policy expressly prohibits Non-Employee Directors from purchasing options, puts or calls or engaging in other transactions that are intended to hedge against the
+economic risk of owning Company stock. 
+Director Compensation 
+Compensation paid to the Non-Employee Directors for fiscal year 2013 was as follows: 
+2013 DIRECTOR COMPENSATION 
+Name 
+Fees Earned or 
+Paid in Cash (1) 
+($) 
+Stock 
+Awards 
+(2) 
+($) 
+Total ($) 
+Joseph E. Casabona (3) 
+108,981 
+142,136 
+251,117 
+Anthony J. Crisafio 
+76,250 
+142,136 
+218,386 
+Larry F. Mazza 
+88,500 
+142,136 
+230,636 
+David C. Parke 
+81,000 
+142,136 
+223,136 
+Jeffrey C. Swoveland (4) 
+190,000 
+178,961 
+368,961 
+Kimberly Luff Wakim 
+106,000 
+142,136 
+248,136 
+(1) 
+Includes annual Board retainer, regular Committee and Committee Chair retainers, Audit sub-committee retainers, any cash compensation paid for
+participation on the Special Committee and retainers for the Non-Executive Chairman of the Board. No per-meeting fees are paid. 
+(2) 
+On June 7, 2013, the Company awarded 3,431 shares of restricted stock to the Non-Executive Chairman and 2,725 shares of restricted stock to
+each other Non-Employee Director equal to $170,000 and $135,000 of value, respectively, using the average of the 15-day closing prices ending ten days prior to the grant date ($49.54). The amount reported in this table reflects the grant date fair
+value as computed in accordance with FASB ASC Topic 718. 
+(3) 
+Mr. Casabona’s cash compensation includes $10,000 for his service on the Audit sub-committee. 
+(4) 
+Mr. Swoveland’s cash compensation includes $100,000 for his service as Non-Executive Chairman of the Board. 
+21 
+Table of Contents 
+DIRECTOR QUALIFICATIONS AND SELECTION 
+The Board has adopted Director Nomination Procedures that prescribe the process the N&G Committee will use to
+recommend nominees for election to the Board. The Director Nomination Procedures can be viewed on the Company’s website. The N&G Committee evaluates each candidate based on his or her level and diversity of experience and knowledge
+(specifically within the industry and relevant industries in which the Company operates, as well as his or her overall experience and knowledge), skills, education, reputation, integrity, professional stature and other factors that may be relevant
+depending on the particular candidate. 
+Additional factors considered by the N&G Committee include the
+size and composition of the Board at the time, and the benefit to the Company of a broad mixture of skills, experience and perspectives on the Board. Accordingly, one or more of these factors may be given more weight in a particular case at a
+particular time, although no single factor is viewed as determinative. The N&G Committee has not specified any minimum qualifications that it believes must be met by any particular nominee. 
+The N&G Committee identifies Director candidates primarily through recommendations made by the Non-Employee
+Directors. These recommendations are developed based on the Non-Employee Directors’ knowledge and experience in a variety of fields and on research conducted by the Company at the N&G Committee’s direction. The N&G Committee also
+considers recommendations made by Directors, employees, stockholders and others, including search firms. All recommendations, regardless of the source, are evaluated on the same basis against the criteria contained in the Director Nomination
+Procedures. The N&G Committee has the authority to engage consultants to help identify or evaluate potential Director nominees, but did not do so in 2013. 
+Diversity Consideration 
+In addition to qualities of
+intellect, integrity and judgment, the N&G Committee takes into consideration diversity of background, senior management experience, education and an understanding of some combination of oil and gas marketing, finance, technology, government
+regulation and public policy. The N&G Committee makes its determination in the context of an assessment of the perceived needs of the Board at that point in time. The N&G Committee evaluates all Director nominees, including nominees
+recommended by stockholders, using these criteria. The Director nomination process specifically includes disclosure of the diversity provided by each candidate, and diversity is considered as part of the overall assessment of the Board’s
+functioning and needs. 
+STOCKHOLDER RECOMMENDATIONS AND NOMINATIONS 
+Stockholder Recommendations 
+The N&G Committee will consider Director candidates recommended by stockholders of the Company on the same basis as those recommended by other sources. Any stockholder who wishes to recommend a
+prospective Director nominee should notify the N&G Committee by writing to the N&G Committee at the Company’s headquarters or by email to board@pdce.com . All recommendations will be reviewed by the N&G Committee. A submission
+recommending a nominee should include: 
+• 
+Sufficient biographical information to allow the N&G Committee to evaluate the potential nominee in light of the Director Nomination Procedures;
+• 
+An indication as to whether the proposed nominee will meet the requirements for independence under NASDAQ and SEC guidelines;
+• 
+Information concerning any relationships between the potential nominee and the stockholder recommending the potential nominee; and
+• 
+An indication of the willingness of the proposed nominee to serve if nominated and elected. 
+22 
+Table of Contents 
+Stockholder Nominations 
+Stockholders may nominate candidates for election to the Board. The Company’s By-Laws require that stockholders who
+wish to submit nominations for election to the Board at an annual meeting of stockholders follow certain procedures. The stockholder must give written notice to the Corporate Secretary at PDC Energy, Inc., 1775 Sherman Street, Suite 3000, Denver,
+Colorado 80203 or may email notice to board@pdce.com not later than 80 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting. If the date of the annual meeting is more than 30 days before or
+more than 60 days after that anniversary date, however, for notice by such stockholder to be timely, it must be received not later than 80 days before the annual meeting, or within 10 days following the Company’s public announcement of the date
+of its annual meeting. The stockholder must be a stockholder of record at the time the notice is given. The written notice must set forth (1) as to each nominee, all information relating to that person that is required to be disclosed in
+solicitations of proxies for election of Directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including such person’s written consent to being named in the proxy statement
+as a nominee and to serving as a Director if elected); (2) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (a) the name and address of the stockholder, as they appear on the
+Company’s books, and of such beneficial owner, and (b) the class and number of shares of the Company’s securities that are beneficially owned by such stockholder and the beneficial owner; and (3) any material interest of such
+stockholder and such beneficial owner in such nomination. 
+THE BOARD’S ROLE IN RISK
+MANAGEMENT 
+The Board seeks to understand and oversee the Company’s critical business risks. Risks
+are considered in every business decision, including by means of Board oversight of the Company’s internal risk management system. For instance, an assessment of potential risks (financial and otherwise) is included in every acquisition
+proposal presented to the Board. The Board realizes, however, that it is not possible or desirable to eliminate all risk and that appropriate risk-taking is essential in order to achieve the Company’s objectives. 
+The Board is responsible for general oversight of the risks of the Company, including overseeing risks related to the
+Company’s key strategic goals. The Audit Committee is the primary committee overseeing risk and specifically reviews risks and related controls in areas that it considers fundamental to the integrity and reliability of the Company’s
+financial statements, such as counterparty risks and derivative program risks. Similarly, the Compensation Committee considers risks related to the structure and size of the Company’s compensation plans, as set out below. 
+We believe that our Board leadership structure supports its risk oversight function. Among other things, there is open
+and continuous communication between our management and our Directors. 
+Compensation Risk Assessment 
+We do not believe that the Company’s executive or non-executive compensation structure is reasonably likely to have a
+material adverse effect on the Company. Risk-mitigating features of our executive and non-executive compensation structure include: 
+• 
+A balance of short-term and long-term programs to ensure focus on both elements of Company performance; 
+• 
+Caps on awards payable to any individual under our bonus and performance share programs, along with Compensation Committee discretion to decrease
+bonus payouts in the event that it believes excessive risk was taken; 
+• 
+Certain bonus awards are subject to reduction or forfeiture following a re-evaluation of prior years’ performance;
+23 
+Table of Contents 
+• 
+“Clawback” provisions are included in all Named Executive Officers’ employment agreements; 
+• 
+Significant stock ownership requirements are in place for our Named Executive Officers and Non-Employee Directors; 
+• 
+A provision in our Insider Trading Policy that prohibits executive officers from selling Company shares without first obtaining permission from the
+Company’s General Counsel, even during open trading windows; and 
+• 
+A hedging policy that does not permit the Company to effect transactions in oil and gas derivatives on a speculative basis.
+COMMUNICATION WITH DIRECTORS BY STOCKHOLDERS 
+Stockholders may communicate with the Board or a committee of the Board by writing to the attention of the Board or
+committee at the Company’s corporate headquarters or by emailing the Board at board@pdce.com with “Board Communication” or the appropriate Board committee indicated in the subject line. 
+CODE OF BUSINESS CONDUCT AND ETHICS 
+The Company has a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all Directors,
+officers, employees, agents, consultants and representatives of the Company, which is reviewed at least annually by the N&G Committee. The Company’s principal executive officer, principal financial officer and principal accounting officer
+are subject to additional specific provisions under the Code of Conduct. The Code of Conduct can be viewed on the Company’s website at www.pdce.com . In the event the Board approves an amendment to or a waiver of any provisions of the
+Code of Conduct, the Company will disclose the information on its website. In 2013, the Board approved waivers regarding any potential conflict related to (1) the service of Mr. Swoveland on the Board of Directors of Linn Energy, LLC; and
+(2) the Company’s dealings with KeyBanc Capital Markets, KeyBank N.A., or any of its affiliate banks (collectively, “KeyBank”), including, but not limited to, its participation in the Company’s revolving bank loan group, to
+the extent that a conflict of interest exists as a result of the employment of Mr. Trimble’s spouse, a senior investment banker at KeyBank. These waivers can be found on the Company’s website. If the Board becomes aware of a potential
+conflict in the future, it will consider at that time whether or not to continue these waivers. 
+TRANSACTIONS WITH RELATED PERSONS 
+Related Transactions 
+From January 1, 2013 to the
+present, there was no transaction or series of transactions, nor is there any currently proposed transaction involving an amount exceeding $120,000 in which the Company is a participant and/or in which any Director, executive officer, known holder
+of more than five percent of the Company’s voting securities, or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest for which disclosure is required under SEC Rule S-K 404.
+Policies and Procedures With Respect to Transactions with Related Persons 
+The Board has adopted a written policy for the review, approval and ratification of transactions that involve related
+parties and potential conflicts of interest. The related party transaction policy applies to each Director and executive officer of the Company, any nominee for election as a Director, any security holder who is known to own more than five percent
+of the Company’s voting securities, any immediate family member of any of the foregoing persons and any corporation, firm or association in which one or more of the Company’s Directors are directors or officers, or have a substantial
+financial interest. 
+24 
+Table of Contents 
+Under our related-party transaction policy, a related person transaction is
+a transaction or arrangement involving a related person in which the Company is a participant or that would require disclosure in the Company’s filings with the SEC as a transaction with a related person. The related person must disclose to the
+Audit Committee any potential related person transactions and must disclose all material facts with respect to such transaction and relationship. All related person transactions will be reviewed by the Audit Committee. In determining whether to
+approve or ratify a transaction, the Audit Committee will consider the relevant facts and circumstances of the transaction, which may include factors such as the relationship of the related person with the Company, the materiality or significance of
+the transaction to the Company and the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to the Company on an arms-length basis and the impact of the transaction on
+the Company’s business and operations. 
+ADDITIONAL INFORMATION 
+The Company files annual, quarterly and current reports, proxy statements and other information with the SEC. Copies of
+the Company’s SEC filings are available at http://www.sec.gov and through a link from the Company’s website at www.pdce.com . These documents may also be viewed at the SEC’s public reference room located at 100 F Street,
+N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. 
+NAMED EXECUTIVE OFFICERS 
+The current Named Executive Officers of the Company, their principal
+occupations for the past five years and additional information is set forth below. 
+JAMES M. TRIMBLE, 65. See
+Proposal No.1 for Mr. Trimble’s information. 
+GYSLE R. SHELLUM, 62, was appointed Chief Financial
+Officer in 2008. Prior to joining the Company, Mr. Shellum served from September 2004 through September 2008 as Vice President, Finance and Special Projects of Crosstex Energy, L.P. in Dallas, Texas. Crosstex Energy, L.P. is a publicly traded
+Delaware limited partnership whose securities are listed on the NASDAQ Global Select Market and is an independent midstream energy company engaged in the gathering, transmission, treating, processing and marketing of natural gas and natural gas
+liquids. Mr. Shellum holds a B.B.A. in Accounting from the University of Texas, Arlington. 
+BARTON R.
+BROOKMAN, JR., 51, was appointed Executive Vice President and Chief Operating Officer in June 2013, having previously served as Senior Vice President Exploration and Production. Prior to joining the Company in July 2005, Mr. Brookman was
+employed by Patina Oil and Gas (“Patina”) and its predecessor Snyder Oil from 1988 until 2005 in a series of operational and technical positions of increasing responsibility, ending his service at Patina as Vice President of Operations.
+Mr. Brookman holds a B.S. in Petroleum Engineering from the Colorado School of Mines and a M.S. in Finance from the University of Colorado. 
+LANCE A. LAUCK, 51, has served as Senior Vice President Corporate Development since January 2012, having joined the Company in August 2009 as Senior Vice President Business Development. Mr. Lauck has
+overall responsibility for PDC’s business development, strategic planning, reserves and midstream and marketing. Previously, he served as Vice President—Acquisitions and Business Development for Quantum Resources Management LLC from 2006
+to 2009. From 1988 until 2006, Mr. Lauck worked for Anadarko Petroleum Corporation, where he initially held production, reservoir and acquisition engineering positions before assuming various management-level positions in the areas of
+acquisitions and business development, ending his service as General Manager, Corporate Development. From 1984 to 1988, Mr. Lauck worked as a production engineer for Tenneco Oil Company. Mr. Lauck holds a B.S. in Petroleum Engineering from
+the University of Missouri-Rolla. 
+25 
+Table of Contents 
+DANIEL W. AMIDON, 53, Senior Vice President, General Counsel and Secretary,
+was appointed General Counsel and Secretary in July 2007 and Senior Vice President in 2012. Prior to joining the Company, Mr. Amidon was employed by Wheeling-Pittsburgh Steel Corporation beginning in July 2004, where he served in several
+positions including General Counsel and Secretary. Prior thereto, Mr. Amidon was employed by J&L Specialty Steel Inc. from 1992 through July 2004 in positions of increasing responsibility, including General Counsel and Secretary.
+Mr. Amidon practiced with the Pittsburgh, Pennsylvania law firm of Buchanan Ingersoll PC from 1986 through 1992. Mr. Amidon graduated from the University of Virginia, with honors, majoring in economics. He received his J.D. from the
+Dickinson School of Law (now Penn State Law). 
+Each of the above was an officer of the Company in September
+2013, when each of twelve partnerships for which the Company was the managing general partner filed for bankruptcy in the federal bankruptcy court, Northern District of Texas, Dallas Division. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee of the Board of Directors of the Company has reviewed and discussed the following Compensation
+Discussion and Analysis with management and, based on its review and discussions, recommends its inclusion in this Proxy Statement. 
+Kimberly Luff Wakim, Chair 
+Anthony J. Crisafio 
+Larry F. Mazza 
+David C. Parke 
+Jeffrey C. Swoveland 
+COMPENSATION COMMITTEE 
+OF THE BOARD OF DIRECTORS 
+COMPENSATION DISCUSSION AND ANALYSIS 
+Executive Summary and
+2013 Highlights 
+Our executive compensation program is designed to reward executives when the Company
+achieves its operational and financial objectives. In addition, our program is designed to: 
+• 
+Align the interests of our executives with the interests of our stockholders; 
+• 
+Support the Company’s strategic plan by focusing performance on specific financial and operational metrics; 
+• 
+Be market-competitive and premised upon informed industry benchmarking; and 
+• 
+Result in executive compensation that is focused on the Company’s actual performance, thereby rewarding performance with compensation, with a
+significant portion of target compensation delivered through equity or a performance-based annual bonus. 
+We believe that in 2013 we exceeded our performance expectations for the year, delivering the following key financial and operational results for our stockholders. The Company: 
+• 
+Continued to successfully execute on the shift in the Company’s long-term strategy: 
+• 
+Completed the consolidation of the Company’s focus into three core areas of operation where the Company has a competitive advantage through
+various divestitures; 
+26 
+Table of Contents 
+• 
+Increased our crude oil and liquids percentage to 54% of proved reserves; and 
+• 
+Reduced the number of remaining partnerships to four. 
+• 
+Achieved outstanding reserve and production growth for the year as a result of execution of our strategic shift: 
+• 
+Replaced approximately 1300% of production from continuing operations, resulting in a three-year average production replacement of 738%;
+• 
+Increased proved reserves by 50% and proved, possible and probable (“3P”) reserves by 45%; 
+• 
+Increased annual production from continuing operations by 35% to 7.4 MMboe; and 
+• 
+Realized first production in the Utica Shale. 
+• 
+Continued to enhance the Company’s financial position: 
+• 
+Increased our adjusted cash flow by 27% over 2012; 
+• 
+Completed an equity offering in August of 5.2 million shares with proceeds to the Company of $276 million; and 
+• 
+Repriced bank debt and ended the year with an undrawn revolver. 
+• 
+Realized excellent stock price performance relative to our 16 peers, performing well above the median of our peers on both one- and three-year
+periods. 
+Our key compensation changes for 2013 included: 
+• 
+Promotion of Mr. Brookman to Executive Vice President and Chief Operating Officer to recognize his expanded responsibilities, and adjustment of
+his compensation accordingly. 
+• 
+Adjustment of target compensation to the current market median, placing more emphasis on variable and equity compensation, including:
+• 
+Moderate increases to base salaries and annual incentive target bonuses; and 
+• 
+Awards of annual equity grants to approximate the median of the market in total target compensation. 
+• 
+Implementation of the Employee Change in Control Severance Plan for all Company employees. 
+General Compensation Philosophy/Objectives 
+Compensation Objectives and Philosophy 
+The
+objectives of our compensation programs are to attract, motivate and retain highly talented executives who can lead the Company in efficiently and profitably exploring for and producing oil and natural gas in a safe and environmentally conscious
+way. To that end, we believe our compensation program should be competitive within the industry and encourage retention of executives. The Compensation Committee (for purposes of this section, the “Committee”) is committed to establishing
+a compensation program that generally establishes target total compensation around the median level for similar positions at comparable companies (unless specific circumstances warrant otherwise) in order to remain competitive for executive talent
+and to retain our current executive leadership. We benchmark each element of total direct compensation (which includes base salary, annual and long-term incentives) and the mix of compensation (cash versus equity-based) to the peer group and other
+survey data, as described below. Our programs are structured to require a commitment to performance because total compensation at the market median is not guaranteed. Therefore, increased compensation rewards above-target performance and
+below-median compensation is provided for performance that does not meet the target. In addition, to encourage retention, long-term incentives are generally forfeited in the event an executive voluntarily terminates employment. 
+27 
+Table of Contents 
+Compensation Should Balance Short-Term and Long-Term Objectives and Be Aligned with
+the Company’s Strategic Plan 
+The Committee aligns its executive compensation decisions with
+the Company’s strategic plan and the operational and financial goals it believes are necessary to drive performance. Our compensation programs are designed to maintain a balance between rewarding the achievement of short-term or annual results
+and ensuring the Company’s long-term growth and success. To this end, the mix of annual and long-term incentives is allocated in a manner generally consistent with market data and with what the Committee believes to be the appropriate balance
+of risk in each program. Each of our incentive programs links all or a portion of its payout to the Company’s performance and our annual incentive program allows for recognition of individual-specific performance as well. Participation in both
+the annual and long-term incentive programs increases at higher levels of responsibility, as executives in these leadership roles have the greatest influence on the Company’s strategic direction and results over time. 
+The charts below show the targeted fixed and at-risk components, as contemplated by the Committee for 2013, for the Named
+Executive Officers as a percentage of target total direct compensation. These charts are not a substitute for the “Summary Compensation Table,” which includes amounts supplemental to total direct compensation and calculates certain
+components of total direct compensation differently from that shown below. 
+These charts demonstrate that, for 2013, the Committee established a target of between
+85% and 86% of total direct compensation for Mr. Trimble as variable and 71% in the form of equity-based compensation, with the other Named Executive Officers having approximately 78% of their compensation as variable and 61% of their
+compensation in the form of equity-based compensation. These charts are based on compensation established in January 2013 and do not include any changes in cash compensation related to the promotion of Mr. Brookman. 
+Peer Groups and Survey Data Help Establish Target Compensation and Define Competitive Levels of Performance
+Each fall, the Committee reviews the composition of a peer group of companies in establishing
+target compensation for each executive for the coming year. In its review, the Committee considers with respect to each potential peer company its size, scope and nature of business operations, ownership structure, prior financial performance and
+current financial scope, including market capitalization, enterprise value, revenue, EBITDA, capital expenditures and assets. In comparing the size of potential peers to the Company, the Committee uses only the Company’s oil and gas sales and
+excludes any other revenues/income. The Committee then assesses whether changes to the peer group are warranted based upon changes in size and/or operations of the Company 
+28 
+Table of Contents 
+and/or the peer company and other factors that may render a peer company no longer comparable. The 2013 peer group below was selected in September 2012 for the Committee’s analysis and
+determination of 2013 compensation. 
+PEER COMPANY 
+PEER 
+COMPANY 
+FOR 2012 
+FISCAL 
+YEAR 
+PEER 
+COMPANY 
+FOR 2013 
+FISCAL 
+YEAR 
+Berry Petroleum Company (1) 
+x 
+x 
+Bill Barrett Corporation 
+x 
+x 
+Brigham Exploration Company (2) 
+x 
+Carrizo Oil & Gas, Inc. 
+x 
+x 
+Comstock Resources, Inc. 
+x 
+x 
+EXCO Resources, Inc. 
+x 
+x 
+Forest Oil Corporation 
+x 
+x 
+Goodrich Petroleum Corporation 
+x 
+x 
+Laredo Petroleum Holdings, Inc. 
+x 
+Magnum Hunter Resources Corp. 
+x 
+Penn Virginia Corporation 
+x 
+x 
+PetroQuest Energy, Inc. 
+x 
+x 
+Quicksilver Resources Inc. 
+x 
+x 
+Resolute Energy Corporation 
+x 
+x 
+Rosetta Resources Inc. 
+x 
+x 
+Stone Energy Corporation 
+x 
+x 
+Swift Energy Company 
+x 
+x 
+Venoco, Inc. (3) 
+x 
+(1) 
+Berry Petroleum Company was acquired by Linn Energy, LLC in December 2013. 
+(2) 
+Brigham Exploration Company was purchased by Statoil ASA in December 2011. 
+(3) 
+Venoco, Inc. became privately owned in October 2012. 
+The Committee also uses several proprietary benchmarking surveys from a broader sample of comparably-sized oil and gas
+companies for additional market perspective, including Effective Compensation, Incorporated’s “Oil and Gas Exploration and Production Industry Survey (ECI),” Meridian Compensation Partners LLC’s “North America Oil and Gas
+Exploration and Production Survey” and survey data compiled by the Consultant. The Committee uses both the peer and survey benchmarking data to establish competitive base salaries, bonus targets and target total direct compensation. The
+Committee also uses either the same or a similar peer group in measuring stock performance under the Company’s performance-based long-term incentive awards described below. 
+Compensation Should Be Tax-Deductible When Appropriate 
+The Committee considers the impact of the applicable tax laws with respect to compensation paid under the Company’s
+plans, arrangements and agreements. Section 162(m) of the Internal Revenue Code (the “Code”) disallows, with certain exceptions, a federal income tax deduction for annual compensation over $1,000,000 paid to any covered employee. The
+covered employees are generally named executive officers other than the chief financial officer (“CFO”). An exception to the deduction limit is provided under Code Section 162(m) for performance-based compensation paid pursuant to
+stockholder-approved plans that meet certain criteria. 
+Elements of our executive compensation program are
+designed to be performance-based, such as stock options, stock appreciation rights (“SARs”) and performance-based equity awards issued under the Company’s Amended and Restated 2010 Long-Term Incentive (“LTI”) Plan. Other
+aspects of our executive compensation 
+29 
+Table of Contents 
+program do not qualify as performance-based, such as time-based restricted stock and the Company’s annual incentive bonus program. It is our intent to preserve our income tax deductions by
+qualifying certain compensation paid to our top executives as performance-based compensation under Code Section 162(m) where practicable under our compensation policies. The Committee nonetheless may approve compensation that may not qualify
+for the compensation deduction if, in light of all applicable circumstances, the Committee believes that it would be in our best interests to pay such compensation. For example, in the case of the annual incentive bonus program, the Committee
+prefers to maintain the ability to exercise discretion in evaluating Company and participant performance. The Committee will continue to monitor the impact of Code Section 162(m) on the Company’s executive compensation programs.
+Section 409A of the Code provides that all amounts deferred under a nonqualified deferred compensation
+plan are currently included in gross income and are subject to an additional 20% tax, to the extent not subject to a substantial risk of forfeiture and not previously included in gross income, unless certain requirements are met. We have designed or
+amended our plans and programs with the intent that they either be exempt from or comply with Code Section 409A. 
+Executives and Directors Are Required to Own Stock 
+Consistent with the goal of driving long-term value creation for our stockholders and in order to discourage undue
+risk-taking, the Company’s stock ownership guidelines require significant stock ownership by the Named Executive Officers and Directors. Each Named Executive Officer is expected to achieve compliance with the ownership guidelines within five
+years of his or her appointment as a Named Executive Officer but is not required to purchase stock to meet these guidelines. The net shares acquired through incentive compensation plans (through the exercise of stock options, SARs, or the vesting of
+restricted stock or performance shares) must be retained if the Named Executive Officer has not satisfied his or her targeted ownership. An executive’s failure to meet the stock ownership guidelines may influence the future mix of cash and
+non-cash compensation awarded by the Committee. Executives are not permitted to pledge their shares or invest in derivatives involving Company stock. Ownership is reviewed at least annually when compensation decisions are made. As of
+December 31, 2013, all of the Named Executive Officers met the stock ownership requirements as set forth below. 
+STOCK
+OWNERSHIP REQUIREMENT 
+Name/Year of Executive Status 
+Stock 
+Ownership 
+Guidelines 
+Number of 
+Shares 
+Required 
+To Own* 
+Number of 
+Qualifying 
+Shares 
+Owned* 
+James M. Trimble (2011) 
+5x Base Salary 
+61,430 
+159,229 
+Gysle R. Shellum (2008) 
+3x Base Salary 
+18,971 
+50,430 
+Barton R. Brookman (2008) 
+3x Base Salary 
+21,681 
+80,285 
+Lance A. Lauck (2009) 
+3x Base Salary 
+17,345 
+61,431 
+Daniel W. Amidon (2007) 
+3x Base Salary 
+16,261 
+40,189 
+* 
+Using average of daily closing prices in December, which was $55.35. 
+Qualifying holdings include stock owned directly, shares held in the Company’s 401(k) and Profit Sharing Plan and
+unvested time-based restricted stock as of December 31, 2013. Not included are stock options, SARs and performance-based awards. Stock ownership requirements applicable to our Non-Employee Directors are described under “Director
+Compensation—Company Stock Ownership Requirements.” 
+30 
+Table of Contents 
+Compensation Process — Making Executive Compensation Decisions 
+Determining Target Total Direct Compensation 
+The Committee determines target total direct compensation for our Named Executive Officers by establishing base salaries
+and setting long-term and annual incentive compensation targets. When appropriate, the Committee also approves special awards and modifies perquisites. The Committee typically establishes target total direct compensation in the first quarter of each
+year. In doing so, the Committee considers the following: 
+• 
+Market data for the target total direct compensation (base salary, bonus targets and long-term incentives) for the peer group, based on disclosure
+in peer company proxies and other applicable survey data; 
+• 
+Individual performance and areas of responsibility relative to the market data; 
+• 
+Compensation relative to that of other executive officers of the Company; and 
+• 
+The CEO’s recommendations with respect to the compensation of the executives who report directly to him, including each of the other Named
+Executive Officers. 
+The Committee’s view is that an executive’s target
+compensation should reflect the current market value of his or her services. For a Named Executive Officer who has performed well in the prior year, the predominant factor in determining target total direct compensation for the current year is the
+market median for that position. Based on the CEO’s extensive experience, however, the Committee has targeted his compensation above the median. In considering the mix of cash and long-term incentives, the Committee may adjust the amount and
+type of each component to generally target total direct compensation at the market median. When recruiting a new executive, the Company may be required to pay above market median to attract an individual. Over time, performance will determine actual
+pay and target pay will generally be adjusted toward the median. 
+Annual and Long-Term Incentive Programs
+The Committee annually reviews and approves program design, including performance metrics and
+target payout, and awards under the annual and long-term incentive programs. These discussions, which usually begin with recommendations from management and involve deliberation among the Committee, management and the Consultant, usually span
+numerous meetings before a design is approved. With respect to equity programs, the Committee also considers the accounting effect of the awards, dilution and employee stock burn rate (based on total outstanding shares). For performance-based equity
+awards, the Committee certifies at the end of the performance period the level at which the performance measures were satisfied and approves the amount of incentive award payable to each Named Executive Officer. 
+Historical Compensation Review 
+Each year the Committee is provided summaries of each Named Executive Officer’s compensation history, as well as all
+compensation payable upon his or her termination of employment and upon a change in control of the Company. These summaries, some of which are included in this Proxy Statement, include the following: 
+• 
+Three-year (or longer) history of base salary, annual incentive targets and awards, long-term incentive grants, payouts and perquisites;
+• 
+Realized gains for the current year and potential gains on unexercised or unvested awards; and 
+• 
+The value of compensation and other severance benefits due to the Named Executive Officer under various termination scenarios, both before and after
+a change in control of the Company. 
+In addition to reviewing the Company’s historical
+compensation and comparing current compensation to that of its peers, the Committee reviews both realizable and earned pay over the past three years relative to the Company’s peers to help determine whether the Company’s compensation plan
+is compensating for performance 
+31 
+Table of Contents 
+as designed. The Committee looks at pay-for-performance using the performance measures used by Institutional Shareholder Services (“ISS”) (although ISS uses a different peer group) as
+well as a group of company-level performance measures relevant to the oil and gas industry. Those measures include production growth, revenue growth, operating cash flow growth, EBITDA/interest expense and total stockholder return. The Committee
+considers the results of this analysis in making adjustments to the compensation program each year. 
+Role of the
+Compensation Consultant 
+The Committee has the sole power to hire, terminate and approve fees for
+advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities. The Consultant has been engaged directly by the Committee for approximately nine years. The Consultant provides the Committee with market
+data and observations regarding executive officer compensation programs and practices, including specifically: 
+• 
+Peer group identification and assessment; 
+• 
+Compensation benchmarking; 
+• 
+Advice and market insight as to the design, payout alternatives and performance measures for annual and long-term incentives and on other aspects of
+compensation (e.g., employment agreements, perquisites, etc.); and 
+• 
+Marketplace compensation trends in the industry and generally. 
+The Consultant does not make recommendations on or approve the amount of compensation of any Named Executive Officer. The
+Committee may request information or advice directly from the Consultant and may direct the Company to provide or solicit information from the Consultant. The Consultant regularly interacts with representatives of the Company and periodically with
+the CEO. The Consultant attends meetings of the Committee when requested. The Committee reviews the engagement of its independent compensation consultant on an annual basis and as a part of that process reviews a summary of all services provided by
+the Consultant and related costs, including the fees paid as a percentage of the Consultant’s total revenue. In 2013, the Consultant did not perform any other material services for the Company, did not have any business or personal
+relationships with the Committee members or executive officers of the Company, did not own any stock of the Company and maintained policies and procedures designed to avoid conflicts of interest. Accordingly, the Committee determined that the
+engagement of the Consultant in 2013 did not create any conflicts of interest. 
+Role of Management in Determining
+Executive Compensation 
+Our CEO plays a significant role in the Committee’s establishment of
+compensation levels for our other Named Executive Officers. Important aspects of his role in the process are: 
+• 
+Assessing his own performance and the performance of the other Named Executive Officers; 
+• 
+Recommending quantitative and qualitative performance measures under our annual incentive program; 
+• 
+Providing feedback on proposed peer group companies; 
+• 
+Recommending base salary levels, annual incentive targets, actual annual incentive awards and long-term incentive awards for the other Named
+Executive Officers; and 
+• 
+Providing his assessment of the Company’s performance for the year with respect to achievement of performance measures under the annual
+incentive program. 
+Management also retains an individual as a consultant in our
+compensation process to coordinate the preparation of certain materials for Committee meetings. This individual is retained by and reports to management, whereas the Consultant reports to the Committee. 
+32 
+Table of Contents 
+At the Committee’s request, our Named Executive Officers may also
+assess the design of or make recommendations related to our compensation and benefit programs. The Committee, with input from the Consultant, determines each element of the CEO’s compensation. With input from the Consultant and the CEO, the
+Committee determines each element of compensation for the other Named Executive Officers. The CEO is not present during voting or deliberations concerning his own compensation. 
+Consideration of Say-on-Pay Vote 
+The Committee considers the results of the non-binding “say-on-pay” vote of our stockholders concerning the
+compensation of our Named Executive Officers. At our 2013 Annual Meeting, an overwhelming majority (98%) of the votes cast approved the compensation of our Named Executive Officers. Accordingly, the Committee concluded that our executive
+compensation programs generally meet the expectations of our stockholders, thus we did not make any material changes to our executive compensation programs in 2013 in response to the say-on-pay results. 
+33 
+Table of Contents 
+Components of the Company’s Compensation Program 
+Our Named Executive Officers’ 2013 compensation consisted principally of the following components, in addition to
+plans and programs in which all of our full-time employees participate, such as health and welfare benefit plans: 
+ELEMENT 
+KEY FEATURES 
+PURPOSE 
+BASE SALARY 
+• Base salaries are generally targeted at the median of the market. 
+• Adjustments are made on an
+annual basis based on an individual’s performance, pay relative to the market, changes in responsibility and internal equity. 
+• To provide a minimum, fixed level of cash compensation upon which our executives can rely. 
+INCENTIVE COMPENSATION 
+Cash Incentive 
+• Annual cash incentive payments are based on attainment of Company and individual
+performance goals. 
+• Company performance goals are based upon measurable financial and operational metrics. 
+• Individual performance goals are
+linked to key business priorities and may include both financial and non-financial goals. 
+• The Committee maintains discretion to adjust awards as appropriate. 
+• To motivate and reward executives to produce strong financial and operational
+results. 
+• To provide a
+competitive reward opportunity that attracts, retains and motivates our executives. 
+Equity Awards 
+• Long-term incentives are delivered through multiple vehicles: restricted stock, SARs and performance
+shares. 
+• To retain executives and align their long-term interests with those of
+stockholders. 
+• To
+provide a mix of equity awards that focuses executives on the long-term growth of our stock price but does not encourage excessive risk-taking. 
+• Restricted stock is an important retention tool and aligns executives with stockholders as the value
+of restricted stock is always equal to the current value of the stock. 
+• SARs reward executives through increases in stock price and are intended to focus executives on taking reasonable actions to increase the stock price over the long term. 
+• Performance share awards promote
+both the long-term growth of our stock price and stock performance that exceeds that of our peers. 
+34 
+Table of Contents 
+ELEMENT 
+KEY FEATURES 
+PURPOSE 
+OTHER COMPENSATION 
+Retirement Plans 
+• Executives participate in our broad-based 401(k) and profit sharing plan
+under which all employees are eligible to make contributions in a tax-deferred vehicle and receive Company contributions. 
+• The Company matches dollar-for-dollar up to 10% of the employee’s compensation, then
+matches 20% of the employee’s contributions over the 10% amount up to the IRS maximum limits. 
+• The Company does not provide any supplemental retirement benefits. 
+• To provide a level of retirement income for all employees, including executive officers, and allow employees to
+build financial security for their retirement. 
+Health and Welfare Benefits 
+• Executives participate in our broad-based health and welfare benefit programs
+on the same terms and conditions (including contribution rates) as other employees. 
+• All Company employees (including executives) are provided up to 13 weeks of short-term disability at full pay. 
+• To attract and retain employees, including executives. 
+Perquisites 
+• The Company provides modest perquisites to executives which include a car allowance for business and personal
+use and club dues (athletic or other non-golf club only). 
+• To provide personal benefits that are modest yet competitive with the perquisites provided to similarly
+situated executives. 
+Severance 
+• Executives are contractually entitled to severance benefits upon certain termination events or a change in
+control of the Company. See “Potential Payments Upon Termination or Change in Control” for a description of these benefits. 
+• To attract and retain executives in a volatile and consolidating industry by providing transitional income
+following loss of employment and to ensure executives act in the best interest of stockholders during a potential change in control. 
+2013 Compensation Decisions 
+Base Salary 
+After reviewing the market data
+provided by the Consultant and outside survey data, and considering the other factors discussed above, we adjusted our Named Executive Officers’ base salaries effective January 1, 2013 as follows: 
+NAMED EXECUTIVE OFFICER 
+2012 Base Salary 
+2013 Base Salary 
+James M. Trimble 
+$ 
+650,000 
+$ 
+680,000 
+Gysle R. Shellum 
+$ 
+325,000 
+$ 
+350,000 
+Barton R. Brookman* 
+$ 
+325,000 
+$ 
+350,000 
+Lance A. Lauck 
+$ 
+300,000 
+$ 
+320,000 
+Daniel W. Amidon 
+$ 
+285,000 
+$ 
+300,000 
+* 
+Mr. Brookman’s base salary was further increased from $350,000 to $400,000 in June 2013 to reflect his promotion to Executive Vice President
+and Chief Operating Officer. 
+35 
+Table of Contents 
+Annual Cash Incentives 
+Each year, we approve a target annual cash incentive award for each Named Executive Officer. These target awards are
+expressed as a percentage of base salary and generally produce, when combined with long-term incentives, total target compensation near the median of the peer group. Actual awards can range up to 200% of these targets based on the achievement of
+Company and individual goals. In January 2013, we approved target annual cash incentive awards as follows: 
+NAMED EXECUTIVE OFFICER 
+TARGET ANNUAL CASH 
+INCENTIVE AS % OF BASE 
+SALARY 
+James M. Trimble 
+100 
+% 
+Gysle R. Shellum 
+75 
+% 
+Barton R. Brookman* 
+75 
+% 
+Lance A. Lauck 
+75 
+% 
+Daniel W. Amidon 
+75 
+% 
+* 
+Mr. Brookman’s bonus target was further increased from 75% to 85% in June 2013 to reflect his promotion. 
+Annual Bonus Program 
+Bonuses under the Company’s annual incentive program are primarily based on specific operational and financial
+metrics established at the beginning of the year. However, the Committee also considers individual performance, stock price performance and other extraordinary items that occur throughout the year. To provide the Committee the flexibility to adjust
+for and react to economic events such as dramatic changes in commodity prices or volatile capital markets, we prefer not to rely solely on a formulaic approach based on pre-established thresholds that result in automatic payouts. Rather, the
+Committee always retains discretion to adjust actual awards as it views appropriate given circumstances at the time of the award. 
+Throughout the year, the Committee reviews the Company’s progress toward meeting the performance metrics for the year. Following the end of the fiscal year, the Committee determines annual incentive
+payments as follows: 
+• 
+An overall corporate performance rating is determined for the annual quantitative operational and financial metrics; 50% is based on operational
+metrics and 50% is based on financial metrics; 
+• 
+The Committee may apply other subjective considerations in the final determination of the corporate performance rating (e.g., business conditions,
+stock price performance, etc.); and 
+• 
+Individual awards are determined by multiplying the overall corporate performance rating by the individual’s annual incentive target and
+multiplying the result by the individual’s base salary. Individual awards may be adjusted downward or upward at the Committee’s discretion based on individual performance. Such adjustments are anticipated to have a maximum range of +/-20%.
+36 
+Table of Contents 
+2013 Performance Metrics 
+In early 2013, we established specific targets for each of the following operational and financial metrics based on our
+2013 public financial guidance. See the specific targets under “2013 Performance Results.” 
+OPERATIONAL METRICS (50%)* 
+Production (Boe) 
+Actual production volume for the year. 
+Production, Exploration and G&A Expense per Boe 
+The sum of total production, exploration, general and administrative expense and corporate general and administrative expense (G&A) divided by Bbl (mcf
+equivalent for gas and oil). 
+Reserve Replacement Ratio (three-year average) 
+The sum of 2011, 2012 and 2013 extensions and discoveries, revisions in previous estimates and purchase of reserves, divided by the sum of 2011, 2012 and 2013
+production. 
+FINANCIAL METRICS (50%)* 
+Adjusted Cash Flow per Share 
+Net income plus/minus change in operating assets and liabilities per share. 
+Capital Efficiency (three-year) 
+Adjusted EBITDAX divided by production, divided by three years’ average finding and development cost per unit. 
+* 
+A reconciliation of certain items above to the most closely related amounts calculated in accordance with Generally Accepted Accounting Principles
+(“GAAP”) can be found in our quarterly investor relations material posted on our website at http://investor.pdce.com/presentations.cfm . 
+2013 Performance Results 
+Upon
+completion of the fiscal year, the Committee reviewed the Company’s performance relative to the quantitative operational and financial measures described above. Results for 2013 were as follows: 
+CORPORATE PERFORMANCE METRIC 
+TARGET 
+ACTUAL 
+RESULTS 
+PERFORMANCE 
+Operational Metrics (50%) 
+Production (MMboe) 
+7.3 
+7.4 
+Above Target 
+Production, Exploration and G&A Expense per Boe 
+$ 
+18.45 
+$ 
+19.32 
+Below Target 
+Reserve Replacement Ratio (three-year average) 
+350 
+% 
+738 
+% 
+Above Target 
+Financial Metrics (50%) 
+Adjusted Cash Flow per Share 
+$ 
+6.48 
+$ 
+($ 
+6.41 
+6.84 adj. 
+*) 
+Above Target 
+(on adj. basis) 
+Capital Efficiency (three-year) 
+200 
+% 
+377 
+% 
+Above Target 
+* 
+Cash flow per share is adjusted for the equity offering in August 2013. 
+In evaluating performance, the Committee considered the following with respect to each corporate performance metric:
+• 
+Production: Actual results were slightly better than target due to superior performance from our horizontal Codell and Niobrara programs, despite
+curtailments by our third-party gatherer in the Wattenberg Field and EPA permitting delays in the Marcellus Shale; 
+• 
+Production, Exploration and G&A Expense per BOE: Although the Company did not meet target for the year, operating costs per BOE were down for
+the year, primarily due to pad operations and the sale of high operating cost wells. The Company did incur approximately $6.6 million in additional expense in 2013 (e.g., Colorado flooding and other non-cash changes), which on an adjusted basis
+would have brought us more in line with target; 
+37 
+Table of Contents 
+• 
+Reserve Replacement Ratio (three-year average): Results on a three-year basis were outstanding and significantly above target because of drilling
+and workover success in our three core areas; 
+• 
+Adjusted Cash Flow per Share: Actual results were close to target, but when adjusted to remove the impact of the equity offering of 5.2 million
+shares in August 2013, the results were above target; and 
+• 
+Capital Efficiency (three-year): The Company’s three-year average was above target due to outstanding reserve growth and maintenance of a
+disciplined capital program. 
+In evaluating the Company’s 2013 performance, the
+Committee acknowledged that the strategic repositioning of the Company in 2012 and 2013 was a significant factor in the 2013 results, but felt that the bonus award in 2012 and the long-term incentive grants in January 2014 (described below under
+“2014 Equity Grants”) adequately recognized this effort. As a result, for the 2013 bonus, the Committee focused more on management’s execution on the strategy and actual performance on the corporate metrics outlined above. In
+determining the final percentage to award the Named Executive Officers, the Committee primarily considered the following: 
+• 
+Based on the adjusted results, the Company generally exceeded the targets for the year, especially reserve replacement and financial metrics;
+• 
+Overall, the Company’s operational and financial performance in 2013 exceeded performance in 2012; 
+• 
+The Company had a successful environmental and safety record for the year; and 
+• 
+Stock price performance for the year was excellent. 
+As a result of its consideration of the metrics and the Company’s other accomplishments, the Committee determined
+that an overall corporate performance rating of 135% should be applied to each Named Executive Officer’s annual incentive award target. As the Committee felt that management achieved these results as a team, no individual performance
+adjustments were made to the awards. Actual bonus amounts paid for 2013 performance and reflected in the “Summary Compensation Table” are as follows: 
+NAMED EXECUTIVE OFFICER 
+2013 ANNUAL 
+BONUS 
+James M. Trimble 
+$ 
+920,000 
+Gysle R. Shellum 
+$ 
+355,000 
+Barton R. Brookman 
+$ 
+416,000 
+Lance A. Lauck 
+$ 
+324,000 
+Daniel W. Amidon 
+$ 
+304,000 
+Long-Term Incentives 
+The Committee uses a combination of grants of restricted stock, SARs and performance shares in its mix of long-term
+incentives. While the Committee considers long-term incentives as primarily forward-looking, the Committee also considers the Company’s and Named Executive Officers’ performance in the prior year in determining the size of the awards.
+Generally, the Committee considers competitive market data, previous equity awards, equity ownership levels and the mix of cash and equity compensation that is necessary to place our Named Executive Officers at the median of the latest available
+compensation data for total direct compensation (base salary, bonus and long-term incentives combined). The Committee typically awards equity grants in the first quarter of the year. 
+Over the past several years, the Committee has modified the mix of long-term incentives to create a more
+performance-driven approach that better aligns the interests of our Named Executive Officers with the interests of our stockholders. For 2013, the Committee continued that program and awarded a mix of 50% time-based restricted stock, 25% SARs and
+25% performance shares. The performance shares may be earned at the end of a three-year performance period upon the achievement of specific total stockholder return (“TSR”) levels relative to a group of peers. The time-based restricted
+shares and SARs vest ratably over three years. 
+38 
+Table of Contents 
+Annually, the Committee determines the target value of the long-term
+incentives it wants to deliver to the executive to place total target compensation at the market level targeted by the Committee. Once determined, the Committee typically uses an average of the closing share price of the 15 trading days ending ten
+days prior to the scheduled grant date to determine the number of shares to be granted. The dollar value reflected in the “Summary Compensation Table” is the accounting value of the grant. This amount will generally vary from the targeted
+amount since the target amount is based on a 15-day average and the accounting value of those shares is based solely on the price of Company stock on the date of grant. Given the volatility of the Company’s stock, this price difference can be
+significant. 
+The table below shows the actual grants approved for 2013 for each Named Executive Officer.
+2013 LONG-TERM INCENTIVE GRANTS 
+NAME 
+TARGETED 
+VALUE 
+RESTRICTED 
+STOCK 
+SARs 
+PERFORMANCE 
+SHARES 
+James M. Trimble 
+$ 
+3,300,000 
+49,284 
+41,646 
+19,880 
+Gysle R. Shellum 
+$ 
+1,000,000 
+14,935 
+12,620 
+6,025 
+Barton R. Brookman 
+$ 
+1,000,000 
+14,935 
+12,620 
+6,025 
+Lance A. Lauck 
+$ 
+800,000 
+11,948 
+10,096 
+4,820 
+Daniel W. Amidon 
+$ 
+800,000 
+11,948 
+10,096 
+4,820 
+Grant date accounting values for the 2013 grants are reflected in the “Summary
+Compensation Table” and “Grants of Plan-Based Awards.” 
+Performance Share Program 
+Under this program, Named Executive Officers receive shares of stock based on the Company’s relative TSR over the
+specified performance period, as ranked among the comparably-measured TSR of the applicable peer group. The Committee believes that the peer group designated for measuring relative stock price performance may be different from the peer group the
+Company is competing with for executive talent. However, the Committee generally uses the same companies whenever possible. For 2013, the peer group selected by the Committee for measuring relative TSR is identical to the compensation benchmarking
+group for 2013. The specified performance period is from January 1, 2013 through December 31, 2015. 
+The TSR for the Company and each of the peer companies is determined by dividing (1) the average share price for the
+last twenty business days of the performance period, minus the average share price for the 20 business days preceding the beginning of the performance period, plus dividends (cash or stock based on the ex-dividend date) paid per share
+of common stock over the performance period, by (2) the average share price for the 20 business days preceding the beginning of the performance period. 
+At the end of the performance period, payout can range from 0% (if results are below the 25th percentile) to 200% of the target award, as follows: 
+COMPANY TSR RANKING 
+AMONG PEERS 
+PAYOUT LEVELS AS % OF 
+AWARD 
+Top 
+200 
+% 
+75th Percentile 
+150 
+% 
+Median 
+100 
+% 
+25th Percentile 
+50 
+% 
+Below 25th Percentile 
+0 
+% 
+If performance falls between the percentiles, payout levels are interpolated. In
+addition, if the Company has negative TSR for the performance period, the maximum award is limited to 100%, regardless of relative performance. 
+39 
+Table of Contents 
+For descriptions of the previous year programs and payouts, see
+“Additional Discussion of Tables Related to Summary Compensation and 2013 Grants of Plan-Based Awards—Terms of the Performance Share Program.” As a result of the Company’s excellent stock price performance over the three years
+ended December 31, 2013, the 2011 Performance Share Program paid out at 156%, above the 75th percentile. 
+2013 was also the final measuring period for a legacy performance share program adopted in 2009 (the “2009
+Program”). Pursuant to the 2009 Program, executives could earn shares of stock based on the company meeting certain stock price appreciation targets. The 2009 Program also paid out at maximum as discussed below. For a description of what
+happens in the event of termination of the Named Executive Officer or a change in control of the Company prior to the end of the performance periods, see “Potential Payments Upon Termination or Change in Control.” 
+2014 Equity Grants 
+In 2014, the Committee elected to deviate from the established practice of targeting the median of the market for the Named Executive Officers’ total compensation and make above-market equity grants
+for the year by awarding the same number of shares to each individual as was granted in 2013 (with the exception of Mr. Brookman whose award was increased slightly based on his new position to 16,352 restricted shares, 13,790 SARs and 6,606
+performance shares). The Committee determined that the additional value granted was appropriate to recognize the leadership team for their execution of the Company’s strategy change in 2012 and 2013 and the resulting overall performance in
+2013. Although the Committee elected to award the same number of shares as in 2013, the accounting value of these shares in 2014 is approximately 30% higher to each Named Executive Officer (except Mr. Brookman whose award value is somewhat
+higher due to his 2013 promotion). Some portion of this increase in value would be attributable to the normal increase in median compensation. 
+Special Equity Grants 
+From time to time, the Committee
+approves special grants which typically take the form of restricted stock, although other types of awards may be made when appropriate. Special grants are typically considered: 
+• 
+In connection with promotion where more stock exposure is desired; 
+• 
+To recognize extraordinary achievement; 
+• 
+When the survey data demonstrates a significant deviation from market total direct compensation for the comparator group;
+• 
+When the Committee determines that special retention measures are necessary for a particular executive; or 
+• 
+As part of a new hire package for an executive. 
+No special grants were awarded in 2013. 
+Agreements with Named Executive Officers 
+Severance Plan and
+Employment Agreements with Named Executive Officers 
+The Committee believes that severance
+protection plays a valuable role in attracting, motivating and retaining highly talented executives and that having an existing agreement in place is preferable to negotiating an exit package at the time of a Named Executive Officer’s
+departure. Severance provisions give the Company the flexibility to make decisions regarding organizational issues with agreed-upon severance terms. In the event that the Company faces a change in control, severance benefits encourage executive
+officers to remain with the Company during an important time when prospects for continued employment are often uncertain, and to provide a measure of financial security to the executive officer. The Committee believes that the severance amounts that
+may be paid upon a change in control of the Company ensure that the interests of the executive officers will be materially consistent with the interests of the Company’s stockholders and strike a proper balance between the hiring, motivating
+and retention effects described above, without providing excessive benefits to executives. 
+40 
+Table of Contents 
+The CEO’s employment agreement expired in June 2013. In anticipation of
+this event, in 2012 the Company decided to move away from the use of employment agreements and adopted the PDC Energy Executive Severance and Compensation Plan (the “Severance Plan”) to cover the CEO and any future senior executive
+officers of the Company. The Company grandfathered the existing employment agreements in effect with the current senior executives. The Severance Plan and individual employment agreements provide termination benefits both prior to and upon a change
+in control of the Company. See “Potential Payments Upon Termination or Change in Control.” The Committee considers these protections to be an important part of an executive’s compensation and consistent with competitive practices in
+the oil and gas industry. 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus (1) 
+($) 
+Stock 
+Awards (2) 
+($) 
+Options
+/ 
+SAR 
+Awards (3) 
+($) 
+All
+Other 
+Compensation (4) 
+($) 
+Total 
+Compensation 
+($) 
+James M. Trimble 
+2013 
+680,000 
+920,000 
+2,807,294 
+914,546 
+56,184 
+5,378,024 
+CEO and President (5) 
+2012 
+650,000 
+815,000 
+1,700,880 
+580,408 
+54,444 
+3,800,732 
+2011 
+336,539 
+1,007,000 
+1,903,496 
+— 
+40,384 
+3,287,419 
+Gysle R. Shellum 
+2013 
+350,000 
+355,000 
+850,749 
+277,135 
+52,710 
+1,885,594 
+CFO 
+2012 
+325,000 
+305,000 
+503,983 
+171,979 
+50,573 
+1,356,535 
+2011 
+315,000 
+256,000 
+693,539 
+128,723 
+48,015 
+1,441,277 
+Barton R. Brookman 
+2013 
+378,300 
+416,000 
+850,749 
+277,135 
+56,693 
+1,978,877 
+Executive Vice President and 
+2012 
+325,000 
+305,000 
+503,983 
+171,979 
+50,218 
+1,356,180 
+Chief Operating Officer (6) 
+2011 
+315,000 
+256,000 
+385,889 
+128,723 
+40,739 
+1,126,351 
+Lance A. Lauck 
+2013 
+320,000 
+324,000 
+680,600 
+221,708 
+51,012 
+1,597,320 
+Senior Vice President 
+2012 
+300,000 
+282,000 
+409,486 
+139,735 
+48,146 
+1,179,367 
+Corporate Development 
+2011 
+265,000 
+480,000 
+315,743 
+105,319 
+40,762 
+1,206,824 
+Daniel W. Amidon 
+2013 
+300,000 
+304,000 
+680,600 
+221,708 
+53,414 
+1,559,722 
+Senior Vice President, 
+2012 
+285,000 
+250,000 
+409,486 
+139,735 
+50,384 
+1,134,605 
+General Counsel and Secretary 
+2011 
+275,000 
+224,000 
+315,743 
+105,319 
+57,434 
+977,496 
+(1) 
+Represents the amounts paid under the Company’s annual incentive bonus plan with the following exceptions: 
+(a) 
+2011 amount for Mr. Trimble includes a $782,000 annual incentive bonus and a $225,000 hiring bonus; and 
+(b) 
+2011 amount for Mr. Lauck includes an annual incentive bonus of $282,000 and a special acquisitions bonus of $265,000 earned in 2011 but
+payable over two years. In addition to his annual incentive bonus, Mr. Lauck was eligible to receive this special bonus in the event of the completion of successful acquisitions, as determined by the Committee. This program was put in place to
+incent value-added growth through acquisitions as part of the Company’s five-year business plan. In 2012, the Committee elected to eliminate the acquisitions bonus and treat Mr. Lauck’s compensation comparably to that of the other
+Named Executive Officers. 
+The 2013 awards are described in “Annual Cash
+Incentives—2013 Performance Results.” 
+(2) 
+Represents the grant date fair value of stock-based compensation awards, which include the following: 
+(a) 
+Time-based restricted stock awards; 
+(b) 
+Performance-based awards; 
+(c) 
+New hire restricted stock grant to Mr. Trimble in 2011; and 
+(d) 
+Special restricted stock grant to Mr. Shellum in 2011 of $307,650. 
+41 
+Table of Contents 
+The 2013 grants are detailed in the “2013 Grants of Plan-Based
+Awards” table. Terms of the awards and descriptions of the performance-based awards can be found in “Additional Discussion of Tables Related to Summary Compensation and 2013 Grants of Plan-Based Awards.” In accordance with SEC rules,
+the amounts reported in the above table reflect the aggregate grant date fair value of the stock awards, calculated in accordance with FASB ASC Topic 718, disregarding estimated forfeitures for awards subject to performance conditions. These values
+have been determined under the principles used to calculate the grant date fair value of equity awards for purposes of the Company’s financial statements, as set forth in Note 12 to Form 10-K filed with the SEC on February 20, 2014.
+(3) 
+Represents the grant date fair value of SARs granted in each year. These grants are detailed in the “2013 Grants of Plan-Based Awards”
+table. Terms of the awards can be found in “Additional Discussion of Tables Related to Summary Compensation and 2013 Grants of Plan-Based Awards.” In accordance with SEC rules, the amounts reported in the above table reflect the aggregate
+grant date fair value of the SAR awards calculated in accordance with FASB ASC Topic 718 disregarding estimated forfeitures for awards subject to performance conditions. These values have been determined under the principles used to calculate the
+grant date fair value of SAR awards for purposes of the Company’s financial statements, as set forth in Note 12 to the financial statements included in the Annual Report on Form 10-K filed with the SEC on February 20, 2014.
+(4) 
+Amounts shown in this column for 2013 are detailed in “2013 All Other Compensation.” 
+(5) 
+Mr. Trimble was hired as CEO and President on June 10, 2011. His annualized 2011 base salary was $625,000. 
+(6) 
+Mr. Brookman’s base salary for 2013 reflects an increase in his base salary in June 2013 upon his promotion to Executive Vice President
+and Chief Operating Officer. 
+2013 ALL OTHER COMPENSATION 
+Name 
+Year 
+401(k) 
+Matching 
+Contribution (1) 
+($) 
+Annual 
+Profit 
+Sharing 
+Contribution (2) 
+($) 
+Perquisites (3) 
+($) 
+Tax 
+Gross-Up (4) 
+($) 
+Total 
+All
+Other 
+Compensation 
+($) 
+James M. Trimble 
+2013 
+23,000 
+8,288 
+24,896 
+— 
+56,184 
+Gysle R. Shellum 
+2013 
+23,000 
+8,288 
+20,676 
+746 
+52,710 
+Barton R. Brookman 
+2013 
+23,000 
+8,288 
+23,094 
+2,311 
+56,693 
+Lance A. Lauck 
+2013 
+23,000 
+8,288 
+18,482 
+1,242 
+51,012 
+Daniel W. Amidon 
+2013 
+23,000 
+8,288 
+21,046 
+1,080 
+53,414 
+(1) 
+Represents the Company’s annual matching contribution to the Company’s 401(k) and Profit Sharing Plan. 
+(2) 
+Represents the Company’s annual profit sharing contribution to the Company’s 401(k) and Profit Sharing Plan. 
+(3) 
+Represents total value of perquisites provided by the Company. No individual perquisite exceeded $25,000. Types of perquisites included are
+primarily monthly automobile allowances, health club dues and spouse or family travel. 
+(4) 
+Includes Board-approved “tax gross-up” for any spouse or family member travel that was requested by the Company and approved by the Board.
+42 
+Table of Contents 
+2013 GRANTS OF PLAN-BASED AWARDS 
+Grant Date 
+Estimated Future Payouts 
+Under
+Non-Equity 
+Incentive Plan Awards (1) 
+Estimated Future Payouts 
+Under
+Equity 
+Incentive Plan Awards (2) 
+All Other 
+Stock 
+Awards: 
+Number of 
+Shares 
+of Stock (3) 
+(#) 
+All Other 
+Option 
+Awards: 
+Number of 
+Securities 
+Underlying 
+Options (4) 
+(#) 
+Exercise 
+or Base 
+Price of 
+Option 
+Awards 
+($) 
+Grant Date 
+Fair Value 
+of Stock and 
+Option 
+Awards 
+($) 
+Name 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Threshold 
+(#) 
+Target 
+(#) 
+Maximum 
+(#) 
+James M. Trimble 
+1/1/2013 
+— 
+680,000 
+1,360,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+1/16/2013 
+— 
+— 
+— 
+9,940 
+19,880 
+39,760 
+— 
+— 
+— 
+974,915 
+(7) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+41,646 
+37.18 
+914,546 
+(5)(8) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+49,284 
+— 
+— 
+1,832,379 
+(5)(6) 
+Gysle R. Shellum 
+1/1/2013 
+— 
+262,500 
+525,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+1/16/2013 
+— 
+— 
+— 
+3,012 
+6,025 
+12,050 
+— 
+— 
+— 
+295,466 
+(7) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+12,620 
+37.18 
+277,135 
+(5)(8) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+14,935 
+— 
+— 
+555,283 
+(5)(6) 
+Barton R. Brookman 
+1/1/2013 
+— 
+308,000 
+616,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+1/16/2013 
+— 
+— 
+— 
+3,012 
+6,025 
+12,050 
+— 
+— 
+— 
+295,466 
+(7) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+12,620 
+37.18 
+277,135 
+(5)(8) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+14,935 
+— 
+— 
+555,283 
+(5)(6) 
+Lance A. Lauck 
+1/1/2013 
+— 
+240,000 
+480,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+1/16/2013 
+— 
+— 
+— 
+2,410 
+4,820 
+9,640 
+— 
+— 
+— 
+236,373 
+(7) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+10,096 
+37.18 
+221,708 
+(5)(8) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+11,948 
+— 
+— 
+444,227 
+(5)(6) 
+Daniel W. Amidon 
+1/1/2013 
+— 
+225,000 
+450,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+1/16/2013 
+— 
+— 
+— 
+2,410 
+4,820 
+9,640 
+— 
+— 
+— 
+236,373 
+(7) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+10,096 
+37.18 
+221,708 
+(5)(8) 
+1/16/2013 
+— 
+— 
+— 
+— 
+— 
+— 
+11,948 
+— 
+— 
+444,227 
+(5)(6) 
+(1) 
+Represents target and maximum cash awards payable under the Company’s annual incentive plan. For a description of the 2013 awards, see
+“Annual Cash Incentives.” The amount shown for Mr. Brookman is determined based on five months of the year as Senior Vice President and seven months of the year as Executive Vice President and Chief Operating Officer.
+(2) 
+Represents performance share awards under the 2010 LTI Plan. For a description of the awards see “Long-Term Incentives—2013 Performance
+Share Program.” 
+(3) 
+Represents annual time-based restricted stock awards under the 2010 LTI Plan. For a description of the 2013 awards, see “Long-Term
+Incentives.” 
+(4) 
+Represents SARs awarded under the Company’s 2010 LTI Plan. For a description of the 2013 awards, see “Long-Term Incentives.”
+(5) 
+These grants vest ratably over three years. 
+(6) 
+Grant date fair value for restricted stock is computed by multiplying the number of shares awarded by the closing price of the Company’s common
+stock, as reported on the NASDAQ Global Select Market on the date of grant. The closing price was $37.18 on January 16, 2013, the trade date immediately preceding the grant date. 
+(7) 
+Grant date fair value is computed by multiplying the number of performance shares awarded by the grant date fair value as computed utilizing the
+Monte Carlo pricing model, which was $49.04 per share. 
+(8) 
+Grant date fair value for SARs is computed by multiplying the number of SARs awarded by the grant date fair value as computed utilizing the
+Black-Scholes pricing model, which was $21.96 per SAR. 
+43 
+Table of Contents 
+ADDITIONAL DISCUSSION OF TABLES RELATED TO SUMMARY COMPENSATION
+AND 2013 GRANTS OF PLAN-BASED AWARDS 
+The following provides additional disclosure about the Company’s long-term incentive awards: 
+Terms of Restricted Stock and SAR Grants 
+Restricted Stock 
+Restricted stock awards to Named Executive Officers vest ratably over three years except for the following: 
+• 
+Mr. Shellum’s 2011 award includes a special award of 7,000 shares that vests ratably over five years; and 
+• 
+Unvested awards are forfeited by the executive if the executive voluntarily terminates or is terminated for cause prior to the vesting date.
+SARs 
+• 
+SARs are awarded at the NASDAQ closing price of Company stock on the date of the grant and vest ratably over three years;
+• 
+Awards expire no later than ten years after grant date; and 
+• 
+All unvested awards are forfeited by the executive if the executive voluntarily terminates or is terminated for cause prior to the vesting date.
+Terms of the Performance Share Programs 
+2013 Program 
+For a discussion of the provisions of the 2013 Performance Share Program, see “Long-Term Incentives—2013 Performance Shares Program.” 
+2012 Program 
+The 2012 Performance Share Program covers the three-year period January 1, 2012 through December 31, 2014. The provisions of the 2012 Program are identical to those of the 2013 Program except
+for the peer group used to measure relative TSR over the performance period. The 15 companies used in the 2012 program as peers were: Berry Petroleum Company, Bill Barrett Corporation, Carrizo Oil & Gas Inc., Comstock Resources, EXCO
+Resources, Inc., Forest Oil Corporation, Goodrich Petroleum Corporation, Penn Virginia Corporation, PetroQuest Energy Inc., Quicksilver Resources Inc., Resolute Energy Corporation, Rosetta Resources, Inc., Stone Energy Corporation, Swift Energy
+Company and Venoco, Inc. 
+2011 Program 
+The 2011 Performance Share Program covered the three-year period January 1, 2011 through December 31, 2013. The
+provisions of the 2011 Program are identical to those of the 2013 Program except for the peer group used to measure relative TSR. There were originally 15 peer companies, of which two were no longer traded at the end of the performance period. Based
+on the Company’s excellent stock price performance over this three-year period, the Company ranked third among the peers, resulting in 156% of the target award payout to each Named Executive Officer. The chart below shows the peer companies,
+their TSR performance and relative rankings at the end of the period. 
+44 
+Table of Contents 
+Ranking 
+Company* 
+3-Year TSR 
+1 
+Cabot Oil & Gas Corporation 
+303.2 
+% 
+2 
+SM Energy Company 
+50.3 
+% 
+3 
+PDC Energy, Inc. 
+37.2 
+% 
+4 
+Carrizo Oil & Gas Inc. 
+33.3 
+% 
+5 
+Rosetta Resources, Inc. 
+33.0 
+% 
+6 
+Goodrich Petroleum Corporation 
+2.5 
+% 
+7 
+Comstock Resources Inc. 
+(28.7 
+)% 
+8 
+Bill Barrett Corporation 
+(32.5 
+)% 
+9 
+Penn Virginia Corporation 
+(41.1 
+)% 
+10 
+PetroQuest Energy Inc. 
+(46.7 
+)% 
+* 
+Venoco, Inc. went private in October 2012 and Berry Petroleum Company was acquired by Linn Energy in December 2013. 
+2009 Program 
+In 2009, the Committee awarded performance shares that vest upon achievement of specific stock price targets over a three- to five-year period. The initial tranche could be earned as of the end of year
+three, with additional hurdle targets for the end of years four and five. Any shares not vested remain eligible to vest in future years; however, any unvested shares at the end of the five-year performance period would be forfeited. The Committee
+used three measurement dates to take into account the volatility of energy prices and their impact on the stock price of the Company. The following chart shows the various stock price hurdle rates and payout levels by year for the 2009 program.
+Based on the Company’s stock price performance, 75% of the shares awarded vested at the end of 2011 and the remaining 25% of the shares awarded vested as of December 31, 2013. 
+YEAR OF 
+AWARD 
+APPROXIMATE 
+GROWTH 
+TARGET * 
+TARGET
+PRICE * 
+VESTED 
+TARGET 
+PERCENT 
+ATTAINED
+2011 
+2012 
+2013 
+2009 
+12 
+% 
+30.50 
+— 
+— 
+50 
+% 
+16 
+% 
+34.00 
+— 
+— 
+75 
+% 
+20 
+% 
+37.50 
+45.00 
+54.00 
+100 
+% 
+* 
+Growth target percentages and target prices are based on the average closing price of the Company’s common stock during the preceding December
+for each year. As of December 31, 2013, the average closing price in December was $55.35, exceeding the $54.00 target price above for such year, causing the 25% remaining unvested performance shares to vest in full.
+Effect of Termination and Change in Control on Long-Term Incentive Payments 
+For a description of the impact on stock options/SARs, performance shares and restricted stock under various termination
+scenarios or upon a change in control of the Company, see “Potential Payments Upon Termination or a Change in Control—Impact on Long-Term Incentive Plans.” 
+45 
+Table of Contents 
+OUTSTANDING EQUITY AWARDS AT 2013 FISCAL YEAR-END
+Options/SARs Awards 
+Stock Awards 
+Number of Securities 
+Underlying Unexercised 
+Options/SARs Held at 
+December 31, 2013 
+Option/ 
+SAR 
+Exercise 
+Price
+($) 
+Option/ 
+SAR 
+Expiration 
+Date
+Number of 
+Shares of 
+Stock 
+That Have 
+Not 
+Vested (3) 
+(#) 
+Market 
+Value of 
+Shares of 
+Stock 
+That 
+Have 
+Not 
+Vested (4) 
+($) 
+Equity 
+Incentive 
+Plan Awards: 
+Number of 
+Unearned 
+Shares That 
+Have
+Not 
+Vested (5) 
+(#) 
+Equity 
+Incentive 
+Plan Awards: 
+Market 
+Value 
+of Unearned 
+Shares That 
+Have
+Not 
+Vested (4) 
+($) 
+Name 
+Exercisable (1) 
+(#) 
+Unexercisable (2) 
+(#) 
+James M. Trimble 
+10,986 
+21,973 
+30.19 
+1/16/2022 
+94,336 
+5,020,562 
+34,605 
+1,841,678 
+— 
+41,646 
+37.18 
+1/16/2023 
+— 
+— 
+— 
+— 
+Gysle R. Shellum 
+— 
+1,702 
+43.95 
+3/12/2021 
+28,699 
+1,527,361 
+10,388 
+552,849 
+— 
+6,511 
+30.19 
+1/16/2022 
+— 
+— 
+— 
+— 
+— 
+12,620 
+37.18 
+1/16/2023 
+— 
+— 
+— 
+— 
+Barton R. Brookman 
+8,295 
+— 
+24.44 
+4/19/2020 
+24,499 
+1,303,837 
+10,388 
+552,849 
+3,402 
+1,702 
+43.95 
+3/12/2021 
+— 
+— 
+— 
+— 
+3,255 
+6,511 
+30.19 
+1/16/2022 
+— 
+— 
+— 
+— 
+— 
+12,620 
+37.18 
+1/16/2023 
+— 
+— 
+— 
+— 
+Lance A. Lauck 
+7,319 
+— 
+24.44 
+4/19/2020 
+19,731 
+1,050,084 
+8,365 
+445,185 
+2,784 
+1,392 
+43.95 
+3/12/2021 
+— 
+— 
+— 
+— 
+2,645 
+5,290 
+30.19 
+1/16/2022 
+— 
+— 
+— 
+— 
+— 
+10,096 
+37.18 
+1/16/2023 
+— 
+— 
+— 
+— 
+Daniel W. Amidon 
+7,807 
+— 
+24.44 
+4/19/2020 
+19,731 
+1,050,084 
+8,365 
+445,185 
+2,784 
+1,392 
+43.95 
+3/12/2021 
+— 
+— 
+— 
+— 
+2,645 
+5,290 
+30.19 
+1/16/2022 
+— 
+— 
+— 
+— 
+— 
+10,096 
+37.18 
+1/16/2023 
+— 
+— 
+— 
+— 
+(1) 
+Stock options/SARs exercisable as of December 31, 2013. 
+(2) 
+SARs granted in 2011, 2012 and 2013 vest ratably over three years on each anniversary of the date of grant. The exercise price related to the SARs
+does not represent capital payable to the Company, but rather represents the base from which the stock appreciation value will be determined on the date of exercise. 
+(3) 
+The restricted stock in this column vests in accordance as follows: 
+Shares Vesting Per Year 
+2014 
+2015 
+2016 
+Total 
+James M. Trimble 
+48,641 
+29,267 
+16,428 
+94,336 
+Gysle R. Shellum 
+12,137 
+10,183 
+6,379 
+28,699 
+Barton R. Brookman 
+10,737 
+8,783 
+4,979 
+24,499 
+Lance A. Lauck 
+8,674 
+7,074 
+3,983 
+19,731 
+Daniel W. Amidon 
+8,674 
+7,074 
+3,983 
+19,731 
+(4) 
+The market value of these shares is based on the closing price of the Company’s common stock of $53.22, as reported on NASDAQ Global Select
+Market on December 31, 2013. 
+(5) 
+Performance shares granted in 2012 and 2013 to be issued contingent upon the achievement of certain specified stock performance goals as described
+in “Additional Discussion of Tables Relating to Summary Compensation and 2013 Grants of Plan-Based Awards,” at target levels. 
+2013 OPTION EXERCISES AND STOCK VESTED 
+Option Awards 
+Stock Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise 
+(#) 
+Value 
+Realized 
+on 
+Exercise 
+($) 
+Number of 
+Shares Acquired 
+on Vesting (1) 
+(#) 
+Value 
+Realized 
+on 
+Vesting (2) 
+($) 
+James M. Trimble 
+— 
+— 
+32,622 
+1,518,907 
+Gysle R. Shellum 
+15,147 
+425,213 
+14,208 
+629,382 
+Barton R. Brookman 
+— 
+— 
+17,415 
+765,409 
+Lance A. Lauck 
+— 
+— 
+14,846 
+702,813 
+Daniel W. Amidon 
+— 
+— 
+15,332 
+671,584 
+46 
+Table of Contents 
+(1) 
+Number of shares includes restricted stock and performance shares vesting in 2013 as described previously and reflected in the chart below:
+Restricted 
+Performance Shares 
+Name 
+2009 Program 
+2011 Program 
+Total 
+James M. Trimble 
+32,622 
+— 
+— 
+32,622 
+Gysle R. Shellum 
+12,019 
+— 
+2,189 
+14,208 
+Barton R. Brookman 
+14,076 
+1,150 
+2,189 
+17,415 
+Lance A. Lauck 
+13,055 
+— 
+1,791 
+14,846 
+Daniel W. Amidon 
+12,496 
+1,045 
+1,791 
+15,332 
+(2) 
+Value of the restricted shares and performance shares that vested in 2013 is determined by multiplying the number of shares vesting by the market
+value of the shares on the vesting date. Performance shares were issued on January 16, 2014 at a price of $49.57 per share. 
+POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 
+In 2012, the Company adopted the Severance Plan, which covers the CEO and any future senior executive officers. The Severance Plan was adopted to replace Mr. Trimble’s employment agreement,
+which expired in June 2013, and to provide severance benefits to any future senior executives of the Company. The Company grandfathered the employment agreements in effect with the other current Named Executive Officers. 
+The primary purpose of the Severance Plan and similar provisions of the employment agreements is to provide severance
+benefits in the event of the termination of the Named Executive Officer by the Company without “just cause” or termination by the Named Executive Officer for “good reason,” either prior to or following a change in control of the
+Company. Upon a change in control, the Severance Plan and individual employment agreements provide benefits only in the event that an executive is terminated by the acquiring company “without cause” or by the executive for “good
+reason” (i.e., they are “double-trigger” in nature). 
+Under the terms of the Severance Plan, in
+the event of termination by the Company without “just cause” or termination by the executive for “good reason,” any Tier One executive (currently the CEO is the only Tier One executive) receives two times the sum of his or her
+base salary and target bonus for the year and Tier Two executives (any remaining covered executives) would receive one and one-half times the sum of his or her base salary and target bonus for the year. In the event of termination related to a
+change in control of the Company, a Tier One Executive (the CEO) would receive three times the sum of his or her base salary and target bonus for the year and each Tier Two executive would receive two and one-half times the sum of his or her base
+salary and target bonus for the year. In addition, if termination is due to a change in control of the Company, the executive would receive a pro-rata bonus at the target amount for the year at the time of termination. The Severance Plan provides a
+benefit “offset” so that cash benefits paid upon severance would be reduced by any other severance benefits that the executive is entitled to receive under a Company (or successor company) plan. Currently, the Committee has elected to
+cover only Mr. Trimble under the Severance Plan and to maintain the grandfathered employment agreements for the other Named Executive Officers. The following table summarizes the cash payout under certain termination scenarios for each Named
+Executive Officer: 
+TERMINATION WITHOUT CAUSE 
+OR FOR GOOD
+REASON 
+TERMINATION DUE TO 
+CHANGE IN CONTROL 
+CONTROLLING PLAN 
+OR
+AGREEMENT 
+James M. Trimble 
+2x base plus target bonus 
+3x base plus target bonus plus pro-rata bonus for the year of termination 
+Severance Plan 
+Gysle R. Shellum 
+2x base plus bonus* 
+3x base plus bonus* 
+Employment Agreement 
+Barton R. Brookman 
+2x base plus bonus* 
+3x base plus bonus* 
+Employment Agreement 
+Lance A. Lauck 
+2x base plus bonus* 
+3x base plus bonus* 
+Employment Agreement 
+Daniel W. Amidon 
+3x base plus bonus* 
+3x base plus bonus* 
+Employment Agreement 
+* 
+Highest bonus of last two years 
+47 
+Table of Contents 
+The “Potential Payments Upon Termination or Change in Control”
+table outlines any additional benefits that may be paid in the event of any termination, including termination for cause, death or disability, under either the Severance Plan or the individual’s employment agreement. 
+As a condition of receiving severance benefits under the Severance Plan and under the terms of the grandfathered
+employment agreements, there is a non-disclosure covenant and the executive officer is prohibited for a period of one year following his termination from engaging in any competing business within any county or in any adjacent county in which the
+Company is doing business. In addition, the executive is prohibited from soliciting employees from the Company for up to two years (varies by individual agreement) following termination. To aid in the enforcement of these provisions, prior to a
+change in control of the Company, the Severance Plan pays the severance benefits over 12 months. 
+In addition,
+each grandfathered employment agreement contains a clawback provision requiring the executive to reimburse all or a portion of his annual bonus if the Company must restate all or a portion of its financial statements due to material noncompliance by
+the Company with any financial reporting requirement under securities laws. The reimbursements are equal to the difference between the bonus paid to the executive for the affected years and the bonus that would have been paid to the executive had
+the financial results been properly reported. These clawback provisions are in addition to any clawback provisions contained in statutes or regulations. The grandfathered employment agreements automatically extend for 12 months on December 31
+of each year prior to the last year of the employment agreement (or any extensions thereof) unless either party gives notice of non-renewal. However, each executive officer with an employment agreement serves at the discretion of the Board, as the
+agreements allow for termination at any time with 30 days’ written notice. 
+Impact of Termination and Change in Control on
+Long-Term Incentive Plans 
+Under the terms of the 2010 LTI Plan and related grant agreements and
+employment agreements, all unvested restricted stock, stock options and SARs vest upon death, disability or change in control. The following table outlines the effect on outstanding unvested LTI awards under various termination scenarios and upon a
+change in control of the Company based on the terms of the 2010 LTI Plan and related grant agreements and the executive employment agreements: 
+TERMINATION SCENARIO/ 
+CHANGE IN CONTROL 
+RESTRICTED 
+STOCK/SARs/ 
+OPTIONS 
+PERFORMANCE SHARES 
+Voluntary Termination 
+Forfeited 
+Forfeited 
+Termination for Cause 
+Forfeited 
+Forfeited 
+Termination by Company Without Cause or Executive for Good Reason Prior to Change in Control 
+Vests 
+Forfeited 
+Death 
+Vests 
+Earned pro-rata based on performance through either date of death or end of performance period. 
+Disability 
+Vests 
+Earned pro-rata based on performance at end of performance period. 
+Occurrence of a Change in Control 
+Vests 
+If less than 50% of the performance period has elapsed, earns 100% of performance shares. If 50% or more of the performance period has elapsed, earns greater of actual performance
+through change in control or 100% of performance shares. 
+48 
+Table of Contents 
+Change in Control Excise Tax Provision 
+The Company currently provides no income tax gross-up or excise tax gross-up pursuant to taxes that may be imposed on
+“excess parachute payments” within the meaning of Section 280G and Section 4999 of the Code. If, in connection with a change in control of the Company, any Named Executive Officer receives compensation that is contingent upon
+such change in control, that executive could, in some cases, be considered to have received “parachute payments” within the meaning of Section 280G and Section 4999 of the Code, and the executive could be subject to a 20% excise
+tax on parachute payments that exceed a certain amount (“excess parachute payments”). In such case, the Company would be denied a tax deduction for such excess parachute payments. The Severance Plan and the grandfathered employment
+agreements provide that if it is determined that any payment or distribution by the Company to or for the executive’s benefit would constitute an “excess parachute payment,” the Company will either (1) pay the total amount to the
+executive and he would be responsible for the excise tax; or (2) reduce the executive’s payments such that the executive receives no “excess parachute payments,” whichever amount would give the executive the greater benefit on a
+net, after-tax basis. 
+Termination Benefits Table 
+The table below and the discussion that follows show the maximum compensation payable to each Named Executive Officer upon
+death, permanent disability, change in control of the Company or other termination under the Severance Plan, each Named Executive Officer’s employment agreement and/or the equity compensation plans. The amounts shown assume that termination
+occurred on December 31, 2013, that the closing price per share on such date was $53.22, and, in the event of termination due to change in control, the executive’s benefit is not reduced as a result of Section 280G and
+Section 4999 of the Code (as described above). The actual amounts to be paid can only be determined at the time of such executive’s separation from the Company. 
+POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 
+By Company Without 
+Cause or By Executive
+for 
+Good Reason 
+Name/Element of Compensation 
+Voluntary 
+by 
+Executive 
+Prior to 
+Change in 
+Control 
+Following 
+Change in 
+Control 
+(1) 
+For 
+Cause 
+Death 
+Disability 
+James M. Trimble 
+Cash Compensation 
+Earned but unpaid compensation (2) 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+Severance / Salary Continuation (3) 
+— 
+2,720,000 
+4,760,000 
+— 
+680,000 
+510,000 
+Acceleration of unvested equity 
+Restricted Stock (4) 
+— 
+5,020,562 
+5,020,562 
+— 
+5,020,562 
+5,020,562 
+SARs (5) 
+— 
+1,174,040 
+1,174,040 
+— 
+1,174,040 
+1,174,040 
+Performance Shares (6) 
+— 
+— 
+2,382,393 
+— 
+1,401,354 
+1,401,354 
+Earned Profit Sharing / Deferred Compensation (7) 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+Health Benefit — Continuation (8) 
+— 
+29,028 
+29,028 
+— 
+— 
+— 
+Total 
+$ 
+8,288 
+$ 
+8,951,918 
+$ 
+13,374,311 
+$ 
+8,288 
+$ 
+8,284,244 
+$ 
+8,114,244 
+Gysle R. Shellum 
+Cash Compensation 
+Earned but unpaid compensation (2) 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+Severance / Salary Continuation (3) 
+— 
+1,310,000 
+1,965,000 
+262,500 
+175,000 
+262,500 
+Acceleration of unvested equity 
+Restricted Stock (4) 
+— 
+1,527,361 
+1,527,361 
+— 
+1,527,361 
+1,527,361 
+SARs (5) 
+— 
+368,151 
+368,151 
+— 
+368,151 
+368,151 
+Performance Shares (6) 
+— 
+— 
+713,067 
+— 
+418,729 
+418,729 
+Earned Profit Sharing / Deferred Compensation (7) 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+Health Benefit — Continuation (8) 
+— 
+29,028 
+29,028 
+— 
+— 
+— 
+Total 
+$ 
+8,288 
+$ 
+3,242,828 
+$ 
+4,610,895 
+$ 
+270,788 
+$ 
+2,497,529 
+$ 
+2,585,029 
+49 
+Table of Contents 
+By Company Without 
+Cause
+or By Executive for 
+Good Reason 
+Name/Element of Compensation 
+Voluntary 
+by 
+Executive 
+Prior to 
+Change in 
+Control 
+Following 
+Change in 
+Control 
+(1) 
+For 
+Cause 
+Death 
+Disability 
+Barton R. Brookman 
+Cash Compensation 
+Earned but unpaid compensation (2) 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+Severance / Salary Continuation (3) 
+— 
+1,366,600 
+2,049,900 
+308,000 
+189,500 
+284,250 
+Acceleration of unvested equity 
+Restricted Stock (4) 
+— 
+1,303,837 
+1,303,837 
+— 
+1,303,837 
+1,303,837 
+SARs (5) 
+— 
+368,151 
+368,151 
+— 
+368,151 
+368,151 
+Performance Shares (6) 
+— 
+— 
+713,067 
+— 
+418,729 
+418,729 
+Earned Profit Sharing / Deferred Compensation (7) 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+Health Benefit — Continuation (8) 
+— 
+29,028 
+29,028 
+— 
+— 
+— 
+Total 
+$ 
+8,288 
+$ 
+3,075,904 
+$ 
+4,472,271 
+$ 
+316,288 
+$ 
+2,288,505 
+$ 
+2,383,255 
+Lance A. Lauck 
+Cash Compensation 
+Earned but unpaid compensation (2) 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+Severance / Salary Continuation (3) 
+— 
+1,204,000 
+1,806,000 
+240,000 
+160,000 
+240,000 
+Acceleration of unvested equity 
+Restricted Stock (4) 
+— 
+1,050,084 
+1,050,084 
+— 
+1,050,084 
+1,050,084 
+SARs (5) 
+— 
+324,792 
+324,792 
+— 
+324,792 
+324,792 
+Performance Shares (6) 
+— 
+— 
+575,364 
+— 
+338,257 
+338,257 
+Earned Profit Sharing / Deferred Compensation (7) 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+Health Benefit — Continuation (8) 
+— 
+29,028 
+29,028 
+— 
+— 
+— 
+Total 
+$ 
+8,288 
+$ 
+2,616,192 
+$ 
+3,793,556 
+$ 
+248,288 
+$ 
+1,881,421 
+$ 
+1,961,421 
+Daniel W. Amidon 
+Cash Compensation 
+Earned but unpaid compensation (2) 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+Severance / Salary Continuation (3) 
+225,000 
+1,650,000 
+1,650,000 
+— 
+375,000 
+450,000 
+Acceleration of unvested equity 
+Restricted Stock (4) 
+— 
+1,050,084 
+1,050,084 
+— 
+1,050,084 
+1,050,084 
+SARs (5) 
+— 
+324,792 
+324,792 
+— 
+324,792 
+324,792 
+Performance Shares (6) 
+— 
+— 
+575,364 
+— 
+338,257 
+338,257 
+Earned Profit Sharing / Deferred Compensation (7) 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+8,288 
+Health Benefit — Continuation (8) 
+— 
+29,028 
+29,028 
+— 
+— 
+— 
+Total 
+$ 
+233,288 
+$ 
+3,062,192 
+$ 
+3,637,556 
+$ 
+8,288 
+$ 
+2,096,421 
+$ 
+2,171,421 
+(1) 
+A benefit is only payable if, within two years following a change in control, the executive is terminated by the Company or its successor
+“without cause” or the executive terminates for “good reason” (“double trigger”) as defined in either his employment agreement or the Severance Plan, whichever is applicable. The Company currently provides for no tax
+gross-ups with respect to “excess parachute payments” within the meaning of Section 280G and Section 4999 of the Code. 
+(2) 
+There are no amounts shown for “earned but unpaid compensation for 2013. However, the Committee in its sole discretion could award a bonus for
+2013 performance. This amount is not known on December 31 since it is typically not determined until the following February. The cash bonus amounts paid in 2014 for 2013 performance are reflected in the “Summary Compensation Table” as
+2013 compensation. 
+(3) 
+In determining severance amounts for each Named Executive Officer, the following factors were considered: 
+(a) 
+The amount of severance shown for Mr. Trimble upon change in control includes a $680,000 target bonus for 2013 in accordance with the Severance
+Plan since 2013 bonuses are not determined until February; 
+(b) 
+The amount of severance upon termination “By Company Without Cause or By Executive for Good Reason” for Messrs. Shellum, Brookman, Lauck
+and Amidon is determined using the 2012 bonus paid, pursuant to their respective employment agreements. (Mr. Amidon receives the greater of his 2012 bonus paid in 2013 or his 2013 bonus earned but not yet paid; however, as of December 31, this
+amount had not yet been determined); 
+50 
+Table of Contents 
+(c) 
+The amount of severance shown for Messrs. Shellum, Brookman and Lauck upon termination for “cause” and for Mr. Amidon upon voluntary
+termination is a pro-rata bonus for the year pursuant to their respective employment agreements. For purposes of this table, the pro-rata bonus was assumed to be the target bonus, since the 2013 bonus had not yet been determined. Upon termination,
+the Committee would determine bonuses based on the Company’s actual performance; 
+(d) 
+In determining Mr. Lauck’s severance amounts, any acquisition bonus amounts paid are not included in any of his severance calculations
+pursuant to the terms of his employment agreement; 
+(e) 
+Under the terms of their respective employment agreements, each executive would receive up to 13 weeks’ salary continuation in the event of
+short-term disability and a lump sum payment equal to six months’ base salary upon qualifying for long-term disability. Mr. Amidon would also receive a pro-rata bonus for the year, if he terminates after March 31 of the year, which is
+included in the severance amount shown. For purposes of this table, the bonus was assumed to be the target bonus amount for 2013, since the 2013 bonus had not yet been determined. The Committee would determine each executive’s bonus based upon
+the Company’s actual performance; and 
+(f) 
+In the event of death, Messrs. Shellum, Brookman, Lauck and Amidon would receive a lump sum cash payment equal to six months’ base salary
+pursuant to their respective employment agreements. Mr. Trimble would receive no death benefit pursuant to the Severance Plan. In addition, Messrs. Trimble and Amidon would be entitled to receive a pro-rata bonus for the year which is included
+in the severance shown. For purposes of this table, the bonus was assumed to be the target bonus since the 2013 bonus had not yet been determined. Upon death, the Committee would determine bonuses based on the Company’s actual performance.
+(4) 
+The 2010 LTI Plan or the specific award letter agreements and the grandfathered employment agreements provide for full accelerated vesting of all
+restricted stock upon a change in control of the Company, death or disability. In addition, all unvested shares of restricted stock would vest upon all termination events except voluntary termination and termination for “cause.” For the
+unvested shares of restricted stock subject to accelerated vesting, see “Outstanding Equity Awards at 2013 Fiscal Year-End.” 
+(5) 
+The 2010 LTI Plan or the specific award letter agreements and the grandfathered employment agreements provide for full accelerated vesting of all
+SARs upon a change in control of the Company, death or disability. In addition, all unvested SARs would vest under the employment agreements upon all termination events except voluntary termination and termination for “cause.” The value of
+the SARs shown is calculated using the closing price of the Company’s shares on December 31, 2013, less the exercise price of the SARs determined on the grant date. For the unvested SARs that would have accelerated vesting, see
+“Outstanding Equity Awards at 2013 Fiscal Year-End.” 
+(6) 
+Based on performance through December 31, 2013, the percentage of target earned for the 2012 performance shares is 169% and the percentage of
+target earned for the 2013 performance shares is 147%. The 2009 and 2011 performance shares were earned as of December 31, 2013 and are included in the “2013 Options Exercises and Shares Vested” table. Using these target earned
+percentages, the performance shares would vest as follows: 
+(a) 
+Performance shares would be forfeited except in the case of disability, death or a change in control of the Company; 
+(b) 
+In the case of disability, in accordance with the performance share agreements, one-third of the 2013 and two-thirds of the 2012 performance shares
+would be earned. Although payment would not occur until the end of the performance period, for purposes of this illustration, the price is assumed to be the price on December 31, 2013. The value shown is determined by using the target number of
+shares awarded times the percentage of target earned as of December 31, 2013 (as shown above) times the pro-rata amount earned for the performance period (based upon completed months of the performance period divided by total months of the
+performance period) times the stock price on December 31, 2013; 
+(c) 
+In the case of death, in accordance with the performance share agreements, one-third of the 2013 and two-thirds of the 2012 performance shares would
+be earned. Assuming death had occurred on December 31, 2013, which is during the first two years of the performance period, the amount earned would be based upon the performance results through December 31, 2013. The value shown is
+determined by using the target number of shares awarded times the percentage of target earned as of December 31, 2013 (as shown above) times the pro-rata amount earned for the performance period (based upon completed months of the performance
+period divided by total months of the performance period) times the stock price on December 31, 2013; and 
+(d) 
+In the event of a change in control of the Company, the value shown is determined by using the target number of shares awarded times the percentage
+of target earned as of December 31, 2013 (as shown above) times the stock price on December 31, 2013, except as follows per the terms of the 2010 LTI Plan agreements: 
+i. 
+The percentage of target earned for the 2013 performance shares is 100%, since 50% of the performance period had not expired; and
+ii. 
+The percentage of target earned for the 2012 performance shares is based upon the Company’s performance through December 31, 2013 (as
+shown above) since performance exceeded 100%. 
+(7) 
+Amount for each executive includes a profit sharing contribution of $8,288 for 2013 that was remitted to each executive’s 401(k) account in
+March 2014. 
+(8) 
+Amount represents the Company-subsidized COBRA premium cost to continue family health, vision and dental coverage for an 18-month period.
+51 
+Table of Contents 
+EQUITY COMPENSATION PLAN INFORMATION 
+The following table summarizes information related to our equity compensation plans under which our equity securities are authorized for
+issuance as of December 31, 2013: 
+Plan Category 
+Number of 
+Securities to
+be 
+Issued Upon Exercise of 
+Outstanding Options 
+and Rights (1) 
+(#) 
+Weighted-Average 
+Exercise Price
+of 
+Outstanding Options 
+and Rights 
+($) 
+Number of 
+Securities
+Remaining 
+Available for 
+Future Issuance 
+Under Equity 
+Compensation Plans (2) 
+(#) 
+Equity compensation plans approved by security holders 
+266,397 
+33.97 
+1,708,107 
+Equity compensation plans not approved by security holders 
+— 
+— 
+— 
+Total 
+266,397 
+33.97 
+1,708,107 
+(1) 
+Includes 72,111 shares of common stock to be issued based upon continuous employment and the maximum achievement of certain performance goals over a
+specified period of time as described in “Additional Discussion of Tables Related to Summary Compensation and 2013 Grants of Plan-Based Awards.” These shares have been excluded from the weighted average exercise price calculation.
+(2) 
+The number of securities remaining available for future issuances has been reduced by the number of securities to be issued upon exercise of
+outstanding options, SARs and restricted shares subject to time vesting and certain market-based performance goals over a specified period of time. 
+STOCKHOLDER NOMINATIONS AND PROPOSALS 
+Stockholder Proposals
+for 2015 Annual Meeting 
+Any proposal that a stockholder wishes to include in the Company’s proxy
+statement for the 2015 annual meeting of stockholders must be received by the Company at its principal office on or prior to December 22, 2014, and must be submitted in compliance with SEC Rule 14a-8. Proposals should be addressed to:
+Corporate Secretary 
+PDC Energy, Inc. 
+1775 Sherman Street, Suite 3000 
+Denver, Colorado, 80203 
+Advance Notice Procedures Under the Company’s By-Laws 
+Any proposal or nomination for Director that a stockholder wishes to propose for consideration at the 2015 annual meeting
+of stockholders, but does not seek to include in our proxy statement under applicable SEC rules, must be submitted in accordance with Section 2.14(b) of the Company’s By-Laws, which provides that no business may be brought before an annual
+meeting of stockholders unless it is specified in the notice of the meeting or is otherwise brought before the meeting by or at the direction of the Board or by a stockholder entitled to vote who has delivered advance notice to the Company. The
+notice must contain certain information specified in the By-Laws and be delivered to the Corporate Secretary at the address set forth above not less than 80 days nor more than 90 days prior to the first anniversary of the preceding year’s
+annual meeting. In the case of the 2015 annual meeting, the deadline for the notice would be March 17, 2015. However, the By-Laws also provide that if the meeting is held more than 30 days before the anniversary of the prior year’s annual
+meeting or 60 days after such anniversary, notice can generally be given not later than the tenth day following the day on which public announcement of the date of the annual meeting is first made by the Company. 
+52 
+Table of Contents 
+Pursuant to SEC Rule 14a-4(c)(1), if our Corporate Secretary receives any
+stockholder proposal at the address listed above after March 8, 2015 that is intended to be presented at the 2015 annual meeting of stockholders without inclusion in the proxy statement for the meeting, the proxies designated by the Board will
+have discretionary authority to vote on such proposal. 
+HOUSEHOLDING INFORMATION 
+The SEC permits companies and intermediaries (such as brokers and banks) to satisfy delivery requirements for proxy
+statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement and annual report to those stockholders. This process, which is commonly referred to as “householding,”
+is intended to reduce the volume of duplicate information stockholders receive and reduce expenses for companies. Both the Company and some of our intermediaries may be householding our proxy materials and annual report. Once you have received
+notice from your broker or another intermediary that they will be householding materials sent to your address, householding will continue until you are notified otherwise or until you revoke your consent. Should you wish to receive separate copies
+of our annual report and proxy statement in the future, we will promptly deliver a separate copy of each of these documents to you if you send a written request to us at our address appearing on the cover of this proxy statement, to the attention of
+the Corporate Secretary. If you hold your shares through an intermediary that is householding and you want to receive separate copies of our annual report and proxy statement in the future, you should contact your bank, broker or other nominee
+record holder. 
+By Order of the Board of Directors, 
+James M. Trimble 
+Chief Executive Officer and President 
+Dated: April 22, 2014 
+THE COMPANY WILL PROVIDE WITHOUT
+CHARGE TO ANY PERSON WHO IS A RECORD OR BENEFICIAL HOLDER OF COMMON STOCK OF THE COMPANY, ON WRITTEN REQUEST OF SUCH PERSON, A COPY OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013, INCLUDING FINANCIAL
+STATEMENTS AND SCHEDULES THERETO, WHICH THE COMPANY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. COPIES MAY BE OBTAINED BY WRITING TO INVESTOR RELATIONS, PDC ENERGY, INC., 1775 SHERMAN STREET, SUITE 3000, DENVER, COLORADO, 80203. 
+53 
+Table of Contents 
+APPENDIX A 
+THIRD FOURTH AMENDED AND RESTATED ARTICLES OF INCORPORATION 
+OF 
+PDC ENERGY,
+INC. 
+(FORMERLY PETROLEUM DEVELOPMENT CORPORATION) 
+Pursuant to the provisions of Section 78.403 of the Nevada Revised Statues, the undersigned Corporation adopts the
+following Amended and Restated Articles of Incorporation; 
+FIRST: 
+The Articles of Incorporation of the Corporation were filed with the Secretary of State of Nevada on the 25 th day of March, 1955, and were amended by Certificate of Amendment to
+Articles of Incorporation on the 21 st day of November 1969
+and by Certificate of Amendment of Articles of Incorporation on the 22 nd day of September 1997, and were amended and restated on the
+16 th day of September 1998, and were further
+amended and restated on the 17 th of July 2008 ,
+and the 26 th day of August, 2012. 
+SECOND: 
+The Articles of Incorporation, as amended and restated to the date of this certificate, are hereby amended and restated to read in their entirety as
+follows: 
+FIRST. 
+The name of the Corporation is PDC ENERGY, INC. 
+SECOND. 
+The Corporation will maintain a registered agent and registered office in the State of Nevada. 
+THIRD. 
+The number of shares of capital stock the Corporation is authorized to issue is 150 200 ,000,000 shares, consisting solely of:
+(a) 
+100 150 ,000,000 shares of common stock, par value $0.01 per share (“ Common Stock ”); and
+(b) 
+50,000,000 shares of preferred stock, par value $0.01 per share (“ Preferred Stock ”). 
+The Preferred Stock may be issued by the Corporation from time to time in one or more series and in such amounts as may be determined by the Board
+of Directors thereof. The designations, voting rights, amounts of preference upon distribution of assets, rates of dividends, premiums of redemption, conversion rights and other variations, if any, the qualifications, limitations or restrictions
+thereof, if any, of the Preferred Stock, and of each series thereof, shall be such as are fixed by the Board of Directors, the authority so to do being hereby expressly granted, and as are stated and expressed in a resolution or resolutions adopted
+by the Board of Directors providing for the issue of such series of Preferred Stock (hereinafter called the “ Directors’ Resolution ”). The Directors’ Resolution as to any series shall state (a) the number of shares
+constituting that series and the distinctive designation of that series, or any increase or decrease (but not below the number of shares thereof then outstanding) in such number; (b) the dividend rate on the shares of that series, whether such
+dividends, if any, shall be cumulative, and, if so, the date or dates from which dividends payable on such shares shall accumulate, and the relative rights of priority, if any, of payment of dividends on shares of that series; (c) whether that
+series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (d) whether that series shall have conversion privileges with respect to shares of any other class or classes of stock or
+of any other series of any class of stock, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate upon occurrence of such events as the Board of Directors shall determine; (e) whether the
+shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, 
+A-1
+Table of Contents 
+including their relative rights of priority, if any, of redemption, the date or dates upon or after which they shall be redeemable, provisions regarding
+redemption notices, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (f) whether that series shall have a sinking fund for the redemption or purchase of
+shares of that series, and, if so, the terms and amount of such sinking fund; (g) the rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution, or winding up of the Corporation, and the relative rights of
+priority, if any, of payment of shares of that series; (h) the conditions or restrictions upon the creation of indebtedness of the Corporation or upon the issuance of additional Preferred Stock or other capital stock ranking on a parity therewith,
+or prior thereto, with respect to dividends or distribution of assets upon liquidation; (i) the conditions or restrictions with respect to the issuance of, payment of dividends upon, or the making of other distributions to, or the acquisition or
+redemption of, shares ranking junior to the Preferred Stock or to any series thereof with respect to dividends or distribution of assets upon liquidation; and (j) any other designations, powers, preferences, and rights, including, without
+limitation, any qualifications, limitations, or restrictions thereof. 
+FOURTH. 
+The governing board of the Corporation shall be known as directors, and the number of directors shall not be less than three (3) nor more than nine
+(9). 
+FIFTH. 
+The purpose of the Corporation is to engage any lawful activity permitted under the Nevada Revised Statutes. 
+SIXTH. 
+The stock of the Corporation shall be fully paid and nonassessable. No stockholder of the Corporation shall by reason of his holding shares of any class have any
+preemptive or preferential right to purchase or subscribe to any shares of any class of the Corporation, now or hereafter to be authorized, or any shares or other securities convertible into or carrying options or warrants to purchase shares of any
+class, now or hereafter to be authorized, whether or not the issuance of any such shares or other securities would adversely affect the dividend or voting rights of such holders, other than such rights, if any, as the Board of Directors, in its
+discretion from time to time may grant, and at such price as the Board of Directors in its discretion may fix; and the Board of Directors may issue shares of any class of the Corporation or other securities convertible into or carrying options or
+warrants to purchase shares of any class without offering any such shares of any class, either in whole or in part, to the existing stockholders of any class. 
+SEVENTH. 
+The Corporation may from time to time determine whether and to what extent, and the times and places and upon what conditions, the books, records and assets of
+the Corporation, or any of them (other than the stock ledger), shall be open to inspection by the stockholders, and no stockholder shall have any right to inspect any account, book or document of the Corporation, except as conferred by law or by
+resolution of the Board of Directors or stockholders. 
+EIGHTH. 
+The Corporation shall have perpetual existence. 
+NINTH. 
+No director or officers of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary
+duty as a director or officer, except that this Article does not eliminate or limit the liability of a director or officer for: (i) an act or omission that involves intentional misconduct, fraud or a knowing violation of the law; (ii) an act or
+omission for which the liability of a director or officer is expressly provided for by an applicable statute, including the liability for payment of distributions in violation of Section 78.300 of the Nevada Revised Statutes; or (iii) any other act,
+omission, transaction or breach of duty as to which any applicable statute, rule or regulation provides that the liability 
+A-2
+Table of Contents 
+of directors or officers may not be eliminated or limited. If the Nevada Revised Statutes or other applicable laws (collectively, “Laws”) hereafter are
+amended to authorize-the further elimination of limitation of the liability of directors or officers, then the liability of a director or officer of the Corporation, in addition to the limitation on personal liability provided herein, shall be
+limited to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended Laws. No amendment to or repeal of this Article shall apply to or have any effect on the liability or alleged liability
+of any director or officer of the Corporation for or with respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal. 
+The number of shares of the Corporation outstanding and entitled to vote on an amendment and restatement
+of the Articles of Incorporation was 23,652,262 35,798,743 on April 10, 2012 14, 2014 , and the said changes, amendment and restatement have been consented and approved by a majority vote of the
+stockholders holding at lease a majority of each class of stock outstanding and entitled to vote thereon. 
+/s/ James M. Trimble 
+James M . Trimble, Chief Executive Officer 
+/s/ Daniel W. Amidon 
+Daniel W. Amidon, Secretary 
+A-3
+Table of Contents 
+Electronic Voting Instructions 
+Available 24 hours a day, 7 days a week! 
+Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your
+proxy. 
+VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. 
+Proxies submitted by the Internet or telephone must 
+be received by 1:00 am Eastern Time on June 5, 2014. 
+Vote by Internet 
+• Go to www.envisionreports.com/PDCE 
+• Or scan the QR code with your
+smartphone 
+• Follow the steps outlined
+on the secure website 
+Vote by telephone 
+• Call toll free 1-800-652-VOTE (8683)
+within the USA, US territories & Canada on a touch tone telephone 
+• Follow the instructions provided by the recorded message 
+Using a black ink pen, mark your votes with an X as shown in 
+this example. Please do not write outside the designated areas. 
+x 
+q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
+ENVELOPE. q 
+A 
+Proposals — The Board recommends a vote FOR all nominees and FOR Proposals 2, 3 and 4. 
+1. Election of Three Class I Directors: 
+For 
+Withhold 
+For 
+Withhold 
+For 
+Withhold 
++ 
+01 - Joseph E. Casabona 
+¨ 
+¨ 
+02 - David C. Parke 
+¨ 
+¨ 
+03 - Jeffrey C. Swoveland 
+¨ 
+¨ 
+For 
+Against 
+Abstain 
+2. To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for
+the Company for the year ending December 31, 2014. 
+¨ 
+¨ 
+¨ 
+3. To approve, on an advisory basis, the compensation of the Company’s Named Executive Officers. 
+¨ 
+¨ 
+¨ 
+4. To approve and adopt the Fourth Amended and Restated Articles of Incorporation to increase the number of authorized shares of
+common stock from 100,000,000 to 150,000,000. 
+¨ 
+¨ 
+¨ 
+B 
+Non-Voting Items 
+Change of Address — Please print new address below. 
+C 
+Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below 
+Please sign exactly as name(s) appears hereon. Joint owners should each sign personally. When signing as attorney, executor,
+administrator, trustee, guardian, or custodian, please give full title as such. If a corporation or partnership, please sign full corporate or partnership name, by an authorized officer or an authorized person, respectively. 
+Date (mm/dd/yyyy) — Please print date below. 
+Signature 1 — Please keep signature within the box. 
+Signature 2 (if needed) — Please keep signature within the box. 
+/ 
+/ 
+Table of Contents 
+q IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
+ENVELOPE. q 
+Proxy — PDC Energy, Inc. 
+1775 Sherman Street, Suite 3000 
+Denver, Colorado 80203 
+Proxy Solicited by Board of Directors for 2014 Annual Meeting of Stockholders 
+The undersigned appoints GYSLE R. SHELLUM and DANIEL W. AMIDON, and either of them, proxies, each with full power to act without the other and with full
+power of substitution for and in the name of the undersigned at the 2014 Annual Meeting of Stockholders of PDC Energy, Inc. (the “Company”) to be held on June 5, 2014, at 11:30 a.m. Central Time, and at any adjournment or postponement
+thereof, to vote all shares of the common stock of the Company held by the undersigned with respect to the matters specified herein and on such other matters as may properly come before the meeting. 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement for such meeting to be held on
+June 5, 2014, and a copy of the Company’s 2013 Annual Report. 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE
+REVOKED PRIOR TO ITS EXERCISE. THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED, IT WILL BE VOTED FOR EACH OF THE DIRECTORS SPECIFIED IN PROPOSAL 1
+AND FOR EACH OF PROPOSAL 2, PROPOSAL 3 AND PROPOSAL 4. 
+In their discretion, the appointed proxies are authorized to vote upon such other
+business as may properly come before the meeting and at any and all adjournments or postponements thereof. 
+IMPORTANT INFORMATION IS CONTAINED ON
+OTHER SIDE OF THIS CARD. PLEASE READ BOTH SIDES OF THIS CARD, SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
\ No newline at end of file
diff --git a/raw/proxies/0000077877/0001193125-14-151905/proxy_rpt.txt b/raw/proxies/0000077877/0001193125-14-151905/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e3403060b655118179e7b76971157049fd91bf64
--- /dev/null
+++ b/raw/proxies/0000077877/0001193125-14-151905/proxy_rpt.txt
@@ -0,0 +1,18 @@
+TRANSACTIONS WITH RELATED PERSONS 
+Related Transactions 
+From January 1, 2013 to the
+present, there was no transaction or series of transactions, nor is there any currently proposed transaction involving an amount exceeding $120,000 in which the Company is a participant and/or in which any Director, executive officer, known holder
+of more than five percent of the Company’s voting securities, or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest for which disclosure is required under SEC Rule S-K 404.
+Policies and Procedures With Respect to Transactions with Related Persons 
+The Board has adopted a written policy for the review, approval and ratification of transactions that involve related
+parties and potential conflicts of interest. The related party transaction policy applies to each Director and executive officer of the Company, any nominee for election as a Director, any security holder who is known to own more than five percent
+of the Company’s voting securities, any immediate family member of any of the foregoing persons and any corporation, firm or association in which one or more of the Company’s Directors are directors or officers, or have a substantial
+financial interest. 
+24 
+Table of Contents 
+Under our related-party transaction policy, a related person transaction is
+a transaction or arrangement involving a related person in which the Company is a participant or that would require disclosure in the Company’s filings with the SEC as a transaction with a related person. The related person must disclose to the
+Audit Committee any potential related person transactions and must disclose all material facts with respect to such transaction and relationship. All related person transactions will be reviewed by the Audit Committee. In determining whether to
+approve or ratify a transaction, the Audit Committee will consider the relevant facts and circumstances of the transaction, which may include factors such as the relationship of the related person with the Company, the materiality or significance of
+the transaction to the Company and the business purpose and reasonableness of the transaction, whether the transaction is comparable to a transaction that could be available to the Company on an arms-length basis and the impact of the transaction on
+the Company’s business and operations.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001032210-01-501126/proxy.txt b/raw/proxies/0000719733/0001032210-01-501126/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..2d67a7264092f22a1ac6244c951c9fec8c8b5031
--- /dev/null
+++ b/raw/proxies/0000719733/0001032210-01-501126/proxy.txt
@@ -0,0 +1,937 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+DEFINITIVE PROXY STATEMENT 
+TABLE OF CONTENTS LINK 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant
+[X] 
+Filed by a Party other than the Registrant [_] 
+Check the appropriate box: 
+[_] 
+Preliminary Proxy Statement 
+[_] 
+Confidential, for Use of the Commission Only (as Permitted by Rule 14a-6(e)(2)) 
+[X] 
+Definitive Proxy Statement 
+[_] 
+Definitive Additional Materials 
+[_] 
+Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+[X] 
+No fee required. 
+[_] 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+[_] 
+Fee paid previously with preliminary materials. 
+[_] 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the
+Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Notes: 
+September 25, 2001 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders
+and Proxy Statement relates to the Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”), to be held on Friday, October 26, 2001, at 10:00 a.m. Pacific Time at the principal executive offices of
+the Company, 4424 N. Sullivan Road, Spokane, Washington 99216. 
+Whether or not you will attend the Annual Meeting in person and regardless of the number of
+shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even if you have previously returned
+your proxy card. 
+Sincerely, 
+Jack W. Oehlke 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+¯ 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+September 25, 2001 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the
+“Company”) will be held on Friday, October 26, 2001, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road, Spokane, Washington 99216 (the “Annual Meeting”), for the following
+purposes: 
+1. 
+To elect six directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified; 
+2. 
+To ratify the appointment of Deloitte & Touche LLP as independent auditors for fiscal year 2002; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 6, 2001 are entitled to
+notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope
+in order to ensure that your shares will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you have previously returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane, Washington 
+September 25, 2001 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD PROMPTLY,
+WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. 
+¯ 
+First mailed to shareholders on or about September 25, 2001. 
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic Corporation, a Washington corporation (the “Company”), to the holders of
+outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of Directors of the Company from holders of such shares. The proxies are to be used at the Annual
+Meeting of Shareholders of the Company to be held on Friday, October 26, 2001 at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road, Spokane, Washington 99216, and any adjournments or postponements
+thereof (the “Annual Meeting”). The proxies appoint Jack W. Oehlke, Wendell J. Satre and Yacov A. Shamash, any of them and their substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy
+solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the Common Stock at the close of business on September 6, 2001 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 9,672,580 shares of Common
+Stock were issued and outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the
+instructions thereon. If no instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and FOR the ratification of the appointment of Deloitte & Touche
+LLP as the Company’s independent auditors for fiscal year 2002. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by
+delivering a completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such
+proxy. 
+Voting 
+Each share of Common
+Stock outstanding is entitled to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum
+exists at a meeting: (i) the six nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors
+and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other
+than a vote for a nominee will have the practical effect of voting against the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast. 
+¯ 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of
+Shareholders and until their respective successors have been elected and have qualified. The six nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a
+nominee or director, the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named
+without nomination of a substitute, or the size of the Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to
+serve as a nominee or as a director if elected. One current member of the Board of Directors, Clarence W. Spangle, has announced that he will not stand for re-election at the Annual Meeting. The Board has, therefore, in accordance with the By-Laws
+reduced the size of the Board from seven to six, effective at the time of the Annual Meeting. The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+Jack W. Oehlke , age 55, has been President and Chief Executive Officer of the Company since June 1997. From October 1995, he served as Chief
+Operating Officer. Previously, he served as Senior Vice President of Operations from January 1995 to October 1995 and Vice President of Manufacturing Operations of the Company from December 1993 to January 1995. Mr. Oehlke served as Director of
+Operations, Director of Quality and in various management positions within manufacturing, engineering and quality functions of the Microswitch Division of Honeywell, Inc. from 1968 to 1993. 
+Dale F. Pilz , age 75, has served as Chairman of the Board since January 2000 and has been a director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of
+Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE Sprint Communications from 1983 to 1985 and also served as Chief
+Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Wendell J. Satre , age 83, has been a director of the
+Company since 1988 and served as Chairman of the Board of Directors from July 1991 through August 1995. Mr. Satre also served as a director from 1983 through 1986 and served as President and CEO of the Company from August 1991 through February 1992.
+Mr. Satre is the retired Chairman of the Board and Chief Executive Officer of the Washington Water Power Company (now Avista Corp.), a public utility headquartered in Spokane, Washington. Mr. Satre also serves on the Boards of Directors of Output
+Technology Corporation and The Coeur d’Alenes Company. 
+Yacov A. Shamash , age 51, has been a director of the Company since 1989.
+He has been the Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of
+Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. 
+Patrick Sweeney , age 66, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as
+Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and also served as Managing Director of
+Ireland for Wang and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Asic Alliance, Info. Mosaic, Manufacturers’ Services Ltd. Advisory Board, Pentus, Photo Machining Inc.,
+Piercom, and Raidtec. 
+William E. Terry , age 68, has been a director of the Company since August 1992. Mr. Terry retired from
+Hewlett-Packard in November 1993 where he served in a number of executive positions during the prior 36 years. He is a member of the Advisory Committee of the Santa Clara University Engineering School and, 
+¯ 
+2 
+in 1983, was elected to the university’s Board of Regents. Mr. Terry also serves on the Board of
+Directors of Altera Corporation. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+The Board of
+Directors and Committees 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified. There are no family relationships
+among any of the directors or executive officers of the Company. 
+The Company’s Board of Directors met four times during fiscal 2001. During fiscal 2001, each director attended at least 75% of
+the total number of Board of Directors meetings and meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+The Audit
+Committee, which currently consists of Messrs. Spangle (Chairman), Sweeney and Terry met four times during fiscal 2001. The Audit Committee recommends to the Board of Directors the independent auditors to be selected to audit the financial
+statements of the Company for the fiscal year for which they are appointed, reviews the fees of the independent auditors and other terms of their engagement and monitors the adequacy of the audit effort and the Company’s financial and
+accounting organization, financial reporting and internal controls. 
+The Compensation and Administration Committee (the “Compensation
+Committee”), which currently consists of Messrs. Shamash (Chairman), and Satre, met three times during fiscal 2001. The Compensation Committee establishes and reviews annually the Company’s general compensation policies applicable to the
+Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers annually to the
+Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding
+changes to existing compensation plans. The Compensation Committee administers the Company’s stock option plans, including determining the individuals to receive options and the terms of such options. 
+The Executive Committee, which currently consists of Messrs. Satre (Chairman), Oehlke, Pilz and Terry met one time during fiscal 2001. The Executive Committee
+generally exercises the authority of the Board of Directors with respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Nominating Committee, which
+currently consists of Messrs. Satre (Chairman), Oehlke and Terry did not meet during fiscal 2001. The Nominating Committee develops Board of Directors membership criteria, conducts searches for and reviews potential director candidates and presents
+recommendations for director nominees to the Board of Directors. Although there are no formal procedures for shareholders to recommend nominees, the Nominating Committee will consider recommendations from shareholders, which should be addressed to
+Kathleen L. Nemeth, Secretary, at the Company’s address listed above. 
+Director Compensation 
+Each director, other than the Chairman of the
+Board, who is not an employee of the Company receives a quarterly retainer of $1,875, a fee of $1,000 for each Board meeting attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a fee of $500 for
+each committee meeting attended (committee members receive a committee attendance fee of $250 if the committee meeting is held the same day as a Board meeting), except that directors receive a fee of $1,000 for each Executive Committee meeting
+attended (which payment is in lieu of any payment for a Board meeting 
+¯ 
+3 
+attended on the same day). The Chairman of the Board
+receives a quarterly retainer of $2,500, plus an additional $500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of out-of-pocket expenses
+related to their service as directors. 
+Each director who is not, upon election to the Board of Directors, an employee of the Company participates in the Company’s Amended and Restated 1990 Stock
+Option Plan for Non-Employee Directors. Each non-employee director is granted, upon initial election, an option to purchase 10,000 shares of the Company’s Common Stock. An additional option to purchase 10,000 shares upon the director’s
+first re-election to the Board of Directors and an additional option to purchase 7,500 shares upon each reelection to the Board of Directors after the first reelection are also granted. The two 10,000 share option grants have a three year vesting
+period and the subsequent 7,500 share option grants have a two year vesting period. 
+EXECUTIVE OFFICERS 
+In addition to Mr. Oehlke, the following persons are the executive officers of the Company: 
+Craig D.
+Gates, age 42, has been Executive Vice President of Marketing, Engineering and Sales since July 1997. Previously he was Vice President and General Manager of New Business Development from October 1995 to July 1997. He joined the Company
+as Vice President of Engineering in October 1994. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois, Urbana. From 1982 he held various engineering and
+management positions within the Microswitch Division of Honeywell, Inc., in Freeport, Illinois and from 1991 to October 1994 he served as Director of Operations, Electronics for Microswitch. 
+Ronald F.
+Klawitter , age 49, has been Executive Vice President of Administration, CFO, and Treasurer since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary
+from November 1994 to October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. 
+Michael D. Chard , age 43, has been Vice President of Materials of the Company since July 2000. From February 1999 to July 2000, he held various management positions with the Company in planning,
+quality assurance, and materials. From January 1997 to January 1999, he was Vice President of Product Delivery at Wang Global and its predecessor Olivetti North America. From 1983 to 1996, he held various management positions in finance, marketing,
+and operations at ISC Systems, the predecessor to Olivetti North America. He holds a BA Degree in Business and Accounting from Washington State University and is a Certified Public Accountant. 
+Efren R.
+Perez , age 61, has served as Vice President of S.W. Operations since July 1997. Previously he was the Managing Director of SW Operations from July 1996 to July 1997 and Director of SW Operations from July 1995 to June 1996. Following the
+Company’s acquisition of the Honeywell, Inc. Keyboard Division, Mr. Perez served as Plant Manager in Juarez from July 1993 to July 1995. He served as Plant Manager in Juarez for the Keyboard Division of Honeywell, Inc. from February 1989 to
+July 1993. Mr. Perez is a graduate of the University of Mexico with a B.S. in Physics. 
+All executive officers hold office until their successors are elected and have qualified. 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial
+ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director 
+¯ 
+4 
+and nominee for director of the Company; (iii) each of the executive officers of the Company named in the Summary Compensation table; and (iv) all directors and executive
+officers of the Company as a group. 
+Name of 
+Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class (1) 
+Wellington Management Co LLP 
+75 State Street 
+Boston, MA 02109 
+954,400 
+(2),(3) 
+9.9 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+807,300 
+(4),(5) 
+8.3 
+% 
+Davidson Investment Advisors, Inc. 
+8 Third Street North 
+Great Falls, MT 59401 
+520,060 
+(6),(7) 
+5.4 
+% 
+Jack W. Oehlke 
+478,551 
+(8) 
+4.7 
+% 
+Dale F. Pilz 
+29,052 
+(9) 
+** 
+Wendell J. Satre 
+62,500 
+(10) 
+** 
+Yacov A. Shamash 
+27,000 
+(11) 
+** 
+Clarence W. Spangle 
+31,852 
+(12) 
+** 
+Patrick Sweeney 
+32,333 
+(13) 
+** 
+William E. Terry 
+31,602 
+(14) 
+** 
+Craig D. Gates 
+329,243 
+(15) 
+3.3 
+% 
+Ronald F. Klawitter 
+353,946 
+(16) 
+3.5 
+% 
+Michael D. Chard 
+32,815 
+(17) 
+** 
+Efren R. Perez 
+101,244 
+(18) 
+1.0 
+% 
+All executive officers and directors as a group (11 persons) 8-18, 19 
+1,530,229 
+(19) 
+14.0 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 9,672,580 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own as of the record date any
+shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such person or persons have the
+right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated 6/30/2001. 
+¯ 
+5 
+3. Wellington Management Co LLP is a registered investment advisor. 
+4. Based on Form 13F filed with the Securities and Exchange Commission, dated 6/30/2001. 
+5. Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA Investment Dimensions Group, Inc., a
+registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified employee benefit plans, for all of which
+DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. Based on
+Form 13G filed with the Securities and Exchange Commission, dated 7/26/01. 
+7. Davidson Investment Advisors, Inc. is a registered investment
+advisor. 
+8. Includes 422,000 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife.
+Also includes Common Stock allocated to Mr. Oehlke as a participant in the Company’s Variable Investment Plan (23,837 shares) as of June 30, 2001. 
+9. Includes 22,500 shares issuable upon exercise of director stock options. 
+10. Includes 22,500 shares issuable upon
+exercise of director stock options. 
+11. Includes 22,500 shares issuable upon exercise of
+director stock options. Does not include 1,100 shares held by Mr. Shamash’s daughter. 
+12. Includes 22,500 shares issuable upon exercise of director
+stock options. 
+13. Includes 3,333 shares issuable upon exercise of director stock options. 
+14. Includes 22,500 shares issuable upon exercise of director stock options. 
+15. Includes 313,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s Variable Investment Plan (7,452 shares) as of June 30,
+2001. 
+16. Includes 317,682 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a
+participant in the Company’s Variable Investment Plan (17,853 shares) as of June 30, 2001. 
+17. Represents 25,000 shares issuable upon exercise
+of employee stock options and Common Stock allocated to Mr. Chard as a participant in the Company’s Variable Investment Plan (7,815 shares) as of June 30, 2001. 
+18. Represents 100,084 shares issuable upon exercise of employee stock options and Common Stock allocated to Mr. Perez as a participant in the Company’s Variable Investment Plan (1,160 shares) as of June 30,
+2001. 
+19. Includes 1,286,932 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently
+exercisable or exercisable within 60 days of September 6, 2001. 
+¯ 
+6 
+EXECUTIVE COMPENSATION 
+Compensation Tables 
+Set forth below is information on the annual and long-term compensation
+for services rendered during fiscal years 2001, 2000 and 1999, by the Named Executive Officers which include (i) Mr. Oehlke, the Chief Executive Officer and President, and (ii) the four other persons who served as executive officers of the Company
+during fiscal 2001. For information regarding the Company’s current executive officers, see Executive Officers , page 4. 
+SUMMARY COMPENSATION TABLE 
+Long-Term Compensation 
+Annual Compensation 
+Awards 
+Payouts 
+Name and Principal Position 
+Fiscal Year 
+Salary ($) (1) 
+Bonus ($) (2) 
+Other Annual Compensation($) (3) 
+Restricted Stock Award(s) ($) 
+Securities Underlying Options (#) 
+Payouts ($) 
+All Other 
+Compen- 
+sation 
+($) (4) 
+Jack W. Oehlke 
+Chief Executive Officer & President 
+2001 
+326,250 
+-- 
+-- 
+-- 
+0 
+-- 
+4,663 
+2000 
+310,577 
+-- 
+-- 
+-- 
+30,000 
+-- 
+3,593 
+1999 
+298,846 
+147,173 
+-- 
+-- 
+50,000 
+-- 
+4,298 
+Craig D. Gates 
+Executive Vice President, Marketing, Engineering & Sales 
+2001 
+239,762 
+-- 
+-- 
+-- 
+0 
+-- 
+4,891 
+2000 
+226,462 
+-- 
+-- 
+-- 
+30,000 
+-- 
+2,701 
+1999 
+222,168 
+87,359 
+-- 
+-- 
+40,000 
+-- 
+4,716 
+Ronald F. Klawitter 
+Executive Vice President of Administration, CFO and Treasurer 
+2001 
+239,762 
+-- 
+-- 
+-- 
+0 
+-- 
+4,891 
+2000 
+226,462 
+-- 
+-- 
+-- 
+30,000 
+-- 
+2,786 
+1999 
+222,168 
+87,359 
+-- 
+-- 
+40,000 
+-- 
+4,506 
+Michael D. Chard 
+Vice President of Materials 
+2001 
+124,728 
+-- 
+-- 
+-- 
+0 
+-- 
+3,421 
+2000 
+-- 
+-- 
+-- 
+-- 
+-- 
+-- 
+-- 
+1999 
+-- 
+-- 
+-- 
+-- 
+-- 
+-- 
+-- 
+Efren R. Perez 
+Vice President of SW Operations 
+2001 
+167,871 
+-- 
+13,792 
+-- 
+0 
+-- 
+4,610 
+2000 
+160,160 
+-- 
+11,693 
+-- 
+30,000 
+-- 
+3,804 
+1999 
+142,793 
+49,126 
+13,329 
+-- 
+20,000 
+-- 
+3,570 
+(1) Includes amounts deferred under the 401(k) component of the Company’s Variable Investment Plan. 
+(2) Represents dollar value of cash bonuses earned by the Named Executive Officers during the fiscal year indicated. 
+(3) In accordance with
+the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits has been omitted in those instances where such perquisites and other personal benefits constituted less than the lesser of
+$60,000 or ten percent of the total of annual salary and bonus for the named executive officer for such year. 
+(4) Represents Company matching payments in 2001, 2000 and 1999 under
+the Company’s Variable Investment Plan. 
+¯ 
+7 
+OPTION GRANTS IN 2001 FISCAL YEAR 
+The following table sets forth information concerning individual grants of
+stock options made during fiscal 2001 to each of the individuals identified in the Summary Compensation Table. 
+NAME 
+Number of Securities Underlying Options Granted (#) (1) 
+% of Total Options Granted to Employees In Fiscal 2001 
+Exercise Price ($/Share) 
+Expiration Date 
+Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term (2) 
+5% ($) 
+10% ($) 
+Jack W. Oehlke 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Craig D. Gates 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Ronald F. Klawitter 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Michael D. Chard 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Efren R. Perez 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+(1) No stock option grants were made during fiscal 2001 to any of the individuals identified in the Summary Compensation Table. 
+(2) The rates of appreciation shown in the table are for illustrative purposes only pursuant to applicable Securities and Exchange Commission requirements. Actual values realized on stock options are
+dependent on actual future performance of the Company, among other factors. Accordingly the amounts shown may not necessarily be realized. 
+The following table provides information on the exercise of
+options to purchase Common Stock by the Named Executive Officers in fiscal 2001 and such officers’ unexercised options to purchase Common Stock at June 30, 2001. 
+Aggregated
+Option Exercises in Fiscal Year 2001 
+and Fiscal Year-End Option Values 
+Shares 
+Acquired 
+on 
+Exercise 
+Value 
+Realized 
+Number of Shares 
+Underlying Unexercised 
+Options at Fiscal 
+Year-End(#) 
+Value of Unexercised 
+In-the-Money Options 
+at Fiscal Year-End($)(1) 
+Name 
+(#) 
+($) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Jack W. Oehlke 
+0 
+N/A 
+422,000 
+20,000 
+N/A 
+N/A 
+Craig D. Gates 
+0 
+N/A 
+313,000 
+20,000 
+N/A 
+N/A 
+Ronald F. Klawitter 
+0 
+N/A 
+317,682 
+20,000 
+N/A 
+N/A 
+Michael D. Chard 
+0 
+N/A 
+25,000 
+20,000 
+N/A 
+N/A 
+Efren R. Perez 
+0 
+N/A 
+100,084 
+20,000 
+N/A 
+N/A 
+(1) This amount represents the
+aggregate of the number of in-the-money options multiplied by the difference between the closing price of the Common Stock on the Nasdaq National Market on June 30, 2001 and the exercise prices for the relevant options. 
+Employment Contracts and Termination and Change in Control Arrangements 
+Employment Contracts . The Company entered into employment contracts with
+Messrs. Oehlke, Gates, Klawitter, Chard and Perez at the time each employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard non-disclosure, confidentiality and covenant not
+to compete provisions. Each of the employment contracts provides that the Company may terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall
+continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The employment contracts 
+¯ 
+8 
+entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of
+the employee in such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The employment contracts of Messrs. Oehlke, Gates and
+Klawitter were amended in November 1999 to provide that upon termination of employment by the Company prior to July 30, 2002, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a
+period of two years after termination. 
+Stock Option Plans . The executive stock option plans and non-employee directors stock option plan provide that upon a change of control of
+the Company vesting of outstanding options will be accelerated. 
+Compensation Committee Interlocks and Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Satre. Mr. Satre served as President, CEO and Chairman of the Board of the Company from August 1991 through February
+1992. 
+COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 
+Overview. Key Tronic’s compensation philosophy
+established by the Compensation Committee (“Committee”) is that annual total cash compensation should vary with the performance of the Company and long-term incentives should be aligned with the interests of the Company’s
+shareholders. The Company’s compensation plan is designed to allow the Company to attract, motivate and retain highly qualified individuals and to be consistent with the short-term and long-term goals of the Company. Compensation of the
+Company’s executive officers including the Chief Executive Officer (“CEO”), except as otherwise noted in this report, has three primary elements: base salary, annual incentive bonus and annual stock option grants. Base salaries 
+are established following a review of competitive information related to comparable companies, in similar industries, nationally and in the Northwest. Annual incentive bonuses are tied to the profitability of the Company and the key
+employee’s contribution to the Company’s performance. Annual stock option incentive grants are based upon base salary and a stock performance goal established by the Committee. Annual stock option grants to executive officers are
+made under the Company’s employee stock option plans. 
+Base Salaries. The Company’s compensation philosophy emphasizes performance-based pay. The goal is to have base salary represent
+a target percentage of an executive officer’s total annual compensation. Prior to setting compensation levels for executive officers, including the CEO, the Committee reviews competitive information related to comparable companies, in similar
+industries, nationally and in the Northwest. These companies include some but not all of the companies appearing in the Nasdaq Computer Manufacturer Index in the performance graph on page 11. The Committee indexes base salary ranges to be at average
+competitive levels. During fiscal 2001, executive officer pay ranges, including the range for the CEO, were adjusted upward to be consistent with the Committee’s established index. Management recommendations (other than those of the subject
+executive officer) are considered by the Committee in establishing an individual executive officer’s recommended salary. The Committee also considers factors related to individual performance, individual responsibility, Company performance
+based on net earnings and external competitive factors. The Committee establishes each executive officer’s annual salary, including the CEO’s salary. 
+Annual Bonus. The Committee
+established a key employee incentive bonus plan for fiscal 2001. The plan was based upon Company profit goals. A minimum Company profit goal had to be achieved before any payment was to be made under the plan to key employees, including all
+executive officers. Bonus payments under the plan were to be based on three performance levels: threshold achievement, expected achievement, and over-achievement of Company profit goals. Over-achievement payments under the plan were intended to be
+comparable to industry averages for annual incentive bonus plans. Payments were to be based upon a percentage of the key employees fiscal 2001 base earnings. The payment percentage ranges were established in descending order for the CEO, all other
+officers and all other key employees. 
+¯ 
+9 
+The payment percentage range for the CEO ranged from 5% at threshold achievement up to 75% at over-achievement level. Threshold level performance was not achieved and therefore
+no incentive bonus for fiscal 2001 was earned by the CEO or any other officers or employees. 
+Annual Stock Option Awards. The Committee’s policies make long-term incentive
+compensation an important part of motivating and retaining key employees. Such long-term incentive compensation is consistent with the interests of the Company’s shareholders in that it ties executive compensation to the performance of the
+Company’s stock. The Committee believes that long–term incentive compensation can best be implemented through the granting of annual stock options. The Committee makes the determination to grant options to key employees based upon each key
+employee’s position in the Company, base salary and the recommendations of the CEO based on individual performance. The exercise price of the options is equal to the closing price of the Common Stock on the date of grant as quoted by the Nasdaq
+National Market, as reported in The Wall Street Journal . The vesting periods for options range from one to three years. The Committee granted no options to executive officers during fiscal 2001. 
+Compensation payments in excess of $1 million in any taxable year to any “covered employee” (defined as the CEO and the Company’s other four most highly compensated officers) is subject to a limitation on
+deductibility for the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended. Certain performance-based compensation is not subject to the limitation on deductibility. To the extent that there is no adverse effect on the
+Company’s performance-related compensation philosophy or on the Company’s ability to provide competitive compensation, it is the policy of the Committee and the Board of Directors to minimize executive compensation that is not deductible
+by the Company for tax purposes. 
+The Compensation Committee: Yacov A. Shamash (Chairman), Wendell J. Satre 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. All Audit Committee members are independent as defined in
+Rule 4200 of the NASDAQ Stock Market’s listing standards. The Audit Committee operates under a written charter adopted by the Board of Directors, a copy of which is included as Exhibit A to this proxy statement. 
+The Audit Committee has met and discussed with the Company’s management and Deloitte & Touche, LLP, the Company’s independent auditors, the Company’s financial statements contained in the Annual Report of
+Form 10K for the year ended June 30, 2001. 
+The Audit Committee has reviewed and discussed with Deloitte & Touche LLP the matters required to be discussed pursuant to Statement of Auditing
+Standards No. 61, “Communications with Audit Committees”. Deloitte & Touche has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from Deloitte & Touche required by Independence
+Standards Board Standard No. 1 “Independence Discussions with Audit Committees” and the Audit Committee discussed with Deloitte & Touch that firm’s independence. 
+Based upon the
+reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10K for the fiscal year ended June 30, 2001. 
+The Audit Committee: Clarence W. Spangle (Chairman), Patrick Sweeney, William E. Terry 
+Audit Fees. The aggregate fees billed
+by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively “Deloitte & Touche LLP”) for professional services for the audit of the Company’s annual financial
+statements for the fiscal year ended June 30, 2001 and for the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10Q for that fiscal year were approximately $161,000. 
+¯ 
+10 
+Financial Information Systems Design and Implementation Fees. No fees were billed by Deloitte & Touche LLP for professional services rendered for information
+technology services relating to financial information systems design and implementation for the fiscal year ended June 30, 2001. 
+All Other Fees. The aggregate fees billed by Deloitte &
+Touche LLP for services rendered to the Company for the fiscal year ended June 30, 2001 other than for services described above under “Audit Fees” were approximately $ 91,000. 
+The Audit
+Committee has considered whether the provision of non-audit services is compatible with maintaining the principal auditors’ independence. 
+SHAREHOLDER RETURN PERFORMANCE PRESENTATION 
+Set forth below is a line graph comparing the cumulative total shareholder return on the Company’s Common Stock with the
+cumulative total return of the Nasdaq Market Index and the Nasdaq Computer Manufacturer Index in fiscal 2001. 
+COMPARISON OF 5 YEAR CUMULATIVE TOTAL
+RETURN* 
+AMONG KEY TRONIC CORPORATION, THE NASDAQ STOCK MARKET 
+(U.S. & FOREIGN) INDEX AND THE NASDAQ COMPUTER MANUFACTURER INDEX 
+* 
+$100 INVESTED ON 6/30/96 IN STOCK OR INDEX-INCLUDING REINVESTMENT OF 
+DIVIDENDS. FISCAL YEAR ENDING JUNE 30. 
+(1) Assumes that the value of the investment in the Common Stock and each index was $100 invested on July 1, 1995 and that all dividends, if any, were reinvested. The Nasdaq (U.S. and Foreign)
+Market Index is composed of companies included within all Standard Industrial Classification (SIC) codes. The SIC code of all companies included in the Nasdaq Computer Manufacturer Index is 357. The Company will provide a list of companies included
+in the indexes to any shareholder upon written request to the Company’s Secretary. 
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 9. 
+¯ 
+11 
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+Deloitte & Touche LLP has served as the Company’s independent auditors since 1983 and has been appointed by the Board of
+Directors as the Company’s independent auditors for the fiscal year ending June 30, 2001. In the event that ratification of this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in
+person or by proxy, management will review its future selection of auditors. Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they
+are expected to be available to respond to appropriate questions. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF DELOITTE
+& TOUCHE LLP AS THE 
+COMPANY’S INDEPENDENT AUDITORS. 
+SHAREHOLDER PROPOSALS 
+To be considered for presentation to
+the Annual Meeting of Shareholders to be held in 2002, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road, Spokane, Washington 99216, no later than May 27, 2002. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of
+1934, as amended, requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership
+with the Securities and Exchange Commission (“SEC”) and Nasdaq. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its review of the copies of
+such forms received or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended June 30, 2001 all the Reporting Persons complied with all applicable
+filing requirements except Michael D. Chard, who filed one report late. 
+Solicitation Expenses . The expense of printing and mailing proxy material will be borne by the Company. In
+addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such
+solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding
+solicitation material to such beneficial owners. 
+Other Business . The Board of Directors knows of no other business that will be presented to the Annual Meeting. If any other business
+is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane, Washington 
+September 25, 2001 
+¯ 
+12 
+EXHIBIT A 
+AUDIT COMMITTEE CHARTER 
+PURPOSE 
+The purpose of the Audit Committee
+is to assist the Board in monitoring (1) the integrity of the financial statements of the Company, (2) the compliance by the Company with legal and regulatory requirements and (3) the independence and performance of the Company’s external
+auditors. 
+MEMBERSHIP 
+The Audit Committee shall consist of three or more Directors. The members of the Audit Committee shall meet the independence and
+experience requirements of the NASDAQ Stock Market, Inc. The Chairman and the members of the Audit Committee shall be appointed by the Board of Directors at the annual organizational meeting of the Board of Directors. Changes in Committee membership
+may be made at anytime during the year by majority vote of the Board. The Chairman of the Board, Chief Executive Officer and such other officers and Directors as the Chairman of the Committee may deem appropriate may attend committee meetings upon
+invitation by the Chairman of the Committee. 
+FUNCTIONS AND AUTHORITY 
+The Audit Committee shall: 
+1. Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. 
+2. Review the annual audited financial statements with management, including major issues regarding accounting and auditing principles and practices as well as the
+adequacy of internal controls that could significantly affect the Company’s financial statements. 
+3. Review an analysis prepared by
+management and the independent auditor of significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements. 
+4. Review with management and the independent auditor the Company’s quarterly financial statements prior to the filing of its Form 10-Q. Review may be by the Committee or the Committee
+Chairman. 
+5. Meet periodically with management to review the Company’s major financial risk exposures and the steps management has
+taken to monitor and control such exposures. 
+6. Review major changes to the Company’s auditing and accounting principles and
+practices as suggested by the independent auditor or management. 
+7. Recommend to the Board the appointment of the independent auditor,
+which firm is ultimately accountable to the Audit Committee and the Board. 
+8. Approve the fees to be paid to the independent
+auditor. 
+9. Receive periodic reports from the independent auditor regarding the auditor’s independence consistent with
+Independence Standards Board Standard 1, discuss such reports with the auditor, and if so determined by the Audit Committee, take or recommend that the full Board take appropriate action to oversee the independence of the auditor. 
+¯ 
+A-1 
+10. Meet with the independent auditor prior
+to the audit to review the planning and staffing of the audit. 
+11. Evaluate together with the Board the performance of the independent
+auditor and, if so determined by the Audit Committee, recommend that the Board replace the independent auditor. 
+12. Obtain from the
+independent auditor assurance that Section 10A of the Securities Exchange Act of 1934 has not been implicated. 
+13. Obtain reports from
+management and the independent auditor that the Company’s subsidiary/foreign affiliated entities are in conformity with applicable legal requirements. 
+14. 
+Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit. 
+15. Review with the independent auditor any problems or difficulties the auditor may have encountered and any management letter provided by the auditor and the Company’s response to that letter.
+16. Prepare the report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual
+proxy statement. 
+17. Advise the Board with respect to the Company’s policies and procedures regarding compliance with applicable
+laws and regulations and with the Company’s policies. 
+18. Meet at least annually with the chief financial officer and the
+independent auditor in separate executive sessions. 
+19. Have the authority to retain special legal, accounting or other consultants to
+advise the Committee. The Audit Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of or consultants to, the
+Committee. 
+20. Review the company’s risk management program to determine its adequacy. 
+While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are
+complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. Nor is it the duty of the Audit Committee to conduct investigations, to resolve
+disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations and the Company’s policies. 
+MEETINGS 
+The Audit Committee shall
+meet from time to time at the call of its Chairman. 
+QUORUM 
+The majority of the members of the committee shall constitute a quorum. The committee shall act only on the affirmative vote of at least
+two of the standing members. 
+ACCOUNTABILITY 
+The Committee shall report to the Board of Directors at
+the board’s next regular meeting any and all action it has taken since its previous report to the board. 
+¯ 
+A-2 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 26, 2001 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned
+would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Friday, October 26, 2001, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on
+other side.) 
+5 FOLD AND DETACH HERE 5 
+¯ 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark 
+your votes 
+as indicated 
+[X] 
+1. Election of Directors 
+FOR all 
+nominees 
+listed below 
+WITHHOLD AUTHOR- 
+ITY 
+to vote for all nominees 
+listed below 
+FOR, except vote withheld from the following nominees(s): 
+[_] 
+[_] 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+Nominees: 
+01 - Jack W. Oehlke, 02 - Dale F. Pilz, 
+03 - Wendell J. Satre, 04 - Yacov A. 
+Shamash, 05 - Patrick Sweeney and 
+06 - William E. Terry. 
+2. Ratification of the appointment of Deloitte & Touche LLP as the Company's independent auditors for fiscal year 2002. 
+FOR 
+[_] 
+AGAINST 
+[_] 
+ABSTAIN 
+[_] 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may
+lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before
+the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors' recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN
+PROMPTLY. 
+Mark [_] for address change: 
+Please sign exactly as your name appears herein. Joint owners should each 
+sign. When signing as attorney, executor, administrator, trustee or guardian, 
+please give full title as such. 
+Signature 
+Signature 
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+5 FOLD AND DETACH HERE 5 
+¯ 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 26, 2001 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which
+the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Friday, October 26, 2001, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+5 FOLD
+AND DETACH HERE 5 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane, WA 99216 
+As a participant in
+the Key Tronic 401(k) Retirement Savings Plan (the "Plan"), you have the right to direct United Missouri Bank ("UMB") (the "Plan Trustee"), to vote the shares of Common Stock of Key Tronic Corporation (the
+"Company") represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on October 26, 2001. 
+For your
+information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to Mellon Investor Services is enclosed for your use in returning your completed, signed, and
+dated proxy card to the Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or
+employees of the Company, except to the extent required by law. 
+If your completed proxy card is not received by October 16, 2001 the Administrative Committee for the Plan may direct the Plan Trustee to vote your shares. All
+unvoted shares will be voted in the same proportion as the voted shares received. 
+United Missouri Bank (UMB) 
+¯ 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark 
+your votes 
+as indicated 
+[X] 
+1. Election of Directors 
+FOR all 
+nominees 
+listed below 
+WITHHOLD AUTHOR- 
+ITY 
+to vote for all nominees 
+listed below 
+FOR, except vote withheld from the following nominees(s): 
+[_] 
+[_] 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+Nominees: 
+01 - Jack W. Oehlke, 02 - Dale F. Pilz, 
+03 - Wendell J. Satre, 04 - Yacov A. 
+Shamash, 05 - Patrick Sweeney and 
+06 - William E. Terry. 
+2. Ratification of the appointment of Deloitte & Touche LLP as the Company's independent auditors for fiscal year 2002. 
+FOR 
+[_] 
+AGAINST 
+[_] 
+ABSTAIN 
+[_] 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may
+lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before
+the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors' recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN
+PROMPTLY. 
+Mark [_] for address change: 
+Please sign exactly as your name appears herein. Joint owners should each 
+sign. When signing as attorney, executor, administrator, trustee or guardian, 
+please give full title as such. 
+Signature 
+Signature 
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+5 FOLD AND DETACH HERE 5 
+¯ 
+TABLE OF CONTENTS 
+Page 
+Schedule 14A 
+Letter to Shareholders 
+Notice of Annual Meeting of Shareholders 
+Introduction 
+1 
+Election of Directors 
+2 
+Executive Officers 
+4 
+Principal Shareholders and Security Ownership of Management 
+4 
+Executive Compensation 
+7 
+Audit Committee Report 
+10 
+Shareholder Return Performance Presentation 
+11 
+Ratification of Appointment of Auditors 
+12 
+Exhibit A - Audit Committee Charter 
+A-1 
+Proxy Cards
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001032210-01-501126/proxy_rpt.txt b/raw/proxies/0000719733/0001032210-01-501126/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..3ed62c4272f39c99e296bd5c5965f2d3853f53d9
--- /dev/null
+++ b/raw/proxies/0000719733/0001032210-01-501126/proxy_rpt.txt
@@ -0,0 +1,4 @@
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 9. 
+¯ 
+11
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001032210-02-001378/proxy.txt b/raw/proxies/0000719733/0001032210-02-001378/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..b647606b3fc78bba046d6db72807b44a87a06fe1
--- /dev/null
+++ b/raw/proxies/0000719733/0001032210-02-001378/proxy.txt
@@ -0,0 +1,875 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Prepared by R.R. Donnelley Financial -- Definitive Proxy Statement 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of 
+the Securities Exchange Act of
+1934 
+(Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ Preliminary Proxy Statement 
+¨ Confidential, for Use of the Commission Only 
+(as permitted by Rule
+14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to § 240.14a-11(c) or § 240.14a-12 
+KEY TRONIC CORPORTION 
+(Name of Registrant As Specified In Its Charter)
+(Name of Person(s) Filing Proxy Statement) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No Fee required 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 
+(1) Title of 
+each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated
+and state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Notes: 
+September 20, 2002 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”), to be held on Thursday, October
+24, 2002, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road, Spokane, Washington 99216. 
+Whether or not you will attend the Annual Meeting in person and regardless of the number of shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying
+postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even if you have previously returned your proxy card. 
+Sincerely, 
+By: 
+/s/ J ACK W. O EHLKE 
+Jack W. Oehlke 
+President and
+Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+September 20, 2002 
+To the Shareholders of KEY TRONIC
+CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the
+“Company”) will be held on Thursday, October 24, 2002, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road, Spokane, Washington 99216 (the “Annual Meeting”), for the following
+purposes: 
+1. To elect six directors of the Company to hold office until the next
+Annual Meeting of Shareholders and until their successors are elected and have qualified; 
+2. To ratify the appointment of Deloitte & Touche LLP as independent auditors for fiscal year 2003; and 
+3. To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 4, 2002 are entitled to notice of and to vote at the Annual Meeting and any
+adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares will be voted at
+the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you have previously returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+/s/ K ATHLEEN L.
+N EMETH 
+Kathleen L. Nemeth 
+Secretary 
+Spokane, Washington 
+September 20, 2002 
+YOUR
+VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD 
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. 
+First mailed to shareholders on or about September 20, 2002. 
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of
+Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company
+(“Common Stock”) in connection with the solicitation of proxies by the Board of Directors of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday,
+October 24, 2002 at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road, Spokane, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Jack
+W. Oehlke, Wendell J. Satre and Yacov A. Shamash, any of them and their substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the
+Common Stock at the close of business on September 4, 2002 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 9,672,580 shares of Common Stock were issued and outstanding. A proxy card
+for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on
+an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent auditors for fiscal
+year 2003. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any
+earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock outstanding is entitled
+to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at a meeting: (i) the six
+nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and (ii) matter 2 listed in the
+accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other than a vote for a nominee will
+have the practical effect of voting against the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast. 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors
+are to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have been elected and have qualified. The six nominees receiving the highest number of affirmative votes will be
+elected as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board of Directors or
+the proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no
+reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. The following information has been provided to the Company with respect to the nominees for election to the Board of
+Directors: 
+Jack W. Oehlke , age 56, has been President and Chief Executive Officer of the Company since
+June 1997. From October 1995, he served as Chief Operating Officer. Previously, he served as Senior Vice President of Operations from January 1995 to October 1995 and Vice President of Manufacturing Operations of the Company from December 1993 to
+January 1995. Mr. Oehlke served as Director of Operations, Director of Quality and in various management positions within manufacturing, engineering and quality functions of the Microswitch Division of Honeywell, Inc. from 1968 to 1993.
+Dale F. Pilz , age 76, has served as Chairman of the Board since January 2000 and has been a director of
+the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE
+Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Wendell J. Satre , age 84, has been a director of the Company since 1988 and served as Chairman of the Board of Directors from July 1991 through August 1995. Mr. Satre also served as a director
+from 1983 through 1986 and served as President and CEO of the Company from August 1991 through February 1992. Mr. Satre is the retired Chairman of the Board and Chief Executive Officer of the Washington Water Power Company (now Avista Corp.), a
+public utility headquartered in Spokane, Washington. Mr. Satre also serves on the Boards of Directors of Output Technology Corporation and The Coeur d’Alenes Company. 
+Yacov A. Shamash , age 52, has been a director of the Company since 1989. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp (AMAC). He
+has been the Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of
+Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. 
+Patrick Sweeney , age 67, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and
+formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang—USA from 1981 through 1986 and also served as
+Managing Director of Ireland for Wang and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Zaig Tech, Info. Mosaic, Photo Machining Inc., Piercom, Raidtec and Titan Transport. He is
+also a member of the Advisory Board of Manufacturers’ Services Ltd. 
+William E. Terry , age 69, has
+been a director of the Company since August 1992. Mr. Terry retired from Hewlett-Packard in November 1993 where he served in a number of executive positions during the prior 36 years. He is a Trustee of Santa Clara University and also serves on the
+Board of Directors of Altera Corporation. 
+2 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED
+ABOVE. 
+The Board of Directors and Committees 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified. There are no family relationships
+among any of the directors or executive officers of the Company. 
+The Company’s Board of Directors met five
+times during fiscal 2002. During fiscal 2002, each director attended at least 75% of the total number of Board of Directors meetings and meetings of committees of the Board of Directors on which the director served during the time he served on the
+Board or committee. 
+The Audit Committee, which currently consists of Messrs. Sweeney (Chairman), Pilz and Terry
+met four times during fiscal 2002. The Audit Committee recommends to the Board of Directors the independent auditors to be selected to audit the financial statements of the Company for the fiscal year for which they are appointed, reviews the fees
+of the independent auditors and other terms of their engagement and monitors the adequacy of the audit effort and the Company’s financial and accounting organization, financial reporting and internal controls. 
+The Compensation and Administration Committee (the “Compensation Committee”), which currently consists of Messrs. Shamash
+(Chairman), and Satre, met four times during fiscal 2002. The Compensation Committee establishes and reviews annually the Company’s general compensation policies applicable to the Company’s executive officers and other key employees,
+reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers annually to the Board a report disclosing compensation policies applicable to
+the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding changes to existing compensation plans. The Compensation Committee
+administers the Company’s stock option plans, including determining the individuals to receive options and the terms of such options. 
+The Executive Committee, which currently consists of Messrs. Satre (Chairman), Oehlke, Pilz and Terry did not meet during fiscal 2002. The Executive Committee generally exercises the authority of the Board of Directors with
+respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Nominating
+Committee, which currently consists of Messrs. Satre (Chairman), Oehlke and Terry did not meet during fiscal 2002. The Nominating Committee develops Board of Directors membership criteria, conducts searches for and reviews potential director
+candidates and presents recommendations for director nominees to the Board of Directors. Although there are no formal procedures for shareholders to recommend nominees, the Nominating Committee will consider recommendations from shareholders, which
+should be addressed to Kathleen L. Nemeth, Secretary, at the Company’s address listed above. 
+Director Compensation
+Each director, other than the Chairman of the Board, who is not an employee of the Company receives a
+quarterly retainer of $1,875, a fee of $1,000 for each Board meeting attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a fee of $500 for each committee meeting attended (committee members
+receive a committee attendance fee of $250 if the committee meeting is held the same day as a Board meeting), except that directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a
+Board meeting attended on the same day). The Chairman of the Board receives a quarterly retainer of $2,500, plus an additional $500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 
+3 
+for each committee meeting attended. Directors also receive payment of out-of-pocket expenses related to their service as directors.
+Each director who is not, upon election to the Board of Directors, an employee of the Company participates in the
+Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee Directors. Each non-employee director is granted, upon initial election, an option to purchase 10,000 shares of the Company’s Common Stock. An additional option to
+purchase 10,000 shares upon the director’s first re-election to the Board of Directors and an additional option to purchase 7,500 shares upon each re-election to the Board of Directors after the first re-election are also granted. The two
+10,000 share option grants have a three year vesting period and the subsequent 7,500 share option grants have a two year vesting period. 
+EXECUTIVE OFFICERS 
+In addition to Mr. Oehlke, the following persons are the executive
+officers of the Company: 
+Craig D. Gates, age 43, has been Executive Vice President and General Manager
+since August 2002. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business Development from October 1995 to July 1997. He joined the Company as
+Vice President of Engineering in October 1994. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois, Urbana. From 1982 he held various engineering and
+management positions within the Microswitch Division of Honeywell, Inc., in Freeport, Illinois and from 1991 to October 1994 he served as Director of Operations, Electronics for Microswitch. 
+Ronald F. Klawitter , age 50, has been Executive Vice President of Administration, CFO, and Treasurer since July 1997. Previously he
+was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr.
+Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a BA degree from Wittenberg University and is a Certified Public Accountant. 
+Michael D. Chard , age 44, has been Vice President of Materials of the Company since July 2000. From February 1999 to July 2000, he held various management positions
+with the Company in planning, quality assurance, and materials. From January 1997 to January 1999, he was Vice President of Product Delivery at Wang Global and its predecessor Olivetti North America. From 1983 to 1996, he held various management
+positions in finance, marketing, and operations at ISC Systems, the predecessor to Olivetti North America. He holds a BA degree in Business and Accounting from Washington State University and is a Certified Public Accountant. 
+Efren R. Perez , age 62, has served as Vice President of Southwest Operations since July 1997. Previously he was the
+Managing Director of Southwest Operations from July 1996 to July 1997 and Director of Southwest Operations from July 1995 to June 1996. Following the Company’s acquisition of the Honeywell, Inc. Keyboard Division, Mr. Perez served as Plant
+Manager in Juarez from July 1993 to July 1995. He served as Plant Manager in Juarez for the Keyboard Division of Honeywell, Inc. from February 1989 to July 1993. Mr. Perez is a graduate of the University of Mexico with a B.S. in Physics.
+All executive officers hold office until their successors are elected and have qualified. 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been
+furnished to the Company regarding beneficial ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director
+4 
+and nominee for director of the Company; (iii) each of the executive officers of the Company named in
+the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of 
+Beneficial Owner* 
+Number of Shares 
+Beneficially Owned(1) 
+Percent of Class(1) 
+Wellington Management Company LLP 
+75 State Street 
+Boston, MA 02109 
+957,400 
+(2),(3) 
+9.9 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+790,200 
+(4),(5) 
+8.2 
+% 
+Davidson Investment Advisors, Inc. 
+8 Third Street North 
+Great Falls, MT 59401 
+539,210 
+(6),(7) 
+5.6 
+% 
+Jack W. Oehlke 
+485,236 
+(8) 
+4.8 
+% 
+Dale F. Pilz 
+40,302 
+(9) 
+* 
+* 
+Wendell J. Satre 
+82,750 
+(10) 
+* 
+* 
+Yacov A. Shamash 
+36,250 
+(11) 
+* 
+* 
+Patrick Sweeney 
+38,999 
+(12) 
+* 
+* 
+William E. Terry 
+42,852 
+(13) 
+* 
+* 
+Craig D. Gates 
+336,850 
+(14) 
+3.4 
+% 
+Ronald F. Klawitter 
+358,956 
+(15) 
+3.6 
+% 
+Michael D. Chard 
+41,583 
+(16) 
+* 
+* 
+Efren R. Perez 
+124,109 
+(17) 
+1.3 
+% 
+All executive officers and directors as a group 
+(10 persons) 8-17, 18 
+1,587,887 
+(18) 
+14.4 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 9,672,580 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to
+beneficially own as of the record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any
+shares which such person or persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
+5 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2002. 
+3. 
+Wellington Management Company LLP is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2002. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held
+in portfolios of DFA Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment
+vehicles for qualified employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Based on Form 13G filed with the Securities and Exchange Commission, dated February 7, 2002. 
+7. 
+Davidson Investment Advisors, Inc. is a registered investment advisor. 
+8. 
+Includes 432,000 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock
+allocated to Mr. Oehlke as a participant in the Company’s Variable Investment Plan (20,522 shares) as of June 29, 2002. 
+9. 
+Includes 33,750 shares issuable upon exercise of director stock options. 
+10. 
+Includes 33,750 shares issuable upon exercise of director stock options. 
+11. 
+Includes 33,750 shares issuable upon exercise of director stock options. Does not include 1,100 shares held by Mr. Shamash’s daughter. 
+12. 
+Includes 9,999 shares issuable upon exercise of director stock options. 
+13. 
+Includes 33,750 shares issuable upon exercise of director stock options. 
+14. 
+Includes 323,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the
+Company’s Variable Investment Plan (5,059 shares) as of June 29, 2002. 
+15. 
+Includes 327,682 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the
+Company’s Variable Investment Plan (12,863 shares) as of June 29, 2002. 
+16. 
+Represents 35,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Chard as a participant in the
+Company’s Variable Investment Plan (6,583 shares) as of June 29, 2002. 
+17. 
+Represents 123,417 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Perez as a participant in the
+Company’s Variable Investment Plan (692 shares) as of June 29, 2002. 
+18. 
+Includes 1,386,098 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable
+within 60 days of September 4, 2002. 
+6 
+EXECUTIVE COMPENSATION 
+Compensation Tables 
+Set forth below is
+information on the annual and long-term compensation for services rendered during fiscal years 2002, 2001 and 2000 by the Named Executive Officers which include (i) Mr. Oehlke, the Chief Executive Officer and President, and (ii) the four other
+persons who served as executive officers of the Company during fiscal 2002. For information regarding the Company’s current executive officers, see Executive Officers , page 4. 
+SUMMARY COMPENSATION TABLE 
+Long-Term Compensation 
+Annual Compensation 
+Awards 
+Payouts 
+Name and Principal Position 
+Fiscal 
+Year 
+Salary 
+($)(1) 
+Bonus 
+($)(2) 
+Other Annual 
+Compensation 
+($)(3) 
+Restricted 
+Stock Award(s) 
+($) 
+Securities 
+Underlying 
+Options 
+(#) 
+Payouts 
+($) 
+All Other 
+Compensation 
+($)(4) 
+Jack W. Oehlke 
+Chief Executive 
+Officer & President 
+2002 
+2001 
+2000 
+300,625 
+326,250 
+310,577 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+30,000 
+— 
+— 
+— 
+6,431 
+4,663 
+3,593 
+Craig D. Gates 
+Executive Vice President and 
+General Manager 
+2002 
+2001 
+2000 
+220,150 
+239,762 
+226,462 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+30,000 
+— 
+— 
+— 
+6,741 
+4,891 
+2,701 
+Ronald F. Klawitter 
+Executive Vice President of 
+Administration, CFO and
+Treasurer 
+2002 
+2001 
+2000 
+220,150 
+239,762 
+226,462 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+30,000 
+— 
+— 
+— 
+6,718 
+4,891 
+2,786 
+Efren R. Perez 
+Vice President of SW 
+Operations 
+2002 
+2001 
+2000 
+155,400 
+167,871 
+160,160 
+— 
+— 
+— 
+12,096 
+13,792 
+11,693 
+— 
+— 
+— 
+40,000 
+0 
+30,000 
+— 
+— 
+— 
+6,216 
+4,610 
+3,804 
+Michael D. Chard 
+Vice President of Materials 
+2002 
+2001 
+2000 
+117,475 
+124,728 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+— 
+— 
+— 
+— 
+4,435 
+3,421 
+— 
+(1) 
+Includes amounts deferred under the 401(k) component of the Company’s Variable Investment Plan. 
+(2) 
+Represents dollar value of cash bonuses earned by the Named Executive Officers during the fiscal year indicated. 
+(3) 
+In accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits, securities or
+property, has been omitted in those instances where such perquisites and other personal benefits, securities or property, constituted less than the lesser of $50,000 or ten percent of the total of annual salary and bonus for the named executive
+officer for such year. 
+(4) 
+Represents Company matching payments in 2002, 2001 and 2000 under the Company’s Variable Investment Plan. 
+7 
+OPTION GRANTS IN 2002 FISCAL YEAR 
+The following table sets forth information concerning individual grants of stock options made during fiscal year 2002 to each of the
+individuals identified in the Summary Compensation Table. 
+Name 
+Number of Securities Underlying Options Granted (#)(1) 
+% of Total Options Granted to Employees In Fiscal 2002 
+Exercise Price ($/Share) 
+Expiration 
+Date 
+Potential Realizable Value at 
+Assumed Annual Rates of Stock Price Appreciation for 
+Option Term (2) 
+5% ($) 
+10% ($) 
+Jack W. Oehlke 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Craig D. Gates 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Ronald F. Klawitter 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Michael D. Chard 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Efren Perez 
+13,333 
+13,333 
+13,334 
+14.8 
+14.8 
+14.8 
+% 
+% 
+% 
+2.09 
+2.09 
+2.09 
+10/26/07 
+10/26/08 
+10/26/09 
+9,466 
+11,333 
+13,334 
+21,466 
+26,399 
+31,868 
+(1) 
+A stock option grant was made during fiscal year 2002 to one of the individuals identified in the Summary Compensation Table. 
+(2) 
+The rates of appreciation shown in the table are for illustrative purposes only pursuant to applicable Securities and Exchange Commission requirements. Actual
+values realized on stock options are dependent on actual future performance of the Company, among other factors. Accordingly the amounts shown may not necessarily be realized. 
+The following table provides information on the exercise of options to purchase Common Stock by the Named Executive Officers in fiscal year 2002 and such
+officers’ unexercised options to purchase Common Stock at June 29, 2002. 
+Aggregated Option Exercises in Fiscal
+Year 2002 and Fiscal Year-End Option Values 
+Shares Acquired on Exercise 
+Value Realized 
+Number of Shares 
+Underlying
+Unexercised 
+Options at Fiscal 
+Year-End(#) 
+Value of Unexercised 
+In-the-Money 
+Options at Fiscal 
+Year-End($)(1) 
+Name 
+(#) 
+($) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Jack W. Oehlke 
+0 
+N/A 
+432,000 
+10,000 
+0 
+0 
+Craig D. Gates 
+0 
+N/A 
+323,000 
+10,000 
+0 
+0 
+Ronald F. Klawitter 
+0 
+N/A 
+327,682 
+10,000 
+0 
+0 
+Michael D. Chard 
+0 
+N/A 
+30,000 
+10,000 
+0 
+0 
+Efren R. Perez 
+0 
+N/A 
+110,084 
+50,000 
+0 
+0 
+(1) 
+This amount represents the aggregate of the number of in-the-money options multiplied by the difference between the closing price of the Common Stock on the
+Nasdaq National Market on June 28, 2002 and the exercise prices for the relevant options. 
+Employment Contracts and
+Termination and Change in Control Arrangements 
+Employment Contracts. The
+Company entered into employment contracts with Messrs. Oehlke, Gates, Klawitter, Chard and Perez at the time each employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard
+non-disclosure, confidentiality and covenant not to compete provisions. Each of the employment contracts provides that the Company may terminate employment at any time. The employment contracts provide that upon 
+8 
+termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to
+termination for a period of one year after termination. The employment contracts entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and
+duties of the employee in such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The employment contracts of Messrs. Oehlke,
+Gates and Klawitter were amended in November 1999 to provide that upon termination of employment by the Company prior to July 30, 2002, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to
+termination for a period of two years after termination. In April 2002 the employment contracts of Messrs. Oehlke, Gates, Klawitter, Chard and Perez were amended to provide that upon termination of employment by the Company prior to July 30, 2003,
+other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. 
+Stock Option Plans. The executive stock option plans and non-employee directors stock option plan provide that upon a change of control of the
+Company vesting of outstanding options will be accelerated. 
+Compensation Committee Interlocks and Insider Participation in
+Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs.
+Shamash and Satre. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during fiscal year 2002. Mr. Satre served as President, CEO and Chairman of the Board of the Company from August 1991
+through February 1992. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the Compensation
+Committee of the Company. 
+COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 
+Overview. Key Tronic’s compensation philosophy established by the Compensation Committee
+(“Committee”) is that annual total cash compensation should vary with the performance of the Company and long-term incentives should be aligned with the interests of the Company’s shareholders. The Company’s compensation plan is
+designed to allow the Company to attract, motivate and retain highly qualified individuals and to be consistent with the short-term and long-term goals of the Company. Compensation of the Company’s executive officers including the Chief
+Executive Officer (“CEO”), except as otherwise noted in this report, has three primary elements: base salary, annual incentive bonus and annual stock option grants. Base salaries are established following a review of competitive
+information related to comparable companies, in similar industries, nationally and in the Northwest. Annual incentive bonuses are tied to the profitability of the Company and the key employee’s contribution to the Company’s
+performance. Annual stock option incentive grants are based upon base salary and the employee’s contribution to the Company’s performance. Annual stock option grants to executive officers are made under the Company’s employee
+stock option plans. 
+Base Salaries. The Company’s compensation philosophy
+emphasizes performance-based pay. The goal is to have base salary represent a target percentage of an executive officer’s total annual compensation. Prior to setting compensation levels for executive officers, including the CEO, the Committee
+reviews competitive information related to comparable companies, in similar industries, nationally and in the Northwest. These companies include some but not all of the companies appearing in the Nasdaq Computer Manufacturer Index in the performance
+graph on page 9. The Committee indexes base salary ranges to be at average competitive levels. During fiscal 2002, executive officer pay ranges, including the range for the CEO, were adjusted upward to be consistent with the Committee’s
+established index. Management recommendations (other than those of the subject executive officer) are considered by the Committee in establishing an individual executive officer’s recommended salary. The Committee also considers factors related
+to individual performance, individual responsibility, Company performance based on net earnings and external competitive factors. The Committee establishes each executive officer’s annual salary, including the CEO’s salary. 
+9 
+Annual Bonus. The Committee established a key
+employee incentive bonus plan for fiscal 2002. The plan was based upon Company profit goals. A minimum Company profit goal had to be achieved before any payment was to be made under the plan to key employees, including all executive officers. Bonus
+payments under the plan were to be based on three performance levels: threshold achievement, expected achievement, and over-achievement of Company profit goals. Over-achievement payments under the plan were intended to be comparable to industry
+averages for annual incentive bonus plans. Payments were to be based upon a percentage of the key employee’s fiscal 2002 base earnings. The payment percentage ranges were established in descending order for the CEO, all other officers and all
+other key employees. 
+The payment percentage range for the CEO ranged from 5% at threshold achievement up to 75%
+at over-achievement level. Threshold level performance was not achieved and therefore no incentive bonus for fiscal 2002 was earned by the CEO or any other officers or employees. 
+Annual Stock Option Awards. The Committee’s policies make long-term incentive compensation an important part of motivating and retaining
+key employees. Such long-term incentive compensation is consistent with the interests of the Company’s shareholders in that it ties executive compensation to the performance of the Company’s stock. The Committee believes that long-term
+incentive compensation can best be implemented through the granting of annual stock options. The Committee makes the determination to grant options to key employees based upon each key employee’s position in the Company, base salary and the
+recommendations of the CEO based on individual performance. The exercise price of the options is equal to the closing price of the Common Stock on the date of grant as quoted by the Nasdaq National Market, as reported in The Wall Street
+Journal . The vesting periods for options range from one to three years. The Committee granted an option to one executive officer during fiscal 2002. 
+Compensation payments in excess of $1 million in any taxable year to any “covered employee” (defined as the CEO and the Company’s other four most highly compensated officers) is subject
+to a limitation on deductibility for the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended. Certain performance-based compensation is not subject to the limitation on deductibility. To the extent that there is no adverse
+effect on the Company’s performance-related compensation philosophy or on the Company’s ability to provide competitive compensation, it is the policy of the Committee and the Board of Directors to minimize executive compensation that is
+not deductible by the Company for tax purposes. 
+The Compensation Committee: Yacov A. Shamash (Chairman), Wendell
+J. Satre 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. All Audit Committee members are independent as defined in Rule 4200(a)(15) of the
+National Association of Securities Dealers’ listing standards. The Audit Committee operates under a written charter adopted by the Board of Directors. 
+The Audit Committee has met and discussed with the Company’s management and Deloitte & Touche, LLP, the Company’s independent auditors, the Company’s financial statements contained
+in the Annual Report on Form 10K for the year ended June 29, 2002. 
+The Audit Committee has reviewed and discussed
+with Deloitte & Touche LLP the matters required to be discussed pursuant to Statement of Auditing Standards No. 61, “Communications with Audit Committees”. Deloitte & Touche has submitted to the Audit Committee and the Committee
+has reviewed the written disclosures and letter from Deloitte & Touche required by Independence Standards Board Standard No. 1 “Independence Discussions with Audit Committees” and the Audit Committee discussed with Deloitte & Touch
+that firm’s independence. 
+Based upon the reviews and discussions described above, the Audit Committee
+recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10K for the fiscal year ended June 29, 2002. 
+10 
+The Audit Committee: Patrick Sweeney (Chairman), Dale F. Pilz, William E. Terry
+Audit Fees. The aggregate fees billed by Deloitte & Touche LLP, the
+member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively “Deloitte & Touche LLP”) for professional services for the audit of the Company’s annual financial statements for the fiscal year ended June
+29, 2002 and for the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10Q for that fiscal year were approximately $191,000. 
+Financial Information Systems Design and Implementation Fees. No fees were billed by Deloitte & Touche LLP for professional services
+rendered for information technology services relating to financial information systems design and implementation for the fiscal year ended June 29, 2002. 
+All Other Fees. The aggregate fees billed by Deloitte & Touche LLP for services rendered to the Company for the fiscal year ended June 29, 2002 other than for
+services described above under “Audit Fees” were approximately $ 17,950. 
+The Audit Committee has
+considered whether the provision of non-audit services is compatible with maintaining the principal auditor’s independence. 
+SHAREHOLDER RETURN PERFORMANCE PRESENTATION 
+Set forth below is a line graph comparing the
+cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of the Nasdaq Market Index and the Nasdaq Computer Manufacturer Index in fiscal 2002. 
+COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* 
+AMONG KEY TRONIC CORPORATION, THE
+NASDAQ STOCK MARKET 
+(U.S. & FOREIGN) INDEX AND THE NASDAQ COMPUTER MANUFACTURER INDEX 
+(*) 
+Assumes that the value of the investment in the Common Stock and each index was $100 invested on June 28, 1997 and that all dividends, if any, were reinvested.
+The Nasdaq (U.S. and Foreign) Market Index is composed of companies included within all Standard Industrial Classification (SIC) codes. The SIC code of all companies included in the Nasdaq Computer Manufacturer Index is 357. The Company will provide
+a list of companies included in the indexes to any shareholder upon written request to the Company’s Secretary. 
+11 
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 9. 
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+Deloitte & Touche LLP has served as the
+Company’s independent auditors since 1983 and has been appointed by the Board of Directors as the Company’s independent auditors for the fiscal year ending June 29, 2002. In the event that ratification of this appointment of auditors is
+not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, management will review its future selection of auditors. Representatives of Deloitte & Touche LLP are expected to be present at the
+Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond to appropriate questions. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE
+APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE 
+COMPANY’S INDEPENDENT AUDITORS. 
+SHAREHOLDER PROPOSALS 
+To be
+considered for presentation to the Annual Meeting of Shareholders to be held in 2003, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road, Spokane, Washington 99216, no later than
+May 23, 2003. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
+Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange
+Commission (“SEC”) and Nasdaq. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its review of the copies of such forms received or written
+representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended June 29, 2002 all the Reporting Persons complied with all applicable filing requirements. 
+Solicitation Expenses . The expense of printing and mailing proxy material will be
+borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation
+will be paid for such solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses
+incurred in forwarding solicitation material to such beneficial owners. 
+Other
+Business . The Board of Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed
+form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors 
+/s/ K ATHLEEN L. N EMETH 
+Kathleen L Nemeth 
+Secretary 
+Spokane, Washington 
+September 20, 2002 
+12 
+Key Tronic Corporation 
+4424 N. Sullivan Road, Spokane, Washington 99216 
+PROXY SOLICITED BY BOARD OF DIRECTORS 
+FOR ANNUAL MEETING OCTOBER 24, 2002 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would
+possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 24, 2002, and any adjournment or postponement thereof. 
+(CONTINUED AND TO BE SIGNED AND DATED ON OTHER SIDE.) 
+< 
+< 
+FOLD AND DETACH HERE 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN
+FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark your votes as indicated 
+x 
+FOR all nominees listed below 
+WITHHOLD AUTHORITY to vote for all nominees listed below 
+1. Election of Directors: 
+FOR, except vote withheld from the following nominee(s): 
+¨ 
+¨ 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may
+designate). 
+Nominees: 01—Jack W. Oehlke, 02—Dale F.Pilz, 03—Wendell J. Satre, 
+04—Yacov A. Shamash, 05—Patrick Sweeney and
+06—William E. Terry 
+FOR 
+AGAINST 
+ABSTAIN 
+2. Ratification of the appointment of Deloitte & Touche LLP as the Company’s
+independent 
+auditors for fiscal year 2003. 
+¨ 
+¨ 
+¨ 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
+and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their
+discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark ¨ for address change: 
+Please sign exactly as your name
+appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+< 
+< 
+FOLD AND DETACH HERE 
+Key Tronic Corporation 
+4424 N. Sullivan Road, Spokane, Washington 99216 
+PROXY SOLICITED BY BOARD OF DIRECTORS 
+FOR ANNUAL MEETING OCTOBER 24, 2002 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would
+possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 24, 2002, and any adjournment or postponement thereof. 
+(CONTINUED AND TO BE SIGNED AND DATED ON OTHER SIDE.) 
+< 
+< 
+FOLD AND DETACH HERE 
+Key Tronic Corporation 
+4424 N. Sullivan Road, Spokane, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the
+“Plan”), you have the right to direct UMB Bank, n.a. (the “Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in
+the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on October 24, 2002. 
+For your
+information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to Mellon Investor Services is enclosed for your use in returning your completed, signed, and
+dated proxy card to the Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific
+information regarding your instructions to any person, including officers or employees of the Company, except to the extent required by law. 
+If
+your completed proxy card is not received by October 14, 2002 the Administrative Committee for the Plan may direct the Plan Trustee to vote your shares. All unvoted shares will be voted in the same proportion as the voted shares received.
+UMB Bank, n.a. 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN
+FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark your votes as indicated 
+x 
+FOR all nominees listed below 
+WITHHOLD AUTHORITY to vote for all nominees listed below 
+1. Election of Directors: 
+FOR, except vote withheld from the following nominee(s): 
+¨ 
+¨ 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may
+designate). 
+Nominees: 01—Jack W. Oehlke, 02—Dale F. Pilz, 03—Wendell J. Satre, 
+04—Yacov A. hamash, 05—Patrick Sweeney and
+06—William E. Terry 
+FOR 
+AGAINST 
+ABSTAIN 
+2. Ratification of the appointment of Deloitte & Touche LLP as the Company’s
+independent 
+auditors for fiscal year 2003. 
+¨ 
+¨ 
+¨ 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
+and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their
+discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark ¨ for address change: 
+Please sign exactly as your name
+appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+< 
+< 
+FOLD AND DETACH HERE
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001032210-02-001378/proxy_rpt.txt b/raw/proxies/0000719733/0001032210-02-001378/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..977501f7fa30f005e9142ae498f57f59c1e25df6
--- /dev/null
+++ b/raw/proxies/0000719733/0001032210-02-001378/proxy_rpt.txt
@@ -0,0 +1,2 @@
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 9.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-03-051451/proxy.txt b/raw/proxies/0000719733/0001193125-03-051451/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..df88e0eb652f648c008173857484c1c09f95f473
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-03-051451/proxy.txt
@@ -0,0 +1,957 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 19, 2003 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the
+Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”), to be held on Thursday, October 23, 2003, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan
+Road, Spokane, Washington 99216. 
+Whether or not you will attend the Annual
+Meeting in person and regardless of the number of shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and
+vote in person, even if you previously have returned your proxy card. 
+Sincerely, 
+Jack W. Oehlke 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF
+SHAREHOLDERS 
+September 19, 2003 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 23, 2003, at 10:00
+a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road, Spokane, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect six directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO Seidman, LLP as independent auditors for fiscal year 2004; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 4,
+2003 are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed
+postage-prepaid envelope in order to ensure that your shares will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane, Washington 
+September 19, 2003 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD 
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. 
+First mailed to shareholders on or about September 19, 2003. 
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of
+Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company
+(“Common Stock”) in connection with the solicitation of proxies by the Board of Directors of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday,
+October 23, 2003 at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road, Spokane, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Jack
+W. Oehlke, Wendell J. Satre and Yacov A. Shamash, any of them and their substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the Common Stock at the close of business on September 4, 2003 (the “Record Date”) are entitled to notice of and to vote at the Annual
+Meeting. As of the Record Date, 9,672,580 shares of Common Stock were issued and outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be
+voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and FOR the
+ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2004. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the
+Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has
+given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock outstanding is entitled to one vote on each matter presented for
+a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at a meeting: (i) the six nominees for election as directors who
+receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of
+Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other than a vote for a nominee will have the practical effect of voting against
+the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast. 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have been elected and
+have qualified. The six nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the balance of those
+nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the Board of
+Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. The following
+information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+Jack W. Oehlke , age 57, has been President and Chief Executive Officer of the Company since June 1997. From October 1995, he served as Chief Operating Officer.
+Previously, he served as Senior Vice President of Operations from January 1995 to October 1995 and Vice President of Manufacturing Operations of the Company from December 1993 to January 1995. Mr. Oehlke served as Director of Operations, Director of
+Quality and in various management positions within manufacturing, engineering and quality functions of the Microswitch Division of Honeywell, Inc. from 1968 to 1993. Mr. Oehlke has a Bachelor of Science Degree in Industrial Technology from the
+University of Wisconsin at Menomoniee. 
+Dale F. Pilz , age 77, has served
+as Chairman of the Board since January 2000 and has been a director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986.
+Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Wendell J. Satre , age 85, has been a director of the Company since 1988 and served as
+Chairman of the Board of Directors from July 1991 through August 1995. Mr. Satre also served as a director from 1983 through 1986 and served as President and CEO of the Company from August 1991 through February 1992. Mr. Satre is the retired
+Chairman of the Board and Chief Executive Officer of the Washington Water Power Company (now Avista Corp.), a public utility headquartered in Spokane, Washington. Mr. Satre also serves on the Boards of Directors of Output Technology Corporation and
+The Coeur d’Alenes Company. 
+Yacov A. Shamash , age 53, has been a
+director of the Company since 1989. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp (AMAC). He has been the Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since
+1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering
+Department at Washington State University from 1985 until 1992. 
+Patrick
+Sweeney , age 68, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of
+Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang—USA from 1981 through 1986 and also served as Managing Director of Ireland for Wang and as Plant Manager of its Galway and Clonmel divisions.
+Mr. Sweeney also serves on the Board of Directors of Aimware, Zaig Tech, Info. Mosaic, Photo Machining Inc., Piercom and Raidtec. He is also a member of the Advisory Board of Manufacturers’ Services Ltd. 
+William E. Terry , age 70, has been a director of the Company since August 1992. Mr.
+Terry retired from Hewlett-Packard in November 1993 where he served in a number of executive positions during the prior 36 years. He is a Trustee of Santa Clara University and also serves on the Board of Directors of Altera Corporation. 
+2 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+The Board of Directors and Committees 
+All directors hold office until the next Annual Meeting of Shareholders and until their
+successors have been elected and have qualified. There are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met four times during fiscal 2003. During fiscal 2003, each
+director attended 75% or more of the total number of Board of Directors meetings and meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+The Audit Committee, which currently consists of Messrs. Sweeney (Chairman), Pilz and Terry
+met eight times during fiscal 2003. The Audit Committee selects and approves the independent auditors engaged to audit the financial statements of the Company for the fiscal year for which they are appointed, reviews and approves the fees of the
+independent auditors and other terms of their engagement and monitors the adequacy of the audit effort and the Company’s financial and accounting organization, financial reporting and internal controls. 
+The Compensation and Administration Committee (the “Compensation Committee”), which
+currently consists of Messrs. Shamash (Chairman), and Satre, met four times during fiscal 2003. The Compensation Committee establishes and reviews annually the Company’s general compensation policies applicable to the Company’s executive
+officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers annually to the Board a report disclosing
+compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding changes to existing compensation
+plans. The Compensation Committee administers the Company’s stock option plans, including determining the individuals to receive options and the terms of such options. 
+The Executive Committee, which currently consists of Messrs. Satre (Chairman), Oehlke, Pilz and Terry met one time during fiscal 2003. The
+Executive Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Nominating Committee, which currently consists of Messrs. Satre (Chairman) and Terry did not meet during fiscal 2003. The Nominating
+Committee develops Board of Directors membership criteria, conducts searches for and reviews potential director candidates and presents recommendations for director nominees to the Board of Directors. Although there are no formal procedures for
+shareholders to recommend nominees, the Nominating Committee will consider recommendations from shareholders, which should be addressed to Kathleen L. Nemeth, Secretary, at the Company’s address listed above. 
+Director Compensation 
+Each director, other than the Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $1,875, a fee of
+$1,000 for each Board meeting attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a fee of $500 for each committee meeting attended (committee members receive a committee attendance fee of $250
+if the committee meeting is held the same day as a Board meeting), except that directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day).
+The Chairman of the Board receives a quarterly retainer of $2,500, plus an additional $500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of
+out-of-pocket expenses related to their service as directors. 
+3 
+Each director who is not, upon election to the Board of Directors, an employee of the Company participates in the
+Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee Directors. Each non-employee director is granted, upon initial election, an option to purchase 10,000 shares of the Company’s Common Stock. An additional option to
+purchase 10,000 shares upon the director’s first re-election to the Board of Directors and an additional option to purchase 7,500 shares upon each re-election to the Board of Directors after the first re-election are also granted. The two
+10,000 share option grants have a three year vesting period and the subsequent 7,500 share option grants have a two year vesting period. 
+EXECUTIVE OFFICERS 
+In addition to Mr. Oehlke, the following persons are the executive officers of the Company: 
+Craig D. Gates, age 44, has been the Executive Vice President and General Manager since August 2002. Previously he was Executive Vice
+President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business Development from October 1995 to July 1997. He joined the Company as Vice President of Engineering in October 1994. Mr.
+Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois, Urbana. From 1982 he held various engineering and management positions within the Microswitch Division of
+Honeywell, Inc., in Freeport, Illinois and from 1991 to October 1994 he served as Director of Operations, Electronics for Microswitch. 
+Ronald F. Klawitter , age 51, has been Executive Vice President of Administration, CFO, and Treasurer since July 1997. Previously he was Vice President of Finance,
+Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance
+at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a BA degree from Wittenberg University and is a Certified Public Accountant. 
+Michael D. Chard , age 45, has been Vice President of Materials of the Company since July 2000. From February 1999 to July 2000, he held various management
+positions with the Company in planning, quality assurance, and materials. From January 1997 to January 1999, he was Vice President of Product Delivery at Wang Global and its predecessor Olivetti North America. From 1983 to 1996, he held various
+management positions in finance, marketing, and operations at ISC Systems, the predecessor to Olivetti North America. He holds a BA degree in Business and Accounting from Washington State University and is a Certified Public Accountant. 
+Efren R. Perez , age 63, has served as Vice President of Southwest Operations since
+July 1997. Previously he was the Managing Director of Southwest Operations from July 1996 to July 1997 and Director of Southwest Operations from July 1995 to June 1996. Following the Company’s acquisition of the Honeywell, Inc. Keyboard
+Division, Mr. Perez served as Plant Manager in Juarez from July 1993 to July 1995. He served as Plant Manager in Juarez for the Keyboard Division of Honeywell, Inc. from February 1989 to July 1993. Mr. Perez is a graduate of the University of Mexico
+with a B.S. in Physics. 
+All executive officers hold office until their
+successors are elected and have qualified. 
+PRINCIPAL
+SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial ownership of the Common Stock
+as of the Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director and nominee for director of the Company; (iii) each of the executive officers of the
+Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+4 
+Name of 
+Beneficial
+Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class (1) 
+Wellington Management Company LLP 
+75 State Street 
+Boston, MA 02109 
+957,400 
+(2),(3) 
+9.9 
+% 
+Davidson Investment Advisors, Inc. 
+8 Third Street North 
+Great Falls, MT 59401 
+872,405 
+(4),(5) 
+9.0 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+603,800 
+(6),(7) 
+6.2 
+% 
+Jack W. Oehlke 
+504,506 
+(8) 
+5.0 
+% 
+Dale F. Pilz 
+47,802 
+(9) 
+* 
+* 
+Wendell J. Satre 
+90,250 
+(10) 
+* 
+* 
+Yacov A. Shamash 
+41,250 
+(11) 
+* 
+* 
+Patrick Sweeney 
+49,416 
+(12) 
+* 
+* 
+William E. Terry 
+50,352 
+(13) 
+* 
+* 
+Craig D. Gates 
+349,246 
+(14) 
+3.5 
+% 
+Ronald F. Klawitter 
+348,086 
+(15) 
+3.5 
+% 
+Michael D. Chard 
+61,152 
+(16) 
+* 
+* 
+Efren R. Perez 
+156,244 
+(17) 
+1.6 
+% 
+All executive officers and directors as a group 
+(10 persons) 8-17, 18 
+1,698,304 
+(18) 
+15.2 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 9,672,580 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own as of the
+record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such person or
+persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2003. 
+3. 
+Wellington Management Company LLP is a registered investment advisor. 
+5 
+4. 
+Based on Form 13G/A filed with the Securities and Exchange Commission, dated January 6, 2003. 
+5. 
+Davidson Investment Advisors, Inc. is a registered investment advisor. 
+6. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2003. 
+7. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA
+Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified
+employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+8. 
+Includes 442,000 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock allocated to Mr.
+Oehlke as a participant in the Company’s Variable Investment Plan (29,792 shares) as of June 28, 2003. 
+9. 
+Includes 41,250 shares issuable upon exercise of director stock options. 
+10. 
+Includes 41,250 shares issuable upon exercise of director stock options. 
+11. 
+Includes 41,250 shares issuable upon exercise of director stock options. Does not include 1,100 shares held by Dr. Shamash’s daughter. 
+12. 
+Includes 20,416 shares issuable upon exercise of director stock options. 
+13. 
+Includes 41,250 shares issuable upon exercise of director stock options. 
+14. 
+Includes 333,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s Variable
+Investment Plan (7,455 shares) as of June 28, 2003. 
+15. 
+Includes 311,815 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s Variable
+Investment Plan (17,860 shares) as of June 28, 2003. 
+16. 
+Represents 53,333 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Chard as a participant in the Company’s Variable
+Investment Plan (7,819 shares) as of June 28, 2003. 
+17. 
+Represents 155,083 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Perez as a participant in the Company’s Variable
+Investment Plan (1,161 shares) as of June 28, 2003. 
+18. 
+Includes 1,698,304 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60 days of
+September 4, 2003. 
+EXECUTIVE COMPENSATION
+Compensation Tables 
+Set forth below is information on the annual and long-term compensation for services
+rendered during fiscal years 2003, 2002 and 2001 by the Named Executive Officers which include (i) Mr. Oehlke, the Chief Executive Officer and President, and (ii) the four other persons who served as executive officers of the Company during fiscal
+2003. For information regarding the Company’s current executive officers, see Executive Officers, page 4. 
+6 
+SUMMARY COMPENSATION TABLE 
+Long-Term Compensation 
+All 
+Other 
+Compen- 
+sation 
+($) (4) 
+Annual Compensation 
+Awards 
+Payouts 
+Name and 
+Principal
+Position 
+Fiscal 
+Year 
+Salary 
+($) (1) 
+Bonus 
+($) (2) 
+Other 
+Annual 
+Compensa- 
+tion ($) (3) 
+Restricted 
+Stock 
+Award(s) 
+($) 
+Securities 
+Underlying 
+Options (#) 
+Payouts 
+($) 
+Jack W. Oehlke 
+Chief Executive Officer & President 
+2003 
+2002 
+2001 
+329,433 
+300,625 
+326,250 
+211,250 
+— 
+— 
+(5) 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+0 
+— 
+— 
+— 
+7,662 
+6,431 
+4,663 
+Craig D. Gates 
+Executive Vice President and General 
+Manager 
+2003 
+2002 
+2001 
+240,024 
+220,150 
+239,762 
+119,000 
+— 
+— 
+(6) 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+0 
+— 
+— 
+— 
+7,982 
+6,741 
+4,891 
+Ronald F. Klawitter 
+Executive VicePresident 
+of Administration, CFO and Treasurer 
+2003 
+2002 
+2001 
+238,835 
+220,150 
+239,762 
+119,000 
+— 
+— 
+(7) 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+0 
+— 
+— 
+— 
+7,754 
+6,718 
+4,891 
+Efren R. Perez 
+Vice President of SW 
+Operations 
+2003 
+2002 
+2001 
+170,610 
+155,400 
+167,871 
+55,538 
+— 
+— 
+(8) 
+13,481 
+12,096 
+13,792 
+— 
+— 
+— 
+25,000 
+40,000 
+0 
+— 
+— 
+— 
+6,752 
+6,216 
+4,610 
+Michael D. Chard 
+Vice President of 
+Materials 
+2003 
+2002 
+2001 
+132,500 
+117,475 
+124,728 
+43,551 
+— 
+— 
+(8) 
+— 
+— 
+— 
+— 
+— 
+— 
+25,000 
+0 
+0 
+— 
+— 
+— 
+5,295 
+4,435 
+3,421 
+(1) 
+Includes amounts deferred under the 401(k) component of the Company’s Variable Investment Plan. 
+(2) 
+Represents dollar value of cash bonuses earned by the Named Executive Officers during the fiscal year indicated. 
+(3) 
+In accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits, securities or property, has been
+omitted in those instances where such perquisites and other personal benefits, securities or property, constituted less than the lesser of $50,000 or ten percent of the total of annual salary and bonus for the named executive officer for such year.
+(4) 
+Represents Company matching payments in 2003, 2002 and 2001 under the Company’s Variable Investment Plan. 
+(5) 
+Represents for 2003 $154,834 earned under the Incentive Compensation Plan for fiscal 2003 and $56,416 under Mr. Oehlke’s retention bonus plan. See “Certain Relationships
+and Related Transactions”, page 12. 
+(6) 
+Represents for 2003 $90,249 earned under the Incentive Compensation Plan for fiscal 2003 and $28,751 under Mr. Gates’ retention bonus plan. See “Certain Relationships and
+Related Transactions”, page 12. 
+(7) 
+Represents for 2003 $89,802 earned under the Incentive Compensation Plan for fiscal 2003 and $29,189 under Mr. Klawitter’s retention bonus plan. See “Certain Relationships
+and Related Transactions”, page 12. 
+(8) 
+Represents amounts earned under the Incentive Compensation Plan for fiscal 2003. 
+7 
+OPTION GRANTS IN 2003 FISCAL YEAR 
+The following table sets forth information concerning individual grants of stock options made during fiscal year 2003 to each of the
+individuals identified in the Summary Compensation Table. 
+Number
+of 
+Securities 
+Underlying 
+Options 
+Granted (#) (1) 
+% of Total 
+Options 
+Granted to 
+Employees 
+In
+Fiscal 
+2003 
+Exercise 
+Price 
+($/Share) 
+Expiration 
+Date 
+Potential Realizable Value 
+at Assumed Annual Rates 
+of Stock
+Price 
+Appreciation for 
+Option Term (2) 
+Name 
+5% ($) 
+10% ($) 
+Jack W. Oehlke 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Craig D. Gates 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Ronald F. Klawitter 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Michael D. Chard 
+8,333 
+8,333 
+8,334 
+6.83 
+6.83 
+6.83 
+% 
+% 
+% 
+1.15 
+1.15 
+1.15 
+10/24/08 
+10/24/09 
+10/24/10 
+2,647 
+3,259 
+3,902 
+5,851 
+7,394 
+9,093 
+Efren Perez 
+8,333 
+8,333 
+8,334 
+6.83 
+6.83 
+6.83 
+% 
+% 
+% 
+1.15 
+1.15 
+1.15 
+10/24/08 
+10/24/09 
+10/24/10 
+2,647 
+3,259 
+3,902 
+5,851 
+7,394 
+9,093 
+(1) 
+A stock option grant was made during fiscal year 2003 to two of the individuals identified in the Summary Compensation Table. 
+(2) 
+The rates of appreciation shown in the table are for illustrative purposes only pursuant to applicable Securities and Exchange Commission requirements. Actual values realized on
+stock options are dependent on actual future performance of the Company, among other factors. Accordingly the amounts shown may not necessarily be realized. 
+The following table provides information on the exercise of options to purchase Common Stock by the Named Executive Officers in fiscal year
+2003 and such officers’ unexercised options to purchase Common Stock at June 28, 2003. 
+Aggregated Option Exercises in Fiscal Year 2003 
+and Fiscal Year-End Option Values 
+Shares 
+Acquired 
+on 
+Exercise 
+Value 
+Realized 
+Number of Shares 
+Underlying Unexercised 
+Options at Fiscal 
+Year-End(#) 
+Value of Unexercised 
+In-the-Money Options at 
+Fiscal Year-End($)(1) 
+Name 
+(#) 
+($) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Jack W. Oehlke 
+0 
+N/A 
+442,000 
+0 
+0 
+0 
+Craig D. Gates 
+0 
+N/A 
+333,000 
+0 
+0 
+0 
+Ronald F. Klawitter 
+0 
+N/A 
+311,815 
+0 
+0 
+0 
+Michael D. Chard 
+0 
+N/A 
+45,000 
+25,000 
+0 
+$ 
+36,000 
+Efren R. Perez 
+0 
+N/A 
+133,417 
+51,667 
+0 
+$ 
+36,000 
+(1) 
+This amount represents the aggregate of the number of in-the-money options multiplied by the difference between the closing price of the Common Stock on the Nasdaq National Market
+on June 27, 2003 and the exercise prices for the relevant options. 
+Employment Contracts and Termination and Change in Control Arrangements 
+Employment Contracts. The Company entered into employment contracts with Messrs. Oehlke, Gates, Klawitter, Chard and Perez at the time each employee was first elected an executive officer of the Company. Each
+of the employment contracts imposes upon the employee standard non-disclosure, confidentiality and covenant not to compete provisions. Each of the employment contracts provides that the Company may terminate employment at any time. The employment
+contracts provide that upon 
+8 
+termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base
+salary in effect prior to termination for a period of one year after termination. The employment contracts entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the event the Company changes the
+substantive responsibilities and duties of the employee in such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The
+employment contracts of Messrs. Oehlke, Gates and Klawitter were amended in November 1999 to provide that upon termination of employment by the Company prior to July 30, 2002, other than for cause, the Company shall continue to pay employee’s
+base salary in effect prior to termination for a period of two years after termination. In April 2002 the employment contracts of Messrs. Oehlke, Gates, Klawitter, Chard and Perez were amended to provide that upon termination of employment by the
+Company prior to July 30, 2003, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. In October 2002 the employment contracts of Messrs.
+Oehlke, Gates, Klawitter, Chard and Perez were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to
+termination for a period of two years after termination. 
+Stock
+Option Plans. The executive stock option plans and non-employee directors stock option plan provide that upon a change of control of the Company vesting of outstanding options will be accelerated. 
+Compensation Committee Interlocks and Insider Participation in Compensation Decisions
+The Board of Directors has a Compensation Committee presently consisting
+of Messrs. Shamash and Satre. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during fiscal year 2003. Mr. Satre served as President, CEO and Chairman of the Board of the Company from
+August 1991 through February 1992. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the
+Compensation Committee of the Company. 
+COMPENSATION
+COMMITTEE REPORT ON EXECUTIVE COMPENSATION 
+Overview. Key
+Tronic’s compensation philosophy established by the Compensation Committee (“Committee”) is that annual total cash compensation should vary with the performance of the Company and long-term incentives should be aligned with the
+interests of the Company’s shareholders. The Company’s compensation plan is designed to allow the Company to attract, motivate and retain highly qualified individuals and to be consistent with the short-term and long-term goals of the
+Company. Compensation of the Company’s executive officers including the Chief Executive Officer (“CEO”), except as otherwise noted in this report, has three primary elements: base salary, annual incentive bonus and annual stock option
+grants. Base salaries are established following a review of competitive information related to comparable companies, in similar industries, nationally and in the Northwest. Annual incentive bonuses are tied to the profitability of the
+Company and the key employee’s contribution to the Company’s performance. Annual stock option incentive grants are based upon base salary and the employee’s contribution to the Company’s performance. Annual stock option
+grants to executive officers are made under the Company’s employee stock option plans. 
+Base Salaries. The Company’s compensation philosophy emphasizes performance-based pay. The goal is to have base salary represent a target percentage of an executive officer’s total annual
+compensation. Prior to setting compensation levels for executive officers, including the CEO, the Committee reviews competitive information related to comparable companies, in similar industries, nationally and in the Northwest. These companies
+include some but not all of the companies appearing in the Nasdaq Electronic Components Index in the performance graph on page 11. The Committee indexes base salary ranges to be at average competitive levels. During fiscal 2003, executive officer
+pay ranges, including the range for the CEO, were adjusted upward to be consistent with the Committee’s established index. Management recommendations (other than those of the subject executive officer) are considered by the Committee in
+establishing an individual executive officer’s recommended salary. The Committee also considers factors related to individual performance, individual responsibility, Company performance based on net earnings 
+9 
+and external competitive factors. The Committee establishes each executive officer’s annual salary, including the
+CEO’s salary. 
+Annual Bonus. The Committee established a key
+employee Incentive Compensation Plan for fiscal 2003. The plan was based upon Company profit goals. A minimum Company profit goal had to be achieved before any payment was to be made under the plan to key employees, including all executive officers.
+Bonus payments under the plan were to be based on three performance levels: threshold achievement, expected achievement, and over-achievement of Company profit goals. Over-achievement payments under the plan were intended to be comparable to
+industry averages for annual incentive bonus plans. Payments were to be based upon a percentage of the key employee’s fiscal 2003 base earnings. The payment percentage ranges were established in descending order for the CEO, all other officers
+and all other key employees. 
+The payment percentage range for the CEO ranged
+from 5% at threshold achievement up to 75% at over-achievement level. Near expected level performance was achieved and therefore incentive bonuses for fiscal 2003 were earned by the CEO, all other officers and all other key employees. 
+Annual Stock Option Awards. The Committee’s policies make long-term incentive
+compensation an important part of motivating and retaining key employees. Such long-term incentive compensation is consistent with the interests of the Company’s shareholders in that it ties executive compensation to the performance of the
+Company’s stock. The Committee believes that long-term incentive compensation can best be implemented through the granting of annual stock options. The Committee makes the determination to grant options to key employees based upon each key
+employee’s position in the Company, base salary and the recommendations of the CEO based on individual performance. The exercise price of the options is equal to the closing price of the Common Stock on the date of grant as quoted by the Nasdaq
+National Market, as reported in The Wall Street Journal . The vesting periods for options range from one to three years. The Committee granted an option to two executive officers during fiscal 2003. 
+Compensation payments in excess of $1 million in any taxable year to any “covered
+employee” (defined as the CEO and the Company’s other four most highly compensated officers) is subject to a limitation on deductibility for the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended. Certain
+performance-based compensation is not subject to the limitation on deductibility. To the extent that there is no adverse effect on the Company’s performance-related compensation philosophy or on the Company’s ability to provide competitive
+compensation, it is the policy of the Committee and the Board of Directors to minimize executive compensation that is not deductible by the Company for tax purposes. 
+The Compensation Committee: Yacov A. Shamash (Chairman), Wendell J. Satre 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. All
+Audit Committee members are independent as defined in Rule 4200(a)(15) of the National Association of Securities Dealers’ listing standards. The Audit Committee operates under a written charter adopted by the Board of Directors. 
+The Audit Committee has met and discussed with the Company’s management and BDO Seidman,
+LLP (“BDO”), the Company’s independent auditors, the Company’s financial statements contained in the Annual Report on Form 10K for the year ended June 28, 2003. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards No.
+61, “Communications with Audit Committees”. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO required by Independence Standards Board Standard No. 1 “Independence
+Discussions with Audit Committees” and the Audit Committee discussed with BDO that firm’s independence. 
+10 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that
+the audited financial statements be included in the Company’s Annual Report on Form 10K for the fiscal year ended June 28, 2003, for filing with the Securities and Exchange Commission. 
+The Audit Committee: Patrick Sweeney (Chairman), Dale F. Pilz, William
+E. Terry 
+Audit Fees . The aggregate fees, including out of pocket
+expenses, billed by the Company’s auditors for professional services for the audit of the Company’s consolidated financial statements for the fiscal year ended June 28, 2003 and for the reviews of the interim financial statements included
+in the Company’s Quarterly Reports on Form 10Q for that fiscal year were approximately $84,750. 
+Financial Information Systems Design and Implementation Fees. No fees were billed by BDO for professional services rendered for information technology services relating to financial information systems design
+and implementation for the fiscal year ended June 28, 2003. 
+All Other Fees.
+The aggregate fees, including out of pocket expenses, billed by BDO for services rendered to the Company for the fiscal year ended June 28, 2003 other than for services described above under “Audit Fees” were approximately $10,278,
+primarily for tax related services. 
+The Audit Committee has considered whether
+the provision of non-audit services is compatible with maintaining the principal auditor’s independence. 
+SHAREHOLDER RETURN PERFORMANCE PRESENTATION 
+Set forth below is a line graph comparing the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of the Nasdaq Market Index, the Nasdaq Electronic Components Index
+and the Nasdaq Computer Manufacturers Index in fiscal 2003. 
+COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* 
+AMONG KEY TRONIC CORPORATION, THE NASDAQ STOCK MARKET (U.S. & FOREIGN)
+INDEX, 
+THE NASDAQ COMPUTER MANUFACTURING INDEX 
+AND THE NASDAQ ELECTRONIC COMPONENTS INDEX 
+(*) Assumes that the value of the investment in
+the Common Stock and each index was $100 invested on June 27, 1998 and that all dividends, if any, were reinvested. The Nasdaq (U.S. and Foreign) Market Index is composed of companies included within all Standard Industrial Classification (SIC)
+codes. The SIC code of all companies included in the Nasdaq Computer Manufacturers Index is 357. The SIC code 
+11 
+for all companies included in the Nasdaq Electronic Components Index is 367. The Company will provide a list of companies
+included in the indexes to any shareholder upon written request to the Company’s Secretary. 
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 9. 
+In October 2002, the Board of Directors approved retention bonus plans for Messrs. Oehlke, Gates and Klawitter. Under the retention bonus plan, Mr. Oehlke is eligible to
+receive retention bonus payments in August of 2003, 2004 and 2005, if he is then employed by the Company or has been terminated by the Company without cause. Maximum payment amounts under Mr. Oehlke’s retention bonus plan are $211,250 for 2003,
+$243,750 for 2004 and $276,250 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Oehlke pursuant to any Company incentive plans during the fiscal year immediately preceding the
+retention bonus payment date. 
+Under the retention bonus plan, Mr. Gates is
+eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he is then employed by the Company or has been terminated by the Company without cause. Maximum payment amounts under Mr. Gates retention bonus plan are $119,000 for
+2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Gates pursuant to any Company incentive plans during the fiscal year immediately preceding the
+retention bonus payment date. 
+Under the retention bonus plan, Mr. Klawitter is
+eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he is then employed by the Company or has been terminated by the Company without cause. Maximum payment amounts under Mr. Klawitter’s retention bonus plan are
+$119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Klawitter pursuant to any Company incentive plans during the fiscal year immediately
+preceding the retention bonus payment date. 
+PROPOSAL 2
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO Seidman, LLP (“BDO”) as the Company’s
+independent auditors for the fiscal year ending July 3, 2004. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond
+to appropriate questions. In the event that ratification of this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will review its future
+selection of auditors. 
+On December 3, 2002 Deloitte & Touche, LLP
+(“D&T”) was dismissed as the Company’s independent public accountants and BDO was appointed as the Company’s new independent accountants to replace D&T for the fiscal year ending June 28, 2003. The decision to dismiss
+D&T and to appoint BDO was made and approved by the Audit Committee. D&T’s reports on the Company’s financial statements for the past two fiscal years did not contain an adverse opinion or disclaimer of opinion, nor were they
+qualified or modified as to uncertainty, audit scope or accounting principles. During the prior two fiscal years and through December 3, 2002, there were no disagreements with D&T on any matter of accounting principles or practices, financial
+statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of D&T, would have caused that firm to make reference to the subject matter of the disagreements in connection with its reports and
+there were no reportable events as defined in certain SEC regulations. Prior to the engagement of BDO the Company had not consulted with BDO during the prior two fiscal years and through December 3, 2002 in any matter regarding the application of
+accounting principles on a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, or any other matters or reportable events as defined in certain SEC
+regulations. 
+12 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY’S 
+INDEPENDENT AUDITORS 
+SHAREHOLDER PROPOSALS 
+To be considered
+for presentation to the Annual Meeting of Shareholders to be held in 2004, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road, Spokane, Washington 99216, no later than May 23,
+2004. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the
+Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership
+and changes in ownership with the Securities and Exchange Commission (“SEC”) and Nasdaq. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its
+review of the copies of such forms received or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended June 28, 2003 all the Reporting Persons
+complied with all applicable filing requirements. 
+Solicitation
+Expenses . The expense of printing and mailing proxy material will be borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the
+Company by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the
+shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation material to such beneficial owners. 
+Other Business . The Board of Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought
+before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors 
+Kathleen L. Nemeth 
+Secretary 
+Spokane,
+Washington 
+September 19, 2003 
+13 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 23, 2003 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each
+with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation
+to be held on Thursday, October 23, 2003, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+é FOLD AND DETACH HERE é 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the “Plan”), you have the right to direct UMB Bank, n.a. (the “Plan Trustee”), to
+vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to
+be held on October 23, 2003. 
+For your information, copies of the Notice of
+Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to Mellon Investor Services is enclosed for your use in returning your completed, signed and, dated proxy card to the Plan
+Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and
+will not divulge or release specific information regarding your instructions to any person, including officers or employees of the Company, except to the extent required by law. 
+If your completed proxy card is not received by October 15, 2003 the Administrative Committee for the Plan may direct the Plan Trustee to
+vote your shares. All unvoted shares will be voted in the same proportion as the voted shares received. 
+UMB Bank, n.a. 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark 
+your votes 
+as indicated 
+x 
+1 Election of Directors: 
+FOR all 
+nominees 
+listed below 
+WITHHOLD AUTHORITY 
+to vote for all nominees 
+listed below 
+FOR 
+AGAINST 
+ABSTAIN 
+FOR, except vote withheld from the following nominee(s): 
+¨ 
+¨ 
+2 Ratification of the appointment of BDO Seidman, LLP as the Company’s independent
+auditors for fiscal year 2004. 
+¨ 
+¨ 
+¨ 
+Election of six directors (or if any nominees is not available for election, such substitute as the
+Board of Directors or the proxy holders may designate). 
+Nominees: 01 - Jack W. Oehlke 02 - Dale F.
+Pilz 
+03 - Wendell J. Satre 04 - Yacov A. 
+Shamash 05 - Patrick Sweeney and 
+06 - William E. Terry 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may
+lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before
+the Annual Meeting and any adjournment of postponement thereof. 
+If you wish to vote in accordance with the Board of Directors recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark 
+¨ 
+for address change: 
+Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator,
+trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States.
+é FOLD AND DETACH HERE é 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 23, 2003 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each
+with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation
+to be held on Thursday, October 23, 2003, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+é FOLD AND DETACH HERE é 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark 
+your votes 
+as indicated 
+x 
+FOR all 
+nominees 
+listed below 
+WITHHOLD 
+AUTHORITY 
+to vote for all 
+nominees 
+listed below 
+FOR 
+AGAINST 
+ABSTAIN 
+1 
+Election of Directors: 
+¨ 
+¨ 
+2 
+Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2004. 
+¨ 
+¨ 
+¨ 
+FOR, except vote withheld from the following nominee(s): 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+Nominees; 01 - Jack W. Oehike 02 - Dale F. Pilz 03- Wendell J. Satre 04 - Yacov A. Shamash 05 - Patrick Sweeny and 06 -
+William E. Terry 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all
+that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such
+other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark ¨ for address change: 
+Please sign exactly as your name appears herein. Joint owners should each
+sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States.
+é FOLD AND DETACH HERE é
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-03-051451/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-03-051451/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..9a00d24e3731f24a20b31657c6f7aa2f1a0ae8c0
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-03-051451/proxy_rpt.txt
@@ -0,0 +1,14 @@
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 9. 
+In October 2002, the Board of Directors approved retention bonus plans for Messrs. Oehlke, Gates and Klawitter. Under the retention bonus plan, Mr. Oehlke is eligible to
+receive retention bonus payments in August of 2003, 2004 and 2005, if he is then employed by the Company or has been terminated by the Company without cause. Maximum payment amounts under Mr. Oehlke’s retention bonus plan are $211,250 for 2003,
+$243,750 for 2004 and $276,250 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Oehlke pursuant to any Company incentive plans during the fiscal year immediately preceding the
+retention bonus payment date. 
+Under the retention bonus plan, Mr. Gates is
+eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he is then employed by the Company or has been terminated by the Company without cause. Maximum payment amounts under Mr. Gates retention bonus plan are $119,000 for
+2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Gates pursuant to any Company incentive plans during the fiscal year immediately preceding the
+retention bonus payment date. 
+Under the retention bonus plan, Mr. Klawitter is
+eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he is then employed by the Company or has been terminated by the Company without cause. Maximum payment amounts under Mr. Klawitter’s retention bonus plan are
+$119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Klawitter pursuant to any Company incentive plans during the fiscal year immediately
+preceding the retention bonus payment date.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-04-157972/proxy.txt b/raw/proxies/0000719733/0001193125-04-157972/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..7485477f0ca0307eb0c0b77989fcb36ba2cae5a6
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-04-157972/proxy.txt
@@ -0,0 +1,1057 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 24, 2004 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key Tronic
+Corporation, a Washington corporation (the “Company”), to be held on Thursday, October 28, 2004, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley,
+Washington 99216. 
+Whether or not you will attend the Annual Meeting in person
+and regardless of the number of shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even
+if you previously have returned your proxy card. 
+Sincerely, 
+Jack W. Oehlke 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF
+SHAREHOLDERS 
+To Be Held October 28, 2004 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 28, 2004, at 10:00 a.m.
+Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect six directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO Seidman, LLP as independent auditors for fiscal year 2005; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 8,
+2004 are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed
+postage-prepaid envelope in order to ensure that your shares will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 24, 2004 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL 
+MEETING. 
+First mailed to shareholders on or about September 24, 2004. 
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic
+Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of Directors
+of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 28, 2004 at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424
+N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Jack W. Oehlke, Wendell J. Satre and Yacov A. Shamash, any of them and their
+substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the Common Stock at the close of business on September 8, 2004 (the “Record Date”) are entitled to notice of and to vote at the Annual
+Meeting. As of the Record Date 9,675,913 shares of Common Stock were issued and outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be
+voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and FOR the
+ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2005. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the
+Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has
+given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock outstanding is entitled to one vote on each matter presented for
+a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at a meeting: (i) the six nominees for election as directors who
+receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of
+Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other than a vote for a nominee will have the practical effect of voting against
+the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast. 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have been elected and
+have qualified. The six nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the balance of those
+nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the Board of
+Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. It is the
+Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2003 Annual Meeting attended the 2003 Annual Meeting. The following information has been provided to the Company with
+respect to the nominees for election to the Board of Directors: 
+Jack W.
+Oehlke , age 58, has been President and Chief Executive Officer of the Company since June 1997. From October 1995, he served as Chief Operating Officer. Previously, he served as Senior Vice President of Operations from January 1995 to October
+1995 and Vice President of Manufacturing Operations of the Company from December 1993 to January 1995. Mr. Oehlke served as Director of Operations, Director of Quality and in various management positions within manufacturing, engineering and quality
+functions of the Microswitch Division of Honeywell, Inc. from 1968 to 1993. Mr. Oehlke has a Bachelor of Science Degree in Industrial Technology from the University of Wisconsin at Menomonie. 
+Dale F. Pilz , age 78, has served as Chairman of the Board since January 2000 and has
+been a director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer and
+President of GTE Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Wendell J. Satre , age 86, has been a director of the Company since 1988 and served as Chairman of the Board of Directors from July 1991 through August 1995. Mr.
+Satre also served as a director from 1983 through 1986 and served as President and CEO of the Company from August 1991 through February 1992. Mr. Satre is the retired Chairman of the Board and Chief Executive Officer of the Washington Water Power
+Company (now Avista Corp.), a public utility headquartered in Spokane, Washington. Mr. Satre also serves on the Board of Directors of Output Technology Corporation and The Coeur d’Alenes Company. 
+Yacov A. Shamash , age 54, has been a director of the Company since 1989. He has been
+the Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital
+Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical Alert
+Corp, Manchester Technologies Inc. and Netsmart Technologies, Inc. 
+Patrick
+Sweeney , age 69, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of
+Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and also served as Managing Director of Ireland for Wang and as Plant Manager of its Galway and Clonmel divisions. Mr.
+Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, Photo Machining Inc. and Farran Technologies. 
+2 
+William E. Terry , age 71, has been a director of the Company since August 1992. Mr. Terry retired from
+Hewlett-Packard in November 1993 where he served in a number of executive positions during the prior 36 years. He is a Trustee of Santa Clara University and also serves on the Board of Directors of Altera Corporation. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED
+ABOVE. 
+THE BOARD OF DIRECTORS AND COMMITTEES 
+Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified.
+There are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met four times during fiscal 2004. During fiscal 2004, each director attended 100% of the Board of Directors
+meetings and meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+Directors’ Independence 
+The Board of Directors has determined that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable
+Nasdaq Stock Market (“NASDAQ”) listing standards, except for Mr. Oehlke, the Company’s current President and Chief Executive Officer. 
+The Board of Directors has also determined that all members of the Audit Committee (1) meet NASDAQ’s definition of independence contained in Rule 4200(a)(15); (2)
+meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during
+the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, as required by Marketplace Rule 4350(d)(2). 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee
+has the requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Executive Sessions 
+At each regular meeting of the Board of Directors, the independent directors meet separately in executive session without management
+present. 
+Code of Conduct 
+The Board of Directors has adopted a written Code of Conduct which applies to all directors,
+officers and employees of the Company. The Code of Conduct is available on the Company’s website at www.keytronic.com . The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of
+Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o General Counsel & Secretary, Key Tronic Corporation, N. 4424 Sullivan Road – Lower Level, Spokane Valley, WA 99216. All such
+shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors or Board member. 
+3 
+Nominations to the Board 
+The Nominating and Corporate Governance Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are
+submitted to the Secretary of the Company, together with biographical information and references, at least six months prior to the annual meeting. 
+Committees 
+The Board of Directors has four standing committees: the Audit Committee, the Compensation and Administration Committee, the Executive Committee and the Nominating and Corporate Governance Committee. The committees
+each have written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Nominating Committee are available on the Company’s website at www.keytronic.com . 
+The Audit Committee, which currently consists of Messrs. Sweeney (Chairman), Pilz and Terry
+met nine times during fiscal 2004. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and
+appoints the Company’s independent auditors, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establishes the fees and other compensation to be paid to the independent
+auditors; monitors the qualifications, independence and performance of the Company’s independent auditors; and establishes procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous
+submissions by the Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of communication among the Board, the independent auditor and management. The responsibilities of the Audit Committee
+are described in greater detail in Appendix A: Audit Committee Charter. 
+The
+Compensation and Administration Committee which currently consists of Messrs. Shamash (Chairman), and Satre, met three times during fiscal 2004. The Committee establishes and reviews annually the Company’s general compensation policies
+applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers
+annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board
+regarding changes to existing compensation plans. The Committee administers the Company’s stock option plans, including determining the individuals to receive options and the terms of such options. 
+The Executive Committee, which currently consists of Messrs. Satre (Chairman), Oehlke, Pilz
+and Terry did not meet during fiscal 2004. The Executive Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Nominating and Corporate Governance Committee, which currently consists of Messrs. Satre
+(Chairman) and Sweeney did not meet during fiscal 2004. The Committee makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board
+with respect to the structure and composition of the Board. The Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has
+no specific minimum qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be identified to the Committee by members of the Board, officers of the
+Company, shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. The Company has not paid any third party a fee to assist in
+identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner of more than 5% of the Company’s Common Stock. 
+4 
+Director Compensation 
+Each director, other than the Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $3,750, a fee of $1,000 for each Board meeting
+attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a fee of $500 for each committee meeting attended (committee members receive a committee attendance fee of $250 if the committee meeting is
+held the same day as a Board meeting), except that directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day). The Chairman of the Board
+receives a quarterly retainer of $ 5,000, plus a fee of $1500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of out-of-pocket expenses
+related to their service as directors. 
+Each director who is not, upon election
+to the Board of Directors, an employee of the Company participates in the Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee Directors. Each non- employee director is granted, upon initial election, an option to purchase
+10,000 shares of the Company’s Common Stock. An additional option to purchase 10,000 shares upon the director’s first re-election to the Board of Directors and an additional option to purchase 7,500 shares upon each re-election to the
+Board of Directors after the first re-election are also granted. The two 10,000 share option grants have a three year vesting period and the subsequent 7,500 share option grants have a two year vesting period. 
+EXECUTIVE OFFICERS 
+In addition to Mr. Oehlke, the following persons are the executive officers of the Company:
+Craig D. Gates, age 45, has been the Executive Vice President and
+General Manager since August 2002. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business Development from October 1995 to July 1997. He joined
+the Company as Vice President of Engineering in October 1994. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois, Urbana. From 1982 he held various
+engineering and management positions within the Microswitch Division of Honeywell, Inc., in Freeport, Illinois and from 1991 to October 1994 he served as Director of Operations, Electronics for Microswitch. 
+Ronald F. Klawitter , age 52, has been Executive Vice President of Administration, CFO,
+and Treasurer since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to October 1995 and Vice President of Finance and Treasurer from 1992
+to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a BA degree from Wittenberg University and is a Certified Public Accountant. 
+Michael D. Chard , age 46, has been Vice President of Materials of the Company since
+July 2000. From February 1999 to July 2000, he held various management positions with the Company in planning, quality assurance, and materials. From January 1997 to January 1999, he was Vice President of Product Delivery at Wang Global and its
+predecessor Olivetti North America. From 1983 to 1996, he held various management positions in finance, marketing, and operations at ISC Systems, the predecessor to Olivetti North America. He holds a BA degree in Business and Accounting from
+Washington State University and is a Certified Public Accountant. 
+Efren R.
+Perez , age 64, has served as Vice President of Southwest Operations since July 1997. Previously he was the Managing Director of Southwest Operations from July 1996 to July 1997 and Director of Southwest Operations from July 1995 to June 1996.
+Following the Company’s acquisition of the Honeywell, Inc. Keyboard Division, Mr. Perez served as Plant Manager in Juarez from July 1993 to July 1995. He served as Plant Manager in Juarez for the Keyboard Division of Honeywell, Inc. from
+February 1989 to July 1993. Mr. Perez is a graduate of the University of Mexico with a B.S. in Physics. 
+All executive officers hold office until their successors are elected and have qualified. 
+5 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more
+than 5% of the Company’s Common Stock; (ii) each director and nominee for director of the Company; (iii) each of the executive officers of the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the
+Company as a group. 
+Name of 
+Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class (1) 
+Wellington Management Company LLP 
+75 State Street 
+Boston, MA 02109 
+1,063,400 
+(2),(3) 
+11.0 
+% 
+Davidson Investment Advisors, Inc. 
+8 Third Street North 
+Great Falls, MT 59401 
+1,009,770 
+(4),(5) 
+10.4 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+555,900 
+(6),(7) 
+5.7 
+% 
+Jack W. Oehlke 
+475,506 
+(8) 
+4.7 
+% 
+Dale F. Pilz 
+55,302 
+(9) 
+** 
+Wendell J. Satre 
+97,750 
+(10) 
+1.0 
+% 
+Yacov A. Shamash 
+48,750 
+(11) 
+** 
+Patrick Sweeney 
+60,250 
+(12) 
+** 
+William E. Terry 
+57,852 
+(13) 
+** 
+Craig D. Gates 
+349,246 
+(14) 
+3.5 
+% 
+Ronald F. Klawitter 
+339,271 
+(15) 
+3.4 
+% 
+Michael D. Chard 
+69,485 
+(16) 
+** 
+Efren R. Perez 
+167,327 
+(17) 
+1.7 
+% 
+All executive officers and directors as a group (10 persons) 8-17, 18 
+1,720,739 
+(18) 
+15.4 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 9,675,913 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own as of the
+record date any shares which such person or group of persons has the right to acquire within 60 days after the record 
+6 
+date. In computing the percentage of outstanding shares held by each person or group of persons, any
+shares which such person or persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2004. 
+3. 
+Wellington Management Company LLP is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2004. 
+5. 
+Davidson Investment Advisors, Inc. is a registered investment advisor. 
+6. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2004. 
+7. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA
+Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified
+employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+8. 
+Includes 413,000 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock allocated to Mr.
+Oehlke as a participant in the Company’s 401(k) Retirement Savings Plan (29,792 shares) as of July 3, 2004. 
+9. 
+Includes 48,750 shares issuable upon exercise of director stock options. 
+10. 
+Includes 48,750 shares issuable upon exercise of director stock options. 
+11. 
+Represents 48,750 shares issuable upon exercise of director stock options. 
+12. 
+Includes 31,250 shares issuable upon exercise of director stock options. 
+13. 
+Includes 48,750 shares issuable upon exercise of director stock options. 
+14. 
+Includes 333,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k) Retirement
+Savings Plan (7,455 shares) as of July 3, 2004. 
+15. 
+Includes 303,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k)
+Retirement Savings Plan (17,860 shares) as of July 3, 2004. 
+16. 
+Represents 61,666 shares issuable upon exercise of employee stock options and Common Stock allocated to Mr. Chard as a participant in the Company’s 401(k) Retirement Savings
+Plan (7,819 shares) as of July 3, 2004. 
+17. 
+Represents 166,166 shares issuable upon exercise of employee stock options and Common Stock allocated to Mr. Perez as a participant in the Company’s 401(k) Retirement Savings
+Plan (1,161 shares) as of July 3, 2004. 
+18. 
+Includes 1,503,082 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60 days of
+September 8, 2004. 
+7 
+EXECUTIVE COMPENSATION 
+Compensation Tables 
+Set forth below is information on the annual and long-term compensation for services rendered during fiscal years 2004, 2003 and 2002 by the Named Executive Officers
+which include (i) Mr. Oehlke, the Chief Executive Officer and President, and (ii) the four other persons who served as executive officers of the Company during fiscal 2004. For information regarding the Company’s current executive officers, see
+Executive Officers, page 5. 
+SUMMARY COMPENSATION TABLE
+Long-Term Compensation 
+Annual Compensation 
+Awards 
+Payouts 
+Name and 
+Principal
+Position 
+Fiscal 
+Year 
+Salary 
+($) (1) 
+Bonus 
+($) (2) 
+Other 
+Annual 
+Compensa- 
+tion ($) (3) 
+Restricted 
+Stock 
+Award(s) 
+($) 
+Securities 
+Underlying 
+Options 
+(#) 
+Payouts 
+($) 
+All Other 
+Compen- 
+sation 
+($) (4) 
+Jack W. Oehlke 
+Chief Executive Officer & 
+President 
+2004 
+2003 
+2002 
+328,865 
+329,433 
+300,625 
+243,750 
+211,250 
+— 
+(5) 
+(6) 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+0 
+— 
+— 
+— 
+13,031 
+7,662 
+6,431 
+Craig D. Gates 
+Executive Vice President 
+and General Manager 
+2004 
+2003 
+2002 
+237,472 
+240,024 
+220,150 
+142,800 
+119,000 
+— 
+(5) 
+(7) 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+0 
+— 
+— 
+— 
+9,494 
+7,982 
+6,741 
+Ronald F. Klawitter 
+Executive Vice President of 
+Administration, CFO and Treasurer 
+2004 
+2003 
+2002 
+230,652 
+238,835 
+220,150 
+142,800 
+119,000 
+— 
+(5) 
+(8) 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+0 
+0 
+— 
+— 
+— 
+9,218 
+7,754 
+6,718 
+Efren R. Perez 
+Vice President of SW 
+Operations 
+2004 
+2003 
+2002 
+166,488 
+170,610 
+155,400 
+— 
+55,538 
+— 
+(9) 
+13,394 
+13,481 
+12,096 
+— 
+— 
+— 
+0 
+25,000 
+40,000 
+— 
+— 
+— 
+6,515 
+6,752 
+6,216 
+Michael D. Chard 
+Vice President of 
+Materials 
+2004 
+2003 
+2002 
+131,767 
+132,500 
+117,475 
+— 
+43,551 
+— 
+(9) 
+— 
+— 
+— 
+— 
+— 
+— 
+0 
+25,000 
+0 
+— 
+— 
+— 
+5,259 
+5,295 
+4,435 
+(1) 
+Includes amounts deferred under the Company’s 401(k) Retirement Savings Plan. Salaries paid were lower in fiscal year 2004 than fiscal year 2003 due to a temporary 10% salary
+reduction in effect for part of fiscal year 2004. 
+(2) 
+Represents dollar value of cash bonuses earned by the Named Executive Officers during the fiscal year indicated. 
+(3) 
+In accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits, securities or property, has been
+omitted in those instances where such perquisites and other personal benefits, securities or property, constituted less than the lesser of $50,000 or ten percent of the total of annual salary and bonus for the named executive officer for such year.
+(4) 
+Represents Company matching payments in 2004, 2003 and 2002 under the Company’s 401(k) Retirement Savings Plan. 
+(5) 
+Represents for 2004 amounts earned under retention bonus plans. See “Certain Relationships and Related Transactions”, page 13. 
+8 
+(6) 
+Represents for 2003 $154,834 earned under the Incentive Compensation Plan for fiscal year 2003 and $56,416 under Mr. Oehlke’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 13. 
+(7) 
+Represents for 2003 $90,249 earned under the Incentive Compensation Plan for fiscal year 2003 and $28,751 under Mr. Gates’ retention bonus plan. See “Certain Relationships
+and Related Transactions”, page 13. 
+(8) 
+Represents for 2003 $89,802 earned under the Incentive Compensation Plan for fiscal year 2003 and $29,198 under Mr. Klawitter’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+(9) 
+Represents amounts earned under the Incentive Compensation Plan for fiscal 2003. 
+OPTION GRANTS IN 2004 FISCAL YEAR 
+The following table sets forth information concerning individual grants of stock options made during fiscal year 2004 to each of the
+individuals identified in the Summary Compensation Table. 
+Name 
+Number of 
+Securities 
+Underlying 
+Options 
+Granted (#) (1) 
+% of Total 
+Options 
+Granted to 
+Employees 
+In Fiscal 
+2004 
+Exercise 
+Price 
+($/Share) 
+Expiration 
+Date 
+Potential Realizable Value 
+at Assumed Annual Rates 
+of Stock
+Price 
+Appreciation for 
+Option Term (2) 
+5% ($) 
+10% ($) 
+Jack W. Oehlke 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Craig D. Gates 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Ronald F. Klawitter 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Michael D. Chard 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Efren Perez 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+(1) 
+No stock option grants were made during fiscal year 2004 to any of the individuals identified in the Summary Compensation Table. 
+(2) 
+The rates of appreciation shown in the table are for illustrative purposes only pursuant to applicable Securities and Exchange Commission requirements. Actual values realized on
+stock options are dependent on actual future performance of the Company, among other factors. Accordingly the amounts shown may not necessarily be realized. 
+The following table provides information on the exercise of options to purchase Common Stock by the Named Executive Officers in fiscal year
+2004 and such officers’ unexercised options to purchase Common Stock at July 3, 2004. 
+Aggregated Option Exercises in Fiscal Year 2004 
+and Fiscal Year-End Option Values 
+Shares 
+Acquired 
+on 
+Exercise 
+Value 
+Realized 
+Number of Shares 
+Underlying Unexercised 
+Options at Fiscal 
+Year-End(#) 
+Value of Unexercised 
+In-the-Money Options 
+at Fiscal Year-End($)(1) 
+Name 
+(#) 
+($) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Jack W. Oehlke 
+0 
+N/A 
+422,000 
+0 
+123,750 
+0 
+Craig D. Gates 
+0 
+N/A 
+333,000 
+0 
+95,400 
+0 
+Ronald F. Klawitter 
+0 
+N/A 
+311,815 
+0 
+95,400 
+0 
+Michael D. Chard 
+0 
+N/A 
+53,333 
+16,667 
+42,583 
+40,167 
+Efren R. Perez 
+0 
+N/A 
+149,999 
+30,001 
+122,282 
+59,768 
+(1) 
+This amount represents the aggregate of the number of in-the-money options multiplied by the difference between the closing price of the Common Stock on the Nasdaq National Market
+on July 2, 2004 and the exercise prices for the relevant options. 
+9 
+Employment Contracts and Termination and Change in Control Arrangements 
+Employment Contracts. The Company entered into employment contracts with Messrs.
+Oehlke, Gates, Klawitter, Chard and Perez at the time each employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard non-disclosure, confidentiality and covenant not to
+compete provisions. Each of the employment contracts provides that the Company may terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall
+continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The employment contracts entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the
+event the Company changes the substantive responsibilities and duties of the employee in such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year
+after termination. The employment contracts of Messrs. Oehlke, Gates and Klawitter were amended in November 1999 to provide that upon termination of employment by the Company prior to July 30, 2002, other than for cause, the Company shall continue
+to pay employee’s base salary in effect prior to termination for a period of two years after termination. In April 2002 the employment contracts of Messrs. Oehlke, Gates, Klawitter, Chard and Perez were amended to provide that upon termination
+of employment by the Company prior to July 30, 2003, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. In October 2002 the employment
+contracts of Messrs. Oehlke, Gates, Klawitter, Chard and Perez were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary
+in effect prior to termination for a period of two years after termination. 
+Stock Option Plans. The executive stock option plans and non-employee directors stock option plan provide that upon a change of control of the Company vesting of outstanding options will be accelerated.
+Compensation Committee Interlocks and Insider Participation in Compensation
+Decisions 
+The Board of Directors has a Compensation Committee presently
+consisting of Messrs. Shamash and Satre. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during fiscal year 2004. Mr. Satre served as President, CEO and Chairman of the Board of the
+Company from August 1991 through February 1992. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or
+on the Compensation Committee of the Company. 
+COMPENSATION
+COMMITTEE REPORT ON EXECUTIVE COMPENSATION 
+Overview. Key
+Tronic’s compensation philosophy established by the Compensation Committee (“Committee”) is that annual total cash compensation should vary with the performance of the Company and long-term incentives should be aligned with the
+interests of the Company’s shareholders. The Company’s compensation plan is designed to allow the Company to attract, motivate and retain highly qualified individuals and to be consistent with the short-term and long-term goals of the
+Company. Compensation of the Company’s executive officers including the Chief Executive Officer (“CEO”), except as otherwise noted in this report, has three primary elements: base salary, annual incentive bonus and annual stock option
+grants. Base salaries are established following a review of competitive information related to 
+10 
+comparable companies, in similar industries, nationally and in the Northwest. Annual incentive bonuses are tied to
+the profitability of the Company and the key employee’s contribution to the Company’s performance. Annual stock option incentive grants are based upon base salary and the employee’s contribution to the Company’s
+performance. Annual stock option grants to executive officers are made under the Company’s employee stock option plans. 
+Base Salaries. The Company’s compensation philosophy emphasizes performance-based pay. The goal is to have base salary represent a target percentage of an
+executive officer’s total annual compensation. Prior to setting compensation levels for executive officers, including the CEO, the Committee reviews competitive information related to comparable companies, in similar industries, nationally and
+in the Northwest. These companies include some but not all of the companies appearing in the Nasdaq Electronic Components Index in the performance graph on page 13. The Committee indexes base salary ranges to be at average competitive levels. During
+fiscal 2004, executive officer pay ranges, including the range for the CEO, were adjusted upward to be consistent with the Committee’s established index. Management recommendations (other than those of the subject executive officer) are
+considered by the Committee in establishing an individual executive officer’s recommended salary. The Committee also considers factors related to individual performance, individual responsibility, Company performance based on net earnings and
+external competitive factors. The Committee establishes each executive officer’s annual salary, including the CEO’s salary. 
+Annual Bonus. The Committee established a key employee Incentive Compensation Plan for fiscal 2004. The plan was based upon Company profit goals. A minimum Company
+profit goal had to be achieved before any payment was to be made under the plan to key employees, including all executive officers. Bonus payments under the plan were to be based on three performance levels: threshold achievement, expected
+achievement, and over-achievement of Company profit goals. Over-achievement payments under the plan were intended to be comparable to industry averages for annual incentive bonus plans. Payments were to be based upon a percentage of the key
+employee’s fiscal 2004 base earnings. The payment percentage ranges were established in descending order for the CEO, all other officers and all other key employees. 
+The payment percentage range for the CEO ranged from 5% at threshold achievement up to 75% at over-achievement level. Threshold achievement
+level performance was not achieved and therefore no incentive bonuses for fiscal 2004 were earned by the CEO or other officers or other key employees. 
+Annual Stock Option Awards. The Committee’s policies make long-term incentive compensation an important part of motivating and retaining key employees. Such
+long-term incentive compensation is consistent with the interests of the Company’s shareholders in that it ties executive compensation to the performance of the Company’s stock. The Committee believes that long-term incentive compensation
+can best be implemented through the granting of annual stock options. The Committee makes the determination to grant options to key employees based upon each key employee’s position in the Company, base salary and the recommendations of the CEO
+based on individual performance. The exercise price of the options is equal to the closing price of the Common Stock on the date of grant as quoted by the Nasdaq National Market, as reported in The Wall Street Journal . The vesting periods for
+options range from one to three years. The Committee did not grant options to executive officers during fiscal 2004. 
+Compensation payments in excess of $1 million in any taxable year to any “covered employee” (defined as the CEO and the Company’s other four most highly
+compensated officers) is subject to a limitation on deductibility for the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended. Certain performance-based compensation is not subject to the limitation on deductibility. To the
+extent that there is no adverse effect on the Company’s performance-related compensation philosophy or on the Company’s ability to provide competitive compensation, it is the policy of the Committee and the Board of Directors to minimize
+executive compensation that is not deductible by the Company for tax purposes. 
+The Compensation Committee: Yacov A. Shamash (Chairman), Wendell J. Satre 
+11 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit
+Committee members are independent as defined in Rule 4200(a)(15) of the National Association of Securities Dealers’ listing standards and that the Chairman of the Committee has the requisite attributes of an “audit committee financial
+expert” as defined by SEC regulations. The Audit Committee operates under a written charter adopted by the Board of Directors. See Appendix A: Audit Committee Charter. 
+The Audit Committee has met and discussed with the Company’s management and BDO Seidman, LLP (“BDO”), the Company’s
+independent auditors, the Company’s financial statements contained in the Annual Report on Form 10K for the year ended July 3, 2004. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards No. 61, “Communications with
+Audit Committees”. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO required by Independence Standards Board Standard No. 1 “Independence Discussions with Audit
+Committees”. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal auditor’s independence. All
+services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial
+statements be included in the Company’s Annual Report on Form 10K for the fiscal year ended July 3, 2004, for filing with the Securities and Exchange Commission. 
+The Audit Committee: Patrick Sweeney (Chairman), Dale F. Pilz, William E. Terry 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit
+and non-audit fees billed or expected to be billed to the Company by BDO for professional services in the named categories for the fiscal years ended July 3, 2004 and June 28, 2003: 
+FY 2004 
+FY 2003 
+Audit Fees (1) 
+$ 
+155,750 
+$ 
+143,750 
+Audit Related Fees (2) 
+7,250 
+7,000 
+Tax Fees (3) 
+10,500 
+11,523 
+All Other Fees 
+0 
+0 
+Total 
+$ 
+173,500 
+$ 
+162,273 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the Company’s Annual
+Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q and review of documents filed with the SEC. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan. 
+(3) 
+Tax fees for fiscal years 2004 and 2003 consisted of professional services provided for the review of tax returns and consultation on tax matters. 
+12 
+SHAREHOLDER RETURN PERFORMANCE PRESENTATION 
+Set forth below is a line graph comparing the cumulative total shareholder return on the
+Company’s Common Stock with the cumulative total return of the Nasdaq Stock Market (U.S. & Foreign) Index and the Nasdaq Electronic Components Index in fiscal 2004. 
+(*) 
+Assumes that the value of the investment in the Common Stock and each index was $100 invested on July 3, 1999 and that all dividends, if any, were reinvested. The Nasdaq (U.S. and
+Foreign) Market Index is composed of companies included within all Standard Industrial Classification (SIC) codes. The SIC code for all companies included in the Nasdaq Electronic Components Index is 367. The Company will provide a list of companies
+included in the indices to any shareholder upon written request to the Company’s Secretary. 
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 10. 
+In October 2002, the Board of Directors approved retention bonus plans for Messrs. Oehlke, Gates and Klawitter. Under the retention bonus plan, Mr. Oehlke became eligible
+to receive retention bonus payments in August of 2003, 2004 and 2005, if he is employed by the Company on the payment date or has been terminated by the Company without cause. Maximum payment amounts under Mr. Oehlke’s retention bonus plan are
+$211,250 for 2003, $243,750 for 2004 and $276,250 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Oehlke pursuant to any Company incentive plans during the fiscal year immediately
+preceding the retention bonus payment date. 
+Under the retention bonus plan,
+Mr. Gates became eligible to receive on the payment date retention bonus payments in August of 2003, 2004 and 2005 if he is employed by the Company on the payment date or has been terminated by the Company without cause. Maximum payment amounts
+under Mr. Gates retention bonus plan are $119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Gates pursuant to any Company incentive
+plans during the fiscal year immediately preceding the retention bonus payment date. 
+13 
+Under the retention bonus plan, Mr. Klawitter became eligible to receive retention bonus payments in August of 2003, 2004
+and 2005 if he is employed by the Company on the payment date or has been terminated by the Company without cause. Maximum payment amounts under Mr. Klawitter’s retention bonus plan are $119,000 for 2003, $142,800 for 2004 and $166,600 for
+2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Klawitter pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date.
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO Seidman, LLP (“BDO”) as the Company’s
+independent auditors for the fiscal year ending July 2, 2005. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond
+to appropriate questions. In the event that ratification of this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will review its future
+selection of auditors. 
+On December 3, 2002 Deloitte & Touche, LLP
+(“D&T”) was dismissed as the Company’s independent public accountants and BDO was appointed as the Company’s new independent accountants to replace D&T for the fiscal year ending June 28, 2003. The decision to dismiss
+D&T and to appoint BDO was made and approved by the Audit Committee. D&T’s reports on the Company’s financial statements for the past two fiscal years did not contain an adverse opinion or disclaimer of opinion, nor were they
+qualified or modified as to uncertainty, audit scope or accounting principles. During the prior two fiscal years and through December 3, 2002, there were no disagreements with D&T on any matter of accounting principles or practices, financial
+statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of D&T, would have caused that firm to make reference to the subject matter of the disagreements in connection with its reports and
+there were no reportable events as defined in certain SEC regulations. Prior to the engagement of BDO the Company had not consulted with BDO during the prior two fiscal years and through December 3, 2002 in any matter regarding the application of
+accounting principles on a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, or any other matters or reportable events as defined in certain SEC
+regulations. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
+VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY’S INDEPENDENT AUDITORS 
+SHAREHOLDER PROPOSALS 
+To be considered for presentation to the Annual Meeting of Shareholders to be held in 2005, a
+shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, no later than May 20, 2005. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended,
+requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities
+and Exchange Commission (“SEC”) and Nasdaq. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its review of the copies of such forms received or
+written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended July 3, 2004 all the Reporting Persons complied with all applicable filing
+requirements. 
+14 
+Solicitation Expenses . The expense of printing and mailing proxy material will be borne by the Company. In
+addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such
+solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding
+solicitation material to such beneficial owners. 
+Other Business . 
+The Board of Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in
+accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 24, 2004 
+15 
+Appendix A 
+THE BOARD OF DIRECTORS OF KEY TRONIC CORPORATION 
+AUDIT COMMITTEE CHARTER 
+PURPOSE 
+The purpose of the Audit Committee (“Committee”) is to represent and assist the Board in fulfilling its oversight responsibilities. The Committee’s principal functions are to: 
+1. monitor the integrity of the Company’s financial statements, financial reporting
+processes and systems of internal controls regarding finance, accounting and legal compliance; 
+2. select and appoint the Company’s independent auditors, pre-approve all audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establish the fees and other
+compensation to be paid to the independent auditors; 
+3. monitor the
+qualifications, independence and performance of the Company’s independent auditors; and 
+4. establish procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Company’s employees, regarding accounting, internal controls or
+auditing matters, and provide an avenue of communication among the Board, the independent auditor and management. 
+MEMBERSHIP 
+The Committee shall consist of three or more Directors. The members of the Committee shall meet the independence and experience requirements of the Securities and Exchange Commission (“SEC”) and the NASDAQ
+Stock Market, Inc. (“NASDAQ”). The Chairman and the members of the Committee shall be appointed by the Board of Directors at the annual organizational meeting of the Board of Directors. Changes in Committee membership may be made at
+anytime during the year by majority vote of the Board. The Chairman of the Board, Chief Executive Officer and such other officers and Directors as the Chairman of the Committee may deem appropriate may attend Committee meetings upon invitation by
+the Chairman of the Committee. 
+RESPONSIBILITIES AND AUTHORITY
+The Committee shall: 
+1. be directly responsible for the appointment, compensation, retention and oversight of the
+work of the independent auditor (including resolution of disagreements between management and the auditor regarding financial reporting). The independent auditor shall report directly to the Committee; 
+2. review and discuss with the independent auditor the written statement from the independent
+auditor concerning any relationship between the auditor and the Company or any other relationships that may adversely affect the independence of the auditor, and, based on such review, assess the independence of the auditor; 
+3. establish policies and procedures for the review and pre-approval by the Committee of all
+auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent auditor; 
+4. review and discuss with the independent auditor: (a) its audit plans, and audit procedures, including the scope, fees and timing of the audit; (b) the results of the
+annual audit examination and accompanying management letters; and (c) the results of the independent auditor’s procedures with respect to interim periods; 
+5. review and discuss reports from the independent auditors on: (a) all critical accounting policies and practices used by the Company; (b) alternative accounting
+treatments within generally accepted accounting principles (“GAAP”) related to material items that have been discussed with management, including the ramifications of the use of the alternative treatments and the treatment preferred by the
+independent auditor; and (c) other material written communications between the independent auditor and management; 
+16 
+6. review and discuss with the independent auditor the independent auditor’s judgments as to the quality, not just
+the acceptability, of the Company’s accounting principles and such further matters as the independent auditors present the Committee under generally accepted auditing standards; 
+7. review and discuss with management and the independent auditor quarterly earnings press releases, including the interim financial
+information included therein prior to release, Quarterly Reports on Form 10-Q prior to filing, the year-end audited financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and,
+if appropriate, recommend to the Board that the audited financial statements be included in the form 10-K for the fiscal year; 
+8. review and discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures;
+9. review and approve related-party transactions (as defined in the relevant
+NASDAQ requirements); 
+10. review and discuss with management and the
+independent auditor (a) the adequacy and effectiveness of the Company’s internal controls (including any significant deficiencies and significant changes in internal controls reported to the Committee by the independent auditor or management;
+and (b) the adequacy and effectiveness of the Company’s disclosures controls and procedures, and management reports thereon; 
+11. establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing
+matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; 
+12. review matters related to the corporate compliance activities of the Company, including the review of reports from the company’s Compliance Committee;
+13. review and approve the report of the Committee required by SEC rules to be
+included in the Company’s annual proxy statement; 
+14. when appropriate,
+designate one or more of its members to perform certain of its duties on its behalf, subject to such reporting to or ratification by the Committee as the Committee shall direct; and 
+15. have the authority to engage independent legal, accounting and other advisers, as it determines necessary to carry out its duties. The
+Committee shall have sole authority to approve related fees and retention terms, and 
+16. annually review and reassess the adequacy of the Committee’s Charter and recommend any changes to the Board of Directors. 
+While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the
+Company’s financial statements are complete and accurate and are in accordance with GAAP. This is the responsibility of management and the independent auditor. 
+MEETINGS 
+The Committee shall meet from time to time at the call of its Chairman or a majority of its members. 
+QUORUM 
+The majority of the members of the Committee shall constitute a quorum. The Committee shall act only on the affirmative vote of a majority (but not less than two) of its
+members. 
+ACCOUNTABILITY 
+The Committee shall report to the Board of Directors at the Board’s next regular
+meeting any and all action it has taken since its previous report to the Board. 
+17 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 28, 2004 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each
+with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation
+to be held on Thursday, October 28, 2004, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+Address Change/Comments (Mark the corresponding box on the reverse side) 
+D FOLD AND DETACH HERE D 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please 
+Mark Here 
+for Address 
+Change
+or 
+Comments 
+SEE 
+REVERSE 
+SIDE 
+¨ 
+FOR all 
+nominees 
+listed below 
+WITHHOLD AUTHORITY 
+to vote for all nominees 
+listed below 
+FOR 
+AGAINST 
+ABSTAIN 
+1. Election of Directors: 
+FOR, except vote withheld from the following nominee(s): 
+¨ 
+¨ 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors
+for fiscal year 2005. 
+¨ 
+¨ 
+¨ 
+Election of six directors (or if 
+any nominee is not available 
+for election, such substitute as 
+the Board of Directors or the 
+proxy
+holders may designate). 
+Nominees: 01 - Jack W. Oehlke 
+02 - Dale F. Pilz 
+03 - Wendell J. Satre 
+04 - Yacov A. Shamash 
+05 - Patrick Sweeney 
+06 - William E. Terry 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies
+all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon
+such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN 
+PROMPTLY. 
+Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give
+full title as such. 
+Signature 
+Signature 
+Date 
+No
+postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+D FOLD AND DETACH HERE D 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 28, 2004 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each
+with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation
+to be held on Thursday, October 28, 2004, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+Address Change/Comments (Mark the corresponding box on the reverse side) 
+D FOLD AND DETACH HERE D 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the “Plan”), you have the right to direct JP Morgan Chase Bank (the
+“Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of
+Shareholders of Key Tronic Corporation to be held on October 28, 2004. 
+For your information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to Mellon Investor Services is enclosed for your use in returning your
+completed, signed, and dated proxy card to the Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or employees of the Company, except to the extent required
+by law. 
+If your completed proxy card is not received by
+October 15, 2004 the Administrative Committee for the Plan may direct the Plan Trustee to vote your shares. All unvoted shares will be voted in the same proportion as the voted shares received. 
+JP Morgan Chase Bank 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please 
+Mark Here 
+for Address 
+Change
+or 
+Comments 
+SEE 
+REVERSE 
+SIDE 
+¨ 
+FOR all 
+nominees 
+listed below 
+WITHHOLD AUTHORITY 
+to vote for all nominees 
+listed below 
+FOR 
+AGAINST 
+ABSTAIN 
+1. Election of Directors: 
+FOR, except vote withheld from the following nominee(s): 
+¨ 
+¨ 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors
+for fiscal year 2005. 
+¨ 
+¨ 
+¨ 
+Election of six directors (or if 
+any nominee is not available 
+for election, such substitute as 
+the Board of Directors or the 
+proxy
+holders may designate). 
+Nominees: 01 - Jack W. Oehlke 
+02 - Dale F. Pilz 
+03 - Wendell J. Satre 
+04 - Yacov A. Shamash 
+05 - Patrick Sweeney 
+06 - William E. Terry 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies
+all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon
+such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN 
+PROMPTLY. 
+Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give
+full title as such. 
+Signature 
+Signature 
+Date 
+No
+postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+D FOLD AND DETACH HERE D
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-04-157972/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-04-157972/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ac54b426f10b010516d3fb04d988af7cdaf4444f
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-04-157972/proxy_rpt.txt
@@ -0,0 +1,14 @@
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions, page 10. 
+In October 2002, the Board of Directors approved retention bonus plans for Messrs. Oehlke, Gates and Klawitter. Under the retention bonus plan, Mr. Oehlke became eligible
+to receive retention bonus payments in August of 2003, 2004 and 2005, if he is employed by the Company on the payment date or has been terminated by the Company without cause. Maximum payment amounts under Mr. Oehlke’s retention bonus plan are
+$211,250 for 2003, $243,750 for 2004 and $276,250 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Oehlke pursuant to any Company incentive plans during the fiscal year immediately
+preceding the retention bonus payment date. 
+Under the retention bonus plan,
+Mr. Gates became eligible to receive on the payment date retention bonus payments in August of 2003, 2004 and 2005 if he is employed by the Company on the payment date or has been terminated by the Company without cause. Maximum payment amounts
+under Mr. Gates retention bonus plan are $119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Gates pursuant to any Company incentive
+plans during the fiscal year immediately preceding the retention bonus payment date. 
+13 
+Under the retention bonus plan, Mr. Klawitter became eligible to receive retention bonus payments in August of 2003, 2004
+and 2005 if he is employed by the Company on the payment date or has been terminated by the Company without cause. Maximum payment amounts under Mr. Klawitter’s retention bonus plan are $119,000 for 2003, $142,800 for 2004 and $166,600 for
+2005. The maximum retention bonus payment in each year is reduced by the amount of any payments earned by Mr. Klawitter pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-05-188172/proxy.txt b/raw/proxies/0000719733/0001193125-05-188172/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..f2b72ec2ef10f2cb08e5c85d7db70a3ac6305ec1
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-05-188172/proxy.txt
@@ -0,0 +1,938 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 23, 2005 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key Tronic
+Corporation, a Washington corporation (the “Company”), to be held on Thursday, October 27, 2005, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley,
+Washington 99216. 
+Whether or not you will attend the Annual Meeting in person
+and regardless of the number of shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even
+if you previously have returned your proxy card. 
+Sincerely, 
+Jack W. Oehlke 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF
+SHAREHOLDERS 
+To Be Held October 27, 2005 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 27, 2005, at 10:00 a.m.
+Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect six directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO Seidman, LLP as independent auditors for fiscal year 2006; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 7,
+2005 are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed
+postage-prepaid envelope in order to ensure that your shares will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington
+September 23, 2005 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. 
+First mailed to shareholders on or about September 23, 2005. 
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic
+Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of Directors
+of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 27, 2005 at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424
+N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Jack W. Oehlke, Wendell J. Satre and Yacov A. Shamash, any of them and their
+substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the Common Stock at the close of business on September 7, 2005 (the “Record Date”) are entitled to notice of and to vote at the Annual
+Meeting. As of the Record Date 9,693,913 shares of Common Stock were issued and outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be
+voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and FOR the
+ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2006. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the
+Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has
+given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock outstanding is entitled to one vote on each matter presented for
+a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at a meeting: (i) the six nominees for election as directors who
+receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of
+Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other than a vote for a nominee will have the practical effect of voting against
+the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast. 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors are
+to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have been elected and have qualified. The six nominees receiving the highest number of affirmative votes will be elected
+as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the
+proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no
+reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. It is the Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees
+for election at the 2005 Annual Meeting attended the 2004 Annual Meeting. The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+Jack W. Oehlke , age 59, has been President and Chief Executive Officer of the Company
+since June 1997. From October 1995, he served as Chief Operating Officer. Previously, he served as Senior Vice President of Operations from January 1995 to October 1995 and Vice President of Manufacturing Operations of the Company from December 1993
+to January 1995. Mr. Oehlke served as Director of Operations, Director of Quality and in various management positions within manufacturing, engineering and quality functions of the Microswitch Division of Honeywell, Inc. from 1968 to 1993. Mr.
+Oehlke has a Bachelor of Science Degree in Industrial Technology from the University of Wisconsin at Menomonie. 
+Dale F. Pilz, age 79, has served as Chairman of the Board since January 2000 and has been a director of the Company since April 1992. Mr. Pilz was Chief Executive
+Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE Sprint Communications from 1983 to 1985 and also served as
+Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Wendell J. Satre , age 87, has been a director of the Company since 1988 and served as Chairman of the Board of Directors from July 1991 through August 1995. Mr. Satre also served as a director from 1983 through 1986 and served as
+President and CEO of the Company from August 1991 through February 1992. Mr. Satre is the retired Chairman of the Board and Chief Executive Officer of the Washington Water Power Company (now Avista Corp.), a public utility headquartered in Spokane,
+Washington. Mr. Satre also serves on the Board of Directors of Output Technology Corporation and The Coeur d’Alenes Company. 
+Yacov A. Shamash, age 55, has been a director of the Company since 1989. He has been the Dean of Engineering and Applied Sciences at the State University of New
+York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the
+Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp, Manchester Technologies Inc. and Netsmart Technologies, Inc.
+Patrick Sweeney , age 70, has been a director of the Company since July
+2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of
+International Manufacturing at Wang - USA from 1981 through 1986 and also served as Managing Director of Ireland for Wang and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info.
+Mosaic and Photo Machining Inc. 
+William E. Terry , age 72, has been a
+director of the Company since August 1992. Mr. Terry retired from Hewlett-Packard in November 1993 where he served in a number of executive positions during the prior 36 years. He is a Trustee of Santa Clara University and also serves on the Board
+of Directors of Altera Corporation. 
+THE BOARD OF DIRECTORS RECOMMENDS A
+VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+2 
+THE BOARD OF DIRECTORS AND COMMITTEES 
+Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified. There are no family relationships
+among any of the directors or executive officers of the Company. The Company’s Board of Directors met four times during fiscal 2005. During fiscal 2005, each director attended 100% of the Board of Directors meetings and at least 89% of meetings
+of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+Directors’ Independence 
+The Board of Directors has determined that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable
+Nasdaq Stock Market (“NASDAQ”) listing standards, except for Mr. Oehlke, the Company’s current President and Chief Executive Officer. 
+The Board of Directors has also determined that all members of the Audit Committee (1) meet NASDAQ’s definition of independence contained in Rule 4200(a)(15); (2)
+meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during
+the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, as required by Marketplace Rule 4350(d)(2). 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee,
+has the requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Executive Sessions 
+At three of the four regular meetings of the Board of Directors held during fiscal year 2005, the independent directors meet separately in
+executive session without management present. 
+Code of Conduct
+The Board of Directors has adopted a written Code of Conduct which
+applies to all directors, officers and employees of the Company. The Code of Conduct is available on the Company’s website at www.keytronic.com . The Company intends to disclose on its website any amendments to or waivers of the Code of
+Conduct. 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of
+Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o General Counsel & Secretary, Key Tronic Corporation, N. 4424 Sullivan Road – Lower Level, Spokane Valley, WA 99216. All such
+shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors or Board member. 
+Nominations to the Board 
+The Nominating and Corporate Governance Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are submitted
+to the Secretary of the Company, together with biographical information and references, at least six months prior to the annual meeting. 
+Committees 
+The Board of Directors has four standing committees: the Audit Committee, the Compensation and Administration Committee, the Executive Committee and the Nominating and Corporate Governance Committee. The committees
+each have written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Nominating Committee are available on the Company’s website at www.keytronic.com . 
+3 
+The Audit Committee, which currently consists of Messrs. Sweeney (Chairman), Pilz and Terry met nine times during fiscal
+2005. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and appoints the Company’s
+independent auditors, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establishes the fees and other compensation to be paid to the independent auditors; monitors the
+qualifications, independence and performance of the Company’s independent auditors; and establishes procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the
+Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of communication among the Board, the independent auditor and management. 
+The Compensation and Administration Committee which currently consists of Messrs. Shamash (Chairman), and Satre, met five times during
+fiscal 2005. The Committee establishes and reviews annually the Company’s general compensation policies applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the
+Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the
+Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding changes to existing compensation plans. The Committee administers the Company’s stock option plans, including determining
+the individuals to receive options and the terms of such options. 
+The
+Executive Committee, which currently consists of Messrs. Satre (Chairman), Oehlke, Pilz and Terry did not meet during fiscal 2005. The Executive Committee generally exercises the authority of the Board of Directors with respect to the management and
+operation of the Company between meetings of the Board of Directors. 
+The
+Nominating and Corporate Governance Committee, which currently consists of Messrs. Satre (Chairman) and Sweeney met one time during fiscal 2005. The Committee makes recommendations to the Board regarding corporate governance, recommends for
+selection by the Board nominees for election as Directors and makes recommendations to the Board with respect to the structure and composition of the Board. The Committee evaluates potential director nominees based upon a number of criteria,
+including the potential nominee’s skills, relevant experience and independence. The Committee has no specific minimum qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case
+basis. Potential nominees may be identified to the Committee by members of the Board, officers of the Company, shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential
+nominee’s recommendation. The Company has not paid any third party a fee to assist in identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a
+beneficial owner of more than 5% of the Company’s Common Stock. 
+Director Compensation 
+Each director, other than the Chairman
+of the Board, who is not an employee of the Company receives a quarterly retainer of $3,750, a fee of $1,000 for each Board meeting attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a fee of
+$500 for each committee meeting attended (committee members receive a committee attendance fee of $250 if the committee meeting is held the same day as a Board meeting and a fee of $200 if the committee meeting is held by phone), except that
+directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day). The Chairman of the Board receives a quarterly retainer of $5,000, plus a fee of
+$1,500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of out-of-pocket expenses related to their service as directors. 
+4 
+Each director who was not, upon election to the Board of Directors, an employee of the Company participated in the
+Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee Directors which Plan terminated on July 27, 2005. Under the Plan each non-employee director was granted, upon initial election, an option to purchase 10,000 shares of the
+Company’s Common Stock. An additional option to purchase 10,000 shares upon the director’s first re-election to the Board of Directors and an additional option to purchase 7,500 shares upon each re-election to the Board of Directors after
+the first re-election were also granted. A final option to purchase 4,930 shares was granted to each non-employee director upon re-election to the Board in October, 2004. The two 10,000 share option grants have a three year vesting period and the
+subsequent share option grants have a two year vesting period. 
+EXECUTIVE OFFICERS 
+In addition to Mr. Oehlke, the following
+persons are the executive officers of the Company: 
+Craig D. Gates , age
+46, has been the Executive Vice President and General Manager since August 2002. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business
+Development from October 1995 to July 1997. He joined the Company as Vice President of Engineering in October 1994. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of
+Illinois, Urbana. From 1982 he held various engineering and management positions within the Microswitch Division of Honeywell, Inc., in Freeport, Illinois and from 1991 to October 1994 he served as Director of Operations, Electronics for
+Microswitch. 
+Ronald F. Klawitter, age 53, has been Executive Vice
+President of Administration, CFO, and Treasurer since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to October 1995 and Vice President of
+Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a BA degree from Wittenberg University and is a Certified Public
+Accountant. 
+Michael D. Chard , age 47, has been Vice President of
+Materials of the Company since July 2000. From February 1999 to July 2000, he held various management positions with the Company in planning, quality assurance, and materials. From January 1997 to January 1999, he was Vice President of Product
+Delivery at Wang Global and its predecessor Olivetti North America. From 1983 to 1996, he held various management positions in finance, marketing, and operations at ISC Systems, the predecessor to Olivetti North America. He holds a BA degree in
+Business and Accounting from Washington State University and is a Certified Public Accountant. 
+Efren R. Perez , age 65, has served as Vice President of Southwest Operations since July 1997. Previously he was the Managing Director of Southwest Operations from July 1996 to July 1997 and Director of
+Southwest Operations from July 1995 to June 1996. Following the Company’s acquisition of the Honeywell, Inc. Keyboard Division, Mr. Perez served as Plant Manager in Juarez from July 1993 to July 1995. He served as Plant Manager in Juarez for
+the Keyboard Division of Honeywell, Inc. from February 1989 to July 1993. Mr. Perez is a graduate of the University of Mexico with a B.S. in Physics. 
+All executive officers hold office until their successors are elected and have qualified. 
+5 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more
+than 5% of the Company’s Common Stock; (ii) each director and nominee for director of the Company; (iii) each of the executive officers of the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the
+Company as a group. 
+Name of 
+Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class (1) 
+Wellington Management Company LLP 
+75 State Street 
+Boston, MA 02109 
+1,221,000 (2),(3 ) 
+12.6% 
+Davidson Investment Advisors, Inc. 
+8 Third Street North 
+Great Falls, MT 59401 
+964,315 (4),(5) 
+9.9% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+558,000 (6),(7) 
+5.8% 
+Jack W. Oehlke 
+460,506 (8) 
+4.6% 
+Dale F. Pilz 
+61,517 (9) 
+** 
+Wendell J. Satre 
+103,965 (10) 
+1.1% 
+Yacov A. Shamash 
+56,065 (11) 
+** 
+Patrick Sweeney 
+66,465 (12) 
+** 
+William E. Terry 
+64,067 (13) 
+** 
+Craig D. Gates 
+316,746 (14) 
+3.2% 
+Ronald F. Klawitter 
+342,271 (15) 
+3.4% 
+Michael D. Chard 
+77,819 (16) 
+** 
+Efren R. Perez 
+166,661 (17) 
+1.7% 
+All executive officers and directors as a group 
+(10 persons) 8-17, 18 
+1,716,082 (18) 
+15.4% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 9,693,913 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially
+own as of the record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any 
+6 
+shares which such person or persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be
+outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2005. 
+3. 
+Wellington Management Company LLP is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2005. 
+5. 
+Davidson Investment Advisors, Inc. is a registered investment advisor. 
+6. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2005. 
+7. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA
+Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified
+employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+8. 
+Includes 398,000 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock allocated to Mr.
+Oehlke as a participant in the Company’s 401(k) Retirement Savings Plan (29,792 shares) as of July 2, 2005. 
+9. 
+Includes 54,965 shares issuable upon exercise of director stock options. 
+10. 
+Includes 54,965 shares issuable upon exercise of director stock options. 
+11. 
+Represents 54,965 shares issuable upon exercise of director stock options. 
+12. 
+Includes 37,465 shares issuable upon exercise of director stock options. 
+13. 
+Includes 54,965 shares issuable upon exercise of director stock options. 
+14. 
+Includes 300,500 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k) Retirement
+Savings Plan (7,455 shares) as of July 2, 2005. 
+15. 
+Includes 288,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k)
+Retirement Savings Plan (17,860 shares) as of July 2, 2005. 
+16. 
+Includes 60,000 shares issuable upon exercise of employee stock options and Common Stock allocated to Mr. Chard as a participant in the Company’s 401(k) Retirement Savings Plan
+(7,819 shares) as of July 2, 2005. 
+17. 
+Represents 165,500 shares issuable upon exercise of employee stock options and Common Stock allocated to Mr. Perez as a participant in the Company’s 401(k) Retirement Savings
+Plan (1,161 shares) as of July 2, 2005. 
+18. 
+Includes 1,469,325 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60 days of
+September 7, 2005. 
+7 
+EXECUTIVE COMPENSATION 
+Compensation Tables 
+Set forth below is information on the annual and long-term compensation for services rendered during fiscal years 2005, 2004 and 2003 by the Named Executive Officers
+which include (i) Mr. Oehlke, the Chief Executive Officer and President, and (ii) the four other persons who served as executive officers of the Company during fiscal 2005. For information regarding the Company’s current
+executive officers, see Executive Officers, page 5. 
+SUMMARY
+COMPENSATION TABLE 
+Long-Term Compensation 
+Annual Compensation 
+Awards 
+Payouts 
+Name and Principal Position 
+Fiscal 
+Year 
+Salary 
+($) (1) 
+Bonus 
+($) (2) 
+Other 
+Annual 
+Compensa- 
+tion ($) (3) 
+Restricted 
+Stock 
+Award(s) 
+($) 
+Securities 
+Underlying 
+Options (#) 
+Payouts 
+($) 
+All Other 
+Compensation 
+($) (4) 
+Jack W. Oehlke 
+2005 
+354,615 
+276,250 
+(9) 
+— 
+— 
+0 
+— 
+8,200 
+Chief Executive 
+2004 
+328,865 
+243,750 
+(5) 
+— 
+— 
+0 
+— 
+13,031 
+Officer & President 
+2003 
+329,433 
+211,250 
+(6) 
+— 
+— 
+0 
+— 
+3,662 
+Craig D. Gates 
+2005 
+257,504 
+166,600 
+(10) 
+— 
+— 
+0 
+— 
+8,200 
+Executive Vice President 
+2004 
+237,472 
+142,800 
+(5) 
+— 
+— 
+0 
+— 
+9,494 
+and General Manager 
+2003 
+240,024 
+119,000 
+(7) 
+— 
+— 
+0 
+— 
+7,982 
+Ronald F. Klawitter 
+2005 
+247,600 
+166,600 
+(11) 
+— 
+— 
+0 
+— 
+8,200 
+Executive Vice President 
+2004 
+230,652 
+142,800 
+(5) 
+— 
+— 
+0 
+— 
+9,218 
+of Administration, CFO and Treasurer 
+2003 
+238,835 
+119,000 
+(8) 
+— 
+— 
+0 
+— 
+7,754 
+Efren R. Perez 
+2005 
+176,731 
+92,784 
+(12) 
+13,986 
+— 
+0 
+— 
+7,069 
+Vice President of SW 
+2004 
+166,488 
+— 
+13,394 
+— 
+0 
+— 
+6,515 
+Operations 
+2003 
+170,610 
+55,538 
+(13) 
+13,481 
+— 
+25,000 
+— 
+6,752 
+Michael D. Chard 
+2005 
+144,631 
+75,931 
+(12) 
+20,000 
+(14) 
+— 
+0 
+— 
+5,785 
+Vice President of 
+2004 
+131,767 
+— 
+— 
+— 
+0 
+— 
+5,259 
+Materials 
+2003 
+132,500 
+43,551 
+(13) 
+— 
+— 
+25,000 
+— 
+5,295 
+(1) 
+Includes amounts deferred under the Company’s 401(k) Retirement Savings Plan. 
+(2) 
+Represents dollar value of cash bonuses earned by the Named Executive Officers during the fiscal year indicated. 
+(3) 
+In accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits, securities or property, has been
+omitted in those instances where such perquisites and other personal benefits, securities or property, constituted less than the lesser of $50,000 or ten percent of the total of annual salary and bonus for the named executive officer for such year.
+(4) 
+Represents Company matching payments in 2005, 2004 and 2003 under the Company’s 401(k) Retirement Savings Plan. 
+(5) 
+Represents for 2004 amounts earned under retention bonus plans. See “Certain Relationships and Related Transactions”, page 14. 
+(6) 
+Represents for 2003 $154,834 earned under the Incentive Compensation Plan for fiscal year 2003 and $56,416 under Mr. Oehlke’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+8 
+(7) 
+Represents for 2003 $90,249 earned under the Incentive Compensation Plan for fiscal year 2003 and $28,751 under Mr. Gates’ retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+(8) 
+Represents for 2003 $89,802 earned under the Incentive Compensation Plan for fiscal year 2003 and $29,198 under Mr. Klawitter’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+(9) 
+Represents for 2005 $265,962 earned under the Incentive Compensation Plan for fiscal year 2005 and $10,288 under Mr. Oehlke’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+(10) 
+Represents for 2005 $154,502 earned under the Incentive Compensation Plan for fiscal year 2005 and $12,098 under Mr. Gates retention bonus plan. See “Certain Relationships
+and Related Transactions”, page 14. 
+(11) 
+Represents for 2005 $148,560 earned under the Incentive Compensation Plan for fiscal year 2005 and $18,040 under Mr. Klawitter’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+(12) 
+Represents amounts earned under the Incentive Compensation Plan for fiscal year 2005. 
+(13) 
+Represents amounts earned under the Incentive Compensation Plan for fiscal year 2003. 
+(14) 
+Represents compensation recognized upon exercise of stock options. 
+OPTION GRANTS IN 2005 FISCAL YEAR 
+The following table sets forth information concerning individual grants of stock options made during fiscal year 2005 to each of the individuals identified in the Summary
+Compensation Table. 
+Name 
+Number of 
+Securities 
+Underlying 
+Options 
+Granted (#) (1) 
+% of Total 
+Options 
+Granted to 
+Employees 
+In Fiscal 
+2005 
+Exercise 
+Price 
+($/Share) 
+Expiration 
+Date 
+Potential Realizable Value 
+at Assumed Annual Rates 
+of Stock
+Price 
+Appreciation for 
+Option Term (2) 
+5% ($) 
+10% ($) 
+Jack W. Oehlke 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Craig D. Gates 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Ronald F. Klawitter 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Michael D. Chard 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Efren Perez 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+(1) 
+No stock option grants were made during fiscal year 2005 to any of the individuals identified in the Summary Compensation Table. 
+(2) 
+The rates of appreciation shown in the table are for illustrative purposes only pursuant to applicable Securities and Exchange Commission requirements. Actual values realized on
+stock options are dependent on actual future performance of the Company, among other factors. Accordingly the amounts shown may not necessarily be realized. 
+The following table provides information on the exercise of options to purchase Common Stock by the Named Executive Officers in fiscal year
+2005 and such officers’ unexercised options to purchase Common Stock at July 2, 2005. 
+9 
+Aggregated Option Exercises in Fiscal Year 2005 
+and Fiscal Year-End Option Values 
+Shares 
+Acquired 
+on 
+Exercise 
+Value 
+Realized 
+Number of Shares 
+Underlying Unexercised 
+Options at Fiscal 
+Year-End(#) 
+Value of Unexercised 
+In-the-Money Options 
+at Fiscal Year-End($)(1) 
+Name 
+(#) 
+($) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Jack W. Oehlke 
+0 
+N/A 
+413,000 
+0 
+105,150 
+0 
+Craig D. Gates 
+0 
+N/A 
+313,000 
+0 
+81,000 
+0 
+Ronald F. Klawitter 
+0 
+N/A 
+303,000 
+0 
+81,000 
+0 
+Michael D. Chard 
+10,000 
+20,000 
+51,666 
+8,334 
+23,100 
+19,085 
+Efren R. Perez 
+0 
+N/A 
+166,166 
+8,334 
+145,565 
+19,085 
+(1) 
+This amount represents the aggregate of the number of in-the-money options multiplied by the difference between the closing price of the Common Stock on the Nasdaq National Market
+on July 1, 2005 and the exercise prices for the relevant options. 
+Employment Contracts and Termination and Change in Control Arrangements 
+Employment Contracts. The Company entered into employment contracts with Messrs. Oehlke, Gates, Klawitter, Chard and Perez at the time each employee was first elected an executive officer of the Company. Each
+of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the Company may terminate employment at any time. The employment contracts
+provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The employment contracts
+entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in such a way as to constitute a demotion, the Company
+shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Oehlke, Gates, Klawitter, Chard and Perez were amended to provide that
+upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. 
+Stock Option Plans. The executive stock option plans and non-employee directors stock
+option plan provide that upon a change of control of the Company vesting of outstanding options will be accelerated. 
+Compensation Committee Interlocks and Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Satre. No member of the Compensation
+Committee was an officer or employee of the Company or any of its subsidiaries during fiscal year 2005. Mr. Satre served as President, CEO and Chairman of the Board of the Company from August 1991 through February 1992. None of the executive
+officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee of the Company. 
+COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 
+Overview. Key Tronic’s compensation philosophy established by the Compensation
+Committee (“Committee”) is that annual total cash compensation should vary with the performance of the Company and long-term incentives should be aligned with the interests of the Company’s shareholders. The Company’s
+compensation plan is designed to allow the Company to attract, motivate and retain highly qualified individuals and to be consistent with the short-term and long-term goals of the Company. Compensation of the Company’s executive officers
+including the Chief Executive Officer (“CEO”), except 
+10 
+as otherwise noted in this report, has three primary elements: base salary, annual incentive compensation and long term incentive compensation. Base
+salaries are established following a review of competitive information related to comparable companies, in similar industries, nationally and in the Northwest. Annual incentive bonuses are tied to the profitability of the Company and the
+key employee’s contribution to the Company’s performance. Long term incentive compensation is based upon base salary and the employee’s contribution to the Company’s performance. Long term compensation has historically been in
+the form of annual stock option grants to executive officers pursuant to the Company’s employee stock option plans. 
+Compensation Consultant. The Compensation Committee’s charter provides that the Committee shall have the authority to engage independent compensation
+consultants with sole authority to retain and terminate such consultants. During fiscal year 2005, the Committee retained the Milliman group as its independent compensation consultant with respect to comparative market data regarding executive
+compensation. 
+Base Salaries. The Company’s compensation philosophy
+emphasizes performance-based pay. The goal is to have base salary represent a target percentage of an executive officer’s total annual compensation. Prior to setting compensation levels for executive officers, including the CEO, in fiscal year
+2005 the Committee reviewed and consulted with the Milliman group with respect to competitive compensation surveys related to comparable companies, in similar industries, nationally and in the Northwest. These companies include some but not all of
+the companies appearing in the Nasdaq Electronic Components Index in the performance graph on page 13. The Committee indexes base salary ranges to be at average competitive levels. Management recommendations (other than those of the subject
+executive officer) are considered by the Committee in establishing an individual executive officer’s recommended salary. The Committee also considers factors related to individual performance, individual responsibility, Company performance
+based on net earnings and external competitive factors. The Board of Directors, upon the recommendation of the Committee, establishes each executive officer’s annual salary, including the CEO’s salary. 
+Annual Incentive Compensation. Upon the recommendation of the Committee the Board of
+Directors established the performance goals and target percentage payments for each executive officer, including the CEO, for fiscal year 2005 pursuant to the Incentive Compensation Plan. The plan was based upon Company profit goals. A minimum
+Company profit goal had to be achieved before any payment was to be made under the plan to key employees, including all executive officers. Bonus payments under the plan were based on three performance levels: threshold achievement, expected
+achievement, and over-achievement of Company profit goals. Over-achievement payments under the plan were intended to be comparable to industry averages for annual incentive bonus plans. Payments were based upon a percentage of the key
+employee’s base salary paid during fiscal year 2005. The payment percentage ranges were established in descending order for the CEO, all other officers and all other key employees. The payment percentage range for the CEO ranged from 5% at
+threshold achievement up to 75% at over-achievement level. Over-achievement level performance was achieved during fiscal year 2005 and, therefore, over-achievement level bonuses for fiscal 2005 were earned under the Incentive Compensation Plan for
+2005 by the CEO, the other officers and other key employees. 
+Long Term
+Incentive Compensation. The Committee’s policies make long-term incentive compensation an important part of motivating and retaining key employees. Such long-term incentive compensation has historically been in the form of annual stock
+option grants and is consistent with the interests of the Company’s shareholders in that it ties executive compensation to the performance of the Company’s stock. The Committee has made the determination to grant options to key employees
+based upon each key employee’s position in the Company, base salary and the recommendations of the CEO based on individual performance. The exercise price of options is equal to the closing price of the Common Stock on the date of grant as
+quoted by the Nasdaq National Market, as reported in The Wall Street Journal . The vesting periods for options range from one to three years. The Committee did not grant options to executive officers during fiscal year 2005. 
+Compensation of the Chief Executive Officer. The Committee annually reviews and
+recommends to the Board of Directors for determination the compensation of the Chief Executive Officer (“CEO”) of the Company. In determining the amount, form and terms of such compensation the Committee considers the annual performance
+evaluation of the CEO conducted by the Board of Directors in light of Company goals and objectives relevant to CEO compensation and competitive market data supplied by the Committee’s 
+11 
+independent compensation consultant pertaining to CEO compensation at comparable companies. Mr. Oehlke, the Company’s CEO, received an increase in his
+bi-weekly base salary in fiscal year 2005 from $13,462 to $14,615. As a participant in the Incentive Compensation Plan for 2005, Mr. Oehlke earned an incentive bonus of $265,962 based upon over-achievement level profit goal performance for fiscal
+year 2005. Mr. Oehlke also earned a retention bonus payment of $10,288 pursuant to Mr. Oehlke’s October 2002 three year retention bonus plan. See “Certain Relationships and Related Transactions” page 14. No stock options were granted
+to Mr. Oehlke during fiscal year 2005. 
+Internal Revenue Code Section
+162(m). Compensation payments in excess of $1 million in any taxable year to any “covered employee” (defined as the CEO and the Company’s other four most highly compensated officers) is subject to a limitation on deductibility for
+the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended. Certain performance-based compensation is not subject to the limitation on deductibility. To the extent that there is no adverse effect on the Company’s
+performance-related compensation philosophy or on the Company’s ability to provide competitive compensation, it is the policy of the Committee and the Board of Directors to minimize executive compensation that is not deductible by the Company
+for tax purposes. 
+The Compensation Committee: Yacov A.
+Shamash (Chairman), Wendell J. Satre 
+AUDIT COMMITTEE REPORT
+The Audit Committee of the Company’s Board of Directors consists of
+three members. The Board of Directors has determined that all Audit Committee members are independent as defined in Rule 4200(a)(15) of the National Association of Securities Dealers’ listing standards and that the Chairman of the Committee has
+the requisite attributes of an “audit committee financial expert” as defined by SEC regulations. The Audit Committee operates under a written charter adopted by the Board of Directors. 
+The Audit Committee has met and discussed with the Company’s management and BDO Seidman,
+LLP (“BDO”), the Company’s independent auditors, the Company’s financial statements contained in the Annual Report on Form 10K for the year ended July 2, 2005. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards No.
+61, “Communications with Audit Committees”. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO required by Independence Standards Board Standard No. 1 “Independence
+Discussions with Audit Committees”. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal auditor’s
+independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial
+statements be included in the Company’s Annual Report on Form 10K for the fiscal year ended July 2, 2005, for filing with the Securities and Exchange Commission. 
+The Audit Committee: Patrick Sweeney (Chairman), Dale F. Pilz, William E. Terry 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit
+and non-audit fees billed or expected to be billed to the Company by BDO for professional services in the named categories for the fiscal years ended July 2, 2005 and July 3, 2004: 
+FY 2005 
+FY 2004 
+Audit Fees (1) 
+$ 
+175,300 
+$ 
+158,850 
+Audit Related Fees (2) 
+7,600 
+7,250 
+Tax Fees (3) 
+38,250 
+10,500 
+All Other Fees 
+0 
+0 
+Total 
+$ 
+221,150 
+$ 
+176,600 
+12 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the Company’s Annual
+Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan. 
+(3) 
+Tax fees for fiscal years 2005 and 2004 consisted of professional services provided for the review of tax returns and consultation on tax matters. 
+SHAREHOLDER RETURN PERFORMANCE PRESENTATION 
+Set forth below is a line graph comparing the cumulative total shareholder return on the
+Company’s Common Stock with the cumulative total return of the Nasdaq Stock Market (U.S. & Foreign) Index and the Nasdaq Electronic Components Index in fiscal 2005. 
+(*) 
+Assumes that the value of the investment in the Common Stock and each index was $100 invested on July 1, 2000 and that all dividends, if any, were reinvested. The Nasdaq (U.S. and
+Foreign) Market Index is composed of companies included within all Standard Industrial Classification (SIC) codes. The SIC code for all companies included in the Nasdaq Electronic Components Index is 367. The Company will provide a list of companies
+included in the indices to any shareholder upon written request to the Company’s Secretary. 
+13 
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions,
+page 10. 
+In October 2002, the Board of Directors approved retention bonus
+plans for Messrs. Oehlke, Gates and Klawitter. Under the retention bonus plan, Mr. Oehlke became eligible to receive retention bonus payments in August of 2003, 2004 and 2005, if he was employed by the Company on the payment date or had been
+terminated by the Company without cause. Maximum payment amounts under Mr. Oehlke’s retention bonus plan were $211,250 for 2003, $243,750 for 2004 and $276,250 for 2005. The maximum retention bonus payment in each year was reduced by the amount
+of any payments earned by Mr. Oehlke pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date. 
+Under the retention bonus plan, Mr. Gates became eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he was employed by the Company on the
+payment date or had been terminated by the Company without cause. Maximum payment amounts under Mr. Gates retention bonus plan were $119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year was
+reduced by the amount of any payments earned by Mr. Gates pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date. 
+Under the retention bonus plan, Mr. Klawitter became eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he was
+employed by the Company on the payment date or had been terminated by the Company without cause. Maximum payment amounts under Mr. Klawitter’s retention bonus plan were $119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum
+retention bonus payment in each year was reduced by the amount of any payments earned by Mr. Klawitter pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date. 
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO Seidman, LLP (“BDO”) as the Company’s
+independent auditors for the fiscal year ending July 1, 2006. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond
+to appropriate questions. In the event that ratification of this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will review its future
+selection of auditors. 
+THE BOARD OF DIRECTORS UNANIMOUSLY
+RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY’S 
+INDEPENDENT AUDITORS 
+SHAREHOLDER PROPOSALS 
+To be considered for presentation to the Annual Meeting of Shareholders to be held in 2006, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key
+Tronic Corporation, 4424 N. Sullivan Road - Lower Level, Spokane Valley, Washington 99216, no later than May 19, 2006. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors and persons
+who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”) and Nasdaq. Reporting Persons
+are required by SEC regulations to furnish the Company with copies of all Section 16(a) 
+14 
+forms which they file. Based solely on its review of the copies of such forms received or written representations from certain Reporting Persons that no
+Forms 5’s were required, the Company believes that with respect to the fiscal year ended July 2, 2005 all the Reporting Persons complied with all applicable filing requirements. 
+Solicitation Expenses. The expense of printing and mailing proxy material will be borne by the Company. In addition to the
+solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. The
+Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation
+material to such beneficial owners. 
+Other Business. The Board of
+Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance
+with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley,
+Washington 
+September 23, 2005 
+15 
+KEY TRONIC
+CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting October 27, 2005 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each with the power of substitution, are hereby authorized to
+represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 27, 2005, and any
+adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+Address Change/Comments (Mark the corresponding box on the reverse side) 
+FOLD AND DETACH HERE 
+UNLESS OTHERWISE
+SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please Mark Here for Address Change or Comments
+SEE REVERSE SIDE 
+1. Election of Directors: 
+FOR all nominees listed below 
+WITHHOLD AUTHORITY to vote for all nominees listed below 
+FOR, except vote withheld from the following nominee(s): 
+Election of six
+directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+Nominees: 01 - Jack W. Oehlke 
+02 - Dale F. Pilz 
+03 - Wendell J. Satre 
+04 - Yacov A. Shamash 
+05 - Patrick Sweeney 
+06 - William E. Terry 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2006. 
+FOR 
+AGAINST 
+ABSTAIN 
+The undersigned hereby acknowledges receipt of the Notice of Annual
+Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their
+discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+FOLD AND DETACH HERE 
+KEY TRONIC
+CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting October 27, 2005 
+JACK W. OEHLKE, WENDELL J. SATRE, and YACOV A. SHAMASH, or any of them, each with the power of substitution, are hereby authorized to
+represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 27, 2005, and any
+adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+Address Change/Comments (Mark the corresponding box on the reverse side) 
+FOLD AND DETACH HERE 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the “Plan”), you have the right to direct JP Morgan Chase
+Bank, N.A. (the “Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual
+Meeting of Shareholders of Key Tronic Corporation to be held on October 27, 2005. 
+For your information, copies of the
+Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to Mellon Investor Services is enclosed for your use in returning your completed, signed, and dated proxy card to the
+Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific
+information regarding your instructions to any person, including officers or employees of the Company, except to the extent required by law. 
+If your completed proxy card is not received by October 14, 2005 the Administrative Committee for the Plan will direct the Plan Trustee to vote your shares. The Trustee will be directed to vote all such unvoted shares in the
+same proportion as the voted shares received. 
+JP Morgan Chase Bank, N.A. 
+UNLESS OTHERWISE
+SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please Mark Here for Address Change or Comments
+SEE REVERSE SIDE 
+1. Election of Directors: 
+FOR all nominees listed below 
+WITHHOLD AUTHORITY to vote for all nominees listed below 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2006. 
+FOR AGAINST ABSTAIN 
+FOR, except vote withheld from the following
+nominee(s): 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of
+Directors or the proxy holders may designate). 
+Nominees: 01 - Jack W. Oehlke 02 - Dale F. Pilz 03 - Wendell J. Satre 04 -
+Yacov A. Shamash 05 - Patrick Sweeney 06 - William E. Terry 
+The undersigned hereby acknowledges receipt of the Notice of
+Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In
+their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+FOLD AND DETACH HERE
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-05-188172/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-05-188172/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..900b74dad4ddc2e0f46407cdbfe9b75eab62c39c
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-05-188172/proxy_rpt.txt
@@ -0,0 +1,13 @@
+CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in Compensation Decisions,
+page 10. 
+In October 2002, the Board of Directors approved retention bonus
+plans for Messrs. Oehlke, Gates and Klawitter. Under the retention bonus plan, Mr. Oehlke became eligible to receive retention bonus payments in August of 2003, 2004 and 2005, if he was employed by the Company on the payment date or had been
+terminated by the Company without cause. Maximum payment amounts under Mr. Oehlke’s retention bonus plan were $211,250 for 2003, $243,750 for 2004 and $276,250 for 2005. The maximum retention bonus payment in each year was reduced by the amount
+of any payments earned by Mr. Oehlke pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date. 
+Under the retention bonus plan, Mr. Gates became eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he was employed by the Company on the
+payment date or had been terminated by the Company without cause. Maximum payment amounts under Mr. Gates retention bonus plan were $119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year was
+reduced by the amount of any payments earned by Mr. Gates pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date. 
+Under the retention bonus plan, Mr. Klawitter became eligible to receive retention bonus payments in August of 2003, 2004 and 2005 if he was
+employed by the Company on the payment date or had been terminated by the Company without cause. Maximum payment amounts under Mr. Klawitter’s retention bonus plan were $119,000 for 2003, $142,800 for 2004 and $166,600 for 2005. The maximum
+retention bonus payment in each year was reduced by the amount of any payments earned by Mr. Klawitter pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-06-192371/proxy.txt b/raw/proxies/0000719733/0001193125-06-192371/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..faa5de5bb99ef21d327618d8a264ebcdbd693359
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-06-192371/proxy.txt
@@ -0,0 +1,1062 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 22, 2006 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key
+Tronic Corporation, a Washington corporation (the “Company”), to be held on Thursday, October 26, 2006, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane
+Valley, Washington 99216. 
+Whether or not you will attend the Annual Meeting in person and regardless of the number of shares you own, we request that you
+complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even if you previously have returned your proxy card. 
+Sincerely, 
+Jack W. Oehlke 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 26, 2006 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 26, 2006, at
+10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect five directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO Seidman, LLP as independent auditors for fiscal year 2007; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 6, 2006 are entitled to notice of and to vote at the Annual Meeting and any
+adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares will be voted at
+the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 22, 2006 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD 
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT
+THE ANNUAL 
+MEETING. 
+First mailed to shareholders on or about September 22, 2006. 
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key
+Tronic Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of
+Directors of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 26, 2006 at 10:00 a.m. Pacific Time at the principal executive offices of the
+Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Jack W. Oehlke, Dale F. Pilz and Wendell J. Satre, any of them
+and their substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies,
+Revocation 
+Record holders of the Common Stock at the close of business on September 6, 2006 (the “Record Date”) are entitled to notice
+of and to vote at the Annual Meeting. As of the Record Date 9,885,878 shares of Common Stock were issued and outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies
+returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director
+named below, and FOR the ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2007. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to
+the Secretary of the Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the
+shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock outstanding is entitled to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of
+Incorporation and Amended and Restated By-Laws, if a quorum exists at a meeting: (i) the five nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or
+represented by proxy and entitled to vote shall be elected directors and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number
+of votes cast against it. In the election of directors, any action other than a vote for a nominee will have the practical effect of voting against the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of
+matter 2 since neither represents a vote cast. 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Five directors are to be elected at the Annual Meeting to serve until the next Annual Meeting
+of Shareholders and until their respective successors have been elected and have qualified. The Board of Directors, pursuant to the Bylaws, has determined that the number of directors of the Company will be reduced from six to five as of the Annual
+meeting. The five nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the balance of those nominees
+named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the Board of Directors may be
+reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. It is the Company’s policy that
+nominees for election at the Annual Meeting attend the Annual Meeting. With the exception of James R. Bean who is standing as a nominee for election to the Board of Directors for the first time at the 2006 Annual Meeting, all nominees for election
+at the 2006 Annual Meeting attended the 2005 Annual meeting. Wendell J. Satre and William E. Terry will retire when their terms expire at the Annual Meeting. 
+Mr. Bean who is standing for election for the first time was suggested as a nominee by the President and Chief Executive Officer of the Company following his search for and interviews with a number of potential nominees. Mr. Bean
+was interviewed by members of management, the members of the Governance and Nominating Committee and other members of the Board. Based upon these interviews and reference checks by the Company, Mr. Bean was selected by the Governance and
+Nominating Committee and approved by the Board. 
+The following information has been provided to the Company with respect to the nominees for election to
+the Board of Directors: 
+James R. Bean , age 56, has been President and CEO of Preco Electronics, Inc. since November 1999. From May 1997 to 1999 he
+held various management positions in Boise, Idaho with Preco Electronics, Inc. Previously he held various management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer, Inc. and National Semiconductor, Inc.
+Mr. Bean is a graduate of New Mexico State University with a B.S. in Industrial Engineering. 
+Jack W. Oehlke , age 60, has been President and
+Chief Executive Officer of the Company since June 1997. From October 1995, he served as Chief Operating Officer. Previously, he served as Senior Vice President of Operations from January 1995 to October 1995 and Vice President of Manufacturing
+Operations of the Company from December 1993 to January 1995. Mr. Oehlke served as Director of Operations, Director of Quality and in various management positions within manufacturing, engineering and quality functions of the Microswitch
+Division of Honeywell, Inc. from 1968 to 1993. Mr. Oehlke has a Bachelor of Science Degree in Industrial Technology from the University of Wisconsin at Menomonie. 
+Dale F. Pilz , age 80, has served as Chairman of the Board since January 2000 and has been a director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986
+to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President
+of GTE Spacenet Corporation from 1983 to 1985. 
+Yacov A. Shamash , age 56, has been a director of the Company since 1989. He has been the Dean of
+Engineering and Applied Sciences at the State University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated
+Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp.,
+Netsmart Technologies, Inc. and Applied DNA Sciences, Inc. 
+Patrick Sweeney , age 71, has been a director of the Company since July 2000.
+Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the 
+2 
+Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and also served as Managing Director of Ireland for Digital Equipment
+Corporation and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, Photo Machining Inc. and Event Medical (Ireland). 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+THE BOARD OF DIRECTORS AND COMMITTEES 
+Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified. There are no family relationships among any of the directors or executive
+officers of the Company. The Company’s Board of Directors met four times during fiscal 2006. During fiscal 2006, each director attended 100% of the Board of Directors meetings and at least 91% of meetings of committees of the Board of Directors
+on which the director served during the time he served on the Board or committee. 
+Directors’ Independence 
+The Board of Directors has determined that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable
+Nasdaq Stock Market (“NASDAQ”) listing standards, except for Mr. Oehlke, the Company’s current President and Chief Executive Officer. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet NASDAQ’s definition of independence contained in Rule 4200(a)(15); (2) meet the requirements of the Securities and Exchange
+Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three years; and (4) are able to
+read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, as required by Marketplace Rule 4350(d)(2). 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee, has the requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such
+attributes were acquired through relevant education and/or experience. 
+Executive Sessions 
+At two of the four regular meetings of the Board of Directors held during fiscal year 2006, the independent directors met separately in executive session without
+management present. 
+Code of Conduct 
+The Board of
+Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of Conduct is available on the Company’s website at www.keytronic.com . The Company intends to disclose on its
+website any amendments to or waivers of the Code of Conduct. 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of Directors or any of its members by certified mail only, addressed to the Board of
+Directors or any member, c/o General Counsel & Secretary, Key Tronic Corporation, N. 4424 Sullivan Road – Lower Level, Spokane Valley, WA 99216. All such shareholder communications will be compiled by the General Counsel &
+Secretary and submitted to the Board of Directors or Board member. 
+3 
+Nominations to the Board 
+The Governance and Nominating Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are submitted to the Secretary of the Company, together with biographical information and
+references, at least six months prior to the annual meeting. 
+Committees 
+The Board of Directors has four standing committees: the Audit Committee, the Compensation and Administration Committee, the Executive Committee and the Governance and Nominating Committee. The committees each have
+written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Governance and Nominating Committee are available on the Company’s website at www.keytronic.com .
+The Audit Committee, which currently consists of Messrs. Sweeney (Chairman), Pilz and Terry met eleven times during fiscal 2006. The Audit Committee
+monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and appoints the Company’s independent auditors,
+pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establishes the fees and other compensation to be paid to the independent auditors; monitors the qualifications, independence
+and performance of the Company’s independent auditors; and establishes procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Company’s employees, regarding
+accounting, internal controls or auditing matters, and provides an avenue of communication among the Board, the independent auditor and management. 
+The
+Compensation and Administration Committee which currently consists of Messrs. Shamash (Chairman), and Satre, met three times during fiscal 2006. The Committee establishes and reviews annually the Company’s general compensation policies
+applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers
+annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board
+regarding changes to existing compensation plans. The Committee administers the Company’s incentive compensation plans and stock option plans, including determining the individuals to receive awards and options and the terms of such awards and
+options. 
+The Executive Committee, which currently consists of Messrs. Satre (Chairman), Oehlke, Pilz and Terry did not meet during fiscal 2006. The
+Executive Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Governance and Nominating Committee, which currently consists of Messrs. Satre (Chairman) and Sweeney met one time during fiscal 2006. The Committee makes recommendations to the Board regarding corporate
+governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect to the structure and composition of the Board. The Committee evaluates potential director nominees based upon a
+number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific minimum qualifications which must be met by a potential director nominee. Each potential nominee is considered on
+a case by case basis. Potential nominees may be identified to the Committee by members of the Board, officers of the Company, shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source
+of the potential nominee’s recommendation. The Company has not paid any third party a fee to assist in identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding
+year by a beneficial owner of more than 5% of the Company’s Common Stock. 
+Director Compensation 
+Each director, other than the Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $3,750, a fee of $1,000 for each Board meeting
+attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a fee of $500 for each committee 
+4 
+meeting attended (committee members receive a committee attendance fee of $250 if the committee meeting is held the same day as a Board meeting and a fee of
+$200 if the committee meeting is held by phone), except that directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day). The Chairman of the
+Board receives a quarterly retainer of $ 5,000, plus a fee of $1,500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of out-of-pocket
+expenses related to their service as directors. 
+Each director participates in the Company’s Long-Term Incentive Plan (“Plan”). The Plan
+provides a long-term cash bonus opportunity to the members of the Board of Directors if certain Company performance measures established by the Board of Directors are met for three fiscal year performance periods. No amounts can be earned for any
+three fiscal year performance period until the end of the third fiscal year since achievement of performance measures can only be determined at the end of the third fiscal year. During fiscal year 2006, each non-employee Director was awarded 10,000
+units under the Plan. If performance measures are met, these units will result in a cash payment ranging from $5,000 to $15,000 to each non-employee Director at the end of fiscal year 2008. 
+Each director who was not, upon election to the Board of Directors, an employee of the Company participated in the Company’s Amended and Restated 1990 Stock Option
+Plan for Non-Employee Directors which Plan terminated on July 27, 2005. Under the Plan each non-employee director was granted, upon initial election, an option to purchase 10,000 shares of the Company’s Common Stock. An additional option
+to purchase 10,000 shares upon the director’s first re-election to the Board of Directors and an additional option to purchase 7,500 shares upon each re-election to the Board of Directors after the first re-election were also granted. A final
+option to purchase 4,930 shares was granted to each non-employee director upon re-election to the Board in October, 2004. The two 10,000 share option grants have a three year vesting period and the subsequent share option grants have a two year
+vesting period. 
+EXECUTIVE OFFICERS 
+All executive officers hold office until their successors are elected and have qualified. In addition to Mr. Oehlke, the following persons are the executive officers of the Company: 
+George R. Alford , age 53, has been Vice President of Materials of the Company since July 2006. From August 2005 to July 2006 he served as Director of Materials
+(HID Group) at Cooper Industries. From October 2000 to August 2005, he served in various procurement and materials management positions with Solectron Corporation. Mr. Alford has a B.S. in Industrial Technology and a M.A. in Management from
+Middle Tennessee State University and a J.D. in Civil Law from Nashville School of Law. 
+Craig D. Gates, age 47, has been the Executive Vice
+President and General Manager since August 2002. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business Development from October 1995 to July
+1997. He joined the Company as Vice President of Engineering in October 1994. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois, Urbana. From 1982 he
+held various engineering and management positions within the Microswitch Division of Honeywell, Inc., in Freeport, Illinois and from 1991 to October 1994 he served as Director of Operations, Electronics for Microswitch. 
+Ronald F. Klawitter , age 54, has been Executive Vice President of Administration, CFO, and Treasurer since July 1997. Previously he was Vice President of Finance,
+Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President,
+Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a BA degree from Wittenberg University and is a Certified Public Accountant. 
+Efren R. Perez , age 66, has served as Vice President of Southwest Operations since July 1997. Previously he was the Managing Director of Southwest Operations from July 1996 to July 1997 and Director of Southwest Operations from July
+1995 to June 1996. Following the Company’s acquisition of the Honeywell, Inc. Keyboard Division, Mr. Perez served as Plant Manager in Juarez from July 1993 to July 1995. He served as Plant Manager in Juarez for the Keyboard Division of
+Honeywell, Inc. from February 1989 to July 1993. Mr. Perez is a graduate of the University of Mexico with a B.S. in Physics. 
+5 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been
+furnished to the Company regarding beneficial ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director
+and nominee for director of the Company; (iii) each of the executive officers of the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of 
+Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class (1) 
+Wellington Management Company LLP 
+75 State Street 
+Boston, MA 02109 
+1,026,400 
+(2),(3) 
+10.6 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+705,300 
+(4),(5) 
+7.3 
+% 
+James R. Bean 
+0 
+* 
+* 
+Jack W. Oehlke 
+442,506 
+(6) 
+4.3 
+% 
+Dale F. Pilz 
+63,982 
+(7) 
+* 
+* 
+Wendell J. Satre 
+106,430 
+(8) 
+1.6 
+% 
+Yacov A. Shamash 
+58,530 
+(9) 
+* 
+* 
+Patrick Sweeney 
+68,930 
+(10) 
+* 
+* 
+William E. Terry 
+66,532 
+(11) 
+* 
+* 
+Craig D. Gates 
+286,246 
+(12) 
+2.8 
+% 
+Ronald F. Klawitter 
+306,271 
+(13) 
+3.0 
+% 
+Michael D. Chard (17) 
+65,000 
+(14) 
+* 
+* 
+Efren R. Perez 
+156,661 
+(15) 
+1.6 
+% 
+All executive officers and directors as a group (11 persons) 6-15, 16 
+1,621,088 
+(16) 
+14.5 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 9,885,878 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own as of the
+record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such person or
+persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+6 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2006. 
+3. 
+Wellington Management Company LLP is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2006. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA
+Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified
+employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Includes 380,000 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock allocated to
+Mr. Oehlke as a participant in the Company’s 401(k) Retirement Savings Plan (29,792 shares) as of July 1, 2006. 
+7. 
+Includes 57,430 shares issuable upon exercise of director stock options. 
+8. 
+Includes 57,430 shares issuable upon exercise of director stock options. 
+9. 
+Represents 57,430 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+10. 
+Includes 2,465 shares issuable upon exercise of director stock options. 
+11. 
+Includes 57,430 shares issuable upon exercise of director stock options. 
+12. 
+Includes 270,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k)
+Retirement Savings Plan (7,455 shares) as of July 1, 2006. 
+13. 
+Includes 210,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k)
+Retirement Savings Plan (17,860 shares) as of July 1, 2006. 
+14. 
+Includes 45,000 shares issuable upon exercise of employee stock options. 
+15. 
+Represents 155,500 shares issuable upon exercise of employee stock options and Common Stock allocated to Mr. Perez as a participant in the Company’s 401(k) Retirement
+Savings Plan (1,161 shares) as of July 1, 2006. 
+16. 
+Includes 1,330,150 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60 days of
+September 6, 2006. 
+17. 
+Mr. Chard resigned as Vice President of Materials on July 21, 2006. 
+7 
+EXECUTIVE COMPENSATION 
+Compensation Tables 
+Set forth below is information on the annual and long-term compensation for services rendered
+during fiscal years 2006, 2005 and 2004 by the Named Executive Officers which include (i) Mr. Oehlke, the Chief Executive Officer and President, and (ii) the four other persons who served as executive officers of the Company during
+fiscal 2006. For information regarding the Company’s current executive officers, see Executive Officers, page 5. 
+SUMMARY
+COMPENSATION TABLE 
+Long-Term Compensation 
+Annual Compensation 
+Awards 
+Payouts 
+Name and 
+Principal Position 
+Fiscal 
+Year 
+Salary 
+($) (1) 
+Bonus 
+($) (2) 
+Other 
+Annual 
+Compensa- 
+tion ($) (3) 
+Restricted 
+Stock 
+Award(s) 
+($) 
+Securities 
+Underlying 
+Options(#) 
+Payouts 
+($) 
+All 
+Other 
+Compen- 
+sation 
+($) (4) 
+Jack W. Oehlke 
+2006 
+382,308 
+203,388 
+(10) 
+8,400 
+Chief Executive Officer & 
+2005 
+354,615 
+276,250 
+(6) 
+— 
+— 
+0 
+— 
+8,200 
+President 
+2004 
+328,865 
+243,750 
+(5) 
+— 
+— 
+0 
+— 
+13,031 
+Craig D. Gates 
+2006 
+277,969 
+118,304 
+(10) 
+8,400 
+Executive Vice President 
+2005 
+257,504 
+166,600 
+(7) 
+— 
+— 
+0 
+— 
+8,200 
+and General Manager 
+2004 
+237,472 
+142,800 
+(5) 
+— 
+— 
+0 
+— 
+9,494 
+Ronald F. Klawitter 
+2006 
+248,361 
+105,703 
+(10) 
+8,400 
+Executive Vice President of 
+2005 
+247,600 
+166,600 
+(8) 
+— 
+— 
+0 
+— 
+8,200 
+Administration, CFO and 
+2004 
+230,652 
+142,800 
+(5) 
+— 
+— 
+0 
+— 
+9,218 
+Treasurer 
+Efren R. Perez 
+2006 
+190,877 
+71,083 
+(10) 
+15,600 
+8,400 
+Vice President of SW 
+2005 
+176,731 
+92,784 
+(9) 
+13,986 
+— 
+0 
+— 
+7,069 
+Operations 
+2004 
+166,488 
+— 
+13,394 
+— 
+0 
+— 
+6,515 
+Michael D. Chard 
+2006 
+148,700 
+55,376 
+(10) 
+38,700 
+(11) 
+6,926 
+Vice President of 
+2005 
+144,631 
+75,931 
+(9) 
+20,000 
+(11) 
+— 
+0 
+— 
+5,785 
+Materials 
+2004 
+131,767 
+— 
+— 
+— 
+0 
+— 
+5,259 
+(1) 
+Includes amounts deferred under the Company’s 401(k) Retirement Savings Plan. 
+(2) 
+Represents dollar value of cash bonuses earned by the Named Executive Officers during the fiscal year indicated. 
+(3) 
+In accordance with the rules of the Securities and Exchange Commission, other compensation in the form of perquisites and other personal benefits, securities or property, has been
+omitted in those instances where such perquisites and other personal benefits, securities or property, constituted less than the lesser of $50,000 or ten percent of the total of annual salary and bonus for the named executive officer for such year.
+(4) 
+Represents Company matching payments in 2006, 2005 and 2004 under the Company’s 401(k) Retirement Savings Plan. 
+(5) 
+Represents for 2004 amounts earned under retention bonus plans. See “Certain Relationships and Related Transactions”, page 14. 
+8 
+(6) 
+Represents for 2005 $265,962 earned under the Incentive Compensation Plan for fiscal year 2005 and $10,288 under Mr. Oehlke’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+(7) 
+Represents for 2005 $154,502 earned under the Incentive Compensation Plan for fiscal year 2005 and $12,098 under Mr. Gates retention bonus plan. See “Certain Relationships
+and Related Transactions”, page 14. 
+(8) 
+Represents for 2005 $148,560 earned under the Incentive Compensation Plan for fiscal year 2005 and $18,040 under Mr. Klawitter’s retention bonus plan. See “Certain
+Relationships and Related Transactions”, page 14. 
+(9) 
+Represents amounts earned under the Incentive Compensation Plan for fiscal year 2005. 
+(10) 
+Represents amounts earned under the Incentive Compensation Plan for fiscal year 2006. 
+(11) 
+Represents compensation realized upon exercise of stock options. 
+OPTION GRANTS IN 2006 FISCAL YEAR 
+The following table sets forth information concerning individual grants of stock options made during
+fiscal year 2006 to each of the individuals identified in the Summary Compensation Table. 
+Name 
+Number of 
+Securities 
+Underlying 
+Options 
+Granted (#) (1) 
+% of Total 
+Options 
+Granted to 
+Employees 
+In Fiscal 
+2006 
+Exercise 
+Price 
+($/Share) 
+Expiration 
+Date 
+Potential Realizable Value 
+at Assumed Annual Rates 
+of Stock Price 
+Appreciation for
+Option 
+Term (2) 
+5%($) 
+10%($) 
+Jack W. Oehlke 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Craig D. Gates 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Ronald F. Klawitter 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Michael D. Chard 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+Efren Perez 
+0 
+N/A 
+N/A 
+N/A 
+N/A 
+N/A 
+(1) 
+No stock option grants were made during fiscal year 2006 to any of the individuals identified in the Summary Compensation Table. 
+(2) 
+The rates of appreciation shown in the table are for illustrative purposes only pursuant to applicable Securities and Exchange Commission requirements. Actual values realized on
+stock options are dependent on actual future performance of the Company, among other factors. Accordingly the amounts shown may not necessarily be realized. 
+The following table provides information on the exercise of options to purchase Common Stock by the Named Executive Officers in fiscal year 2006 and such officers’ unexercised options to purchase Common Stock at
+July 1, 2006. 
+9 
+Aggregated Option Exercises in Fiscal Year 2006 
+and Fiscal Year-End Option Values 
+Shares 
+Acquired 
+on 
+Exercise 
+Value 
+Realized 
+Number of Shares 
+Underlying Unexercised 
+Options at Fiscal 
+Year-End(#) 
+Value of Unexercised 
+In-the-Money Options 
+at Fiscal Year-End($)(1) 
+Name 
+(#) 
+($) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Jack W. Oehlke 
+0 
+N/A 
+380,000 
+0 
+178,000 
+0 
+Craig D. Gates 
+0 
+N/A 
+270,000 
+0 
+137,400 
+0 
+Ronald F. Klawitter 
+0 
+N/A 
+270,000 
+0 
+137,400 
+0 
+Michael D. Chard 
+15,000 
+38,700 
+45,000 
+0 
+33,000 
+0 
+Efren R. Perez 
+0 
+N/A 
+155,500 
+0 
+232,800 
+0 
+(1) 
+This amount represents the aggregate of the number of in-the-money options multiplied by the difference between the closing price of the Common Stock on the Nasdaq National Market
+on July 1, 2006 and the exercise prices for the relevant options. 
+Long-Term Incentive Plans – Awards
+In Last Fiscal Year 
+Name 
+(a) 
+Number of 
+Shares, Units or 
+Other
+Rights 
+(#) 
+(b) 
+Performance or 
+Other
+Period 
+Until Maturation 
+or Payout 
+(c) 
+Estimated Future Payouts Under 
+Non-Stock Price-Based Plans 
+Threshold 
+($ or #) 
+(d) 
+Target 
+($ or #) 
+(e) 
+Maximum 
+($ or #) 
+(f) 
+Jack W. Oehlke 
+250,000 
+3 years 
+$ 
+125,000 
+$ 
+250,000 
+$ 
+375,000 
+Craig D. Gates 
+150,000 
+3 years 
+$ 
+75,000 
+$ 
+150,000 
+$ 
+225,000 
+Ronald F. Klawitter 
+70,000 
+3 years 
+$ 
+35,000 
+$ 
+70,000 
+$ 
+105,000 
+Michael D. Chard 
+40,000 
+3 years 
+$ 
+20,000 
+$ 
+40,000 
+$ 
+60,000 
+Efren Perez 
+40,000 
+3 years 
+$ 
+20,000 
+$ 
+40,000 
+$ 
+60,000 
+Employment Contracts and Termination and Change in Control Arrangements 
+Employment Contracts. The Company entered into employment contracts with Messrs. Oehlke, Gates, Klawitter, Chard, Perez and Alford at the time each employee was
+first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the Company may
+terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of
+one year after termination. The employment contracts entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in
+such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Oehlke, Gates,
+Klawitter, Chard and Perez were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a
+period of two years after termination. 
+Stock Option Plans. The executive stock option plans and non-employee directors stock option plan provide
+that upon a change of control of the Company vesting of outstanding options will be accelerated. 
+10 
+Long-Term Incentive Plan. The Long-Term Incentive Plan provides that upon a change of control of the Company,
+vesting of units awarded under the Plan will be accelerated and will be payable at two times their value. 
+Compensation Committee Interlocks and Insider
+Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Satre. No
+member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during fiscal year 2006. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of
+any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee of the Company. 
+COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION 
+Overview. Key Tronic’s compensation philosophy established by the
+Compensation Committee (“Committee”) is that annual total cash compensation should vary with the performance of the Company and long-term incentives should be aligned with the interests of the Company’s shareholders. The
+Company’s compensation plan is designed to allow the Company to attract, motivate and retain highly qualified individuals and to be consistent with the short-term and long-term goals of the Company. Compensation of the Company’s executive
+officers including the Chief Executive Officer (“CEO”), except as otherwise noted in this report, has three primary elements: base salary, annual incentive compensation and long-term incentive compensation. Base salaries are
+established following a review of competitive information related to comparable companies, in similar industries, nationally and in the Northwest. Annual incentive bonuses are tied to the profitability of the Company and the key
+employee’s contribution to the Company’s performance. Long-term incentive compensation is based upon base salary and the employee’s contribution to the Company’s performance. Long-term compensation has historically been in the
+form of annual stock option grants to executive officers pursuant to the Company’s employee stock option plans. During fiscal year 2006, the Board of Directors, upon the recommendation of the Committee, adopted a long-term cash incentive
+compensation plan to replace stock options as the primary element of long-term incentive compensation. 
+Compensation Consultant. The Compensation
+Committee’s charter provides that the Committee shall have the authority to engage independent compensation consultants with sole authority to retain and terminate such consultants. During fiscal year 2006, the Committee retained the Milliman
+group as its independent compensation consultant with respect to comparative market data regarding executive compensation. 
+Base Salaries. The
+Company’s compensation philosophy emphasizes performance-based pay. The goal is to have base salary represent a target percentage of an executive officer’s total annual compensation. Prior to setting compensation levels for executive
+officers, including the CEO, in fiscal year 2006 the Committee reviewed and consulted with the Milliman group with respect to competitive compensation surveys related to comparable companies, in similar industries, nationally and in the Northwest.
+These companies include some but not all of the companies appearing in the Nasdaq Electronic Components Index in the performance graph on page 14. The Committee indexes base salary ranges to be at average competitive levels. Management
+recommendations (other than those of the subject executive officer) are considered by the Committee in establishing an individual executive officer’s recommended salary. The Committee also considers factors related to individual performance,
+individual responsibility, Company performance based on net earnings and external competitive factors. The Board of Directors, upon the recommendation of the Committee, establishes each executive officer’s annual salary, including the
+CEO’s salary. 
+Annual Incentive Compensation. Upon the recommendation of the Committee the Board of Directors established the performance goals
+and target percentage payments for each executive officer, including the CEO, for fiscal year 2006 pursuant to the Incentive Compensation Plan. The plan was based upon Company profit goals. A minimum Company profit goal had to be achieved before any
+payment was to be made under the plan to key employees, including all executive officers. Bonus payments under the plan were based on three performance levels: threshold achievement, expected achievement, and over-achievement of Company profit
+goals. Over-achievement payments under the plan were intended to be comparable to industry averages for annual incentive bonus plans. Payments were based upon a percentage 
+11 
+of the key employee’s base salary paid during fiscal year 2006. The payment percentage ranges were established in descending order for the CEO, all
+other officers and all other key employees. The payment percentage range for the CEO ranged from 5% at threshold achievement up to 75% at over-achievement level. Expected level performance was achieved during fiscal year 2006 and, therefore,
+expected achievement level bonuses for fiscal 2006 were earned under the Incentive Compensation Plan by the CEO, the other officers and other key employees. 
+Cash Based Long-Term Incentive Compensation. The Committee’s policies make long-term incentive compensation an important part of motivating and retaining key employees. During fiscal year 2006, the Board of Directors, upon the
+recommendation of the Committee, adopted a long-term incentive plan (“Plan”) to provide a long-term cash bonus opportunity to the officers of the Company and the non-employee members of the Board of Directors if certain Company performance
+measures established by the Board of Directors are met for three fiscal year performance periods. No amounts can be earned for any three fiscal year performance period until the end of the third fiscal year since achievement of performance measures
+can only be determined at the end of the third fiscal year. 
+Equity Based Long-Term Incentive Compensation. Long-term incentive compensation has
+historically been in the form of annual stock option grants and is consistent with the interests of the Company’s shareholders in that it ties executive compensation to the performance of the Company’s stock. The Committee granted options
+to key employees based upon each key employee’s position in the Company, base salary and individual performance. The exercise price of options is equal to the closing price of the Common Stock on the date of grant as quoted by the Nasdaq Global
+Market, as reported in The Wall Street Journal . The vesting periods for options range from one to three years. The Committee did not grant options to executive officers during fiscal year 2006. 
+Compensation of the Chief Executive Officer. The Committee annually reviews and recommends to the Board of Directors for determination the compensation of the
+Chief Executive Officer (“CEO”) of the Company. In determining the amount, form and terms of such compensation the Committee considers the annual performance evaluation of the CEO conducted by the Board of Directors in light of Company
+goals and objectives relevant to CEO compensation and competitive market data supplied by the Committee’s independent compensation consultant pertaining to CEO compensation at comparable companies. Mr. Oehlke, the Company’s CEO,
+received an increase in his bi-weekly base salary in fiscal year 2006 from $14,615 to $15,192.31. As a participant in the Incentive Compensation Plan for 2006, Mr. Oehlke earned an incentive bonus of $203,388 based upon expected level profit
+goal performance for fiscal year 2006. During fiscal year 2006, Mr. Oehlke was awarded 250,000 target units under the Long-Term Incentive Plan for the three fiscal years performance period 2006 – 2008. No stock options were granted to
+Mr. Oehlke during fiscal year 2006. 
+Internal Revenue Code Section 162(m). Compensation payments in excess of $1 million in any taxable
+year to any “covered employee” (defined as the CEO and the Company’s other four most highly compensated officers) is subject to a limitation on deductibility for the Company under Section 162(m) of the Internal Revenue Code of
+1986, as amended. Certain performance-based compensation is not subject to the limitation on deductibility. To the extent that there is no adverse effect on the Company’s performance-related compensation philosophy or on the Company’s
+ability to provide competitive compensation, it is the policy of the Committee and the Board of Directors to minimize executive compensation that is not deductible by the Company for tax purposes. 
+The Compensation Committee: Yacov A. Shamash (Chairman), Wendell J. Satre 
+12 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit Committee members are independent as defined in Rule 4200(a)(15) of the
+National Association of Securities Dealers’ listing standards and that the Chairman of the Committee has the requisite attributes of an “audit committee financial expert” as defined by SEC regulations. The Audit Committee operates
+under a written charter adopted by the Board of Directors. The Audit Committee has met and discussed with the Company’s management and BDO Seidman, LLP (“BDO”), the Company’s independent auditors, the Company’s financial
+statements contained in the Annual Report on Form 10K for the year ended July 1, 2006. 
+The Audit Committee has reviewed and discussed with BDO the
+matters required to be discussed pursuant to Statement of Auditing Standards No. 61, “Communications with Audit Committees”. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter
+from BDO required by Independence Standards Board Standard No. 1 “Independence Discussions with Audit Committees”. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the
+provision of non-audit services is compatible with maintaining the principal auditor’s independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later
+ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the
+audited financial statements be included in the Company’s Annual Report on Form 10K for the fiscal year ended July 1, 2006, for filing with the Securities and Exchange Commission. 
+The Audit Committee: Patrick Sweeney (Chairman), Dale F. Pilz, William E. Terry 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit and non-audit fees billed or expected to be billed to the Company by BDO and its affiliate Mexican firm BDO Hernandez,
+Marron y Cia, SC for professional services in the named categories for the fiscal years ended July 1, 2006 and July 2, 2005: 
+FY 2006 
+FY 2005 
+Audit Fees (1) 
+$ 
+181,600 
+$ 
+175,300 
+Audit Related Fees (2) 
+8,000 
+7,600 
+Tax Fees (3) 
+80,500 
+38,250 
+All Other Fees 
+8,400 
+0 
+Total 
+$ 
+278,500 
+$ 
+221,150 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the Company’s Annual
+Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan. 
+(3) 
+Tax fees for fiscal years 2006 and 2005 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters.
+13 
+SHAREHOLDER RETURN PERFORMANCE PRESENTATION 
+Set forth below is a line graph comparing the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of the Nasdaq Stock
+Market (U.S. & Foreign) Index and the Nasdaq Electronic Components Index in fiscal 2006. 
+(*) 
+Assumes that the value of the investment in the Common Stock and each index was $100 invested on June 30, 2001 and that all dividends, if any, were reinvested. The Nasdaq (U.S.
+and Foreign) Market Index is composed of companies included within all Standard Industrial Classification (SIC) codes. The SIC code for all companies included in the Nasdaq Electronic Components Index is 367. The Company will provide a list of
+companies included in the indices to any shareholder upon written request to the Company’s Secretary. 
+CERTAIN
+RELATIONSHIPS AND RELATED TRANSACTIONS 
+See Compensation Committee Interlocks and Insider Participation in
+Compensation Decisions, page 11. 
+In October 2002, the Board of Directors approved retention bonus plans for Messrs. Oehlke, Gates and Klawitter. Under the
+retention bonus plan, Mr. Oehlke became eligible to receive retention bonus payments in August of 2004 and 2005, if he was employed by the Company on the payment date or had been terminated by the Company without cause. Maximum payment amounts
+under Mr. Oehlke’s retention bonus plan were $243,750 for 2004 and $276,250 for 2005. The maximum retention bonus payment in each year was reduced by the amount of any payments earned by Mr. Oehlke pursuant to any Company incentive
+plans during the fiscal year immediately preceding the retention bonus payment date. 
+14 
+Under the retention bonus plan, Mr. Gates became eligible to receive retention bonus payments in August of 2004 and
+2005 if he was employed by the Company on the payment date or had been terminated by the Company without cause. Maximum payment amounts under Mr. Gates retention bonus plan were $142,800 for 2004 and $166,600 for 2005. The maximum retention
+bonus payment in each year was reduced by the amount of any payments earned by Mr. Gates pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date. 
+Under the retention bonus plan, Mr. Klawitter became eligible to receive retention bonus payments in August of 2004 and 2005 if he was employed by the Company on
+the payment date or had been terminated by the Company without cause. Maximum payment amounts under Mr. Klawitter’s retention bonus plan were $142,800 for 2004 and $166,600 for 2005. The maximum retention bonus payment in each year was
+reduced by the amount of any payments earned by Mr. Klawitter pursuant to any Company incentive plans during the fiscal year immediately preceding the retention bonus payment date. 
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO Seidman, LLP (“BDO”) as the Company’s independent auditors for the fiscal year ending June 30, 2007.
+Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond to appropriate questions. In the event that ratification of
+this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will review its future selection of auditors. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY’S 
+INDEPENDENT AUDITORS
+SHAREHOLDER PROPOSALS 
+To be
+considered for presentation to the Annual Meeting of Shareholders to be held in 2007, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road – Lower Level, Spokane Valley,
+Washington 99216, no later than May 18, 2007. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors and
+persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”) and Nasdaq. Reporting
+Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its review of the copies of such forms received or written representations from certain Reporting Persons
+that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended July 1, 2006 all the Reporting Persons complied with all applicable filing requirements. 
+Solicitation Expenses . The expense of printing and mailing proxy material will be borne by the Company. In addition to the solicitation of proxies by mail,
+solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. The Company will request brokers and
+nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation material to such beneficial owners.
+15 
+Other Business . The Board of Directors knows of no other business that will be presented to the Annual
+Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 22, 2006 
+16 
+KEY TRONIC
+CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 26, 2006 
+JACK W. OEHLKE, DALE F. PILZ, and WENDELL J. SATRE, or any
+of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key
+Tronic Corporation to be held on Thursday, October 26, 2006, and any adjournment or postponement thereof. 
+(Continued and to
+be signed and dated on other side.) 
+Address Change/Comments (Mark the corresponding box on the reverse side) 
+FOLD AND DETACH HERE 
+UNLESS OTHERWISE
+SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please 
+Mark Here 
+for Address 
+Change or 
+Comments 
+SEE REVERSE SIDE 
+1. Election of Directors: 
+FOR all 
+nominees 
+listed below 
+WITHHOLD AUTHORITY 
+to vote for all nominees 
+listed below 
+FOR, except vote withheld from the following nominee(s): 
+2. Ratification of the appointment of BDO Seidman, LLP as the 
+Company’s independent auditors for fiscal year 2007. 
+FOR AGAINST ABSTAIN 
+Election of five directors (or if any nominee is not
+available 
+for election, such substitute as the Board of Directors or 
+the proxy holders may designate). 
+Nominees: 01 - James R. Bean 
+02 - Jack W. Oehlke 
+03 - Dale F. Pilz 
+04 - Yacov A. Shamash 
+05 - Patrick Sweeney. 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying 
+proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and 
+revokes all prior proxies. Shares represented by this proxy will be voted as directed by the 
+shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may 
+properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date 
+below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Please sign exactly as your name appears herein. Joint
+owners should each 
+sign. When signing as attorney, executor, administrator, trustee or guardian, 
+please give full title as such. 
+Signature 
+Signature 
+Date 
+No postage is required if this proxy is returned in the enclosed
+envelope and mailed in the United States. 
+FOLD AND DETACH HERE 
+KEY TRONIC
+CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 26, 2006 
+JACK W. OEHLKE, DALE F. PILZ, and WENDELL J. SATRE, or any
+of them, each with the 
+power of substitution, are hereby authorized to represent and vote all shares of the undersigned,
+with 
+all the powers which the undersigned would possess if personally present, at the Annual Meeting of 
+Shareholders of Key Tronic Corporation to be held on Thursday, October 26, 2006, and any 
+adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side.) 
+Address Change/Comments (Mark the
+corresponding box on the reverse side) 
+FOLD AND DETACH HERE 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement
+Savings Plan (the “Plan”), you have the right to direct JP Morgan Chase Bank, N.A. (the “Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest
+attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on October 26, 2006. 
+For your information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to Mellon Investor Services is
+enclosed for your use in returning your completed, signed, and dated proxy card to the Plan Trustee. 
+The Plan Trustee will
+hold your voting instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or employees of the Company, except to the extent required by law. 
+If your completed proxy card is not received by October 13, 2006 the Administrative Committee for the Plan will direct the Plan Trustee to
+vote your shares. The Trustee will be directed to vote all such unvoted shares in the same proportion as the voted shares received. 
+JP Morgan Chase Bank, N.A. 
+UNLESS OTHERWISE
+SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please 
+Mark Here 
+for Address 
+Change or 
+Comments 
+SEE REVERSE SIDE 
+1. Election of Directors: 
+FOR all 
+nominees 
+listed below 
+WITHHOLD AUTHORITY 
+to vote for all nominees 
+listed below 
+2. Ratification of the appointment of BDO Seidman, LLP as the 
+Company’s independent auditors for fiscal year 2007. 
+FOR AGAINST ABSTAIN 
+FOR, except vote withheld from the following
+nominee(s): 
+Election of five directors (or if any nominee is not available 
+for election, such substitute as the Board of Directors 
+or the proxy holders may designate). 
+Nominees: 01 - James R. Bean
+02 - Jack W. Oehlke 
+03 - Dale F. Pilz 
+04 - Yacov A. Shamash 
+05 - Patrick Sweeney. 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying 
+proxy
+statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and 
+revokes all prior
+proxies. Shares represented by this proxy will be voted as directed by the 
+shareholder. In their discretion, the Proxies
+are authorized to vote upon such other business as may 
+properly come before the Annual Meeting and any adjournment or
+postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and
+date 
+below. You need not mark any boxes. 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Please sign exactly as your name
+appears herein. Joint owners should each 
+sign. When signing as attorney, executor, administrator, trustee or guardian,
+please give full title as such. 
+Signature 
+Signature 
+Date 
+No
+postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+FOLD AND DETACH
+HERE
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-06-192371/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-06-192371/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000719733/0001193125-07-201911/proxy.txt b/raw/proxies/0000719733/0001193125-07-201911/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..d678573f26d02bac553a27a3937f5d59bd49cd6f
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-07-201911/proxy.txt
@@ -0,0 +1,1200 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 21, 2007 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key
+Tronic Corporation, a Washington corporation (the “Company” or “Key Tronic”), to be held on Thursday, October 25, 2007, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road
+– Lower Level, Spokane Valley, Washington 99216. 
+Whether or not you will attend the Annual Meeting in person and regardless of the number of shares
+you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even if you previously have returned your
+proxy card. 
+Sincerely, 
+Jack W. Oehlke 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 25, 2007 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 25, 2007, at 10:00
+a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect five directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO Seidman, LLP as independent auditors for fiscal year 2008; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 5, 2007 are entitled to notice of and to vote at the Annual Meeting and any
+adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares will be voted at
+the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 21, 2007 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD PROMPTLY,
+WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. 
+First mailed to shareholders on or about September 21, 2007.
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key
+Tronic Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of
+Directors of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 25, 2007 at 10:00 a.m. Pacific Time at the principal executive offices of the
+Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Jack W. Oehlke and Dale F. Pilz, each of them and their
+substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the Common Stock at the close of business on September 5, 2007 (the “Record Date”) are entitled to notice of and to vote
+at the Annual Meeting. As of the Record Date 9,921,045 shares of Common Stock were issued and outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the
+Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and
+FOR the ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2008. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of
+the Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has
+given a proxy will not revoke such proxy. 
+Voting 
+Each
+share of Common Stock outstanding is entitled to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws,
+if a quorum exists at a meeting: (i) the five nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be
+elected directors and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of
+directors, any action other than a vote for a nominee will have the practical effect of voting against the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast.
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Five directors are to be elected at the Annual Meeting to serve until the next Annual Meeting
+of Shareholders and until their respective successors have been elected and have qualified. The five nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as
+a nominee or director, the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named
+without nomination of a substitute, or the size of the Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to
+serve as a nominee or as a director if elected. It is the Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2007 Annual Meeting attended the 2006 Annual meeting.
+The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+James R. Bean , age 57, has been President and CEO of Preco Electronics, Inc. since November 1999. From May 1997 to 1999 he held various management positions in
+Boise, Idaho with Preco Electronics, Inc. Previously he held various management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer, Inc. and National Semiconductor, Inc. Mr. Bean is a graduate of New Mexico State
+University with a B.S. in Industrial Engineering. 
+Jack W. Oehlke , age 61, has been President and Chief Executive Officer of the Company since June
+1997. From October 1995, he served as Chief Operating Officer. Previously, he served as Senior Vice President of Operations from January 1995 to October 1995 and Vice President of Manufacturing Operations of the Company from December 1993 to January
+1995. Mr. Oehlke served as Director of Operations, Director of Quality and in various management positions within manufacturing, engineering and quality functions of the Microswitch Division of Honeywell, Inc. from 1968 to 1993. Mr. Oehlke
+has a Bachelor of Science Degree in Industrial Technology from the University of Wisconsin at Menomonie. 
+Dale F. Pilz , age 81, has served as
+Chairman of the Board since January 2000 and has been a director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986.
+Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Yacov A. Shamash , age 57, has been a director of the Company since 1989. He has been the Dean of Engineering and Applied Sciences at the State University of New
+York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the
+Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp., and Applied DNA Sciences, Inc. 
+Patrick Sweeney , age 72, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995
+and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and also served as
+Managing Director of Ireland for Digital Equipment Corporation and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, and Photo Machining Inc. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+2 
+CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS 
+Board Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors
+have been elected and have qualified. There are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met four times during fiscal 2007. During fiscal 2007, each director
+attended 100% of the Board of Directors meetings and 100% of meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+Directors’ Independence 
+The Board of Directors has determined
+that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable Nasdaq Stock Market (“NASDAQ”) listing standards, except for Mr. Oehlke, the Company’s current
+President and Chief Executive Officer. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet NASDAQ’s
+definition of independence contained in Rule 4200(a)(15); (2) meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of
+the Company or any current subsidiary of the Company at any time during the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow
+statement, as required by Marketplace Rule 4350(d)(2). 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee, has
+the requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Executive Sessions 
+At all of the four regular meetings of the Board
+of Directors held during fiscal year 2007, the independent directors met separately in executive session without management present. 
+Code of Conduct
+The Board of Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of Conduct
+is available on the Company’s website at www.keytronic.com . The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of
+Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o General Counsel & Secretary, Key Tronic Corporation, N. 4424 Sullivan Road – Lower Level, Spokane Valley, WA 99216. All such
+shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors or Board member. 
+Nominations to the Board 
+The Governance and Nominating Committee will consider written proposals from shareholders for directors to be
+elected at the annual meeting which are submitted to the Secretary of the Company, together with biographical information and references, at least six months prior to the annual meeting. 
+Board Committees 
+The Board of Directors has four standing committees: the Audit Committee, the Compensation and
+Administration Committee, the Executive Committee and the Governance and Nominating Committee. The committees each have written charters approved by the Board. The charters of the Audit Committee, the 
+3 
+Compensation and Administration Committee and the Governance and Nominating Committee are available on the Company’s
+website at www.keytronic.com . 
+The Audit Committee , which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met ten times
+during fiscal 2007. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and appoints the
+Company’s independent auditors, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establishes the fees and other compensation to be paid to the independent auditors;
+monitors the qualifications, independence and performance of the Company’s independent auditors; and establishes procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by
+the Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of communication among the Board, the independent auditor and management. 
+The Compensation and Administration Committee which currently consists of Messrs. Shamash (Chairman), and Pilz, met three times during fiscal 2007. The Committee
+establishes and reviews annually the Company’s general compensation policies applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief
+Executive Officer and other officers and key management employees, prepares and delivers annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive
+Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding changes to existing compensation plans. The Committee administers the Company’s incentive compensation plans and stock option plans,
+including determining the individuals to receive awards and options and the terms of such awards and options. 
+The Executive Committee , which
+currently consists of Messrs. Sweeney (Chairman), Oehlke and Pilz did not meet during fiscal 2007. The Executive Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company
+between meetings of the Board of Directors. 
+The Governance and Nominating Committee , which currently consists of Messrs. Sweeney (Chairman), Bean
+and Pilz met one time during fiscal 2007. The Committee makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect
+to the structure and composition of the Board. The Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific
+minimum qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be identified to the Committee by members of the Board, officers of the Company,
+shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. The Company has not paid any third party a fee to assist in identifying and
+evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner of more than 5% of the Company’s Common Stock. 
+Related Person Transactions 
+In April 2007, the Board of Directors
+adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested
+Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may
+be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent
+beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last
+fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent 
+4 
+beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing.
+Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home
+(other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In
+determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an
+unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. The Company had no related Party Transactions during fiscal year 2007. 
+Compensation Committee Interlocks and Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Pilz. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during
+fiscal year 2007. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee
+of the Company. 
+EXECUTIVE OFFICERS 
+All executive officers hold office until their successors are elected and have qualified. In addition to Mr. Oehlke, the following persons are the executive officers of the Company: 
+George R. Alford , age 54, has been Vice President of Materials of the Company since July 21, 2006. From August 2005 to July 2006 he served as Director of
+Materials (HID Group) at Cooper Industries. From October 2000 to August 2005, he served in various procurement and materials management positions with Solectron Corporation. Mr. Alford has a B.S. in Industrial Technology and a M.A. in
+Management from Middle Tennessee State University and a J.D. in Civil Law from Nashville School of Law. 
+Craig D. Gates, age 48, has been the
+Executive Vice President and General Manager since August 2002. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business Development from October
+1995 to July 1997. He joined the Company as Vice President of Engineering in October 1994. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois, Urbana.
+From 1982 he held various engineering and management positions within the Microswitch Division of Honeywell, Inc., in Freeport, Illinois and from 1991 to October 1994 he served as Director of Operations, Electronics for Microswitch. 
+Ronald F. Klawitter , age 55, has been Executive Vice President of Administration, CFO, and Treasurer since July 1997. Previously he was Vice
+President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter
+was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a BA degree from Wittenberg University and is a Certified Public Accountant. 
+Efren R. Perez , age 67, has served as Vice President of Southwest Operations since July 1997. Previously he was the Managing Director of Southwest Operations from July 1996 to July 1997 and Director of
+Southwest Operations from July 1995 to June 1996. Following the Company’s acquisition of the Honeywell, Inc. Keyboard Division, Mr. Perez served as Plant Manager in Juarez from July 1993 to July 1995. He served as Plant Manager in Juarez
+for the Keyboard Division of Honeywell, Inc. from February 1989 to July 1993. Mr. Perez is a graduate of the University of Mexico with a B.S. in Physics. 
+5 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been
+furnished to the Company regarding beneficial ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director
+and nominee for director of the Company; (iii) each of the executive officers of the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class (1) 
+MORE THAN 5% SHAREHOLDERS 
+Signia Capital Management LLC 
+108 N. Washington Street, Suite 305 
+Spokane, WA 99201 
+1,379,972 
+(2),(3) 
+13.9 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+811,213 
+(4),(5) 
+8.2 
+% 
+Tieton Capital Management 
+4700 Tieton Drive, Suite C 
+Yakima, WA 98908 
+654,608 
+(6),(7) 
+6.6 
+% 
+Citigroup Investment Research 
+399 Park Avenue 
+New York, NY 10043 
+531,517 
+(8),(9) 
+5.4 
+% 
+DIRECTORS AND EXECUTIVE OFFICERS 
+James R. Bean 
+0 
+* 
+* 
+Jack W. Oehlke 
+451,506 
+(10) 
+4.3 
+% 
+Dale F. Pilz 
+63,982 
+(11) 
+* 
+* 
+Yacov A. Shamash 
+58,530 
+(12) 
+* 
+* 
+Patrick Sweeney 
+68,930 
+(13) 
+* 
+* 
+Craig D. Gates 
+301,496 
+(14) 
+2.9 
+% 
+Ronald F. Klawitter 
+315,271 
+(15) 
+3.1 
+% 
+George R. Alford 
+0 
+* 
+* 
+Efren R. Perez 
+161,661 
+(16) 
+1.6 
+% 
+All executive officers and directors as a group 
+(9 persons) 10-16, 17 
+1,421,376 
+(17) 
+12.8 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+6 
+1. 
+Percentage beneficially owned is based on 9,921,045 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own as of the
+record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such person or
+persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, filed July 30, 2007. 
+3. 
+Signia Capital Management LLC is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, filed July 26, 2007. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA
+Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified
+employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Based on Form 13D filed with the Securities and Exchange Commission, dated January 17, 2007. 
+7. 
+Tieton Capital Management is a registered investment advisor. 
+8. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated August 14, 2007. 
+9. 
+Citigroup Investment Research is a registered investment advisor. 
+10. 
+Includes 389,000 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock allocated to
+Mr. Oehlke as a participant in the Company’s 401(k) Retirement Savings Plan (29,792 shares) as of June 30, 2007. 
+11. 
+Includes 57,430 shares issuable upon exercise of director stock options. 
+12. 
+Represents 57,430 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+13. 
+Includes 2,465 shares issuable upon exercise of director stock options. 
+14. 
+Includes 285,250 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k)
+Retirement Savings Plan (7,455 shares) as of June 30, 2007. 
+15. 
+Includes 219,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k)
+Retirement Savings Plan (17,860 shares) as of June 30, 2007. 
+16. 
+Represents 160,500 shares issuable upon exercise of employee stock options and Common Stock allocated to Mr. Perez as a participant in the Company’s 401(k) Retirement
+Savings Plan (1,161 shares) as of June 30, 2007. 
+17. 
+Includes 1,171,075 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60 days of
+September 5, 2007. 
+7 
+EXECUTIVE COMPENSATION 
+COMPENSATION DISCUSSION AND ANALYSIS 
+Executive Compensation Philosophy 
+Performance at the company level and at the group or individual level is the cornerstone of our total compensation
+program. We compensate our senior management using a mix of salary, annual cash incentives, a long-term cash incentive that replaces a prior stock option program, and benefits that in total are designed to be competitive with comparable employers
+and to align management interests with those of our shareholders. Salary and incentives are all tied directly to performance. Our goal is to pay at market median in total compensation when our results are strong with total compensation opportunity
+reaching or exceeding the 75 th percentile for the strongest corporate and individual results. At the senior level, base salaries are built around the
+median of the market. Annual cash incentives at target are intended to be at or above the median of the market. Our current plan rewards corporate performance and individual contribution. At lower levels financial performance at the unit level and
+individual contribution are the focus. Long-term cash incentives are intended to reward sustained performance over multiple years (usually three) and are below median levels typical in publicly traded peer companies. This long-term incentive is
+available to officers of the Company 
+Total Compensation Structure 
+To assist Key Tronic with allocating compensation and moving from an equity-based long-term incentive plan to a cash-based plan, at the direction of the Board’s Compensation and Administration Committee, the
+Company engaged Milliman, Inc. a nationally recognized consulting firm to conduct an analysis of the compensation of senior management at Key Tronic. This analysis included the use of reputable published surveys of executive compensation among
+companies similar in size (total revenues, number of employees) and similar in operational complexity to Key Tronic. In addition, twelve peer companies that are publicly traded and similar to Key Tronic in terms of business (not necessarily size)
+were analyzed, primarily as part of an analysis of company performance in key areas: sales, net income, days in inventory, P/E ratio, diluted EPS, current ratio, etc. These companies included: Flextronics, SCI, Solectron, Plexus, CTS, Suntron,
+Sigmatron and Sypris to name a few. The Committee has elected to conduct compensation analysis using published survey data rather than an analysis of proxy statements of similar companies primarily because of the difficulty of finding a robust group
+of similar publicly traded companies. The Compensation and Administration Committee focuses on the top five most highly compensated officers. For Key Tronic, this group includes our President & CEO (“CEO”), EVP Administration
+CFO & Treasurer, EVP & General Manager, VP Southwest Operations and VP Materials. Data obtained from Milliman’s analysis includes total direct compensation (base, annual incentives, long-term incentives) plus non-qualified
+compensation and other material compensation awards. Milliman also analyzed other Key Tronic positions using reputable published data appropriate for our various locations and assisted us in adjusting our compensation structures to align better with
+competitive levels. Data from this analysis were factored into setting pay ranges and incentive targets for the executive officers. 
+The results of the
+study by Milliman included modifications to our annual incentive plan for executives and all other employees; the replacement of stock option programs with a new cash-based long-term incentive plan (in fiscal year 2006) in which the Board will
+approve three-year goals tied to the grant of “performance units” to each officer. These units will have a value to be determined at the end of each three-year grant period tied to achievement of these Board set goals. 
+Based on these analyses, the Board established a total direct compensation target for the CEO of $850,000 which is approximately 40% below the market median. The target
+total direct compensation for the EVP Administration CFO & Treasurer is $435,000 which is approximately 25% below the market median. The target total direct compensation for the EVP & General Manager is $556,000 which is 20% below
+the market median. The target total direct compensation for the VP Southwest Operations is $310,000 which is 8% above the market median. The target total direct compensation for the VP Materials is $250,000 which is approximately 20% above the
+market median. 
+8 
+Allocation Among Compensation Elements 
+Position 
+Base Salary 
+Annual 
+Incentive 
+Target 
+Long-term 
+Incentive 
+Target Value 
+CEO & President 
+45 
+% 
+25 
+% 
+30 
+% 
+EVP Administration CFO & Treasurer 
+60 
+% 
+25 
+% 
+15 
+% 
+EVP & General Manager 
+50 
+% 
+20 
+% 
+30 
+% 
+VP Southwest Operations 
+65 
+% 
+25 
+% 
+10 
+% 
+VP Materials 
+65 
+% 
+20 
+% 
+15 
+% 
+The Board believes that compensation of executives at Key Tronic should be predominantly performance based. The
+allocation of total direct compensation has adequate amounts of pay at risk while recognizing the limitations of a cash-based long-term incentive plan when compared to stock based plans. This allocation is in keeping with the Board’s
+compensation strategy. Base salary at all levels is dependent on market practice and individual performance. In companies similar in business to Key Tronic, Milliman found in general that base salary comprised 54%, annual incentives comprised 25%
+and long term incentives comprised 20% of total direct compensation. 
+In addition, each senior executive position has been assigned to a base salary range
+that is built around median market practice as recommended by Milliman. 
+Base Salary 
+Key Tronic provides executives with a level of “guaranteed” compensation in the form of base salary that facilitates an appropriate lifestyle given their professional status and accomplishments. As indicated
+earlier, each position is paid within a range that targets median market salary. Individual salary levels vary around this point based on experience, knowledge, and individual contribution. For the CEO that range is between $307,000 and $501,000.
+For the EVP Administration CFO & Treasurer that range is between $187,000 and $278,000. For the EVP & General Manager that range is between $207,000 and $341,000. For the VP Southwest Operations that range is between $150,000 and
+$206,000. For the VP Materials that range is between $116,000 and $159,000. These ranges were objectively determined using the combined data provided by Milliman and are consistent with Milliman’s recommendations for providing middle of the
+market base salary. 
+Annual Incentives 
+For our senior
+officers, annual incentives are tied directly to the achievement of a company-wide financial goal which is profit before taxes (PBT). PBT is the financial goal because of its significant impact on increasing shareholder equity. The Board has
+determined that the disclosure of the specific target would not be in the best interests of shareholders and would provide competitors with important competitive information. The Board believes that achievement of the target financial goal (PBT) is
+a stretch goal which requires performance significantly above the previous fiscal year. In addition, individual contributions and achievement of specific individual goals subjectively evaluated by the Board for the CEO and by the CEO for the other
+officers (and reviewed by the Board) affect the final award each year. Target annual incentive levels for the top executives are set at or slightly above typical market practice to enable total direct compensation to be more competitive given that
+Key Tronic’s long-term incentive is cash-based and therefore not completely comparable to what our publicly traded peers offer through the potential appreciation available to them in their equity-based long term incentive plans. The fiscal year
+2007 Incentive Compensation Plan provided that if Key Tronic hit its PBT target, executives would have the opportunity to earn 100% of their incentive target. If PBT exceeded target by 18%, executives would have the opportunity to earn up to 150% of
+their annual incentive target. If PBT were more than 18% below target level, no incentive would be paid. 
+Long-term Incentives 
+Historically, the primary form of long-term compensation at Key Tronic has been stock options. No new options have not been granted to any of the Named Executive Officers
+since October 24, 2002. Beginning in fiscal year 2006, the officers and non-employee directors of Key Tronic became eligible to participate in Key Tronic’s Long-term Incentive Plan (LTIP) a long-term incentive plan approved by the Board in
+9 
+September 2005. Under this plan, officers and non-employee
+directors may be awarded a number of “performance units” at the start of each fiscal year. These units will have a future value tied directly to the achievement of Board determined and approved goals for a three-year period. At the end of
+each three-year period, these units will be exchanged for cash at the value set by the Board at the beginning of the three year period based on goal achievement as measured at the end of the three year period. The target value of the units awarded
+to each executive was determined by analyzing long-term incentive compensation among the peer group and evaluating total direct compensation with such awards included. These awards are set at levels that approximate the 25 th percentile of this group. If maximum goals are achieved, the units will have 150% of their target value at the end of the three-year period. Total direct
+compensation at target for the senior executives (when including the value of these units) should be between the 25 th percentile and the 50 th percentile of the market. The LTIP provides clarity as to the relationship between achievement of long term goals and reward. 
+For the Chief Executive Officer this award at target represents $250,000 of compensation. For the EVP Administration CFO & Treasurer this award at target
+represents $120,000 of compensation. For the EVP & General Manager this award at target represents $150,000 of compensation. For the VP Southwest Operations, this award at target represents $40,000 of compensation. For the VP Materials this
+award at target represents $40,000 of compensation. 
+Other Benefits 
+The Named Executive Officers and all other U.S. employees are eligible to participate in the Key Tronic Corporation 401(k) Retirement Savings Plan (“401(k) Plan”). The 401(k) Plan is a defined contribution
+tax qualified retirement savings plan under which employees can contribute a portion of their eligible cash compensation to the 401(k) Plan and the Company makes matching cash contributions of 100% of the first 3% and 50% of the next 2% of
+compensation deferred subject to qualified plan limits. All employee contributions and matching contributions are vested upon contribution. The Company offers the Named Executive Officers and all other U.S. employees life insurance, disability,
+medical and dental plans for which the Named Executive Officers are charged the same rate as all other employees. 
+Named Executive Officers’
+Severance and Change in Control Arrangements 
+The Company entered into employment contracts with Messrs. Oehlke, Gates, Klawitter, Perez and Alford at
+the time each employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides
+that the Company may terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to
+termination for a period of one year after termination. The employment contracts entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and
+duties of the employee in such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of
+Messrs. Oehlke, Gates, Klawitter and Perez were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to
+termination for a period of two years after termination. 
+Role of the CEO in Compensation Decisions and Timing of Compensation Decisions 
+The Board of Directors, upon the recommendation of its Compensation and Administration Committee, makes all compensation decisions for the Company’s officers
+(which includes the Named Executive Officers). The CEO conducts a performance review of each of the other Named Executive Officers each year. The CEO presents the results of the performance reviews to the Compensation and Administration Committee
+along with his recommendations as to salary changes based upon the review results. The Committee has the discretion to modify the recommendations in arriving at its recommendation to the Board of salary changes. Annual and long term incentive awards
+and financial goals are established and approved by the Board, upon recommendation of the Compensation and Administration Committee, at the Board’s July meeting each year. 
+10 
+General Compensation Policies 
+• 
+Should any of the performance metrics require restatement that results in a prior overpayment to any of the named executive officers, any such overpayment will
+reduce the value of future awards unless otherwise determined by the Board in its judgment. 
+• 
+In setting levels for each compensation element, the Board does not factor into its determination prior awards already earned and paid, ownership levels, or awards
+or benefits provided from prior employers. 
+• 
+In general, long-term incentive awards will be made at the start of each fiscal year provided that the Board has been able to establish appropriate three-year
+goals. If such goals are not established, awards will be made at the time when the goals have been adopted (but not later than six months after the start of the first year of the three-year period) and will vest at the end of the third fiscal year,
+regardless of when the award is made. 
+• 
+Compensation payments in excess of $1 million in any taxable year to any “covered employee” (defined as the CEO and the Company’s other four most
+highly compensated officers) is subject to a limitation on deductibility for the Company under Section 162(m) of the Internal Revenue Code of 1986, as amended. Certain performance-based compensation is not subject to the limitation on
+deductibility. To the extent that there is no adverse effect on the Company’s performance-related compensation philosophy or on the Company’s ability to provide competitive compensation, it is the policy of the Committee and the Board of
+Directors to minimize executive compensation that is not deductible by the Company for tax purposes. 
+11 
+REPORT OF COMPENSATION COMMITTEE 
+The Compensation and Administration Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with management. Based upon the Committee’s review of and
+discussions with management with respect to the Compensation Discussion and Analysis the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual
+Report on Form 10-K for the fiscal year ended June 30, 2007, for filing with the Securities and Exchange Commission. 
+Compensation
+and Administration Committee: Yacov A. Shamash (Chairman), Dale F. Pilz 
+Summary Compensation Table 
+Set forth below is information on the compensation of the Company’s Chief Executive Officer and its four other executive officers who served in such capacities
+during fiscal year 2007 (“Named Executive Officers”). For information regarding the Company’s current executive officers, see Executive Officers, page 7. No stock awards or option awards were granted by the Company during fiscal year
+2007 and no Named Executive Officer is covered by a pension plan or a nonqualified deferred compensation plan; therefore these columns have been omitted from the table. 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation (2) 
+($) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Jack W. Oehlke, 
+Chief Executive Officer & President 
+2007 
+398,077 
+— 
+169,760 
+8,800 
+(3) 
+576,637 
+Craig D. Gates, 
+Executive Vice President & General Manager 
+2007 
+287,700 
+— 
+98,152 
+8,800 
+(3) 
+394,652 
+Ronald F. Klawitter 
+Executive Vice President of Administration, CFO & Treasurer 
+2007 
+258,000 
+— 
+88,019 
+8,800 
+(3) 
+354,819 
+George R. Alford, 
+Vice President of Materials 
+2007 
+148,923 
+40,106 
+(1) 
+44,456 
+9,093 
+(4) 
+242,578 
+Efren R. Perez 
+Vice President of SW Operations 
+2007 
+213,903 
+— 
+59,155 
+8,800 
+(3) 
+281,858 
+12 
+(1) 
+Represents signing bonus of $10,000 and relocation allowance of $30,106. Mr. Alford joined the Company and was elected VP of Materials on July 21, 2006.
+(2) 
+Represents amounts earned under the Incentive Compensation Plan for fiscal year 2007. 
+(3) 
+Represents Company matching payments in 2007 under the Company’s 401(k) Retirement Savings Plan. 
+(4) 
+Represents Company matching payments in 2007 under the Company’s 401(k) Retirement Savings Plan in the amount of $3,692 and tax gross up of signing bonus in the amount of
+$5,401. 
+GRANTS OF PLAN BASED AWARDS IN 2007 FISCAL YEAR 
+The following table sets forth information concerning individual grants of non-equity incentive plan awards made during fiscal year 2007 to each of the Named Executive Officers under the annual Incentive Compensation
+Plan and the Long-term Incentive Plan. No stock awards or option awards were granted by the Company during fiscal year 2007; therefore these columns have been omitted from the table. 
+Name 
+Grant Date 
+Estimated Future Payouts 
+Under Non-Equity Incentive Plan Awards 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Jack W. Oehlke 
+07/27/06 
+07/27/06 
+(1) 
+(2) 
+19,904 
+125,000 
+199,038 
+250,000 
+298,558 
+375,000 
+Craig D. Gates 
+07/27/06 
+07/27/06 
+(1) 
+(2) 
+11,508 
+75,000 
+115,080 
+150,000 
+172,620 
+225,000 
+Ronald F. Klawitter 
+07/27/06 
+07/27/06 
+(1) 
+(2) 
+10,320 
+60,000 
+103,200 
+120,000 
+154,800 
+180,000 
+George R. Alford 
+07/27/06 
+07/27/06 
+(1) 
+(2) 
+5,212 
+20,000 
+52,123 
+40,000 
+78,185 
+60,000 
+Efren R. Perez 
+07/27/06 
+07/27/06 
+(1) 
+(2) 
+6,936 
+20,000 
+69,358 
+40,000 
+104,037 
+60,000 
+(1) 
+Represents threshold, target and maximum payouts under the annual Incentive Compensation Plan for fiscal year 2007. For actual payouts earned for fiscal year 2007 see the Summary
+Compensation Table. The Incentive Compensation Plan is discussed under the caption “Annual Incentives” in the Compensation Discussion and Analysis. 
+(2) 
+Represents threshold, target and maximum payouts under the Long-term Incentive Plan for the 2007-2009 performance cycle. The Long-term Incentive Plan is discussed under the caption
+“Long-term Incentives” in the Compensation Discussion and Analysis. Payouts under the Long-term Incentive Plan for the 2007-2009 performance cycle will depend upon the achievement of goals for three year average sales growth and return on
+invested capital compared to peer group companies. 
+13 
+The following table provides information on stock options held by the Named Executive Officers at June 30, 2007. The
+Company does not have any outstanding stock awards; therefore these columns have been omitted from the table. 
+OUTSTANDING EQUITY AWARDS
+AT FISCAL YEAR-END 
+Option Awards 
+Name 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) 
+Exercisable 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) 
+Unexercisable 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date 
+Jack W. Oehlke 
+7,500 
+9,000
+22,000 
+22,000 
+15,500 
+15,500 
+50,000 
+50,000 
+50,000 
+37,500 
+37,500 
+50,000 
+10,000 
+10,000 
+10,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+16.25 
+8.34
+5.63 
+5.63 
+5.50 
+5.50 
+4.81 
+4.81 
+4.81 
+2.75 
+2.75 
+2.75 
+2.81 
+2.81 
+2.81 
+07/27/07 
+06/18/08 
+05/21/08 
+05/21/09
+06/17/08 
+06/17/09 
+08/28/08 
+08/28/09 
+08/28/10 
+06/26/09 
+06/26/10 
+06/30/09 
+05/22/11 
+05/22/12 
+05/22/13 
+Craig D. Gates 
+6,250 
+15,250 
+22,000 
+22,000 
+8,000 
+8,000 
+30,000 
+30,000 
+30,000 
+25,000 
+25,000 
+40,000 
+10,000 
+10,000 
+10,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+16.25 
+8.34
+5.63 
+5.63 
+5.50 
+5.50 
+4.81 
+4.81 
+4.81 
+2.75 
+2.75 
+2.75 
+2.81 
+2.81 
+2.81 
+07/27/07 
+06/18/08 
+05/21/08 
+05/21/09
+06/17/08 
+06/17/09 
+08/28/08 
+08/28/09 
+08/28/10 
+06/26/09 
+06/26/10 
+06/30/09 
+05/22/11 
+05/22/12 
+05/22/13 
+14 
+Ronald F. Klawitter 
+7,500 
+9,000 
+22,000 
+22,000 
+8,000 
+8,000 
+30,000 
+30,000 
+30,000 
+30,000 
+10,000 
+10,000 
+10,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+16.25 
+8.34 
+5.63 
+5.63 
+5.50 
+5.50 
+4.81 
+4.81 
+4.81 
+2.75 
+2.81 
+2.81 
+2.81 
+07/27/07 
+06/18/08 
+05/21/08 
+05/21/09
+06/17/08 
+06/17/09 
+08/28/08 
+08/28/09 
+08/28/10 
+06/30/09 
+05/22/11 
+05/22/12 
+05/22/13 
+George R. Alford 
+— 
+— 
+— 
+— 
+Efren R. Perez 
+4,500 
+5,000 
+5,250 
+5,250 
+15,000 
+15,000 
+20,000 
+10,000 
+10,000 
+10,000 
+13,333 
+13,333 
+13,334 
+8,333 
+8,333 
+8,334 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+16.25 
+8.34 
+5.63 
+5.63 
+2.75 
+2.75 
+2.75 
+2.81 
+2.81 
+2.81 
+2.09 
+2.09 
+2.09 
+1.15 
+1.15 
+1.15 
+07/27/07 
+06/18/08 
+05/21/08 
+05/21/09
+06/26/09 
+06/26/10 
+06/30/09 
+05/22/11 
+05/22/12 
+05/22/13 
+10/26/07 
+10/26/08 
+10/26/09 
+10/24/08 
+10/24/09 
+10/24/10 
+The following table provides information on exercises of stock options by Named Executive Officers during fiscal
+year 2007. The Company does not have any outstanding stock awards; therefore these columns have been omitted from the table. 
+OPTION
+EXERCISES AND STOCK VESTED 
+Option Awards 
+Name 
+Number of 
+Shares Acquired on 
+Exercise 
+(#) 
+Value Realized 
+on Exercise 
+($) (1) 
+Jack W. Oehlke 
+— 
+— 
+Craig D. Gates 
+— 
+— 
+Ronald F. Klawitter 
+60,000 
+87,000 
+George R. Alford 
+— 
+— 
+Efren R. Perez 
+— 
+— 
+(1) 
+Represents the difference between the exercise price and the closing price of the shares on the exercise date. 
+15 
+Pension Benefits 
+None of the Named Executive Officers is covered by a pension plan. 
+Non-qualified Deferred Compensation 
+None of the Named Executive Officers is covered by a defined contribution plan or other plan that provides for the deferral of compensation on a basis that is not
+tax-qualified. 
+Potential Payments Upon Termination or Change in Control 
+Employment Contracts. The Company entered into employment contracts with Messrs. Oehlke, Gates, Klawitter, Perez and Alford at the time each
+employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the
+Company may terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for
+a period of one year after termination. The employment contracts entered into with Messrs. Oehlke and Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the
+employee in such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Oehlke,
+Gates, Klawitter and Perez were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a
+period of two years after termination. 
+Stock Option Plans. The executive stock option plans and non-employee directors stock option
+plan provide that upon a change of control of the Company vesting of outstanding options will be accelerated. 
+Long-term Incentive
+Plan. The Long-term Incentive Plan provides that upon a change of control of the Company, vesting of units awarded under the Plan will be accelerated and will be payable at two times their value. 
+Compensation of Directors 
+Fees. Each director, other than the
+Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $3,750, a fee of $1,000 for each Board meeting attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a
+fee of $500 for each committee meeting attended (committee members receive a committee attendance fee of $250 if the committee meeting is held the same day as a Board meeting and a fee of $200 if the committee meeting is held by phone), except that
+directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day). The Chairman of the Board receives a quarterly retainer of $ 5,000, plus a
+fee of $1,500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of out-of-pocket expenses related to their service as directors. 
+Long-term Incentive Plan. Each director participates in the Company’s Long-term Incentive Plan (“Plan”). The Plan provides a long-term cash bonus
+opportunity to the members of the Board of Directors if certain Company performance measures established by the Board of Directors are met for three fiscal year performance periods. No amounts can be earned for any three fiscal year performance
+period until the end of the third fiscal year since achievement of performance measures can only be determined at the end of the third fiscal year. During fiscal year 2007, each non-employee Director, except Mr. Bean, was awarded 10,000 units
+under the Plan. If performance measures are met, these units will result in a cash payment ranging from $5,000 to $15,000 to each said non-employee Director at the end of fiscal year 2009. Payouts under the Long-term Incentive Plan will depend upon
+the achievement of goals for three year average sale growth and return on invested capital compared to peer group companies. During fiscal year 2007, Mr. 
+16 
+Bean was awarded 8,889 units under the Plan. If performance measures are met, the units will result in a cash payment
+ranging from $4,445 to $13,334 to Mr. Bean at the end of fiscal year 2009. 
+Stock Options. Each director who was not, upon election to the
+Board of Directors, an employee of the Company participated in the Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee Directors which Plan terminated on July 27, 2005. Under the Plan each non-employee director was
+granted, upon initial election, an option to purchase 10,000 shares of the Company’s Common Stock. An additional option to purchase 10,000 shares upon the director’s first re-election to the Board of Directors and an additional option to
+purchase 7,500 shares upon each re-election to the Board of Directors after the first re-election were also granted. A final option to purchase 4,930 shares was granted to each non-employee director upon re-election to the Board in October, 2004.
+The two 10,000 share option grants have a three year vesting period and the subsequent share option grants have a two year vesting period. 
+Set forth below
+is information on the compensation provided to each non-employee director of the Company during fiscal year 2007. No stock awards or option awards were granted to non-employee directors during fiscal year 2007 and no non-employee director is covered
+by a pension plan or a nonqualified deferred compensation plan; therefore these columns have been omitted from the table. 
+DIRECTOR
+COMPENSATION 
+Name 
+Fees Earned 
+or Paid in 
+Cash 
+($) 
+Option 
+Awards 
+($)(1) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+James R. Bean 
+10,350 
+— 
+— 
+— 
+10,350 
+Dale F. Pilz 
+29,640 
+1,085 
+— 
+— 
+30,725 
+Yacov A. Shamash 
+20,350 
+1,085 
+— 
+— 
+21,435 
+Patrick Sweeney 
+22,850 
+1,085 
+— 
+— 
+23,935 
+Wendell J. Satre(2) 
+11,450 
+1,085 
+— 
+— 
+12,535 
+William E. Terry(2) 
+11,249 
+1,085 
+— 
+— 
+12,334 
+1. 
+Amounts shown do not reflect compensation actually received by the directors. Reflects the dollar amounts recognized for financial statement reporting purposes for the year ended
+June 30, 2007 (relating to options granted in prior fiscal years) in accordance with Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004). “Share-based Payment” (SFAS No.123 (R)) excluding forfeitures. The
+following number of option awards were held by each of the directors and outstanding as of June 30, 2007: Mr. Pilz, 57,430 options; Mr. Sweeney, 57,430 options; Dr. Shamash, 57,430 options; Mr. Satre, 54,965 options;
+Mr. Terry, 54,965 options. 
+2. 
+Messrs. Satre and Terry retired from the Board on October 26, 2006. 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The
+Board of Directors has determined that all Audit Committee members are independent as defined in Rule 4200(a)(15) of the National Association of Securities Dealers’ listing standards and that the Chairman of the Committee has the requisite
+attributes of an “audit committee financial expert” as defined by SEC regulations. The Audit Committee operates under a written charter adopted by the Board of Directors. The Audit Committee has met and discussed with the Company’s
+management and BDO Seidman, LLP (“BDO”), the Company’s 
+17 
+independent auditors, the Company’s financial statements contained in the Annual Report on Form 10K for the year
+ended June 30, 2007. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing
+Standards No. 61, “Communications with Audit Committees”. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO required by Independence Standards Board Standard No. 1
+“Independence Discussions with Audit Committees”. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the
+principal auditor’s independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in
+the Company’s Annual Report on Form 10K for the fiscal year ended June 30, 2007, for filing with the Securities and Exchange Commission. 
+The Audit Committee: Patrick Sweeney (Chairman), James R. Bean, Dale F. Pilz 
+Principal Accountant Fees and Services. The following
+chart shows the aggregate audit and non-audit fees billed or expected to be billed to the Company by BDO and its affiliate Mexican firm BDO Hernandez, Marron y Cia, SC for professional services in the named categories for the fiscal years ended
+June 30, 2007 and July 1, 2006: 
+FY 2007 
+FY 2006 
+Audit Fees (1) 
+$ 
+197,228 
+$ 
+181,600 
+Audit Related Fees (2) 
+8,700 
+8,000 
+Tax Fees (3) 
+19,109 
+80,500 
+All Other Fees 
+— 
+8,400 
+Total 
+$ 
+225,037 
+$ 
+278,500 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the Company’s Annual
+Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan. 
+(3) 
+Tax fees for fiscal years 2007 and 2006 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters.
+18 
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO Seidman, LLP (“BDO”) as the
+Company’s independent auditors for the fiscal year ending June 28, 2008. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be
+available to respond to appropriate questions. In the event that ratification of this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will
+review its future selection of auditors. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
+OF BDO SEIDMAN, LLP AS THE COMPANY’S INDEPENDENT AUDITORS 
+SHAREHOLDER PROPOSALS 
+To be considered for presentation to the Annual Meeting of Shareholders to be held in 2008, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key
+Tronic Corporation, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, no later than May 16, 2008. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
+the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and
+Exchange Commission (“SEC”) and Nasdaq. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its review of the copies of such forms received
+or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended June 30, 2007 all the Reporting Persons complied with all applicable filing
+requirements. 
+Solicitation Expenses . The expense of printing and mailing proxy material will be borne by the Company. In addition to the
+solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. The
+Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation
+material to such beneficial owners. 
+Other Business . The Board of Directors knows of no other business that will be presented to the Annual
+Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 21, 2007 
+19 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 Proxy Solicited by Board of Directors for Annual Meeting 
+October 25, 2007 
+JACK W. OEHLKE and DALE F. PILZ, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally
+present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 25, 2007, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side) 
+Address
+Change/Comments (Mark the corresponding box on the reverse side) 
+FOLD AND DETACH HERE 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2.
+Mark Here for Address Change or Comments I PLEASE SEE REVERSE SIDE 
+1. Election of five directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy
+holders may designate). 
+Nominees: FOR all nominees listed to the left WITHHOLD AUTHORITY to vote for all nominees listed
+below 
+01. James R. Bean, 02. Jack W. Oehlke, 03. Dale F. Pilz, 04. Yacov A. Shamash, and 05. Patrick Sweeney. FOR, except
+vote withheld from the following nominee(s): FOR AGAINST ABSTAIN 
+2. Ratification of the appointment of BDO Seidman, LLP as
+the Company’s independent auditors for fiscal year 2008. 
+The undersigned hereby acknowledges receipt of the Notice of
+Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In
+their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. PLEASE SIGN, DATE AND RETURN
+PROMPTLY. NOTE: Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. FOLD AND DETACH HERE 
+Signature Signature Date 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 Proxy Solicited by Board of Directors for Annual Meeting 
+October 25, 2007 
+JACK W. OEHLKE and DALE F. PILZ, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally
+present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 25, 2007, and any adjournment or postponement thereof. (Continued and to be signed and dated on other side) 
+Address Change/Comments (Mark the corresponding box on the reverse side) FOLD AND DETACH HERE KEY TRONIC CORPORATION 4424 N. Sullivan
+Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401 (k) Retirement Savings Plan (the
+“Plan”), you have the right to direct JP Morgan Chase Bank, N.A. (the “Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such
+shares held in the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on October 25, 2007. For your information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report
+are enclosed. In addition, a postage paid return envelope addressed to Mellon Investor Services is enclosed for your use in returning your completed, signed, and dated proxy card to the Plan Trustee. The Plan Trustee will hold your voting
+instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or employees of the Company, except to the extent required by law. If your completed proxy card is not
+received by October 12, 2007 the Administrative Committee for the Plan will direct the Plan Trustee to vote your shares. The Trustee will be directed to vote all such unvoted shares in the same proportion as the voted shares received. JP Morgan
+Chase Bank, N.A. 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. Mark
+Here for Address Change or Comments PLEASE SEE REVERSE SIDE 
+1. Election of five directors (or if any nominee is not
+available for election, such substitute as the Board of Directors or the proxy holders may designate). Nominees: FOR all nominees listed to the left WITHHOLD AUTHORITY to vote for all nominees listed below 01. James R. Bean, 02. Jack W.Oehlke, 03.
+Dale F. Pilz, 04. Yacov A. Shamash, and 5. Patrick Sweeney. FOR, except vote withheld from the following nominee(s): 
+FOR
+AGAINST ABSTAIN 2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2008. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement,
+ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to
+vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. No postage is required if this proxy is returned in the enclosed envelope and mailed in the
+United States. PLEASE SIGN, DATE AND RETURN PROMPTLY. NOTE: Please sign exactly as your name appears herein. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. FOLD
+AND DETACH HERE 
+Signature Signature Date
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-07-201911/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-07-201911/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..a357be28ac9bc3323a5805d8eaa44f7f696cf0be
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-07-201911/proxy_rpt.txt
@@ -0,0 +1,19 @@
+Related Person Transactions 
+In April 2007, the Board of Directors
+adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested
+Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may
+be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent
+beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last
+fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent 
+4 
+beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing.
+Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home
+(other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In
+determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an
+unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. The Company had no related Party Transactions during fiscal year 2007. 
+Compensation Committee Interlocks and Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Pilz. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during
+fiscal year 2007. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee
+of the Company.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-08-195741/proxy.txt b/raw/proxies/0000719733/0001193125-08-195741/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..f130fa29d78dbb2fd18b3828838fb46baf3ddb69
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-08-195741/proxy.txt
@@ -0,0 +1,946 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 19, 2008 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key
+Tronic Corporation, a Washington corporation (the “Company” or “Key Tronic”), to be held on Thursday, October 23, 2008, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road
+– Lower Level, Spokane Valley, Washington 99216. 
+Whether or not you will attend the Annual Meeting in person and regardless of the number of shares
+you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even if you previously have returned your
+proxy card. 
+Sincerely, 
+Jack W. Oehlke 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 23, 2008 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 23, 2008, at
+10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect five directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO Seidman, LLP as independent auditors for fiscal year 2009; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 3, 2008 are entitled to notice of and to vote at the Annual Meeting and any
+adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares will be voted at
+the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 19, 2008 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD 
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL 
+MEETING. 
+First mailed to shareholders on or about September 19, 2008. 
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of Shareholders,
+this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common
+Stock”) in connection with the solicitation of proxies by the Board of Directors of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday,
+October 23, 2008 at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual
+Meeting”). The proxies appoint Jack W. Oehlke and Dale F. Pilz, each of them and their substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the Common Stock
+at the close of business on September 3, 2008 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date 10,052,641 shares of Common Stock were issued and outstanding. A proxy card for use
+at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on an
+otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and FOR the ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2009.
+Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any earlier
+proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock outstanding is entitled to one vote on each matter presented for a vote of the
+shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at a meeting: (i) the five nominees for election as directors who receive
+the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of
+Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other than a vote for a nominee will have the practical effect of voting against
+the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast. 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Five directors are to be elected at the Annual Meeting to serve until the next Annual Meeting
+of Shareholders and until their respective successors have been elected and have qualified. The five nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as
+a nominee or director, the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named
+without nomination of a substitute, or the size of the Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to
+serve as a nominee or as a director if elected. It is the Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2008 Annual Meeting attended the 2007 Annual meeting.
+The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+James R. Bean , age 58, has been President and CEO of Preco Electronics, Inc. since November 1999. From May 1997 to 1999 he held various management positions in
+Boise, Idaho with Preco Electronics, Inc. Previously he held various management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer, Inc. and National Semiconductor, Inc. Mr. Bean is a graduate of New Mexico State
+University with a B.S. in Industrial Engineering. 
+Jack W. Oehlke , age 62, has been President and Chief Executive Officer of the Company since June
+1997. From October 1995, he served as Chief Operating Officer. Previously, he served as Senior Vice President of Operations from January 1995 to October 1995 and Vice President of Manufacturing Operations of the Company from December 1993 to January
+1995. Mr. Oehlke served as Director of Operations, Director of Quality and in various management positions within manufacturing, engineering and quality functions of the Microswitch Division of Honeywell, Inc. from 1968 to 1993. Mr. Oehlke
+has a Bachelor of Science Degree in Industrial Technology from the University of Wisconsin at Menomonie. 
+Dale F. Pilz , age 82, has served as
+Chairman of the Board since January 2000 and has been a director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986.
+Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Yacov A. Shamash , age 58, has been a director of the Company since 1989. He has been the Dean of Engineering and Applied Sciences at the State University of New
+York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the
+Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp., and Applied DNA Sciences, Inc. 
+Patrick Sweeney , age 73, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995
+and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and also served as
+Managing Director of Ireland for Digital Equipment Corporation and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, and Photo Machining Inc. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+2 
+CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS 
+Board Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors
+have been elected and have qualified. There are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met five times during fiscal 2008. During fiscal 2008, each director
+attended 80% of the Board of Directors meetings and 90% of meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+Directors’ Independence 
+The Board of Directors has determined
+that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable Nasdaq Stock Market (“NASDAQ”) listing standards, except for Mr. Oehlke, the Company’s current
+President and Chief Executive Officer. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet NASDAQ’s
+definition of independence contained in Rule 4200(a)(15); (2) meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of
+the Company or any current subsidiary of the Company at any time during the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow
+statement, as required by Marketplace Rule 4350(d)(2). 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee, has
+the requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Executive Sessions 
+At three of the four regular meetings of the
+Board of Directors held during fiscal year 2008, the independent directors met separately in executive session without management present. 
+Code of
+Conduct 
+The Board of Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of
+Conduct is available on the Company’s website at www.keytronic.com . The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of
+Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o General Counsel & Secretary, Key Tronic Corporation, N. 4424 Sullivan Road – Lower Level, Spokane Valley, WA 99216. All such
+shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors or Board member. 
+Nominations to the Board 
+The Governance and Nominating Committee will consider written proposals from shareholders for directors to be
+elected at the annual meeting which are submitted to the Secretary of the Company, together with biographical information and references, at least six months prior to the annual meeting. 
+Board Committees 
+The Board of Directors has four standing committees: the Audit Committee, the Compensation and
+Administration Committee, the Executive Committee and the Governance and Nominating Committee. The committees each have written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and
+the Governance and Nominating Committee are available on the Company’s website at www.keytronic.com . 
+3 
+The Audit Committee , which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met ten times during
+fiscal 2008. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and appoints the
+Company’s independent auditors, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establishes the fees and other compensation to be paid to the independent auditors;
+monitors the qualifications, independence and performance of the Company’s independent auditors; and establishes procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by
+the Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of communication among the Board, the independent auditor and management. 
+The Compensation and Administration Committee , which currently consists of Messrs. Shamash (Chairman), and Pilz, met four times during fiscal 2008. The Committee
+establishes and reviews annually the Company’s general compensation policies applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief
+Executive Officer and other officers and key management employees, prepares and delivers annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive
+Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding changes to existing compensation plans. The Committee administers the Company’s incentive compensation plans and stock option plans,
+including determining the individuals to receive awards and options and the terms of such awards and options. 
+The Executive Committee , which
+currently consists of Messrs. Sweeney (Chairman), Oehlke and Pilz did not meet during fiscal 2008. The Executive Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company
+between meetings of the Board of Directors. 
+The Governance and Nominating Committee , which currently consists of Messrs. Sweeney (Chairman), Bean
+and Pilz met one time during fiscal 2008. The Committee makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect
+to the structure and composition of the Board. The Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific
+minimum qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be identified to the Committee by members of the Board, officers of the Company,
+shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. The Company has not paid any third party a fee to assist in identifying and
+evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner of more than 5% of the Company’s Common Stock. 
+4 
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The
+policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the
+aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a
+director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or
+was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director,
+(b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren,
+siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into
+account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related
+Party’s interest in the Transaction. The Company had no related Party Transactions during fiscal year 2008. 
+Compensation Committee Interlocks and
+Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Pilz.
+No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during fiscal year 2008. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee
+of any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee of the Company. 
+5 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been
+furnished to the Company regarding beneficial ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director
+and nominee for director of the Company; (iii) each of the executive officers of the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of 
+Beneficial Owner* 
+Number of 
+Shares 
+Beneficially 
+Owned (1) 
+Percent of 
+Class (1) 
+MORE THAN 5% SHAREHOLDERS 
+Signia Capital Management LLC 
+108 N. Washington Street, Suite 305 
+Spokane, WA 99201 
+1,809,676 
+(2),(3) 
+18.0 
+% 
+Tieton Capital Management 
+4700 Tieton Drive, Suite C 
+Yakima, WA 98908 
+1,059,298 
+(6),(7) 
+10.6 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+802,901 
+(4),(5) 
+8.0 
+% 
+Citigroup Global Markets Inc. 
+399 Park Avenue 
+New York, NY 10043 
+570,552 
+(8),(9) 
+5.7 
+% 
+DIRECTORS AND EXECUTIVE OFFICERS 
+James R. Bean 
+0 
+* 
+* 
+Jack W. Oehlke 
+405,006 
+(10) 
+3.9 
+% 
+Dale F. Pilz 
+56,482 
+(11) 
+* 
+* 
+Yacov A. Shamash 
+51,030 
+(12) 
+* 
+* 
+Patrick Sweeney 
+68,930 
+(13) 
+* 
+* 
+Craig D. Gates 
+256,246 
+(14) 
+2.5 
+% 
+Ronald F. Klawitter 
+276,271 
+(15) 
+2.7 
+% 
+All executive officers and directors as a group 
+(10 persons) 10-15, 16 
+1,198,341 
+(16) 
+10.9 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+6 
+1. 
+Percentage beneficially owned is based on 10,052,641 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own as of the
+record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such person or
+persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, filed July 31, 2008. 
+3. 
+Signia Capital Management LLC is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, filed August 1, 2008. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA
+Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified
+employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Based on Form 13G filed with the Securities and Exchange Commission, dated May 5, 2008. 
+7. 
+Tieton Capital Management is a registered investment advisor. 
+8. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated August 14, 2008. 
+9. 
+Citigroup Global Markets Inc. is a registered investment advisor. 
+10. 
+Includes 342,500 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock allocated to
+Mr. Oehlke as a participant in the Company’s 401(k) Retirement Savings Plan (29,792 shares) as of June 28, 2008. 
+11. 
+Includes 57,430 shares issuable upon exercise of director stock options. 
+12. 
+Represents 49,930 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+13. 
+Includes 2,465 shares issuable upon exercise of director stock options. 
+14. 
+Includes 240,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k)
+Retirement Savings Plan (7,455 shares) as of June 28, 2008. 
+15. 
+Includes 180,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k)
+Retirement Savings Plan (17,860 shares) as of June 28, 2008. 
+16. 
+Includes 932,325 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60 days of
+September 3, 2008. 
+7 
+EXECUTIVE COMPENSATION 
+Summary Compensation Table 
+Set forth below is information on the compensation of the Company’s Chief Executive
+Officer and its two other most highly compensated executive officers who served in such capacities during fiscal year 2008 (“Named Executive Officers”) based on total compensation for the last completed fiscal year. No stock awards or
+option awards were granted by the Company during fiscal year 2008 and no Named Executive Officer is covered by a pension plan or a nonqualified deferred compensation plan; therefore these columns have been omitted from the table. 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($) 
+All Other 
+Compensation 
+($) (5) 
+Total ($) 
+Jack W. Oehlke, 
+Chief Executive Officer
+& President 
+2008 
+417,308 
+0 
+320,942 
+(1) 
+9,000 
+747,250 
+2007 
+398,077 
+0 
+169,760 
+(4) 
+8,800 
+576,637 
+Craig D. Gates, 
+Executive Vice
+President/General Manager of Sales & Program Management 
+2008 
+290,230 
+0 
+189,471 
+(2) 
+9,000 
+488,701 
+2007 
+287,700 
+0 
+98,152 
+(4) 
+8,800 
+394,652 
+Ronald F. Klawitter 
+Executive Vice President
+of Administration, CFO & Treasurer 
+2008 
+264,819 
+0 
+106,001 
+(3) 
+9,000 
+379,820 
+2007 
+258,000 
+0 
+88,019 
+(4) 
+8,800 
+354,819 
+(1) 
+Represents $70,942 earned in fiscal year 2008 under the Incentive Compensation Plan for fiscal year 2008 and $250,000 earned in fiscal year 2008 under the Long-Term Incentive Plan
+for the 2006-2008 performance cycle. 
+(2) 
+Represents $39,471 earned in fiscal year 2008 under the Incentive Compensation Plan for fiscal year 2008 and $150,000 earned in fiscal year 2008 under the Long-Term Incentive Plan
+for the 2006-2008 performance cycle. 
+(3) 
+Represents $36,001 earned in fiscal year 2008 under the Incentive Compensation Plan for fiscal year 2008 and $70,000 earned in fiscal year 2008 under the Long-Term Incentive Plan
+for the 2006-2008 performance cycle. 
+(4) 
+Represents amounts earned in fiscal year 2007 under the Incentive Compensation Plan for fiscal year 2007. 
+(5) 
+Represents Company matching payments in 2008 under the Company’s 401(k) Retirement Savings Plan. 
+8 
+Narrative Disclosure of Summary Compensation Table 
+Base Salary 
+Key Tronic provides the Named Executive Officers with a level of “guaranteed” compensation in
+the form of base salary. Each position is paid within a range that targets median market salary. Individual salary levels vary around this point based on experience, knowledge, and individual contribution. Ranges were objectively determined using
+the combined survey data provided by Milliman. 
+Annual Incentives 
+For our Named Executive Officers, annual incentives are tied directly to the achievement of a company-wide financial goal which is profit before taxes (PBT). PBT is the financial goal because of its significant impact
+on increasing shareholder equity. Target annual incentive levels for the top executives are set at or slightly above typical market practice to enable total direct compensation to be more competitive given that Key Tronic’s long-term incentive
+is cash-based and therefore not completely comparable to what our publicly traded peers offer through the potential appreciation available to them in their equity-based long term incentive plans. The fiscal year 2008 Incentive Compensation Plan
+provided that if Key Tronic hit its PBT target, executives would have the opportunity to earn 100% of their incentive target. If PBT exceeded target by 18%, executives would have the opportunity to earn up to 150% of their annual incentive target.
+If PBT were more than 18% below target level, no incentive would be paid. Key Tronic achieved 34% of its PBT target for 2008. 
+Long-term Incentives 
+Historically, the primary form of long-term compensation at Key Tronic has been stock options. No options have been granted to any of the Named Executive
+Officers since October 24, 2002. Beginning in fiscal year 2006, the officers and non-employee directors of Key Tronic became eligible to participate in Key Tronic’s Long-term Incentive Plan (LTIP). The LTIP was approved by the Board in
+September 2005. Under this plan, officers and non-employee directors may be awarded a number of “performance units” at the start of each fiscal year. These units will have a future value tied directly to the achievement of Board determined
+and approved goals for a three-year period. At the end of each three-year period, these units will be exchanged for cash at the value set by the Board at the beginning of the three year period based on goal achievement as measured at the end of the
+three year period. For the Chief Executive Officer the award at target for the 2006 – 2008 performance cycle was $250,000 of compensation. For the EVP Administration CFO & Treasurer the award at target for the 2006 – 2008
+performance cycle was $70,000 of compensation. For the EVP & General Manager of Sales and Program Management the award at target for the 2006 – 2008 performance cycle was $150,000 of compensation. For each non-employee director the
+award at target for the 2006—2008 performance cycle was $10,000 of compensation. For the 2006 – 2008 performance cycle target goals for three year average sales growth and return on invested capital compared to peer group companies were
+achieved. 
+Other Compensation 
+The Named Executive
+Officers and all other U.S. employees are eligible to participate in the Key Tronic Corporation 401(k) Retirement Savings Plan (“401(k) Plan”). The 401(k) Plan is a defined contribution tax qualified retirement savings plan under which
+employees can contribute a portion of their eligible cash compensation to the 401(k) Plan and the Company makes matching cash contributions of 100% of the first 3% and 50% of the next 2% of compensation deferred subject to qualified plan limits. All
+employee contributions and matching contributions are vested upon contribution. 
+GRANTS OF PLAN BASED AWARDS IN 2008 FISCAL YEAR 
+The following table sets forth information concerning individual grants of non-equity incentive plan awards made during fiscal year 2008 to each of the
+Named Executive Officers under the annual Incentive Compensation Plan and the Long-term Incentive Plan. No stock awards or option awards were granted by the Company during fiscal year 2008; therefore these columns have been omitted from the table.
+9 
+Name 
+Grant 
+Date 
+Estimated Future Payouts 
+Under Non-Equity Incentive
+Plan 
+Awards 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Jack W. Oehlke 
+07/26/07 
+07/26/07 
+(1) 
+(2) 
+20,750 
+125,000 
+207,500 
+250,000 
+311,250 
+375,000 
+Craig D. Gates 
+07/26/07 
+07/26/07 
+(1) 
+(2) 
+11,508 
+75,000 
+115,080 
+150,000 
+172,620 
+225,000 
+Ronald F. Klawitter 
+07/26/07 
+07/26/07 
+(1) 
+(2) 
+10,560 
+60,000 
+105,600 
+120,000 
+158,400 
+180,000 
+(1) 
+Represents threshold, target and maximum payouts under the annual Incentive Compensation Plan for fiscal year 2008. For actual payouts earned for fiscal year 2008 see the Summary
+Compensation Table. The Incentive Compensation Plan is discussed under the caption “Annual Incentives” on page 9. 
+(2) 
+Represents threshold, target and maximum payouts under the Long-term Incentive Plan for the 2008-2010 performance cycle. The Long-term Incentive Plan is discussed under the caption
+“Long-term Incentives” on page 9. Payouts under the Long-term Incentive Plan for the 2008-2010 performance cycle are dependent upon the achievement of goals for three year average sales growth and return on invested capital compared to
+peer group companies. 
+The following table provides information on stock options held by the Named Executive Officers at June 28, 2008.
+The Company does not have any outstanding stock awards. 
+OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 
+Option Awards 
+Name 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options (#) 
+Exercisable 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options (#) 
+Unexercisable 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date 
+Jack W. Oehlke 
+22,000 
+0 
+5.63 
+05/21/09 
+15,500 
+0 
+5.50 
+06/17/09 
+50,000 
+0 
+4.81 
+08/28/08 
+50,000 
+0 
+4.81 
+08/28/09 
+50,000 
+0 
+4.81 
+08/28/10 
+37,500 
+0 
+2.75 
+06/26/09 
+37,500 
+0 
+2.75 
+06/26/10 
+50,000 
+0 
+2.75 
+06/30/09 
+10,000 
+0 
+2.81 
+05/22/11 
+10,000 
+0 
+2.81 
+05/22/12 
+10,000 
+0 
+2.81 
+05/22/13 
+Craig D. Gates 
+22,000 
+0 
+5.63 
+05/21/09 
+8,000 
+0 
+5.50 
+06/17/09 
+30,000 
+0 
+4.81 
+08/28/08 
+30,000 
+0 
+4.81 
+08/28/09 
+30,000 
+0 
+4.81 
+08/28/10 
+25,000 
+0 
+2.75 
+06/26/09 
+25,000 
+0 
+2.75 
+06/26/10 
+40,000 
+0 
+2.75 
+06/30/09 
+10,000 
+0 
+2.81 
+05/22/11 
+10,000 
+0 
+2.81 
+05/22/12 
+10,000 
+0 
+2.81 
+05/22/13 
+Ronald F. Klawitter 
+22,000 
+0 
+5.63 
+05/21/09 
+8,000 
+0 
+5.50 
+06/17/09 
+30,000 
+0 
+4.81 
+08/28/08 
+30,000 
+0 
+4.81 
+08/28/09 
+30,000 
+0 
+4.81 
+08/28/10 
+30,000 
+0 
+2.75 
+06/30/09 
+10,000 
+0 
+2.81 
+05/22/11 
+10,000 
+0 
+2.81 
+05/22/12 
+10,000 
+0 
+2.81 
+05/22/13 
+10 
+Pension Benefits 
+None of the Named Executive Officers is covered by a pension plan. 
+Non-qualified Deferred Compensation 
+None of the Named Executive Officers is covered by a defined contribution plan or other plan that provides for the deferral of compensation on a basis that is not
+tax-qualified. 
+Other Benefits 
+The Company offers the
+Named Executive officers and all other U.S. employees life insurance, disability, medical and dental plans for which the Named Executive Officers are charged the same rate as all other employees. 
+Potential Payments Upon Termination or Change in Control 
+Employment Contracts. The Company entered into employment contracts with Messrs. Oehlke, Gates and Klawitter at the time each employee was first elected an executive officer of the Company. Each of the employment contracts imposes
+upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the Company may terminate employment at any time. The employment contracts provide that upon termination of
+employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The employment contracts entered into with Messrs. Oehlke and
+Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in such a way as to constitute a demotion, the Company shall continue to pay employee’s
+base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Oehlke, Gates and Klawitter were amended to provide that upon termination of employment by the Company after a
+change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. 
+Stock Option Plans. The executive stock option plans and non-employee directors stock option plan provide that upon a change of control of the
+Company vesting of outstanding options will be accelerated. 
+Long-term Incentive Plan. The Long-term Incentive Plan provides that
+upon a change of control of the Company, vesting of units awarded under the Plan will be accelerated and will be payable at two times their value. 
+11 
+Compensation of Directors 
+Fees. Each director, other than the Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $3,750, a fee of $1,000 for each Board meeting attended in person and a fee of $325 for each Board
+meeting attended by telephone. Directors also receive a fee of $500 for each committee meeting attended (committee members receive a committee attendance fee of $250 if the committee meeting is held the same day as a Board meeting and a fee of $200
+if the committee meeting is held by phone), except that directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day). The Chairman of the Board
+receives a quarterly retainer of $ 5,000, plus a fee of $1,500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of out-of-pocket expenses
+related to their service as directors. 
+Long-term Incentive Plan. Each director participates in the Company’s Long-term Incentive Plan
+(“Plan”). The Plan provides a long-term cash bonus opportunity to the members of the Board of Directors if certain Company performance measures established by the Board of Directors are met for three fiscal year performance periods. No
+amounts can be earned for any three fiscal year performance period until the end of the third fiscal year since achievement of performance measures can only be determined at the end of the third fiscal year. During fiscal year 2008, each
+non-employee Director was awarded 10,000 units under the Plan. If performance measures are met, these units will result in a cash payment ranging from $5,000 to $15,000 to each said non-employee Director at the end of fiscal year 2010. Payouts under
+the Long-term Incentive Plan will depend upon the achievement of goals for three year average sale growth and return on invested capital compared to peer group companies. 
+Stock Options. Each director who was not, upon election to the Board of Directors, an employee of the Company participated in the Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee
+Directors which Plan terminated on July 27, 2005. Under the Plan each non-employee director was granted, upon initial election, an option to purchase 10,000 shares of the Company’s Common Stock. An additional option to purchase 10,000
+shares upon the director’s first re-election to the Board of Directors and an additional option to purchase 7,500 shares upon each re-election to the Board of Directors after the first re-election were also granted. A final option to purchase
+4,930 shares was granted to each non-employee director upon re-election to the Board in October, 2004. The two 10,000 share option grants have a three year vesting period and the subsequent share option grants have a two year vesting period.
+Set forth below is information on the compensation provided to each non-employee director of the Company during fiscal year 2008. No stock awards or
+option awards were granted to non-employee directors during fiscal year 2008. There are no outstanding stock awards held by non-employee directors. No non-employee director is covered by a pension plan or a nonqualified deferred compensation plan.
+DIRECTOR COMPENSATION 
+Name 
+Fees Earned 
+or Paid in 
+Cash 
+($) 
+Option 
+Awards 
+($)(1) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($)(2) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+James R. Bean 
+19,950 
+0 
+0 
+0 
+19,950 
+Dale F. Pilz 
+29,400 
+0 
+10,000 
+0 
+39,400 
+Yacov A. Shamash 
+20,650 
+0 
+10,000 
+0 
+30,650 
+Patrick Sweeney 
+23,050 
+0 
+10,000 
+0 
+33,050 
+(1) 
+The following number of option awards were held by each of the directors and outstanding as of June 28, 2008: Mr. Bean, 0 options; Mr. Pilz, 49,930 options;
+Mr. Sweeney, 2,465 options; Dr. Shamash, 49,930 options. All directors were fully vested in such options prior to fiscal year 2008. 
+12 
+(2) 
+Represents amounts earned in fiscal year 2008 under the Long-Term Incentive Plan for the 2006-2008 performance cycle. The Long-Term Incentive Plan is discussed under the caption
+“Long-Term Incentives” on page 9. 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit Committee members are
+independent as defined in Rule 4200(a)(15) of the National Association of Securities Dealers’ listing standards and that the Chairman of the Committee has the requisite attributes of an “audit committee financial expert” as defined by
+SEC regulations. The Audit Committee operates under a written charter adopted by the Board of Directors which is reviewed and reassessed for adequacy annually by the Audit Committee. The Audit Committee has met and discussed with the Company’s
+management and BDO Seidman, LLP (“BDO”), the Company’s independent auditors, the Company’s financial statements contained in the Annual Report on Form 10K for the year ended June 28, 2008. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards No. 61,
+“Communications with Audit Committees”. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO required by Independence Standards Board Standard No. 1 “Independence
+Discussions with Audit Committees”. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal auditor’s
+independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10K for
+the fiscal year ended June 28, 2008, for filing with the Securities and Exchange Commission. 
+The Audit Committee: Patrick
+Sweeney (Chairman), James R. Bean, Dale F. Pilz 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit and non-audit
+fees billed or expected to be billed to the Company by BDO and its affiliate Mexican firm BDO Hernandez, Marron y Cia, SC for professional services in the named categories for the fiscal years ended June 28, 2008 and June 30, 2007:
+FY 2008 
+FY 2007 
+Audit Fees (1) 
+$ 
+202,787 
+$ 
+197,228 
+Audit Related Fees (2) 
+12,100 
+8,700 
+Tax Fees (3) 
+14,036 
+19,109 
+All Other Fees 
+— 
+— 
+Total 
+$ 
+228,923 
+$ 
+225,037 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the Company’s Annual
+Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan. 
+(3) 
+Tax fees for fiscal years 2008 and 2007 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters.
+13 
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO Seidman, LLP (“BDO”) as the
+Company’s independent auditors for the fiscal year ending June 27, 2009. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be
+available to respond to appropriate questions. In the event that ratification of this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will
+review its future selection of auditors. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY’S 
+INDEPENDENT AUDITORS 
+SHAREHOLDER PROPOSALS 
+To be considered for presentation to the Annual Meeting of Shareholders to be held in 2009, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key
+Tronic Corporation, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, no later than May 15, 2009. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
+the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and
+Exchange Commission (“SEC”) and Nasdaq. Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its review of the copies of such forms received
+or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended June 28, 2008 all the Reporting Persons complied with all applicable filing
+requirements. 
+Solicitation Expenses . The expense of printing and mailing proxy material will be borne by the Company. In addition to the
+solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. The
+Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation
+material to such beneficial owners. 
+Other Business . The Board of Directors knows of no other business that will be presented to the Annual
+Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 19, 2008 
+14 
+KEY TRONIC
+CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 Proxy Solicited by Board of Directors for Annual
+Meeting 
+October 23, 2008 
+JACK W. OEHLKE and DALE F. PILZ, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the
+undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 23, 2008, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side) 
+Address Change/Comments (Mark the corresponding box on the reverse side) 
+FOLD AND DETACH HERE 
+You can now access your Key Tronic Corporation account online. 
+Access your Key Tronic Corporation
+Shareholder/stockholder account online via Investor ServiceDirect® (ISD). 
+The transfer agent for Key Tronic Corporation
+now makes it easy and convenient to get current information on your shareholder account. 
+• 
+View account status 
+• 
+View certificate history 
+• 
+View book-entry information 
+• 
+View payment history for dividends 
+• 
+Make address changes 
+• 
+Obtain a duplicate 1099 tax form 
+• 
+Establish/change your PIN 
+Visit us on the web at http://www.bnymellon.com/shareowner/isd 
+For Technical Assistance Call 1-877-978-7778 between 9am-7pm 
+Monday-Friday Eastern
+Time 
+****TRY IT OUT**** 
+www.bnymellon.com/shareowner/isd 
+Investor ServiceDirect® Available 24
+hours per day, 7 days per week 
+TOLL FREE NUMBER: 1-877-277-9953 
+UNLESS OTHERWISE
+SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Mark Here for Address Change or Comments
+PLEASE SEE REVERSE SIDE 
+1. Election of five directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2009. 
+FOR AGAINST ABSTAIN 
+WITHHOLD AUTHORITY 
+to vote for all nominees listed to the left 
+Nominees: 
+FOR ALL 
+nominees listed to the left 
+01. 
+James R. Bean, 
+02. JackW.Oehlke, 
+3. Dale F. Pilz, 
+4.
+Yacov A. Shamash, and 
+5. Patrick Sweeney.
+FOR, except vote withheld from the following nominee(s): 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies al that said
+Proxies or their substitutes may lawfuly do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy wil be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such other
+business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in
+accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+No
+postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+PLEASE SIGN, DATE
+AND RETURN PROMPTLY. Signature 
+NOTE: Please sign exactly as your name appears herein. Joint owners should each sign. When
+signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+FOLD AND
+DETACH HERE 
+KEY TRONIC
+CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 Proxy Solicited by Board of Directors for Annual
+Meeting 
+October 23, 2008 
+JACK W. OEHLKE and DALE F. PILZ, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the
+undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 23, 2008, and any adjournment or postponement thereof. 
+(Continued and to be signed and dated on other side) 
+Address Change/Comments (Mark the corresponding box on the reverse side) 
+FOLD AND DETACH HERE 
+KEY TRONIC CORPORATION 4424 N. Sullivan Road,
+Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401 (k) Retirement Savings Plan (the “Plan”),
+you have the right to direct JP Morgan Chase Bank, N.A. (the “Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC
+Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on October 23, 2008. 
+For your information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to BNY Mellon Shareowner Services is enclosed for your use in
+returning your completed, signed, and dated proxy card to the Plan Trustee. 
+The Plan Trustee will hold your voting
+instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or employees of the Company, except to the extent required by law. 
+If your completed proxy card is not received by October 10, 2008 the Administrative Committee for the Plan will direct the Plan
+Trustee to vote your shares. The Trustee will be directed to vote all such unvoted shares in the same proportion as the voted shares received. 
+JP Morgan Chase Bank, N.A. 
+UNLESS OTHERWISE
+SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Mark Here for Address Change or Comments
+PLEASE SEE REVERSE SIDE 
+1. Election of five directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2009. 
+FOR AGAINST ABSTAIN 
+WITHHOLD AUTHORITY 
+to vote for all nominees listed to the left 
+Nominees: 
+FOR ALL 
+nominees listed to the left 
+01. 
+James R. Bean, 
+02. JackW.Oehlke, 
+3. Dale F. Pilz, 
+4.
+Yacov A. Shamash, and 
+5. Patrick Sweeney.
+FOR, except vote withheld from the following nominee(s): 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said
+Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy wil be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such other
+business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in
+accordance with the Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+No
+postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+Signature PLEASE
+SIGN, DATE AND RETURN PROMPTLY. 
+NOTE: Please sign exactly as your name appears herein. Joint owners should each sign. When
+signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+FOLD AND
+DETACH HERE
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-08-195741/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-08-195741/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..3951e1902f6194453e760e1da5459262c35e05f9
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-08-195741/proxy_rpt.txt
@@ -0,0 +1,18 @@
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The
+policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the
+aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a
+director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or
+was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director,
+(b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren,
+siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into
+account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related
+Party’s interest in the Transaction. The Company had no related Party Transactions during fiscal year 2008. 
+Compensation Committee Interlocks and
+Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Pilz.
+No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during fiscal year 2008. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee
+of any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee of the Company. 
+5
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-09-190588/proxy.txt b/raw/proxies/0000719733/0001193125-09-190588/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..dad1c9d13e3a04f85c5e12f4c2f927d6a102763a
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-09-190588/proxy.txt
@@ -0,0 +1,965 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION 
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the
+previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 18, 2009 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key
+Tronic Corporation, a Washington corporation (the “Company” or “Key Tronic”), to be held on Thursday, October 22, 2009, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road
+– Lower Level, Spokane Valley, Washington 99216. 
+Whether or not you will attend the Annual Meeting in person and regardless of the number of shares
+you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even if you previously have returned your
+proxy card. 
+Sincerely, 
+Craig D. Gates 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 22, 2009 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 22, 2009, at
+10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect six directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO Seidman, LLP as independent auditors for fiscal year 2010; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 2, 2009 are entitled to notice of and to vote at the Annual Meeting and any
+adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares will be voted at
+the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 18, 2009 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL 
+MEETING. 
+First mailed to shareholders on or about September 18, 2009.
+PROXY STATEMENT 
+INTRODUCTION 
+General 
+The preceding Notice of Annual Meeting of Shareholders,
+this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common
+Stock”) in connection with the solicitation of proxies by the Board of Directors of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday,
+October 22, 2009 at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual
+Meeting”). The proxies appoint Craig D. Gates and Dale F. Pilz, each of them and their substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. 
+Record Date, Proxies, Revocation 
+Record holders of the Common Stock
+at the close of business on September 2, 2009 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date 10,065,974 shares of Common Stock were issued and outstanding. A proxy card for use
+at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no instructions are given on an
+otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, and FOR the ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year
+2010. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by delivering a completed, signed proxy bearing a date later than any
+earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock outstanding is entitled to one vote on each matter presented for a vote of the
+shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at a meeting: (i) the six nominees for election as directors who receive the
+greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and (ii) matter 2 listed in the accompanying Notice of Annual Meeting of
+Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other than a vote for a nominee will have the practical effect of voting against
+the nominee. An abstention from voting or a broker nonvote will have no effect on the approval of matter 2 since neither represents a vote cast. 
+1 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors are to be elected at the Annual Meeting to serve until the next Annual Meeting
+of Shareholders and until their respective successors have been elected and have qualified. The six nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as
+a nominee or director, the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named
+without nomination of a substitute, or the size of the Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to
+serve as a nominee or as a director if elected. It is the Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2009 Annual Meeting attended the 2008 Annual meeting. Ronald
+F. Klawitter is standing as a nominee for election to the Board of Directors for the first time at the 2009 Annual Meeting. Jack W. Oehlke will retire when his term expires at the Annual Meeting. 
+The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+James R. Bean, age 59, has been a director of the Company since October 2006. Mr. Bean has been President and CEO of Preco Electronics, Inc. since November
+1999. From May 1997 to 1999 he held various management positions in Boise, Idaho with Preco Electronics, Inc. Previously he held various management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer, Inc. and National
+Semiconductor, Inc. Mr. Bean is a graduate of New Mexico State University with a B.S. in Industrial Engineering. 
+Craig D. Gates, age 50, has
+been a director of the Company since July 2009 and has been President and CEO of the Company since April 2009. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General
+Manager of New Business Development from October 1995 to July 1997. He joined the Company as Vice President of Engineering in October 1994. From 1991 to October 1994, Mr. Gates served as Director of Operations, Electronics for the Microswitch
+Division of Honeywell Inc. From 1982 to 1991, Mr. Gates held various engineering and management positions within the Microswitch Division. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business
+Administration from the University of Illinois, Urbana. 
+Ronald F. Klawitter , age 57, has been Executive Vice President of Administration, CFO and
+Treasurer of the Company since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to October 1995 and Vice President of Finance and Treasurer
+from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a Bachelor of Arts degree from Wittenberg University and is a Certified Public
+Accountant. 
+Dale F. Pilz, age 83, has served as Chairman of the Board since January 2000 and has been a director of the Company since April 1992.
+Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer and President of GTE Sprint Communications
+from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. 
+Yacov A. Shamash, age 59,
+has been a director of the Company since 1989. He has been the Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University
+Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. 
+2 
+Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp., and Applied DNA Sciences, Inc.
+Patrick Sweeney , age 74, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991
+through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and
+also served as Managing Director of Ireland for Digital Equipment Corporation and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, and Photo Machining Inc.
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS 
+Board
+Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified. There
+are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met four times during fiscal 2009. During fiscal 2009, each director attended 95% of the Board of Directors meetings
+and 97% of meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+Directors’ Independence 
+The Board of Directors has determined that all members of the Company’s Board of Directors are
+“independent directors” within the meaning of the applicable Nasdaq Stock Market (“NASDAQ”) listing standards, except for Mr. Gates, the Company’s current President and Chief Executive Officer and Mr. Oehlke, the
+Company’s former President and CEO. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet the definition
+of independence contained in the NASDAQ listing standards; (2) meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of
+the Company or any current subsidiary of the Company at any time during the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow
+statement, as required by the NASDAQ Marketplace Rules. 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee, has
+the requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Executive Sessions 
+At one of the four regular meetings of the Board
+of Directors held during fiscal year 2009, the independent directors met separately in executive session without management present. 
+Code of Conduct
+The Board of Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of Conduct
+is available on the Company’s website at www.keytronic.com . The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+3 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o General Counsel & Secretary, Key
+Tronic Corporation, N. 4424 Sullivan Road – Lower Level, Spokane Valley, WA 99216. All such shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors or Board member.
+Nominations to the Board 
+The Governance and
+Nominating Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are submitted to the Secretary of the Company, together with biographical information and references, at least six months
+prior to the annual meeting. 
+Board Committees 
+The
+Board of Directors has four standing committees: the Audit Committee, the Compensation and Administration Committee, the Executive Committee and the Governance and Nominating Committee. The committees each have written charters approved by the
+Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Governance and Nominating Committee are available on the Company’s website at www.keytronic.com . 
+Th e Audit Committee, which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met nine times during fiscal 2009. The Audit Committee monitors the
+integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and appoints the Company’s independent auditors, pre-approves all
+audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establishes the fees and other compensation to be paid to the independent auditors; monitors the qualifications, independence and performance
+of the Company’s independent auditors; and establishes procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Company’s employees, regarding accounting, internal
+controls or auditing matters, and provides an avenue of communication among the Board, the independent auditor and management. 
+The Compensation and
+Administration Committee (“Compensation Committee”) which currently consists of Messrs. Shamash (Chairman), and Pilz, met three times during fiscal 2009. The Committee establishes and reviews annually the Company’s general
+compensation policies applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees,
+prepares and delivers annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes
+recommendations to the Board regarding changes to existing compensation plans. The Committee administers the Company’s incentive compensation plans and stock option plans, including determining the individuals to receive awards and options and
+the terms of such awards and options. 
+The Executive Committee, which currently consists of Messrs. Sweeney (Chairman), Oehlke and Pilz did not meet
+during fiscal 2009. The Executive Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Governance and Nominating Committee, which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met one time during fiscal 2009. The Committee
+makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect to the structure and composition of the Board. The
+Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific minimum 
+4 
+qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be
+identified to the Committee by members of the Board, officers of the Company, shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation.
+The Company has not paid any third party a fee to assist in identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner of more than 5% of
+the Company’s Common Stock. 
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The
+policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the
+aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a
+director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or
+was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director,
+(b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren,
+siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into
+account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related
+Party’s interest in the Transaction. With the exception of the Transition Agreement with Mr. Oehlke (see “Employment Contracts”, pages 11-12), the Company had no related Party Transactions during fiscal year 2009. 
+Compensation Committee Interlocks and Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Pilz. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during
+fiscal year 2009. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee
+of the Company. 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company
+regarding beneficial ownership of the Common Stock as of the Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director and nominee for director
+of the Company; (iii) each of the executive officers of the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+5 
+Name of 
+Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class (1) 
+MORE THAN 5% SHAREHOLDERS 
+Signia Capital Management LLC 
+108 N. Washington Street, Suite 305 
+Spokane, WA 99201 
+1,768,263 
+(2),(3) 
+17.6 
+% 
+Tieton Capital Management 
+4700 Tieton Drive, Suite C 
+Yakima, WA 98908 
+1,026,318 
+(6),(7) 
+10.2 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+791,787 
+(4),(5) 
+7.9 
+% 
+Citigroup Global Markets Inc. 
+399 Park Avenue 
+New York, NY 10043 
+514,902 
+(8),(9) 
+5.1 
+% 
+DIRECTORS AND EXECUTIVE OFFICERS 
+James R. Bean 
+0 
+** 
+Jack W. Oehlke 
+180,006 
+(10) 
+1.8 
+% 
+Dale F. Pilz 
+48,982 
+(11) 
+** 
+Yacov A. Shamash 
+43,530 
+(12) 
+** 
+Patrick Sweeney 
+68,930 
+(13) 
+** 
+Craig D. Gates 
+101,246 
+(14) 
+1.0 
+% 
+Ronald F. Klawitter 
+156,271 
+(15) 
+1.5 
+% 
+George R. Alford 
+0 
+** 
+All executive officers and directors as a group (10 persons) 10-16 
+675,008 
+(16) 
+6.5 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 10,065,974 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own as of the
+record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such person or
+persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+6 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2009. 
+3. 
+Signia Capital Management LLC is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2009. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in portfolios of DFA
+Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles for qualified
+employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Based on Form 13G filed with the Securities and Exchange Commission, dated December 31, 2008. 
+7. 
+Tieton Capital Management is a registered investment advisor. 
+8. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2009. 
+9. 
+Citigroup Global Markets Inc. is a registered investment advisor. 
+10. 
+Includes 117,500 shares issuable upon exercise of employee stock options and 10,098 shares owned directly by Mr. Oehlke’s wife. Also includes Common Stock allocated to
+Mr. Oehlke as a participant in the Company’s 401(k) Retirement Savings Plan (29,792 shares) as of June 27, 2009. 
+11. 
+Includes 42,430 shares issuable upon exercise of director stock options. 
+12. 
+Represents 42,430 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+13. 
+Includes 2,465 shares issuable upon exercise of director stock options. 
+14. 
+Includes 85,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k)
+Retirement Savings Plan (7,455 shares) as of June 27, 2009. 
+15. 
+Includes 60,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k)
+Retirement Savings Plan (17,860 shares) as of June 27, 2009. 
+16. 
+Includes 398,992 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60 days of
+September 2, 2009. 
+EXECUTIVE COMPENSATION 
+Summary Compensation Table 
+Set forth below is information on the compensation of the Company’s former Chief
+Executive Officer, its Chief Executive Officer and its two other most highly compensated executive officers who were serving as executive officers at the end of fiscal year 2009 (“Named Executive Officers”) based on total compensation for
+the last completed fiscal year. No stock awards or option awards were granted by the Company during fiscal year 2009 and no Named Executive Officer is covered by a pension plan or a nonqualified deferred compensation plan; therefore these columns
+have been omitted from the table. 
+7 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($) 
+All Other 
+Compensation 
+($) (7) 
+Total 
+($) 
+Jack W. Oehlke, 
+Former Chief Executive Officer & President (1) 
+2009 
+2008 
+430,000 
+417,308 
+0 
+0 
+132,618 
+320,942 
+(2) 
+(3) 
+9,200 
+9,000 
+571,818 
+747,250 
+Craig D. Gates, 
+Chief Executive Officer & President (1) 
+2009 
+2008 
+295,008 
+290,230 
+0 
+0 
+84,500 
+189,471 
+(2) 
+(4) 
+9,200 
+9,000 
+388,708 
+488,701 
+Ronald F. Klawitter 
+Executive Vice President of Administration, CFO & Treasurer 
+2009 
+2008 
+273,240 
+264,819 
+0 
+0 
+67,600 
+106,001 
+(2) 
+(5) 
+9,200 
+9,000 
+350,040 
+379,820 
+George R. Alford, 
+Former Executive Vice President of Materials (1) 
+2009 
+2008 
+190,008 
+177,234 
+0 
+0 
+22,533 
+21,091 
+(2) 
+(6) 
+8,444 
+8,858 
+220,985 
+207,183 
+(1) 
+Mr. Oehlke resigned as President and CEO of the Company on April 23, 2009. Mr. Gates began serving as President and CEO of the Company on April 23, 2009.
+Mr. Alford resigned as Executive Vice President of Materials on July 29, 2009. 
+(2) 
+Represents amounts earned in fiscal year 2009 under the Long-Term Incentive Plan for the 2007–2009 performance cycle. 
+(3) 
+Represents $70,942 earned in fiscal year 2008 under the Incentive Compensation Plan for fiscal year 2008 and $250,000 earned in fiscal year 2008 under the Long-Term Incentive Plan
+for the 2006-2008 performance cycle. 
+(4) 
+Represents $39,471 earned in fiscal year 2008 under the Incentive Compensation Plan for fiscal year 2008 and $150,000 earned in fiscal year 2008 under the Long-Term Incentive Plan
+for the 2006-2008 performance cycle. 
+(5) 
+Represents $36,001 earned in fiscal year 2008 under the Incentive Compensation Plan for fiscal year 2008 and $70,000 earned in fiscal year 2008 under the Long-Term Incentive Plan
+for the 2006-2008 performance cycle. 
+(6) 
+Represents amounts earned in fiscal year 2008 under the Incentive Compensation Plan for fiscal year 2008. 
+(7) 
+Represents Company matching payments in fiscal years 2009 and 2008 under the Company’s 401(k) Retirement Savings Plan. 
+8 
+Narrative Disclosure of Summary Compensation Table 
+Base Salary 
+Key Tronic provides the Named Executive Officers with a level of “guaranteed” compensation in
+the form of base salary. Each position is paid within a range that targets median market salary. Individual salary levels vary around this point based on experience, knowledge, and individual contribution. Ranges were objectively determined using
+the combined survey data provided by Milliman, Inc. 
+Annual Incentives 
+For our Named Executive Officers, annual incentives are tied directly to the achievement of a company-wide financial goal which is profit before taxes (PBT). PBT is the financial goal because of its significant impact
+on increasing shareholder equity. Target annual incentive levels for the top executives are set at or slightly above typical market practice to enable total direct compensation to be more competitive given that Key Tronic’s long-term incentive
+is cash-based and therefore not completely comparable to what our publicly traded peers offer through the potential appreciation available to them in their equity-based long term incentive plans. The fiscal year 2009 Incentive Compensation Plan
+provided that if Key Tronic achieved its PBT target, executives would have the opportunity to earn 100% of their incentive target. If PBT exceeded target by 18%, executives would have the opportunity to earn up to 150% of their annual incentive
+target. If PBT were more than 17% below target level, no incentive would be paid. Key Tronic’s PBT for fiscal year 2009 was more than 17% below target level. Therefore no annual incentive payments were earned for fiscal year 2009. 
+Long-term Incentives 
+Historically, the primary form of long-term
+compensation at Key Tronic has been stock options. No options have been granted to any of the Named Executive Officers since October 24, 2002. Beginning in fiscal year 2006, the officers and non-employee directors of Key Tronic became eligible
+to participate in Key Tronic’s Long-term Incentive Plan (LTIP). The LTIP was approved by the Board in September 2005. Under this plan, officers and non-employee directors may be awarded a number of “performance units” at the start of
+each fiscal year. These units will have a future value tied directly to the achievement of Board determined and approved goals for a three-year period. At the end of each three-year period, these units will be exchanged for cash at the value set by
+the Board at the beginning of the three year period based on goal achievement as measured at the end of the three year period. For Mr. Oehlke the award at target for the 2007–2009 performance cycle was $250,000 of compensation. For
+Mr. Gates the award at target for the 2007–2009 performance cycle was $150,000 of compensation. For Mr. Klawitter the award at target for the 2007–2009 performance cycle was $120,000 of compensation. For Mr. Alford the award
+at target for the 2007–2009 performance cycle was $40,000 of compensation. For each non-employee director the award at target for the 2007-2009 performance cycle was $10,000 of compensation. For the 2007–2009 performance cycle threshold
+goals for three year sales growth and return on invested capital compared to peer group companies were exceeded. 
+Other Compensation 
+The Named Executive Officers and all other U.S. employees are eligible to participate in the Key Tronic Corporation 401(k) Retirement Savings Plan (“401(k)
+Plan”). The 401(k) Plan is a defined contribution tax qualified retirement savings plan under which employees can contribute a portion of their eligible cash compensation to the 401(k) Plan and the Company makes matching cash contributions of
+100% of the first 3% and 50% of the next 2% of compensation deferred subject to qualified plan limits. All employee contributions and matching contributions are vested upon contribution. 
+9 
+GRANTS OF PLAN BASED AWARDS IN 2009 FISCAL YEAR 
+The following table sets forth information concerning individual grants of non-equity incentive plan awards made during fiscal year 2009 to each of the Named Executive
+Officers under the annual Incentive Compensation Plan and the Long-term Incentive Plan. No stock awards or option awards were granted by the Company during fiscal year 2009; therefore these columns have been omitted from the table. 
+Name 
+Grant Date 
+Estimated Future Payouts 
+Under Non-Equity Incentive Plan Awards 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Jack W. Oehlke 
+07/24/08 (1) 
+07/24/08 (2) 
+21,500 
+125,000 
+215,000 
+250,000 
+322,500 
+375,000 
+Craig D. Gates 
+07/24/08 (1) 
+07/24/08 (2) 
+11,800 
+75,000 
+118,003 
+150,000 
+177,005 
+225,000 
+Ronald F. Klawitter 
+07/24/08 (1) 
+07/24/08 (2) 
+10,930 
+60,000 
+109,296 
+120,000 
+163,994 
+180,000 
+George R. Alford 
+07/24/08 (1) 
+07/24/08 (2) 
+7,600 
+20,000 
+76,003 
+40,000 
+114,005 
+60,000 
+(1) 
+Represents threshold, target and maximum payouts under the annual Incentive Compensation Plan for fiscal year 2009. For actual payouts earned for fiscal year 2009 see the Summary
+Compensation Table. The Incentive Compensation Plan is discussed under the caption “Annual Incentives” on page 9. 
+(2) 
+Represents threshold, target and maximum payouts under the Long-term Incentive Plan for the 2009-2011 performance cycle. The Long-term Incentive Plan is discussed under the caption
+“Long-term Incentives” on page 9. Payouts under the Long-term Incentive Plan for the 2009-2011 performance cycle are dependent upon the achievement of goals for three years sales growth and return on invested capital compared to peer group
+companies. 
+The following table provides information on stock options held by the Named Executive Officers at June 27, 2009. The Company
+does not have any outstanding stock awards. 
+OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 
+Option Awards 
+Name 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) 
+Exercisable 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) 
+Unexercisable 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date 
+Jack W. Oehlke 
+50,000 
+50,000 
+37,500 
+50,000 
+10,000 
+10,000 
+10,000 
+0 
+0 
+0 
+0 
+0 
+0 
+0 
+4.81 
+4.81 
+2.75 
+2.75 
+2.81 
+2.81 
+2.81 
+08/28/09 
+08/28/10 
+06/26/10 
+06/30/09 
+05/22/11 
+05/22/12 
+05/22/13 
+10 
+Craig D. Gates 
+30,000 
+30,000 
+25,000 
+40,000 
+10,000 
+10,000 
+10,000 
+0 
+0 
+0 
+0 
+0 
+0 
+0 
+4.81 
+4.81 
+2.75 
+2.75 
+2.81 
+2.81 
+2.81 
+08/28/09 
+08/28/10 
+06/26/10 
+06/30/09 
+05/22/11 
+05/22/12 
+05/22/13 
+Ronald F. Klawitter 
+30,000 
+30,000 
+30,000 
+10,000 
+10,000 
+10,000 
+0 
+0 
+0 
+0 
+0 
+0 
+4.81 
+4.81 
+2.75 
+2.81 
+2.81 
+2.81 
+08/28/09 
+08/28/10 
+06/30/09 
+05/22/11 
+05/22/12 
+05/22/13 
+George R. Alford 
+0 
+0 
+Pension Benefits 
+None of the Named Executive Officers is covered by a pension plan. 
+Non-qualified Deferred Compensation 
+None of the Named Executive Officers is covered by a defined contribution plan or other plan that provides for the deferral of compensation on a basis that is not
+tax-qualified. 
+Other Benefits 
+The Company offers the
+Named Executive officers and all other U.S. employees life insurance, disability, medical and dental plans for which the Named Executive Officers are charged the same rate as all other employees. 
+Potential Payments Upon Termination or Change in Control 
+Employment Contracts. The Company entered into employment contracts with Messrs. Oehlke, Gates, Klawitter and Alford at the time each employee was first elected an executive officer of the Company. Each of the employment contracts
+imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the Company may terminate employment at any time. The employment contracts provide that upon termination
+of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. The employment contracts entered into with Messrs. Oehlke
+and Klawitter also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in such a way as to constitute a demotion, the Company shall continue to pay
+employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Oehlke, Gates and Klawitter were amended to provide that upon termination of employment by the
+Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. 
+In connection with Mr. Oehlke’s resignation as President and CEO of the Company on April 23, 2009, the Company entered into a Transition
+Agreement with Mr. Oehlke. The Transition Agreement provides that Mr. Oehlke will continue as an employee of the Company through December 27, 2009 to assist in the transition of his day to day duties. The Agreement provides that
+Mr. Oehlke be compensated at 100% of his rate of base pay in effect on April 23, 2009 (“Current Rate”) until June 28, 2009. The Agreement further provides that from June 29 through September 27, 2009,
+Mr. Oehlke be compensated at 75% of his Current Rate and that from September 28, 2009 through December 27, 2009 he be compensated at 50% of his Current Rate. 
+11 
+Stock Option Plans. The executive stock option plans and non-employee directors stock option plan
+provide that upon a change of control of the Company vesting of outstanding options will be accelerated. 
+Long-term Incentive Plan. 
+The Long-term Incentive Plan provides that upon a change of control of the Company, vesting of units awarded under the Plan will be accelerated and will be payable at two times their value. 
+Compensation of Directors 
+Fees. Each director, other than the
+Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $3,750, a fee of $1,000 for each Board meeting attended in person and a fee of $325 for each Board meeting attended by telephone. Directors also receive a
+fee of $500 for each committee meeting attended (committee members receive a committee attendance fee of $250 if the committee meeting is held the same day as a Board meeting and a fee of $200 if the committee meeting is held by phone), except that
+directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day). The Chairman of the Board receives a quarterly retainer of $5,000, plus a fee of
+$1,500 for each Board meeting attended. Committee chairmen receive an additional fee of $200 for each committee meeting attended. Directors also receive payment of out-of-pocket expenses related to their service as directors. 
+Long-term Incentive Plan. Each director participates in the Company’s Long-term Incentive Plan (“Plan”). The Plan provides a long-term cash bonus
+opportunity to the members of the Board of Directors if certain Company performance measures established by the Board of Directors are met for three fiscal year performance periods. No amounts can be earned for any three fiscal year performance
+period until the end of the third fiscal year since achievement of performance measures can only be determined at the end of the third fiscal year. During fiscal year 2009, each non-employee Director was awarded 10,000 units under the Plan. If
+performance measures are met, these units will result in a cash payment ranging from $5,000 to $15,000 to each said non-employee Director at the end of fiscal year 2011. Payouts under the Long-term Incentive Plan will depend upon the achievement of
+goals for three year sales growth and return on invested capital compared to peer group companies. 
+Stock Options. Each director who was not, upon
+election to the Board of Directors, an employee of the Company participated in the Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee Directors which Plan terminated on July 27, 2005. Under the Plan each non-employee
+director was granted, upon initial election, an option to purchase 10,000 shares of the Company’s Common Stock. An additional option to purchase 10,000 shares upon the director’s first re-election to the Board of Directors and an
+additional option to purchase 7,500 shares upon each re-election to the Board of Directors after the first re-election were also granted. A final option to purchase 4,930 shares was granted to each non-employee director upon re-election to the Board
+in October, 2004. The two 10,000 share option grants have a three year vesting period and the subsequent share option grants have a two year vesting period. 
+Set forth below is information on the compensation provided to each non-employee director of the Company during fiscal year 2009. No stock awards or option awards were granted to non-employee directors during fiscal year 2009. There are no
+outstanding stock awards held by non-employee directors. No non-employee director is covered by a pension plan or a nonqualified deferred compensation plan. 
+12 
+DIRECTOR COMPENSATION 
+Name 
+Fees Earned 
+or Paid in 
+Cash 
+($) 
+Option 
+Awards 
+($)(1) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($)(2) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+James R. Bean 
+21,575 
+0 
+5,007 
+0 
+26,582 
+Dale F. Pilz 
+27,225 
+0 
+5,633 
+0 
+32,858 
+Yacov A. Shamash 
+20,675 
+0 
+5,633 
+0 
+26,308 
+Patrick Sweeney 
+23,075 
+0 
+5,633 
+0 
+28,708 
+(1) 
+The following number of option awards were held by each of the directors and outstanding as of June 27, 2009: Mr. Bean, 0 options; Mr. Pilz, 42,430 options;
+Mr. Sweeney, 2,465 options; Dr. Shamash, 42,430 options. All directors were fully vested in such options prior to fiscal year 2009. 
+(2) 
+Represents amounts paid in fiscal year 2009 under the Long-Term Incentive Plan for the 2007-2009 performance cycle. The Long-Term Incentive Plan is discussed under the caption
+“Long-Term Incentives” on page 9. 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit Committee members meet the
+definition of independence within the meaning of the applicable NASDAQ listing standards and that the Chairman of the Committee has the requisite attributes of an “audit committee financial expert” as defined by SEC regulations. The Audit
+Committee operates under a written charter adopted by the Board of Directors which is reviewed and reassessed for adequacy annually by the Audit Committee. The Audit Committee has met and discussed with the Company’s management and BDO Seidman,
+LLP (“BDO”), the Company’s independent auditors, the Company’s financial statements contained in the Annual Report on Form 10K for the year ended June 27, 2009. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards No. 61, “Communications with Audit Committees”. BDO has submitted
+to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO as required under applicable independence standards for auditors of public companies. The Audit Committee discussed with BDO that firm’s
+independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the principal auditor’s independence. All services to be provided by BDO are pre-approved by the Audit Committee or are
+pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit
+Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10K for the fiscal year ended June 27, 2009, for filing with the Securities and Exchange Commission.
+The Audit Committee: Patrick Sweeney (Chairman), James R. Bean, Dale F. Pilz 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit and non-audit fees billed or expected to be billed to the Company by BDO and
+its affiliate Mexican firm BDO Hernandez, 
+13 
+Marron y Cia, SC for professional services in the named categories for the fiscal years ended June 27, 2009 and
+June 28, 2008: 
+FY 2009 
+FY 2008 
+Audit Fees (1) 
+$ 
+214,733 
+$ 
+202,787 
+Audit Related Fees (2) 
+11,544 
+12,100 
+Tax Fees (3) 
+14,443 
+14,036 
+All Other Fees 
+— 
+— 
+Total 
+$ 
+240,720 
+$ 
+228,923 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the Company’s Annual
+Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan. 
+(3) 
+Tax fees for fiscal years 2009 and 2008 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters.
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO Seidman, LLP (“BDO”) as the Company’s
+independent auditors for the fiscal year ending July 3, 2010. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to
+respond to appropriate questions. In the event that ratification of this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will review its
+future selection of auditors. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO SEIDMAN, LLP AS THE COMPANY’S 
+INDEPENDENT AUDITORS 
+SHAREHOLDER PROPOSALS 
+To be considered for presentation to the Annual Meeting of Shareholders to be held in 2010, a shareholder proposal must be received by Kathleen L. Nemeth, Secretary, Key
+Tronic Corporation, 4424 N. Sullivan Road – Lower Level, Spokane Valley, Washington 99216, no later than May 14, 2010. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS 
+FOR THE SHAREHOLDER MEETING TO BE HELD ON OCTOBER 22, 2009
+The Proxy Statement and 2009 Annual Report to Shareholders are available at: http://bnymellon.mobular.net/bnymellon/ktcc. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership
+Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively,
+“Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”) and Nasdaq. 
+14 
+Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms
+which they file. Based solely on its review of the copies of such forms received or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended
+June 27, 2009 all the Reporting Persons complied with all applicable filing requirements. 
+Solicitation Expenses . The expense of
+printing and mailing proxy material will be borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview,
+telephone or facsimile. No additional compensation will be paid for such solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such
+brokers and nominees for their reasonable expenses incurred in forwarding solicitation material to such beneficial owners. 
+Other Business .
+The Board of Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in
+accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 18, 2009 
+15 
+You can now access
+your Key Tronic Corporation account online. 
+Access your Key Tronic Corporation Shareholder/stockholder account online via
+Investor ServiceDirect® (ISD). 
+The transfer agent for Key Tronic Corporation now makes it easy and convenient to get
+current information on your shareholder account. 
+View account status 
+View certificate history 
+View book-entry information 
+View payment history for dividends 
+Make address changes 
+Obtain a duplicate 1099 tax form 
+Visit us on the web at http://www.bnymellon.com/shareowner/isd 
+For Technical Assistance Call 1-877-978-7778 between 9am-7pm 
+Monday-Friday Eastern Time 
+Investor ServiceDirect® 
+Available 24 hours per day, 7 days per week 
+TOLL FREE NUMBER: 1-800-370-1163 
+Choose MLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor ServiceDirect® at www.bnymellon.com/shareowner/isd
+where step-by-step instructions will prompt you through enrollment. 
+Important notice regarding the Internet availability of
+proxy materials for the Annual Meeting of shareholders. The Proxy Statement and the 2009 Annual Report to Stockholders are available at: http://bnymellon.mobular.net/bnymellon/ktcc 
+FOLD AND DETACH HERE 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 Proxy Solicited by Board of
+Directors for Annual Meeting October 22, 2009 
+CRAIG D. GATES and DALE F. PILZ, or either of them, each with the power
+of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on
+Thursday, October 22, 2009, and any adjournment or postponement thereof. 
+Address Change/Comments 
+(Mark the corresponding box on the reverse side) 
+(Continued and to be marked, dated and signed, on the other side) 
+BNY
+MELLON SHAREOWNER SERVICES 
+P.O. BOX 3550 
+SOUTH HACKENSACK, NJ 07606-9250 
+57263 
+KEY TRONIC
+CORPORATION 
+57263 
+FOLD AND DETACH HERE 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1
+AND PROPOSAL 2. 
+Please mark your votes as indicated in this example 
+FOR ALL 
+WITHHOLD FOR ALL 
+*EXCEPTIONS 
+FOR AGAINST ABSTAIN 
+1. Election of six directors (or if any nominee is not
+available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+Nominees:
+01. 
+James R. Bean, 
+02. 
+Craig D. Gates, 
+03. 
+Ronald F. Klawitter 
+04. 
+Dale F. Pilz, 
+05. 
+Yacov A. Shamash, and 
+06. 
+Patrick Sweeney. 
+(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions” box above and write that nominee’s name in the space provided below.) 
+*Exceptions 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2010. 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares
+represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not
+mark any boxes. 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States.
+Will Attend Meeting 
+YES 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark Here for Address Change or Comments SEE REVERSE 
+Signature Signature Date 
+NOTE: Please sign as name appears hereon. Joint
+owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+KEY TRONIC
+CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401 (k) Retirement Savings Plan (the “Plan”), you have the right to direct JP Morgan
+Chase Bank, N.A. (the “Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual
+Meeting of Shareholders of Key Tronic Corporation to be held on October 22, 2009. 
+For your information, copies of the
+Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to BNY Mellon Shareowner Services is enclosed for your use in returning your completed, signed, and dated proxy card to
+the Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release
+specific information regarding your instructions to any person, including officers or employees of the Company, except to the extent required by law. 
+If your completed proxy card is not received by October 9, 2009 the Administrative Committee for the Plan will direct the Plan Trustee to vote your shares. The Trustee will be directed to vote all
+such unvoted shares in the same proportion as the voted shares received. 
+JP Morgan Chase Bank, N.A. 
+FOLD AND DETACH HERE 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 Proxy Solicited by Board of
+Directors for Annual Meeting 
+October 22, 2009 
+CRAIG D. GATES and DALE F. PILZ, or either of them, each with the power of substitution, are hereby authorized to represent and vote all
+shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 22, 2009, and any adjournment or
+postponement thereof. 
+Address Change/Comments 
+(Mark the corresponding box on the reverse side) 
+BNY MELLON SHAREOWNER
+SERVICES 
+P.O. BOX 3550 
+SOUTH HACKENSACK, NJ 07606-9250 
+(Continued and to be marked, dated and signed, on the other side)
+57263-BL 
+KEY TRONIC
+CORPORATION 
+57263-BL 
+FOLD AND DETACH HERE 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1
+AND PROPOSAL 2. 
+Please mark your votes as indicated in this example 
+FOR ALL 
+WITHHOLD FOR ALL 
+*EXCEPTIONS 
+FOR AGAINST ABSTAIN 
+1. Election of six directors (or if any nominee is not
+available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+Nominees:
+01. 
+James R. Bean, 
+02. 
+Craig D. Gates, 
+03. 
+Ronald F. Klawitter 
+04. 
+Dale F. Pilz, 
+05. 
+Yacov A. Shamash, and 
+06. 
+Patrick Sweeney. 
+(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions” box above and write that nominee’s name in the space provided below.) 
+*Exceptions 
+2. Ratification of the appointment of BDO Seidman, LLP as the Company’s independent auditors for fiscal year 2010. 
+The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares
+represented by this proxy will be voted as directed by the shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
+If you wish to vote in accordance with the Board of Directors’ recommendations, just sign and date below. You need not
+mark any boxes. 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States.
+Will Attend Meeting 
+YES 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark Here for Address Change or Comments SEE REVERSE 
+Signature Signature Date 
+NOTE: Please sign as name appears hereon. Joint
+owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-09-190588/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-09-190588/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..54084ae8e86f7dcc50adfbc6bca5782e7e7214c0
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-09-190588/proxy_rpt.txt
@@ -0,0 +1,16 @@
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The
+policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the
+aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a
+director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or
+was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director,
+(b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren,
+siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into
+account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related
+Party’s interest in the Transaction. With the exception of the Transition Agreement with Mr. Oehlke (see “Employment Contracts”, pages 11-12), the Company had no related Party Transactions during fiscal year 2009. 
+Compensation Committee Interlocks and Insider Participation in Compensation Decisions 
+The Board of Directors has a Compensation Committee presently consisting of Messrs. Shamash and Pilz. No member of the Compensation Committee was an officer or employee of the Company or any of its subsidiaries during
+fiscal year 2009. None of the executive officers of the Company has served on the Board of Directors or on the Compensation Committee of any other entity, any of whose officers served either on the Board of Directors or on the Compensation Committee
+of the Company.
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-10-209070/proxy.txt b/raw/proxies/0000719733/0001193125-10-209070/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..163b7f22ff297d1420460deee6098c5bf170120b
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-10-209070/proxy.txt
@@ -0,0 +1,1876 @@
+DEF 14A
+1
+ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant
+x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 17, 2010 
+Dear Shareholder: 
+The attached Notice of
+Annual Meeting of Shareholders and Proxy Statement relates to the Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company” or “Key Tronic”), to be held on Thursday, October 21, 2010,
+at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. 
+Whether or not you will attend the Annual Meeting in person and regardless of the number of shares you own, we request that you complete, sign, date and
+return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual Meeting and vote in person, even if you previously have returned your proxy card. 
+Sincerely, 
+Craig D. Gates 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 21, 2010 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company”) will be held on Thursday,
+October 21, 2010, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect six directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO USA, LLP as independent auditors for fiscal year 2011; 
+3. 
+To approve the Key Tronic Corporation 2010 Incentive Plan; and 
+4. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 2, 2010 are entitled to notice of and to vote at the Annual
+Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares
+will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington
+September 17, 2010 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE ENCLOSED CARD 
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL 
+MEETING. 
+IMPORTANT
+NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON OCTOBER 21, 2010. The Proxy Statement and 2010 Annual Report to Shareholders are available at: http://bnymellon.mobular.net/bnymellon/ktcc.
+PROXY STATEMENT 
+INTRODUCTION 
+General
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic
+Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of Directors
+of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 21, 2010 at 10:00 a.m. Pacific Time at the principal executive offices of the Company,
+4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Craig D. Gates and Dale F. Pilz, each of them and their substitutes, as
+proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. This proxy statement and the enclosed form of proxy were first mailed to shareholders on or about September 17, 2010. 
+Record Date, Proxies, Revocation 
+Record
+holders of the Common Stock at the close of business on September 2, 2010 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date 10,326,855 shares of Common Stock were issued and
+outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no
+instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below, FOR approval of the 2010 Incentive Plan, and FOR the ratification of the appointment of BDO USA, LLP
+as the Company’s independent auditors for fiscal year 2011. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by delivering a
+completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock
+outstanding is entitled to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at
+a meeting: (i) the six nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors,
+(ii) matter 2 listed in the accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it and (iii) matter 3 listed in the
+accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other than a vote for a nominee will
+have the practical effect of voting against the nominee. An abstention 
+1 
+from voting or a broker nonvote will have no effect on ratification of the appointment of the independent registered public accounting firm (matter 2) since neither represents a vote cast. In the
+approval of the 2010 Incentive Plan (matter 3) any action other than a vote for the Plan will have the practical effect of voting against the Plan. 
+If you are a stockholder of record and do not submit your vote by proxy or vote in person at the annual meeting, your shares will not be voted. However,
+if you hold shares beneficially in street name, the result may be different. If you do not return the voting instruction form, your broker, trustee or nominee may vote your shares in certain circumstances and on certain proposals. Under current
+regulations, brokers can not vote “uninstructed” shares in director elections or on executive compensation matters. Thus, if you hold your shares in street name and you do not instruct your record holder how to vote in the election of
+directors (matter 1) or on approval of the 2010 Incentive Plan (matter 3), no votes will be cast on your behalf. Discretionary voting by brokers is permitted in the ratification of the appointment of the independent registered public accounting firm
+(matter 2).When a broker votes a client’s shares on some but not all of the proposals at a meeting, the missing votes are referred to as “broker non-votes.” Those shares will be included in determining the presence of a quorum at the
+meeting, but are not considered “present” for purposes of voting on non-discretionary matters. 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have
+been elected and have qualified. The six nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the
+balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the
+Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. It is the
+Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2010 Annual Meeting attended the 2009 Annual meeting. 
+The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+James R. Bean , age 60, has been a director of the Company since October 2006. Mr. Bean has been President and CEO of Preco Electronics, Inc.
+since November 1999. From May 1997 to 1999 he held various management positions in Boise, Idaho with Preco Electronics, Inc. Previously he held various management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer,
+Inc. and National Semiconductor, Inc. Mr. Bean is a graduate of New Mexico State University with a B.S. in Industrial Engineering. The Board of Directors has concluded that based upon Mr. Bean’s business and financial expertise,
+current and prior senior management positions and education that he should serve as a director of the company. 
+Craig D. Gates, age 51,
+has been a director of the Company since July 2009 and has been President and CEO of the Company since April 2009. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and
+General Manager of New Business Development from October 1995 to July 1997. He joined the Company as Vice President of Engineering in October 1994. From 1991 to October 1994, Mr. Gates served as Director of Operations, Electronics for the
+Microswitch Division of Honeywell Inc. From 1982 to 1991, Mr. Gates held various engineering and management positions within the Microswitch Division. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in
+Business Administration from the University of Illinois, Urbana. The Board of Directors has concluded that based upon Mr. Gates’ business expertise, current and prior senior management experience and education that he should serve as a
+director of the Company. 
+2 
+Ronald F. Klawitter , age 58, has been a director of the Company since October 2009 and has been
+Executive Vice President of Administration, CFO and Treasurer of the Company since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to
+October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a Bachelor of Arts
+degree from Wittenberg University and is a Certified Public Accountant. The Board of Directors has concluded that based upon Mr. Klawitter’s business and financial expertise, current and prior management experience and education that he
+should serve as a director of the Company. 
+Dale F. Pilz , age 84, has served as Chairman of the Board since January 2000 and has been a
+director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer
+and President of GTE Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. The Board of Directors has concluded that based upon Mr. Pilz’s business
+and financial expertise, senior management experience, service on public companies’ boards and education that he should serve as a director of the Company. 
+Yacov A. Shamash , age 60, has been a director of the Company since 1989. He has been the Dean of Engineering and Applied Sciences at the State
+University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as
+Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp., and Applied DNA Sciences, Inc. The Board of
+Directors has concluded that based upon Dr. Shamash’s professional and management experience, service on public companies’ boards and education that he should serve as a director of the Company. Dr. Shamash has also served on the
+Board of two other public corporations, Manchester Tech., Inc. and Netsmart Tech., Inc., during the past five years. 
+Patrick Sweeney ,
+age 75, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of
+Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang – USA from 1981 through 1986 and also served as Managing Director of Ireland for Digital Equipment Corporation and as Plant Manager of its
+Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, and Photo Machining Inc. The Board of Directors has concluded that based upon Mr. Sweeney’s business and financial expertise,
+senior management experience, service on public companies’ boards and education that he should serve as a director of the Company. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS 
+Board Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified. There are no
+family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met six times during fiscal 2010. During fiscal 2010, each director attended 100% of the Board of Directors meetings and 100%
+of meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+3 
+Directors’ Independence 
+The Board of Directors has determined that all members of the Company’s Board of Directors are “independent directors” within the meaning
+of the applicable Nasdaq Global Select Market (“NASDAQ”) listing standards, except for Mr. Gates, the Company’s President and Chief Executive Officer and Mr. Klawitter, the Company’s Executive Vice President of
+Administration, CFO and Treasurer. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet the
+definition of independence contained in the NASDAQ listing standards; (2) meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial
+statements of the Company or any current subsidiary of the Company at any time during the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement,
+and cash flow statement, as required by the NASDAQ Marketplace Rules. 
+The Board of Directors has determined that Patrick Sweeney, a member of
+the Audit Committee, has the requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Board Leadership Structure and Role in Risk Oversight 
+The Board of Directors determines whether the roles of Chief Executive Officer and Chairman of the Board should be separated based upon its judgment of
+the structure which best meets the current needs of the Company and promotes the most effective communication between the Board and management. The Board currently separates the role of Chief Executive Officer and Chairman of the Board. 
+The Board oversees the Company’s risk directly and through its committees. The Board is assisted by its Audit Committee in performing its risk
+management oversight responsibilities with respect to financial reporting, internal controls and legal and regulatory requirements. The Board, assisted by its Compensation and Administration Committee, in performing its risk management oversight
+responsibilities with respect to risk relating to compensation programs and policies. The Board, with the assistance of its Governance and Nominating Committee oversees risk management with respect to Board membership, structure and organization.
+The Chairmen of the three Board Committees report to the Board on committee meetings at regular meetings of the Board of Directors.
+Management has the day to day responsibility for risk management and members of management make regular reports to the Board and its committees on identification, monitoring and mitigation of material risks. 
+Executive Sessions 
+At three of the four regular meetings of the Board of Directors held during fiscal year 2010, the independent directors met separately in executive
+session without management present. 
+Code of Conduct 
+The Board of Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of Conduct is
+available on the Company’s website at www.keytronic.com . The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+4 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of Directors or any of its members by certified mail only, addressed
+to the Board of Directors or any member, c/o General Counsel & Secretary, Key Tronic Corporation, 4424 N. Sullivan Road, Spokane Valley, WA 99216. All such shareholder communications will be compiled by the General Counsel &
+Secretary and submitted to the Board of Directors or Board member. 
+Nominations to the Board 
+The Governance and Nominating Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are
+submitted to the Secretary of the Company, together with biographical information and references, at least six months prior to the annual meeting. 
+Board Committees 
+The Board of Directors has four standing committees: the Audit Committee, the Compensation and Administration Committee, the Executive Committee and the
+Governance and Nominating Committee. The committees each have written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Governance and Nominating Committee are available on the
+Company’s website at www.keytronic.com . 
+The Audit Committee , which currently consists of Messrs. Sweeney (Chairman), Bean
+and Pilz met nine times during fiscal 2010. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance;
+selects and appoints the Company’s independent auditors, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent auditors, and establishes the fees and other compensation to be paid to the
+independent auditors; monitors the qualifications, independence and performance of the Company’s independent auditors; and establishes procedures for the receipt, retention, response to and treatment of complaints, including confidential,
+anonymous submissions by the Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of communication among the Board, the independent auditor and management. 
+The Compensation and Administration Committee (“Compensation Committee”) which currently consists of Messrs. Shamash (Chairman), and
+Pilz, met five times during fiscal 2010. The Committee establishes and reviews annually the Company’s general compensation policies applicable to the Company’s executive officers and other key employees, reviews and approves the level of
+compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers annually to the Board a report disclosing compensation policies applicable to the Company’s executive
+officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding changes to existing compensation plans. The Committee administers the Company’s incentive
+compensation plans and stock option plans, including determining the individuals to receive awards and options and the terms of such awards and options. 
+The Executive Committee , which currently consists of Messrs. Sweeney (Chairman), Gates and Pilz did not meet during fiscal 2010. The Executive
+Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Governance and Nominating Committee , which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met one time during fiscal 2010.
+The Committee makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect to the structure and composition of the
+Board. The Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific minimum
+5 
+qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be identified to the Committee by members of
+the Board, officers of the Company, shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. Although the Company does not have a policy
+regarding diversity, the Governance and Nominating Committee does take into consideration the value of diversity among Board members in background, experience, education and perspective in considering potential nominees for recommendation to the
+Board for selection. The Company has not paid any third party a fee to assist in identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner
+of more than 5% of the Company’s Common Stock. 
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related
+Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or
+relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related
+Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last fiscal year for which the Company
+has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of the Company’s common stock,
+or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and
+sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for
+review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested
+Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. 
+6 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial ownership of the Common Stock as of the
+Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director and nominee for director of the Company; (iii) each of the executive officers of
+the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of Beneficial Owner* 
+Number of Shares 
+Beneficially 
+Owned (1) 
+Percent of 
+Class 
+(1) 
+MORE THAN 5% SHAREHOLDERS 
+Tieton Capital Management 
+4700 Tieton Drive, Suite C 
+Yakima, WA 98908 
+963,168 
+(2),(3) 
+9.4 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+855,220 
+(4),(5) 
+8.4 
+% 
+DIRECTORS AND EXECUTIVE OFFICERS 
+James R. Bean 
+0 
+* 
+* 
+Dale F. Pilz 
+39,482 
+(6) 
+* 
+* 
+Yacov A. Shamash 
+36,030 
+(7) 
+* 
+* 
+Patrick Sweeney 
+68,930 
+* 
+* 
+Craig D. Gates 
+101,246 
+(8) 
+1.0 
+% 
+Ronald F. Klawitter 
+160,971 
+(9) 
+1.5 
+% 
+Douglas G. Burkhardt 
+76,043 
+(10) 
+* 
+* 
+All executive officers and directors as a group 
+(10 persons) 
+497,675 
+(11) 
+4.7 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 10,326,855 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own
+as of the record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such
+person or persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13G filed with the Securities and Exchange Commission, dated December 31, 2010. 
+7 
+3. 
+Tieton Capital Management is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2010. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in
+portfolios of DFA Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles
+for qualified employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Includes 19,930 shares issuable upon exercise of director stock options. 
+7 
+Represents 34,930 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+8. 
+Includes 30,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Gates as a participant in the Company’s
+401(k) Retirement Savings Plan (7,455 shares) as of July 3, 2010. 
+9. 
+Includes 30,000 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Klawitter as a participant in the
+Company’s 401(k) Retirement Savings Plan (17,860 shares) as of July 3, 2010, 1,600 shares owned directly by Mr. Klawitter’s daughter and 3,100 shares owned directly by Mr. Klawitter’s son. 
+10. 
+Includes 30,834 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Burkhardt as a participant in the
+Company’s 401(k) Retirement Savings Plan (176 shares) as of July 3, 2010. 
+11. 
+Includes 154,028 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60
+days of September 2, 2010. 
+EXECUTIVE COMPENSATION 
+Summary Compensation Table 
+Set forth
+below is information on the compensation of the Company’s Chief Executive Officer and its two other most highly compensated executive officers who were serving as executive officers at the end of fiscal year 2010 (“Named Executive
+Officers”) based on total compensation for the last completed fiscal year. No option awards were granted by the Company during fiscal year 2010 and no Named Executive Officer is covered by a pension plan or a nonqualified deferred compensation
+plan; therefore these columns have been omitted from the table. 
+8 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Option/ 
+SAR 
+Awards (2)
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($) 
+All
+Other 
+Compensation 
+($) (7) 
+Total 
+($) 
+Craig D. Gates, 
+Chief Executive Officer &
+President (1) 
+2010 
+2009 
+365,119 
+295,008 
+0 
+0 
+456,000 
+0 
+459,689 
+84,500 
+(3) 
+(4) 
+9,900 
+9,200 
+1,290,708 
+388,708 
+Ronald F. Klawitter 
+Executive Vice President of Administration, CFO & Treasurer 
+2010 
+2009 
+283,749 
+273,240 
+0 
+0 
+228,000 
+0 
+318,930 
+67,600 
+(5) 
+(4) 
+9,800 
+9,200 
+840,479 
+350,040 
+Douglas G. Burkhardt 
+Executive Vice President of Worldwide Operations 
+2010 
+2009 
+159,684 
+153,331 
+48,231 
+0 
+152,000 
+0 
+109,155 
+0 
+(6) 
+32,463 
+12,821 
+501,533 
+166,152 
+(1) 
+Mr. Gates was elected President & CEO of the Company in April 2009. 
+(2) 
+Represents the aggregate grant date fair value of stock appreciation right awards granted in fiscal year 2010, computed in accordance with FASB ASC Topic
+718. These amounts are not paid to or realized by the NEOs. See Note 7 to the Consolidated Financial Statements included in the Company’s 2010 Annual Report on Form 10-K for a discussion of the assumptions underlying the grant date fair
+value of the stock appreciation right awards. A description of the stock appreciation right awards appears in the narrative text following this table. 
+(3) 
+Represents $273,839 earned in fiscal year 2010 under the Incentive Compensation Plan for fiscal year 2010 and $185,850 earned in fiscal year 2010 under the Long-Term
+Incentive Plan for the 2008-2010 performance cycle. 
+(4) 
+Represents amounts earned in fiscal year 2009 under the Long-Term Incentive Plan for the 2007–2009 performance cycle. 
+(5) 
+Represents $170,250 earned in fiscal year 2010 under the Incentive Compensation Plan for fiscal year 2010 and $148,680 earned in fiscal year 2010 under the Long-Term
+Incentive Plan for the 2008-2010 performance cycle. 
+(6) 
+Represents amounts earned in fiscal year 2010 under the Incentive Compensation Plan for fiscal year 2010. 
+(7) 
+Represents Company matching payments in fiscal years 2010 and 2009 under the Company’s 401(k) Retirement Savings Plan and service awards of $100 to Mr. Gates
+and $200 to Mr. Burkhardt in fiscal year 2010. Also includes for Mr. Burkhardt value realized on the exercise of stock options in the amount of $24,183 in fiscal year 2010 and $6,100 in fiscal year 2009. 
+9 
+Narrative Disclosure of Summary Compensation Table 
+Base Salary 
+Key
+Tronic provides the Named Executive Officers with a level of “guaranteed” compensation in the form of base salary. Each position is paid within a range that targets median market salary. Individual salary levels vary around this point
+based on experience, knowledge, and individual contribution. Ranges were objectively determined using the combined survey data provided by Milliman, Inc. 
+Annual Incentives 
+For our Named Executive Officers, annual incentives are tied directly to the achievement of a company-wide financial goal which is profit before taxes
+(PBT). PBT is the financial goal because of its significant impact on increasing shareholder equity. Target annual incentive levels for the top executives are set at or slightly above typical market practice to enable total direct compensation to be
+more competitive given that Key Tronic’s long-term incentive is cash-based and therefore not completely comparable to what our publicly traded peers offer through the potential appreciation available to them in their equity-based long term
+incentive plans. The fiscal year 2010 Incentive Compensation Plan provided that if Key Tronic achieved its PBT target, executives would have the opportunity to earn 100% of their incentive target. If PBT exceeded target by 44%, executives would have
+the opportunity to earn up to 150% of their annual incentive target. If PBT were more than 80% below target level, no incentive would be paid. Key Tronic’s PBT for fiscal year 2010 was more than 44% above target level. Therefore annual
+incentive payments were earned by participants for fiscal year 2010 in the approximate amount of 150% of their incentive target. 
+Long-term Incentives 
+Long-term Incentive Plan . Beginning in fiscal year 2006, the officers and non-employee directors of Key Tronic became eligible to participate in
+Key Tronic’s Long-term Incentive Plan (LTIP). The LTIP was approved by the Board in September 2005. Under this plan, officers and non-employee directors may be awarded a number of “performance units” at the start of each fiscal year.
+These units will have a future value tied directly to the achievement of Board determined and approved goals for a three-year period. At the end of each three-year period, these units will be exchanged for cash at the value set by the Board at the
+beginning of the three year period based on goal achievement as measured at the end of the three year period. For Mr. Gates the award at target for the 2008–2010 performance cycle was $150,000 of compensation. For Mr. Klawitter the
+award at target for the 2008–2010-1 performance cycle was $120,000 of compensation. For each non-employee director the award at target for the 2008-2010 performance cycle was $10,000 of compensation. For the 2008–2010 performance cycle
+threshold goals for three year sales growth and return on invested capital compared to peer group companies were exceeded. 
+2010 Incentive
+Plan . Historically, the primary form of long-term compensation at Key Tronic has been stock options. No options have been granted to any of the Named Executive Officers since October 24, 2002. In fiscal year 2010, the Named Executive
+Officers received grants of stock appreciation rights under the 2010 Incentive Plan. These stock appreciation right awards vest on the third anniversary of the grant date to the extent the Company’s return on invested capital (ROIC) over the
+vesting period compared to the weighted average ROIC of a selected group of peer companies over the same period has reached 90% or more than peer group average and have a term of five years. See “Proposal 3: Approval of the Key Tronic
+Corporation 2010 Incentive Plan” for further details on these stock appreciation right awards. 
+Other Compensation
+The Named Executive Officers and all other U.S. employees are eligible to participate in the Key Tronic Corporation 401(k) Retirement
+Savings Plan (“401(k) Plan”). The 401(k) Plan is a defined contribution tax qualified retirement savings plan under which employees can contribute a portion of their eligible cash compensation to the 401(k) Plan and the Company makes
+matching cash contributions of 100% of the first 3% and 50% of the next 2% of compensation deferred subject to qualified plan limits. All employee contributions and matching contributions are vested upon contribution. 
+10 
+GRANTS OF PLAN BASED AWARDS IN 2010 FISCAL YEAR 
+The following table sets forth information concerning individual grants of non-equity incentive plan awards and grants of equity incentive plan awards
+made during fiscal year 2010 to each of the Named Executive Officers under the 2010 Incentive Plan. 
+Name 
+Grant Date 
+Estimated Future 
+Payouts 
+Under Non-Equity Incentive Plan Awards 
+Option/SAR 
+Awards: 
+Number of 
+Securities 
+Underlying 
+Options/SARs 
+(#) 
+Exercise or 
+Base Price of 
+Option/
+SAR 
+Awards 
+($/Sh) 
+Grant Date 
+Fair Value 
+of 
+Option/ 
+SAR Awards 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Craig D. Gates 
+05/14/10 
+07/23/09 
+07/23/09 
+(1) 
+(2) 
+(3) 
+18,256 
+125,000 
+182,560 
+250,000 
+273,839 
+375,000 
+150,000 
+$ 
+5.89 
+456,000 
+Ronald F. Klawitter 
+05/14/10 
+07/23/09 
+07/23/09 
+(1) 
+(2) 
+(3) 
+11,350 
+75,000 
+113,500 
+150,000 
+170,250 
+225,000 
+75,000 
+$ 
+5.89 
+228,000 
+Douglas G. Burkhardt 
+05/14/10 
+07/23/09 
+07/23/09 
+(1) 
+(2) 
+(3) 
+7,277 
+30,000 
+72,770 
+60,000 
+109,155 
+90,000 
+50,000 
+$ 
+5.89 
+152,000 
+(1) 
+Represents stock appreciation rights granted under the 2010 Incentive Plan as described in more detail under “Proposal 3: Approval of the Key Tronic Corporation
+2010 Incentive Plan.” These stock appreciation rights vest on the third anniversary of the grant date and have a term of five years. Payouts under the stock appreciation rights are dependent upon the achievement of goals for three year’s
+return on invested capital compared to peer group companies. 
+(2) 
+Represents threshold, target and maximum payouts under the annual Incentive Compensation Plan for fiscal year 2010. For actual payouts earned for fiscal year 2010 see
+the Summary Compensation Table. The Incentive Compensation Plan is discussed under the caption “Annual Incentives” on page 10. 
+(3) 
+Represents threshold, target and maximum payouts under the Long-term Incentive Plan for the 2010-2012 performance cycle. The Long-term Incentive Plan is discussed under
+the caption “Long-term Incentives” on page 10. Payouts under the Long-term Incentive Plan for the 2010-2012 performance cycle are dependent upon the achievement of goals for three years sales growth and return on invested capital compared
+to peer group companies. 
+11 
+OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR-END 
+The following table provides information on stock options and stock appreciation rights held by the Named Executive Officers at July 3, 2010.
+Option/SAR Awards 
+Name 
+Number
+of 
+Securities 
+Underlying 
+Unexercised 
+Options/SARs 
+(#) 
+Exercisable (1) 
+Number 
+of 
+Securities 
+Underlying 
+Unexercised 
+Options/SARs 
+(#) 
+Unexercisable (2) 
+Option/SAR 
+Exercise or 
+Base 
+Price 
+($) 
+Option/SAR 
+Expiration 
+Date 
+Craig D. Gates 
+30,000 
+10,000 
+10,000 
+10,000 
+150,000 
+0 
+0 
+0 
+0 
+5.89 
+4.81 
+2.81 
+2.81 
+2.81 
+05/14/15 
+08/28/10 
+05/22/11 
+05/22/12
+05/22/13 
+Ronald F. Klawitter 
+30,000 
+10,000 
+10,000 
+10,000 
+75,000 
+0 
+0 
+0 
+0 
+5.89 
+4.81 
+2.81 
+2.81 
+2.81 
+05/14/15 
+08/28/10 
+05/22/11 
+05/22/12
+05/22/13 
+Douglas G. Burkhardt 
+3,750 
+3,750 
+6,666 
+6,667 
+6,667 
+3,334 
+50,000 
+0 
+0 
+0 
+0 
+0 
+0 
+5.89 
+6.50 
+6.50 
+2.81 
+2.81 
+2.81 
+1.15 
+05/14/15 
+07/30/10 
+07/30/10 
+05/22/11
+05/22/12 
+05/22/13 
+10/24/10
+(1) 
+Stock options that vested annually over five to ten years beginning on the first anniversary of the date of grant. 
+(2) 
+Stock appreciation rights that vest on the third anniversary of the grant date and have a term of five years. Payouts under the stock appreciation rights are dependent
+upon the achievement of goals for three year’s return on invested capital compared to peer group companies 
+12 
+OPTION EXERCISES FOR FISCAL YEAR 2010 
+The following table sets forth information concerning the number of shares acquired and the dollar amounts realized by Named Executive Officers during
+fiscal year 2010 on the exercise of stock options. 
+Name 
+Option Awards 
+Number of Shares 
+Acquired on 
+Exercise 
+(#) 
+Value Realized 
+on 
+Exercise 
+($) 
+Craig D. Gates 
+0 
+0 
+Ronald F. Klawitter 
+0 
+0 
+Douglas G. Burkhardt 
+18,333 
+24,183 
+(1) 
+(1) 
+Based on the difference between the closing price of the Company’s Common Stock on the exercise date and the exercise price of the option.
+Pension Benefits 
+None of the Named Executive Officers is covered by a pension plan. 
+Non-qualified Deferred Compensation 
+None of the Named Executive Officers is covered by a defined contribution plan or other plan that provides for the deferral of compensation on a basis
+that is not tax-qualified. 
+Other Benefits 
+The Company offers the Named Executive officers and all other U.S. employees life insurance, disability, medical and dental plans for which the Named
+Executive Officers are charged the same rate as all other employees. 
+Potential Payments Upon Termination or Change in Control
+Employment Contracts. The Company entered into employment contracts with Messrs. Gates, Klawitter and Burkhardt at the time each
+employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the
+Company may terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for
+a period of one year after termination. The employment contract entered into with Mr. Klawitter also provides that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in
+such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Gates and Klawitter
+were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after
+termination. 
+13 
+Long-term Incentive Plan. The Long-term Incentive Plan provides that upon a change of control of the
+Company, vesting of units awarded under the Plan will be accelerated and will be payable at two times their value. “Change of control” generally means the occurrence of any of the following events: (1) any individual, entity or group
+(other than the Company, any subsidiary or any employee benefit plan of the Company or a subsidiary) acquires beneficial ownership of securities of the Company representing 40% or more of the combined voting power of the Company’s
+then-outstanding securities (other than as a result of an acquisition of securities directly from the Company); (2) the first purchase of Common Stock pursuant to a tender or exchange offer (other than a tender or exchange offer made by the
+Company or any subsidiary); (3) the approval by the Company’s shareholders of a merger or consolidation, a statutory share exchange, a sale or disposition of all or substantially all the Company’s assets or a plan of liquidation or
+dissolution of the Company; or (4) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority of the Board, unless the election or
+nomination for the election by the Company’s shareholders of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 
+2010 Incentive Plan. Under the 2010 Incentive Plan, in the event of a change of control: (1) all outstanding awards, other than performance
+shares, performance units, will become fully and immediately exercisable, and all applicable and restrictions or forfeiture provisions will lapse, immediately prior to the change of control and such awards will terminate at the effective time of the
+change of control. However, upon certain changes of control, such as certain reorganizations, mergers or consolidations, any such awards that vest based on continuous service will become fully and immediately exercisable, and all applicable deferral
+and restriction limitations or forfeiture provisions will lapse, only if and to the extent such awards are not converted, assumed or replaced by a successor company; and (2) all performance shares, performance units, and stock awards or stock
+units with restrictions based on performance criteria will be payable based on targeted performance being attained as of the effective date of the change of control. 
+“Change of control” generally means the occurrence of any of the following events: (1) an acquisition by any individual, entity or group
+of beneficial ownership of 40% or more of either (a) the then outstanding shares of 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 (excluding generally any acquisition directly from the Company, any acquisition by the Company, any acquisition by any employee benefit plan of the Company or an affiliate, or the consummation of a reorganization, merger or consolidation
+or sale or other disposition of all or substantially all of the assets of the Company pursuant to which certain requirements are met); (2) a change in the composition of the Board during a two-year period such that the incumbent board members
+as of the beginning of the two-year period cease to constitute at least a majority of the Board (not including directors whose election, or nomination for election by shareholders, was approved by a majority of the incumbent board);
+(3) consummation of certain reorganizations, mergers or consolidations or other disposition of all or substantially all of the assets of the Company; or (4) consummation of a complete liquidation or dissolution of the Company. 
+14 
+Compensation of Directors 
+Fees. Each director, other than the Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $6,250, a fee of
+$1,200 for each Board meeting attended in person and a fee of $600 for each Board meeting attended by telephone. Directors also receive a fee of $750 for each committee meeting attended (committee members receive a committee attendance fee of $375
+if the committee meeting is held the same day as a Board meeting and a fee of $375 if the committee meeting is held by phone), except that directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of
+any payment for a Board meeting attended on the same day). The Chairman of the Board receives a quarterly retainer of $7,000, plus a fee of $1,800 for each Board meeting attended. Committee chairmen receive an additional fee of $550 for each
+committee meeting attended. Directors also receive payment of out-of-pocket expenses related to their service as directors. 
+Long-term
+Incentive Plan. Each director participates in the Company’s Long-term Incentive Plan (“Plan”). The Plan provides a long-term cash bonus opportunity to the members of the Board of Directors if certain Company performance measures
+established by the Board of Directors are met for three fiscal year performance periods. No amounts can be earned for any three fiscal year performance period until the end of the third fiscal year since achievement of performance measures can only
+be determined at the end of the third fiscal year. During fiscal year 2010, each non-employee Director was awarded 10,000 units under the Plan. If performance measures are met, these units will result in a cash payment ranging from $5,000 to $15,000
+to each said non-employee Director at the end of fiscal year 2012. Payouts under the Long-term Incentive Plan will depend upon the achievement of goals for three year sales growth and return on invested capital compared to peer group companies.
+2010 Incentive Plan. 
+During
+fiscal year 2010, each non-employee director was awarded 15,000 cash settled stock appreciation rights under the 2010 Incentive Plan, as described in more detail under “Proposal 3: Approval of the Key Tronic Corporation 2010 Incentive
+Plan.” These stock appreciation rights vest [describe vesting] and have a term of five years. 
+Stock Option Plan. Each
+non-employee director received stock options under the Company’s Amended and Restated 1990 Stock Option Plan for Non-Employee Directors, which terminated on July 27, 2005. 
+Set forth below is information on the compensation provided to each non-employee director of the Company during fiscal year 2010. No non-employee
+director is covered by a pension plan or a nonqualified deferred compensation plan. 
+15 
+DIRECTOR COMPENSATION 
+Name 
+Fees Earned 
+or Paid 
+in 
+Cash 
+($) 
+Option/ 
+SAR 
+Awards 
+($)(1)(2) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($)(3) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+James R. Bean 
+25,350 
+45,600 
+12,390 
+0 
+83,340 
+Dale F. Pilz 
+34,675 
+45,600 
+12,390 
+0 
+92,665 
+Yacov A. Shamash 
+25,200 
+45,600 
+12,390 
+0 
+83,190 
+Patrick Sweeney 
+27,550 
+45,600 
+12,390 
+0 
+85,540 
+(1) 
+See Note 7 to the Consolidated Financial Statements included in the Company’s 2010 Annual Report on Form 10-K for a discussion of the assumptions underlying
+the grant date fair value of stock appreciation right awards. 
+(2) 
+Each director holds 15,000 stock appreciation right awards as of July 3, 2010 with a grant date fair value of $45,600. The following number of option awards were
+held by each of the directors and outstanding as of July 3, 2010: Mr. Bean, 0 options; Mr. Pilz, 19,930 options; Mr. Sweeney, 2,465 options; Dr. Shamash, 34,930 options. All directors were fully vested in such options prior
+to fiscal year 2010. 
+(3) 
+Represents amounts paid in fiscal year 2010 under the Long-Term Incentive Plan for the 2008-2010 performance cycle. 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit Committee
+members meet the definition of independence within the meaning of the applicable NASDAQ listing standards and that the Chairman of the Committee has the requisite attributes of an “audit committee financial expert” as defined by SEC
+regulations. The Audit Committee operates under a written charter adopted by the Board of Directors which is reviewed and reassessed for adequacy annually by the Audit Committee. The Audit Committee has met and discussed with the Company’s
+management and BDO USA, LLP (“BDO”), the Company’s independent auditors, the Company’s financial statements contained in the Annual Report on Form 10-K for the fiscal year ended July 3, 2010. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards No. 61,
+(“Codification of Statements on Auditing Standards, AU § 380”), as amended. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO as required under applicable
+independence standards for auditors of public companies. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the
+principal auditor’s independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements
+be included in the Company’s Annual Report on Form 10K for the fiscal year ended July 3, 2010, for filing with the Securities and Exchange Commission. 
+16 
+The Audit Committee: Patrick Sweeney (Chairman), James R. Bean, Dale F. Pilz
+Principal Accountant Fees and Services. The following chart shows the aggregate audit and non-audit fees billed or expected to be
+billed to the Company by BDO and its affiliate Mexican firm BDO Hernandez, Marron y Cia, SC for professional services in the named categories for the fiscal years ended July 3, 2010 and June 29, 2009: 
+FY 2010 
+FY 2009 
+Audit
+Fees (1) 
+$ 
+300,760 
+$ 
+214,733 
+Audit Related
+Fees (2) 
+20,170 
+11,544 
+Tax
+Fees (3) 
+14,940 
+14,443 
+All Other Fees 
+— 
+— 
+Total 
+$ 
+335,870 
+$ 
+240,720 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the
+Company’s Annual Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan and other consultation
+matters. 
+(3) 
+Tax fees for fiscal years 2010 and 2009 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters.
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO USA, LLP (“BDO”) as the Company’s independent auditors for the fiscal year ending July 2, 2011.
+Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond to appropriate questions. In the event that ratification of
+this appointment of auditors is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will review its future selection of auditors. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S 
+INDEPENDENT AUDITORS 
+PROPOSAL 3 
+APPROVAL OF THE KEY TRONIC CORPORATION 
+2010 INCENTIVE PLAN 
+Our
+Board of Directors has determined that the effective use of stock-based long-term incentive compensation is vital to our ability to achieve continued strong performance in the future by providing a direct link between executive compensation and
+long-term shareholder value creation. Accordingly, we are seeking shareholder approval of the Key Tronic Corporation 2010 Incentive Plan, or the 2010 Plan. The Board approved the 2010 Plan on April 22, 2010. 
+Our prior equity compensation plans have expired, and no options have been granted under such plans since November 2, 2004. However, as discussed in
+more detail under New Plan Benefits below, the Board, upon 
+17 
+recommendation of its Compensation Committee, on May 14, 2010 granted cash-settled stock appreciation rights under the 2010 Plan. If shareholders approve the 2010 Plan at the Annual Meeting,
+these stock appreciation rights upon exercise may be settled in cash, in shares of Common Stock, or a combination of cash and Common Stock. If shareholders do not approve the 2010 Plan at the Annual Meeting, only cash-settled awards will be granted
+under the 2010 Plan. 
+The 2010 Plan authorizes the issuance of 1,200,000 shares of our Common Stock. As of September 2, 2010, we had
+outstanding 10,326,855 shares of Common Stock. The shares authorized for issuance under the 2010 Plan represent approximately 12% of these outstanding shares. This percentage calculation is not on a fully diluted basis and, therefore, does not
+include the 261,029 shares subject to outstanding awards under our prior equity compensation plans as of September 2, 2010. 
+Shareholder
+approval of the 2010 Plan will also permit certain performance-based awards described below to qualify for tax deductibility under Code Section 162(m). 
+Shareholders are requested in this Proposal 3 to approve the 2010 Plan. 
+The following description of the 2010 Plan is a summary, does not purport to be a complete description of the 2010 Plan and is qualified in its entirety
+by reference to the full text of the 2010 Plan. A copy of the 2010 Plan is attached to this proxy statement as Appendix A and is incorporated herein by reference. 
+DESCRIPTION OF THE 2010 PLAN 
+Purpose 
+The purpose of the 2010 Plan is
+to attract, retain and motivate our employees, officers and directors by providing them with the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of our shareholders.
+The 2010 Plan would also allow us to provide the same opportunity to consultants, agents, advisors, and independent contractors. 
+Administration 
+The Board of Directors
+or the Compensation Committee of the Board of Directors will administer the 2010 Plan. The Board may delegate administration of the 2010 Plan in accordance with its terms. References to the “Committee” below are, as applicable, to the
+Board, the Compensation Committee, other delegate, including a senior executive officer of the Company authorized by the Board or Compensation Committee to make grants to certain eligible employees of the Company. 
+Eligibility 
+Awards may be granted under
+the 2010 Plan to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its subsidiaries and affiliates. As of September 2, 2010, approximately thirteen employees, including six
+executive officers, and four non-employee directors were eligible to receive awards under the 2010 Plan. 
+Number of Shares 
+The number of shares of Common Stock authorized for issuance under the 2010 Plan is 1,200,000. The shares of Common Stock issuable under the
+2010 Plan will consist of authorized and unissued shares. Shares of Common Stock covered by an award granted under the 2010 Plan will not be counted as used unless and until they are issued and delivered to a participant. 
+18 
+The following shares will be available again for issuance under the 2010 Plan: 
+• 
+shares subject to awards that lapse, expire, terminate or are canceled prior to issuance of the underlying shares; 
+• 
+shares subject to awards that are subsequently forfeited to or otherwise reacquired by us; 
+• 
+shares withheld by or tendered to us as payment for the purchase price of an award or to satisfy tax withholding obligations related to an award; and
+• 
+shares related to an award that is settled in cash or in another manner where some or all of the shares covered by the award are not issued.
+Awards granted in assumption of or substitution for previously granted awards in acquisition transactions will not reduce
+the number of shares authorized for issuance under the 2010 Plan. 
+If any change in our stock occurs by reason of any stock dividend, stock
+split, spin-off, recapitalization, merger, consolidation, combination or exchange of shares, distribution to shareholders other than a normal cash dividend or other change in our corporate or capital structure, the Committee will make proportional
+adjustments to the maximum number and kind of securities (a) available for issuance under the 2010 Plan, (b) issuable as incentive stock options, (c) issuable to certain individuals subject to Code Section 162(m), and
+(d) that are subject to any outstanding award, including the per share price of such securities. 
+The closing price of our Common Stock,
+as reported on NASDAQ on September 2, 2010, was $5.15 per share. 
+Types of Awards 
+The 2010 Plan permits the grant of any or all of the following types of awards. 
+Stock Options. The Committee may grant nonqualified stock options that are not intended to qualify as incentive stock options under Code
+Section 422. The Committee sets option exercise prices and terms, except that the exercise price of stock options granted under the 2010 Plan must be at least 100% of the fair market value of the Common Stock on the date of grant, except in the
+case of options granted in connection with assuming or substituting options in acquisition transactions, and except for options that meet all the requirements for options that are considered “deferred compensation” within the meaning of
+Code Section 409A. At the time of grant, the Committee determines when stock options are exercisable and when they expire, except that the term of a stock option cannot exceed ten years. Unless the Committee otherwise determines, fair market
+value means, as of a given date, the closing price of our Common Stock during regular session trading on NASDAQ. 
+Stock Appreciation
+Rights (SARs). The Committee may grant SARs as a right in tandem with the number of shares underlying stock options granted under the 2010 Plan or on a stand-alone basis. SARs are the right to receive payment per share of an exercised SAR in
+stock or cash, or a combination of stock and cash, equal to the excess of the share’s fair market value on the date of exercise over its fair market value on the date the SAR was granted. Exercise of an SAR issued in tandem with stock options
+will result in the reduction of the number of shares underlying the related SAR to the extent of the SAR exercised. The term of a stand-alone SAR cannot be more than ten years, and the term of a tandem SAR will not exceed the term of the related
+option. 
+Stock Awards, Restricted Stock and Stock Units. The Committee may grant awards of shares of Common Stock, or awards
+designated in units of Common Stock, under the 2010 Plan. These awards may be made subject to repurchase or forfeiture restrictions at the Committee’s discretion. The restrictions may be based on continuous service with us or the achievement of
+specified performance criteria, as determined by the Committee. 
+19 
+Performance Awards. The Committee may grant performance awards in the form of performance
+shares or performance units. Performance shares are units valued by reference to a designated number of shares of Common Stock, and performance units are units valued by reference to a designated amount of cash. Either may be payable in stock or
+cash, or a combination of stock and cash, upon the attainment of performance criteria and other terms and conditions as established by the Committee. 
+Other Stock or Cash-Based Awards. The Committee may grant other incentives payable in cash or in shares of Common Stock, subject to the
+terms of the 2010 Plan and any other terms and conditions determined by the Committee. 
+Repricing 
+Without shareholder approval, the Board or the Compensation Committee may not (a) lower the price of an option or SAR after it is granted, except in
+connection with certain specified adjustments, (b) take any other action that is treated as a repricing under generally accepted accounting principles, or (c) cancel an option or SAR when its exercise price exceeds the fair market value of
+the underlying Common Stock, in exchange for another option, SAR, restricted stock or other equity, unless the cancellation and exchange occurs in connection with a merger, acquisition or similar corporate transaction. To date we have never repriced
+stock options or SARs in that manner. 
+Performance-Based Compensation under Code Section 162(m) 
+Performance Goals and Criteria. Under Code Section 162(m), we are generally prohibited from deducting for U.S. federal income tax
+purposes compensation paid to our Chief Executive Officer and our three other most highly compensated executive officers (other than the chief financial officer) in excess of $1 million per person in any year. However, compensation that qualifies as
+performance-based is excluded for purposes of calculating the amount of compensation subject to the $1 million limit. 
+If the Compensation
+Committee intends to qualify an award under the 2010 Plan as “qualified performance-based compensation” under Code Section 162(m), the performance goals selected by the Compensation Committee may be based on the attainment of
+specified levels of one, or any combination, of the following performance criteria for the Company as a whole or any business unit, as reported or calculated by the Company: cash flows (including, but not limited to, operating cash flow, free cash
+flow or cash flow return on capital); working capital; earnings per share; book value per share; operating income (including or excluding depreciation, amortization, extraordinary items, restructuring charges or other expenses); revenues; operating
+margins; return on assets; return on equity; debt; debt plus equity; market or economic value added; stock price appreciation; total shareholder return; cost control; strategic initiatives; market share; net income; return on invested capital;
+improvements in capital structure; revenue growth rate; or customer satisfaction, employee satisfaction, services performance, subscriber, cash management or asset management metrics. 
+The performance goals also may be based on the achievement of specified levels of performance for the Company as a whole or any business unit or
+applicable affiliate under one or more of the performance goals described above relative to the performance of other corporations. 
+The
+Compensation Committee may provide in any award that any evaluation of performance may include or exclude any of the following events that occur during a performance period: asset write-downs; litigation or claim judgments or settlements; the effect
+of changes in tax laws, accounting principles, or other laws or provisions affecting reported results; any reorganization and restructuring programs; extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 or
+in Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company’s annual report to shareholders for the applicable year; acquisitions or divestitures; foreign exchange gains and losses; and
+gains and losses on asset sales. 
+20 
+Adjustments and Certification. The Compensation Committee may adjust the amount payable
+pursuant to an award under the 2010 Plan that is intended to qualify as “performance-based compensation” under Code Section 162(m) downward but not upward. The Compensation Committee may not waive the achievement of performance goals
+related to an award except in the case of a participant’s death or disability. Code Section 162(m) requires that the Compensation Committee certify that performance goals were achieved before the payment of the “performance-based
+compensation.” 
+Limitations. Subject to certain adjustments, participants who are granted awards intended to qualify as
+“performance-based compensation” under Code Section 162(m) may not be granted awards in any calendar year, other than performance units, with respect to more than 600,000 shares for options or SARs and 300,000 shares for
+restricted stock, restricted stock units, performance shares or other stock-based awards. The maximum dollar value payable to any participant with respect to performance units or any other awards payable in cash that are intended to qualify as
+“performance-based compensation” cannot exceed $1,000,000 in any calendar year. 
+Change of Control 
+Under the 2010 Plan, unless otherwise provided in the instrument evidencing an award or in a written employment, services or other agreement between the
+participant and us, in the event of a change of control: 
+• 
+All outstanding awards, other than performance shares, performance units, will become fully and immediately exercisable, and all applicable and
+restrictions or forfeiture provisions will lapse, immediately prior to the change of control and such awards will terminate at the effective time of the change of control. However, upon certain changes of control, such as certain reorganizations,
+mergers or consolidations, any such awards that vest based on continuous service will become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions will lapse, only if and to the extent
+such awards are not converted, assumed or replaced by a successor company. 
+• 
+All performance shares, performance units, and stock awards or stock units with restrictions based on performance criteria will be payable based on
+targeted performance being attained as of the effective date of the change of control. 
+• 
+In the event of certain reorganizations, mergers or consolidations, the Committee may in its discretion instead provide that a participant’s
+outstanding awards will be cashed out. 
+Definition of Change of Control. Unless the Committee determines
+otherwise with respect to an award at the time it is granted or unless otherwise defined for purposes of an award in a written employment, services or other agreement between a participant and us, a change of control of the Company generally means
+the occurrence of any of the following events: 
+• 
+an acquisition by any individual, entity or group of beneficial ownership of 40% or more of either (a) the then outstanding shares of 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 (excluding generally any acquisition directly from the Company, any acquisition by the Company,
+any acquisition by any employee benefit plan of the Company or an affiliate, or the consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company pursuant to which
+certain requirements are met); 
+• 
+a change in the composition of the Board during a two-year period such that the incumbent board members as of the beginning of the two-year period
+cease to constitute at least a majority of the Board (not including directors whose election, or nomination for election by shareholders, was approved by a majority of the incumbent board); 
+• 
+consummation of certain reorganizations, mergers or consolidations or other disposition of all or substantially all of the assets of the Company; or
+21 
+• 
+consummation of a complete liquidation or dissolution of the Company. 
+Amendment and Termination 
+The Board or
+the Compensation Committee may amend the 2010 Plan, except that if any applicable statute, rule or regulation requires shareholder approval for an amendment to the 2010 Plan, then to the extent so required, shareholder approval will be obtained. The
+Board or the Compensation Committee may also suspend or terminate all or any portion of the 2010 Plan at any time, but any suspension or termination may not, without a participant’s consent, materially adversely affect any rights under any
+outstanding award. Unless sooner terminated by the Board or Compensation Committee, the 2010 Plan will terminate ten years after the date of shareholder approval of the 2010 Plan. 
+Federal Income Tax Information 
+The
+following is a brief summary of the U.S. federal income tax consequences of the 2010 Plan generally applicable to us and to participants in the 2010 Plan who are subject to U.S. federal taxes. The summary is based on the U.S. Internal
+Revenue Code of 1986, as amended, applicable Treasury Regulations and administrative and judicial interpretations thereof, each as in effect on the date of this proxy statement and is, therefore, subject to future changes in the law, possibly with
+retroactive effect. The summary is general in nature and does not purport to be legal or tax advice. Furthermore, the summary does not address issues relating to any U.S. gift or estate tax consequences or the consequences of any state, local
+or foreign tax laws. 
+Stock Options 
+Nonqualified Stock Options. A participant generally will not recognize taxable income upon the grant or vesting of a nonqualified stock option with
+an exercise price at least equal to the fair market value of the Common Stock on the date of grant and no additional deferral feature. When a nonqualified stock option is exercised, a participant generally will recognize compensation taxable as
+ordinary income in an amount equal to the difference between the fair market value of the shares underlying the option on the date of exercise and the option exercise price. When a participant sells the shares, the participant will have short-term
+or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the greater of the
+fair market value of the shares on the exercise date or the option exercise price. Special rules apply if a participant uses shares of Common Stock already held by the participant to pay the exercise price. 
+Stock Appreciation Rights 
+A participant generally will not recognize taxable income upon the grant or vesting of an SAR with a grant price at least equal to the fair market value
+of the Common Stock on the date of grant and no additional deferral feature. Upon the exercise of an SAR, a participant generally will recognize compensation taxable as ordinary income in an amount equal to the difference between the fair market
+value of the shares underlying the SAR on the date of exercise and the grant price of the SAR. 
+Unrestricted Stock
+Awards 
+Upon receipt of an unrestricted stock award, a participant generally will recognize compensation taxable as ordinary income in
+an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid by the participant with respect to the shares. 
+22 
+Restricted Stock Awards, Restricted Stock Units, Performance Shares and Performance
+Units 
+A participant generally will not have taxable income upon the grant of restricted stock, restricted stock units, performance
+shares or performance units. Instead, the participant will recognize ordinary income at the time of vesting or payout equal to the fair market value (on the vesting or payout date) of the shares or cash received minus any amount paid. For restricted
+stock only, a participant may instead elect to be taxed at the time of grant. 
+Tax Consequences to the Company 
+In the foregoing cases, we generally will be entitled to a deduction at the same time and in the same amount as a participant recognizes
+ordinary income, subject to certain limitations imposed under the Code. 
+Code Section 409A 
+We intend that awards granted under the 2010 Plan comply with, or otherwise be exempt from, Code Section 409A, but make no representation or warranty
+to that effect. 
+Tax Withholding 
+We are authorized to deduct or withhold from any award granted or payment due under the 2010 Plan, or require a participant to remit to us, the amount of
+any withholding taxes due in respect of the award or payment and to take such other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. We are not required to issue any shares of Common Stock or
+otherwise settle an award under the 2010 Plan until all tax withholding obligations are satisfied. 
+New Plan Benefits 
+All awards to employees, officers, directors and consultants under the 2010 Plan are made at the discretion of the Committee. Therefore, the benefits and
+amounts that will be received or allocated under the 2010 Plan are not determinable at this time. However, on May 14, 2010, the Committee granted SARs to certain participants. The grants made to the Named Executive Officers, to all current
+executive officers as a group, to all non-employee directors as a group, and to all non-executive officer employees as a group are set forth in the table below. These SARs vest on the third anniversary of the grant date and have a term of five years
+and a grant price of $5.89 per share. Payouts under the SARs are dependent on the achievement of goals for three year’s return on invested capital compared to peer group companies Upon exercise these SARs will be settled in cash, except that if
+shareholders approve the 2010 Plan, on exercise these SARs may be settled solely in shares of Common Stock, in cash or in a combination of cash and Common Stock, as determined by the Committee in its sole discretion. 
+Name 
+2010 SAR Grant (#) 
+Craig D. Gates 
+150,000 
+Ronald F. Klawitter 
+75,000 
+Douglas G. Burkhardt 
+50,000 
+All executive officers as a group 
+395,000 
+All non-employee directors as a group 
+60,000 
+All non-executive officer employees as a group 
+100,000 
+23 
+EQUITY COMPENSATION PLAN INFORMATION 
+The following table sets forth information, as of July 3, 2010, concerning securities authorized for issuance under the Company’s equity
+compensation plans. 
+Plan category 
+Number of securities to 
+be issued upon exercise 
+of outstanding options, 
+warrants,
+and rights 
+(a) 
+Weighted-average 
+exercise price of 
+outstanding options, 
+warrants, and rights 
+(b) 
+Number of securities 
+remaining available for 
+future issuance under 
+equity
+compensation 
+plans (excluding 
+securities reflected in 
+column (a) 
+(c) 
+Equity compensation plans approved by security holders 
+243,993 
+$ 
+3.87 
+0 
+Equity compensation plans not approved by security
+holders (1) 
+79,501 
+$ 
+2.67 
+0 
+Total 
+323,494 
+$ 
+3.58 
+0 
+(1) 
+Consists of the Key Tronic Corporation 2000 Employee Stock Option Plan. Not included are the 1,200,000 shares subject to the 2010 Plan, the issuance of
+which is subject to shareholder approval of the 2010 Plan at the Annual Meeting, or the cash-settled stock appreciation rights issued under the 2010 Plan that may be settled in shares of Common Stock, subject to shareholder approval of the 2010
+Plan. See “Proposal 3: Approval of the Key Tronic Corporation 2010 Incentive Plan” for further information about the 2010 Plan. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL 
+OF THE KEY TRONIC CORPORATION 2010 INCENTIVE PLAN 
+SHAREHOLDER PROPOSALS 
+Eligible shareholders who wish to present proposals for action at the Annual Meeting of Shareholders to be held in 2011 must submit their proposals in
+writing to Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. Under Rule 14a-8(e) of the Securities Exchange Act of 1934, proposals submitted for inclusion in our
+proxy statement for the 2011 Annual Meeting must be received by the Secretary at the address above no later than May 20, 2011. In addition, any shareholder who intends to present a proposal at the 2011 Annual Meeting without inclusion of such
+proposal in our proxy materials must provide us notice of such proposal in the manner set forth above by August 3, 2011 or such proposal will be considered untimely. For such proposals that are untimely, the Company retains discretion to vote
+proxies it receives. For such proposals that are timely, the Company retains discretion to vote proxies it receives provided that (1) the Company includes in its Proxy Statement advice on the nature of the proposal and how it intends to
+exercise its voting discretion and (2) the proponent does not issue a proxy statement. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other
+applicable requirements 
+OTHER MATTERS 
+Annual Report on Form 10-K 
+The 2010 Annual Report on Form 10-K (including exhibits), as amended, which we refer to as our “Form 10-K,” is available by accessing
+the Company’s website at www.keytronic.com or the SEC’s website 
+24 
+at www.sec.gov . Stockholders may request a free copy of our Form 10-K by contacting Investor Relations at StreetConnect, (206) 729-3625, ktcc@stct.com. We will furnish any
+exhibit to our Form 10-K if specifically requested to do so. 
+Section 16(a) Beneficial Ownership Reporting Compliance .
+Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting
+Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”) and NASDAQ. 
+Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its
+review of the copies of such forms received or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended July 3, 2010 all the Reporting Persons
+complied with all applicable filing requirements. 
+Solicitation Expenses . The expense of printing and mailing proxy material
+will be borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional
+compensation will be paid for such solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their
+reasonable expenses incurred in forwarding solicitation material to such beneficial owners. In addition, we have retained Georgeson Inc. to aid in the solicitation of proxies. We currently estimate the fees payable to Georgeson Inc. in connection
+with such services to be approximately $15,000, plus reimbursement of out-of-pocket expenses. 
+Other Business . The Board
+of Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in
+accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 17, 2010 
+25 
+APPENDIX A 
+KEY TRONIC CORPORATION 
+2010 INCENTIVE PLAN 
+SECTION 1. PURPOSE 
+The purpose of the
+Key Tronic Corporation 2010 Incentive Plan is to attract, retain and motivate employees, officers, directors, consultants, agents, advisors and independent contractors of the Company and its Related Companies by providing them the opportunity to
+acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company’s shareholders. 
+SECTION 2. DEFINITIONS 
+Certain
+capitalized terms used in the Plan have the meanings set forth in Appendix A. 
+SECTION 3. ADMINISTRATION 
+3.1 
+Administration of the Plan 
+(a) The Plan
+shall be administered by the Board or the Compensation Committee, which shall be composed of two or more directors, each of whom is a “non-employee director” within the meaning of Rule 16b-3(b)(3) promulgated under the Exchange Act, or any
+successor definition adopted by the Securities and Exchange Commission, and an “outside director” within the meaning of Section 162(m) of the Code, or any successor provision thereto. 
+(b) Notwithstanding the foregoing, the Board may delegate concurrent responsibility for administering the Plan, including with respect to designated
+classes of Eligible Persons, to different committees consisting of two or more members of the Board, subject to such limitations as the Board deems appropriate, except with respect to Awards to Participants who are subject to Section 16 of the
+Exchange Act or Awards granted pursuant to Section 15 of the Plan. Members of any committee shall serve for such term as the Board may determine, subject to removal by the Board at any time. To the extent consistent with applicable law, the
+Board may authorize one or more senior executive officers of the Company to grant Awards to designated classes of Eligible Persons, within limits specifically prescribed by the Board; provided, however, that no such officer shall have or obtain
+authority to grant Awards to himself or herself or to any person subject to Section 16 of the Exchange Act. 
+(c) All references in the
+Plan to the “ Committee ” shall be, as applicable, to the Board, the Compensation Committee or any other committee or any officer to whom authority has been delegated to administer the Plan. 
+3.2 
+Administration and Interpretation by Committee 
+(a) Except for the terms and conditions explicitly set forth in the Plan and to the extent permitted by applicable law, the Committee shall have full
+power and exclusive authority, 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 or a committee composed of members of the Board, to (i) select the Eligible
+Persons to whom Awards may from time to time be granted under the Plan; (ii) determine the type or types of Award to be granted to each Participant under the Plan; (iii) determine the number of shares of Common Stock to be
+A-1 
+covered by each Award granted under the Plan; (iv) determine the terms and conditions of any Award granted under the Plan; (v) approve the forms of notice or agreement for use under the
+Plan; (vi) determine whether, to what extent and under what circumstances Awards may be settled in cash, shares of Common Stock or other property or canceled or suspended; (vii) interpret and administer the Plan and any instrument
+evidencing an Award, notice or agreement executed or entered into under the Plan; (viii) establish such rules and regulations as it shall deem appropriate for the proper administration of the Plan; (ix) delegate ministerial duties to such
+of the Company’s employees as it so determines; and (x) make any other determination and take any other action that the Committee deems necessary or desirable for administration of the Plan. 
+(b) In no event, however, shall the Committee have the right, without shareholder approval, to (i) lower the price of an Option after it is granted,
+except in connection with adjustments provided in Section 14.1; (ii) take any other action that is treated as a repricing under generally accepted accounting principles; or (iii) cancel an Option at a time when its strike price
+exceeds the Fair Market Value of the underlying stock, in exchange for another option, restricted stock, or other equity, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate
+transaction. 
+(c) The effect on the vesting of an Award of a Company-approved leave of absence or a Participant’s reduction in hours of
+employment or service shall be determined by the Compensation Committee, whose determination shall be final. 
+(d) Decisions of the Committee
+shall be final, conclusive and binding on all persons, including the Company, any Participant, any shareholder and any Eligible Person. A majority of the members of the Committee may determine its actions. 
+SECTION 4. SHARES SUBJECT TO THE PLAN 
+4.1 
+Authorized Number of Shares 
+Subject to
+adjustment from time to time as provided in Section 14.1, a maximum of 1,200,000 shares of Common Stock shall be available for issuance under the Plan. Shares issued under the Plan shall be drawn from authorized and unissued shares. 
+4.2 
+Share Usage 
+(a) Shares of Common Stock
+covered by an Award shall not be counted as used unless and until they are actually issued and delivered to a Participant. If any Award lapses, expires, terminates or is canceled prior to the issuance of shares thereunder or if shares of Common
+Stock are issued under the Plan to a Participant and thereafter are forfeited to or otherwise reacquired by the Company, the shares subject to such Awards and the forfeited or reacquired shares shall again be available for issuance under the Plan.
+Any shares of Common Stock (i) tendered by a Participant or retained by the Company as full or partial payment to the Company for the purchase price of an Award or to satisfy tax withholding obligations in connection with an Award, or
+(ii) covered by an Award that is settled in cash, or in a manner such that some or all of the shares of Common Stock covered by the Award are not issued, shall be available for Awards under the Plan. The number of shares of Common Stock
+available for issuance under the Plan shall not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares of Common Stock or credited as additional shares of Common Stock subject or paid with respect to
+an Award. 
+(b) The Committee shall also, without limitation, have the authority to grant Awards as an alternative to or as the form of payment
+for grants or rights earned or due under other compensation plans or arrangements of the Company. 
+A-2 
+(c) Notwithstanding any other provision of the Plan to the contrary, the Committee may grant Substitute
+Awards under the Plan. Substitute Awards shall not reduce the number of shares authorized for issuance under the Plan. In the event that an Acquired Entity has shares available for awards or grants under one or more preexisting plans not adopted in
+contemplation of such acquisition or combination, then, to the extent determined by the Board or the Compensation Committee, the shares available for grant pursuant to the terms of such preexisting 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 holders of common stock of the entities that are parties to such acquisition or combination) may
+be used for Awards under the Plan and shall not reduce the number of shares of Common Stock authorized for issuance under the Plan; provided, however, that Awards using such available shares shall not be made after the date awards or grants could
+have been made under the terms of such preexisting plans, absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or a Related Company prior to such acquisition or combination.
+In the event that a written agreement between the Company and an Acquired Entity pursuant to which a merger or consolidation or statutory share exchange is completed is approved by the Board and that agreement sets forth the terms and conditions of
+the substitution for or assumption of outstanding awards of the Acquired Entity, those terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with
+Rule 16b-3 under the Exchange Act, and the persons holding such awards shall be deemed to be Participants. 
+SECTION 5. ELIGIBILITY
+An Award may be granted to any employee, officer or director of the Company or a Related Company whom the Committee from time to time
+selects. An Award may also be granted to any consultant, agent, advisor or independent contractor for bona fide services rendered to the Company or any Related Company that (a) are not in connection with the offer and sale of the Company’s
+securities in a capital-raising transaction and (b) do not directly or indirectly promote or maintain a market for the Company’s securities. 
+SECTION 6. AWARDS 
+6.1 
+Form, Grant and Settlement of Awards 
+The
+Committee shall have the authority, in its sole discretion, to determine the type or types of Awards to be granted under the Plan. Such Awards may be granted either alone or in addition to or in tandem with any other type of Award. Any Award
+settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine. 
+6.2 
+Evidence of Awards 
+Awards granted under
+the Plan shall be evidenced by a written, including an electronic, instrument that shall contain such terms, conditions, limitations and restrictions as the Committee shall deem advisable and that are not inconsistent with the Plan. 
+6.3 
+Dividends and Distributions 
+Participants
+may, if the Committee so determines, be credited with dividends paid with respect to shares of Common Stock underlying an Award in a manner determined by the Committee in its sole discretion. The Committee may apply any restrictions to the dividends
+or dividend equivalents that the Committee deems appropriate. The Committee, in its sole discretion, may determine the form of payment of dividends or dividend equivalents, including cash, shares of Common Stock, Restricted Stock or Stock Units.
+Notwithstanding the foregoing, the right to any dividends or dividend equivalents declared and paid on the number of shares underlying an Option or a Stock Appreciation Right may not be contingent, directly or indirectly on the exercise of the
+Option or Stock Appreciation Right, and must comply with or qualify for an exemption under Section 409A. Also notwithstanding the foregoing, the right to any dividends or dividend 
+A-3 
+equivalents declared and paid on Restricted Stock must (a) be paid at the same time such dividends or dividend equivalents are paid to other shareholders and (b) comply with or qualify
+for an exemption under Section 409A. 
+SECTION 7. OPTIONS 
+7.1 
+Grant of Options 
+The Committee may grant
+Options, which shall be nonqualified stock options that are not intended to qualify as “incentive stock options” as that term is defined for purposes of Section 422 of the Code or any successor provision. 
+7.2 
+Option Exercise Price 
+Options shall be
+granted with an exercise price per share not less than 100% of the Fair Market Value of the Common Stock on the Grant Date, except in the case of Substitute Awards. Notwithstanding the foregoing, the Committee may grant nonqualified stock options
+with an exercise price per share of less than the Fair Market Value of the Common Stock on the Grant Date if the Option meets all the requirements for Awards that are considered “deferred compensation” within the meaning of
+Section 409A. 
+7.3 
+Term of Options 
+Subject to earlier
+termination in accordance with the terms of the Plan and the instrument evidencing the Option, the maximum term of an Option shall be ten years from the Grant Date. 
+7.4 
+Exercise of Options 
+(a) The Committee
+shall establish and set forth in each instrument that evidences an Option the time at which, or the installments in which, the Option shall vest and become exercisable, any of which provisions may be waived or modified by the Committee at any time.
+(b) To the extent an Option has vested and become exercisable, the Option may be exercised in whole or from time to time in part by delivery
+to or as directed or approved by the Company of a properly executed stock option exercise agreement or notice, in a form and in accordance with procedures established by the Committee, setting forth the number of shares with respect to which the
+Option is being exercised, the restrictions imposed on the shares purchased under such exercise agreement or notice, if any, and such representations and agreements as may be required by the Committee, accompanied by payment in full as described in
+Sections 7.5. An Option may be exercised only for whole shares and may not be exercised for less than a reasonable number of shares at any one time, as determined by the Committee. 
+7.5 
+Payment of Exercise Price 
+The exercise
+price for shares purchased under an Option shall be paid in full to the Company by delivery of consideration equal to the product of the Option exercise price and the number of shares purchased. Such consideration must be paid before the Company
+will issue the shares being purchased and must be in a form or a combination of forms acceptable to the Committee for that purchase, which forms may include: 
+(a) cash; 
+(b) check or wire transfer;
+(c) having the Company withhold shares of Common Stock that would otherwise be issued on exercise of the Option that have an aggregate Fair
+Market Value equal to the aggregate exercise price of the shares being purchased under the Option; 
+A-4 
+(d) tendering (either actually or, so long as the Common Stock is registered under Section 12(b) or
+12(g) of the Exchange Act, by attestation) shares of Common Stock owned by the Participant that have an aggregate Fair Market Value equal to the aggregate exercise price of the shares being purchased under the Option; 
+(e) so long as the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, and to the extent permitted by law, delivery of a
+properly executed exercise agreement or notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of proceeds to pay the Option exercise price and
+any withholding tax obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board; or 
+(f) such other consideration as the Committee may permit. 
+7.6 
+Effect of Termination of Service 
+(a) The
+Committee shall establish and set forth in each instrument that evidences an Option whether the Option shall continue to be exercisable, and the terms and conditions of such exercise, after a Termination of Service, any of which provisions may be
+waived or modified by the Committee at any time. 
+(b) If the exercise of the Option following a Participant’s Termination of Service, but
+while the Option is otherwise exercisable, would be prohibited solely because the issuance of Common Stock would violate the registration requirements under the Securities Act or similar requirements under the laws of any state or foreign
+jurisdiction, then the Option shall remain exercisable until the earlier of (i) the Option Expiration Date and (ii) the expiration of a period of three months (or such longer period of time as determined by the Committee in its sole
+discretion) after the Participant’s Termination of Service during which the exercise of the Option would not be in violation of such Securities Act or other requirements. 
+SECTION 8. STOCK APPRECIATION RIGHTS 
+8.1 
+Grant of Stock Appreciation Rights 
+The
+Committee may grant Stock Appreciation Rights to Participants at any time on such terms and conditions as the Committee shall determine in its sole discretion. An SAR may be granted in tandem with an Option or alone (“freestanding”). The
+grant price of a tandem SAR shall be equal to the exercise price of the related Option. The grant price of a freestanding SAR shall be established in accordance with procedures for Options set forth in Section 7.2. An SAR may be exercised upon
+such terms and conditions and for such term as the Committee determines in its sole discretion; provided, however, that, subject to earlier termination in accordance with the terms of the Plan and the instrument evidencing the SAR, the maximum term
+of a freestanding SAR shall be ten years, and in the case of a tandem SAR, (a) the term shall not exceed the term of the related Option and (b) the tandem SAR may be exercised for all or part of the shares subject to the related Option
+upon the surrender of the right to exercise the equivalent portion of the related Option, except that the tandem SAR may be exercised only with respect to the shares for which its related Option is then exercisable. 
+8.2 
+Payment of SAR Amount 
+Upon the exercise
+of an SAR, a Participant shall be entitled to receive payment in an amount determined by multiplying: (a) the difference between the Fair Market Value of the Common Stock on the date of exercise over the grant price of the SAR by (b) the
+number of shares with respect to which the SAR is exercised. At the discretion of the Committee as set forth in the instrument evidencing the Award, the payment upon exercise of an SAR may be in cash, in shares, in some combination thereof or in any
+other manner approved by the Committee in its sole discretion. 
+A-5 
+8.3 
+Waiver of Restrictions 
+The Committee, in
+its sole discretion, may waive any other terms, conditions or restrictions on any SAR under such circumstances and subject to such terms and conditions as the Committee shall deem appropriate. 
+SECTION 9. STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS 
+9.1 
+Grant of Stock Awards, Restricted Stock and Stock Units 
+The Committee may grant Stock Awards, Restricted Stock and Stock Units on such terms and conditions and subject to such repurchase or forfeiture
+restrictions, if any, which may be based on continuous service with the Company or a Related Company or the achievement of any performance goals, as the Committee shall determine in its sole discretion, which terms, conditions and restrictions shall
+be set forth in the instrument evidencing the Award. 
+9.2 
+Vesting of Restricted Stock and Stock Units 
+Upon the satisfaction of any terms, conditions and restrictions prescribed with respect to Restricted Stock or Stock Units, or upon a Participant’s
+release from any terms, conditions and restrictions of Restricted Stock or Stock Units, as determined by the Committee (a) the shares of Restricted Stock covered by each Award of Restricted Stock shall become freely transferable by the
+Participant, and (b) Stock Units shall be paid in shares of Common Stock or, if set forth in the instrument evidencing the Awards, in cash or a combination of cash and shares of Common Stock. Any fractional shares subject to such Awards shall
+be paid to the Participant in cash. 
+9.3 
+Waiver of Restrictions 
+The Committee, in
+its sole discretion, may waive the repurchase or forfeiture period and any other terms, conditions or restrictions on any Restricted Stock or Stock Unit under such circumstances and subject to such terms and conditions as the Committee shall deem
+appropriate. 
+SECTION 10. PERFORMANCE AWARDS 
+10.1 
+Performance Shares 
+The Committee may
+grant Awards of Performance Shares, designate the Participants to whom Performance Shares are to be awarded and determine the number of Performance Shares and the terms and conditions of each such Award. Performance Shares shall consist of a unit
+valued by reference to a designated number of shares of Common Stock, which value may be paid to the Participant by delivery of shares of Common Stock or, if set forth in the instrument evidencing the Award, of such property as the Committee shall
+determine, including, without limitation, cash, shares of Common Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee.
+The amount to be paid under an Award of Performance Shares may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion. 
+10.2 
+Performance Units 
+The Committee may
+grant Awards of Performance Units, designate the Participants to whom Performance Units are to be awarded and determine the number of Performance Units and the terms and conditions of each such Award. Performance Units shall consist of a unit valued
+by reference to a designated amount of property other than shares of Common Stock, which value may be paid to the Participant by delivery of such property as the Committee shall determine, including, without limitation, cash, shares of Common
+A-6 
+Stock, other property, or any combination thereof, upon the attainment of performance goals, as established by the Committee, and other terms and conditions specified by the Committee. The amount
+to be paid under an Award of Performance Units may be adjusted on the basis of such further consideration as the Committee shall determine in its sole discretion. 
+SECTION 11. OTHER STOCK OR CASH-BASED AWARDS 
+Subject to the terms of the Plan and such other terms and conditions as the Committee deems appropriate, the Committee may grant other incentives payable
+in cash or in shares of Common Stock under the Plan. 
+SECTION 12. WITHHOLDING 
+The Company may require the Participant to pay to the Company the amount of (a) any taxes that the Company is required by applicable federal, state,
+local or foreign law to withhold with respect to the grant, vesting or exercise of an Award (“tax withholding obligations”) and (b) any amounts due from the Participant to the Company or to any Related Company (“other
+obligations”). Notwithstanding any other provision of the Plan to the contrary, the Company shall not be required to issue any shares of Common Stock or otherwise settle an Award under the Plan until such tax withholding obligations and other
+obligations are satisfied. 
+The Committee may permit or require a Participant to satisfy all or part of the Participant’s tax withholding
+obligations and other obligations by (a) paying cash to the Company, (b) having the Company withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant, (c) having the Company withhold a
+number of shares of Common Stock that would otherwise be issued to the Participant (or become vested, in the case of Restricted Stock) having a Fair Market Value equal to the tax withholding obligations and other obligations, or
+(d) surrendering a number of shares of Common Stock the Participant already owns having a value equal to the tax withholding obligations and other obligations. The value of the shares so withheld or tendered may not exceed the employer’s
+minimum required tax withholding rate. 
+SECTION 13. ASSIGNABILITY 
+No Award or interest in an Award may be sold, assigned, pledged (as collateral for a loan or as security for the performance of an obligation or for any
+other purpose) or transferred by a Participant or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution, except to the extent the Participant designates one or more
+beneficiaries on a Company-approved form who may exercise the Award or receive payment under the Award after the Participant’s death. During a Participant’s lifetime, an Award may be exercised only by the Participant. Notwithstanding the
+foregoing, the Committee, in its sole discretion, may permit a Participant to assign or transfer an Award subject to such terms and conditions as the Committee shall specify. 
+SECTION 14. ADJUSTMENTS 
+14.1 
+Adjustment of Shares 
+In the event, at
+any time or from time to time, a stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, statutory share exchange, distribution to shareholders other than a normal cash dividend, or other
+change in the Company’s corporate or capital structure results in (a) the outstanding shares of Common Stock, or any securities exchanged therefor or received in their place, being exchanged for a different number or kind of securities of
+the Company or (b) new, different or additional securities of the Company or any other company being received by the holders of shares of Common Stock, then the Committee shall make proportional adjustments in (i) the maximum number and
+kind of securities available for issuance under the Plan; (ii) the maximum numbers and kind of securities set forth in Section 15.3; and (iii) the number and kind of securities that are subject to
+A-7 
+any outstanding Award and the per share price of such securities, without any change in the aggregate price to be paid therefor. The determination by the Committee, as to the terms of any of the
+foregoing adjustments, shall be conclusive and binding. 
+Notwithstanding the foregoing, the issuance by the Company of shares of stock of any
+class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services rendered, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or
+obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, outstanding Awards. Also notwithstanding the foregoing, a dissolution or liquidation of
+the Company or a Company Transaction shall not be governed by this Section 14.1 but shall be governed by Sections 14.2 and 14.3, respectively. 
+14.2 
+Dissolution or Liquidation 
+To the extent
+not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Awards shall terminate immediately prior to the dissolution or liquidation of the Company. To the extent a vesting condition, forfeiture
+provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation. 
+14.3 
+Change in Control 
+Notwithstanding any
+other provision of the Plan to the contrary, unless the Committee shall determine otherwise in the instrument evidencing the Award or in a written employment, services or other agreement between the Participant and the Company or a Related Company,
+in the event of a Change in Control: 
+(a) All outstanding Awards, other than Performance Shares and Performance Units, shall become fully and
+immediately vested and exercisable, and all applicable restrictions or forfeiture provisions shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of the Change in Control; provided, however, that with
+respect to a Change in Control that is a Company Transaction in which such Awards could be converted, assumed or replaced by the Successor Company, any such Awards that vest based on continuous employment or service with the Company shall become
+fully and immediately vested and exercisable, and all applicable restrictions or forfeiture provisions shall lapse, only if and to the extent such Awards are not converted, assumed or replaced by the Successor Company. If an Option or a Stock
+Appreciation Right shall become fully and immediately vested and exercisable in lieu of being converted, assumed or replaced by the Successor Company in the event of a Company Transaction, the Committee shall notify the Participant in advance of the
+anticipated closing date of such transaction in writing or electronically that the Option or Stock Appreciation Right shall be fully vested and exercisable for a specified time period after the date of such notice, and the Option or Stock
+Appreciation Right, to the extent not exercised, shall terminate upon the expiration of such period, in each case conditioned on the consummation of the Company Transaction. Such notice shall be given to the Participant at least seven days prior to
+the expiration of such period. 
+For the purposes of this Section 14.3(a), an Award shall be considered converted, assumed or replaced by
+the Successor Company if, following the Company Transaction, the Option or right confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Company Transaction, the consideration (whether
+stock, cash or other securities or property) received in the Company Transaction by holders of Common Stock for each share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of
+consideration chosen by the holders of a majority of the outstanding shares); provided, however, that if such consideration received in the Company Transaction is not solely common stock of the Successor Company, the Committee may, with the consent
+of the Successor Company, provide for the consideration to be received pursuant to the Award, for each share of Common Stock subject thereto, to be solely common stock of the Successor Company substantially equal in fair market value to the per
+share consideration received by holders of Common Stock in the Company Transaction. The determination of such substantial equality of value of consideration shall be made by the Committee, and its determination shall be conclusive and binding.
+A-8 
+(b) All Performance Shares or Performance Units earned and outstanding as of the date the Change in Control
+is determined to have occurred and for which the payout level has been determined shall be payable in full in accordance with the payout schedule pursuant to the instrument evidencing the Award. Any remaining Performance Shares or Performance Units
+(including any applicable performance period) for which the payout level has not been determined shall be prorated at the target payout level up to and including the date of such Change in Control and shall be payable in full at the target level in
+accordance with the payout schedule pursuant to the instrument evidencing the Award. Any existing deferrals or other restrictions not waived by the Committee in its sole discretion shall remain in effect. 
+(c) Notwithstanding the foregoing, the Committee, in its sole discretion, may instead provide, in the event of a Change in Control that is a Company
+Transaction, that a Participant’s outstanding Awards shall terminate upon or immediately prior to such Company Transaction and that such Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which
+(x) the value of the per share consideration received by holders of Common Stock in the Company Transaction or, in the event the Company Transaction is one of the transactions listed under subsection (c) in the definition of Company
+Transaction or otherwise does not result in direct receipt of consideration by holders of Common Stock, the value of the deemed per share consideration received, in each case as determined by the Committee in its sole discretion, multiplied by the
+number of shares of Common Stock subject to such outstanding Awards (to the extent then vested and exercisable or whether or not then vested and exercisable, as determined by the Committee in its sole discretion) exceeds (y) if
+applicable, the respective aggregate exercise price or grant price for such Awards. 
+14.4 
+Further Adjustment of Awards 
+Subject to
+Sections 14.2 and 14.3, the Committee shall have the discretion, exercisable at any time before a sale, merger, consolidation, statutory share exchange, reorganization, liquidation, dissolution or change of control of the Company, as defined by
+the Committee, to take such further action as it determines to be necessary or advisable with respect to Awards. Such authorized action may include (but shall not be limited to) establishing, amending or waiving the type, terms, conditions or
+duration of, or restrictions on, Awards so as to provide for earlier, later, extended or additional time for exercise, lifting restrictions and other modifications, and the Committee may take such actions with respect to all Participants, to certain
+categories of Participants or only to individual Participants. The Committee may take such action before or after granting Awards to which the action relates and before or after any public announcement with respect to such sale, merger,
+consolidation, statutory share exchange, reorganization, liquidation, dissolution or change of control that is the reason for such action. 
+14.4 
+No Limitations 
+The grant of Awards shall
+in no way affect the Company’s right to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
+14.5 
+Fractional Shares 
+In the event of any
+adjustment in the number of shares covered by any Award, each such Award shall cover only the number of full shares resulting from such adjustment. 
+14.6 
+Section 409A 
+Notwithstanding any
+other provision of the Plan to the contrary, (a) any adjustments made pursuant to this Section 14 to Awards that are considered “deferred compensation” within the meaning of Section 409A
+A-9 
+shall be made in compliance with the requirements of Section 409A and (b) any adjustments made pursuant to this Section 14 to Awards that are not considered “deferred
+compensation” subject to Section 409A shall be made in such a manner as to ensure that after such adjustment the Awards either (i) continue not to be subject to Section 409A or (ii) comply with the requirements of
+Section 409A. 
+SECTION 15. CODE SECTION 162(m) PROVISIONS 
+Notwithstanding any other provision of the Plan to the contrary, if the Committee determines, at the time Awards are 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 Section 15 is applicable to such Award. 
+15.1 
+Performance Criteria 
+(a) If an Award is
+subject to this Section 15, then the lapsing of restrictions thereon and the distribution of cash, shares of Common Stock 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 of or any combination of the following “performance criteria” for the Company as a whole or any business unit of the Company,
+as reported or calculated by the Company: cash flows (including, but not limited to, operating cash flow, free cash flow or cash flow return on capital); working capital; earnings per share; book value per share; operating income (including or
+excluding depreciation, amortization, extraordinary items, restructuring charges or other expenses); revenues; operating margins; return on assets; return on equity; debt; debt plus equity; market or economic value added; stock price appreciation;
+total shareholder return; cost control; strategic initiatives; market share; net income; return on invested capital; improvements in capital structure; revenue growth rate; or customer satisfaction, employee satisfaction, services performance,
+subscriber, cash management or asset management metrics (together, the “ Performance Criteria ”). 
+(b) Such performance
+goals also may be based on the achievement of specified levels of Company performance (or performance of an applicable affiliate or business unit of the Company) under one or more of the Performance Criteria described above relative to the
+performance of other corporations. 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, or any successor provision thereto,
+and the regulations thereunder. 
+(c) The Committee may provide, at the time it establishes performance goals for any such Award, that any
+evaluation of performance shall include or exclude any one or more of the following events that occurs during a performance period: (i) asset write-downs; (ii) litigation or claim judgments or settlements; (iii) the effect of changes
+in tax laws, accounting principles, or other laws or provisions affecting reported results; (iv) any reorganization and restructuring programs; (v) extraordinary nonrecurring items as described in Accounting Principles Board Opinion
+No. 30 and/or in Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in the Company’s annual report to shareholders for the applicable year; (vi) acquisitions or divestitures;
+(vii) foreign exchange gains and losses; and (viii) gains and losses on asset sales. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that satisfies the requirements for
+“performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto. 
+15.2 
+Compensation Committee Certification; Adjustment of Awards 
+(a) After the completion of each performance period, the Compensation Committee shall certify the extent to which any performance goal established under
+this Section 15 has been satisfied, and the amount payable as a result thereof, prior to payment, settlement or vesting, as applicable, of any Award subject to this Section 15. 
+A-10 
+(b) Notwithstanding any provision of the Plan other than Section 14, with respect to any Award that is
+intended to qualify as performance-based compensation subject to this Section 15, the Committee may adjust downward, but not upward, 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 Covered Employee. 
+15.3 
+Limitations 
+Subject to adjustment from
+time to time as provided in Section 14.1, no Covered Employee may be granted Awards other than Performance Units or other cash-based awards subject to this Section 15 in any calendar year period with respect to more than the following:
+(a) 600,000 shares for Options or SARs; (b) 300,000 shares for Restricted Stock, Restricted Stock Units or Performance Shares; and (c) 300,000 shares for other stock-based Awards. The maximum dollar value payable with respect to
+Performance Units or other cash-based awards subject to this Section 15 granted to any Covered Employee in any one calendar year is $1,000,000. 
+The Committee shall have the power to impose such other restrictions on Awards subject to this Section 15 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)(4)(C) of the Code, or any successor provision thereto. 
+SECTION 16. AMENDMENT AND TERMINATION 
+16.1 
+Amendment, Suspension or Termination 
+The
+Board or the Compensation Committee may amend, suspend or terminate the Plan or any portion of the Plan at any time and in such respects as it shall deem advisable; provided, however, that, to the extent required by applicable law, regulation or
+stock exchange rule, shareholder approval shall be required for any amendment to the Plan; and provided, further, that any amendment that requires shareholder approval may be made only by the Board. Subject to Section 16.3, the Committee may
+amend the terms of any outstanding Award, prospectively or retroactively. 
+16.2 
+Term of the Plan 
+Unless sooner
+terminated as provided herein, the Plan shall terminate ten years from the Effective Date. After the Plan is terminated, no future Awards may be granted, but Awards previously granted shall remain outstanding in accordance with their applicable
+terms and conditions and the Plan’s terms and conditions. 
+16.3 
+Consent of Participant 
+The amendment,
+suspension or termination of the Plan or a portion thereof or the amendment of an outstanding Award shall not, without the Participant’s consent, materially adversely affect any rights under any Award theretofore granted to the Participant
+under the Plan. Notwithstanding the foregoing, any adjustments made pursuant to Section 15 shall not be subject to these restrictions. 
+SECTION 17. GENERAL 
+17.1 
+No Individual Rights 
+No individual or
+Participant shall have any claim to be granted any Award under the Plan, and the Company has no obligation for uniformity of treatment of Participants under the Plan. Furthermore, nothing in the Plan or any Award granted under the Plan shall be
+deemed to constitute an employment contract or confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of
+the Company or any Related Company to terminate a Participant’s employment or other relationship at any time, with or without cause. 
+A-11 
+17.2 
+Issuance of Shares 
+Notwithstanding any
+other provision of the Plan, the Company shall have no obligation to issue or deliver any shares of Common Stock under the Plan or make any other distribution of benefits under the Plan unless, in the opinion of the Company’s counsel, such
+issuance, delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act or the laws of any state or foreign jurisdiction) and the applicable requirements of any securities
+exchange or similar entity. 
+The Company shall be under no obligation to any Participant to register for offering or resale or to qualify for
+exemption under the Securities Act, or to register or qualify under the laws of any state or foreign jurisdiction, any shares of Common Stock, security or interest in a security paid or issued under, or created by, the Plan, or to continue in effect
+any such registrations or qualifications if made. 
+As a condition to the exercise of an Option or any other receipt of Common Stock pursuant
+to an Award under the Plan, the Company may require (a) the Participant to represent and warrant at the time of any such exercise or receipt that such shares are being purchased or received only for the Participant’s own account and
+without any present intention to sell or distribute such shares and (b) such other action or agreement by the Participant as may from time to time be necessary to comply with the federal, state and foreign securities laws. At the option of the
+Company, a stop-transfer order against any such shares may be placed on the official stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or otherwise transferred, unless an opinion of counsel is
+provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from registration. The Committee may also require the
+Participant to execute and deliver to the Company a purchase agreement or such other agreement as may be in use by the Company at such time that describes certain terms and conditions applicable to the shares. 
+To the extent the Plan or any instrument evidencing an Award provides for issuance of stock certificates to reflect the issuance of shares of Common
+Stock, the issuance may be effected on a noncertificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange. 
+17.3 
+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 3, 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 such person in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person 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 such person in settlement thereof, with the Company’s approval, or paid by such person in satisfaction of any judgment in any such
+claim, action, suit or proceeding against such person; provided, however, that such person shall give the Company an opportunity, at its own expense, to handle and defend the same before such person undertakes to handle and defend it on such
+person’s own behalf, unless such loss, cost, liability or expense is a result of such person’s 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 person may be entitled under the
+Company’s articles of incorporation or bylaws, as a matter of law, or otherwise, or of any power that the Company may have to indemnify or hold harmless. 
+A-12 
+17.4 
+No Rights as a Shareholder 
+Unless
+otherwise provided by the Committee or in the instrument evidencing the Award or in a written employment, services or other agreement, no Award, other than a Stock Award or Restricted Stock, shall entitle the Participant to any cash dividend, voting
+or other right of a shareholder unless and until the date of issuance under the Plan of the shares that are the subject of such Award. 
+17.5 
+Compliance With Laws and Regulations 
+The
+Plan and Awards granted under the Plan are intended to be exempt from the requirements of Section 409A to the maximum extent possible, whether pursuant to the short-term deferral exception described in Treasury Regulation
+Section 1.409A-1(b)(4), the exclusion applicable to stock options, stock appreciation rights and certain other equity-based compensation under Treasury Regulation Section 1.409A-1(b)(5), or otherwise. To the extent Section 409A is
+applicable to the Plan or any Award granted under the Plan, it is intended that the Plan and any Awards granted under the Plan shall comply with the deferral, payout and other limitations and restrictions imposed under Section 409A.
+Notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, the Plan and any Award granted under the Plan shall be interpreted, operated and administered in a manner consistent with such intentions. Without
+limiting the generality of the foregoing, and notwithstanding any other provision of the Plan or any Award granted under the Plan to the contrary, with respect to any payments and benefits under the Plan or any Award granted under the Plan to which
+Section 409A applies, all references in the Plan or any Award granted under the Plan to the termination of the Participant’s employment or service are intended to mean the Participant’s “separation from service,” within the
+meaning of Section 409A(a)(2)(A)(i). In addition, if the Participant is a “specified employee,” within the meaning of Section 409A, then to the extent necessary to avoid subjecting the Participant to the imposition of any
+additional tax under Section 409A, amounts that would otherwise be payable under the Plan or any Award granted under the Plan during the six-month period immediately following the Participant’s “separation from service,” within
+the meaning of Section 409A(a)(2)(A)(i), shall not be paid to the Participant during such period, but shall instead be accumulated and paid to the Participant (or, in the event of the Participant’s death, the Participant’s estate) in
+a lump sum on the first business day after the earlier of the date that is six months following the Participant’s separation from service or the Participant’s death. Notwithstanding any other provision of the Plan to the contrary, the
+Committee, to the extent it deems necessary or advisable in its sole discretion, reserves the right, but shall not be required, to unilaterally amend or modify the Plan and any Award granted under the Plan so that the Award qualifies for exemption
+from or complies with Section 409A; provided, however, that the Committee makes no representations that Awards granted under the Plan shall be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A
+from applying to Awards granted under the Plan. 
+17.6 
+Participants in Other Countries or Jurisdictions 
+Without amending the Plan, the Committee may grant Awards to Eligible Persons who are foreign nationals on such terms and conditions different from those
+specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan and shall have the authority to adopt such modifications, procedures, subplans and the like as
+may be necessary or desirable to comply with provisions of the laws or regulations of other countries or jurisdictions in which the Company or any Related Company may operate or have employees to ensure the viability of the benefits from Awards
+granted to Participants employed in such countries or jurisdictions, meet the requirements that permit the Plan to operate in a qualified or tax-efficient manner, comply with applicable foreign laws or regulations and meet the objectives of the
+Plan. 
+17.7 
+No Trust or Fund 
+The Plan is intended to
+constitute an “unfunded” plan. Nothing contained herein shall require the Company to segregate any monies or other property, or shares of Common Stock, or to create any trusts, or to make any special deposits for any immediate or deferred
+amounts payable to any Participant, and no Participant shall have any rights that are greater than those of a general unsecured creditor of the Company. 
+A-13 
+17.8 
+Successors 
+All obligations of the
+Company under the Plan with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all
+the business and/or assets of the Company. 
+17.9 
+Severability 
+If any provision of the
+Plan or any Award is determined to be invalid, illegal or unenforceable in any jurisdiction, or as to any person, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed
+amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the Committee’s determination, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such
+jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect. 
+17.10 
+Choice of Law and Venue 
+The Plan, all
+Awards granted thereunder and all determinations made and actions taken pursuant hereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Washington without giving effect to
+principles of conflicts of law. Participants irrevocably consent to the nonexclusive jurisdiction and venue of the state and federal courts located in the State of Washington. 
+17.11 
+Legal Requirements 
+The granting of
+Awards and the issuance of shares of Common Stock under the Plan are subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required. 
+SECTION 18. EFFECTIVE DATE 
+The
+effective date (the “ Effective Date ”) is the date on which the Plan is adopted by the Board; provided, however, that no Awards other than SARs that are settled in cash, Performance Units or other cash-based awards may be
+granted prior to the date shareholders approve the Plan. 
+A-14 
+APPENDIX A 
+DEFINITIONS 
+As used in
+the Plan, 
+“ Acquired Entity ” means any entity acquired by the Company or a Related Company or with which the Company
+or a Related Company merges or combines. 
+“ Award ” means any Option, Stock Appreciation Right, Stock Award, Restricted
+Stock, Stock Unit, Performance Share, Performance Unit, cash-based award or other incentive payable in cash or in shares of Common Stock as may be designated by the Committee from time to time. 
+“ Board ” means the Board of Directors of the Company. 
+“ Cause ,” unless otherwise defined in the instrument evidencing an Award or in a written employment, services or other agreement
+between the Participant and the Company or a Related Company, means: (a) conviction of a felony or misdemeanor involving moral turpitude; (b) engaging in illegal business practices or other practices contrary to the written policies of the
+Company; (c) misappropriation of assets of the Company; (d) continual or repeated insobriety or drug use; (e) continual or repeated absence for reasons other than disability or sickness, (f) fraud; (g) embezzlement;
+(h) violation of the Company’s written conflict of interest policies, in each case as determined by the Committee, whose determination shall be conclusive and binding. 
+“ Change in Control ,” unless the Committee determines otherwise with respect to an Award at the time the Award is granted or
+unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, means the occurrence of any of the following events: 
+(a) an acquisition by any Entity of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of
+either (1) the then-outstanding shares of common stock of the Company (the “ Outstanding Company Common Stock ”) or (2) 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 the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from
+the Company, other than an acquisition by virtue of the exercise of a conversion privilege where the security being so converted was not acquired directly from the Company by the party exercising the conversion privilege, (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 Related Company, or (iv) any acquisition by any Entity pursuant to a transaction that meets the conditions
+of clauses (i), (ii) and (iii) set forth in the definition of Company Transaction; (b) a change in the composition of the Board during any two-year period such that the individuals who, as of the beginning of such two-year period,
+constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board
+subsequent to the beginning of the two-year period, whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of those individuals who are members of the Board and who were also
+members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; and provided further, however, that any such individual whose initial assumption of
+office occurs as a result of or in connection with 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 an Entity other
+than the Board shall not be considered a member of the Incumbent Board; or (c) consummation of a Company Transaction. 
+A-15 
+“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
+“ Committee ” has the meaning set forth in Section 3.1. 
+“ Common Stock ” means the common stock, no par value, of the Company. 
+“ Company ” means Key Tronic Corporation, a Washington corporation. 
+“ Company Transaction ,” unless the Committee determines otherwise with respect to an Award at the time the Award is granted or
+unless otherwise defined for purposes of an Award in a written employment, services or other agreement between the Participant and the Company or a Related Company, means consummation of: 
+(a) a merger or consolidation of the Company with or into any other company; 
+(b) a statutory share exchange pursuant to which the Company’s outstanding shares are acquired or a sale in one transaction or a series of
+transactions undertaken with a common purpose of all or substantially all of the Company’s outstanding voting securities; or 
+(c) a sale,
+lease, exchange or other transfer in one transaction or a series of related transactions undertaken with a common purpose of all or substantially all of the Company’s assets, excluding, however, in each case, a transaction pursuant to which
+(i) the Entities who are the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting
+Securities immediately prior to such Company Transaction will beneficially own, directly or indirectly, at least 50% of the 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, of the Successor Company in substantially the same proportions as their ownership, immediately prior to such Company Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting
+Securities; 
+(ii) no Entity (other than the Company, any employee benefit plan (or related trust) of the Company, a Related
+Company or a Successor Company) will beneficially own, directly or indirectly, 40% or more of, respectively, the outstanding shares of common stock of the Successor Company or the combined voting power of the outstanding voting securities of the
+Successor Company entitled to vote generally in the election of directors unless such ownership resulted solely from ownership of securities of the Company prior to the Company Transaction; and 
+(iii) individuals who were members of the Incumbent Board will, immediately after the consummation of the Company Transaction, constitute
+at least a majority of the members of the board of directors of the Successor Company. 
+Where a series of transactions undertaken with a
+common purpose is deemed to be a Company Transaction, the date of such Company Transaction shall be the date on which the last of such transactions is consummated. 
+“ Compensation Committee ” means the Compensation Committee of the Board. 
+“ Covered Employee ” means a “covered employee” as that term is defined for purposes of Section 162(m)(3) of the
+Code or any successor provision. 
+“ Disability ,” unless otherwise defined by the Committee from time to time for
+purposes of the Plan, means a period of disability during which a Participant qualifies for benefits under the Company’s then-current long-term disability plan or, in the case of a Participant who is not an employee of the Company, means a
+period of disability during which such Participant, if he or she were an employee of the Company, would qualify for benefits under the Company’s then-current current long-term disability plan. 
+A-16 
+“ Effective Date ” has the meaning set forth in Section 18. 
+“ Eligible Person ” means any person eligible to receive an Award as set forth in Section 5. 
+“ Entity ” means any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
+Exchange Act). 
+“ Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time. 
+“ Fair Market Value ” means the closing price for the Common Stock on any given date during regular trading, or if not trading on
+that date, such price on the last preceding date on which the Common Stock was traded, unless determined otherwise by the Committee using such methods or procedures as it may establish. 
+“ Grant Date ” means the later of (a) the date on which the Committee completes the corporate action authorizing the grant of
+an Award or such later date specified by the Committee and (b) the date on which all conditions precedent to an Award have been satisfied, provided that conditions to the exercisability or vesting of Awards shall not defer the Grant Date.
+“ Option ” means a right to purchase Common Stock granted under Section 7. 
+“ Option Expiration Date ” means the last day of the maximum term of an Option. 
+“ Outstanding Company Common Stock ” has the meaning set forth in the definition of “Change in Control.” 
+“ Outstanding Company Voting Securities ” has the meaning set forth in the definition of “Change in Control.” 
+“ Parent Company ” means a company or other entity that, as a result of a Company Transaction, owns the
+Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries. 
+“ Participant ” means any Eligible Person to whom an Award is granted. 
+“ Performance Award ” means an Award of Performance Shares or Performance Units granted under Section 10. 
+“ Performance Criteria ” has the meaning set forth in Section 15.1. 
+“ Performance Share ” means an Award of units denominated in shares of Common Stock granted under Section 10.1. 
+“ Performance Unit ” means an Award of units denominated in cash or property other than shares of Common Stock granted under
+Section 10.2. 
+“ Plan ” means the Key Tronic Corporation 2010 Incentive Plan. 
+“ Related Company ” means any entity that is directly or indirectly controlled by, in control of or under common control with the
+Company. 
+A-17 
+“ Restricted Stock ” means an Award of shares of Common Stock granted under
+Section 9, the rights of ownership of which are subject to restrictions prescribed by the Committee. 
+“ Retirement ,” unless otherwise defined in the instrument evidencing the Award or in a written employment,
+services or other agreement between the Participant and the Company or a Related Company, means “Retirement” as defined for purposes of the Plan by the Committee or, if not so defined, means Termination of Service on or after the later of
+(i) the date a Participant attains age 65 and (ii) the fifth anniversary of the date the Participant commenced employment or a service relationship with the Company. 
+“ Securities Act ” means the Securities Act of 1933, as amended from time to time. 
+“ Section 409A ” means Section 409A of the Code. 
+“ Stock Appreciation Right ” or “ SAR ” means a right granted under Section 8.1 to receive the excess of
+the Fair Market Value of a specified number of shares of Common Stock over the grant price. 
+“ Stock Appreciation Right Expiration
+Date ” means the last day of the maximum term of a Stock Appreciation Right. 
+“ Stock Award ” means an Award
+of shares of Common Stock granted under Section 9, the rights of ownership of which are not subject to restrictions prescribed by the Committee. 
+“ Stock Unit ” means an Award denominated in units of Common Stock granted under Section 9. 
+“ Substitute Awards ” means Awards granted or shares of Common Stock issued by the Company in substitution or exchange for awards
+previously granted by an Acquired Entity. 
+“ Successor Company ” means the surviving company, the
+successor company or Parent Company, as applicable, in connection with a Company Transaction. 
+“ Termination of
+Service ” means a termination of employment or service relationship with the Company or a Related Company for any reason, whether voluntary or involuntary, including by reason of death, Disability or Retirement. Any question as to
+whether and when there has been a Termination of Service for the purposes of an Award and the cause of such Termination of Service shall be determined by the Company’s chief human resources officer or other person performing that function or,
+with respect to directors and executive officers, by the Compensation Committee, whose determination shall be conclusive and binding. Transfer of a Participant’s employment or service relationship between the Company and any Related Company
+shall not be considered a Termination of Service for purposes of an Award. Unless the Compensation Committee determines otherwise, a Termination of Service shall be deemed to occur if the Participant’s employment or service relationship is with
+an entity that has ceased to be a Related Company. A Participant’s change in status from an employee of the Company or a Related Company to a nonemployee director, consultant, advisor or independent contractor of the Company or a Related
+Company or a change in status from a nonemployee director, consultant, advisor or independent contractor of the Company or a Related Company to an employee of the Company or a Related Company, shall not be considered a Termination of Service.
+“ Vesting Commencement Date ” means the Grant Date or such other date selected by
+the Committee as the date from which an Award begins to vest. 
+A-18 
+You can now access your Key Tronic Corporation account online. 
+Access your Key Tronic Corporation account online via Investor
+ServiceDirect ® (ISD). 
+BNY Mellon Shareowner Services, the transfer agent for Key Tronic Corporation, now makes it easy and convenient to get current information on your
+shareholder account. 
+•View account status 
+•View payment history for dividends 
+•View certificate history 
+•Make address changes 
+•View book-entry information 
+•Obtain a duplicate 1099 tax form 
+Visit us on the web at http://www.bnymellon.com/shareowner/isd 
+For Technical Assistance Call 1-877-978-7778 between 9am-7pm 
+Monday-Friday Eastern Time 
+Investor
+ServiceDirect ® 
+Available 24 hours per day, 7 days per week 
+TOLL FREE NUMBER: 1-800-370-1163 
+Choose
+MLink SM 
+for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor
+ServiceDirect ® at www.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you
+through enrollment. 
+Important notice regarding the Internet availability of proxy materials for the Annual Meeting of
+shareholders. The Proxy Statement and the 2010 Annual Report to Stockholders are available at: http://bnymellon.mobular.net/bnymellon/ktcc 
+q FOLD
+AND DETACH HERE q 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 21, 2010 
+CRAIG D. GATES and DALE F. PILZ, or either of them, each with the power of substitution, are hereby authorized to represent and
+vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 21, 2010, and any adjournment or
+postponement thereof. 
+Address Change/Comments 
+(Mark the corresponding box on the reverse side) 
+BNY MELLON SHAREOWNER SERVICES 
+P.O. BOX 3550 
+SOUTH HACKENSACK, NJ 07606-9250 
+(Continued and to be marked, dated and signed, on the other
+side) 
+80233 
+KEY TRONIC CORPORATION 
+80233 
+q FOLD AND DETACH
+HERE q 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1, PROPOSAL 2, AND PROPOSAL 3. 
+Please mark your votes as indicated in this example 
+x 
+FOR 
+WITHHOLD 
+*EXCEPTIONS 
+ALL 
+FOR ALL 
+FOR 
+AGAINST 
+ABSTAIN 
+1. 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+¨ 
+¨ 
+¨ 
+2. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent auditors for fiscal year 2011. 
+¨ 
+¨ 
+¨ 
+Nominees: 
+3. 
+Approve the Key Tronic Corporation 2010 Incentive Plan. 
+¨ 
+¨ 
+¨ 
+01. James R. Bean, 
+04. Dale F. Pilz, 
+The undersigned hereby acknowledges
+receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed
+by the shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations,
+just sign and date below. You need not mark any boxes. 
+No postage is
+required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+02. Craig D. Gates, 
+05. Yacov A. Shamash, and 
+03. Ronald F. Klawitter, 
+06. Patrick Sweeney. 
+(INSTRUCTIONS: To withhold authority to vote for
+any individual nominee, mark the “Exceptions” box above and write that nominee’s name in the space provided below.) 
+*Exceptions 
+Will Attend Meeting 
+¨ 
+YES 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark Here for 
+Address Change 
+or Comments
+SEE REVERSE 
+¨ 
+NOTE: Please sign as name appears hereon. Joint owners should each
+sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the “Plan”), you have the right to direct JP Morgan Chase Bank, N.A. (the
+“Plan Trustee”), to vote the shares of Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of
+Shareholders of Key Tronic Corporation to be held on October 21, 2010. 
+For your information, copies of the Notice of Annual Meeting,
+Proxy Statement, and Annual Report are enclosed. In addition, a postage paid return envelope addressed to BNY Mellon Shareowner Services is enclosed for your use in returning your completed, signed, and dated proxy card to the Plan Trustee.
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific information regarding your
+instructions to any person, including officers or employees of the Company, except to the extent required by law. 
+If your completed proxy
+card is not received by October 8, 2010 the Administrative Committee for the Plan will direct the Plan Trustee to vote your shares. The Trustee will be directed to vote all such unvoted shares in the same proportion as the voted shares
+received. 
+JP Morgan Chase Bank, N.A. 
+q FOLD
+AND DETACH HERE q 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 21, 2010 
+CRAIG D. GATES and DALE F. PILZ, or either of them, each with the power of substitution, are hereby authorized to represent and
+vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 21, 2010, and any adjournment or
+postponement thereof. 
+Address Change/Comments 
+(Mark the corresponding box on the reverse side) 
+BNY MELLON SHAREOWNER SERVICES 
+P.O. BOX 3550 
+SOUTH HACKENSACK, NJ 07606-9250 
+(Continued and to be marked, dated and signed, on the other
+side) 
+80233-bl 
+KEY TRONIC CORPORATION 
+80233-bl 
+q FOLD AND DETACH
+HERE q 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1, PROPOSAL 2, AND PROPOSAL 3. 
+Please mark your votes as indicated in this example 
+x 
+FOR 
+WITHHOLD 
+*EXCEPTIONS 
+ALL 
+FOR ALL 
+FOR 
+AGAINST 
+ABSTAIN 
+1. 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+¨ 
+¨ 
+¨ 
+2. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent auditors for fiscal year 2011. 
+¨ 
+¨ 
+¨ 
+Nominees: 
+3. 
+Approve the Key Tronic Corporation 2010 Incentive Plan. 
+¨ 
+¨ 
+¨ 
+01. James R. Bean, 
+04. Dale F. Pilz, 
+The undersigned hereby acknowledges
+receipt of the Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed
+by the shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+If you wish to vote in accordance with the Board of Directors’ recommendations,
+just sign and date below. You need not mark any boxes. 
+No postage is
+required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+02. Craig D. Gates, 
+05. Yacov A. Shamash, and 
+03. Ronald F. Klawitter, 
+06. Patrick Sweeney. 
+(INSTRUCTIONS: To withhold authority to vote for
+any individual nominee, mark the “Exceptions” box above and write that nominee’s name in the space provided below.) 
+*Exceptions 
+Will Attend Meeting 
+¨ 
+YES 
+PLEASE SIGN, DATE AND RETURN PROMPTLY. 
+Mark Here for 
+Address Change 
+or Comments
+SEE REVERSE 
+¨ 
+NOTE: Please sign as name appears hereon. Joint owners should each
+sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-10-209070/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-10-209070/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..185707fef51fee3375c6504c46088d4ef0f2d091
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-10-209070/proxy_rpt.txt
@@ -0,0 +1,13 @@
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related
+Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or
+relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related
+Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last fiscal year for which the Company
+has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of the Company’s common stock,
+or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and
+sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for
+review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested
+Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. 
+6
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-11-251001/proxy.txt b/raw/proxies/0000719733/0001193125-11-251001/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..74ee73175a3942d5fb566d38dd94d278c3f60349
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-11-251001/proxy.txt
@@ -0,0 +1,1034 @@
+DEF 14A
+1
+d231840ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing
+Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 23, 2011 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement
+relates to the Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company” or “Key Tronic”), to be held on Thursday, October 27, 2011, at 10:00 a.m. Pacific Time at the principal
+executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. 
+Whether or not you will attend
+the Annual Meeting in person and regardless of the number of shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual
+Meeting and vote in person, even if you previously have returned your proxy card. 
+Sincerely, 
+Craig D. Gates 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 27, 2011 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic
+Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 27, 2011, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley,
+Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect six directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO USA, LLP as independent registered public accounting firm for fiscal year 2012; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 7, 2011 are entitled to notice of and to vote at the Annual
+Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares
+will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 23, 2011 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE
+ENCLOSED CARD 
+PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL 
+MEETING. 
+IMPORTANT
+NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON OCTOBER 27, 2011. The Proxy Statement and 2011 Annual Report to Shareholders are available at: http://bnymellon.mobular.net/bnymellon/ktcc.
+PROXY STATEMENT 
+INTRODUCTION 
+General
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic
+Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of Directors
+of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 27, 2011 at 10:00 a.m. Pacific Time at the principal executive offices of the Company,
+4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Craig D. Gates and Dale F. Pilz, each of them and their substitutes, as
+proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. This proxy statement and the enclosed form of proxy were first mailed to shareholders on or about September 23, 2011. 
+Record Date, Proxies, Revocation 
+Record
+holders of the Common Stock at the close of business on September 7, 2011 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date 10,439,187 shares of Common Stock were issued and
+outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no
+instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below and FOR the ratification of the appointment of BDO USA, LLP as the Company’s independent
+registered public accounting firm for fiscal year 2012. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by delivering a
+completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock
+outstanding is entitled to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at
+a meeting: (i) the six nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and
+(ii) matter 2 listed in the accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other
+than a vote for a nominee will have the practical effect of voting against the nominee. An 
+1 
+abstention from voting or a broker nonvote will have no effect on ratification of the appointment of the independent registered public accounting firm (matter 2) since neither represents a vote
+cast. 
+If you are a stockholder of record and do not submit your vote by proxy or vote in person at the annual meeting, your shares will not
+be voted. However, if you hold shares beneficially in street name, the result may be different. If you do not return the voting instruction form, your broker, trustee or nominee may vote your shares in certain circumstances and on certain proposals.
+Under current regulations, brokers can not vote “uninstructed” shares in director elections or on executive compensation matters. Thus, if you hold your shares in street name and you do not instruct your record holder how to vote in the
+election of directors (matter 1), no votes will be cast on your behalf. Discretionary voting by brokers is permitted in the ratification of the appointment of the independent registered public accounting firm (matter 2).When a broker votes a
+client’s shares on some but not all of the proposals at a meeting, the missing votes are referred to as “broker non-votes.” Those shares will be included in determining the presence of a quorum at the meeting, but are not considered
+“present” for purposes of voting on non-discretionary matters. 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Six directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have
+been elected and have qualified. The six nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the
+balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the
+Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. It is the
+Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2010 Annual Meeting, except Mr. Bean, attended the 2010 Annual meeting. 
+The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+James R. Bean , age 61, has been a director of the Company since October 2006. Mr. Bean has been President and CEO of Preco Electronics, Inc.
+since November 1999. From May 1997 to 1999 he held various management positions in Boise, Idaho with Preco Electronics, Inc. Previously he held various management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer,
+Inc. and National Semiconductor, Inc. Mr. Bean is a graduate of New Mexico State University with a B.S. in Industrial Engineering. The Board of Directors has concluded that based upon Mr. Bean’s business and financial expertise,
+current and prior senior management positions and education that he should serve as a director of the company. 
+Craig D. Gates, age 52,
+has been a director of the Company since July 2009 and has been President and CEO of the Company since April 2009. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and
+General Manager of New Business Development from October 1995 to July 1997. He joined the Company as Vice President of Engineering in October 1994. From 1991 to October 1994, Mr. Gates served as Director of Operations, Electronics for the
+Microswitch Division of Honeywell Inc. From 1982 to 1991, Mr. Gates held various engineering and management positions within the Microswitch Division. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in
+Business Administration from the University of Illinois, Urbana. The Board of Directors has concluded that based upon Mr. Gates’ business expertise, current and prior senior management experience and education that he should serve as a
+director of the Company. 
+2 
+Ronald F. Klawitter , age 59, has been a director of the Company since October 2009 and has been
+Executive Vice President of Administration, CFO and Treasurer of the Company since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to
+October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a Bachelor of Arts
+degree from Wittenberg University and is a Certified Public Accountant. The Board of Directors has concluded that based upon Mr. Klawitter’s business and financial expertise, current and prior management experience and education that he
+should serve as a director of the Company. 
+Dale F. Pilz , age 85, has served as Chairman of the Board since January 2000 and has been a
+director of the Company since April 1992. Mr. Pilz was Chief Executive Officer of Flowind Corporation from 1986 to 1990. He served as President of Omninet Corporation from 1985 to 1986. Prior to that, Mr. Pilz was Chief Executive Officer
+and President of GTE Sprint Communications from 1983 to 1985 and also served as Chief Executive Officer and President of GTE Spacenet Corporation from 1983 to 1985. The Board of Directors has concluded that based upon Mr. Pilz’s business
+and financial expertise, senior management experience, service on public companies’ boards and education that he should serve as a director of the Company. 
+Yacov A. Shamash , age 61, has been a director of the Company since 1989. He has been the Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since
+1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering
+Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical Alert Corp., and Applied DNA Sciences, Inc. The Board of Directors has concluded that based upon
+Dr. Shamash’s professional and management experience, service on public companies’ boards and education that he should serve as a director of the Company. Dr. Shamash has also served on the Board of two other public corporations,
+Manchester Tech., Inc. and Netsmart Tech., Inc., during the past five years. 
+Patrick Sweeney , age 76, has been a director of the
+Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney
+was the Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and also served as Managing Director of Ireland for Digital Equipment Corporation and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney
+also serves on the Board of Directors of Aimware, Info. Mosaic, and Photo Machining Inc. The Board of Directors has concluded that based upon Mr. Sweeney’s business and financial expertise, senior management experience, service on public
+companies’ boards and education that he should serve as a director of the Company. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE
+FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS 
+Board Meetings 
+All directors hold office
+until the next Annual Meeting of Shareholders and until their successors have been elected and have qualified. There are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors
+met four times during fiscal 2011. During fiscal 2011, each director attended 100% of the Board of Directors meetings and 100% of meetings of committees of the Board of Directors on which the director served during the time he served on the Board or
+committee. 
+3 
+Directors’ Independence 
+The Board of Directors has determined that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable Nasdaq Global Select Market
+(“NASDAQ”) listing standards, except for Mr. Gates, the Company’s President and Chief Executive Officer and Mr. Klawitter, the Company’s Executive Vice President of Administration, CFO and Treasurer. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet the definition of independence contained in the NASDAQ
+listing standards; (2) meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of the Company or any current subsidiary of
+the Company at any time during the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, as required by the NASDAQ
+Marketplace Rules. 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee, has the requisite attributes
+of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Board Leadership Structure and Role in Risk Oversight 
+The Board of Directors determines
+whether the roles of Chief Executive Officer and Chairman of the Board should be separated based upon its judgment of the structure which best meets the current needs of the Company and promotes the most effective communication between the Board and
+management. The Board currently separates the role of Chief Executive Officer and Chairman of the Board. 
+The Board oversees the
+Company’s risk directly and through its committees. The Board is assisted by its Audit Committee in performing its risk management oversight responsibilities with respect to financial reporting, internal controls and legal and regulatory
+requirements. The Board is assisted by its Compensation and Administration Committee in performing its risk management oversight responsibilities with respect to risk relating to compensation programs and policies. The Board, with the assistance of
+its Governance and Nominating Committee oversees risk management with respect to Board membership, structure and organization. 
+The Chairmen
+of the three Board Committees report to the Board on committee meetings at regular meetings of the Board of Directors. Management has the day to day responsibility for risk management and members of management make regular reports to the Board and
+its committees on identification, monitoring and mitigation of material risks. 
+Executive Sessions 
+At two of the four regular meetings of the Board of Directors held during fiscal year 2011, the independent directors met separately in executive session
+without management present. 
+Code of Conduct 
+The Board of Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of Conduct is available on the Company’s website at
+www.keytronic.com . The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+4 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o
+General Counsel & Secretary, Key Tronic Corporation, 4424 N. Sullivan Road, Spokane Valley, WA 99216. All such shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors
+or a Board member. 
+Nominations to the Board 
+The Governance and Nominating Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are submitted to the Secretary of the Company, together
+with biographical information and references, at least six months prior to the annual meeting. 
+Board Committees 
+The Board of Directors has four standing committees: the Audit Committee, the Compensation and Administration Committee, the Executive Committee and the
+Governance and Nominating Committee. The committees each have written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Governance and Nominating Committee are available on the
+Company’s website at www.keytronic.com . 
+The Audit Committee , which currently consists of Messrs. Sweeney (Chairman), Bean
+and Pilz met nine times during fiscal 2011. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance;
+selects and appoints the Company’s independent registered public accounting firm, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent registered public accounting firm, and establishes
+the fees and other compensation to be paid to the independent registered public accounting firm; monitors the qualifications, independence and performance of the Company’s independent registered public accounting firm; and establishes
+procedures for the receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of
+communication among the Board, the independent registered public accounting firm and management. 
+The Compensation and Administration
+Committee (“Compensation Committee”) which currently consists of Messrs. Shamash (Chairman), and Pilz, met three times during fiscal 2011. The Committee establishes and reviews annually the Company’s general compensation policies
+applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers
+annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board
+regarding changes to existing compensation plans. The Committee administers the Company’s incentive compensation plans and stock option plans, including determining the individuals to receive awards and options and the terms of such awards and
+options. 
+The Executive Committee , which currently consists of Messrs. Sweeney (Chairman), Gates and Pilz did not meet during fiscal
+2011. The Executive Committee generally exercises the authority of the Board of Directors with respect to the management and operation of the Company between meetings of the Board of Directors. 
+The Governance and Nominating Committee , which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met one time during fiscal 2011.
+The Committee makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect to the structure and composition of the
+Board. The 
+5 
+Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific
+minimum qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be identified to the Committee by members of the Board, officers of the Company,
+shareholders or other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. Although the Company does not have a policy regarding diversity, the Governance
+and Nominating Committee does take into consideration the value of diversity among Board members in background, experience, education and perspective in considering potential nominees for recommendation to the Board for selection. The Company has
+not paid any third party a fee to assist in identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner of more than 5% of the
+Company’s Common Stock. 
+The Board created a Special Committee in October 2010, consisting of Messrs. Pilz and Sweeney, to interface with
+members of the board of directors of a customer to pursue a business solution to certain commercial disputes. A fee of $2,000 per day and reimbursement of expenses was approved for service as a member of the Special Committee including participation
+in meetings and conference calls, consultation with management and review of documents. 
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related
+Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or
+relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related
+Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if
+they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the
+foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such
+person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of
+Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than
+terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. 
+6 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial ownership of the Common Stock as of the
+Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director and nominee for director of the Company; (iii) each of the executive officers of
+the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class
+(1) 
+MORE THAN 5% SHAREHOLDERS 
+Tieton Capital Management LLC 
+4700 Tieton Drive, Suite C 
+Yakima, WA 98908 
+851,243 
+(2),(3) 
+8.22% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+844,614 
+(4),(5) 
+8.16% 
+Morgan Stanley Smith Barney LLC 
+1585 Broadway 
+New York, NY 10036 
+733,000 
+(6),(7) 
+7.08% 
+DIRECTORS AND EXECUTIVE OFFICERS 
+James R. Bean 
+0 
+** 
+Dale F. Pilz 
+29,982 
+(8) 
+** 
+Yacov A. Shamash 
+36,030 
+(9) 
+** 
+Patrick Sweeney 
+68,930 
+** 
+Craig D. Gates 
+101,249 
+(10) 
+1.0% 
+Ronald F. Klawitter 
+160,978 
+(11) 
+1.5% 
+Douglas G. Burkhardt 
+68,543 
+(12) 
+** 
+All executive officers and directors as a group (11 persons) 
+522,205 
+(13) 
+4.9% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 10,439,187 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to
+beneficially own as of the record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any
+shares which such person or persons have the right to acquire within 60 days after the record date are 
+7 
+deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13G filed with the Securities and Exchange Commission, dated December 31, 2010. 
+3. 
+Tieton Capital Management LLC is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2011. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in
+portfolios of DFA Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles
+for qualified employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2011. 
+7. 
+Morgan Stanley Smith Barney LLC is a registered broker dealer. 
+8. 
+Includes 12,430 shares issuable upon exercise of director stock options. 
+9. 
+Includes 27,430 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+10. 
+Includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k) Retirement Savings Plan (7,458 shares) as of July 1, 2011.
+11. 
+Includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k) Retirement Savings Plan (17,867 shares) as of July 1, 2011,
+1,600 shares owned directly by Mr. Klawitter’s daughter and 3,100 shares owned directly by Mr. Klawitter’s son. 
+12. 
+Includes 13,334 shares issuable upon exercise of employee stock options. Also includes Common Stock allocated to Mr. Burkhardt as a participant in the
+Company’s 401(k) Retirement Savings Plan (176 shares) as of July 1, 2011. 
+13. 
+Includes 66,528 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60
+days of September 7, 2011. 
+EXECUTIVE COMPENSATION 
+Summary Compensation Table 
+Set forth
+below is information on the compensation of the Company’s Chief Executive Officer and its two other most highly compensated executive officers who were serving as executive officers at the end of fiscal year 2011 (“Named Executive
+Officers”) based on total compensation for the last completed fiscal year. No option awards were granted by the Company during fiscal year 2011 and no Named Executive Officer is covered by a pension plan or a nonqualified deferred compensation
+plan; therefore these columns have been omitted from the table. 
+8 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Option/ 
+SAR 
+Awards (1) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($) 
+All Other 
+Compensation 
+($) (8) 
+Total 
+($) 
+Craig D. Gates, 
+2011 
+437,000 
+0 
+409,885 
+(2) 
+92,960 
+939,845 
+Chief Executive Officer & President 
+2010 
+365,119 
+0 
+456,000 
+459,689 
+(3) 
+9,900 
+1,290,708 
+Ronald F. Klawitter 
+2011 
+301,029 
+0 
+269,006 
+(4) 
+29,010 
+599,045 
+Executive Vice President of Administration, CFO & Treasurer 
+2010 
+283,749 
+0 
+228,000 
+318,930 
+(5) 
+9,800 
+840,479 
+Douglas G. Burkhardt 
+2011 
+198,290 
+0 
+132,099 
+(6) 
+37,469 
+367,858 
+Executive Vice President of Worldwide Operations 
+2010 
+159,684 
+48,231 
+152,000 
+109,155 
+(7) 
+32,463 
+501,533 
+(1) 
+Represents the aggregate grant date fair value of stock appreciation right awards granted in fiscal year 2010, computed in accordance with FASB ASC Topic
+718. These amounts are not paid to or realized by the NEOs. See Note 7 to the Consolidated Financial Statements included in the Company’s 2011 Annual Report on Form 10-K for a discussion of the assumptions underlying the grant date fair
+value of the stock appreciation right awards. A description of the stock appreciation right awards appears in the narrative text following this table. 
+(2) 
+Represents $236,635 earned in fiscal 2011 under the Incentive Compensation Plan for fiscal year 2011 and $173,250 earned in fiscal year 2011 under the Long-Term
+Incentive Plan for the 2009-2011 performance cycle. 
+(3) 
+Represents $273,839 earned in fiscal year 2010 under the Incentive Compensation Plan for fiscal year 2010 and $185,850 earned in fiscal year 2010 under the Long-Term
+Incentive Plan for the 2008-2010 performance cycle. 
+(4) 
+Represents $130,406 earned in fiscal year 2011 under the Incentive Compensation Plan for fiscal year 2011 and $138,600 earned in fiscal year 2011 under the Long-Term
+Incentive Plan for the 2009-2011 performance cycle. 
+(5) 
+Represents $170,250 earned in fiscal year 2010 under the Incentive Compensation Plan for fiscal year 2010 and $148,680 earned in fiscal year 2010 under the Long-Term
+Incentive Plan for the 2008-2010 performance cycle. 
+9 
+(6) 
+Represents $85,899 earned in fiscal year 2011 under the Incentive Compensation Plan for fiscal year 2011 and $46,200 earned in fiscal year 2011 under the Long-Term
+Incentive Plan for the 2009-2011 performance cycle. 
+(7) 
+Represents amounts earned in fiscal year 2010 under the Incentive Compensation Plan for fiscal year 2010. 
+(8) 
+Represents Company matching payments in fiscal years 2011 and 2010 under the Company’s 401(k) Retirement Savings Plan. Also includes for Mr. Gates value
+realized on the exercise of stock options in the amount of $83,160 in fiscal year 2011, for Mr. Klawitter value realized on the exercise of stock options in the amount of $19,210 in fiscal year 2011, and for Mr. Burkhardt value realized on
+the exercise of stock options in the amount of $27,668.70 in fiscal year 2011 and $24,183 in fiscal year 2010. 
+Narrative
+Disclosure of Summary Compensation Table 
+Base Salary 
+Key Tronic provides the Named Executive Officers with a level of “guaranteed” compensation in the form of base salary. Each position is paid within a range that targets median market salary.
+Individual salary levels vary around this point based on experience, knowledge, and individual contribution. Ranges were objectively determined using the combined survey data provided by Milliman, Inc. 
+Annual Incentives 
+For our Named
+Executive Officers, annual incentives are tied directly to the achievement of a company-wide financial goal which is profit before taxes (PBT). PBT is the financial goal because of its significant impact on increasing shareholder equity. Target
+annual incentive levels for the top executives are set at or slightly above typical market practice to enable total direct compensation to be more competitive given that Key Tronic’s long-term incentive is primarily cash-based and therefore not
+completely comparable to what our publicly traded peers offer through the potential appreciation available to them in their equity-based long term incentive plans. The fiscal year 2011 Incentive Compensation Plan provided that if Key Tronic achieved
+its PBT target, executives would have the opportunity to earn 100% of their incentive target. If PBT exceeded target by 44%, executives would have the opportunity to earn up to 150% of their annual incentive target. If PBT were more than 80% below
+target level, no incentive would be paid. Key Tronic’s PBT for fiscal year 2011 was approximately 8% above target level. Therefore annual incentive payments were earned by participants for fiscal year 2011 in the approximate amount of 108% of
+their incentive target. 
+Long-term Incentives 
+Long-term Incentive Plan . Beginning in fiscal year 2006, the officers and non-employee directors of Key Tronic became eligible to participate in Key Tronic’s Long-term Incentive Plan (LTIP).
+The LTIP was approved by the Board in September 2005. Under this plan, officers and non-employee directors may be awarded a number of “performance units” at the start of each fiscal year. These units will have a future value tied directly
+to the achievement of Board determined and approved goals for a three-year period. At the end of each three-year period, these units will be exchanged for cash at the value set by the Board at the beginning of the three year period based on goal
+achievement as measured at the end of the three year period. For Mr. Gates the award at target for the 2009–2011 performance cycle was $150,000 of compensation. For Mr. Klawitter the award at target for the 2009–2011 performance
+cycle was $120,000 of compensation. For each non-employee director the award at target for the 2009–2011 performance cycle was $10,000 of compensation. For the 2009–2011 performance cycle threshold goals for three year sales growth and
+return on invested capital compared to peer group companies were exceeded. 
+2010 Incentive Plan . Historically, the primary form of
+long-term compensation at Key Tronic has been stock options. No options have been granted to any of the Named Executive Officers since October 24, 2002. In fiscal year 2010, the Named Executive Officers received grants of stock appreciation
+rights under the 2010 Incentive Plan. These stock appreciation right awards vest on the third anniversary of the grant 
+10 
+date to the extent the Company’s return on invested capital (ROIC) over the vesting period compared to the weighted average ROIC of a selected group of peer companies over the same period
+has reached 90% or more than peer group average and have a term of five years. Payment upon exercise of a stock appreciation right may be in cash, in shares, in some combination thereof or in any other manner approved by the Compensation Committee.
+Other Compensation 
+The
+Named Executive Officers and all other U.S. employees are eligible to participate in the Key Tronic Corporation 401(k) Retirement Savings Plan (“401(k) Plan”). The 401(k) Plan is a defined contribution tax qualified retirement savings plan
+under which employees can contribute a portion of their eligible cash compensation to the 401(k) Plan and the Company makes matching cash contributions of 100% of the first 3% and 50% of the next 2% of compensation deferred subject to qualified plan
+limits. All employee contributions and matching contributions are vested upon contribution. 
+GRANTS OF PLAN BASED AWARDS IN
+2011 FISCAL YEAR 
+The following table sets forth information concerning individual grants of non-equity incentive plan awards and grants
+of equity incentive plan awards made during fiscal year 2011 to each of the Named Executive Officers. 
+Name 
+Grant Date 
+Estimated Future
+Payouts 
+Under Non-Equity Incentive Plan Awards 
+Option/ SAR 
+Awards: 
+Number of 
+Securities 
+Underlying 
+Options/SARs 
+(#) 
+Exercise or 
+Base Price of 
+Option/ SAR 
+Awards 
+($/Sh) 
+Grant Date 
+Fair Value of 
+Option/ 
+SAR Awards 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Craig D. Gates 
+07/22/10 
+(1) 
+21,850 
+218,500 
+327,750 
+— 
+— 
+— 
+07/22/10 
+(2) 
+125,000 
+250,000 
+375,000 
+Ronald F. Klawitter 
+07/22/10 
+(1) 
+12,000 
+120,000 
+180,000 
+— 
+— 
+— 
+07/22/10 
+(2) 
+75,000 
+150,000 
+225,000 
+Douglas G. Burkhardt 
+07/22/10 
+(1) 
+8,080 
+80,800 
+121,200 
+— 
+— 
+— 
+07/22/10 
+(2) 
+50,000 
+100,000 
+150,000 
+(1) 
+Represents threshold, target and maximum payouts under the annual Incentive Compensation Plan for fiscal year 2011. For actual payouts earned for fiscal year 2011 see
+the Summary Compensation Table. The Incentive Compensation Plan is discussed under the caption “Annual Incentives” on page 10. 
+(2) 
+Represents threshold, target and maximum payouts under the Long-term Incentive Plan for the 2011-2013 performance cycle. The Long-term Incentive Plan is discussed under
+the caption “Long-term Incentives” on page 10. Payouts under the Long-term Incentive Plan for the 2011-2013 performance cycle are dependent upon the achievement of goals for three years sales growth and return on invested capital compared
+to peer group companies. 
+11 
+OUTSTANDING EQUITY AWARDS AT 2011 FISCAL YEAR-END 
+The following table provides information on stock options and stock appreciation rights held by the Named Executive Officers at July 2, 2011.
+Option/SAR Awards 
+Name 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options/SARs 
+(#) 
+Exercisable (1) 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options/SARs 
+(#) 
+Unexercisable (2) 
+Option/SAR 
+Exercise or Base 
+Price 
+($) 
+Option/SAR 
+Expiration 
+Date 
+Craig D. Gates 
+150,000 
+5.89 
+05/14/15 
+10,000 
+0 
+2.81 
+05/22/12 
+10,000 
+0 
+2.81 
+05/22/13 
+Ronald F. Klawitter 
+75,000 
+5.89 
+05/14/15 
+10,000 
+0 
+2.81 
+05/22/12 
+10,000 
+0 
+2.81 
+05/22/13 
+Douglas G. Burkhardt 
+50,000 
+5.89 
+05/14/15 
+3,750 
+0 
+6.50 
+07/30/11 
+6,667 
+0 
+2.81 
+05/22/12 
+6,667 
+0 
+2.81 
+05/22/13 
+(1) 
+Stock options that vested annually over five to ten years beginning on the first anniversary of the date of grant. 
+(2) 
+Stock appreciation rights that vest on the third anniversary of the grant date and have a term of five years. Payouts under the stock appreciation rights are dependent
+upon the achievement of goals for three year’s return on invested capital compared to peer group companies. 
+12 
+OPTION EXERCISES FOR FISCAL YEAR 2011 
+The following table sets forth information concerning the number of shares acquired and the dollar amounts realized by Named Executive Officers during
+fiscal year 2011 on the exercise of stock options. 
+Name 
+Option Awards 
+Number of Shares 
+Acquired on 
+Exercise 
+(#) 
+Value Realized 
+on Exercise 
+($) 
+Craig D. Gates 
+65,000 
+83,160 
+Ronald F. Klawitter 
+40,000 
+19,210 
+Douglas G. Burkhardt 
+10,000 
+27,669 
+(1) 
+Based on the difference between the closing price of the Company’s Common Stock on the exercise date and the exercise price of the option.
+Pension Benefits 
+None of the Named Executive Officers is covered by a pension plan. 
+Non-qualified Deferred
+Compensation 
+None of the Named Executive Officers is covered by a defined contribution plan or other plan that provides for the deferral
+of compensation on a basis that is not tax-qualified. 
+Other Benefits 
+The Company offers the Named Executive officers and all other U.S. employees life insurance, disability, medical and dental plans for which the Named Executive Officers are charged the same rate as all
+other employees. 
+Potential Payments Upon Termination or Change in Control 
+Employment Contracts. The Company entered into employment contracts with Messrs. Gates, Klawitter and Burkhardt at the time each
+employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the
+Company may terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for
+a period of one year after termination. The employment contract entered into with Mr. Klawitter also provides that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in
+such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Gates and Klawitter
+were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after
+termination. In August 2011, the employment contracts of Messrs. Gates, Klawitter and Burkhardt 
+13 
+were amended to condition the payment of severance upon execution of a release of claims and to add provisions to comply with Internal Revenue Code Section 409A. 
+Long-term Incentive Plan. The Long-term Incentive Plan provides that upon a change of control of the Company, vesting of units
+awarded under the Plan will be accelerated and will be payable at two times their value. “Change of control” generally means the occurrence of any of the following events: (1) any individual, entity or group (other than the Company,
+any subsidiary or any employee benefit plan of the Company or a subsidiary) acquires beneficial ownership of securities of the Company representing 40% or more of the combined voting power of the Company’s then-outstanding securities (other
+than as a result of an acquisition of securities directly from the Company); (2) the first purchase of Common Stock pursuant to a tender or exchange offer (other than a tender or exchange offer made by the Company or any subsidiary);
+(3) the approval by the Company’s shareholders of a merger or consolidation, a statutory share exchange, a sale or disposition of all or substantially all the Company’s assets or a plan of liquidation or dissolution of the Company; or
+(4) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority of the Board, unless the election or nomination for the election by the
+Company’s shareholders of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 
+2010 Incentive Plan. Under the 2010 Incentive Plan, in the event of a change of control: (1) all outstanding awards, other
+than performance shares and performance units, will become fully and immediately exercisable, and all applicable restrictions or forfeiture provisions will lapse, immediately prior to the change of control and such awards will terminate at the
+effective time of the change of control. However, upon certain changes of control, such as certain reorganizations, mergers or consolidations, any such awards that vest based on continuous service will become fully and immediately exercisable, and
+all applicable deferral and restriction limitations or forfeiture provisions will lapse, only if and to the extent such awards are not converted, assumed or replaced by a successor company; and (2) all performance shares, performance units, and
+stock awards or stock units with restrictions based on performance criteria will be payable based on targeted performance being attained as of the effective date of the change of control. 
+“Change of control” generally means the occurrence of any of the following events: (1) an acquisition by any individual,
+entity or group of beneficial ownership of 40% or more of either (a) the then outstanding shares of 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 (excluding generally any acquisition directly from the Company, any acquisition by the Company, any acquisition by any employee benefit plan of the Company or an affiliate, or the consummation of a reorganization, merger or
+consolidation or sale or other disposition of all or substantially all of the assets of the Company pursuant to which certain requirements are met); (2) a change in the composition of the Board during a two-year period such that the incumbent
+board members as of the beginning of the two-year period cease to constitute at least a majority of the Board (not including directors whose election, or nomination for election by shareholders, was approved by a majority of the incumbent board);
+(3) consummation of certain reorganizations, mergers or consolidations or other disposition of all or substantially all of the assets of the Company; or (4) consummation of a complete liquidation or dissolution of the Company. 
+Compensation of Directors 
+Fees .
+Each director, other than the Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $6,250, a fee of $1,200 for each Board meeting attended in person and a fee of $600 for each Board meeting attended by
+telephone. Directors also receive a fee of $750 for each committee meeting attended (committee members receive a committee attendance fee of $375 if the committee meeting is held the same day as a Board meeting and a fee of $375 if the committee
+meeting is held by phone), except that directors receive a fee of $1,000 for each Executive Committee meeting attended (which payment is in lieu of any payment for a Board meeting attended on the same day). The
+14 
+Chairman of the Board receives a quarterly retainer of $8,000, plus a fee of $1,800 for each Board meeting attended. Committee chairmen receive an additional fee of $550 for each committee
+meeting attended. Directors also receive payment of out-of-pocket expenses related to their service as directors. 
+Long-term Incentive
+Plan . Each director participates in the Company’s Long-term Incentive Plan (“Plan”). The Plan provides a long-term cash bonus opportunity to the members of the Board of Directors if certain Company performance measures established
+by the Board of Directors are met for three fiscal year performance periods. No amounts can be earned for any three fiscal year performance period until the end of the third fiscal year since achievement of performance measures can only be
+determined at the end of the third fiscal year. During fiscal year 2011, each non-employee Director was awarded 10,000 units under the Plan. If performance measures are met, these units will result in a cash payment ranging from $5,000 to $15,000 to
+each said non-employee Director at the end of fiscal year 2013. Payouts under the Long-term Incentive Plan will depend upon the achievement of goals for three year sales growth and return on invested capital compared to peer group companies.
+2010 Incentive Plan . 
+During fiscal year 2010, each non-employee director was awarded 15,000 stock appreciation rights under the Key Tronic Corporation 2010 Incentive Plan.
+These stock appreciation rights vest on the third anniversary of the grant date to the extent the Company’s return on invested capital (ROIC) over the vesting period compared to the weighted average ROIC of a selected peer group of companies
+over the same period has reached 90% or more than the peer group average and have a term of five years. Payment upon exercise of a stock appreciation right may be in cash, in shares, in some combination thereof or in any other manner approved by the
+Compensation Committee. 
+Stock Option Plan . Non-employee directors received stock options under the Company’s Amended and Restated
+1990 Stock Option Plan for Non-Employee Directors, which Plan terminated on July 27, 2005. 
+Set forth below is information on the
+compensation provided to each non-employee director of the Company during fiscal year 2011. No non-employee director is covered by a pension plan or a nonqualified deferred compensation plan. 
+15 
+DIRECTOR COMPENSATION 
+Name 
+Fees Earned 
+or Paid
+in 
+Cash 
+($) 
+Option/ 
+SAR 
+Awards 
+($)(1) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($)(2) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+James R. Bean 
+33,550 
+— 
+11,550 
+0 
+45,100 
+Dale F. Pilz 
+46,075 
+— 
+11,550 
+0 
+57,625 
+Yacov A. Shamash 
+31,750 
+— 
+11,550 
+0 
+43,300 
+Patrick Sweeney 
+46,300 
+— 
+11,550 
+0 
+57,850 
+(1) 
+Each director holds 15,000 stock appreciation right awards as of July 2, 2011 with a grant date fair value of $45,600. See Note 7 to the Consolidated Financial
+Statements included in the Company’s 2010 Annual Report on Form 10-K for a discussion of the assumptions underlying the grant date fair value of stock appreciation right awards. The following number of option awards were held by each of the
+directors and outstanding as of July 2, 2011: Mr. Bean, 0 options; Mr. Pilz, 12,430 options; Mr. Sweeney, 0 options; Dr. Shamash, 27,430 options. All directors were fully vested in such options prior to fiscal year 2011.
+(2) 
+Represents amounts earned in fiscal year 2011 under the Long-Term Incentive Plan for the 2009-2011 performance cycle. 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit Committee
+members meet the definition of independence within the meaning of the applicable NASDAQ listing standards and that the Chairman of the Committee has the requisite attributes of an “audit committee financial expert” as defined by SEC
+regulations. The Audit Committee operates under a written charter adopted by the Board of Directors which is reviewed and reassessed for adequacy annually by the Audit Committee. The Audit Committee has met and discussed with the Company’s
+management and BDO USA, LLP (“BDO”), the Company’s independent registered public accounting firm, the Company’s financial statements contained in the Annual Report on Form 10-K for the fiscal year ended July 2, 2011.
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards
+No. 61, (“Codification of Statements on Auditing Standards, AU § 380”), as amended. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO as required under
+applicable independence standards for auditors of public companies. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining
+the principal auditor’s independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements
+be included in the Company’s Annual Report on Form 10K for the fiscal year ended July 2, 2011, for filing with the Securities and Exchange Commission. 
+16 
+The Audit Committee: Patrick Sweeney (Chairman), James R. Bean, Dale F. Pilz 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit and non-audit fees billed or expected to be billed to the
+Company by BDO and its former affiliate Mexican firm BDO Hernandez, Marron y Cia, SC for professional services in the named categories for the fiscal years ended July 2, 2011 and July 3, 2010: 
+FY 2011 
+FY 2010 
+Audit Fees (1) 
+$ 
+286,362 
+$ 
+300,760 
+Audit Related Fees (2) 
+18,700 
+20,170 
+Tax Fees (3) 
+29,807 
+14,940 
+All Other Fees 
+— 
+— 
+Total 
+$ 
+334,869 
+$ 
+335,870 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the
+Company’s Annual Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan and other consultation
+matters. 
+(3) 
+Tax fees for fiscal years 2011 and 2010 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters.
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO USA, LLP
+(“BDO”) as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2012. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if
+they desire to do so, and they are expected to be available to respond to appropriate questions. In the event that ratification of this appointment of BDO as the Company’s registered public accounting firm is not approved by a majority of the
+shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will review its future selection of its registered public accounting firm. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S 
+INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+SHAREHOLDER PROPOSALS 
+Eligible shareholders who wish to present proposals for action at
+the Annual Meeting of Shareholders to be held in 2012 must submit their proposals in writing to Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. Under
+Rule 14a-8(e) of the Securities Exchange Act of 1934, proposals submitted for inclusion in our proxy statement for the 2012 Annual Meeting must be received by the Secretary at the address above no later than May 18, 2012. In addition, any
+shareholder who intends to present a proposal at the 2012 Annual Meeting without inclusion of such proposal in our proxy materials must provide us notice of such proposal in the manner set forth above by August 3, 2012 or such proposal will be
+considered untimely. For such proposals that are untimely, the Company retains discretion to vote proxies it receives. For such proposals that are timely, the Company retains discretion to vote proxies it receives provided that (1) the Company
+includes in its Proxy 
+17 
+Statement advice on the nature of the proposal and how it intends to exercise its voting discretion and (2) the proponent does not issue a proxy statement. We reserve the right to reject,
+rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements. 
+OTHER MATTERS 
+Annual Report on Form 10-K 
+The 2011 Annual Report on Form 10-K (including exhibits), as amended, which we refer to as our “Form 10-K,” is available by
+accessing the Company’s website at www.keytronic.com or the SEC’s website at www.sec.gov . Stockholders may request a free copy of our Form 10-K by contacting Investor Relations at StreetConnect, (206) 729-3625,
+ktcc@stct.com. We will furnish any exhibit to our Form 10-K if specifically requested to do so. 
+Section 16(a)
+Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common
+Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”) and NASDAQ. 
+Reporting Persons are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms which they file. Based solely on its review of the copies of such forms received or
+written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the fiscal year ended July 2, 2011 all the Reporting Persons complied with all applicable filing
+requirements. 
+Solicitation Expenses . The expense of printing and mailing proxy material will be borne by the Company. In
+addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such
+solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding
+solicitation material to such beneficial owners. 
+Other Business . The Board of Directors knows of no other business that
+will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the
+proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 23, 2011 
+18 
+You can now access your Key Tronic Corporation account online. 
+Access your Key Tronic Corporation account online via Investor ServiceDirect ® (ISD). 
+BNY Mellon Shareowner Services, the transfer agent
+for Key Tronic Corporation, now makes it easy and convenient to get current information on your shareholder account. 
+• View account status 
+• View payment history for dividends 
+• View certificate history 
+• Make address changes 
+• View book-entry information 
+• Obtain a duplicate 1099 tax form 
+Visit us on the web at http://www.bnymellon.com/shareowner/equityaccess 
+For Technical Assistance Call 1-877-978-7778 between 9am-7pm 
+Monday-Friday Eastern Time 
+Investor ServiceDirect ® 
+Available 24 hours per day, 7 days per week 
+TOLL FREE NUMBER: 1-800-370-1163 
+Choose MLink SM for fast, easy and secure 24/7 online access to your
+future proxy materials, investment plan statements, tax documents and more. Simply log on to Investor
+ServiceDirect ® at www.bnymellon.com/shareowner/equityaccess where step-by-step instructions will
+prompt you through enrollment. 
+Important notice regarding the Internet availability of proxy materials for the Annual Meeting of shareholders.
+The Proxy Statement and the 2011 Annual Report to Stockholders are available at: http://bnymellon.mobular.net/bnymellon/ktcc 
+q 
+FOLD AND DETACH HERE q 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington
+99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 27, 2011 
+CRAIG D. GATES and DALE F. PILZ , or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the
+undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 27, 2011, and any adjournment or postponement thereof. 
+Address Change/Comments 
+(Mark the corresponding box on the reverse
+side) 
+BNY MELLON SHAREOWNER SERVICES 
+P.O. BOX 3550 
+SOUTH HACKENSACK, NJ 07606-9250 
+(Continued and to be marked, dated and signed, on the other side) 
+07653 
+KEY TRONIC CORPORATION 
+07653 
+q FOLD AND DETACH HERE q 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark your votes as indicated in this example 
+x 
+FOR 
+WITHHOLD 
+*EXCEPTIONS 
+ALL 
+FOR ALL 
+FOR 
+AGAINST 
+ABSTAIN 
+1. 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+¨ 
+¨ 
+¨ 
+2. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for fiscal year 2012. 
+¨ 
+¨ 
+¨ 
+Nominees: 
+01. James R. Bean, 
+02. Craig D. Gates, 
+03. Ronald F. Klawitter, 
+04. Dale F. Pilz, 
+05. Yacov A. Shamash, and 
+06. Patrick Sweeney. 
+The undersigned hereby acknowledges receipt of the
+Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the
+shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions” box above and
+write that nominee’s name in the space provided below.) 
+*Exceptions 
+If you wish to vote in accordance with the Board of
+Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+Will Attend Meeting 
+¨ 
+YES 
+PLEASE SIGN, DATE AND RETURN
+PROMPTLY. 
+Mark Here for 
+Address Change 
+or Comments SEE REVERSE 
+¨ 
+NOTE: Please sign as name appears hereon. Joint owners
+should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date 
+KEY TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the “Plan”), you have the right to direct JP Morgan Chase Bank, N.A. (the “Plan Trustee”), to vote the shares of
+Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on
+October 27, 2011. 
+For your information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In
+addition, a postage paid return envelope addressed to BNY Mellon Shareowner Services is enclosed for your use in returning your completed, signed, and dated proxy card to the Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or employees of the
+Company, except to the extent required by law. 
+If your completed proxy card is not received by October 14, 2011 the Administrative
+Committee for the Plan will direct the Plan Trustee to vote your shares. The Trustee will be directed to vote all such unvoted shares in the same proportion as the voted shares received. 
+JP Morgan Chase Bank, N.A. 
+q FOLD AND DETACH HERE q 
+KEY
+TRONIC CORPORATION 
+4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting 
+October 27, 2011 
+CRAIG D. GATES and DALE F. PILZ , or either
+of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key
+Tronic Corporation to be held on Thursday, October 27, 2011, and any adjournment or postponement thereof. 
+Address Change/Comments 
+(Mark the corresponding box on the reverse
+side) 
+BNY MELLON SHAREOWNER SERVICES 
+P.O. BOX 3550 
+SOUTH HACKENSACK, NJ 07606-9250 
+(Continued and to be marked, dated and signed, on the other side) 
+07653-bl 
+KEY TRONIC CORPORATION 
+07653-bl 
+q FOLD AND DETACH HERE q 
+UNLESS OTHERWISE SPECIFIED THIS PROXY WILL BE VOTED IN FAVOR OF PROPOSAL 1 AND PROPOSAL 2. 
+Please mark your votes as indicated in this example 
+x 
+FOR 
+WITHHOLD 
+*EXCEPTIONS 
+ALL 
+FOR ALL 
+FOR 
+AGAINST 
+ABSTAIN 
+1. 
+Election of six directors (or if any nominee is not available for election, such substitute as the Board of Directors or the proxy holders may designate). 
+¨ 
+¨ 
+¨ 
+2. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for fiscal year 2012. 
+¨ 
+¨ 
+¨ 
+Nominees: 
+01. James R. Bean, 
+02. Craig D. Gates, 
+03. Ronald F. Klawitter, 
+04. Dale F. Pilz, 
+05. Yacov A. Shamash, and 
+06. Patrick Sweeney. 
+The undersigned hereby acknowledges receipt of the
+Notice of Annual Meeting and accompanying proxy statement, ratifies all that said Proxies or their substitutes may lawfully do by virtue hereof, and revokes all prior proxies. Shares represented by this proxy will be voted as directed by the
+shareholder. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. 
+(INSTRUCTIONS: To withhold authority to vote for
+any individual nominee, mark the “Exceptions” box above and write that nominee’s name in the space provided below.) 
+If you wish to vote in accordance with the
+Board of Directors’ recommendations, just sign and date below. You need not mark any boxes. 
+No postage is required if this proxy is returned in the enclosed envelope and mailed in the United States. 
+*Exceptions 
+Will Attend Meeting 
+¨ 
+YES 
+PLEASE SIGN, DATE AND RETURN
+PROMPTLY. 
+Mark Here for 
+Address Change 
+or Comments SEE REVERSE 
+¨ 
+NOTE: Please sign as name appears hereon. Joint owners
+should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. 
+Signature 
+Signature 
+Date
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-11-251001/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-11-251001/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..00e9ed21cde481b9e5cde30e743950ac88f27141
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-11-251001/proxy_rpt.txt
@@ -0,0 +1,13 @@
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related
+Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or
+relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related
+Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if
+they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the
+foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such
+person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of
+Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than
+terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. 
+6
\ No newline at end of file
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index 0000000000000000000000000000000000000000..e1526da87bbef2da1af88547961bb617d91ea3b3
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@@ -0,0 +1,1064 @@
+DEF 14A
+1
+d411104ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing
+Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 21, 2012 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement
+relates to the Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company” or “Key Tronic”), to be held on Thursday, October 25, 2012, at 10:00 a.m. Pacific Time at the principal
+executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. 
+Whether or not you will attend
+the Annual Meeting in person and regardless of the number of shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual
+Meeting and vote in person, even if you previously have returned your proxy card. 
+Sincerely, 
+Craig D. Gates 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 25, 2012 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic
+Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 25, 2012, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley,
+Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect five directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To ratify the appointment of BDO USA, LLP as independent registered public accounting firm for fiscal year 2013; and 
+3. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 5, 2012 are entitled to notice of and to vote at the Annual
+Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares
+will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 21, 2012 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE
+ENCLOSED CARD PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
+PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON OCTOBER 25, 2012. The Proxy Statement and 2012 Annual Report to Shareholders are available at: www.edocumentview.com/kttc. 
+PROXY STATEMENT 
+INTRODUCTION 
+General
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic
+Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of Directors
+of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 25, 2012 at 10:00 a.m. Pacific Time at the principal executive offices of the Company,
+4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Craig D. Gates and Ronald F. Klawitter, each of them and their
+substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. This proxy statement and the enclosed form of proxy were first mailed to shareholders on or about September 21, 2012. 
+Record Date, Proxies, Revocation 
+Record
+holders of the Common Stock at the close of business on September 5, 2012 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 10,488,856 shares of Common Stock were issued and
+outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no
+instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below and FOR the ratification of the appointment of BDO USA, LLP as the Company’s independent
+registered public accounting firm for fiscal year 2013. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by delivering a
+completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock
+outstanding is entitled to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at
+a meeting: (i) the five nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and
+(ii) matter 2 listed in the accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action other
+than a vote for a nominee will have the practical effect of voting against the nominee. An abstention from voting or a broker nonvote will have no effect on ratification of the 
+1 
+appointment of the independent registered public accounting firm (matter 2) since neither represents a vote cast. 
+If you are a stockholder of record and do not submit your vote by proxy or vote in person at the annual meeting, your shares will not be voted. However, if you hold shares beneficially in street name, the
+result may be different. If you do not return the voting instruction form, your broker, trustee or nominee may vote your shares in certain circumstances and on certain proposals. Under current regulations, brokers can not vote
+“uninstructed” shares in director elections or on executive compensation matters. Thus, if you hold your shares in street name and you do not instruct your record holder how to vote in the election of directors (matter 1), no votes will be
+cast on your behalf. Discretionary voting by brokers is permitted in the ratification of the appointment of the independent registered public accounting firm (matter 2). When a broker votes a client’s shares on some but not all of the proposals
+at a meeting, the missing votes are referred to as “broker non-votes.” Those shares will be included in determining the presence of a quorum at the meeting, but are not considered “present” for purposes of voting on
+non-discretionary matters. 
+PROPOSAL 1 
+ELECTION OF DIRECTORS 
+Five directors are to be elected at the Annual Meeting to serve
+until the next Annual Meeting of Shareholders and until their respective successors have been elected and have qualified. The five nominees receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is
+unable or unwilling to serve as a nominee or director, the proxies may be voted for the balance of those nominees named and for any substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the
+balance of those nominees named without nomination of a substitute, or the size of the Board of Directors may be reduced in accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named
+will be unable or unwilling to serve as a nominee or as a director if elected. It is the Company’s policy that nominees for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2011 Annual Meeting attended
+the 2011 Annual meeting. Dale F. Pilz will retire when his term expires at the Annual Meeting. 
+The following information has been provided to
+the Company with respect to the nominees for election to the Board of Directors: 
+James R. Bean , age 62, has been a director of the
+Company since October 2006. Mr. Bean has been President and CEO of Preco Electronics, Inc. since November 1999. From May 1997 to 1999 he held various management positions in Boise, Idaho with Preco Electronics, Inc. Previously he held various
+management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer, Inc. and National Semiconductor, Inc. Mr. Bean is a graduate of New Mexico State University with a B.S. in Industrial Engineering. The Board of
+Directors has concluded that based upon Mr. Bean’s business and financial expertise, current and prior senior management positions and education that he should serve as a director of the company. 
+Craig D. Gates, age 53, has been a director of the Company since July 2009 and has been President and CEO of the Company since April 2009.
+Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business Development from October 1995 to July 1997. He joined the Company as Vice President of
+Engineering in October 1994. From 1991 to October 1994, Mr. Gates served as Director of Operations, Electronics for the Microswitch Division of Honeywell Inc. From 1982 to 1991, Mr. Gates held various engineering and management positions
+within the Microswitch Division. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois, Urbana. Mr. Gates also serves on the Board of Directors of
+CyberOptics Corporation. The Board of Directors has concluded that based upon Mr. Gates’ business expertise, current and prior senior management experience and education that he should serve as a director of the Company. 
+2 
+Ronald F. Klawitter , age 60, has been a director of the Company since October 2009 and has been
+Executive Vice President of Administration, CFO and Treasurer of the Company since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to
+October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a Bachelor of Arts
+degree from Wittenberg University and is a Certified Public Accountant. The Board of Directors has concluded that based upon Mr. Klawitter’s business and financial expertise, current and prior management experience and education that he
+should serve as a director of the Company. 
+Yacov A. Shamash , age 62, has been a director of the Company since 1989. He has been the
+Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital
+Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of American Medical
+Alert Corp., and Applied DNA Sciences, Inc. The Board of Directors has concluded that based upon Dr. Shamash’s professional and management experience, service on public companies’ boards and education that he should serve as a
+director of the Company. Dr. Shamash has also served on the Board of two other public corporations, Manchester Tech., Inc. and Netsmart Tech., Inc., during the past five years. 
+Patrick Sweeney , age 77, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991 through 1995 and formerly served as Hadco’s
+Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang - USA from 1981 through 1986 and also served as Managing Director of Ireland for
+Digital Equipment Corporation and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, and Photo Machining Inc. The Board of Directors has concluded that based upon
+Mr. Sweeney’s business and financial expertise, senior management experience, service on public companies’ boards and education that he should serve as a director of the Company. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS 
+Board Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and
+until their successors have been elected and have qualified. There are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met four times during fiscal 2012. During fiscal
+2012, each director attended 100% of the Board of Directors meetings and at least 90% of meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+3 
+Directors’ Independence 
+The Board of Directors has determined that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable Nasdaq Global Select Market
+(“NASDAQ”) listing standards, except for Mr. Gates, the Company’s President and Chief Executive Officer and Mr. Klawitter, the Company’s Executive Vice President of Administration, CFO and Treasurer. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet the definition of independence contained in the NASDAQ
+listing standards; (2) meet the requirements of the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of the Company or any current subsidiary of
+the Company at any time during the past three years; and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, as required by the NASDAQ
+Marketplace Rules. 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee, has the requisite attributes
+of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Board Leadership Structure and Role in Risk Oversight 
+The Board of Directors determines
+whether the roles of Chief Executive Officer and Chairman of the Board should be separated based upon its judgment of the structure which best meets the current needs of the Company and promotes the most effective communication between the Board and
+management. The Board currently separates the role of Chief Executive Officer and Chairman of the Board. 
+The Board oversees the
+Company’s risk directly and through its committees. The Board is assisted by its Audit Committee in performing its risk management oversight responsibilities with respect to financial reporting, internal controls and legal and regulatory
+requirements. The Board is assisted by its Compensation and Administration Committee in performing its risk management oversight responsibilities with respect to risk relating to compensation programs and policies. The Board, with the assistance of
+its Governance and Nominating Committee oversees risk management with respect to Board membership, structure and organization. 
+The Chairmen
+of the three Board Committees report to the Board on committee meetings at regular meetings of the Board of Directors. Management has the day to day responsibility for risk management and members of management make regular reports to the Board and
+its committees on identification, monitoring and mitigation of material risks. 
+Executive Sessions 
+At three of the four regular meetings of the Board of Directors held during fiscal year 2012, the independent directors met separately in executive
+session without management present. 
+Code of Conduct 
+The Board of Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of Conduct is available on the Company’s website at
+www.keytronic.com. The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+4 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o
+General Counsel & Secretary, Key Tronic Corporation, 4424 N. Sullivan Road, Spokane Valley, WA 99216. All such shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors
+or a Board member. 
+Nominations to the Board 
+The Governance and Nominating Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are submitted to the Secretary of the Company, together
+with biographical information and references, at least six months prior to the annual meeting. 
+Board Committees 
+The Board of Directors has three standing committees: the Audit Committee, the Compensation and Administration Committee, and the Governance and
+Nominating Committee. The committees each have written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Governance and Nominating Committee are available on the Company’s
+website at www.keytronic.com . 
+The Audit Committee , which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met
+ten times during fiscal 2012. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and
+appoints the Company’s independent registered public accounting firm, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent registered public accounting firm, and establishes the fees and
+other compensation to be paid to the independent registered public accounting firm; monitors the qualifications, independence and performance of the Company’s independent registered public accounting firm; and establishes procedures for the
+receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of communication among
+the Board, the independent registered public accounting firm and management. 
+The Compensation and Administration Committee
+(“Compensation Committee”) which currently consists of Messrs. Shamash (Chairman), and Pilz, met four times during fiscal 2012. The Committee establishes and reviews annually the Company’s general compensation policies applicable
+to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers annually to
+the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board regarding
+changes to existing compensation plans. The Committee administers the Company’s incentive compensation plans and stock option plans, including determining the individuals to receive awards and options and the terms of such awards and options.
+The Governance and Nominating Committee , which currently consists of Messrs. Sweeney (Chairman), Bean and Pilz met one time during
+fiscal 2012. The Committee makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect to the structure and
+composition of the Board. The Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific minimum qualifications
+which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be identified to the Committee by members of the Board, officers of the Company, shareholders or other persons.
+The Committee evaluates each potential nominee 
+5 
+in the same manner regardless of the source of the potential nominee’s recommendation. Although the Company does not have a policy regarding diversity, the Governance and Nominating
+Committee does take into consideration the value of diversity among Board members in background, experience, education and perspective in considering potential nominees for recommendation to the Board for selection. The Company has not paid any
+third party a fee to assist in identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner of more than 5% of the Company’s Common
+Stock. 
+The Board created a Special Committee in October 2010, consisting of Messrs. Pilz and Sweeney, to interface with members of the board
+of directors of a customer to pursue a business solution to certain commercial disputes. A fee of $2,000 per day and reimbursement of expenses was approved for service as a member of the Special Committee including participation in meetings and
+conference calls, consultation with management and review of documents. The Special Committee was abolished on October 26, 2011. 
+Related Person Transactions 
+In April
+2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an
+“Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount
+involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or a
+less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was
+(since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater
+than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings,
+mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will
+take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the
+Related Party’s interest in the Transaction. 
+6 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial ownership of the Common Stock as of the
+Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director and nominee for director of the Company; (iii) each of the executive officers of
+the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class 
+(1) 
+MORE THAN 5% SHAREHOLDERS 
+Tieton Capital Management LLC 
+4700 Tieton Drive, Suite C 
+Yakima, WA 98908 
+975,325 
+( 2 ),( 3 ) 
+9.30 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+872,121 
+(4),(5) 
+8.31 
+% 
+DIRECTORS AND EXECUTIVE OFFICERS 
+James R. Bean 
+0 
+** 
+Dale F. Pilz 
+29,982 
+( 6 ) 
+** 
+Yacov A. Shamash 
+36,030 
+( 7 ) 
+** 
+Patrick Sweeney 
+68,930 
+** 
+Craig D. Gates 
+153,339 
+( 8 ) 
+1.46 
+% 
+Ronald F. Klawitter 
+162,078 
+( 9 ) 
+1.55 
+% 
+Douglas G. Burkhardt 
+68,543 
+(1 0 ) 
+** 
+All executive officers and directors as a group (13 persons) 
+577,891 
+(1 1 ) 
+5.49 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 10,488,856 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own
+as of the record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such
+person or persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2012. 
+7 
+3. 
+Tieton Capital Management LLC is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2012. 
+5. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in
+portfolios of DFA Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles
+for qualified employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+6. 
+Includes 12,430 shares issuable upon exercise of director stock options. 
+7. 
+Includes 12,430 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+8. 
+Includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k) Retirement Savings Plan (7,458 shares) as of June 30, 2012.
+9. 
+Includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k) Retirement Savings Plan (17,867 shares) as of June 30, 2012,
+1,600 shares owned directly by Mr. Klawitter’s daughter and 4,200 shares owned directly by Mr. Klawitter’s son. 
+10. 
+Includes Common Stock allocated to Mr. Burkhardt as a participant in the Company’s 401(k) Retirement Savings Plan (176 shares) as of June 30, 2012.
+11. 
+Includes 31,527 shares subject to issuance pursuant to stock options held by directors and executive officers which are currently exercisable or exercisable within 60
+days of September 5, 2012. 
+EXECUTIVE COMPENSATION 
+Summary Compensation Table 
+Set forth
+below is information on the compensation of the Company’s Chief Executive Officer and its two other most highly compensated executive officers who were serving as executive officers at the end of fiscal year 2012 (“Named Executive
+Officers”) based on total compensation for the last completed fiscal year. No Named Executive Officer had option awards or nonqualified deferred compensation earnings during fiscal year 2012; therefore those columns has been omitted from the
+table. 
+8 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Stock 
+Awards ( 1 ) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($) 
+All Other 
+Compensation 
+($) ( 8 ) 
+Total 
+($) 
+Craig D. Gates, 
+Chief Executive Officer & President 
+2012 
+445,068 
+0 
+110,000 
+702,750 
+(2) 
+26,600 
+1,284,418 
+2011 
+437,000 
+0 
+0 
+409,885 
+( 3 ) 
+92,960 
+939,845 
+Ronald F. Klawitter 
+2012 
+300,000 
+0 
+55,000 
+405,000 
+(4) 
+26,600 
+786,600 
+Executive Vice President of Administration, CFO & Treasurer 
+2011 
+301,029 
+0 
+0 
+269,006 
+( 5 ) 
+29,010 
+599,045 
+Douglas G. Burkhardt 
+Executive Vice President of Worldwide Operations 
+2012 
+215,842 
+0 
+44,000 
+219,505 
+(6) 
+99,138 
+578,485 
+2011 
+198,290 
+0 
+0 
+132,099 
+( 7 ) 
+37,469 
+367,858 
+(1) 
+Represents the aggregate grant date fair value of stock appreciation right awards granted in fiscal year 2012, computed in accordance with FASB ASC Topic
+718. These amounts are not paid to or realized by the NEOs. See Note 7 to the Consolidated Financial Statements included in the Company’s 2012 Annual Report on Form 10-K for a discussion of the assumptions underlying the grant date fair
+value of the stock appreciation right awards. A description of the stock appreciation right awards appears in the narrative text following this table. 
+(2) 
+Represents $327,750 earned in fiscal year 2012 under the Incentive Compensation Plan for fiscal year 2012 and $375,000 earned in fiscal year 2012 under the Long-Term
+Incentive Plan for the 2010-2012 performance cycle. 
+(3) 
+Represents $236,635 earned in fiscal 2011 under the Incentive Compensation Plan for fiscal year 2011 and $173,250 earned in fiscal year 2011 under the Long-Term
+Incentive Plan for the 2009-2011 performance cycle. 
+(4) 
+Represents $180,000 earned in fiscal year 2012 under the Incentive Compensation Plan for fiscal year 2012 and $225,000 earned in fiscal year 2012 under the Long-Term
+Incentive Plan for the 2010-2012 performance cycle. 
+(5) 
+Represents $130,406 earned in fiscal year 2011 under the Incentive Compensation Plan for fiscal year 2011 and $138,600 earned in fiscal year 2011 under the Long-Term
+Incentive Plan for the 2009-2011 performance cycle. 
+9 
+(6) 
+Represents $129,505 earned in fiscal year 2012 under the Incentive Compensation Plan for fiscal year 2012 and $90,000 earned in fiscal year 2012 under the Long-Term
+Incentive Plan for the 2010-2012 performance cycle. 
+(7) 
+Represents $85,899 earned in fiscal year 2011 under the Incentive Compensation Plan for fiscal year 2011 and $46,200 earned in fiscal year 2011 under the Long-Term
+Incentive Plan for the 2009-2011 performance cycle. 
+(8) 
+Includes Company matching payments in fiscal years 2012 and 2011 under the Company’s 401(k) Retirement Savings Plan. Also includes for Mr. Gates value
+realized on the exercise of stock options in the amount of $16,800 in fiscal year 2012 and $83,160 in fiscal year 2011, for Mr. Klawitter value realized on the exercise of stock options in the amount of $16,800 in fiscal year 2012 and $19,210
+in fiscal year 2011, and for Mr. Burkhardt value realized on the exercise of stock options in the amount of $89,338 in fiscal year 2012 and $27,668.70 in fiscal year 2011. 
+Narrative Disclosure of Summary Compensation Table 
+Base Salary 
+Key Tronic provides the Named Executive Officers with a level of “guaranteed” compensation in the form of base salary. Each position is paid
+within a range that targets median market salary. Individual salary levels vary around this point based on experience, knowledge, and individual contribution. Ranges were objectively determined using the combined survey data provided by Milliman,
+Inc. Base salary market data for the three Named Executive Officer positions was derived by averaging base salary data for comparable positions from the following 2009 surveys: Economic Research Institute Executive Assessor, Watson Wyatt Top
+Management, Milliman Executive Compensation Report, Aon Executive Compensation Report and Mercer Executive Compensation. In addition, the Board considered the compensation of executives at a group of peer group companies consisting of CTS
+Corporation, LaBarge Inc., Plexus, Sigma Tron International Inc., SMTC Corporation, Sparton Corporation and Sypris Solutions Inc. Three year’s worth of data extracted from these peers’ proxy statements aged to a common point in time in
+2009 were reviewed. The peer group companies were selected based on similar line of business, stage and size as measured by factors such as revenue, net income, market cap and number of employees. In fiscal years 2010, 2011 and 2012 the
+Company’s compensation consultant, Milliman, Inc., advised the Company that the market surveys and the peer companies’ base salary data had moved up in each of those years by approximately 3%. The average median base salary in 2009 of the
+market surveys was $436,841 for the CEO position, $257,411 for the CFO position and $202,989 for the top manufacturing officer position. The median base salary of the peer group in 2009 was $561,734 for the CEO position, $286,963 for the CFO
+position and $291,526 for the top manufacturing officer position. Fiscal year 2011 and 2012, base salaries of the Company’s CEO and top manufacturing officer are both below the market survey median and the peer group’s medians (after
+adjusting the 2009 market survey average median and peer group median base salaries by 3% in fiscal years 2010, 2011 and 2012). In fiscal years 2011 and 2012, the CFO’s base salary is below the peer group median base salary and above the market
+surveys average median base salary after similar adjustments. Salary increases in fiscal 2011 for each of the Named Executive Officers and for the CEO and the Executive Vice President of Worldwide Operations in fiscal year 2012 were determined based
+upon experience, knowledge and individual contribution in addition to market survey and peer group data. 
+Annual Incentives 
+For our Named Executive Officers, annual incentives are tied directly to the achievement of a company-wide financial goal which is profit before taxes
+(PBT). PBT is the financial goal because of its significant impact on increasing shareholder equity. Target annual incentive levels for the top executives are set to be comparable to what our publicly traded peers offer. The fiscal year 2012
+Incentive Compensation Plan provided that if Key Tronic achieved its PBT target, executives would have the opportunity to earn 100% of their incentive target. If PBT exceeded target by 33%, executives would have the opportunity to earn up to 150% of
+their annual incentive target. If PBT were more than 58% below target level, no incentive would be paid. Key Tronic’s PBT for fiscal year 2012 was more than 33% above target level. Therefore annual
+10 
+incentive payments were earned by participants for fiscal year 2012 in the approximate amount of 150% of their incentive target. 
+Long-term Incentives 
+Long-term Incentive Plan . Beginning in fiscal year 2006, the
+officers and non-employee directors of Key Tronic became eligible to participate in Key Tronic’s Long-term Incentive Plan (LTIP). The LTIP was approved by the Board in September 2005. Under this plan, officers and non-employee directors may be
+awarded a number of “performance units” at the start of each fiscal year. These units will have a future value tied directly to the achievement of Board determined and approved goals for a three-year period. At the end of each three-year
+period, these units will be exchanged for cash at the value set by the Board at the beginning of the three year period based on goal achievement as measured at the end of the three year period. For Mr. Gates the award at target for the
+2010–2012 performance cycle was $250,000 of compensation. For Mr. Klawitter the award at target for the 2010–2012 performance cycle was $150,000 of compensation. For Mr. Burkhardt the award at target for the 2010-2012 performance
+cycle was $60,000 of compensation. For each non-employee director the award at target for the 2010-2012 performance cycle was $10,000 of compensation. For the 2010–2012 performance cycle the maximum goals for three year sales growth compared to
+peer group companies and return on invested capital were exceeded. 
+2010 Incentive Plan . Historically, the primary form of long-term
+compensation at Key Tronic has been stock options. No options have been granted to any of the Named Executive Officers since October 24, 2002. In fiscal years 2010 and 2012, the Named Executive Officers received grants of stock appreciation
+rights under the 2010 Incentive Plan. These stock appreciation rights awards vest on the third anniversary of the grant date to the extent the Company’s return on invested capital (ROIC) over the vesting period compared to the weighted average
+ROIC of a selected group of peer companies over the same period has reached 90% or more than peer group average and have a term of five years. Payment upon exercise of a stock appreciation right may be in cash, in shares, in some combination thereof
+or in any other manner approved by the Compensation Committee. 
+Other Compensation 
+The Named Executive Officers and all other U.S. employees are eligible to participate in the Key Tronic Corporation 401(k) Retirement Savings Plan
+(“401(k) Plan”). The 401(k) Plan is a defined contribution tax qualified retirement savings plan under which employees can contribute a portion of their eligible cash compensation to the 401(k) Plan and the Company makes matching cash
+contributions of 100% of the first 3% and 50% of the next 2% of compensation deferred subject to qualified plan limits. All employee contributions and matching contributions are vested upon contribution. 
+11 
+GRANTS OF PLAN BASED AWARDS IN 2012 FISCAL YEAR 
+The following table sets forth information concerning individual grants of non-equity incentive plan awards and grants of equity incentive plan awards
+made during fiscal year 2012 to each of the Named Executive Officers. 
+Name 
+Grant Date 
+Estimated Future
+Payouts 
+Under Non-Equity Incentive Plan Awards 
+Stock 
+Awards: 
+Number 
+of 
+Securities 
+Underlying 
+Options/SARs 
+(#) 
+Exercise or 
+Base Price of 
+Stock 
+Awards 
+($/Sh) 
+Grant Date 
+Fair Value of 
+Stock 
+Awards 
+(#) 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Craig D. Gates 
+07/27/11 
+07/27/11 
+07/27/11 
+(1) 
+( 2 ) 
+( 3 ) 
+21,850 
+137,500 
+218,500 
+275,000 
+327,750 
+412,500 
+50,000 
+— 
+4.40 
+— 
+110,000 
+— 
+Ronald F. Klawitter 
+07/27/11 
+07/27/11 
+07/27/11 
+(1) 
+( 2 ) 
+( 3 ) 
+12,000 
+82,500 
+120,000 
+165,000 
+180,000 
+247,500 
+25,000 
+— 
+4.40 
+— 
+55,000 
+— 
+Douglas G. Burkhardt 
+07/27/11 
+07/27/11 
+07/27/11 
+(1) 
+( 2 ) 
+( 3 ) 
+8,634 
+50,000 
+86,337 
+100,000 
+129,505 
+150,000 
+20,000 
+— 
+4.40 
+— 
+44,000 
+— 
+(1) 
+Represents stock appreciation rights awards during fiscal year 2012 under the 2010 Incentive Compensation Plan. The 2010 Incentive Compensation Plan is discussed under
+the caption “Long-Term Incentives on page 11. 
+(2) 
+Represents threshold, target and maximum payouts under the annual Incentive Compensation Plan for fiscal year 2012. For actual payouts earned for fiscal year 2012 see
+the Summary Compensation Table. The Incentive Compensation Plan is discussed under the caption “Annual Incentives” on page 10. 
+(3) 
+Represents threshold, target and maximum payouts under the Long-term Incentive Plan for the 2012-2014 performance cycle. The Long-term Incentive Plan is discussed under
+the caption “Long-term Incentives” on page 11. Payouts under the Long-term Incentive Plan for the 2012-2014 performance cycle are dependent upon the achievement of goals for three years sales growth compared to peer group companies and
+return on invested capital. 
+12 
+OUTSTANDING EQUITY AWARDS AT 2012 FISCAL YEAR-END 
+The following table provides information on stock appreciation rights held by the Named Executive Officers at June 30, 2012. No Named Executive
+Officer held any option awards at June 30, 2012; therefore those columns have been omitted from the table. 
+Stock Awards 
+Name 
+Number of 
+Shares or Units 
+of Stock That 
+Have Not 
+Vested 
+(#) 
+Market Value of 
+Shares or Units 
+That Have Not 
+Vested 
+(#) 
+Equity Incentive 
+Plan Awards: 
+Number of 
+Unearned Shares, 
+Units or 
+Other 
+Rights That Have 
+Not Vested 
+(#) 
+Equity Incentive 
+Plan Awards: 
+Market or Payout 
+Value of 
+Unearned 
+Share 
+Units or Other 
+Rights That Have 
+Not Vested 
+($) (3) 
+Craig D. Gates 
+0 
+0 
+0 
+0 
+50,000 
+150,000 
+(1) 
+(2) 
+192,000 
+352,500 
+Ronald F. Klawitter 
+0 
+0 
+0 
+0 
+25,000 
+75,000 
+(1) 
+(2) 
+96,000 
+176,250 
+Douglas G. Burkhardt 
+0 
+0 
+0 
+0 
+20,000 
+50,000 
+(1) 
+(2) 
+76,800 
+117,500 
+(1) 
+Stock appreciation rights granted 07/27/11, at a base price of $4.40 per unit, that vest on the third anniversary of the grant date and have a term of five years.
+Payouts under the stock appreciation rights are dependent upon the achievement of goals for three year’s return on invested capital compared to peer group companies 
+(2) 
+Stock appreciation rights granted 05/14/10, at a base price of $5.89 per unit, that vest on the third anniversary of the grant date and have a term of five years.
+Payouts under the stock appreciation rights are dependent upon the achievement of goals for three years return on invested capital compared to peer group companies. 
+(3) 
+The payout value based upon $8.24 per unit, the closing sales price of the Company’s common stock on the Nasdaq Stock Market on June 29, 2012, less the base
+price per unit. Assumes overachievement level goal will be achieved for the applicable three year performance period. 
+13 
+OPTION EXERCISES FOR FISCAL YEAR 2012 
+The following table sets forth information concerning the number of shares acquired and the dollar amounts realized by Named Executive Officers during
+fiscal year 2012 on the exercise of stock options. 
+Name 
+Option Awards 
+Number of Shares 
+Acquired on 
+Exercise 
+(#) 
+Value Realized 
+on Exercise 
+($) 
+Craig D. Gates 
+20,000 
+16,800 
+Ronald F. Klawitter 
+20,000 
+16,800 
+Douglas G. Burkhardt 
+17,084 
+89,338 
+(1) 
+Based on the difference between the closing price of the Company’s Common Stock on the exercise date and the exercise price of the option.
+Pension Benefits 
+None of the Named Executive Officers is covered by a pension plan. 
+Non-qualified Deferred
+Compensation 
+None of the Named Executive Officers is covered by a defined contribution plan or other plan that provides for the deferral
+of compensation on a basis that is not tax-qualified. 
+Other Benefits 
+The Company offers the Named Executive Officers and all other U.S. employees life insurance, disability, medical and dental plans for which the Named Executive Officers are charged the same rate as all
+other employees. 
+Potential Payments Upon Termination or Change in Control 
+Employment Contracts. The Company entered into employment contracts with Messrs. Gates, Klawitter and Burkhardt at the time each
+employee was first elected an executive officer of the Company. Each of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the
+Company may terminate employment at any time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for
+a period of one year after termination. The employment contract entered into with Mr. Klawitter also provides that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in
+such a way as to constitute a demotion, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. In October 2002 the employment contracts of Messrs. Gates and Klawitter
+were amended to provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after
+termination. In August 2011, the employment contracts of Messrs. Gates, Klawitter and Burkhardt 
+14 
+were amended to condition the payment of severance upon execution of a release of claims and to add provisions to comply with Internal Revenue Code Section 409A. In May 2012, the employment
+contracts of Messrs. Gates and Burkhardt were amended to provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in such a way as to constitute a demotion, the
+Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination. Mr. Burkhardt’s employment contract was also amended in May 2012 to provide that upon termination of
+employment by the Company after a change of control, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. 
+Long-term Incentive Plan. The Long-term Incentive Plan provides that upon a change of control of the Company, vesting of units
+awarded under the Plan will be accelerated and will be payable at two times their value. “Change of control” generally means the occurrence of any of the following events: (1) any individual, entity or group (other than the Company,
+any subsidiary or any employee benefit plan of the Company or a subsidiary) acquires beneficial ownership of securities of the Company representing 40% or more of the combined voting power of the Company’s then-outstanding securities (other
+than as a result of an acquisition of securities directly from the Company); (2) the first purchase of Common Stock pursuant to a tender or exchange offer (other than a tender or exchange offer made by the Company or any subsidiary);
+(3) the approval by the Company’s shareholders of a merger or consolidation, a statutory share exchange, a sale or disposition of all or substantially all the Company’s assets or a plan of liquidation or dissolution of the Company; or
+(4) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority of the Board, unless the election or nomination for the election by the
+Company’s shareholders of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 
+2010 Incentive Plan. Under the 2010 Incentive Plan, in the event of a change of control: (1) all outstanding awards, other
+than performance shares and performance units, will become fully and immediately exercisable, and all applicable restrictions or forfeiture provisions will lapse, immediately prior to the change of control and such awards will terminate at the
+effective time of the change of control. However, upon certain changes of control, such as certain reorganizations, mergers or consolidations, any such awards that vest based on continuous service will become fully and immediately exercisable, and
+all applicable deferral and restriction limitations or forfeiture provisions will lapse, only if and to the extent such awards are not converted, assumed or replaced by a successor company; and (2) all performance shares, performance units, and
+stock awards or stock units with restrictions based on performance criteria will be payable based on targeted performance being attained as of the effective date of the change of control. 
+“Change of control” generally means the occurrence of any of the following events: (1) an acquisition by any individual,
+entity or group of beneficial ownership of 40% or more of either (a) the then outstanding shares of 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 (excluding generally any acquisition directly from the Company, any acquisition by the Company, any acquisition by any employee benefit plan of the Company or an affiliate, or the consummation of a reorganization, merger or
+consolidation or sale or other disposition of all or substantially all of the assets of the Company pursuant to which certain requirements are met); (2) a change in the composition of the Board during a two-year period such that the incumbent
+board members as of the beginning of the two-year period cease to constitute at least a majority of the Board (not including directors whose election, or nomination for election by shareholders, was approved by a majority of the incumbent board);
+(3) consummation of certain reorganizations, mergers or consolidations or other disposition of all or substantially all of the assets of the Company; or (4) consummation of a complete liquidation or dissolution of the Company. 
+15 
+Compensation of Directors 
+Fees. Each director, other than the Chairman of the Board, who is not an employee of the Company receives a quarterly retainer of $6,250, a fee of $1,200 for each Board meeting attended in person
+and a fee of $600 for each Board meeting attended by telephone. Directors also receive a fee of $750 for each committee meeting attended (committee members receive a committee attendance fee of $375 if the committee meeting is held the same day as a
+Board meeting and a fee of $375 if the committee meeting is held by phone). The Chairman of the Board receives a quarterly retainer of $8,000, plus a fee of $1,800 for each Board meeting attended. Committee chairmen receive an additional fee of $550
+for each committee meeting attended. Directors also receive payment of out-of-pocket expenses related to their service as directors. 
+Long-term Incentive Plan. Each director participates in the Company’s Long-term Incentive Plan (“Plan”). The Plan provides a
+long-term cash bonus opportunity to the members of the Board of Directors if certain Company performance measures established by the Board of Directors are met for three fiscal year performance periods. No amounts can be earned for any three fiscal
+year performance period until the end of the third fiscal year since achievement of performance measures can only be determined at the end of the third fiscal year. During fiscal year 2012, each non-employee Director was awarded 10,000 units under
+the Plan. If performance measures are met, these units will result in a cash payment ranging from $5,000 to $15,000 to each said non-employee Director at the end of fiscal year 2014. Payouts under the Long-term Incentive Plan will depend upon the
+achievement of goals for three year sales growth compared to peer group companies and return on invested capital. 
+2010 Incentive Plan.
+During fiscal year 2012, each non-employee director was awarded 5,000 stock appreciation rights under the Key Tronic Corporation 2010
+Incentive Plan. These stock appreciation rights vest on the third anniversary of the grant date to the extent the Company’s return on invested capital (ROIC) over the vesting period compared to the weighted average ROIC of a selected peer group
+of companies over the same period has reached 90% or more than the peer group average and have a term of five years. Payment upon exercise of a stock appreciation right may be in cash, in shares, in some combination thereof or in any other manner
+approved by the Compensation Committee. 
+Stock Option Plan. Non-employee directors received stock options under the Company’s
+Amended and Restated 1990 Stock Option Plan for Non-Employee Directors, which Plan terminated on July 27, 2005. 
+Set forth below is
+information on the compensation provided to each non-employee director of the Company during fiscal year 2012. No non-employee director had option awards or nonqualified deferred compensation earnings during fiscal year 2012; therefore those columns
+have been omitted from the table. 
+16 
+DIRECTOR COMPENSATION 
+Name 
+Fees Earned 
+or Paid 
+in 
+Cash 
+($) 
+Stock 
+Awards 
+($)(1) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($)(2) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+James R. Bean 
+33,550 
+11,000 
+15,000 
+0 
+59,550 
+Dale F. Pilz 
+44,825 
+11,000 
+15,000 
+0 
+70,825 
+Yacov A. Shamash 
+32,400 
+11,000 
+15,000 
+0 
+58,400 
+Patrick Sweeney 
+40,950 
+11,000 
+15,000 
+0 
+66,950 
+(1) 
+As of June 30, 2012, each director holds 15,000 stock appreciation rights awards with a grant date fair value of $45,600 and 5,000 stock appreciation rights awards
+with a grant date fair value of $11,000. See Note 7 to the Consolidated Financial Statements included in the Company’s 2012 Annual Report on Form 10-K for a discussion of the assumptions underlying the grant date fair value of stock
+appreciation rights awards. The following number of option awards were held by each of the directors and outstanding as of June 30, 2012: Mr. Bean, 0 options; Mr. Pilz, 12,430 options; Mr. Sweeney, 0 options; Dr. Shamash,
+12,430 options. All directors were fully vested in such options prior to fiscal year 2012. 
+(2) 
+Represents amounts earned in fiscal year 2012 under the Long-Term Incentive Plan for the 2010-2012 performance cycle. 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit Committee
+members meet the definition of independence within the meaning of the applicable NASDAQ listing standards and that the Chairman of the Committee has the requisite attributes of an “audit committee financial expert” as defined by SEC
+regulations. The Audit Committee operates under a written charter adopted by the Board of Directors which is reviewed and reassessed for adequacy annually by the Audit Committee. The Audit Committee has met and discussed with the Company’s
+management and BDO USA, LLP (“BDO”), the Company’s independent registered public accounting firm, the Company’s financial statements contained in the Annual Report on Form 10-K for the fiscal year ended June 30, 2012.
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards
+No. 61, (“Codification of Statements on Auditing Standards, AU § 380”), as amended. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO as required under
+applicable independence standards for auditors of public companies. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining
+the principal auditor’s independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements
+be included in the Company’s Annual Report on Form 10K for the fiscal year ended June 30, 2012, for filing with the Securities and Exchange Commission. 
+17 
+The Audit Committee: Patrick Sweeney (Chairman), James R. Bean, Dale F. Pilz 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit and non-audit fees billed or expected to be billed to the
+Company by BDO and its former affiliate Mexican firm BDO Hernandez, Marron y Cia, SC for professional services in the named categories for the fiscal years ended June 30, 2012 and July 2, 2011: 
+FY 2012 
+FY 2011 
+Audit Fees (1) 
+$ 
+286,545 
+$ 
+286,362 
+Audit Related Fees (2) 
+19,961 
+18,700 
+Tax Fees (3) 
+147,441 
+29,807 
+All Other Fees 
+— 
+— 
+Total 
+$ 
+453,947 
+$ 
+334,869 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the
+Company’s Annual Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan and other consultation
+matters. 
+(3) 
+Tax fees for fiscal years 2012 and 2011 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters. Tax
+fees for fiscal year 2012 also included fees for BDO performing a study relating to research and development tax credits. 
+PROPOSAL 2 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO USA, LLP (“BDO”) as the Company’s independent registered public accounting firm for the fiscal year
+ending June 29, 2013. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond to appropriate questions. In the
+event that ratification of this appointment of BDO as the Company’s registered public accounting firm is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will
+review its future selection of its registered public accounting firm. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
+FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S 
+INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+SHAREHOLDER PROPOSALS 
+Eligible shareholders who wish to present proposals for action at
+the Annual Meeting of Shareholders to be held in 2013 must submit their proposals in writing to Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. Under
+Rule 14a-8(e) of the Securities Exchange Act of 1934, proposals submitted for inclusion in our proxy statement for the 2013 Annual Meeting must be received by the Secretary at the address above no later than May 24, 2013. In addition, any
+shareholder who intends to present a proposal at the 2013 Annual Meeting without inclusion of such proposal in our proxy materials must provide us notice of such proposal in the manner set forth above by August 2, 2013 or such proposal will be
+considered untimely. For such proposals that are untimely, the Company retains discretion to vote proxies it receives. For such proposals that are timely, the 
+18 
+Company retains discretion to vote proxies it receives provided that (1) the Company includes in its Proxy Statement advice on the nature of the proposal and how it intends to exercise its
+voting discretion and (2) the proponent does not issue a proxy statement. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable
+requirements. 
+OTHER MATTERS 
+Annual Report on Form 10-K 
+The 2012
+Annual Report on Form 10-K (including exhibits), as amended, which we refer to as our “Form 10-K,” is available by accessing the Company’s website at www.keytronic.com or the SEC’s website at www.sec.gov. Stockholders
+may request a free copy of our Form 10-K by contacting Investor Relations at StreetConnect, (206) 729-3625, ktcc@stct.com. We will furnish any exhibit to our Form 10-K if specifically requested to do so. 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the Securities Exchange Act of 1934, as amended,
+requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership and changes in ownership with the Securities
+and Exchange Commission (“SEC”) and NASDAQ. 
+Reporting Persons are required by SEC regulations to furnish the Company with copies of
+all Section 16(a) forms which they file. Based solely on its review of the copies of such forms received or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to
+the fiscal year ended June 30, 2012 all the Reporting Persons complied with all applicable filing requirements. 
+Solicitation
+Expenses . The expense of printing and mailing proxy material will be borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of the
+Company by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of the
+shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation material to such beneficial owners. 
+Other Business . The Board of Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is
+intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 21, 2012 
+19 
+If you are not an Internet user and wish to contact Key Tronic Corporation, you may use one of the
+following methods: 
+Call: 877-277-9953 Write: Key Tronic Corporation, c/o Computershare, P.O. Box 43078, Providence, RI
+02940-3078 
+Attention Internet Users! 
+You can now access your stockholder information on the following secure Internet site: www.computershare.com/investor 
+Step 1: Register (1st time users only) 
+Click on “Create Login” in the blue box and follow the instructions. 
+Step 2: Log In (Returning users) 
+Enter your User ID and Password and click the Login button. 
+Step 3: View your account details and perform multiple transactions, such as: 
+• View account balances 
+• View transaction history 
+• View payment history 
+• View stock quotes 
+• Change your address 
+• View electronic stockholder communications 
+• Buy or sell shares 
+• Check replacements 
+q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE
+ENCLOSED ENVELOPE. q 
+Proxy — Key Tronic Corporation 
+Notice of 2012 Annual Meeting of Shareholders 4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting – October 25, 2012 
+Craig D. Gates and Ronald F. Klawitter, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the
+undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 25, 2012, and any adjournment or postponement thereof. 
+Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxies will have authority to
+vote FOR Item 1 and FOR Item 2. 
+In their discretion, the Proxies are authorized to vote upon such other business as may
+properly come before the meeting. 
+(Items to be voted appear on reverse side.) 
+Key Tronic Corporation 
+IMPORTANT ANNUAL MEETING 
+INFORMATION 
+Using a black ink pen, mark your votes with an X as shown 
+in 
+this example. Please do not write outside the designated areas. 
+x 
+Annual Meeting Proxy Card 
+q PLEASE FOLD ALONG THE
+PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q 
+A 
+Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2. 
+1. 
+Election of Directors: 
+For 
+Withhold 
+For 
+Withhold 
+For 
+Withhold 
++ 
+01 - James R. Bean 
+¨ 
+¨ 
+02 - Craig D. Gates 
+¨ 
+¨ 
+03 - Ronald F. Klawitter 
+¨ 
+¨ 
+04 - Yacov A. Shamash 
+¨ 
+¨ 
+05 - Patrick Sweeney 
+¨ 
+¨ 
+For 
+Against 
+Abstain 
+2. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for fiscal year 2013. 
+¨ 
+¨ 
+¨ 
+B 
+Non-Voting Items 
+Change of Address — Please print your new address below. 
+Comments — Please print your comments below. 
+Meeting Attendance 
+Mark the box to the right 
+if you plan to attend the 
+Annual Meeting. 
+¨ 
+C 
+Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below 
+Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor,
+administrator, corporate officer, trustee, guardian, or custodian, please give full title. 
+Date (mm/dd/yyyy) — Please print date below. 
+Signature 1 — Please keep signature within the box. 
+Signature 2 — Please keep signature within the box. 
+/ / 
+¢ 
+5 1 D V 
++ 
+01IMXC 
+Key Tronic Corporation 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the “Plan”), you have the right to direct JP Morgan Chase Bank, N.A. (the “Plan Trustee”), to vote the shares of
+Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on
+October 25, 2012. 
+For your information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In
+addition, a postage paid return envelope addressed to Computershare is enclosed for your use in returning your completed, signed, and dated proxy card to the Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or employees of the
+Company, except to the extent required by law. 
+If your completed proxy card is not received by October 12, 2012 the Administrative
+Committee for the Plan will direct the Plan Trustee to vote your shares. The Trustee will be directed to vote all such unvoted shares in the same proportion as the voted shares received. 
+JP Morgan Chase Bank, N.A. 
+q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE
+ENCLOSED ENVELOPE. q 
+Proxy — Key Tronic Corporation 
+Notice of 2012 Annual Meeting of Shareholders 4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting – October 25, 2012 
+Craig D. Gates and Ronald F. Klawitter, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the
+undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 25, 2012, and any adjournment or postponement thereof. 
+Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxies will have authority to
+vote FOR Item 1 and FOR Item 2. 
+In their discretion, the Proxies are authorized to vote upon such other business as may
+properly come before the meeting. 
+(Items to be voted appear on reverse side.) 
+IMPORTANT ANNUAL MEETING 
+INFORMATION 
+Using a black ink pen, mark your votes with an X as shown 
+in 
+this example. Please do not write outside the designated areas. 
+x 
+Annual Meeting Proxy Card 
+q PLEASE FOLD ALONG THE
+PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q 
+A 
+Proposals — The Board of Directors recommends a vote FOR all the nominees listed and FOR Proposal 2. 
+1. 
+Election of Directors: 
+For 
+Withhold 
+For 
+Withhold 
+For 
+Withhold 
++ 
+01 - James R. Bean 
+¨ 
+¨ 
+02 - Craig D. Gates 
+¨ 
+¨ 
+03 - Ronald F. Klawitter 
+¨ 
+¨ 
+04 - Yacov A. Shamash 
+¨ 
+¨ 
+05 - Patrick Sweeney 
+¨ 
+¨ 
+For 
+Against 
+Abstain 
+2. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for fiscal year 2013. 
+¨ 
+¨ 
+¨ 
+B 
+Non-Voting Items 
+Change of Address — Please print your new address below. 
+Comments — Please print your comments below. 
+Meeting Attendance 
+Mark the box to the right 
+if you plan to attend the 
+Annual Meeting. 
+¨ 
+C 
+Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below 
+Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor,
+administrator, corporate officer, trustee, guardian, or custodian, please give full title. 
+Date (mm/dd/yyyy) — Please print date below. 
+Signature 1 — Please keep signature within the box. 
+Signature 2 — Please keep signature within the box. 
+/ / 
+¢ 
+5 1 D V 
++ 
+01IMZB
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-12-393520/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-12-393520/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..9503db3b842ac1bced5df2124db0ad497a00a66d
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-12-393520/proxy_rpt.txt
@@ -0,0 +1,14 @@
+Related Person Transactions 
+In April
+2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an
+“Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount
+involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related Party has or will have a direct or indirect interest (other than solely as a result of being a director or a
+less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was
+(since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater
+than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings,
+mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will
+take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the
+Related Party’s interest in the Transaction. 
+6
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-13-367422/proxy.txt b/raw/proxies/0000719733/0001193125-13-367422/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ec4cab75a5da67b2c3fecddd807a7ca2a03622a8
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-13-367422/proxy.txt
@@ -0,0 +1,1790 @@
+DEF 14A
+1
+d588254ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+SCHEDULE 14A 
+(Rule 14a-101) 
+INFORMATION REQUIRED IN PROXY STATEMENT 
+SCHEDULE 14A INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Under Rule 14a-12 
+KEY TRONIC CORPORATION
+(Name of Registrant as Specified in Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) 
+Payment of Filing
+Fee (Check the appropriate box): 
+x 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
+state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. 
+(1) 
+Amount previously paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+September 20, 2013 
+Dear Shareholder: 
+The attached Notice of Annual Meeting of Shareholders and Proxy Statement
+relates to the Annual Meeting of Shareholders of Key Tronic Corporation, a Washington corporation (the “Company” or “Key Tronic”), to be held on Thursday, October 24, 2013, at 10:00 a.m. Pacific Time at the principal
+executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. 
+Whether or not you will attend
+the Annual Meeting in person and regardless of the number of shares you own, we request that you complete, sign, date and return the enclosed proxy card promptly in the accompanying postage-prepaid envelope. You may, of course, attend the Annual
+Meeting and vote in person, even if you previously have returned your proxy card. 
+Sincerely, 
+Craig D. Gates 
+President and Chief Executive Officer 
+Member of the Board of Directors 
+NOTICE OF ANNUAL MEETING OF SHAREHOLDERS 
+To Be Held October 24, 2013 
+To the Shareholders of KEY TRONIC CORPORATION: 
+The Annual Meeting of Shareholders of Key Tronic
+Corporation, a Washington corporation (the “Company”) will be held on Thursday, October 24, 2013, at 10:00 a.m. Pacific Time at the principal executive offices of the Company, 4424 N. Sullivan Road – Upper Level, Spokane Valley,
+Washington 99216 (the “Annual Meeting”), for the following purposes: 
+1. 
+To elect five directors of the Company to hold office until the next Annual Meeting of Shareholders and until their successors are elected and have qualified;
+2. 
+To hold an advisory vote to approve the compensation of the Company’s named executive officers, as disclosed in “Compensation Discussion and Analysis”
+and “Executive Compensation” herein; and 
+3. 
+To hold an advisory vote on the future frequency of advisory votes on executive compensation; and 
+4. 
+To ratify the appointment of BDO USA, LLP as independent registered public accounting firm for fiscal year 2014; and 
+5. 
+To transact such other business as may properly come before the meeting and any adjournments or postponements thereof. 
+Record holders of the Company’s Common Stock at the close of business on September 4, 2013 are entitled to notice of and to vote at the Annual
+Meeting and any adjournments or postponements thereof. Even if you will attend the Annual Meeting, please complete, sign, date and return the enclosed proxy to the Company in the enclosed postage-prepaid envelope in order to ensure that your shares
+will be voted at the Annual Meeting. You may vote your shares in person at the Annual Meeting even if you previously have returned your proxy card to the Company. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 20, 2013 
+YOUR VOTE IS IMPORTANT. PLEASE EXECUTE AND RETURN THE
+ENCLOSED CARD PROMPTLY, WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING. 
+IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
+PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON OCTOBER 24, 2013. The Proxy Statement and 2013 Annual Report to Shareholders are available at: www.edocumentview.com/kttc. 
+PROXY STATEMENT 
+INTRODUCTION 
+General
+The preceding Notice of Annual Meeting of Shareholders, this Proxy Statement and the enclosed proxy card are being furnished by Key Tronic
+Corporation, a Washington corporation (the “Company”), to the holders of outstanding shares of Common Stock, no par value, of the Company (“Common Stock”) in connection with the solicitation of proxies by the Board of Directors
+of the Company from holders of such shares. The proxies are to be used at the Annual Meeting of Shareholders of the Company to be held on Thursday, October 24, 2013 at 10:00 a.m. Pacific Time at the principal executive offices of the Company,
+4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216, and any adjournments or postponements thereof (the “Annual Meeting”). The proxies appoint Craig D. Gates and Ronald F. Klawitter, each of them and their
+substitutes, as proxy to vote all shares represented at the Annual Meeting pursuant to this proxy solicitation. This proxy statement and the enclosed form of proxy were first mailed to shareholders on or about September 20, 2013. 
+Record Date, Proxies, Revocation 
+Record
+holders of the Common Stock at the close of business on September 4, 2013 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting. As of the Record Date, 10,515,861 shares of Common Stock were issued and
+outstanding. A proxy card for use at the Annual Meeting is enclosed with this Proxy Statement. All completed, signed and dated proxies returned to the Company will be voted at the Annual Meeting in accordance with the instructions thereon. If no
+instructions are given on an otherwise signed and dated proxy card, the proxy will be voted FOR the election of nominees for director named below and FOR the ratification of the appointment of BDO USA, LLP as the Company’s independent
+registered public accounting firm for fiscal year 2014. Any proxy may be revoked at any time before it has been voted by giving written notice of revocation to the Secretary of the Company at the address set forth above; by delivering a
+completed, signed proxy bearing a date later than any earlier proxy; or by voting shares in person at the Annual Meeting. The mere presence at the Annual Meeting of the shareholder who has given a proxy will not revoke such proxy. 
+Voting 
+Each share of Common Stock
+outstanding is entitled to one vote on each matter presented for a vote of the shareholders at the Annual Meeting. Under applicable law and the Company’s Restated Articles of Incorporation and Amended and Restated By-Laws, if a quorum exists at
+a meeting: (i) the five nominees for election as directors who receive the greatest number of votes cast for the election of directors by the shares present in person or represented by proxy and entitled to vote shall be elected directors and
+(ii) matters 2 and 4 listed in the accompanying Notice of Annual Meeting of Shareholders will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it. In the election of directors, any action
+other than a vote for a nominee will have the practical effect of voting against the nominee. An abstention from voting or a broker nonvote will have no effect on ratification of the appointment of the independent registered public accounting firm
+(matter 4) since neither represents a vote cast. 
+1 
+If you are a stockholder of record and do not submit your vote by proxy or vote in person at the annual
+meeting, your shares will not be voted. However, if you hold shares beneficially in street name, the result may be different. If you do not return the voting instruction form, your broker, trustee or nominee may vote your shares in certain
+circumstances and on certain proposals. Under current regulations, brokers can not vote “uninstructed” shares in director elections or on executive compensation matters. Thus, if you hold your shares in street name and you do not instruct
+your record holder how to vote in the election of directors (matter 1), no votes will be cast on your behalf. Discretionary voting by brokers is permitted in the ratification of the appointment of the independent registered public accounting firm
+(matter 4). When a broker votes a client’s shares on some but not all of the proposals at a meeting, the missing votes are referred to as “broker non-votes.” Those shares will be included in determining the presence of a quorum at the
+meeting, but are not considered “present” for purposes of voting on non-discretionary matters. 
+PROPOSAL 1
+ELECTION OF DIRECTORS 
+Five directors are to be elected at the Annual Meeting to serve until the next Annual Meeting of Shareholders and until their respective successors have been elected and have qualified. The five nominees
+receiving the highest number of affirmative votes will be elected as directors. In the event any nominee is unable or unwilling to serve as a nominee or director, the proxies may be voted for the balance of those nominees named and for any
+substitute nominee designated by the present Board of Directors or the proxy holders to fill such vacancy, or for the balance of those nominees named without nomination of a substitute, or the size of the Board of Directors may be reduced in
+accordance with the By-Laws of the Company. The Board of Directors has no reason to believe that any of the persons named will be unable or unwilling to serve as a nominee or as a director if elected. It is the Company’s policy that nominees
+for election at the Annual Meeting attend the Annual Meeting. All nominees for election at the 2012 Annual Meeting attended the 2012 Annual meeting. 
+The following information has been provided to the Company with respect to the nominees for election to the Board of Directors: 
+James R. Bean , age 63, has been a director of the Company since October 2006. Mr. Bean has been President and CEO of Preco Electronics, Inc. since November 1999. From May 1997 to 1999 he held
+various management positions in Boise, Idaho with Preco Electronics, Inc. Previously he held various management positions in manufacturing operations with Sun Microsystems, Inc., Apple Computer, Inc. and National Semiconductor, Inc. Mr. Bean is
+a graduate of New Mexico State University with a B.S. in Industrial Engineering. The Board of Directors has concluded that based upon Mr. Bean’s business and financial expertise, current and prior senior management positions and education
+that he should serve as a director of the company. 
+Craig D. Gates, age 54, has been a director of the Company since July 2009 and has
+been President and CEO of the Company since April 2009. Previously he was Executive Vice President of Marketing, Engineering and Sales since July 1997. He served as Vice President and General Manager of New Business Development from October 1995 to
+July 1997. He joined the Company as Vice President of Engineering in October 1994. From 1991 to October 1994, Mr. Gates served as Director of Operations, Electronics for the Microswitch Division of Honeywell Inc. From 1982 to 1991,
+Mr. Gates held various engineering and management positions within the Microswitch Division. Mr. Gates has a Bachelor of Science Degree in Mechanical Engineering and a Masters in Business Administration from the University of Illinois,
+Urbana. Mr. Gates also serves on the Board of Directors of CyberOptics Corporation. The Board of Directors has concluded that based upon Mr. Gates’ business expertise, current and prior senior management experience and education that
+he should serve as a director of the Company. 
+2 
+Ronald F. Klawitter , age 61, has been a director of the Company since October 2009 and has been
+Executive Vice President of Administration, CFO and Treasurer of the Company since July 1997. Previously he was Vice President of Finance, Secretary and Treasurer of the Company since October 1995. He was Acting Secretary from November 1994 to
+October 1995 and Vice President of Finance and Treasurer from 1992 to October 1995. From 1987 to 1992, Mr. Klawitter was Vice President, Finance at Baker Hughes Tubular Service, a subsidiary of Baker Hughes, Inc. He has a Bachelor of Arts
+degree from Wittenberg University and is a Certified Public Accountant. The Board of Directors has concluded that based upon Mr. Klawitter’s business and financial expertise, current and prior management experience and education that he
+should serve as a director of the Company. 
+Yacov A. Shamash , age 63, has been a director of the Company since 1989. He has been the
+Dean of Engineering and Applied Sciences at the State University of New York campus at Stony Brook since 1992. Professor Shamash developed and directed the NSF Industry/University Cooperative Research Center for the Design of Analog/Digital
+Integrated Circuits from 1989 to 1992 and also served as Chairman of the Electrical and Computer Engineering Department at Washington State University from 1985 until 1992. Dr. Shamash also serves on the Board of Directors of Applied DNA
+Sciences, Inc. and Softheon. The Board of Directors has concluded that based upon Dr. Shamash’s professional and management experience, service on public companies’ boards and education that he should serve as a director of the
+Company. Dr. Shamash has also served on the Board of one other public corporation, Netsmart Tech., Inc., during the past five years. 
+Patrick Sweeney , age 78, has been a director of the Company since July 2000. Mr. Sweeney was President and CEO of Hadco Corporation from 1991
+through 1995 and formerly served as Hadco’s Vice President/Chief Financial Officer and Vice President of Operations. Prior to that Mr. Sweeney was the Vice President of International Manufacturing at Wang - USA from 1981 through
+1986 and also served as Managing Director of Ireland for Digital Equipment Corporation and as Plant Manager of its Galway and Clonmel divisions. Mr. Sweeney also serves on the Board of Directors of Aimware, Info. Mosaic, and Photo Machining
+Inc. The Board of Directors has concluded that based upon Mr. Sweeney’s business and financial expertise, senior management experience, service on public companies’ boards and education that he should serve as a director of the
+Company. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE. 
+CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS 
+Board Meetings 
+All directors hold office until the next Annual Meeting of Shareholders and
+until their successors have been elected and have qualified. There are no family relationships among any of the directors or executive officers of the Company. The Company’s Board of Directors met eight times during fiscal 2013. During fiscal
+2013, each director attended 100% of the Board of Directors meetings and 100% of the meetings of committees of the Board of Directors on which the director served during the time he served on the Board or committee. 
+Directors’ Independence 
+The Board
+of Directors has determined that all members of the Company’s Board of Directors are “independent directors” within the meaning of the applicable Nasdaq Global Select Market (“NASDAQ”) listing standards, except for
+Mr. Gates, the Company’s President and Chief Executive Officer and Mr. Klawitter, the Company’s Executive Vice President of Administration, CFO and Treasurer. 
+The Board of Directors also has determined that all members of the Audit Committee (1) meet the definition of independence contained in the NASDAQ listing standards; (2) meet the requirements of
+the Securities and Exchange Commission (“SEC”) Rule 10A-3(b)(1); (3) have not participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three years;
+and (4) are able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement, as required by the NASDAQ Marketplace Rules. 
+3 
+The Board of Directors has determined that Patrick Sweeney, a member of the Audit Committee, has the
+requisite attributes of an “audit committee financial expert” as defined by SEC regulations and that such attributes were acquired through relevant education and/or experience. 
+Board Leadership Structure and Role in Risk Oversight 
+The Board of Directors determines
+whether the roles of Chief Executive Officer and Chairman of the Board should be separated based upon its judgment of the structure which best meets the current needs of the Company and promotes the most effective communication between the Board and
+management. The Board currently separates the role of Chief Executive Officer and Chairman of the Board. 
+The Board oversees the
+Company’s risk directly and through its committees. The Board is assisted by its Audit Committee in performing its risk management oversight responsibilities with respect to financial reporting, internal controls and legal and regulatory
+requirements. The Board is assisted by its Compensation and Administration Committee in performing its risk management oversight responsibilities with respect to risk relating to compensation programs and policies. The Board, with the assistance of
+its Governance and Nominating Committee, oversees risk management with respect to Board membership, structure and organization. 
+The Chairmen
+of the three Board Committees report to the Board on committee meetings at regular meetings of the Board of Directors. Management has the day to day responsibility for risk management and members of management make regular reports to the Board and
+its committees on identification, monitoring and mitigation of material risks. 
+Executive Sessions 
+At two of the four regular meetings of the Board of Directors held during fiscal year 2013, the independent directors met separately in executive session
+without management present. 
+Code of Conduct 
+The Board of Directors has adopted a written Code of Conduct which applies to all directors, officers and employees of the Company. The Code of Conduct is available on the Company’s website at
+www.keytronic.com. The Company intends to disclose on its website any amendments to or waivers of the Code of Conduct. 
+Insider Trading
+Policy 
+The Board of Directors has adopted a written policy on Insider Trading which applies to all directors, officers and employees of
+the Company. The policy prohibits directors, officers and employees from engaging in short-term speculative transactions involving the Company’s securities, including short sales and buying or selling put or call options. 
+Recoupment Policy 
+The Board of
+Directors has adopted a written Recoupment Policy which provides that in the event of a restatement of the Company’s consolidated financial statements, the Company shall have the right to recoup from any executive officer any portion of any
+bonus or other equity or non-equity incentive compensation received by the executive officer the grant of which was tied to the achievement of one or more specific performance targets, with respect to the period for which such financial statements
+are restated, regardless of whether the executive officer engaged in any misconduct or was at fault or responsible in any way for causing the restatement, if, as a result of such restatement, the executive officer would not have received such bonus
+or other compensation or portion thereof. 
+4 
+Shareholder Communications 
+Shareholders of Key Tronic Corporation may send written communications to the Board of Directors or any of its members by certified mail only, addressed to the Board of Directors or any member, c/o
+General Counsel & Secretary, Key Tronic Corporation, 4424 N. Sullivan Road, Spokane Valley, WA 99216. All such shareholder communications will be compiled by the General Counsel & Secretary and submitted to the Board of Directors
+or a Board member. 
+Nominations to the Board 
+The Governance and Nominating Committee will consider written proposals from shareholders for directors to be elected at the annual meeting which are submitted to the Secretary of the Company, together
+with biographical information and references, at least six months prior to the annual meeting. 
+Board Committees 
+The Board of Directors has three standing committees: the Audit Committee, the Compensation and Administration Committee, and the Governance and
+Nominating Committee. The committees each have written charters approved by the Board. The charters of the Audit Committee, the Compensation and Administration Committee and the Governance and Nominating Committee are available on the Company’s
+website at www.keytronic.com . 
+The Audit Committee , which currently consists of Messrs. Bean (Chairman), Shamash and Sweeney met
+eight times during fiscal 2013. The Audit Committee monitors the integrity of the Company’s financial statements, financial reporting processes and systems of internal controls regarding finance, accounting and legal compliance; selects and
+appoints the Company’s independent registered public accounting firm, pre-approves all audit and non-audit services to be provided to the Company by the Company’s independent registered public accounting firm, and establishes the fees and
+other compensation to be paid to the independent registered public accounting firm; monitors the qualifications, independence and performance of the Company’s independent registered public accounting firm; and establishes procedures for the
+receipt, retention, response to and treatment of complaints, including confidential, anonymous submissions by the Company’s employees, regarding accounting, internal controls or auditing matters, and provides an avenue of communication among
+the Board, the independent registered public accounting firm and management. 
+The Compensation and Administration Committee
+(“Compensation Committee”) which currently consists of Messrs. Shamash (Chairman), Bean and Sweeney, met four times during fiscal 2013. The Committee establishes and reviews annually the Company’s general compensation policies
+applicable to the Company’s executive officers and other key employees, reviews and approves the level of compensation awarded to the Company’s Chief Executive Officer and other officers and key management employees, prepares and delivers
+annually to the Board a report disclosing compensation policies applicable to the Company’s executive officers and the basis for the Chief Executive Officer’s compensation during the last fiscal year and makes recommendations to the Board
+regarding changes to existing compensation plans. The Committee administers the Company’s incentive compensation plans and stock option plans, including determining the individuals to receive awards and options and the terms of such awards and
+options. 
+The Governance and Nominating Committee , which currently consists of Messrs. Bean (Chairman), Shamash and Sweeney met one
+time during fiscal 2013. The Committee makes recommendations to the Board regarding corporate governance, recommends for selection by the Board nominees for election as Directors and makes recommendations to the Board with respect to the structure
+and composition of the Board. The Committee evaluates potential director nominees based upon a number of criteria, including the potential nominee’s skills, relevant experience and independence. The Committee has no specific minimum
+qualifications which must be met by a potential director nominee. Each potential nominee is considered on a case by case basis. Potential nominees may be identified to the Committee by members of the Board, officers of the Company, shareholders or
+other persons. The Committee evaluates each potential nominee in the same manner regardless of the source of the potential nominee’s recommendation. Although the Company does not have a policy regarding diversity, the Governance and Nominating
+5 
+Committee does take into consideration the value of diversity among Board members in background, experience, education and perspective in considering potential nominees for recommendation to the
+Board for selection. The Company has not paid any third party a fee to assist in identifying and evaluating potential director nominees. The Committee has not rejected any potential nominee recommended within the preceding year by a beneficial owner
+of more than 5% of the Company’s Common Stock. 
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related
+Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or
+relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related
+Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if
+they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the
+foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such
+person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of
+Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than
+terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. 
+6 
+PRINCIPAL SHAREHOLDERS AND SECURITY 
+OWNERSHIP OF MANAGEMENT 
+The following table provides certain information which has been furnished to the Company regarding beneficial ownership of the Common Stock as of the
+Record Date, with respect to (i) each person known by the Company to own beneficially more than 5% of the Company’s Common Stock; (ii) each director and nominee for director of the Company; (iii) each of the executive officers of
+the Company named in the Summary Compensation table; and (iv) all directors and executive officers of the Company as a group. 
+Name of Beneficial Owner* 
+Number of Shares 
+Beneficially Owned (1) 
+Percent of 
+Class
+(1) 
+MORE THAN 5% SHAREHOLDERS 
+Royce & Associates, LLC 
+745 Fifth Avenue 
+New York, NY 10151 
+1,285,362 
+(2), (3) 
+12.22 
+% 
+Tieton Capital Management LLC 
+4700 Tieton Drive, Suite C 
+Yakima, WA 98908 
+927,361 
+(4),(5) 
+8.82 
+% 
+Dimensional Fund Advisors, Inc. 
+1299 Ocean Avenue, Suite 650 
+Santa Monica, CA 90401 
+889,201 
+(6),(7) 
+8.46 
+% 
+DIRECTORS AND EXECUTIVE OFFICERS 
+James R. Bean 
+0 
+** 
+Yacov A. Shamash 
+36,030 
+(8) 
+** 
+Patrick Sweeney 
+75,103 
+** 
+Craig D. Gates 
+153,339 
+(9) 
+1.46 
+% 
+Ronald F. Klawitter 
+162,078 
+(10) 
+1.54 
+% 
+Douglas G. Burkhardt 
+68,543 
+(11) 
+** 
+Philip S. Hochberg 
+12,514 
+(12) 
+** 
+Brett R. Larsen 
+1,180 
+(13) 
+** 
+All executive officers and directors as a group 
+(12 persons) 
+555,336 
+(14) 
+5.28 
+% 
+* 
+Unless otherwise noted, the address for each named shareholder is in care of the Company at its principal executive offices. 
+** 
+Less than 1%. 
+1. 
+Percentage beneficially owned is based on 10,515,861 shares of Common Stock outstanding on the Record Date. A person or group of persons is deemed to beneficially own
+as of the record date any shares which such person or group of persons has the right to acquire within 60 days after the record date. In computing the percentage of outstanding shares held by each person or group of persons, any shares which such
+person or persons have the right to acquire within 60 days after the record date are deemed to be outstanding, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. 
+7 
+2. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2013. 
+3. 
+Royce & Associates, LLC is a registered investment advisor. 
+4. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2013. 
+5. 
+Tieton Capital Management LLC is a registered investment advisor. 
+6. 
+Based on Form 13F filed with the Securities and Exchange Commission, dated June 30, 2013. 
+7. 
+Dimensional Fund Advisors, Inc. (“DFA”), a registered investor advisor, is deemed to have beneficial ownership of these shares all of which are held in
+portfolios of DFA Investment Dimensions Group, Inc., a registered open-end investment company, or in series of the DFA Investment Trust Company, a Delaware business trust, or the DFA Group Trust and DFA Participation Group Trust, investment vehicles
+for qualified employee benefit plans, for all of which DFA serves as investment manager. DFA disclaims beneficial ownership of all shares. 
+8. 
+Includes 4,930 shares issuable upon exercise of director stock options and 1,100 shares owned directly by Dr. Shamash’s daughter. 
+9. 
+Includes Common Stock allocated to Mr. Gates as a participant in the Company’s 401(k) Retirement Savings Plan (7,458 shares) as of June 30, 2013.
+10. 
+Includes Common Stock allocated to Mr. Klawitter as a participant in the Company’s 401(k) Retirement Savings Plan (17,867 shares) as of June 30, 2013,
+1,600 shares owned directly by Mr. Klawitter’s daughter and 4,200 shares owned directly by Mr. Klawitter’s son. 
+11. 
+Includes Common Stock allocated to Mr. Burkhardt as a participant in the Company’s 401(k) Retirement Savings Plan (176 shares) as of June 30, 2013.
+12. 
+Includes Common Stock allocated to Mr. Hochberg as a participant in the Company’s 401(k) Retirement Savings Plan (847 shares) as of June 30, 2013.
+13. 
+Represents Common Stock allocated to Mr. Larsen as a participant in the Company’s 401(k) Retirement Savings Plan as of June 30, 2013.
+14. 
+Includes 4,930 shares subject to issuance pursuant to stock options held by directors which are currently exercisable or exercisable within 60 days of September 4,
+2013. 
+EXECUTIVE COMPENSATION 
+Compensation Discussion and Analysis 
+Executive Summary 
+This Compensation Discussion and Analysis explains our compensation philosophy, summarizes our compensation programs and reviews compensation decisions
+for the executives identified as named executive officers in the Summary Compensation Table on page 16. The named executive officers for fiscal 2013 were: 
+• 
+Craig D. Gates, President & Chief Executive Officer 
+8 
+• 
+Ronald F. Klawitter, Executive Vice President of Administration, CFO & Treasurer 
+• 
+Douglas G. Burkhardt, Executive Vice President of Worldwide Operations 
+• 
+Philip S. Hochberg, Executive Vice President of Business Development 
+• 
+Brett R. Larsen, Vice President of Finance & Controller 
+The Compensation Committee of the Board of Directors (the “Committee”) is comprised of Yacov A. Shamash (Chairman), James R. Bean, and Patrick Sweeney, each of whom is an independent director
+under applicable Nasdaq listing standards. 
+Our executive compensation program is aligned with our business strategy and culture to attract
+and retain top talent, reward business results and individual performance, and most importantly, maximize shareholder returns. Our total compensation program for the named executive officers is highly incentive-based and competitive in the
+marketplace, with Company performance determining a significant portion of total compensation. 
+Executive Compensation Highlights
+The total compensation for each of the named executive officers is shown in the Summary Compensation Table on page 16. While we describe
+executive compensation in greater detail throughout this Compensation Discussion and Analysis, actions the Committee took in fiscal 2013 are highlighted below: 
+• 
+Base Salaries . Base salaries were modified to maintain a competitive position as compared to the organization’s targeted labor market.
+These increases were predicated on individual performance, tenure with the organization, and relative position to the market. 
+• 
+Performance-Based Annual Cash Incentive Pla n. Target awards for Fiscal 2013 remained the same as the prior year. 
+• 
+Performance-Based Long-Term Cash Incentive Plan . Target awards for the named executive officers for fiscal 2013 remained the same as the prior
+year. 
+• 
+Performance Based Long-Term Equity Incentive Plan . Equity based long term performance based awards (SARS) for fiscal 2013 for the named
+executive officers remained the same as the prior year 
+• 
+Peer Group . Each year the Committee reviews the appropriateness of our peer group. The peer companies represent electronics manufacturers that
+are relevant to Key Tronic. These peers may not always have a direct match to our product offerings or annual revenue. However, they meet certain selection criteria important to Key Tronic, including revenue, net income, and employee size. Key
+Tronic falls below the median (50 th percentile) of the
+peer group in terms of revenue and employee size while it is positioned above the median when looking at net income. Worthwhile to note is that some peers may have more employees due to internal functional design, but this does not necessarily
+indicate a more complex organization. Additionally, we look for peers with general compatibility with our compensation strategy that includes a competitive offering of the primary pay elements of base salary, performance-based bonus and long-term
+incentives. We believe that the 13 peer organizations proposed is a reasonable and appropriate group to be used for Key Tronic’s executive compensation comparison purposes. The established peer group for purposes of our 2013 executive
+compensation analysis was: 
+o 
+CTS Corporation 
+o 
+Ducommun 
+o 
+Fabrinet 
+9 
+o 
+IPG Photonics Corporation 
+o 
+Mercury Computer Systems, Inc. 
+o 
+Methode Electronics, Inc. 
+o 
+Multi-Fineline Electronix, Inc. 
+o 
+Planar Systems, Inc. 
+o 
+Pulse Electronics Corporation 
+o 
+Radisys Corporation 
+o 
+Richardson Electronics Ltd. 
+o 
+Sypris Solutions, Inc. 
+o 
+TTM Technologies 
+The Compensation Committee oversees the Board’s responsibilities relating to the compensation of the Company’s
+chief executive officer and all other officers. (The chief executive officer (“CEO”), chief financial officer (“CFO”) and the three most highly compensated executive officers other than the CEO and CFO are listed in the Summary
+Compensation Table below and referred to herein as the Company’s “named executive officers”). In discharging this responsibility, the Compensation Committee evaluates and approves the Company’s compensation plans, policies and
+programs as they affect the named executive officers. 
+This discussion describes and analyzes the compensation program for the named executive
+officers. First, it covers the Company’s compensation objectives and philosophy, the cornerstone of which is pay for performance. Next, it reviews the process the Compensation Committee follows in deciding how to compensate the named executive
+officers and provides a brief overview of the principal components of the Company’s compensation program, including a detailed discussion and analysis of the Compensation Committee’s specific decisions about the compensation of the
+Company’s named executive officers for fiscal year 2013. 
+Compensation Objectives and Philosophy 
+The Company believes that compensation of its executive officers should encourage creation of shareholder value and achievement of strategic corporate
+objectives. The Company attempts to align the interests of its shareholders and management by integrating compensation with the Company’s short-term and long-term corporate strategic and financial objectives. In order to attract and retain the
+most qualified personnel, the Company intends to offer a total compensation package competitive with companies in our industry sector, taking into account relative company size, performance and geographic location as well as individual
+responsibilities and performance. 
+The elements of compensation for the named executive officers include base salaries, annual cash
+incentives, long-term cash incentives and long-term equity incentives as well as severance benefits in connection with certain terminations of employment and additional benefits which are available to all other U.S. employees, including a 401(k)
+plan, health and welfare programs, and life insurance. In general, base salaries and other benefit programs, and severance and other termination benefits are primarily intended to attract and retain highly qualified executives as they provide
+predictable compensation levels that reward executives for their continued service. Annual cash incentives are primarily intended to motivate executives to achieve specific tactical and operating objectives, while long-term cash and equity
+incentives are primarily intended to align executives’ long-term interests with those of the Company’s shareholders. Executives have substantial portions of their compensation at risk for annual and long-term performance, with the largest
+portion at risk for the most senior executives. 
+Compensation Process 
+As part of its process for determining the compensation for the named executive officers, the Compensation Committee considers competitive market data. As authorized by its charter, the Compensation
+Committee has engaged Milliman, Inc. (“Milliman”), an independent executive compensation consultant, to review the Company’s compensation plans, policies and programs that affect executive officers and to provide advice and
+recommendations on competitive market practices and specific compensation decisions. Milliman has worked directly with the Compensation Committee to assist the Compensation Committee in satisfying its responsibilities and will undertake no projects
+for management except at the request of the Compensation Committee chair and in the capacity of the Compensation Committee’s agent. To date, Milliman has provided limited assistance to management in evaluating the competitiveness of
+compensation for personnel other than executive officers. 
+10 
+In order to assess competitive market data for executive compensation, the Compensation Committee
+works with its compensation consultant to develop a peer group of companies with which the Company competes for executive talent (which may or may not be the same organizations that the company competes with directly on a business level). In early
+2013, Milliman assisted the Compensation Committee in reviewing the peer group, focusing most closely on industry type and organization size/complexity, with the best indicators of organization size in the Company’s industry being number of
+employees and enterprise value, although each company’s revenue and net income were also considered. Following this process, the Compensation Committee selected the following peer group for fiscal 2013 compensation decisions, all of which are
+electronics organizations somewhat larger than the Company but comparable to the Company in business space and profitability: CTS Corporation, Mercury Computer Systems, Inc., Methode Electronics, Inc., Planar Systems, Inc., Pulse Electronics
+Corporation, Radisys Corporation, Richardson Electronics, Ltd., Ducommun, Fabrinet, IPG Photonics Corporation, Multi-Fineline Electronix, Inc., Sypris Solutions, Inc., and TTM Technologies . The Committee takes into consideration multiple
+factors for purposes of analyzing executive compensation. A combination of both published executive salary surveys provided by our Consultant as well as our evaluation of peer organizations and their publicly disclosed compensation information
+comprise our evaluation. 
+Once the peer group is established, the Compensation Committee then reviews the base salaries, annual
+cash-incentive compensation, long-term cash and equity incentive compensation and total compensation for the Company’s executive officers as compared to the compensation paid by the companies within the Company’s peer group, comparing each
+executive officer to their counterparts in similar positions with the peer group companies; however, the Compensation Committee does not base its decisions on targeting compensation levels to specific benchmarks against the peer group. Instead, the
+Compensation Committee refers to the peer group compensation data as background information regarding competitive pay levels and also considers the other factors identified below in making its decisions. In addition, the Compensation Committee
+reviews published compensation data on all executives. Published compensation data is also focused on a similar labor for Key Tronic executives. We gather data on organizations in the electronics manufacturing industry with annual revenues close to
+that of Key Tronic’s. In addition to consideration of the peer group data, the Compensation Committee also considers the value of each item of compensation, both separately and in the aggregate, in light of Company performance, each executive
+officer’s position within the Company, the executive officer’s performance history and potential for future advancement, and, with respect to long-term cash and equity incentive compensation, the value of existing vested and unvested
+outstanding cash and equity awards. The Compensation Committee also considers the recommendations of the Company’s chief executive officer with respect to the compensation for each executive other than himself. In setting compensation, the
+Compensation Committee also considers, among other factors, the possible tax consequences to the Company and its executive officers, the accounting consequences and the impact on shareholder dilution. The Compensation Committee does not assign a
+specific weight to these factors and none of these factors by itself will compel a particular compensation decision. Instead, this information is used generally by the Compensation Committee to help inform its decision-making process. Except as
+noted below, such decisions by the Compensation Committee are subjective, made in the exercise of the Compensation Committee’s independent business judgment. 
+Principal Elements of Compensation 
+The principal elements of compensation for the
+Company’s executive officers are composed of base salary, annual cash incentive compensation, and long-term cash and equity incentive compensation. These elements of total compensation are targeted to pay at market median when performance meets
+expectations. Pay “at risk” for the CEO position is 66.3 percent. “At risk” pay is slightly lower for the other named executive officers. 
+11 
+The Company also provides other forms of compensation, consisting of benefits available to all of the
+Company’s U.S. employees, including a 401(k) plan, health and welfare programs, and life insurance. The Compensation Committee reviews, considers and approves each element of compensation, as well as all combined elements of compensation, for
+the named executive officers. 
+Base Salaries . Base salaries, including merit-based salary increases, for the named executive officers
+are established based on the scope of their respective responsibilities, competitive market salaries and general levels of market increases in salaries, individual performance, achievement of the Company’s corporate and strategic goals and
+changes in job duties and responsibilities. 
+In July 2012 the Compensation Committee reviewed the base salaries of the
+named executive officers and determined that they are generally competitive with the market (50 th percentile) when compared to the Company’s peer group and other data. Given the competitive position of some salaries, the Compensation Committee determined that base salaries should increase
+somewhat in 2013. As a result, the named executive officers’ base salaries for fiscal 2013 were as follows: Craig Gates $471,960, Ron Klawitter $306,000, Doug Burkhardt $260,000, Phil Hochberg $257,400, and Brett Larsen $183,500. These
+increases were predicated on individual performance, tenure with the company and relative position to market. 
+Annual Cash Incentive
+Compensation . Annual cash incentives for the Company’s executive officers are designed to reward performance for achieving key corporate goals, which the Company believes should increase shareholder value. In general, the annual incentive
+awards for executive officers are determined based on achievement of performance objectives for profit before taxes established by the Compensation Committee for the fiscal year. Profit Before Tax is an appropriate goal for calculating short-term
+incentive because it is the best measure of operating performance and should yield the best result for shareholders. Having the entire management team with the same goal will prevent having conflicting goals between different functions of the
+Company. 
+In July 2012, the Compensation Committee established the fiscal year 2013 cash incentive program for the Company’s named
+executive officers, including minimum target and maximum bonus opportunities for each executive as well as performance goals that would need to be achieved in order for the executives to receive such bonuses. Both minimum target and maximum bonus
+opportunities under the program were determined by reference to a percentage of the executive officer’s base salary. For fiscal year 2013 performance, the target bonus opportunities were 50% for Mr. Gates, 40% for each of
+Mr. Klawitter, Mr. Burkhardt and Mr. Hochberg, and 35% for Mr. Larsen. The maximum bonus opportunities were 75% for Mr. Gates, 60% for each of Mr. Klawitter, Mr. Burkhardt and Mr. Hochberg, and 52.5% for
+Mr. Larsen. These target and maximum bonus levels are consistent with the levels established for the fiscal year 2012 annual cash incentive program and were determined by the Compensation Committee, after consulting with Milliman, to be
+appropriate based on its subjective assessment of the executive’s position and ability to directly impact and responsibility for the Company’s performance, and its subjective assessment of general compensation practices in place at
+companies in the Company peer group identified above. Bonuses under the fiscal year 2013 cash annual incentive program were paid out in August 2013 only if the executive officer was employed by the Company on the payment date. 
+The annual cash incentive program focuses on key metrics for a given year. Most often the Company uses a single company-wide financial element: profit
+before taxes (PBT). Performance for fiscal year 2013 was measured based on the Company’s profit before taxes. For fiscal 2013 the Committee established a stretch goal component for achieving over and above the annual incentive compensation
+goal. The payout does not begin until profit exceeds five times incentive expenses. The amounts earned under the stretch goal were placed in a pool to be shared on a pro-rata basis by all participants in the fiscal year 2013 Incentive Compensation
+Plan. 
+Long-Term Cash Incentive Compensation . The Compensation Committee awards long-term cash incentive compensation to the
+Company’s executive officers to align their interests with those of the Company’s shareholders, to provide additional incentives to the Company’s executive officers to improve the long-term performance of the Company’s common
+stock and achieve the Company’s corporate goals and strategic objectives and to retain the Company’s executive officers. The Company’s current practice is 
+12 
+primarily to grant long-term cash incentive awards to the named executive officers in the form of performance units at the start of each fiscal year. These units will have a future value tied
+directly to the achievement of Board determined and approved goals for a three-year period. At the end of each three-year period, the cash value of these units will be paid to the executive officer at a value set by the Board at the beginning of the
+three-year period based on goal achievement as measured at the end of the three-year period. The table below contains the target award levels for each named executive officer for the three year period ending at the end of fiscal year 2013. The goals
+consist of sales growth compared to peer group companies and return on invested capital. Revenue growth compared to the industry and Return on Invested Capital combine to provide the most appropriate measures of long-term financial performance.
+Having a goal of revenue growth compared to the industry incents management to gain market share. Having a goal of ROIC above the Company’s weighted average cost of capital builds shareholder value and incents management to make sure that
+revenue growth is profitable. 
+Executive 
+Minimum Award 
+Target Award 
+Maximum Award 
+Craig D. Gates 
+$ 
+125,000 
+$ 
+250,000 
+$ 
+375,000 
+Ronald F. Klawitter 
+$ 
+75,000 
+$ 
+150,000 
+$ 
+225,000 
+Douglas G. Burkhardt 
+$ 
+50,000 
+$ 
+100,000 
+$ 
+150,000 
+Philip S. Hochberg 
+$ 
+20,000 
+$ 
+40,000 
+$ 
+60,000 
+Brett R. Larsen 
+$ 
+20,000 
+$ 
+40,000 
+$ 
+60 000 
+Long-Term Equity Incentive Compensation. In fiscal years 2011, 2012 and 2013 the named executive officers received
+grants of stock appreciation rights (“SARS”) under the 2010 Incentive Plan. These stock appreciation rights vest on the third anniversary of the grant date to the extent the Company’s return on invested capital (ROIC) over the vesting
+period compared to the weighted average ROIC of a selected group of peer companies over the same period has reached 90% or more of the ROIC of the peer group average. These rights have a five year term. Payment upon exercise of a stock appreciation
+right may be in cash, in shares, in some combination thereof or in any other manner approved by the Compensation Committee. 
+The stock
+appreciation rights are designed to link executives’ interests with those of the Company’s shareholders as the shares’ value is based on the increase in key financial metrics, to provide a long-term retention incentive for the vesting
+period and, awards are subject to performance-based vesting requirements, to provide further incentives for executives to achieve goals considered critical to the Company’s success. The Committee has determined that return on invested capital
+is the key measure for aligning executive’s performance with the long-term shareholder interests. 
+In determining the size of the
+Company’s long-term equity incentive awards, the Compensation Committee reviews competitive market data for similar positions in the Company’s peer companies, the executive officer’s performance history and/or potential for future
+responsibility and promotion, the chief executive officer’s recommendations (with respect to executives other than himself) and the value of existing vested and unvested outstanding cash and equity awards. The relative weight given to each of
+these factors will vary from individual to individual at the Compensation Committee’s discretion and adjustments may be made as the Compensation Committee deems reasonable to attract candidates in the competitive environment for highly
+qualified employees in which the Company operates. 
+13 
+SARS awards are outlined in the table below for the past three fiscal years. 
+Executive 
+2011 (1) 
+2012 
+2013 
+Craig D. Gates 
+150,000 
+50,000 
+50,000 
+Ronald F. Klawitter 
+75,000 
+25,000 
+25,000 
+Douglas G. Burkhardt 
+50,000 
+20,000 
+20,000 
+Philip S. Hochberg 
+30,000 
+25,000 
+(2) 
+20,000 
+Brett R. Larsen 
+30,000 
+10,000 
+10,000 
+(1) 
+Awards for the 2011-2013 cycle were granted at the end of fiscal 2010. 
+(2) 
+Includes 15,000 SARS awarded to Mr. Hochberg in 2012 as a result of his promotion from vice president to executive vice president. 
+Other Benefits . The named executive officers are also entitled to participate in the Company’s benefit programs which are available to all of
+the Company’s U.S. employees, including company-sponsored health, welfare, 401(k), and disability and life insurance. 
+Post-Termination Protection and Payments 
+The Company has entered into employment agreements with each of the named executive officers. The Compensation Committee believes these agreements are
+important in attracting and retaining key executive officers. Under these agreements, the executive would be entitled to severance benefits in the event of a termination of the executive’s employment by the Company without cause or by the
+executive for good reason. The Company has determined that it is appropriate to provide each named executive officer with severance benefits under these circumstances in light of his/her position with the Company and as part of his/her overall
+compensation package. The severance benefits for each named executive officer are generally determined as if he/she continued to remain employed by the Company for 12 months following his actual termination date or 24 months following termination
+upon a change of control. Because the Company believes that a termination by an executive for good reason (or constructive termination) is conceptually the same as an actual termination by the Company without cause, the Company believes it is
+appropriate to provide severance benefits following such a constructive termination of the executive’s employment. Monthly base salary payments will terminate immediately upon the executive’s employment by a third party at a base salary
+equal to or greater than the monthly base salary then being paid the executive by the Company. If the executive is paid a monthly base salary by a third party lower than that being paid by the Company, the Company will continue to pay the difference
+for the remainder of the severance period. 
+If a change in control of the Company occurs, outstanding long-term cash incentive awards and SARS
+awards, including awards held by the Company’s named executive officers, will generally become fully vested if they are not assumed by the successor entity. 
+Tax Deductibility of Pay 
+Section 162(m) of the Internal Revenue Code places a limit
+of $1,000,000 on the amount of compensation that the Company may deduct in any one year with respect to the Company’s chief executive officer and certain other executive officers. There is an exception to the $1,000,000 limitation for
+performance-based compensation meeting certain requirements. In general, awards granted under the Company’s annual cash incentive plan, long-term cash incentive plan and SARS granted under the 2010 Incentive Plan are intended to comply with the
+applicable requirements for this exemption, and the Compensation Committee generally considers the limitations imposed by Section 162(m) among other factors in making its compensation decisions. However, the Compensation Committee reserves the
+right to design programs that recognize a full range of performance criteria important to the Company’s success, even where the compensation paid 
+14 
+under such programs may not be deductible. The Compensation Committee will continue to monitor the tax and other consequences of the Company’s executive compensation program as part of its
+primary objective of ensuring that compensation paid to the Company’s executive officers is reasonable, performance-based and consistent with the Company’s goals and the goals of the Company’s shareholders. 
+Risk Considerations 
+The Compensation
+Committee has reviewed the Company’s compensation programs to determine whether they encourage unnecessary or excessive risk taking and has concluded that they do not. The Compensation Committee believes that the design of the Company’s
+annual cash, long-term cash and long-term equity incentives provides an effective and appropriate mix of incentives to help ensure the Company’s performance is focused on long-term shareholder value creation and does not encourage the taking of
+short-term risks at the expense of long-term results. While the Company’s performance-based annual cash bonuses are generally based on annual results, the amount of such bonuses represent only a portion of each individual’s overall total
+compensation opportunities. 
+As to the Company’s compensation arrangements for named executive officers, the Compensation Committee takes
+risk into account in establishing and reviewing these arrangements and believes that the executive compensation arrangements do not encourage unnecessary or excessive risk-taking. Base salaries are fixed in amount and thus do not encourage
+risk-taking. While the Compensation Committee considers the achievement of specific financial and operating performance goals in determining the cash bonuses to be awarded to executives under the Company’s cash incentive programs, the
+Compensation Committee determines the actual amount of each executive’s award based on Company performance criteria as described above. The Compensation Committee believes that the annual incentive program appropriately balances risk and the
+desire to focus executives on specific annual goals important to the Company’s success, and that it does not encourage unnecessary or excessive risk taking. Finally, a significant portion of the compensation provided to the Company’s
+executive officers is in the form of long term cash and equity based awards that further align executives’ interests with those of shareholders. The Compensation Committee believes that these awards do not encourage unnecessary or excessive
+risk-taking since the ultimate value of the equity based awards is tied to the Company’s stock price, and since grants are generally subject to long-term vesting schedules and a two year retention requirement after exercise to help ensure that
+executives always have significant value tied to long-term stock price performance. Also, annual cash incentive compensation and long term cash and equity incentive compensation payments are subject to the Company’s Recoupment Policy, described
+under the caption “Recoupment Policy” on page 4. 
+Summary 
+The Compensation Committee believes that the Company’s compensation philosophy and programs are designed to foster a performance-oriented culture that aligns executives’ interests with those of
+the Company’s shareholders. The Compensation Committee believes that the compensation of the Company’s executives’ is both appropriate and responsive to the goal of improving shareholder value. 
+Compensation Committee Report 
+The
+Compensation Committee reviewed this Compensation Discussion and Analysis and discussed its contents with Company management. Based on this review and discussions, the Compensation Committee has recommended to the Board that this Compensation
+Discussion and Analysis be included in the Annual Report on Form 10-K. 
+Respectfully submitted by the Compensation Committee: 
+Yacov A. Shamash, Chair 
+James R. Bean 
+Patrick Sweeney 
+15 
+Compensation Committee Interlocks and Insider Participation 
+The directors listed at the end of the Compensation Committee Report above were each members of the Compensation Committee during all of fiscal year 2013,
+except Mr. Bean, who has served as a member since October 2012. No director who served on the Compensation Committee during fiscal year 2013 is or has been an executive officer of the Company or had any relationships requiring disclosure by the
+Company under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving
+an equivalent function) of any other entity, any executive officer of which served as a member of the Board or the Compensation Committee during fiscal year 2013. 
+EXECUTIVE COMPENSATION 
+Summary Compensation Table—Fiscal Years 2011-2013
+The following table sets forth information concerning compensation for services rendered to the Company by the Chief Executive Officer, or
+the CEO, the Executive Vice President - Chief Financial Officer, and the Company’s next three most highly compensated executive officers for fiscal years 2011, 2012 and 2013 by each of the named executive officers. Collectively, these are the
+“named executive officers.” 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) (1) 
+Stock 
+Awards 
+($) (2) 
+Option 
+Awards 
+($) (2) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($) (1) 
+All Other 
+Compensation 
+($) (3) 
+Total 
+($) 
+Craig D. Gates, 
+President & Chief Executive Officer 
+2013 
+2012 
+2011 
+469,272 
+445,068 
+437,000 
+0 
+0 
+0 
+185,500 
+110,000 
+0 
+0 
+0 
+0 
+752,694 
+702,750 
+409,885 
+10,000 
+26,600 
+92,960 
+1,417,466 
+1,284,418 
+939,845 
+Ronald F. Klawitter, 
+Executive Vice President, Chief Financial Officer 
+2013 
+2012 
+2011 
+306,000 
+300,000 
+301,029 
+0 
+0 
+0 
+92,750 
+55,000 
+0 
+0 
+0 
+0 
+418,698 
+405,000 
+269,006 
+10,000 
+26,600 
+29,010 
+827,448 
+786,600 
+599,045 
+Douglas G. Burkhardt, 
+Executive Vice President, Operations 
+2013 
+2012 
+2011 
+256,692 
+215,842 
+198,290 
+0 
+0 
+0 
+74,200 
+44,000 
+0 
+0 
+0 
+0 
+312,486 
+219,505 
+132,099 
+10,000 
+99,138 
+37,469 
+653,378 
+578,485 
+367,858 
+Philip S. Hochberg, 
+Executive Vice President Business Development 
+2013 
+2012 
+2011 
+245,850 
+209,250 
+181,816 
+0 
+0 
+0 
+74,200 
+68,200 
+0 
+0 
+0 
+0 
+215,623 
+162,176 
+68,917 
+10,000 
+8,288 
+31,205 
+545,673 
+447,914 
+281,938 
+Brett R. Larsen, 
+VP Finance & Controller 
+2013 
+2012 
+2011 
+175,000 
+162,000 
+152,596 
+0 
+0 
+0 
+37,100 
+22,000 
+0 
+0 
+0 
+0 
+156,928 
+132,330 
+57,842 
+10,000 
+9,036 
+7,243 
+379,028 
+325,366 
+217,681 
+1) 
+The target and maximum amounts for each named executive officer’s fiscal 2013 incentive opportunity are reported in the “Grants of Plan-Based Awards”
+table below. 
+2) 
+The amounts reported in the “Stock Awards” and “Option Awards” columns of the table above for each fiscal year reflect the fair value on the grant
+date of the stock awards (including restricted stock, stock bonuses, SARs, etc.) and option awards, respectively, granted to the named executive officers during the fiscal year. These values have been determined under generally accepted accounting
+principles used to calculate the value of equity awards for purposes of the Company’s financial statements. For a discussion of the assumptions and methodologies used to calculate the amounts reported above, please see the discussion of equity
+awards contained in Note 7 – “Stock Option and Benefit Plans” to the Consolidated Financial Statements in the Company’s 2013 Annual Report. 
+16 
+3) 
+Includes Company matching payments in fiscal years 2013, 2012 and 2011 under the Company’s 401(k) Retirement Savings Plan. Also includes for Mr. Gates value
+realized on the exercise of stock options in the amount of $16,800 in fiscal year 2012 and $83,160 in fiscal year 2011, for Mr. Klawitter value realized on the exercise of stock options in the amount of $16,800 in fiscal year 2012 and $19,210
+in fiscal year 2011, for Mr. Burkhardt value realized on the exercise of stock options in the amount of $89,338 in fiscal year 2012 and $27,668.70 in fiscal year 2011 and for Mr. Hochberg value realized on the exercise of stock options in
+the amount of $23,788 in fiscal year 2011. 
+Compensation of Named Executive Officers 
+The Summary Compensation Table above quantifies the value of the different forms of compensation earned by or awarded to the Company’s named
+executive officers for the fiscal years indicated above. The primary elements of each named executive officer’s total compensation reported in the table are base salary, an annual cash incentive, long-term cash incentive, and long-term equity
+incentives consisting of awards of long-term equity based awards. Named executive officers also received the other benefits listed in the “All Other Compensation” column of the Summary Compensation Table, as further described in the
+footnotes to the table. 
+The Summary Compensation Table should be read in conjunction with the tables and narrative descriptions that follow.
+The Grants of Plan-Based Awards table and the accompanying description of the material terms of the equity awards granted in fiscal 2013, provides information regarding the long-term equity incentives awarded to the named executive officers in
+fiscal 2013. The Outstanding Equity Awards at Fiscal Year-End and Option Exercises and Stock Vested tables provide further information on the named executive officers’ potential realizable value and actual value realized with respect to their
+equity awards. The “Potential Payments Upon Termination or Change in Control” section provides information on the benefits the named executive officers may be entitled to receive in connection with certain terminations of their employment
+and/or a change in control of the Company. 
+Description of Employment Agreements—Cash Compensation 
+The Company entered into employment contracts with Messrs. Gates, Klawitter, Burkhardt, Hochberg and Larsen at the time each employee was first elected an
+officer of the Company. Each of the employment contracts imposes upon the employee standard nondisclosure, confidentiality and no competition provisions. Each of the employment contracts provides that the Company may terminate employment at any
+time. The employment contracts provide that upon termination of employment by the Company, other than for cause, the Company shall continue to pay employee’s base salary in effect prior to termination for a period of one year after termination.
+The employment contracts also provide that upon termination by the employee in the event the Company changes the substantive responsibilities and duties of the employee in such a way as to constitute a demotion, the Company shall continue to pay
+employee’s base salary in effect prior to termination for a period of one year after termination. The contracts provide that upon termination of employment by the Company after a change of control, other than for cause, the Company shall
+continue to pay employee’s base salary in effect prior to termination for a period of two years after termination. The contracts condition the payment of severance upon execution of a release of claims and include provisions to comply with
+Internal Revenue Code Section 409A. 
+17 
+GRANTS OF PLAN BASED AWARDS IN 2013 FISCAL YEAR 
+The following table sets forth information concerning individual grants of non-equity incentive plan awards and grants of equity incentive plan awards
+made during fiscal year 2013 to each of the named executive officers. 
+Name 
+Grant Date 
+Estimated Future Payouts 
+Under Non-Equity Incentive Plan Awards 
+Stock 
+Awards: 
+Number
+of 
+Securities 
+Underlying 
+Options/SARs 
+(#) 
+Exercise or 
+Base Price of 
+Stock 
+Awards 
+($/Sh) 
+Grant Date 
+Fair Value 
+of 
+Stock 
+Awards 
+($) 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Craig D. Gates 
+07/26/12 
+07/26/12 
+07/26/12 
+(1) 
+(2) 
+(3) 
+21,850 
+137,500 
+218,500 
+275,000 
+327,750 
+412,500 
+50,000 
+— 
+— 
+7.45 
+— 
+— 
+185,500 
+— 
+— 
+Ronald F. Klawitter 
+07/26/12 
+07/26/12 
+07/26/12 
+(1) 
+(2) 
+(3) 
+12,240 
+82,500 
+123,400 
+165,000 
+183,600 
+247,500 
+25,000 
+— 
+— 
+7.45 
+— 
+— 
+92,750 
+— 
+— 
+Douglas G. Burkhardt 
+07/26/12 
+07/26/12 
+07/26/12 
+(1) 
+(2) 
+(3) 
+8,680 
+50,000 
+86,798 
+100,000 
+130,198 
+150,000 
+20,000 
+— 
+— 
+7.45 
+— 
+— 
+74,200 
+— 
+— 
+Philip S. Hochberg 
+07/26/12 
+07/26/12 
+07/26/12 
+(1) 
+(2) 
+(3) 
+8,580 
+50,000 
+85,800 
+100,000 
+128,700 
+150,000 
+20,000 
+— 
+— 
+7.45 
+— 
+— 
+74,200 
+— 
+— 
+Brett R. Larsen 
+07/26/12 
+07/26/12 
+07/26/12 
+(1) 
+(2) 
+(3) 
+5,968 
+20,000 
+59,675 
+40,000 
+89,513 
+60,000 
+10,000 
+— 
+— 
+7.45 
+— 
+— 
+37,100 
+— 
+— 
+(1) 
+Represents stock appreciation rights awards during fiscal year 2013 under the 2010 Incentive Compensation Plan. The 2010 Incentive Compensation Plan is discussed under
+the caption “Long-Term Equity Incentive Compensation” on pages 13 and 14. 
+(2) 
+Represents threshold, target and maximum payouts under the annual Incentive Compensation Plan for fiscal year 2013. For actual payouts earned for fiscal year 2013 see
+the Summary Compensation Table. The Incentive Compensation Plan is discussed under the caption “Annual Cash Incentive Compensation” on page 12. 
+(3) 
+Represents threshold, target and maximum payouts under the Long-Term Incentive Plan for the 2013-2015 performance cycle. The Long-Term Incentive Plan is discussed under
+the caption “Long-Term Cash Incentive Compensation” on pages 12 and 13. Payouts under the Long-Term Incentive Plan for the 2013-2015 performance cycle are dependent upon the achievement of goals for three years sales growth compared to
+peer group companies and return on invested capital. 
+18 
+Outstanding Equity Awards at Fiscal 2013 Year-End 
+The following table presents information regarding the outstanding equity awards held by each of the Company’s named executive officers as of
+June 29, 2013, including the vesting dates for the portions of these awards that had not vested as of that date. 
+Option Awards 
+Stock Awards 
+Name 
+Grant 
+Date 
+Number of 
+Shares 
+Underlying 
+Unexercised 
+Options (#) 
+Exercisable 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options (#) 
+Unexercisable 
+Option 
+Exercise 
+Price ($) 
+Option 
+Expiration 
+Date 
+Number of 
+Shares or 
+Units 
+of Stock 
+That 
+Have Not 
+Vested 
+(#) 
+Market Value of 
+Shares 
+or 
+Units 
+of Stock 
+That 
+Have Not 
+Vested 
+($) 
+Equity Incentive 
+Plan Awards: 
+Number of 
+Unearned Shares, 
+Units Or Other 
+Rights That Have 
+Not Vested 
+Equity Incentive 
+Plan Awards: 
+Market or Payout 
+Value of 
+Unearned Shares, 
+Units or Other 
+Rights That Have 
+Not Vested 
+$ (1) 
+Craig D. Gates 
+07/26/12 
+07/27/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+50,000 
+50,000 
+145,000 
+297,500 
+Ronald F. Klawitter 
+07/26/12 
+07/27/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+25,000 
+25,000 
+72,500 
+148,750 
+Douglas G. Burkhardt 
+07/26/12 
+07/27/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+20,000 
+20,000 
+58,000 
+119,000 
+Philip S. Hochberg 
+07/26/12 
+01/26/12 
+07/27/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+20,000 
+15,000 
+10,000 
+58,000 
+60,750 
+59,500 
+Brett R. Larsen 
+07/26/12 
+07/27/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+10,000 
+10,000 
+29,000 
+59,500 
+(1) 
+The dollar amounts shown in these columns are determined by multiplying the applicable number of shares or units by $10.35 (the closing price of the Company’s
+common stock on the last trading day of fiscal 2013) minus the base price of the applicable number of stock appreciation rights units. 
+19 
+Option Exercises and Stock Vested—Fiscal Year 2013 
+The following table presents information regarding the vesting during fiscal year 2013 of stock awards previously granted by the Company to the named
+executive officers. No executive officer exercised any stock options granted by the Company during fiscal 2013. 
+Stock Awards 
+Name 
+Number of Shares 
+Acquired on 
+Exercise 
+(#) 
+Value Realized 
+on Exercise 
+($) 
+Number of Shares 
+Acquired on 
+Vesting 
+(#) (1) 
+Value Realized 
+on Vesting 
+($) (2) 
+Craig D. Gates 
+— 
+— 
+150,000 
+729,000 
+Ronald F. Klawitter 
+— 
+— 
+75,000 
+364,500 
+Doug G. Burkhardt 
+— 
+— 
+50,000 
+243,000 
+Philip S. Hochberg 
+— 
+— 
+30,000 
+145,800 
+Brett R. Larsen 
+— 
+— 
+30,000 
+145,800 
+(1) 
+The number of shares shown in this column for stock awards represent stock appreciation rights granted 05/14/10 at a base price of $5.89 which vested on 05/14/13.
+(2) 
+The dollar amounts shown in this column for stock awards are determined by multiplying the number of stock appreciation rights that vested by the per-share closing
+price of the Company’s common stock on the vesting date minus the base price. 
+Pension Benefits 
+None of the named executive officers is covered by a pension plan. 
+Non-qualified Deferred Compensation 
+None of the named executive officers is covered by a
+defined benefit plan or other plan that provides for the deferral of compensation on a basis that is not tax-qualified. 
+Other Benefits
+The Company offers the named executive officers and all other U.S. employees life insurance, disability, medical and dental plans for
+which the named executive officers are charged the same rate as all other employees. 
+Potential Payments upon Termination or Change in
+Control 
+The following section describes the benefits that may become payable to the named executive officers in connection with a
+termination of their employment and/or a change in control of the Company. 
+Quantification of Severance and Change in Control Benefits .
+The tables below quantify the benefits that would have been payable to each of the named executive officers if the executive’s employment had terminated under the circumstances described above and/or a change in control of the Company had
+occurred on June 29, 2013. The first table presents the benefits the executive would have received if such a termination had occurred outside of the context of a change in control. The second table presents the benefits the executive would have
+received if such a termination occurred in connection with a change in control. 
+20 
+Severance Benefits (Outside of Change of Control) 
+Name 
+Cash 
+Severance 
+($)(1) 
+Continuation of 
+Health/Life 
+Benefits($)(2) 
+Cash-Out 
+of Accrued 
+and 
+Earned 
+Vacation($) 
+Total($) 
+Craig D. Gates 
+500,280 
+0 
+17,919 
+518,199 
+Ronald F. Klawitter 
+312,120 
+0 
+46,824 
+358,944 
+Douglas G. Burkhardt 
+260,000 
+0 
+26,875 
+286,875 
+Philip S. Hochberg 
+257,400 
+0 
+0 
+257,400 
+Brett R. Larsen 
+183,501 
+0 
+6,030 
+189,531 
+1. 
+This amount represents 12 months of the executive’s base salary. Monthly base salary payments will terminate immediately upon the executive’s employment by a
+third party at a monthly base salary equal to or greater than the monthly base salary then being paid the executive by the Company. If the executive is paid a base salary by a third party lower than that being paid by the Company, the Company will
+continue to pay the difference for the remainder of the 12 month severance period. 
+2. 
+The premiums that would be charged to continue health coverage for the applicable period pursuant to COBRA for the executive and his eligible dependents (to the extent
+that such dependents were receiving health benefits as of June 29, 2013) would be paid by the executive and the Company will not reimburse the executive for these premiums. 
+Change of Control Severance Benefits 
+Name 
+Cash 
+Severance 
+($)(1) 
+Continuation 
+of
+Health 
+Benefits($)(2) 
+Cash-Out 
+of Accrued 
+and 
+Unpaid 
+Paid
+Time 
+Off($) 
+Equity 
+Acceleration 
+($)(3) 
+Section 
+280G 
+Gross- 
+Up 
+($)(4) 
+Total($) 
+Craig D. Gates 
+1,000,560 
+— 
+17,919 
+442,500 
+— 
+1,460,979 
+Ronald F. Klawitter 
+624,240 
+— 
+46,824 
+221,250 
+— 
+892,314 
+Douglas G. Burkhardt 
+520,000 
+— 
+26,875 
+177,000 
+— 
+723,875 
+Philip S. Hochberg 
+514,800 
+— 
+0 
+178,250 
+— 
+693,050 
+Brett R. Larsen 
+367,001 
+— 
+6,030 
+88,500 
+— 
+461,531 
+21 
+1. 
+For each of the named executive officers, this amount represents the sum of 24 months of the executive’s base salary. Monthly base salary payments will terminate
+immediately upon the executive’s employment by a third party at a monthly base salary equal to or greater than the monthly base salary then being paid the executive by the Company. If the executive is paid a base salary by a third party lower
+than that being paid by the Company, the Company will continue to pay the difference for the remainder of the 24 month severance period. 
+2. 
+See footnote (2) to the table above. 
+3. 
+This amount represents the intrinsic value of the unvested portions of the executive’s stock appreciation rights (SARS) awards that would have accelerated on a
+termination of the executive’s employment as described above. This value is calculated by multiplying the amount by which $10.35 (the closing price of the Company’s common stock on the last trading day of fiscal 2013) exceeds the base
+price of the SARS by the number of SARS subject to the accelerated portion of the option. Each executive would have been entitled to full acceleration of his then-outstanding equity awards on such a termination. 
+4. 
+The severance agreements for each of the named executive officers do not provide for a Section 280G gross-up payment. 
+DIRECTOR COMPENSATION 
+Non-Employee Director Compensation Table 
+The following table presents information regarding the compensation paid for fiscal year 2013 to members of the Board of Directors who are not also
+employees of the Company (referred to herein as “non-employee directors”). 
+Name 
+Fees Earned 
+or Paid
+in 
+Cash 
+($) 
+Stock 
+Awards 
+($)(1)(2) 
+Option 
+Awards 
+($)(1)(2) 
+Non-Equity 
+Incentive 
+Plan 
+Compensation 
+($) 
+Change in 
+Pension 
+Value and 
+Nonqualified 
+Deferred 
+Compensation 
+Earnings 
+($) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+James R. Bean 
+61,052 
+27,825 
+— 
+15,000 
+N/A 
+0 
+103,877 
+Dale F. Pilz (3) 
+44,475 
+— 
+— 
+1,667 
+N/A 
+0 
+46,142 
+Yacov A. Shamash 
+60,052 
+27,825 
+— 
+15,000 
+N/A 
+0 
+102,877 
+Patrick Sweeney 
+68,401 
+27,825 
+— 
+15,000 
+N/A 
+0 
+111,226 
+(1) 
+The amounts reported in the “Stock Awards” and “Option Awards” columns of the table above reflect the fair value on the grant date of the stock
+awards and option awards, respectively, granted to the Company’s non-employee directors during fiscal year 2013 as determined under generally accepted accounting principles used to calculate the value of equity awards for purposes of the
+Company’s financial statements. For a discussion of the assumptions and methodologies used to calculate the amounts reported above, please see the discussion of equity awards contained in Note 7 – “Stock Option and Benefit Plans”
+to the Consolidated Financial Statements in the Company’s 2013 Annual Report . 
+22 
+(2) 
+The table below presents the number of outstanding and unexercised option awards and the number of shares subject to unvested stock awards held by each of the
+Company’s non-employee directors as of June 29, 2013. 
+(3) 
+Mr. Pilz retired as a member of the Board of Directors in October 2012. 
+Director 
+Number of Shares 
+Subject to Outstanding 
+Options as of 
+06/29/2013 
+Number of Unvested 
+Restricted Shares/Units 
+as of 06/29/2013 
+James. R. Bean 
+0 
+12,500 
+Yacov A. Shamash 
+12,430 
+12,500 
+Patrick Sweeney 
+0 
+12,500 
+Non-Employee Director Compensation 
+Equity Grants. Under the Company’s 2010 Incentive Plan, as approved by the Shareholders in October 2010, the Company’s non-employee directors receive company stock equity awards/SARS,
+subject to the non-employee director’s continued service to the Company through the vesting date. 
+Long-Term Incentive Plan
+Awards. Under the Company’s Long-Term Incentive Plan, non-employee directors receive long term non-equity incentive compensation awards. 
+Retainers and Meeting Fees . In addition, non-employee directors receive annual retainers and fees for attending Board and committee meetings as set forth in the following table: 
+Meeting Fees ($) 
+Annual Cash 
+Retainer ($) 
+Board 
+Committee 
+Board Member, other than Chairman of the Board 
+36,000 
+1,700 
+1,000 
+Chairman of the Board 
+48,938 
+2,550 
+1,733 
+All non-employee directors are also reimbursed for their expenses incurred in attending Board meetings and committee
+meetings, as well as other Board-related travel expenses. 
+PROPOSAL 2 
+ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED 
+EXECUTIVE OFFICERS 
+The
+Dodd-Frank Wall Street Reform and Consumer Protection Act added Section 14A to the Securities Exchange Act of 1934, which requires that we provide our shareholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the
+compensation of our named executive officers as disclosed in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission. 
+As described in greater detail in the “Compensation Discussion and Analysis” section of this proxy statement the Company believes that compensation of its executive officers should encourage
+creation of shareholder value and achievement of strategic corporate objectives. The Company attempts to align the interest of its shareholders and management by integrating compensation with the Company’s short-term and long-term corporate
+strategic and financial objectives. In order to attract and retain the most qualified personnel, the Company intends to offer a total compensation package competitive with companies in our industry sector, taking into account relative company size,
+performance and geographic location as well as individual responsibilities and performance, while at the same time avoiding the encouragement of unnecessary or excessive risk taking. 
+23 
+This vote is advisory, which means that the vote on executive compensation is not binding on the Company,
+our Board of Directors or the Compensation Committee of the Board of Directors. The vote on this resolution is not intended to address any specific element of compensation, but rather relates to the overall compensation of our named executive
+officers, as described in this proxy statement in accordance with the compensation disclosure rules of the Securities and Exchange Commission. To the extent there is a significant vote against our named executive officers compensation as disclosed
+in this proxy statement, the Compensation Committee will evaluate whether any actions are necessary to address our shareholders concerns. 
+Therefore, we ask our shareholders to vote on the following resolution at the Annual Meeting: 
+RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as
+disclosed in the Company’s Proxy Statement for the 2013 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary
+Compensation Table and the other related tables and disclosure. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE
+COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT. 
+PROPOSAL 3 
+ADVISORY VOTE ON THE FUTURE FREQUENCY OF AN ADVISORY VOTE 
+ON EXECUTIVE COMPENSATION 
+The Dodd-Frank Wall Street Reform and Consumer Protection Act
+added Section 14A to the Securities Exchange Act of 1934, which requires we provide shareholders with the opportunity to vote on a non-binding, advisory basis, for their preference as to how frequently to vote on future advisory votes on the
+compensation of our named executive officers as disclosed in accordance with the compensation disclosure rules of the Securities and Exchange Commission. 
+Shareholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation once every one, two, or three years. If no preference is indicated, shares will be voted
+in accordance with the Board of Director recommendation. The Board of Directors has determined that an advisory vote on executive compensation that occurs once every three years is the most appropriate alternative for the Company and therefore the
+Board recommends that you vote for a three year interval for the advisory vote on executive compensation. In determining to recommend that shareholders vote for a frequency of once every three years, the Board considered how an advisory vote at this
+frequency will provide our shareholders with sufficient time to evaluate the effectiveness of our overall compensation objectives and philosophy and compensation process in the context of our long term business results for the corresponding period,
+while avoiding over-emphasis on short-term variations in compensation and business results. An advisory vote occurring once every three years will also permit our shareholders to observe and evaluate the impact of any changes to our compensation
+objectives and philosophy and compensation process which have occurred since the last advisory vote on executive compensation. 
+This vote is
+advisory, which means that the vote on executive compensation is not binding on the Company, our Board of Directors or the Compensation Committee of the Board of Directors. The Board of Directors and the Compensation Committee will take into account
+the outcome of the vote; however, when considering the frequency of future advisory votes on executive compensation, the Board of Directors may decide that it is in the best interests of our shareholders and the Company to hold an advisory vote on
+executive compensation more or less frequently than the frequency receiving the most votes cast by our shareholders. 
+24 
+The proxy card provides shareholders with the opportunity to choose among three options (holding the vote
+once every one, two or three years) and therefore, shareholders will not be voting to approve or disapprove the recommendation of the Board of Directors. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE OPTION OF ONCE EVERY THREE YEARS AS THE PREFERRED FREQUENCY FOR ADVISORY VOTES ON EXECUTIVE COMPENSATION. 
+AUDIT COMMITTEE REPORT 
+The Audit Committee of the Company’s Board of Directors consists of three members. The Board of Directors has determined that all Audit Committee
+members meet the definition of independence within the meaning of the applicable NASDAQ listing standards and that Patrick Sweeney has the requisite attributes of an “audit committee financial expert” as defined by SEC regulations. The
+Audit Committee operates under a written charter adopted by the Board of Directors which is reviewed and reassessed for adequacy annually by the Audit Committee. The Audit Committee has met and discussed with the Company’s management and BDO
+USA, LLP (“BDO”), the Company’s independent registered public accounting firm, the Company’s financial statements contained in the Annual Report on Form 10-K for the fiscal year ended June 29, 2013. 
+The Audit Committee has reviewed and discussed with BDO the matters required to be discussed pursuant to Statement of Auditing Standards No. 61,
+(“Codification of Statements on Auditing Standards, AU § 380”), as amended. BDO has submitted to the Audit Committee and the Committee has reviewed the written disclosures and letter from BDO as required under applicable
+independence standards for auditors of public companies. The Audit Committee discussed with BDO that firm’s independence. The Audit Committee has considered whether the provision of non-audit services is compatible with maintaining the
+principal auditor’s independence. All services to be provided by BDO are pre-approved by the Audit Committee or are pre-approved by a member of the Audit Committee and later ratified by the Committee. 
+Based upon the reviews and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements
+be included in the Company’s Annual Report on Form 10K for the fiscal year ended June 29, 2013, for filing with the Securities and Exchange Commission. 
+The Audit Committee: James R. Bean (Chairman), Yacov A. Shamash, Patrick Sweeney 
+Principal Accountant Fees and Services. The following chart shows the aggregate audit and non-audit fees billed or expected to be billed to the
+Company by BDO and its former affiliate Mexican firm BDO Hernandez, Marron y Cia, SC for professional services in the named categories for the fiscal years ended June 29, 2013 and June 30, 2012: 
+FY 2013 
+FY 2012 
+Audit Fees (1) 
+$ 
+317,450 
+$ 
+286,545 
+Audit Related Fees (2) 
+13,000 
+19,961 
+Tax Fees (3) 
+71,963 
+147,441 
+All Other Fees 
+— 
+— 
+Total 
+$ 
+402,413 
+$ 
+453,947 
+(1) 
+Audit fees consisted of professional services provided in connection with the audit of the Company’s consolidated financial statements included in the
+Company’s Annual Report on Form 10-K, review of the interim consolidated financial statements included in the Company’s quarterly reports on Form 10-Q, review of documents filed with the SEC and statutory audits. 
+25 
+(2) 
+Audit related fees consisted of professional services provided in connection with the audit of the Company’s 401(k) Retirement Savings Plan and other consultation
+matters. 
+(3) 
+Tax fees for fiscal years 2013 and 2012 consisted of professional services provided for the review of foreign tax returns and consultation on foreign tax matters. Tax
+fees for fiscal year 2013 also included fees for BDO performing a study relating to research and development tax credits. 
+PROPOSAL 4 
+RATIFICATION OF APPOINTMENT OF AUDITORS 
+The Audit Committee has retained BDO USA, LLP (“BDO”) as the Company’s independent registered public accounting firm for the fiscal year
+ending June 28, 2014. Representatives of BDO are expected to be present at the Annual Meeting with the opportunity to make a statement, if they desire to do so, and they are expected to be available to respond to appropriate questions. In the
+event that ratification of this appointment of BDO as the Company’s registered public accounting firm is not approved by a majority of the shares of Common Stock voting at the Annual Meeting in person or by proxy, the Audit Committee will
+review its future selection of its registered public accounting firm. 
+THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
+FOR 
+RATIFICATION OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S 
+INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+SHAREHOLDER PROPOSALS 
+Eligible shareholders who wish to present proposals for action at
+the Annual Meeting of Shareholders to be held in 2014 must submit their proposals in writing to Kathleen L. Nemeth, Secretary, Key Tronic Corporation, 4424 N. Sullivan Road – Upper Level, Spokane Valley, Washington 99216. Under
+Rule 14a-8(e) of the Securities Exchange Act of 1934, proposals submitted for inclusion in our proxy statement for the 2014 Annual Meeting must be received by the Secretary at the address above no later than May 23, 2014. In addition, any
+shareholder who intends to present a proposal at the 2014 Annual Meeting without inclusion of such proposal in our proxy materials must provide us notice of such proposal in the manner set forth above by August 1, 2014 or such proposal will be
+considered untimely. For such proposals that are untimely, the Company retains discretion to vote proxies it receives. For such proposals that are timely, the Company retains discretion to vote proxies it receives provided that (1) the Company
+includes in its Proxy Statement advice on the nature of the proposal and how it intends to exercise its voting discretion and (2) the proponent does not issue a proxy statement. We reserve the right to reject, rule out of order, or take other
+appropriate action with respect to any proposal that does not comply with these and other applicable requirements. 
+OTHER MATTERS
+Annual Report on Form 10-K 
+The 2013 Annual Report on Form 10-K (including exhibits), as amended, which we refer to as our “Form 10-K,” is available by accessing the Company’s website at www.keytronic.com or
+the SEC’s website at www.sec.gov. Stockholders may request a free copy of our Form 10-K by contacting Investor Relations at StreetConnect, (206) 729-3625, ktcc@stct.com. We will furnish any exhibit to our Form 10-K if
+specifically requested to do so. 
+Section 16(a) Beneficial Ownership Reporting Compliance . Section 16(a) of the
+Securities Exchange Act of 1934, as amended, requires the Company’s executive officers and directors and persons who own more than 10% of the Company’s Common Stock (collectively, “Reporting Persons”) to file reports of ownership
+and changes in ownership with the Securities and Exchange Commission (“SEC”) and NASDAQ. 
+26 
+Reporting Persons are required by SEC regulations to furnish the Company with copies of all
+Section 16(a) forms which they file. Based solely on its review of the copies of such forms received or written representations from certain Reporting Persons that no Forms 5’s were required, the Company believes that with respect to the
+fiscal year ended June 29, 2013 all the Reporting Persons complied with all applicable filing requirements. 
+Solicitation
+Expenses . The expense of printing and mailing proxy material will be borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by certain directors, executive officers and other employees of
+the Company by personal interview, telephone or facsimile. No additional compensation will be paid for such solicitation. The Company will request brokers and nominees who hold stock in their names to furnish proxy material to beneficial owners of
+the shares and will reimburse such brokers and nominees for their reasonable expenses incurred in forwarding solicitation material to such beneficial owners. In addition, we have retained Georgeson Inc. to aid in the solicitation of proxies. We
+currently estimate the fees payable to Georgeson Inc. in connection with such services to be approximately $15,000, plus reimbursement of out of picket expenses. 
+Other Business . The Board of Directors knows of no other business that will be presented to the Annual Meeting. If any other business is properly brought before the Annual Meeting, it is
+intended that proxies in the enclosed form will be voted in respect thereof in accordance with the judgment of the persons voting the proxies. 
+By Order of the Board of Directors, 
+Kathleen L. Nemeth 
+Secretary 
+Spokane Valley, Washington 
+September 20, 2013 
+27 
+Key Tronic Corporation 
+IMPORTANT ANNUAL MEETING 
+INFORMATION 
+Using a black ink pen, mark your votes with an X as shown 
+in 
+this example. Please do not write outside the designated areas. 
+x 
+Annual Meeting Proxy Card 
+q PLEASE FOLD ALONG THE
+PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q 
+A 
+Proposals — The Board of Directors recommends a vote FOR all the nominees listed, FOR Proposal 2, FOR the holding of future advisory votes
+on executive compensation every three years and FOR Proposal 4. 
+1. 
+Election of Directors: 
+01 - James R. Bean 
+02 - Craig D. Gates 
+03 - Ronald F. Klawitter 
++ 
+04 - Yacov A. Shamash 
+05 - Patrick Sweeney 
+¨ 
+Mark here to vote FOR all nominees 
+¨ 
+Mark here to WITHHOLD 
+vote from all nominees 
+¨ 
+For All EXCEPT - To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) below. 
+For 
+Against 
+Abstain 
+1 Year 
+2 Years 
+3 Years 
+Abstain 
+2. 
+Advisory vote to approve the compensation of the Company’s named executive officers as disclosed in “Compensation Discussion and Analysis” and
+“Executive Compensation” in the Proxy Statement. 
+¨ 
+¨ 
+¨ 
+3. 
+Advisory vote on the future frequency of an advisory vote on Executive Compensation. 
+¨ 
+¨ 
+¨ 
+¨ 
+4. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for fiscal year 2014. 
+¨ 
+¨ 
+¨ 
+B 
+Non-Voting Items 
+Change of Address — Please print your new address below. 
+Comments — Please print your comments below. 
+Meeting Attendance 
+Mark the box to the right 
+if you plan to attend the 
+Annual Meeting. 
+¨ 
+C 
+Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below 
+Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor,
+administrator, corporate officer, trustee, guardian, or custodian, please give full title. 
+Date (mm/dd/yyyy) — Please print date below. 
+Signature 1 — Please keep signature within the box. 
+Signature 2 — Please keep signature within the box. 
+/ / 
+¢ 
+1 U P X 
++ 
+01PD7A 
+If you are not an Internet user and wish to contact Key Tronic Corporation, you may use one of the
+following methods: 
+Call: 877-277-9953 Write: Key Tronic Corporation, c/o Computershare, P.O. Box 43078, Providence, RI
+02940-3078 
+Attention Internet Users! 
+You can now access your stockholder information on the following secure Internet site: www.computershare.com/investor 
+Step 1: Register ( 1st time users only ) 
+Click on “Create Login” in the blue box and follow the instructions. 
+Step 2: Log In ( Returning users ) 
+Enter your User ID and Password and click the Login button. 
+Step 3: View your account details and perform multiple transactions, such as: 
+• View account balances 
+• View transaction history 
+• View payment history 
+• View stock quotes 
+• Change your address 
+• View electronic stockholder communications 
+• Buy or sell shares 
+• Check replacements 
+q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q 
+Proxy — Key Tronic Corporation 
+Notice of 2013 Annual Meeting of Shareholders 4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting – October 24, 2013 
+Craig D. Gates and Ronald F. Klawitter, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the
+undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 24, 2013, and any adjournment or postponement thereof. 
+Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to
+vote FOR Item 1, FOR Item 2, FOR the holding of future advisory votes on executive compensation every three years, and FOR Item 4. 
+In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. 
+(Items to be voted appear on reverse side.) 
+Key Tronic Corporation 
+IMPORTANT ANNUAL MEETING 
+INFORMATION 
+Using a black ink pen, mark your votes with an X as shown 
+in 
+this example. Please do not write outside the designated areas. 
+x 
+Annual Meeting Proxy Card 
+q PLEASE FOLD ALONG THE
+PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q 
+A 
+Proposals — The Board of Directors recommends a vote FOR all the nominees listed, FOR Proposal 2, FOR the holding of future advisory votes
+on executive compensation every three years and FOR Proposal 4. 
+1. 
+Election of Directors: 
+01 - James R. Bean 
+02 - Craig D. Gates 
+03 - Ronald F. Klawitter 
++ 
+04 - Yacov A. Shamash 
+05 - Patrick Sweeney 
+¨ 
+Mark here to vote FOR all nominees 
+¨ 
+Mark here to WITHHOLD 
+vote from all nominees 
+¨ 
+For All EXCEPT - To withhold authority to vote for any nominee(s), write the name(s) of such nominee(s) below. 
+For 
+Against 
+Abstain 
+1 Year 
+2 Years 
+3 Years 
+Abstain 
+2. 
+Advisory vote to approve the compensation of the Company’s named executive officers as disclosed in “Compensation Discussion and Analysis” and
+“Executive Compensation” in the Proxy Statement. 
+¨ 
+¨ 
+¨ 
+3. 
+Advisory vote on the future frequency of an advisory vote on Executive Compensation. 
+¨ 
+¨ 
+¨ 
+¨ 
+4. 
+Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for fiscal year 2014. 
+¨ 
+¨ 
+¨ 
+B 
+Non-Voting Items 
+Change of Address — Please print your new address below. 
+Comments — Please print your comments below. 
+Meeting Attendance 
+Mark the box to the right 
+if you plan to attend the 
+Annual Meeting. 
+¨ 
+C 
+Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below 
+Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor,
+administrator, corporate officer, trustee, guardian, or custodian, please give full title. 
+Date (mm/dd/yyyy) — Please print date below. 
+Signature 1 — Please keep signature within the box. 
+Signature 2 — Please keep signature within the box. 
+/ / 
+¢ 
+1 U P X 
++ 
+01PD9A 
+Key Tronic Corporation 
+4424 N. Sullivan Road, Spokane Valley, WA 99216 
+As a participant in the Key Tronic 401(k) Retirement Savings Plan (the “Plan”), you have the right to direct JP Morgan Chase Bank, N.A. (the “Plan Trustee”), to vote the shares of
+Common Stock of Key Tronic Corporation (the “Company”) represented by your interest attributable to such shares held in the KTC Stock Fund under the Plan at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on
+October 24, 2013. 
+For your information, copies of the Notice of Annual Meeting, Proxy Statement, and Annual Report are enclosed. In
+addition, a postage paid return envelope addressed to Computershare is enclosed for your use in returning your completed, signed, and dated proxy card to the Plan Trustee. 
+The Plan Trustee will hold your voting instructions in confidence and will not divulge or release specific information regarding your instructions to any person, including officers or employees of the
+Company, except to the extent required by law. 
+If your completed proxy card is not received by October 11, 2013 the Administrative
+Committee for the Plan will direct the Plan Trustee to vote your shares. The Trustee will be directed to vote all such unvoted shares in the same proportion as the voted shares received. 
+q PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE
+ENCLOSED ENVELOPE. q 
+Proxy — Key Tronic Corporation 
+Notice of 2013 Annual Meeting of Shareholders 4424 N. Sullivan Road, Spokane Valley, Washington 99216 
+Proxy Solicited by Board of Directors for Annual Meeting – October 24, 2013 
+Craig D. Gates and Ronald F. Klawitter, or either of them, each with the power of substitution, are hereby authorized to represent and vote all shares of the undersigned, with all the powers which the
+undersigned would possess if personally present, at the Annual Meeting of Shareholders of Key Tronic Corporation to be held on Thursday, October 24, 2013, and any adjournment or postponement thereof. 
+Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to
+vote FOR Item 1, FOR Item 2, FOR the holding of future advisory votes on executive compensation every three years, and FOR Item 4. 
+In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. 
+(Items to be voted appear on reverse side.)
\ No newline at end of file
diff --git a/raw/proxies/0000719733/0001193125-13-367422/proxy_rpt.txt b/raw/proxies/0000719733/0001193125-13-367422/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..00e9ed21cde481b9e5cde30e743950ac88f27141
--- /dev/null
+++ b/raw/proxies/0000719733/0001193125-13-367422/proxy_rpt.txt
@@ -0,0 +1,13 @@
+Related Person Transactions 
+In April 2007, the Board of Directors adopted a written policy and procedures for the approval or ratification of Interested Transactions with Related
+Parties. The policy and procedures supplement the Company’s Code of Conduct. The policy defines an “Interested Transaction” as any transaction, arrangement or relationship or series of similar transactions, arrangements or
+relationships (including any indebtedness or guarantee of indebtedness) in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) the Company is a participant, and (3) any Related
+Party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity). 
+The policy defines a “Related Party” as any (a) person who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if
+they do not presently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the
+foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such
+person’s home (other than a tenant or employee). 
+The Audit Committee is responsible for review, approval, ratification or disapproval of
+Interested Transactions. In determining whether to approve or ratify an Interested Transaction, the Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than
+terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Party’s interest in the Transaction. 
+6
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950123-10-023462/proxy.txt b/raw/proxies/0000889900/0000950123-10-023462/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..934a5d1e559bcb7a5ab92fe05bb16d32816503c5
--- /dev/null
+++ b/raw/proxies/0000889900/0000950123-10-023462/proxy.txt
@@ -0,0 +1,5723 @@
+DEF 14A
+1
+d71175ddef14a.htm
+DEF 14A
+def14a 
+Table of Contents 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the Securities 
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant
+þ 
+Filed by a Party other than the Registrant
+o 
+Check the appropriate box: 
+o Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by
+Rule 14a-6(e)(2)) 
+þ Definitive Proxy Statement 
+o Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+Patterson-UTI Energy,
+Inc. 
+(Name
+of Registrant as Specified In Its Charter) 
+(Name
+of Person(s) Filing Proxy Statement, if other than the
+Registrant) 
+Payment of Filing Fee (Check the appropriate box):
+þ No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
+0-11. 
+1) Title of each class of securities to which transaction applies: 
+2) Aggregate number of securities to which transaction applies: 
+3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+4) Proposed maximum aggregate value of transaction: 
+5) Total fee paid: 
+o Fee paid previously with preliminary materials. 
+o Check box if any part of the fee is offset as provided by Exchange Act
+Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration
+statement number, or the Form or Schedule and the date of its filing. 
+1) Amount Previously Paid: 
+2) Form, Schedule or Registration Statement No.: 
+3) Filing Party: 
+4) Date Filed: 
+Table of Contents 
+March 11,
+2010
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual
+meeting will be held Monday, April 26, 2010, at
+3:00 p.m., local time, at the Hilton Houston North Hotel,
+12400 Greenspoint Drive, Houston, Texas 77060.
+We are pleased to take advantage of Securities and Exchange
+Commission rules that allow us to furnish these proxy materials
+and our annual report primarily over the Internet. We believe
+that posting these materials on the Internet enables us to
+provide stockholders with the information that they need
+quickly, while lowering our costs of printing and delivery and
+conserving natural resources. We encourage you to vote via the
+Internet and follow the links to our proxy statement and annual
+report, which are both available at www.proxyvote.com.
+For those stockholders who have elected to receive their proxy
+materials in the mail, please review our proxy statement and
+annual report and vote via the Internet, by telephone or using
+your proxy card.
+Your vote is important to us. Please review your proxy materials
+carefully and send in your vote today.
+Thank you for your support.
+Sincerely,
+Mark S. Siegel
+Douglas J. Wall
+Chairman of the Board 
+President and Chief Executive Officer 
+TABLE OF CONTENTS 
+NOTICE OF 2010 ANNUAL MEETING OF STOCKHOLDERS To Be Held April 26, 2010 
+PROXY STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS To Be Held April 26, 2010 
+GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 
+PROPOSAL NO. 2 
+PROPOSAL NO. 3 
+EXECUTIVE OFFICERS 
+COMPENSATION DISCUSSION AND ANALYSIS 
+COMPENSATION COMMITTEE REPORT 
+Summary Compensation Table 
+Option Exercises and Stock Vested 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+CERTAIN TRANSACTIONS 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+OTHER MATTERS 
+Appendix A 
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+NOTICE OF
+2010 ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held April 26, 2010 
+The 2010 annual meeting of the stockholders of Patterson-UTI
+Energy, Inc., a Delaware corporation
+(“Patterson-UTI”), will be held Monday, April 26,
+2010, at 3:00 p.m., local time, at the Hilton Houston North
+Hotel, 12400 Greenspoint Drive, Houston, Texas 77060 (the
+“Meeting”), for the following purposes:
+• 
+to elect seven directors to the Board of Directors of
+Patterson-UTI to serve until the next annual meeting of the
+stockholders or until their respective successors are elected
+and qualified;
+• 
+approve an amendment to Patterson-UTI’s 2005 Long-Term
+Incentive Plan to increase the number of shares available for
+issuance under the plan;
+• 
+to ratify the selection of PricewaterhouseCoopers LLP as the
+independent registered public accounting firm of Patterson-UTI
+for the fiscal year ending December 31, 2010; and
+• 
+transact such other business as may properly come before the
+Meeting or any adjournment or postponement thereof.
+Stockholders of record at the close of business on March 1,
+2010 are entitled to vote at the Meeting and any adjournment or
+postponement thereof.
+Your vote is important to us. Whether or not you plan to attend
+the Meeting in person, we urge you to promptly vote your shares
+via the Internet, by telephone, or if the accompanying proxy
+statement was mailed to you, by completing, signing, dating and
+returning your proxy card as soon as possible in the enclosed
+postage prepaid envelope.
+By order of the Board of Directors
+Seth D. Wexler
+General Counsel and Secretary 
+March 11, 2010
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+PROXY
+STATEMENT 
+ANNUAL
+MEETING OF STOCKHOLDERS 
+To Be Held April 26, 2010 
+GENERAL
+INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 
+The Board of Directors (the “Board” or “Board of
+Directors”) of Patterson-UTI Energy, Inc., a Delaware
+corporation (“Patterson-UTI”), has made these proxy
+materials available to you on the Internet, or, upon your
+request has delivered printed versions of these materials to you
+by mail. Patterson-UTI is furnishing this proxy statement in
+connection with the solicitation by the Board of Directors of
+proxies to be voted at the 2010 annual meeting of stockholders
+of Patterson-UTI (the “Meeting”). The Meeting will be
+held Monday, April 26, 2010, at 3:00 p.m., local time,
+at the Hilton Houston North Hotel, 12400 Greenspoint Drive,
+Houston, Texas 77060, or at any adjournment thereof. The Notice
+of Internet Availability of Proxy Materials (the
+“Notice”) was mailed to each of Patterson-UTI’s
+stockholders (other than those who previously requested
+electronic delivery) entitled to vote at the Meeting on or about
+March 12, 2010.
+Pursuant to the “notice and access” rules adopted by
+the Securities and Exchange Commission (the “SEC”),
+Patterson-UTI has elected to provide stockholders access to its
+proxy materials over the Internet. Accordingly, Patterson-UTI
+sent a Notice to all of its stockholders as of the record date.
+The Notice includes instructions on how to access
+Patterson-UTI’s proxy materials over the Internet and how
+to request a printed copy of these materials. In addition, by
+following the instructions in the Notice, stockholders may
+request to receive proxy materials in printed form by mail or
+electronically by email on an ongoing basis.
+Choosing to receive your future proxy materials by email will
+save us the cost of printing and mailing documents to you and
+will help conserve natural resources. If you choose to receive
+future proxy materials by email, you will receive an email next
+year with instructions containing a link to those materials and
+a link to the proxy voting site. Your election to receive proxy
+materials by email will remain in effect until you
+terminate it.
+If your shares are registered directly in your name with our
+transfer agent, Continental Stock Transfer &
+Trust Company, you are considered the “stockholder of
+record” with respect to those shares, and the Notice was
+sent directly to you.
+If your shares are held in an account at a brokerage firm, bank,
+broker-dealer, or other similar organization, then you are the
+beneficial owner of shares held in “street name,” and
+the Notice was forwarded to you by that organization. As a
+beneficial owner, you have the right to direct that organization
+on how to vote the shares held in your account.
+Whether you are a “stockholder of record” or hold your
+shares in “street name,” you may direct your vote
+without attending the Meeting in person.
+If you are a stockholder of record, you may vote by Internet or
+by telephone by following the instructions on the Notice. If you
+request printed copies of the proxy materials by mail, you may
+also vote by signing and submitting your proxy card and
+returning by mail or by submitting your vote by telephone. You
+should sign your name exactly as it appears on the proxy card.
+If you are signing in a representative capacity (for example, as
+guardian, executor, trustee, custodian, attorney or officer of a
+corporation), you should indicate your name and title or
+capacity.
+If you are the beneficial owner of shares held in street name,
+you may be eligible to vote your shares electronically over the
+Internet or by telephone by following the instructions on the
+Notice. If you request printed copies of the proxy materials by
+mail, you may also vote by signing the voter instruction card
+provided by your
+Table of Contents 
+brokerage firm, bank, broker-dealer, or other similar
+organization and returning it by mail. If you provide specific
+voting instructions by mail, telephone or the Internet, your
+shares will be voted by your brokerage firm, bank,
+broker-dealer, or similar organization as you have directed.
+Properly submitted proxies received either by mail, Internet,
+telephone or in person, in time to be counted for the Meeting
+will be voted as you have directed in your proxy, unless you
+revoke your proxy in the manner provided below. As to any matter
+for which you give no direction in your proxy, your shares will
+be voted as follows:
+• 
+“FOR” the election of all of the nominees to the Board
+of Directors;
+• 
+“FOR” the approval of the amendment to
+Patterson-UTI’s 2005 Long-Term Incentive Plan to increase
+the number of shares authorized for issuance under the plan;
+• 
+“FOR” the ratification of PricewaterhouseCoopers LLP
+as the independent registered public accounting firm of
+Patterson-UTI for the fiscal year ending December 31,
+2010; and
+• 
+“FOR” or “AGAINST” any other proposals that
+may be properly submitted at the Meeting at the discretion of
+the persons named in the proxy.
+If you are a stockholder of record, you may revoke your proxy
+before the proxy is voted by either:
+• 
+submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone, in time to be counted
+for the meeting;
+• 
+notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or
+• 
+attending the Meeting and voting in person.
+If your shares are held in street name, you must obtain a proxy
+executed in your favor from the stockholder of record (that is,
+your brokerage firm, bank, broker-dealer or similar
+organization) to be able to vote at the Meeting.
+The Board of Directors is making this solicitation.
+Patterson-UTI’s officers and other employees, without
+compensation other than regular compensation, may solicit
+proxies by mail, email, the Internet, telephone, electronic
+means and personal interview. Patterson-UTI does not intend to
+retain a proxy solicitation firm to assist in the solicitation
+of proxies of stockholders, but may do so if circumstances
+warrant. Patterson-UTI will pay all costs associated with this
+solicitation.
+SHARES
+OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of Patterson-UTI’s common
+stock, $.01 par value per share (the “Common
+Stock”), at the close of business on March 1, 2010 are
+entitled to notice of and to vote at the Meeting or any
+adjournment or postponement thereof. At the close of business on
+March 1, 2010, there were 153,574,336 shares of Common
+Stock issued and outstanding. Holders of record of Common Stock
+on March 1, 2010 will be entitled to one vote per share on
+all matters to properly come before the Meeting. A list of
+stockholders entitled to notice of and to vote at the Meeting
+will be made available during regular business hours at the
+offices of Patterson-UTI Energy, Inc., 450 Gears Road,
+Suite 500, Houston, Texas 77067, from April 9, 2010
+through April 23, 2010 and at the Meeting for examination
+by any stockholder for any purpose germane to the Meeting.
+A quorum is necessary to transact business at the Meeting. A
+majority of the shares of Common Stock outstanding on
+March 1, 2010 will constitute a quorum. The shares held by
+each stockholder who attends the Meeting in person, signs and
+timely returns the form of proxy or properly votes using the
+Internet or telephone will be counted for purposes of
+determining the presence of a quorum at the Meeting.
+“Broker non-votes” will be considered present at the
+Meeting but will not be counted to determine the total number of
+votes cast. Broker non-votes occur when nominees, such as
+brokerage firms, banks, broker-dealers, or other similar
+organizations holding shares on behalf of the beneficial owners,
+are prohibited from exercising discretionary voting authority
+for beneficial owners who have not provided voting instructions.
+If you do not give instructions to your bank, brokerage firm or
+other agent, the bank, brokerage firm or other agent will
+nevertheless be entitled to vote your shares of Common Stock in
+its discretion on “routine matters” and may give or
+authorize the
+2
+Table of Contents 
+giving of a proxy to vote the shares of Common Stock in its
+discretion on such matters. The ratification of an independent
+registered public accounting firm is generally considered a
+routine matter, whereas the election of directors and action
+with respect to incentive plans are not considered routine
+matters. For these reasons, please promptly vote in accordance
+with the instructions provided by your brokerage firm, bank,
+broker-dealer, or other similar organization.
+PROPOSAL NO. 1 
+ELECTION
+OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the number of members
+of the Board of Directors shall be fixed either by amendment to
+the bylaws or by resolution of the Board of Directors. Directors
+are elected to serve until the next annual meeting of
+stockholders and until their successors are elected and
+qualified. Patterson-UTI’s bylaws provide that the
+affirmative vote of a plurality of the votes cast at the meeting
+at which a quorum is present is required for the election of
+directors. Shares as to which a stockholder withholds authority
+to vote on the election of directors and shares as to which a
+broker indicates that it does not have discretionary authority
+to vote on the election of directors will not be counted as
+voting thereon and will not affect the election of the nominees
+receiving a plurality of the votes cast.
+The enclosed form of proxy provides a means for you to either:
+• 
+vote “FOR” the election of the nominees to the Board
+of Directors listed below,
+• 
+withhold authority to vote for one or more of the
+nominees, or
+• 
+withhold authority to vote for all of the nominees.
+The Board of Directors recommends that you vote
+“FOR” all of the nominees. Unless you
+give contrary instructions in your proxy, your proxy will be
+voted “FOR” the election of all of the nominees to the
+Board of Directors. If any nominee should become unable or
+unwilling to accept nomination or election, the person acting
+under the proxy will vote for the election of such other person
+as the Board of Directors may recommend. The Board has no
+reason, however, to believe that any of the nominees will be
+unable or unwilling to serve if elected. Abstentions will have
+no effect with respect to the election of directors. A broker
+non-vote will be counted for purposes of establishing a quorum,
+but will not be treated as a vote cast with respect to the
+election of directors. This will have the effect of reducing the
+absolute number of votes cast for the election of directors.
+There are no arrangements or understandings between any person
+and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no
+family relationships among any of the directors or executive
+officers of Patterson-UTI.
+Our corporate governance guidelines require that if a director
+receives in an uncontested election a greater number of
+“withhold” votes than votes cast “for” his
+or her election, the Nominating and Corporate Governance
+Committee of the Board of Directors will undertake a prompt
+evaluation of the appropriateness of the director’s
+continued service on the Board of Directors. In performing this
+evaluation, the Nominating and Corporate Governance Committee
+will review all factors it deems relevant, including the stated
+reasons why votes were withheld, the director’s length of
+service, his or her past contributions to Patterson-UTI and the
+availability of other qualified candidates. The Nominating and
+Corporate Governance Committee will then make its recommendation
+to the Board. The Board of Directors will review the Nominating
+and Corporate Governance Committee’s recommendation and
+consider such further factors and information as it deems
+relevant. The Board of Directors will act on the Nominating and
+Corporate Governance Committee’s recommendation no later
+than 90 days following the date of the stockholders’
+meeting. If the Board of Directors determines remedial action is
+appropriate, the director shall promptly take whatever action is
+requested by the Board. If the director does not promptly take
+the recommended remedial action or if the Board of Directors
+determines that immediate resignation is in the best interests
+of Patterson-UTI and its stockholders, the Board of Directors
+may accept the director’s resignation that will have been
+tendered as follows. Each director will as a condition to his or
+her appointment or election as a director or nomination as a
+director agree in writing to comply with the terms of
+Patterson-UTI’s majority voting policy and provide to the
+Board of Directors an irrevocable resignation that will be
+effective upon (i) the failure to receive the
+3
+Table of Contents 
+required vote at the next annual meeting at which such director
+faces re-election and (ii) the Board of Directors
+acceptance of such resignation.
+Set forth below is the name, age, position and a brief
+description of the business experience during at least the past
+five years of each of the members of Patterson-UTI’s Board
+of Directors, as well as specific qualifications, attributes and
+skills of such member that were identified by the Nominating and
+Corporate Governance Committee when concluding such member
+should be nominated to serve on the Board of Directors. Each
+current member of Patterson-UTI’s Board of Directors is a
+nominee for election to the Board of Directors.
+Name 
+Age 
+Position 
+Mark S. Siegel
+59
+Chairman of the Board and Director
+Kenneth N. Berns
+50
+Senior Vice President and Director
+Charles O. Buckner
+65
+Director
+Curtis W. Huff
+52
+Director
+Terry H. Hunt
+61
+Director
+Kenneth R. Peak
+64
+Director
+Cloyce A. Talbott
+74
+Director
+When considering whether directors and nominees have the
+experience, qualifications, attributes and skills, taken as a
+whole, to enable the Board of Directors to satisfy its oversight
+responsibilities effectively in light of the Company’s
+business and structure, the Nominating and Corporate Governance
+Committee and the Board of Directors focused primarily on the
+information discussed in each of the directors’ individual
+biographies set forth below.
+In particular, with regard to Mr. Buckner, the Board of
+Directors considered his past and current service as a director
+of oil and gas companies, as well as his experience, expertise
+and background with regard to accounting matters, which includes
+his role as the former chairman of Ernst & Young
+LLP’s United States energy practice.
+With regard to Mr. Huff, the Board of Directors considered
+his background as an executive of publicly traded oilfield
+services companies and as an owner and manager of a private
+equity firm and investment firm focused on the oilfield service
+industry. The Board noted his knowledge and experience in a
+broad range of oilfield products and services and his current
+and historical experience in managing operations in both the
+United States and internationally. The Board also considered
+Mr. Huff’s expertise and background with regard to
+accounting and legal matters, which, among other things,
+provides guidance to Patterson-UTI in assessing its corporate
+governance structure, policies and procedures.
+With regard to Mr. Hunt, the Board of Directors considered
+that his over twenty-five years of experience covering most
+phases of the upstream oil and natural gas industry in the
+United States and Canada, including the evaluation of
+exploration and development programs, oil and natural gas
+production and pipeline operations, and project development and
+major production facility construction provides Patterson-UTI
+with an invaluable perspective of the oil and natural gas
+industry and its customers. In addition, Mr. Hunt’s
+many years of senior executive experience leading natural gas
+distribution, storage and marketing companies provides insight
+into the management of multi-faceted businesses and the markets
+for natural gas in North America.
+With regard to Mr. Peak, the Board of Directors considered
+his nearly forty years in the energy industry, including in a
+financial capacity, as well as his current role as the chairman
+and chief executive officer of a publicly traded oil and gas
+exploration and production company. This experience and
+background provides Patterson-UTI with an important perspective
+into its customers, current industry conditions and expectations
+of where the oil and natural gas market is headed.
+With regard to Mr. Talbott, the Board of Directors
+considered his more than fifty years of experience in the oil
+and gas industry, more than thirty of which has been with
+Patterson-UTI, which provides unique and valuable knowledge of
+the U.S. land drilling industry and a historical
+perspective of the cyclical nature of the oil and natural gas
+industry.
+4
+Table of Contents 
+With regard to Mr. Berns, the Board of Directors considered
+his more than twenty-five years of financial, mergers and
+acquisitions and transactional experience, including fifteen
+years in the oil and gas industry. This experience and
+background, provides perspective on the cyclical nature of the
+oil and gas industry and allows Mr. Berns to provide
+valuable direction with respect to Patterson-UTI’s
+financial affairs, corporate transactions and strategic
+decisions.
+With regard to Mr. Siegel, the Board of Directors
+considered his broad business and legal experience, as well as
+his expertise with respect to Patterson-UTI’s business. In
+addition, the Board considered Mr. Siegel’s
+demonstrated leadership over the past 15 years of both
+Patterson-UTI and one of its predecessor companies, UTI Energy,
+Inc. In addition, the Board considered Mr. Siegel’s
+prior leadership experience in other public companies in the oil
+services industry, and in numerous other businesses and
+industries. Mr. Siegel also brings substantial experience
+and expertise in mergers and acquisitions, capital structure
+transactions, strategic planning, and board and business
+management. Mr. Siegel’s broad and deep experience and
+expertise allows him to provide Patterson-UTI with valuable
+leadership in all areas of its business endeavors.
+Mark S. Siegel — Mr. Siegel has served as
+Chairman of the Board and as a director of Patterson-UTI since
+May 2001. Mr. Siegel served as Chairman of the Board and as
+a director of UTI Energy Corp. (“UTI”) from 1995 to
+May 2001, when UTI merged with and into Patterson-UTI.
+Mr. Siegel has been President of REMY Investors &
+Consultants, Incorporated (“REMY Investors”) since
+1993. From 1992 to 1993, Mr. Siegel was President, Music
+Division, Blockbuster Entertainment Corp. From 1988 through
+1992, Mr. Siegel was an Executive Vice President of
+Shamrock Holdings, Inc., a private investment company, and
+Managing Director of Shamrock Capital Advisors, Incorporated.
+Mr. Siegel holds a Bachelor of Arts degree from Colgate
+University and a J.D. from the University of California,
+Berkeley (Boalt Hall) School of Law.
+Kenneth N. Berns — Mr. Berns has served as
+Senior Vice President of Patterson-UTI since April 2003 and as a
+director of Patterson-UTI since May 2001. Mr. Berns served
+as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns
+holds a Bachelors Degree in Business Administration from
+San Diego State University and a Masters Degree in Taxation
+from Golden Gate University.
+Charles O. Buckner — Mr. Buckner has
+served as a director of Patterson-UTI since February 2007.
+Mr. Buckner, a private investor, retired from the public
+accounting firm of Ernst & Young LLP in 2002 after
+35 years of service in a variety of client service and
+administrative roles, including chairmanship of
+Ernst & Young’s United States energy practice. He
+presently serves as a director of Gateway Energy Corporation, a
+public company in the oil and gas pipeline business, and Energy
+Partners, Ltd., a publicly held company with oil and natural gas
+exploration and production on the continental shelf in the Gulf
+of Mexico. Mr. Buckner served as a director of Horizon
+Offshore, Incorporated, a marine construction services company
+for the offshore oil and gas industry from 2003 to 2007, and
+Whittier Energy Corporation, a publicly held company with
+domestic onshore oil and natural gas exploration and production
+from 2003 to 2007. Mr. Buckner is a Certified Public
+Accountant and holds a Bachelor of Business Administration from
+the University of Texas and a Masters of Business Administration
+from the University of Houston.
+Curtis W. Huff — Mr. Huff has served as a
+director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1997 to May 2001. Mr. Huff is the
+co-founder and Managing Partner of Intervale Capital, an
+oilfield service private equity firm that Mr. Huff created
+in 2006. Mr. Huff is also the President and Chief Executive
+Officer of Freebird Investments LLC, a private family office
+investment company that was created in October 2002.
+Mr. Huff served as the President and Chief Executive
+Officer of Grant Prideco, Inc., a provider of drill pipe and
+other drill stem products, from February 2001 to June 2002. From
+January 2000 to February 2001, Mr. Huff served as Executive
+Vice President, Chief Financial Officer and General Counsel of
+Weatherford International, Inc., one of the world’s largest
+international oilfield services company. He served as Senior
+Vice President and General Counsel of Weatherford from May 1998
+to January 2000. Mr. Huff began his professional career in
+1983 with the law firm of Fulbright & Jaworski L.L.P.
+where he specialized in corporate, securities and merger and
+acquisition matters. Mr. Huff was made a partner in that
+firm in 1989 where he served until 1998 when he joined
+Weatherford. Mr. Huff holds a Bachelor of Arts degree and
+Juris Doctorate from the University of New Mexico, where he
+graduated as a member of the order of the coif and cum laude,
+and a Masters of Law from New York University School of Law.
+5
+Table of Contents 
+Terry H. Hunt — Mr. Hunt has served as a
+director of Patterson-UTI since April 2003 and served as a
+director of UTI from 1994 to May 2001. Mr. Hunt is an
+energy consultant and investor. Mr. Hunt served as Senior
+Vice President — Strategic Planning of PPL
+Corporation, an international energy and utility holding
+company, from 1998 to 2000. Mr. Hunt served as the
+President and Chief Executive Officer of Penn Fuel Gas, Inc., a
+Pennsylvania-based natural gas and propane distribution company,
+from 1992 to 1999. Previously, Mr. Hunt was President of
+Carnegie Natural Gas and Apollo Gas Company, both Appalachian
+natural gas distribution companies. He also previously served in
+senior management positions in natural gas project and venture
+development, oil and natural gas exploration and development
+evaluation and operations and major production facilities
+construction with Texas Oil & Gas Corp. and Atlantic
+Richfield. Mr. Hunt holds a Bachelor of Engineering degree
+from the University of Saskatchewan, Canada and a Masters of
+Business Administration from Southern Methodist University.
+Kenneth R. Peak — Mr. Peak has served as a
+director of Patterson-UTI since November 2000. Mr. Peak has
+served as Chairman and Chief Executive Officer of Contango
+Oil & Gas Company since September 1999. Mr. Peak
+entered the energy industry in 1972 as a commercial banker and
+has held a variety of financial and executive positions in the
+oil and gas industry prior to starting Contango in 1999.
+Mr. Peak served as an officer in the U.S. Navy from
+1968 to 1971. Mr. Peak received a Bachelor of Science in
+Physics from Ohio University in 1967 and a Masters of Business
+Administration from Columbia University in 1972.
+Cloyce A. Talbott — Mr. Talbott has served
+as a director of Patterson-UTI since its incorporation in 1978.
+Mr. Talbott co-founded Patterson-UTI and has served in
+various capacities, including as its Chief Executive Officer
+from 1983 until his retirement from that position in September
+2007. He also served as Chairman of the Board from 1983 to May
+2001. Mr. Talbott is currently employed as a consultant by
+Patterson-UTI. Mr. Talbott holds a Bachelor of Science
+degree in petroleum engineering from Texas Tech University.
+Board
+Leadership Structure and Role in Risk Oversight 
+The Board evaluates its leadership structure and role in risk
+oversight on an ongoing basis. The decision on whether to
+combine or separate the Chairman and Chief Executive Officer
+(“CEO”) role is determined on the basis of what the
+Board considers to be best for Patterson-UTI at any given point
+in time. Patterson-UTI’s current Board leadership structure
+separates the role of Chairman and CEO. The Board also believes
+part of an effective Board leadership structure is to have a
+Lead Director. The Board has appointed Mr. Huff as the Lead
+Director. The independent directors meet regularly in executive
+sessions at which only independent directors are present, and
+the Lead Director chairs those sessions. The Lead Director
+serves as a liaison between the Chairman and the independent
+directors, consults with regard to Board and agenda items, and
+works with the chairpersons of Board committees as appropriate.
+The Nominating and Corporate Governance Committee and the Board
+currently believe that the Board’s leadership structure,
+which includes the separation of the role of CEO and Chairman
+and the appointment of an independent Lead Director, is
+appropriate because it, among other things, provides for
+sufficient independence between the Board and management and for
+an independent director who provides board member leadership.
+In March 2010, the Board adopted Corporate Governance
+Guidelines, which can be accessed electronically in the
+“Governance” section of Patterson-UTI’s website
+at www.patenergy.com . The Guidelines describe one of the
+Board’s primary responsibilities as overseeing
+Patterson-UTI’s processes for assessing and managing risks.
+The Board discharges this responsibility, in part, through
+regular inquiries from the Chairman of the Board
+and/or the
+Lead Director to management, periodic communications from
+management to the Board of Directors of particular risks and
+events, and discussions during Board meetings with and without
+management of general and specific risks to Patterson-UTI.
+Meetings
+and Committees of the Board of Directors 
+The Board of Directors met eight times during the year ended
+December 31, 2009. Each director attended, in person or by
+telephone, at least 75% of the aggregate of all meetings held by
+the Board and meetings of each committee on which such director
+served. A majority of the members of the Board of Directors are
+independent within the meaning of the Nasdaq Stock Market, Inc.
+(“Nasdaq”) listing standards. Specifically, the Board
+has determined that Messrs. Buckner, Huff, Hunt and Peak
+are independent within the meaning of the Nasdaq listing
+6
+Table of Contents 
+standards. In reaching this conclusion, the Board considered
+that Mr. Huff controls and manages two investment
+companies, which have interests in oilfield service portfolio
+companies that have supplied parts and equipment to
+Patterson-UTI in the ordinary course of their businesses
+consistent with customary terms in the industry. The Board has
+determined that these transactions are not material to such
+companies, Patterson-UTI or Mr. Huff and that such
+transactions do not affect Mr. Huff’s independence
+under applicable rules and regulations.
+The Board of Directors has established four standing committees,
+an Executive Committee, an Audit Committee, a Compensation
+Committee and a Nominating and Corporate Governance Committee.
+The Executive Committee, which currently is composed of
+Messrs. Siegel, Talbott and Berns, has the authority, to
+the extent permitted by applicable law, to act for the Board in
+all matters arising between regular or special meetings of the
+Board of Directors.
+The Audit Committee members are Messrs. Buckner (chairman),
+Huff and Hunt, each of whom is independent within the meaning of
+applicable Securities Exchange Act of 1934, as amended (the
+“Exchange Act”), rules and within the meaning of the
+Nasdaq listing standards. The Audit Committee oversees
+management’s conduct of Patterson-UTI’s accounting and
+financial reporting process, including review of the financial
+reports and other financial information provided by
+Patterson-UTI to the public and government and regulatory
+bodies, Patterson-UTI’s system of internal accounting,
+Patterson-UTI’s financial controls, and the annual
+independent audit of Patterson-UTI’s financial statements.
+The Audit Committee also oversees compliance with
+Patterson-UTI’s codes of conduct and ethics and with legal
+and regulatory requirements. The Board has determined that
+Messrs. Buckner and Huff are “audit committee
+financial experts” within the meaning of applicable SEC
+rules. The Audit Committee selects the independent registered
+public accounting firm to audit Patterson-UTI’s books and
+records and considers and acts upon accounting matters as they
+arise. The Board of Directors has adopted a written charter for
+the Audit Committee. The Audit Committee held five meetings
+during the year ended December 31, 2009. Please see
+“Audit Committee Report” elsewhere in this proxy
+statement.
+The Compensation Committee members are Messrs. Hunt
+(chairman), Buckner, Huff and Peak, each of whom is independent
+as defined in the Nasdaq listing standards. Among other things,
+the Compensation Committee sets and administers the policies
+that govern the compensation of executive officers and directors
+of Patterson-UTI. The Board of Directors has adopted a written
+charter for the Compensation Committee. The Compensation
+Committee held five meetings during the year ended
+December 31, 2009. Please see “Compensation Discussion
+and Analysis” and “Compensation Committee Report”
+elsewhere in this proxy statement for further information about
+the Compensation Committee.
+The Nominating and Corporate Governance Committee members are
+Messrs. Huff (chairman), Buckner and Peak, each of whom is
+independent as defined in the Nasdaq listing standards. The
+purpose of the Nominating and Corporate Governance Committee is
+to identify individuals qualified to become Board members, to
+recommend for selection by the Board director nominees for the
+next annual meeting of stockholders, to review
+Patterson-UTI’s Code of Business Conduct, to develop and
+continually make recommendations with respect to the best
+corporate governance principles and to oversee the evaluation of
+the Board and management. The Board of Directors has adopted a
+written charter for the Nominating and Corporate Governance
+Committee. The Nominating and Corporate Governance Committee
+held two meetings during the year ended December 31, 2009.
+All of the director nominees are existing directors of
+Patterson-UTI standing for re-election to the Board of Directors.
+On behalf of the Board, the Nominating and Governance Committee
+considers director nominees recommended by Patterson-UTI’s
+stockholders if the recommendations are made in accordance with
+all legal requirements, including applicable provisions of
+Patterson-UTI’s restated certificate of incorporation and
+bylaws. In accordance with Patterson-UTI’s bylaws, in
+addition to any other applicable requirements, nominations of
+persons for election to the Board may be made at a meeting of
+stockholders only by or at the direction of the Board or by a
+stockholder who is a stockholder of record on the date of the
+giving of the notice provided for below and on the record date
+for the determination of stockholders entitled to vote at such
+annual meeting and gives timely notice of such nomination in
+writing to the Secretary of Patterson-UTI. To be timely with
+respect to the 2011 annual meeting of stockholders, a
+stockholder’s notice must be delivered to or mailed and
+received at Patterson-UTI’s principal
+7
+Table of Contents 
+executive offices not earlier than December 27, 2010 and
+not later than January 26, 2011; provided, however, that in
+the event that the annual meeting is called for a date that is
+not within 30 days before or after April 26, 2011,
+notice by the stockholder must be received not later than the
+close of business on the tenth day following the day on which
+such notice of the date of the meeting was mailed or public
+disclosure of the annual meeting date was made, whichever occurs
+first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+as to each person whom the stockholder proposes to nominate for
+election or re-election as director, all information relating to
+such person that is required to be disclosed in solicitations of
+proxies for election of directors, or is otherwise required, in
+each case pursuant to Regulation 14A promulgated under the
+Exchange Act, or any successor regulation thereto,
+• 
+the name and record address of the stockholder proposing such
+nomination,
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+a description of all arrangements or understandings between such
+stockholder and each proposed nominee and any other person or
+persons (including their names) pursuant to which the nomination
+or nominations are to be made by such stockholder, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the meeting to nominate the persons named
+in the notice.
+Such notice must be accompanied by a written consent of each
+proposed nominee to being named as a nominee and to serve as a
+director if elected.
+The Nominating and Corporate Governance Committee determines
+qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of
+Patterson-UTI. The Nominating and Corporate Governance Committee
+relies on the knowledge and relationships of Patterson-UTI and
+its officers and directors, as well as third parties when it
+deems appropriate, to identify and evaluate nominees for
+director, including nominees recommended by stockholders. In
+evaluating a nominee for director, the Nominating and Corporate
+Governance Committee considers the nominee’s skills,
+expertise, industry and other knowledge, personal and
+professional ethics, integrity and values, sound business
+judgment, willingness to commit sufficient time to the Board and
+be committed to representing the long-term interests of
+Patterson-UTI’s stockholders. Although the Nominating and
+Corporate Governance Committee does not have a stand-alone
+policy with regard to consideration of diversity in identifying
+director nominees, it considers diversity in professional
+background, experience, expertise (including as to financial
+matters) and perspective (including as to age, gender and
+ethnicity) with respect to the Board of Directors composition as
+a whole when evaluating a director nominee.
+Succession
+Planning 
+The Board of Directors oversees processes and procedures to
+provide continuity of well-qualified executive leadership and to
+assess whether such leadership possesses the skill and talent to
+execute Patterson-UTI’s long term business strategies. The
+Board of Directors reviews the succession plan for the Chief
+Executive Officer and the senior executives tailored to reflect
+the Board’s standards for executive leadership and
+Patterson-UTI’s business strategy and vision. The
+succession plan addresses (i) both current and long term
+needs of Patterson-UTI and establishes a process for identifying
+and assessing potential internal candidates; (ii) periodic
+review and assessment of readiness: (iii) contingency
+planning for temporary absences of the Chief Executive Officer
+due to disability or other unexpected event; and (iv) long
+term continuity planning for succession to the Chief Executive
+Officer position.
+Communication
+with the Board and its Independent Members 
+Persons may communicate with the Board, or directly with its
+Chairman, Mr. Siegel, by submitting such communication in
+writing in care of Chairman of the Board of Directors,
+Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500,
+Houston, Texas 77067. Persons may communicate with the
+independent members of the Board by
+8
+Table of Contents 
+submitting such communication in writing to the Nominating and
+Corporate Governance Committee of the Board of Directors of
+Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500,
+Houston, Texas 77067.
+Although Patterson-UTI does not have a formal policy regarding
+attendance by members of the Board at its annual meetings of
+stockholders, directors are invited to attend annual meetings of
+Patterson-UTI stockholders. Six directors attended the 2009
+annual meeting of stockholders with three directors attending in
+person and three directors attending via telephone.
+Corporate
+Governance Documents Available on Patterson-UTI’s
+Website 
+Copies of each of the following documents can be accessed
+electronically in the “Governance” section of the
+Patterson-UTI website at www.patenergy.com and in print
+to any stockholder who requests them from the Secretary of
+Patterson-UTI:
+• 
+Audit Committee Charter;
+• 
+Compensation Committee Charter;
+• 
+Nominating and Corporate Governance Committee Charter;
+• 
+Corporate Governance Guidelines;
+• 
+Code of Business Conduct for its employees, officers and
+directors; and
+• 
+Code of Business Conduct and Ethics for Senior Financial
+Executives.
+PROPOSAL NO. 2 
+AMENDMENT
+TO 2005 LONG-TERM INCENTIVE PLAN 
+On March 9, 2010, our Board of Directors adopted, subject
+to stockholder approval, an amendment to the 2005 Long-Term
+Incentive Plan (as amended, the “2005 Plan”) that
+would increase the number of shares of Common Stock reserved for
+issuance under the 2005 Plan by 5,000,000 shares (the
+“Amendment”). At the Meeting, the Patterson-UTI
+stockholders will be asked to vote on a proposal to approve the
+Amendment. Approval of the Amendment requires the affirmative
+vote of the holders of a majority of the shares of Common Stock
+that are present in person or by proxy and entitled to vote at
+the Meeting.
+On March 9, 2010, our Board of Directors also adopted,
+subject to stockholder approval of the Amendment, an amendment
+to the 2005 Plan to (1) change the determination of the
+number of shares available for grant at any particular time
+under the 2005 Plan, (2) incorporate into the 2005 Plan the
+change of control definition that is currently contained in
+Patterson-UTI’s forms of award agreement for executives,
+which are listed as exhibits to Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the year ended December 31, 2009 and were previously
+filed with the SEC, (3) eliminate the discretion of the
+Board to designate an event that is not described in the change
+in control definition as a change in control event,
+(4) clarify that generally no option or stock appreciation
+right granted under the 2005 Plan may be repriced and
+(5) provide that dividend equivalents may not be granted
+with respect to performance awards unless the payment of the
+dividend equivalents are subject to the same performance
+conditions as the performance awards (the “Share Multiple
+and Omnibus Amendment”). Each share that is subject to
+awards other than options and stock appreciation rights
+(“SARs”) is currently counted as two (2.0) shares of
+Common Stock against the number of shares available for grant
+under the 2005 Plan. Additionally, each share of Common Stock
+that is subject to awards other than options and SARs that again
+becomes available for grant under the 2005 Plan is currently
+added back to the number of shares available for grant under the
+2005 Plan as two (2.0) shares. The Share Multiple and Omnibus
+Amendment would decrease the multiplier from two (2.0) to one
+and thirty-five one hundredths (1.35).
+Currently the 2005 Plan provides that the definition of a change
+of control of Patterson-UTI will be provided in an individual
+award agreement granted under the 2005 Plan and that the Board
+retains the discretion to determine the events that constitute a
+change of control of Patterson-UTI. The Share Multiple and
+Omnibus Amendment formally incorporates into the 2005 Plan the
+change of control definition that is currently contained in
+Patterson-
+9
+Table of Contents 
+UTI’s forms of award agreement for executives, which are
+listed as exhibits to Patterson-UTI’s Annual Report on
+Form 10-K 
+for the year ended December 31, 2009 and were previously
+filed with the SEC, and eliminates the discretion of the Board
+to designate an event that is not described in the change of
+control definition as a change of control event.
+Currently, options are not permitted to be repriced under the
+2005 Plan. The provisions of the 2005 Plan do not preclude
+repricing stock appreciation rights granted under the 2005 Plan.
+The Share Multiple and Omnibus Amendment amends the Plan to
+provide that repricing is not permitted with respect to options
+or stock appreciation rights. Dividend equivalents may be
+granted by the Compensation Committee in connection with the
+various awards or as separate awards under the 2005 Plan and may
+be payable currently or, if applicable, deferred until the
+conditions of payment of the underlying award are satisfied.
+Under the Share Multiple and Omnibus Amendment, if dividend
+equivalents are granted in connection with performance unit or
+performance share awards, no dividend equivalents will be
+payable until the Compensation Committee determines that the
+performance conditions relating to the settlement of the
+performance unit or performance share award have been satisfied.
+The Share Multiple and Omnibus Amendment will become effective
+upon, and is subject to, the approval by the Patterson-UTI
+stockholders of the Amendment described in this
+Proposal No. 2. Unless otherwise stated, the
+description of the 2005 Plan below does not give effect to the
+Amendment or the Share Multiple and Omnibus Amendment.
+The 2005 Plan was approved by the Patterson-UTI stockholders in
+June 2005. The 2005 Plan was subsequently amended twice in 2008,
+with each amendment effective June 5, 2008 (the “2008
+Amendments”). The first 2008 Amendment was approved by the
+Patterson-UTI stockholders in June 2008. The second 2008
+Amendment was not subject to the approval of Patterson-UTI
+stockholders but was approved by Patterson-UTI’s Board of
+Directors contingent upon the approval of the first 2008
+Amendment by Patterson-UTI stockholders. All references to the
+2005 Plan in this discussion include a reference to the 2008
+Amendments.
+Certain material features of the 2005 Plan are discussed below;
+however, the description is subject to, and qualified by the
+full text of the 2005 Plan, attached as Appendix A ,
+which includes the Amendment highlighted in bold and the Share
+Multiple and Omnibus Amendment in italics.
+Reasons
+for the Amendment to the 2005 Plan 
+The Board of Directors believes that the ability to grant
+stock-based compensation to Patterson-UTI’s employees is
+crucial to Patterson-UTI’s continuing ability to attract
+and retain qualified employees. Historically, the Board of
+Directors has relied on awards of stock options and restricted
+stock as part of its compensation philosophy and structure to
+recruit and retain certain key employees.
+The Board of Directors believes that the 2005 Plan advances the
+best interests of Patterson-UTI and its stockholders by helping
+to attract, retain and motivate its employees and directors. The
+2005 Plan provides for the grant of awards to selected
+employees, officers and non-employee directors, thereby
+increasing the personal stake of such persons in the continued
+success and growth of Patterson-UTI.
+As of December 31, 2009, only 2,545,524 shares of
+Common Stock remained available for grant under the 2005 Plan.
+The Board of Directors has determined that an increase in the
+number of shares available for grant under the 2005 Plan is
+necessary in order to continue to provide an adequate level of
+performance-based incentives to Patterson-UTI’s executive
+management, other employees and directors and to continue the
+Board of Directors’ ongoing philosophy of utilizing
+stock-based compensation awards as part of Patterson-UTI’s
+overall compensation structure. Therefore, the Board of
+Directors has approved an amendment to the 2005 Plan to increase
+the number of shares available for grant under the 2005 Plan by
+5,000,000 shares.
+Administration 
+The 2005 Plan is administered by the Compensation Committee of
+Patterson-UTI’s Board of Directors, which comprises
+exclusively non-employee independent directors. The 2005 Plan
+provides for the granting of incentive stock options
+(“ISOs”) that are intended to meet the provisions of
+Section 422 of the Internal Revenue Code of 1986, as
+amended (the “Code”), and non-incentive stock options
+(“NQSOs”), as well as other awards, such as tandem and
+freestanding SARs, restricted stock awards, other stock unit
+awards, performance shares, performance units and
+10
+Table of Contents 
+dividend equivalents. Certain awards under the 2005 Plan may be
+paid in cash or Common Stock, as determined by the Compensation
+Committee. The Compensation Committee has the exclusive
+authority to select the participants to whom awards may be
+granted under the 2005 Plan, and to determine the type, size and
+terms of each such award. The Compensation Committee also makes
+all determinations that it decides are necessary or desirable in
+the interpretation and administration of the 2005 Plan. In
+addition, the Compensation Committee may, if consistent with
+applicable rules, regulations and Nasdaq requirements, delegate
+to a committee of one or more directors or to one or more
+executive officers the right to grant, cancel and suspend awards
+to employees who are not directors or executive officers of
+Patterson-UTI.
+General
+Terms 
+Without giving effect to the Amendment or the Share Multiple and
+Omnibus Amendment, both of which are described above in the
+beginning paragraphs of this Proposal No. 2, the following
+describes general terms of the 2005 Plan:
+• 
+The aggregate number of shares of Common Stock authorized for
+grant under the 2005 Plan is 10,250,000, reduced by the number
+of shares that are subject to awards granted under equity plans
+of Patterson-UTI existing during the period commencing on
+January 1, 2005 and ending on the date the 2005 Plan was
+approved by the Patterson-UTI stockholders. Shares that are
+subject to options or SARs count as one (1.0) share of Common
+Stock against the aggregate number. Shares that are subject to
+other awards that were awarded prior to June 5, 2008 count
+as one and six tenths (1.6) shares of Common Stock against the
+aggregate number and shares that are subject to other awards
+that were awarded on or after June 5, 2008 count as two
+(2.0) shares of Common Stock against the aggregate number.
+• 
+Generally, if an award granted under the 2005 Plan or the other
+existing equity plans of Patterson-UTI 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 2005 Plan. Any shares of Common Stock
+that again become available for grant under the 2005 Plan will
+be added back as one (1.0) share if the shares were subject to
+options or SARs, and one and six tenths (1.6) shares if the
+shares were subject to awards other than options or SARs that
+were forfeited, expire or otherwise terminated prior to
+June 5, 2008 or two (2.0) shares if the shares were subject
+to awards other than options or SARs that are forfeited, expire
+or otherwise terminate on or after June 5, 2008.
+• 
+Directors, employees, including officers, consultants and
+advisors are eligible for awards.
+• 
+The 2005 Plan provides for awards of NQSOs, ISO, tandem and
+freestanding SARs, restricted stock awards, other stock unit
+awards, performance awards and dividend equivalents.
+• 
+The Board of Directors, at any time, may amend the terms of the
+2005 Plan, subject to the stockholder approval requirements of
+Nasdaq and other rules and regulations applicable to
+Patterson-UTI.
+• 
+Under the 2005 Plan, no participant may be granted
+(i) options or SARs during any
+12-month 
+period with respect to more than 1,000,000 shares of Common
+Stock 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. In
+addition to the foregoing limits, the maximum dollar value
+payable to any participant in any
+12-month 
+period with respect to performance awards is $5,000,000.
+Options 
+• 
+The vesting schedule for options is set by the Compensation
+Committee; however, options may not fully vest sooner than one
+year from the date of grant, except for certain limited
+exceptions.
+• 
+The term of options is set by the Compensation Committee, but
+may not exceed 10 years.
+• 
+The exercise price for options may be paid in cash, with
+previously acquired shares of Common Stock, or by other means
+approved by the Compensation Committee.
+11
+Table of Contents 
+• 
+Each option granted under the 2005 Plan is granted with an
+exercise price equal to or greater than the fair market value of
+the Common Stock at the time such option is granted.
+SARs 
+• 
+SARs may be granted alone or in connection with the grant of any
+option or other award.
+• 
+Each SAR granted under the 2005 Plan is granted with a grant
+price equal to or greater than the fair market value of the
+Common Stock at the time such SAR is granted.
+• 
+SARs granted alone may be exercised at such times and be subject
+to such terms and conditions as the Compensation Committee may
+impose. SARs that are granted in tandem with options may be
+exercised only on the surrender of the right to purchase an
+equivalent number of shares under the related options and may be
+exercised only with respect to the shares of Common Stock for
+which the related options are then exercisable.
+• 
+The term of SARs may not exceed 10 years.
+• 
+A SAR entitles a participant to surrender any then exercisable
+portion of the SAR and, if applicable, the related option, in
+exchange for an amount equal to the excess of (1) the fair
+market value of a share of Common Stock on the date of exercise
+over (2) the grant price of the SAR on the date that the
+SAR was granted, or, if the SAR is related to an option, as
+specified by the Compensation Committee in its sole discretion,
+subject to certain limitations.
+• 
+Upon the exercise of a SAR, payment shall be made in whole
+shares of Common Stock.
+Restricted
+Stock Awards 
+• 
+The Compensation Committee determines the material terms of the
+restricted stock awards, including the price, if any, to be paid
+by the recipient, and the vesting schedule and conditions, which
+may include the attainment of specified performance objectives
+described below.
+• 
+A restricted stock award that is subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions.
+• 
+Beginning on the date of grant, a participant receiving a
+restricted stock award will become a stockholder of
+Patterson-UTI with respect to all shares of Common Stock subject
+to the restricted stock award, which, unless the Compensation
+Committee determines otherwise at the time of the grant,
+includes the right to vote such shares and receive regular,
+ordinary dividends in respect of such shares.
+Other
+Stock Units 
+• 
+The Compensation Committee may grant other stock unit awards
+under the 2005 Plan, which have a value equal to an identical
+number of shares of Common Stock. Other stock unit awards may
+also be a form of payment for other awards granted under the
+2005 Plan and other earned cash-based incentive compensation.
+• 
+The payment of other stock units may be in cash, shares of
+Common Stock, other property, or any combination of the
+foregoing, and may be made in a lump sum or, in accordance with
+procedures established by the Compensation Committee, on a
+deferred basis subject to the requirements of Section 409A
+of the Code.
+• 
+Other stock unit awards that are subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions.
+12
+Table of Contents 
+Dividend
+Equivalent Rights 
+• 
+The Compensation Committee may grant dividend equivalent rights
+either in connection with awards or as separate awards under the
+2005 Plan. Amounts payable in respect of dividend equivalent
+rights may be payable currently or, if applicable, deferred
+until the lapsing of restrictions on the dividend equivalent
+rights or until the vesting, exercise, payment, settlement or
+other lapse of restrictions on the award to which the dividend
+equivalent rights relate.
+• 
+No SARs have been granted under the 2005 Plan and no option
+granted under the 2005 Plan has included dividend equivalent
+rights.
+Performance
+Awards 
+• 
+Performance awards are payable in cash, shares of Common Stock,
+other property, or a combination of the foregoing, and may be
+paid in a lump sum, in installments, or on a deferred basis in
+accordance with procedures established by the Compensation
+Committee.
+• 
+The Compensation Committee determines the material terms of the
+performance awards, including a performance period over which
+the performance goal of such award shall be measured, which must
+be at least 12 months and no longer than five years.
+Deferrals 
+• 
+The Compensation Committee may require or permit a participant
+to defer the receipt of cash or shares pursuant to any awards
+under the 2005 Plan. Any deferral permitted under the 2005 Plan
+will be administered in a manner that is intended to comply with
+Section 409A of the Code.
+Effect of
+Certain Transactions and Change of Control 
+Without giving effect to the Amendment or the Share Multiple and
+Omnibus Amendment, both of which are described above in the
+beginning paragraphs of this Proposal No. 2, the following
+describes the effects of certain transactions and a change of
+control:
+The Compensation Committee may provide in the terms of an award
+under the 2005 Plan that, on a change of control as defined in
+the award agreement,
+• 
+options and SARs outstanding on the date of the change of
+control immediately vest;
+• 
+options and SARs outstanding on the date of the change of
+control may be cancelled and terminated without payment if the
+fair market value of a share of Common Stock on the date of the
+change of control is less than the per share option exercise
+price or SAR grant price;
+• 
+restrictions and deferral limitations on restricted stock lapse
+and the restricted stock becomes free of all restrictions and
+limitations and becomes fully vested;
+• 
+all performance awards shall be considered to be earned and
+payable and any deferral or other restriction shall lapse and
+the performance awards shall be immediately settled or
+distributed to the extent permitted under Section 409A of
+the Code;
+• 
+restrictions and deferral limitations and other conditions
+applicable to any other stock unit awards or any other awards
+lapse, and the other stock unit awards and other awards 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
+• 
+such other additional benefits as the Compensation Committee
+deems appropriate shall apply.
+The Compensation Committee, in its discretion, may determine
+that, upon a change of control, each option and SAR shall
+terminate within a specified period of days after notice to the
+participant, or that with respect to such option or SAR each
+participant shall receive an amount equal to the excess of the
+fair market value of such share immediately prior to the
+occurrence of the change of control over the exercise price per
+share of such option or SAR. The payment may be made in one or
+more kinds of stock or property or a combination of stock or
+property. Further,
+13
+Table of Contents 
+in the event of changes in the capital or corporate structure of
+Patterson-UTI due to events such as recapitalization, stock
+split, merger, spin-off or similar transaction, that affect the
+shares of Common Stock, the Compensation Committee, in its sole
+discretion, may determine that it is equitable or appropriate to
+make adjustments or substitutions to the Plan or outstanding
+options and awards, including to the number, class, kind and
+option or exercise price or securities subject to awards.
+Currently the 2005 Plan provides that the definition of a change
+of control of Patterson-UTI will be provided in an individual
+award agreement granted under the 2005 Plan and that the Board
+retains the discretion to determine the events that constitute a
+change of control of Patterson-UTI. Subject to the Share
+Multiple and Omnibus Amendment becoming effective, it formally
+incorporates into the 2005 Plan the change of control definition
+that is currently contained in Patterson-UTI’s forms of
+award agreements for executives, which are listed as exhibits to
+Patterson-UTI’s Annual Report on
+Form 10-K 
+for the year ended December 31, 2009 and were previously
+filed with the SEC, and eliminates the discretion of the Board
+to designate an event that is not described in the change of
+control definition as a change of control event.
+Performance
+Criteria 
+If the Compensation Committee determines that
+Section 162(m) of the Code (see “Federal Income Tax
+Consequences — Performance-Based Compensation”
+below) applies (or is likely to apply) to a restricted stock
+award, performance award or other stock unit award, the lapsing
+of restrictions on the award and the distribution of cash,
+shares or other property pursuant to such award, shall be
+subject to the achievement of one or more objective performance
+goals established by the Compensation Committee, which shall be
+based on attaining specified levels in one or more areas, such
+as: net sales; revenue growth; pre-tax income before allocation
+of corporate overhead and bonus; earnings per share; operating
+income or net income; return on stockholders’ equity;
+attainment of strategic and operational initiatives;
+appreciation in
+and/or 
+maintenance of the price of the Common Stock or other
+publicly-traded securities of Patterson-UTI; market share; gross
+profits; earnings before taxes or before interest and taxes or
+before interest, taxes, depreciation, depletion and
+amortization; comparisons with various stock market indices;
+improvement in or attainment of expense levels or working
+capital levels; cash margins; safety records; and rig
+utilization and rig count growth. Performance goals may be
+measured solely by reference to Patterson-UTI’s performance
+or the performance of a subsidiary, division, business segment
+or business unit of Patterson-UTI, or based upon the relative
+performance of other companies or upon comparisons of any of the
+indicators of performance relative to other companies, in each
+case as specified by the Compensation Committee in the award.
+The Compensation Committee also may adjust performance goals to
+reflect the impact of specified events, occurrences or
+transactions, accounting or tax law changes or other
+extraordinary or nonrecurring events.
+Federal
+Income Tax Consequences 
+The following discussion summarizes certain federal income tax
+consequences of the issuance and receipt of awards pursuant to
+the 2005 Plan under the law as in effect on the date of this
+proxy statement. The rules governing the tax treatment of such
+awards are quite technical, so the following discussion of tax
+consequences is necessarily general in nature and is not
+complete. In addition, statutory provisions are subject to
+change, as are their interpretations, and their application may
+vary in individual circumstances. This summary does not purport
+to cover all federal employment tax or other federal tax
+consequences associated with the 2005 Plan, nor does it address
+state, local, or
+non-U.S. taxes. 
+ISOs 
+In general, a participant will not recognize income upon the
+grant or exercise of an ISO. However, if the participant is
+subject to federal “alternative minimum tax,” the
+exercise of an ISO will be treated essentially the same as a
+NQSO for purposes of the alternative minimum tax ( see NQSOs,
+SARs, Performance Award, and Other Stock Unit Award below).
+Subject to certain exceptions for death or disability, if a
+participant exercises an ISO more than three months after
+termination of employment, the exercise of the option will be
+taxed as the exercise of a NQSO, as described below.
+The general rule is that gain or loss from the sale or exchange
+of shares acquired on the exercise of an ISO will be treated as
+capital gain or loss. However, if shares acquired upon the
+exercise of an ISO are disposed of within two
+14
+Table of Contents 
+years from the date of grant or within one year after exercise
+(a “disqualifying disposition”), the participant
+generally will recognize ordinary income in the year of
+disposition in an amount equal to the fair market value of the
+shares at the time of exercise (or, if less, the amount realized
+on the disposition of the shares) less the exercise price. Any
+further gain (or loss) realized by the participant generally
+will be taxed as short-or long-term capital gain (or loss)
+depending on the holding period.
+NQSOs,
+SARs, Performance Award, and Other Stock Unit
+Award 
+A participant generally is not required to recognize income on
+the grant of a NQSO, a SAR, performance award or other stock
+unit award. Instead, ordinary income generally is required to be
+recognized on the date the NQSO or SAR is exercised, or in the
+case of performance awards or other stock unit awards, upon the
+issuance of shares
+and/or the
+payment of cash pursuant to the terms of the award. In general,
+the amount of ordinary income required to be recognized is,
+(a) in the case of a NQSO, an amount equal to the excess,
+if any, of the fair market value of the shares on the exercise
+date over the exercise price, (b) in the case of a SAR, the
+fair market value of any shares received upon exercise plus the
+amount of taxes withheld from such amounts, and (c) in the
+case of performance awards or other stock unit awards, the
+amount of cash
+and/or the
+fair market value of any shares received in respect thereof,
+plus the amount of taxes withheld from such amounts.
+Restricted
+Common Stock 
+Unless a participant who receives an award of restricted Common
+Stock makes an election under Section 83(b) of the Code as
+described below, the participant generally is not required to
+recognize ordinary income on the award of restricted Common
+Stock. Instead, on the date the shares vest ( i.e. , become
+transferable and no longer subject to forfeiture), the
+participant will be required to recognize ordinary income in an
+amount equal to the excess, if any, of the fair market value of
+the shares on such date over the amount, if any, paid for such
+shares. If a Section 83(b) election has not been made, any
+dividends received with respect to restricted Common Stock that
+are subject at that time to a risk of forfeiture or restrictions
+on transfer generally will be treated as compensation that is
+taxable as ordinary income to the recipient. If a participant
+makes a Section 83(b) election within 30 days of the
+date of transfer of the restricted Common Stock, the participant
+will recognize ordinary income on the date the shares are
+awarded. The amount of ordinary income required to be recognized
+is an amount equal to the excess, if any, of the fair market
+value of the shares on the date of award over the amount, if
+any, paid for such shares. In such case, the participant will
+not be required to recognize additional ordinary income when the
+shares vest. However, if the shares are later forfeited, a loss
+can only be recognized up to the amount the participant paid, if
+any, for the shares.
+Gain
+or Loss on Sale or Exchange of Shares 
+In general, gain or loss from the sale or exchange of shares
+granted or awarded under the 2005 Plan will be treated as
+capital gain or loss, provided that the shares are held as
+capital assets at the time of the sale or exchange. However, if
+certain holding period requirements are not satisfied at the
+time of a sale or exchange of shares acquired upon exercise of
+an ISO (a “disqualifying disposition,” see
+above), a participant generally will be required to
+recognize ordinary income upon such disposition.
+Deductibility
+by Patterson-UTI 
+To the extent that a participant recognizes ordinary income in
+the circumstances described above, Patterson-UTI or its
+subsidiary for which the participant performs services will be
+entitled to a corresponding deduction, provided that, among
+other things, the income meets the test of reasonableness, is an
+ordinary and necessary business expense, is not an “excess
+parachute payment” within the meaning of Section 280G
+of the Code and is not disallowed by the $1 million
+limitation on certain executive compensation under
+Section 162(m) of the Code ( see Performance Based
+Compensation and Parachute Payments below).
+Performance
+Based Compensation 
+In general, under Section 162(m) of the Code, remuneration
+paid by a public corporation to its principal executive officer
+or its three most highly compensated executive officers
+(excluding the principal executive officer
+15
+Table of Contents 
+and the principal financial officer of the corporation), ranked
+by pay, is not deductible to the extent it exceeds
+$1 million for any year. Taxable payments or benefits under
+the 2005 Plan may be subject to this deduction limit. However,
+under Section 162(m) of the Code, qualifying
+performance-based compensation, including income from stock
+options and other performance-based awards that are made under
+shareholder approved plans and that meet certain other
+requirements, is exempt from the deduction limitation. The 2005
+Plan has been designed so that the Compensation Committee in its
+discretion may grant qualifying exempt performance-based awards
+under the 2005 Plan.
+Parachute
+Payments 
+Under the so-called “golden parachute” provisions of
+the Code, the accelerated vesting of stock options and benefits
+paid under other awards in connection with a change of control
+of a corporation may be required to be valued and taken into
+account in determining whether participants have received
+compensatory payments, contingent on the change of control, in
+excess of certain limits. If these limits are exceeded, a
+portion of the amounts payable to the participant may be subject
+to an additional 20% federal tax and may be nondeductible to the
+corporation.
+Withholding 
+Awards under the 2005 Plan may be subject to tax withholding.
+Where an award results in income subject to withholding,
+Patterson-UTI may require the participant to remit the
+withholding amount to Patterson-UTI or cause shares of Common
+Stock to be withheld or sold in order to satisfy the tax
+withholding obligations.
+Section 409A 
+Awards of SARs, performance awards, or other stock unit awards
+under the 2005 Plan may, in some cases, result in the deferral
+of compensation that is subject to the requirements of
+Section 409A of the Code. Generally, if deferrals of these
+awards fail to meet the requirements of Section 409A of the
+Code, the compensation payable under these awards will be
+subject to immediate taxation and tax penalties in the year in
+which the awards vest. It is the intent of Patterson-UTI that
+awards under the 2005 Plan will be structured and administered
+in a manner that complies with the requirements of
+Section 409A of the Code.
+Summary
+Information Pertaining to all Equity Compensation Plans of
+Patterson-UTI 
+The following information summarizes as of December 31,
+2009 certain information regarding Patterson-UTI’s equity
+compensation plans. For a more detailed description of the
+equity compensation plans, see Note 11 of
+Patterson-UTI’s audited financial statements contained in
+its Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2009.
+Equity Compensation Plan Information 
+Number of 
+Number of 
+Securities 
+Securities to 
+Weighted- 
+Remaining Available 
+be Issued upon 
+Average Exercise 
+for Future Issuance 
+Exercise of 
+Price of 
+under Equity 
+Outstanding 
+Outstanding 
+Compensation Plans 
+Options, 
+Options, 
+(Excluding 
+Warrants and 
+Warrants and 
+Securities Reflected 
+Plan Category 
+Rights 
+Rights 
+in Column(a)) 
+(a) 
+(b) 
+(c) 
+Equity compensation plans approved by security holders(1)
+6,627,634
+$
+20.50
+2,545,524
+Equity compensation plans not approved by security holders(2)
+214,136
+$
+9.97
+—
+Total
+6,841,770
+$
+20.17
+2,545,524
+(1) 
+The 2005 Plan provides for awards of incentive stock options,
+non-incentive stock options, tandem and freestanding stock
+appreciation rights, restricted stock awards, other stock unit
+awards, performance share 
+16
+Table of Contents 
+awards, performance unit awards and dividend equivalents to key
+employees, officers and directors, which are subject to certain
+vesting and forfeiture provisions. All options are granted with
+an exercise price equal to or greater than the fair market value
+of the common stock at the time of grant. The vesting schedule
+and term are set by the Compensation Committee of the Board of
+Directors. All securities remaining available for future
+issuance under equity compensation plans approved by security
+holders in column (c) are available under this plan. None
+of the stock options granted under the 2005 Plan or any other
+equity compensation plan approved by security holders has been
+granted with rights to receive cash dividends or dividend
+equivalent rights. 
+(2) 
+The Amended and Restated Patterson-UTI Energy, Inc. 2001
+Long-Term Incentive Plan (the “2001 Plan”) was
+approved by the Board of Directors in July 2001. In connection
+with the approval of the 2005 Plan, the Board of Directors
+approved a resolution that no further options, restricted stock
+or other awards would be granted under any equity compensation
+plan, other than the 2005 Plan. The terms of the 2001 Plan
+provided for grants of stock options, stock appreciation rights,
+shares of restricted stock and performance awards to eligible
+employees other than officers and directors. No Incentive Stock
+Options could be awarded under the Plan. All options were
+granted with an exercise price equal to or greater than the fair
+market value of the common stock at the time of grant. The
+vesting schedule and term were set by the Compensation Committee
+of the Board of Directors. None of the stock options granted
+under the 2001 Plan has been granted with rights to receive cash
+dividends or dividend equivalent rights. 
+Additional
+Information Regarding the 2005 Plan 
+As of March 9, 2010, the closing price of
+Patterson-UTI’s common stock on the Nasdaq Global Select
+Market was $15.30 per share. Except for receipt of the option
+exercise price when and if options are exercised, Patterson-UTI
+receives no consideration in connection with the award of
+options or restricted stock under the 2005 Plan. Patterson-UTI
+has not determined the type, number and other terms of awards
+under the 2005 Plan that will be granted in the future to
+eligible directors and nominees, executive officers, officers as
+a group, or non-officer employees as a group as that
+determination is subject to the discretion of the Compensation
+Committee.
+The Board of Directors recommends a vote “FOR” the
+approval of the Amendment to the 2005
+Plan. Approval of the Amendment requires the
+affirmative vote of the holders of a majority of the shares of
+Common Stock present in person or by proxy, and entitled to vote
+at the Meeting. If you do not vote against or abstain from
+voting on the Amendment to the 2005 Plan, your proxy will be
+voted “FOR” approval of the Amendment to the 2005
+Plan. Abstentions will be counted as shares entitled to vote on
+the proposal and will have the same effect as a vote
+“AGAINST” the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be
+treated as a share entitled to vote on the proposal. This will
+have the effect of reducing the absolute number of shares
+necessary to approve the proposal.
+PROPOSAL NO. 3 
+RATIFICATION
+OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as the
+independent registered public accounting firm to audit the
+financial statements of Patterson-UTI for the fiscal year ending
+December 31, 2010, and directed that such engagement be
+submitted to the stockholders of Patterson-UTI for ratification.
+In recommending ratification by the stockholders of such
+engagement, the Board of Directors is acting upon the
+recommendation of the Audit Committee, which has satisfied
+itself as to PricewaterhouseCoopers LLP’s independence,
+professional competence and standing. Although ratification by
+stockholders of the engagement of PricewaterhouseCoopers LLP is
+not required by Delaware corporate law or Patterson-UTI’s
+restated certificate of incorporation or bylaws, the Audit
+Committee believes a decision of this nature should be made with
+the consideration of Patterson-UTI’s stockholders. If the
+stockholders fail to ratify the appointment, the Audit Committee
+will reconsider whether to retain PricewaterhouseCoopers LLP and
+may retain that firm or another without re-submitting the matter
+to our stockholders. Even if the appointment is ratified, the
+Audit Committee may, in its discretion, direct the appointment
+of a different independent registered public accounting firm at
+any time during the year if it determines that such change would
+be in the best interests of Patterson-UTI and its stockholders.
+17
+Table of Contents 
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and
+will be given the opportunity to make a statement if they so
+desire. It also is expected that the representative(s) will be
+available to respond to appropriate questions from the
+stockholders.
+The Board of Directors recommends a vote “FOR” the
+ratification of PricewaterhouseCoopers LLP as
+Patterson-UTI’s independent registered public accounting
+firm. Ratification of the selection of
+PricewaterhouseCoopers LLP requires the affirmative vote of the
+holders of a majority of the shares of Common Stock present in
+person or by proxy, and entitled to vote at the Meeting. Unless
+you give contrary instructions in your proxy, your proxy will be
+voted “FOR” such ratification. Abstentions will be
+counted as shares entitled to vote on the proposal and will have
+the same effect as a vote “AGAINST” the proposal.
+Because the ratification of an independent registered public
+accounting firm is considered a routine matter, if you do not
+give instructions to your brokerage firm, bank, broker-dealer,
+or other similar organization, the brokerage firm, bank,
+broker-dealer, or other similar organization will nevertheless
+be entitled to vote your shares in its discretion and may give
+or authorize the giving of a proxy to vote the shares in its
+discretion on this proposal.
+EXECUTIVE
+OFFICERS 
+Set forth below is the name, age and position followed by a
+brief description of the business experience during at least the
+past five years for each executive officer of Patterson-UTI who
+is not also a member of the Board of Directors.
+Name 
+Age 
+Position 
+Douglas J. Wall
+57
+President and Chief Executive Officer
+John E. Vollmer III
+54
+Senior Vice President — Corporate Development,
+Chief Financial Officer and Treasurer
+Seth D. Wexler
+38
+General Counsel and Secretary
+Gregory W. Pipkin
+38
+Chief Accounting Officer and Assistant Secretary
+Douglas J. Wall — Mr. Wall has served as
+President and Chief Executive Officer of Patterson-UTI since
+October 2007. From April through September 2007 he served as
+Chief Operating Officer of Patterson-UTI. From 2005 to April
+2007, Mr. Wall served as Group President, Completion and
+Production of Baker Hughes Incorporated, an oilfield service
+company. In that capacity, Mr. Wall was responsible for the
+combined activities of Baker Oil Tools, Baker Petrolite,
+Centrilift and ProductionQuest divisions. From 2003 to 2005 he
+served as President of Baker Oil Tools, a division of Baker
+Hughes, and from 1997 to 2003 he served as President of Hughes
+Christensen Company, a division of Baker Hughes. Mr. Wall
+holds a Bachelor Degree in Economics from the University of
+Calgary and a Masters of Business Administration in Finance and
+Marketing from the University of Alberta.
+John E. Vollmer III — Mr. Vollmer has
+served as Chief Financial Officer and Treasurer of Patterson-UTI
+since November 2005 and Senior Vice President —
+Corporate Development of Patterson-UTI since May 2001.
+Mr. Vollmer also served as Secretary of Patterson-UTI from
+November 2005 to February 2007. Mr. Vollmer served as
+Senior Vice President, Chief Financial Officer, Secretary and
+Treasurer of UTI from 1998 to May 2001. From 1992 until 1997,
+Mr. Vollmer served in a variety of capacities at
+Blockbuster Entertainment, including Senior Vice
+President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+Seth D. Wexler — Mr. Wexler has served as
+General Counsel and Secretary of Patterson-UTI since August
+2009. From March 1998 to August 2009, he specialized in
+securities law and mergers and acquisitions for the law firm of
+Fulbright & Jaworski L.L.P., including as a partner of
+such law firm since January 2007. Mr. Wexler holds a
+Bachelor of Business Administration in Finance from the
+University of Texas at Austin, a Juris Doctorate from the
+University of Houston Law Center and a Masters of Business
+Administration from the University of Houston.
+Gregory W. Pipkin — Mr. Pipkin has served
+as Chief Accounting Officer and Assistant Secretary of
+Patterson-UTI since August 2007. From June 2006 to August 2007,
+Mr. Pipkin served as Director of Financial Reporting of
+Patterson-UTI. From April 2001 through May 2006, Mr. Pipkin
+was Controller and Vice President of Accounting and Reporting
+for Alamosa Holdings, Inc., a publicly traded wireless
+telecommunications company. Prior to April
+18
+Table of Contents 
+2001, Mr. Pipkin was in the practice of public accounting.
+Mr. Pipkin is a Certified Public Accountant and holds a
+Bachelor of Business Administration in Accounting from Texas
+Tech University.
+COMPENSATION
+DISCUSSION AND ANALYSIS 
+Overview 
+Compensation
+Committee 
+The Compensation Committee (the “Committee”) sets and
+administers the policies that govern the compensation of
+executive officers and directors of Patterson-UTI. As part of
+its duties, the Committee determines the compensation of
+Patterson-UTI’s executive officers who are named in the
+Summary Compensation Table appearing elsewhere in this proxy
+statement (the “Named Executive Officers”) and grants
+all awards of restricted stock, stock options and performance
+units under Patterson-UTI’s long-term incentive plan.
+The Committee currently consists of Messrs. Hunt
+(chairman), Buckner, Huff and Peak, each of whom is an
+independent director as defined by the Nasdaq listing standards.
+Compensation
+Objectives 
+The Committee’s objectives are to provide to the Named
+Executive Officers competitive compensation packages that will
+permit Patterson-UTI to attract and retain highly qualified
+individuals and to motivate and reward the Named Executive
+Officers for performance that benefits Patterson-UTI and its
+stockholders.
+Role
+of Management and Compensation Consultant 
+All compensation decisions with respect to the Named Executive
+Officers of Patterson-UTI are made solely by the Committee. The
+Committee is permitted under its charter to delegate any of its
+powers to a subcommittee of the Committee. In performing its
+duties, the Committee considers input from senior management on
+individual performance and compensation matters.
+For 2009, the Committee engaged Towers Perrin (who pursuant to a
+January 2010 merger is now known as Towers Watson (“Towers
+Perrin”)), an independent compensation consultant, who
+reported directly to the Committee to evaluate and make
+recommendations to the Committee regarding Patterson-UTI’s
+executive compensation philosophy and practices. Towers Perrin
+reviewed the executive salaries, non-equity incentive
+compensation and long-term incentives for competitiveness with
+similarly situated oilfield service companies. Towers Perrin was
+provided a proposed representative peer group within the
+oilfield services industry based on various criteria and was
+provided information as to the responsibilities of the members
+of Patterson-UTI’s executive team in relationship to its
+peers. Towers Perrin also analyzed Patterson-UTI’s share
+utilization as compared to its peers for purposes of assessing
+dilution resulting from awards under Patterson-UTI’s
+incentive plans. Towers Perrin was asked to provide its advice
+as to Patterson-UTI’s incentive plans and the
+Committee’s proposed compensation of the Named Executive
+Officers and the reasonableness of that compensation.
+For 2009, the Committee reviewed compensation data from the
+following peer group of companies: BJ Services Company, Cameron
+International Corporation, Diamond Offshore Drilling Inc., Ensco
+International Inc., FMC Technologies Inc., Helmerich &
+Payne Inc., Nabors Industries Ltd., National Oilwell Varco Inc.,
+Noble Corp., Pride International, Inc., Rowan Companies Inc.,
+Smith International Inc., Transocean Inc. and Weatherford
+International Ltd. Towers Perrin provided information to the
+Committee to assist it in benchmarking individual and aggregate
+executive compensation against such peer group of companies.
+Elements
+of Compensation 
+Patterson-UTI’s compensation program for its Named
+Executive Officers includes three primary elements:
+(1) base salary, (2) non-equity incentive compensation
+in the form of cash bonuses and (3) long-term incentive
+opportunities in the form of restricted stock, stock options and
+performance units. Below is a summary of each element of
+compensation. The general intent of the base salary for the
+Named Executive Officers was for that
+19
+Table of Contents 
+compensation to be around the 50th percentile of the peer
+group and for incentive and equity based compensation to be
+above the 66th percentile. These objectives were
+established based on Patterson-UTI’s historical top tier
+performance on returns on assets and equity and long-term share
+value creation as compared to peers.
+In determining compensation for the Named Executive Officers for
+2009, the Committee considered a variety of information,
+including:
+• 
+compensation for executive officers at similarly situated
+oilfield service companies;
+• 
+the portion of cash compensation that would be directly related
+to cash generated by operations;
+• 
+historical and projected financial and operational results at
+Patterson-UTI, including margins achieved, rig utilization, net
+income and earnings before interest, taxes, depreciation and
+amortization (“EBITDA”) and return on equity and
+assets;
+• 
+historical stock performance;
+• 
+operational and strategic objectives of Patterson-UTI; and
+• 
+individual performance.
+Base
+Salary 
+Historically, the Committee has emphasized performance-based
+compensation in the form of non-equity and equity incentive
+compensation and has minimized salary adjustments. In February
+2007, the base salary of Mr. Berns was increased from
+$215,000 to $265,000. In October 2007, upon being named
+President and Chief Executive officer of Patterson-UTI,
+Mr. Wall’s base salary was increased from $450,000 to
+$600,000. In February 2008, the base salary of Mr. Vollmer
+was increased from $275,000 to $350,000.
+The base salaries of Named Executive Officers are reviewed and
+determined annually by the Committee based on
+(i) subjective evaluations of the officer’s functional
+position and specific performance, (ii) assessment of the
+relative importance of each position at Patterson-UTI,
+(iii) a comparison to salary ranges for executives of other
+companies in the oilfield service industry with market,
+financial and operational characteristics similar to those of
+Patterson-UTI, (iv) Patterson-UTI’s financial results
+and position and (v) Patterson-UTI’s performance
+compared to similarly situated companies.
+Non-Equity
+Incentive Compensation 
+The Named Executive Officers have historically received
+non-equity incentive compensation in the form of annual cash
+bonuses designed to put a meaningful portion of total
+compensation at risk. In 2009, non-equity incentive compensation
+for Messrs. Siegel, Wall, Vollmer and Berns was tied to a
+bonus pool based upon Patterson-UTI’s EBITDA. The bonus
+pool was allocated among those four officers pursuant to a
+pre-determined sharing percentage that reflected a team-based
+philosophy as well as the organizational structure of the top
+management team. The bonus pool and allocation are subject to
+modification by the Committee at its discretion. EBITDA has been
+chosen as the performance measure for the annual cash bonus
+because Patterson-UTI believes it is an important measure of
+current year financial performance. Non-equity incentive
+compensation for Mr. Wexler during 2009 was determined at
+the discretion of the Committee based on the operating
+performance of Patterson-UTI and the individual performance of
+Mr. Wexler during the portion of the year following the
+commencement of his employment.
+In 2009, the bonus pool for Messrs. Siegel, Wall, Vollmer
+and Berns, subject to a minimum threshold of $200 million
+of EBITDA, was approximately 0.611 of one percent of
+Patterson-UTI’s EBITDA. The allocation of the bonus pool as
+a percentage of 2009 EBITDA was as follows: 0.222 of one percent
+to Mr. Siegel, 0.167 of one percent to Mr. Wall and
+0.111 of one percent to each of Messrs. Vollmer and Berns.
+While the Committee did not establish a specific threshold bonus
+amount for each such officer, the Grants of Plan-Based Awards
+table presents a threshold bonus amount for each such officer
+based on an assumed EBITDA at the minimum EBITDA threshold of
+$200 million and the allocation formula. The maximum amount
+that can be awarded to an individual under any cash-based
+performance award granted under the 2005 Plan during a
+12-month 
+period is $5,000,000. In order to
+20
+Table of Contents 
+reach this maximum amount, EBITDA of $2.25 billion in the
+case of Mr. Siegel, $3.00 billion in the case of
+Mr. Wall and $4.50 billion in the case of
+Messrs. Vollmer and Berns would have been needed. The
+Committee did not establish a target bonus amount. The target
+bonus amount presented in the Grants of Plan-Based Awards table
+is calculated for the respective officer based on
+Patterson-UTI’s actual EBITDA for the fiscal year ended
+December 31, 2009 and the allocation formula applied to the
+bonus pool for distribution.
+The aggregate bonus pool paid to Messrs. Siegel, Wall,
+Vollmer and Berns for 2009 was $1,452,271 based on
+Patterson-UTI’s 2009 EBITDA of $239,708,000 reduced at the
+discretion of the Committee by $1.9 million which
+represented the impact of an impairment loss recognized in 2009
+on the disposal of Patterson-UTI’s drilling and completion
+fluids business. Based on the allocation above, Mr. Siegel
+received $528,462; Mr. Wall received $396,347 and
+Messrs. Vollmer and Berns each received $264,231.
+Consistent with Patterson-UTI’s emphasis on
+performance-based compensation, non-equity incentive
+compensation for 2009 represented a significant portion of each
+Named Executive Officer’s total cash compensation from
+Patterson-UTI for the year.
+Long-Term
+Incentive Compensation 
+Long-term incentive compensation for the Named Executive
+Officers consists of both awards of shares of restricted stock
+and options to purchase Common Stock. The four most highly
+compensated Named Executive Officers also receive performance
+units payable in cash. The restricted stock and options vest
+over three years. Payouts under the performance units are tied
+to Patterson-UTI’s total shareholder return for the
+performance period beginning April 1, 2009 and ending
+March 31, 2012 as compared to total shareholder return for
+a peer group determined by the Committee. Total shareholder
+return for Patterson-UTI is measured based on $100 invested in
+Common Stock on the first day of the performance period, with
+dividends reinvested. The recipients will receive a base payment
+of $625,000 in the case of Mr. Siegel, $468,750 in the case
+of Mr. Wall and $312,500 in the case of
+Messrs. Vollmer and Berns if Patterson-UTI’s total
+shareholder return is at or above the 25th percentile but
+less than the 50th percentile, two times the base if at or
+above the 50th percentile but less than the
+75th percentile and four times the base if at the
+75th percentile or higher. No cash payments will be made in
+respect of the performance units unless Patterson-UTI has
+positive total shareholder return as of the end of the
+performance period; except that if during the two year period
+ending March 31, 2014, Patterson-UTI’s total
+shareholder return for any 30 consecutive day period equals or
+exceeds 18% on an annualized basis from April 1, 2009
+through the end of such 30 consecutive day period, then cash
+payments, if any, will be made as set forth above based on
+Patterson-UTI’s total shareholder return relative to the
+peer group as of March 31, 2012.
+Awards of such long-term incentive compensation reflect the
+Committee’s desire to provide the Named Executive Officers
+with additional incentives by increasing their proprietary
+interest in the success of Patterson-UTI. The Committee believes
+that there should be an emphasis on equity and performance-based
+compensation in order to provide incentives and rewards that are
+closely aligned with stockholders. The Committee reviews equity
+and performance-based compensation of the Named Executive
+Officers on an annual basis.
+Patterson-UTI’s equity and performance-based compensation
+has historically been given significant weight, along with
+short-term non-equity incentive compensation, in the overall
+compensation package of the Named Executive Officers. The
+allocation and mix of equity and performance-based compensation
+among restricted stock, stock options and performance units in
+2009 followed this approach; the Committee made grants of
+performance units and emphasized performance units and stock
+options over restricted stock for the four most highly
+compensated Named Executive Officers in order to ensure that the
+greatest awards would only be earned for achievement of certain
+performance goals in the case of performance units and increases
+in Patterson-UTI’s equity value in the case of stock
+options.
+In determining the appropriate equity based compensation grants,
+the Committee sought to achieve a roughly even mix of value
+among performance units, restricted stock and stock options,
+with the overall value of the grants being targeted at the
+50-75th percentile 
+of the peer group, with the range being used to take into
+account comparability issues among the peer group, including
+differing market capitalizations, revenues and EBITDA. In
+21
+Table of Contents 
+addition, among the different factors considered by the
+Committee in establishing the long-term incentive compensation
+awards in 2009 were:
+• 
+the different option valuation methods, including Black-Scholes,
+utilized in establishing stock option grants and variations in
+value depending on assumptions used in the valuations;
+• 
+the portion of equity based compensation that has
+performance-based vesting
+and/or 
+compared to those of Patterson-UTI’s peer group of
+companies;
+• 
+stock price volatility and its impact on the valuation of equity
+grants;
+• 
+estimated changes in industry equity compensation amounts based
+on information provided by Towers Perrin;
+• 
+the fact that two-thirds of the 2009 equity-based compensation
+was directly related to Patterson-UTI’s performance and was
+benchmarked to the performance of Patterson-UTI’s peer
+group of companies;
+• 
+prior option and restricted stock grant amounts and the nominal
+valuations of those grants;
+• 
+the addition of performance units as a new element of
+compensation, which could further link compensation with
+performance; and
+• 
+the desire to have a balance between compensation tied primarily
+to operational performance measures and compensation tied
+primarily to stock performance measures.
+The result of this analysis was a valuation for the equity
+grants for 2009 being broadly benchmarked at an approximate
+twenty percent (20%) discount to a targeted 66th percentile
+relative to the peer group of companies with adjustments made in
+absolute grant numbers due to the greater emphasis on direct
+performance-based equity compensation. This methodology resulted
+in grants in the
+50-75th percentile 
+of the peer group depending on particular valuation analysis
+applied.
+The Committee’s practice has generally been to grant any
+stock options, restricted stock and performance units to Named
+Executive Officers at a meeting following the conclusion of
+Patterson-UTI’s first quarter. Such meetings are typically
+held in conjunction with regular quarterly Board meetings that
+are held prior to Patterson-UTI’s public release of
+quarterly earnings information. Options are granted at an
+exercise price equal to the closing price of
+Patterson-UTI’s stock on the date of grant.
+Retirement
+Plans 
+Patterson-UTI offers a 401(k) plan to its employees, including
+its Named Executive Officers. Participants may contribute a
+portion of their base salary to the 401(k) plan, subject to
+federal limits. Patterson-UTI makes matching contributions up to
+four percent of each participant’s eligible base salary.
+The Named Executive Officers of Patterson-UTI are eligible to
+participate in the 401(k) plan on the same basis as other
+employees. Patterson-UTI does not have any other retirement plan.
+Perquisites
+and Personal Benefits 
+No Named Executive Officer received perquisites totaling more
+than $10,000. Accordingly, the perquisites do not meet the
+threshold which would require disclosure in the Summary
+Compensation Table below.
+Share
+Ownership Guidelines 
+The Nominating and Corporate Governance Committee has enacted
+share ownership guidelines applicable to all executive officers
+and directors of Patterson-UTI. The guidelines require officers
+and directors to hold at all
+22
+Table of Contents 
+times, subject to a four year phase-in from the date first
+elected as an officer or director, at least the following number
+of shares of Common Stock:
+•
+Chairman
+120,000 shares
+•
+President and Chief Executive Officer
+90,000 shares
+•
+Senior Vice Presidents
+60,000 shares
+•
+General Counsel
+7,500 shares
+•
+Chief Accounting Officer
+7,500 shares
+•
+Outside Directors
+10,000 shares
+•
+Non-executive Inside Director
+10,000 shares
+Each of the Named Executive Officers and Directors was in
+compliance with these guidelines as of the date of this proxy
+statement.
+Change in
+Control and Severance Agreements 
+Patterson-UTI has entered into change in control agreements with
+its Named Executive Officers as further described elsewhere in
+this proxy statement. The Committee believes that the change in
+control agreements help Patterson-UTI to attract and retain the
+Named Executive Officers by reducing the personal uncertainty
+and anxiety that arises from the possibility of a future
+business combination. The Committee also believes the change in
+control agreements should prevent the Named Executive Officers
+from leaving employment out of concern for the security of their
+jobs or being unable to concentrate on their work.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer pursuant to which
+Patterson-UTI has agreed to pay each such person within ten days
+of the termination of his employment with Patterson-UTI for any
+reason (including voluntary termination by him), an amount in
+cash equal to his annual base salary at the time of such
+termination. Patterson-UTI has entered into a severance
+agreement with Mr. Wall that provides for a lump-sum cash
+payment of $750,000 to be payable to Mr. Wall within ten
+days of the date of a qualifying termination of his employment
+with Patterson-UTI. A qualifying termination for Mr. Wall
+is defined in the severance agreement generally as a termination
+by Patterson-UTI for any reason other than cause or, if certain
+conditions are met, a termination by Mr. Wall due to a
+reduction in his annual base salary below a defined threshold
+amount. Mr. Wall’s severance agreement expires on
+April 9, 2010 unless he experiences a qualifying
+termination prior to such date. Any payment made by
+Patterson-UTI pursuant to these letter agreements or the
+severance agreement will reduce dollar for dollar any payment
+owed to such person, if any, pursuant to the change in control
+agreements discussed above.
+Section 162(m)
+Considerations 
+In considering compensation decisions for the executive
+management of Patterson-UTI, the Committee routinely considers
+the potential effect of Section 162(m) of the Internal
+Revenue Code. Section 162(m) imposes a limitation on
+corporate tax deductions for non-performance based compensation
+to certain officers that exceeds $1 million that can be
+taken by a publicly held corporation for compensation paid to
+certain of its executive officers. While Patterson-UTI does not
+design its compensation programs for tax purposes, Patterson-UTI
+does design its plans to be tax efficient for Patterson-UTI
+where possible. However, the Committee believes that tax
+deduction limitations should not compromise Patterson-UTI’s
+ability to establish and maintain appropriate executive
+compensation programs and reserves the right to award
+non-deductible compensation.
+Compensation
+Committee Interlocks and Insider Participation 
+No member of the Compensation Committee was, during the year
+ended December 31, 2009, an officer or employee of
+Patterson-UTI or any of its subsidiaries, or was formerly an
+officer of Patterson-UTI or any of its subsidiaries, or had any
+relationships requiring disclosure by Patterson-UTI under
+Item 404 of
+Regulation S-K. 
+During the year ended December 31, 2009, none of
+Patterson-UTI’s executive officers served as (i) a
+member of the compensation committee (or other Board committee
+performing equivalent functions) of another entity, one of whose
+executive officers served on the Compensation Committee,
+(ii) a director of another entity, one of whose
+23
+Table of Contents 
+executive officers served on the Compensation Committee, or
+(iii) a member of the compensation committee (or other
+Board committee performing equivalent functions) of another
+entity, one of whose executive officers served as a director of
+Patterson-UTI.
+COMPENSATION
+COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the
+Compensation Discussion and Analysis included in this proxy
+statement required by Item 402(b) of
+Regulation S-K 
+with management and, based upon such review and discussion, the
+Compensation Committee has recommended to the Board that the
+Compensation Discussion and Analysis be included in this proxy
+statement.
+Terry H. Hunt, Chairman 
+Charles O. Buckner 
+Curtis W. Huff 
+Kenneth R. Peak
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2009
+with respect to the Principal Executive Officer, the Principal
+Financial Officer and the other Named Executive Officers of
+Patterson-UTI:
+Summary
+Compensation Table 
+Non-equity 
+Stock 
+Option 
+Incentive plan 
+All Other 
+Salary 
+Bonus 
+Awards 
+Awards 
+Compensation 
+Compensation 
+Total 
+Name and Principal Position(s) 
+Year 
+($) 
+($) 
+($)(1) 
+($)(2) 
+($)(3) 
+($)(4) 
+($) 
+Douglas J. Wall 
+2009
+$
+600,000
+$
+—
+$
+1,558,620
+(5)
+$
+1,253,149
+$
+396,347
+$
+9,800
+$
+3,817,916
+President & Chief
+2008
+$
+600,000
+$
+—
+$
+2,088,338
+$
+1,458,577
+$
+1,367,378
+$
+9,200
+$
+5,523,493
+Executive Officer
+2007
+$
+365,625
+$
+1,075,000
+(6)
+$
+2,272,000
+$
+665,215
+$
+—
+$
+—
+$
+4,377,840
+John E. Vollmer III 
+2009
+$
+350,000
+$
+—
+$
+1,039,080
+(7)
+$
+835,433
+$
+264,231
+$
+9,800
+$
+2,498,544
+Senior Vice President —
+2008
+$
+326,125
+$
+—
+$
+1,392,225
+$
+972,385
+$
+911,586
+$
+9,200
+$
+3,611,521
+Corporate Development, Chief Financial Officer &
+Treasurer
+2007
+$
+275,000
+$
+—
+$
+604,250
+$
+1,072,845
+$
+1,022,050
+$
+10,735
+$
+2,984,880
+Mark S. Siegel 
+2009
+$
+350,000
+$
+—
+$
+2,078,160
+(8)
+$
+1,670,865
+$
+528,462
+$
+—
+$
+4,627,487
+Chairman of the Board
+2008
+$
+350,000
+$
+—
+$
+2,784,450
+$
+1,944,769
+$
+1,823,171
+$
+—
+$
+6,902,390
+2007
+$
+350,000
+$
+—
+$
+1,208,500
+$
+2,145,690
+$
+2,044,100
+$
+—
+$
+5,748,290
+Kenneth N. Berns 
+2009
+$
+265,000
+$
+—
+$
+1,039,080
+(7)
+$
+835,433
+$
+264,231
+$
+—
+$
+2,403,744
+Senior Vice President
+2008
+$
+265,000
+$
+—
+$
+1,392,225
+$
+972,385
+$
+911,586
+$
+—
+$
+3,541,196
+2007
+$
+258,055
+$
+—
+$
+604,250
+$
+1,072,845
+$
+1,022,050
+$
+—
+$
+2,957,200
+Seth D. Wexler 
+2009
+$
+96,554
+$
+125,000
+(9)
+$
+213,900
+$
+79,856
+$
+—
+$
+—
+$
+515,310
+General Counsel and Secretary
+(1) 
+Amounts set forth include the fair value of awards at the date
+of grant as determined in accordance with FASB ASC Topic 718
+with respect to restricted stock awarded to the Named Executive
+Officer in the fiscal years ended December 31, 2009, 2008
+and 2007 and with respect to performance units awarded to
+Messrs. Wall, Vollmer, Siegel and Berns in the fiscal year
+ended December 31, 2009. Performance conditions for all
+awards of restricted stock had been satisfied as of
+December 31, 2009. For additional information related to
+the assumptions used and valuation of restricted stock and
+performance units see Note 11 to the consolidated financial
+statements in Patterson-UTI’s Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2009. 
+(2) 
+Amounts set forth represent the fair value at the date of grant
+as determined in accordance with FASB ASC Topic 718 with respect
+to stock options awarded to the Named Executive Officer in the
+fiscal years ended December 31, 2009, 2008 and 2007. For
+additional information related to the assumptions used in
+connection with the valuation of stock options using the
+Black-Scholes option pricing model see Note 11 to the 
+24
+Table of Contents 
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the fiscal year ended December 31, 2009. 
+(3) 
+Represents annual bonuses earned for the fiscal years ended
+December 31, 2009, 2008 and 2007. The bonus plan in each of
+those fiscal years provided for a bonus pool based on EBITDA,
+subject to a minimum EBITDA of $400 million for 2007 and
+2008 and $200 million for 2009. The bonus pool was
+allocated among the participants based on a pre-determined
+sharing percentage. At the direction of the Compensation
+Committee, the total amount paid out pursuant to the executive
+bonus pool was $1.45 million for 2009, $5.01 million
+for 2008 and $6.13 million for 2007. 
+(4) 
+Amounts set forth reflect contributions to a 401(k) plan by
+Patterson-UTI on behalf of the Named Executive Officer. 
+(5) 
+Includes $967,995 related to an award of shares of restricted
+stock and $590,625 related to an award of performance units
+during 2009. 
+(6) 
+Amount includes a signing bonus of $275,000 paid to
+Mr. Wall upon the commencement of his employment with
+Patterson-UTI and an annual bonus for the fiscal year ended
+December 31, 2007 of $800,000, which was paid pursuant to
+the terms of the offer letter provided to Mr. Wall prior to
+his employment with Patterson-UTI. 
+(7) 
+Includes $645,330 related to an award of shares of restricted
+stock and $393,750 related to an award of performance units
+during 2009. 
+(8) 
+Includes $1,290,660 related to an award of shares of restricted
+stock and $787,500 related to an award of performance units
+during 2009. 
+(9) 
+Includes $60,000 paid to Mr. Wexler upon the commencement
+of his employment with Patterson-UTI. 
+The following table sets forth information concerning grants of
+plan-based awards during the fiscal year ended December 31,
+2009 to the Named Executive Officers:
+Grants of
+Plan-Based Awards 
+All Other 
+All Other 
+Option Awards: 
+Stock Awards: 
+Number of 
+Exercise or 
+Grant Date 
+Estimated Possible Payouts under 
+Estimated Possible Payouts under 
+Number of 
+Securities 
+Base Price 
+Fair Value of 
+Non-equity Incentive Plan Awards 
+Equity Incentive Plan Awards 
+Shares of 
+Underlying 
+of Option 
+Stock and 
+Grant 
+Threshold 
+Target 
+Maximum 
+Threshold 
+Target 
+Maximum 
+Stock or Units 
+Options 
+Awards 
+Option Awards 
+Name 
+Date 
+($) 
+($) 
+($) 
+($) 
+($) 
+($) 
+(#)(3) 
+(#)(4) 
+($/Sh) 
+($)(5) 
+Douglas J. Wall
+2/06/09
+(1)
+$
+333,333
+$
+399,513
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/28/09
+(2)
+—
+—
+—
+$
+468,750
+$
+936,500
+$
+1,875,000
+—
+—
+—
+—
+4/28/09
+—
+—
+—
+—
+—
+—
+73,500
+—
+—
+$
+967,995
+4/28/09
+—
+—
+—
+—
+—
+—
+—
+262,500
+$
+13.17
+$
+1,253,149
+John E. Vollmer III
+2/06/09
+(1)
+$
+222,222
+$
+266,342
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/28/09
+(2)
+—
+—
+—
+$
+312,500
+$
+625,000
+$
+1,250,000
+—
+—
+—
+—
+4/28/09
+—
+—
+—
+—
+—
+—
+49,000
+—
+—
+$
+645,330
+4/28/09
+—
+—
+—
+—
+—
+—
+—
+175,000
+$
+13.17
+$
+835,433
+Mark S. Siegel
+2/06/09
+(1)
+$
+444,444
+$
+532,684
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/28/09
+(2)
+—
+—
+—
+$
+625,000
+$
+1,250,000
+$
+2,500,000
+—
+—
+—
+—
+4/28/09
+—
+—
+—
+—
+—
+—
+98,000
+—
+—
+$
+1,290,660
+4/28/09
+—
+—
+—
+—
+—
+—
+—
+350,000
+$
+13.17
+$
+1,670,865
+Kenneth N. Berns
+2/06/09
+(1)
+$
+222,222
+$
+266,342
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/28/09
+(2)
+—
+—
+—
+$
+312,500
+$
+625,000
+$
+1,250,000
+—
+—
+—
+—
+4/28/09
+—
+—
+—
+—
+—
+—
+49,000
+—
+—
+$
+645,330
+4/28/09
+—
+—
+—
+—
+—
+—
+—
+175,000
+$
+13.17
+$
+835,433
+Seth D. Wexler
+8/10/09
+—
+—
+—
+—
+—
+—
+15,000
+—
+—
+$
+213,900
+8/10/09
+—
+—
+—
+—
+—
+—
+—
+15,000
+$
+14.41
+$
+79,856
+(1) 
+The 2009 bonus plan for Named Executive Officers for the fiscal
+year ended December 31, 2009 was approved on
+February 6, 2009. The 2009 bonus plan for
+Messrs. Wall, Vollmer, Siegel and Berns provided for a
+bonus pool based on EBITDA for the fiscal year ended
+December 31, 2009, subject to a minimum EBITDA of
+$200 million. The bonus pool was allocated among
+Messrs. Wall, Vollmer, Siegel and Berns based on a 
+25
+Table of Contents 
+pre-determined 
+sharing percentage. The threshold amount presented in this table
+is calculated for the respective officer based on an assumed
+EBITDA of $200 million and the allocation formula applied
+to the bonus pool for distribution due to the fact that the
+bonus plan provides for no payment if the minimum EBITDA of
+$200 million is not satisfied. The target amount is
+calculated based on Patterson-UTI’s actual EBITDA for the
+fiscal year ended December 31, 2009 and the allocation
+formula applied to the bonus pool for distribution. The target
+amounts presented in the table differ from the actual amounts
+earned presented in the Summary Compensation Table as a result
+of a discretionary downward adjustment to the total bonus pool
+by the Compensation Committee. The Compensation Committee
+determined the payouts for 2009 based on Patterson-UTI’s
+actual EBITDA less $1.9 million which represented an
+impairment charge recorded in connection with the disposal of
+Patterson-UTI’s drilling and completion fluids business.
+The cash bonuses awarded from the bonus pool were awarded under
+the 2005 Plan, which has been designed to meet the requirements
+of Section 162(m) of the Code. Although the bonus pool for
+Messrs. Wall, Vollmer, Siegel and Berns did not have an
+EBITDA cap, the maximum amount that could be awarded to an
+individual under any cash-based performance award granted under
+the 2005 Plan during a
+12-month 
+period is $5,000,000. 
+(2) 
+On April 28, 2009, Patterson-UTI granted performance unit
+awards to Messrs. Wall, Vollmer, Siegel and Berns. These
+awards provide for the recipients to receive a cash payment upon
+the achievement of certain performance goals established by
+Patterson-UTI during a specified period. The performance period
+is the period from April 1, 2009 through March 31,
+2012, subject to certain exceptions that could extend the
+performance period up to two additional years, as described in
+“Compensation Discussion and Analysis” above. The
+performance goals are tied to Patterson-UTI’s total
+shareholder return for the performance period as compared to
+total shareholder return for a peer group determined by the
+Compensation Committee. If Patterson-UTI’s total
+shareholder return for the performance period is positive and at
+or above the
+25 th 
+percentile but less than the
+50 th 
+percentile in relation to the peer group, the awards provide for
+the payment of a base amount. If Patterson-UTI’s total
+shareholder return for the performance period is positive and
+above the
+50 th 
+percentile but less than the
+75 th 
+percentile in relation to the peer group, the awards provide for
+the payment of two times the base amount. If
+Patterson-UTI’s total shareholder return for the
+performance period is positive and above the
+75 th 
+percentile in relation to the peer group, the awards provide for
+the payment of four times the base amount. The base amounts set
+forth in the awards are $468,750 for Mr. Wall, $312,500 for
+Mr. Vollmer, $625,000 for Mr. Siegel and $312,500 for
+Mr. Berns. The target amounts presented in the table are
+based on Patterson-UTI’s total shareholder return at the
+end of the performance period being positive and at or above the
+50 th 
+percentile but less than the
+75 th 
+percentile in relation to the peer group. 
+(3) 
+Shares of restricted stock were awarded pursuant to the 2005
+Plan. Ordinary dividends are paid on unvested shares of
+restricted stock. The rate at which these dividends are paid is
+the same rate at which ordinary dividends are paid on all other
+shares of common stock of Patterson-UTI. The right to receive
+these dividends has been included in the grant date fair value
+of stock awards presented in the table. The shares awarded to
+Messrs. Wall, Vollmer, Siegel and Berns vest over a three
+year period as follows: one-third on April 28, 2010, and
+the remaining two-thirds in equal monthly installments over the
+twenty-four months following April 28, 2010. The shares
+awarded to Mr. Wexler vest over a three year period as
+follows: one-third on June 9, 2010, one-third on
+June 9, 2011 and one-third on June 9, 2012. 
+(4) 
+Options were granted pursuant to the 2005 Plan. Options awarded
+to Messrs. Wall, Vollmer, Siegel and Berns vest over a
+three year period as follows: one-third on April 28, 2010,
+and the remaining two-thirds in equal monthly installments over
+the twenty-four months following April 28, 2010. Options
+awarded to Mr. Wexler vest one-third on August 10,
+2010, and the remaining two-thirds in equal monthly installments
+over the twenty-four months following August 10, 2010. 
+(5) 
+The grant date fair value of restricted stock is based on the
+closing price of Patterson-UTI Common Stock on the date of
+grant, which is consistent with the valuation used by
+Patterson-UTI for the recognition of compensation expense under
+FASB ASC Topic 718. The grant date fair value of stock options
+was determined using the Black-Scholes option pricing model,
+which is consistent with the valuation used by Patterson-UTI for
+the recognition of compensation expense under FASB ASC Topic
+718, with assumptions that are more fully described in
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on Form
+10-K for the
+fiscal year ended December 31, 2009. 
+26
+Table of Contents 
+The following table sets forth information concerning
+outstanding equity awards at December 31, 2009 for the
+Named Executive Officers:
+Outstanding
+Equity Awards 
+at Fiscal Year-End 
+Stock Awards 
+Equity Incentive 
+Equity Incentive 
+Plan Awards: 
+Plan Awards: Market 
+Option Awards 
+Number of 
+or Payout Value of 
+Number of Securities 
+Option 
+Number of Shares 
+Market Value of 
+Unearned Shares, 
+Unearned Shares, 
+Underlying Unexercised 
+Exercise 
+Option 
+or Units of Stock 
+Shares or Units of 
+Units or Other 
+Units or Other 
+Options (#) 
+Price 
+Expiration 
+That Have 
+Stock That Have 
+Rights that 
+Rights that Have 
+Name 
+Exercisable 
+Unexercisable 
+($) 
+Date 
+Not Vested (#) 
+Not Vested ($)(1) 
+Have Not Vested 
+Not Vested ($)(3) 
+Douglas J. Wall
+66,666
+8,334
+(4)
+$
+22.720
+4/08/17
+138,501
+(5)
+$
+2,125,990
+468,750
+$
+468,750
+18,055
+6,945
+(6)
+$
+22.990
+9/30/17
+99,166
+79,334
+(7)
+$
+29.310
+4/24/18
+—
+262,500
+(8)
+$
+13.170
+4/27/19
+John E. Vollmer III
+210,000
+—
+$
+13.195
+7/17/12
+80,399
+(9)
+$
+1,234,125
+312,500
+$
+312,500
+190,000
+—
+$
+16.220
+4/29/13
+60,000
+—
+$
+19.140
+4/27/14
+75,000
+—
+$
+24.630
+4/26/15
+125,000
+—
+$
+28.160
+7/31/16
+133,333
+16,667
+(10)
+$
+24.170
+4/22/17
+66,111
+52,889
+(11)
+$
+29.310
+4/24/18
+—
+175,000
+(8)
+$
+13.170
+4/27/19
+Mark S. Siegel
+380,000
+—
+$
+16.220
+4/29/13
+160,797
+(12)
+$
+2,468,234
+625,000
+$
+625,000
+120,000
+—
+$
+19.140
+4/27/14
+150,000
+—
+$
+24.630
+4/26/15
+250,000
+—
+$
+28.160
+7/31/16
+266,666
+33,337
+(10)
+$
+24.170
+4/22/17
+132,222
+105,778
+(11)
+$
+29.310
+4/24/18
+—
+350,000
+(8)
+$
+13.170
+4/27/19
+Kenneth N. Berns
+190,000
+—
+$
+16.220
+4/29/13
+80,399
+(9)
+$
+1,234,125
+312,500
+$
+312,500
+60,000
+—
+$
+19.140
+4/27/14
+75,000
+—
+$
+24.630
+4/26/15
+125,000
+—
+$
+28.160
+7/31/16
+133,333
+16,667
+(10)
+$
+24.170
+4/22/17
+66,111
+52,889
+(11)
+$
+29.310
+4/24/18
+—
+175,000
+(8)
+$
+13.170
+4/27/19
+Seth D. Wexler
+—
+15,000
+(13)
+$
+14.410
+8/09/19
+15,000
+(14)
+$
+230,250
+—
+$
+—
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on
+December 31, 2009 of $15.35 per share. 
+(2) 
+As discussed in footnote (2) to the Grants of Plan Based
+Awards table, on April 28, 2009, Patterson-UTI granted
+performance unit awards to Messrs. Wall, Vollmer, Siegel
+and Berns. These awards are denominated in dollars and the
+numbers presented in this column represent the base amount of
+the respective awards. Based on Patterson-UTI’s total
+shareholder return during the performance period ending
+March 31, 2012, the recipients could receive no payment
+under the awards or could receive a payment equal to the base
+amount, two times the base amount or four times the base amount. 
+(3) 
+The performance period for performance unit awards outstanding
+at December 31, 2009 ends on March 31, 2012. Amounts
+presented in this column represent the threshold payouts that
+could be earned according to the terms of the performance unit
+awards. 
+27
+Table of Contents 
+(4) 
+These options vest in equal monthly installments from
+January 9, 2010 through April 9, 2010. 
+(5) 
+These shares of restricted stock vest as follows:
+33,334 shares on April 9, 2010; 31,667 shares
+that vest in equal monthly installments from January 25,
+2010 through April 25, 2011; 24,500 shares on
+April 28, 2010 and 49,000 shares that vest in equal
+monthly installments from May 28, 2010 through
+April 28, 2012. 
+(6) 
+These options vest in equal monthly installments from
+January 1, 2010 through October 1, 2010. 
+(7) 
+These options vest in equal monthly installments from
+January 25, 2010 through April 25, 2011. 
+(8) 
+These options vest as follows: one-third on April 28, 2010,
+and the remainder in equal monthly installments over the
+twenty-four months following April 28, 2010. 
+(9) 
+These shares of restricted stock vest as follows:
+2,787 shares in equal monthly installments from
+January 23, 2010 through April 23, 2010;
+21,112 shares in equal monthly installments from
+January 25, 2010 through April 25, 2012;
+16,333 shares on April 28, 2010; 32,667 shares in
+equal monthly installments from May 28, 2010 through
+April 28, 2012; and 7,500 shares on August 1,
+2010. 
+(10) 
+These options vest in equal monthly installments from
+January 23, 2010 through April 23, 2010. 
+(11) 
+These options vest in equal monthly installments from
+January 25, 2010 through April 25, 2011. 
+(12) 
+These shares of restricted stock vest as follows:
+5,574 shares in equal monthly installments from
+January 23, 2010 through April 23, 2010;
+42,223 shares in equal monthly installments from
+January 25, 2010 through April 25, 2012;
+32,666 shares on April 28, 2010; 65,334 shares in
+equal monthly installments from May 28, 2010 through
+April 28, 2012; and 15,000 shares on August 1,
+2010. 
+(13) 
+These options vest as follows: one-third on August 9, 2010,
+and the remainder in equal monthly installments over the
+twenty-four months following August 9, 2010. 
+(14) 
+These shares of restricted stock vest as follows:
+5,000 shares on June 9, 2010; 5,000 shares on
+June 9, 2011 and 5,000 shares on June 9, 2012. 
+The following table sets forth information concerning option
+exercises and stock awards vested during the fiscal year ended
+December 31, 2009 for the Named Executive Officers:
+Option
+Exercises 
+and Stock Vested 
+Option Awards 
+Stock Awards 
+Number of 
+Number of 
+Shares Acquired 
+Value Realized 
+Shares Acquired 
+Value Realized 
+Name 
+on Exercise (#) 
+on Exercise ($) 
+on Vesting (#) 
+on Vesting ($)(1) 
+Douglas J. Wall
+—
+$
+—
+72,916
+$
+931,910
+John E. Vollmer III
+—
+$
+—
+49,716
+$
+695,067
+Mark S. Siegel
+—
+$
+—
+99,433
+$
+1,390,135
+Kenneth N. Berns
+—
+$
+—
+49,716
+$
+695,067
+Seth D. Wexler
+—
+$
+—
+—
+$
+—
+(1) 
+Value realized on vesting is based on the closing price of
+Patterson-UTI Common Stock on the day immediately prior to the
+date at which the respective shares vested. 
+Patterson-UTI provides no pension benefits for any of the Named
+Executive Officers. None of the Named Executive Officers had any
+items of nonqualified deferred compensation during 2009. As a
+result, tables with respect to pension benefits and nonqualified
+deferred compensation have not been provided.
+28
+Table of Contents 
+DIRECTOR
+COMPENSATION 
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2009
+with respect to the directors of Patterson-UTI who are not
+executive officers:
+Director
+Compensation Table 
+Fees Earned or Paid 
+All Other 
+in Cash 
+Stock Awards 
+Option Awards 
+Compensation 
+Total 
+Name 
+($) 
+($)(1) 
+($)(2) 
+($) 
+($) 
+Charles O. Buckner
+$
+57,083
+$
+34,530
+(3)
+$
+28,896
+(4)
+$
+—
+$
+120,509
+Curtis W. Huff
+$
+57,647
+$
+34,530
+(3)
+$
+28,896
+(4)
+$
+—
+$
+121,073
+Terry H. Hunt
+$
+51,250
+$
+34,530
+(3)
+$
+28,896
+(4)
+$
+—
+$
+114,676
+Kenneth R. Peak
+$
+47,917
+$
+34,530
+(3)
+$
+28,896
+(4)
+$
+—
+$
+111,343
+Cloyce A. Talbott
+$
+—
+$
+—
+$
+—
+$
+250,000
+(5)
+$
+250,000
+(1) 
+Amounts set forth represent the fair value at the date of grant
+as determined in accordance with FASB ASC Topic 718 with respect
+to restricted stock awarded to the directors in the fiscal year
+ended December 31, 2009. For additional information related
+to the assumptions used and valuation of restricted stock, see
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2009. 
+(2) 
+Amounts set forth represent the fair value at the date of grant
+as determined in accordance with FASB ASC Topic 718 with respect
+to stock options awarded to the directors in the fiscal year
+ended December 31, 2009. For additional information related
+to the assumptions used in connection with the valuation of
+stock options using the Black-Scholes option pricing model see
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on Form
+10-K for the
+fiscal year ended December 31, 2009. 
+(3) 
+Messrs. Buckner, Huff, Hunt and Peak each received an award
+of 3,000 shares of restricted stock on January 1, 2009
+with a market value of $11.51 per share which fully vested on
+January 1, 2010. As of December 31, 2009,
+Messrs. Buckner, Huff, Hunt and Peak each held 3,000
+unvested shares of restricted stock. 
+(4) 
+Messrs. Buckner, Huff, Hunt and Peak each received options
+to purchase 10,000 shares of stock on January 1, 2009
+with a market value of $2.89 per share, which fully vested on
+January 1, 2010. As of December 31, 2009,
+Messrs. Huff, Hunt and Peak each held options to purchase a
+total of 40,000 shares of Common Stock, of which options to
+purchase 10,000 shares were unvested. As of
+December 31, 2009, Mr. Buckner held options to
+purchase a total of 30,000 shares of Common Stock, of which
+options to purchase 10,000 shares were unvested. 
+(5) 
+Mr. Talbott retired from his position as President and
+Chief Executive Officer of Patterson-UTI on September 30,
+2007. Patterson-UTI entered into an employment agreement with
+Mr. Talbott effective October 1, 2007 which provided
+for the employment of Mr. Talbott on a part-time basis for
+a period of five years. Mr. Talbott’s salary during
+the term of this employment agreement is $250,000 per year. 
+Directors who are also employees of Patterson-UTI do not receive
+compensation for serving as a director or as a member of a
+committee of the Board of Directors. All directors are
+reimbursed for reasonable
+out-of-pocket 
+expenses incurred in connection with serving as a member of the
+Board of Directors. Each non-employee director receives annual
+cash compensation of $35,000 and (i) 3,000 shares of
+restricted stock subject to one-year vesting (subject to
+acceleration in certain limited situations, including a change
+of control) and (ii) an option to purchase
+10,000 shares of Common Stock at an exercise price equal to
+the closing price of Common Stock on the grant date. The option
+has a
+10-year 
+term, vests after one-year (subject to acceleration in certain
+limited situations, including a change of control) and contains
+a right to exercise for three years following cessation of the
+holder as a director (but not beyond the
+10-year 
+term). Each non-employee director that serves on the Audit
+Committee or the Compensation Committee receives additional
+annual cash compensation of $10,000 per committee on which he
+serves, with the chairman of each such committee receiving
+$15,000. In March 2010, the Compensation Committee authorized
+additional annual cash compensation of $20,000 to the Lead
+Director.
+29
+Table of Contents 
+CHANGE IN
+CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; 
+INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+Patterson-UTI has entered into change in control agreements with
+Messrs. Siegel, Wall, Berns, Vollmer and Wexler (each
+agreement, an “Agreement” and collectively, the
+“Agreements”; and each individual, an “Employee
+and collectively, the “Employees”). The Agreements
+were entered into to protect the Employees should a change in
+control occur, thereby encouraging the Employee to remain in the
+employ of Patterson-UTI and not be distracted from the
+performance of his duties to Patterson-UTI by the possibility of
+a change in control.
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other
+than for cause or by the Employee for good reason, the terms of
+the Agreements would entitle the Employee to, among other things:
+• 
+a bonus payment equal to the highest bonus paid after the
+Agreement was entered into (such bonus payment prorated for the
+portion of the fiscal year preceding the termination date),
+• 
+a payment equal to 2.5 times (in the case of Messrs. Siegel
+and Wall), 2.0 times (in the case of Messrs. Berns and
+Vollmer) or 1.5 times (in the case of Mr. Wexler) of the
+sum of (i) the highest annual salary in effect for such
+Employee during the term of the Agreement and (ii) the
+average of the three annual bonuses earned by the Employee for
+the three fiscal years preceding the termination date (or a
+benchmark bonus in the case of Mr. Wexler), and
+• 
+continued coverage under Patterson-UTI’s welfare plans for
+up to three years (in the case of Messrs. Siegel and Wall)
+or two years (in the case of Messrs. Berns, Vollmer and
+Wexler).
+Each Agreement provides the Employee with a full
+gross-up 
+payment for any excise taxes imposed on payments and benefits
+received under the Agreements or otherwise, including other
+taxes that may be imposed as a result of the
+gross-up 
+payment.
+A “change in control” is principally defined by the
+Agreement as:
+• 
+an acquisition by any individual, entity or group of beneficial
+ownership of 35% or more of either Patterson-UTI’s then
+outstanding Common Stock or the combined voting power of the
+then outstanding voting securities of Patterson-UTI entitled to
+vote in the election of directors,
+• 
+a change occurs in which the members of the Board of Directors
+as of the date of the Agreement cease to constitute at least a
+majority of Patterson-UTI’s Board of Directors unless that
+change occurs through a vote of at least a majority of the
+incumbent members of the Board of Directors, or
+• 
+a change in the beneficial ownership of Patterson-UTI following
+consummation of a reorganization, merger, consolidation, sale of
+Patterson-UTI or any subsidiary of Patterson-UTI or a
+disposition of all or substantially all of the assets of
+Patterson-UTI, in which the beneficial owners immediately prior
+to the transaction own 65% or less of outstanding Common Stock
+of the newly combined or merged entity.
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or retirement,
+• 
+the termination of the Employee’s employment, or
+• 
+January 29, 2011 although, unless otherwise terminated, the
+Agreements automatically renew for successive twelve-month
+periods until Patterson-UTI notifies the Employee at least
+90 days before the expiration of the initial term or the
+renewal period, as applicable, that the term will not be
+extended. Patterson-UTI has not provided any such notification
+to the Employees.
+All unvested stock options and restricted stock awards held by
+Named Executive Officers vest upon a change of control as
+defined by the underlying award agreements. Upon a change in
+control as defined in the underlying performance unit award
+grants, Messrs. Wall, Vollmer, Siegel and Berns would
+receive two times the base payment payable thereunder. All
+restricted stock and performance unit awards held by Named
+Executive Officers contain
+30
+Table of Contents 
+provisions that in the event of termination due to death or
+disability, the Named Executive Officer would vest in a portion
+of the award.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer pursuant to which
+Patterson-UTI has agreed to pay each such person within ten days
+of the termination of his employment with Patterson-UTI for any
+reason (including voluntary termination by him), an amount in
+cash equal to his annual base salary at the time of such
+termination. Patterson-UTI has entered into a severance
+agreement with Mr. Wall that provides for a lump-sum cash
+payment of $750,000 to be payable to Mr. Wall within ten
+days of the date of a qualifying termination of his employment
+with Patterson-UTI. A qualifying termination for Mr. Wall
+is defined in the severance agreement generally as a termination
+by Patterson-UTI for any reason other than cause or, if certain
+conditions are met, a termination by Mr. Wall due to a
+reduction in his annual base salary below a defined threshold
+amount. Mr. Wall’s severance agreement expires on
+April 9, 2010 unless he experiences a qualifying
+termination prior to such date. Any payment made by
+Patterson-UTI pursuant to these letter agreements or the
+severance agreement will reduce dollar for dollar any payment
+owed to such person, if any, pursuant to the change in control
+agreements discussed above.
+Amounts that each of the Named Executive Officers would be
+entitled to under the existing Agreements if a change in control
+had occurred as of December 31, 2009 and the
+employee’s employment was terminated by Patterson-UTI other
+than for cause or by the employee for good reason (as defined in
+the Agreements) are reflected in the following table:
+Cash Payments 
+Other Benefits 
+Bonus 
+Salary and 
+Performance 
+Option 
+Stock 
+Continued 
+Statutory Tax 
+Payment 
+Bonus 
+Unit Awards 
+Awards 
+Awards 
+Benefits 
+Gross-Up 
+Total 
+Name 
+($)(1) 
+($)(2) 
+($)(3) 
+($)(4) 
+($)(4) 
+($)(5) 
+($)(6) 
+($) 
+Douglas J. Wall
+$
+1,367,378
+$
+4,209,223
+$
+937,500
+$
+572,250
+$
+2,125,990
+$
+15,401
+$
+2,213,063
+$
+10,073,427
+John E. Vollmer III
+$
+1,375,000
+$
+2,905,757
+$
+625,000
+$
+381,500
+$
+1,234,125
+$
+12,009
+$
+—
+$
+6,533,391
+Mark S. Siegel
+$
+2,750,000
+$
+6,389,393
+$
+1,250,000
+$
+763,000
+$
+2,468,234
+$
+—
+$
+—
+$
+13,620,627
+Kenneth N. Berns
+$
+1,375,000
+$
+2,735,757
+$
+625,000
+$
+381,500
+$
+1,234,125
+$
+—
+$
+—
+$
+6,351,382
+Seth D. Wexler
+$
+100,000
+$
+525,000
+$
+—
+$
+14,100
+$
+230,250
+$
+12,009
+$
+—
+$
+881,359
+(1) 
+The assumed bonus payment is equal to the highest annual bonus
+paid from the time the Agreements were entered into through
+December 31, 2009 except in the case of Mr. Wexler where
+the amount represents a benchmark bonus as defined in his
+Agreement. 
+(2) 
+The assumed salary and bonus payment represents 2.5 times (in
+the case of Messrs. Siegel and Wall), 2.0 times (in the
+case of Messrs. Berns and Vollmer) or 1.5 times (in the
+case of Mr. Wexler) of the sum of the 2009 salary in effect
+for each employee and the average of the annual bonuses earned
+by each employee for 2008, 2007 and 2006 (or a benchmark bonus
+in the case of Messrs. Wall and Wexler). Bonus amounts
+earned in 2009 were not considered in this calculation as they
+were not determined until after December 31, 2009. 
+(3) 
+Performance units awarded to Messrs. Wall, Vollmer, Siegel
+and Berns in 2009 include a provision that upon a change in
+control as defined in the respective award agreements, the Named
+Executive Officer will receive a cash payment equal to two times
+the base amount set forth in each agreement. Amounts presented
+in the table represent the assumed payment of two times the base
+amount if a change in control had occurred on December 31,
+2009. 
+(4) 
+Each of the Named Executive Officers’ option and stock
+award agreements provide that unvested options and awards will
+immediately vest upon a change in control. Amounts presented in
+the table represent the value of unvested option and stock
+awards using the market price of Patterson-UTI Common Stock at
+December 31, 2009. 
+(5) 
+Messrs. Wall, Vollmer and Wexler participated in
+Patterson-UTI’s health and welfare plans as of
+December 31, 2009. The amounts presented represent
+Patterson-UTI’s portion of the premiums for three years in
+the case of Mr. Wall and two years in the case of
+Messrs. Vollmer and Wexler based on the rates in effect at
+December 31, 2009. 
+31
+Table of Contents 
+(6) 
+Assumes Mr. Wall would be subject to an excise tax on
+payments received under the existing agreements if a change in
+control had occurred as of December 31, 2009. Amount
+presented in the table represents the
+gross-up 
+payment that Mr. Wall would be entitled to as a result of
+the imposition of the excise tax. 
+All restricted stock and performance unit awards held by Named
+Executive Officers provide that in the event of termination of
+employment due to death or disability, the Named Executive
+Officer would vest in a portion of the award. With respect to
+Mr. Wall, such a termination would have resulted in the
+accelerated vesting of 41,262 shares of restricted stock
+with a fair value of $633,372. With respect to
+Messrs. Vollmer and Berns, such a termination at
+December 31, 2009 would have resulted in the accelerated
+vesting of 18,970 shares of restricted stock with a fair
+value of $291,190. With respect to Mr. Siegel, such a
+termination at December 31, 2009 would have resulted in the
+accelerated vesting of 37,942 shares of restricted stock
+with a fair value of $582,410. With respect to Mr. Wexler,
+such a termination would have resulted in the accelerated
+vesting of 1,957 shares of restricted stock with a fair
+value of $30,400. In the event of termination of employment due
+to death or disability, the Named Executive Officer would vest
+in the portion of the performance unit award that was earned at
+the time of death or disability. This payment would be
+determined at the end of the performance period and would equal
+the amount that the Named Executive Officer would have received
+at that time, pro-rated for the amount of time from the date of
+grant through the date of death or disability.
+Patterson-UTI has entered into an indemnification agreement with
+each of its Named Executive Officers and directors containing
+provisions that may require Patterson-UTI, among other things,
+to indemnify such executive officers and directors against
+liabilities that may arise by reason of their status or service
+as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN
+TRANSACTIONS 
+In connection with the acquisition by REMY Capital Partners III,
+L.P. (“REMY Capital”) of an ownership interest in UTI
+Energy Corp. in March 1995, REMY Capital succeeded to a
+registration rights agreement with UTI. As the
+successor-in-interest 
+to UTI, Patterson-UTI assumed this registration rights agreement
+pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares
+held by REMY Capital under the Securities Act of 1933, as
+amended. In the event that such rights are exercised in
+connection with a primary offering proposed by Patterson-UTI (or
+a secondary offering with which Patterson-UTI agrees to
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elects to exercise such rights other than in
+connection with an offering in which Patterson-UTI participates,
+REMY Capital would bear all costs of the offering. These rights
+continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995. As of the date of this
+proxy statement, REMY Capital continues to hold
+1,000,000 shares of such Common Stock.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is
+President and sole stockholder of REMY Investors, which is the
+general partner of REMY Capital. Mr. Berns, a director and
+Senior Vice President of Patterson-UTI, is an executive of REMY
+Investors.
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer, Patterson-UTI delivered a letter to
+Mr. Vollmer dated February 6, 2006 (the “Letter
+Agreement”). Pursuant to the Letter Agreement,
+Patterson-UTI agreed, to the extent permitted by law and
+provided that the applicable accounting restatement pending at
+that time did not result from Patterson-UTI’s material
+non-compliance with financial reporting requirements under the
+federal securities laws as a result of knowing misconduct by
+Mr. Vollmer:
+• 
+Patterson-UTI is not entitled to and will not make any claim
+against Mr. Vollmer for reimbursement of any bonus or other
+incentive or equity based compensation received by him or any
+profits realized by him from the sale of securities of
+Patterson-UTI, under Section 304 of the Sarbanes-Oxley Act of
+2002 (“Section 304”) on account of the
+restatement of any financial statements of Patterson-UTI
+covering any accounting period ending on or prior to
+September 30, 2005;
+32
+Table of Contents 
+• 
+Patterson-UTI will not make any claim against Mr. Vollmer
+for any profits realized from the sale of securities of
+Patterson-UTI that were owned by him prior to his becoming Chief
+Financial Officer or were acquired by him on account of the
+exercise of options or the settling of restricted stock units
+that were held by him immediately prior to his becoming Chief
+Financial Officer, under Section 304 on account of the
+restatement of any financial statements of Patterson-UTI
+covering any period during which he was Chief Financial
+Officer; and
+• 
+Patterson-UTI will indemnify Mr. Vollmer against all losses
+in connection with his defense of any claim against him under
+Section 304 in contravention of the two immediately
+preceding bullets, to the extent he is obligated to reimburse
+Patterson-UTI for any bonus or other incentive or equity
+compensation received by him or any profits realized by him for
+the sale of Patterson-UTI securities.
+Notwithstanding court decisions that Patterson-UTI’s right
+to make any such claims appears doubtful, Patterson-UTI entered
+into this agreement because of the breadth of language of
+Section 304 and the uncertainty as to how the statute may
+be interpreted by the courts in the future and the importance at
+the time of Mr. Vollmer’s continued service as Chief
+Financial Officer.
+Patterson-UTI has a written policy with respect to related
+person transactions. In accordance with this policy, related
+person transactions are reviewed by the Lead Director or the
+chair of the Audit Committee, each of whom has full delegated
+authority to approve, disapprove, ratify, amend, terminate or
+rescind any such transaction, or direct that such transaction be
+submitted to the Audit Committee or the full Board of Directors
+for consideration. In approving or disapproving related person
+transactions, the relevant facts and circumstances of the
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater beneficial
+ownership interest or in which they are an executive officer,
+general partner, principal or engaged in a similar position.
+Certain related person transactions have been pre-approved under
+the terms of the policy, including, subject to certain
+exceptions and limitations, the sale to or purchase from
+Patterson-UTI of goods and services by entities related to
+directors in the ordinary course of business that are immaterial
+to Patterson-UTI and with respect to which the director has no
+direct economic interest or decision making authority.
+33
+Table of Contents 
+SECURITY
+OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of March 9, 2010, the
+stock ownership of (i) the Named Executive Officers,
+directors and Board nominees, individually, (ii) all
+directors, Board nominees and executive officers as a group and
+(iii) each person known by Patterson-UTI to be the
+beneficial owner of more than 5% of Common Stock.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common
+Stock:
+FMR LLC
+16,766,872
+(1)
+10.9
+%
+BlackRock, Inc. 
+14,198,366
+(2)
+9.2
+%
+Directors and Executive Officers:
+Mark S. Siegel
+2,840,332
+(3)
+1.8
+%
+Douglas J. Wall
+536,319
+(4)
+*
+John E. Vollmer III
+1,117,166
+(5)
+*
+Kenneth N. Berns
+915,166
+(6)
+*
+Seth D. Wexler
+15,000
+(7)
+*
+Charles O. Buckner
+42,000
+(8)
+*
+Curtis W. Huff
+85,880
+(9)
+*
+Terry H. Hunt
+63,000
+(10)
+*
+Kenneth R. Peak
+60,000
+(11)
+*
+Cloyce A. Talbott
+1,549,476
+(12)
+1.0
+%
+All directors and executive officers as a group (11 persons)
+7,248,593
+(13)
+4.6
+%
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G/A filed February 16,
+2010, jointly on behalf of FMR LLC (“FMR”), Edward C.
+Johnson 3d, and Fidelity Management & Research
+Company, a wholly-owned subsidiary of FMR
+(“Fidelity”). According to the report, the shares are
+beneficially owned as follows: Fidelity —
+15,386,902 shares; Pyramis Global Advisors LLC, an indirect
+wholly-owned subsidiary of FMR (“PGALLC”) —
+394,310 shares; Pyramis Global Advisors Trust Company, an
+indirect wholly-owned subsidiary of FMR
+(“PGATC”) — 658,440 shares; FIL Limited
+(“FIL”) — 327,220 shares. FMR and FIL
+are of the view that the shares held by the other entity need
+not be aggregated for purposes of Section 13(d) under the
+Securities Exchange Act of 1934, but FMR filed the report on a
+voluntary basis as if all of the shares are beneficially owned
+by FMR and FIL on a joint basis. The Fidelity Funds’ Board
+of Trustees has sole voting power over the shares that are
+beneficially owned by Fidelity, and Edward C. Johnson 3d and
+FMR, through control of Fidelity and the Fidelity Funds, each
+has sole dispositive power over the 15,386,902 shares owned
+by the Fidelity Funds. Edward C. Johnson 3d and FMR, through
+control of PGALLC, PGATC, and FMR LLC subsidiaries, each has
+sole dispositive power and sole power to vote or direct the
+voting of the shares beneficially owned by PGALLC and PGATC. FIL
+and various foreign-based subsidiaries of FMR provide investment
+advisory and management services to a number of
+non-U.S. 
+investment companies and certain institutional investors.
+Partnerships controlled predominantly by members of the family
+of Edward C. Johnson 3d, or trusts for their benefit, own shares
+of voting stock of FIL with the right to cast approximately 47%
+of the total votes which may be cast by all holders of FIL
+voting stock. FMR and FIL are separate and independent corporate
+entities and their Boards of Directors are generally composed of
+different individuals. The address of FMR, Edward C. Johnson 3d
+and Fidelity is 82 Devonshire Street, Boston, MA 02109. The
+address of PGALLC and PGATC is 53 State Street, Boston, MA
+02109. The address of FIL is Pembroke Hall, 42 Crow Lane,
+Hamilton, Bermuda. 
+(2) 
+Based solely on a Schedule 13G/A filed jointly by
+BlackRock, Inc. with the SEC on January 29, 2010. According
+to the report, BlackRock, Inc. has sole voting and dispositive
+power with respect to 
+34
+Table of Contents 
+14,198,366 shares. The address of the principal business
+office of BlackRock, Inc. is 40 East 52nd Street, New York, New
+York 10022. 
+(3) 
+Mr. Siegel is the President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital Partners
+III, L.P. (“REMY Capital”). The Common Stock
+beneficially owned by Mr. Siegel includes
+1,000,000 shares of Common Stock owned by REMY Capital. The
+Common Stock beneficially owned by Mr. Siegel also includes
+stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within sixty days, to purchase
+1,475,332 shares of Common Stock, but does not include
+312,668 shares underlying stock options held by
+Mr. Siegel that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+152,744 shares of unvested restricted Common Stock held by
+Mr. Siegel, over which he presently has voting power. 
+(4) 
+Includes shares underlying stock options held by Mr. Wall,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 303,027 shares of Common Stock, but
+does not include 237,973 shares underlying stock options
+held by Mr. Wall that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+134,543 shares of unvested restricted Common Stock held by
+Mr. Wall, over which he presently has voting power. 
+(5) 
+Includes shares underlying stock options held by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to purchase 947,666 shares.
+Does not include 156,334 shares underlying stock options
+held by Mr. Vollmer that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+76,372 shares of unvested restricted Common Stock held by
+Mr. Vollmer, over which he presently has voting power. 
+(6) 
+Includes shares underlying stock options held by Mr. Berns,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 737,666 shares. Does not include
+156,334 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 76,372 shares of unvested restricted
+Common Stock held by Mr. Berns, over which he presently has
+voting power. Does not include shares of Common Stock
+beneficially owned by REMY Investors. Mr. Berns disclaims
+beneficial ownership of such shares beneficially owned by REMY
+Investors. 
+(7) 
+Does not include 15,000 shares underlying stock options
+that are not presently exercisable and will not become
+exercisable within sixty days. Includes 15,000 shares of
+unvested restricted Common Stock held by Mr. Wexler, over
+which he presently has voting power. 
+(8) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Buckner to purchase 30,000 shares. Does
+not include 10,000 shares underlying stock options held by
+Mr. Buckner that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Buckner,
+over which he presently has voting power. 
+(9) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Huff to purchase 40,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Huff, over
+which he presently has voting power. 
+(10) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Hunt to purchase 40,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Hunt that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Hunt, over
+which he presently has voting power. 
+(11) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Peak to purchase 40,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Peak, over
+which he presently has voting power. 
+(12) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to purchase
+1,200,000 shares. Includes 17,798 shares of unvested
+restricted Common Stock held by Mr. Talbott, over which he
+presently has voting power. 
+35
+Table of Contents 
+(13) 
+Includes shares underlying stock options, which are presently
+exercisable or become exercisable within sixty days, to purchase
+4,817,025 shares of Common Stock. Does not include shares
+underlying stock options to purchase 924,975 shares held by
+such individuals that are not presently exercisable and will not
+become exercisable within sixty days. Includes an aggregate of
+498,582 shares of unvested restricted Common Stock held by
+certain directors and executive officers, over which they
+presently have voting power. 
+Except as stated herein, each stockholder has sole voting and
+investment power with respect to Common Stock included in the
+above table. There are no arrangements known to Patterson-UTI
+which may result in a change in control.
+36
+Table of Contents 
+AUDIT
+COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute
+soliciting material and should not be deemed filed or
+incorporated by reference into any other Patterson-UTI filing
+under the Securities Act of 1933, as amended, or the Exchange
+Act, except to the extent Patterson-UTI specifically
+incorporates this report by reference therein.
+The Audit Committee has reviewed and discussed the audited
+financial statements with management and Patterson-UTI’s
+independent registered public accounting firm.
+The Audit Committee has discussed with the independent
+registered public accounting firm the matters required to be
+discussed by Auditing Standard 380, The Auditor’s
+Communication with those Charged with Governance , as adopted
+by the Public Company Accounting Oversight Board in
+Rule 3200T.
+The Audit Committee has received and reviewed the written
+disclosures and the letter from the independent registered
+public accounting firm required by applicable requirements of
+the Public Company Accounting Oversight Board regarding the
+independent registered public accounting firm’s
+communications with the Audit Committee concerning independence,
+and has discussed with the independent registered public
+accounting firm their independence.
+Taking the foregoing into consideration, the undersigned Audit
+Committee members recommended to the Board of Directors that the
+Board approve the inclusion of Patterson-UTI’s audited
+financial statements in the Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2009.
+Audit Committee of the Board of Directors:
+Charles O. Buckner, Chairman 
+Curtis W. Huff 
+Terry H. Hunt
+PricewaterhouseCoopers
+Fees for Fiscal Years 2009 and 2008 
+In 2009 and 2008, Patterson-UTI and its subsidiaries incurred
+fees for services provided relating to (i) professional
+services rendered for the audit of Patterson-UTI’s annual
+financial statements, review of quarterly financial statements,
+and assessment of Patterson-UTI’s internal controls over
+financial reporting, (ii) professional services rendered
+for tax compliance, advice and planning, and (iii) products
+and services provided by PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2009 
+2008 
+Audit fees
+$
+1,175,000
+$
+1,201,750
+Tax fees
+40,000
+45,000
+All other fees
+1,600
+1,600
+Total
+$
+1,216,600
+$
+1,248,350
+The Audit Committee appoints the independent registered public
+accounting firm. The Audit Committee or Mr. Buckner, as
+Chairman of the Audit Committee, approves all other engagements
+of the independent registered public accounting firm in advance.
+In the event Mr. Buckner approves any such engagement, he
+discusses such approval with the Audit Committee at its next
+meeting.
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2009 and 2008 consisting
+of the examination of Patterson-UTI’s consolidated
+financial statements, quarterly reviews of Patterson-UTI’s
+interim financial statements and services to assess
+Patterson-UTI’s internal control over financial reporting.
+“Tax fees” include federal, state, local and foreign
+tax compliance and related matters. “All other fees”
+consists of an annual subscription fee to a software product.
+The Audit Committee or Mr. Buckner, as Chairman of the
+Audit Committee, approved all of the services described above.
+37
+Table of Contents 
+The Audit Committee has discussed the non-audit services
+provided by PricewaterhouseCoopers LLP and the related fees and
+has considered whether those services and fees are compatible
+with maintaining auditor independence. The Audit Committee
+determined that such non-audit services were consistent with the
+independence of PricewaterhouseCoopers LLP.
+OTHER
+MATTERS 
+Section 16(a)
+Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires
+Patterson-UTI’s officers and directors and persons who own
+more than 10 percent of a registered class of
+Patterson-UTI’s equity securities, to file reports of
+ownership and changes in ownership with the SEC. Each of these
+persons is required by SEC regulation to furnish Patterson-UTI
+with copies of Section 16(a) filings. Based solely upon a
+review of Forms 3 and 4 and amendments thereto furnished to
+Patterson-UTI during 2009 and Forms 5 and amendments
+thereto furnished to Patterson-UTI with respect to 2009, or a
+written representation from the reporting person that no
+Form 5 is required, all filings required to be made by such
+officers, directors, and beneficial owners of more than
+10 percent of a registered class of Patterson-UTI’s
+common stock were timely made.
+Other
+Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not aware of any matter to be presented at the
+Meeting other than as set forth herein. If any other matters are
+properly brought before the Meeting, however, the shares
+represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting
+them.
+Stockholder
+Proposals for 2011 Annual Meeting 
+Proposals or Director Nominations for Inclusion in the Proxy
+Statement. Pursuant to
+Rule 14a-8 
+under the Exchange Act, stockholders may present proper
+proposals or director nominations for inclusion in
+Patterson-UTI’s proxy statement and for consideration at
+the next annual meeting of stockholders by submitting their
+proposals or director nominations to Patterson-UTI in a timely
+manner. In order to be included in Patterson-UTI’s proxy
+statement for the 2011 annual meeting of stockholders, proposals
+or director nominations from stockholders must be received by
+Patterson-UTI no later than November 11, 2010, and must
+otherwise comply with the requirements of
+Rule 14a-8. 
+Proposals or Director Nominations not Included in the Proxy
+Statement. In addition, Patterson-UTI’s
+bylaws establish an advance notice procedure with regard to
+stockholder proposals and director nominations not included in
+Patterson-UTI’s proxy statement. For director nominations
+not included in Patterson-UTI’s proxy statement, please
+refer to “Election of Directors — Meetings and
+Committees of the Board of Directors.” For stockholder
+proposals to be properly brought before the 2011 annual meeting,
+by a stockholder, the stockholder must be a stockholder of
+record on the date of the giving of the notice provided for
+below and on the record date for the determination of
+stockholders entitled to vote at such annual meeting and must
+give timely notice of such business in writing to the Secretary
+of Patterson-UTI. To be timely with respect to the 2011 annual
+meeting, a stockholder’s notice must be delivered to or
+mailed and received at Patterson-UTI’s principal executive
+offices not earlier than December 27, 2010 and not later
+than January 26, 2011; provided, however, that in the event
+that the annual meeting is called for a date that is not within
+30 days before or after April 26, 2011, notice by the
+stockholder to be timely must be received not later than the
+close of business on the tenth day following the day on which
+such notice of the date of the meeting was mailed or public
+disclosure of the annual meeting date was made, whichever occurs
+first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+a brief description of each matter desired to be brought before
+the annual meeting and the reasons for conducting such business
+at the annual meeting,
+• 
+the name and record address of the stockholder proposing such
+business,
+38
+Table of Contents 
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+any material interest of the stockholder in such
+business, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the annual meeting to bring such business
+before the annual meeting.
+The proxies will have discretionary authority to vote on any
+matter that properly comes before the annual meeting if the
+stockholder has not provided timely written notice as required
+by the Patterson-UTI bylaws.
+Patterson-UTI reserves the right to reject, rule out of order,
+or take other appropriate action with respect to any proposal or
+nomination that does not comply with these and other applicable
+requirements.
+Annual
+Report 
+A copy of Patterson-UTI’s annual report on
+Form 10-K 
+(the “Annual Report on
+Form 10-K”) 
+accompanies this proxy statement only if you have requested that
+a copy of this proxy statement be mailed to you. The Annual
+Report on
+Form 10-K 
+also is available electronically by following the instructions
+in the Notice. The Annual Report on
+Form 10-K 
+is not incorporated into this proxy statement and is not
+considered proxy-soliciting material.
+A copy of the Annual Report on
+Form 10-K, 
+excluding exhibits, may be obtained by stockholders without
+charge by written request to the Secretary of Patterson-UTI at
+450 Gears Road, Suite 500, Houston, Texas 77067 or by
+accessing it on Patterson-UTI’s website at
+www.patenergy.com in the investors section under the
+“financial reports” link.
+39
+Table of Contents 
+Appendix A 
+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 “Change of Control of the Company”
+shall mean the occurrence of any of the following after
+April 26, 2010: 
+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 2.4, 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 2.4; or 
+ii. Individuals who, as of April 26, 2010,
+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 April 26, 2010
+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 
+A-1
+Table of Contents 
+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. 
+2.5. “ Code ” shall mean the Internal
+Revenue Code of 1986, as amended from time to time.
+2.6. “ 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.
+2.7. “ Covered Employee ” shall mean
+a “covered employee” within the meaning of
+Section 162(m) of the Code.
+2.8. “ Director ” shall mean a
+non-employee member of the Board.
+2.9. “ Dividend Equivalents ” shall
+have the meaning set forth in Section 12.6. 
+2.10. “ 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.
+2.11. “ Exchange Act ” shall mean the
+Securities Exchange Act of 1934, as amended.
+2.12. “ 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.
+2.13. “ Freestanding Stock Appreciation
+Right ” shall have the meaning set forth in
+Section 6.1.
+2.14. “ Limitations ” shall have the
+meaning set forth in Section 10.5.
+2.15. “ 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.
+2.16. “ Other Stock Unit Award ”
+shall have the meaning set forth in Section 8.1.
+2.17. “ Participant ” shall mean an
+Employee or Director who is selected by the Committee to receive
+an Award under the Plan.
+2.18. “ Payee ” shall have the
+meaning set forth in Section 13.1.
+A-2
+Table of Contents 
+2.19. “ Performance Award ” shall
+mean any Award of Performance Shares or Performance Units
+granted pursuant to Article 9.
+2.20. “ 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.
+2.21. “ 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.
+2.22. “ 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.
+2.23. “ Permitted Assignee ” shall
+have the meaning set forth in Section 12.3.
+2.24. “ 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.
+2.25. “ 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.
+2.26. “ Restriction Period ” shall
+have the meaning set forth in Section 7.1.
+2.27. “ Restricted Stock Award ”
+shall have the meaning set forth in Section 7.1.
+2.28. “ Shares ” shall mean the
+shares of common stock of the Company, par value $.01 per share.
+2.29. “ Stock Appreciation Right ”
+shall mean the right granted to a Participant pursuant to
+Section 6.
+2.30. “ 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.
+2.31. “ 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
+awards, by a company acquired by the Company or any Subsidiary
+or with which the Company or any Subsidiary combines.
+2.32. “ 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 15,250,000 , 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 prior to
+June 5, 2008 or a Prior Plan during the Pre-Effective
+Period, shall be counted against this limit as one and six
+tenths (1.6)
+A-3
+Table of Contents 
+Shares for every one (1) Share awarded. Any Shares that are
+subject to Awards other than Options or Stock Appreciation
+Rights awarded under this Plan on or after June 5, 2008
+but prior to April 26, 2010 shall be counted against
+this limit as two (2) Shares for every one (1) Share
+awarded. Any Shares that are subject to Awards other than
+Options or Stock Appreciation Rights awarded under this Plan on
+or after April 26, 2010 shall be counted against this limit
+as one and 35 one-hundredths (1.35) 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 ( w ) 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, ( x ) 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 or under Prior Plans that are forfeited,
+expire or otherwise terminate prior to June 5, 2008, ( y )
+as two (2) Shares if such Shares were subject to Awards
+other than Options or Stock Appreciation Rights granted under
+the Plan or under Prior Plans that are forfeited, expire
+or otherwise terminate on or after June 5, 2008 but
+prior to April 26, 2010 or ( z ) as one and thirty-five one
+hundredths (1.35) Shares if such Shares were subject to Awards
+other than Options or Stock Appreciation Rights granted under
+the Plan or under Prior Plans that are forfeited, expire or
+otherwise terminate on or after April 26, 2010. 
+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 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;
+A-4
+Table of Contents 
+(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 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
+A-5
+Table of Contents 
+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. Not-withstanding 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.
+5.9. No Repricing. Notwithstanding anything in
+the Plan to the contrary, except in connection with a corporate
+transaction involving the Company (including, without
+limitation, any stock dividend, stock split, extraordinary cash
+dividend, recapitalization, reorganization, merger,
+consolidation,
+split-up, 
+spin-off, combination, or exchange of shares), the terms of
+outstanding Awards may not be amended to reduce the option price
+of outstanding Options or cancel outstanding Options in exchange
+for cash, other awards or Options with an option price that is
+less than the option price of the original Options without
+stockholder approval. 
+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.
+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
+A-6
+Table of Contents 
+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.
+6.3. No Repricing. Notwithstanding anything in
+the Plan to the contrary, except in connection with a corporate
+transaction involving the Company (including, without
+limitation, any stock dividend, stock split, extraordinary cash
+dividend, recapitalization, reorganization, merger,
+consolidation,
+split-up, 
+spin-off, combination, or exchange of shares), the terms of
+outstanding awards may not be amended to reduce the exercise
+price of outstanding Stock Appreciation Rights or cancel
+outstanding Stock Appreciation Rights in exchange for cash,
+other awards or Stock Appreciation Rights with an exercise price
+that is less than the exercise price of the original Stock
+Appreciation Rights without stockholder approval. 
+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
+A-7
+Table of Contents 
+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 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
+A-8
+Table of Contents 
+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
+2 1 / 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
+2 1 / 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.
+9.5. Performance Award Dividend Equivalents.
+Subject to the provisions of the Plan and any Award Agreement,
+the Committee in its sole discretion may award currently or on a
+deferred basis, Dividend Equivalents with respect to the number
+of Shares covered by a Performance Unit or Performance Share
+Award, provided, that such Dividend Equivalents (if any) shall
+be deemed to have been reinvested in additional Shares or Units
+and shall provide that such Dividend Equivalents are subject to
+the same performance conditions as the underlying Award. 
+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
+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
+A-9
+Table of Contents 
+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,
+(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 therefore 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 each case to
+any terms and conditions contained in the Award Agreement
+evidencing such Award. Effective with respect to Awards
+granted prior to April 26, 2010, 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
+A-10
+Table of Contents 
+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 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.
+A-11
+Table of Contents 
+12.5. Deferral. 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.
+12.6. Dividend Equivalents. 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
+conditions as the underlying Award; provided, however, that with
+respect to Dividend Equivalents (if any) awarded in connection
+with a Performance Unit Award or Performance Share Award, such
+Dividend Equivalents (if any) shall be deemed to have been
+reinvested in additional Shares or Units and shall provide that
+such Dividend Equivalents are subject to the same 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 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.
+A-12
+Table of Contents 
+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.
+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
+A-13
+Table of Contents 
+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 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.
+A-14
+Table of Contents 
+TO VOTE, MARK BLOCKS BELOW
+IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+DETACH
+AND RETURN THIS PORTION
+ONLY 
+For 
+All 
+Withhold 
+All 
+For All 
+Except 
+To withhold authority to vote for any individual 
+nominee(s), mark “For All Except” and write the 
+number(s) of
+the nominee(s) on the line below. 
+The
+Board of Directors recommends that you 
+vote FOR the following: 
+1. Election of Directors 
+o 
+o 
+o 
+Nominees 
+01 
+Mark S. Siegel 
+02 
+Kenneth N. Berns 
+03 
+Charles O. Buckner 
+04 
+Curtis W. Huff 
+05 
+Terry H. Hunt 
+06 
+Kenneth R. Peak 
+07 
+Cloyce A. Talbott 
+The
+Board of Directors recommends you vote FOR the following proposal(s)
+: 
+For 
+Against 
+Abstain 
+2 
+Approve an amendment to Patterson-UTI’s 2005 Long-Term Incentive Plan to increase the number of shares available for issuance
+under the plan. 
+o 
+o 
+o 
+3 
+Ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for
+the fiscal year ending December 31, 2010. 
+o 
+o 
+o 
+The
+Board of Directors does not have a recommendation for voting on the
+following proposal(s): 
+For 
+Against 
+Abstain 
+4 
+In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Meeting or any and all adjournments or postponements thereof. 
+o 
+o 
+o 
+Please sign exactly as your name(s) appear(s) hereon. When signing as attorney,
+executor, administrator, or other fiduciary, please give full title as such. Joint owners
+should each sign personally. All holders must sign. If a corporation or
+partnership, please sign in
+full corporate or partnership name, by authorized officer. 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+Table of Contents 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: 
+The Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com . 
+PATTERSON-UTI ENERGY, INC. 
+Annual Meeting of Stockholders 
+April 26, 2010 3:00 PM 
+This proxy is solicited by the Board of Directors 
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby
+appoints Mark S. Siegel, Douglas J. Wall and John E. Vollmer III, and each of them, proxies to
+the undersigned, each with full power to act without the other and with full power of substitution,
+to vote all of the shares which the undersigned is entitled to vote at the annual meeting of stockholders
+of the Company to be held Monday, April 26, 2010, at 3:00 p.m., local time, at the Hilton Houston North
+Hotel, 12400 Greenspoint Drive, Houston, Texas 77060, and at any and all adjournments or postponements thereof,
+with the same force and effect as if the undersigned were personally present. The undersigned hereby instructs
+the above-named proxies to vote the shares represented by this proxy in the manner as directed for the undersigned
+on the reverse side of this proxy card. If no directions are made, the proxies will vote “FOR” the nominees
+for directors, “FOR” the approval of the amendment to Patterson-UTI’s 2005 Long-Term Incentive Plan to
+increase the number of shares authorized for issuance under the plan and “FOR” the ratification of the
+selection of PricewaterhouseCoopers LLP as set forth on the reverse side. If any other matter should be presented
+properly, this proxy will be voted in accordance with the discretion of the above-named proxies. 
+Continued and to be marked, dated and signed on the reverse side
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950123-10-023462/proxy_rpt.txt b/raw/proxies/0000889900/0000950123-10-023462/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..0e6851cd667aa20e0cf6c450eb5fde982b0c9eb1
--- /dev/null
+++ b/raw/proxies/0000889900/0000950123-10-023462/proxy_rpt.txt
@@ -0,0 +1,24 @@
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater beneficial
+ownership interest or in which they are an executive officer,
+general partner, principal or engaged in a similar position.
+Certain related person transactions have been pre-approved under
+the terms of the policy, including, subject to certain
+exceptions and limitations, the sale to or purchase from
+Patterson-UTI of goods and services by entities related to
+directors in the ordinary course of business that are immaterial
+to Patterson-UTI and with respect to which the director has no
+direct economic interest or decision making authority.
+33
+Table of Contents 
+SECURITY
\ No newline at end of file
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new file mode 100644
index 0000000000000000000000000000000000000000..f21b2aded717ae1c2ebf4d0b6a23f6c2660ab4e8
--- /dev/null
+++ b/raw/proxies/0000889900/0000950123-11-036543/proxy.txt
@@ -0,0 +1,6194 @@
+DEF 14A
+1
+d80478def14a.htm
+DEF 14A
+def14a 
+Table of Contents 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the Securities 
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant
+þ 
+Filed by a Party other than the Registrant
+o 
+Check the appropriate box: 
+o Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by
+Rule 14a-6(e)(2)) 
+þ Definitive Proxy Statement 
+o Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+Patterson-UTI Energy,
+Inc. 
+(Name
+of Registrant as Specified In Its Charter) 
+(Name
+of Person(s) Filing Proxy Statement, if other than the
+Registrant) 
+Payment of Filing Fee (Check the appropriate box):
+þ No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
+0-11. 
+1) Title of each class of securities to which transaction applies: 
+2) Aggregate number of securities to which transaction applies: 
+3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+4) Proposed maximum aggregate value of transaction: 
+5) Total fee paid: 
+o Fee paid previously with preliminary materials. 
+o Check box if any part of the fee is offset as provided by Exchange Act
+Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration
+statement number, or the Form or Schedule and the date of its filing. 
+1) Amount Previously Paid: 
+2) Form, Schedule or Registration Statement No.: 
+3) Filing Party: 
+4) Date Filed: 
+Table of Contents 
+April 18,
+2011
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual
+meeting will be held Wednesday, June 8, 2011, at
+10:00 a.m., local time, at the Hilton Houston North Hotel,
+12400 Greenspoint Drive, Houston, Texas 77060.
+We are pleased to take advantage of Securities and Exchange
+Commission rules that allow us to furnish these proxy materials
+and our annual report primarily over the Internet. We believe
+that posting these materials on the Internet enables us to
+provide stockholders with the information that they need
+quickly, while lowering our costs of printing and delivery and
+conserving natural resources. We encourage you to vote via the
+Internet and follow the links to our proxy statement and annual
+report, which are both available at www.proxyvote.com .
+For those stockholders who have elected to receive their proxy
+materials in the mail, please review our proxy statement and
+annual report and vote via the Internet, by telephone or using
+your proxy card.
+Your vote is important to us. Please review your proxy materials
+carefully and send in your vote today.
+Thank you for your support.
+Sincerely,
+Mark S. Siegel
+Douglas J. Wall
+Chairman of the Board 
+President and Chief Executive Officer 
+TABLE OF CONTENTS 
+NOTICE OF 2011 ANNUAL MEETING OF STOCKHOLDERS To Be Held June 8, 2011 
+PROXY STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS To Be Held June 8, 2011 
+GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 
+PROPOSAL NO. 2 
+CASH COMPENSATION 
+EQUITY-BASED GRANTS 
+COMPENSATION COMMITTEE REPORT 
+Option Exercises and Stock Vested 
+CHANGE IN CONTROL ARRANGEMENTS; INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+CERTAIN TRANSACTIONS 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+OTHER MATTERS 
+Appendix A 
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+NOTICE OF
+2011 ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 8, 2011 
+The 2011 annual meeting of the stockholders of Patterson-UTI
+Energy, Inc., a Delaware corporation
+(“Patterson-UTI”), will be held Wednesday,
+June 8, 2011, at 10:00 a.m., local time, at the Hilton
+Houston North Hotel, 12400 Greenspoint Drive, Houston, Texas
+77060 (the “Meeting”), for the following purposes:
+• 
+to elect seven directors to the Board of Directors of
+Patterson-UTI to serve until the next annual meeting of the
+stockholders or until their respective successors are elected
+and qualified;
+• 
+to approve the material terms of the performance goals that may
+apply to performance-based awards under Patterson-UTI’s
+Long-Term Incentive Plan;
+• 
+to hold an advisory vote on executive compensation;
+• 
+to hold an advisory vote on the frequency of future advisory
+votes on executive compensation;
+• 
+to ratify the selection of PricewaterhouseCoopers LLP as the
+independent registered public accounting firm of Patterson-UTI
+for the fiscal year ending December 31, 2011; and
+• 
+transact such other business as may properly come before the
+Meeting or any adjournment or postponement thereof.
+Stockholders of record at the close of business on
+April 11, 2011 are entitled to vote at the Meeting and any
+adjournment or postponement thereof.
+Your vote is important to us. Whether or not you plan to attend
+the Meeting in person, we urge you to promptly vote your shares
+via the Internet, by telephone, or if the accompanying proxy
+statement was mailed to you, by completing, signing, dating and
+returning your proxy card as soon as possible in the enclosed
+postage prepaid envelope.
+By order of the Board of Directors
+Seth D. Wexler
+General Counsel and Secretary 
+April 18, 2011
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+PROXY
+STATEMENT 
+ANNUAL
+MEETING OF STOCKHOLDERS 
+To Be Held June 8, 2011 
+GENERAL
+INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 
+The Board of Directors (the “Board” or “Board of
+Directors”) of Patterson-UTI Energy, Inc., a Delaware
+corporation (“Patterson-UTI”), has made these proxy
+materials available to you on the Internet, or, upon your
+request has delivered printed versions of these materials to you
+by mail beginning on or about April 26, 2011. Patterson-UTI
+is furnishing this proxy statement in connection with the
+solicitation by the Board of Directors of proxies to be voted at
+the 2011 annual meeting of stockholders of Patterson-UTI (the
+“Meeting”). The Meeting will be held Wednesday,
+June 8, 2011, at 10:00 a.m., local time, at the Hilton
+Houston North Hotel, 12400 Greenspoint Drive, Houston, Texas
+77060, or at any adjournment thereof. The Notice of Internet
+Availability of Proxy Materials (the “Notice”) was
+mailed to each of Patterson-UTI’s stockholders (other than
+those who previously requested electronic delivery) entitled to
+vote at the Meeting on or about April 26, 2011.
+Pursuant to the “notice and access” rules adopted by
+the Securities and Exchange Commission (the “SEC”),
+Patterson-UTI has elected to provide stockholders access to its
+proxy materials over the Internet. Accordingly, Patterson-UTI
+sent a Notice to all of its stockholders as of the record date.
+The Notice includes instructions on how to access
+Patterson-UTI’s proxy materials over the Internet and how
+to request a printed copy of these materials. In addition, by
+following the instructions in the Notice, stockholders may
+request to receive proxy materials in printed form by mail or
+electronically by email on an ongoing basis.
+Choosing to receive your future proxy materials by email will
+save us the cost of printing and mailing documents to you and
+will help conserve natural resources. If you choose to receive
+future proxy materials by email, you will receive an email next
+year with instructions containing a link to those materials and
+a link to the proxy voting site. Your election to receive proxy
+materials by email will remain in effect until you
+terminate it.
+If your shares are registered directly in your name with our
+transfer agent, Continental Stock Transfer &
+Trust Company, you are considered the “stockholder of
+record” with respect to those shares, and the Notice was
+sent directly to you.
+If your shares are held in an account at a brokerage firm, bank,
+broker-dealer, or other similar organization, then you are the
+beneficial owner of shares held in “street name,” and
+the Notice was forwarded to you by that organization. As a
+beneficial owner, you have the right to direct that organization
+on how to vote the shares held in your account.
+Whether you are a “stockholder of record” or hold your
+shares in “street name,” you may direct your vote
+without attending the Meeting in person.
+If you are a stockholder of record, you may vote by Internet or
+by telephone by following the instructions on the Notice. If you
+request printed copies of the proxy materials by mail, you may
+also vote by signing and submitting your proxy card and
+returning it by mail. You should sign your name exactly as it
+appears on the proxy card. If you are signing in a
+representative capacity (for example, as guardian, executor,
+trustee, custodian, attorney or officer of a corporation), you
+should indicate your name and title or capacity.
+If you are the beneficial owner of shares held in street name,
+you may be eligible to vote your shares electronically over the
+Internet or by telephone by following the instructions on the
+Notice. If you request printed
+Table of Contents 
+copies of the proxy materials by mail, you may also vote by
+signing the voter instruction card provided by your brokerage
+firm, bank, broker-dealer, or other similar organization and
+returning it by mail. If you provide specific voting
+instructions by mail, telephone or the Internet, your shares
+will be voted by your brokerage firm, bank, broker-dealer, or
+similar organization as you have directed.
+Properly submitted proxies received either by mail, Internet,
+telephone or in person, in time to be counted for the Meeting
+will be voted as you have directed in your proxy, unless you
+revoke your proxy in the manner provided below. As to any matter
+for which you give no direction in your proxy, your shares will
+be voted as follows:
+• 
+“FOR” the election of all of the nominees to the Board
+of Directors;
+• 
+“FOR” the approval of the material terms of the
+performance goals that may apply to performance-based awards
+under Patterson-UTI’s Long Term Incentive Plan;
+• 
+“FOR” the approval, on an advisory basis, of our
+executive compensation;
+• 
+“FOR” the approval of an advisory vote to be held
+every year on executive compensation;
+• 
+“FOR” the ratification of PricewaterhouseCoopers LLP
+as the independent registered public accounting firm of
+Patterson-UTI for the fiscal year ending December 31,
+2011; and
+• 
+“FOR” or “AGAINST” any other proposals that
+may be properly submitted at the Meeting at the discretion of
+the persons named in the proxy.
+If you are a stockholder of record, you may revoke your proxy
+before the proxy is voted by either:
+• 
+submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone, in time to be counted
+for the meeting;
+• 
+notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or
+• 
+attending the Meeting and voting in person.
+If your shares are held in street name, you must obtain a proxy
+executed in your favor from the stockholder of record (that is,
+your brokerage firm, bank, broker-dealer or similar
+organization) to be able to vote at the Meeting.
+The Board of Directors is making this solicitation.
+Patterson-UTI’s officers and other employees, without
+compensation other than regular compensation, may solicit
+proxies by mail, email, the Internet, telephone, electronic
+means and personal interview. Patterson-UTI does not intend to
+retain a proxy solicitation firm to assist in the solicitation
+of proxies of stockholders, but may do so if circumstances
+warrant. Patterson-UTI will pay all costs associated with this
+solicitation.
+SHARES OUTSTANDING
+AND VOTING RIGHTS 
+Only stockholders of record of Patterson-UTI’s common
+stock, $.01 par value per share (the “Common
+Stock”), at the close of business on April 11, 2011
+are entitled to notice of and to vote at the Meeting or any
+adjournment or postponement thereof. At the close of business on
+April 11, 2011, there were 154,246,395 shares of
+Common Stock issued and outstanding. Holders of record of Common
+Stock on April 11, 2011 will be entitled to one vote per
+share on all matters to properly come before the Meeting. A list
+of stockholders entitled to notice of and to vote at the Meeting
+will be made available during regular business hours at the
+offices of Patterson-UTI Energy, Inc., 450 Gears Road,
+Suite 500, Houston, Texas 77067, from May 24, 2011
+through June 7, 2011 and at the Meeting for examination by
+any stockholder for any purpose germane to the Meeting.
+A quorum is necessary to transact business at the Meeting. A
+majority of the shares of Common Stock outstanding on
+April 11, 2011 will constitute a quorum. The shares held by
+each stockholder who attends the Meeting in person, signs and
+timely returns the form of proxy or properly votes using the
+Internet or telephone will be counted for purposes of
+determining the presence of a quorum at the Meeting.
+“Broker non-votes” will be considered present at the
+Meeting but will not be counted to determine the total number of
+votes cast. Broker non-votes occur when nominees, such as
+brokerage firms, banks, broker-dealers, or
+2
+Table of Contents 
+other similar organizations holding shares on behalf of the
+beneficial owners, are prohibited from exercising discretionary
+voting authority for beneficial owners who have not provided
+voting instructions. If you do not give instructions to your
+bank, brokerage firm or other agent, the bank, brokerage firm or
+other agent will nevertheless be entitled to vote your shares of
+Common Stock in its discretion on “routine matters”
+and may give or authorize the giving of a proxy to vote the
+shares of Common Stock in its discretion on such matters. The
+ratification of an independent registered public accounting firm
+is generally considered a routine matter, whereas the election
+of directors, action with respect to incentive plans and the
+advisory votes on executive compensation and the frequency of
+such future advisory votes are not considered routine matters.
+For these reasons, please promptly vote in accordance with the
+instructions provided by your brokerage firm, bank,
+broker-dealer, or other similar organization.
+PROPOSAL NO. 1 
+ELECTION
+OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the number of members
+of the Board of Directors shall be fixed either by amendment to
+the bylaws or by resolution of the Board of Directors. Directors
+are elected to serve until the next annual meeting of
+stockholders and until their successors are elected and
+qualified. Patterson-UTI’s bylaws provide that the
+affirmative vote of a plurality of the votes cast at the meeting
+at which a quorum is present is required for the election of
+directors. Shares as to which a stockholder withholds authority
+to vote on the election of directors and shares as to which a
+broker indicates that it does not have discretionary authority
+to vote on the election of directors will not be counted as
+voting thereon and will not affect the election of the nominees
+receiving a plurality of the votes cast.
+The enclosed form of proxy provides a means for you to either:
+• 
+vote “FOR” the election of the nominees to the Board
+of Directors listed below,
+• 
+withhold authority to vote for one or more of the
+nominees, or
+• 
+withhold authority to vote for all of the nominees.
+The Board of Directors recommends that you vote
+“FOR” all of the nominees. Unless you
+give contrary instructions in your proxy, your proxy will be
+voted “FOR” the election of all of the nominees to the
+Board of Directors. If any nominee should become unable or
+unwilling to accept nomination or election, the person acting
+under the proxy will vote for the election of such other person
+as the Board of Directors may recommend. The Board has no
+reason, however, to believe that any of the nominees will be
+unable or unwilling to serve if elected. Abstentions will have
+no effect with respect to the election of directors. A broker
+non-vote will be counted for purposes of establishing a quorum,
+but will not be treated as a vote cast with respect to the
+election of directors. This will have the effect of reducing the
+absolute number of votes cast for the election of directors.
+There are no arrangements or understandings between any person
+and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no
+family relationships among any of the directors or executive
+officers of Patterson-UTI.
+Our corporate governance guidelines require that if a director
+receives in an uncontested election a greater number of
+“withhold” votes than votes cast “for” his
+or her election, the Nominating and Corporate Governance
+Committee of the Board of Directors will undertake a prompt
+evaluation of the appropriateness of the director’s
+continued service on the Board of Directors. In performing this
+evaluation, the Nominating and Corporate Governance Committee
+will review all factors it deems relevant, including the stated
+reasons why votes were withheld, the director’s length of
+service, his or her past contributions to Patterson-UTI and the
+availability of other qualified candidates. The Nominating and
+Corporate Governance Committee will then make its recommendation
+to the Board. The Board of Directors will review the Nominating
+and Corporate Governance Committee’s recommendation and
+consider such further factors and information as it deems
+relevant. The Board of Directors will act on the Nominating and
+Corporate Governance Committee’s recommendation no later
+than 90 days following the date of the stockholders’
+meeting. If the Board of Directors determines remedial action is
+appropriate, the director shall promptly take whatever action is
+requested by the Board. If the director does not promptly take
+the recommended
+3
+Table of Contents 
+remedial action or if the Board of Directors determines that
+immediate resignation is in the best interests of Patterson-UTI
+and its stockholders, the Board of Directors may accept the
+director’s resignation that will have been tendered as
+follows. Each director will as a condition to his or her
+appointment or election as a director or nomination as a
+director agree in writing to comply with the terms of
+Patterson-UTI’s majority voting policy and provide to the
+Board of Directors an irrevocable resignation that will be
+effective upon (i) the failure to receive the required vote
+at the next annual meeting at which such director faces
+re-election and (ii) the Board of Directors’
+acceptance of such resignation.
+Set forth below is the name, age, position and a brief
+description of the business experience during at least the past
+five years of each of the members of Patterson-UTI’s Board
+of Directors, as well as specific qualifications, attributes and
+skills of such member that were identified by the Nominating and
+Corporate Governance Committee when concluding such member
+should be nominated to serve on the Board of Directors. Each
+current member of Patterson-UTI’s Board of Directors is a
+nominee for election to the Board of Directors.
+Name 
+Age 
+Position 
+Mark S. Siegel
+60
+Chairman of the Board and Director
+Kenneth N. Berns
+51
+Senior Vice President and Director
+Charles O. Buckner
+66
+Director
+Curtis W. Huff
+53
+Director
+Terry H. Hunt
+62
+Director
+Kenneth R. Peak
+65
+Director
+Cloyce A. Talbott
+75
+Director
+When considering whether directors and nominees have the
+experience, qualifications, attributes and skills, taken as a
+whole, to enable the Board of Directors to satisfy its oversight
+responsibilities effectively in light of Patterson-UTI’s
+business and structure, the Nominating and Corporate Governance
+Committee and the Board of Directors focused primarily on the
+information discussed in each of the directors’ individual
+biographies set forth below.
+In particular, with regard to Mr. Buckner, the Board of
+Directors considered his past and current service as a director
+of oil and gas companies, as well as his experience, expertise
+and background with regard to accounting matters, which includes
+his role as the former chairman of Ernst & Young
+LLP’s United States energy practice.
+With regard to Mr. Huff, the Board of Directors considered
+his background as an executive of publicly traded oilfield
+services companies and as an owner and manager of a private
+equity firm and investment firm focused on the oilfield service
+industry. The Board noted his knowledge and experience in a
+broad range of oilfield products and services and his current
+and historical experience in managing operations in both the
+United States and internationally. The Board also considered
+Mr. Huff’s expertise and background with regard to
+accounting and legal matters, which, among other things,
+provides guidance to Patterson-UTI in assessing its corporate
+governance structure, policies and procedures.
+With regard to Mr. Hunt, the Board of Directors considered
+that his over twenty-five years of experience covering most
+phases of the upstream oil and natural gas industry in the
+United States and Canada, including the evaluation of
+exploration and development programs, oil and natural gas
+production and pipeline operations, and project development and
+major production facility construction provides Patterson-UTI
+with an invaluable perspective of the oil and natural gas
+industry and its customers. In addition, Mr. Hunt’s
+many years of senior executive experience leading natural gas
+distribution, storage and marketing companies provides insight
+into the management of multi-faceted businesses and the markets
+for natural gas in North America.
+With regard to Mr. Peak, the Board of Directors considered
+his nearly forty years in the energy industry, including in a
+financial capacity, as well as his current role as the chairman
+and chief executive officer of a publicly traded oil and gas
+exploration and production company. This experience and
+background provides Patterson-UTI with an important perspective
+into its customers, current industry conditions and expectations
+of where the oil and natural gas market is headed.
+4
+Table of Contents 
+With regard to Mr. Talbott, the Board of Directors
+considered his more than fifty years of experience in the oil
+and gas industry, more than thirty of which has been with
+Patterson-UTI, which provides unique and valuable knowledge of
+the U.S. land drilling industry and a historical
+perspective of the cyclical nature of the oil and natural gas
+industry.
+With regard to Mr. Berns, the Board of Directors considered
+his more than twenty-five years of financial, mergers and
+acquisitions and transactional experience, including over
+fifteen years in the oil and gas industry. This experience and
+background, provides perspective on the cyclical nature of the
+oil and gas industry and allows Mr. Berns to provide
+valuable direction with respect to Patterson-UTI’s
+financial affairs, corporate transactions and strategic
+decisions.
+With regard to Mr. Siegel, the Board of Directors
+considered his broad business and legal experience, as well as
+his expertise with respect to Patterson-UTI’s business. In
+addition, the Board considered Mr. Siegel’s
+demonstrated leadership for more than 15 years of both
+Patterson-UTI and one of its predecessor companies, UTI Energy
+Corp. In addition, the Board considered Mr. Siegel’s
+prior leadership experience in other public companies and in the
+oil services industry, and in numerous other businesses and
+industries. Mr. Siegel also brings substantial experience
+and expertise in mergers and acquisitions, capital structure
+transactions, strategic planning, and board and business
+management. Mr. Siegel’s broad and deep experience and
+expertise allows him to provide Patterson-UTI with valuable
+leadership in all areas of its business endeavors.
+Mark S. Siegel — Mr. Siegel has served as
+Chairman of the Board and as a director of Patterson-UTI since
+May 2001. Mr. Siegel served as Chairman of the Board and as
+a director of UTI Energy Corp. (“UTI”) from 1995 to
+May 2001, when UTI merged with and into Patterson-UTI.
+Mr. Siegel has been President of REMY Investors &
+Consultants, Incorporated (“REMY Investors”) since
+1993. From 1992 to 1993, Mr. Siegel was President, Music
+Division, Blockbuster Entertainment Corp. From 1988 through
+1992, Mr. Siegel was an Executive Vice President of
+Shamrock Holdings, Inc., a private investment company, and
+Managing Director of Shamrock Capital Advisors, Incorporated.
+Mr. Siegel holds a Bachelor of Arts degree from Colgate
+University and a J.D. from the University of California,
+Berkeley (Boalt Hall) School of Law.
+Kenneth N. Berns — Mr. Berns has served as
+Senior Vice President of Patterson-UTI since April 2003 and as a
+director of Patterson-UTI since May 2001. Mr. Berns served
+as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns
+holds a Bachelors Degree in Business Administration from
+San Diego State University and a Masters Degree in Taxation
+from Golden Gate University.
+Charles O. Buckner — Mr. Buckner has
+served as a director of Patterson-UTI since February 2007.
+Mr. Buckner, a private investor, retired from the public
+accounting firm of Ernst & Young LLP in 2002 after
+35 years of service in a variety of client service and
+administrative roles, including chairmanship of
+Ernst & Young’s United States energy practice. He
+presently serves as a director of Global Industries, Ltd., a
+marine construction services company with global operations, and
+Energy Partners, Ltd., a publicly held company with oil and
+natural gas exploration and production on the continental shelf
+in the Gulf of Mexico. Mr. Buckner served as a director of
+Gateway Energy Corporation, a publicly held oil and gas pipeline
+company from 2008 to 2010, Horizon Offshore, Incorporated, a
+marine construction services company for the offshore oil and
+gas industry from 2003 to 2007, and Whittier Energy Corporation,
+a publicly held company with domestic onshore oil and natural
+gas exploration and production from 2003 to 2007.
+Mr. Buckner is a Certified Public Accountant and holds a
+Bachelor of Business Administration from the University of Texas
+and a Masters of Business Administration from the University of
+Houston.
+Curtis W. Huff — Mr. Huff has served as a
+director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1997 to May 2001. Mr. Huff is the
+co-founder and Managing Partner of Intervale Capital, an
+oilfield service private equity firm that Mr. Huff created
+in 2006. Mr. Huff is also the President and Chief Executive
+Officer of Freebird Investments LLC, a private family office
+investment company that was created in October 2002.
+Mr. Huff served as the President and Chief Executive
+Officer of Grant Prideco, Inc., a provider of drill pipe and
+other drill stem products, from February 2001 to June 2002. From
+January 2000 to February 2001, Mr. Huff served as Executive
+Vice President, Chief Financial Officer and General Counsel of
+Weatherford International, Inc., one of the world’s largest
+international oilfield services companies. He served as Senior
+Vice President and General Counsel of Weatherford from May 1998
+to January 2000. Mr. Huff began his professional career in
+1983 with the
+5
+Table of Contents 
+law firm of Fulbright & Jaworski L.L.P. where he
+specialized in corporate, securities and merger and acquisition
+matters. Mr. Huff was made a partner in that firm in 1989
+where he served until 1998 when he joined Weatherford.
+Mr. Huff holds a Bachelor of Arts degree and Juris
+Doctorate from the University of New Mexico, where he graduated
+as a member of the order of the coif and cum laude, and a
+Masters of Law from New York University School of Law.
+Terry H. Hunt — Mr. Hunt has served as a
+director of Patterson-UTI since April 2003 and served as a
+director of UTI from 1994 to May 2001. Mr. Hunt is an
+energy consultant. Mr. Hunt served as Senior Vice
+President — Strategic Planning of PPL Corporation, an
+international energy and utility holding company, from 1998 to
+2000. Mr. Hunt served as the President and Chief Executive
+Officer of Penn Fuel Gas, Inc., a Pennsylvania-based natural gas
+and propane distribution company, from 1992 to 1999. Previously,
+Mr. Hunt was President of Carnegie Natural Gas and Apollo
+Gas Company, both Appalachian natural gas distribution
+companies. He also previously served in senior management
+positions in natural gas project and venture development, oil
+and natural gas exploration and development evaluation and
+operations and major production facilities construction with
+Texas Oil & Gas Corp. and Atlantic Richfield.
+Mr. Hunt holds a Bachelor of Engineering degree from the
+University of Saskatchewan, Canada and a Masters of Business
+Administration from Southern Methodist University.
+Kenneth R. Peak — Mr. Peak has served as a
+director of Patterson-UTI since November 2000. Mr. Peak has
+served as Chairman and Chief Executive Officer of Contango
+Oil & Gas Company since September 1999. Mr. Peak
+entered the energy industry in 1972 as a commercial banker and
+has held a variety of financial and executive positions in the
+oil and gas industry prior to starting Contango in 1999.
+Mr. Peak served as an officer in the U.S. Navy from
+1968 to 1971. Mr. Peak received a Bachelor of Science in
+Physics from Ohio University in 1967 and a Masters of Business
+Administration from Columbia University in 1972.
+Cloyce A. Talbott — Mr. Talbott has served
+as a director of Patterson-UTI since its incorporation in 1978.
+Mr. Talbott co-founded Patterson-UTI and has served in
+various capacities, including as its Chief Executive Officer
+from 1983 until his retirement from that position in September
+2007. He also served as Chairman of the Board from 1983 to May
+2001. Mr. Talbott is currently employed as a consultant by
+Patterson-UTI. Mr. Talbott holds a Bachelor of Science
+degree in petroleum engineering from Texas Tech University.
+Board
+Leadership Structure, Lead Director and Board Role in Risk
+Oversight 
+The Board evaluates its leadership structure and role in risk
+oversight on an ongoing basis. The decision on whether to
+combine or separate the Chairman and Chief Executive Officer
+(“CEO”) role is determined on the basis of what the
+Board considers to be best for Patterson-UTI at any given point
+in time. Patterson-UTI’s current Board leadership structure
+separates the role of Chairman and CEO.
+The Board also believes part of an effective Board leadership
+structure is to have a lead independent director, the “Lead
+Director.” The Board has appointed Mr. Huff as the
+Lead Director. The independent directors meet regularly in
+executive sessions at which only independent directors are
+present, and the Lead Director chairs those sessions. The Lead
+Director serves as a liaison between the Chairman and the
+independent directors, consults with regard to Board and agenda
+items, and works with the chairpersons of Board committees as
+appropriate.
+The Nominating and Corporate Governance Committee and the Board
+currently believe that the Board’s leadership structure,
+which includes the separation of the role of CEO and Chairman
+and the appointment of an independent Lead Director, is
+appropriate because it, among other things, provides for
+sufficient independence between the Board and management and for
+an independent director who provides board member leadership.
+The Board has adopted Corporate Governance Guidelines, which can
+be accessed electronically in the “Governance” section
+of Patterson-UTI’s website at www.patenergy.com . The
+Guidelines describe one of the Board’s primary
+responsibilities as overseeing Patterson-UTI’s processes
+for assessing and managing risks. The Board discharges this
+responsibility, in part, through regular inquiries from the
+Chairman of the Board
+and/or the
+Lead Director to management, periodic communications from
+management to the Board of Directors of particular risks and
+events, and discussions during Board meetings with and without
+management of general and specific risks to Patterson-UTI.
+6
+Table of Contents 
+Meetings
+and Committees of the Board of Directors 
+The Board of Directors met nine times during the year ended
+December 31, 2010. Each director attended, in person or by
+telephone, at least 75% of the aggregate of all meetings held by
+the Board and meetings of each committee on which such director
+served. A majority of the members of the Board of Directors are
+independent within the meaning of the Nasdaq Stock Market, Inc.
+(“Nasdaq”) listing standards. Specifically, the Board
+has determined that Messrs. Buckner, Huff, Hunt and Peak
+are independent within the meaning of the Nasdaq listing
+standards. In reaching this conclusion, the Board considered
+that Mr. Huff controls and manages two investment
+companies, which have interests in oilfield service portfolio
+companies that, prior to 2010, have supplied parts and equipment
+to Patterson-UTI in the ordinary course of their businesses
+consistent with customary terms in the industry. In reaching
+this conclusion, the Board also considered that Mr. Peak is
+the Chairman and Chief Executive Officer of a publicly traded
+independent natural gas and oil company, which has a subsidiary
+that obtained contract drilling services from Patterson-UTI in
+the ordinary course of their businesses consistent with
+customary terms in the industry. The Board has determined that
+these transactions are not material to such companies,
+Patterson-UTI or Messrs. Huff or Peak and that such
+transactions do not affect either director’s independence
+under applicable rules and regulations.
+The Board of Directors has established four standing committees,
+an Executive Committee, an Audit Committee, a Compensation
+Committee and a Nominating and Corporate Governance Committee.
+The Executive Committee, which currently is composed of
+Messrs. Siegel, Talbott and Berns, has the authority, to
+the extent permitted by applicable law, to act for the Board in
+all matters arising between regular or special meetings of the
+Board of Directors.
+The Audit Committee members are Messrs. Buckner (chairman),
+Huff and Hunt, each of whom is independent within the meaning of
+applicable Securities Exchange Act of 1934, as amended (the
+“Exchange Act”), rules and within the meaning of the
+Nasdaq listing standards. The Audit Committee oversees
+management’s conduct of Patterson-UTI’s accounting and
+financial reporting process, including review of the financial
+reports and other financial information provided by
+Patterson-UTI to the public and government and regulatory
+bodies, Patterson-UTI’s system of internal accounting,
+Patterson-UTI’s financial controls, and the annual
+independent audit of Patterson-UTI’s financial statements
+and internal control over financial reporting. The Audit
+Committee also oversees compliance with Patterson-UTI’s
+codes of conduct and ethics and with legal and regulatory
+requirements. The Board has determined that Messrs. Buckner
+and Huff are “audit committee financial experts”
+within the meaning of applicable SEC rules. The Audit Committee
+selects the independent registered public accounting firm to
+audit Patterson-UTI’s books and records and considers and
+acts upon accounting matters as they arise. The Board of
+Directors has adopted a written charter for the Audit Committee.
+The Audit Committee held five meetings during the year ended
+December 31, 2010. Please see “Audit Committee
+Report” elsewhere in this proxy statement.
+The Compensation Committee members are Messrs. Hunt
+(chairman), Buckner, Huff and Peak, each of whom is independent
+as defined in the Nasdaq listing standards. Among other things,
+the Compensation Committee sets and administers the policies
+that govern the compensation of executive officers and directors
+of Patterson-UTI. The Board of Directors has adopted a written
+charter for the Compensation Committee. The Compensation
+Committee held seven meetings during the year ended
+December 31, 2010. Please see “Compensation Discussion
+and Analysis” and “Compensation Committee Report”
+elsewhere in this proxy statement for further information about
+the Compensation Committee.
+The Nominating and Corporate Governance Committee members are
+Messrs. Huff (chairman), Buckner and Peak, each of whom is
+independent as defined in the Nasdaq listing standards. The
+purpose of the Nominating and Corporate Governance Committee is
+to identify individuals qualified to become Board members, to
+recommend for selection by the Board director nominees for the
+next annual meeting of stockholders, to review
+Patterson-UTI’s Code of Business Conduct, to develop and
+continually make recommendations with respect to the best
+corporate governance principles and to oversee the evaluation of
+the Board and management. The Board of Directors has adopted a
+written charter for the Nominating and Corporate Governance
+Committee. The Nominating and Corporate Governance Committee
+held four meetings during the year ended December 31, 2010.
+7
+Table of Contents 
+All of the director nominees are existing directors of
+Patterson-UTI standing for re-election to the Board of Directors.
+On behalf of the Board, the Nominating and Governance Committee
+considers director nominees recommended by Patterson-UTI’s
+stockholders if the recommendations are made in accordance with
+all legal requirements, including applicable provisions of
+Patterson-UTI’s restated certificate of incorporation and
+bylaws. In accordance with Patterson-UTI’s bylaws, in
+addition to any other applicable requirements, nominations of
+persons for election to the Board may be made at a meeting of
+stockholders only by or at the direction of the Board or by a
+stockholder who is a stockholder of record on the date of the
+giving of the notice provided for below and on the record date
+for the determination of stockholders entitled to vote at such
+annual meeting and gives timely notice of such nomination in
+writing to the Secretary of Patterson-UTI. To be timely with
+respect to the 2012 annual meeting of stockholders, a
+stockholder’s notice must be delivered to or mailed and
+received at Patterson-UTI’s principal executive offices not
+earlier than February 9, 2012 and not later than
+March 10, 2012; provided, however, that in the event that
+the annual meeting is called for a date that is not within
+30 days before or after June 8, 2012, notice by the
+stockholder must be received not later than the close of
+business on the tenth day following the day on which such notice
+of the date of the meeting was mailed or public disclosure of
+the annual meeting date was made, whichever occurs first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+as to each person whom the stockholder proposes to nominate for
+election or re-election as director, all information relating to
+such person that is required to be disclosed in solicitations of
+proxies for election of directors, or is otherwise required, in
+each case pursuant to Regulation 14A promulgated under the
+Exchange Act, or any successor regulation thereto,
+• 
+the name and record address of the stockholder proposing such
+nomination,
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+a description of all arrangements or understandings between such
+stockholder and each proposed nominee and any other person or
+persons (including their names) pursuant to which the nomination
+or nominations are to be made by such stockholder, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the meeting to nominate the persons named
+in the notice.
+Such notice must be accompanied by a written consent of each
+proposed nominee to being named as a nominee and to serve as a
+director if elected.
+The Nominating and Corporate Governance Committee determines
+qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of
+Patterson-UTI. The Nominating and Corporate Governance Committee
+relies on the knowledge and relationships of Patterson-UTI and
+its officers and directors, as well as third parties when it
+deems appropriate, to identify and evaluate nominees for
+director, including nominees recommended by stockholders. In
+evaluating a nominee for director, the Nominating and Corporate
+Governance Committee considers the nominee’s skills,
+expertise, industry and other knowledge, personal and
+professional ethics, integrity and values, sound business
+judgment and willingness to commit sufficient time to the Board
+and be committed to representing the long-term interests of
+Patterson-UTI’s stockholders. Although the Nominating and
+Corporate Governance Committee does not have a stand-alone
+policy with regard to consideration of diversity in identifying
+director nominees, it considers diversity in professional
+background, experience, expertise (including as to financial
+matters) and perspective (including as to age, gender and
+ethnicity) with respect to the Board of Directors composition as
+a whole when evaluating a director nominee.
+Succession
+Planning 
+The Board of Directors oversees processes and procedures to
+provide continuity of well-qualified executive leadership and to
+assess whether such leadership possesses the skill and talent to
+execute Patterson-UTI’s long term business strategies. The
+Board of Directors reviews the succession plan for the Chief
+Executive Officer and the senior executives tailored to reflect
+the Board’s standards for executive leadership and
+Patterson-UTI’s business
+8
+Table of Contents 
+strategy and vision. The succession plan addresses (i) both
+current and long term needs of Patterson-UTI and establishes a
+process for identifying and assessing potential internal
+candidates; (ii) periodic review and assessment of
+readiness: (iii) contingency planning for temporary
+absences of the Chief Executive Officer due to disability or
+other unexpected event; and (iv) long term continuity
+planning for succession to the Chief Executive Officer position.
+Communication
+with the Board and its Independent Members 
+Persons may communicate with the Board, or directly with its
+Chairman, Mr. Siegel, by submitting such communication in
+writing in care of Chairman of the Board of Directors,
+Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500,
+Houston, Texas 77067. Persons may communicate with the
+independent members of the Board by submitting such
+communication in writing to the Nominating and Corporate
+Governance Committee of the Board of Directors of Patterson-UTI
+Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas
+77067.
+Although Patterson-UTI does not have a formal policy regarding
+attendance by members of the Board at its annual meetings of
+stockholders, directors are invited to attend annual meetings of
+Patterson-UTI stockholders. All of the directors attended the
+2010 annual meeting of stockholders with six directors attending
+in person and one director attending via telephone.
+Corporate
+Governance Documents Available on Patterson-UTI’s
+Website 
+Copies of each of the following documents can be accessed
+electronically in the “Governance” section of the
+Patterson-UTI website at www.patenergy.com and in print
+to any stockholder who requests them from the Secretary of
+Patterson-UTI:
+• 
+Audit Committee Charter;
+• 
+Compensation Committee Charter;
+• 
+Nominating and Corporate Governance Committee Charter;
+• 
+Corporate Governance Guidelines;
+• 
+Code of Business Conduct for its employees, officers and
+directors; and
+• 
+Code of Business Conduct and Ethics for Senior Financial
+Executives.
+PROPOSAL NO. 2 
+APPROVAL
+OF MATERIAL TERMS OF THE PERFORMANCE CRITERIA 
+UNDER THE LONG-TERM INCENTIVE PLAN 
+Patterson-UTI’s Board of Directors is seeking stockholder
+approval of the material terms of the performance goals that may
+apply to performance-based awards under the Patterson-UTI
+Energy, Inc. 2005 Long-Term Incentive Plan (the
+“LTIP”). This approval is necessary to preserve
+Patterson-UTI’s federal income tax deduction for
+performance-based compensation paid to certain executive
+officers under Section 162(m) of the Internal Revenue Code
+of 1986, as amended (the “Code”).
+The Compensation Committee places a strong emphasis on
+performance-based compensation, which promotes stockholder value
+by linking the employee’s reward to the achievement of
+Patterson-UTI’s business strategies and goals. The purposes
+of the LTIP are to motivate key employees to improve stockholder
+value by linking a portion of their cash compensation to
+Patterson-UTI’s financial performance, reward key employees
+for improving Patterson-UTI’s financial performance and
+help attract and retain key employees. The Board of Directors
+believes it would be in the best interests of the stockholders
+and Patterson-UTI to approve the material terms of the
+performance criteria under the LTIP.
+Certain material features of the LTIP are discussed below;
+however, the description is subject to, and qualified by the
+full text of the LTIP, attached as Appendix A .
+9
+Table of Contents 
+Background 
+Section 162(m) of the Code imposes an annual deduction
+limit of $1 million on the amount of compensation paid to
+each of the Chief Executive Officer and the other three highest
+compensated officers of Patterson-UTI (other than the CFO) as
+determined on the last day of a tax year. The deduction limit
+does not apply to performance-based compensation that satisfies
+the requirements of Section 162(m) of the Code. The
+requirements of Section 162(m) of the Code for
+performance-based compensation include shareholder approval of
+the material terms of the performance goals under which the
+compensation is paid. The material terms include (1) the
+employees eligible to receive compensation upon attainment of a
+goal, (2) the business criteria on which the goals may be
+based, and (3) the maximum amount payable to an employee
+upon attainment of a goal.
+Compensation paid under the LTIP, under appropriate
+circumstances, is intended to meet the “performance-based
+compensation” exception under Section 162(m) of the
+Code, so that Patterson-UTI will be permitted to receive a
+federal income tax deduction for the payment of this incentive
+compensation. Performance-based awards under the LTIP may be
+granted to key employees of Patterson-UTI and its subsidiaries
+and affiliates, and to non-employee directors of Patterson-UTI.
+The LTIP was approved by Patterson-UTI stockholders in 2005 and
+subsequently approved by stockholders and Patterson-UTI’s
+Board of Directors with respect to subsequent amendments. All
+references to the LTIP in this discussion include a reference to
+the LTIP amendments.
+Performance
+Criteria 
+If the Compensation Committee determines that
+Section 162(m) of the Code (see “Federal Income Tax
+Consequences — Performance-Based Compensation”
+below) applies (or is likely to apply) to a restricted stock
+award, performance award or other stock unit award, the lapsing
+of restrictions on the award and the distribution of cash,
+shares or other property pursuant to such award, shall be
+subject to the achievement of one or more objective performance
+goals established by the Compensation Committee, which shall be
+based on attaining specified levels in one or more areas, such
+as: net sales; revenue growth; pre-tax income before allocation
+of corporate overhead and bonus; earnings per share; operating
+income or net income; return on stockholders’ equity;
+attainment of strategic and operational initiatives;
+appreciation in
+and/or 
+maintenance of the price of the Common Stock or other
+publicly-traded securities of Patterson-UTI; market share; gross
+profits; earnings before taxes or before interest and taxes or
+before interest, taxes, depreciation, depletion and
+amortization; comparisons with various stock market indices;
+improvement in or attainment of expense levels or working
+capital levels; cash margins; safety records; and rig
+utilization and rig count growth. Performance goals may be
+measured solely by reference to Patterson-UTI’s performance
+or the performance of a subsidiary, division, business segment
+or business unit of Patterson-UTI, or based upon the relative
+performance of other companies or upon comparisons of any of the
+indicators of performance relative to other companies, in each
+case as specified by the Compensation Committee in the award.
+The Compensation Committee also may adjust performance goals to
+reflect the impact of specified events, occurrences or
+transactions, accounting or tax law changes or other
+extraordinary or nonrecurring events.
+Administration 
+The LTIP is administered by the Compensation Committee of
+Patterson-UTI’s Board of Directors, which comprises
+exclusively non-employee independent directors. The LTIP
+provides for the granting of incentive stock options
+(“ISOs”) that are intended to meet the provisions of
+Section 422 of the Code, and non-incentive stock options
+(“NQSOs”), as well as other awards, such as tandem and
+freestanding SARs, restricted stock awards, other stock unit
+awards, performance shares, performance units and dividend
+equivalents. Certain awards under the LTIP may be paid in cash
+or Common Stock, as determined by the Compensation Committee.
+The Compensation Committee has the exclusive authority to select
+the participants to whom awards may be granted under the LTIP,
+and to determine the type, size and terms of each such award.
+The Compensation Committee also makes all determinations that it
+decides are necessary or desirable in the interpretation and
+administration of the LTIP. In addition, the Compensation
+Committee may, if consistent with applicable rules, regulations
+and Nasdaq requirements, delegate to a committee of one or more
+directors or to one or more executive officers the right to
+grant, cancel and suspend awards to employees who are not
+directors or executive officers of Patterson-UTI.
+10
+Table of Contents 
+General
+Terms 
+The following describes general terms of the LTIP:
+• 
+The aggregate number of shares of Common Stock authorized for
+grant under the LTIP is 15,250,000, reduced by the number of
+shares that are subject to awards granted under equity plans of
+Patterson-UTI existing during the period commencing on
+January 1, 2005 and ending on the date the LTIP was
+approved by the Patterson-UTI stockholders. Shares that are
+subject to options or SARs count as one (1.0) share of Common
+Stock against the aggregate number. Shares that are subject to
+other awards that were awarded prior to June 5, 2008 count
+as one and six tenths (1.6) shares of Common Stock against the
+aggregate number, shares that are subject to other awards that
+were awarded on or after June 5, 2008 but prior to
+April 26, 2010 count as two (2.0) shares of Common Stock
+against the aggregate number and shares that are subject to
+other awards that were awarded on or after April 26, 2010
+count as one and thirty-five hundredths (1.35) shares of Common
+Stock against the aggregate number.
+• 
+Generally, if an award granted under the LTIP or the other
+existing equity plans of Patterson-UTI 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 LTIP. Any shares of Common Stock that
+again become available for grant under the LTIP will be added
+back as one (1.0) share if the shares were subject to options or
+SARs, and one and six tenths (1.6) shares if the shares were
+subject to awards other than options or SARs that were
+forfeited, expire or otherwise terminated prior to June 5,
+2008 or two (2.0) shares if the shares were subject to awards
+other than options or SARs that are forfeited, expire or
+otherwise terminate on or after June 5, 2008 but prior to
+April 26, 2010 or one and thirty-five hundredths (1.35)
+shares if the shares were subject to awards other than options
+or SARs that are forfeited, expire or otherwise terminate on or
+after April 26, 2010.
+• 
+Directors, employees, including officers, consultants and
+advisors are eligible for awards. As of December 31, 2010
+Patterson-UTI had four non-employee directors and approximately
+7,000 full time employees.
+• 
+The LTIP provides for awards of NQSOs, ISO, tandem and
+freestanding SARs, restricted stock awards, other stock unit
+awards, performance awards and dividend equivalents.
+• 
+The Board of Directors, at any time, may amend the terms of the
+LTIP, subject to the stockholder approval requirements of Nasdaq
+and other rules and regulations applicable to Patterson-UTI.
+• 
+Under the LTIP, no participant may be granted (i) options
+or SARs during any
+12-month 
+period with respect to more than 1,000,000 shares of Common
+Stock 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. In
+addition to the foregoing limits, the maximum dollar value
+payable to any participant in any
+12-month 
+period with respect to performance awards is $5,000,000.
+Options 
+• 
+The vesting schedule for options is set by the Compensation
+Committee; however, options may not fully vest sooner than one
+year from the date of grant, except for certain limited
+exceptions.
+• 
+The term of options is set by the Compensation Committee, but
+may not exceed 10 years.
+• 
+The exercise price for options may be paid in cash, with
+previously acquired shares of Common Stock, or by other means
+approved by the Compensation Committee.
+• 
+Each option granted under the LTIP is granted with an exercise
+price equal to or greater than the fair market value of the
+Common Stock at the time such option is granted. Repricing is
+not permitted with respect to options.
+SARs 
+• 
+SARs may be granted alone or in connection with the grant of any
+option or other award.
+11
+Table of Contents 
+• 
+Each SAR granted under the LTIP is granted with a grant price
+equal to or greater than the fair market value of the Common
+Stock at the time such SAR is granted. Repricing is not
+permitted with respect to SARs.
+• 
+SARs granted alone may be exercised at such times and be subject
+to such terms and conditions as the Compensation Committee may
+impose. SARs that are granted in tandem with options may be
+exercised only on the surrender of the right to purchase an
+equivalent number of shares under the related options and may be
+exercised only with respect to the shares of Common Stock for
+which the related options are then exercisable.
+• 
+The term of SARs may not exceed 10 years.
+• 
+A SAR entitles a participant to surrender any then exercisable
+portion of the SAR and, if applicable, the related option, in
+exchange for an amount equal to the excess of (1) the fair
+market value of a share of Common Stock on the date of exercise
+over (2) the grant price of the SAR on the date that the
+SAR was granted, or, if the SAR is related to an option, as
+specified by the Compensation Committee in its sole discretion,
+subject to certain limitations.
+• 
+Upon the exercise of a SAR, payment shall be made in whole
+shares of Common Stock.
+Restricted
+Stock Awards 
+• 
+The Compensation Committee determines the material terms of the
+restricted stock awards, including the price, if any, to be paid
+by the recipient, and the vesting schedule and conditions, which
+may include the attainment of specified performance objectives
+described below.
+• 
+A restricted stock award that is subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions.
+• 
+Beginning on the date of grant, a participant receiving a
+restricted stock award will become a stockholder of
+Patterson-UTI with respect to all shares of Common Stock subject
+to the restricted stock award, which, unless the Compensation
+Committee determines otherwise at the time of the grant,
+includes the right to vote such shares and receive regular,
+ordinary dividends in respect of such shares.
+Other
+Stock Units 
+• 
+The Compensation Committee may grant other stock unit awards
+under the LTIP, which have a value equal to an identical number
+of shares of Common Stock. Other stock unit awards may also be a
+form of payment for other awards granted under the LTIP and
+other earned cash-based incentive compensation.
+• 
+The payment of other stock units may be in cash, shares of
+Common Stock, other property, or any combination of the
+foregoing, and may be made in a lump sum or, in accordance with
+procedures established by the Compensation Committee, on a
+deferred basis subject to the requirements of Section 409A of
+the Code.
+• 
+Other stock unit awards that are subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions.
+Dividend
+Equivalent Rights 
+• 
+The Compensation Committee may grant dividend equivalent rights
+either in connection with awards or as separate awards under the
+LTIP. Amounts payable in respect of dividend equivalent rights
+may be payable currently or, if applicable, deferred until the
+lapsing of restrictions on the dividend equivalent rights or
+until the vesting, exercise, payment, settlement or other lapse
+of restrictions on the award to which the dividend equivalent
+rights relate. If dividend equivalents are granted in connection
+with performance unit or performance share awards, no dividend
+equivalents will be payable until the Compensation Committee
+12
+Table of Contents 
+determines that the performance conditions relating to the
+settlement of the performance unit or performance share award
+have been satisfied.
+• 
+No SARs have been granted under the LTIP and no option granted
+under the LTIP has included dividend equivalent rights.
+Performance
+Awards 
+• 
+Performance awards are payable in cash, shares of Common Stock,
+other property, or a combination of the foregoing, and may be
+paid in a lump sum, in installments, or on a deferred basis in
+accordance with procedures established by the Compensation
+Committee.
+• 
+The Compensation Committee determines the material terms of the
+performance awards, including a performance period over which
+the performance goal of such award shall be measured, which must
+be at least 12 months and no longer than five years.
+Deferrals 
+• 
+The Compensation Committee may require or permit a participant
+to defer the receipt of cash or shares pursuant to any awards
+under the LTIP. Any deferral permitted under the LTIP will be
+administered in a manner that is intended to comply with
+Section 409A of the Code.
+Effect of
+Certain Transactions and Change of Control 
+The following describes the effects of certain transactions and
+a change of control:
+The Compensation Committee may provide in the terms of an award
+under the LTIP that, on a change of control as defined in the
+Plan (or award agreement, if awarded prior to April 26,
+2010),
+• 
+options and SARs outstanding on the date of the change of
+control immediately vest;
+• 
+options and SARs outstanding on the date of the change of
+control may be cancelled and terminated without payment if the
+fair market value of a share of Common Stock on the date of the
+change of control is less than the per share option exercise
+price or SAR grant price;
+• 
+restrictions and deferral limitations on restricted stock lapse
+and the restricted stock becomes free of all restrictions and
+limitations and becomes fully vested;
+• 
+all performance awards shall be considered to be earned and
+payable and any deferral or other restriction shall lapse and
+the performance awards shall be immediately settled or
+distributed to the extent permitted under Section 409A of
+the Code;
+• 
+restrictions and deferral limitations and other conditions
+applicable to any other stock unit awards or any other awards
+lapse, and the other stock unit awards and other awards 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
+• 
+such other additional benefits as the Compensation Committee
+deems appropriate shall apply.
+The Compensation Committee, in its discretion, may determine
+that, upon a change of control, each option and SAR shall
+terminate within a specified period of days after notice to the
+participant, or that with respect to such option or SAR each
+participant shall receive an amount equal to the excess of the
+fair market value of such share immediately prior to the
+occurrence of the change of control over the exercise price per
+share of such option or SAR. The payment may be made in one or
+more kinds of stock or property or a combination of stock or
+property. Further, in the event of changes in the capital or
+corporate structure of Patterson-UTI due to events such as
+recapitalization, stock split, merger, spin-off or similar
+transaction, that affect the shares of Common Stock, the
+Compensation Committee, in its sole discretion, may determine
+that it is equitable or appropriate to make adjustments or
+substitutions to the Plan or outstanding options and awards,
+including to the number, class, kind and option or exercise
+price or securities subject to awards.
+13
+Table of Contents 
+Prior to April 26, 2010, the LTIP provided that the
+definition of a change of control of Patterson-UTI would be
+provided in an individual award agreement granted under the LTIP
+and that the Board retained the discretion to determine the
+events that constitute a change of control of Patterson-UTI.
+After April 26, 2010, the LTIP provides the change of
+control definition that is currently contained in the LTIP.
+Furthermore, the Board no longer retains the discretion to
+designate an event that is not described in the change of
+control definition as a change of control event.
+Federal
+Income Tax Consequences 
+The following discussion summarizes certain federal income tax
+consequences of the issuance and receipt of awards pursuant to
+the LTIP under the law as in effect on the date of this proxy
+statement. The rules governing the tax treatment of such awards
+are quite technical, so the following discussion of tax
+consequences is necessarily general in nature and is not
+complete. In addition, statutory provisions are subject to
+change, as are their interpretations, and their application may
+vary in individual circumstances. This summary does not purport
+to cover all federal employment tax or other federal tax
+consequences associated with the LTIP, nor does it address
+state, local, or
+non-U.S. taxes. 
+ISOs 
+In general, a participant will not recognize income upon the
+grant or exercise of an ISO. However, if the participant is
+subject to federal “alternative minimum tax,” the
+exercise of an ISO will be treated essentially the same as a
+NQSO for purposes of the alternative minimum tax ( see NQSOs,
+SARs, Performance Award, and Other Stock Unit Award below).
+Subject to certain exceptions for death or disability, if a
+participant exercises an ISO more than three months after
+termination of employment, the exercise of the option will be
+taxed as the exercise of a NQSO, as described below.
+The general rule is that gain or loss from the sale or exchange
+of shares acquired on the exercise of an ISO will be treated as
+capital gain or loss. However, if shares acquired upon the
+exercise of an ISO are disposed of within two years from the
+date of grant or within one year after exercise (a
+“disqualifying disposition”), the participant
+generally will recognize ordinary income in the year of
+disposition in an amount equal to the fair market value of the
+shares at the time of exercise (or, if less, the amount realized
+on the disposition of the shares) less the exercise price. Any
+further gain (or loss) realized by the participant generally
+will be taxed as short-or long-term capital gain (or loss)
+depending on the holding period.
+NQSOs,
+SARs, Performance Award, and Other Stock Unit
+Award 
+A participant generally is not required to recognize income on
+the grant of a NQSO, a SAR, performance award or other stock
+unit award. Instead, ordinary income generally is required to be
+recognized on the date the NQSO or SAR is exercised, or in the
+case of performance awards or other stock unit awards, upon the
+issuance of shares
+and/or the
+payment of cash pursuant to the terms of the award. In general,
+the amount of ordinary income required to be recognized is,
+(a) in the case of a NQSO, an amount equal to the excess,
+if any, of the fair market value of the shares on the exercise
+date over the exercise price, (b) in the case of a SAR, the
+fair market value of any shares received upon exercise plus the
+amount of taxes withheld from such amounts, and (c) in the
+case of performance awards or other stock unit awards, the
+amount of cash
+and/or the
+fair market value of any shares received in respect thereof,
+plus the amount of taxes withheld from such amounts.
+Restricted
+Common Stock 
+Unless a participant who receives an award of restricted Common
+Stock makes an election under Section 83(b) of the Code as
+described below, the participant generally is not required to
+recognize ordinary income on the award of restricted Common
+Stock. Instead, on the date the shares vest ( i.e. , become
+transferable and no longer subject to forfeiture), the
+participant will be required to recognize ordinary income in an
+amount equal to the excess, if any, of the fair market value of
+the shares on such date over the amount, if any, paid for such
+shares. If a Section 83(b) election has not been made, any
+dividends received with respect to restricted Common Stock that
+are subject at that time to a risk of forfeiture or restrictions
+on transfer generally will be treated as compensation that is
+taxable as ordinary income to the recipient. If a participant
+makes a Section 83(b) election within 30 days of the
+date of transfer
+14
+Table of Contents 
+of the restricted Common Stock, the participant will recognize
+ordinary income on the date the shares are awarded. The amount
+of ordinary income required to be recognized is an amount equal
+to the excess, if any, of the fair market value of the shares on
+the date of award over the amount, if any, paid for such shares.
+In such case, the participant will not be required to recognize
+additional ordinary income when the shares vest. However, if the
+shares are later forfeited, a loss can only be recognized up to
+the amount the participant paid, if any, for the shares.
+Gain
+or Loss on Sale or Exchange of Shares 
+In general, gain or loss from the sale or exchange of shares
+granted or awarded under the LTIP will be treated as capital
+gain or loss, provided that the shares are held as capital
+assets at the time of the sale or exchange. However, if certain
+holding period requirements are not satisfied at the time of a
+sale or exchange of shares acquired upon exercise of an ISO (a
+“disqualifying disposition,” see above), a
+participant generally will be required to recognize ordinary
+income upon such disposition.
+Deductibility
+by Patterson-UTI 
+To the extent that a participant recognizes ordinary income in
+the circumstances described above, Patterson-UTI or its
+subsidiary for which the participant performs services will be
+entitled to a corresponding deduction, provided that, among
+other things, the income meets the test of reasonableness, is an
+ordinary and necessary business expense, is not an “excess
+parachute payment” within the meaning of Section 280G
+of the Code and is not disallowed by the $1 million
+limitation on certain executive compensation under
+Section 162(m) of the Code ( see Performance Based
+Compensation and Parachute Payments below).
+Performance
+Based Compensation 
+In general, under Section 162(m) of the Code, remuneration
+paid by a public corporation to its principal executive officer
+or its three most highly compensated executive officers
+(excluding the principal executive officer and the principal
+financial officer of the corporation), ranked by pay, is not
+deductible to the extent it exceeds $1 million for any
+year. Taxable payments or benefits under the LTIP may be subject
+to this deduction limit. However, under Section 162(m) of
+the Code, qualifying performance-based compensation, including
+income from stock options and other performance-based awards
+that are made under shareholder approved plans and that meet
+certain other requirements, is exempt from the deduction
+limitation. The LTIP has been designed so that the Compensation
+Committee in its discretion may grant qualifying exempt
+performance-based awards under the LTIP.
+Parachute
+Payments 
+Under the so-called “golden parachute” provisions of
+the Code, the accelerated vesting of stock options and benefits
+paid under other awards in connection with a change of control
+of a corporation may be required to be valued and taken into
+account in determining whether participants have received
+compensatory payments, contingent on the change of control, in
+excess of certain limits. If these limits are exceeded, a
+portion of the amounts payable to the participant may be subject
+to an additional 20% federal tax and may be nondeductible to the
+corporation.
+Withholding 
+Awards under the LTIP may be subject to tax withholding. Where
+an award results in income subject to withholding, Patterson-UTI
+may require the participant to remit the withholding amount to
+Patterson-UTI or cause shares of Common Stock to be withheld or
+sold in order to satisfy the tax withholding obligations.
+Section 409A 
+Awards of SARs, performance awards, or other stock unit awards
+under the LTIP may, in some cases, result in the deferral of
+compensation that is subject to the requirements of
+Section 409A of the Code. Generally, if deferrals of these
+awards fail to meet the requirements of Section 409A of the
+Code, the compensation payable under these awards will be
+subject to immediate taxation and tax penalties in the year in
+which the awards vest. It is the intent of
+15
+Table of Contents 
+Patterson-UTI that awards under the LTIP will be structured and
+administered in a manner that complies with the requirements of
+Section 409A of the Code.
+Summary
+Information Pertaining to all Equity Compensation Plans of
+Patterson-UTI 
+The following information summarizes as of December 31,
+2010 certain information regarding Patterson-UTI’s equity
+compensation plans. For a more detailed description of the
+equity compensation plans, see Note 11 of
+Patterson-UTI’s audited financial statements contained in
+its Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2010.
+Equity Compensation Plan Information 
+Number of 
+Number of 
+Securities 
+Securities to 
+Weighted- 
+Remaining Available 
+be Issued upon 
+Average Exercise 
+for Future Issuance 
+Exercise of 
+Price of 
+under Equity 
+Outstanding 
+Outstanding 
+Compensation Plans 
+Options, 
+Options, 
+(Excluding 
+Warrants and 
+Warrants and 
+Securities Reflected 
+Plan Category 
+Rights 
+Rights 
+in Column(a)) 
+(a) 
+(b) 
+(c) 
+Equity compensation plans approved by security holders(1)
+7,541,550
+$
+19.78
+5,763,314
+Equity compensation plans not approved by security holders(2)
+168,552
+$
+10.23
+—
+Total
+7,710,102
+$
+19.58
+5,763,314
+(1) 
+The LTIP provides for awards of incentive stock options,
+non-incentive stock options, tandem and freestanding stock
+appreciation rights, restricted stock awards, other stock unit
+awards, performance share awards, performance unit awards and
+dividend equivalents to key employees, officers and directors,
+which are subject to certain vesting and forfeiture provisions.
+All options are granted with an exercise price equal to or
+greater than the fair market value of the common stock at the
+time of grant. The vesting schedule and term are set by the
+Compensation Committee of the Board of Directors. All securities
+remaining available for future issuance under equity
+compensation plans approved by security holders in column
+(c) are available under this plan. None of the stock
+options, granted under the LTIP or any other equity compensation
+plan approved by security holders, have been granted with rights
+to receive cash dividends or dividend equivalent rights. 
+(2) 
+The Amended and Restated Patterson-UTI Energy, Inc. 2001
+Long-Term Incentive Plan (the “2001 Plan”) was
+approved by the Board of Directors in July 2001. In connection
+with the approval of the LTIP, the Board of Directors approved a
+resolution that no further options, restricted stock or other
+awards would be granted under any equity compensation plan,
+other than the LTIP. The terms of the 2001 Plan provided for
+grants of stock options, stock appreciation rights, shares of
+restricted stock and performance awards to eligible employees
+other than officers and directors. No Incentive Stock Options
+could be awarded under the Plan. All options were granted with
+an exercise price equal to or greater than the fair market value
+of the common stock at the time of grant. The vesting schedule
+and term were set by the Compensation Committee of the Board of
+Directors. None of the stock options granted under the 2001 Plan
+has been granted with rights to receive cash dividends or
+dividend equivalent rights. 
+Additional
+Information Regarding the LTIP 
+As of April 13, 2011, the closing price of
+Patterson-UTI’s common stock on the Nasdaq Global Select
+Market was $28.04 per share. Except for receipt of the option
+exercise price when and if options are exercised, Patterson-UTI
+receives no consideration in connection with the award of
+options or restricted stock under the LTIP. Except with respect
+to annual grants of restricted stock and stock options awarded
+to non-employee directors on an annual basis as discussed in the
+Director Compensation section of this Proxy Statement,
+Patterson-UTI has not determined the type, number and other
+terms of awards under the LTIP that will be granted in the
+future to eligible directors and
+16
+Table of Contents 
+nominees, executive officers, officers as a group, or
+non-officer employees as a group as that determination is
+subject to the discretion of the Compensation Committee.
+The Board of Directors recommends a vote “FOR” the
+approval of the material terms of the performance goals that may
+apply to performance-based awards under the LTIP. Approval
+of the material terms of the performance goals that may apply to
+performance-based awards under the LTIP requires the affirmative
+vote of the holders of a majority of the shares of Common Stock
+present in person or by proxy, and entitled to vote at the
+Meeting. If you do not vote against or abstain from voting on
+the performance goals under the LTIP, your proxy will be voted
+“FOR” approval of the performance goals under the
+LTIP. Abstentions will be counted as shares entitled to vote on
+the proposal and will have the same effect as a vote
+“AGAINST” the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be
+treated as a share entitled to vote on the proposal. This will
+have the effect of reducing the absolute number of shares
+necessary to approve the proposal.
+PROPOSAL NO. 3 
+ADVISORY
+VOTE ON EXECUTIVE COMPENSATION 
+In accordance with the recently adopted Section 14A of the
+Exchange Act, the Board of Directors is asking stockholders to
+approve a non-binding, advisory resolution on the compensation
+of Patterson-UTI’s executive officers who are named in the
+Summary Compensation Table appearing in this proxy statement
+(the “Named Executive Officers”). The compensation of
+Patterson-UTI’s Named Executive Officers is described in
+the “Compensation Discussion and Analysis” section of
+this proxy statement.
+The compensation program for the Named Executive Officers is
+designed to attract and retain highly qualified individuals and
+to motivate and reward them for performance that benefits
+Patterson-UTI and its stockholders. The Compensation Committee
+and the Board of Directors believe that the policies and
+procedures detailed in the “Compensation Discussion and
+Analysis” achieve these goals by:
+• 
+providing a mix of short-term compensation in the form of base
+salary and cash bonuses and long-term compensation in the form
+of restricted stock, stock options and performance units, which
+strikes a balance between offering competitive compensation
+packages and aligning compensation with long-term growth and
+creating value for stockholders;
+• 
+setting annual base salaries, in part, based on
+Patterson-UTI’s financial results and position and
+performance compared to similarly situated companies;
+• 
+providing performance-based cash bonuses designed to put a
+meaningful portion of total compensation at risk;
+• 
+awarding stock options and performance units, whose value is
+tied to the achievement of certain performance goals
+and/or an
+increase in the price of the Common Stock;
+• 
+awarding stock options and restricted stock with vesting periods
+of three years; and
+• 
+establishing stock ownership guidelines.
+As a matter of good corporate governance and in accordance with
+Section 14A of the Exchange Act, the Board of Directors is
+asking stockholders to approve the following non-binding,
+advisory resolution at the Meeting:
+“RESOLVED, that the stockholders of Patterson-UTI Energy,
+Inc. (the “Company”) approve, on an advisory basis,
+the compensation of the Company’s named executive officers,
+as disclosed pursuant to Item 402 of
+Regulation S-K, 
+including the Compensation Discussion and Analysis, the
+compensation tables and other narrative discussion in the Proxy
+Statement for the 2011 Annual Meeting of Stockholders of the
+Company.”
+This advisory resolution, commonly referred to as a
+“say-on-pay” 
+resolution, is non-binding on the Board of Directors. Although
+non-binding, the Board of Directors and the Compensation
+Committee value the views of Patterson-UTI’s stockholders
+and will review and consider the voting results when
+(i) evaluating the effectiveness of Patterson-UTI’s
+compensation policies and practices and (ii) making future
+compensation decisions for the Named Executive Officers.
+17
+Table of Contents 
+The Board of Directors recommends a vote “FOR” the
+approval of the advisory resolution on executive
+compensation . Approval of the resolution, on an advisory
+basis, requires the affirmative vote of the holders of a
+majority of the shares of Common Stock present in person or by
+proxy, and entitled to vote at the Meeting. If you do not vote
+against or abstain from voting on the advisory resolution, your
+proxy will be voted “FOR” approval of the advisory
+resolution. Abstentions will be counted as shares entitled to
+vote on the proposal and will have the same effect as a vote
+“AGAINST” the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be
+treated as a share entitled to vote on the proposal. This will
+have the effect of reducing the absolute number of shares
+necessary to approve the proposal.
+PROPOSAL NO. 4 
+ADVISORY
+VOTE ON FREQUENCY OF 
+ADVISORY VOTES ON EXECUTIVE COMPENSATION 
+In accordance with Section 14A of the Exchange Act, the
+Board of Directors is asking stockholders to vote, on an
+advisory basis, on whether future advisory votes on the
+compensation of the Named Executive Officers should occur every
+year, every two years or every three years. Stockholders may
+also abstain from casting a vote on this proposal.
+After careful review and consideration, the Board of Directors,
+on recommendation of the Compensation Committee, has determined
+that an advisory vote on the compensation of the Named Executive
+Officers should take place every year. In making its
+determination, the Board considered that an annual advisory vote
+on executive compensation will allow Patterson-UTI’s
+stockholders to provide their direct and timely feedback on
+Patterson-UTI’s compensation objectives, policies and
+practices.
+This advisory vote on the frequency of future advisory votes on
+the compensation of the Named Executive Officers is non-binding
+on the Board. However, the Board of Directors and the
+Compensation Committee value the views of Patterson-UTI’s
+stockholders and will take into account the outcome of the
+voting when determining the frequency of such a vote.
+Stockholders will be able to specify one of four choices for
+this proposal on the proxy card: one year, two years, three
+years or abstain. Stockholders are not being asked to approve or
+disapprove the Board’s recommendation, but instead to
+indicate their choice among the frequency options (or to
+abstain).
+The Board of Directors recommends a vote “FOR”
+approval, on an advisory basis, of a vote every year on
+executive compensation . Approval of the frequency of future
+advisory votes on executive compensation will be decided by the
+affirmative vote of a plurality of shares of the Common Stock
+present in person or by proxy, and entitled to vote at the
+Meeting. A “plurality” means that the frequency option
+that receives the greatest number of votes cast will be
+considered the preference of Patterson-UTI’s stockholders.
+If you do not vote against or abstain from voting, your proxy
+will be voted “FOR” approval of, on an advisory basis,
+a stockholder vote every year on executive compensation.
+Abstentions and broker non-votes will have no effect on the
+outcome of this vote.
+PROPOSAL NO. 5 
+RATIFICATION
+OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as the
+independent registered public accounting firm to audit the
+financial statements and internal control over financial
+reporting of Patterson-UTI for the fiscal year ending
+December 31, 2011, and directed that such engagement be
+submitted to the stockholders of Patterson-UTI for ratification.
+In recommending ratification by the stockholders of such
+engagement, the Board of Directors is acting upon the
+recommendation of the Audit Committee, which has satisfied
+itself as to PricewaterhouseCoopers LLP’s independence,
+professional competence and standing. Although ratification by
+stockholders of the engagement of PricewaterhouseCoopers LLP is
+not required by Delaware corporate law or Patterson-UTI’s
+restated certificate of incorporation or bylaws, the Audit
+Committee believes a decision of this nature should be made with
+the consideration of Patterson-UTI’s stockholders. If the
+stockholders fail to ratify the appointment, the Audit Committee
+will reconsider whether to retain PricewaterhouseCoopers LLP and
+may retain that firm or another without re-submitting the matter
+to our stockholders. Even if the appointment is ratified, the
+Audit Committee may,
+18
+Table of Contents 
+in its discretion, direct the appointment of a different
+independent registered public accounting firm at any time during
+the year if it determines that such change would be in the best
+interests of Patterson-UTI and its stockholders.
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and
+will be given the opportunity to make a statement if they so
+desire. It also is expected that the representative(s) will be
+available to respond to appropriate questions from the
+stockholders.
+The Board of Directors recommends a vote “FOR” the
+ratification of PricewaterhouseCoopers LLP as
+Patterson-UTI’s independent registered public accounting
+firm. Ratification of the selection of
+PricewaterhouseCoopers LLP requires the affirmative vote of the
+holders of a majority of the shares of Common Stock present in
+person or by proxy, and entitled to vote at the Meeting. Unless
+you give contrary instructions in your proxy, your proxy will be
+voted “FOR” such ratification. Abstentions will be
+counted as shares entitled to vote on the proposal and will have
+the same effect as a vote “AGAINST” the proposal.
+Because the ratification of an independent registered public
+accounting firm is considered a routine matter, if you do not
+give instructions to your brokerage firm, bank, broker-dealer,
+or other similar organization, the brokerage firm, bank,
+broker-dealer, or other similar organization will nevertheless
+be entitled to vote your shares in its discretion and may give
+or authorize the giving of a proxy to vote the shares in its
+discretion on this proposal.
+EXECUTIVE
+OFFICERS 
+Set forth below is the name, age and position followed by a
+brief description of the business experience during at least the
+past five years for each executive officer of Patterson-UTI who
+is not also a member of the Board of Directors.
+Name 
+Age 
+Position 
+Douglas J. Wall
+58
+President and Chief Executive Officer
+John E. Vollmer III
+55
+Senior Vice President — Corporate Development, Chief
+Financial Officer and Treasurer
+Seth D. Wexler
+39
+General Counsel and Secretary
+Gregory W. Pipkin
+39
+Chief Accounting Officer and Assistant Secretary
+Douglas J. Wall — Mr. Wall has served as
+President and Chief Executive Officer of Patterson-UTI since
+October 2007. From April through September 2007 he served as
+Chief Operating Officer of Patterson-UTI. From 2005 to April
+2007, Mr. Wall served as Group President, Completion and
+Production of Baker Hughes Incorporated, an oilfield service
+company. In that capacity, Mr. Wall was responsible for the
+combined activities of Baker Oil Tools, Baker Petrolite,
+Centrilift and ProductionQuest divisions. From 2003 to 2005 he
+served as President of Baker Oil Tools, a division of Baker
+Hughes, and from 1997 to 2003 he served as President of Hughes
+Christensen Company, a division of Baker Hughes. Mr. Wall
+holds a Bachelor Degree in Economics from the University of
+Calgary and a Masters of Business Administration in Finance and
+Marketing from the University of Alberta.
+John E. Vollmer III — Mr. Vollmer has
+served as Chief Financial Officer and Treasurer of Patterson-UTI
+since November 2005 and Senior Vice President —
+Corporate Development of Patterson-UTI since May 2001.
+Mr. Vollmer also served as Secretary of Patterson-UTI from
+November 2005 to February 2007. Mr. Vollmer served as
+Senior Vice President, Chief Financial Officer, Secretary and
+Treasurer of UTI from 1998 to May 2001. From 1992 until 1997,
+Mr. Vollmer served in a variety of capacities at
+Blockbuster Entertainment, including Senior Vice
+President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+Seth D. Wexler — Mr. Wexler has served as
+General Counsel and Secretary of Patterson-UTI since August
+2009. From March 1998 to August 2009, he specialized in
+securities law and mergers and acquisitions for the law firm of
+Fulbright & Jaworski L.L.P., including as a partner of
+such law firm since January 2007. Mr. Wexler holds a
+Bachelor of Business Administration in Finance from the
+University of Texas at Austin, a Juris Doctorate from the
+University of Houston Law Center and a Masters of Business
+Administration from the University of Houston.
+Gregory W. Pipkin — Mr. Pipkin has served
+as Chief Accounting Officer and Assistant Secretary of
+Patterson-UTI since August 2007. From June 2006 to August 2007,
+Mr. Pipkin served as Director of Financial Reporting of
+19
+Table of Contents 
+Patterson-UTI. From April 2001 through May 2006, Mr. Pipkin
+was Controller and Vice President of Accounting and Reporting
+for Alamosa Holdings, Inc., a publicly traded wireless
+telecommunications company. Prior to April 2001, Mr. Pipkin
+was in the practice of public accounting. Mr. Pipkin is a
+Certified Public Accountant and holds a Bachelor of Business
+Administration in Accounting from Texas Tech University.
+COMPENSATION
+DISCUSSION AND ANALYSIS 
+Compensation
+Framework: Overview and Policies 
+Patterson-UTI’s executive compensation philosophy is to
+(i) link executive compensation with the operational and
+market performance of the Company and (ii) establish
+incentives that reward Patterson-UTI’s key executives for
+their efforts in achieving both short-term tactical and
+long-term strategic goals. The Compensation Committee (the
+“Committee”) seeks to offer to the Company’s key
+executives competitive compensation packages that will permit
+Patterson-UTI to attract and retain highly qualified individuals
+and to motivate and reward them for achieving the Company’s
+goals.
+The Committee seeks to achieve a proper balance in its
+compensation program between current and long-term compensation
+by using a combination of fixed and variable cash for short-term
+incentives and time-vested equity awards for long-term
+incentives. In its program, the Committee emphasizes
+equity-based compensation over cash as a means of aligning the
+interests of management with the Company’s stockholders.
+Our compensation policies are designed to take into account the
+cyclical and volatile nature of our industry, and in particular
+the impact on our results and operations of sometimes large and
+unpredictable swings in drilling activity as we experienced in
+2009 and early 2010. The Committee believes that Patterson-UTI
+has a strong management team that works effectively and
+collaboratively. The Committee has designed our compensation
+program to foster this effective and collaborative management
+with shared compensation objectives and rewards.
+We believe that our management and compensation policies have
+over the long run delivered superior returns to our
+stockholders, with total stockholder returns having been in the
+67th and 90th percentiles over the past one and three
+years when measured against our peer group. We have delivered
+consistent strong returns on assets and equity over our history
+while maintaining a strong and low leveraged balance sheet.
+Key
+Compensation Principles 
+Our compensation structure has historically emphasized the
+following three key principles:
+The Use
+of Low Base Salaries and Higher Variable Cash Compensation Tied
+to Financial Results 
+The Committee has designed the cash compensation component of
+our program to be mostly variable by using comparatively low
+base salaries and higher cash bonuses tied to the Company’s
+annual earnings before interest, taxes, depreciation and
+amortization (“EBITDA”). The Committee adopted this
+program ten years ago and has allocated between 0.6111% and 1%
+of total EBITDA to an executive management pool that is then
+allocated among the top executive officers. Our current
+allocation is potentially 0.80%, which is allocated among
+Messrs. Siegel, Wall, Vollmer and Berns.
+The use of lower market-based salaries with higher variable
+bonuses aligns our executives’ annual cash compensation
+with our actual financial results. During periods with low
+earnings, such as we had in 2009, total cash compensation will
+typically be in the lower quartiles against our peers but
+reflective of our results. During periods of higher earnings,
+cash compensation will typically be in the top quartiles and
+reflective of the Company’s higher cash generation.
+Accordingly, the Committee has designed our program as a
+multi-year program that is targeted to provide cash compensation
+to our top four Named Executive Officers that is in the
+50-65th percentile 
+as a group on a full cycle basis with an expectation that over
+the cycle, stockholder returns will also be within that range.
+Although there will sometimes be periods where cash compensation
+is in the higher quartiles and relative stock performance is at
+a lower quartile or vice versa, this result generally occurs
+during a period of market change where there exists a difference
+between market outlook and current activity. A good example of
+this was the end of 2008
+20
+Table of Contents 
+where activity and operating results were strong, but the public
+market value for land drillers was falling on the expectation of
+a severe downturn that did occur in 2009.
+The Committee has generally not changed base compensation for
+the top Named Executive Officers from year to year to promote
+the idea that management should not focus on the fixed
+compensation, and management should expect that variable
+compensation — tied to the Company’s
+performance — will be the most significant part of
+compensation.
+The Committee has considered in the past the use of more
+traditional bonus plans tied to annual budgets and performance
+against budgets and has concluded that with the extreme
+volatility in our industry those plans would not provide the
+incentives that the Committee is seeking to achieve and could in
+fact create incentives to focus only on the short-term. By tying
+a meaningful portion of the top four Named Executive
+Officers’ compensation to EBITDA, the Committee believes
+that their compensation and the stockholders’ interests are
+especially well aligned.
+The Committee has for 2011 modified our annual cash compensation
+plan for our top four Named Executive Officers from 0.6111% of
+EBITDA to a maximum of 0.80% of EBITDA to allow for the
+potential for additional payments based on exceptional
+performance against our strategic objectives. The 2011 plan also
+provides for a downward adjustment in the EBITDA-based payout
+for relative underperformance against strategic measures.
+Emphasis
+on Equity for Long-term Incentive Compensation 
+The Committee has historically targeted more than 60% of total
+compensation to be in the form of equity or equity-based
+compensation. This emphasis on equity-based compensation is
+aimed at aligning the financial interest of top Named Executive
+Officers with our stockholders and the total returns provided to
+stockholders. The Committee believes that by making a large
+portion of compensation tied to equity, our top Named Executive
+Officers will generally fully realize the potential benefits of
+the compensation only if our stockholders also benefit.
+Over the years the Committee has adjusted the form of the equity
+incentives provided to our top Named Executive Officers from
+solely options to a current mix of options, restricted stock and
+performance units. The Committee believes that this mix allows
+it to tailor our program to encourage the building of long-term
+value and, in the case of performance units, achievement of
+stockholder returns in excess of a peer group.
+Restricted Stock. The Committee views
+restricted stock as additional basic compensation that will
+provide value only if the executive remains in the employment of
+the Company during the vesting period, with that value being
+subject to increases and decreases in value depending on the
+performance of Patterson-UTI’s stock. The Committee
+typically targets restricted stock to be approximately
+30-40% of
+the equity compensation.
+Stock Options. The issuance of stock options
+is intended to offer equity incentives that provide value to the
+executive only if the Company’s stock appreciates. When the
+Committee grants options to our executives, it considers a
+number of different factors, including the stock value at the
+time of grant, the Black Scholes value of the option grant for
+accounting purposes and prior option grant amounts. In addition
+to considering the Black Scholes option value, the Committee may
+also consider other option valuation models and modifications to
+the Black Scholes model to address situations where historical
+volatility may not be representative of a normalized market. The
+high volatility that we have seen in our and other
+companies’ stock prices since the financial crisis in 2008
+has created a situation where the impact of volatility on value
+needs to be considered as it can skew the calculated value and
+therefore the perceived value of an executive’s
+compensation package.
+Ultimately, the Committee’s decision on the number of
+options granted in any year will be based on the circumstances
+at the time and consideration of a variety of factors, with the
+overriding objective being the expectation of the potential
+value the option may provide in light of current market prices,
+where Patterson-UTI is in the business cycle and
+Patterson-UTI’s long-term value creation objectives.
+Performance Units. The Committee added
+performance units to the mix of equity-based compensation in
+2009. The Committee added the performance units in lieu of a
+portion of restricted stock and options that it would have
+granted. The use of performance units is intended to tie the top
+four Named Executive Officers’ compensation to the relative
+outperformance of Patterson-UTI as an investment relative to its
+peer group. This component assures
+21
+Table of Contents 
+that the value provided to those Named Executive Officers will
+not be created solely by an increase in stock price due to
+market conditions, but also requires outperformance.
+The Committee has considered the potential risks associated with
+providing a large portion of executive compensation tied to
+equity. For the following reasons the Committee does not believe
+that the use of such equity grants creates unreasonable risks.
+First, the long-term nature of the equity awards and the
+required vesting periods help minimize the potential of
+excessive risk taking and actions aimed at short-term stock
+gains. Second, the combination of different types of equity
+grants, in particular the use of restricted stock, help offset
+risks. Finally, the top four Named Executive Officers each have
+worked with the Company for at least four years and three of
+them have worked with the Company for more than ten years, and
+the Committee believes management to be highly ethical and
+focused on creating true long-term value for stockholders and
+not just short-term gains. The Board and the Committee monitor
+and consider risks associated with the Company’s
+compensation plans.
+Team
+Compensation Structure 
+For more than the past ten years our senior executive management
+has had the philosophy that they operate as a team, with each
+member being an important part of the team. As a result, they
+have requested, and the Board and the Committee have agreed,
+that as a general proposition cash and equity incentive
+compensation be allocated and shared among the team. Although
+the allocations have changed over time as a result of changes to
+the executive management team, the allocations among the
+existing team have generally remained consistent.
+When allocating the incentive compensation among the top Named
+Executive Officers, the Committee currently allocates 2/5.5th to
+Mr. Siegel, our Executive Chairman, 1.5/5.5th to
+Mr. Wall, our President and Chief Executive Officer, and
+1/5.5th to each of Mr. Vollmer, our Senior Vice
+President-Corporate Development, Chief Financial Officer and
+Treasurer, and Mr. Berns, our Senior Vice President,
+respectively.
+The Committee believes that the above approach for compensating
+our top four Named Executive Officers fosters effective
+decision-making and collaborative efforts in executing
+Patterson-UTI’s long-term strategic and short-term tactical
+objectives. This approach has worked well for Patterson-UTI for
+ten years. In addition, although the Committee will continue to
+monitor the team compensation approach to make sure the process
+works in practice, the Committee expects to continue to use this
+approach in the future.
+Board
+and Committee Processes and Grant Policies 
+Committee
+Review Process 
+The Board of Directors has delegated the management of the
+Company’s executive compensation programs to the Committee.
+The Committee meets on a regular basis to consider compensation
+matters and to review how the Company’s plans and policies
+work in practice. The Committee currently consists of
+Messrs. Hunt (chairman), Buckner, Huff and Peak, each of
+whom is an independent director as defined by the Nasdaq listing
+standards.
+Compensation determinations and equity awards by the Committee
+are conducted through a process that seeks the input from
+management through Mr. Siegel as well as from outside
+compensation consultants retained by the Committee. Consultants
+used by the Committee are independent and are paid on a basic
+fixed fee structure plus expenses. The Committee has retained
+Pearl Meyer & Partners as consultant and advisor for
+executive compensation matters for 2011. The Committee also
+considers internal budgets, historical data for the Company and
+its peers, strategic planning updates and other relevant
+information.
+The Committee uses the outside consultant reports as a tool for
+obtaining information on historical compensation and stockholder
+returns, market trends and peer compensation practices. The
+Committee further seeks the advice of its consultants to confirm
+that the final compensation arrangements established by the
+Committee are reasonable.
+When considering peer compensation data, the Committee considers
+data for both individual positions and for the top Named
+Executive Officers as a whole. The Committee has generally given
+greater weight to the peer data for the team as a whole versus
+the individual positions at its peers given the team management
+approach followed by the Company. The Committee has found that
+total compensation for its top Named Executive Officers as a
+group has
+22
+Table of Contents 
+typically been around the
+50-75th percentile 
+range depending on the year and that under the Company’s
+team-based approach there has typically been a shift of
+compensation from the top two Named Executive Officers to the
+rest of the team.
+The Company has in recent years used the following peer group
+for compensation matters: Cameron International Corporation,
+Diamond Offshore Drilling Inc., Ensco International Inc., FMC
+Technologies Inc., Helmerich & Payne Inc., Nabors
+Industries Ltd., National Oilwell Varco Inc., Noble Corp., Pride
+International, Inc., Rowan Companies Inc., Transocean Ltd. and
+Weatherford International Ltd. In 2010, the Committee added
+eight additional companies to the peer group in order to gain a
+broader perspective on the competitive market place and to
+include some smaller drilling and service companies in its peer
+group. The companies added were: Atwood Oceanics, Baker Hughes
+Incorporated, Basic Energy Services, Inc., Bronco Drilling
+Company, Inc., Key Energy Services, Inc., Parker Drilling
+Company, Pioneer Drilling Company, and Unit Corp. BJ Services
+Company and Smith International, Inc. have also been included in
+prior years, but will be eliminated from the peer group going
+forward due to their having been acquired in 2010.
+Cash
+Compensation 
+The Committee generally sets base compensation and terms for
+bonus cash compensation for management in the fourth quarter of
+the preceding year or in the first quarter of the year in
+question. The Committee when reviewing cash compensation looks
+at the total cash compensation received by the executives over a
+multi-year period as well as the total cash compensation
+projected for the current year. This approach allows the
+Committee to look at the cash compensation paid over a full
+cycle in order to obtain comparable data for benchmarking
+purposes. The Committee also annually establishes the
+performance criteria for the cash bonus compensation paid to its
+executives in order to meet the requirements for the
+performance-based compensation exception to the limitation on
+deductions under Section 162(m) of the Internal Revenue
+Code (as further described elsewhere in this proxy statement).
+Although a wide range of criteria may be used, the criterion
+used has historically been the achievement of a threshold EBITDA
+amount.
+Equity
+Compensation 
+The Committee’s practice has generally been to grant any
+stock options, restricted stock and performance units to
+executive management at a meeting following the conclusion of
+Patterson-UTI’s first quarter. This meeting is typically
+held in conjunction with regular quarterly Board meetings that
+are held prior to Patterson-UTI’s public release of
+quarterly earnings information. This timing also allows the
+Committee to have received market data for prior year grants.
+The Committee considers a number of factors when determining
+equity grants, including competitive peer data, prior year
+grants and current and historical stock prices. The Committee
+also takes into consideration the advice of its consultants as
+to peer and market practices on the use and mix of restricted
+stock, options and performance units.
+For restricted stock and stock options, these awards are subject
+to three-year vesting with one-third vesting after the first
+year and 1/36th of the grant vesting each month over the next
+two years. The performance units granted in 2010 are to be
+settled with shares of stock, with the number of shares to be
+issued based on the Company’s total stockholder return at
+the end of the third year following the grant relative to the
+total stockholder return for our peer group of companies.
+Subject to limited exceptions, no payout will be provided on
+performance units unless the Company’s relative total
+stockholder return against its peers is at least at the 25th
+percentile and the Company has a positive stockholder return.
+The Company has also adopted the following additional practices
+regarding its equity grants:
+• 
+Grants will not vest in less than one year;
+• 
+Options will not be re-priced or exchanged;
+• 
+Equity grants are subject to claw-back in the event that the
+Board learns that any misconduct by the Named Executive Officer
+contributed to the Company having to restate all or a portion of
+its financial statements;
+23
+Table of Contents 
+• 
+Options are to have exercise prices equal to or greater than the
+fair market value on the date of grant; and
+• 
+Performance targets are not to be modified other than to give
+effect to acquisition or disposition of businesses or similar
+structural changes — market condition changes will not
+result in changes in performance targets.
+Overview
+of 2010 Performance and Compensation 
+In 2009, the Patterson-UTI Board of Directors adopted a
+long-term strategic plan that included: (i) diversifying
+its customer base and increasing market share, upgrading its rig
+fleet and providing superior value to its customers in land
+drilling, (ii) expanding its pressure pumping business,
+(iii) being nimble both in operations and in strategic
+decisions, and (iv) providing superior returns to its
+stockholders.
+From January 1, 2009 through December 31, 2010, the
+Company has:
+• 
+Added 39 new high technology
+APEX tm 
+rigs, bringing the total to 66 at the end of 2010, an increase
+of over 140%;
+• 
+Expanded its customer base and secured additional long-term
+drilling contracts to finance its rig expansion;
+• 
+Built a reputation for rig design innovation and being one of
+the most efficient drillers in the industry;
+• 
+Increased its market share and has become a significant player
+in many of the new shale plays, including the Marcellus;
+• 
+Increased its pressure pumping horsepower in Appalachia by
+approximately 85 percent;
+• 
+Acquired in 2010 the pressure pumping business of Key Energy and
+expanded its pressure pumping capabilities;
+• 
+Disposed of Patterson-UTI’s non-core drilling fluids
+business at an attractive price;
+• 
+Managed through the downturn of 2009 and 2010 successfully at a
+time where Patterson-UTI saw its rig count fall to a low of 60
+for the month of June 2009 and recover to approximately 200 at
+the end of 2010; and
+• 
+Provided top quartile stockholder returns.
+2010
+Accomplishments 
+The oil and gas industry went through significant challenges
+during 2010. Following the financial crisis in 2008,
+U.S. drilling activity plummeted in early 2009 by over 50%
+from its prior highs in October 2008. By 2010 the industry began
+to recover with the expansion of the natural gas shale plays in
+the U.S. and an increase in drilling for oil. Drilling
+processes also changed during this period from being
+predominately vertical to more than 60% horizontal today. With
+the change in drilling methods, came a need for higher
+technology rigs and higher drilling efficiencies.
+Patterson-UTI’s efforts over the past few years positioned
+the Company and its rig fleet to take advantage of the change in
+drilling methods and the need for higher technology rigs. As a
+result, Patterson-UTI was able to nearly double its consolidated
+revenue base from $782 million in 2009 to
+$1.46 billion in 2010 and increase its consolidated EBITDA
+124% to $536 million in 2010. During this period, the
+Company added 19 new rigs, entered into long-term contracts for
+over 70 rigs and grew its market share to number one in the
+combined U.S. market in which Patterson-UTI conducts
+business in terms of operating rigs as of the end of 2010.
+The Company’s pressure pumping business similarly grew in
+2010 to a record $351 million in revenue and
+$103 million in EBITDA from $161 million in revenues
+and $28.6 million in EBITDA in 2009. The well-timed
+acquisition of Key Energy’s pressure pumping business in
+the fourth quarter of 2010 at a net cost of less than $1,000 per
+horse power doubled the size of the Company’s second core
+business and further accelerated the growth of this business
+segment. This segment is expected to continue to grow and become
+a greater part of the Company’s overall business.
+24
+Table of Contents 
+During 2010, the Company also divested its non-core drilling
+fluids business and certain oil and gas properties, the proceeds
+of which were used to grow the Company’s core businesses.
+The Company also expanded access to capital for expansion in
+2010 by completing bank and private placement financings.
+2010
+Compensation 
+Cash
+Compensation 
+Under the terms of the Company’s cash compensation plan
+described above, the top four Named Executives Officers earned
+the following cash payments in respect of 2010. These payments
+were determined based on the salaries and incentive compensation
+percentages determined for the named individuals at the
+beginning of 2010 and were not adjusted. The incentive
+compensation was calculated by taking the Company’s
+$536 million in EBITDA and multiplying it by the EBITDA
+percentages noted below. The Committee had fixed a
+$200 million minimum EBITDA threshold for 2010, which was
+exceeded.
+CASH
+COMPENSATION 
+EBITDA Incentive 
+Variable Cash 
+(Percentage of 
+Compensation Based 
+Company 
+on 
+Total Cash 
+Name 
+Salary 
+EBITDA) 
+EBITDA 
+Compensation 
+Douglas J. Wall 
+$
+600,000
+0.1666
+%
+$
+893,611
+$
+1,493,611
+John E. Vollmer III 
+$
+350,000
+0.1111
+%
+$
+595,741
+$
+945,741
+Mark S. Siegel 
+$
+350,000
+0.2222
+%
+$
+1,191,482
+$
+1,541,482
+Kenneth N. Berns 
+$
+265,000
+0.1111
+%
+$
+595,741
+$
+860,741
+The maximum amount that can be awarded to an individual under
+our cash-based incentive plan during a
+12-month 
+period is $5,000,000. In order to reach this maximum amount,
+EBITDA of $2.25 billion in the case of Mr. Siegel,
+$3.00 billion in the case of Mr. Wall and
+$4.50 billion in the case of Messrs. Vollmer and Berns
+would have been needed. The Committee did not establish a target
+bonus amount. The target bonus amount presented in the Grants of
+Plan-Based Awards table is calculated for the respective officer
+based on Patterson-UTI’s actual EBITDA for the fiscal year
+ended December 31, 2010 and the allocation formula applied
+to the bonus pool for distribution.
+Equity-Based
+Compensation 
+The Company made the following equity-based grants to the top
+four Named Executive Officers. The grant of restricted stock,
+options and performance units to such officers were made
+following the vesting, term and other criteria described above.
+EQUITY-BASED
+GRANTS 
+Restricted Stock(1) 
+Stock Options(2) 
+Performance Unit Awards(3) 
+Total 
+Name 
+# Shares 
+Value 
+# Shares 
+Value 
+# Shares 
+Value 
+Value 
+Douglas J. Wall 
+75,000
+$
+1,112,250
+266,250
+$
+1,510,223
+24,375
+$
+849,956
+$
+3,472,429
+John E. Vollmer III 
+50,000
+$
+741,500
+177,500
+$
+1,006,816
+16,250
+$
+566,638
+$
+2,314,954
+Mark S. Siegel 
+100,000
+$
+1,483,000
+355,000
+$
+2,013,631
+32,500
+$
+1,133,275
+$
+4,629,906
+Kenneth N. Berns 
+50,000
+$
+741,500
+177,500
+$
+1,006,816
+16,250
+$
+566,638
+$
+2,314,954
+(1) 
+Shares of restricted stock were awarded on April 27, 2010
+and the value indicated in the table is the value on the date of
+grant based on the closing price of Patterson-UTI’s common
+stock on April 27, 2010. 
+(2) 
+Options were awarded on April 27, 2010 and the value
+indicated in the table was determined using the Black-Scholes
+option pricing model as of the date of grant. 
+25
+Table of Contents 
+(3) 
+Performance Units were awarded on April 27, 2010. The
+number of shares indicated in the table represents the base
+number of shares for each respective award. According to the
+terms of the awards, the actual number of shares earned by the
+recipient can range from zero to four times the base number
+depending on how Patterson-UTI performs in terms of total
+stockholder return relative to its peer group. The value
+indicated in the table was determined based on a Monte-Carlo
+simulation model and represents the estimate of fair value on
+the date of grant. 
+The performance units granted in 2010 to the top four Named
+Executive Officers provide for the issuance of
+32,500 shares of Common Stock to Mr. Siegel,
+24,375 shares of Common Stock to Mr. Wall and
+16,250 shares of Common Stock to each of
+Messrs. Vollmer and Berns, respectively, if
+Patterson-UTI’s total stockholder return is at or above the
+25th percentile but less than the 50th percentile, two
+times that number of shares if Patterson-UTI’s total
+stockholder return is at or above the 50th percentile but
+less than the 75th percentile and four times that amount if
+Patterson-UTI’s total stockholder return is at the
+75th percentile or higher. The grant of shares when
+achievement is between the 25th and 75th percentile
+will be determined on a pro-rata basis.
+Total stockholder return for Patterson-UTI for the 2010
+performance unit grants is measured based on $100 invested in
+Common Stock on the first day of the performance period, with
+dividends reinvested. The performance period is the period from
+April 1, 2010 through March 31, 2013, subject to
+certain exceptions that could extend the performance period up
+to two additional years. No shares will be issued in respect of
+the performance units unless Patterson-UTI has positive total
+stockholder return as of the end of the performance period;
+except that if during the two-year period ending after the
+performance period, Patterson-UTI’s total stockholder
+return for any 30 consecutive day period equals or exceeds 18%
+on an annualized basis from the beginning of the performance
+period through the end of such 30 consecutive day period, then
+shares issued under the grant will be made as set forth above
+based on Patterson-UTI’s total stockholder return relative
+to the peer group as of end of the performance period.
+Total
+Compensation and Relationship to Performance 
+The Committee considered the advice of Towers Watson when
+establishing its 2010 compensation program. In doing so, the
+Committee sought to offer a total compensation package (cash and
+long-term) for the top four Named Executive Officers as a group
+that would be between the 50th and 75th percentile. Based on
+early 2011 proxy data for Patterson-UTI’s peers, the
+Committee was able to confirm that the compensation provided in
+2010 for Patterson-UTI’s top four Named Executive Officers
+was approximately 70th percentile against its peers. This
+compensation compares favorably to Patterson-UTI’s 67th
+percentile total stockholder return performance in 2010 and 90th
+percentile performance over the past three years.
+The Committee believes that Patterson-UTI has a strong and
+cohesive management team and that the compensation policies that
+it has implemented provide the proper mix of current
+compensation and long-term incentives for building stockholder
+value. The Company’s above market performance has supported
+the use of these policies and align the interest of management
+with the Company’s stockholders.
+With respect to the Company’s executive officers other than
+the top Named Executive Officers, the Committee has historically
+determined their compensation with a philosophy of using a
+combination of fixed and variable cash in the form of base
+salary and discretionary cash bonuses for short-term incentives
+and time-vested equity awards in the form of restricted stock
+and/or stock
+options for long-term incentives. With respect to
+Mr. Wexler’s compensation for 2010, his incentive
+compensation was determined at the discretion of the Committee.
+Mr. Wexler’s non-equity incentive compensation was
+determined based on the operating performance of Patterson-UTI
+and his individual performance, and his equity-based, long-term
+incentive compensation was awarded in the form of restricted
+stock.
+Employment
+and Termination Agreements and Other Matters 
+Retirement
+Plans 
+Patterson-UTI offers a 401(k) plan to its employees, including
+its Named Executive Officers. Participants may contribute a
+portion of their base salary to the 401(k) plan, subject to
+federal limits. Patterson-UTI makes matching
+26
+Table of Contents 
+contributions up to four percent of each participant’s
+eligible base salary. The Named Executive Officers of
+Patterson-UTI are eligible to participate in the 401(k) plan on
+the same basis as other employees. Patterson-UTI does not have
+any other retirement plan.
+Perquisites
+and Personal Benefits 
+No Named Executive Officer received perquisites totaling more
+than $10,000. Accordingly, the perquisites do not meet the
+threshold that would require disclosure in the Summary
+Compensation Table below.
+Share
+Ownership Guidelines 
+The Nominating and Corporate Governance Committee has enacted
+share ownership guidelines applicable to all executive officers
+and directors of Patterson-UTI. The guidelines require officers
+and directors to hold at all times, subject to a four year
+phase-in from the date first elected as an officer or director,
+at least the following number of shares of Common Stock:
+•
+Executive Chairman
+120,000 shares
+•
+President and Chief Executive Officer
+90,000 shares
+•
+Senior Vice Presidents
+60,000 shares
+•
+General Counsel
+7,500 shares
+•
+Chief Accounting Officer
+7,500 shares
+•
+Outside Directors
+10,000 shares
+•
+Non-executive Inside Director
+10,000 shares
+Each of the Named Executive Officers and Directors was in
+compliance with these guidelines as of the date of this proxy
+statement.
+Change in
+Control and Severance Agreements 
+Patterson-UTI has entered into change in control agreements with
+its Named Executive Officers as further described elsewhere in
+this proxy statement The Company, however, believes that such
+agreements may under certain circumstances protect the interest
+of the Company from leaving employment out of concern for the
+security of their jobs or being unable to concentrate on their
+work. The Committee believes that the change in control
+agreements may also help Patterson-UTI to attract and retain new
+key employees by reducing the personal uncertainty and anxiety
+that arises from the possibility of a future business
+combination. Any future change in control or severance
+agreements will be approved subject to the circumstances
+existing at the time.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer pursuant to which
+Patterson-UTI has agreed to pay each such person within ten days
+of the termination of his employment with Patterson-UTI for any
+reason (including voluntary termination by him), an amount in
+cash equal to his annual base salary at the time of such
+termination. Any payment made by Patterson-UTI pursuant to these
+letter agreements will reduce dollar for dollar any payment owed
+to such person, if any, pursuant to the change in control
+agreements discussed above.
+Section 162(m)
+Considerations 
+In considering compensation decisions for the executive
+management of Patterson-UTI, the Committee routinely considers
+the potential effect of Section 162(m) of the Internal
+Revenue Code. Section 162(m) imposes a limitation on
+corporate tax deductions for non-performance based compensation
+to certain officers that exceeds $1 million that can be
+taken by a publicly held corporation for compensation paid to
+certain of its executive officers. While Patterson-UTI does not
+design its compensation programs for tax purposes, Patterson-UTI
+does design its plans to be tax efficient for Patterson-UTI
+where possible. However, the Committee believes that tax
+deduction limitations should not compromise Patterson-UTI’s
+ability to establish and maintain appropriate executive
+compensation programs and reserves the right to award
+non-deductible compensation.
+27
+Table of Contents 
+Compensation
+Committee Interlocks and Insider Participation 
+No member of the Compensation Committee was, during the year
+ended December 31, 2010, an officer or employee of
+Patterson-UTI or any of its subsidiaries, or was formerly an
+officer of Patterson-UTI or any of its subsidiaries, or had any
+relationships requiring disclosure by Patterson-UTI under
+Item 404 of
+Regulation S-K. 
+During the year ended December 31, 2010, none of
+Patterson-UTI’s executive officers served as (i) a
+member of the compensation committee (or other Board committee
+performing equivalent functions) of another entity, one of whose
+executive officers served on the Compensation Committee,
+(ii) a director of another entity, one of whose executive
+officers served on the Compensation Committee, or (iii) a
+member of the compensation committee (or other Board committee
+performing equivalent functions) of another entity, one of whose
+executive officers served as a director of Patterson-UTI.
+COMPENSATION
+COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the
+Compensation Discussion and Analysis included in this proxy
+statement required by Item 402(b) of
+Regulation S-K 
+with management and, based upon such review and discussion, the
+Compensation Committee has recommended to the Board that the
+Compensation Discussion and Analysis be included in this proxy
+statement.
+Terry H. Hunt, Chairman 
+Charles O. Buckner 
+Curtis W. Huff 
+Kenneth R. Peak
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2010
+with respect to the Principal Executive Officer, the Principal
+Financial Officer and the other Named Executive Officers of
+Patterson-UTI:
+Summary
+Compensation Table 
+Non-equity 
+Stock 
+Option 
+Incentive plan 
+All Other 
+Salary 
+Bonus 
+Awards 
+Awards 
+Compensation 
+Compensation 
+Total 
+Name and Principal Position(s) 
+Year 
+($) 
+($) 
+($)(1) 
+($)(2) 
+($)(3) 
+($)(4) 
+($) 
+Douglas J. Wall 
+2010
+$
+600,000
+$
+—
+$
+1,962,206
+(5)
+$
+1,510,223
+$
+893,611
+$
+9,800
+$
+4,975,840
+President & Chief
+2009
+$
+600,000
+$
+—
+$
+1,558,620
+$
+1,253,149
+$
+396,347
+$
+9,800
+$
+3,817,916
+Executive Officer
+2008
+$
+600,000
+$
+—
+$
+2,088,338
+$
+1,458,577
+$
+1,367,378
+$
+9,200
+$
+5,523,493
+John E. Vollmer III 
+2010
+$
+350,000
+$
+—
+$
+1,308,138
+(6)
+$
+1,006,816
+$
+595,741
+$
+9,800
+$
+3,270,495
+Senior Vice President —
+2009
+$
+350,000
+$
+—
+$
+1,039,080
+$
+835,433
+$
+264,231
+$
+9,800
+$
+2,498,544
+Corporate Development, Chief Financial Officer &
+Treasurer
+2008
+$
+326,125
+$
+—
+$
+1,392,225
+$
+972,385
+$
+911,586
+$
+9,200
+$
+3,611,521
+Mark S. Siegel 
+2010
+$
+350,000
+$
+—
+$
+2,616,275
+(7)
+$
+2,013,631
+$
+1,191,482
+$
+—
+$
+6,171,388
+Chairman of the Board
+2009
+$
+350,000
+$
+—
+$
+2,078,160
+$
+1,670,865
+$
+528,462
+$
+—
+$
+4,627,487
+2008
+$
+350,000
+$
+—
+$
+2,784,450
+$
+1,944,769
+$
+1,823,171
+$
+—
+$
+6,902,390
+Kenneth N. Berns 
+2010
+$
+265,000
+$
+—
+$
+1,308,138
+(6)
+$
+1,006,816
+$
+595,741
+$
+—
+$
+3,175,695
+Senior Vice President
+2009
+$
+265,000
+$
+—
+$
+1,039,080
+$
+835,433
+$
+264,231
+$
+—
+$
+2,403,744
+2008
+$
+265,000
+$
+—
+$
+1,392,225
+$
+972,385
+$
+911,586
+$
+—
+$
+3,541,196
+Seth D. Wexler 
+2010
+$
+250,000
+$
+250,000
+$
+276,200
+$
+—
+$
+—
+$
+5,385
+$
+781,585
+General Counsel and Secretary
+2009
+$
+96,554
+$
+125,000
+$
+213,900
+$
+79,856
+$
+—
+$
+—
+$
+515,310
+(1) 
+Amounts set forth include the fair value of awards at the date
+of grant as determined in accordance with FASB ASC Topic 718
+with respect to restricted stock awarded to the Named Executive
+Officer in the fiscal years ended December 31, 2010, 2009
+and 2008 and with respect to performance units awarded to
+Messrs. Wall, Vollmer, Siegel and Berns in the fiscal years
+ended December 31, 2010 and 2009. Performance conditions
+for 
+28
+Table of Contents 
+all awards of restricted stock had been satisfied as of
+December 31, 2010. For additional information related to
+the assumptions used and valuation of restricted stock and
+performance units see Note 11 to the consolidated financial
+statements in Patterson-UTI’s Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2010. 
+(2) 
+Amounts set forth represent the fair value at the date of grant
+as determined in accordance with FASB ASC Topic 718 with respect
+to stock options awarded to the Named Executive Officer in the
+fiscal years ended December 31, 2010, 2009 and 2008. For
+additional information related to the assumptions used in
+connection with the valuation of stock options using the
+Black-Scholes option pricing model see Note 11 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the fiscal year ended December 31, 2010. 
+(3) 
+Represents annual bonuses earned for the fiscal years ended
+December 31, 2010, 2009 and 2008. The bonus plan in each of
+those fiscal years provided for a bonus pool based on EBITDA,
+subject to a minimum EBITDA of $400 million for 2008 and
+$200 million for 2010 and 2009. The bonus pool was
+allocated among the participants based on a pre-determined
+sharing percentage. At the direction of the Compensation
+Committee, the total amount paid out pursuant to the executive
+bonus pool was $3.28 million for 2010, $1.45 million
+for 2009 and $5.01 million for 2008. 
+(4) 
+Amounts set forth reflect contributions to a 401(k) plan by
+Patterson-UTI on behalf of the Named Executive Officer. 
+(5) 
+Includes $1,112,250 related to an award of shares of restricted
+stock and $849,956 related to an award of performance units
+during 2010. 
+(6) 
+Includes $741,500 related to an award of shares of restricted
+stock and $566,638 related to an award of performance units
+during 2010. 
+(7) 
+Includes $1,483,000 related to an award of shares of restricted
+stock and $1,133,275 related to an award of performance units
+during 2010. 
+The following table sets forth information concerning grants of
+plan-based awards during the fiscal year ended December 31,
+2010 to the Named Executive Officers:
+Grants of
+Plan-Based Awards 
+All Other 
+All Other 
+Option Awards: 
+Estimated Future Payouts 
+Stock Awards: 
+Number of 
+Exercise or 
+Grant Date 
+under 
+Estimated Future Payouts under 
+Number of 
+Securities 
+Base Price 
+Fair Value of 
+Non-equity Incentive Plan Awards 
+Equity Incentive Plan Awards 
+Shares of 
+Underlying 
+of Option 
+Stock and 
+Grant 
+Threshold 
+Target 
+Maximum 
+Threshold 
+Target 
+Maximum 
+Stock or Units 
+Options 
+Awards 
+Option Awards 
+Name 
+Date 
+($) 
+($) 
+($) 
+(#) 
+(#) 
+(#) 
+(#)(3) 
+(#)(4) 
+($/Sh) 
+($)(5) 
+Douglas J. Wall
+2/09/10
+(1)
+$
+333,333
+$
+893,611
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/27/10
+(2)
+—
+—
+—
+24,375
+48,750
+97,500
+—
+—
+—
+$
+849,956
+4/27/10
+—
+—
+—
+—
+—
+—
+75,000
+—
+—
+$
+1,112,250
+4/27/10
+—
+—
+—
+—
+—
+—
+—
+266,250
+$
+14.83
+$
+1,510,223
+John E. Vollmer III
+2/09/10
+(1)
+$
+222,222
+$
+595,741
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/27/10
+(2)
+—
+—
+—
+16,250
+32,500
+65,000
+—
+—
+—
+$
+566,638
+4/27/10
+—
+—
+—
+—
+—
+—
+50,000
+—
+—
+$
+741,500
+4/27/10
+—
+—
+—
+—
+—
+—
+—
+177,500
+$
+14.83
+$
+1,006,816
+Mark S. Siegel
+2/09/10
+(1)
+$
+444,444
+$
+1,191,482
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/27/10
+(2)
+—
+—
+—
+32,500
+65,000
+130,000
+—
+—
+—
+$
+1,133,275
+4/27/10
+—
+—
+—
+—
+—
+—
+100,000
+—
+—
+$
+1,483,000
+4/27/10
+—
+—
+—
+—
+—
+—
+—
+355,000
+$
+14.83
+$
+2,013,631
+Kenneth N. Berns
+2/09/10
+(1)
+$
+222,222
+$
+595,741
+$
+5,000,000
+—
+—
+—
+—
+—
+—
+—
+4/27/10
+(2)
+—
+—
+—
+16,250
+32,500
+65,000
+—
+—
+—
+$
+566,638
+4/27/10
+—
+—
+—
+—
+—
+—
+50,000
+—
+—
+$
+741,500
+4/27/10
+—
+—
+—
+—
+—
+—
+—
+177,500
+$
+14.83
+$
+1,006,816
+Seth D. Wexler
+6/09/10
+—
+—
+—
+—
+—
+—
+20,000
+—
+—
+$
+276,200
+29
+Table of Contents 
+(1) 
+The 2010 bonus plan for Named Executive Officers for the fiscal
+year ended December 31, 2010 was approved on
+February 9, 2010. The 2010 bonus plan for
+Messrs. Wall, Vollmer, Siegel and Berns provided for a
+bonus pool based on EBITDA for the fiscal year ended
+December 31, 2010, subject to a minimum EBITDA of
+$200 million. The bonus pool was allocated among
+Messrs. Wall, Vollmer, Siegel and Berns based on a
+pre-determined sharing percentage. The threshold amount
+presented in this table is calculated for the respective officer
+based on an assumed EBITDA of $200 million and the
+allocation formula applied to the bonus pool for distribution
+due to the fact that the bonus plan provides for no payment if
+the minimum EBITDA of $200 million is not satisfied. The
+target amount is calculated based on Patterson-UTI’s actual
+EBITDA for the fiscal year ended December 31, 2010 and the
+allocation formula applied to the bonus pool for distribution.
+The cash bonuses awarded from the bonus pool were awarded under
+the LTIP, which has been designed to meet the requirements of
+Section 162(m) of the Code. Although the bonus pool for
+Messrs. Wall, Vollmer, Siegel and Berns did not have an
+EBITDA cap, the maximum amount that could be awarded to an
+individual under any cash-based performance award granted under
+the LTIP during a
+12-month 
+period is $5,000,000. 
+(2) 
+On April 27, 2010, Patterson-UTI granted performance unit
+awards to Messrs. Wall, Vollmer, Siegel and Berns. These
+awards provide for the recipients to receive shares of Common
+Stock upon the achievement of certain performance goals
+established by Patterson-UTI during a specified period. The
+performance period is the period from April 1, 2010 through
+March 31, 2013, subject to certain exceptions that could
+extend the performance period up to two additional years, as
+described in “Compensation Discussion and Analysis”
+above. The performance goals are tied to Patterson-UTI’s
+total shareholder return for the performance period as compared
+to total shareholder return for a peer group determined by the
+Compensation Committee. If Patterson-UTI’s total
+shareholder return for the performance period is positive and at
+or above the 25th percentile but less than the 50th percentile
+in relation to the peer group, the awards provide for the grant
+of a base number of shares. If Patterson-UTI’s total
+shareholder return for the performance period is positive and
+above the 50th percentile but less than the 75th percentile in
+relation to the peer group, the awards provide for the grant of
+two times the base number of shares. If Patterson-UTI’s
+total shareholder return for the performance period is positive
+and above the 75th percentile in relation to the peer group, the
+awards provide for the grant of four times the base number of
+shares. The grant of shares when achievement is between the 25th
+and 75th percentile will be determined on a pro-rata basis. The
+target number of shares presented in the table are based on
+Patterson-UTI’s total shareholder return at the end of the
+performance period being positive and at the
+50 th 
+percentile in relation to the peer group. 
+(3) 
+Shares of restricted stock were awarded pursuant to the LTIP.
+Ordinary dividends are paid on unvested shares of restricted
+stock. The rate at which these dividends are paid is the same
+rate at which ordinary dividends are paid on all other shares of
+common stock of Patterson-UTI. The right to receive these
+dividends has been included in the grant date fair value of
+stock awards presented in the table. The shares awarded to
+Messrs. Wall, Vollmer, Siegel and Berns vest over a three
+year period as follows: one-third on April 27, 2011, and
+the remaining two-thirds in equal monthly installments over the
+twenty-four months following April 27, 2011. The shares
+awarded to Mr. Wexler vest over a three year period as
+follows: one-third on June 9, 2011, one-third on
+June 9, 2012 and one-third on June 9, 2013. 
+(4) 
+Options were granted pursuant to the LTIP. Options awarded to
+Messrs. Wall, Vollmer, Siegel and Berns vest over a three
+year period as follows: one-third on April 27, 2011, and
+the remaining two-thirds in equal monthly installments over the
+twenty-four months following April 27, 2011. 
+(5) 
+The grant date fair value of restricted stock is based on the
+closing price of Patterson-UTI Common Stock on the date of
+grant, which is consistent with the valuation used by
+Patterson-UTI for the recognition of compensation expense under
+FASB ASC Topic 718. The grant date fair value of stock options
+was determined using the Black-Scholes option pricing model,
+which is consistent with the valuation used by Patterson-UTI for
+the recognition of compensation expense under FASB ASC Topic
+718, with assumptions that are more fully described in
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on Form
+10-K for the
+fiscal year ended December 31, 2010. 
+30
+Table of Contents 
+The following table sets forth information concerning
+outstanding equity awards at December 31, 2010 for the
+Named Executive Officers:
+Outstanding
+Equity Awards 
+at Fiscal Year-End 
+Stock Awards 
+Equity Incentive 
+Equity Incentive 
+Plan Awards: 
+Plan Awards: Market 
+Option Awards 
+Number of 
+or Payout Value of 
+Number of Securities 
+Option 
+Number of Shares 
+Market Value of 
+Unearned Shares, 
+Unearned Shares, 
+Underlying Unexercised 
+Exercise 
+Option 
+or Units of Stock 
+Shares or Units of 
+Units or Other 
+Units or Other 
+Options (#) 
+Price 
+Expiration 
+That Have 
+Stock That Have 
+Rights that 
+Rights that Have 
+Name 
+Exercisable 
+Unexercisable 
+($) 
+Date 
+Not Vested (#) 
+Not Vested ($)(1) 
+Have Not Vested(2) 
+Not Vested ($)(3) 
+Douglas J. Wall
+75,000
+—
+$
+22.720
+4/08/17
+115,584
+(4)
+$
+2,490,835
+24,375
+$
+994,031
+(5)
+25,000
+—
+$
+22.990
+9/30/17
+158,666
+19,834
+(6)
+$
+29.310
+4/24/18
+145,833
+116,667
+(7)
+$
+13.170
+4/27/19
+—
+266,250
+(8)
+$
+14.830
+4/26/20
+John E. Vollmer III
+210,000
+—
+$
+13.195
+7/17/12
+77,057
+(9)
+$
+1,660,578
+16,250
+$
+662,688
+(10)
+190,000
+—
+$
+16.220
+4/29/13
+60,000
+—
+$
+19.140
+4/27/14
+75,000
+—
+$
+24.630
+4/26/15
+125,000
+—
+$
+28.160
+7/31/16
+150,000
+—
+$
+24.170
+4/22/17
+105,777
+13,223
+(6)
+$
+29.310
+4/24/18
+97,222
+77,778
+(7)
+$
+13.170
+4/27/19
+—
+177,500
+(8)
+$
+14.830
+4/26/20
+Mark S. Siegel
+380,000
+—
+$
+16.220
+4/29/13
+154,113
+(11)
+$
+3,321,135
+32,500
+$
+1,325,375
+(12)
+120,000
+—
+$
+19.140
+4/27/14
+150,000
+—
+$
+24.630
+4/26/15
+250,000
+—
+$
+28.160
+7/31/16
+300,000
+—
+$
+24.170
+4/22/17
+211,555
+26,445
+(6)
+$
+29.310
+4/24/18
+194,444
+155,556
+(7)
+$
+13.170
+4/27/19
+—
+355,000
+(8)
+$
+14.830
+4/26/20
+Kenneth N. Berns
+190,000
+—
+$
+16.220
+4/29/13
+77,057
+(9)
+$
+1,660,578
+16,250
+$
+662,688
+(10)
+60,000
+—
+$
+19.140
+4/27/14
+75,000
+—
+$
+24.630
+4/26/15
+125,000
+—
+$
+28.160
+7/31/16
+150,000
+—
+$
+24.170
+4/22/17
+105,777
+13,223
+(6)
+$
+29.310
+4/24/18
+97,222
+77,778
+(7)
+$
+13.170
+4/27/19
+—
+177,500
+(8)
+$
+14.830
+4/26/20
+Seth D. Wexler
+6,666
+8,334
+(13)
+$
+14.410
+8/09/19
+30,000
+(14)
+$
+646,500
+—
+$
+—
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on
+December 31, 2010 of $21.55 per share. 
+(2) 
+As discussed in footnote (2) to the Grants of Plan Based
+Awards table, on April 27, 2010, Patterson-UTI granted
+performance unit awards to Messrs. Wall, Vollmer, Siegel
+and Berns. The number of shares presented in this column
+represents the base number of shares for the respective awards.
+Based on Patterson-UTI’s total shareholder return during
+the performance period ending March 31, 2013, the
+recipients could receive a number of shares ranging from no
+shares to four times the base number of shares. Performance unit
+awards 
+31
+Table of Contents 
+were granted in 2009 to Messrs. Wall, Vollmer, Siegel and
+Berns which were denominated in dollars and provided for a cash
+payout based on Patterson-UTI’s total shareholder return
+during the performance period ending March 31, 2012. Since
+these awards provide for no issuance of shares they are not
+included in this column. 
+(3) 
+As of December 31, 2010, performance unit awards had been
+granted to Messrs. Wall, Vollmer, Siegel and Berns. The
+2009 performance unit awards were granted on April 28, 2009
+and provide for a cash payment to the recipient based on
+Patterson-UTI’s total shareholder return compared to a peer
+group of companies for the performance period from April 1,
+2009 through March 31, 2012. The 2010 performance unit
+awards were granted on April 27, 2010 and provide for an
+award of shares of Patterson-UTI common stock to the recipient
+based on Patterson-UTI’s total shareholder return compared
+to a peer group of companies for the performance period from
+April 1, 2010 through March 31, 2013. All performance
+unit awards provide for a threshold payout (in dollars for the
+2009 awards and in shares for the 2010 awards) based on
+threshold level of total shareholder return compared to the peer
+group. Due to the fact that the performance periods for all
+awards had not been completed as of December 31, 2010, the
+amounts presented in this column represent the threshold payout
+under the performance unit awards. For the 2010 performance unit
+awards, the threshold number of shares is valued at the
+December 31, 2010 closing price of Patterson-UTI common
+stock which was $21.55 per share. 
+(4) 
+These shares of restricted stock vest as follows:
+7,917 shares that vest in equal monthly installments from
+January 25, 2011 through April 25, 2011;
+32,667 shares that vest in equal monthly installments from
+January 28, 2011 through April 28, 2012;
+25,000 shares that vest on April 27, 2011 and
+50,000 shares that vest in equal monthly installments from
+May 27, 2011 through April 27, 2013. 
+(5) 
+Amount includes $468,750 related to the 2009 performance unit
+award and $525,281 related to the 2010 performance unit award. 
+(6) 
+These options vest in equal monthly installments from
+January 25, 2010 through April 25, 2011. 
+(7) 
+These options vest in equal monthly installments from
+January 28, 2010 through April 28, 2012. 
+(8) 
+These options vest as follows: one-third on April 27, 2011,
+and the remainder in equal monthly installments over the
+twenty-four months following April 28, 2011. 
+(9) 
+These shares of restricted stock vest as follows:
+5,279 shares in equal monthly installments from
+January 25, 2011 through April 25, 2011;
+21,778 shares in equal monthly installments from
+January 28, 2011 through April 28, 2013;
+16,666 shares on April 27, 2011 and 33,334 shares
+in equal monthly installments from May 27, 2011 through
+April 27, 2013. 
+(10) 
+Amount includes $312,500 related to the 2009 performance unit
+award and $350,188 related to the 2010 performance unit award. 
+(11) 
+These shares of restricted stock vest as follows:
+10,557 shares in equal monthly installments from
+January 25, 2011 through April 25, 2011;
+43,556 shares in equal monthly installments from
+January 28, 2011 through April 28, 2013;
+33,333 shares on April 27, 2011 and 66,667 shares
+in equal monthly installments from May 27, 2011 through
+April 27, 2013. 
+(12) 
+Amount includes $625,000 related to the 2009 performance unit
+award and $700,375 related to the 2010 performance unit award. 
+(13) 
+These options vest in equal monthly installments from
+January 9, 2011 through August 9, 2012. 
+(14) 
+These shares of restricted stock vest as follows:
+11,666 shares on June 9, 2011; 11,666 shares on
+June 9, 2012 and 6,668 shares on June 9, 2013. 
+32
+Table of Contents 
+The following table sets forth information concerning option
+exercises and stock awards vested during the fiscal year ended
+December 31, 2010 for the Named Executive Officers:
+Option
+Exercises 
+and Stock Vested 
+Option Awards 
+Stock Awards 
+Number of 
+Number of 
+Shares Acquired 
+Value Realized 
+Shares Acquired 
+Value Realized 
+Name 
+on Exercise (#) 
+on Exercise ($) 
+on Vesting (#) 
+on Vesting ($)(1) 
+Douglas J. Wall
+—
+$
+—
+97,917
+$
+1,497,970
+John E. Vollmer III
+—
+$
+—
+53,342
+$
+851,319
+Mark S. Siegel
+—
+$
+—
+106,684
+$
+1,702,638
+Kenneth N. Berns
+—
+$
+—
+53,342
+$
+851,319
+Seth D. Wexler
+—
+$
+—
+5,000
+$
+69,150
+(1) 
+Value realized on vesting is based on the closing price of
+Patterson-UTI Common Stock on the day immediately prior to the
+date at which the respective shares vested. 
+Patterson-UTI provides no pension benefits for any of the Named
+Executive Officers. None of the Named Executive Officers had any
+items of nonqualified deferred compensation during 2010. As a
+result, tables with respect to pension benefits and nonqualified
+deferred compensation have not been provided.
+DIRECTOR
+COMPENSATION 
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2010
+with respect to the directors of Patterson-UTI who are not
+executive officers:
+Director
+Compensation Table 
+Fees Earned or Paid 
+All Other 
+in Cash 
+Stock Awards 
+Option Awards 
+Compensation 
+Total 
+Name 
+($) 
+($)(1) 
+($)(2) 
+($) 
+($) 
+Charles O. Buckner
+$
+60,000
+$
+46,050
+$
+60,922
+$
+—
+$
+166,972
+Curtis W. Huff
+$
+71,667
+$
+46,050
+$
+60,922
+$
+—
+$
+178,639
+Terry H. Hunt
+$
+60,000
+$
+46,050
+$
+60,922
+$
+—
+$
+166,972
+Kenneth R. Peak
+$
+45,000
+$
+46,050
+$
+60,922
+$
+—
+$
+151,972
+Cloyce A. Talbott
+$
+—
+$
+—
+$
+—
+$
+250,000
+(3)
+$
+250,000
+(1) 
+Amounts set forth represent the fair value at the date of grant
+as determined in accordance with FASB ASC Topic 718 with respect
+to restricted stock awarded to the directors in the fiscal year
+ended December 31, 2010. For additional information related
+to the assumptions used and valuation of restricted stock, see
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2010.
+Messrs. Buckner, Huff, Hunt and Peak each received an award
+of 3,000 shares of restricted stock on January 1, 2010
+with a market value of $15.35 per share which fully vested on
+January 1, 2011. As of December 31, 2010,
+Messrs. Buckner, Huff, Hunt and Peak each held 3,000
+unvested shares of restricted stock. 
+(2) 
+Amounts set forth represent the fair value at the date of grant
+as determined in accordance with FASB ASC Topic 718 with respect
+to stock options awarded to the directors in the fiscal year
+ended December 31, 2010. For additional information related
+to the assumptions used in connection with the valuation of
+stock options using the Black-Scholes option pricing model see
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on Form
+10-K for the
+fiscal year ended December 31, 2010. Messrs. Buckner,
+Huff, Hunt and Peak each received options to purchase
+10,000 shares of stock on January 1, 2010 with a
+market value of $6.09 per share, which fully vested on
+January 1, 2011. As of December 31, 2010,
+Messrs. Huff, Hunt and Peak each 
+33
+Table of Contents 
+held options to purchase a total of 50,000 shares of Common
+Stock, of which options to purchase 10,000 shares were
+unvested. As of December 31, 2010, Mr. Buckner held
+options to purchase a total of 40,000 shares of Common
+Stock, of which options to purchase 10,000 shares were
+unvested. 
+(3) 
+Mr. Talbott retired from his position as President and
+Chief Executive Officer of Patterson-UTI on September 30,
+2007. Patterson-UTI entered into an employment agreement with
+Mr. Talbott effective October 1, 2007 which provided
+for the employment of Mr. Talbott on a part-time basis for
+a period of five years. Mr. Talbott’s salary during
+the term of this employment agreement is $250,000 per year. 
+Directors who are also employees of Patterson-UTI do not receive
+compensation for serving as a director or as a member of a
+committee of the Board of Directors. All directors are
+reimbursed for reasonable
+out-of-pocket 
+expenses incurred in connection with serving as a member of the
+Board of Directors. Each non-employee director receives annual
+cash compensation of $35,000 and (i) 3,000 shares of
+restricted stock subject to one-year vesting (subject to
+acceleration in certain limited situations, including a change
+of control) and (ii) an option to purchase
+10,000 shares of Common Stock at an exercise price equal to
+the closing price of Common Stock on the grant date. The option
+has a
+10-year 
+term, vests after one-year (subject to acceleration in certain
+limited situations, including a change of control) and contains
+a right to exercise for three years following cessation of the
+holder as a director (but not beyond the
+10-year 
+term). Each non-employee director that serves on the Audit
+Committee or the Compensation Committee receives additional
+annual cash compensation of $10,000 per committee on which he
+serves, with the chairman of each such committee receiving
+$15,000. In March 2010, the Compensation Committee authorized
+additional annual cash compensation of $20,000 to the Lead
+Director.
+CHANGE IN
+CONTROL ARRANGEMENTS; 
+INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+Patterson-UTI has entered into change in control agreements with
+Messrs. Siegel, Wall, Berns, Vollmer and Wexler (each
+agreement, an “Agreement” and collectively, the
+“Agreements”; and each individual, an “Employee
+and collectively, the “Employees”). The Agreements
+were entered into to protect the Employees should a change in
+control occur, thereby encouraging the Employee to remain in the
+employ of Patterson-UTI and not be distracted from the
+performance of his duties to Patterson-UTI by the possibility of
+a change in control.
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other
+than for cause or by the Employee for good reason, the terms of
+the Agreements would entitle the Employee to, among other things:
+• 
+a bonus payment equal to the highest bonus paid after the
+Agreement was entered into (such bonus payment prorated for the
+portion of the fiscal year preceding the termination date),
+• 
+a payment equal to 2.5 times (in the case of Messrs. Siegel
+and Wall), 2.0 times (in the case of Messrs. Berns and
+Vollmer) or 1.5 times (in the case of Mr. Wexler) of the
+sum of (i) the highest annual salary in effect for such
+Employee during the term of the Agreement and (ii) the
+average of the three annual bonuses earned by the Employee for
+the three fiscal years preceding the termination date (or a
+benchmark bonus in the case of Mr. Wexler), and
+• 
+continued coverage under Patterson-UTI’s welfare plans for
+up to three years (in the case of Messrs. Siegel and Wall)
+or two years (in the case of Messrs. Berns, Vollmer and
+Wexler).
+Each Agreement provides the Employee with a full
+gross-up 
+payment for any excise taxes imposed on payments and benefits
+received under the Agreements or otherwise, including other
+taxes that may be imposed as a result of the
+gross-up 
+payment.
+A “change in control” is principally defined by the
+Agreement as:
+• 
+an acquisition by any individual, entity or group of beneficial
+ownership of 35% or more of either Patterson-UTI’s then
+outstanding Common Stock or the combined voting power of the
+then outstanding voting securities of Patterson-UTI entitled to
+vote in the election of directors,
+34
+Table of Contents 
+• 
+a change occurs in which the members of the Board of Directors
+as of the date of the Agreement cease to constitute at least a
+majority of Patterson-UTI’s Board of Directors unless that
+change occurs through a vote of at least a majority of the
+incumbent members of the Board of Directors, or
+• 
+a change in the beneficial ownership of Patterson-UTI following
+consummation of a reorganization, merger, consolidation, sale of
+Patterson-UTI or any subsidiary of Patterson-UTI or a
+disposition of all or substantially all of the assets of
+Patterson-UTI, in which the beneficial owners immediately prior
+to the transaction own 65% or less of outstanding Common Stock
+of the newly combined or merged entity.
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or retirement,
+• 
+the termination of the Employee’s employment, or
+• 
+January 29, 2012 although, unless otherwise terminated, the
+Agreements automatically renew for successive twelve-month
+periods until Patterson-UTI notifies the Employee at least
+90 days before the expiration of the initial term or the
+renewal period, as applicable, that the term will not be
+extended. Patterson-UTI has not provided any such notification
+to the Employees.
+All unvested stock options and restricted stock awards held by
+Named Executive Officers vest upon a change of control as
+defined by the underlying award agreements. Upon a change in
+control as defined in the underlying performance unit award
+grants, Messrs. Wall, Vollmer, Siegel and Berns would
+receive two times the base payment payable thereunder. All
+restricted stock and performance unit awards held by Named
+Executive Officers contain provisions that in the event of
+termination due to death or disability, the Named Executive
+Officer would vest in a portion of the award.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer pursuant to which
+Patterson-UTI has agreed to pay each such person within ten days
+of the termination of his employment with Patterson-UTI for any
+reason (including voluntary termination by him), an amount in
+cash equal to his annual base salary at the time of such
+termination. Any payment made by Patterson-UTI pursuant to these
+letter agreements will reduce dollar for dollar any payment owed
+to such person, if any, pursuant to the change in control
+agreements discussed above.
+Amounts that each of the Named Executive Officers would be
+entitled to under the existing Agreements if a change in control
+had occurred as of December 31, 2010 and the
+employee’s employment was terminated by Patterson-UTI other
+than for cause or by the employee for good reason (as defined in
+the Agreements) are reflected in the following table:
+Cash Payments 
+Other Benefits 
+2009 
+2010 
+Bonus 
+Salary and 
+Performance 
+Option 
+Stock 
+Performance 
+Continued 
+Statutory Tax 
+Payment 
+Bonus 
+Unit Awards 
+Awards 
+Awards 
+Unit Awards 
+Benefits 
+Gross-Up 
+Total 
+Name 
+($)(1) 
+($)(2) 
+($)(3) 
+($)(4) 
+($)(4) 
+($)(5) 
+($)(6) 
+($)(7) 
+($) 
+Douglas J. Wall
+$
+1,367,378
+$
+3,636,438
+$
+937,500
+$
+2,766,869
+$
+2,490,835
+$
+1,050,563
+$
+15,895
+$
+2,107,864
+$
+14,373,342
+John E. Vollmer III
+$
+1,375,000
+$
+2,165,245
+$
+625,000
+$
+1,844,580
+$
+1,660,578
+$
+700,375
+$
+12,421
+$
+—
+$
+8,383,199
+Mark S. Siegel
+$
+2,750,000
+$
+4,538,111
+$
+1,250,000
+$
+3,689,159
+$
+3,321,135
+$
+1,400,750
+$
+—
+$
+—
+$
+16,949,155
+Kenneth N. Berns
+$
+1,375,000
+$
+1,995,245
+$
+625,000
+$
+1,844,580
+$
+1,660,578
+$
+700,375
+$
+—
+$
+—
+$
+8,200,778
+Seth D. Wexler
+$
+125,000
+$
+562,500
+$
+—
+$
+59,505
+$
+646,500
+$
+—
+$
+12,421
+$
+—
+$
+1,405,926
+(1) 
+The assumed bonus payment is equal to the highest annual bonus
+paid from the time the Agreements were entered into through
+December 31, 2010. 
+(2) 
+The assumed salary and bonus payment represents 2.5 times (in
+the case of Messrs. Siegel and Wall), 2.0 times (in the
+case of Messrs. Berns and Vollmer) or 1.5 times (in the
+case of Mr. Wexler) of the sum of the 2010 salary in effect
+for each employee and the average of the annual bonuses earned
+by each employee for 2009, 2008 and 2007 (or a benchmark bonus
+in the case of Mr. Wexler). Bonus amounts earned in 2010
+were not considered in this calculation as they were not
+determined until after December 31, 2010. 
+35
+Table of Contents 
+(3) 
+Cash settled performance units awarded to Messrs. Wall,
+Vollmer, Siegel and Berns in 2009 include a provision that upon
+a change in control as defined in the respective award
+agreements, the Named Executive Officer will receive a cash
+payment equal to two times the base amount set forth in each
+agreement. Amounts presented in the table represent the assumed
+payment of two times the base amount if a change in control had
+occurred on December 31, 2010. 
+(4) 
+Each of the Named Executive Officers’ option and stock
+award agreements provide that unvested options and awards will
+immediately vest upon a change in control. Amounts presented in
+the table represent the value of unvested option and stock
+awards using the market price of Patterson-UTI Common Stock at
+December 31, 2010. 
+(5) 
+Share settled performance units awarded to Messrs. Wall,
+Vollmer, Siegel and Berns in 2010 include a provision that upon
+a change in control as defined in the respective award
+agreements, the Named Executive Officer will receive an award of
+shares equal to two times the base amount set forth in each
+agreement. Amounts presented in the table represent the assumed
+award of two times the base number of shares if a change in
+control had occurred on December 31, 2010 valued at the
+December 31, 2010 closing price of Patterson-UTI common
+stock of $21.55 per share. 
+(6) 
+Messrs. Wall, Vollmer and Wexler participated in
+Patterson-UTI’s health and welfare plans as of
+December 31, 2010. The amounts presented represent
+Patterson-UTI’s portion of the premiums for three years in
+the case of Mr. Wall and two years in the case of
+Messrs. Vollmer and Wexler based on the rates in effect at
+December 31, 2010. 
+(7) 
+Assumes Mr. Wall would be subject to an excise tax on
+payments received under the existing agreements if a change in
+control had occurred as of December 31, 2010. Amount
+presented in the table represents the
+gross-up 
+payment that Mr. Wall would be entitled to as a result of
+the imposition of the excise tax. 
+All restricted stock and performance unit awards held by Named
+Executive Officers provide that in the event of termination of
+employment due to death or disability, the Named Executive
+Officer would vest in a portion of the award. With respect to
+Mr. Wall, such a termination would have resulted in the
+accelerated vesting of 17,553 shares of restricted stock
+with a fair value of $378,267. With respect to
+Messrs. Vollmer and Berns, such a termination at
+December 31, 2010 would have resulted in the accelerated
+vesting of 11,703 shares of restricted stock with a fair
+value of $252,200. With respect to Mr. Siegel, such a
+termination at December 31, 2010 would have resulted in the
+accelerated vesting of 23,407 shares of restricted stock
+with a fair value of $504,421. With respect to Mr. Wexler,
+such a termination would have resulted in the accelerated
+vesting of 5,692 shares of restricted stock with a fair
+value of $122,663. In the event of termination of employment due
+to death or disability, the Named Executive Officer would vest
+in the portion of the performance unit award that was earned at
+the time of death or disability. This payment would be
+determined at the end of the performance period and would equal
+the amount that the Named Executive Officer would have received
+at that time, pro-rated for the amount of time from the date of
+grant through the date of death or disability.
+Patterson-UTI has entered into an indemnification agreement with
+each of its Named Executive Officers and directors containing
+provisions that may require Patterson-UTI, among other things,
+to indemnify such executive officers and directors against
+liabilities that may arise by reason of their status or service
+as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN
+TRANSACTIONS 
+In connection with the acquisition by REMY Capital Partners III,
+L.P. (“REMY Capital”) of an ownership interest in UTI
+Energy Corp. in March 1995, REMY Capital succeeded to a
+registration rights agreement with UTI. As the
+successor-in-interest 
+to UTI, Patterson-UTI assumed this registration rights agreement
+pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares
+held by REMY Capital under the Securities Act of 1933, as
+amended. In the event that such rights are exercised in
+connection with a primary offering proposed by Patterson-UTI (or
+a secondary offering with which Patterson-UTI agrees to
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elects to exercise such
+36
+Table of Contents 
+rights other than in connection with an offering in which
+Patterson-UTI participates, REMY Capital would bear all costs of
+the offering. These rights continue so long as REMY Capital
+continues to own the Common Stock that it acquired in March
+1995. As of the date of this proxy statement, REMY Capital
+continues to hold 1,000,000 shares of such Common Stock.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is
+President and sole stockholder of REMY Investors, which is the
+general partner of REMY Capital. Mr. Berns, a director and
+Senior Vice President of Patterson-UTI, is an executive of REMY
+Investors.
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer, Patterson-UTI delivered a letter to
+Mr. Vollmer dated February 6, 2006 (the “Letter
+Agreement”). Pursuant to the Letter Agreement,
+Patterson-UTI agreed, to the extent permitted by law and
+provided that the applicable accounting restatement pending at
+that time did not result from Patterson-UTI’s material
+non-compliance with financial reporting requirements under the
+federal securities laws as a result of knowing misconduct by
+Mr. Vollmer:
+• 
+Patterson-UTI is not entitled to and will not make any claim
+against Mr. Vollmer for reimbursement of any bonus or other
+incentive or equity based compensation received by him or any
+profits realized by him from the sale of securities of
+Patterson-UTI, under Section 304 of the Sarbanes-Oxley Act of
+2002 (“Section 304”) on account of the
+restatement of any financial statements of Patterson-UTI
+covering any accounting period ending on or prior to
+September 30, 2005;
+• 
+Patterson-UTI will not make any claim against Mr. Vollmer
+for any profits realized from the sale of securities of
+Patterson-UTI that were owned by him prior to his becoming Chief
+Financial Officer or were acquired by him on account of the
+exercise of options or the settling of restricted stock units
+that were held by him immediately prior to his becoming Chief
+Financial Officer, under Section 304 on account of the
+restatement of any financial statements of Patterson-UTI
+covering any period during which he was Chief Financial
+Officer; and
+• 
+Patterson-UTI will indemnify Mr. Vollmer against all losses
+in connection with his defense of any claim against him under
+Section 304 in contravention of the two immediately
+preceding bullets, to the extent he is obligated to reimburse
+Patterson-UTI for any bonus or other incentive or equity
+compensation received by him or any profits realized by him for
+the sale of Patterson-UTI securities.
+Notwithstanding court decisions that Patterson-UTI’s right
+to make any such claims appears doubtful, Patterson-UTI entered
+into this agreement because of the breadth of language of
+Section 304 and the uncertainty as to how the statute may
+be interpreted by the courts in the future and the importance at
+the time of Mr. Vollmer’s continued service as Chief
+Financial Officer.
+In 2010, Patterson-UTI provided contract drilling services to a
+subsidiary of a publicly traded independent natural gas and oil
+company of which Mr. Peak is the Chairman, Chief Executive
+Officer and approximately fifteen percent owner. Patterson-UTI
+was paid approximately $1.1 million to perform the
+services, which were performed in the ordinary course of their
+businesses and consistent with customary terms in the industry.
+The Board determined that this transaction was not material to
+either company and did not affect the director’s
+independence under applicable rules and regulations. The
+transaction was pre-approved by the Board of Directors
+consistent with Patterson-UTI’s related person transaction
+policy described below.
+Patterson-UTI has a written policy with respect to related
+person transactions. In accordance with this policy, related
+person transactions are reviewed by the Lead Director or the
+chair of the Audit Committee, each of whom has full delegated
+authority to approve, disapprove, ratify, amend, terminate or
+rescind any such transaction, or direct that such transaction be
+submitted to the Audit Committee or the full Board of Directors
+for consideration. In approving or disapproving related person
+transactions, the relevant facts and circumstances of the
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater
+37
+Table of Contents 
+beneficial ownership interest or in which they are an executive
+officer, general partner, principal or engaged in a similar
+position. Certain related person transactions have been
+pre-approved under the terms of the policy, including, subject
+to certain exceptions and limitations, the sale to or purchase
+from Patterson-UTI of goods and services by entities related to
+directors in the ordinary course of business that are immaterial
+to Patterson-UTI and with respect to which the director has no
+direct economic interest or decision making authority.
+SECURITY
+OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of April 13, 2011, the
+stock ownership of (i) the Named Executive Officers,
+directors and Board nominees, individually, (ii) all
+directors, Board nominees and executive officers as a group and
+(iii) each person known by Patterson-UTI to be the
+beneficial owner of more than 5% of Common Stock.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common
+Stock:
+FMR LLC
+14,534,460
+(1)
+9.4
+%
+BlackRock, Inc. 
+9,847,541
+(2)
+6.4
+%
+Directors and Executive Officers:
+Mark S. Siegel
+3,274,249
+(3)
+2.1
+%
+Douglas J. Wall
+865,228
+(4)
+*
+John E. Vollmer III
+1,334,124
+(5)
+*
+Kenneth N. Berns
+1,132,124
+(6)
+*
+Seth D. Wexler
+44,166
+(7)
+*
+Charles O. Buckner
+55,000
+(8)
+*
+Curtis W. Huff
+98,880
+(9)
+*
+Terry H. Hunt
+76,000
+(10)
+*
+Kenneth R. Peak
+73,000
+(11)
+*
+Cloyce A. Talbott
+1,534,476
+(12)
+*
+All directors and executive officers as a group (11 persons)
+8,516,191
+(13)
+5.3
+%
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G/A filed February 14,
+2011, jointly on behalf of FMR LLC (“FMR”), Edward C.
+Johnson 3d, and Fidelity Management & Research
+Company, a wholly-owned subsidiary of FMR
+(“Fidelity”). According to the report, the shares are
+beneficially owned as follows: Fidelity —
+12,925,920 shares (including 8,027,870 shares owned by
+Fidelity Variable Insurance Products Mid Cap Portfolio);
+Strategic Advisers, Inc., a wholly-owned subsidiary of
+FMR — 290,400 shares, Pyramis Global Advisors
+LLC, an indirect wholly-owned subsidiary of FMR
+(“PGALLC”) — 315,800 shares; Pyramis
+Global Advisors Trust Company, an indirect wholly-owned
+subsidiary of FMR (“PGATC”) —
+763,090 shares; FIL Limited (“FIL”) —
+239,250 shares. FMR and FIL are each of the view that the
+shares held by the other entity need not be aggregated for
+purposes of Section 13(d) under the Securities Exchange Act
+of 1934, but FMR filed the report on a voluntary basis as if all
+of the shares are beneficially owned by FMR and FIL on a joint
+basis. The Fidelity Funds’ Board of Trustees has sole
+voting power over the shares that are beneficially owned by
+Fidelity, and Edward C. Johnson 3d and FMR, through control of
+Fidelity and the Fidelity Funds, each has sole dispositive power
+over the 12,925,920 shares owned by the Fidelity Funds.
+Edward C. Johnson 3d and FMR, through control of PGALLC, PGATC
+and FMR subsidiaries, each has sole dispositive power and sole
+power to vote or direct the voting of the shares beneficially
+owned by PGALLC and PGATC. FIL and various foreign-based
+subsidiaries of FMR provide investment advisory and management
+services to a number of
+non-U.S. 
+investment companies and certain institutional investors.
+Partnerships controlled predominantly by members of the family
+of Edward C. Johnson 3d, or trusts for their benefit, own shares
+of voting stock of FIL with the right to cast approximately 39%
+of the 
+38
+Table of Contents 
+total votes which may be cast by all holders of FIL voting
+stock. FMR and FIL are separate and independent corporate
+entities and their Boards of Directors are generally composed of
+different individuals. The address of FMR, Edward C. Johnson 3d
+and Fidelity is 82 Devonshire Street, Boston, MA 02109. The
+address of PGALLC and PGATC is 53 State Street, Boston, MA
+02109. The address of FIL is Pembroke Hall, 42 Crow Lane,
+Hamilton, Bermuda. 
+(2) 
+Based solely on a Schedule 13G/A filed by BlackRock, Inc.
+with the SEC on February 8, 2011. According to the report,
+BlackRock, Inc. has sole voting and dispositive power with
+respect to 9,847,541 shares. The address of the principal
+business office of BlackRock, Inc. is 40 East 52nd Street, New
+York, New York 10022. 
+(3) 
+Mr. Siegel is the President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital Partners
+III, L.P. (“REMY Capital”). The Common Stock
+beneficially owned by Mr. Siegel includes
+1,000,000 shares of Common Stock owned by REMY Capital. The
+Common Stock beneficially owned by Mr. Siegel also includes
+stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within sixty days, to purchase
+1,809,249 shares. Does not include 333,751 shares
+underlying stock options held by Mr. Siegel that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 138,030 shares of unvested restricted
+Common Stock held by Mr. Siegel, over which he presently
+has voting power. 
+(4) 
+Includes shares underlying stock options held by Mr. Wall,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 556,936 shares. Does not include
+250,314 shares underlying stock options held by
+Mr. Wall that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+103,522 shares of unvested restricted Common Stock held by
+Mr. Wall, over which he presently has voting power. 
+(5) 
+Includes shares underlying stock options held by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to purchase
+1,114,624 shares. Does not include 166,876 shares
+underlying stock options held by Mr. Vollmer that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 69,015 shares of unvested restricted
+Common Stock held by Mr. Vollmer, over which he presently
+has voting power. 
+(6) 
+Includes shares underlying stock options held by Mr. Berns,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 904,624 shares. Does not include
+166,876 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 69,015 shares of unvested restricted
+Common Stock held by Mr. Berns, over which he presently has
+voting power. Does not include shares of Common Stock
+beneficially owned by REMY Investors. Mr. Berns disclaims
+beneficial ownership of such shares beneficially owned by REMY
+Investors. 
+(7) 
+Includes shares underlying stock options held by
+Mr. Wexler, which are presently exercisable or become
+exercisable within sixty days, to purchase 9,166 shares.
+Does not include 5,834 shares underlying stock options that
+are not presently exercisable and will not become exercisable
+within sixty days. Includes 30,000 shares of unvested
+restricted Common Stock held by Mr. Wexler, over which he
+presently has voting power. 
+(8) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Buckner to purchase 40,000 shares. Does
+not include 10,000 shares underlying stock options held by
+Mr. Buckner that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Buckner,
+over which he presently has voting power. 
+(9) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Huff to purchase 50,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Huff, over
+which he presently has voting power. 
+(10) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Hunt to purchase 50,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Hunt that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Hunt, over
+which he presently has voting power. 
+39
+Table of Contents 
+(11) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Peak to purchase 50,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Peak, over
+which he presently has voting power. 
+(12) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to purchase 1,200,000 shares. 
+(13) 
+Includes shares underlying stock options, which are presently
+exercisable or become exercisable within sixty days, to purchase
+5,791,543 shares of Common Stock. Does not include shares
+underlying stock options to purchase 966,707 shares held by
+such individuals that are not presently exercisable and will not
+become exercisable within sixty days. Includes an aggregate of
+429,222 shares of unvested restricted Common Stock held by
+certain directors and executive officers, over which they
+presently have voting power. 
+Except as stated herein, each stockholder has sole voting and
+investment power with respect to Common Stock included in the
+above table. There are no arrangements known to Patterson-UTI
+which may result in a change in control.
+40
+Table of Contents 
+AUDIT
+COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute
+soliciting material and should not be deemed filed or
+incorporated by reference into any other Patterson-UTI filing
+under the Securities Act of 1933, as amended, or the Exchange
+Act, except to the extent Patterson-UTI specifically
+incorporates this report by reference therein.
+The Audit Committee has reviewed and discussed the audited
+financial statements with management and Patterson-UTI’s
+independent registered public accounting firm.
+The Audit Committee has discussed with the independent
+registered public accounting firm the matters required to be
+discussed by Auditing Standard 380, The Auditor’s
+Communication with those Charged with Governance , as adopted
+by the Public Company Accounting Oversight Board in
+Rule 3200T.
+The Audit Committee has received and reviewed the written
+disclosures and the letter from the independent registered
+public accounting firm required by applicable requirements of
+the Public Company Accounting Oversight Board regarding the
+independent registered public accounting firm’s
+communications with the Audit Committee concerning independence,
+and has discussed with the independent registered public
+accounting firm their independence.
+Taking the foregoing into consideration, the undersigned Audit
+Committee members recommended to the Board of Directors that the
+Board approve the inclusion of Patterson-UTI’s audited
+financial statements in the Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2010.
+Audit Committee of the Board of Directors:
+Charles O. Buckner, Chairman 
+Curtis W. Huff 
+Terry H. Hunt
+PricewaterhouseCoopers
+Fees for Fiscal Years 2010 and 2009 
+In 2010 and 2009, Patterson-UTI and its subsidiaries incurred
+fees for services provided relating to (i) professional
+services rendered for the audit of Patterson-UTI’s annual
+financial statements, review of quarterly financial statements,
+and assessment of Patterson-UTI’s internal controls over
+financial reporting, (ii) professional services rendered
+for tax compliance, advice and planning, and (iii) products
+and services provided by PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2010 
+2009 
+Audit fees
+$
+1,431,400
+$
+1,175,000
+Tax fees
+45,600
+40,000
+All other fees
+1,600
+1,600
+Total
+$
+1,478,600
+$
+1,216,600
+The Audit Committee appoints the independent registered public
+accounting firm. The Audit Committee or Mr. Buckner, as
+Chairman of the Audit Committee, approves all other engagements
+of the independent registered public accounting firm in advance.
+In the event Mr. Buckner approves any such engagement, he
+discusses such approval with the Audit Committee at its next
+meeting.
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2010 and 2009 consisting
+of the examination of Patterson-UTI’s consolidated
+financial statements, quarterly reviews of Patterson-UTI’s
+interim financial statements and services to assess
+Patterson-UTI’s internal control over financial reporting.
+“Tax fees” include federal, state, local and foreign
+tax compliance and related matters. “All other fees”
+consists of an annual subscription fee to a software product.
+The Audit Committee or Mr. Buckner, as Chairman of the
+Audit Committee, approved in advance all of the services
+described above.
+41
+Table of Contents 
+The Audit Committee has discussed the non-audit services
+provided by PricewaterhouseCoopers LLP and the related fees and
+has considered whether those services and fees are compatible
+with maintaining auditor independence. The Audit Committee
+determined that such non-audit services were consistent with the
+independence of PricewaterhouseCoopers LLP.
+OTHER
+MATTERS 
+Section 16(a)
+Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires
+Patterson-UTI’s officers and directors and persons who own
+more than 10 percent of a registered class of
+Patterson-UTI’s equity securities, to file reports of
+ownership and changes in ownership with the SEC. Each of these
+persons is required by SEC regulation to furnish Patterson-UTI
+with copies of Section 16(a) filings. Based solely upon a
+review of Forms 3 and 4 and amendments thereto furnished to
+Patterson-UTI during 2010 and Forms 5 and amendments
+thereto furnished to Patterson-UTI with respect to 2010, or a
+written representation from the reporting person that no
+Form 5 is required, all filings required to be made by such
+officers, directors, and beneficial owners of more than
+10 percent of a registered class of Patterson-UTI’s
+common stock were timely made.
+Other
+Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not aware of any matter to be presented at the
+Meeting other than as set forth herein. If any other matters are
+properly brought before the Meeting, however, the shares
+represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting
+them.
+Stockholder
+Proposals for 2012 Annual Meeting 
+Proposals or Director Nominations for Inclusion in the Proxy
+Statement. Pursuant to
+Rule 14a-8 
+under the Exchange Act, stockholders may present proper
+proposals or director nominations for inclusion in
+Patterson-UTI’s proxy statement and for consideration at
+the next annual meeting of stockholders by submitting their
+proposals or director nominations to Patterson-UTI in a timely
+manner. In order to be included in Patterson-UTI’s proxy
+statement for the 2012 annual meeting of stockholders, proposals
+or director nominations from stockholders must be received by
+Patterson-UTI no later than December 20, 2011, and must
+otherwise comply with the requirements of
+Rule 14a-8. 
+Proposals or Director Nominations not Included in the Proxy
+Statement. In addition, Patterson-UTI’s
+bylaws establish an advance notice procedure with regard to
+stockholder proposals and director nominations not included in
+Patterson-UTI’s proxy statement. For director nominations
+not included in Patterson-UTI’s proxy statement, please
+refer to “Election of Directors — Meetings and
+Committees of the Board of Directors.” For stockholder
+proposals to be properly brought before the 2012 annual meeting,
+by a stockholder, the stockholder must be a stockholder of
+record on the date of the giving of the notice provided for
+below and on the record date for the determination of
+stockholders entitled to vote at such annual meeting and must
+give timely notice of such business in writing to the Secretary
+of Patterson-UTI. To be timely with respect to the 2012 annual
+meeting, a stockholder’s notice must be delivered to or
+mailed and received at Patterson-UTI’s principal executive
+offices not earlier than February 9, 2012 and not later
+than March 10, 2012; provided, however, that in the event
+that the annual meeting is called for a date that is not within
+30 days before or after June 8, 2012, notice by the
+stockholder to be timely must be received not later than the
+close of business on the tenth day following the day on which
+such notice of the date of the meeting was mailed or public
+disclosure of the annual meeting date was made, whichever occurs
+first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+a brief description of each matter desired to be brought before
+the annual meeting and the reasons for conducting such business
+at the annual meeting,
+• 
+the name and record address of the stockholder proposing such
+business,
+42
+Table of Contents 
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+any material interest of the stockholder in such
+business, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the annual meeting to bring such business
+before the annual meeting.
+The proxies will have discretionary authority to vote on any
+matter that properly comes before the annual meeting if the
+stockholder has not provided timely written notice as required
+by the Patterson-UTI bylaws.
+Patterson-UTI reserves the right to reject, rule out of order,
+or take other appropriate action with respect to any proposal or
+nomination that does not comply with these and other applicable
+requirements.
+Annual
+Report 
+A copy of Patterson-UTI’s annual report on
+Form 10-K 
+(the “Annual Report on
+Form 10-K”) 
+accompanies this proxy statement only if you have requested that
+a copy of this proxy statement be mailed to you. The Annual
+Report on
+Form 10-K 
+also is available electronically by following the instructions
+in the Notice. The Annual Report on
+Form 10-K 
+is not incorporated into this proxy statement and is not
+considered proxy-soliciting material.
+A copy of the Annual Report on
+Form 10-K, 
+including the financial statements and financial statement
+schedules, but excluding exhibits, may be obtained by
+stockholders without charge by written request to the Secretary
+of Patterson-UTI at 450 Gears Road, Suite 500, Houston,
+Texas 77067 or by accessing it on Patterson-UTI’s website
+at www.patenergy.com in the investors section under the
+“financial reports” link. Patterson-UTI will furnish
+the exhibits to
+Form 10-K 
+upon request and upon receipt of a reproduction fee. 
+Delivery
+of Documents to Stockholders Sharing an Address 
+The SEC’s rules allow companies to send a single Notice or
+single copy of annual reports, proxy statements, prospectuses
+and other disclosure documents to two or more stockholders
+sharing the same address, subject to certain conditions. These
+rules are intended to provide greater convenience for
+stockholders, and cost savings for companies, by reducing the
+number of duplicate documents that stockholders receive. If
+instructions for separate delivery have been received from any
+stockholder, Patterson-UTI will deliver promptly separate copies
+of the relevant disclosure materials. Similarly, if multiple
+copies of disclosure materials are being delivered to a single
+address, stockholders can request a single copy for future
+deliveries. Written requests should be submitted to the
+Secretary of Patterson-UTI at 450 Gears Road, Suite 500,
+Houston, Texas 77067.
+43
+Table of Contents 
+Appendix A 
+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. “ Change of Control of the
+Company ” shall mean the occurrence of any of the
+following after April 26, 2010:
+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 2.4, the following
+acquisitions shall not constitute a Change of 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 2.4; or
+ii. Individuals who, as of April 26, 2010, 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 April 26, 2010
+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
+A-1
+Table of Contents 
+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.
+2.5. “ Code ” shall mean the Internal
+Revenue Code of 1986, as amended from time to time.
+2.6. “ 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.
+2.7. “ Covered Employee ” shall mean
+a “covered employee” within the meaning of
+Section 162(m) of the Code.
+2.8. “ Director ” shall mean a
+non-employee member of the Board.
+2.9. “ Dividend Equivalents ” shall
+have the meaning set forth in Section 12.6.
+2.10. “ 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.
+2.11. “ Exchange Act ” shall mean the
+Securities Exchange Act of 1934, as amended.
+2.12. “ 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.
+2.13. “ Freestanding Stock Appreciation
+Right ” shall have the meaning set forth in
+Section 6.1.
+2.14. “ Limitations ” shall have the
+meaning set forth in Section 10.5.
+2.15. “ 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.
+2.16. “ Other Stock Unit Award ”
+shall have the meaning set forth in Section 8.1.
+2.17. “ Participant ” shall mean an
+Employee or Director who is selected by the Committee to receive
+an Award under the Plan.
+2.18. “ Payee ” shall have the
+meaning set forth in Section 13.1.
+A-2
+Table of Contents 
+2.19. “ Performance Award ” shall
+mean any Award of Performance Shares or Performance Units
+granted pursuant to Article 9.
+2.20. “ 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.
+2.21. “ 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.
+2.22. “ 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.
+2.23. “ Permitted Assignee ” shall
+have the meaning set forth in Section 12.3.
+2.24. “ 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.
+2.25. “ 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.
+2.26. “ Restriction Period ” shall
+have the meaning set forth in Section 7.1.
+2.27. “ Restricted Stock Award ”
+shall have the meaning set forth in Section 7.1.
+2.28. “ Shares ” shall mean the
+shares of common stock of the Company, par value $.01 per share.
+2.29. “ Stock Appreciation Right ”
+shall mean the right granted to a Participant pursuant to
+Section 6.
+2.30. “ 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.
+2.31. “ 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
+awards, by a company acquired by the Company or any Subsidiary
+or with which the Company or any Subsidiary combines.
+2.32. “ 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 15,250,000, 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 prior to
+June 5, 2008 or a Prior Plan during the Pre-Effective
+Period, shall be counted against this limit as one and six
+tenths (1.6)
+A-3
+Table of Contents 
+Shares for every one (1) Share awarded. Any Shares that are
+subject to Awards other than Options or Stock Appreciation
+Rights awarded under this Plan on or after June 5, 2008 but
+prior to April 26, 2010 shall be counted against this limit
+as two (2) Shares for every one (1) Share awarded. Any
+Shares that are subject to Awards other than Options or Stock
+Appreciation Rights awarded under this Plan on or after
+April 26, 2010 shall be counted against this limit as one
+and 35 one-hundredths (1.35) 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 ( w ) 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, ( x ) 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 or under Prior Plans that are forfeited, expire
+or otherwise terminate prior to June 5, 2008, ( y ) as two
+(2) Shares if such Shares were subject to Awards other than
+Options or Stock Appreciation Rights granted under the Plan or
+under Prior Plans that are forfeited, expire or otherwise
+terminate on or after June 5, 2008 but prior to
+April 26, 2010 or ( z ) as one and thirty-five
+one-hundredths (1.35) Shares if such Shares were subject to
+Awards other than Options or Stock Appreciation Rights granted
+under the Plan or under Prior Plans that are forfeited, expire
+or otherwise terminate on or after April 26, 2010.
+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 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;
+A-4
+Table of Contents 
+(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 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
+A-5
+Table of Contents 
+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. Not-withstanding 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.
+5.9 No Repricing. Notwithstanding
+anything in the Plan to the contrary, except in connection with
+a corporate transaction involving the Company (including,
+without limitation, any stock dividend, stock split,
+extraordinary cash dividend, recapitalization, reorganization,
+merger, consolidation,
+split-up, 
+spin-off, combination, or exchange of shares), the terms of
+outstanding Awards may not be amended to reduce the option price
+of outstanding Options or cancel outstanding Options in exchange
+for cash, other awards or Options with an option price that is
+less than the option price of the original Options without
+stockholder approval.
+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.
+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
+A-6
+Table of Contents 
+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.
+6.3. No Repricing. Notwithstanding
+anything in the Plan to the contrary, except in connection with
+a corporate transaction involving the Company (including,
+without limitation, any stock dividend, stock split,
+extraordinary cash dividend, recapitalization, reorganization,
+merger, consolidation,
+split-up, 
+spin-off, combination, or exchange of shares), the terms of
+outstanding awards may not be amended to reduce the exercise
+price of outstanding Stock Appreciation Rights or cancel
+outstanding Stock Appreciation Rights in exchange for cash,
+other awards or Options or Stock Appreciation Rights with an
+exercise price that is less than the exercise price of the
+original Stock Appreciation Rights without stockholder approval.
+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
+A-7
+Table of Contents 
+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. The maximum
+aggregate number of Shares with respect to which Restricted
+Stock Awards or Other Stock Units that are subject solely to
+continued employment or service restrictions of Employees or
+directors of the Company or any Subsidiary with a Restriction
+Period of less than three years from date of grant (but
+permitting pro rata vesting over such time) shall be five
+percent (5%) of the number of Shares authorized for grant under
+Section 3.1 (as such number may be adjusted as provided in
+Sections 3.1 and 12.2). Any Restricted Stock Award or
+portion of such award that is subject to a Restriction Period of
+three years or more (notwithstanding the fact that a portion of
+such award may vest within three years of the date of grant due
+to pro rata vesting over the Restriction Period) or that meets
+the requirements of a Performance Award under Section 9
+shall not be subject to the foregoing five-percent (5%)
+limitation.
+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.
+A-8
+Table of Contents 
+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 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. The maximum aggregate
+number of Shares with respect to which Restricted Stock Awards
+or Other Stock Units that are subject solely to continued
+employment or service restrictions of Employees or directors of
+the Company or any Subsidiary with a Restriction Period of less
+than three years from date of grant (but permitting pro rata
+vesting over such time) shall be five percent (5%) of the number
+of Shares authorized for grant under Section 3.1 (as such
+number may be adjusted as provided in Sections 3.1 and
+12.2). Any Other Stock Unit Award or portion of such award that
+is subject to a Restriction Period of three years or more
+(notwithstanding the fact that a portion of such award may vest
+within three years of the date of grant due to pro rata vesting
+over the Restriction Period) or that meets the requirements of a
+Performance Award under Article 9 shall not be subject to
+the foregoing five-percent (5%) limitation
+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
+2 1 / 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
+2 1 / 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.
+9.5 Performance Award Dividend
+Equivalents. Subject to the provisions of the Plan and
+any Award Agreement, the Committee in its sole discretion may
+award currently or on a deferred basis, Dividend Equivalents
+with respect to the number of Shares covered by a Performance
+Unit or Performance Share Award, provided, that such
+Dividend Equivalents (if any) shall be deemed to have been
+reinvested in additional Shares or Units and shall provide that
+such Dividend Equivalents are subject to the same performance
+conditions as the underlying Award.
+A-9
+Table of Contents 
+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
+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,
+(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
+A-10
+Table of Contents 
+payment therefore 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 each case to any terms and
+conditions contained in the Award Agreement evidencing such
+Award. Effective with respect to Awards granted prior to
+April 26, 2010, 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
+A-11
+Table of Contents 
+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 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. 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.
+12.6 Dividend Equivalents. 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
+conditions as the underlying Award; provided, however ,
+that with respect to Dividend Equivalents (if any) awarded in
+connection with a Performance Unit Award or Performance Share
+Award, such Dividend Equivalents (if any) shall be deemed to
+have been reinvested in additional Shares or Units and shall
+provide that such Dividend Equivalents are subject to the same
+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.
+A-12
+Table of Contents 
+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 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
+A-13
+Table of Contents 
+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.
+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
+A-14
+Table of Contents 
+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 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.
+A-15
+Table of Contents 
+VOTE BY INTERNET — www.proxyvote.com Use the Internet to transmit your voting instructions and
+for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off
+date or meeting date. Have your proxy card in hand when you access the web site and follow the
+instructions to obtain your records and to create an electronic voting instruction form.
+PATTERSON-UTI ENERGY, INC. 450 GEARS ROAD, SUITE 500 Electronic Delivery of Future PROXY MATERIALS
+HOUSTON, TX 77067 If you would like to reduce the costs incurred by our company in mailing proxy
+materials, you can consent to receiving all future proxy statements, proxy cards and annual reports
+electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the
+instructions above to vote using the Internet and, when prompted, indicate that you agree to
+receive or access proxy materials electronically in future years. VOTE BY PHONE — 1-800-690-6903
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time
+the day before the cut-off date or meeting date. Have your proxy card in hand when you call and
+then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the
+postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes
+Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
+PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN
+SIGNED AND DATED. For Withhold For All To withhold authority to vote for any All All Except
+individual nominee(s), mark “For All Except” and write the number(s) of the The Board of Directors
+recommends you vote nominee(s) on the line below. FOR the following: 0 0 0 1. Election of Directors
+Nominees 01 Mark S. Siegel 02 Kenneth N. Berns 03 Charles O. Buckner 04 Curtis W. Huff 05 Terry H.
+Hunt 06 Kenneth R. Peak 07 Cloyce A. Talbott The Board of Directors recommends you vote FOR The
+Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain the following
+proposal: For Against Abstain 2 Approval of the material terms of the 0 0 0 5 Ratification of the
+selection of 0 0 0 performance criteria under Patterson-UTI’s PricewaterhouseCoopers LLP as the
+independent Long-Term Incentive Plan. registered public accounting firm of Patterson-UTI for the
+fiscal year ending December 31, 2011. 3 Approval of an advisory resolution on executive 0 0 0 NOTE:
+Such other business as may properly come compensation. before the meeting or any adjournment
+thereof. The Board of Directors recommends you vote 1 YEAR on the following proposal: 1 year 2
+years 3 years Abstain 4 Advisory vote on the frequency of future 0 0 0 0 advisory votes on
+executive compensation. R1.0.0.11699 _1 Please sign exactly as your name(s) appear(s) hereon. When
+signing as 0000103965 attorney, executor, administrator, or other fiduciary, please give full title
+as such. Joint owners should each sign personally. All holders must sign. If a corporation or
+partnership, please sign in full corporate or partnership name, by authorized officer. Signature
+[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 
+Table of Contents 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The
+Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com . PATTERSON-UTI
+ENERGY, INC. Annual Meeting of Stockholders June 8, 2011 10:00 AM This proxy is solicited by the
+Board of Directors The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby
+appoints Mark S. Siegel, Douglas J. Wall and John E. Vollmer III, and each of them, proxies to the
+undersigned, each with full power to act without the other and with full power of substitution, to
+vote all of the shares which the undersigned is entitled to vote at the annual meeting of
+stockholders of the Company to be held Wednesday, June 8, 2011, at 10:00 a.m., local time, at the
+Hilton Houston North Hotel, 12400 Greenspoint Drive, Houston, Texas 77060, and at any and all
+adjournments or postponements thereof, with the same force and effect as if the undersigned were
+personally present. The undersigned hereby instructs the above-named proxies to vote the shares
+represented by this proxy in the manner as directed for the undersigned on the reverse side of this
+proxy card. If no directions are made, the proxies will vote “FOR” the nominees for directors,
+“FOR” the approval of the material terms of the performance goals that may apply to
+performance-based awards under Patterson-UTI’s Long-Term Incentive Plan, “FOR” the approval of the
+advisory resolution on executive compensation, “FOR” approval, on an advisory basis, of a vote
+every year on executive compensation and “FOR” the ratification of the selection of
+PricewaterhouseCoopers LLP as set forth on the reverse side. If any other matter should be
+presented properly, this proxy will be voted in R1.0.0.11699 accordance with the discretion of the
+above-named proxies. _2 0000103965 Continued and to be marked, dated and signed on reverse side
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950123-11-036543/proxy_rpt.txt b/raw/proxies/0000889900/0000950123-11-036543/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..76775689e19a3c731ff0682b38780ca0f751f64e
--- /dev/null
+++ b/raw/proxies/0000889900/0000950123-11-036543/proxy_rpt.txt
@@ -0,0 +1,24 @@
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater
+37
+Table of Contents 
+beneficial ownership interest or in which they are an executive
+officer, general partner, principal or engaged in a similar
+position. Certain related person transactions have been
+pre-approved under the terms of the policy, including, subject
+to certain exceptions and limitations, the sale to or purchase
+from Patterson-UTI of goods and services by entities related to
+directors in the ordinary course of business that are immaterial
+to Patterson-UTI and with respect to which the director has no
+direct economic interest or decision making authority.
+SECURITY
\ No newline at end of file
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+DEF 14A
+1
+h15546adef14a.htm
+DEFINITIVE PROXY STATEMENT
+Patterson-UTI Energy, Inc. - June 29, 2004 
+Table of Contents 
+OMB APPROVAL 
+OMB Number:
+3235-0059 
+Expires:
+February 28, 2006 
+Estimated average burden 
+hours per
+response 
+12.75 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the Securities 
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant
+x 
+Filed by a Party other than the Registrant o 
+Check the appropriate box: 
+o Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by
+Rule 14a-6(e)(2)) 
+x Definitive Proxy Statement 
+o Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+PATTERSON-UTI ENERGY, INC. 
+(Name of Registrant as Specified In Its Charter)
+(Name of Person(s) Filing Proxy
+Statement, if other than the Registrant)
+Payment of Filing Fee (Check the appropriate box):
+x No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
+0-11. 
+1) Title of each class of securities to which transaction applies: 
+2) Aggregate number of securities to which transaction applies: 
+3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+4) Proposed maximum aggregate value of transaction: 
+5) Total fee paid: 
+o Fee paid previously with preliminary materials. 
+o Check box if any part of the fee is offset as provided by Exchange Act
+Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration
+statement number, or the Form or Schedule and the date of its filing. 
+1) Amount Previously Paid: 
+2) Form, Schedule or Registration Statement No.: 
+3) Filing Party: 
+4) Date Filed: 
+Table of Contents 
+June 1, 2004
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI
+Energy, Inc.’s annual stockholders’ meeting. The
+annual meeting will be held Tuesday, June 29, 2004, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549.
+At the annual meeting, stockholders will vote on
+a number of important matters. Please take the time to carefully
+read each of the proposals described in the attached proxy
+statement.
+Thank you for your support.
+Sincerely,
+MARK S. SIEGEL 
+Chairman of the Board 
+CLOYCE A. TALBOTT 
+Chief Executive Officer 
+This proxy statement and the accompanying proxy
+card are being
+mailed to Patterson-UTI Energy, Inc. stockholders
+beginning on or about June 1, 2004.
+TABLE OF CONTENTS 
+NOTICE OF 2004 ANNUAL MEETING 
+PROXY STATEMENT 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 
+PROPOSAL NO. 2 
+PROPOSAL NO. 3 
+PROPOSAL NO. 4 
+PROPOSAL NO. 5 
+SUMMARY INFORMATION PERTAINING TO EQUITY COMPENSATION PLANS OF PATTERSON-UTI 
+EXECUTIVE OFFICERS 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; INDEMNIFICATION AGREEMENTS 
+CERTAIN TRANSACTIONS 
+COMPENSATION COMMITTEE REPORT 
+PERFORMANCE GRAPH 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+OTHER MATTERS 
+APPENDIX A 
+APPENDIX B 
+APPENDIX C 
+AMENDMENT TO THE PATTERSON-UTI ENERGY, INC. AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN 
+Table of Contents 
+PATTERSON-UTI ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+NOTICE OF 2004 ANNUAL MEETING 
+The 2004 annual meeting of the stockholders of
+Patterson-UTI Energy, Inc. (“Patterson-UTI”), a
+Delaware corporation, will be held Tuesday, June 29, 2004,
+at 10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder,
+Texas 79549 (the “Meeting”). At the Meeting, the
+stockholders will be asked to:
+• 
+elect nine directors to the Board of Directors of
+Patterson-UTI to serve until the next annual meeting of the
+stockholders or until their respective successors are elected
+and qualified;
+• 
+approve an amendment to Patterson-UTI’s
+restated certificate of incorporation to increase the authorized
+shares of Patterson-UTI’s common stock from
+200,000,000 shares to 300,000,000 shares;
+• 
+re-approve the criteria upon which performance
+objectives are currently based in the Patterson-UTI Amended and
+Restated 1997 Long-Term Incentive Plan (the “1997
+Plan”);
+• 
+approve an amendment to the 1997 Plan to increase
+the aggregate annual amount of cash that may be received as a
+performance award by a participant under the 1997 Plan and to
+amend the criteria upon which performance objectives are
+currently based in the 1997 Plan;
+• 
+ratify the selection of PricewaterhouseCoopers
+LLP as independent accountants of Patterson-UTI for the fiscal
+year ending December 31, 2004; and
+• 
+take action upon any other matters which may
+properly come before the Meeting.
+Stockholders of record at the close of business
+on May 28, 2004, are entitled to vote at the Meeting and
+any adjournment thereof.
+It is important that your shares be represented
+at the Meeting. I urge you to sign, date and promptly return the
+enclosed proxy card in the enclosed postage paid envelope or
+vote by following the Internet or telephone instructions
+included on the proxy card.
+By order of the Board of Directors
+JONATHAN D. NELSON
+Vice President, Chief Financial
+Officer, 
+Secretary and Treasurer 
+June 1, 2004
+Table of Contents 
+PATTERSON-UTI ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+PROXY STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 29, 2004 
+The Board of Directors of Patterson-UTI Energy,
+Inc. (“Patterson-UTI”), a Delaware corporation,
+prepared this proxy statement for the purpose of soliciting
+proxies for Patterson-UTI’s 2004 annual meeting of
+stockholders (the “Meeting”) to be held Tuesday,
+June 29, 2004, at 10:00 a.m., local time, at the
+corporate offices of Patterson-UTI Energy, Inc., 4510 Lamesa
+Highway, Snyder, Texas 79549, and at any adjournment thereof.
+This proxy statement and the accompanying proxy are being mailed
+to stockholders on or about June 1, 2004.
+The Board of Directors is making this
+solicitation by mail. In addition to the solicitation of proxies
+by mail, Patterson-UTI’s officers and other employees,
+without compensation other than regular compensation, may
+solicit proxies by telephone, electronic means and personal
+interview. Patterson-UTI does not intend to retain a proxy
+solicitation firm to assist in the solicitation of proxies of
+stockholders whose shares are held in street name by brokers,
+banks and other institutions, but may do so if circumstances
+warrant. Patterson-UTI will pay all costs associated with this
+solicitation.
+Properly submitted proxies received either by
+mail, Internet, telephone or in person, in time for the Meeting
+will be voted as you have directed in your proxy, unless you
+revoke your proxy in the manner provided below. As to any matter
+for which you give no direction in your proxy, your shares will
+be voted as follows:
+• 
+“FOR” the election of all of the
+nominees to the Board of Directors;
+• 
+“FOR” the approval of the amendment to
+Patterson-UTI’s restated certificate of incorporation to
+increase the authorized shares of Patterson-UTI’s common
+stock from 200,000,000 shares to 300,000,000 shares;
+• 
+“FOR” the re-approval of the criteria
+upon which performance objectives are currently based in the
+Patterson-UTI Amended and Restated 1997 Long-Term Incentive Plan
+(the “1997 Plan”);
+• 
+“FOR” the approval of the amendment to
+the 1997 Plan to increase the aggregate annual amount of cash
+that may be received as a performance award by a participant
+under the 1997 Plan and to amend the criteria upon which
+performance objectives are currently based in the 1997 Plan;
+• 
+“FOR” the ratification of
+PricewaterhouseCoopers LLP as independent accountants of
+Patterson-UTI for the fiscal year ending December 31,
+2004; and
+• 
+“FOR” or “AGAINST” any other
+proposals which may be submitted at the Meeting at the
+discretion of the persons named in the proxy.
+You may revoke your proxy at any time before the
+proxy is voted by either:
+• 
+submitting a new proxy with a later date,
+including a proxy submitted by the Internet or by telephone;
+• 
+notifying the Secretary of Patterson-UTI in
+writing before the Meeting that you have revoked your
+proxy; or
+• 
+attending the Meeting and voting in person.
+Table of Contents 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of
+Patterson-UTI’s common stock, $.01 par value per share
+(the “Common Stock”), at the close of business on
+May 28, 2004 are entitled to notice of and to vote at the
+Meeting or any adjournment thereof. At the close of business on
+May 28, 2004, there were 83,393,127 shares of Common
+Stock issued and outstanding. Holders of record of Common Stock
+on May 28, 2004 will be entitled to one vote per share on
+all matters to come before the Meeting. A list of stockholders
+entitled to notice of and to vote at the Meeting will be made
+available during regular business hours at the offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549, from June 15, 2004 through June 28, 2004 and at
+the Meeting for inspection by any stockholder for any purpose
+regarding the Meeting.
+A quorum is necessary to transact business at the
+Meeting. A majority of the shares of Common Stock outstanding on
+May 28, 2004 will constitute a quorum. The shares held by
+each stockholder who signs and returns the enclosed form of
+proxy or properly votes using the Internet or telephone will be
+counted for purposes of determining the presence of a quorum at
+the Meeting.
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the
+number of members of the Board of Directors of Patterson-UTI
+shall be fixed either by amendment to the bylaws or by
+resolution of the Board of Directors. Directors are elected to
+serve until the next annual meeting of stockholders or until
+their successors are elected and qualified. Patterson-UTI’s
+bylaws provide that the affirmative vote of a plurality of the
+votes cast at the meeting at which a quorum is present is
+required for the election of directors. Shares as to which a
+stockholder withholds authority to vote on the election of
+directors and shares as to which a broker indicates that it does
+not have discretionary authority to vote on the election of
+directors will not be counted as voting thereon and will not
+affect the election of the nominees receiving a plurality of the
+votes cast.
+The enclosed form of proxy provides a means for
+you to either:
+• 
+vote “FOR” the election of the nominees
+to the Board of Directors listed below,
+• 
+withhold authority to vote for one or more of the
+nominees, or
+• 
+withhold authority to vote for all of the
+nominees.
+The Board of Directors recommends that you
+vote “FOR” all of the
+nominees. Unless you give contrary
+instructions in your proxy, your proxy will be voted
+“FOR” the election of all of the nominees to the Board
+of Directors. If any nominee should become unable or unwilling
+to accept nomination or election, the person acting under the
+proxy will vote for the election of such other person as the
+Board of Directors may recommend. The Board has no reason,
+however, to believe that any of the nominees will be unable or
+unwilling to serve if elected.
+There are no arrangements or understandings
+between any person and any of the directors pursuant to which
+such director was selected as a nominee for election at the
+Meeting. There are no family relationships among any of the
+directors or executive officers of Patterson-UTI, other than
+between Messrs. Talbott and Patterson, who are
+brothers-in-law.
+2
+Table of Contents 
+Set forth below is the name, age, position and a
+brief description of the business experience during at least the
+past five years of each of the nominees for election to the
+Board of Directors.
+Name 
+Age 
+Position 
+Mark S. Siegel
+53 
+Chairman of the Board and Director
+Cloyce A. Talbott
+68 
+Chief Executive Officer and Director
+A. Glenn Patterson
+57 
+President, Chief Operating Officer and Director
+Kenneth N. Berns
+44 
+Senior Vice President and Director
+Robert C. Gist
+63 
+Director
+Curtis W. Huff
+46 
+Director
+Terry H. Hunt
+55 
+Director
+Kenneth R. Peak
+58 
+Director
+Nadine C. Smith
+46 
+Director
+Mark S.
+Siegel — Mr. Siegel has
+served as Chairman of the Board and as a director of
+Patterson-UTI since May 2001. Mr. Siegel served as Chairman
+of the Board and as a director of UTI Energy Corp.
+(“UTI”) from 1995 to May 2001, when UTI merged with
+and into Patterson-UTI. Mr. Siegel has been President of
+REMY Investors & Consultants, Incorporated (“REMY
+Investors”) since 1993. From 1992 to 1993, Mr. Siegel
+was President, Music Division, Blockbuster Entertainment Corp.
+From 1988 through 1992, Mr. Siegel was an Executive Vice
+President of Shamrock Holdings, Inc., a private investment
+company, and Managing Director of Shamrock Capital Advisors,
+Incorporated. Mr. Siegel is also Chairman of the Board and
+a director of Variflex Inc., a consumer products company.
+Mr. Siegel holds a Bachelor of Arts degree from Colgate
+University and a J.D. from the University of California,
+Berkeley (Boalt Hall) School of Law.
+Cloyce A.
+Talbott — Mr. Talbott
+has served as a director of Patterson-UTI since its
+incorporation in 1978 and as its Chief Executive Officer since
+1983. Mr. Talbott co-founded Patterson-UTI, served as Vice
+President from 1978 to 1983, and served as Chairman of the Board
+from 1983 to May 2001. Mr. Talbott holds a Bachelor of
+Science degree in petroleum engineering from Texas Tech
+University.
+A. Glenn
+Patterson —
+Mr. Patterson has served as a director of Patterson-UTI
+since its incorporation in 1978. Mr. Patterson co-founded
+Patterson-UTI and has served as its President since 1978 and
+also as Chief Operating Officer since 1983. Mr. Patterson
+holds a Bachelor of Science degree in business from Angelo State
+University.
+Kenneth N.
+Berns — Mr. Berns has
+served as Senior Vice President of Patterson-UTI since April
+2003 and as a director of Patterson-UTI since May 2001.
+Mr. Berns served as a director of UTI from 1995 to May
+2001. Mr. Berns has been an executive with REMY Investors
+since 1994. Mr. Berns is also a director of Variflex Inc.
+Mr. Berns holds a Bachelors Degree in Business
+Administration from San Diego State University and a
+Masters Degree in Taxation from Golden Gate University.
+Robert C.
+Gist — Mr. Gist has
+served as a director of Patterson-UTI since 1985. He was general
+legal counsel and advisor to Patterson-UTI from 1987 to May
+2001. Mr. Gist holds a Bachelor of Science degree in
+economics and a J.D. from Southern Methodist University. He has
+been self-employed as an attorney for more than five years and
+has over 20 years experience in the oil and gas industry.
+Curtis W.
+Huff — Mr. Huff has
+served as a director of Patterson-UTI since May 2001 and served
+as a director of UTI from 1997 to May 2001. Mr. Huff is the
+President and Chief Executive Officer of Freebird Investments
+LLC, a private investment company, and has served in that
+capacity since October 2002. Mr. Huff served as the
+President and Chief Executive Officer of Grant Prideco, Inc., a
+provider of drill pipe and other drill stem products, from
+February 2001 to June 2002. From January 2000 to February 2001,
+Mr. Huff served as Executive Vice President, Chief
+Financial Officer and General Counsel of Weatherford
+International, Inc., an oilfield services company. He served as
+Senior Vice President and General Counsel of Weatherford from
+May 1998 to January 2000. Prior to that time, Mr. Huff was
+a partner with the law firm of Fulbright & Jaworski
+L.L.P. and held that position for more than five years.
+3
+Table of Contents 
+Terry H.
+Hunt — Mr. Hunt has
+served as a director of Patterson-UTI since April 2003 and
+served as a director of UTI from 1994 to May 2001. Mr. Hunt
+is an energy consultant and investor. Mr. Hunt served as
+Senior Vice President — Strategic Planning of PPL
+Corporation, an international energy and utility holding
+company, from 1998 to 2000. Mr. Hunt served as the
+President and Chief Executive Officer of Penn Fuel Gas, Inc., a
+natural gas and propane distribution company, from 1992 to 1999.
+From 1989 to 1992, Mr. Hunt was President and Chairman of
+Carnegie Natural Gas Company, a gas distribution and
+transportation company, and of Apollo Gas Company, a natural gas
+distributor. Mr. Hunt holds a Bachelor of Engineering
+degree from the University of Saskatchewan, Canada and a Masters
+of Business Administration from Southern Methodist University.
+Kenneth R.
+Peak — Mr. Peak has
+served as a director of Patterson-UTI since November 2000.
+Mr. Peak is the Chairman of the Board, President, Chief
+Executive Officer and Chief Financial Officer of Contango
+Oil & Gas Company and has served in that capacity since
+1999. Mr. Peak served as the President of Peak Enernomics,
+Incorporated, an oil and gas industry consulting company, from
+1990 to 1999. Prior to that time, Mr. Peak served as the
+Treasurer of Tosco Corporation, an independent oil refiner, and
+as Chief Financial Officer of Texas International Company, an
+independent oil and gas exploration and production company. His
+tenure at Texas International Company included serving as
+President of TIPCO, the domestic operating subsidiary of Texas
+International’s oil and gas operations.
+Mr. Peak’s energy career began in 1973 as a commercial
+banker with First Chicago’s energy group. Mr. Peak
+holds a Bachelor of Science in physics from Ohio University and
+a Masters of Business Administration from Columbia University.
+Nadine C.
+Smith — Ms. Smith has
+served as a director of Patterson-UTI since May 2001 and served
+as a director of UTI from 1995 to May 2001. Ms. Smith is a
+private investor and business consultant. From August 2000 to
+December 2001, Ms. Smith was President of Final
+Arrangements, LLC, a company providing software and web-based
+internet services to the funeral industry. From April 2000 to
+August 2000, Ms. Smith served as the President of Aegis
+Asset Management, Inc., an asset management company. From 1997
+to April 2000, Ms. Smith was President and Chief Executive
+Officer of Enidan Capital Corp., an investment company.
+Previously, Ms. Smith was an investment banker and
+principal with NC Smith & Co. and The First Boston
+Corporation and a management consultant with McKinsey &
+Co. Ms. Smith is a director of American Retirement
+Corporation, a New York Stock Exchange listed company that
+owns and manages senior housing properties. Ms. Smith holds
+a Bachelor of Science degree in economics from Smith College and
+a Masters of Business Administration from Yale University.
+Meetings and Committees of the Board of
+Directors 
+The Board of Directors met eight times during the
+year ended December 31, 2003. Each incumbent director
+attended, in person or by telephone, at least 75% of the
+aggregate of all meetings held by the Board and all meetings of
+each committee for which such director was eligible to attend.
+Each incumbent director attended the 2003 annual meeting of
+stockholders. A majority of the members of the Board of
+Directors are independent within the meaning of the National
+Association of Securities Dealers’ (“NASD”)
+published listing standards.
+The Board of Directors has an Executive
+Committee, Audit Committee, Compensation Committee and a
+Nominating and Corporate Governance Committee.
+The Executive Committee, which currently is
+composed of Messrs. Siegel, Talbott, Patterson and Berns,
+has the authority, to the extent permitted by applicable law, to
+act for the Board in all matters arising between regular or
+special meetings of the Board of Directors.
+The Audit Committee oversees management’s
+conduct of Patterson-UTI’s accounting and financial
+reporting process including review of the financial reports and
+other financial information provided by Patterson-UTI to the
+public and government and regulatory bodies,
+Patterson-UTI’s system of internal accounting,
+Patterson-UTI’s financial controls, and the annual
+independent audit of Patterson-UTI’s financial statements.
+The Audit Committee also oversees compliance with
+Patterson-UTI’s codes of conduct and ethics and with legal
+and regulatory requirements. The Audit Committee members are
+Messrs. Peak and Gist and Ms. Smith. The Board has
+confirmed that all members of the Audit Committee are
+“independent” within the
+4
+Table of Contents 
+meaning of Item 7(d)(3)(iv) of
+Schedule 14A under the Securities Exchange Act of 1934, as
+amended (the “Exchange Act”) and within the meaning of
+the NASD’s published listing standards. The Board has
+determined that Mr. Peak is an “audit committee
+financial expert” within the meaning of applicable
+Securities and Exchange Commission (“SEC”) rules. The
+Audit Committee selects, subject to the Board’s approval,
+the independent accountants to audit Patterson-UTI’s books
+and records and considers and acts upon accounting matters as
+they arise. The Board of Directors has adopted a written charter
+for the Audit Committee, a copy of which is attached to this
+proxy statement as Appendix A. The Audit Committee met four
+times during the year ended December 31, 2003. Please see
+the Audit Committee Report on page 26 for further
+information about the Audit Committee.
+The Compensation Committee members are
+Messrs. Huff and Hunt and Ms. Smith, each of whom is
+independent as defined in the NASD’s published listing
+standards. Among other things, the Compensation Committee
+administers the incentive compensation plans, including stock
+option plans of Patterson-UTI and determines the annual
+compensation of the executive officers and directors of
+Patterson-UTI. The Compensation Committee held four meetings
+during the year ended December 31, 2003. Please see the
+Compensation Committee Report on page 20 for further
+information about the Compensation Committee.
+The Nominating and Corporate Governance Committee
+members are Messrs. Gist, Huff and Hunt, each of whom is
+independent as defined in the NASD’s published listing
+standards. The purpose of the Nominating and Corporate
+Governance Committee is to identify individuals qualified to
+become Board members, to recommend for selection by the Board
+director nominees for the next annual meeting of stockholders,
+to review Patterson-UTI’s Code of Business Conduct, to
+develop and continually make recommendations with respect to the
+best corporate governance principles and to oversee the
+evaluation of the Board and management. The Board of Directors
+has adopted a written charter for the Nominating and Corporate
+Governance Committee. The Nominating and Corporate Governance
+Committee was founded in 2003 and did not have its first meeting
+until 2004.
+On behalf of the Board, the Nominating and
+Governance Committee considers director nominees recommended by
+Patterson-UTI’s stockholders if the recommendations are
+made in accordance with all legal requirements, including
+applicable provisions of Patterson-UTI’s restated
+certificate of incorporation and bylaws. In accordance with
+Patterson-UTI’s bylaws, in addition to any other applicable
+requirements, any person recommending a nominee for
+Patterson-UTI’s Board must be a stockholder of record on
+the date of the giving of the notice provided for below and on
+the record date for the determination of stockholders entitled
+to vote at such annual meeting and must give timely notice of
+such nomination in writing to the Secretary of Patterson-UTI. To
+be timely with respect to the 2005 annual meeting, a
+stockholder’s notice must be delivered to or mailed and
+received at Patterson-UTI’s principal executive offices not
+earlier than March 1, 2005 and not later than
+March 31, 2005; provided, however, that in the event that
+the annual meeting is called for a date that is not within
+30 days before or after June 29, 2005, notice by the
+stockholder to be timely must be received not later than the
+close of business on the tenth day following the day on which
+such notice of the date of the meeting was mailed or public
+disclosure of the annual meeting date was made, whichever occurs
+first.
+A stockholder’s notice to the Secretary of
+Patterson-UTI shall set forth:
+• 
+as to each person whom the stockholder proposes
+to nominate for election or re-election as director, all
+information relating to such person that is required to be
+disclosed in solicitations of proxies for election of directors,
+or is otherwise required, in each case pursuant to
+Regulation 14A promulgated under the Exchange Act, or any
+successor regulation thereto,
+• 
+the name and record address of the stockholder
+proposing such nomination,
+• 
+the class and number of shares of Patterson-UTI
+that are beneficially owned by the stockholder,
+• 
+a description of all arrangements or
+understandings between such stockholder and each proposed
+nominee and any other person or persons (including their names)
+pursuant to which the nomination or nominations are to be made
+by such stockholder, and
+5
+Table of Contents 
+• 
+a representation that such stockholder intends to
+appear in person or by proxy at the meeting to nominate the
+persons named in the notice.
+Such notice must be accompanied by a written
+consent of each proposed nominee to being named as a nominee and
+to serve as a director if elected.
+The Nominating and Corporate Governance Committee
+determines qualification criteria and procedures for the
+identification and recruitment of candidates for election to
+serve as directors of Patterson-UTI. The Nominating and
+Corporate Governance Committee relies on the knowledge and
+relationships of Patterson-UTI and its officers and directors,
+as well as third parties when it deems necessary, to identify
+and evaluate nominees for director, including nominees
+recommended by stockholders.
+Communication with the Board and Its
+Independent Members 
+Persons may communicate with the Board, or
+directly with its Chairman, Mr. Siegel, by submitting such
+communication in writing in care of Chairman of the Board of
+Directors, Patterson-UTI Energy, Inc., P.O. Box 1416,
+Snyder, Texas 79550. Persons may communicate with the
+independent members of the Board by submitting such
+communication in writing to the Nominating and Corporate
+Governance Committee of the Board of Directors of Patterson-UTI
+Energy, Inc., P.O. Box 1416, Snyder, Texas 79550.
+Corporate Governance Documents Available on
+Patterson-UTI’s Website 
+Copies of each of the following documents are
+available on the Patterson-UTI website at www.patenergy.com
+and in print to any stockholder who requests them from the
+Secretary of Patterson-UTI:
+• 
+Audit Committee Charter;
+• 
+Compensation Committee Charter;
+• 
+Nominating and Governance Committee Charter;
+• 
+Code of Business Conduct for its employees,
+officers and directors; and
+• 
+Code of Business Conduct and Ethics for Senior
+Financial Executives.
+Compensation of Directors 
+Directors who are also employees of Patterson-UTI
+do not receive compensation for serving as a director or as a
+member of a committee of the Board of Directors. All directors
+are reimbursed for reasonable out-of-pocket expenses incurred in
+connection with attendance at Board of Directors meetings and
+committee meetings. Each non-employee director receives annual
+cash compensation of $35,000. Each non-employee director that
+serves on the Audit Committee, Compensation Committee or
+Nominating and Governance Committee receives additional annual
+cash compensation of $10,000 per committee on which he or
+she serves, with the chairman of each such committee receiving
+$15,000.
+Patterson-UTI maintains a Non-Employee Director
+Stock Option Plan (the “Director Plan”). Under the
+Director Plan, each non-employee director is granted options to
+purchase 20,000 shares of Common Stock upon becoming a
+director and is granted options to
+purchase 10,000 shares of Common Stock on the last
+business day of each subsequent year in which the director
+serves on the Board of Directors.
+PROPOSAL NO. 2 
+AMENDMENT TO RESTATED CERTIFICATE OF
+INCORPORATION TO INCREASE 
+THE NUMBER OF AUTHORIZED SHARES OF COMMON
+STOCK 
+General 
+Patterson-UTI’s Board of Directors has
+approved a proposal authorizing an amendment to
+Patterson-UTI’s restated certificate of incorporation to
+increase the authorized shares of Patterson-UTI’s Common
+Stock from 200,000,000 shares to 300,000,000 shares.
+The Board of Directors proposed that the amendment, a
+6
+Table of Contents 
+copy of which is attached to this proxy statement
+as Appendix B, be submitted to a vote by the stockholders
+at the Meeting.
+If the stockholders approve the amendment as
+proposed by the Board of Directors, the restated certificate of
+incorporation of Patterson-UTI will be amended and the number of
+authorized shares of Common Stock will be increased to
+300,000,000. Pursuant to the proposed amendment, the first
+sentence of Article FOURTH of the restated certificate of
+incorporation of Patterson-UTI will be amended to read as
+follows:
+“FOURTH: The total number of shares of stock
+that the Corporation shall have authority to issue is three
+hundred one million (301,000,000) shares, of which three hundred
+million (300,000,000) shares shall be Common Stock, having a par
+value of $0.01 per share, and one million (1,000,000)
+shares shall be Preferred Stock, having a par value of
+$0.01 per share.”
+Of the 200,000,000 currently authorized shares of
+Common Stock, as of May 28, 2004, 83,393,127 shares
+were outstanding. As of May 28, 2004, 7,390,791 shares
+were reserved for issuance under Patterson-UTI’s employee
+and non-employee director stock option plans and long-term
+incentive stock plan and 325,000 shares were reserved for
+issuance under certain warrants to purchase Common Stock.
+On April 28, 2004, the Board of Directors
+authorized a two-for-one stock split in the form of a stock
+dividend to be paid on June 30, 2004 to holders of record
+as of June 14, 2004 (“Stock Split”). The Stock
+Split will reduce the number of authorized shares of Common
+Stock available for issuance; therefore, Patterson-UTI is
+proposing this amendment to increase the authorized shares of
+Common Stock. Approval by the stockholders of the Stock Split is
+not being requested nor is it required, and Patterson-UTI
+intends to proceed with the Stock Split regardless of whether
+the proposal to increase the authorized shares of Common Stock
+is approved by the stockholders at the Meeting.
+The following table sets forth the number of
+authorized, issued and reserved shares of Common Stock on
+May 28, 2004, the record date for the Meeting, and the
+number of shares of Common Stock that will be authorized, issued
+and reserved immediately after the Stock Split if the amendment
+is approved or not approved:
+Number of Shares of Common Stock 
+Amendment 
+Amendment 
+May 28, 2004 
+Not Approved 
+Approved 
+(Pre-Split) 
+(Post-Split)(1) 
+(Post-Split)(1) 
+Authorized
+200,000,000 
+200,000,000 
+300,000,000 
+Issued
+84,899,675 
+169,799,350 
+169,799,350 
+Reserved for issuance under option plans,
+incentive plans and warrants
+7,715,791 
+15,431,582 
+15,431,582 
+Unissued and unreserved
+107,384,534 
+14,769,068 
+114,769,068 
+(1) 
+Other than pursuant to the Stock Split, assumes
+no issuances or reservations of Common Stock between the record
+date for the Meeting and the effective date of the Stock Split.
+Reasons for the Increase in the Number of
+Authorized Shares of Common Stock 
+The Board of Directors believes that the
+authorization of additional shares of Common Stock will enable
+Patterson-UTI to meet possible future developments without the
+expense and delay of holding a meeting of stockholders to secure
+their authorization when a specific need for the shares may
+arise. In addition, the Board of Directors believes that it is
+desirable that Patterson-UTI have the flexibility to issue a
+substantial number of shares of Common Stock without further
+stockholder action, except as otherwise provided by law. The
+availability of additional shares will enhance
+Patterson-UTI’s flexibility in connection with possible
+future actions, such as:
+• 
+stock splits,
+• 
+stock dividends,
+• 
+financings,
+7
+Table of Contents 
+• 
+employee benefit programs,
+• 
+corporate mergers and acquisitions,
+• 
+asset purchases, and
+• 
+other corporate purposes.
+The Board of Directors will determine whether,
+when and on what terms the issuance of shares of Common Stock
+may be warranted in connection with any of the foregoing
+purposes. Except for the Stock Split, Patterson-UTI does not
+have any current planned use of the proposed additional shares
+of Common Stock.
+The availability for issuance of additional
+shares of Common Stock or rights to purchase such shares could
+enable the Board of Directors to render more difficult or
+discourage an attempt to obtain control of Patterson-UTI. For
+example, the issuance of shares of Common Stock in a public or
+private sale, merger or similar transaction would increase the
+number of outstanding shares, thereby possibly diluting the
+interest of a party attempting to obtain control of
+Patterson-UTI. Patterson-UTI is not aware of any pending or
+threatened efforts to obtain control of Patterson-UTI and the
+Board of Directors has no present intent to authorize the
+issuance of additional shares of Common Stock to discourage such
+efforts.
+If the proposed amendment is approved, all or any
+of the authorized shares of Common Stock or preferred stock may
+be issued without further action by the stockholders and without
+first offering such shares to the stockholders for subscription,
+subject to applicable laws and listing requirements that may
+require stockholder approval for certain issuances of additional
+shares. The issuance of Common Stock other than on a pro rata
+basis to all current stockholders could have the effect of
+diluting the following:
+• 
+earnings per share,
+• 
+book value per share, and
+• 
+voting power of current stockholders.
+The Board of Directors recommends that you
+vote “FOR” the amendment to the restated certificate
+of incorporation to increase the authorized shares of Common
+Stock from 200,000,000 to 300,000,000. 
+The affirmative vote of the holders of a majority of the
+outstanding shares of the Common Stock entitled to vote at the
+Meeting will be required to approve this amendment to the
+restated certificate of incorporation. As a result, abstentions
+and broker non-votes will have the same effect as votes
+“AGAINST” the proposal. Unless you give contrary
+instructions in your proxy, your proxy will be voted
+“FOR” the proposal.
+PROPOSAL NO. 3 
+RE-APPROVAL OF CRITERIA UPON WHICH PERFORMANCE
+OBJECTIVES ARE 
+CURRENTLY BASED IN THE 1997 LONG-TERM
+INCENTIVE PLAN 
+At the Meeting, the stockholders of Patterson-UTI
+will be asked to vote on a proposal to re-approve criteria upon
+which performance objectives are currently based in the
+Patterson-UTI Amended and Restated 1997 Long-Term Incentive Plan
+(the “1997 Plan”).
+The 1997 Plan was initially approved by the
+stockholders of UTI Energy Corp. in August 1997 and was assumed
+by Patterson-UTI as a part of its merger with UTI on May 8,
+2001. Options outstanding under the 1997 Plan at the time of the
+merger became options to acquire Common Stock. In 2003, the
+Board amended the 1997 Plan to increase the number of authorized
+shares of Common Stock available for grant under the 1997 Plan
+from 6,000,000 to 8,250,000, and the Patterson-UTI stockholders
+approved that amendment at the 2003 annual meeting. In April
+2003, the Board also approved amendments to the 1997 Plan that
+included limiting the amount of shares of restricted stock that
+could be awarded to 500,000 and eliminating a repricing
+provision which permitted repricing of stock options. The 1997
+Plan, as amended to date, and the amendment described in
+Proposal No. 4 (the “Amendment”), are attached to
+this proxy statement as Appendix C.
+8
+Table of Contents 
+The Board of Directors believes that the 1997
+Plan advances the best interests of Patterson-UTI and its
+stockholders by attracting, retaining and motivating key
+employees. The 1997 Plan provides for the grant of awards to
+certain key employees including executive officers and
+directors, thereby increasing the personal stake of such key
+employees in the continued success and growth of Patterson-UTI.
+At present, there are approximately 200 key employees
+eligible for grants under the 1997 Plan.
+Reasons for the Re-approval of the Criteria
+upon which Performance Objectives are Currently Based in the
+1997 Plan 
+Section 162(m) of the Internal Revenue Code
+of 1986, as amended (the “Code”), contains special
+rules regarding the federal income tax deductibility of
+compensation paid to a company’s chief executive officer
+and to each of the other four most highly compensated executive
+officers. The general rule is that annual compensation paid to
+any of these specified executives will be deductible only to the
+extent that it does not exceed $1 million. Patterson-UTI
+can preserve the deductibility of certain compensation in excess
+of $1 million, however, if Patterson-UTI complies with
+conditions imposed by section 162(m). Among the conditions
+imposed by section 162(m) is a requirement that the
+performance criteria used to determine the performance awards
+under the 1997 Plan be re-approved by stockholders every five
+years. The purpose of this proposal is to obtain such
+re-approval and thereby continue to provide the Compensation
+Committee the flexibility to determine compensation that
+satisfies the requirements of section 162(m) for
+deductibility of certain compensation in excess of
+$1 million.
+If the Patterson-UTI stockholders do not approve
+this proposal, any compensation expense of Patterson-UTI
+associated with restricted stock awards and cash and other
+performance awards under the 1997 Plan (together with all other
+non-performance based compensation) in excess of $1 million
+for Patterson-UTI’s Chief Executive Officer or any of its
+other four most highly compensated executive officers will not
+be deductible for tax purposes. If the Patterson-UTI
+stockholders do not approve this proposal, the Compensation
+Committee would consider the possible loss of the deduction, but
+may approve restricted stock awards and cash and other
+performance awards for which some of the deduction is lost.
+Material Features of the 1997 Plan 
+The following is a summary of the material
+features of the 1997 Plan, which is qualified in its entirety by
+reference to the full text of the 1997 Plan and the Amendment
+attached to this proxy statement as Appendix C.
+General. 
+• 
+The 1997 Plan is administered by the Compensation
+Committee.
+• 
+Key employees, including officers and directors,
+are eligible for awards.
+• 
+The 1997 Plan provides for awards of
+non-qualified stock options(“NQSOs”), Incentive Stock
+Options (“ISOs”), tandem and independent stock
+appreciation rights (“SARs”), restricted stock and
+performance awards.
+• 
+The Board of Directors, at any time, may amend
+the terms of the 1997 Plan, subject to the stockholder approval
+requirements of the NASD published listing standards and other
+rules and regulations applicable to Patterson-UTI.
+Options. 
+• 
+The vesting schedule for options is set by the
+Compensation Committee, however, the options typically vest over
+three to five years.
+• 
+Options typically have a term of 10 years.
+9
+Table of Contents 
+• 
+Unless otherwise stated in the grant thereof,
+options will vest upon a change in control as that term is
+defined in the 1997 Plan. Options granted to non-executive
+employees typically do not vest upon a change in control.
+• 
+All options granted under the 1997 Plan are
+granted with an exercise price equal to or greater than the fair
+market value of the Common Stock at the time the option is
+granted.
+Restricted Stock Awards. 
+• 
+The Compensation Committee determines the
+material terms of the restricted stock awards, including the
+price, if any, to be paid by the recipient, and the vesting
+schedule and conditions, which may include the attainment of
+specified performance objectives based on increases in share
+prices, operating income, net income or cash flow thresholds on
+a company wide, subsidiary or division or group basis, rig
+utilization, safety records, return on common equity or any
+combination of the foregoing (subject to the changes described
+in the Amendment).
+• 
+A restricted stock award will vest upon a change
+in control as that term is defined in the 1997 Plan.
+Performance Awards. 
+• 
+Performance awards are payable in cash, stock or
+a combination thereof.
+• 
+The Compensation Committee determines the
+material terms of the performance awards, which include:
+• 
+a performance period over which the performance
+goal of such award shall be measured,
+• 
+a minimum level of acceptable achievement for the
+holder at the time of the award, which achievement shall be
+based on increases in share prices, operating income, net income
+or cash flow thresholds on a company wide, subsidiary or
+division or group basis, rig utilization, safety records, return
+on common equity or any combination of the foregoing (subject to
+the changes described in the Amendment), and
+• 
+the size, frequency and vesting schedule of the
+award.
+• 
+A performance award will vest upon a change in
+control as that term is defined in the 1997 Plan, and the
+recipient shall receive the maximum award he or she could have
+earned for the proportionate part of the award prior to the
+change of control, and shall retain the right to earn any
+additional portion of such award if he or she remains employed
+with Patterson-UTI.
+Federal Income Tax Consequences 
+The following discussion summarizes certain
+federal income tax consequences of the issuance and receipt of
+options and awards pursuant to the 1997 Plan under the law as in
+effect on the date of this proxy statement. The rules governing
+the tax treatment of such options and awards are quite
+technical, so the following discussion of tax consequences is
+necessarily general in nature and is not complete. In addition,
+statutory provisions are subject to change, as are their
+interpretations, and their application may vary in individual
+circumstances. This summary does not purport to cover all
+federal employment tax or other federal tax consequences
+associated with the 1997 Plan, nor does it address state, local,
+or non-U.S. taxes.
+ISOs. In general, a
+participant will not recognize income upon the grant or exercise
+of an ISO. However, the exercise of an ISO may result in an
+alternative minimum tax liability to the participant because the
+difference between the exercise price and the fair market value
+of the stock on the date of exercise is an adjustment item for
+purposes of the alternative minimum tax. If a participant does
+not exercise an ISO within certain specified periods after
+termination of employment, the participant will recognize
+ordinary income on the exercise of an ISO in the same manner as
+on the exercise of a NQSO, as described below.
+The general rule is that gain or loss from the
+sale or exchange of shares acquired on the exercise of an ISO
+will be treated as capital gain or loss. However, a disposition
+of shares purchased pursuant to an ISO
+10
+Table of Contents 
+within two years from the date of grant or within
+one year after exercise (a “disqualifying
+disposition”) will produce ordinary income to the
+participant equal to the value of the shares at the time of
+exercise less the exercise price. Gain recognized on the
+disqualifying disposition in excess of the ordinary income
+resulting therefrom will be capital gain, and any loss
+recognized will be a capital loss.
+NQSOs, SARs, Performance Awards.
+A participant generally is not
+required to recognize income on the grant of a NQSO, a SAR, or
+performance award. Instead, ordinary income generally is
+required to be recognized on the date the NQSO or SAR is
+exercised, or in the case of performance awards, upon the
+issuance of shares and/or the payment of cash pursuant to the
+terms of the award. In general, the amount of ordinary income
+required to be recognized is, (a) in the case of a NQSO, an
+amount equal to the excess, if any, of the fair market value of
+the shares on the exercise date over the exercise price,
+(b) in the case of a SAR, the amount of cash and/or the
+fair market value of any shares received upon exercise plus the
+amount of taxes withheld from such amounts, and (c) in the
+case of performance awards, the amount of cash and/or the fair
+market value of any shares received in respect thereof, plus the
+amount of taxes withheld from such amounts.
+Restricted Common
+Stock. Unless a participant who
+receives an award of restricted Common Stock makes an election
+under section 83(b) of the Code as described below, the
+participant generally is not required to recognize ordinary
+income on the award of restricted Common Stock. Instead, on the
+date the shares vest ( i.e. , become transferable and no
+longer subject to forfeiture), the participant will be required
+to recognize ordinary income in an amount equal to the excess,
+if any, of the fair market value of the shares on such date over
+the amount, if any, paid for such shares. If a participant makes
+a section 83(b) election, the participant will recognize
+ordinary income on the date the shares are awarded. The amount
+of ordinary income required to be recognized is an amount equal
+to the excess, if any, of the fair market value of the shares on
+the date of award over the amount, if any, paid for such shares.
+In such case, the participant will not be required to recognize
+additional ordinary income when the shares vest.
+Gain or Loss on Sale or Exchange of
+Shares. In general, gain or loss from
+the sale or exchange of shares granted or awarded under the 1997
+Plan will be treated as capital gain or loss, provided that the
+shares are held as capital assets at the time of the sale or
+exchange. However, if certain holding period requirements are
+not satisfied at the time of a sale or exchange of shares
+acquired upon exercise of an ISO (a “disqualifying
+disposition,” see above), a participant generally
+will be required to recognize ordinary income upon such
+disposition.
+Deductibility by
+Patterson-UTI. Patterson-UTI generally
+is not allowed a deduction in connection with the grant or
+exercise of an ISO. However, if a participant is required to
+recognize ordinary income as a result of a disqualifying
+disposition, Patterson-UTI will be entitled to a deduction equal
+to the amount of ordinary income so recognized. In general, in
+the case of a NQSO (including an ISO that is treated as a NQSO,
+as described above), a SAR, restricted common stock of
+Patterson-UTI, and performance awards, Patterson-UTI will be
+allowed a deduction in an amount equal to the amount of ordinary
+income recognized by a participant, provided that certain income
+tax reporting requirements are satisfied.
+Performance Based
+Compensation. In general, under
+section 162(m) of the Code, remuneration paid by a public
+corporation to its chief executive officer or any of its other
+top four named executive officers, ranked by pay, is not
+deductible to the extent it exceeds $1 million for any
+year. Taxable payments or benefits under the 1997 Plan may be
+subject to this deduction limit. However, under section 162(m),
+qualifying performance-based compensation, including income from
+stock options and other performance-based awards that are made
+under shareholder approved plans and that meet certain other
+requirements, is exempt from the deduction limitation. The 1997
+Plan has been designed so that the Compensation Committee in its
+discretion may grant qualifying exempt performance-based awards
+under the 1997 Plan.
+Parachute Payments. 
+Under the so-called “golden parachute” provisions of
+the Code, the accelerated vesting of stock options and benefits
+paid under other awards in connection with a change of control
+of a corporation may be required to be valued and taken into
+account in determining whether participants have received
+compensatory payments, contingent on the change of control, in
+excess of certain limits. If these
+11
+Table of Contents 
+limits are exceeded, a portion of the amounts
+payable to the participant may be subject to an additional 20%
+federal tax and may be nondeductible to the corporation.
+Withholding. Awards
+under the 1997 Plan may be subject to tax withholding. Where an
+award results in income subject to withholding, Patterson-UTI
+may require the participant to remit the withholding amount to
+Patterson-UTI or cause shares of Common Stock to be withheld or
+sold in order to satisfy the tax withholding obligations.
+Recommendation 
+The Board of Directors recommends a vote
+“FOR” the re-approval of criteria upon which the
+performance objectives are currently based in the 1997
+Plan. Approval of the proposal
+requires the affirmative vote of the holders of a majority of
+the shares of Common Stock present in person or by proxy and
+entitled to vote at the Meeting. If you do not vote against or
+abstain from voting on the proposal, your proxy will be voted
+“FOR” approval of the proposal. Abstentions will be
+counted as shares entitled to vote on the proposal and will have
+the same effect as a vote “AGAINST” the proposal. A
+broker non-vote will be counted for purposes of establishing a
+quorum, but will not be treated as a share entitled to vote on
+the proposal. This will have the effect of reducing the absolute
+number of shares necessary to approve the proposal.
+PROPOSAL NO. 4 
+AMENDMENT TO 1997 LONG-TERM INCENTIVE
+PLAN 
+At the Meeting, the stockholders of Patterson-UTI
+will be asked to vote on a proposal to approve an amendment to
+the 1997 Plan to increase the aggregate annual amount of cash
+that may be received as a performance award by a participant
+under the 1997 Plan and to amend the criteria upon which
+performance objectives are currently based in the 1997 Plan.
+The amendment to the 1997 Plan increases the
+aggregate annual amount of cash that may be received as a
+performance award by a participant under the 1997 Plan from
+$500,000 to $2,000,000. Restricted stock awards and performance
+awards under the 1997 Plan may vest or be contingent upon the
+attainment of specified performance objectives. The amendment to
+the 1997 Plan also expands the specified performance objectives
+on which performance awards are based to include cash margins
+and earnings before interest, income taxes and depreciation,
+depletion and amortization thresholds on a company wide,
+subsidiary or division or group basis.
+The 1997 Plan was initially approved by the
+stockholders of UTI Energy Corp. in August 1997 and was assumed
+by Patterson-UTI as a part of its merger with UTI on May 8,
+2001. Options outstanding under the 1997 Plan at the time of the
+merger became options to acquire Common Stock. In 2003, the
+Board amended the 1997 Plan to increase the number of authorized
+shares of Common Stock available for grant under the 1997 Plan
+from 6,000,000 to 8,250,000, and the Patterson-UTI stockholders
+approved that amendment at the 2003 annual meeting. In April
+2003, the Board also approved amendments to the 1997 Plan that
+included limiting the amount of shares of restricted stock that
+could be awarded to 500,000 and eliminating a repricing
+provision which permitted repricing of stock options. The 1997
+Plan, as amended to date, and the Amendment described in this
+proposal are attached to this proxy statement as Appendix C.
+The Board of Directors believes that the 1997
+Plan advances the best interests of Patterson-UTI and its
+stockholders by attracting, retaining and motivating key
+employees. The 1997 Plan provides for the grant of awards to
+certain key employees including executive officers and
+directors, thereby increasing the personal stake of such key
+employees in the continued success and growth of Patterson-UTI.
+At present, there are approximately 200 key employees
+eligible for grants under the 1997 Plan.
+Reasons for the Amendment to the 1997
+Plan 
+Section 162(m) of the Code contains special
+rules regarding the federal income tax deductibility of
+compensation paid to a company’s chief executive officer
+and to each of the other four most highly
+12
+Table of Contents 
+compensated executive officers. The general rule
+is that annual compensation paid to any of these specified
+executives will be deductible only to the extent that it does
+not exceed $1 million. Patterson-UTI can preserve the
+deductibility of certain compensation in excess of
+$1 million, however, if Patterson-UTI complies with
+conditions imposed by section 162(m). The purpose of the
+amendment described in this proposal is to provide the
+Compensation Committee greater flexibility to structure an
+incentive compensation program that recognizes exceptional
+contributions in a manner that satisfies the requirements of
+section 162(m) for deductibility of certain compensation in
+excess of $1 million.
+If Patterson-UTI stockholders do not approve this
+proposal, Patterson-UTI would not be able to pay a cash
+performance award in excess of $500,000 in any one year to a
+participant under the 1997 Plan. To the extent the Compensation
+Committee elected to pay a cash performance bonus in excess of
+$500,000 to one of the five highest paid officers in any one
+year, such bonus may not be deductible for tax purposes. If the
+Patterson-UTI stockholders do not approve this proposal, the
+Compensation Committee would consider the possible loss of the
+deduction, but may approve cash performance awards for which
+some or all of the deduction is lost.
+Material Features of the 1997 Plan 
+Please see the summary of the material features
+of the 1997 Plan, beginning on page 9 of this proxy
+statement, which is qualified in its entirety by reference to
+the full text of the 1997 Plan, as amended to date, and the
+Amendment, which are attached to this proxy statement as
+Appendix C.
+Recommendation 
+The Board of Directors recommends a vote
+“FOR” the amendment to the 1997 Plan.
+Approval of the proposal requires the
+affirmative vote of the holders of a majority of the shares of
+Common Stock present in person or by proxy and entitled to vote
+at the Meeting. If you do not vote against or abstain from
+voting on the proposal, your proxy will be voted “FOR”
+approval of the proposal. Abstentions will be counted as shares
+entitled to vote on the proposal and will have the same effect
+as a vote “AGAINST” the proposal. A broker non-vote
+will be counted for purposes of establishing a quorum, but will
+not be treated as a share entitled to vote on the proposal. This
+will have the effect of reducing the absolute number of shares
+necessary to approve the proposal.
+PROPOSAL NO. 5 
+RATIFICATION OF INDEPENDENT AUDITORS 
+The Board of Directors voted to engage
+PricewaterhouseCoopers LLP as independent accountants to audit
+the financial statements of Patterson-UTI for the fiscal year
+ending December 31, 2004, and directed that such engagement
+be submitted to the stockholders of Patterson-UTI for
+ratification. In recommending ratification by the stockholders
+of such engagement, the Board of Directors is acting upon the
+recommendation of the Audit Committee, which has satisfied
+itself as to the firm’s professional competence and
+standing. Although ratification by stockholders of the
+engagement of PricewaterhouseCoopers LLP is not required by
+Delaware corporate law or Patterson-UTI’s restated
+certificate of incorporation or bylaws, management feels a
+decision of this nature should be made with the consideration of
+Patterson-UTI’s stockholders. If stockholder ratification
+is not received, management will reconsider the engagement.
+It is expected that one or more representatives
+of PricewaterhouseCoopers LLP will be present at the Meeting and
+will be given the opportunity to make a statement if they so
+desire. It also is expected that the representatives will be
+available to respond to appropriate questions from the
+stockholders.
+The Board of Directors recommends a vote
+“FOR” the ratification of PricewaterhouseCoopers LLP
+as independent accountants. 
+Ratification of the selection of PricewaterhouseCoopers LLP
+requires the affirmative vote of the holders of a majority of
+the shares of Common Stock present in person or by proxy, and
+entitled to vote at the Meeting. Unless you give contrary
+instructions in your proxy, your proxy will be voted
+“FOR” such ratification. Abstentions will be counted
+as shares entitled to vote on the proposal and will have
+13
+Table of Contents 
+the same effect as a vote “AGAINST” the
+proposal. A broker non-vote will be counted for purposes of
+establishing a quorum, but will not be treated as a share
+entitled to vote on the proposal. This will have the effect of
+reducing the absolute number of shares necessary to approve the
+proposal.
+SUMMARY INFORMATION PERTAINING TO EQUITY
+COMPENSATION PLANS OF PATTERSON-UTI 
+The following information summarizes as of
+December 31, 2003 certain information regarding equity
+compensation to employees, officers and directors under
+Patterson-UTI’s equity compensation plans. For a more
+detailed description of the equity compensation plans, see
+Note 12 of Patterson-UTI’s audited financial
+statements contained in its Annual Report on Form 10-K, as
+amended, for the year ended December 31, 2003.
+Equity Compensation Plan Information 
+Number of Securities 
+Number of Securities 
+Remaining Available for 
+to be Issued Upon 
+Weighted-Average 
+Future Issuance Under 
+Exercise of 
+Exercise Price of 
+Equity Compensation 
+Outstanding Options, 
+Outstanding Options, 
+Plans (Excluding Securities 
+Plan Category 
+Warrants and Rights 
+Warrants and Rights 
+Reflected in Column (a)) 
+(a) 
+(b) 
+(c) 
+Equity compensation plans approved by security
+holders
+5,279,021 
+$ 
+20.82 
+2,242,037 
+Equity compensation plans not approved by
+security holders(1)
+858,737 
+$ 
+19.39 
+25,694 
+Total
+6,137,758 
+$ 
+20.62 
+2,267,731 
+(1) 
+The Patterson-UTI Energy, Inc. 2001 Long-Term
+Incentive Plan (the “2001 Plan”) was approved by
+Patterson-UTI’s Board of Directors in July 2001. The terms
+of the 2001 Plan provide for grants of stock options to eligible
+employees other than officers and directors of Patterson-UTI.
+The total number of stock options that could be granted under
+the 2001 Plan was 1,000,000. No Incentive Stock Options may be
+awarded under the 2001 Plan. All options are granted with an
+exercise price equal to or greater than the fair market value of
+the Common Stock at the time of grant. The vesting schedule and
+term are set by the Compensation Committee of the Board of
+Directors.
+Also in July 2001, the Board of Directors
+approved option grants, not included in any of
+Patterson-UTI’s stock option plans, for two non-employee
+directors, each covering options to purchase 12,000 shares
+of the Common Stock at an exercise price greater than the fair
+market value of the Common Stock on the grant date. The options
+vested in November 2001 and expire in November 2005.
+14
+Table of Contents 
+Benefits Under the 1997 Plan 
+At present, approximately 200 key employees
+are eligible for grants under the 1997 Plan, including
+Patterson-UTI’s executive officers and directors. The
+granting of awards under the 1997 Plan is discretionary, and
+Patterson-UTI cannot now determine the number or type of awards
+to be granted in the future to any particular person or group.
+The Compensation Committee did, however, award cash bonuses for
+fiscal 2003 and restricted stock and stock options in April 2004
+under the 1997 Plan to the following persons in the following
+amounts:
+Cash 
+Restricted 
+Stock 
+Name and Position 
+Bonus(1) 
+Stock(2) 
+Options(3) 
+Mark S. Siegel 
+Chairman of the
+Board and 
+Director
+$ 
+411,530 
+25,000 shares of Common Stock 
+Options to purchase 60,000 shares of Common Stock
+Cloyce A. Talbott 
+Chief Executive
+Officer and 
+Director
+$ 
+411,530 
+25,000 shares of Common Stock 
+Options to purchase 60,000 shares of Common Stock
+A. Glenn Patterson 
+President and
+Chief Operating 
+Officer
+$ 
+411,530 
+25,000 shares of Common Stock 
+Options to purchase 60,000 shares of Common Stock
+Kenneth N. Berns 
+Senior Vice
+President and 
+Director
+$ 
+205,765 
+12,500 shares of Common Stock 
+Options to purchase 30,000 shares of Common Stock
+Jonathan D. Nelson 
+Vice President,
+Chief Financial 
+Officer, Secretary and Treasurer
+$ 
+205,765 
+12,500 shares of Common Stock 
+Options to purchase 30,000 shares of Common Stock
+John E. Vollmer III 
+Senior
+Vice President — Corporate 
+Development
+$ 
+205,765 
+12,500 shares of Common Stock 
+Options to purchase 30,000 shares of Common Stock
+(1) 
+The Compensation Committee awarded the bonuses in
+an aggregate cash amount equal to 1% of Patterson-UTI’s
+earnings before interest, income taxes and depreciation,
+depletion and amortization.
+(2) 
+Each restricted stock award vests 50% on the
+third anniversary date of the grant and the remaining 50% vests
+on the fourth anniversary date of the grant.
+(3) 
+Each stock option vests one-third on the first
+anniversary date of the grant and the remaining two-thirds vests
+in equal monthly installments during the twenty-four months
+thereafter. The exercise price of each option is equal to the
+fair market value of the Common Stock on the date of grant.
+On May 26, 2004, the last reported sale
+price of the Common Stock on the NASDAQ National Market was
+$30.28 per share.
+EXECUTIVE OFFICERS 
+Set forth below is the name, age and position
+followed by a brief description of the business experience
+during at least the past five years for each of the executive
+officers of Patterson-UTI who is not also a current director.
+Name 
+Age 
+Position 
+Jonathan D. Nelson
+35 
+Vice President, Chief Financial Officer,
+Secretary and Treasurer
+John E. Vollmer III
+48 
+Senior Vice President — Corporate
+Development
+Jonathan D.
+Nelson — Mr. Nelson has
+served as Vice President, Chief Financial Officer, Secretary and
+Treasurer of Patterson-UTI since July 1999. Mr. Nelson
+served as Controller of Patterson-UTI from May 1996 until July
+1999. Prior to his employment with Patterson-UTI,
+Mr. Nelson was employed in public
+15
+Table of Contents 
+accounting for approximately five years.
+Mr. Nelson holds a Bachelor of Science degree in Accounting
+from Texas Tech University.
+John E.
+Vollmer III —
+Mr. Vollmer has served as Senior Vice President —
+Corporate Development of Patterson-UTI since May 2001.
+Mr. Vollmer served as Senior Vice President, Chief
+Financial Officer, Secretary and Treasurer of UTI from 1998 to
+May 2001. Mr. Vollmer was a financial consultant from
+October 1997 until joining UTI in 1998. From 1992 until October
+1997, Mr. Vollmer served in a variety of capacities at
+Blockbuster Entertainment, including Senior Vice
+President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+Summary Compensation Table 
+The following table sets forth information
+concerning compensation for 2003, 2002 and 2001 earned by or
+paid to the Chief Executive Officer and the other executive
+officers of Patterson-UTI:
+Annual Compensation 
+Securities 
+Other Annual 
+Underlying 
+All Other 
+Salary 
+Bonus 
+Compensation(1) 
+Options Granted 
+Compensation(2) 
+Name and Principal Position(s) 
+Year 
+($) 
+($) 
+($) 
+(#) 
+($) 
+Mark S. Siegel(3) 
+2003 
+298,333 
+411,530 
+— 
+190,000 
+— 
+Chairman of the Board
+2002 
+180,833 
+140,000 
+— 
+400,000 
+— 
+2001 
+160,577 
+300,000 
+— 
+250,000 
+— 
+Cloyce A. Talbott 
+2003 
+413,750 
+411,530 
+— 
+190,000 
+4,935 
+Chief Executive Officer
+2002 
+316,458 
+140,000 
+— 
+400,000 
+6,000 
+2001 
+317,500 
+375,000 
+— 
+250,000 
+5,250 
+A. Glenn Patterson 
+2003 
+413,750 
+411,530 
+— 
+190,000 
+4,935 
+President and Chief
+2002 
+316,458 
+140,000 
+— 
+400,000 
+6,000 
+Operating Officer
+2001 
+317,500 
+375,000 
+— 
+250,000 
+5,250 
+Kenneth N. Berns(3) 
+2003 
+182,333 
+205,765 
+— 
+95,000 
+— 
+Senior Vice President
+2002 
+108,500 
+70,000 
+— 
+200,000 
+— 
+2001 
+104,615 
+150,000 
+— 
+125,000 
+— 
+Jonathan D. Nelson 
+2003 
+198,667 
+205,765 
+— 
+95,000 
+3,935 
+Vice President, Chief
+2002 
+144,667 
+70,000 
+— 
+200,000 
+2,438 
+Financial Officer, Secretary
+2001 
+157,833 
+150,000 
+— 
+125,000 
+5,250 
+and Treasurer
+John E. Vollmer III(3) 
+2003 
+251,908 
+205,765 
+— 
+95,000 
+3,935 
+Senior Vice President —
+2002 
+190,779 
+70,000 
+— 
+200,000 
+5,500 
+Corporate Development
+2001 
+204,558 
+150,000 
+— 
+125,000 
+1,574 
+(1) 
+The aggregate amounts of perquisites and other
+personal benefits, securities or property received by each of
+the executive officers does not exceed the lesser of $50,000 or
+ten percent of that executive officer’s combined annual
+salary and bonus during the applicable year.
+(2) 
+Amounts set forth for 2003, 2002 and 2001 reflect
+Patterson-UTI’s (or UTI’s, as applicable)
+contributions or other allocations to defined contribution plans.
+(3) 
+These individuals were previously employed by
+UTI, which merged with and into Patterson-UTI on May 8,
+2001. Amounts presented herein include compensation received
+from UTI prior to the merger.
+16
+Table of Contents 
+The following table sets forth information
+regarding grants of stock options during 2003 to the executive
+officers listed in the Summary Compensation Table:
+Options Granted During Fiscal Year
+2003 
+Number of 
+% of Total Options 
+Exercise or 
+Securities Underlying 
+Granted to Employees 
+Base Price 
+Expiration 
+Grant Date 
+Name 
+Options Granted 
+in Fiscal Year 
+($/Sh) 
+Date 
+Value(2) 
+Mark S. Siegel
+190,000 
+(1) 
+22.22% 
+$ 
+32.44 
+4/29/13 
+$ 
+3,040,304 
+Cloyce A. Talbott
+190,000 
+(1) 
+22.22% 
+$ 
+32.44 
+4/29/13 
+$ 
+3,040,304 
+A. Glenn Patterson
+190,000 
+(1) 
+22.22% 
+$ 
+32.44 
+4/29/13 
+$ 
+3,040,304 
+Kenneth N. Berns
+95,000 
+(1) 
+11.11% 
+$ 
+32.44 
+4/29/13 
+$ 
+1,520,152 
+Jonathan D. Nelson
+95,000 
+(1) 
+11.11% 
+$ 
+32.44 
+4/29/13 
+$ 
+1,520,152 
+John E. Vollmer III
+95,000 
+(1) 
+11.11% 
+$ 
+32.44 
+4/29/13 
+$ 
+1,520,152 
+(1) 
+These options were granted pursuant to the terms
+and conditions of the Patterson-UTI Energy, Inc. Amended and
+Restated 1997 Long Term Incentive Plan. These options vest over
+a three (3) year period as follows: 33.33% on
+April 30, 2004, and then in equal monthly installments
+through April 30, 2006.
+(2) 
+The value of the options were estimated using the
+Black-Scholes option valuation model. The following assumptions
+were used in the calculation: no expected dividend, risk-free
+interest rate of 2.81%, volatility of 52.05% and an expected
+term of 5 years. No discount was considered for the
+non-transferability or the risk of forfeiture of the options.
+The actual value, if any, of any option will depend on the
+amount, if any, by which the stock price exceeds the exercise
+price on the date the option is exercised. Thus, this valuation
+may not be a reliable indication as to the value and there is no
+assurance the value realized will be at or near the value
+estimated by the Black-Scholes model.
+The following table sets forth information
+concerning stock options exercised in 2003 and stock options
+unexercised at December 31, 2003 for the executive officers
+of Patterson-UTI:
+Aggregated Option Exercises in 2003 
+and Value Table at December 31,
+2003 
+Number of Securities 
+Value of Unexercised 
+Underlying Unexercised 
+In-the-Money 
+Options at 
+Options at 
+December 31, 2003(2) 
+December 31, 2003(3) 
+Shares Acquired 
+Value 
+Name 
+on Exercise 
+Realized(1) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Mark S. Siegel
+— 
+$ 
+— 
+489,721 
+530,279 
+$ 
+8,343,435 
+$ 
+3,679,940 
+Cloyce A. Talbott
+100,000 
+$ 
+2,632,970 
+309,721 
+530,279 
+$ 
+3,299,160 
+$ 
+3,679,940 
+A. Glenn Patterson
+266,000 
+$ 
+5,723,420 
+218,721 
+530,279 
+$ 
+1,744,880 
+$ 
+3,679,940 
+Kenneth N. Berns
+— 
+$ 
+— 
+254,861 
+265,139 
+$ 
+4,451,955 
+$ 
+1,839,970 
+Jonathan D. Nelson
+— 
+$ 
+— 
+198,456 
+265,139 
+$ 
+2,550,663 
+$ 
+1,839,970 
+John E. Vollmer III
+— 
+$ 
+— 
+488,344 
+260,056 
+$ 
+10,922,821 
+$ 
+1,737,082 
+(1) 
+Calculated by subtracting actual option exercise
+price from the market price at the respective dates of exercise
+and multiplying the difference by the number of shares in each
+category.
+(2) 
+The total number of unexercised options held as
+of December 31, 2003, separated between those options that
+were exercisable and those options that were not exercisable.
+(3) 
+Calculated by subtracting the actual option
+exercise price from the market price at December 31, 2003
+($32.93 per share) and multiplying the difference by the
+number of shares in each category.
+17
+Table of Contents 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT
+CONTRACTS; 
+INDEMNIFICATION AGREEMENTS 
+On January 29, 2004, Patterson-UTI entered
+into change in control agreements (each, an
+“Agreement” and collectively, the
+“Agreements”) with Messrs. Siegel, Talbott,
+Patterson, Berns, Nelson and Vollmer, (each, an
+“Employee” and collectively, the
+“Employees”). The Agreements were entered into to
+protect the Employees should a change in control occur, thereby
+encouraging the Employee to remain in the employ of
+Patterson-UTI and not be distracted from the performance of his
+duties to Patterson-UTI by the possibility of a change in
+control.
+In the event of a change in control of
+Patterson-UTI in which an Employee’s employment is
+terminated by Patterson-UTI other than for cause or by the
+Employee for good reason, the terms of the Agreement would
+entitle the Employee to, among other things:
+• 
+a bonus payment equal to the greater of the
+highest bonus paid after the Agreement was entered into and the
+average of the two annual bonuses earned in the two fiscal years
+immediately preceding a change in control (such bonus payment
+prorated for the portion of the fiscal year preceding the
+termination date),
+• 
+a payment equal to 2.5 times (in the case of
+Messrs. Siegel, Talbott and Patterson) or 1.5 times
+(in the case of Messrs. Berns, Nelson and Vollmer) of the
+sum of (1) the highest annual salary in effect for such
+Employee and (2) the average of the three annual bonuses
+earned by the Employee for the three fiscal years preceding the
+termination date, and
+• 
+continued coverage under Patterson-UTI’s
+welfare plans for up to three years (in the case of
+Messrs. Siegel, Talbott and Patterson) or two years (in the
+case of Messrs. Berns, Nelson and Vollmer).
+Each Agreement provides the Employee with a full
+gross-up payment for any excise taxes imposed on payments and
+benefits received under the Agreements or otherwise including
+other taxes that may be imposed as a result of the gross-up
+payment.
+A change in control is principally defined by the
+Agreement as:
+• 
+an acquisition by any individual, entity or group
+of beneficial ownership of 35% or more of either
+Patterson-UTI’s then outstanding Common Stock or the
+combined voting power of the then outstanding voting securities
+of Patterson-UTI entitled to vote in the election of directors,
+• 
+a change occurs in which the members of the Board
+of Directors as of the date of the Agreement cease to constitute
+at least a majority of Patterson-UTI’s Board of Directors
+unless that change occurs through a vote of at least a majority
+of the incumbent members of the Board of Directors, or
+• 
+a change in the beneficial ownership of
+Patterson-UTI following consummation of a reorganization,
+merger, consolidation, sale of Patterson-UTI or any subsidiary
+of Patterson-UTI or a disposition of all or substantially all of
+the assets of Patterson-UTI in which the beneficial owners
+immediately prior to the transaction own 65% or less of
+outstanding Common Stock of the newly combined or merged entity.
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or
+retirement,
+• 
+the termination of the Employee’s
+employment, or
+• 
+three years from the date the Agreement was
+signed although, unless otherwise terminated, the Agreements
+will automatically renew for successive twelve-month periods
+unless Patterson-UTI notifies the Employee at least 90 days
+before the expiration of the initial term or the renewal period,
+as applicable, that the term will not be extended.
+18
+Table of Contents 
+Messrs. Siegel, Berns and Vollmer have
+employment arrangements which entitle them to one year’s
+salary upon termination of employment with Patterson-UTI.
+All unvested stock options held by executive
+officers vest upon a change of control as defined by the
+underlying stock option plan.
+Patterson-UTI has entered into an indemnification
+agreement with each of its executive officers and directors
+containing provisions that may require Patterson-UTI, among
+other things, to indemnify such executive officers and directors
+against liabilities that may arise by reason of their status or
+service as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN TRANSACTIONS 
+In connection with the acquisition by REMY
+Capital Partners III, L.P. (“REMY Capital”)
+of an ownership interest in UTI in March 1995, REMY Capital
+succeeded to a registration rights agreement with UTI. As the
+successor-in-interest to UTI, Patterson-UTI assumed this
+registration rights agreement pursuant to which REMY Capital has
+the right to require Patterson-UTI to use its reasonable efforts
+to register shares held by REMY Capital under the Securities Act
+of 1933, as amended. In the event that such rights are exercised
+in connection with a primary offering proposed by Patterson-UTI
+(or a secondary offering with which Patterson-UTI agrees to
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elected to exercise such rights other than in
+connection with an offering in which Patterson-UTI participates,
+REMY Capital would bear all costs of the offering. These rights
+continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995.
+Mr. Siegel, Chairman of the Board of
+Patterson-UTI, is President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital.
+Mr. Berns, a director and Senior Vice President of
+Patterson-UTI, is an executive of REMY Investors.
+During 2003, Patterson-UTI paid approximately
+$740,000 to TMP Truck and Trailer LP (“TMP”), an
+entity owned by Thomas M. Patterson, son of A. Glenn Patterson,
+Patterson-UTI’s President and Chief Operating Officer, for
+certain equipment and metal fabrication services. Purchases from
+TMP were at current market prices. TMP continues to be a vendor
+to Patterson-UTI in 2004.
+During 2003, Patterson-UTI paid approximately
+$209,000 to Melco Services (“Melco”) for dirt
+contracting services and $59,000 to L&N Transportation
+(“L&N”) for water hauling services. Both entities
+are owned by Lance D. Nelson, brother of Jonathan D. Nelson,
+Patterson-UTI’s Vice President, Chief Financial Officer,
+Secretary and Treasurer. Purchases from Melco and L&N were
+at current market prices. Melco and L&N continue to be
+vendors to Patterson-UTI in 2004.
+Patterson-UTI operates certain oil and natural
+gas properties in which certain of its officers and members of
+their families have participated, either individually or through
+entities they control, in the prospects or properties in which
+Patterson-UTI has an interest. These participations, which have
+been on a working interest basis, have been in prospects or
+properties originated or acquired by Patterson-UTI. At
+December 31, 2003, affiliated persons were working interest
+owners of 236 of the 260 wells operated by Patterson-UTI.
+Sales of working interests are made by Patterson-UTI to reduce
+its economic risk in the properties. Generally, it is more
+efficient for Patterson-UTI to sell the working interests to
+these affiliated persons than to market them to unrelated third
+parties. Sales were made by Patterson-UTI at its cost, comprised
+of Patterson-UTI’s costs of acquiring and preparing the
+working interests for sale. These costs were paid by the working
+interest owners on a pro rata basis based upon their working
+interest ownership percentage. The price at which working
+interests were sold to affiliated persons was the same price at
+which working interests were sold to unaffiliated persons.
+The following table sets forth production
+revenues received and joint interest costs of each of the
+affiliated persons during 2003 for all wells operated by
+Patterson-UTI in which they have working interests. These
+amounts do not necessarily represent their profits or losses
+from these interests because the joint interest costs
+19
+Table of Contents 
+do not include the parties’ related drilling
+and leasehold acquisition costs incurred prior to
+January 1, 2003. These activities resulted in a net
+receivable from the affiliated persons of approximately $17,000
+at December 31, 2003 and a net payable to the affiliated
+persons of approximately $466,000 at December 31, 2002.
+Year Ended December 31, 2003 
+Joint 
+Production 
+Interest 
+Name 
+Revenues(1) 
+Costs(2) 
+Cloyce A. Talbott
+$ 
+185,180 
+$ 
+85,244 
+Anita Talbott(3)
+73,424 
+27,514 
+Jana Talbott, Executrix to the Estate of Steve
+Talbott(3)
+2,633 
+3,467 
+Stan Talbott(3)
+8,802 
+2,531 
+John Evan Talbott Trust(3)
+2,880 
+1,066 
+Lisa Beck and Stacy Talbott(3)
+737,445 
+503,017 
+SSI Oil & Gas, Inc.(4)
+240,921 
+129,290 
+IDC Enterprises, Ltd.(5)
+9,553,047 
+6,829,996 
+SSSL, Ltd.(6)
+1,744 
+1,177 
+A. Glenn Patterson
+127,027 
+45,942 
+Glenn Patterson Family Limited Partnership(7)
+1,744 
+1,181 
+Robert Patterson(7)
+8,423 
+3,348 
+Thomas M. Patterson(7)
+8,423 
+3,348 
+Jonathan D. Nelson
+151,912 
+265,355 
+Total
+$ 
+11,103,605 
+$ 
+7,902,476 
+(1) 
+Revenues for production of oil and natural gas,
+net of state severance taxes.
+(2) 
+Includes leasehold costs, tangible equipment
+costs, intangible drilling costs, and lease operating expense
+billed during that period. All joint interest costs have been
+paid on a timely basis.
+(3) 
+Anita Talbott is the wife of Cloyce A. Talbott.
+Stan Talbott, Lisa Beck, and Stacy Talbott are
+Mr. Talbott’s adult children. Steve Talbott is the
+deceased son of Mr. Talbott. John Evan Talbott is
+Mr. Talbott’s grandson.
+(4) 
+SSI Oil & Gas, Inc. is beneficially
+owned 50% by Cloyce A. Talbott and directly owned 50% by
+A. Glenn Patterson.
+(5) 
+IDC Enterprises, Ltd. is 50% owned by Cloyce A.
+Talbott and 50% owned by A. Glenn Patterson.
+(6) 
+SSSL, Ltd. is a limited partnership in which
+children and grandchildren of Mr. Talbott are beneficiaries
+and Mr. Talbott is the general partner.
+(7) 
+Robert and Thomas M. Patterson are A. Glenn
+Patterson’s adult children. The Glenn Patterson Family
+Limited Partnership is a partnership in which each of
+Mr. Patterson’s children shares equally and
+Mr. Patterson is the manager.
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee sets and administers
+the policies that govern the annual compensation and long-term
+compensation of executive officers and directors of
+Patterson-UTI. The Compensation Committee consisted of
+Messrs. Huff and Hunt, and Ms. Smith, each of whom is
+an independent director as defined by the NASD published listing
+standards. The Compensation Committee makes all decisions
+concerning compensation of executive officers, determines the
+total amount of bonuses to be paid annually and grants all
+awards of stock options under Patterson-UTI’s incentive
+stock option plans. The Compensation Committee also reviews and
+oversees bonus and incentive compensation decisions for
+Patterson-UTI as a whole.
+20
+Table of Contents 
+The Compensation Committee’s policy is to
+provide to the executives competitive compensation packages that
+will permit Patterson-UTI to attract and retain highly qualified
+individuals and to motivate and reward Patterson-UTI’s
+executives for performance that benefits Patterson-UTI and its
+shareholders. Historically, Patterson-UTI’s executive
+compensation package consisted of a combination of base salary,
+cash bonus awards and long-term incentive opportunities in the
+form of stock options and a 401(k) plan.
+Executive salaries are reviewed by the
+Compensation Committee on an annual basis and are set for
+individual executive officers based on subjective evaluations of
+each individual’s specific performance,
+Patterson-UTI’s financial results and position,
+Patterson-UTI’s performance compared to similar companies
+and a comparison to salary ranges for executives of other
+companies in the oil and natural gas industry with
+characteristics similar to those of Patterson-UTI. The process
+applied by the Compensation Committee is intended to allow the
+committee to set salaries in a manner that is both competitive
+and reasonable within the industry.
+Cash bonuses have historically been considered on
+an annual basis by the Compensation Committee using a variety of
+objective and subjective criteria, including (i) the
+relative and overall financial results of Patterson-UTI from an
+earnings and cash flow generation standpoint, (ii) the
+operational results (including cash margin per rig and rig
+utilization) of Patterson-UTI as compared to its competition,
+(iii) the implementation of corporate objectives and
+acquisition and integration strategies and (iv) the
+performance of the stock against its peers and the industry.
+During 2003, the Compensation Committee engaged
+an outside consultant to assist it in the design of an executive
+compensation package for Patterson-UTI that would be both
+competitive in the industry and focused on establishing
+incentive compensation tied to financial performance and
+operational results. In initiating such engagement, the
+committee recognized that the compensation philosophy of
+Patterson-UTI had provided cash compensation at a lower level
+than many of Patterson-UTI’s peers but had endeavored to
+offset this with relatively higher equity compensation. The
+study indicated to the committee that the cash compensation paid
+to the top executives was generally in the bottom quartile when
+compared to Patterson-UTI’s peers both for base salary and
+bonus compensation. The study also indicated that the
+stock-based compensation was in the top quartile when compared
+to peers and over all the total compensation was slightly below
+the median.
+In contrast to the relative position of executive
+compensation at Patterson-UTI to its peers, the committee noted
+that under almost all value matrixes, Patterson-UTI had
+consistently provided returns to its stockholders substantially
+higher than most peers and that performance and returns to
+stockholders were among the top in the industry over a sustained
+period of time.
+After consideration of the data and information
+provided to the committee by the outside consultant and the
+performance of the top executives, the committee believed that
+substantial increases in cash salaries were appropriate for the
+executive officers and approved those increases effective
+May 1, 2003. The committee also determined that
+Patterson-UTI should implement a more formal cash bonus program
+and created a cash bonus plan for 2003 of a bonus pool for the
+top executive officers based on earnings before interest, income
+taxes and depreciation, depletion and amortization. The
+committee retained the right to allocate the pool among the
+executive officers in its discretion. The committee also awarded
+stock options on a basis it believed to be consistent with
+Patterson-UTI’s past practices, as noted above, with
+respect to equity compensation.
+The compensation of the Chief Executive Officer
+of Patterson-UTI is determined in the same manner as the
+compensation for other executive officers as described above. As
+a result, Mr. Talbott’s base annual salary was
+increased from $350,000 to $450,000 effective May 1, 2003.
+Mr. Talbott also received a cash bonus for 2003 of $411,530
+from the bonus pool discussed above.
+It is the general policy of the Compensation
+Committee to review stock-based compensation of Patterson-UTI on
+at least an annual basis. Awards of stock-based compensation
+reflect the Board’s and Compensation Committee’s
+desire to provide Patterson-UTI’s employees who have
+substantial responsibility for Patterson-UTI’s management
+and growth with additional incentives by increasing their
+proprietary interest in the success of Patterson-UTI. As noted
+above, on a relation to peers basis, stock-based compensation has
+21
+Table of Contents 
+historically been given more weight in
+Patterson-UTI’s overall compensation package than cash
+compensation. The decision whether to grant stock options to any
+particular employee is based upon a variety of factors,
+including position, performance, current share and stock option
+ownership and the need to insure the continued employment of the
+employee with Patterson-UTI. During 2003 the committee awarded
+options to purchase 190,000 shares to Mr. Talbott
+at the then current market price.
+In considering compensation decisions for the
+executive management of Patterson-UTI, the Compensation
+Committee and the Board of Directors of Patterson-UTI routinely
+considers the potential effect of section 162(m) of the
+Code. Section 162(m) imposes a limitation on deductions
+over $1 million that can be taken by a publicly held
+corporation for compensation paid to certain of its executive
+officers. Stock option grants and cash and other performance
+awards pursuant to Patterson-UTI’s employee benefit plans
+may be exempt from the deduction limit if certain requirements
+are met.
+Compensation Committee of the Board of Directors:
+Curtis W. Huff, Chairman 
+Terry H. Hunt
+Nadine C. Smith
+22
+Table of Contents 
+PERFORMANCE GRAPH 
+The following graph compares the cumulative
+stockholder return on the Common Stock of Patterson-UTI, for the
+period from December 31, 1998 through December 31,
+2003, with the cumulative total return of the Standard and Poors
+500 Stock Index, the Oilfield Service Index, and a Patterson-UTI
+determined peer group. Patterson-UTI’s 2003 peer group
+consists of Grey Wolf, Inc., Helmerich & Payne, Inc.,
+Nabors Industries, Ltd., plus Unit Corp. Patterson-UTI’s
+2002 peer group index comprised the companies in its 2003 peer
+group and Key Energy Services, Inc., Pioneer Drilling Co.,
+Precision Drilling Corp. and TMBR/Sharp Drilling, Inc. All of
+the companies in Patterson-UTI’s 2003 and 2002 peer group
+are providers of land-based drilling services. The graph assumes
+investment of $100 on December 31, 1998 and reinvestment of
+all dividends.
+COMPARISON OF CUMULATIVE TOTAL
+RETURNS 
+(Total return based on $100 initial investment
+and reinvestment of all dividends) 
+Basis 
+1998 
+1999 
+2000 
+2001 
+2002 
+2003 
+Description 
+($) 
+($) 
+($) 
+($) 
+($) 
+($) 
+Patterson-UTI Energy, Inc.
+100.00 
+320.00 
+916.92 
+573.78 
+742.64 
+810.58 
+2003 Peer Group Index
+100.00 
+191.38 
+377.87 
+231.23 
+239.25 
+271.75 
+2002 Peer Group Index*
+100.00 
+194.35 
+369.54 
+237.12 
+251.49 
+294.59 
+S&P 500 Index
+100.00 
+121.05 
+110.02 
+96.95 
+75.52 
+97.19 
+Oilfield Service Index (OSX)
+100.00 
+166.82 
+242.15 
+169.12 
+168.27 
+182.34 
+* 
+As a result of Patterson-UTI’s continued
+growth as a provider of domestic, land-based contract drilling
+services and Patterson-UTI’s significantly increased market
+capitalization over the past several years, the 2002 Peer Group
+Index was revised in 2003 to include only the companies that own
+the four largest domestic, land-based contract drilling fleets,
+other than Patterson-UTI.
+The foregoing graph is based on historical data
+and is not necessarily indicative of future performance. This
+graph shall not be deemed to be “soliciting material”
+or to be “filed” with the SEC or subject to the
+Regulations of 14A or 14C under the Exchange Act or to the
+liabilities of Section 18 under such act.
+23
+Table of Contents 
+SECURITY OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of
+May 28, 2004, the stock ownership of (i) the executive
+officers, directors and Board nominees individually,
+(ii) all directors, Board nominees and executive officers
+as a group and (iii) each person known by Patterson-UTI to
+be the beneficial owner of more than 5% of Patterson-UTI’s
+Common Stock. The table does not reflect the pro forma effect of
+the Stock Split.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5% of
+Patterson-UTI’s Common Stock:
+FMR Corp
+82 Devonshire Street 
+Boston, MA 02109
+4,625,340 
+5.5 
+% 
+First Pacific Advisors, Inc.
+11400 West Olympic Boulevard 
+Los Angeles, CA 90064
+4,292,600 
+5.1 
+% 
+Directors, Board nominees and Executive Officers
+Listed in Summary Compensation Table:
+Mark S. Siegel
+4,075,079 
+(1) 
+4.9 
+% 
+Cloyce A. Talbott
+724,121 
+(2) 
+* 
+A. Glenn Patterson
+507,129 
+(3) 
+* 
+Kenneth N. Berns
+317,778 
+(4) 
+* 
+Robert C. Gist
+46,386 
+(5) 
+* 
+Curtis W. Huff
+33,940 
+(6) 
+* 
+Terry H. Hunt
+24,000 
+(7) 
+* 
+Kenneth R. Peak
+35,000 
+(8) 
+* 
+Nadine C. Smith
+49,000 
+(9) 
+* 
+Jonathan D. Nelson
+195,378 
+(10) 
+* 
+John E. Vollmer III
+338,778 
+(11) 
+* 
+All directors and executive officers as a group
+6,346,589 
+(12) 
+7.4 
+% 
+* 
+indicates less than 1.0%
+(1) 
+Mr. Siegel is the President and sole
+stockholder of REMY Investors, which is the general partner of
+REMY Capital Partners III, L.P. (“REMY Capital”).
+The Common Stock beneficially owned by Mr. Siegel includes
+3,294,524 shares of Common Stock owned by REMY Capital. The
+Common Stock beneficially owned by Mr. Siegel also includes
+stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within sixty days, to
+purchase 535,555 shares of Common Stock, but does not
+include 409,445 shares underlying stock options held by
+Mr. Siegel that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+25,000 shares of restricted Common Stock held by
+Mr. Siegel, over which he presently has voting power.
+(2) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 490,555 shares. Does not include shares
+underlying stock options held by Mr. Talbott to
+purchase 409,445 shares each that are not presently
+exercisable and will not become exercisable within sixty days.
+Includes 25,000 shares of restricted Common Stock held by
+Mr. Talbott, over which he presently has voting power.
+(3) 
+Includes shares underlying stock options held by
+Mr. Patterson, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 399,555 shares. Does not include shares
+underlying stock options held by Mr. Patterson to
+purchase 409,445 shares each that are not presently
+exercisable
+24
+Table of Contents 
+and will not become exercisable within sixty
+days. Includes 25,000 shares of restricted Common Stock
+held by Mr. Patterson, over which he presently has voting
+power.
+(4) 
+Includes shares underlying stock options owned by
+Mr. Berns, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 285,278 shares. Does not include
+204,722 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days and does not include shares of Common Stock
+beneficially owned by REMY Investors by whom Mr. Berns is
+employed. Mr. Berns disclaims beneficial ownership of such
+shares beneficially owned by REMY Investors. Includes
+12,500 shares of restricted Common Stock held by
+Mr. Berns, over which he presently has voting power.
+(5) 
+Includes shares underlying presently exercisable
+stock options held by Mr. Gist to
+purchase 23,000 shares. Does not include
+10,000 shares underlying stock options held by
+Mr. Gist that are not presently exercisable and will not
+become exercisable within sixty days.
+(6) 
+Includes shares underlying presently exercisable
+stock options held by Mr. Huff to
+purchase 30,000 shares. Does not include
+10,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days.
+(7) 
+Includes shares underlying presently exercisable
+stock options held by Mr. Hunt to
+purchase 20,000 shares.
+(8) 
+Includes shares underlying presently exercisable
+stock options held by Mr. Peak to
+purchase 35,000 shares. Does not include
+10,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days.
+(9) 
+Includes shares underlying presently exercisable
+stock options held by Ms. Smith to
+purchase 30,000 shares. Does not include
+10,000 shares underlying stock options held by
+Ms. Smith that are not presently exercisable and will not
+become exercisable within sixty days.
+(10) 
+Includes shares underlying stock options owned by
+Mr. Nelson, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 182,778 shares. Does not include
+204,722 shares underlying stock options held by
+Mr. Nelson that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+12,500 shares of restricted Common Stock held by
+Mr. Nelson, over which he presently has voting power.
+(11) 
+Includes shares underlying stock options owned by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 326,278 shares. Does not include
+203,722 shares underlying stock options held by
+Mr. Vollmer that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+12,500 shares of restricted Common Stock held by
+Mr. Vollmer, over which he presently has voting power.
+(12) 
+Includes shares underlying stock options, which
+are presently exercisable or become exercisable within sixty
+days, to purchase 2,353,999 shares of Common Stock.
+Does not include shares underlying stock options to
+purchase 1,881,501 shares owned by such individuals
+that are not presently exercisable and will not become
+exercisable within sixty days. Includes an aggregate of
+112,500 shares of restricted Common Stock held by certain
+directors and executive officers, over which they presently have
+voting power.
+Except as stated herein, each stockholder has
+sole voting and investment power with respect to Common Stock
+included in the above table. There are no arrangements known to
+Patterson-UTI which may result in a change in control.
+25
+Table of Contents 
+AUDIT COMMITTEE REPORT 
+The following report of the Audit Committee does
+not constitute soliciting material and should not be deemed
+filed or incorporated by reference into any other Patterson-UTI
+filing under the Securities Act of 1933, as amended, or the
+Exchange Act, except to the extent Patterson-UTI specifically
+incorporates this report by reference therein.
+The Audit Committee has discussed with the
+independent auditors the matters required to be discussed by
+Statement on Auditing Standards No. 61, Communication
+with Audit Committees, as amended, by the Auditing Standards
+Board of the American Institute of Certified Public Accountants.
+The Audit Committee has received and reviewed the
+written disclosures and the letter from the independent auditors
+required by Independence Standard No. 1, Independence
+Discussions with Audit Committees, as amended, by the
+Independence Standards Board, and has discussed with the
+auditors the auditors’ independence.
+The Audit Committee met four times during fiscal
+2003. The Audit Committee schedules its meetings with a view to
+ensuring that it devotes appropriate attention to all of its
+tasks. The Audit Committee meetings include, whenever
+appropriate, executive sessions with the independent auditors
+without the presence of Patterson-UTI’s management.
+During fiscal 2003, as part of its oversight of
+the financial statements, the Audit Committee reviewed and
+discussed with both management and the independent auditors the
+audited financial statements and quarterly operating results
+prior to their issuance. During fiscal 2003,
+Patterson-UTI’s management advised the Audit Committee that
+each set of financial statements reviewed had been prepared in
+accordance with generally accepted accounting principles, and
+reviewed significant accounting and disclosure issues with the
+Audit Committee.
+In addition, during fiscal 2003, the Audit
+Committee reviewed major initiatives and programs aimed at
+strengthening the effectiveness of Patterson-UTI’s internal
+control structure. As part of this process, the Audit Committee
+continued to monitor the scope and adequacy of the internal
+control structure, reviewing staffing levels and steps taken to
+implement recommended improvements in internal procedures and
+controls.
+Taking all of these reviews and discussions into
+account, the undersigned Audit Committee members recommended to
+the Board of Directors that the Board approve the inclusion of
+the Patterson-UTI’s audited financial statements in the
+Annual Report on Form 10-K for the fiscal year ended
+December 31, 2003.
+Audit Committee of the Board of Directors:
+Kenneth R. Peak, Chairman 
+Robert C. Gist
+Nadine C. Smith
+PricewaterhouseCoopers Fees for Fiscal Years
+2003 and 2002 
+In 2003 and 2002, PricewaterhouseCoopers LLP
+billed Patterson-UTI and its subsidiaries for the aggregate fees
+set forth in the table below. These fees include all fees
+incurred by Patterson-UTI for (i) professional services
+rendered for the audit of Patterson-UTI’s annual financial
+statements and review of quarterly financial statements,
+(ii) assurance and related services that are reasonably
+related to the performance of the audit or review of
+Patterson-UTI’s financial statements,
+(iii) professional services
+26
+Table of Contents 
+rendered for tax compliance, tax advice, and tax
+planning, and (iv) products and services provided by
+PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2003 
+2002 
+Audit fees
+$ 
+323,000 
+$ 
+331,000 
+Audit-related fees
+180,000 
+73,000 
+Tax fees
+81,000 
+285,000 
+All other fees
+31,000 
+98,000 
+Total
+$ 
+615,000 
+$ 
+787,000 
+The Audit Committee approves the appointment of
+the independent audit firm. The Audit Committee or
+Mr. Peak, as Chairman of the Audit Committee, approves all
+other engagements of the independent audit firm in advance. In
+the event Mr. Peak approves any such engagement, he
+discusses such approval with the Audit Committee at the next
+meeting.
+Fiscal 2003 
+“Audit Fees” relate to audit services
+of PricewaterhouseCoopers LLP for fiscal 2003 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements and quarterly review of Patterson-UTI’s
+financial statements. “Audit-related Fees” includes
+reading of Patterson-UTI’s registration statement and
+consultation on the correspondence between Patterson-UTI and the
+SEC related to the registration statement/proxy statement with
+respect to the acquisition of TMBR/ Sharp Drilling, Inc.
+“Tax Fees” includes federal, state and foreign income
+tax compliance and related matters. “All Other Fees”
+includes consultation related to Sarbanes-Oxley matters. The
+Audit Committee or Mr. Peak, as Chairman of the Audit
+Committee, approved all of the services described above.
+Fiscal 2002 
+“Audit Fees” relate to audit services
+of PricewaterhouseCoopers LLP for fiscal 2002 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements and quarterly review of Patterson-UTI’s
+financial statements. “Audit-related Fees” includes
+consultation on the appropriate accounting method related to the
+acquisition of TMBR/ Sharp Drilling, Inc. “Tax Fees”
+includes federal, state and foreign income tax compliance and
+related matters. “All Other Fees” includes
+consultation related to Sarbanes-Oxley matters. The Audit
+Committee or Mr. Peak, as Chairman of the Audit Committee,
+approved all of the services described above.
+The Audit Committee has discussed the non-audit
+services provided by PricewaterhouseCoopers LLP and the related
+fees and has considered whether those services and fees are
+compatible with maintaining auditor independence. The Audit
+Committee determined that such non-audit services were
+consistent with the independence of PricewaterhouseCoopers LLP.
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership
+Reporting Compliance 
+Section 16(a) of the Securities Exchange Act
+requires Patterson-UTI’s officers and directors, and
+persons who own more than 10% of a registered class of
+Patterson-UTI’s equity securities, to file reports of
+ownership and changes in ownership with the SEC. Each of these
+persons is required by SEC regulation to furnish Patterson-UTI
+with copies of Section 16(a) filings.
+Based solely on its review of copies of such
+forms received by it, Patterson-UTI believes that, during the
+year ended December 31, 2003, its officers, directors,
+other than Mr. Stephen J. DeGroat, and beneficial owners of
+more than ten percent of a registered class of its equity
+securities complied with all applicable filing
+27
+Table of Contents 
+requirements. Mr. DeGroat failed to timely
+file a Form 4 related to a sale of Common Stock prior to
+his cessation of directorship on April 30, 2003.
+Other Business 
+As of the date of this proxy statement,
+management of Patterson-UTI was not aware of any matter to be
+presented at the Meeting other than as set forth herein. If any
+other matters are properly brought before the Meeting, however,
+the shares represented by valid proxies will be voted with
+respect to such matters in accordance with the judgment of the
+persons voting them.
+Stockholder Proposals for 2005 Annual
+Meeting 
+All proposals submitted by stockholders for
+presentation at the 2005 annual meeting must comply with the
+SEC’s rules regarding shareholder proposals. In addition,
+Patterson-UTI’s bylaws provide that for business to be
+properly brought before an annual meeting by a stockholder, the
+stockholder, in addition to any other applicable requirements,
+must be a stockholder of record on the date of the giving of the
+notice provided for below and on the record date for the
+determination of stockholders entitled to vote at such annual
+meeting and must give timely notice of such business in writing
+to the Secretary of Patterson-UTI. To be timely with respect to
+the 2005 annual meeting, a stockholder’s notice must be
+delivered to or mailed and received at Patterson-UTI’s
+principal executive offices not earlier than March 1, 2005
+and not later than March 31, 2005; provided, however, that
+in the event that the annual meeting is called for a date that
+is not within 30 days before or after June 29, 2005,
+notice by the stockholder to be timely must be received not
+later than the close of business on the tenth day following the
+day on which such notice of the date of the meeting was mailed
+or public disclosure of the annual meeting date was made,
+whichever occurs first.
+A stockholder’s notice to the Secretary of
+Patterson-UTI shall set forth:
+• 
+a brief description of each matter desired to be
+brought before the annual meeting and the reasons for conducting
+such business at the annual meeting,
+• 
+the name and record address of the stockholder
+proposing such business,
+• 
+the class and number of shares of Patterson-UTI
+that are beneficially owned by the stockholder,
+• 
+any material interest of the stockholder in such
+business, and
+• 
+a representation that such stockholder intends to
+appear in person or by proxy at the annual meeting to bring such
+business before the meeting.
+The proxies will have discretionary authority to
+vote on any matter that properly comes before the meeting if the
+stockholder has not provided timely written notice as required
+by the Patterson-UTI bylaws.
+Any proposal by a stockholder to be presented at
+Patterson-UTI’s 2005 annual meeting of stockholders must be
+received by Patterson-UTI no later than February 1, 2005,
+in order to be eligible for inclusion in Patterson-UTI’s
+proxy statement and proxy used in connection with the 2005
+annual meeting.
+Patterson-UTI reserves the right to reject, rule
+out of order, or take other appropriate action with respect to
+any proposal or nomination that does not comply with these and
+other applicable requirements.
+Annual Report 
+You are referred to Patterson-UTI’s annual
+report to stockholders with a copy of its Annual Report on
+Form 10-K, as amended, for the year ended December 31,
+2003, filed with the SEC, enclosed herewith for your
+information. The annual report to stockholders is not
+incorporated in this proxy statement and is not to be considered
+part of the soliciting material.
+28
+Table of Contents 
+APPENDIX A 
+PATTERSON-UTI ENERGY, INC. 
+AUDIT COMMITTEE OF THE BOARD OF
+DIRECTORS 
+CHARTER 
+Purpose 
+The Audit Committee shall oversee
+management’s conduct of the Corporation’s accounting
+and financial reporting process including review of the
+financial reports and other financial information provided by
+the Corporation to the public and government and regulatory
+bodies, the Corporation’s system of internal accounting,
+the Corporations’ financial controls, and the annual
+independent audit of the Corporation’s financial
+statements. The Audit Committee shall also oversee compliance
+with the Corporation’s codes of conduct and ethics and with
+legal and regulatory requirements.
+In discharging its role, the Audit Committee is
+empowered to investigate any matter brought to its attention or
+developed on its own initiative, with full access to all books,
+records, facilities and personnel to the Corporation and the
+power to retain outside counsel, auditors or other experts for
+this purpose. The Board and the Audit Committee are in place to
+represent the corporation’s stockholders; and, accordingly,
+the independent auditors are ultimately accountable to the Board
+through the Audit Committee.
+Composition 
+The Audit Committee shall be comprised of three
+or more directors as determined by the Board, each of whom shall
+meet the independence requirements of Rules 4200(a)(15) and
+4350(d)(2) of the NASDAQ Stock Market, Inc. and
+Rule 10A-3(b)(1) of the rules and regulations under the
+Securities Exchange Act of 1934. All members of the Audit
+Committee shall have a working familiarity with basic finance
+and accounting practices, and at least one member of the Audit
+Committee shall have accounting or related financial management
+expertise.
+The members of the Audit Committee shall be
+elected by the Board at the annual organizational meeting of the
+Board and until their successors shall be duly elected and
+qualified. Unless a Chairperson is elected by the full Board,
+the members of the Audit Committee may designate a Chairperson
+by majority vote of the full Audit Committee membership. A
+member of the Audit Committee may be removed at any time by the
+Board.
+Additionally, the Audit Committee shall have at
+least one audit committee financial expert within the meaning of
+item 401(h)(2) of Schedule SK of the Securities and
+Exchange Commission and meeting the requirements of
+Rule 4350(d)(2)(iv) of the NASDAQ Stock Market, Inc.
+Meetings 
+The Audit Committee shall meet at least four
+times annually, or more frequently as circumstances dictate. As
+part of its job to foster open communication, the Audit
+Committee should meet at least annually with management,
+including the Chief Financial Officer, and the independent
+auditors separately to discuss any matters that the Audit
+Committee or each of these groups believes should be discussed
+privately. In addition, the Audit Committee or at least its
+Chairperson should meet with the independent auditors and
+management quarterly to review the Corporation’s financial
+statements consistent with paragraph number 3 below.
+Responsibilities and Duties 
+The Audit Committee’s job is one of review
+and it recognizes that the Corporation’s management is
+responsible for preparing the Corporations’ financial
+statements and that the independent auditors are
+A-1
+Table of Contents 
+responsible for auditing those financial
+statements. Additionally, the Audit Committee recognizes that
+management and the independent auditors have more time,
+knowledge, and detailed information concerning the corporation
+than do Audit Committee members. Consequently, in performing its
+functions, the Audit Committee is not providing any expert or
+special assurance as to the Corporation’s financial
+statements or any professional certification as to the
+independent auditors’ work.
+The following functions will be the common
+recurring activities of the Audit Committee. These functions are
+set forth as a guide with the understanding that the Audit
+Committee may diverge from this guide as appropriate given the
+circumstances.
+Documents/ Reports Review 
+1. Review and reassess, at least annually,
+the adequacy of this Charter. Make recommendations to the Board,
+as conditions dictate, to update this Charter.
+2. Review with management and the
+independent auditors the Corporation’s audited financial
+statements, including a discussion with the independent auditors
+of the matters required to be discussed by Statement of Auditing
+Standards No. 61 (“SAS No. 61”).
+3. Review with management and the
+independent auditors the interim financial results prior to the
+release of earnings and filing of the Quarterly Report on
+Form 10-Q, and including a discussion with the independent
+auditors of the matters to be discussed by SAS No. 61. The
+Chairperson of the Audit Committee may represent the entire
+Audit Committee for purposes of this review.
+4. Review with management and independent
+auditors, the quality and adequacy of the Corporation’s
+internal controls.
+5. Discuss with management its philosophy
+and approach to earnings releases and guidance given to analysts
+and rating agencies.
+Independent Auditors 
+6. Pre-approve all audit and non-audit
+services provided by the independent auditors to the Corporation
+(subject to any de minimis exceptions permitted by law for
+non-audit services, which must, in any event, be approved
+annually by the Audit Committee prior to completion of the
+annual audit). The Audit Committee may take any measures that it
+determines to be appropriate to assure that the independent
+auditors are not engaged to perform specific non-audit services
+proscribed by law or regulation. The Audit Committee may
+delegate pre-approval authority to a member or members of the
+Audit Committee or to a subcommittee of the Audit Committee. The
+decisions of any Audit Committee member or members or
+subcommittee to whom pre-approval authority is delegated must be
+presented to the full Audit Committee at its next scheduled
+meeting.
+7. Review the performance of the independent
+auditors and make decisions with respect to the appointment,
+compensation, retention and oversight of the independent
+auditors (including resolutions of disagreements between
+management and the independent auditors). The independent
+auditors shall report directly to the Audit Committee.
+8. Oversee independence of the accountants
+by:
+• 
+receiving from the independent auditors, on an
+annual basis, a formal written statement delineating all
+relationships between the accountants and the Corporation
+consistent with Independence Standards Board Standard 1;
+• 
+reviewing, and actively discussing with the
+Board, if necessary, and the independent auditors, on a periodic
+basis, any disclosed relationships or services between the
+independent auditors and the Corporation or any other disclosed
+relationships or services that may impact the objectivity and
+independence of the independent auditors; and
+• 
+taking appropriate action to satisfy itself of
+the accountant’s independence.
+A-2
+Table of Contents 
+9. Based on the review and discussions
+referred to in Paragraphs numbered 2 and 7 above, the Audit
+Committee shall determine whether to recommend to the Board that
+the Corporations’ audited financial statements be included
+in the Corporations’ Annual Report on Form 10-K.
+10. The Audit Committee shall receive
+quarterly reports, and other reports as requested by it from
+time to time, from the independent auditors on, and assess,
+(i) the critical accounting policies and practices of the
+Company and (ii) all alternative treatments of financial
+information within generally accepted accounting principles that
+have been discussed with management, the ramifications thereof
+and the preferred treatment thereof and shall receive from both
+(at the time they are sent) all material written communications
+between the independent auditors and the Company’s
+management.
+Financial Reporting Process 
+11. In conjunction with the independent
+auditors and the Chief Financial Officer, review the integrity
+of the Corporation’s financial reporting processes, both
+internal and external.
+12. Consider and approve, if appropriate,
+major changes to the Corporation’s auditing and accounting
+principles and practices as recommended by the independent
+auditors, management, or the internal auditing department.
+13. Establish regular systems of reporting
+to the Audit Committee by each of management, the independent
+auditors and the internal auditors regarding any significant
+judgments made in management’s preparation of the financial
+statements and any significant difficulties encountered during
+the course of the review or audit; including any restrictions on
+the scope of the work or access to required information.
+14. Review any significant disagreement
+among management and the independent auditors or the internal
+auditing department in connection with the preparation of the
+financial statements.
+Legal Compliance/ General 
+15. The Audit Committee shall, from time to
+time, discuss with management, the internal auditors and the
+independent auditors the Company’s adherence to legal and
+ethical compliance programs (e.g., Company’s code of
+conduct) and the steps management has taken to require and
+monitor such adherence by Company employees and agents.
+16. The Audit Committee shall, from time to
+time as it deems appropriate, discuss with Company counsel
+matters that may have a material impact on the Company’s
+financial statements and compliance with legal requirements and
+shall receive any attorney’s report, required by law to be
+submitted to the committee or the Board of Directors, of
+evidence of a material violation of securities laws or breaches
+of fiduciary duty or similar violation by the Company or any
+agent thereof.
+17. The Audit Committee shall periodically
+require each of its members to certify that such person meets
+the independence requirements prescribed by law and NASDAQ
+rules, including that such person has received no compensation
+from the Company other than director and Board committee fees.
+18. The Audit Committee shall report through
+its Chairperson to the Board following meetings of the Audit
+Committee.
+19. The Audit Committee shall maintain
+minutes or other records of meetings and activities of the Audit
+Committee.
+20. The Audit Committee shall have full
+authority to engage and cause the Corporation to compensate, as
+and when deemed necessary or appropriate by the Audit Committee,
+independent counsel and other advisers, including accounting
+advisers.
+21. The Corporation shall provide
+appropriate funding, as determined by the Audit Committee, for
+the payment of compensation to the independent accountant, and
+to any advisers engaged by the Audit Committee and for the
+ordinary administrative expenses of the Audit Committee
+necessary or appropriate to the carrying out of its duties.
+A-3
+Table of Contents 
+22. No Audit Committee member shall
+simultaneously serve on the audit committee of more than two
+other public companies without notice to and approval by the
+Board of Directors.
+While the Audit Committee has the
+responsibilities and powers set forth in this Charter, it is not
+the duty of the Audit Committee to plan or conduct audits or to
+determine that the Company’s financial statements are
+complete and accurate and are in accordance with generally
+accepted accounting principles. This is the responsibility of
+management and the independent auditors.
+A-4
+Table of Contents 
+APPENDIX B 
+CERTIFICATE OF AMENDMENT 
+to the 
+RESTATED CERTIFICATE OF INCORPORATION
+OF 
+PATTERSON-UTI ENERGY, INC. 
+Patterson-UTI Energy, Inc., a Delaware
+corporation (the “Corporation”), does hereby certify:
+FIRST: The name of the Corporation is
+PATTERSON UTI-ENERGY, INC.
+SECOND: The following amendment to the
+Restated Certificate of Incorporation was duly adopted by a vote
+of the stockholders sufficient for approval effective
+June 29, 2004, in the manner prescribed by the General
+Corporation Law of the State of Delaware:
+The first sentence of Article FOURTH of the
+Restated Certificate of Incorporation is amended to read in its
+entirety as follows:
+FOURTH: The total number of shares of stock
+that the Corporation shall have authority to issue is three
+hundred one million (301,000,000) shares, of which three hundred
+million (300,000,000) shares shall be Common Stock, having a par
+value of $0.01 per share, and one million (1,000,000)
+shares shall be Preferred Stock, having a par value of
+$0.01 per share.
+THIRD: The aforesaid amendment to the
+Restated Certificate of Incorporation was duly adopted in
+accordance with the provisions of Section 242 of the
+General Corporation Law of the State of Delaware.
+FOURTH: The aforesaid amendment does not
+effect a change in the amount of stated capital.
+ATTEST: 
+Jonathan D. Nelson, 
+Secretary 
+PATTERSON-UTI ENERGY, INC. 
+A. Glenn Patterson, 
+President 
+Dated: ,
+2004
+Each of the undersigned, A. Glenn Patterson, the
+President of the Corporation, and Jonathan D. Nelson, the
+Secretary of the Corporation, hereby affirms and acknowledges,
+under penalties of perjury, that the respective signature of the
+undersigned on the foregoing instrument is his respective act
+and deed or the act and deed of the Corporation, and that the
+facts stated in the foregoing instrument are true.
+A. Glenn Patterson,
+President 
+Jonathan D. Nelson,
+Secretary 
+B-1
+Table of Contents 
+APPENDIX C 
+PATTERSON-UTI ENERGY, INC. 
+AMENDED AND RESTATED 
+1997 LONG-TERM INCENTIVE PLAN 
+ARTICLE I:
+GENERAL
+SECTION 1.1 Purpose
+of the Plan. This Amended and Restated 1997 Long-Term
+Incentive Plan (the “Plan”) of Patterson-UTI Energy,
+Inc. (the “Company”) is intended to advance the best
+interests of the Company, its subsidiaries and its stockholders
+in order to attract, retain and motivate key employees by
+providing them with additional incentives through (i) the
+grant of options (“Options”) to purchase shares of
+Common Stock, par value $.01 per share, of the Company
+(“Common Stock”), (ii) the grant of stock
+appreciation rights (“Stock Appreciation Rights”),
+(iii) the award of shares of restricted Common Stock
+(“Restricted Stock”) and (iv) the award of units
+payable in cash or shares of Common Stock based on performance
+(“Performance Awards”), thereby increasing the
+personal stake of such key employees in the continued success
+and growth of the Company.
+SECTION 1.2 Administration
+of the Plan. (a) The Plan shall be administered either
+by the full Board of Directors of the Company (the “Board
+of Directors”) or by the Compensation Committee or other
+designated committee of the Board of Directors. The Board of
+Directors or such committee is referred to herein as the
+“Committee”. The Committee shall have authority to
+interpret conclusively the provisions of the Plan, to adopt such
+rules and regulations for carrying out the Plan as it may deem
+advisable, to decide conclusively all questions of fact arising
+in the application of the Plan, to establish performance
+criteria in respect of Awards (as defined herein) under the
+Plan, to certify that Plan requirements have been met for any
+participant in the Plan, to submit such matters as it may deem
+advisable to the Company’s stockholders for their approval,
+and to make all other determinations and take all other actions
+necessary or desirable for the administration of the Plan. The
+Committee is expressly authorized to adopt rules and regulations
+limiting or eliminating its discretion in respect of certain
+matters as it may deem advisable to comply with or obtain
+preferential treatment under any applicable tax or other law
+rule, or regulation. All decisions and acts of the Committee
+shall be final and binding upon all affected Plan participants.
+(b) The Committee shall designate the
+eligible employees, if any, to be granted Awards and the type
+and amount of such Awards and the time when Awards will be
+granted. All Awards granted under the Plan shall be on the terms
+and subject to the conditions determined by the Committee
+consistent with the Plan.
+SECTION 1.3 Eligible
+Participants. Key employees, including officers and
+directors, of the Company and its subsidiaries (all such
+subsidiaries being referred to as “Subsidiaries”)
+shall be eligible for Awards under the Plan.
+SECTION 1.4 Awards
+Under the Plan. Awards to key employees may be in the form
+of (i) Options, (ii) Stock Appreciation Rights, which
+may be issued independent of or in tandem with Options,
+(iii) shares of Restricted Stock, (iv) Performance
+Awards, or (v) any combination of the foregoing
+(collectively, “Awards”).
+SECTION 1.5 Shares
+Subject to the Plan. Initially, the aggregate number of
+shares of Common Stock that may be issued under the Plan shall
+be 8,250,000, subject to adjustment as provided in
+Section 5.2 of the Plan. Shares distributed pursuant to the
+Plan may consist of authorized but unissued shares or treasury
+shares of the Company, as shall be determined from time to time
+by the Board of Directors.
+If any Award under the Plan shall expire,
+terminate or be canceled (including cancellation upon an Option
+holder’s exercise of a related Stock Appreciation Right)
+for any reason without having been exercised in full, or if any
+Award shall be forfeited to the Company, the unexercised or
+forfeited Award shall not count against the above limits and
+shall again become available for Awards under the Plan (unless
+the holder of such
+C-1
+Table of Contents 
+Award received dividends or other economic
+benefits with respect to such Award, which dividends or other
+economic benefits are not forfeited, in which case the Award
+shall count against the above limits). Shares of Common Stock
+equal in number to the shares surrendered in payment of the
+option price, and shares of Common Stock which are withheld in
+order to satisfy Federal, state or local tax liability, shall
+count against the above limits. Only the number of shares of
+Common Stock actually issued upon exercise of a Stock
+Appreciation Right shall count against the above limits, and any
+shares which were estimated to be used for such purposes and
+were not in fact so used shall again become available for Awards
+under the Plan. Cash exercises of Stock Appreciation Rights and
+cash settlement of other Awards will not count against the above
+limits.
+The aggregate number of shares of Common Stock
+subject to Options or Stock Appreciation Rights that may be
+granted to any one participant in any one year under the Plan
+shall be 600,000, subject to adjustment as provided in
+Section 5.2 of the Plan. The aggregate number of shares of
+Common Stock that may be granted to any one participant in any
+one year in respect of Restricted Stock shall be 600,000,
+subject to adjustment as provided in Section 5.2 of the
+Plan. The aggregate number of shares of Common Stock that may be
+received by any one participant in any one year in respect of a
+Performance Award shall be 600,000, subject to adjustment as
+provided in Section 5.2 of the Plan, and the aggregate
+amount of cash that may be received by any one participant in
+any one year in respect to a Performance Award shall be $500,000.
+The total number of Awards (or portions thereof)
+settled in cash under the Plan, based on the number of shares
+covered by such Awards (e.g., 100 shares for a Stock
+Appreciation Right with respect to 100 shares), shall not
+exceed a number equal to (i) the number of shares initially
+available for issuance under the Plan plus (ii) the number
+of shares that have become available for issuance under the Plan
+pursuant to the first paragraph of this Section 1.5.
+The aggregate number of shares of Common Stock
+that are available under the Plan for Options granted in
+accordance with Section 2.4(i) (“ISOs”) is
+600,000, subject to adjustment as provided in Section 5.2
+of the Plan.
+SECTION 1.6 Other
+Compensation Programs. Nothing contained in the Plan shall
+be construed to preempt or limit the authority of the Board of
+Directors to exercise its corporate rights and powers,
+including, but not by way of limitation, the right of the Board
+of Directors (i) to grant incentive awards for proper
+corporate purposes otherwise than under the Plan to any
+employee, officer, director or other person or entity or
+(ii) to grant incentive awards to, or assume incentive
+awards of, any person or entity in connection with the
+acquisition (whether by purchase, lease, merger, consolidation
+or otherwise) of the business or assets (in whole or in part) of
+any person or entity.
+ARTICLE II:
+STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
+SECTION 2.1 Terms
+and Conditions of Options. Subject to the following
+provisions, all Options granted under the Plan to employees of
+the Company and its Subsidiaries shall be in such form and shall
+have such terms and conditions as the Committee, in its
+discretion, may from time to time determine consistent with the
+Plan.
+(a) Option Price. The option price
+per share shall be determined by the Committee, except that in
+the case of an Option granted in accordance with
+Section 2.4(i) the option price per share shall not be less
+than the fair market value of a share of Common Stock (as
+determined by the Committee) on the date the Option is granted
+(other than in the case of substitute or assumed Options to the
+extent required to qualify such Options for preferential tax
+treatment under the Code as in effect at the time of such grant).
+(b) Term of Option. The term of an
+Option shall be determined by the Committee, except that the
+term of an Option shall not exceed ten years from the date of
+grant, and, notwithstanding any other provision of this Plan, no
+Option shall be exercised after the expiration of its term.
+C-2
+Table of Contents 
+(c) Exercise of Options. Options
+shall be exercisable at such time or times and subject to such
+terms and conditions as the Committee shall specify in the
+Option grant. Unless the Option grant specifies otherwise, the
+Committee shall have discretion at any time to accelerate such
+time or times and otherwise waive or amend any conditions in
+respect of all or any portion of the Options held by any
+optionee. An Option may be exercised in accordance with its
+terms as to any or all shares purchasable thereunder.
+(d) Payment for Shares. The Committee
+may authorize payment for shares as to which an Option is
+exercised to be made in cash, shares of Common Stock, a
+combination thereof, by “cashless exercise” or in such
+other manner as the Committee in its discretion may provide.
+(e) Stockholder Rights. The holder of
+an Option shall, as such, have none of the rights of a
+stockholder.
+(f) Termination of Employment. The
+Committee shall have discretion to specify in the Option grant,
+or, with the consent of the optionee, an amendment thereof,
+provisions with respect to the period, not extending beyond the
+term of the Option, during which the Option may be exercised
+following the optionee’s termination of employment.
+SECTION 2.2 Stock
+Appreciation Rights in Tandem with Options. (a) The
+Committee may, either at the time of grant of an Option or at
+any time during the term of the Option, grant Stock Appreciation
+Rights (“Tandem SARs”) with respect to all or any
+portion of the shares of Common Stock covered by such Option. A
+Tandem SAR may be exercised at any time the Option to which it
+relates is then exercisable, but only to the extent the Option
+to which it relates is exercisable, and shall be subject to the
+conditions applicable to such Option. When a Tandem SAR is
+exercised, the Option to which it relates shall cease to be
+exercisable to the extent of the number of shares with respect
+to which the Tandem SAR is exercised. Similarly, when an Option
+is exercised, the Tandem SARs relating to the shares covered by
+such Option exercise shall terminate. Any Tandem SAR which is
+outstanding on the last day of the term of the related Option
+(as determined pursuant to Section 2.1(b)) shall be
+automatically exercised on such date for cash without any action
+by the optionee.
+(b) Upon exercise of a Tandem SAR, the
+holder shall receive, for each share with respect to which the
+Tandem SAR is exercised, an amount (the
+“Appreciation”) equal to the difference between the
+option price per share of the Option to which the Tandem SAR
+relates and the fair market value (as determined by the
+Committee) of a share of Common Stock on the date of exercise of
+the Tandem SAR. The Appreciation shall be payable in cash,
+Common Stock, or a combination of both, at the option of the
+Committee, and shall be paid within 30 days of the exercise
+of the Tandem SAR.
+SECTION 2.3 Stock
+Appreciation Rights Independent of Options. Subject to the
+following provisions, all Stock Appreciation Rights granted
+independent of Options (“Independent SARs”) under the
+Plan to employees of the Company and its Subsidiaries shall be
+in such form and shall have such terms and conditions as the
+Committee, in its discretion, may from time to time determine
+consistent with the Plan.
+(a) Exercise Price. The exercise
+price per share shall be determined by the Committee on the date
+the Independent SAR is granted.
+(b) Term of Independent SAR. The term
+of an Independent SAR shall be determined by the Committee, and,
+notwithstanding any other provision of this Plan, no Independent
+SAR shall be exercised after the expiration of its term.
+(c) Exercise of Independent SARs.
+Independent SARs shall be exercisable at such time or times
+and subject to such terms and conditions as the Committee shall
+specify in the Independent SAR grant. Unless the Independent SAR
+grant specifies otherwise, the Committee shall have discretion
+at any time to accelerate such time or times and otherwise waive
+or amend any conditions in respect of all or any portion of the
+Independent SARs held by any participant. Upon exercise of an
+Independent SAR, the holder shall receive, for each share
+specified in the Independent SAR grant, an amount (the
+“Appreciation”) equal to the difference between the
+exercise price per share specified in the Independent SAR grant
+and the fair market value (as determined by the Committee) of a
+share of Common Stock on the
+C-3
+Table of Contents 
+date of exercise of the Independent SAR. The
+Appreciation shall be payable in cash, Common Stock, or a
+combination of both, at the option of the Committee, and shall
+be paid within 30 days of the exercise of the Independent
+SAR.
+(d) Stockholder Rights. The holder of
+an Independent SAR shall, as such, have none of the rights of a
+stockholder.
+(e) Termination of Employment. The
+Committee shall have discretion to specify in the Independent
+SAR grant, or, with the consent of the holder, an amendment
+thereof, provisions with respect to the period, not extending
+beyond the term of the Independent SAR, during which the
+Independent SAR may be exercised following the holder’s
+termination of employment.
+SECTION 2.4 Statutory
+Options. Subject to the limitations on Option terms set
+forth in Section 2.1, the Committee shall have the
+authority to grant (i) ISOs within the meaning of
+Section 422 of the Internal Revenue Code of 1986, as
+amended (the “Code”), and (ii) Options containing
+such terms and conditions as shall be required to qualify such
+Options for preferential tax treatment under the Code as in
+effect at the time of such grant, including, if then applicable,
+limits with respect to minimum exercise price, duration and
+amounts and special limitations applicable to any individual
+who, at the time the Option is granted, owns stock possessing
+more than 10% of the total combined voting power of all classes
+of stock of the Company or any affiliate. Options granted
+pursuant to this Section 2.4 may contain such other terms
+and conditions permitted by Article II of this Plan as the
+Committee, in its discretion, may from time to time determine
+(including, without limitation, provision for Stock Appreciation
+Rights), to the extent that such terms and conditions do not
+cause the Options to lose their preferential tax treatment. If
+an Option intended to be an ISO ceases or is otherwise not
+eligible to be an ISO, such Option (or portion thereof necessary
+to maintain the status of the remaining portion of the Option as
+an ISO) shall remain valid but be treated as an Option other
+than an ISO.
+SECTION 2.5 Change
+of Control. Notwithstanding the exercisability schedule
+governing any Option or Stock Appreciation Right, upon the
+occurrence of a Change of Control (as defined in
+Section 5.8) all Options and Stock Appreciation Rights
+outstanding at the time of such Change of Control and held by
+participants who are employees of the Company or its
+subsidiaries at the time of such Change of Control shall (unless
+specifically provided otherwise in the grant thereof) become
+immediately exercisable and, unless the participant agrees
+otherwise in writing, remain exercisable for three years (but
+not beyond the term of the Option or Stock Appreciation Right)
+after the employee’s termination of employment for any
+reason other than termination by the Company or a subsidiary of
+the Company for dishonesty, conviction of a felony, willful
+unauthorized disclosure of confidential information or willful
+refusal to perform the duties of such employee’s position
+or positions with the Company or such subsidiary (termination
+for “cause”); provided that this Section 2.5
+shall not apply to Awards granted to a participant if, in
+connection with a Change of Control pursuant to clause (1)
+of Section 5.8, such participant is the Person or forms
+part of the Person specified in such clause (1).
+ARTICLE III:
+RESTRICTED STOCK
+SECTION 3.1 Terms
+and Conditions of Restricted Stock Awards. Subject to the
+following provisions, all Awards of Restricted Stock under the
+Plan to employees of the Company and its Subsidiaries shall be
+in such form and shall have such terms and conditions as the
+Committee, in its discretion, may from time to time determine
+consistent with the Plan.
+(a) Restricted Stock Award. The
+Restricted Stock Award shall specify the number of shares of
+Restricted Stock to be awarded, the price, if any, to be paid by
+the recipient of the Restricted Stock, and the date or dates on
+which the Restricted Stock will vest. The vesting and number of
+shares of Restricted Stock may be conditioned upon the
+completion of a specified period of service with the Company or
+its Subsidiaries, upon the attainment of specified performance
+objectives, or upon such other criteria as the Committee may
+determine in accordance with the provisions hereof. Performance
+objectives will be based on increases in share prices, operating
+income, net income or cash flow thresholds on a company
+C-4
+Table of Contents 
+wide, subsidiary or division or group basis, rig
+utilization, safety records, return on common equity or any
+combination of the foregoing.
+(b) Restrictions on Transfer. Stock
+certificates representing the Restricted Stock granted to an
+employee shall be registered in the employee’s name. Such
+certificates shall either be held by the Company on behalf of
+the employee, or delivered to the employee bearing a legend to
+restrict transfer of the certificate until the Restricted Stock
+has vested, as determined by the Committee. The Committee shall
+determine whether the employee shall have the right to vote
+and/or receive dividends on the Restricted Stock before it has
+vested. No share of Restricted Stock may be sold, transferred,
+assigned, or pledged by the employee until such share has vested
+in accordance with the terms of the Restricted Stock Award.
+Unless the grant of a Restricted Stock Award specifies
+otherwise, in the event of an employee’s termination of
+employment before all the employee’s Restricted Stock has
+vested, or in the event other conditions to the vesting of
+Restricted Stock have not been satisfied prior to any deadline
+for the satisfaction of such conditions set forth in the Award,
+the shares of Restricted Stock that have not vested shall be
+forfeited and any purchase price paid by the employee shall be
+returned to the employee. At the time Restricted Stock vests
+(and, if the employee has been issued legended certificates of
+Restricted Stock, upon the return of such certificates to the
+Company), a certificate for such vested shares shall be
+delivered to the employee or the employee’s estate, free of
+all restrictions.
+(c) Accelerated Vesting. 
+Notwithstanding the vesting conditions set forth in the
+Restricted Stock Award, (i) unless the Restricted Stock
+grant specifies otherwise, the Committee may in its discretion
+at any time accelerate the vesting of Restricted Stock or
+otherwise waive or amend any conditions of a grant of Restricted
+Stock, and (ii) all shares of Restricted Stock shall vest
+upon a Change of Control of the Company; provided that
+clause (ii) above shall not apply to Awards granted to a
+participant if, in connection with a Change of Control pursuant
+to clause (1) of Section 5.8, such participant is the
+Person or forms part of the Person specified in such
+clause (1).
+(d) Maximum Number. The maximum
+aggregate number of shares of Restricted Stock which may be
+awarded under the Plan shall be 500,000 shares.
+ARTICLE IV:
+PERFORMANCE AWARDS
+SECTION 4.1 
+Terms and Conditions of Performance Awards. The Committee
+shall be authorized to grant Performance Awards, which are
+payable in stock, cash or a combination thereof, at the
+discretion of the Committee.
+(a) Performance Period. The Committee
+shall establish with respect to each Performance Award a
+performance period over which the performance goal of such
+Performance Award shall be measured. The performance period for
+a Performance Award shall be established prior to the time such
+Performance Award is granted and may overlap with performance
+periods relating to other Performance Awards granted hereunder
+to the same employee.
+(b) Performance Objectives. The
+Committee shall establish a minimum level of acceptable
+achievement for the holder at the time of each Award. Each
+Performance Award shall be contingent upon future performances
+and achievement of objectives described either in terms of
+Company-wide performance or in terms that are related to
+performance of the employee or of the division, subsidiary,
+department or function within the Company in which the employee
+is employed. The Committee shall have the authority to establish
+the specific performance objectives and measures applicable to
+such objectives. Such objectives, however, shall be based on
+increases in share prices, operating income, net income or cash
+flow thresholds on a company wide, subsidiary or division or
+group, rig utilization, safety records, return on common equity
+or any combination of the foregoing.
+C-5
+Table of Contents 
+(c) Size, Frequency and Vesting. The
+Committee shall have the authority to determine at the time of
+the Award the maximum value of a Performance Award, the
+frequency of Awards and the date or dates when Awards vest.
+(d) Payment. Following the end of
+each performance period, the holder of each Performance Award
+will be entitled to receive payment of an amount, not exceeding
+the maximum value of the Performance Award, based on the
+achievement of the performance measures for such performance
+period, as determined by the Committee. If at the end of the
+performance period the specified objectives have been attained,
+the employee shall be deemed to have fully earned the
+Performance Award. If the employee exceeds the specified minimum
+level of acceptable achievement but does not fully attain such
+objectives, the employee shall be deemed to have partly earned
+the Performance Award, and shall become entitled to receive a
+portion of the total Award, as determined by the Committee. If a
+Performance Award is granted after the start of a performance
+period, the Award shall be reduced to reflect the portion of the
+performance period during which the Award was in effect. Unless
+the Award specifies otherwise, including restrictions in order
+to satisfy the conditions under Section 162(m) of the Code,
+the Committee may adjust the payment of Awards or the
+performance objectives if events occur or circumstances arise
+which would cause a particular payment or set of performance
+objectives to be inappropriate, as determined by the Committee.
+(e) Termination of Employment. A
+recipient of a Performance Award who, by reason of death,
+disability or retirement, terminates employment before the end
+of the applicable performance period shall be entitled to
+receive, to the extent earned, a portion of the Award which is
+proportional to the portion of the performance period during
+which the employee was employed. A recipient of a Performance
+Award who terminates employment for any other reason shall not
+be entitled to any part of the Award unless the Committee
+determines otherwise; however, the Committee may in no event pay
+the employee more than that portion of the Award which is
+proportional to his or her period of actual service.
+(f) Accelerated Vesting. 
+Notwithstanding the vesting conditions set forth in a
+Performance Award, (i) unless the Award specifies
+otherwise, the Committee may in its discretion at any time
+accelerate vesting of the Award or otherwise waive or amend any
+conditions (including but not limited to performance objectives)
+in respect of a Performance Award, and (ii) all Performance
+Awards shall vest upon a Change of Control of the Company. In
+addition, each participant in the Plan shall receive the maximum
+Performance Award he or she could have earned for the
+proportionate part of the performance period prior to the Change
+of Control, and shall retain the right to earn any additional
+portion of his or her Award if he or she remains in the
+Company’s employ. However, clause (ii) above shall not
+apply to Awards granted to a participant if, in connection with
+a Change of Control pursuant to clause (1) of
+Section 5.8, such participant is the Person or forms part
+of the Person specified in such clause (1).
+(g) Stockholder Rights. The holder of
+a Performance Award shall, as such, have none of the rights of a
+stockholder.
+ARTICLE V:
+ADDITIONAL PROVISIONS
+SECTION 5.1 General
+Restrictions. Each Award under the Plan shall be subject to
+the requirement that, if at any time the Committee shall
+determine that (i) the listing, registration or
+qualification of the shares of Common Stock subject or related
+thereto upon any securities exchange or under any state or
+Federal law, or (ii) the consent or approval of any
+government regulatory body, or (iii) an agreement by the
+recipient of an Award with respect to the disposition of shares
+of Common Stock, is necessary or desirable (in connection with
+any requirement or interpretation of any Federal or state
+securities law, rule or regulation) as a condition of, or in
+connection with, the granting of such Award or the issuance,
+purchase or delivery of shares of Common Stock thereunder, such
+Award may not be consummated in whole or in part unless such
+listing, registration, qualification, consent, approval or
+agreement shall have been effected or obtained free of any
+conditions not acceptable to the Committee.
+C-6
+Table of Contents 
+SECTION 5.2 Adjustments
+for Changes in Capitalization. In the event of any stock
+dividends, stock splits, recapitalizations, combinations,
+exchanges of shares, mergers, consolidation, liquidations,
+split-ups, split-offs, spin-offs, or other similar changes in
+capitalization, or any distribution to stockholders, including a
+rights offering, other than regular cash dividends, changes in
+the outstanding stock of the Company by reason of any increase
+or decrease in the number of issued shares of Common Stock
+resulting from a split-up or consolidation of shares or any
+similar capital adjustment or the payment of any stock dividend,
+any share repurchase at a price in excess of the market price of
+the Common Stock at the time such repurchase is announced or
+other increase or decrease in the number of such shares, the
+Committee shall make appropriate adjustment in the number and
+kind of shares authorized by the Plan (including shares
+available for ISOs), in the number, price or kind of shares
+covered by the Awards and in any outstanding Awards under the
+Plan; provided, however, that no such adjustment shall increase
+the aggregate value of any outstanding Award.
+In the event of any adjustment in the number of
+shares covered by any Award, any fractional shares resulting
+from such adjustment shall be disregarded and each such Award
+shall cover only the number of full shares resulting from such
+adjustment.
+SECTION 5.3 Amendments. 
+(a) The Board of Directors may at any time and from time to
+time and in any respect amend or modify the Plan.
+(b) The Committee shall have the authority
+to amend any Award to include any provision which, at the time
+of such amendment, is authorized under the terms of the Plan;
+however, no outstanding Award may be revoked or altered in a
+manner unfavorable to the holder without the written consent of
+the holder.
+SECTION 5.4 Withholding. 
+Whenever the Company proposes or is required to issue or
+transfer shares of Common Stock under the Plan, the Company
+shall have the right to require the holder to pay an amount in
+cash or to retain or sell without notice, or demand surrender
+of, shares of Common Stock in value sufficient to satisfy any
+Federal, state or local withholding tax liability
+(“Withholding Tax”) prior to the delivery of any
+certificate for such shares (or remainder of shares if Common
+Stock is retained to satisfy such tax liability). Whenever under
+the Plan payments are to be made in cash, such payments shall be
+net of an amount sufficient to satisfy any Federal, state or
+local withholding tax liability. An Award may also provide the
+holder with the right to satisfy the Withholding Tax with
+previously owned shares of Common Stock or shares of Common
+Stock otherwise issuable to the holder.
+Whenever Common Stock is so retained or
+surrendered to satisfy Withholding Tax, the value of shares of
+Common Stock so retained or surrendered shall be determined by
+the Committee, and the value of shares of Common Stock so sold
+shall be the net proceeds (after deduction of commissions)
+received by the Company from such sale, as determined by the
+Committee.
+SECTION 5.5 Non-assignability. 
+Except as expressly provided in the Plan or in any agreements,
+no Award under the Plan shall be assignable or transferable by
+the holder thereof except by will or by the laws of descent and
+distribution. During the life of the holder, Awards under the
+Plan shall be exercisable only by such holder or by the guardian
+or legal representative of such holder.
+SECTION 5.6 Non-uniform
+Determinations. Determinations by the Committee under the
+Plan (including, without limitation, determinations of the
+persons to receive Awards; the form, amount and timing of such
+Awards; the terms and provisions of such Awards and the
+agreements evidencing same; and provisions with respect to
+termination of employment) need not be uniform and may be made
+by it selectively among persons who receive, or are eligible to
+receive, Awards under the Plan, whether or not such persons are
+similarly situated.
+SECTION 5.7 No
+Guarantee of Employment. The grant of an Award under the
+Plan shall not constitute an assurance of continued employment
+for any period or any obligation of the Board of Directors to
+nominate any director for reelection by the Company’s
+stockholders.
+C-7
+Table of Contents 
+SECTION 5.8 Change
+of Control. A “Change of Control” shall be deemed
+to have occurred if:
+(1) any Person (as defined below), other
+than a Designated Person, is or becomes the Beneficial Owner (as
+defined below) of securities of the Company representing 35% or
+more of the Voting Power (as defined below);
+(2) there shall occur a change in the
+composition of a majority of the Board of Directors within any
+period of four consecutive years which change shall not have
+been approved by a majority of the Board of Directors as
+constituted immediately prior to the commencement of such period;
+(3) at any meeting of the stockholders of
+the Company called for the purpose of electing directors, more
+than one of the persons nominated by the Board of Directors for
+election as directors shall fail to be elected; or
+(4) a merger, consolidation, sale of
+substantially all assets or other reorganization of the Company,
+other than a reincorporation, in which the Company does not
+survive, shall occur.
+For purposes of this Section 5.8,
+(i) “Person” shall have the meaning set forth in
+Sections 3(a)(9) and 13(d)(3) of the Securities Exchange
+Act of 1934 (the “Exchange Act”), as in effect on
+May 1, 1997, (ii) “Beneficial Owner” shall
+have the meaning set forth in Rules 13d-3 and 13d-5
+promulgated under the Exchange Act on May 1, 1997;
+(iii) “Voting Power” shall mean the voting power
+of the outstanding securities of the Company having the right
+under ordinary circumstances to vote at an election of the Board
+of Directors; and (iv) “Designated Person” shall
+mean any Person whose Beneficial Ownership of securities is
+solely the result of such Person acquiring securities as an
+underwriter in an underwritten public offering of such
+securities. Notwithstanding anything contained herein to the
+contrary, a Change in Control shall not be deemed to have
+occurred due to the Voting Power of Remy Capital
+Partners III, L.P. or any of its affiliates (collectively
+“Remy”) falling below 35% or subsequently increasing
+over 35%.
+SECTION 5.9 Duration
+and Termination. (a) The Plan shall be of unlimited
+duration. Notwithstanding the foregoing, no ISO (within the
+meaning of Section 422 of the Code) shall be granted under
+the Plan ten (10) years after the effective date of the
+Plan, but Awards granted prior to such date may extend beyond
+such date, and the terms of this Plan shall continue to apply to
+all Awards granted hereunder.
+(b) The Board of Directors may suspend,
+discontinue or terminate the Plan at any time. Such action shall
+not impair any of the rights of any holder of any Award
+outstanding on the date of the Plan’s suspension,
+discontinuance or termination without the holder’s written
+consent.
+SECTION 5.10 Deferred
+Compensation and Trust Agreements. The Committee may
+authorize and establish deferred compensation agreements and
+arrangements in connection with Awards under the Plan and may
+establish trusts and other arrangements including “rabbi
+trusts”, with respect to such agreements and appoint one or
+more trustees for such trusts. Shares of Common Stock under the
+Plan may also be acquired by one or more trustees from the
+Company, in the open market or otherwise.
+SECTION 5.11 Effective
+Date. The Plan is effective as of July 23, 1997, the
+effective date of the Long-Term Incentive Plan prior to
+amendment.
+C-8
+Table of Contents 
+AMENDMENT 
+TO THE PATTERSON-UTI ENERGY, INC. 
+AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE
+PLAN 
+THIS AGREEMENT is by Patterson-UTI Energy, Inc.
+(the “Sponsor”),
+WITNESSETH:
+WHEREAS, the Sponsor maintains the Plan known as
+the “Patterson-UTI Energy, Inc. Amended and Restated 1997
+Long-Term Incentive Plan” (the “Plan”); and
+WHEREAS, the Sponsor retained the right in
+Section 5.3 of the Plan to amend the Plan from time to
+time; and
+WHEREAS, the Board of Directors of the Sponsor
+approved resolutions on April 28, 2004 to amend the Plan;
+NOW, THEREFORE, the Sponsor agrees that,
+effective upon the approval of a majority of the stockholders of
+the Sponsor entitled to vote thereon, the Plan is hereby
+amended, as follows:
+1. The reference to “$500,000” in
+the third paragraph of Section 1.5 of the Plan is hereby
+deleted and replaced by “$2,000,000”.
+2. The last sentence of Section 3.1(a)
+of the Plan is hereby deleted in its entirety and replaced by
+“Performance objectives will be based on
+absolute and relative increases in share prices, operating
+income, net income, cash flow, cash margins and earnings before
+interest, income taxes and depreciation, depletion and
+amortization thresholds on a company wide, subsidiary, division
+or group basis, rig utilization, safety records, return on
+common equity or any combination of the foregoing.”
+3. The last sentence of Section 4.1(b)
+of the Plan is hereby deleted in its entirety and replaced by
+“Such objectives, however, shall be based on
+absolute and relative increases in share prices, operating
+income, net income, cash flow, cash margins and earnings before
+interest, income taxes and depreciation, depletion and
+amortization thresholds on a company wide, subsidiary, division
+or group basis, rig utilization, safety records, return on
+common equity or any combination of the foregoing.”
+IN WITNESS WHEREOF, the Sponsor has executed this
+Agreement
+this day
+of 2004.
+PATTERSON-UTI ENERGY, INC.
+By 
+Name: 
+Title: 
+C-9
+Table of Contents 
+VOTE BY TELEPHONE OR INTERNET 
+QUICK ««« EASY 
+««« IMMEDIATE 
+PATTERSON-UTI ENERGY, INC. 
+• 
+You can now vote your shares electronically through the Internet or
+the telephone. 
+• 
+This eliminates the need to return the proxy card. 
+• 
+Your electronic vote authorizes the named proxies to vote your shares in the
+same manner as if you marked, signed, dated and returned the proxy card. 
+TO VOTE YOUR PROXY BY INTERNET 
+www.continentalstock.com 
+Have your proxy card in hand when you access the above website. You will be
+prompted to enter the company number, proxy number and account number to create
+an electronic ballot. Follow the prompts to vote your shares.
+TO VOTE YOUR PROXY BY MAIL 
+Mark, sign and date your proxy card below, detach it and return it in the
+postage-paid envelope provided.
+TO VOTE YOUR PROXY BY PHONE 
+1-800-293-8533 
+Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
+when you call. You will be prompted to enter the company number, proxy number
+and account number. Follow the voting instructions to vote your shares.
+PLEASE DO NOT RETURN THE CARD BELOW IF YOU VOTED ELECTRONICALLY 
+Ñ FOLD AND DETACH HERE AND READ THE REVERSE SIDE Ñ 
+PROXY BY MAIL 
+THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE NOMINEES FOR ELECTION AS DIRECTORS AND “FOR” PROPOSALS 2, 3, 4 AND 5. 
+THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED BY THE PROXIES IN THE
+MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
+THE PROXIES WILL VOTE “FOR” THE NOMINEES FOR ELECTION AS DIRECTORS NOTED BELOW
+AND “FOR” PROPOSALS 2, 3, 4 AND 5. 
+Please mark 
+your votes 
+x 
+like this 
+1.
+ELECTION OF BOARD
+FOR all nominees listed
+WITHHOLD AUTHORITY to 
+OF DIRECTORS.
+below (except as indicated
+o 
+vote for all nominees listed
+o 
+to the contrary below)
+below 
+Nominees for election to the Board of Directors: 01 Mark S. Siegel, 02 Cloyce
+A. Talbott,
+03 A. Glenn Patterson, 04 Kenneth N. Berns, 05 Robert C. Gist, 06 Curtis W.
+Huff,
+07 Terry H. Hunt, 08 Kenneth R. Peak, and 09 Nadine C. Smith.
+(INSTRUCTION: To withhold authority to vote for any one or more individual
+nominees,
+write the name of each such nominee in the space provided below.)
+IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE INSTRUCTIONS ABOVE. 
+FOR
+AGAINST
+ABSTAIN 
+2.
+Approve an amendment to the Company’s Restated Certificate of
+Incorporation to increase the number of authorized shares of Common
+Stock;
+o 
+o 
+o 
+FOR
+AGAINST
+ABSTAIN 
+3.
+Re-approve the criteria upon which performance objectives are currently based in
+the Amended and Restated 1997 Long-Term Incentive Plan;
+o 
+o 
+o 
+FOR
+AGAINST
+ABSTAIN 
+4.
+Approve an amendment to the Company’s Amended and Restated 1997
+Long-Term Incentive Plan to increase the aggregate annual amount of
+cash that may be received as a performance award by a participant
+under that plan and to amend the criteria upon which performance
+objectives are currently based in that plan;
+o 
+o 
+o 
+FOR
+AGAINST
+ABSTAIN 
+5.
+Ratify the selection of PricewaterhouseCoopers LLP as independent
+accountants of the Company for the fiscal year ending
+December 31, 2004; and
+o 
+o 
+o 
+6.
+In their discretion, the Proxies are authorized to vote upon such other
+business as may properly come before the
+Meeting or any adjournment or adjournments thereof.
+COMPANY ID: 
+PROXY NUMBER: 
+ACCOUNT NUMBER: 
+Signature 
+Signature 
+Date 
+NOTE: Please sign exactly as your name or names appear on this card. Joint
+owners should each sign personally. When signing as attorney, executor,
+administrator, personal representative, trustee or guardian, please give your
+full title as such. For a corporation or a partnership, please sign in the full
+corporate name by the President or other authorized officer or the full
+partnership name by an authorized person, as the case may be. (Please mark,
+sign, date, and return this proxy in the enclosed envelope.)
+Table of Contents 
+Your Vote Is Important! 
+Follow Instructions on The Reverse Side. 
+PLEASE VOTE 
+Ñ FOLD AND DETACH HERE Ñ 
+PROXY 
+PROXY 
+PATTERSON-UTI ENERGY, INC. 
+PROXY FOR ANNUAL MEETING OF STOCKHOLDERS 
+TO BE HELD ON JUNE 29, 2004 
+THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS 
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”)
+hereby appoints Mark S. Siegel, Cloyce A. Talbott and A. Glenn
+Patterson, and each of them,
+attorneys and proxies of the undersigned, each with full power to act without
+the other and with full power of substitution, to vote all of the shares which
+the undersigned is entitled to vote at the annual meeting of stockholders of
+the Company to be held Tuesday, June 29, 2004, at 10:00 a.m.,
+local time, at the corporate offices of Patterson-UTI Energy, Inc., 4510 Lamesa
+Highway, Snyder, Texas, 79549, and at any and all adjournments thereof, with
+the same force and effect as if the undersigned were personally present. The
+undersigned hereby instructs the above-named Attorneys and Proxies to vote the
+shares represented by this proxy in the manner as directed by the undersigned
+on the reverse side of this proxy card. If no directions are made, the Proxies
+will vote “FOR” the nominees for directors set forth on the reverse side and
+“FOR” proposals 2, 3, 4 and 5.
+Please mark, sign, date and return this proxy card promptly using the enclosed
+envelope, or follow the instructions on the reverse side to vote your shares by
+Internet or by telephone. 
+(continued on the reverse side)
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950129-04-003769/proxy_rpt.txt b/raw/proxies/0000889900/0000950129-04-003769/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000889900/0000950129-05-004240/proxy.txt b/raw/proxies/0000889900/0000950129-05-004240/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..0f22a9ef52280debfd229e2713ba9b8ba8f71e40
--- /dev/null
+++ b/raw/proxies/0000889900/0000950129-05-004240/proxy.txt
@@ -0,0 +1,3692 @@
+DEF 14A
+1
+d24432ddef14a.htm
+PATTERSON-UTI ENERGY, INC. - JUNE 15, 2005
+def14a 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of
+the Securities 
+Exchange Act of 1934 (Amendment No.
+) 
+Filed by the Registrant 
+x 
+Filed by a Party other than the Registrant 
+o 
+Check the appropriate box:
+o Preliminary
+Proxy Statement 
+o Confidential,
+for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x Definitive
+Proxy Statement
+o Definitive
+Additional Materials
+o Soliciting
+Material Pursuant to §240.14a-12
+PATTERSON-UTI ENERGY, INC.
+(Name of Registrant as Specified In Its Charter)
+Not Applicable
+(Name of Person(s) Filing Proxy Statement, if
+other than the Registrant)
+Payment of Filing Fee (Check the appropriate box):
+x 
+No fee required.
+o 
+Fee computed on table below per Exchange Act
+Rules 14a-6(i)(4) and 0-11.
+(1) 
+Title of each class of securities to which
+transaction applies:
+(2) 
+Aggregate number of securities to which
+transaction applies:
+(3) 
+Per unit price or other underlying value of
+transaction computed pursuant to Exchange Act Rule 0-11
+(set forth the amount on which the filing fee is calculated and
+state how it was determined):
+(4) 
+Proposed maximum aggregate value of transaction:
+(5) 
+Total fee paid:
+o 
+Fee paid previously with preliminary materials.
+o 
+Check box if any part of the fee is offset as
+provided by Exchange Act Rule 0-11(a)(2) and identify the
+filing for which the offsetting fee was paid previously.
+Identify the previous filing by registration statement number,
+or the Form or Schedule and the date of its filing.
+(1) 
+Amount Previously Paid:
+(2) 
+Form, Schedule or Registration Statement No.:
+(3) 
+Filing Party:
+(4) 
+Date Filed:
+April 28, 2005
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual
+meeting will be held Wednesday, June 15, 2005, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder,
+Texas 79549.
+At the annual meeting, stockholders will vote on a number of
+important matters. Please take the time to carefully read each
+of the proposals described in the attached proxy statement.
+Thank you for your support.
+Sincerely,
+Mark S. Siegel 
+Chairman of the Board 
+Cloyce A. Talbott 
+Chief Executive Officer 
+This proxy statement and the accompanying proxy card are being
+mailed to Patterson-UTI Energy, Inc. stockholders
+beginning on or about April 28, 2005.
+TABLE OF CONTENTS 
+NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS 
+ANNUAL MEETING OF STOCKHOLDERS To Be Held June 15, 2005 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 ELECTION OF DIRECTORS 
+PROPOSAL NO. 2 APPROVAL OF THE PATTERSON-UTI ENERGY, INC. 2005 LONG-TERM INCENTIVE PLAN 
+PROPOSAL NO. 3 RATIFICATION OF INDEPENDENT AUDITORS 
+EXECUTIVE OFFICERS 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; INDEMNIFICATION AGREEMENTS 
+CERTAIN TRANSACTIONS 
+COMPENSATION COMMITTEE REPORT 
+PERFORMANCE GRAPH 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+OTHER MATTERS 
+ANNEX A 
+PATTERSON-UTI ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS 
+The 2005 annual meeting of the stockholders of Patterson-UTI
+Energy, Inc. (“Patterson-UTI”), a Delaware
+corporation, will be held Wednesday, June 15, 2005, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549 (the “Meeting”). At the Meeting, the
+stockholders will be asked to:
+• 
+elect nine directors to the Board of Directors of Patterson-UTI
+to serve until the next annual meeting of the stockholders or
+until their respective successors are elected and qualified; 
+• 
+approve the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive
+Plan; 
+• 
+ratify the selection of PricewaterhouseCoopers LLP as
+independent accountants of Patterson-UTI for the fiscal year
+ending December 31, 2005; and 
+• 
+take action upon any other matters which may properly come
+before the Meeting. 
+Stockholders of record at the close of business on
+April 25, 2005, are entitled to vote at the Meeting and any
+adjournment thereof.
+It is important that your shares be represented at the Meeting.
+I urge you to sign, date and promptly return the enclosed proxy
+card in the enclosed postage paid envelope or vote by following
+the Internet or telephone instructions included on the proxy
+card.
+By order of the Board of Directors 
+Jonathan D. Nelson
+Vice President, Chief Financial Officer, 
+Secretary and Treasurer 
+April 28, 2005
+PATTERSON-UTI ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+PROXY STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 15, 2005 
+The Board of Directors of Patterson-UTI Energy, Inc.
+(“Patterson-UTI”), a Delaware corporation, prepared
+this proxy statement for the purpose of soliciting proxies for
+Patterson-UTI’s 2005 annual meeting of stockholders (the
+“Meeting”) to be held Wednesday, June 15, 2005,
+at 10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549, and at any adjournment thereof. This proxy statement and
+the accompanying proxy are being mailed to stockholders on or
+about April 28, 2005.
+The Board of Directors is making this solicitation by mail. In
+addition to the solicitation of proxies by mail,
+Patterson-UTI’s officers and other employees, without
+compensation other than regular compensation, may solicit
+proxies by telephone, electronic means and personal interview.
+Patterson-UTI does not intend to retain a proxy solicitation
+firm to assist in the solicitation of proxies of stockholders
+whose shares are held in street name by brokers, banks and other
+institutions, but may do so if circumstances warrant.
+Patterson-UTI will pay all costs associated with this
+solicitation.
+Properly submitted proxies received either by mail, Internet,
+telephone or in person, in time for the Meeting will be voted as
+you have directed in your proxy, unless you revoke your proxy in
+the manner provided below. As to any matter for which you give
+no direction in your proxy, your shares will be voted as follows:
+• 
+“FOR” the election of all of the nominees to the Board
+of Directors; 
+• 
+“FOR” the approval of the Patterson-UTI Energy, Inc.
+2005 Long-Term Incentive Plan; 
+• 
+“FOR” the ratification of PricewaterhouseCoopers LLP
+as independent accountants of Patterson-UTI for the fiscal year
+ending December 31, 2005; and 
+• 
+“FOR” or “AGAINST” any other proposals which
+may be submitted at the Meeting at the discretion of the persons
+named in the proxy. 
+You may revoke your proxy at any time before the proxy is voted
+by either:
+• 
+submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone; 
+• 
+notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or 
+• 
+attending the Meeting and voting in person. 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of Patterson-UTI’s common
+stock, $.01 par value per share (the “Common
+Stock”), at the close of business on April 25, 2005
+are entitled to notice of and to vote at the Meeting or any
+adjournment thereof. At the close of business on April 25,
+2005, there were 169,579,043 shares of Common Stock issued
+and outstanding. Holders of record of Common Stock on
+April 25, 2005 will be entitled to one vote per share on
+all matters to come before the Meeting. A list of stockholders
+entitled to notice of and to vote at the Meeting will be made
+available during regular business hours at the offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549, from June 3, 2005 through June 14, 2005 and at
+the Meeting for inspection by any stockholder for any purpose
+regarding the Meeting.
+A quorum is necessary to transact business at the Meeting. A
+majority of the shares of Common Stock outstanding on
+April 25, 2005 will constitute a quorum. The shares held by
+each stockholder who signs and returns the enclosed form of
+proxy or properly votes using the Internet or telephone will be
+counted for purposes of determining the presence of a quorum at
+the Meeting.
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the number of members
+of the Board of Directors of Patterson-UTI shall be fixed either
+by amendment to the bylaws or by resolution of the Board of
+Directors. Directors are elected to serve until the next annual
+meeting of stockholders or until their successors are elected
+and qualified. Patterson-UTI’s bylaws provide that the
+affirmative vote of a plurality of the votes cast at the meeting
+at which a quorum is present is required for the election of
+directors. Shares as to which a stockholder withholds authority
+to vote on the election of directors and shares as to which a
+broker indicates that it does not have discretionary authority
+to vote on the election of directors will not be counted as
+voting thereon and will not affect the election of the nominees
+receiving a plurality of the votes cast.
+The enclosed form of proxy provides a means for you to either:
+• 
+vote “FOR” the election of the nominees to the Board
+of Directors listed below, 
+• 
+withhold authority to vote for one or more of the
+nominees, or 
+• 
+withhold authority to vote for all of the nominees. 
+The Board of Directors recommends that you vote
+“FOR” all of the nominees. Unless you give
+contrary instructions in your proxy, your proxy will be voted
+“FOR” the election of all of the nominees to the Board
+of Directors. If any nominee should become unable or unwilling
+to accept nomination or election, the person acting under the
+proxy will vote for the election of such other person as the
+Board of Directors may recommend. The Board has no reason,
+however, to believe that any of the nominees will be unable or
+unwilling to serve if elected.
+There are no arrangements or understandings between any person
+and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no
+family relationships among any of the directors or executive
+officers of Patterson-UTI, other than between
+Messrs. Talbott and Patterson, who are brothers-in-law.
+Set forth below is the name, age, position and a brief
+description of the business experience during at least the past
+five years of each of the nominees for election to the Board of
+Directors.
+Name 
+Age 
+Position 
+Mark S. Siegel 
+54 
+Chairman of the Board and Director 
+Cloyce A. Talbott 
+69 
+Chief Executive Officer and Director 
+A. Glenn Patterson 
+58 
+President, Chief Operating Officer and Director 
+Kenneth N. Berns 
+45 
+Senior Vice President and Director 
+Robert C. Gist 
+64 
+Director 
+Curtis W. Huff 
+47 
+Director 
+Terry H. Hunt 
+56 
+Director 
+Kenneth R. Peak 
+59 
+Director 
+Nadine C. Smith 
+47 
+Director 
+Mark S. Siegel — Mr. Siegel has served as
+Chairman of the Board and as a director of Patterson-UTI since
+May 2001. Mr. Siegel served as Chairman of the Board and as
+a director of UTI Energy Corp. (“UTI”) from 1995 to
+May 2001, when UTI merged with and into Patterson-UTI.
+Mr. Siegel has been President of REMY Investors &
+Consultants, Incorporated (“REMY Investors”) since
+1993. From 1992 to 1993,
+2
+Mr. Siegel was President, Music Division, Blockbuster
+Entertainment Corp. From 1988 through 1992, Mr. Siegel was
+an Executive Vice President of Shamrock Holdings, Inc., a
+private investment company, and Managing Director of Shamrock
+Capital Advisors, Incorporated. Mr. Siegel holds a Bachelor
+of Arts degree from Colgate University and a J.D. from the
+University of California, Berkeley (Boalt Hall) School of Law.
+Cloyce A. Talbott — Mr. Talbott has served
+as a director of Patterson-UTI since its incorporation in 1978
+and as its Chief Executive Officer since 1983. Mr. Talbott
+co-founded Patterson-UTI, served as Vice President from 1978 to
+1983, and served as Chairman of the Board from 1983 to May 2001.
+Mr. Talbott holds a Bachelor of Science degree in petroleum
+engineering from Texas Tech University.
+A. Glenn Patterson — Mr. Patterson
+has served as a director of Patterson-UTI since its
+incorporation in 1978. Mr. Patterson co-founded
+Patterson-UTI and has served as its President since 1978 and
+also as Chief Operating Officer since 1983. Mr. Patterson
+holds a Bachelor of Science degree in business from Angelo State
+University.
+Kenneth N. Berns — Mr. Berns has served as
+Senior Vice President of Patterson-UTI since April 2003 and as a
+director of Patterson-UTI since May 2001. Mr. Berns served
+as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns
+holds a Bachelors Degree in Business Administration from
+San Diego State University and a Masters Degree in Taxation
+from Golden Gate University.
+Robert C. Gist — Mr. Gist has served as a
+director of Patterson-UTI since 1985. He was general legal
+counsel and advisor to Patterson-UTI from 1987 to May 2001.
+Mr. Gist holds a Bachelor of Science degree in economics
+and a J.D. from Southern Methodist University. He has been
+self-employed as an attorney for more than five years and has
+over 20 years experience in the oil and gas industry.
+Curtis W. Huff — Mr. Huff has served as a
+director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1997 to May 2001. Mr. Huff is the
+President and Chief Executive Officer of Freebird Investments
+LLC, a private investment company, and has served in that
+capacity since October 2002. Mr. Huff served as the
+President and Chief Executive Officer of Grant Prideco, Inc., a
+provider of drill pipe and other drill stem products, from
+February 2001 to June 2002. From January 2000 to February 2001,
+Mr. Huff served as Executive Vice President, Chief
+Financial Officer and General Counsel of Weatherford
+International, Inc., an oilfield services company. He served as
+Senior Vice President and General Counsel of Weatherford from
+May 1998 to January 2000. Prior to that time, Mr. Huff was
+a partner with the law firm of Fulbright & Jaworski
+L.L.P. and held that position for more than five years.
+Terry H. Hunt — Mr. Hunt has served as a
+director of Patterson-UTI since April 2003 and served as a
+director of UTI from 1994 to May 2001. Mr. Hunt is an
+energy consultant and investor. Mr. Hunt served as Senior
+Vice President — Strategic Planning of PPL
+Corporation, an international energy and utility holding
+company, from 1998 to 2000. Mr. Hunt served as the
+President and Chief Executive Officer of Penn Fuel Gas, Inc., a
+natural gas and propane distribution company, from 1992 to 1999.
+Previously, Mr. Hunt was President and Chairman of Carnegie
+Natural Gas Company, a gas distribution and transmission
+company, and of Apollo Gas Company, a natural gas distributor.
+Mr. Hunt holds a Bachelor of Engineering degree from the
+University of Saskatchewan, Canada and a Masters of Business
+Administration from Southern Methodist University.
+Kenneth R. Peak — Mr. Peak has served as a
+director of Patterson-UTI since November 2000. Mr. Peak is
+the Chairman of the Board, President, Chief Executive Officer
+and Chief Financial Officer of Contango Oil & Gas
+Company and has served in that capacity since 1999.
+Mr. Peak served as the President of Peak Enernomics,
+Incorporated, an oil and gas industry consulting company, from
+1990 to 1999. Prior to that time, Mr. Peak served as the
+Treasurer of Tosco Corporation, an independent oil refiner, and
+as Chief Financial Officer of Texas International Company, an
+independent oil and gas exploration and production company. His
+tenure at Texas International Company included serving as
+President of TIPCO, the domestic operating subsidiary of Texas
+International’s oil and gas operations.
+Mr. Peak’s energy career began in 1973 as a commercial
+banker with First Chicago’s energy group. Mr. Peak
+holds a Bachelor of Science in physics from Ohio University and
+a Masters of Business Administration from Columbia University.
+3
+Nadine C. Smith — Ms. Smith has served as
+a director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1995 to May 2001. Ms. Smith is a
+private investor and business consultant. From August 2000 to
+December 2001, Ms. Smith was President of Final
+Arrangements, LLC, a company providing software and web-based
+internet services to the funeral industry. From April 2000 to
+August 2000, Ms. Smith served as the President of Aegis
+Asset Management, Inc., an asset management company. From 1997
+to April 2000, Ms. Smith was President and Chief Executive
+Officer of Enidan Capital Corp., an investment company.
+Previously, Ms. Smith was an investment banker and
+principal with NC Smith & Co. and The First Boston
+Corporation and a management consultant with McKinsey &
+Co. Ms. Smith is a director of American Retirement
+Corporation, a New York Stock Exchange listed company that owns
+and manages senior housing properties. Ms. Smith holds a
+Bachelor of Science degree in economics from Smith College and a
+Masters of Business Administration from Yale University.
+Meetings and Committees of the Board of Directors 
+The Board of Directors met six times during the year ended
+December 31, 2004. Each director attended, in person or by
+telephone, at least 75% of the aggregate of all meetings held by
+the Board and all meetings of each committee for which such
+director was eligible to attend. A majority of the members of
+the Board of Directors are independent within the meaning of the
+National Association of Securities Dealers’
+(“NASD”) published listing standards. Specifically,
+the Board has determined that Messrs. Peak, Gist, Huff and
+Hunt and Ms. Smith are independent within the meaning of
+the NASD published listing standards.
+The Board of Directors has an Executive Committee, Audit
+Committee, Compensation Committee and a Nominating and Corporate
+Governance Committee.
+The Executive Committee, which currently is composed of
+Messrs. Siegel, Talbott, Patterson and Berns, has the
+authority, to the extent permitted by applicable law, to act for
+the Board in all matters arising between regular or special
+meetings of the Board of Directors.
+The Audit Committee oversees management’s conduct of
+Patterson-UTI’s accounting and financial reporting process
+including review of the financial reports and other financial
+information provided by Patterson-UTI to the public and
+government and regulatory bodies, Patterson-UTI’s system of
+internal accounting, Patterson-UTI’s financial controls,
+and the annual independent audit of Patterson-UTI’s
+financial statements. The Audit Committee also oversees
+compliance with Patterson-UTI’s codes of conduct and ethics
+and with legal and regulatory requirements. The Audit Committee
+members are Messrs. Peak and Gist and Ms. Smith. The
+Board has confirmed that all members of the Audit Committee are
+“independent” within the meaning of
+Item 7(d)(3)(iv) of Schedule 14A under the Securities
+Exchange Act of 1934, as amended (the “Exchange Act”)
+and within the meaning of the NASD’s published listing
+standards. The Board has determined that Mr. Peak is an
+“audit committee financial expert” within the meaning
+of applicable Securities and Exchange Commission
+(“SEC”) rules. The Audit Committee selects, subject to
+the Board’s approval, the independent accountants to audit
+Patterson-UTI’s books and records and considers and acts
+upon accounting matters as they arise. The Board of Directors
+has adopted a written charter for the Audit Committee, a copy of
+which is available on Patterson-UTI’s website at
+www.patenergy.com. The Audit Committee met five times during the
+year ended December 31, 2004. Please see the Audit
+Committee Report on page 24 for further information about
+the Audit Committee.
+The Compensation Committee members are Messrs. Huff and
+Hunt and Ms. Smith, each of whom is independent as defined
+in the NASD’s published listing standards. Among other
+things, the Compensation Committee administers the incentive
+compensation plans, including stock option plans of
+Patterson-UTI and determines the annual compensation of the
+executive officers and directors of Patterson-UTI. The
+Compensation Committee held four meetings during the year ended
+December 31, 2004. Please see the Compensation Committee
+Report on page 18 for further information about the
+Compensation Committee.
+The Nominating and Corporate Governance Committee members are
+Messrs. Gist, Huff and Hunt, each of whom is independent as
+defined in the NASD’s published listing standards. The
+purpose of the Nominating and Corporate Governance Committee is
+to identify individuals qualified to become Board members, to
+recommend for selection by the Board director nominees for the
+next annual meeting of stockholders, to
+4
+review Patterson-UTI’s Code of Business Conduct, to develop
+and continually make recommendations with respect to the best
+corporate governance principles and to oversee the evaluation of
+the Board and management. The Board of Directors has adopted a
+written charter for the Nominating and Corporate Governance
+Committee. The Nominating and Corporate Governance Committee was
+founded in 2003 and held one meeting during the year ended
+December 31, 2004.
+On behalf of the Board, the Nominating and Corporate Governance
+Committee considers director nominees recommended by
+Patterson-UTI’s stockholders if the recommendations are
+made in accordance with all legal requirements, including
+applicable provisions of Patterson-UTI’s restated
+certificate of incorporation and bylaws. In accordance with
+Patterson-UTI’s bylaws, in addition to any other applicable
+requirements, any person recommending a nominee for
+Patterson-UTI’s Board must be a stockholder of record on
+the date of the giving of the notice provided for below and on
+the record date for the determination of stockholders entitled
+to vote at such annual meeting and must give timely notice of
+such nomination in writing to the Secretary of Patterson-UTI. To
+be timely with respect to the 2006 annual meeting, a
+stockholder’s notice must be delivered to or mailed and
+received at Patterson-UTI’s principal executive offices not
+earlier than February 15, 2006 and not later than
+March 17, 2006; provided, however, that in the event that
+the annual meeting is called for a date that is not within
+30 days before or after June 15, 2006, notice by the
+stockholder to be timely must be received not later than the
+close of business on the tenth day following the day on which
+such notice of the date of the meeting was mailed or public
+disclosure of the annual meeting date was made, whichever occurs
+first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+as to each person whom the stockholder proposes to nominate for
+election or re-election as director, all information relating to
+such person that is required to be disclosed in solicitations of
+proxies for election of directors, or is otherwise required, in
+each case pursuant to Regulation 14A promulgated under the
+Exchange Act, or any successor regulation thereto, 
+• 
+the name and record address of the stockholder proposing such
+nomination, 
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder, 
+• 
+a description of all arrangements or understandings between such
+stockholder and each proposed nominee and any other person or
+persons (including their names) pursuant to which the nomination
+or nominations are to be made by such stockholder, and 
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the meeting to nominate the persons named
+in the notice. 
+Such notice must be accompanied by a written consent of each
+proposed nominee to being named as a nominee and to serve as a
+director if elected.
+The Nominating and Corporate Governance Committee determines
+qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of
+Patterson-UTI. The Nominating and Corporate Governance Committee
+relies on the knowledge and relationships of Patterson-UTI and
+its officers and directors, as well as third parties when it
+deems necessary, to identify and evaluate nominees for director,
+including nominees recommended by stockholders.
+Communication with the Board and Its Independent Members 
+Persons may communicate with the Board, or directly with its
+Chairman, Mr. Siegel, by submitting such communication in
+writing in care of Chairman of the Board of Directors,
+Patterson-UTI Energy, Inc., P.O. Box 1416, Snyder,
+Texas 79550. Persons may communicate with the independent
+members of the Board by submitting such communication in writing
+to the Nominating and Corporate Governance Committee of the
+Board of Directors of Patterson-UTI Energy, Inc., P.O.
+Box 1416, Snyder, Texas 79550.
+5
+Corporate Governance Documents Available on
+Patterson-UTI’s Website 
+Copies of each of the following documents are available on the
+Patterson-UTI website at www.patenergy.com and in print
+to any stockholder who requests them from the Secretary of
+Patterson-UTI:
+• 
+Audit Committee Charter; 
+• 
+Compensation Committee Charter; 
+• 
+Nominating and Corporate Governance Committee Charter; 
+• 
+Code of Business Conduct for its employees, officers and
+directors; and 
+• 
+Code of Business Conduct and Ethics for Senior Financial
+Executives. 
+Compensation of Directors 
+Directors who are also employees of Patterson-UTI do not receive
+compensation for serving as a director or as a member of a
+committee of the Board of Directors. All directors are
+reimbursed for reasonable out-of-pocket expenses incurred in
+connection with attendance at Board of Directors meetings and
+committee meetings. Each non-employee director receives annual
+cash compensation of $35,000. Each non-employee director that
+serves on the Audit Committee or the Compensation Committee
+receives additional annual cash compensation of $10,000 per
+committee on which he or she serves, with the chairman of each
+such committee receiving $15,000.
+Subject to approval by Patterson-UTI’s stockholders of
+Proposal No. 2, the Compensation Committee currently
+contemplates that on January 3, 2006, it will grant to each
+non-employee director of Patterson-UTI
+(1) 3,000 shares of restricted stock subject to
+one-year vesting (subject to acceleration in certain limited
+situations, including a change of control), and (2) an
+option to purchase 10,000 shares of Common Stock at an
+exercise price equal to the closing price of the Common Stock on
+the grant date. The option would have a 10-year term, vest after
+one year (subject to acceleration in certain limited situations,
+including a change of control), and contain a right to exercise
+for three years following cessation of the holder as a director
+(but not beyond the 10-year term).
+Patterson-UTI currently maintains a Non-Employee Director Stock
+Option Plan (the “Director Plan”). Under the Director
+Plan, each non-employee director is granted options to
+purchase 40,000 shares of Common Stock upon becoming a
+director and is granted options to
+purchase 20,000 shares of Common Stock on the last
+business day of each subsequent year in which the director
+serves on the Board of Directors. The current terms of the
+Director Plan prohibit the grant of options under the Director
+Plan after December 18, 2005. If Proposal No. 2
+is approved by Patterson-UTI’s stockholders, no future
+option grants under the Director Plan would be permitted as of
+the approval date.
+PROPOSAL NO. 2 
+APPROVAL OF THE PATTERSON-UTI ENERGY, INC. 
+2005 LONG-TERM INCENTIVE PLAN 
+General 
+On April 19, 2005, Patterson-UTI’s Board of Directors
+adopted the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive
+Plan (the “2005 Plan”), subject to approval by
+Patterson-UTI’s stockholders. In addition, on the same
+date, the Board of Directors approved, subject to and effective
+upon the approval by the stockholders of the 2005 Plan, the
+termination of any future grants under all existing equity plans
+of Patterson-UTI.
+The primary objective of the 2005 Plan is to promote stockholder
+value by providing appropriate incentives to certain employees,
+consultants, advisors, officers and directors of Patterson-UTI
+and its subsidiaries. The 2005 Plan is administered by the
+Compensation Committee of Patterson-UTI’s Board of
+Directors, which comprises exclusively non-employee independent
+directors. The 2005 Plan provides for the
+6
+granting of incentive and non-incentive stock options, as well
+as other awards, such as tandem and freestanding stock
+appreciation rights, restricted stock awards, other stock unit
+awards, performance shares, performance units and dividend
+equivalents. Certain awards under the 2005 Plan may be paid in
+cash or Common Stock, as determined by the Compensation
+Committee. The Compensation Committee has exclusive authority to
+select the participants to whom awards may be granted, and to
+determine the type, size and terms of each award. The
+Compensation Committee will also make all determinations that it
+decides are necessary or desirable in the interpretation and
+administration of the 2005 Plan. In addition, the Compensation
+Committee may, if consistent with applicable rules, regulations
+and NASDAQ requirements, delegate to a committee of one or more
+directors or to one or more executive officers the right to
+grant, cancel and suspend awards to employees who are not
+directors or executive officers of Patterson-UTI.
+The following summary of the material features of the 2005 Plan
+is qualified by reference to the copy of the 2005 Plan that is
+attached as Annex A to this proxy statement.
+General Terms 
+• 
+The aggregate number of shares of Common Stock authorized for
+grant under the 2005 Plan is 6,250,000, reduced by the number of
+shares that are subject to awards granted under existing equity
+plans of Patterson-UTI during the period commencing on
+January 1, 2005 and ending on the date the 2005 Plan is
+approved by the shareholders. Shares that are subject to options
+or SARs count as one share of Common Stock against the aggregate
+number. Shares that are subject to other awards count as
+1.6 shares of Common Stock against the aggregate number. 
+• 
+Generally, if an award granted under the 2005 Plan or the
+existing equity plans of Patterson-UTI 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 2005 Plan. Any shares of Common Stock
+that again become available for grant under the 2005 Plan will
+be added back as one share if the shares were subject to options
+or SARs, and as one and six tenths shares if the shares were
+subject to awards other than options or SARs. 
+• 
+The 2005 Plan is administered by the Compensation Committee. 
+• 
+Directors, employees, including officers, consultants and
+advisors are eligible for awards. 
+• 
+The 2005 Plan provides for awards of non-qualified stock options
+(“NQSOs”), Incentive Stock Options (“ISOs”),
+tandem and freestanding stock appreciation rights
+(“SARs”), restricted stock awards, other stock unit
+awards, performance awards and dividend equivalents. 
+• 
+The Board of Directors, at any time, may amend the terms of the
+2005 Plan, subject to the stockholder approval requirements of
+the NASDAQ Stock Market and other rules and regulations
+applicable to Patterson-UTI. 
+• 
+Under the 2005 Plan, no participant may be granted options or
+SARs during any 12-month period with respect to more than
+1,000,000 shares of Common Stock or 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. In addition to the foregoing
+limits, the maximum dollar value payable to any participant in
+any 12-month period with respect to performance awards is
+$5,000,000. 
+Options 
+• 
+The vesting schedule for options is set by the Compensation
+Committee; however, options may not fully vest sooner than one
+year from the date of grant, except for certain limited
+exceptions. 
+• 
+The term of options is set by the Compensation Committee, but
+may be no longer than 10 years. 
+• 
+The exercise price for options may be paid in cash, with
+previously acquired shares of Common Stock, or by other means
+approved by the Compensation Committee. 
+7
+• 
+All options granted under the 2005 Plan are granted with an
+exercise price equal to or greater than the fair market value of
+the Common Stock at the time the option is granted. 
+SARs 
+• 
+SARs may be granted alone or in connection with the grant of any
+option. 
+• 
+SARs granted alone may be exercised at such times and be subject
+to such terms and conditions as the Compensation Committee may
+impose. SARs that are granted in tandem with options may be
+exercised only on the surrender of the right to purchase an
+equivalent number of shares under the related options and may be
+exercised only with respect to the shares of Common Stock for
+which the related options are then exercisable. 
+• 
+The term of SARs under the 2005 Plan may be no longer than
+10 years. 
+• 
+An SAR entitles a participant to surrender any then exercisable
+portion of the SAR and, if applicable, the related option, in
+exchange for an amount equal to the product of (1) the
+excess of the fair market value of a share of Common Stock on
+the date preceding the date of surrender over the fair market
+value of a share of Common Stock on the date that the SAR was
+granted, or, if the SAR is related to an option, the per share
+exercise price of the option, multiplied by (2) the number
+of shares of Common Stock subject to the SAR and being
+surrendered. Payment on exercise of an SAR shall be in shares of
+Common Stock. 
+Restricted Stock Awards 
+• 
+The Compensation Committee determines the material terms of the
+restricted stock awards, including the price, if any, to be paid
+by the recipient, and the vesting schedule and conditions, which
+may include the attainment of specified performance objectives
+described below. 
+• 
+A restricted stock award that is subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions. 
+• 
+Beginning on the date of grant, a participant receiving a
+restricted stock award will become a stockholder of
+Patterson-UTI with respect to all shares of Common Stock subject
+to the restricted stock award, which, unless the Committee
+determines otherwise at the time of the grant, includes the
+right to vote the shares and receive dividends in respect of the
+shares. 
+Other Stock Units 
+• 
+The Compensation Committee may grant other stock unit awards
+under the 2005 Plan, which have a value equal to an identical
+number of shares of Common Stock. Other stock unit awards may
+also be a form of payment for other awards granted under the
+2005 Plan and other earned cash-based incentive compensation. 
+• 
+The payment of other stock units may be in cash, shares of
+Common Stock, other property, or any combination of the
+foregoing, and may be made in a lump sum or, in accordance with
+procedures established by the Compensation Committee, on a
+deferred basis subject to the requirements of section 409A
+of the Internal Revenue Code of 1986, as amended (the
+“Code”). 
+• 
+Other stock unit awards that are subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions. 
+Dividend Equivalent Rights 
+• 
+The Compensation Committee may grant dividend equivalent rights
+either in connection with awards or as separate awards under the
+2005 Plan. Amounts payable in respect of dividend equivalent
+rights 
+8
+may be payable currently or, if applicable, deferred until the
+lapsing of restrictions on the dividend equivalent rights or
+until the vesting, exercise, payment, settlement or other lapse
+of restrictions on the award to which the dividend equivalent
+rights relate. 
+Performance Awards 
+• 
+Performance awards are payable in cash, shares of Common Stock,
+other property, or a combination of the foregoing, and may be
+paid in a lump sum, in installments, or on a deferred basis in
+accordance with procedures established by the Compensation
+Committee. 
+• 
+The Compensation Committee determines the material terms of the
+performance awards, including a performance period over which
+the performance goal of such award shall be measured, which must
+be at least 12 months and no longer than five years. 
+Deferrals 
+• 
+The Compensation Committee may require or permit a participant
+to defer the receipt of cash or shares pursuant to any awards
+under the 2005 Plan. Any deferral permitted under the 2005 Plan
+will be administered in a manner that is intended to comply with
+Section 409A of the Code. 
+Effect of Certain Transactions and Change of Control 
+The Compensation Committee may provide in the terms of an award
+under the 2005 Plan that, on a change of control as defined in
+the award agreement,
+• 
+options and SARs outstanding on the date of the change of
+control immediately vest; 
+• 
+options and SARs outstanding on the date of the change of
+control may be cancelled and terminated without payment if the
+fair market value of a share of Common Stock on the date of the
+change of control is less than the per share option exercise
+price or SAR grant price; 
+• 
+restrictions and deferral limitations on restricted stock lapse
+and the restricted stock becomes free of all restrictions and
+limitations and becomes fully vested; 
+• 
+all performance awards shall be considered to be earned and
+payable and any deferral or other restriction shall lapse and
+the performance awards shall be immediately settled or
+distributed; and 
+• 
+such other additional benefits as the Compensation Committee
+deems appropriate shall apply. 
+The Compensation Committee, in its discretion, may determine
+that, upon a change of control, each option and SAR shall
+terminate within a specified period of days after notice to the
+participant, or that with respect to such option or SAR each
+participant shall receive an amount equal to the excess of the
+fair market value of such share immediately prior to the
+occurrence of the change of control over the exercise price per
+share of such option or SAR. The payment may be made in one or
+more kinds of stock or property or a combination of stock or
+property. Further, in the event of changes in the capital or
+corporate structure of Patterson-UTI due to events such as
+recapitalization, stock split, merger, spin-off or similar
+transaction, that affect the shares of Common Stock, the
+Compensation Committee, in its sole discretion, may determine
+that it is equitable or appropriate to make adjustments or
+substitutions to the Plan or outstanding options and awards,
+including to the number, class, kind and option or exercise
+price or securities subject to awards.
+Performance Criteria 
+If the Compensation Committee determines that
+section 162(m) (see “Federal Income Tax
+Consequences — Performance-Based Compensation”
+below) of the Code applies (or is likely to apply) to a
+restricted stock award, performance award or other stock unit
+award, the lapsing of restrictions on the award and the
+distribution of cash, shares or other property pursuant to such
+award, shall be subject to the achievement of one or more
+objective performance goals established by the Compensation
+Committee, which shall be based on attaining specified levels in
+one or more areas, such as: net sales; revenue growth; pre-tax
+9
+income before allocation of corporate overhead and bonus;
+earnings per share; operating income or net income; return on
+stockholders’ equity; attainment of strategic and
+operational initiatives; appreciation in and/or maintenance of
+the price of the Common Stock or other publicly-traded
+securities of Patterson-UTI; market share; gross profits;
+earnings before taxes or before interest and taxes or before
+interest, taxes, depreciation, depletion and amortization;
+comparisons with various stock market indices; improvement in or
+attainment of expense levels or working capital levels; cash
+margins; safety records; and rig utilization and rig count
+growth. Performance goals may be measured solely by reference to
+Patterson-UTI’s performance or the performance of a
+subsidiary, division, business segment or business unit of
+Patterson-UTI, or based upon the relative performance of other
+companies or upon comparisons of any of the indicators of
+performance relative to other companies, in each case as
+specified by the Compensation Committee in the award. The
+Compensation Committee also may adjust performance goals to
+reflect the impact of specified events, occurrences or
+transactions, accounting or tax law changes or other
+extraordinary or nonrecurring events.
+Awards Currently Contemplated Under the 2005 Plan 
+The Compensation Committee currently contemplates that on
+January 3, 2006, it will grant to each non-employee
+director of Patterson-UTI (1) 3,000 shares of
+restricted stock subject to one-year vesting (subject to
+acceleration in certain limited situations, including a change
+of control), and (2) an option to
+purchase 10,000 shares of Common Stock at an exercise
+price equal to the closing price of the Common Stock on the
+grant date. The option would have a 10-year term, vest after one
+year (subject to acceleration in certain limited situations,
+including a change of control), and contain a right to exercise
+for three years following cessation of the holder as a director
+(but not beyond the 10-year term). The closing price of the
+Common Stock on April 22, 2005 was $25.64 per share.
+The following table sets forth information relating to the
+benefits and amounts that would be received by or allocated to
+the executive officers named in the Summary Compensation Table
+and directors under the 2005 Plan, to the extent that such
+benefits or amounts are determinable as of the date of this
+proxy statement:
+NEW PLAN BENEFITS 
+Patterson-UTI Energy, Inc. 2005 Long-Term Incentive
+Plan(1) 
+Number of Units 
+Options to 
+Dollar 
+Shares of 
+Purchase 
+Name and Position 
+Value ($) 
+Restricted Stock 
+Common Stock 
+Mark S. Siegel, Chairman of the Board and Director 
+— 
+— 
+— 
+Cloyce A. Talbott, Chief Executive Officer and Director 
+— 
+— 
+— 
+A. Glenn Patterson, President, Chief Operating Officer and
+Director 
+— 
+— 
+— 
+Kenneth N. Berns, Senior Vice President and Director 
+— 
+— 
+— 
+Jonathan D. Nelson, Vice President, Chief Financial Officer,
+Secretary and Treasurer 
+— 
+— 
+— 
+John E. Vollmer III, Senior Vice President —
+Corporate Development 
+— 
+— 
+— 
+Executive Group 
+— 
+— 
+— 
+Non-Executive Director Group 
+n/a 
+(2) 
+15,000 
+50,000 
+Non-Executive Officer Employee Group 
+— 
+— 
+— 
+(1) 
+No awards have been made pursuant to the 2005 Plan because the
+2005 Plan remains subject to stockholder approval. Upon approval
+of the 2005 Plan by the stockholders of Patterson-UTI, it is
+contemplated that the respective awards set forth in this table
+will be granted as described above. Additional amounts
+ultimately allocated under the 2005 Plan are not determinable at
+this time. Likewise, 
+10
+it is not possible to provide information about specific
+additional grants of awards that may be made under the 2005 Plan. 
+(2) 
+The dollar value of an award granted under the 2005 Plan will be
+equal to the Fair Market Value, as that term is defined in the
+2005 Plan, of the Company’s Common Stock on the date of
+such award. As such, the dollar amount of any such award is not
+currently determinable. If the awards had been granted on
+January 1, 2004, the value of the restricted stock awards
+and the value of the options would have been $49,410 and
+$62,100, respectively, for each non-employee director. 
+Federal Income Tax Consequences 
+The following discussion summarizes certain federal income tax
+consequences of the issuance and receipt of options and awards
+pursuant to the 2005 Plan under the law as in effect on the date
+of this proxy statement. The rules governing the tax treatment
+of such options and awards are quite technical, so the following
+discussion of tax consequences is necessarily general in nature
+and is not complete. In addition, statutory provisions are
+subject to change, as are their interpretations, and their
+application may vary in individual circumstances. This summary
+does not purport to cover all federal employment tax or other
+federal tax consequences associated with the 2005 Plan, nor does
+it address state, local, or non-U.S. taxes.
+ISOs 
+In general, a participant will not recognize income upon the
+grant or exercise of an ISO. However, if the participant is
+subject to federal “alternative minimum tax,” the
+exercise of an ISO will be treated essentially the same as a
+NQSO for purposes of the alternative minimum tax ( see NQSOs,
+SARs, Performance Award, and Other Stock Unit Award below).
+Subject to certain exceptions for death or disability, if a
+participant exercises an ISO more than three months after
+termination of employment, the exercise of the option will be
+taxed as the exercise of a NQSO, as described below.
+The general rule is that gain or loss from the sale or exchange
+of shares acquired on the exercise of an ISO will be treated as
+capital gain or loss. However, if shares acquired upon the
+exercise of an ISO are disposed of within two years from the
+date of grant or within one year after exercise (a
+“disqualifying disposition”), the participant
+generally will recognize ordinary income in the year of
+disposition in an amount equal to the fair market value of the
+shares at the time of exercise (or, if less, the amount realized
+on the disposition of the shares) less the exercise price. Any
+further gain (or loss) realized by the participant generally
+will be taxed as short- or long-term capital gain (or loss)
+depending on the holding period.
+NQSOs, SARs, Performance Award, and Other Stock Unit
+Award. A participant generally is not required to recognize
+income on the grant of a NQSO, a SAR, performance award or other
+stock unit award. Instead, ordinary income generally is required
+to be recognized on the date the NQSO or SAR is exercised, or in
+the case of performance awards or other stock unit awards, upon
+the issuance of shares and/or the payment of cash pursuant to
+the terms of the award. In general, the amount of ordinary
+income required to be recognized is, (a) in the case of a
+NQSO, an amount equal to the excess, if any, of the fair market
+value of the shares on the exercise date over the exercise
+price, (b) in the case of a SAR, the fair market value of
+any shares received upon exercise plus the amount of taxes
+withheld from such amounts, and (c) in the case of
+performance awards or other stock unit awards, the amount of
+cash and/or the fair market value of any shares received in
+respect thereof, plus the amount of taxes withheld from such
+amounts.
+Restricted Common Stock. Unless a participant who
+receives an award of restricted Common Stock makes an election
+under section 83(b) of the Code as described below, the
+participant generally is not required to recognize ordinary
+income on the award of restricted Common Stock. Instead, on the
+date the shares vest ( i.e. , become transferable and no
+longer subject to forfeiture), the participant will be required
+to recognize ordinary income in an amount equal to the excess,
+if any, of the fair market value of the shares on such date over
+the amount, if any, paid for such shares. If a
+section 83(b) election has not been made, any dividends
+received with respect to restricted Common Stock that are
+subject at that time to a risk of forfeiture or restrictions on
+transfer generally will be treated as compensation that is
+taxable as ordinary income to the recipient. If a participant
+makes a section 83(b) election within 30 days of the
+date of transfer of the restricted
+11
+Common Stock, the participant will recognize ordinary income on
+the date the shares are awarded. The amount of ordinary income
+required to be recognized is an amount equal to the excess, if
+any, of the fair market value of the shares on the date of award
+over the amount, if any, paid for such shares. In such case, the
+participant will not be required to recognize additional
+ordinary income when the shares vest. However, if the shares are
+later forfeited, a loss can only be recognized up to the amount
+the participant paid, if any, for the shares.
+Gain or Loss on Sale or Exchange of Shares. In general,
+gain or loss from the sale or exchange of shares granted or
+awarded under the 2005 Plan will be treated as capital gain or
+loss, provided that the shares are held as capital assets at the
+time of the sale or exchange. However, if certain holding period
+requirements are not satisfied at the time of a sale or exchange
+of shares acquired upon exercise of an ISO (a
+“disqualifying disposition,” see above), a
+participant generally will be required to recognize ordinary
+income upon such disposition.
+Deductibility by Patterson-UTI. To the extent that a
+participant recognizes ordinary income in the circumstances
+described above, Patterson-UTI or the subsidiary for which the
+participant performs services will be entitled to a
+corresponding deduction, provided that, among other things, the
+income meets the test of reasonableness, is an ordinary and
+necessary business expense, is not an “excess parachute
+payment” within the meaning of section 280G of the
+Code and is not disallowed by the $1,000,000 limitation on
+certain executive compensation under section 162(m) of the
+Code ( see Performance Based Compensation and Parachute
+Payments below).
+Performance Based Compensation. In general, under
+section 162(m) of the Code, remuneration paid by a public
+corporation to its chief executive officer or any of its other
+top four named executive officers, ranked by pay, is not
+deductible to the extent it exceeds $1 million for any
+year. Taxable payments or benefits under the 2005 Plan may be
+subject to this deduction limit. However, under
+section 162(m), qualifying performance-based compensation,
+including income from stock options and other performance-based
+awards that are made under shareholder approved plans and that
+meet certain other requirements, is exempt from the deduction
+limitation. The 2005 Plan has been designed so that the
+Compensation Committee in its discretion may grant qualifying
+exempt performance-based awards under the 2005 Plan.
+Parachute Payments. Under the so-called “golden
+parachute” provisions of the Code, the accelerated vesting
+of stock options and benefits paid under other awards in
+connection with a change of control of a corporation may be
+required to be valued and taken into account in determining
+whether participants have received compensatory payments,
+contingent on the change of control, in excess of certain
+limits. If these limits are exceeded, a portion of the amounts
+payable to the participant may be subject to an additional 20%
+federal tax and may be nondeductible to the corporation.
+Withholding. Awards under the 2005 Plan may be subject to
+tax withholding. Where an award results in income subject to
+withholding, Patterson-UTI may require the participant to remit
+the withholding amount to Patterson-UTI or cause shares of
+Common Stock to be withheld or sold in order to satisfy the tax
+withholding obligations.
+Section 409A. Awards of SARs, performance awards, or
+other stock unit awards under the 2005 Plan may, in some cases,
+result in the deferral of compensation that is subject to the
+requirements of section 409A of the Code. To date, the
+U.S. Treasury Department and Internal Revenue Service have
+issued only preliminary guidance regarding the impact of
+section 409A of the Code on the taxation of these types of
+awards. Generally, to the extent that deferrals of these awards
+fail to meet certain requirements under section 409A of the
+Code, such awards will be subject to immediate taxation and tax
+penalties in the year they vest unless the requirements of
+section 409A of the Code are satisfied. It is the intent of
+Patterson-UTI that awards under the 2005 Plan will be structured
+and administered in a manner that complies with the requirements
+of section 409A of the Code.
+12
+Recommendation 
+The Board of Directors recommends a vote “FOR” the
+approval of the 2005 Plan. Approval of the proposal requires
+the affirmative vote of the holders of a majority of the shares
+of Common Stock present in person or by proxy and entitled to
+vote at the Meeting. If you do not vote against or abstain from
+voting on the proposal, your proxy will be voted “FOR”
+approval of the proposal. Abstentions will be counted as shares
+entitled to vote on the proposal and will have the same effect
+as a vote “AGAINST” the proposal. A broker non-vote
+will be counted for purposes of establishing a quorum, but will
+not be treated as a share entitled to vote on the proposal. This
+will have the effect of reducing the absolute number of shares
+necessary to approve the proposal.
+PROPOSAL NO. 3 
+RATIFICATION OF INDEPENDENT AUDITORS 
+The Board of Directors voted to engage PricewaterhouseCoopers
+LLP as independent accountants to audit the financial statements
+of Patterson-UTI for the fiscal year ending December 31,
+2005, and directed that such engagement be submitted to the
+stockholders of Patterson-UTI for ratification. In recommending
+ratification by the stockholders of such engagement, the Board
+of Directors is acting upon the recommendation of the Audit
+Committee, which has satisfied itself as to the firm’s
+professional competence and standing. Although ratification by
+stockholders of the engagement of PricewaterhouseCoopers LLP is
+not required by Delaware corporate law or Patterson-UTI’s
+restated certificate of incorporation or bylaws, management
+feels a decision of this nature should be made with the
+consideration of Patterson-UTI’s stockholders. If
+stockholder ratification is not received, management will
+reconsider the engagement.
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and
+will be given the opportunity to make a statement if they so
+desire. It also is expected that the representatives will be
+available to respond to appropriate questions from the
+stockholders.
+The Board of Directors recommends a vote “FOR” the
+ratification of PricewaterhouseCoopers LLP as independent
+accountants. Ratification of the selection of
+PricewaterhouseCoopers LLP requires the affirmative vote of the
+holders of a majority of the shares of Common Stock present in
+person or by proxy, and entitled to vote at the Meeting. Unless
+you give contrary instructions in your proxy, your proxy will be
+voted “FOR” such ratification. Abstentions will be
+counted as shares entitled to vote on the proposal and will have
+the same effect as a vote “AGAINST” the proposal. A
+broker non-vote will be counted for purposes of establishing a
+quorum, but will not be treated as a share entitled to vote on
+the proposal. This will have the effect of reducing the absolute
+number of shares necessary to approve the proposal.
+EXECUTIVE OFFICERS 
+Set forth below is the name, age and position followed by a
+brief description of the business experience during at least the
+past five years for each of the executive officers of
+Patterson-UTI who is not also a current director.
+Name 
+Age 
+Position 
+Jonathan D. Nelson 
+36 
+Vice President, Chief Financial Officer, Secretary and Treasurer 
+John E. Vollmer III 
+49 
+Senior Vice President — Corporate Development 
+Jonathan D. Nelson — Mr. Nelson has served
+as Vice President, Chief Financial Officer, Secretary and
+Treasurer of Patterson-UTI since July 1999. Mr. Nelson
+served as Controller of Patterson-UTI from May 1996 until
+July 1999. Prior to his employment with Patterson-UTI,
+Mr. Nelson was employed in public accounting for
+approximately five years. Mr. Nelson holds a Bachelor of
+Business Administration degree in Accounting from Texas Tech
+University.
+13
+John E. Vollmer III — Mr. Vollmer has
+served as Senior Vice President — Corporate
+Development of Patterson-UTI since May 2001.
+Mr. Vollmer served as Senior Vice President, Chief
+Financial Officer, Secretary and Treasurer of UTI from 1998 to
+May 2001. Mr. Vollmer was a financial consultant from
+October 1997 until joining UTI in 1998. From 1992 until
+October 1997, Mr. Vollmer served in a variety of
+capacities at Blockbuster Entertainment, including Senior Vice
+President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+Summary Compensation Table 
+The following table sets forth information concerning
+compensation for 2004, 2003 and 2002 earned by or paid to the
+Chief Executive Officer and the other executive officers of
+Patterson-UTI:
+Annual Compensation 
+Securities 
+Other Annual 
+Restricted 
+Underlying 
+All Other 
+Salary 
+Bonus 
+Compensation(1) 
+Stock 
+Options Granted 
+Compensation(2) 
+Name and Principal Position(s) 
+Year 
+($) 
+($) 
+($) 
+Award(s) 
+(#) 
+($) 
+Mark S. Siegel 
+2004 
+350,000 
+645,798 
+(3) 
+— 
+50,000 
+(4) 
+120,000 
+— 
+Chairman of the Board 
+2003 
+298,333 
+411,530 
+— 
+— 
+380,000 
+— 
+2002 
+180,833 
+140,000 
+— 
+— 
+800,000 
+— 
+Cloyce A. Talbott 
+2004 
+450,000 
+645,798 
+(3) 
+— 
+50,000 
+(4) 
+120,000 
+5,644 
+Chief Executive Officer 
+2003 
+413,750 
+411,530 
+— 
+— 
+380,000 
+4,935 
+2002 
+316,458 
+140,000 
+— 
+— 
+800,000 
+6,000 
+A. Glenn Patterson 
+2004 
+450,000 
+645,798 
+(3) 
+— 
+50,000 
+(4) 
+120,000 
+5,644 
+President and Chief 
+2003 
+413,750 
+411,530 
+— 
+— 
+380,000 
+4,935 
+Operating Officer 
+2002 
+316,458 
+140,000 
+— 
+— 
+800,000 
+6,000 
+Kenneth N. Berns 
+2004 
+215,000 
+322,899 
+(3) 
+— 
+25,000 
+(4) 
+60,000 
+— 
+Senior Vice President 
+2003 
+182,333 
+205,765 
+— 
+— 
+190,000 
+— 
+2002 
+108,500 
+70,000 
+— 
+— 
+400,000 
+— 
+Jonathan D. Nelson 
+2004 
+220,000 
+322,899 
+(3) 
+— 
+25,000 
+(4) 
+60,000 
+3,745 
+Vice President, Chief 
+2003 
+198,667 
+205,765 
+— 
+— 
+190,000 
+3,935 
+Financial Officer, 
+2002 
+144,667 
+70,000 
+— 
+— 
+400,000 
+2,438 
+Secretary and Treasurer 
+John E. Vollmer III 
+2004 
+275,000 
+322,899 
+(3) 
+— 
+25,000 
+(4) 
+60,000 
+3,745 
+Senior Vice President — 
+2003 
+251,908 
+205,765 
+— 
+— 
+190,000 
+3,935 
+Corporate Development 
+2002 
+190,779 
+70,000 
+— 
+— 
+400,000 
+5,500 
+(1) 
+The aggregate amounts of perquisites and other personal
+benefits, securities or property received by each of the
+executive officers does not exceed the lesser of $50,000 or ten
+percent of that executive officer’s combined annual salary
+and bonus during the applicable year. 
+(2) 
+Amounts set forth reflect Patterson-UTI’s contributions or
+other allocations to defined contribution plans. 
+(3) 
+On February 9, 2005, the Compensation Committee approved
+cash bonuses for each of the executive officers based on a
+percentage of Patterson-UTI’s earnings before interest,
+income taxes and depreciation, depletion and amortization for
+2004. 
+(4) 
+Represents restricted stock grants on April 28, 2004, under
+Patterson-UTI’s 1997 Long-Term Incentive Plan, as amended.
+The terms of the restricted stock awards provide that dividends
+may be paid on the shares of restricted stock granted. The
+vesting periods for the restricted stock awards are 50% after
+three years and the remaining 50% after four years, in each case
+from the date of grant. Based on the last reported sales price
+on the Nasdaq Stock Market on December 31, 2004 of $19.45,
+the value of the restricted stock was $972,500 for each of
+Messrs. Siegel, Talbott and Patterson and $486,250 for each
+of Messrs. Berns, Nelson and Vollmer. 
+14
+The following table sets forth information regarding grants of
+stock options during 2004 to the executive officers listed in
+the Summary Compensation Table:
+Options Granted During Fiscal Year 2004 
+Number of 
+% of Total Options 
+Exercise or 
+Grant Date 
+Securities Underlying 
+Granted to Employees 
+Base Price 
+Expiration 
+Present 
+Name 
+Options Granted 
+in Fiscal Year 
+($/Sh) 
+Date 
+Value(2) 
+Mark S. Siegel 
+120,000 
+(1) 
+22.22 
+% 
+$ 
+19.14 
+4/27/14 
+$ 
+797,964 
+Cloyce A. Talbott 
+120,000 
+(1) 
+22.22 
+% 
+$ 
+19.14 
+4/27/14 
+$ 
+797,964 
+A. Glenn Patterson 
+120,000 
+(1) 
+22.22 
+% 
+$ 
+19.14 
+4/27/14 
+$ 
+797,964 
+Kenneth N. Berns 
+60,000 
+(1) 
+11.11 
+% 
+$ 
+19.14 
+4/27/14 
+$ 
+398,982 
+Jonathan D. Nelson 
+60,000 
+(1) 
+11.11 
+% 
+$ 
+19.14 
+4/27/14 
+$ 
+398,982 
+John E. Vollmer III 
+60,000 
+(1) 
+11.11 
+% 
+$ 
+19.14 
+4/27/14 
+$ 
+398,982 
+(1) 
+These options were granted pursuant to the terms and conditions
+of the Patterson-UTI Energy, Inc. Amended and Restated 1997 Long
+Term Incentive Plan. These options vest over a three year period
+as follows: 33.33% on April 28, 2005, and then in equal
+monthly installments through April 28, 2007. 
+(2) 
+The value of the options were estimated using the Black-Scholes
+option valuation model. The following assumptions were used in
+the calculation: no expected dividend yield, risk-free interest
+rate of 3.21%, volatility of 38.86% and an expected term of
+4 years. No discount was considered for the
+non-transferability or the risk of forfeiture of the options.
+The actual value, if any, of any option will depend on the
+amount, if any, by which the stock price exceeds the exercise
+price on the date the option is exercised. Thus, this valuation
+may not be a reliable indication as to the value and there is no
+assurance the value realized will be at or near the value
+estimated by the Black-Scholes model. 
+The following table sets forth information concerning stock
+options exercised in 2004 and stock options unexercised at
+December 31, 2004 for the executive officers of
+Patterson-UTI:
+Aggregated Option Exercises in 2004 
+and Value Table at December 31, 2004 
+Number of Securities 
+Value of Unexercised 
+Underlying Unexercised 
+In-the-Money 
+Options at 
+Options at 
+December 31, 2004(2) 
+December 31, 2004(3) 
+Shares Acquired 
+Value 
+Name 
+on Exercise 
+Realized(1) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Mark S. Siegel 
+560,000 
+$ 
+7,914,969 
+997,221 
+602,779 
+$ 
+6,345,591 
+$ 
+3,380,509 
+Cloyce A. Talbott 
+200,000 
+$ 
+2,286,420 
+997,221 
+602,779 
+$ 
+6,345,591 
+$ 
+3,380,509 
+A. Glenn Patterson 
+174,000 
+$ 
+1,778,385 
+841,221 
+602,779 
+$ 
+4,758,491 
+$ 
+3,380,509 
+Kenneth N. Berns 
+300,000 
+$ 
+4,347,714 
+498,610 
+301,390 
+$ 
+3,172,786 
+$ 
+1,690,264 
+Jonathan D. Nelson 
+212,190 
+$ 
+2,298,470 
+473,610 
+301,390 
+$ 
+2,884,661 
+$ 
+1,690,264 
+John E. Vollmer III 
+496,800 
+$ 
+7,728,177 
+760,777 
+299,223 
+$ 
+7,051,812 
+$ 
+1,654,892 
+(1) 
+Calculated by subtracting actual option exercise price from the
+market price at the respective dates of exercise and multiplying
+the difference by the number of shares in each category. 
+(2) 
+The total number of unexercised options held as of
+December 31, 2004, separated between those options that
+were exercisable and those options that were not exercisable. 
+(3) 
+Calculated by subtracting the actual option exercise price from
+the market price at December 31, 2004 ($19.45 per
+share) and multiplying the difference by the number of shares in
+each category. 
+15
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; 
+INDEMNIFICATION AGREEMENTS 
+On January 29, 2004, Patterson-UTI entered into change in
+control agreements (each, an “Agreement” and
+collectively, the “Agreements”) with
+Messrs. Siegel, Talbott, Patterson, Berns, Nelson and
+Vollmer, (each, an “Employee” and collectively, the
+“Employees”). The Agreements were entered into to
+protect the Employees should a change in control occur, thereby
+encouraging the Employee to remain in the employ of
+Patterson-UTI and not be distracted from the performance of his
+duties to Patterson-UTI by the possibility of a change in
+control.
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other
+than for cause or by the Employee for good reason, the terms of
+the Agreement would entitle the Employee to, among other things:
+• 
+a bonus payment equal to the greater of the highest bonus paid
+after the Agreement was entered into and the average of the two
+annual bonuses earned in the two fiscal years immediately
+preceding a change in control (such bonus payment prorated for
+the portion of the fiscal year preceding the termination date), 
+• 
+a payment equal to 2.5 times (in the case of
+Messrs. Siegel, Talbott and Patterson) or 1.5 times (in the
+case of Messrs. Berns, Nelson and Vollmer) of the sum of
+(1) the highest annual salary in effect for such Employee
+and (2) the average of the three annual bonuses earned by
+the Employee for the three fiscal years preceding the
+termination date, and 
+• 
+continued coverage under Patterson-UTI’s welfare plans for
+up to three years (in the case of Messrs. Siegel, Talbott
+and Patterson) or two years (in the case of Messrs. Berns,
+Nelson and Vollmer). 
+Each Agreement provides the Employee with a full gross-up
+payment for any excise taxes imposed on payments and benefits
+received under the Agreements or otherwise including other taxes
+that may be imposed as a result of the gross-up payment.
+A change in control is principally defined by the Agreement as:
+• 
+an acquisition by any individual, entity or group of beneficial
+ownership of 35% or more of either Patterson-UTI’s then
+outstanding Common Stock or the combined voting power of the
+then outstanding voting securities of Patterson-UTI entitled to
+vote in the election of directors, 
+• 
+a change occurs in which the members of the Board of Directors
+as of the date of the Agreement cease to constitute at least a
+majority of Patterson-UTI’s Board of Directors unless that
+change occurs through a vote of at least a majority of the
+incumbent members of the Board of Directors, or 
+• 
+a change in the beneficial ownership of Patterson-UTI following
+consummation of a reorganization, merger, consolidation, sale of
+Patterson-UTI or any subsidiary of Patterson-UTI or a
+disposition of all or substantially all of the assets of
+Patterson-UTI in which the beneficial owners immediately prior
+to the transaction own 65% or less of outstanding Common Stock
+of the newly combined or merged entity. 
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or retirement, 
+• 
+the termination of the Employee’s employment, or 
+• 
+three years from the date the Agreement was signed although,
+unless otherwise terminated, the Agreements will automatically
+renew for successive twelve-month periods unless Patterson-UTI
+notifies the Employee at least 90 days before the
+expiration of the initial term or the renewal period, as
+applicable, that the term will not be extended. 
+16
+All unvested stock options held by executive officers vest upon
+a change of control as defined by the underlying stock option
+plan.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer confirming and
+evidencing the existing agreements between Patterson-UTI and
+each of them pursuant to which Patterson-UTI has agreed to pay
+each such person within ten days of the termination of his
+employment with Patterson-UTI for any reason (including
+voluntary termination by him), an amount in cash equal to his
+annual base salary at the time of such termination. Any such
+payment made by Patterson-UTI pursuant to the agreement
+evidenced in these letter agreements will reduce dollar for
+dollar any payment owed to such person, if any, pursuant to the
+change in control agreements discussed above.
+Patterson-UTI has entered into an indemnification agreement with
+each of its executive officers and directors containing
+provisions that may require Patterson-UTI, among other things,
+to indemnify such executive officers and directors against
+liabilities that may arise by reason of their status or service
+as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN TRANSACTIONS 
+In connection with the acquisition by REMY Capital
+Partners III, L.P. (“REMY Capital”) of an
+ownership interest in UTI in March 1995, REMY Capital succeeded
+to a registration rights agreement with UTI. As the
+successor-in-interest to UTI, Patterson-UTI assumed this
+registration rights agreement pursuant to which REMY Capital has
+the right to require Patterson-UTI to use its reasonable efforts
+to register shares held by REMY Capital under the Securities Act
+of 1933, as amended. In the event that such rights are exercised
+in connection with a primary offering proposed by Patterson-UTI
+(or a secondary offering with which Patterson-UTI agrees to
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elected to exercise such rights other than in
+connection with an offering in which Patterson-UTI participates,
+REMY Capital would bear all costs of the offering. These rights
+continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is
+President and sole stockholder of REMY Investors, which is the
+general partner of REMY Capital. Mr. Berns, a director and
+Senior Vice President of Patterson-UTI, is an executive of REMY
+Investors.
+During 2004, Patterson-UTI paid approximately $914,000 to TMP
+Truck and Trailer LP (“TMP”), an entity owned by
+Thomas M. Patterson, son of A. Glenn Patterson,
+Patterson-UTI’s President and Chief Operating Officer, for
+certain equipment and metal fabrication services. Purchases from
+TMP were at current market prices. TMP continues to be a vendor
+to Patterson-UTI in 2005.
+During 2004, Patterson-UTI paid approximately $39,000 to Melco
+Services (“Melco”) for dirt contracting services and
+$44,000 to L&N Transportation (“L&N”) for
+water hauling services. Both entities are owned by Lance D.
+Nelson, brother of Jonathan D. Nelson, Patterson-UTI’s
+Vice President, Chief Financial Officer, Secretary and
+Treasurer. Purchases from Melco and L&N were at current
+market prices. Melco and L&N continue to be vendors to
+Patterson-UTI in 2005.
+Patterson-UTI operates certain oil and natural gas properties in
+which certain of its officers and members of their families have
+participated, either individually or through entities they
+control, in the prospects or properties in which Patterson-UTI
+has an interest. These participations, which have been on a
+working interest basis, have been in prospects or properties
+originated or acquired by Patterson-UTI. At December 31,
+2004, affiliated persons were working interest owners of 237 of
+the 300 wells operated by Patterson-UTI. Sales of working
+interests are made by Patterson-UTI to reduce its economic risk
+in the properties. Generally, it is more efficient for
+Patterson-UTI to sell the working interests to these affiliated
+persons than to market them to unrelated third parties. Sales
+were made by Patterson-UTI at its cost, comprised of
+Patterson-UTI’s costs of acquiring and preparing the
+working interests for sale. These costs were paid by the working
+interest owners on
+17
+a pro rata basis based upon their working interest ownership
+percentage. The price at which working interests were sold to
+affiliated persons was the same price at which working interests
+were sold to unaffiliated persons.
+The following table sets forth production revenues received and
+joint interest costs of each of the affiliated persons during
+2004 for all wells operated by Patterson-UTI in which they have
+working interests. These amounts do not necessarily represent
+their profits or losses from these interests because the joint
+interest costs do not include the parties’ related drilling
+and leasehold acquisition costs incurred prior to
+January 1, 2004. These activities resulted in a payable to
+the affiliated persons of approximately $1.2 million and
+$871,000 and a receivable from the affiliated persons of
+approximately $856,000 and $888,000 at December 31, 2004
+and 2003, respectively.
+Year Ended December 31, 2004 
+Joint 
+Production 
+Interest 
+Name 
+Revenues(1) 
+Costs(2) 
+Cloyce A. Talbott 
+$ 
+186,971 
+$ 
+42,313 
+Anita Talbott(3) 
+76,423 
+22,591 
+Jana Talbott, Executrix to the Estate of Steve Talbott(3) 
+11,655 
+2,940 
+Stan Talbott(3) 
+9,320 
+4,366 
+John Evan Talbott Trust(3) 
+3,124 
+668 
+Lisa Beck and Stacy Talbott(3) 
+978,607 
+410,334 
+SSI Oil & Gas, Inc.(4) 
+163,584 
+263,123 
+IDC Enterprises, Ltd.(5) 
+12,019,230 
+6,462,580 
+Subtotal 
+13,448,914 
+7,208,915 
+A. Glenn Patterson 
+123,583 
+27,468 
+Robert Patterson(6) 
+8,476 
+2,518 
+Thomas M. Patterson(6) 
+8,476 
+2,518 
+Subtotal 
+140,535 
+32,504 
+Jonathan D. Nelson 
+248,297 
+263,549 
+Total 
+$ 
+13,837,746 
+$ 
+7,504,968 
+(1) 
+Revenues for production of oil and natural gas, net of state
+severance taxes. 
+(2) 
+Includes leasehold costs, tangible equipment costs, intangible
+drilling costs, and lease operating expense billed during that
+period. All joint interest costs have been paid on a timely
+basis. 
+(3) 
+Anita Talbott is the wife of Cloyce A. Talbott. Stan Talbott,
+Lisa Beck, and Stacy Talbott are Mr. Talbott’s adult
+children. Steve Talbott is the deceased son of Mr. Talbott.
+John Evan Talbott is Mr. Talbott’s grandson. 
+(4) 
+SSI Oil & Gas, Inc. is beneficially owned 50% by Cloyce
+A. Talbott and directly owned 50% by A. Glenn Patterson. 
+(5) 
+IDC Enterprises, Ltd. is 50% owned by Cloyce A. Talbott and 50%
+owned by A. Glenn Patterson. 
+(6) 
+Robert and Thomas M. Patterson are A. Glenn Patterson’s
+adult children. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee sets and administers the policies
+that govern the annual compensation and long-term compensation
+of executive officers and directors of Patterson-UTI. The
+Compensation Committee consists of Messrs. Huff and Hunt,
+and Ms. Smith, each of whom is an independent director as
+defined by the NASD published listing standards. The
+Compensation Committee makes all decisions concerning
+compensation of executive officers, determines the total amount
+of bonuses to be paid annually and grants all awards of
+18
+stock options under Patterson-UTI’s incentive stock option
+plans. The Compensation Committee also reviews and oversees
+bonus and incentive compensation decisions for Patterson-UTI as
+a whole.
+The Compensation Committee’s policy is to provide to the
+executives competitive compensation packages that will permit
+Patterson-UTI to attract and retain highly qualified individuals
+and to motivate and reward Patterson-UTI’s executives for
+performance that benefits Patterson-UTI and its shareholders.
+Historically, Patterson-UTI’s executive compensation
+package consisted of a combination of base salary, cash bonus
+awards and long-term incentive opportunities in the form of
+stock options and a 401(k) plan.
+Executive salaries are reviewed by the Compensation Committee on
+an annual basis and are set for individual executive officers
+based on subjective evaluations of each individual’s
+specific performance, Patterson-UTI’s financial results and
+position, Patterson-UTI’s performance compared to similar
+companies and a comparison to salary ranges for executives of
+other companies in the oil and natural gas industry with
+characteristics similar to those of Patterson-UTI. The process
+applied by the Compensation Committee is intended to allow the
+committee to set salaries in a manner that is both competitive
+and reasonable within the industry, but with an emphasis on
+incentive bonus and equity compensation.
+Patterson-UTI’s bonus plan for the executive officers
+allocates a bonus pool among the top executive officers that is
+based on Patterson-UTI’s earnings before interest, income
+taxes and depreciation, depletion and amortization. The bonus
+pool is allocated among the executive officers of Patterson-UTI
+in a manner that reflects the organizational structure of the
+top management and the corporate team management philosophy of
+Patterson-UTI. The committee retains the right to modify cash
+bonus awards based on individual and corporate performance.
+It is the general policy of the Compensation Committee to review
+stock-based compensation of Patterson-UTI on at least an annual
+basis. Awards of stock-based compensation reflect the
+Board’s and Compensation Committee’s desire to provide
+Patterson-UTI’s employees who have substantial
+responsibility for Patterson-UTI’s management and growth
+with additional incentives by increasing their proprietary
+interest in the success of Patterson-UTI. The Compensation
+Committee believes that there should be an emphasis on equity
+based compensation in order to provide incentives and rewards
+that are closely aligned with shareholders. As a result, on a
+relative basis, stock-based compensation has historically been
+given more weight in Patterson-UTI’s overall compensation
+package than cash compensation. Equity based compensation
+consists of both awards of options to purchase Common Stock and
+shares of restricted stock. Grants of options and restricted
+stock vest over time, with restricted stock grants currently
+having a four year vesting schedule whereby no shares vest until
+three years after grant subject to certain acceleration events.
+The allocation among the executive officers of Patterson-UTI of
+equity based compensation is made by the Compensation Committee
+based on various factors, including the executive’s
+position and contribution to the overall goals and objectives of
+Patterson-UTI.
+During 2004 the Compensation Committee, with the approval of the
+Board, enacted a share ownership guideline applicable to all
+executive officers and directors of Patterson-UTI. Under this
+policy and subject to a four year phase-in, each of
+Patterson-UTI’s Chairman, Chief Executive Officer and
+President are required to hold shares of Common Stock having a
+value equal to at least five times their base compensation and
+Patterson-UTI’s other executive officers are required to
+hold shares of Common Stock having a value equal to at least
+three times their base compensation. In addition, subject to a
+four year phase-in, each director of Patterson-UTI is required
+to hold shares of Common Stock having a value equal to at least
+four times the cash compensation provided to the director.
+The compensation of the Chief Executive Officer of Patterson-UTI
+is determined in the same manner as the compensation for other
+executive officers as described above. Mr. Talbott’s
+base annual salary is currently $450,000 and Mr. Talbott
+also received a cash bonus for 2004 of $645,798 from the bonus
+pool discussed above. The Compensation Committee also awarded
+Mr. Talbott 50,000 shares of restricted stock having a
+four-year vesting period and options to
+purchase 120,000 shares of Common Stock at the then
+current market price.
+19
+In considering compensation decisions for the executive
+management of Patterson-UTI, the Compensation Committee and the
+Board of Directors of Patterson-UTI routinely considers the
+potential effect of section 162(m) of the Code.
+Section 162(m) imposes a limitation on deductions over
+$1 million that can be taken by a publicly held corporation
+for compensation paid to certain of its executive officers.
+Stock option grants and cash and other performance awards
+pursuant to Patterson-UTI’s employee benefit plans may be
+exempt from the deduction limit if certain requirements are met.
+Compensation Committee of the Board of Directors: 
+Curtis W. Huff, Chairman 
+Terry H. Hunt 
+Nadine C. Smith 
+20
+PERFORMANCE GRAPH 
+The following graph compares the cumulative stockholder return
+on the Common Stock of Patterson-UTI, for the period from
+December 31, 1999 through December 31, 2004, with the
+cumulative total return of the Standard and Poors 500 Stock
+Index, the Standard and Poors MidCap Index, the Oilfield Service
+Index, and a Patterson-UTI determined peer group.
+Patterson-UTI’s 2004 peer group consists of Grey Wolf,
+Inc., Helmerich & Payne, Inc., Nabors Industries, Ltd.,
+Pioneer Drilling Co., Precision Drilling Corp., and Unit Corp.
+All of the companies in Patterson-UTI’s 2004 peer group are
+providers of land-based drilling services. The graph assumes
+investment of $100 on December 31, 1999 and reinvestment of
+all dividends.
+COMPARISON OF CUMULATIVE TOTAL RETURNS 
+(Total return based on $100 initial investment and
+reinvestment of all dividends) 
+Basis 
+1999 
+2000 
+2001 
+2002 
+2003 
+2004 
+Description 
+($) 
+($) 
+($) 
+($) 
+($) 
+($) 
+Patterson-UTI Energy, Inc. 
+100.00 
+286.54 
+179.31 
+232.08 
+253.31 
+301.84 
+2004 Peer Group Index 
+100.00 
+188.38 
+117.69 
+125.09 
+146.18 
+192.39 
+S&P 500 Index 
+100.00 
+90.89 
+80.09 
+62.39 
+80.29 
+89.02 
+S&P MidCap Index 
+100.00 
+117.51 
+116.79 
+99.84 
+135.41 
+157.73 
+Oilfield Service Index (OSX) 
+100.00 
+138.48 
+95.90 
+87.76 
+103.17 
+137.86 
+The foregoing graph is based on historical data and is not
+necessarily indicative of future performance. This graph shall
+not be deemed to be “soliciting material” or to be
+“filed” with the SEC or subject to the Regulations of
+14A or 14C under the Exchange Act or to the liabilities of
+Section 18 under such act.
+21
+SECURITY OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of April 25, 2005, the
+stock ownership of (i) the executive officers, directors
+and Board nominees individually, (ii) all directors, Board
+nominees and executive officers as a group and (iii) each
+person known by Patterson-UTI to be the beneficial owner of more
+than 5% of Patterson-UTI’s Common Stock.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common
+Stock: 
+First Pacific Advisors, Inc. 
+11400 West Olympic Boulevard 
+Los Angeles, CA 90064 
+9,226,700 
+5.4 
+% 
+Directors, Board nominees and Executive Officers Listed in
+Summary Compensation Table: 
+Mark S. Siegel 
+4,482,614 
+(1) 
+2.6 
+% 
+Cloyce A. Talbott 
+1,543,798 
+(2) 
+* 
+A. Glenn Patterson 
+1,240,814 
+(3) 
+* 
+Kenneth N. Berns 
+536,433 
+(4) 
+* 
+Robert C. Gist 
+104,772 
+(5) 
+* 
+Curtis W. Huff 
+77,880 
+(6) 
+* 
+Terry H. Hunt 
+48,800 
+(7) 
+* 
+Kenneth R. Peak 
+90,000 
+(8) 
+* 
+Nadine C. Smith 
+73,000 
+(9) 
+* 
+Jonathan D. Nelson 
+638,533 
+(10) 
+* 
+John E. Vollmer III 
+621,500 
+(11) 
+* 
+All directors and executive officers as a group 
+9,458,144 
+(12) 
+5.6 
+% 
+* 
+indicates less than 1.0% 
+(1) 
+Mr. Siegel is the President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital Partners
+III, L.P. (“REMY Capital”). The Common Stock
+beneficially owned by Mr. Siegel includes 3,288,348 shares
+of Common Stock owned by REMY Capital. The Common Stock
+beneficially owned by Mr. Siegel also includes stock
+options held by Mr. Siegel, which are presently exercisable or
+become exercisable within sixty days, to purchase 924,266 shares
+of Common Stock, but does not include 323,334 shares underlying
+stock options held by Mr. Siegel that are not presently
+exercisable and will not become exercisable within sixty days.
+Includes 50,000 shares of restricted Common Stock held by
+Mr. Siegel, over which he presently has voting power. 
+(2) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to purchase 1,276,666 shares.
+Does not include shares underlying stock options held by
+Mr. Talbott to purchase 323,334 shares each that are
+not presently exercisable and will not become exercisable within
+sixty days. Includes 50,000 shares of restricted Common
+Stock held by Mr. Talbott, over which he presently has
+voting power. 
+(3) 
+Includes shares underlying stock options held by
+Mr. Patterson, which are presently exercisable or become
+exercisable within sixty days, to purchase 1,120,666 shares.
+Does not include shares underlying stock options held by
+Mr. Patterson to purchase 323,334 shares each that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 50,000 shares of restricted Common
+Stock held by Mr. Patterson, over which he presently has voting
+power. 
+22
+(4) 
+Includes shares underlying stock options owned by
+Mr. Berns, which are presently exercisable or become
+exercisable within sixty days, to purchase 491,433 shares. Does
+not include 161,667 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 25,000 shares of restricted Common
+Stock held by Mr. Berns, over which he presently has voting
+power. Does not include shares of Common Stock beneficially
+owned by REMY Investors. Mr. Berns disclaims beneficial
+ownership of such shares beneficially owned by REMY Investors. 
+(5) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Gist to purchase 58,000 shares. Does not
+include 20,000 shares underlying stock options held by
+Mr. Gist that are not presently exercisable and will not
+become exercisable within sixty days. 
+(6) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Huff to purchase 65,000 shares. Does not
+include 20,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days. 
+(7) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Hunt to purchase 40,000 shares. Includes
+800 shares of Common Stock owned by Mr. Hunt’s
+mother-in-law, over which Mr. Hunt presently has shared
+voting power. Does not include 20,000 shares underlying stock
+options held by Mr. Hunt that are not presently exercisable
+and will not become exercisable within sixty days. 
+(8) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Peak to purchase 90,000 shares. Does not
+include 20,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days. 
+(9) 
+Includes shares underlying presently exercisable stock options
+held by Ms. Smith to purchase 65,000 shares. Does not
+include 20,000 shares underlying stock options held by
+Ms. Smith that are not presently exercisable and will not
+become exercisable within sixty days. 
+(10) 
+Includes shares underlying stock options owned by
+Mr. Nelson, which are presently exercisable or become
+exercisable within sixty days, to purchase 613,333 shares.
+Does not include 161,667 shares underlying stock options
+held by Mr. Nelson that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+25,000 shares of restricted Common Stock held by
+Mr. Nelson, over which he presently has voting power. 
+(11) 
+Includes shares underlying stock options owned by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to purchase 596,500 shares.
+Does not include 163,500 shares underlying stock options
+held by Mr. Vollmer that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+25,000 shares of restricted Common Stock held by
+Mr. Vollmer, over which he presently has voting power. 
+(12) 
+Includes shares underlying stock options, which are presently
+exercisable or become exercisable within sixty days, to purchase
+5,340,864 shares of Common Stock. Does not include shares
+underlying stock options to purchase 1,556,836 shares owned by
+such individuals that are not presently exercisable and will not
+become exercisable within sixty days. Includes 800 shares of
+Common Stock over which a director presently has shared voting
+power. Includes an aggregate of 225,000 shares of restricted
+Common Stock held by certain directors and executive officers,
+over which they presently have voting power. 
+Except as stated herein, each stockholder has sole voting and
+investment power with respect to Common Stock included in the
+above table. There are no arrangements known to Patterson-UTI
+which may result in a change in control.
+23
+AUDIT COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute
+soliciting material and should not be deemed filed or
+incorporated by reference into any other Patterson-UTI filing
+under the Securities Act of 1933, as amended, or the Exchange
+Act, except to the extent Patterson-UTI specifically
+incorporates this report by reference therein.
+The Audit Committee has discussed with the independent auditors
+the matters required to be discussed by Statement on Auditing
+Standards No. 61, Communication with Audit Committees,
+as amended, by the Auditing Standards Board of the American
+Institute of Certified Public Accountants.
+The Audit Committee has received and reviewed the written
+disclosures and the letter from the independent auditors
+required by Independence Standard No. 1, Independence
+Discussions with Audit Committees, as amended, by the
+Independence Standards Board, and has discussed with the
+auditors the auditors’ independence.
+The Audit Committee met five times during fiscal 2004. The Audit
+Committee schedules its meetings with a view to ensuring that it
+devotes appropriate attention to all of its tasks. The Audit
+Committee meetings include, whenever appropriate, executive
+sessions with the independent auditors without the presence of
+Patterson-UTI’s management.
+During fiscal 2004, as part of its oversight of the financial
+statements, the Audit Committee reviewed and discussed with both
+management and the independent auditors the audited financial
+statements and quarterly operating results prior to their
+issuance. During fiscal 2004, Patterson-UTI’s management
+advised the Audit Committee that each set of financial
+statements reviewed had been prepared in accordance with
+generally accepted accounting principles, and reviewed
+significant accounting and disclosure issues with the Audit
+Committee.
+In addition, during fiscal 2004, the Audit Committee reviewed
+major initiatives and programs aimed at strengthening the
+effectiveness of Patterson-UTI’s internal control
+structure. As part of this process, the Audit Committee
+continued to monitor the scope and adequacy of the internal
+control structure, reviewing staffing levels and steps taken to
+implement recommended improvements in internal procedures and
+controls.
+Taking all of these reviews and discussions into account, the
+undersigned Audit Committee members recommended to the Board of
+Directors that the Board approve the inclusion of the
+Patterson-UTI’s audited financial statements in the Annual
+Report on Form 10-K for the fiscal year ended
+December 31, 2004.
+Audit Committee of the Board of Directors: 
+Kenneth R. Peak, Chairman 
+Robert C. Gist 
+Nadine C. Smith 
+PricewaterhouseCoopers Fees for Fiscal Years 2004 and 2003 
+In 2004 and 2003, Patterson-UTI and its subsidiaries incurred
+fees for services provided relating to (i) professional
+services rendered for the audit of Patterson-UTI’s annual
+financial statements and review of quarterly financial
+statements, (ii) professional services rendered for the
+assessment of Patterson-UTI’s internal controls over
+financial reporting and other assurance and related services
+that are reasonably related to the performance of the audit or
+review of Patterson-UTI’s financial statements,
+(iii) professional services
+24
+rendered for tax compliance, advice and planning, and
+(iv) products and services provided by
+PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2004 
+2003 
+Audit fees 
+$ 
+419,000 
+$ 
+323,000 
+Audit-related fees 
+1,141,000 
+180,000 
+Tax fees 
+573,000 
+81,000 
+All other fees 
+19,000 
+31,000 
+Total 
+$ 
+2,152,000 
+$ 
+615,000 
+The Audit Committee approves the appointment of the independent
+audit firm. The Audit Committee or Mr. Peak, as Chairman of
+the Audit Committee, approves all other engagements of the
+independent audit firm in advance. In the event Mr. Peak
+approves any such engagement, he discusses such approval with
+the Audit Committee at its next meeting.
+Fiscal 2004 
+“Audit Fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2004 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements and quarterly reviews of Patterson-UTI’s interim
+financial statements. “Audit-related Fees” includes
+services provided to assess Patterson-UTI’s internal
+controls over financial reporting and services provided which
+relate to the acquisition of TMBR/ Sharp Drilling, Inc. and
+associated filings made with the SEC. “Tax Fees”
+includes federal, state, local and foreign tax compliance and
+related matters. “All Other Fees” includes other
+non-audit related matters. The Audit Committee or Mr. Peak,
+as Chairman of the Audit Committee, approved all of the services
+described above.
+Fiscal 2003 
+“Audit Fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2003 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements and quarterly reviews of Patterson-UTI’s
+financial statements. “Audit-related Fees” includes
+reading of Patterson-UTI’s registration statement and
+consultation on the correspondence between Patterson-UTI and the
+SEC related to the registration statement/proxy statement with
+respect to the acquisition of TMBR/ Sharp Drilling, Inc.
+“Tax Fees” includes federal, state, local and foreign
+tax compliance and related matters. “All Other Fees”
+includes consultation related to Sarbanes-Oxley matters. The
+Audit Committee or Mr. Peak, as Chairman of the Audit
+Committee, approved all of the services described above.
+The Audit Committee has discussed the non-audit services
+provided by PricewaterhouseCoopers LLP and the related fees and
+has considered whether those services and fees are compatible
+with maintaining auditor independence. The Audit Committee
+determined that such non-audit services were consistent with the
+independence of PricewaterhouseCoopers LLP.
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting
+Compliance 
+Section 16(a) of the Securities Exchange Act requires
+Patterson-UTI’s officers and directors, and persons who own
+more than 10% of a registered class of Patterson-UTI’s
+equity securities, to file reports of ownership and changes in
+ownership with the SEC. Each of these persons is required by SEC
+regulation to furnish Patterson-UTI with copies of
+Section 16(a) filings.
+Based solely on its review of copies of such forms received by
+it, Patterson-UTI believes that, during the year ended
+December 31, 2004, its officers, directors and beneficial
+owners of more than ten percent of a registered class of its
+equity securities complied with all applicable filing
+requirements.
+25
+Other Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not aware of any matter to be presented at the
+Meeting other than as set forth herein. If any other matters are
+properly brought before the Meeting, however, the shares
+represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting
+them.
+Stockholder Proposals for 2006 Annual Meeting 
+All proposals submitted by stockholders for presentation at the
+2006 annual meeting must comply with the SEC’s rules
+regarding shareholder proposals. In addition,
+Patterson-UTI’s bylaws provide that for business to be
+properly brought before an annual meeting by a stockholder, the
+stockholder, in addition to any other applicable requirements,
+must be a stockholder of record on the date of the giving of the
+notice provided for below and on the record date for the
+determination of stockholders entitled to vote at such annual
+meeting and must give timely notice of such business in writing
+to the Secretary of Patterson-UTI. To be timely with respect to
+the 2006 annual meeting, a stockholder’s notice must be
+delivered to or mailed and received at Patterson-UTI’s
+principal executive offices not earlier than February 15,
+2006 and not later than March 17, 2006; provided, however,
+that in the event that the annual meeting is called for a date
+that is not within 30 days before or after June 15,
+2006, notice by the stockholder to be timely must be received
+not later than the close of business on the tenth day following
+the day on which such notice of the date of the meeting was
+mailed or public disclosure of the annual meeting date was made,
+whichever occurs first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+a brief description of each matter desired to be brought before
+the annual meeting and the reasons for conducting such business
+at the annual meeting, 
+• 
+the name and record address of the stockholder proposing such
+business, 
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder, 
+• 
+any material interest of the stockholder in such business, and 
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the annual meeting to bring such business
+before the meeting. 
+The proxies will have discretionary authority to vote on any
+matter that properly comes before the meeting if the stockholder
+has not provided timely written notice as required by the
+Patterson-UTI bylaws.
+Any proposal by a stockholder to be presented at
+Patterson-UTI’s 2006 annual meeting of stockholders must be
+received by Patterson-UTI no later than December 29, 2005,
+in order to be eligible for inclusion in Patterson-UTI’s
+proxy statement and proxy used in connection with the 2006
+annual meeting.
+Patterson-UTI reserves the right to reject, rule out of order,
+or take other appropriate action with respect to any proposal or
+nomination that does not comply with these and other applicable
+requirements.
+Annual Report 
+You are referred to Patterson-UTI’s annual report to
+stockholders with a copy of its Annual Report on Form 10-K
+for the year ended December 31, 2004, filed with the SEC,
+enclosed herewith for your information. The annual report to
+stockholders is not incorporated in this proxy statement and is
+not to be considered part of the soliciting material.
+26
+ANNEX A 
+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.
+A-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
+A-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
+A-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
+A-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.
+A-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. 
+A-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
+A-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
+2 1 / 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
+2 1 / 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
+A-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
+A-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
+A-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
+A-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.
+A-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
+A-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.
+A-14
+PATTERSON-UTI ENERGY, INC. 
+n 
+You can now vote your shares electronically through the Internet or the telephone. 
+n 
+This eliminates the need to return the proxy card. 
+n 
+Your electronic vote authorizes the named proxies to vote your shares in the same
+manner as if you marked, signed, dated and returned the proxy card. 
+TO VOTE YOUR PROXY BY
+INTERNET 
+www.continentalstock.com 
+Have your proxy card in hand when you access the above website. You will be prompted to
+enter the
+company number, proxy number and account number to create an electronic ballot. Follow the prompts
+to vote your shares.
+TO VOTE YOUR PROXY BY MAIL 
+Mark, sign and date your proxy card below, detach it and return it in the postage-paid envelope
+provided.
+TO VOTE YOUR PROXY BY
+PHONE 
+1-866-894-0537 
+Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
+You
+will be prompted to enter the company number, proxy number and account number. Follow the voting
+instructions to vote your shares.
+PLEASE DO NOT RETURN THE CARD BELOW IF YOU VOTED 
+ELECTRONICALLY 
+▼ FOLD AND DETACH
+HERE AND READ THE REVERSE SIDE ▼ 
+PROXY BY MAIL 
+Please
+mark 
+your votes 
+x 
+THE BOARD OF DIRECTORS
+RECOMMENDS THAT YOU VOTE “FOR” THE
+NOMINEES FOR ELECTION AS DIRECTORS 
+AND “FOR” PROPOSALS 2 AND
+3. 
+like this
+THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
+VOTED BY THE PROXIES IN
+THE MANNER DIRECTED HEREIN BY
+THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXIES WILL
+VOTE “FOR” THE NOMINEES FOR
+ELECTION AS DIRECTORS NOTED BELOW AND “FOR” PROPOSALS 2 AND 3. 
+1.
+ELECTION OF BOARD 
+OF DIRECTORS.
+FOR all nominees 
+listed
+below (except 
+as indicated
+to 
+the contrary below)
+o 
+WITHHOLD AUTHORITY 
+to
+vote for all 
+nominees listed 
+below
+o 
+Nominees for election to the Board of Directors: 01 Mark S. Siegel, 02 Cloyce A. Talbott, 03 A.
+Glenn Patterson, 04 Kenneth N. Berns, 05 Robert C. Gist, 06 Curtis W. Huff, 07 Terry H. Hunt, 08
+Kenneth R. Peak, and 09 Nadine C. Smith. 
+(INSTRUCTION: To
+withhold authority to vote for any one or more individual nominees, write the
+name of each such nominee in the space provided below.) 
+FOR 
+AGAINST 
+ABSTAIN 
+2. 
+Approve the adoption of the Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan (the
+“2005 Plan”);
+o 
+o 
+o 
+FOR 
+AGAINST 
+ABSTAIN 
+3. 
+Ratify the selection of PricewaterhouseCoopers LLP as independent accountants of the Company for
+the fiscal year ending December 31, 2005; and 
+o 
+o 
+o 
+4. 
+In their discretion, the Proxies are authorized to vote upon such
+other business as may properly come before the Meeting or any adjournment or adjournments thereof. 
+IF YOU WISH TO VOTE ELECTRONICALLY, 
+PLEASE
+READ THE INSTRUCTIONS ABOVE. 
+COMPANY ID: 
+PROXY NUMBER: 
+ACCOUNT NUMBER: 
+Signature ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
+Signature ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ 
+Date ▬▬▬▬▬▬▬▬ 
+NOTE: Please sign exactly as your name or names appear on this card. Joint owners should
+each
+sign personally. When signing as attorney, executor, administrator, personal representative,
+trustee or guardian, please give your full title as such. For a corporation or a
+partnership, please sign in the full corporate name by the President or other authorized officer or
+the full partnership name by an authorized person, as the case may be. (Please mark, sign, date,
+and return this proxy in the enclosed envelope.) 
+Your Vote Is Important! 
+Follow Instructions on The Reverse Side. 
+PLEASE VOTE 
+▼ FOLD AND DETACH HERE ▼ 
+PROXY 
+PROXY 
+PATTERSON-UTI ENERGY,
+INC. 
+PROXY FOR ANNUAL MEETING OF STOCKHOLDERS 
+TO BE HELD ON JUNE 15, 2005 
+THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS 
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”)
+hereby appoints Mark
+S. Siegel, Cloyce A. Talbott and A. Glenn Patterson, and each of them, attorneys and proxies of the
+undersigned, each with full power to act without the other and with full power of substitution, to
+vote all of the shares which the undersigned is entitled to vote at the annual meeting of
+stockholders of the Company to be held Wednesday, June 15, 2005, at 10:00 a.m., local time, at the
+corporate offices of Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas, 79549, and at
+any and all adjournments thereof, with the same force and effect as if the undersigned were
+personally present. The undersigned hereby instructs the above-named Attorneys and Proxies to vote
+the shares represented by this proxy in the manner as directed by the undersigned on the reverse
+side of this proxy card. If no directions are made, the Proxies will vote “FOR” the nominees for
+directors set forth on the reverse side and “FOR” proposals 2 and 3.
+Please mark, sign, date and return this proxy card promptly using the enclosed envelope,
+or follow
+the instructions on the reverse side to vote your shares by Internet or by telephone. 
+(continued on the reverse side)
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950129-05-004240/proxy_rpt.txt b/raw/proxies/0000889900/0000950129-05-004240/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000889900/0000950134-02-004228/proxy.txt b/raw/proxies/0000889900/0000950134-02-004228/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..5a8ae8a918ee10014de17ebbd7de78e8fcc64d8c
--- /dev/null
+++ b/raw/proxies/0000889900/0000950134-02-004228/proxy.txt
@@ -0,0 +1,1803 @@
+DEF 14A
+1
+d96047ddef14a.txt
+DEFINITIVE PROXY STATEMENT
+SCHEDULE 14A INFORMATION
+Proxy Statement Pursuant to Section 14(a)
+of the Securities Exchange Act of 1934
+Filed by the Registrant [X]
+Filed by a Party other than the Registrant [ ]
+Check the appropriate box:
+[ ] Preliminary Proxy Statement
+[ ] Confidential, for Use of the Commission Only (as permitted by rule
+14a-6(e)(2))
+[X] Definitive Proxy Statement
+[ ] Definitive Additional Materials
+[ ] Soliciting Material Pursuant toss.240.14(a)-11(c) orss.240.14a-12
+PATTERSON-UTI ENERGY, INC.
+--------------------------------------------------------------------------------
+(Name of Registrant as Specified in Its Charter)
+Not Applicable
+--------------------------------------------------------------------------------
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
+Payment of Filing Fee (Check the appropriate box):
+[X] No Fee Required
+[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
+(1) Title of each class of securities to which transaction applies:
+--------------------------------------------------------------------------
+(2) Aggregate number of securities to which transaction applies:
+--------------------------------------------------------------------------
+(3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
+filing fee is calculated and state how it was determined):
+--------------------------------------------------------------------------
+(4) Proposed maximum aggregate value of transaction:
+--------------------------------------------------------------------------
+(5) Total Fee Paid:
+--------------------------------------------------------------------------
+[ ] Fee paid previously with preliminary materials.
+[ ] Check box if any part of the fee is offset as provided by the Exchange Act
+Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
+paid previously. Identify the previous filing by registration statement
+number, or the Form or Schedule and the date of its filing.
+(1) Amount Previously Paid:
+--------------------------------------------------------------------------
+(2) Form, Schedule or Registration No.:
+--------------------------------------------------------------------------
+(3) Filing Party:
+--------------------------------------------------------------------------
+(4) Date Filed:
+--------------------------------------------------------------------------
+[LOGO]
+April 26, 2002
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy, Inc.'s annual
+stockholders' meeting. The annual meeting will be held Thursday, May 30, 2002,
+at 10:00 a.m., local time, at the Wyndham Greenspoint Hotel, 12400 Greenspoint
+Drive, Houston, Texas 77060.
+At the annual meeting, stockholders will vote on a number of important matters.
+Please take the time to carefully read each of the proposals described in the
+attached proxy statement.
+Thank you for your support.
+Sincerely,
+/s/ MARK S. SIEGEL /s/ CLOYCE A. TALBOTT
+Mark S. Siegel Cloyce A. Talbott
+Chairman of the Board Chief Executive Officer
+----------------------------------------------------------------------------
+This proxy statement and the accompanying proxy card are being mailed to
+Patterson-UTI Energy, Inc. stockholders beginning on or about April 26, 2002
+PATTERSON-UTI ENERGY, INC.
+P. O. Box 1416
+Snyder, Texas 79550
+--------------------------------------------------------------------------------
+NOTICE OF 2002 ANNUAL MEETING
+--------------------------------------------------------------------------------
+The 2002 annual meeting of the stockholders of Patterson-UTI Energy,
+Inc. ("Patterson-UTI"), a Delaware corporation, will be held Thursday, May 30,
+2002, at 10:00 a.m., local time, at the Wyndham Greenspoint Hotel, 12400
+Greenspoint Drive, Houston, Texas 77060 (the "Meeting"). At the Meeting, the
+stockholders will be asked to:
+o elect the Board of Directors of Patterson-UTI to serve until the
+next annual meeting of the stockholders or until their respective
+successors are elected and qualified;
+o approve an amendment to Patterson-UTI's Amended and Restated 1997
+Long-Term Incentive Plan increasing the number of shares
+available for issuance under the plan;
+o ratify the selection of PricewaterhouseCoopers LLP as independent
+accountants of Patterson-UTI for the fiscal year ending December
+31, 2002; and
+o take action upon any other matters which may properly come before
+the Meeting.
+Stockholders of record at the close of business on April 24, 2002, are
+entitled to vote at the Meeting and any adjournment thereof.
+It is important that your shares be represented at the Meeting. I urge
+you to sign, date and promptly return the enclosed proxy card in the enclosed
+postage paid envelope or vote by following the Internet or telephone
+instructions included on the proxy card.
+By order of the Board of Directors
+/s/ JONATHAN D. NELSON
+Jonathan D. Nelson
+Vice President, Chief Financial Officer,
+Secretary and Treasurer
+April 26, 2002
+PATTERSON-UTI ENERGY, INC.
+P. O. Box 1416
+Snyder, Texas 79550
+--------------------------------------------------------------------------------
+PROXY STATEMENT
+--------------------------------------------------------------------------------
+ANNUAL MEETING OF STOCKHOLDERS
+TO BE HELD MAY 30, 2002
+The Board of Directors of Patterson-UTI Energy, Inc. ("Patterson-UTI"),
+a Delaware corporation, prepared this proxy statement for the purpose of
+soliciting proxies for Patterson-UTI's 2002 annual meeting of stockholders (the
+"Meeting") to be held Thursday, May 30, 2002, at 10:00 a.m., local time, at the
+Wyndham Greenspoint Hotel, 12400 Greenspoint Drive, Houston, Texas 77060, and at
+any adjournment thereof. This proxy statement and the accompanying proxy are
+being mailed to stockholders on or about April 26, 2002. The Board of Directors
+is making this solicitation by mail, and Patterson-UTI will pay all the costs
+associated with this solicitation.
+Properly submitted proxies received either by mail, Internet, telephone
+or in person, in time for the Meeting will be voted as you have directed in your
+proxy, unless you revoke your proxy in the manner provided below. As to any
+matter for which you give no direction in your proxy, your shares will be voted
+as follows:
+o "FOR" the election of all of the nominees to the Board of
+Directors;
+o "FOR" the approval of the amendment to Patterson-UTI's Amended
+and Restated 1997 Long-Term Incentive Plan increasing the number
+of shares authorized for issuance under the plan;
+o "FOR" the ratification of PricewaterhouseCoopers LLP as
+independent accountants of Patterson-UTI for the fiscal year
+ending December 31, 2002; and
+o "FOR" or "AGAINST" any other proposals which may be submitted at
+the Meeting at the discretion of the persons named in the proxy.
+You may revoke your proxy at any time before the proxy is voted by
+either:
+o submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone;
+o notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or
+o attending the Meeting and voting in person.
+SHARES OUTSTANDING AND VOTING RIGHTS
+Only stockholders of record of Patterson-UTI's common stock $.01 par
+value, at the close of business on April 24, 2002 are entitled to notice of and
+to vote at the Meeting or any adjournment thereof. At the close of business on
+April 24, 2002, there were 78,463,178 shares of common stock issued and
+outstanding. Holders of record of common stock on April 24, 2002 will be
+entitled to one vote per share on all matters to come before the Meeting. A list
+of stockholders entitled to notice of and to vote at the Meeting will be made
+available during regular business hours at the offices of Patterson-UTI Energy,
+Inc., 4510 Lamesa Highway, Snyder, Texas 79549, from May 15, 2002 through May
+28, 2002 and at the Meeting for inspection by any stockholder for any purpose
+regarding the Meeting.
+A quorum is necessary to transact business at the Meeting. A majority
+of the shares of common stock outstanding on April 24, 2002 will constitute a
+quorum. The shares held by each stockholder who signs and returns the enclosed
+form of proxy or properly votes using the Internet or telephone will be counted
+for purposes of determining the presence of a quorum at the Meeting.
+PROPOSAL NO. 1
+ELECTION OF DIRECTORS
+Patterson-UTI's bylaws provide that the number of members of the Board
+of Directors of Patterson-UTI shall be fixed either by amendment to the bylaws
+or by resolution of the Board of Directors. Pursuant to Board resolution, the
+size of the Board has been reduced from eleven members to nine. Spencer D.
+Armour III and Vaughn E. Drum, both current members of the Board will not stand
+for election at the Meeting. Directors are elected to serve until the next
+annual meeting of stockholders or until their successors are elected and
+qualified. Patterson-UTI's bylaws provide that the affirmative vote of a
+plurality of the votes cast at the meeting at which a quorum is present is
+required for the election of directors.
+The enclosed form of proxy provides a means for you to either:
+o vote "FOR" the election of the nominees to the Board of Directors
+listed below,
+o withhold authority to vote for one or more of the nominees, or
+o withhold authority to vote for all of the nominees.
+THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ALL OF THE
+NOMINEES, EACH OF WHOM CURRENTLY SERVES AS A DIRECTOR OF PATTERSON-UTI. Unless
+you give contrary instructions in your proxy, your proxy will be voted "FOR" the
+election of all of the nominees to the Board of Directors. If any nominee should
+become unable or unwilling to accept nomination or election, the person acting
+under the proxy will vote for the election of such other person as the Board of
+Directors may recommend. However, the Board has no reason to believe that any of
+the nominees will be unable or unwilling to serve if elected.
+Four of the nominees were elected to Patterson-UTI's Board of Directors
+on May 8, 2001 as a part of the merger on that date of UTI Energy Corp. ("UTI")
+into Patterson-UTI (formerly "Patterson Energy, Inc."). These nominees are Mark
+S. Siegel, Kenneth N. Berns, Curtis W. Huff and Nadine C. Smith. There are no
+arrangements or understandings between any person and any of these four
+directors or any of the other directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no family
+relationships among any of the directors or executive officers of Patterson-UTI,
+other than between Messrs. Talbott and Patterson, who are brothers-in-law.
+2
+Set forth below is the name, age and position followed by a brief
+description of the business experience during at least the past five years of
+each of the current directors and the nine nominees for election to the Board of
+Directors.
+NAME AGE POSITION
+---- --- --------
+Mark S. Siegel* 51 Chairman of the Board and Director
+Cloyce A. Talbott* 66 Chief Executive Officer and Director
+A. Glenn Patterson* 55 President, Chief Operating Officer and Director
+Spencer D. Armour III 48 Vice President Corporate Sales, Contract
+Drilling and Fluids Divisions and Director
+Kenneth N. Berns* 42 Director
+Stephen J. DeGroat* 53 Director
+Vaughn E. Drum 56 Director
+Robert C. Gist* 61 Director
+Curtis W. Huff* 44 Director
+Kenneth R. Peak* 56 Director
+Nadine C. Smith* 44 Director
+*Nominees for election to the Board of Directors.
+Mark S. Siegel - Mr. Siegel has served as Chairman of the Board and as
+a director of Patterson-UTI since May 8, 2001. Mr. Siegel served as Chairman of
+the Board and as a director of UTI from 1995 to May 8, 2001. Mr. Siegel has been
+President of REMY Investors & Consultants, Incorporated ("REMY Investors") since
+1993. From 1992 to 1993, Mr. Siegel was President, Music Division, Blockbuster
+Entertainment Corp. From 1988 through 1992, Mr. Siegel was an Executive Vice
+President of Shamrock Holdings, Inc. and Managing Director of Shamrock Capital
+Advisors, Incorporated. Mr. Siegel is also Chairman of the Board and a director
+of Variflex Inc. and serves as a director of Discovery Laboratories, Inc. Mr.
+Siegel holds a Bachelor of Arts from Colgate University and a J.D. from Boalt
+Hall School of Law.
+Cloyce A. Talbott - Mr. Talbott has served as a director of
+Patterson-UTI since its incorporation in 1978 and as its Chief Executive Officer
+since 1983. Mr. Talbott co-founded Patterson-UTI, served as Vice President from
+1978 to 1983, and served as Chairman of the Board from 1983 to May 8, 2001. Mr.
+Talbott received a Bachelor of Science degree in Petroleum Engineering in 1958
+from Texas Tech University, Lubbock, Texas.
+A. Glenn Patterson - Mr. Patterson has served as a director of
+Patterson-UTI since its incorporation in 1978. Mr. Patterson co-founded
+Patterson-UTI and has served as its President since 1978 and also as Chief
+Operating Officer since 1983. Mr. Patterson received his Bachelor of Science
+degree in Business in 1970 from Angelo State University, San Angelo, Texas.
+Spencer D. Armour III - Mr. Armour has served as a director of
+Patterson-UTI since July 1999 and as Vice President of Corporate Sales of
+Patterson-UTI's contract drilling and fluids divisions since January 2002. Mr.
+Armour founded Lone Star Mud, Inc. in 1986 and served as its President until its
+acquisition by Patterson-UTI in January 1998. Mr. Armour served as the President
+of Patterson-UTI's fluids division from January 1998 to January 2002. Mr. Armour
+received a Bachelor of Science degree in Economics from the University of
+Houston in 1977. Mr. Armour has 20 years experience in the oilfield service
+business.
+3
+Kenneth N. Berns - Mr. Berns has served as a director of Patterson-UTI
+since May 8, 2001 and served as a director of UTI from 1995 to May 8, 2001. Mr.
+Berns has been an executive with REMY Investors since 1994. Prior to that time,
+Mr. Berns was an executive at a real estate development company and at an
+investment banking firm, and a senior manager in the financial advisory services
+practice area of a national accounting firm. Mr. Berns is also a director of
+Variflex Inc. Mr. Berns is a Certified Public Accountant and holds a Bachelors
+Degree in Business Administration from San Diego State University and a Masters
+Degree in Taxation from Golden Gate University.
+Stephen J. DeGroat - Mr. DeGroat has served as a director of
+Patterson-UTI since November 6, 2000. Mr. DeGroat has served as Chairman of
+Jesup & Lamont, a privately held brokerage and investment banking firm based in
+New York City since the merger in early 2002 of Broadmark Asset Management, a
+registered investment advisor, into Jesup & Lamont. Prior to the merger with
+Jesup & Lamont and for a period of more than five years, Mr. DeGroat served in
+various capacities with Broadmark Asset Management, including President, Chief
+Executive Officer and as a member of the management committee. Mr. DeGroat began
+his career with Drexel Burnham Lambert in sales and, prior to forming Broadmark
+Capital Corporation, Mr. DeGroat was a Principal and Manager of the New York
+office of Gilford Securities, a regional investment bank. Throughout his career
+in finance, Mr. DeGroat has managed public underwritings, private equity
+placements, and merger and acquisition transactions. Mr. DeGroat is a graduate
+of Fordham University where he received a Bachelor of Arts in Economics.
+Vaughn E. Drum - Mr. Drum has served as a director of Patterson-UTI
+since May 8, 2001 and served as President, Chief Executive Officer and as a
+director of UTI from 1986 to May 8, 2001. From 1980 through November 1986, Mr.
+Drum served in various capacities for UGI Development Company, a subsidiary of
+UGI Corporation. Mr. Drum holds a Bachelor of Science in Petroleum Engineering
+from Marietta College.
+Robert C. Gist - Mr. Gist has served as a director of Patterson-UTI
+since 1985. He was general legal counsel and advisor to Patterson-UTI from 1987
+to May 8, 2001. Mr. Gist received a Bachelor of Science degree in Economics in
+1962 and a law degree in 1965 from Southern Methodist University. He has been
+self-employed as an attorney for more than five years and has over 20 years
+experience in the oil and gas industry.
+Curtis W. Huff - Mr. Huff has served as a director of Patterson-UTI
+since May 8, 2001 and served as a director of UTI from 1997 to May 8, 2001. Mr.
+Huff is the President and Chief Executive Officer of Grant Prideco, Inc., a
+manufacturer of engineered oilfield tubular products, and has served in that
+capacity since February 2001. From January 2000 to February 2001, Mr. Huff
+served as Executive Vice President, Chief Financial Officer and General Counsel
+of Weatherford International, Inc., a global oilfield service company. He served
+as Senior Vice President and General Counsel of Weatherford from May 1998 to
+January 2000. Prior to that time, Mr. Huff was a partner with the law firm of
+Fulbright & Jaworski L.L.P., and held that position for more than five years.
+Kenneth R. Peak - Mr. Peak has served as a director of Patterson-UTI
+since November 6, 2000. Mr. Peak is Chairman, President, Chief Executive Officer
+and Chief Financial Officer of Contango Oil & Gas Company. Contango explores for
+and acquires oil and gas properties primarily in the onshore Gulf Coast and
+offshore Gulf of Mexico regions. Prior to becoming President of Contango in
+1999, Mr. Peak was the President of Peak Enernomics, Incorporated, a company
+formed in 1990 and engaged in consulting activities to the oil and gas industry.
+His energy career began in 1973 as a commercial banker in First Chicago's energy
+group. In 1980, Mr. Peak became Treasurer of Tosco Corporation, and in 1982 he
+became Chief Financial Officer of Texas International Company. His tenure at
+Texas International Company included serving as President of TIPCO, the domestic
+operating subsidiary of Texas International's oil and gas operations. Mr. Peak
+received a Bachelor of Science in physics from Ohio University and a Masters of
+Business Administration from Columbia University. He currently serves as a
+director of NL Industries, Inc. and Cellxion, Inc.
+4
+Nadine C. Smith - Ms. Smith has served as a director of Patterson-UTI
+since May 8, 2001 and served as a director of UTI from 1995 to May 8, 2001. Ms.
+Smith is a private investor and business consultant. From August 2000 to
+December 2001, Ms. Smith was President of Final Arrangements, LLC and CEO of
+Arrange OnLine.com internet service providers. From April 2000 to August 2000,
+Ms. Smith served as the President of Aegis Asset Management, Inc. Prior to April
+2000, Ms. Smith was President and Chief Executive Officer of Enidan Capital
+Corp., an investment company that makes equity investments in public and
+privately held companies. Previously, Ms. Smith was an investment banker and
+principal with NC Smith & Co. and The First Boston Corporation and a management
+consultant with McKinsey & Co. Ms. Smith is a director of American Retirement
+Corporation and American Southwest Holdings. Ms. Smith earned a bachelors degree
+in economics from Smith College and a masters degree in business from Yale
+University.
+MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
+The Board of Directors met five times during the year ended December
+31, 2001. Each director attended, in person or by telephone, at least 75% of all
+meetings held by the Board for which such director was eligible and all meetings
+of each committee for which such director was eligible.
+The Board of Directors has an executive committee, an audit committee
+and a compensation committee. The Board does not have a nominating or other
+similar committee.
+The executive committee, which currently is composed of Messrs. Siegel,
+Talbott, Patterson and Berns, has the authority to act for the Board in all
+matters arising between regular or special meetings of the Board of Directors.
+The executive committee met informally on numerous occasions during the year
+ended December 31, 2001.
+The audit committee, which currently is composed of Messrs. Peak and
+Gist, and Ms. Smith, selects, subject to Board of Directors approval, the
+independent accountants to audit Patterson-UTI's books and records and considers
+and acts upon accounting matters as they arise. The Board of Directors has
+adopted a written charter for the audit committee, a copy of which is attached
+to this proxy statement as Annex A. The audit committee met four times during
+the year ended December 31, 2001. All members of the audit committee are
+independent as that term is defined by the National Association of Securities
+Dealers' listing standards.
+The compensation committee, which currently is composed of Messrs. Huff
+and DeGroat, and Ms. Smith, administers the employee stock option plan and
+similar plans of Patterson-UTI and determines the annual compensation of the
+executive officers and directors of Patterson-UTI. The compensation committee
+met twice during the year ended December 31, 2001.
+COMPENSATION OF DIRECTORS
+Directors who are also employees of Patterson-UTI do not receive any
+additional compensation for serving as a director or as a member of a committee
+of the Board of Directors. All directors are reimbursed for reasonable
+out-of-pocket expenses incurred in connection with attendance at Board of
+Directors meetings and committee meetings.
+Effective May 8, 2001, the compensation committee increased the
+compensation that each non-employee director receives for serving on the Board
+of Directors and the various committees to $24,000 annually. Previously, each
+non-employee director received $12,000 annually as compensation as a director
+and committee member.
+5
+Patterson-UTI maintains a Non-Employee Director Stock Option Plan (the
+"Director Plan"). Under the Director Plan:
+o each non-employee director receives options to purchase 15,000
+shares upon becoming a director of Patterson-UTI, and options to
+purchase 7,500 shares are automatically granted on the last
+business day of each subsequent year in which such director
+serves on the Board of Patterson-UTI;
+o the exercise price of the options is the fair market value of
+Patterson-UTI's common stock on the date of the grant;
+o all options vest on the first anniversary of the option grant;
+and
+o all options expire five years from the date of grant.
+On July 24, 2001, the compensation committee granted to each of Messrs.
+Peak and DeGroat an option to purchase 12,000 shares of Patterson-UTI's common
+stock. These options vested on November 6, 2001 and expire on November 5, 2005.
+The exercise price of each of the options was $28.625 which was in excess of the
+fair market value of Patterson-UTI's common stock on the date of grant. These
+options were granted separately from the Director Plan.
+PROPOSAL NO. 2
+AMENDMENT TO 1997 LONG-TERM INCENTIVE PLAN
+At the Meeting, the stockholders of Patterson-UTI will be asked to vote
+on a proposal to approve an amendment to Patterson-UTI's Amended and Restated
+1997 Long-Term Incentive Plan (the "1997 Plan") to increase the number of shares
+of common stock authorized for issuance under the 1997 Plan. Approval of such
+amendment requires the affirmative vote of the holders of a majority of the
+shares of common stock that are present in person or by proxy and entitled to
+vote at the Meeting. The amendment to the 1997 Plan increases the aggregate
+number of shares of common stock available for grant under the 1997 Plan from
+3,800,000 to 6,000,000.
+The 1997 Plan was initially approved by the stockholders of UTI in
+August 1997 and was assumed by Patterson-UTI as a part of its merger with UTI on
+May 8, 2001. Options outstanding under the 1997 Plan at the time of the merger
+became options to acquire Patterson-UTI common stock.
+REASONS FOR THE AMENDMENT TO THE 1997 PLAN
+The Board of Directors believes that the ability to grant stock-based
+compensation to its employees is crucial to its continuing ability to attract
+and retain qualified employees. Historically, the Board of Directors has relied
+on stock option incentives as part of its compensation philosophy and structure
+to recruit and retain certain key employees.
+The Board of Directors believes that the 1997 Plan advances the best
+interests of Patterson-UTI and its stockholders by attracting, retaining and
+motivating key employees. The 1997 Plan provides for the grant of awards to
+certain key employees including executive officers and employee directors,
+thereby increasing the personal stake of such key employees in the continued
+success and growth of Patterson-UTI. At present, there are approximately 130 key
+employees eligible for grants under the 1997 Plan.
+As of April 24, 2002, only 134,368 shares of common stock remained
+available for grant under the 1997 Plan. The Board of Directors has determined
+that an increase in the number of shares available for grant under the 1997 Plan
+is necessary in order to continue to provide an adequate level of
+performance-based incentives to Patterson-UTI's executive management and other
+key employees and to
+6
+continue the Board of Directors' ongoing philosophy of utilizing stock-based
+awards as part of Patterson-UTI's overall compensation structure. Therefore, the
+Board of Directors has approved an amendment to the 1997 Plan to increase the
+number of shares available for grant under the 1997 Plan by 2,200,000.
+MATERIAL FEATURES OF THE 1997 PLAN
+The material features of the 1997 Plan are as follows:
+o It is administered by the compensation committee of the Board of
+Directors.
+o All employees, including officers and employee directors, are
+eligible for awards.
+o Although in addition to non-qualified stock options, the plan
+allows for awards of Incentive Stock Options ("ISOs"), tandem and
+independent stock appreciation rights, restricted stock and
+performance awards, no such awards have been granted.
+o The vesting schedule is set by the compensation committee,
+however, typically 20% of the options vest after one year and the
+remaining 80% vest in equal monthly installments over the next
+four years.
+o Options typically have a term of 10 years.
+o Unless otherwise stated in the grant thereof, options will vest
+upon a change in control as that term is defined in the 1997
+Plan. Options granted to non-executive employees typically do not
+vest upon a change in control.
+o All options granted under the plan are granted with an exercise
+price equal to or greater than the fair market value of
+Patterson-UTI's common stock at the time the option is granted.
+o The Board of Directors, at any time, may amend the terms of the
+1997 Plan, subject to the stockholder approval requirements of
+the National Association of Securities Dealers listing
+requirements.
+FEDERAL INCOME TAX CONSEQUENCES UPON ISSUANCE AND EXERCISE OF OPTIONS
+Neither Patterson-UTI nor the optionee will recognize taxable income or
+deduction for federal income tax purposes upon the award of a stock option.
+The exercise of a non-ISO results in immediately taxable income to the
+optionee under the Internal Revenue Code in an amount equal to the difference
+between the option price and the market price on the date of exercise. For
+employee optionees, this same amount is deductible by Patterson-UTI as
+compensation.
+The exercise of an ISO results in no tax consequences to Patterson-UTI.
+Although the difference between the option price and the market price on the
+date of exercise is not taxable to the optionee upon exercise, it is a "tax
+preference item," which, under certain circumstances, may give rise to an
+alternative minimum tax liability on the part of the optionee.
+The sale by an employee, within one year, of stock acquired by the
+exercise of an ISO will be deductible by Patterson-UTI as compensation in an
+amount equal to the difference between the option price and the lesser of the
+market price on the date of exercise or the net proceeds of the sale. The sale
+of stock acquired through the exercise of an ISO held for more than one year
+after exercise does not result in a deduction for Patterson-UTI.
+7
+SUMMARY INFORMATION PERTAINING TO ALL STOCK OPTION AND RELATED PLANS OF
+PATTERSON-UTI
+The following information is being provided to present a current status
+of all Patterson-UTI's stock option plans and options granted thereunder as of
+April 24, 2002 and December 31, 2001. For a more detailed description of the
+stock option plans, see Note 10 of Patterson-UTI's audited financial statements
+contained in its Annual Report on Form 10-K for the year ended December 31,
+2001.
+April 24, 2002 December 31, 2001
+-------------- -----------------
+Number of shares issuable upon exercise of outstanding
+options(1) ...................................................... 5,793,342 6,596,292
+Weighted-average exercise price of outstanding options .......... $ 11.29 $ 10.40
+Number of shares remaining available for future issuances
+under stock option
+plans(2) ........................................................ 635,868 692,001
+Weighted average remaining contracted life of outstanding
+options (years) ................................................. 6.46 6.35
+----------
+(1) There have been no restricted stock awards, stock appreciation rights or
+performance awards granted. There are no other stock options, warrants, or
+convertible securities outstanding other than 452,000 warrants issued in
+connection with acquisitions completed during 2000 and 2001.
+(2) Includes 360,000 options issuable under the Non-Employee Director Plan,
+134,368 options issuable under the 1997 Plan, and 141,500 options issuable under
+the 2001 Plan at April 24, 2002.
+ADDITIONAL INFORMATION REGARDING THE 1997 PLAN
+As of April 17, 2002, the closing price of Patterson-UTI's common stock
+on the NASDAQ National Market was $31.55 per share. Patterson-UTI receives no
+additional consideration for granting the options under the 1997 Plan.
+Patterson-UTI has not determined the number of options under the 1997 Plan that
+will be granted in the future to eligible directors and nominees, executive
+officers, officers as a group, or non-officer employees as a group as that
+determination is subject to the discretion of the compensation committee of the
+Board of Directors.
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
+AMENDMENT TO THE 1997 PLAN. Approval of the amendment requires the affirmative
+vote of the holders of a majority of the shares of common stock present in
+person or by proxy and entitled to vote at the Meeting. If you do not vote
+against or abstain from voting on the amendment to the 1997 Plan, your proxy
+will be voted "FOR" approval of the amendment to the 1997 Plan. Abstentions will
+be counted as shares entitled to vote on the proposal and will have the same
+effect as a vote "AGAINST" the proposal. A broker non-vote will be counted for
+purposes of establishing a quorum, but will not be treated as a share entitled
+to vote on the proposal. This will have the effect of reducing the absolute
+number of shares necessary to approve the proposal.
+8
+EXECUTIVE OFFICERS
+Set forth below is the name, age and position followed by a brief
+description of the business experience during at least the past five years for
+each of the executive officers of Patterson-UTI who is not also a current
+director.
+NAME AGE POSITION
+---- --- --------
+Jonathan D. Nelson 33 Vice President, Chief Financial Officer, Secretary and
+Treasurer
+John E. Vollmer III 46 Senior Vice President - Corporate Development
+Jonathan D. Nelson - Mr. Nelson has served as Vice President, Chief
+Financial Officer, Secretary and Treasurer of Patterson-UTI since July 1999. Mr.
+Nelson served as Controller of Patterson-UTI from May 1996 until July 1999.
+Prior to his employment with Patterson-UTI, Mr. Nelson was a Senior Associate in
+public accounting, of which approximately four years were spent with
+PricewaterhouseCoopers LLP. Mr. Nelson received a Bachelor of Science degree in
+Accounting in 1991 from Texas Tech University, Lubbock, Texas.
+John E. Vollmer III - Mr. Vollmer has served as Senior Vice
+President-Corporate Development since May 8, 2001. Mr. Vollmer served as Senior
+Vice President, Chief Financial Officer, Secretary and Treasurer of UTI from
+1998 to May 8, 2001. Mr. Vollmer was a financial consultant from October 1997
+until joining UTI in 1998. From 1992 until October 1997, Mr. Vollmer served in a
+variety of capacities at Blockbuster Entertainment, including Senior Vice
+President-Finance and Chief Financial Officer of Blockbuster Entertainment's
+Music Division. Mr. Vollmer holds a Bachelor of Arts in Accounting from Michigan
+State University.
+SUMMARY COMPENSATION TABLE
+The following table sets forth information concerning compensation for
+2001, 2000 and 1999 earned by or paid to the executive officers of Patterson-UTI
+listed below:
+o Patterson-UTI's Chief Executive Officer; and
+o Patterson-UTI's four most highly compensated other executive
+officers whose total annual salary and bonus exceeded $100,000 in
+2001.
+9
+Annual Compensation
+-----------------------------------------
+Securities
+Other Annual Underlying All Other
+Compensation Compensation(1) Options Compensation(4)
+Name and Principal Position Year Salary ($) Bonus ($) ($) Granted(#) ($)
+--------------------------- ---- ---------- ------------ --------------- ---------- ---------------
+Mark S. Siegel(2) 2001 160,577 300,000 -- 250,000 --
+Chairman of the Board 2000 121,254 -- -- -- --
+1999 100,000 -- -- 180,000 --
+Cloyce A. Talbott(3) 2001 317,500 375,000 -- 250,000 5,250
+Chief Executive Officer 2000 290,900 75,000 -- -- 5,250
+1999 247,265 -- -- 100,000 --
+A. Glenn Patterson 2001 317,500 375,000 -- 250,000 5,250
+President and Chief 2000 290,900 75,000 -- -- 5,250
+Operating Officer 1999 247,265 -- -- 135,000 --
+Jonathan D. Nelson 2001 157,833 150,000 -- 125,000 5,250
+Vice President, 2000 125,000 35,000 -- -- 5,100
+Chief Financial Officer, 1999 99,170 -- -- 60,000 --
+Secretary and Treasurer
+John E. Vollmer III(2) 2001 204,558 150,000 -- 125,000 1,574
+Senior Vice President - 2000 180,077 35,000 -- -- 3,762
+Corporate Development 1999 150,000 25,000 -- 200,000 2,140
+----------
+(1) The aggregate amounts of perquisites and other personal benefits,
+securities or property received by each of the executive officers does not
+exceed either $50,000 or ten percent of that executive officer's combined
+annual salary and bonus during the applicable year.
+(2) These individuals were previously employed by UTI, which merged with and
+into Patterson-UTI on May 8, 2001. Prior to the merger, Mr. Siegel served
+as the Chairman of the Board of UTI, and Mr. Vollmer served as Senior
+Vice-President, Chief Financial Officer, Secretary and Treasurer of UTI.
+Mr. Siegel assumed the position of Chairman of the Board of Patterson-UTI
+and Mr. Vollmer was named Senior Vice President - Corporate Development
+upon the effective date of the merger. Amounts presented herein include
+compensation received from UTI prior to the merger.
+(3) Mr. Talbott resigned from the position of Chairman of the Board of
+Patterson-UTI on May 8, 2001.
+(4) Amounts set forth for 2001, 2000 and 1999 reflect Patterson-UTI's
+contributions or other allocations to defined contribution plans.
+The following table sets forth information regarding grants of stock
+options to the executive officers listed in the Summary Compensation Table
+during 2001:
+OPTIONS GRANTED DURING FISCAL YEAR 2001
+Potential Realizable Value at
+Number of % of Total Exercise Assumed Annual Rates of
+Securities Options Or Stock Price Appreciation for
+Underlying Granted to Base Option Term
+Options Employees in Price Expiration -----------------------------
+Name Granted Fiscal Year ($/Sh) Date 5%($) 10% ($)
+---- ---------- ------------ ---------- ---------- ---------- ----------
+Mark S. Siegel 250,000(1) 11.89% $ 15.85 7/19/11 $2,491,995 $6,315,205
+Cloyce A. Talbott 250,000(1) 11.89% $ 15.85 7/19/11 $2,491,995 $6,315,205
+A. Glenn Patterson 250,000(1) 11.89% $ 15.85 7/19/11 $2,491,995 $6,315,205
+Jonathan D. Nelson 125,000(1) 5.94% $ 15.85 7/19/11 $1,245,997 $3,157,602
+John E. Vollmer III 20,000(2) 0.94% $ 15.85 7/19/11 $ 199,360 $ 505,216
+105,000(3) 5.00% $ 16.12 10/22/11 $1,013,778 $2,569,113
+----------
+(1) These options were granted pursuant to the terms and conditions of the 1997
+Plan. These options vest over a five (5) year period as follows: 20% on
+July 20, 2002, and then in equal monthly installments through July 20,
+2006.
+(2) These options were granted pursuant to the terms and conditions of the 1997
+Plan. These options are fully vested.
+(3) These options were granted pursuant to the terms and conditions of the 1997
+Plan. These options vest over a five (5) year period as follows: 20% on
+October 23, 2002, and then in equal monthly installments through October
+23, 2006.
+10
+The following table sets forth information concerning stock options
+exercised in 2001 and stock options unexercised at December 31, 2001 for the
+executive officers listed in the Summary Compensation Table:
+AGGREGATED OPTION EXERCISES IN 2001
+AND VALUE TABLE AT DECEMBER 31, 2001
+Number of Unexercised Value of Unexercised
+Shares Options at In-the-Money Options
+Acquired December 31, 2001(2) at December 31, 2001(3)
+on Value --------------------------- ------------------------------
+Name Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
+---- --------- ----------- ----------- ------------- ----------- -------------
+Mark S. Siegel -- $ -- 1,280,000 250,000 $25,308,766 $ 2,157,500
+Cloyce A. Talbott 60,000 $ 1,735,428 100,000 250,000 $ 1,460,500 $ 2,157,500
+A. Glenn Patterson 174,240 $ 4,903,992 175,000 250,000 $ 1,815,250 $ 2,157,500
+Jonathan D. Nelson 26,405 $ 744,982 43,595 125,000 $ 532,705 $ 1,078,750
+John E. Vollmer III -- $ -- 348,400 105,000 $ 6,596,313 $ 863,000
+----------
+(1) Calculated by subtracting actual option price from market price at
+respective dates of exercise and multiplying the difference by the number
+of shares in each category.
+(2) The total number of unexercised options held as of December 31, 2001,
+separated between those options that were exercisable and those options
+that were not exercisable.
+(3) Calculated by subtracting the actual option exercise price from the market
+price at December 28, 2001 ($24.48 per share) and multiplying the
+difference by the number of shares in each category.
+EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
+Messrs. Siegel, Berns and Vollmer have employment arrangements which
+entitle them to one year's salary upon termination of employment with
+Patterson-UTI.
+All unvested stock options granted to executive officers under the 1997
+Plan vest upon a change in control as defined in the plan.
+COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
+Curtis W. Huff, Stephen J. DeGroat and Nadine C. Smith serve as the
+members of the compensation committee. Messrs. Huff and DeGroat, and Ms. Smith
+have not served as officers or employees of Patterson-UTI or any of its
+subsidiaries.
+Prior to May 8, 2001, Robert C. Gist, Stephen J. DeGroat, Kenneth R.
+Peak and Vincent A. Rossi, Jr. served as members of the compensation committee.
+Except in his capacity as a manager of a subsidiary limited liability company of
+Patterson-UTI for which he receives no compensation, Mr. Gist has not served as
+an officer of Patterson-UTI or any of its subsidiaries, but was paid a monthly
+retainer for legal and consulting services of $1,000 from 1993 until May 8,
+2001. Patterson-UTI also paid premiums for Mr. Gist's family health insurance
+coverage during the same period. Messrs. DeGroat, Peak and Rossi have not served
+as officers or employees of Patterson-UTI or any of its subsidiaries. Mr. Rossi
+ceased being a director of Patterson-UTI upon its merger with UTI.
+CERTAIN TRANSACTIONS
+In connection with the acquisition by REMY Capital Partners III, L.P.
+("REMY Capital") of an ownership interest in UTI in March 1995, REMY Capital
+succeeded to a registration rights agreement with UTI. As the successor in
+interest to UTI, Patterson-UTI assumed this registration rights agreement
+11
+pursuant to which REMY Capital has the right to require Patterson-UTI to use its
+best efforts to register shares held by REMY Capital under the Securities Act.
+In the event that such rights are exercised in connection with a primary
+offering proposed by Patterson-UTI (or a secondary offering with which
+Patterson-UTI agrees to participate), REMY Capital would bear its pro rata share
+of the costs of the offering, other than legal, accounting and printing costs,
+all of which Patterson-UTI shall bear. In the event that REMY Capital elected to
+exercise such rights other than in connection with an offering in which
+Patterson-UTI participates, REMY Capital would bear all costs of the offering.
+These rights continue so long as REMY Capital continues to own the common stock
+that it acquired.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is President and
+sole stockholder of REMY Investors, which is the general partner of REMY
+Capital. Mr. Berns, a director and employee of Patterson-UTI, is an employee of
+REMY Investors.
+As a part of the merger of Patterson-UTI and UTI, UTI's Board of
+Directors agreed to reimburse REMY Capital for all filing fees and related
+charges incurred by it in conjunction with its Hart Scott Rodino filing with the
+Federal Trade Commission and the United States Justice Department which was
+required by law and without which the merger could not be completed. As
+successor in interest to UTI, Patterson-UTI reimbursed REMY Capital for $125,000
+in Hart Scott Rodino filing fees and related charges.
+During 2001, Patterson-UTI paid approximately $387,000 to an entity
+owned by Thomas M. Patterson, a son of A. Glenn Patterson, the President and
+Chief Operating Officer of Patterson-UTI for certain equipment and metal
+fabrication services. He continues to be a vendor to Patterson-UTI in 2002.
+Through October of 2001, Patterson-UTI leased a 1981 Beech King-Air 90
+airplane owned by a company affiliated with Patterson-UTI's Chief Executive
+Officer and President/Chief Operating Officer. Under the terms of the lease,
+Patterson-UTI paid a monthly rental of $9,200 and its proportionate share of the
+costs of fuel, insurance, taxes and maintenance of the aircraft. Patterson-UTI
+paid approximately $212,583, $193,769 and $222,583 for the lease of the airplane
+during 2001, 2000 and 1999, respectively. The airplane lease was terminated in
+October 2001 when Patterson-UTI purchased its own airplane. Patterson-UTI
+maintains a policy whereby Patterson-UTI is reimbursed for any personal use of
+the airplane.
+Certain of Patterson-UTI's affiliated persons have participated, either
+individually or through entities they control, in oil and gas prospects or
+properties in which Patterson-UTI has an interest. Affiliated persons are
+directors, executive officers and key employees of Patterson-UTI and their
+family members. These participations, which have been on a working interest
+basis, have been in prospects or properties originated or acquired by
+Patterson-UTI. At December 31, 2001, affiliated persons were working interest
+owners in 132 of the 167 wells then being operated by Patterson-UTI. Sales of
+working interests are made to reduce Patterson-UTI's economic risk in the
+properties.
+The following table sets forth production revenues received and joint
+production costs paid by each of the affiliated persons during 2001 for all
+wells operated by Patterson-UTI in which they have working interests. These
+numbers do not necessarily represent their profits or losses from these
+interests because the joint production costs do not include the parties' related
+drilling and leasehold acquisition costs incurred prior to January 1, 2001.
+12
+YEAR ENDED DECEMBER 31,
+2001
+-----------------------------
+PRODUCTION JOINT
+REVENUES INTEREST
+NAME RECEIVED(1) BILLINGS(2)
+---- ----------- -----------
+Cloyce A. Talbott ............................................... $ 198,087 $ 615,425
+Anita Talbott(3) ................................................ 152,021 89,992
+Jana Talbott, Executrix to the Estate of Steve Talbott(3) ....... 21,381 6,733
+Stan Talbott(3) ................................................. 35,040 29,772
+Lisa Beck and Stacy Talbott(3) .................................. 621,455 234,040
+SSI Oil & Gas, Inc.(4) .......................................... 402,693 311,769
+IDC Enterprises, Ltd.(5) ........................................ 6,330,781 2,728,884
+SSSL, Ltd.(6)(9) ................................................ -- 554,516
+T & H Exploration(7) ............................................ 327,234 69,463
+---------- ----------
+Subtotal ............................................... 8,088,692 4,640,594
+---------- ----------
+A. Glenn Patterson .............................................. 113,643 590,126
+Glenn Patterson Family Limited Partnership(8)(9) ................ -- 554,510
+Robert Patterson(8) ............................................. 32,716 16,974
+Thomas M. Patterson(8) .......................................... 32,716 16,974
+---------- ----------
+Subtotal ............................................... 179,075 1,178,584
+---------- ----------
+Jonathan D. Nelson .............................................. 2,582 51,649
+---------- ----------
+Total .................................................. $8,270,349 $5,819,178
+========== ==========
+----------
+(1) Revenues received for production of oil and natural gas, net of state
+severance taxes.
+(2) Includes leasehold costs, tangible equipment costs, intangible drilling
+costs and lease operating expense billed during that period. All joint
+interest billings have been paid on a timely basis.
+(3) Anita Talbott is the wife of Cloyce A. Talbott. Stan Talbott, Lisa Beck and
+Stacy Talbott are Mr. Talbott's adult children. Steve Talbott is the
+deceased son of Mr. Talbott.
+(4) SSI Oil & Gas, Inc. is beneficially owned 50% by Cloyce A. Talbott and
+directly owned 50% by A. Glenn Patterson.
+(5) IDC Enterprises, Ltd. is 50% owned by Cloyce A. Talbott and 50% owned by A.
+Glenn Patterson.
+(6) SSSL, Ltd. is a limited partnership whereby Cloyce A. Talbott is the
+general partner.
+(7) T & H Exploration is a company owned in part by Jana Talbott, Executrix to
+the Estate of Steve Talbott.
+(8) Robert and Thomas M. Patterson are A. Glenn Patterson's adult children. The
+Glenn Patterson Family Limited Partnership is a partnership in which each
+of Mr. Patterson's children shares equally and Mr. Patterson is the
+manager.
+(9) Revenues included in IDC Enterprises, Ltd. revenues.
+COMPENSATION COMMITTEE REPORT
+The compensation committee sets and administers the policies that
+govern the annual compensation and long-term compensation of executive officers
+and directors of Patterson-UTI. The compensation committee consists of Messrs.
+Huff and DeGroat, and Ms. Smith, none of whom are employees of Patterson-UTI.
+The compensation committee makes all decisions concerning compensation of
+executive officers, determines the total amount of bonuses to be paid annually
+and grants all awards of stock options under Patterson-UTI's incentive stock
+option plans.
+The compensation committee's policy is to offer executive officers
+competitive compensation packages that will permit Patterson-UTI to attract and
+retain highly qualified individuals and to motivate and reward such individuals
+on the basis of Patterson-UTI's performance. At present, Patterson-UTI's
+executive compensation package consists of base salary, cash bonus awards and
+long-term incentive opportunities in the form of stock options and a 401(k)
+plan. Executive salaries are reviewed by the compensation committee on an annual
+basis and are set for individual executive officers based on subjective
+evaluations of each individual's performance, Patterson-UTI's performance and a
+comparison to salary ranges for executives of other companies in the oil and
+natural gas industry with characteristics similar to those of Patterson-UTI.
+This allows the compensation committee to set salaries in a manner that is both
+competitive and reasonable within Patterson-UTI's industry.
+Cash performance bonuses may be awarded on an annual basis by the
+compensation committee. The use of a specific formula to evaluate management
+performance is not employed because it is difficult
+13
+to define an appropriate formula and it restricts the flexibility of the
+compensation committee. The compensation committee considers the achievements of
+Patterson-UTI, specifically including earnings for the year and return on
+stockholders' equity in determining appropriate levels for bonus awards.
+The compensation of the Chief Executive Officer of Patterson-UTI is
+determined in the same manner as the compensation for other executive officers
+as described above. As a result, the compensation of the Chief Executive Officer
+is largely dependent upon the overall performance of Patterson-UTI as well as a
+comparison to compensation being paid by other comparable peer companies to
+their chief executive officers. Mr. Talbott's base annual salary was increased
+to $350,000 in July 2001. The salary increase is responsive to the greater
+responsibilities of Mr. Talbott resulting from the doubling in size of
+Patterson-UTI through its merger with UTI in May 2001. Mr. Talbott was also paid
+a $375,000 bonus for 2001 in recognition of his efforts in connection with the
+merger and as compensation for Patterson-UTI's outstanding performance in 2001.
+In January 2002, along with other management and operational employees,
+Mr. Talbott's salary was reduced 10% to $315,000 as a part of Patterson-UTI's
+efforts to reduce its overall costs in response to the weakened industry
+conditions.
+It is the general policy of Patterson-UTI to review stock-based
+compensation on an annual basis. Awards of stock-based compensation reflect the
+Board's and compensation committee's desire to provide Patterson-UTI's employees
+who have substantial responsibility for Patterson-UTI's management and growth
+with additional incentives by increasing their proprietary interest in the
+success of Patterson-UTI. The decision whether to grant stock options to any
+particular employee is based upon a variety of factors, including position,
+performance, current share and stock option ownership and the need to insure the
+continued employment of the employee with Patterson-UTI. Grants of options to
+purchase 2,103,500 shares of common stock were made to Patterson-UTI's employees
+during 2001.
+Section 162(m) of the Code imposes a limitation on deductions that can
+be taken by a publicly held corporation for compensation paid to certain of its
+executive officers. Under Section 162(m), a deduction is denied for compensation
+paid in a tax year beginning on or after January 1, 1994, to the executive
+officers listed in the Summary Compensation Table to the extent that such
+compensation exceeds $1 million per individual. Stock option grants pursuant to
+Patterson-UTI's employee benefit plans may be exempt from the deduction limit if
+certain requirements are met. The Board of Directors and the compensation
+committee has considered the effect of Section 162(m) on Patterson-UTI's
+existing compensation program.
+COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
+Curtis W. Huff*
+Stephen J. DeGroat
+Nadine C. Smith
+*Chairman
+14
+PERFORMANCE GRAPH
+The following graph compares the cumulative stockholder return on the
+common stock of Patterson-UTI, for the period from December 31, 1996 through
+December 31, 2001, with the cumulative total return of the NASDAQ Market Index,
+the Standard and Poors 500 Stock Index, the Oilfield Service Index and a
+Patterson-UTI determined peer group. Patterson-UTI's peer group consists of Grey
+Wolf, Inc., Helmerich & Payne, Inc., Key Energy Services, Inc., Nabors
+Industries, Inc., Pioneer Drilling Co., Precision Drilling Corp., TMBR/SHARP
+Drilling Inc., and Unit Corp. All of the companies in Patterson-UTI's peer group
+are providers of land-based drilling services. The graph assumes investment of
+$100 on December 31, 1996 and reinvestment of all dividends.
+COMPARISON OF CUMULATIVE TOTAL RETURNS*
+[GRAPH]
+Basis
+Description 1996 1997 1998 1999 2000 2001
+----------- ----- ---- ---- ---- ---- ----
+($) ($) ($) ($) ($) ($)
+Patterson-UTI Energy, Inc. 100.00 300.49 63.11 201.94 578.64 362.10
+NASDAQ Market Index 100.00 122.32 172.52 304.29 191.25 152.46
+Peer Group Index 100.00 150.94 64.78 122.44 234.36 149.80
+S&P 500 Index 100.00 133.36 171.47 207.56 188.66 166.24
+Oilfield Service Index (OSX) 100.00 156.96 80.30 115.38 156.44 110.34
+The foregoing graph is based on historical data and is not necessarily
+indicative of future performance. This graph shall not be deemed to be
+"soliciting material" or to be "filed" with the Securities and Exchange
+Commission or subject to the Regulations of 14A or 14C under the Exchange Act or
+to the liabilities of Section 18 under such act.
+15
+SECURITY OWNERSHIP OF PRINCIPAL
+STOCKHOLDERS AND MANAGEMENT
+The following table sets forth, as of April 24, 2002, the stock
+ownership of the executive officers, directors and Board nominees individually,
+all directors, Board nominees and executive officers as a group and each person
+known by Patterson-UTI to be the beneficial owner of more than 5% of common
+stock.
+AMOUNT AND
+NATURE OF
+NAME OF BENEFICIAL PERCENT
+BENEFICIAL OWNER OWNERSHIP OF CLASS
+---------------- ----------- --------
+Other Beneficial Owners:
+REMY Capital Partners III, L.P
+1801 Century Park East, Suite 1111
+Los Angeles, CA 90067 ........................................................... 4,729,524(1) 6.0%
+REMY Investors & Consultants, Incorporated
+1801 Century Park East, Suite 1111
+Los Angeles, CA 90067 ........................................................... 4,729,524(1) 6.0%
+Directors, Board nominees and Executive Officers Listed in Summary
+Compensation Table:
+Mark S. Siegel .................................................................... 6,009,524(1) 7.7%
+Cloyce A. Talbott ................................................................. 618,566(2) *
+A. Glenn Patterson ................................................................ 476,600(2) *
+Vaughn E. Drum .................................................................... 442,400(3) *
+Kenneth N. Berns .................................................................. 290,000(4) *
+Curtis W. Huff .................................................................... 37,500(3) *
+Nadine C. Smith ................................................................... 41,500(3) *
+Robert C. Gist .................................................................... 35,386(3) *
+Spencer D. Armour III ............................................................. 33,400(5) *
+Stephen J. DeGroat ................................................................ 24,100(3) *
+Kenneth R. Peak ................................................................... 20,000(3) *
+Jonathan D. Nelson ................................................................ 93,500(5) *
+John E. Vollmer III ............................................................... 348,400(5) *
+--------- *
+All directors, Board nominees and executive officers as a group (13 persons) 8,470,876(6) 10.8%
+=========
+----------
+* indicates less than 1.0%
+(1) The common stock beneficially owned by REMY Investors, which is the general
+partner of REMY Capital, includes the 4,729,524 shares of common stock
+owned by REMY Capital. The common stock beneficially owned by Mr. Siegel,
+who is the President and sole stockholder of REMY Investors, includes the
+4,729,524 shares of common stock beneficially owned by REMY Investors as
+well as presently exercisable stock options held by Mr. Siegel to purchase
+950,000 shares of common stock, but does not include 250,000 shares
+underlying stock options held by Mr. Siegel, which options are not
+presently exercisable and will not become exercisable within sixty days.
+(2) Includes shares underlying presently exercisable stock options held by Mr.
+Talbott to purchase 100,000 shares and presently exercisable stock options
+held by Mr. Patterson to purchase 175,000 shares. Does not include shares
+underlying stock options held by Messrs. Talbott and Patterson to purchase
+250,000 shares each that are not presently exercisable and will not become
+exercisable within sixty days.
+(3) Includes presently exercisable stock options owned by Mr. Drum to purchase
+70,000 shares; by Mr. Huff to purchase 37,500 shares; by Mr. Gist to
+purchase 16,000 shares; by Messrs. DeGroat and Peak to purchase 20,000
+shares each; and by Ms. Smith to purchase 22,500 shares. Does not include
+7,500 shares underlying stock options held by Messrs. Drum, Huff, Gist,
+DeGroat, Peak and Ms. Smith that are not presently exercisable and will not
+become exercisable within sixty days. Mr. Drum shares voting and investment
+power with respect to 297,000 of the shares he beneficially owns.
+(4) Includes presently exercisable stock options owned by Mr. Berns to purchase
+260,000 shares. Does not include 125,000 shares underlying options that are
+not presently exercisable and will not become exercisable within sixty days
+and does not
+16
+include shares of common stock beneficially owned by REMY Investors by whom
+Mr. Berns is employed. Mr. Berns disclaims beneficial ownership of such
+shares beneficially owned by REMY Investors.
+(5) Includes presently exercisable stock options owned by Mr. Armour to
+purchase 32,400 shares, by Mr. Nelson to purchase 43,595 shares and by Mr.
+Vollmer to purchase 348,400 shares. Does not include 20,000 shares
+underlying stock options held by Mr. Armour, 125,000 shares underlying
+stock options held by Mr. Nelson and 105,000 shares underlying stock
+options held by Mr. Vollmer that are not presently exercisable and will not
+become exercisable within sixty days.
+(6) Includes presently exercisable options to purchase 2,095,395 shares of
+common stock. Does not include options to purchase 1,170,000 shares owned
+by such individuals that are not exercisable within sixty days.
+Except as stated herein, each stockholder has sole voting and investment power
+with respect to common stock included in the above table. There are no
+arrangements known to Patterson-UTI which may result in a change in control.
+AUDIT COMMITTEE REPORT AND FEES PAID TO
+INDEPENDENT ACCOUNTANTS
+AUDIT COMMITTEE REPORT
+Patterson-UTI's audit committee has reviewed and discussed with
+management Patterson-UTI's audited financial statements as of and for the year
+ended December 31, 2001.
+The audit committee has discussed with the independent auditors the
+matters required to be discussed by Statement on Auditing Standards No. 61,
+Communication with Audit Committees, as amended, by the Auditing Standards Board
+of the American Institute of Certified Public Accountants.
+The audit committee has received and reviewed the written disclosures
+and the letter from the independent auditors required by Independence Standard
+No. 1, Independence Discussions with Audit Committees, as amended, by the
+Independence Standards Board, and has discussed with the auditors the auditors'
+independence.
+Based on the reviews and discussions referred to above, the audit
+committee recommended to the Board of Directors that the financial statements
+referred to above be included in Patterson-UTI's Annual Report on Form 10-K for
+the year ended December 31, 2001.
+AUDIT COMMITTEE OF THE BOARD OF DIRECTORS:
+Kenneth R. Peak*
+Robert C. Gist
+Nadine C. Smith
+*Chairman
+AUDIT FEES; FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES; AND
+ALL OTHER FEES
+During 2001, Patterson-UTI paid to PricewaterhouseCoopers LLP $194,046
+in fees relating to the audit of its 2001 financial statements and reviews of
+its Form 10-Qs for fiscal year 2001, no fees for financial information systems
+design and implementation, and $529,282 in non-audit related fees.
+17
+Fees paid during the year for non-audit related services included the
+following:
+o $228,000 for Federal and state income tax filings compliance and
+related matters,
+o $124,000 related to the merger with UTI,
+o $115,000 associated with the restructuring of Patterson-UTI's
+corporate structure, and
+o $62,000 for other services.
+The audit committee considered whether the provision of non-audit
+services is compatible with maintaining the independence of Patterson-UTI's
+outside auditors PricewaterhouseCoopers LLP.
+PROPOSAL NO. 3
+RATIFICATION OF INDEPENDENT ACCOUNTANTS
+The Board of Directors voted to engage PricewaterhouseCoopers LLP as
+independent accountants to audit the financial statements of Patterson-UTI for
+the fiscal year ending December 31, 2002, and directed that such engagement be
+submitted to the stockholders of Patterson-UTI for ratification. In recommending
+ratification by the stockholders of such engagement, the Board of Directors is
+acting upon the recommendation of the audit committee, which has satisfied
+itself as to the firm's professional competence and standing. Although
+ratification by stockholders of the engagement of PricewaterhouseCoopers LLP is
+not required by Delaware corporate law or Patterson-UTI's Restated Certificate
+of Incorporation or bylaws, management feels a decision of this nature should be
+made with the consideration of Patterson-UTI's stockholders. If stockholder
+ratification is not received, management will reconsider the engagement.
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and will be given the
+opportunity to make a statement if they so desire. It also is expected that the
+representatives will be available to respond to appropriate questions from the
+stockholders.
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
+PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS. Ratification of the
+selection of PricewaterhouseCoopers LLP requires the affirmative vote of the
+holders of a majority of the shares of common stock present in person or by
+proxy, and entitled to vote at the Meeting. If you do not vote against or
+abstain from voting on the ratification of the selection of
+PricewaterhouseCoopers LLP, your proxy will be voted "FOR" such ratification.
+Abstentions will be counted as shares entitled to vote on the proposal and will
+have the same effect as a vote "AGAINST" the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be treated as a
+share entitled to vote on the proposal. This will have the effect of reducing
+the absolute number of shares necessary to approve the proposal.
+18
+OTHER MATTERS
+SECTION 16(a) BENEFICIAL OWNERSHIP OF REPORTING COMPLIANCE
+Section 16(a) of the Securities Exchange Act of 1934, as amended,
+requires Patterson-UTI's officers and directors, and persons who own more than
+10% of a registered class of Patterson-UTI's equity securities, to file reports
+of ownership and changes in ownership with the SEC. Each of these persons is
+required by SEC regulation to furnish Patterson-UTI with copies of Section 16(a)
+filings.
+Based solely on its review of copies of such forms received by it,
+Patterson-UTI believes that, during the year ended December 31, 2001, its
+officers, directors, and greater than 10% beneficial owners other than Messrs.
+Talbott, Patterson, Drum, Nelson, Peak and DeGroat complied with all applicable
+filing requirements. Messrs. Peak and DeGroat failed to file initial statements
+of ownership of Patterson-UTI on a timely basis. Messrs. Nelson and Talbott each
+failed to report on a timely basis one transaction both of which were exempt
+from liability under Section 16; and Messrs. Patterson and Drum each failed to
+report on a timely basis two transactions all of which were exempt from
+liability under Section 16.
+OTHER BUSINESS
+As of the date of this Proxy Statement, management of Patterson-UTI was
+not aware of any matter to be presented at the Meeting other than as set forth
+herein. If any other matters are properly brought before the Meeting, however,
+the shares represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting them.
+DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
+Any proposal by a stockholder to be presented at Patterson-UTI's 2003
+annual meeting of stockholders must be received by Patterson-UTI no later than
+December 26, 2002, in order to be eligible for inclusion in Patterson-UTI's
+proxy statement and proxy used in connection with the 2003 annual meeting.
+ANNUAL REPORT
+You are referred to Patterson-UTI's annual report to stockholders with
+a copy of its Annual Report on Form 10-K for the year ended December 31, 2001,
+filed with the Securities and Exchange Commission, enclosed herewith for your
+information. The annual report to stockholders is not incorporated in this proxy
+statement and is not to be considered part of the soliciting material.
+19
+ANNEX A
+PATTERSON-UTI ENERGY, INC.
+AUDIT COMMITTEE
+OF THE
+BOARD OF DIRECTORS
+CHARTER*
+PURPOSE
+The Audit Committee shall provide assistance to the corporate directors
+in fulfilling their responsibility to oversee management's conduct of the
+Corporation's financial reporting progress including review of the financial
+reports and other financial information provided by the Corporation to the
+public and governmental and regulatory bodies, the Corporation's system of
+internal accounting, the Corporation's financial controls, and the annual
+independent audit of the Corporation's financial statements.
+In discharging its role, the Audit Committee is empowered to
+investigate any matter brought to its attention, with full access to all books,
+records, facilities and personnel to the Corporation and the power to retain
+outside counsel, auditors or other experts for this purpose. The Board and the
+Audit Committee are in place to represent the Corporation's stockholders; and,
+accordingly, the independent accountants are ultimately accountable to the Board
+through the Audit Committee.
+COMPOSITION
+The Audit Committee shall be comprised of three or more directors as
+determined by the Board, each of whom shall be independent directors, and free
+from any relationship that, in the opinion of the Board, would interfere with
+the exercise of his or her independent judgment as a member of the Audit
+Committee. All members of the Audit Committee shall have a working familiarity
+with basic finance and accounting practices, and at least one member of the
+Audit Committee shall have accounting or related financial management expertise.
+Audit Committee members may enhance their familiarity with finance and
+accounting by participating in educational programs conducted by the Corporation
+or an outside consultant.
+The members of the Audit Committee shall be elected by the Board at the
+annual organizational meeting of the Board or until their successors shall be
+duly elected and qualified. Unless a Chairperson is elected by the full Board,
+the members of the Audit Committee may designate a Chairperson by majority vote
+of the full Audit Committee membership.
+----------
+* As amended and restated effective February 8, 2002
+A-1
+MEETINGS
+The Audit Committee shall meet at least four times annually, or more
+frequently as circumstances dictate. As part of its job to foster open
+communication, the Audit Committee should meet at least annually with
+management, including the Chief Financial Officer, and the independent
+accountants separately to discuss any matters that the Audit Committee or each
+of these groups believes should be discussed privately. In addition, the Audit
+Committee or at least its Chairperson should meet with the independent
+accountants and management quarterly to review the Corporation's financials
+consistent with Paragraph number 4 below.
+RESPONSIBILITIES AND DUTIES
+The Audit Committee's job is one of review and it recognizes that the
+Corporation's management is responsible for preparing the Corporation's
+financial statements and that the independent accountants are responsible for
+auditing those financial statements. Additionally, the Audit Committee
+recognizes that financial management and the independent auditors have more
+time, knowledge, and detailed information concerning the Corporation than do
+Audit Committee members. Consequently, in performing its functions, the Audit
+Committee is not providing any expert or special assurance as to the
+Corporation's financial statements or any professional certification as to the
+independent accountants' work.
+The following functions will be the common recurring activities of the
+Audit Committee. These functions are set forth as a guide with the understanding
+that the Audit Committee may diverge from this guide as appropriate given the
+circumstances.
+DOCUMENTS/REPORTS REVIEW
+1. Review and reassess, at least annually, the adequacy of this
+Charter. Make recommendations to the Board, as conditions
+dictate, to update this Charter.
+2. Review with management and the independent accountants the
+Corporation's audited financial statements, including a
+discussion with the independent accountants of the matters
+required to be discussed by Statement of Auditing Standards No.
+61 ("SAS No. 61").
+3. Review with management and the independent accountants the
+interim financial results prior to the release of earnings and
+filing of the Quarterly Report on Form 10-Q, and including a
+discussion with the independent accountants of the matters to be
+discussed by SAS No. 61. The Chairperson of the Audit Committee
+may represent the entire Audit Committee for purposes of this
+review.
+4. Review with management and independent accountants, the quality
+and adequacy of the Corporation's internal controls.
+A-2
+INDEPENDENT ACCOUNTANTS
+5. Review the performance of the independent accountants and make
+recommendations to the Board regarding the appointment or
+termination of the independent accountants. The Audit Committee
+and the Board have the ultimate authority and responsibility to
+select, evaluate and, where appropriate, replace the outside
+auditor.
+6. Oversee independence of the accountants by:
+o receiving from the independent accountants, on an annual
+basis, a formal written statement delineating all
+relationships between the accountants and the Corporation
+consistent with Independence Standards Board Standard 1 ("ISB
+No. 1");
+o reviewing, and actively discussing with the Board, if
+necessary, and the independent accountants, on a periodic
+basis, any disclosed relationships or services between the
+independent accountants and the Corporation or any other
+disclosed relationships or services that may impact the
+objectivity and independence of the independent accountants;
+and
+o recommending, if necessary, that the Board take appropriate
+action in response to the independent accountant's report to
+satisfy itself of the accountant's independence.
+7. Based on the review and discussions referred to in Paragraphs
+numbered 2 and 6 above, the Audit Committee shall determine
+whether to recommend to the Board that the Corporation's audited
+financial statements be included in the Corporation's Annual
+Report on Form 10-K for the last fiscal year for filing with the
+Securities and Exchange Commission.
+FINANCIAL REPORTING PROCESS
+8. In conjunction with the independent accountants and the Chief
+Financial Officer, review the integrity of the Corporation's
+financial reporting processes, both internal and external.
+9. Consider and approve, if appropriate, major changes to the
+Corporation's auditing and accounting principles and practices as
+suggested by the independent accountants, management, or the
+internal auditing department.
+10. Establish regular systems of reporting to the Audit Committee by
+each of management, the independent accountants and the internal
+auditors regarding any significant judgments made in management's
+preparation of the financial statements and any significant
+difficulties encountered during the course of the review or
+audit, including any restrictions on the scope of the work or
+access to required information.
+11. Review any significant disagreement among management and the
+independent accountants or the internal auditing department in
+connection with the preparation of the financial statements.
+A-3
+LEGAL COMPLIANCE/GENERAL
+12. Review with the Corporation's counsel, any legal matter than
+could have a significant impact on the Corporation's financial
+statements.
+13. Report through its Chairperson to the Board following meetings of
+the Audit Committee.
+14. Maintain minutes or other records of meetings and activities of
+the Audit Committee.
+While the Audit Committee has the responsibilities and powers set forth
+in this Charter, it is not the duty of the Audit Committee to plan or conduct
+audits or to determine that the Company's financial statements are complete and
+accurate and are in accordance with generally accepted accounting principles.
+This is the responsibility of management and the independent accountants. Nor is
+it the duty of the Audit Committee to conduct investigations, to resolve
+disagreements, if any, between management and the independent accountants.
+A-4
+This appendix is filed with the Securities and Exchange Commission
+pursuant to Instruction 3 to Item 10 of Schedule 14a. It was not part of the
+Patterson-UTI Energy, Inc. Proxy Statement and was not otherwise provided to the
+stockholders of Patterson-UTI Energy, Inc. as a part thereof.
+PATTERSON-UTI ENERGY, INC.
+AMENDED AND RESTATED
+1997 LONG-TERM INCENTIVE PLAN
+ARTICLE I: GENERAL
+SECTION 1.1 Purpose of the Plan. This Amended and Restated Long-Term
+Incentive Plan (the "Plan") of Patterson-UTI Energy, Inc. (the "Company") amends
+and restates in its entirety the Company's 1997 Long-Term Incentive Plan to
+reflect the three-for-one stock dividend paid to stockholders of UTI Energy
+Corp., a predecessor of the Company, on September 5, 1997. The Plan is intended
+to advance the best interests of the Company, its subsidiaries and its
+stockholders in order to attract, retain and motivate key employees by providing
+them with additional incentives through (i) the grant of options ("Options") to
+purchase shares of Common Stock, par value $.01 per share, of the Company
+("Common Stock"), (ii) the grant of stock appreciation rights ("Stock
+Appreciation Rights"), (iii) the award of shares of restricted Common Stock
+("Restricted Stock") and (iv) the award of units payable in cash or shares of
+Common Stock based on performance ("Performance Awards"), thereby increasing the
+personal stake of such key employees in the continued success and growth of the
+Company.
+SECTION 1.2 Administration of the Plan. (a) The Plan shall be
+administered either by the full Board of Directors of the Company (the "Board of
+Directors") or by the Compensation Committee or other designated committee of
+the Board of Directors. The Board of Directors or such committee is referred to
+herein as the "Committee". The Committee shall have authority to interpret
+conclusively the provisions of the Plan, to adopt such rules and regulations for
+carrying out the Plan as it may deem advisable, to decide conclusively all
+questions of fact arising in the application of the Plan, to establish
+performance criteria in respect of Awards (as defined herein) under the Plan, to
+certify that Plan requirements have been met for any participant in the Plan, to
+submit such matters as it may deem advisable to the Company's stockholders for
+their approval, and to make all other determinations and take all other actions
+necessary or desirable for the administration of the Plan. The Committee is
+expressly authorized to adopt rules and regulations limiting or eliminating its
+discretion in respect of certain matters as it may deem advisable to comply with
+or obtain preferential treatment under any applicable tax or other law rule, or
+regulation. All decisions and acts of the Committee shall be final and binding
+upon all affected Plan participants.
+(b) The Committee shall designate the eligible employees, if any, to be
+granted Awards and the type and amount of such Awards and the time when Awards
+will be granted. All Awards granted under the Plan shall be on the terms and
+subject to the conditions determined by the Committee consistent with the Plan.
+1
+SECTION 1.3 Eligible Participants. Key employees, including officers
+and directors, of the Company and its subsidiaries (all such subsidiaries being
+referred to as "Subsidiaries") shall be eligible for Awards under the Plan.
+SECTION 1.4 Awards Under the Plan. Awards to key employees may be in
+the form of (i) Options, (ii) Stock Appreciation Rights, which may be issued
+independent of or in tandem with Options, (iii) shares of Restricted Stock, (iv)
+Performance Awards, or (v) any combination of the foregoing (collectively,
+"Awards").
+SECTION 1.5 Shares Subject to the Plan. Initially, the aggregate number
+of shares of Common Stock that may be issued under the Plan shall be 600,000,
+subject to adjustment as provided in Section 5.2 of the Plan. Shares distributed
+pursuant to the Plan may consist of authorized but unissued shares or treasury
+shares of the Company, as shall be determined from time to time by the Board of
+Directors.
+If any Award under the Plan shall expire, terminate or be canceled
+(including cancellation upon an Option holder's exercise of a related Stock
+Appreciation Right) for any reason without having been exercised in full, or if
+any Award shall be forfeited to the Company, the unexercised or forfeited Award
+shall not count against the above limits and shall again become available for
+Awards under the Plan (unless the holder of such Award received dividends or
+other economic benefits with respect to such Award, which dividends or other
+economic benefits are not forfeited, in which case the Award shall count against
+the above limits). Shares of Common Stock equal in number to the shares
+surrendered in payment of the option price, and shares of Common Stock which are
+withheld in order to satisfy Federal, state or local tax liability, shall count
+against the above limits. Only the number of shares of Common Stock actually
+issued upon exercise of a Stock Appreciation Right shall count against the above
+limits, and any shares which were estimated to be used for such purposes and
+were not in fact so used shall again become available for Awards under the Plan.
+Cash exercises of Stock Appreciation Rights and cash settlement of other Awards
+will not count against the above limits.
+The aggregate number of shares of Common Stock subject to Options or
+Stock Appreciation Rights that may be granted to any one participant in any one
+year under the Plan shall be 300,000, subject to adjustment as provided in
+Section 5.2 of the Plan. The aggregate number of shares of Common Stock that may
+be granted to any one participant in any one year in respect of Restricted Stock
+shall be 300,000, subject to adjustment as provided in Section 5.2 of the Plan.
+The aggregate number of shares of Common Stock that may be received by any one
+participant in any one year in respect of a Performance Award shall be 300,000,
+subject to adjustment as provided in Section 5.2 of the Plan, and the aggregate
+amount of cash that may be received by any one participant in any one year in
+respect to a Performance Award shall be $500,000.
+The total number of Awards (or portions thereof) settled in cash under
+the Plan, based on the number of shares covered by such Awards (e.g., 100 shares
+for a Stock Appreciation Right with respect to 100 shares), shall not exceed a
+number equal to (i) the number of shares initially available for issuance under
+the Plan plus (ii) the number of shares that have become available for issuance
+under the Plan pursuant to the first paragraph of this Section 1.5.
+2
+The aggregate number of shares of Common Stock that are available under
+the Plan for Options granted in accordance with Section 2.4(i) ("ISOs") is
+600,000, subject to adjustment as provided in Section 5.2 of the Plan.
+SECTION 1.6 Other Compensation Programs. Nothing contained in the Plan
+shall be construed to preempt or limit the authority of the Board of Directors
+to exercise its corporate rights and powers, including, but not by way of
+limitation, the right of the Board of Directors (i) to grant incentive awards
+for proper corporate purposes otherwise than under the Plan to any employee,
+officer, director or other person or entity or (ii) to grant incentive awards
+to, or assume incentive awards of, any person or entity in connection with the
+acquisition (whether by purchase, lease, merger, consolidation or otherwise) of
+the business or assets (in whole or in part) of any person or entity.
+ARTICLE II: STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
+SECTION 2.1 Terms and Conditions of Options. Subject to the following
+provisions, all Options granted under the Plan to employees of the Company and
+its Subsidiaries shall be in such form and shall have such terms and conditions
+as the Committee, in its discretion, may from time to time determine consistent
+with the Plan.
+(a) Option Price. The option price per share shall be determined by the
+Committee, except that in the case of an Option granted in accordance with
+Section 2.4(i) the option price per share shall not be less than the fair market
+value of a share of Common Stock (as determined by the Committee) on the date
+the Option is granted (other than in the case of substitute or assumed Options
+to the extent required to qualify such Options for preferential tax treatment
+under the Code as in effect at the time of such grant).
+(b) Term of Option. The term of an Option shall be determined by the
+Committee, except that in the case of an ISO the term of the Option shall not
+exceed ten years from the date of grant, and, notwithstanding any other
+provision of this Plan, no Option shall be exercised after the expiration of its
+term.
+(c) Exercise of Options. Options shall be exercisable at such time or
+times and subject to such terms and conditions as the Committee shall specify in
+the Option grant. Unless the Option grant specifies otherwise, the Committee
+shall have discretion at any time to accelerate such time or times and otherwise
+waive or amend any conditions in respect of all or any portion of the Options
+held by any optionee. An Option may be exercised in accordance with its terms as
+to any or all shares purchasable thereunder.
+(d) Payment for Shares. The Committee may authorize payment for shares
+as to which an Option is exercised to be made in cash, shares of Common Stock, a
+combination thereof, by "cashless exercise" or in such other manner as the
+Committee in its discretion may provide.
+(e) Stockholder Rights. The holder of an Option shall, as such, have
+none of the rights of a stockholder.
+3
+(f) Termination of Employment. The Committee shall have discretion to
+specify in the Option grant, or, with the consent of the optionee, an amendment
+thereof, provisions with respect to the period, not extending beyond the term of
+the Option, during which the Option may be exercised following the optionee's
+termination of employment.
+SECTION 2.2 Stock Appreciation Rights in Tandem with Options. (a) The
+Committee may, either at the time of grant of an Option or at any time during
+the term of the Option, grant Stock Appreciation Rights ("Tandem SARs") with
+respect to all or any portion of the shares of Common Stock covered by such
+Option. A Tandem SAR may be exercised at any time the Option to which it relates
+is then exercisable, but only to the extent the Option to which it relates is
+exercisable, and shall be subject to the conditions applicable to such Option.
+When a Tandem SAR is exercised, the Option to which it relates shall cease to be
+exercisable to the extent of the number of shares with respect to which the
+Tandem SAR is exercised. Similarly, when an Option is exercised, the Tandem SARs
+relating to the shares covered by such Option exercise shall terminate. Any
+Tandem SAR which is outstanding on the last day of the term of the related
+Option (as determined pursuant to Section 2.1(b)) shall be automatically
+exercised on such date for cash without any action by the optionee.
+(b) Upon exercise of a Tandem SAR, the holder shall receive, for each
+share with respect to which the Tandem SAR is exercised, an amount (the
+"Appreciation") equal to the difference between the option price per share of
+the Option to which the Tandem SAR relates and the fair market value (as
+determined by the Committee) of a share of Common Stock on the date of exercise
+of the Tandem SAR. The Appreciation shall be payable in cash, Common Stock, or a
+combination of both, at the option of the Committee, and shall be paid within 30
+days of the exercise of the Tandem SAR.
+SECTION 2.3 Stock Appreciation Rights Independent of Options. Subject
+to the following provisions, all Stock Appreciation Rights granted independent
+of Options ("Independent SARs") under the Plan to employees of the Company and
+its Subsidiaries shall be in such form and shall have such terms and conditions
+as the Committee, in its discretion, may from time to time determine consistent
+with the Plan.
+(a) Exercise Price. The exercise price per share shall be determined by
+the Committee on the date the Independent SAR is granted.
+(b) Term of Independent SAR. The term of an Independent SAR shall be
+determined by the Committee, and, notwithstanding any other provision of this
+Plan, no Independent SAR shall be exercised after the expiration of its term.
+(c) Exercise of Independent SARs. Independent SARs shall be exercisable
+at such time or times and subject to such terms and conditions as the Committee
+shall specify in the Independent SAR grant. Unless the Independent SAR grant
+specifies otherwise, the Committee shall have discretion at any time to
+accelerate such time or times and otherwise waive or amend any conditions in
+respect of all or any portion of the Independent SARs held by any participant.
+Upon exercise of an Independent SAR, the holder shall receive, for each share
+specified in the Independent SAR grant, an amount (the "Appreciation") equal to
+the difference between the
+4
+exercise price per share specified in the Independent SAR grant and the fair
+market value (as determined by the Committee) of a share of Common Stock on the
+date of exercise of the Independent SAR. The Appreciation shall be payable in
+cash, Common Stock, or a combination of both, at the option of the Committee,
+and shall be paid within 30 days of the exercise of the Independent SAR.
+(d) Stockholder Rights. The holder of an Independent SAR shall, as
+such, have none of the rights of a stockholder.
+(e) Termination of Employment. The Committee shall have discretion to
+specify in the Independent SAR grant, or, with the consent of the holder, an
+amendment thereof, provisions with respect to the period, not extending beyond
+the term of the Independent SAR, during which the Independent SAR may be
+exercised following the holder's termination of employment.
+SECTION 2.4 Statutory Options. Subject to the limitations on Option
+terms set forth in Section 2.1, the Committee shall have the authority to grant
+(i) ISOs within the meaning of Section 422 of the Internal Revenue Code of 1986,
+as amended (the "Code"), and (ii) Options containing such terms and conditions
+as shall be required to qualify such Options for preferential tax treatment
+under the Code as in effect at the time of such grant, including, if then
+applicable, limits with respect to minimum exercise price, duration and amounts
+and special limitations applicable to any individual who, at the time the Option
+is granted, owns stock possessing more than 10% of the total combined voting
+power of all classes of stock of the Company or any affiliate. Options granted
+pursuant to this Section 2.4 may contain such other terms and conditions
+permitted by Article II of this Plan as the Committee, in its discretion, may
+from time to time determine (including, without limitation, provision for Stock
+Appreciation Rights), to the extent that such terms and conditions do not cause
+the Options to lose their preferential tax treatment. If an Option intended to
+be an ISO ceases or is otherwise not eligible to be an ISO, such Option (or
+portion thereof necessary to maintain the status of the remaining portion of the
+Option as an ISO) shall remain valid but be treated as an Option other than an
+ISO.
+SECTION 2.5 Change of Control. Notwithstanding the exercisability
+schedule governing any Option or Stock Appreciation Right, upon the occurrence
+of a Change of Control (as defined in Section 5.9) all Options and Stock
+Appreciation Rights outstanding at the time of such Change of Control and held
+by participants who are employees of the Company or its subsidiaries at the time
+of such Change of Control shall (unless specifically provided otherwise in the
+grant thereof) become immediately exercisable and, unless the participant agrees
+otherwise in writing, remain exercisable for three years (but not beyond the
+term of the Option or Stock Appreciation Right) after the employee's termination
+of employment for any reason other than termination by the Company or a
+subsidiary of the Company for dishonesty, conviction of a felony, willful
+unauthorized disclosure of confidential information or willful refusal to
+perform the duties of such employee's position or positions with the Company or
+such subsidiary (termination for "cause"); provided that this Section 2.5 shall
+not apply to Awards granted to a participant if, in connection with a Change of
+Control pursuant to clause (1) of Section 5.9, such participant is the Person or
+forms part of the Person specified in such clause (1).
+5
+ARTICLE III: RESTRICTED STOCK
+SECTION 3.1 Terms and Conditions of Restricted Stock Awards. Subject to the
+following provisions, all Awards of Restricted Stock under the Plan to employees
+of the Company and its Subsidiaries shall be in such form and shall have such
+terms and conditions as the Committee, in its discretion, may from time to time
+determine consistent with the Plan.
+(a) Restricted Stock Award. The Restricted Stock Award shall specify
+the number of shares of Restricted Stock to be awarded, the price, if any, to be
+paid by the recipient of the Restricted Stock, and the date or dates on which
+the Restricted Stock will vest. The vesting and number of shares of Restricted
+Stock may be conditioned upon the completion of a specified period of service
+with the Company or its Subsidiaries, upon the attainment of specified
+performance objectives, or upon such other criteria as the Committee may
+determine in accordance with the provisions hereof. Performance objectives will
+be based on increases in share prices, operating income, net income or cash flow
+thresholds on a company wide, subsidiary or division or group basis, rig
+utilization, safety records, return on common equity or any combination of the
+foregoing.
+(b) Restrictions on Transfer. Stock certificates representing the
+Restricted Stock granted to an employee shall be registered in the employee's
+name. Such certificates shall either be held by the Company on behalf of the
+employee, or delivered to the employee bearing a legend to restrict transfer of
+the certificate until the Restricted Stock has vested, as determined by the
+Committee. The Committee shall determine whether the employee shall have the
+right to vote and/or receive dividends on the Restricted Stock before it has
+vested. No share of Restricted Stock may be sold, transferred, assigned, or
+pledged by the employee until such share has vested in accordance with the terms
+of the Restricted Stock Award. Unless the grant of a Restricted Stock Award
+specifies otherwise, in the event of an employee's termination of employment
+before all the employee's Restricted Stock has vested, or in the event other
+conditions to the vesting of Restricted Stock have not been satisfied prior to
+any deadline for the satisfaction of such conditions set forth in the Award, the
+shares of Restricted Stock that have not vested shall be forfeited and any
+purchase price paid by the employee shall be returned to the employee. At the
+time Restricted Stock vests (and, if the employee has been issued legended
+certificates of Restricted Stock, upon the return of such certificates to the
+Company), a certificate for such vested shares shall be delivered to the
+employee or the employee's estate, free of all restrictions.
+(c) Accelerated Vesting. Notwithstanding the vesting conditions set
+forth in the Restricted Stock Award, (i) unless the Restricted Stock grant
+specifies otherwise, the Committee may in its discretion at any time accelerate
+the vesting of Restricted Stock or otherwise waive or amend any conditions of a
+grant of Restricted Stock, and (ii) all shares of Restricted Stock shall vest
+upon a Change of Control of the Company; provided that clause (ii) above shall
+not apply to Awards granted to a participant if, in connection with a Change of
+Control pursuant to clause (1) of Section 5.9, such participant is the Person or
+forms part of the Person specified in such clause (1).
+ARTICLE IV: PERFORMANCE AWARDS
+SECTION 4.1 Terms and Conditions of Performance Awards. The Committee
+shall be authorized to grant Performance Awards, which are payable in stock,
+cash or a combination thereof, at the discretion of the Committee.
+6
+(a) Performance Period. The Committee shall establish with respect to
+each Performance Award a performance period over which the performance goal of
+such Performance Award shall be measured. The performance period for a
+Performance Award shall be established prior to the time such Performance Award
+is granted and may overlap with performance periods relating to other
+Performance Awards granted hereunder to the same employee.
+(b) Performance Objectives. The Committee shall establish a minimum
+level of acceptable achievement for the holder at the time of each Award. Each
+Performance Award shall be contingent upon future performances and achievement
+of objectives described either in terms of Company-wide performance or in terms
+that are related to performance of the employee or of the division, subsidiary,
+department or function within the Company in which the employee is employed. The
+Committee shall have the authority to establish the specific performance
+objectives and measures applicable to such objectives. Such objectives, however,
+shall be based on increases in share prices, operating income, net income or
+cash flow thresholds on a company wide, subsidiary or division or group, rig
+utilization, safety records, return on common equity or any combination of the
+foregoing.
+(c) Size, Frequency and Vesting. The Committee shall have the authority
+to determine at the time of the Award the maximum value of a Performance Award,
+the frequency of Awards and the date or dates when Awards vest.
+(d) Payment. Following the end of each performance period, the holder
+of each Performance Award will be entitled to receive payment of an amount, not
+exceeding the maximum value of the Performance Award, based on the achievement
+of the performance measures for such performance period, as determined by the
+Committee. If at the end of the performance period the specified objectives have
+been attained, the employee shall be deemed to have fully earned the Performance
+Award. If the employee exceeds the specified minimum level of acceptable
+achievement but does not fully attain such objectives, the employee shall be
+deemed to have partly earned the Performance Award, and shall become entitled to
+receive a portion of the total Award, as determined by the Committee. If a
+Performance Award is granted after the start of a performance period, the Award
+shall be reduced to reflect the portion of the performance period during which
+the Award was in effect. Unless the Award specifies otherwise, including
+restrictions in order to satisfy the conditions under Section 162(m) of the
+Code, the Committee may adjust the payment of Awards or the performance
+objectives if events occur or circumstances arise which would cause a particular
+payment or set of performance objectives to be inappropriate, as determined by
+the Committee.
+(e) Termination of Employment. A recipient of a Performance Award who,
+by reason of death, disability or retirement, terminates employment before the
+end of the applicable performance period shall be entitled to receive, to the
+extent earned, a portion of the Award which is proportional to the portion of
+the performance period during which the employee was employed. A recipient of a
+Performance Award who terminates employment for any other reason shall not be
+entitled to any part of the Award unless the Committee determines otherwise;
+7
+however, the Committee may in no event pay the employee more than that portion
+of the Award which is proportional to his or her period of actual service.
+(f) Accelerated Vesting. Notwithstanding the vesting conditions set
+forth in a Performance Award, (i) unless the Award specifies otherwise, the
+Committee may in its discretion at any time accelerate vesting of the Award or
+otherwise waive or amend any conditions (including but not limited to
+performance objectives) in respect of a Performance Award, and (ii) all
+Performance Awards shall vest upon a Change of Control of the Company. In
+addition, each participant in the Plan shall receive the maximum Performance
+Award he or she could have earned for the proportionate part of the performance
+period prior to the Change of Control, and shall retain the right to earn any
+additional portion of his or her Award if he or she remains in the Company's
+employ. However, clause (ii) above shall not apply to Awards granted to a
+participant if, in connection with a Change of Control pursuant to clause (1) of
+Section 5.9, such participant is the Person or forms part of the Person
+specified in such clause (1).
+(g) Stockholder Rights. The holder of a Performance Award shall, as
+such, have none of the rights of a stockholder.
+ARTICLE V: ADDITIONAL PROVISIONS
+SECTION 5.1 General Restrictions. Each Award under the Plan shall be
+subject to the requirement that, if at any time the Committee shall determine
+that (i) the listing, registration or qualification of the shares of Common
+Stock subject or related thereto upon any securities exchange or under any state
+or Federal law, or (ii) the consent or approval of any government regulatory
+body, or (iii) an agreement by the recipient of an Award with respect to the
+disposition of shares of Common Stock, is necessary or desirable (in connection
+with any requirement or interpretation of any Federal or state securities law,
+rule or regulation) as a condition of, or in connection with, the granting of
+such Award or the issuance, purchase or delivery of shares of Common Stock
+thereunder, such Award may not be consummated in whole or in part unless such
+listing, registration, qualification, consent, approval or agreement shall have
+been effected or obtained free of any conditions not acceptable to the
+Committee.
+SECTION 5.2 Adjustments for Changes in Capitalization. In the event of
+any stock dividends, stock splits, recapitalizations, combinations, exchanges of
+shares, mergers, consolidation, liquidations, split-ups, split-offs, spin- offs,
+or other similar changes in capitalization, or any distribution to stockholders,
+including a rights offering, other than regular cash dividends, changes in the
+outstanding stock of the Company by reason of any increase or decrease in the
+number of issued shares of Common Stock resulting from a split-up or
+consolidation of shares or any similar capital adjustment or the payment of any
+stock dividend, any share repurchase at a price in excess of the market price of
+the Common Stock at the time such repurchase is announced or other increase or
+decrease in the number of such shares, the Committee shall make appropriate
+adjustment in the number and kind of shares authorized by the Plan (including
+shares available for ISOs), in the number, price or kind of shares covered by
+the Awards and in any outstanding Awards under the Plan; provided, however, that
+no such adjustment shall increase the aggregate value of any outstanding Award.
+8
+In the event of any adjustment in the number of shares covered by any
+Award, any fractional shares resulting from such adjustment shall be disregarded
+and each such Award shall cover only the number of full shares resulting from
+such adjustment.
+SECTION 5.3 Amendments. (a) The Board of Directors may at any time and
+from time to time and in any respect amend or modify the Plan.
+(b) The Committee shall have the authority to amend any Award to
+include any provision which, at the time of such amendment, is authorized under
+the terms of the Plan; however, no outstanding Award may be revoked or altered
+in a manner unfavorable to the holder without the written consent of the holder.
+SECTION 5.4 Cancellation of Awards. Any Award granted under the Plan
+may be cancelled at any time with the consent of the holder and a new Award may
+be granted to such holder in lieu thereof, which Award may, in the discretion of
+the Committee, be on more favorable terms and conditions than the canceled
+Award.
+SECTION 5.5 Withholding. Whenever the Company proposes or is required
+to issue or transfer shares of Common Stock under the Plan, the Company shall
+have the right to require the holder to pay an amount in cash or to retain or
+sell without notice, or demand surrender of, shares of Common Stock in value
+sufficient to satisfy any Federal, state or local withholding tax liability
+("Withholding Tax") prior to the delivery of any certificate for such shares (or
+remainder of shares if Common Stock is retained to satisfy such tax liability).
+Whenever under the Plan payments are to be made in cash, such payments shall be
+net of an amount sufficient to satisfy any Federal, state or local withholding
+tax liability. An Award may also provide the holder with the right to satisfy
+the Withholding Tax with previously owned shares of Common Stock or shares of
+Common Stock otherwise issuable to the holder.
+Whenever Common Stock is so retained or surrendered to satisfy
+Withholding Tax, the value of shares of Common Stock so retained or surrendered
+shall be determined by the Committee, and the value of shares of Common Stock so
+sold shall be the net proceeds (after deduction of commissions) received by the
+Company from such sale, as determined by the Committee.
+SECTION 5.6 Non-assignability. Except as expressly provided in the Plan
+or in any agreements, no Award under the Plan shall be assignable or
+transferable by the holder thereof except by will or by the laws of descent and
+distribution. During the life of the holder, Awards under the Plan shall be
+exercisable only by such holder or by the guardian or legal representative of
+such holder.
+SECTION 5.7 Non-uniform Determinations. Determinations by the Committee
+under the Plan (including, without limitation, determinations of the persons to
+receive Awards; the form, amount and timing of such Awards; the terms and
+provisions of such Awards and the agreements evidencing same; and provisions
+with respect to termination of employment) need not be uniform and may be made
+by it selectively among persons who receive, or are eligible to receive, Awards
+under the Plan, whether or not such persons are similarly situated.
+9
+SECTION 5.8 No Guarantee of Employment. The grant of an Award under the
+Plan shall not constitute an assurance of continued employment for any period or
+any obligation of the Board of Directors to nominate any director for reelection
+by the Company's stockholders.
+SECTION 5.9 Change of Control. A "Change of Control" shall be deemed to
+have occurred if:
+(1) any Person (as defined below), other than a Designated Person, is
+or becomes the Beneficial Owner (as defined below) of securities of the Company
+representing 35% or more of the Voting Power (as defined below);
+(2) there shall occur a change in the composition of a majority of the
+Board of Directors within any period of four consecutive years which change
+shall not have been approved by a majority of the Board of Directors as
+constituted immediately prior to the commencement of such period;
+(3) at any meeting of the stockholders of the Company called for the
+purpose of electing directors, more than one of the persons nominated by the
+Board of Directors for election as directors shall fail to be elected; or
+(4) the stockholders of the Company approve a merger, consolidation,
+sale of substantially all assets or other reorganization of the Company, other
+than a reincorporation, in which the Company does not survive.
+For purposes of this Section 5.9, (i) "Person" shall have the meaning
+set forth in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of
+1934 (the "Exchange Act"), as in effect on May 1, 1997, (ii) "Beneficial Owner"
+shall have the meaning set forth in Rules 13d-3 and 13d-5 promulgated under the
+Exchange Act on May 1, 1997; (iii) "Voting Power" shall mean the voting power of
+the outstanding securities of the Company having the right under ordinary
+circumstances to vote at an election of the Board of Directors; and (iv)
+"Designated Person" shall mean any Person whose Beneficial Ownership of
+securities is solely the result of such Person acquiring securities as an
+underwriter in an underwritten public offering of such securities.
+Notwithstanding anything contained herein to the contrary, a Change in Control
+shall not be deemed to have occurred due to the Voting Power of Remy Capital
+Partners III, L.P. or any of its affiliates (collectively "Remy") falling below
+35% or subsequently increasing over 35%.
+SECTION 5.10 Duration and Termination. (a) The Plan shall be of
+unlimited duration. Notwithstanding the foregoing, no ISO (within the meaning of
+Section 422 of the Code) shall be granted under the Plan ten (10) years after
+the effective date of the Plan, but Awards granted prior to such date may extend
+beyond such date, and the terms of this Plan shall continue to apply to all
+Awards granted hereunder.
+(b) The Board of Directors may suspend, discontinue or terminate the
+Plan at any time. Such action shall not impair any of the rights of any holder
+of any Award outstanding on the date of the Plan's suspension, discontinuance or
+termination without the holder's written consent.
+10
+SECTION 5.11 Deferred Compensation and Trust Agreements. The Committee
+may authorize and establish deferred compensation agreements and arrangements in
+connection with Awards under the Plan and may establish trusts and other
+arrangements including "rabbi trusts", with respect to such agreements and
+appoint one or more trustees for such trusts. Shares of Common Stock under the
+Plan may also be acquired by one or more trustees from the Company, in the open
+market or otherwise.
+SECTION 5.12 Effective Date. The Plan is effective as of July 23, 1997,
+the effective date of the Long-Term Incentive Plan prior to amendment.
+11
+AMENDMENT NO. 1 TO THE PATTERSON-UTI ENERGY, INC.
+AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN
+ADOPTED BY THE BOARD OF DIRECTORS ON APRIL 26, 1999
+RESOLVED, than an amendment (the "1997 Amendment") to the Company's
+Amended and Restated 1997 Long-Term Incentive Plan (the "1997 Plan"), to
+increase the number of shares authorized for issuance under the 1997 Plan by
+900,000 is hereby authorized, ratified and approved.
+12
+AMENDMENT NO. 2 TO THE PATTERSON-UTI ENERGY, INC.
+AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN
+ADOPTED BY THE BOARD OF DIRECTORS ON APRIL 27, 2000
+RESOLVED, that an amendment to the UTI Energy Corp. Amended and Restated 1997
+Long-Term Incentive Plan (the "1997 Plan"), to increase the number of shares
+authorized for issuance under the 1997 Plan by 400,000 is hereby authorized,
+ratified and approved.
+13
+Please mark
+your votes [X]
+like this
+PROXY BY MAIL
+THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSALS 1, 2 AND 3.
+THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED BY THE PROXIES IN THE MANNER
+DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE
+PROXIES WILL VOTE "FOR" PROPOSALS 1, 2 AND 3.
+FOR all nominees WITHHOLD
+listed below AUTHORITY to vote FOR AGAINST ABSTAIN
+1. ELECTION OF BOARD for all nominees listed 2. Approve an amendment to the Company's [ ] [ ] [ ]
+OF DIRECTORS. below Amended and Restated 1997 Long-Term
+[ ] [ ] Incentive Plan increasing the number
+of shares available for issuance under
+Nominees for election to the Board of Directors: 01 Mark S. Siegel, the plan.
+02 Cloyce A. Talbott, 03 A. Glenn Patterson, 04 Kenneth N. Berns,
+05 Stephen J. DeGroat, 06 Robert C. Gist, 07 Curtis W. Huff, 3. Ratify the selection of [ ] [ ] [ ]
+08 Kenneth R. Peak, and 09 Nadine C. Smith. PricewaterhouseCoopers LLP as
+independent accountants of the
+(INSTRUCTION: To withhold authority to vote for any one or more Company for the fiscal year ending
+individual nominees, write the name of each such nominee in the December 31, 2002.
+space provided below.)
+4. In their discretion, the Proxies are authorized to vote
+------------------------------------------------------------------- upon such other business as may properly come before the
+Meeting or any adjournment or adjournments thereof.
+IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE
+INSTRUCTIONS BELOW.
+------------------------------------------- ====================================
+COMPANY NUMBER:
+PROXY NUMBER:
+ACCOUNT NUMBER:
+------------------------------------------- ====================================
+SIGNATURE SIGNATURE DATE
+-------------------------- --------------------- ---------
+NOTE: Please sign exactly as your name or names appear on this card. Joint
+owners should each sign personally. When signing as attorney, executor,
+administrator, personal representative, trustee or guardian, please give your
+full title as such. For a corporation or a partnership, please sign in the full
+corporate name by the President or other authorized officer or the full
+partnership name by an authorized person, as the case may be. (Please mark,
+sign, date, and return this proxy in the enclosed envelope.)
+--------------------------------------------------------------------------------
+o FOLD AND DETACH HERE AND READ THE REVERSE SIDE o
+VOTE BY TELEPHONE OR INTERNET
+QUICK *** EASY *** IMMEDIATE
+PATTERSON-UTI ENERGY, INC.
+o You can now vote your shares electronically through the Internet or the
+telephone.
+o This eliminates the need to return the proxy card.
+o Your electronic vote authorizes the named proxies to vote your shares in the
+same manner as if you marked, signed, dated and returned the proxy card.
+TO VOTE YOUR PROXY BY INTERNET
+WWW.CONTINENTALSTOCK.COM
+Have your proxy card in hand when you access the above website. You will be
+prompted to enter the company number, proxy number and account number to create
+an electronic ballot. Follow the prompts to vote your shares.
+TO VOTE YOUR PROXY BY MAIL
+Mark, sign and date your proxy card above, detach it and return it in the
+postage-paid envelope provided.
+TO VOTE YOUR PROXY BY PHONE
+1-800-293-8533
+Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
+when you call. You will be prompted to enter the company number, proxy number
+and account number. Follow the voting instructions to vote your shares.
+PLEASE DO NOT RETURN THE ABOVE CARD IF YOU VOTED
+ELECTRONICALLY
+PROXY PROXY
+PATTERSON-UTI ENERGY, INC.
+PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
+TO BE HELD ON MAY 30, 2002
+THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the "Company") hereby
+constitutes and appoints Cloyce A. Talbott and A. Glenn Patterson, or either of
+them, each with the power of substitution as attorneys and proxies to vote all
+of the shares which the undersigned is entitled to vote at the annual meeting
+of stockholders of the Company (the "Meeting") to be held Thursday, May 30,
+2002, at 10:00 a.m., local time, at the Wyndham Greenspoint Hotel, 12400
+Greenspoint Drive, Houston, Texas 77060, and at any and all adjournments
+thereof, with the same force and effect as if the undersigned were personally
+present. The undersigned hereby instructs the above-named Attorneys and Proxies
+to vote the shares represented by this proxy in the manner as directed by the
+undersigned on the reverse side of this proxy card. If no directions are made,
+the Proxies will vote "FOR" proposals 1, 2 and 3.
+PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
+POSTAGE-PAID ENVELOPE, OR FOLLOW THE INSTRUCTIONS ON THE REVERSE SIDE TO VOTE
+YOUR SHARES BY INTERNET OR BY TELEPHONE.
+(CONTINUED ON THE REVERSE SIDE)
+--------------------------------------------------------------------------------
+o FOLD AND DETACH HERE o
+YOUR VOTE IS IMPORTANT!
+FOLLOW INSTRUCTIONS ON THE REVERSE SIDE.
+PLEASE VOTE
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950134-02-004228/proxy_rpt.txt b/raw/proxies/0000889900/0000950134-02-004228/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000889900/0000950134-03-004404/proxy.txt b/raw/proxies/0000889900/0000950134-03-004404/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..08057aa57c5fe0226f4f7b8aed21dd7366af7d70
--- /dev/null
+++ b/raw/proxies/0000889900/0000950134-03-004404/proxy.txt
@@ -0,0 +1,2258 @@
+DEF 14A
+1
+d03923ddef14a.txt
+DEFINITIVE PROXY STATEMENT
+SCHEDULE 14A INFORMATION
+Proxy Statement Pursuant to Section 14(a)
+of the Securities Exchange Act of 1934
+Filed by the Registrant [X]
+Filed by a Party other than the Registrant [ ]
+Check the appropriate box:
+[ ] Preliminary Proxy Statement
+[ ] Confidential, for Use of the Commission Only (as permitted by
+rule 14a-6(e)(2))
+[X] Definitive Proxy Statement
+[ ] Definitive Additional Materials
+[ ] Soliciting Material Pursuant to Section 240.14a-12
+PATTERSON-UTI ENERGY, INC.
+--------------------------------------------------------------------------------
+(Name of Registrant as Specified in Its Charter)
+Not Applicable
+--------------------------------------------------------------------------------
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
+Payment of Filing Fee (Check the appropriate box):
+[X] No Fee Required
+[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
+(1) Title of each class of securities to which transaction applies:
+--------------------------------------------------------------------------
+(2) Aggregate number of securities to which transaction applies:
+--------------------------------------------------------------------------
+(3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
+filing fee is calculated and state how it was determined):
+--------------------------------------------------------------------------
+(4) Proposed maximum aggregate value of transaction:
+--------------------------------------------------------------------------
+(5) Total Fee Paid:
+--------------------------------------------------------------------------
+[ ] Fee paid previously with preliminary materials.
+[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
+0-11(a)(2) and identify the filing for which the offsetting fee was paid
+previously. Identify the previous filing by registration statement number,
+or the Form or Schedule and the date of its filing.
+(1) Amount Previously Paid:
+--------------------------------------------------------------------------
+(2) Form, Schedule or Registration No.:
+--------------------------------------------------------------------------
+(3) Filing Party:
+--------------------------------------------------------------------------
+(4) Date Filed:
+--------------------------------------------------------------------------
+(PATTERSON-UTI ENERGY, INC. LOGO)
+March 31, 2003
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy, Inc.'s annual
+stockholders' meeting. The annual meeting will be held Wednesday, April 30,
+2003, at 11:30 a.m., local time, at the Wyndham Greenspoint Hotel, 12400
+Greenspoint Drive, Houston, Texas 77060.
+At the annual meeting, stockholders will vote on a number of important matters.
+Please take the time to carefully read each of the proposals described in the
+attached proxy statement.
+Thank you for your support.
+Sincerely,
+-s- MARK S. SIEGEL -s- CLOYCE A. TALBOTT
+MARK S. SIEGEL CLOYCE A. TALBOTT
+Chairman of the Board Chief Executive Officer
+---------------------
+This proxy statement and the accompanying proxy card are being mailed to
+Patterson-UTI Energy, Inc. stockholders beginning on or about March 31, 2003
+PATTERSON-UTI ENERGY, INC.
+P. O. BOX 1416
+SNYDER, TEXAS 79550
+---------------------
+NOTICE OF 2003 ANNUAL MEETING
+---------------------
+The 2003 annual meeting of the stockholders of Patterson-UTI Energy, Inc.
+("Patterson-UTI"), a Delaware corporation, will be held Wednesday, April 30,
+2003, at 11:30 a.m., local time, at the Wyndham Greenspoint Hotel, 12400
+Greenspoint Drive, Houston, Texas 77060 (the "Meeting"). At the Meeting, the
+stockholders will be asked to:
+- elect the Board of Directors of Patterson-UTI to serve until the next
+annual meeting of the stockholders or until their respective successors
+are elected and qualified;
+- approve an amendment to Patterson-UTI's Amended and Restated 1997
+Long-Term Incentive Plan increasing the number of shares available for
+issuance under the plan;
+- approve an amendment to Patterson-UTI's Amended and Restated Non-Employee
+Director Stock Option Plan increasing the number of options issued to new
+directors and also increasing the number of options issued to directors
+annually;
+- ratify the selection of PricewaterhouseCoopers LLP as independent
+accountants of Patterson-UTI for the fiscal year ending December 31,
+2003; and
+- take action upon any other matters which may properly come before the
+Meeting.
+Stockholders of record at the close of business on March 14, 2003, are
+entitled to vote at the Meeting and any adjournment thereof.
+It is important that your shares be represented at the Meeting. I urge you
+to sign, date and promptly return the enclosed proxy card in the enclosed
+postage paid envelope or vote by following the Internet or telephone
+instructions included on the proxy card.
+By order of the Board of Directors
+-s- Jonathan D. Nelson
+JONATHAN D. NELSON
+Vice President, Chief Financial
+Officer,
+Secretary and Treasurer
+March 31, 2003
+PATTERSON-UTI ENERGY, INC.
+P. O. BOX 1416
+SNYDER, TEXAS 79550
+---------------------
+PROXY STATEMENT
+---------------------
+ANNUAL MEETING OF STOCKHOLDERS
+TO BE HELD APRIL 30, 2003
+The Board of Directors of Patterson-UTI Energy, Inc. ("Patterson-UTI"), a
+Delaware corporation, prepared this proxy statement for the purpose of
+soliciting proxies for Patterson-UTI's 2003 annual meeting of stockholders (the
+"Meeting") to be held Wednesday, April 30, 2003, at 11:30 a.m., local time, at
+the Wyndham Greenspoint Hotel, 12400 Greenspoint Drive, Houston, Texas 77060,
+and at any adjournment thereof. This proxy statement and the accompanying proxy
+are being mailed to stockholders on or about March 31, 2003. The Board of
+Directors is making this solicitation by mail, and Patterson-UTI will pay all
+the costs associated with this solicitation.
+Properly submitted proxies received either by mail, Internet, telephone or
+in person, in time for the Meeting will be voted as you have directed in your
+proxy, unless you revoke your proxy in the manner provided below. As to any
+matter for which you give no direction in your proxy, your shares will be voted
+as follows:
+- "FOR" the election of all of the nominees to the Board of Directors;
+- "FOR" the approval of the amendment to Patterson-UTI's Amended and
+Restated 1997 Long-Term Incentive Plan increasing the number of shares
+authorized for issuance under the plan;
+- "FOR" the approval of the amendment to Patterson-UTI's Amended and
+Restated Non-Employee Director Stock Option Plan increasing the number of
+options issued to new directors and also increasing the number of options
+issued to directors annually;
+- "FOR" the ratification of PricewaterhouseCoopers LLP as independent
+accountants of Patterson-UTI for the fiscal year ending December 31,
+2003; and
+- "FOR" or "AGAINST" any other proposals which may be submitted at the
+Meeting at the discretion of the persons named in the proxy.
+You may revoke your proxy at any time before the proxy is voted by either:
+- submitting a new proxy with a later date, including a proxy submitted by
+the Internet or by telephone;
+- notifying the Secretary of Patterson-UTI in writing before the Meeting
+that you have revoked your proxy; or
+- attending the Meeting and voting in person.
+SHARES OUTSTANDING AND VOTING RIGHTS
+Only stockholders of record of Patterson-UTI's common stock $.01 par value,
+at the close of business on March 14, 2003 are entitled to notice of and to vote
+at the Meeting or any adjournment thereof. At the close of business on March 14,
+2003, there were 80,254,222 shares of common stock issued and outstanding.
+Holders of record of common stock on March 14, 2003 will be entitled to one vote
+per share on all matters to come before the Meeting. A list of stockholders
+entitled to notice of and to vote at the Meeting will be made available during
+regular business hours at the offices of Patterson-UTI Energy, Inc., 4510 Lamesa
+Highway, Snyder, Texas 79549, from April 18, 2003 through April 29, 2003 and at
+the Meeting for inspection by any stockholder for any purpose regarding the
+Meeting.
+A quorum is necessary to transact business at the Meeting. A majority of
+the shares of common stock outstanding on March 14, 2003 will constitute a
+quorum. The shares held by each stockholder who signs and returns the enclosed
+form of proxy or properly votes using the Internet or telephone will be counted
+for purposes of determining the presence of a quorum at the Meeting.
+PROPOSAL NO. 1
+ELECTION OF DIRECTORS
+Patterson-UTI's bylaws provide that the number of members of the Board of
+Directors of Patterson-UTI shall be fixed either by amendment to the bylaws or
+by resolution of the Board of Directors. Directors are elected to serve until
+the next annual meeting of stockholders or until their successors are elected
+and qualified. Patterson-UTI's bylaws provide that the affirmative vote of a
+plurality of the votes cast at the meeting at which a quorum is present is
+required for the election of directors.
+The enclosed form of proxy provides a means for you to either:
+- vote "FOR" the election of the nominees to the Board of Directors listed
+below,
+- withhold authority to vote for one or more of the nominees, or
+- withhold authority to vote for all of the nominees.
+THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" ALL OF THE
+NOMINEES. Unless you give contrary instructions in your proxy, your proxy will
+be voted "FOR" the election of all of the nominees to the Board of Directors. If
+any nominee should become unable or unwilling to accept nomination or election,
+the person acting under the proxy will vote for the election of such other
+person as the Board of Directors may recommend. However, the Board has no reason
+to believe that any of the nominees will be unable or unwilling to serve if
+elected.
+There are no arrangements or understandings between any person and any of
+the directors pursuant to which such director was selected as a nominee for
+election at the Meeting. There are no family relationships among any of the
+directors or executive officers of Patterson-UTI, other than between Messrs.
+Talbott and Patterson, who are brothers-in-law.
+Set forth below is the name, age and position followed by a brief
+description of the business experience during at least the past five years of
+each of the nominees for election to the Board of Directors.
+NAME AGE POSITION
+---- --- --------
+Mark S. Siegel........................ 52 Chairman of the Board and Director
+Cloyce A. Talbott..................... 67 Chief Executive Officer and Director
+A. Glenn Patterson.................... 56 President, Chief Operating Officer and
+Director
+Kenneth N. Berns...................... 43 Director
+Robert C. Gist........................ 62 Director
+Curtis W. Huff........................ 45 Director
+Terry H. Hunt......................... 54 Director
+Kenneth R. Peak....................... 57 Director
+Nadine C. Smith....................... 45 Director
+Mark S. Siegel -- Mr. Siegel has served as Chairman of the Board and as a
+director of Patterson-UTI since May 8, 2001. Mr. Siegel served as Chairman of
+the Board and as a director of UTI Energy Corp. ("UTI") from 1995 to May 8,
+2001, when UTI merged with and into Patterson-UTI. Mr. Siegel has been President
+of REMY Investors & Consultants, Incorporated ("REMY Investors") since 1993.
+From 1992 to 1993, Mr. Siegel was President, Music Division, Blockbuster
+Entertainment Corp. From 1988 through 1992, Mr. Siegel was an Executive Vice
+President of Shamrock Holdings, Inc. and Managing Director of Shamrock
+2
+Capital Advisors, Incorporated. Mr. Siegel is also Chairman of the Board and a
+director of Variflex Inc. Mr. Siegel holds a Bachelor of Arts from Colgate
+University and a J.D. from Boalt Hall School of Law.
+Cloyce A. Talbott -- Mr. Talbott has served as a director of Patterson-UTI
+since its incorporation in 1978 and as its Chief Executive Officer since 1983.
+Mr. Talbott co-founded Patterson-UTI, served as Vice President from 1978 to
+1983, and served as Chairman of the Board from 1983 to May 8, 2001. Mr. Talbott
+received a Bachelor of Science degree in Petroleum Engineering in 1958 from
+Texas Tech University, Lubbock, Texas.
+A. Glenn Patterson -- Mr. Patterson has served as a director of
+Patterson-UTI since its incorporation in 1978. Mr. Patterson co-founded
+Patterson-UTI and has served as its President since 1978 and also as Chief
+Operating Officer since 1983. Mr. Patterson received his Bachelor of Science
+degree in Business in 1970 from Angelo State University, San Angelo, Texas.
+Kenneth N. Berns -- Mr. Berns has served as a director of Patterson-UTI
+since May 8, 2001 and served as a director of UTI from 1995 to May 8, 2001. Mr.
+Berns has been an executive with REMY Investors since 1994. Prior to that time,
+Mr. Berns' experience included investment banking and financial advisory
+services. Mr. Berns is also a director of Variflex Inc. Mr. Berns holds a
+Bachelors Degree in Business Administration from San Diego State University and
+a Masters Degree in Taxation from Golden Gate University.
+Robert C. Gist -- Mr. Gist has served as a director of Patterson-UTI since
+1985. He was general legal counsel and advisor to Patterson-UTI from 1987 to May
+8, 2001. Mr. Gist received a Bachelor of Science degree in Economics in 1962 and
+a law degree in 1965 from Southern Methodist University. He has been self-
+employed as an attorney for more than five years and has over 20 years
+experience in the oil and gas industry.
+Curtis W. Huff -- Mr. Huff has served as a director of Patterson-UTI since
+May 8, 2001 and served as a director of UTI from 1997 to May 8, 2001. Mr. Huff
+is the President and Chief Executive Officer of Freebird Investments LLC, a
+private investment company, and has served in that capacity since October 2002.
+Mr. Huff served as the President and Chief Executive Officer of Grant Prideco,
+Inc., a manufacturer of engineered oilfield tubular products, from February 2001
+to June 2002. From January 2000 to February 2001, Mr. Huff served as Executive
+Vice President, Chief Financial Officer and General Counsel of Weatherford
+International, Inc., a global oilfield service company. He served as Senior Vice
+President and General Counsel of Weatherford from May 1998 to January 2000.
+Prior to that time, Mr. Huff was a partner with the law firm of Fulbright &
+Jaworski L.L.P., and held that position for more than five years.
+Terry H. Hunt -- Mr. Hunt is an energy consultant and investor. He served
+as Senior Vice President -- Strategic Planning of PPL Corporation, an
+international energy and utility holding company, from 1998 to 2000 following
+their merger of Penn Fuel Gas, Inc. into PPL. Mr. Hunt served as the President
+and Chief Executive Officer of Penn Fuel Gas, Inc., a natural gas and propane
+distribution company, from 1992 to 1999. From 1989 to 1992, Mr. Hunt was
+President and Chairman of Carnegie Natural Gas Company, a gas distribution and
+transportation company, and of Apollo Gas Company, a natural gas distributor.
+Mr. Hunt holds a Bachelor of Engineering degree from the University of
+Saskatchewan, Canada and a M.B.A. from Southern Methodist University. Mr. Hunt
+served as a member of the Board of Directors of UTI from 1994 to 2001.
+Kenneth R. Peak -- Mr. Peak has served as a director of Patterson-UTI since
+November 6, 2000. Mr. Peak is Chairman, President, Chief Executive Officer and
+Chief Financial Officer of Contango Oil & Gas Company. Prior to becoming
+President of Contango in 1999, Mr. Peak was the President of Peak Enernomics,
+Incorporated, a company formed in 1990. Mr. Peak's energy career began in 1973
+as a commercial banker in First Chicago's energy group. In 1980, Mr. Peak became
+Treasurer of Tosco Corporation, and in 1982 he became Chief Financial Officer of
+Texas International Company. His tenure at Texas International Company included
+serving as President of TIPCO, the domestic operating subsidiary of Texas
+International's oil and gas operations. Mr. Peak received a Bachelor of Science
+in physics from Ohio University and a Masters of Business Administration from
+Columbia University.
+3
+Nadine C. Smith -- Ms. Smith has served as a director of Patterson-UTI
+since May 8, 2001 and served as a director of UTI from 1995 to May 8, 2001. Ms.
+Smith is a private investor and business consultant. From August 2000 to
+December 2001, Ms. Smith was President of Final Arrangements, LLC and CEO of
+Arrange OnLine.com internet service providers. From April 2000 to August 2000,
+Ms. Smith served as the President of Aegis Asset Management, Inc. From 1997 to
+April 2000, Ms. Smith was President and Chief Executive Officer of Enidan
+Capital Corp., an investment company that makes equity investments in public and
+privately held companies. Previously, Ms. Smith was an investment banker and
+principal with NC Smith & Co. and The First Boston Corporation and a management
+consultant with McKinsey & Co. Ms. Smith is a director of American Retirement
+Corporation. Ms. Smith earned a bachelors degree in economics from Smith College
+and a masters degree in business from Yale University.
+MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
+The Board of Directors met five times during the year ended December 31,
+2002. Each director attended, in person or by telephone, at least 75% of all
+meetings held by the Board for which such director was eligible and all meetings
+of each committee for which such director was eligible.
+The Board of Directors has an executive committee, an audit committee and a
+compensation committee. The Board does not have a nominating or other similar
+committee.
+The executive committee, which currently is composed of Messrs. Siegel,
+Talbott, Patterson and Berns, has the authority to act for the Board in all
+matters arising between regular or special meetings of the Board of Directors.
+The executive committee met informally on numerous occasions during the year
+ended December 31, 2002.
+The audit committee, which currently is composed of Messrs. Peak and Gist,
+and Ms. Smith, selects, subject to Board of Directors approval, the independent
+accountants to audit Patterson-UTI's books and records and considers and acts
+upon accounting matters as they arise. The Board of Directors has adopted a
+written charter for the audit committee. The audit committee met five times
+during the year ended December 31, 2002. All members of the audit committee are
+independent as that term is defined by the National Association of Securities
+Dealers' listing standards.
+The compensation committee, which currently is composed of Mr. Huff and Ms.
+Smith and Mr. Stephen J. DeGroat (who is not standing for re-election),
+administers the employee stock option plan and similar plans of Patterson-UTI
+and determines the annual compensation of the executive officers and directors
+of Patterson-UTI. The compensation committee met twice during the year ended
+December 31, 2002.
+COMPENSATION OF DIRECTORS
+Directors who are also employees of Patterson-UTI do not receive any
+additional compensation for serving as a director or as a member of a committee
+of the Board of Directors. All directors are reimbursed for reasonable
+out-of-pocket expenses incurred in connection with attendance at Board of
+Directors meetings and committee meetings.
+In light of the recent changes in laws, rules and regulations that
+increased or are expected to increase the duties and responsibilities of
+directors, effective February 4, 2003, the Board of Directors increased the
+compensation that each non-employee director receives for serving on the Board
+of Directors from $24,000 to $35,000 annually. In addition, on February 4, 2003,
+the Board of Directors approved annual cash compensation of $15,000 for the
+chair of each committee and $10,000 for each of the other members of a
+committee. Previously, committee members did not receive compensation in
+addition to the compensation received for serving on the Board of Directors.
+Patterson-UTI maintains a Non-Employee Director Stock Option Plan (the
+"Director Plan"). Under the Director Plan, each non-employee director receives
+options to purchase 15,000 shares upon becoming a director of Patterson-UTI, and
+options to purchase 7,500 shares are automatically granted on the last business
+day of each subsequent year in which such director serves on the Board of
+Patterson-UTI. See Proposal No. 3,
+4
+Amendment to Non-Employee Director Stock Option Plan, for proposed increases in
+the number of options granted to directors and for a description of the material
+features of the Director Plan.
+PROPOSAL NO. 2
+AMENDMENT TO 1997 LONG-TERM INCENTIVE PLAN
+At the Meeting, the stockholders of Patterson-UTI will be asked to vote on
+a proposal to approve an amendment to Patterson-UTI's Amended and Restated 1997
+Long-Term Incentive Plan (the "1997 Plan") to increase the number of shares of
+common stock authorized for issuance under the 1997 Plan. Approval of such
+amendment requires the affirmative vote of the holders of a majority of the
+shares of common stock that are present in person or by proxy and entitled to
+vote at the Meeting. The amendment to the 1997 Plan increases the aggregate
+number of shares of common stock available for grant under the 1997 Plan from
+6,000,000 to 8,250,000.
+The 1997 Plan was initially approved by the stockholders of UTI in August
+1997 and was assumed by Patterson-UTI as a part of its merger with UTI on May 8,
+2001. Options outstanding under the 1997 Plan at the time of the merger became
+options to acquire Patterson-UTI common stock.
+REASONS FOR THE AMENDMENT TO THE 1997 PLAN
+The Board of Directors believes that the ability to grant stock-based
+compensation to its employees is crucial to its continuing ability to attract
+and retain qualified employees. Historically, the Board of Directors has relied
+on stock option incentives as part of its compensation philosophy and structure
+to recruit and retain certain key employees.
+The Board of Directors believes that the 1997 Plan advances the best
+interests of Patterson-UTI and its stockholders by attracting, retaining and
+motivating key employees. The 1997 Plan provides for the grant of awards to
+certain key employees including executive officers and employee directors,
+thereby increasing the personal stake of such key employees in the continued
+success and growth of Patterson-UTI. At present, there are approximately 100 key
+employees eligible for grants under the 1997 Plan.
+As of March 14, 2003, only 532,536 shares of common stock remained
+available for grant under the 1997 Plan. The Board of Directors has determined
+that an increase in the number of shares available for grant under the 1997 Plan
+is necessary in order to continue to provide an adequate level of
+performance-based incentives to Patterson-UTI's executive management and other
+key employees and to continue the Board of Directors' ongoing philosophy of
+utilizing stock-based awards as part of Patterson-UTI's overall compensation
+structure. Therefore, the Board of Directors has approved an amendment to the
+1997 Plan to increase the number of shares available for grant under the 1997
+Plan by 2,250,000.
+MATERIAL FEATURES OF THE 1997 PLAN
+The material features of the 1997 Plan are as follows:
+- It is administered by the compensation committee of the Board of
+Directors.
+- Key employees, including officers and employee directors, are eligible
+for awards.
+- Although in addition to non-qualified stock options, the plan allows for
+awards of Incentive Stock Options ("ISOs"), tandem and independent stock
+appreciation rights, restricted stock and performance awards, to date no
+such awards have been granted.
+- The vesting schedule is set by the compensation committee, however, the
+options typically vest over three to five years.
+- Options typically have a term of 10 years.
+5
+- Unless otherwise stated in the grant thereof, options will vest upon a
+change in control as that term is defined in the 1997 Plan. Options
+granted to non-executive employees typically do not vest upon a change in
+control.
+- All options granted under the plan are granted with an exercise price
+equal to or greater than the fair market value of Patterson-UTI's common
+stock at the time the option is granted.
+- The Board of Directors, at any time, may amend the terms of the 1997
+Plan, subject to the stockholder approval requirements of the National
+Association of Securities Dealers listing requirements.
+FEDERAL INCOME TAX CONSEQUENCES UPON ISSUANCE AND EXERCISE OF OPTIONS
+Neither Patterson-UTI nor the optionee will recognize taxable income or
+deduction for federal income tax purposes upon the award of a stock option.
+The exercise of a non-ISO results in immediately taxable income to the
+optionee under the Internal Revenue Code in an amount equal to the difference
+between the option price and the market price on the date of exercise. This same
+amount is deductible by Patterson-UTI as compensation.
+The exercise of an ISO results in no tax consequences to Patterson-UTI.
+Although the difference between the option price and the market price on the
+date of exercise is not taxable to the optionee upon exercise, it is a "tax
+preference item," which, under certain circumstances, may give rise to an
+alternative minimum tax liability on the part of the optionee.
+The sale by an employee, within one year, of stock acquired by the exercise
+of an ISO will be deductible by Patterson-UTI as compensation in an amount equal
+to the difference between the option price and the lesser of the market price on
+the date of exercise or the net proceeds of the sale. The sale of stock acquired
+through the exercise of an ISO held for more than one year after exercise does
+not result in a deduction for Patterson-UTI.
+SUMMARY INFORMATION PERTAINING TO ALL STOCK OPTION AND RELATED PLANS OF
+PATTERSON-UTI
+The following information summarizes as of December 31, 2002 certain
+information regarding equity compensation to our employees, officers, directors,
+and other persons under our stock option plans. For a more detailed description
+of the stock option plans, see Note 11 of Patterson-UTI's audited financial
+statements contained in its Annual Report on Form 10-K for the year ended
+December 31, 2002.
+EQUITY COMPENSATION PLAN INFORMATION
+---------------------------------------------------------
+NUMBER OF NUMBER OF SECURITIES
+SECURITIES TO WEIGHTED- REMAINING AVAILABLE
+BE ISSUED UPON AVERAGE EXERCISE FOR FUTURE ISSUANCE
+EXERCISE OF PRICE OF UNDER EQUITY
+OUTSTANDING OUTSTANDING COMPENSATION PLANS
+OPTIONS, OPTIONS, (EXCLUDING SECURITIES
+WARRANTS AND WARRANTS AND REFLECTED IN
+PLAN CATEGORY RIGHTS RIGHTS COLUMN(A))
+------------- -------------- ---------------- ---------------------
+(A) (B) (C)
+Equity compensation plans approved by security
+holders...................................... 5,157,364 $17.31 877,536
+Equity compensation plans not approved by
+security holders(1).......................... 981,524 $19.15 8,733
+--------- ------ -------
+Total..................................... 6,138,888 $17.61 886,269
+========= ====== =======
+---------------
+(1) The Patterson-UTI Energy, Inc. 2001 Long-Term Incentive Plan was approved by
+the Company's Board of Directors in July 2001. The terms of the Plan provide
+for grants of stock options to eligible employees other than officers and
+directors of the Company. The total number of stock options that could be
+granted under the Plan was 1,000,000. No Incentive Stock Options may be
+awarded under the Plan. All options are granted with an exercise price equal
+to or greater than the fair market value of the Company's
+6
+common stock at the time of grant. The vesting schedule and term are set by
+the compensation committee of the Board of Directors.
+Also in July 2001, the Company's Board of Directors approved option grants,
+not included in any of the Company's stock option plans, for two
+non-employee directors, each covering options to purchase 12,000 shares of
+the Company's common stock at an exercise price greater than the fair market
+value of the Company's common stock on the grant date. The options vested in
+November 2001 and expire in November 2005.
+ADDITIONAL INFORMATION REGARDING THE 1997 PLAN
+As of March 21, 2003, the closing price of Patterson-UTI's common stock on
+the NASDAQ National Market was $32.17 per share. Except for receipt of the
+option exercise price when and if options are exercised, Patterson-UTI receives
+no consideration in connection with the options under the 1997 Plan.
+Patterson-UTI has not determined the number of options under the 1997 Plan that
+will be granted in the future to eligible directors and nominees, executive
+officers, officers as a group, or non-officer employees as a group as that
+determination is subject to the discretion of the compensation committee of the
+Board of Directors.
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
+AMENDMENT TO THE 1997 PLAN. Approval of the amendment requires the affirmative
+vote of the holders of a majority of the shares of common stock present in
+person or by proxy and entitled to vote at the Meeting. If you do not vote
+against or abstain from voting on the amendment to the 1997 Plan, your proxy
+will be voted "FOR" approval of the amendment to the 1997 Plan. Abstentions will
+be counted as shares entitled to vote on the proposal and will have the same
+effect as a vote "AGAINST" the proposal. A broker non-vote will be counted for
+purposes of establishing a quorum, but will not be treated as a share entitled
+to vote on the proposal. This will have the effect of reducing the absolute
+number of shares necessary to approve the proposal.
+PROPOSAL NO. 3
+AMENDMENT TO NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
+At the Meeting, the stockholders of Patterson-UTI will be asked to vote on
+a proposal to approve an amendment to Patterson-UTI's Amended and Restated
+Non-Employee Director Stock Option Plan (the "Director Plan") to increase the
+number of options granted to new directors from 15,000 to 20,000 and to increase
+the number of options granted to directors annually from 7,500 to 10,000.
+Approval of such amendment requires the affirmative vote of the holders of a
+majority of the shares of common stock that are present in person or by proxy
+and entitled to vote at the Meeting.
+The Director Plan was initially approved by the stockholders of UTI in
+August 1996 and was assumed by Patterson-UTI as a part of its merger with UTI on
+May 8, 2001. Options outstanding under the Director Plan at the time of the
+merger became options to acquire Patterson-UTI common stock.
+REASONS FOR THE AMENDMENT TO THE DIRECTOR PLAN
+The Board of Directors believes that, in light of the increased demands on
+directors of public companies, the number of options granted to directors of
+Patterson-UTI should be increased to compensate for such increased demands.
+Therefore, the Board of Directors approved the increases in the number of
+options granted to new directors and the number of options granted to directors
+annually, and directed that such amendment be submitted to the stockholders of
+Patterson-UTI for approval.
+7
+MATERIAL FEATURES OF THE DIRECTOR PLAN
+The material features of the Director Plan are as follows:
+- Currently, each non-employee director receives options to purchase 15,000
+shares upon becoming a director of Patterson-UTI, and options to purchase
+7,500 shares are automatically granted on the last business day of each
+subsequent year in which such director serves on the Board of
+Patterson-UTI.
+- The exercise price of the options is the fair market value of
+Patterson-UTI's common stock on the date of grant.
+- All options vest on the first anniversary of the option grant.
+- All options expire five years from the date of grant.
+FEDERAL INCOME TAX CONSEQUENCES
+Neither Patterson-UTI nor the optionee will recognize taxable income or
+deduction for federal income tax purposes upon the award of a stock option. The
+exercise of an option results in immediately taxable income to the optionee
+under the Internal Revenue Code in an amount equal to the difference between the
+option price and the market price on the date of exercise. This same amount is
+deductible by Patterson-UTI as compensation.
+ADDITIONAL INFORMATION REGARDING THE DIRECTOR PLAN
+As of March 21, 2003, the closing price of Patterson-UTI's common stock on
+the NASDAQ National Market was $32.17 per share. Except for receipt of the
+option exercise price when and if options are exercised, Patterson-UTI receives
+no consideration in connection with the options under the Director Plan.
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
+AMENDMENT TO THE DIRECTOR PLAN. Approval of the amendment requires the
+affirmative vote of the holders of a majority of the shares of common stock
+present in person or by proxy and entitled to vote at the Meeting. If you do not
+vote against or abstain from voting on the amendment to the Director Plan, your
+proxy will be voted "FOR" approval of the amendment to the Director Plan.
+Abstentions will be counted as shares entitled to vote on the proposal and will
+have the same effect as a vote "AGAINST" the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be treated as a
+share entitled to vote on the proposal. This will have the effect of reducing
+the absolute number of shares necessary to approve the proposal.
+EXECUTIVE OFFICERS
+Set forth below is the name, age and position followed by a brief
+description of the business experience during at least the past five years for
+each of the executive officers of Patterson-UTI who is not also a current
+director.
+NAME AGE POSITION
+---- --- --------
+Jonathan D. Nelson.................... 34 Vice President, Chief Financial
+Officer, Secretary and Treasurer
+John E. Vollmer III................... 47 Senior Vice President -- Corporate
+Development
+Jonathan D. Nelson -- Mr. Nelson has served as Vice President, Chief
+Financial Officer, Secretary and Treasurer of Patterson-UTI since July 1999. Mr.
+Nelson served as Controller of Patterson-UTI from May 1996 until July 1999.
+Prior to his employment with Patterson-UTI, Mr. Nelson was a Senior Associate in
+public accounting, of which approximately four years were spent with
+PricewaterhouseCoopers LLP. Mr. Nelson received a Bachelor of Science degree in
+Accounting in 1991 from Texas Tech University, Lubbock, Texas.
+8
+John E. Vollmer III -- Mr. Vollmer has served as Senior Vice
+President -- Corporate Development since May 8, 2001. Mr. Vollmer served as
+Senior Vice President, Chief Financial Officer, Secretary and Treasurer of UTI
+from 1998 to May 8, 2001. Mr. Vollmer was a financial consultant from October
+1997 until joining UTI in 1998. From 1992 until October 1997, Mr. Vollmer served
+in a variety of capacities at Blockbuster Entertainment, including Senior Vice
+President-Finance and Chief Financial Officer of Blockbuster Entertainment's
+Music Division. Mr. Vollmer holds a Bachelor of Arts in Accounting from Michigan
+State University.
+SUMMARY COMPENSATION TABLE
+The following table sets forth information concerning compensation for
+2002, 2001 and 2000 earned by or paid to the executive officers of Patterson-UTI
+listed below:
+- Patterson-UTI's Chief Executive Officer; and
+- Patterson-UTI's four most highly compensated other executive officers
+whose total annual salary and bonus exceeded $100,000 in 2002.
+ANNUAL COMPENSATION
+------------------------------------------ SECURITIES
+OTHER ANNUAL UNDERLYING ALL OTHER
+COMPENSATION COMPENSATION(1) OPTIONS COMPENSATION(3)
+NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) GRANTED(#) ($)
+--------------------------- ---- --------- ------------ --------------- ---------- ---------------
+Mark S. Siegel(2)..................... 2002 180,833 140,000 -- 400,000 --
+Chairman of the Board 2001 160,577 300,000 -- 250,000 --
+2000 121,254 -- -- -- --
+Cloyce A. Talbott..................... 2002 316,458 140,000 -- 400,000 6,000
+Chief Executive Officer 2001 317,500 375,000 -- 250,000 5,250
+2000 290,900 75,000 -- -- 5,250
+A. Glenn Patterson.................... 2002 316,458 140,000 -- 400,000 6,000
+President and Chief Operating
+Officer 2001 317,500 375,000 -- 250,000 5,250
+2000 290,900 75,000 -- -- 5,250
+Jonathan D. Nelson.................... 2002 144,667 70,000 -- 200,000 2,438
+Vice President, Chief Financial
+Officer, 2001 157,833 150,000 -- 125,000 5,250
+Secretary and Treasurer 2000 125,000 35,000 -- -- 5,100
+John E. Vollmer III (2)............... 2002 190,779 70,000 -- 200,000 5,500
+Senior Vice President -- Corporate 2001 204,558 150,000 -- 125,000 1,574
+Development 2000 180,077 35,000 -- -- 3,762
+---------------
+(1) The aggregate amounts of perquisites and other personal benefits, securities
+or property received by each of the executive officers does not exceed the
+lesser of $50,000 or ten percent of that executive officer's combined annual
+salary and bonus during the applicable year.
+(2) These individuals were previously employed by UTI, which merged with and
+into Patterson-UTI on May 8, 2001. Amounts presented herein include
+compensation received from UTI prior to the merger.
+(3) Amounts set forth for 2002, 2001 and 2000 reflect Patterson-UTI's (or UTI's,
+as applicable) contributions or other allocations to defined contribution
+plans.
+9
+The following table sets forth information regarding grants of stock
+options to the executive officers listed in the Summary Compensation Table
+during 2002:
+OPTIONS GRANTED DURING FISCAL YEAR 2002
+NUMBER OF % OF TOTAL
+SECURITIES OPTIONS EXERCISE
+UNDERLYING GRANTED TO OR BASE
+OPTIONS EMPLOYEES IN PRICE EXPIRATION GRANT
+NAME GRANTED FISCAL YEAR ($/SH) DATE DATE VALUE(2)
+---- ---------- ------------ -------- ---------- -------------
+Mark S. Siegel........................... 400,000(1) 18.95% $26.39 7/17/12 $5,943,160
+Cloyce A. Talbott........................ 400,000(1) 18.95% $26.39 7/17/12 $5,943,160
+A. Glenn Patterson....................... 400,000(1) 18.95% $26.39 7/17/12 $5,943,160
+Jonathan D. Nelson....................... 200,000(1) 9.47% $26.39 7/17/12 $2,971,580
+John E. Vollmer III...................... 200,000(1) 9.47% $26.39 7/17/12 $2,971,580
+---------------
+(1) These options were granted pursuant to the terms and conditions of the 1997
+Plan. These options vest over a three (3) year period as follows: 33.33% on
+July 18, 2003, and then in equal monthly installments through July 18, 2005.
+(2) The value of the options were estimated using the Black-Scholes option
+valuation model. The following assumptions were used in the calculation: no
+expected dividend, risk-free interest rate of 3.77%, volatility of 63.02%
+and an expected term of 5 years. No discount was considered for the
+non-transferability or the risk of forfeiture of the options. The actual
+value, if any, of any option will depend on the amount, if any, by which the
+stock price exceeds the exercise price on the date the option is exercised.
+Thus, this valuation may not be a reliable indication as to value and there
+is no assurance the value realized will be at or near the value estimated by
+the Black-Scholes model.
+The following table sets forth information concerning stock options
+exercised in 2002 and stock options unexercised at December 31, 2002 for the
+executive officers listed in the Summary Compensation Table:
+AGGREGATED OPTION EXERCISES IN 2002
+AND VALUE TABLE AT DECEMBER 31, 2002
+NUMBER OF SECURITIES
+UNDERLYING VALUE OF UNEXERCISED
+UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
+SHARES VALUE DECEMBER 31, 2002(2) AT DECEMBER 31, 2002(3)
+ACQUIRED REALIZED --------------------------- ---------------------------
+NAME ON EXERCISE (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
+---- ----------- ----------- ----------- ------------- ----------- -------------
+Mark S. Siegel....... 1,100,000 $25,237,346 250,833 579,167 $5,561,804 $4,077,671
+Cloyce A. Talbott.... -- $ -- 170,833 579,167 $3,043,829 $4,077,671
+A. Glenn Patterson... -- $ -- 245,833 579,167 $3,825,329 $4,077,671
+Jonathan D. Nelson... -- $ -- 79,012 289,583 $1,287,932 $2,038,829
+John E. Vollmer
+III................ -- $ -- 372,900 280,500 $8,922,944 $1,887,025
+---------------
+(1) Calculated by subtracting actual option price from market price at
+respective dates of exercise and multiplying the difference by the number of
+shares in each category.
+(2) The total number of unexercised options held as of December 31, 2002,
+separated between those options that were exercisable and those options that
+were not exercisable.
+(3) Calculated by subtracting the actual option exercise price from the market
+price at December 31, 2002 ($30.17 per share) and multiplying the difference
+by the number of shares in each category.
+10
+EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
+Messrs. Siegel, Berns and Vollmer have employment arrangements which
+entitle them to one year's salary upon termination of employment with
+Patterson-UTI.
+All unvested stock options granted to executive officers under the 1997
+Plan vest upon a change in control as defined in the plan.
+COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
+Curtis W. Huff, Nadine C. Smith and Stephen J. DeGroat (who is not standing
+for re-election) serve as the members of the compensation committee. Messrs.
+Huff and DeGroat, and Ms. Smith have not served as officers or employees of
+Patterson-UTI or any of its subsidiaries.
+CERTAIN TRANSACTIONS
+In connection with the acquisition by REMY Capital Partners III, L.P.
+("REMY Capital") of an ownership interest in UTI in March 1995, REMY Capital
+succeeded to a registration rights agreement with UTI. As the
+successor-in-interest to UTI, Patterson-UTI assumed this registration rights
+agreement pursuant to which REMY Capital has the right to require Patterson-UTI
+to use its reasonable efforts to register shares held by REMY Capital under the
+Securities Act. In the event that such rights are exercised in connection with a
+primary offering proposed by Patterson-UTI (or a secondary offering with which
+Patterson-UTI agrees to participate), REMY Capital would bear its pro rata share
+of the costs of the offering, other than legal, accounting and printing costs,
+all of which Patterson-UTI shall bear. In the event that REMY Capital elected to
+exercise such rights other than in connection with an offering in which
+Patterson-UTI participates, REMY Capital would bear all costs of the offering.
+These rights continue so long as REMY Capital continues to own the common stock
+that it acquired.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is President and sole
+stockholder of REMY Investors, which is the general partner of REMY Capital. Mr.
+Berns, a director and employee of Patterson-UTI, is an executive of REMY
+Investors.
+During 2002, Patterson-UTI paid approximately $279,000 to TMP Truck and
+Trailer LP, an entity owned by Thomas M. Patterson, a son of A. Glenn Patterson,
+the President and Chief Operating Officer of Patterson-UTI, for certain
+equipment and metal fabrication services. He continues to be a vendor to
+Patterson-UTI in 2003.
+Certain of Patterson-UTI's affiliated persons have participated, either
+individually or through entities they control, in oil and gas prospects or
+properties in which Patterson-UTI has an interest. Affiliated persons are
+directors, executive officers and key employees of Patterson-UTI and their
+family members. These participations, which have been on a working interest
+basis, have been in prospects or properties originated or acquired by
+Patterson-UTI. At December 31, 2002, affiliated persons were working interest
+owners in 215 of the 256 wells then being operated by Patterson-UTI. Sales of
+working interests are made to reduce Patterson-UTI's economic risk in the
+properties.
+11
+The following table sets forth production revenues received and joint
+production costs paid by each of the affiliated persons during 2002 for all
+wells operated by Patterson-UTI in which they have working interests. These
+numbers do not necessarily represent their profits or losses from these
+interests because the joint interest billings do not include the parties'
+related drilling and leasehold acquisition costs incurred prior to January 1,
+2002.
+YEAR ENDED
+DECEMBER 31, 2002
+-------------------------
+PRODUCTION JOINT
+REVENUES INTEREST
+NAME RECEIVED(1) BILLINGS(2)
+---- ----------- -----------
+Cloyce A. Talbott........................................... $ 178,277 $ 81,371
+Anita Talbott(3)............................................ 91,268 52,359
+Jana Talbott, Executrix to the Estate of Steve Talbott(3)... 11,471 6,097
+Stan Talbott(3)............................................. 25,922 14,084
+John Evan Talbott Trust(3).................................. 2,298 1,024
+Lisa Beck and Stacy Talbott(3).............................. 542,625 185,207
+SSI Oil & Gas, Inc.(4)...................................... 271,808 182,538
+IDC Enterprises, Ltd.(5).................................... 5,559,548 4,751,785
+SSSL, Ltd.(6)(8)............................................ -- 13,380
+A. Glenn Patterson.......................................... 127,160 47,246
+Glenn Patterson Family Limited Partnership (7)(8)........... -- 13,365
+Robert Patterson(7)......................................... 8,893 2,684
+Thomas M. Patterson(7)...................................... 8,893 2,684
+Jonathan D. Nelson.......................................... 60,571 151,649
+Stephen J. DeGroat.......................................... 16,390 5,440
+---------- ----------
+Total..................................................... $6,905,124 $5,510,913
+========== ==========
+---------------
+(1) Revenues received for production of oil and natural gas, net of state
+severance taxes.
+(2) Includes leasehold costs, tangible equipment costs, intangible drilling
+costs, and lease operating expense billed during that period. All joint
+interest billings have been paid on a timely basis.
+(3) Anita Talbott is the wife of Cloyce A. Talbott. Stan Talbott, Lisa Beck, and
+Stacy Talbott are Mr. Talbott's adult children. Steve Talbott is the
+deceased son of Mr. Talbott. John Evan Talbott is Mr. Talbott's grandson.
+(4) SSI Oil & Gas, Inc. is beneficially owned 50% by Cloyce A. Talbott and
+directly owned 50% by A. Glenn Patterson.
+(5) IDC Enterprises, Ltd. is 50% owned by Cloyce A. Talbott and 50% owned by A.
+Glenn Patterson.
+(6) SSSL, Ltd. is a limited partnership in which children and grandchildren of
+Mr. Talbott are beneficiaries and Mr. Talbott is the general partner.
+(7) Robert and Thomas M. Patterson are A. Glenn Patterson's adult children. The
+Glenn Patterson Family Limited Partnership is a partnership in which each of
+Mr. Patterson's children shares equally and Mr. Patterson is the manager.
+(8) Revenues included in IDC Enterprises, Ltd. revenues.
+COMPENSATION COMMITTEE REPORT
+The compensation committee sets and administers the policies that govern
+the annual compensation and long-term compensation of executive officers and
+directors of Patterson-UTI. The compensation committee consisted of Messrs. Huff
+and DeGroat, and Ms. Smith, none of whom were employees of Patterson-UTI. The
+12
+compensation committee makes all decisions concerning compensation of executive
+officers, determines the total amount of bonuses to be paid annually and grants
+all awards of stock options under Patterson-UTI's incentive stock option plans.
+The compensation committee also reviews and oversees bonus and incentive
+compensation decisions for the company as a whole.
+The compensation committee's policy is to provide to the executives
+competitive compensation packages that will permit Patterson-UTI to attract and
+retain highly qualified individuals and to motivate and reward Patterson-UTI's
+executives for performance that benefits the company and its shareholders.
+Historically, Patterson-UTI's executive compensation package consisted of a
+combination of base salary, cash bonus awards and long-term incentive
+opportunities in the form of stock options and a 401(k) plan. The compensation
+committee has recently engaged an outside consultant to assist it in the design
+of an executive compensation package for Patterson-UTI that would be both
+competitive in the industry and focused on establishing incentive compensation
+tied to financial performance and operational results. That program is expected
+to be put in place in the second quarter of 2003 and to have cash and stock
+based incentive compensation components. The compensation committee is also
+reviewing the general process and manner in which compensation matters are
+considered, as well as director compensation and other matters involving
+corporate compensation.
+Executive salaries are reviewed by the compensation committee on an annual
+basis and are set for individual executive officers based on subjective
+evaluations of each individual's specific performance, Patterson-UTI's financial
+results and position, Patterson-UTI's performance as compared to similar
+companies and a comparison to salary ranges for executives of other companies in
+the oil and natural gas industry with characteristics similar to those of
+Patterson-UTI. The process applied by the compensation committee is intended to
+allow the committee to set salaries in a manner that is both competitive and
+reasonable within the industry.
+Cash bonuses have historically been considered on an annual basis by the
+compensation committee using a variety of objective and subjective criteria,
+including (i) the relative and overall financial results of Patterson-UTI from
+an earnings and cash flow generation standpoint, (ii) the operational results
+(including cash margin per rig and rig utilization) of Patterson-UTI as compared
+to its competition, (iii) the implementation of corporate objectives and
+acquisition and integration strategies and (iv) the performance of the stock
+against its peers and the industry. The compensation committee has not in the
+past applied a specific formula to evaluate management performance on the theory
+that it is difficult to define an appropriate formula that can appropriately
+take into account the extreme volatility of the contract drilling industry and
+the individual contributions of executive management in achieving corporate
+objectives.
+The compensation of the Chief Executive Officer of Patterson-UTI is
+determined in the same manner as the compensation for other executive officers
+as described above. As a result, the compensation of the Chief Executive Officer
+is largely dependent upon the relative and overall financial and operational
+performance of Patterson-UTI as well as a comparison to compensation being paid
+by other comparable companies to their chief executive officers. Mr. Talbott's
+base annual salary was $350,000 in 2002. Mr. Talbott was paid a $140,000 bonus
+for 2002 in recognition of the company's ability to generate strong cash flow,
+maintain market share and achieve an acceptable cash margin per operating rig in
+a difficult market and deliver shareholder value during the year.
+In January 2002, Mr. Talbott, together with the other executive officers of
+Patterson-UTI, accepted a voluntary salary reduction consistent with other
+management and field employees of 10% in an effort to reduce Patterson-UTI's
+costs in response to the weakened industry conditions that the company was
+facing at the beginning of the year. Mr. Talbott's base annual salary of
+$350,000 was reinstated in February 2003 after field activity levels had
+increased significantly.
+It is the general policy of the compensation committee to review
+stock-based compensation of Patterson-UTI on at least an annual basis. Awards of
+stock-based compensation reflect the Board's and compensation committee's desire
+to provide Patterson-UTI's employees who have substantial responsibility for
+Patterson-UTI's management and growth with additional incentives by increasing
+their proprietary interest in the success of Patterson-UTI. The decision whether
+to grant stock options to any particular employee is based
+13
+upon a variety of factors, including position, performance, current share and
+stock option ownership and the need to insure the continued employment of the
+employee with Patterson-UTI.
+In July 2002, the compensation committee with the assistance of independent
+advisors engaged in a review of the stock compensation of its executives and
+employees. As part of this review, the compensation committee reviewed the
+historical stock option and other stock based grants that had been made to the
+executive officers of Patterson-UTI against other comparable companies in the
+industry. The compensation committee also noted that the option grant patterns
+of Patterson-UTI had been disrupted by the merger of Patterson and UTI and not
+fully harmonized. Based on its review, the compensation committee concluded that
+the employee stock option grants at Patterson-UTI had historically been
+substantially below the industry average and not competitive with other
+comparable companies. As a result, grants of options to purchase a total of
+1,800,000 shares of common stock were made to six members of Patterson-UTI's
+executive management in 2002. Of these options, options to purchase 400,000
+shares were granted to each of Messrs. Talbott, Patterson and Siegel and options
+to purchase 200,000 shares were granted to each of Messrs. Nelson, Vollmer and
+Berns. To provide the appropriate long-term incentives, the options are subject
+to three year time vesting.
+In considering compensation decisions for the executive management of
+Patterson-UTI, the compensation committee and the Board of Directors of
+Patterson-UTI routinely considers the potential effect of Section 162(m) of the
+Code. Section 162(m) imposes a limitation on deductions over $1 million that can
+be taken by a publicly held corporation for compensation paid to certain of its
+executive officers. Stock option grants pursuant to Patterson-UTI's employee
+benefit plans may be exempt from the deduction limit if certain requirements are
+met.
+COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
+Curtis W. Huff, Chairman
+Stephen J. DeGroat
+Nadine C. Smith
+14
+PERFORMANCE GRAPH
+The following graph compares the cumulative stockholder return on the
+common stock of Patterson-UTI, for the period from December 31, 1997 through
+December 31, 2002, with the cumulative total return of the Standard and Poors
+500 Stock Index, the Oilfield Service Index and a Patterson-UTI determined peer
+group. Patterson-UTI's peer group consists of Grey Wolf, Inc., Helmerich &
+Payne, Inc., Key Energy Services, Inc., Nabors Industries, Inc., Pioneer
+Drilling Co., Precision Drilling Corp., TMBR/Sharp Drilling Inc. and Unit Corp.
+All of the companies in Patterson-UTI's peer group are providers of land-based
+drilling services. The graph assumes investment of $100 on December 31, 1997 and
+reinvestment of all dividends.
+COMPARISON OF CUMULATIVE TOTAL RETURNS*
+(PERFORMANCE GRAPH)
+* TOTAL RETURN BASED ON $100 INITIAL INVESTMENT & REINVESTMENT OF ALL DIVIDENDS
+--------------------------------------------------------------------------------
+Basis
+Description 1997 1998 1999 2000 2001 2002
+--------------------------------------------------------------------------------
+Patterson-UTI
+Energy, Inc. 100.00 21.00 67.21 192.57 120.50 155.97
+Oilfield Service
+Index (OSX) 100.00 51.42 68.98 95.20 67.03 62.36
+Peer Group Index 100.00 41.77 80.91 153.00 97.58 103.16
+S&P 500 Index 100.00 128.58 155.64 141.46 124.65 97.10
+The foregoing graph is based on historical data and is not necessarily
+indicative of future performance. This graph shall not be deemed to be
+"soliciting material" or to be "filed" with the Securities and Exchange
+Commission or subject to the Regulations of 14A or 14C under the Exchange Act or
+to the liabilities of Section 18 under such act.
+15
+SECURITY OWNERSHIP OF PRINCIPAL
+STOCKHOLDERS AND MANAGEMENT
+The following table sets forth, as of March 21, 2003, the stock ownership
+of the executive officers, directors and Board nominees individually, all
+directors, Board nominees and executive officers as a group and each person
+known by Patterson-UTI to be the beneficial owner of more than 5% of common
+stock.
+AMOUNT AND
+NATURE OF
+BENEFICIAL PERCENT
+NAME OF BENEFICIAL OWNER OWNERSHIP OF CLASS
+------------------------ ------------- --------
+Other Beneficial Owners:
+REMY Capital Partners III, L.P. .......................... 4,729,524(1) 5.9%
+1801 Century Park East, Suite 1111
+Los Angeles, CA 90067
+REMY Investors & Consultants, Incorporated................ 4,729,524(1) 5.9%
+1801 Century Park East, Suite 1111
+Los Angeles, CA 90067
+Directors, Board nominees and Executive Officers Listed in
+Summary Compensation Table:
+Mark S. Siegel............................................ 5,331,191(1) 6.6%
+Cloyce A. Talbott......................................... 610,233(2) *
+A. Glenn Patterson........................................ 440,907(2) *
+Kenneth N. Berns.......................................... 175,833(3) *
+Curtis W. Huff............................................ 30,000(4) *
+Terry H. Hunt............................................. 4,000 *
+Nadine C. Smith........................................... 41,500(4) *
+Robert C. Gist............................................ 38,886(4) *
+Stephen J. DeGroat........................................ 31,600(4) *
+Kenneth R. Peak........................................... 27,500(4) *
+Jonathan D. Nelson........................................ 139,333(5) *
+John E. Vollmer III....................................... 379,900(5) *
+----------
+(All directors, Board nominees and executive officers as a
+group -- 12 persons)................................... 7,250,883(6) 9.0%
+==========
+---------------
+* indicates less than 1.0%
+(1) The common stock beneficially owned by REMY Investors, which is the general
+partner of REMY Capital, includes the 4,729,524 shares of common stock owned
+by REMY Capital. The common stock beneficially owned by Mr. Siegel, who is
+the President and sole stockholder of REMY Investors, includes the 4,729,524
+shares of common stock beneficially owned by REMY Investors as well as stock
+options held by Mr. Siegel, which are presently exercisable or become
+exercisable within sixty days, to purchase 271,667 shares of common stock,
+but does not include 558,333 shares underlying stock options held by Mr.
+Siegel, which options are not presently exercisable and will not become
+exercisable within sixty days.
+(2) Includes shares underlying stock options held by Mr. Talbott, which are
+presently exercisable or become exercisable within sixty days, to purchase
+191,667 shares and stock options held by Mr. Patterson, which are presently
+exercisable or become exercisable within sixty days, to purchase 266,667
+shares. Does not include shares underlying stock options held by Messrs.
+Talbott and Patterson to purchase 558,333 shares each that are not presently
+exercisable and will not become exercisable within sixty days.
+(3) Includes stock options owned by Mr. Berns, which are presently exercisable
+or become exercisable within sixty days, to purchase 145,833 shares. Does
+not include 279,167 shares underlying options that are not
+16
+presently exercisable and will not become exercisable within sixty days and
+does not include shares of common stock beneficially owned by REMY Investors
+by whom Mr. Berns is employed. Mr. Berns disclaims beneficial ownership of
+such shares beneficially owned by REMY Investors.
+(4) Includes presently exercisable stock options held by Mr. Huff to purchase
+30,000 shares; by Mr. Gist to purchase 19,500 shares; by Messrs. DeGroat and
+Peak to purchase 27,500 shares each; and by Ms. Smith to purchase 22,500
+shares. Does not include 7,500 shares underlying stock options held by
+Messrs. Huff, Gist, DeGroat, Peak and Ms. Smith that are not presently
+exercisable and will not become exercisable within sixty days.
+(5) Includes stock options owned by Mr. Nelson, which are presently exercisable
+or become exercisable within sixty days, to purchase 89,428 shares and stock
+options owned by Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to purchase 379,900 shares. Does not include
+279,167 shares underlying stock options held by Mr. Nelson and 273,500
+shares underlying stock options held by Mr. Vollmer that are not presently
+exercisable and will not become exercisable within sixty days.
+(6) Includes options, which are presently exercisable or become exercisable
+within sixty days, to purchase 1,472,162 shares of common stock. Does not
+include options to purchase 2,544,333 shares owned by such individuals that
+are not exercisable within sixty days.
+Except as stated herein, each stockholder has sole voting and investment power
+with respect to common stock included in the above table. There are no
+arrangements known to Patterson-UTI which may result in a change in control.
+AUDIT COMMITTEE REPORT AND FEES PAID TO
+INDEPENDENT ACCOUNTANTS
+REPORT OF THE AUDIT COMMITTEE
+The audit committee has discussed with the independent auditors the matters
+required to be discussed by Statement on Auditing Standards No. 61,
+Communication with Audit Committees, as amended, by the Auditing Standards Board
+of the American Institute of Certified Public Accountants.
+The audit committee has received and reviewed the written disclosures and
+the letter from the independent auditors required by Independence Standard No.
+1, Independence Discussions with Audit Committees, as amended, by the
+Independence Standards Board, and has discussed with the auditors the auditors'
+independence.
+The charter of the audit committee specifies that the purpose of the
+committee is to assist the Board of Directors in its oversight of:
+- the integrity of Patterson-UTI's financial statements;
+- the adequacy of Patterson-UTI's system of internal controls;
+- Patterson-UTI's compliance with legal and regulatory requirements;
+- the qualifications and independence of Patterson-UTI's independent
+auditors; and
+- the performance of Patterson-UTI's independent auditors and of
+Patterson-UTI's internal audit function.
+17
+In carrying out these responsibilities, the audit committee, among other
+things:
+- monitors preparation of quarterly and annual financial reports by
+Patterson-UTI's management;
+- supervises the relationship between Patterson-UTI and its independent
+auditors, including making decisions with respect to their appointment or
+removal, reviewing the scope of their audit services, approving
+significant non-audit services, and confirming the independence of the
+independent auditors; and
+- overseeing management's implementation and maintenance of effective
+systems of internal and disclosure controls, including review of
+Patterson-UTI's policies relating to legal and regulatory compliance,
+ethics and conflicts of interests and review of Patterson-UTI's internal
+auditing program.
+The committee met five times during fiscal 2002. The committee schedules
+its meetings with a view to ensuring that it devotes appropriate attention to
+all of its tasks. The committee's meetings include, whenever appropriate,
+executive sessions with the independent auditors without the presence of
+Patterson-UTI's management.
+As part of its oversight of the financial statements, the committee reviews
+and discusses with both management and the independent auditors all annual
+financial statements and quarterly operating results prior to their issuance.
+During fiscal 2002, management advised the committee that each set of financial
+statements reviewed had been prepared in accordance with generally accepted
+accounting principles, and reviewed significant accounting and disclosure issues
+with the committee.
+In addition, the committee reviewed major initiatives and programs aimed at
+strengthening the effectiveness of Patterson-UTI's internal control structure.
+As part of this process, the committee continued to monitor the scope and
+adequacy of the internal auditing program, reviewing staffing levels and steps
+taken to implement recommended improvements in internal procedures and controls.
+Taking all of these reviews and discussions into account, the undersigned
+committee members recommended to the Board of Directors that the Board approve
+the inclusion of the Patterson-UTI's audited financial statements in the Annual
+Report on Form 10-K for the fiscal year ended December 31, 2002.
+AUDIT COMMITTEE OF THE BOARD OF DIRECTORS:
+Kenneth R. Peak, Chairman
+Robert C. Gist
+Nadine C. Smith
+AUDIT FEES; FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES; AND
+ALL OTHER FEES
+During 2002, Patterson-UTI paid to PricewaterhouseCoopers LLP $404,000 in
+fees relating to the audit of its 2002 financial statements and reviews of its
+Form 10-Qs for fiscal year 2002, no fees for financial information systems
+design and implementation, and $383,000 in non-audit related fees.
+Fees paid during the year for non-audit related services included the
+following:
+- $285,000 for Federal, state and foreign income tax filings compliance and
+related matters, and
+- $98,000 for other services.
+The audit committee considered whether the provision of non-audit services
+is compatible with maintaining the independence of Patterson-UTI's outside
+auditors PricewaterhouseCoopers LLP.
+PROPOSAL NO. 4
+RATIFICATION OF INDEPENDENT ACCOUNTANTS
+The Board of Directors voted to engage PricewaterhouseCoopers LLP as
+independent accountants to audit the financial statements of Patterson-UTI for
+the fiscal year ending December 31, 2003, and directed that such engagement be
+submitted to the stockholders of Patterson-UTI for ratification. In recommending
+18
+ratification by the stockholders of such engagement, the Board of Directors is
+acting upon the recommendation of the audit committee, which has satisfied
+itself as to the firm's professional competence and standing. Although
+ratification by stockholders of the engagement of PricewaterhouseCoopers LLP is
+not required by Delaware corporate law or Patterson-UTI's Restated Certificate
+of Incorporation or bylaws, management feels a decision of this nature should be
+made with the consideration of Patterson-UTI's stockholders. If stockholder
+ratification is not received, management will reconsider the engagement.
+It is expected that one or more representatives of PricewaterhouseCoopers
+LLP will be present at the Meeting and will be given the opportunity to make a
+statement if they so desire. It also is expected that the representatives will
+be available to respond to appropriate questions from the stockholders.
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF
+PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS. Ratification of the
+selection of PricewaterhouseCoopers LLP requires the affirmative vote of the
+holders of a majority of the shares of common stock present in person or by
+proxy, and entitled to vote at the Meeting. If you do not vote against or
+abstain from voting on the ratification of the selection of
+PricewaterhouseCoopers LLP, your proxy will be voted "FOR" such ratification.
+Abstentions will be counted as shares entitled to vote on the proposal and will
+have the same effect as a vote "AGAINST" the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be treated as a
+share entitled to vote on the proposal. This will have the effect of reducing
+the absolute number of shares necessary to approve the proposal.
+OTHER MATTERS
+SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
+Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
+Patterson-UTI's officers and directors, and persons who own more than 10% of a
+registered class of Patterson-UTI's equity securities, to file reports of
+ownership and changes in ownership with the SEC. Each of these persons is
+required by SEC regulation to furnish Patterson-UTI with copies of Section 16(a)
+filings.
+Based solely on its review of copies of such forms received by it,
+Patterson-UTI believes that, during the year ended December 31, 2002, its
+officers, directors, and greater than 10% beneficial owners other than Messrs.
+Huff, Gist, DeGroat and Peak, and Ms. Smith complied with all applicable filing
+requirements. Each of the aforementioned non-employee directors inadvertently
+reported a year-end, automatic grant of options on a Form 5 instead of a Form 4.
+OTHER BUSINESS
+As of the date of this Proxy Statement, management of Patterson-UTI was not
+aware of any matter to be presented at the Meeting other than as set forth
+herein. If any other matters are properly brought before the Meeting, however,
+the shares represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting them.
+DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
+Any proposal by a stockholder to be presented at Patterson-UTI's 2004
+annual meeting of stockholders must be received by Patterson-UTI no later than
+December 2, 2003, in order to be eligible for inclusion in Patterson-UTI's proxy
+statement and proxy used in connection with the 2004 annual meeting.
+ANNUAL REPORT
+You are referred to Patterson-UTI's annual report to stockholders with a
+copy of its Annual Report on Form 10-K for the year ended December 31, 2002,
+filed with the Securities and Exchange Commission, enclosed herewith for your
+information. The annual report to stockholders is not incorporated in this proxy
+statement and is not to be considered part of the soliciting material.
+19
+APPENDIX
+This appendix is filed with the Securities and Exchange Commission
+pursuant to Instruction 3 to Item 10 of Schedule 14a. It is not part of the
+Patterson-UTI Energy, Inc. Proxy Statement and was not otherwise provided to the
+stockholders of Patterson-UTI Energy, Inc. as a part thereof.
+PATTERSON-UTI ENERGY, INC.
+AMENDED AND RESTATED
+1997 LONG-TERM INCENTIVE PLAN
+ARTICLE I: GENERAL
+SECTION 1.1 Purpose of the Plan. This Amended and Restated 1997
+Long-Term Incentive Plan (the "Plan") of Patterson-UTI Energy, Inc. (the
+"Company") is intended to advance the best interests of the Company, its
+subsidiaries and its stockholders in order to attract, retain and motivate key
+employees by providing them with additional incentives through (i) the grant of
+options ("Options") to purchase shares of Common Stock, par value $.01 per
+share, of the Company ("Common Stock"), (ii) the grant of stock appreciation
+rights ("Stock Appreciation Rights"), (iii) the award of shares of restricted
+Common Stock ("Restricted Stock") and (iv) the award of units payable in cash or
+shares of Common Stock based on performance ("Performance Awards"), thereby
+increasing the personal stake of such key employees in the continued success and
+growth of the Company.
+SECTION 1.2 Administration of the Plan. (a) The Plan shall be
+administered either by the full Board of Directors of the Company (the "Board of
+Directors") or by the Compensation Committee or other designated committee of
+the Board of Directors. The Board of Directors or such committee is referred to
+herein as the "Committee". The Committee shall have authority to interpret
+conclusively the provisions of the Plan, to adopt such rules and regulations for
+carrying out the Plan as it may deem advisable, to decide conclusively all
+questions of fact arising in the application of the Plan, to establish
+performance criteria in respect of Awards (as defined herein) under the Plan, to
+certify that Plan requirements have been met for any participant in the Plan, to
+submit such matters as it may deem advisable to the Company's stockholders for
+their approval, and to make all other determinations and take all other actions
+necessary or desirable for the administration of the Plan. The Committee is
+expressly authorized to adopt rules and regulations limiting or eliminating its
+discretion in respect of certain matters as it may deem advisable to comply with
+or obtain preferential treatment under any applicable tax or other law rule, or
+regulation. All decisions and acts of the Committee shall be final and binding
+upon all affected Plan participants.
+(b) The Committee shall designate the eligible employees, if any, to be
+granted Awards and the type and amount of such Awards and the time when Awards
+will be granted. All Awards granted under the Plan shall be on the terms and
+subject to the conditions determined by the Committee consistent with the Plan.
+1
+SECTION 1.3 Eligible Participants. Key employees, including officers
+and directors, of the Company and its subsidiaries (all such subsidiaries being
+referred to as "Subsidiaries") shall be eligible for Awards under the Plan.
+SECTION 1.4 Awards Under the Plan. Awards to key employees may be in
+the form of (i) Options, (ii) Stock Appreciation Rights, which may be issued
+independent of or in tandem with Options, (iii) shares of Restricted Stock, (iv)
+Performance Awards, or (v) any combination of the foregoing (collectively,
+"Awards").
+SECTION 1.5 Shares Subject to the Plan. Initially, the aggregate number
+of shares of Common Stock that may be issued under the Plan shall be 6,000,000,
+subject to adjustment as provided in Section 5.2 of the Plan. Shares distributed
+pursuant to the Plan may consist of authorized but unissued shares or treasury
+shares of the Company, as shall be determined from time to time by the Board of
+Directors.
+If any Award under the Plan shall expire, terminate or be canceled
+(including cancellation upon an Option holder's exercise of a related Stock
+Appreciation Right) for any reason without having been exercised in full, or if
+any Award shall be forfeited to the Company, the unexercised or forfeited Award
+shall not count against the above limits and shall again become available for
+Awards under the Plan (unless the holder of such Award received dividends or
+other economic benefits with respect to such Award, which dividends or other
+economic benefits are not forfeited, in which case the Award shall count against
+the above limits). Shares of Common Stock equal in number to the shares
+surrendered in payment of the option price, and shares of Common Stock which are
+withheld in order to satisfy Federal, state or local tax liability, shall count
+against the above limits. Only the number of shares of Common Stock actually
+issued upon exercise of a Stock Appreciation Right shall count against the above
+limits, and any shares which were estimated to be used for such purposes and
+were not in fact so used shall again become available for Awards under the Plan.
+Cash exercises of Stock Appreciation Rights and cash settlement of other Awards
+will not count against the above limits.
+The aggregate number of shares of Common Stock subject to Options or
+Stock Appreciation Rights that may be granted to any one participant in any one
+year under the Plan shall be 600,000, subject to adjustment as provided in
+Section 5.2 of the Plan. The aggregate number of shares of Common Stock that may
+be granted to any one participant in any one year in respect of Restricted Stock
+shall be 600,000, subject to adjustment as provided in Section 5.2 of the Plan.
+The aggregate number of shares of Common Stock that may be received by any one
+participant in any one year in respect of a Performance Award shall be 600,000,
+subject to adjustment as provided in Section 5.2 of the Plan, and the aggregate
+amount of cash that may be received by any one participant in any one year in
+respect to a Performance Award shall be $500,000.
+The total number of Awards (or portions thereof) settled in cash under
+the Plan, based on the number of shares covered by such Awards (e.g., 100 shares
+for a Stock Appreciation Right with respect to 100 shares), shall not exceed a
+number equal to (i) the number of shares initially available for issuance under
+the Plan plus (ii) the number of shares that have become available for issuance
+under the Plan pursuant to the first paragraph of this Section 1.5.
+2
+The aggregate number of shares of Common Stock that are available under
+the Plan for Options granted in accordance with Section 2.4(i) ("ISOs") is
+600,000, subject to adjustment as provided in Section 5.2 of the Plan.
+SECTION 1.6 Other Compensation Programs. Nothing contained in the Plan
+shall be construed to preempt or limit the authority of the Board of Directors
+to exercise its corporate rights and powers, including, but not by way of
+limitation, the right of the Board of Directors (i) to grant incentive awards
+for proper corporate purposes otherwise than under the Plan to any employee,
+officer, director or other person or entity or (ii) to grant incentive awards
+to, or assume incentive awards of, any person or entity in connection with the
+acquisition (whether by purchase, lease, merger, consolidation or otherwise) of
+the business or assets (in whole or in part) of any person or entity.
+ARTICLE II: STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
+SECTION 2.1 Terms and Conditions of Options. Subject to the following
+provisions, all Options granted under the Plan to employees of the Company and
+its Subsidiaries shall be in such form and shall have such terms and conditions
+as the Committee, in its discretion, may from time to time determine consistent
+with the Plan.
+(a) Option Price. The option price per share shall be determined by the
+Committee, except that in the case of an Option granted in accordance with
+Section 2.4(i) the option price per share shall not be less than the fair market
+value of a share of Common Stock (as determined by the Committee) on the date
+the Option is granted (other than in the case of substitute or assumed Options
+to the extent required to qualify such Options for preferential tax treatment
+under the Code as in effect at the time of such grant).
+(b) Term of Option. The term of an Option shall be determined by the
+Committee, except that in the case of an ISO the term of the Option shall not
+exceed ten years from the date of grant, and, notwithstanding any other
+provision of this Plan, no Option shall be exercised after the expiration of its
+term.
+(c) Exercise of Options. Options shall be exercisable at such time or
+times and subject to such terms and conditions as the Committee shall specify in
+the Option grant. Unless the Option grant specifies otherwise, the Committee
+shall have discretion at any time to accelerate such time or times and otherwise
+waive or amend any conditions in respect of all or any portion of the Options
+held by any optionee. An Option may be exercised in accordance with its terms as
+to any or all shares purchasable thereunder.
+(d) Payment for Shares. The Committee may authorize payment for shares
+as to which an Option is exercised to be made in cash, shares of Common Stock, a
+combination thereof, by "cashless exercise" or in such other manner as the
+Committee in its discretion may provide.
+(e) Stockholder Rights. The holder of an Option shall, as such, have
+none of the rights of a stockholder.
+3
+(f) Termination of Employment. The Committee shall have discretion to
+specify in the Option grant, or, with the consent of the optionee, an amendment
+thereof, provisions with respect to the period, not extending beyond the term of
+the Option, during which the Option may be exercised following the optionee's
+termination of employment.
+SECTION 2.2 Stock Appreciation Rights in Tandem with Options. (a) The
+Committee may, either at the time of grant of an Option or at any time during
+the term of the Option, grant Stock Appreciation Rights ("Tandem SARs") with
+respect to all or any portion of the shares of Common Stock covered by such
+Option. A Tandem SAR may be exercised at any time the Option to which it relates
+is then exercisable, but only to the extent the Option to which it relates is
+exercisable, and shall be subject to the conditions applicable to such Option.
+When a Tandem SAR is exercised, the Option to which it relates shall cease to be
+exercisable to the extent of the number of shares with respect to which the
+Tandem SAR is exercised. Similarly, when an Option is exercised, the Tandem SARs
+relating to the shares covered by such Option exercise shall terminate. Any
+Tandem SAR which is outstanding on the last day of the term of the related
+Option (as determined pursuant to Section 2.1(b)) shall be automatically
+exercised on such date for cash without any action by the optionee.
+(b) Upon exercise of a Tandem SAR, the holder shall receive, for each
+share with respect to which the Tandem SAR is exercised, an amount (the
+"Appreciation") equal to the difference between the option price per share of
+the Option to which the Tandem SAR relates and the fair market value (as
+determined by the Committee) of a share of Common Stock on the date of exercise
+of the Tandem SAR. The Appreciation shall be payable in cash, Common Stock, or a
+combination of both, at the option of the Committee, and shall be paid within 30
+days of the exercise of the Tandem SAR.
+SECTION 2.3 Stock Appreciation Rights Independent of Options. Subject
+to the following provisions, all Stock Appreciation Rights granted independent
+of Options ("Independent SARs") under the Plan to employees of the Company and
+its Subsidiaries shall be in such form and shall have such terms and conditions
+as the Committee, in its discretion, may from time to time determine consistent
+with the Plan.
+(a) Exercise Price. The exercise price per share shall be determined by
+the Committee on the date the Independent SAR is granted.
+(b) Term of Independent SAR. The term of an Independent SAR shall be
+determined by the Committee, and, notwithstanding any other provision of this
+Plan, no Independent SAR shall be exercised after the expiration of its term.
+(c) Exercise of Independent SARs. Independent SARs shall be exercisable
+at such time or times and subject to such terms and conditions as the Committee
+shall specify in the Independent SAR grant. Unless the Independent SAR grant
+specifies otherwise, the Committee shall have discretion at any time to
+accelerate such time or times and otherwise waive or amend any conditions in
+respect of all or any portion of the Independent SARs held by any participant.
+Upon exercise of an Independent SAR, the holder shall receive, for each share
+specified in the Independent SAR grant, an amount (the "Appreciation") equal to
+the difference between the
+4
+exercise price per share specified in the Independent SAR grant and the fair
+market value (as determined by the Committee) of a share of Common Stock on the
+date of exercise of the Independent SAR. The Appreciation shall be payable in
+cash, Common Stock, or a combination of both, at the option of the Committee,
+and shall be paid within 30 days of the exercise of the Independent SAR.
+(d) Stockholder Rights. The holder of an Independent SAR shall, as
+such, have none of the rights of a stockholder.
+(e) Termination of Employment. The Committee shall have discretion to
+specify in the Independent SAR grant, or, with the consent of the holder, an
+amendment thereof, provisions with respect to the period, not extending beyond
+the term of the Independent SAR, during which the Independent SAR may be
+exercised following the holder's termination of employment.
+SECTION 2.4 Statutory Options. Subject to the limitations on Option
+terms set forth in Section 2.1, the Committee shall have the authority to grant
+(i) ISOs within the meaning of Section 422 of the Internal Revenue Code of 1986,
+as amended (the "Code"), and (ii) Options containing such terms and conditions
+as shall be required to qualify such Options for preferential tax treatment
+under the Code as in effect at the time of such grant, including, if then
+applicable, limits with respect to minimum exercise price, duration and amounts
+and special limitations applicable to any individual who, at the time the Option
+is granted, owns stock possessing more than 10% of the total combined voting
+power of all classes of stock of the Company or any affiliate. Options granted
+pursuant to this Section 2.4 may contain such other terms and conditions
+permitted by Article II of this Plan as the Committee, in its discretion, may
+from time to time determine (including, without limitation, provision for Stock
+Appreciation Rights), to the extent that such terms and conditions do not cause
+the Options to lose their preferential tax treatment. If an Option intended to
+be an ISO ceases or is otherwise not eligible to be an ISO, such Option (or
+portion thereof necessary to maintain the status of the remaining portion of the
+Option as an ISO) shall remain valid but be treated as an Option other than an
+ISO.
+SECTION 2.5 Change of Control. Notwithstanding the exercisability
+schedule governing any Option or Stock Appreciation Right, upon the occurrence
+of a Change of Control (as defined in Section 5.9) all Options and Stock
+Appreciation Rights outstanding at the time of such Change of Control and held
+by participants who are employees of the Company or its subsidiaries at the time
+of such Change of Control shall (unless specifically provided otherwise in the
+grant thereof) become immediately exercisable and, unless the participant agrees
+otherwise in writing, remain exercisable for three years (but not beyond the
+term of the Option or Stock Appreciation Right) after the employee's termination
+of employment for any reason other than termination by the Company or a
+subsidiary of the Company for dishonesty, conviction of a felony, willful
+unauthorized disclosure of confidential information or willful refusal to
+perform the duties of such employee's position or positions with the Company or
+such subsidiary (termination for "cause"); provided that this Section 2.5 shall
+not apply to Awards granted to a participant if, in connection with a Change of
+Control pursuant to clause (1) of Section 5.9, such participant is the Person or
+forms part of the Person specified in such clause (1).
+5
+ARTICLE III: RESTRICTED STOCK
+SECTION 3.1 Terms and Conditions of Restricted Stock Awards. Subject to the
+following provisions, all Awards of Restricted Stock under the Plan to employees
+of the Company and its Subsidiaries shall be in such form and shall have such
+terms and conditions as the Committee, in its discretion, may from time to time
+determine consistent with the Plan.
+(a) Restricted Stock Award. The Restricted Stock Award shall specify
+the number of shares of Restricted Stock to be awarded, the price, if any, to be
+paid by the recipient of the Restricted Stock, and the date or dates on which
+the Restricted Stock will vest. The vesting and number of shares of Restricted
+Stock may be conditioned upon the completion of a specified period of service
+with the Company or its Subsidiaries, upon the attainment of specified
+performance objectives, or upon such other criteria as the Committee may
+determine in accordance with the provisions hereof. Performance objectives will
+be based on increases in share prices, operating income, net income or cash flow
+thresholds on a company wide, subsidiary or division or group basis, rig
+utilization, safety records, return on common equity or any combination of the
+foregoing.
+(b) Restrictions on Transfer. Stock certificates representing the
+Restricted Stock granted to an employee shall be registered in the employee's
+name. Such certificates shall either be held by the Company on behalf of the
+employee, or delivered to the employee bearing a legend to restrict transfer of
+the certificate until the Restricted Stock has vested, as determined by the
+Committee. The Committee shall determine whether the employee shall have the
+right to vote and/or receive dividends on the Restricted Stock before it has
+vested. No share of Restricted Stock may be sold, transferred, assigned, or
+pledged by the employee until such share has vested in accordance with the terms
+of the Restricted Stock Award. Unless the grant of a Restricted Stock Award
+specifies otherwise, in the event of an employee's termination of employment
+before all the employee's Restricted Stock has vested, or in the event other
+conditions to the vesting of Restricted Stock have not been satisfied prior to
+any deadline for the satisfaction of such conditions set forth in the Award, the
+shares of Restricted Stock that have not vested shall be forfeited and any
+purchase price paid by the employee shall be returned to the employee. At the
+time Restricted Stock vests (and, if the employee has been issued legended
+certificates of Restricted Stock, upon the return of such certificates to the
+Company), a certificate for such vested shares shall be delivered to the
+employee or the employee's estate, free of all restrictions.
+(c) Accelerated Vesting. Notwithstanding the vesting conditions set
+forth in the Restricted Stock Award, (i) unless the Restricted Stock grant
+specifies otherwise, the Committee may in its discretion at any time accelerate
+the vesting of Restricted Stock or otherwise waive or amend any conditions of a
+grant of Restricted Stock, and (ii) all shares of Restricted Stock shall vest
+upon a Change of Control of the Company; provided that clause (ii) above shall
+not apply to Awards granted to a participant if, in connection with a Change of
+Control pursuant to clause (1) of Section 5.9, such participant is the Person or
+forms part of the Person specified in such clause (1).
+ARTICLE IV: PERFORMANCE AWARDS
+SECTION 4.1 Terms and Conditions of Performance Awards. The Committee
+shall be authorized to grant Performance Awards, which are payable in stock,
+cash or a combination thereof, at the discretion of the Committee.
+6
+(a) Performance Period. The Committee shall establish with respect to
+each Performance Award a performance period over which the performance goal of
+such Performance Award shall be measured. The performance period for a
+Performance Award shall be established prior to the time such Performance Award
+is granted and may overlap with performance periods relating to other
+Performance Awards granted hereunder to the same employee.
+(b) Performance Objectives. The Committee shall establish a minimum
+level of acceptable achievement for the holder at the time of each Award. Each
+Performance Award shall be contingent upon future performances and achievement
+of objectives described either in terms of Company-wide performance or in terms
+that are related to performance of the employee or of the division, subsidiary,
+department or function within the Company in which the employee is employed. The
+Committee shall have the authority to establish the specific performance
+objectives and measures applicable to such objectives. Such objectives, however,
+shall be based on increases in share prices, operating income, net income or
+cash flow thresholds on a company wide, subsidiary or division or group, rig
+utilization, safety records, return on common equity or any combination of the
+foregoing.
+(c) Size, Frequency and Vesting. The Committee shall have the authority
+to determine at the time of the Award the maximum value of a Performance Award,
+the frequency of Awards and the date or dates when Awards vest.
+(d) Payment. Following the end of each performance period, the holder
+of each Performance Award will be entitled to receive payment of an amount, not
+exceeding the maximum value of the Performance Award, based on the achievement
+of the performance measures for such performance period, as determined by the
+Committee. If at the end of the performance period the specified objectives have
+been attained, the employee shall be deemed to have fully earned the Performance
+Award. If the employee exceeds the specified minimum level of acceptable
+achievement but does not fully attain such objectives, the employee shall be
+deemed to have partly earned the Performance Award, and shall become entitled to
+receive a portion of the total Award, as determined by the Committee. If a
+Performance Award is granted after the start of a performance period, the Award
+shall be reduced to reflect the portion of the performance period during which
+the Award was in effect. Unless the Award specifies otherwise, including
+restrictions in order to satisfy the conditions under Section 162(m) of the
+Code, the Committee may adjust the payment of Awards or the performance
+objectives if events occur or circumstances arise which would cause a particular
+payment or set of performance objectives to be inappropriate, as determined by
+the Committee.
+(e) Termination of Employment. A recipient of a Performance Award who,
+by reason of death, disability or retirement, terminates employment before the
+end of the applicable performance period shall be entitled to receive, to the
+extent earned, a portion of the Award which is proportional to the portion of
+the performance period during which the employee was employed. A recipient of a
+Performance Award who terminates employment for any other reason shall not be
+entitled to any part of the Award unless the Committee determines otherwise;
+7
+however, the Committee may in no event pay the employee more than that portion
+of the Award which is proportional to his or her period of actual service.
+(f) Accelerated Vesting. Notwithstanding the vesting conditions set
+forth in a Performance Award, (i) unless the Award specifies otherwise, the
+Committee may in its discretion at any time accelerate vesting of the Award or
+otherwise waive or amend any conditions (including but not limited to
+performance objectives) in respect of a Performance Award, and (ii) all
+Performance Awards shall vest upon a Change of Control of the Company. In
+addition, each participant in the Plan shall receive the maximum Performance
+Award he or she could have earned for the proportionate part of the performance
+period prior to the Change of Control, and shall retain the right to earn any
+additional portion of his or her Award if he or she remains in the Company's
+employ. However, clause (ii) above shall not apply to Awards granted to a
+participant if, in connection with a Change of Control pursuant to clause (1) of
+Section 5.9, such participant is the Person or forms part of the Person
+specified in such clause (1).
+(g) Stockholder Rights. The holder of a Performance Award shall, as
+such, have none of the rights of a stockholder.
+ARTICLE V: ADDITIONAL PROVISIONS
+SECTION 5.1 General Restrictions. Each Award under the Plan shall be
+subject to the requirement that, if at any time the Committee shall determine
+that (i) the listing, registration or qualification of the shares of Common
+Stock subject or related thereto upon any securities exchange or under any state
+or Federal law, or (ii) the consent or approval of any government regulatory
+body, or (iii) an agreement by the recipient of an Award with respect to the
+disposition of shares of Common Stock, is necessary or desirable (in connection
+with any requirement or interpretation of any Federal or state securities law,
+rule or regulation) as a condition of, or in connection with, the granting of
+such Award or the issuance, purchase or delivery of shares of Common Stock
+thereunder, such Award may not be consummated in whole or in part unless such
+listing, registration, qualification, consent, approval or agreement shall have
+been effected or obtained free of any conditions not acceptable to the
+Committee.
+SECTION 5.2 Adjustments for Changes in Capitalization. In the event of
+any stock dividends, stock splits, recapitalizations, combinations, exchanges of
+shares, mergers, consolidation, liquidations, split-ups, split-offs, spin- offs,
+or other similar changes in capitalization, or any distribution to stockholders,
+including a rights offering, other than regular cash dividends, changes in the
+outstanding stock of the Company by reason of any increase or decrease in the
+number of issued shares of Common Stock resulting from a split-up or
+consolidation of shares or any similar capital adjustment or the payment of any
+stock dividend, any share repurchase at a price in excess of the market price of
+the Common Stock at the time such repurchase is announced or other increase or
+decrease in the number of such shares, the Committee shall make appropriate
+adjustment in the number and kind of shares authorized by the Plan (including
+shares available for ISOs), in the number, price or kind of shares covered by
+the Awards and in any outstanding Awards under the Plan; provided, however, that
+no such adjustment shall increase the aggregate value of any outstanding Award.
+8
+In the event of any adjustment in the number of shares covered by any
+Award, any fractional shares resulting from such adjustment shall be disregarded
+and each such Award shall cover only the number of full shares resulting from
+such adjustment.
+SECTION 5.3 Amendments. (a) The Board of Directors may at any time and
+from time to time and in any respect amend or modify the Plan.
+(b) The Committee shall have the authority to amend any Award to
+include any provision which, at the time of such amendment, is authorized under
+the terms of the Plan; however, no outstanding Award may be revoked or altered
+in a manner unfavorable to the holder without the written consent of the holder.
+SECTION 5.4 Cancellation of Awards. Any Award granted under the Plan
+may be cancelled at any time with the consent of the holder and a new Award may
+be granted to such holder in lieu thereof, which Award may, in the discretion of
+the Committee, be on more favorable terms and conditions than the canceled
+Award.
+SECTION 5.5 Withholding. Whenever the Company proposes or is required
+to issue or transfer shares of Common Stock under the Plan, the Company shall
+have the right to require the holder to pay an amount in cash or to retain or
+sell without notice, or demand surrender of, shares of Common Stock in value
+sufficient to satisfy any Federal, state or local withholding tax liability
+("Withholding Tax") prior to the delivery of any certificate for such shares (or
+remainder of shares if Common Stock is retained to satisfy such tax liability).
+Whenever under the Plan payments are to be made in cash, such payments shall be
+net of an amount sufficient to satisfy any Federal, state or local withholding
+tax liability. An Award may also provide the holder with the right to satisfy
+the Withholding Tax with previously owned shares of Common Stock or shares of
+Common Stock otherwise issuable to the holder.
+Whenever Common Stock is so retained or surrendered to satisfy
+Withholding Tax, the value of shares of Common Stock so retained or surrendered
+shall be determined by the Committee, and the value of shares of Common Stock so
+sold shall be the net proceeds (after deduction of commissions) received by the
+Company from such sale, as determined by the Committee.
+SECTION 5.6 Non-assignability. Except as expressly provided in the Plan
+or in any agreements, no Award under the Plan shall be assignable or
+transferable by the holder thereof except by will or by the laws of descent and
+distribution. During the life of the holder, Awards under the Plan shall be
+exercisable only by such holder or by the guardian or legal representative of
+such holder.
+SECTION 5.7 Non-uniform Determinations. Determinations by the Committee
+under the Plan (including, without limitation, determinations of the persons to
+receive Awards; the form, amount and timing of such Awards; the terms and
+provisions of such Awards and the agreements evidencing same; and provisions
+with respect to termination of employment) need not be uniform and may be made
+by it selectively among persons who receive, or are eligible to receive, Awards
+under the Plan, whether or not such persons are similarly situated.
+9
+SECTION 5.8 No Guarantee of Employment. The grant of an Award under the
+Plan shall not constitute an assurance of continued employment for any period or
+any obligation of the Board of Directors to nominate any director for reelection
+by the Company's stockholders.
+SECTION 5.9 Change of Control. A "Change of Control" shall be deemed to
+have occurred if:
+(1) any Person (as defined below), other than a Designated Person, is
+or becomes the Beneficial Owner (as defined below) of securities of the Company
+representing 35% or more of the Voting Power (as defined below);
+(2) there shall occur a change in the composition of a majority of the
+Board of Directors within any period of four consecutive years which change
+shall not have been approved by a majority of the Board of Directors as
+constituted immediately prior to the commencement of such period;
+(3) at any meeting of the stockholders of the Company called for the
+purpose of electing directors, more than one of the persons nominated by the
+Board of Directors for election as directors shall fail to be elected; or
+(4) the stockholders of the Company approve a merger, consolidation,
+sale of substantially all assets or other reorganization of the Company, other
+than a reincorporation, in which the Company does not survive.
+For purposes of this Section 5.9, (i) "Person" shall have the meaning
+set forth in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of
+1934 (the "Exchange Act"), as in effect on May 1, 1997, (ii) "Beneficial Owner"
+shall have the meaning set forth in Rules 13d-3 and 13d-5 promulgated under the
+Exchange Act on May 1, 1997; (iii) "Voting Power" shall mean the voting power of
+the outstanding securities of the Company having the right under ordinary
+circumstances to vote at an election of the Board of Directors; and (iv)
+"Designated Person" shall mean any Person whose Beneficial Ownership of
+securities is solely the result of such Person acquiring securities as an
+underwriter in an underwritten public offering of such securities.
+Notwithstanding anything contained herein to the contrary, a Change in Control
+shall not be deemed to have occurred due to the Voting Power of Remy Capital
+Partners III, L.P. or any of its affiliates (collectively "Remy") falling below
+35% or subsequently increasing over 35%.
+SECTION 5.10 Duration and Termination. (a) The Plan shall be of
+unlimited duration. Notwithstanding the foregoing, no ISO (within the meaning of
+Section 422 of the Code) shall be granted under the Plan ten (10) years after
+the effective date of the Plan, but Awards granted prior to such date may extend
+beyond such date, and the terms of this Plan shall continue to apply to all
+Awards granted hereunder.
+(b) The Board of Directors may suspend, discontinue or terminate the
+Plan at any time. Such action shall not impair any of the rights of any holder
+of any Award outstanding on the date of the Plan's suspension, discontinuance or
+termination without the holder's written consent.
+10
+SECTION 5.11 Deferred Compensation and Trust Agreements. The Committee
+may authorize and establish deferred compensation agreements and arrangements in
+connection with Awards under the Plan and may establish trusts and other
+arrangements including "rabbi trusts", with respect to such agreements and
+appoint one or more trustees for such trusts. Shares of Common Stock under the
+Plan may also be acquired by one or more trustees from the Company, in the open
+market or otherwise.
+SECTION 5.12 Effective Date. The Plan is effective as of July 23, 1997,
+the effective date of the Long-Term Incentive Plan prior to amendment.
+11
+AMENDMENT
+TO THE PATTERSON-UTI ENERGY, INC. AMENDED AND RESTATED
+1997 LONG-TERM INCENTIVE PLAN
+THIS AGREEMENT by Patterson-UTI Energy, Inc. (the "Sponsor"),
+WITNESSETH
+WHEREAS, the Sponsor maintains the Plan known as the "Patterson-UTI
+Energy, Inc. Amended and Restated 1997 Long-Term Incentive Plan" (the "Plan");
+and
+WHEREAS, the Sponsor retained the right in Section 5.3 of the Plan to
+amend the Plan from time to time; and
+WHEREAS, the Board of Directors of the Sponsor approved resolutions on
+the 17th day of March, 2003, to amend the Plan;
+NOW, THEREFORE, the Sponsor agrees that, effective upon the approval of
+a majority of the stockholders of the Sponsor, the first paragraph of Section
+1.5 of the Plan is hereby amended in its entirety to read as follows:
+Section 1.5 Shares Subject to the Plan. Initially, the aggregate number
+of shares of Common Stock that may be issued under the Plan shall be 8,250,000,
+subject to adjustment as provided in Section 5.2 of the Plan. Shares distributed
+pursuant to the Plan may consist of authorized but unissued shares or treasury
+shares of the Company, as shall be determined from time to time by the Board of
+Directors.
+AMENDED AND RESTATED
+PATTERSON-UTI ENERGY, INC.
+NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
+1. Purpose. This Amended and Restated Non-Employee Director Stock Option
+Plan (the "Plan") of Patterson-UTI Energy, Inc. (the "Company") was adopted for
+the benefit of the directors of the Company who at the time of their service are
+not employees of the Company or any of its subsidiaries ("Non-Employee
+Directors"), and is intended to advance the interests of the Company by
+providing the Non- Employee Directors with additional incentive to serve the
+Company by increasing their proprietary interest in the success of the Company.
+2. Administration. The Plan shall be administered by a committee of the
+Board of Directors of the Company (the "Committee"), the members of which shall
+consist solely of directors who are employees of the Company. For the purposes
+of the Plan, a majority of the members of the Committee shall constitute a
+quorum for the transaction of business, and the vote of a majority of those
+members present at any meeting shall decide any question brought before that
+meeting. In addition, the Committee may take any action otherwise proper under
+the Plan by the affirmative vote, taken without a meeting, of a majority of its
+members. No member of the Committee shall be liable for any act or omission of
+any other member of the Committee or for any act or omission on his own part,
+including but not limited to the exercise of any power or discretion given to
+him under the Plan, except those resulting from his own gross negligence or
+willful misconduct. Except as otherwise expressly provided for herein, all
+questions of interpretation and application of the Plan, or as to options
+granted hereunder (the "Options"), shall be subject to the determination, which
+shall be final and binding, of a majority of the whole Committee.
+Notwithstanding the above, the selection of Non-Employee Directors to whom
+Options are to be granted, the number of shares subject to any Option, the
+exercise price of any Option and the term of any Option shall be as hereinafter
+provided and the Committee shall have no discretion as to such matters.
+3. Option Shares. The stock subject to the Options and other provisions of
+the Plan shall be shares of the Company's Common Stock, $.01 par value (or such
+other par value as may be designated by act of the Company's stockholders) (the
+"Common Stock"). The total amount of the Common Stock with respect to which
+Options may be granted shall not exceed in the aggregate 600,000 shares;
+provided, that the class and aggregate number of shares which may be subject to
+the Options granted hereunder shall be subject to adjustment in accordance with
+the provisions of Paragraph 12 hereof. Such shares may be treasury shares or
+authorized but unissued shares.
+In the event that any outstanding Option for any reason shall expire or
+terminate by reason of the death of the optionee or the fact that the optionee
+ceases to be a director, the surrender of any
+such Option, or any other cause, the shares of Common Stock allocable to the
+unexercised portion of such Option may again be subject to an Option under the
+Plan.
+4. Grant of Options. Subject to the provisions of Paragraph 16 and the
+availability under the Plan of a sufficient number of shares of Common Stock
+that may be issuable upon the exercise of outstanding Options, there shall be
+granted the following Options:
+(a) To each Non-Employee Director as of the date he is first elected as a
+director of the Company, an Option to purchase 15,000 shares, subject to
+adjustment as provided in Paragraph 12 hereof, of Common Stock at a purchase
+price per share of Common Stock (the "Option Price") equal to the fair market
+value of the Common Stock as defined in Paragraph 7 hereof as of the date of
+grant; and
+(b) Each Non-Employee Director who has served as a non-employee director for
+a period of at least one year shall receive on each December 31 on which such
+person is a Non-Employee Director, an Option to purchase 7,500 shares, subject
+to adjustment as provided in Paragraph 12 hereof, of Common Stock at an Option
+Price equal to the fair market value of the Common Stock as defined in Paragraph
+7 hereof as of the date of grant.
+No Option shall be granted pursuant to the Plan after December 18, 2005.
+5. Duration of Options. Each Option granted under the Plan shall be
+exercisable for a term of five years from the date of grant, subject to earlier
+termination as provided in Paragraph 9 hereof.
+6. Amount Exercisable. Each Option granted pursuant to the Plan shall not be
+exercisable for a period of one year from the date of grant. After such time,
+such Option shall be fully vested and exercisable throughout the term of the
+Option. Notwithstanding the foregoing, no Option granted by virtue of the
+amendments effected by this Plan shall be exercisable for a period of six months
+following stockholder approval.
+7. Exercise of Options. An optionee may exercise such optionee's Option by
+delivering to the Company a written notice stating (i) that such optionee wishes
+to exercise such Option on the date such notice is so delivered, (ii) the number
+of shares of stock with respect to which such Option is to be exercised, (iii)
+the address to which the certificate representing such shares of stock should be
+mailed, and (iv) the social security number of such optionee. In order to be
+effective, such written notice shall be accompanied by (i) payment of the Option
+Price of such shares of stock and (ii) if applicable, payment of an amount of
+money necessary to satisfy any withholding tax liability that may result from
+the exercise of such Option. Each such payment shall be made by check drawn on a
+national banking association and payable to the order of the Company in United
+States dollars.
+If, at the time of receipt by the Company of such written notice, (i) the
+Company has unrestricted surplus in an amount not less than the Option Price of
+such shares of stock, (ii) all accrued cumulative preferential dividends and
+other current preferential dividends on all outstanding shares of preferred
+stock of the Company have been fully paid, (iii) the acquisition by the Company
+of its own shares of stock for the purpose of enabling such optionee to exercise
+--------------------------------------------------------------------------------
+Page 2
+such Option is otherwise permitted by applicable law and without any vote or
+consent of any stockholder of the Company, and (iv) there shall have been
+adopted, and there shall be in full force and effect, a resolution of the Board
+of Directors of the Company authorizing the acquisition by the Company of its
+own shares of stock for such purpose, then such optionee may deliver to the
+Company, in payment of the Option Price of the shares of stock with respect to
+which such Option is exercised, (x) certificates registered in the name of such
+optionee that represent a number of shares of stock legally and beneficially
+owned by such optionee (free of all liens, claims and encumbrances of every
+kind) and having a fair market value on the date of receipt by the Company of
+such written notice that is not greater than the Option Price of the shares of
+stock with respect to which such Option is to be exercised, such certificates to
+be accompanied by stock powers duly endorsed in blank by the record holder of
+the shares of stock represented by such certificates, with the signature of such
+record holder guaranteed by a national banking association (or, in lieu of such
+certificates, other arrangements for the transfer of such shares to the Company
+which are satisfactory to the Company) and (y) if the Option Price of the shares
+of stock with respect to which such Options are to be exercised exceeds such
+fair market value, a check drawn on a national banking association and payable
+to the order of the Company in an amount, in United States dollars, equal to the
+amount of such excess plus the amount of money necessary to satisfy any
+withholding tax liability that may result from the exercise of such Option.
+Notwithstanding the provisions of the immediately preceding sentence, the
+Committee, in its sole discretion, may refuse to accept shares of stock in
+payment of the Option Price of the shares of stock with respect to which such
+Option is to be exercised and, in that event, any certificates representing
+shares of stock that were received by the Company with such written notice shall
+be returned to such optionee, together with notice by the Company to such
+optionee of the refusal of the Committee to accept such shares of stock. The
+Company may, at its option and upon approval by the Board of Directors of the
+Company, retain shares of Common Stock which would otherwise be issued upon
+exercise of an Option to satisfy any withholding tax liability that may result
+from the exercise of such Option, which shares shall be valued for such purpose
+at their then fair market value. If, at the expiration of seven business days
+after the delivery to such optionee of such written notice from the Company,
+such optionee shall not have delivered to the Company a check drawn on a
+national banking association and payable to the order of the Company in an
+amount, in United States dollars, equal to the Option Price of the shares of
+stock with respect to which such Option is to be exercised, such written notice
+from the optionee to the Company shall be ineffective to exercise such Option.
+As promptly as practicable after the receipt by the Company of (i) such
+written notice from the optionee, (ii) payment, in the form required by the
+foregoing provisions of this Paragraph 7, of the Option Price of the shares of
+stock with respect to which such Option is to be exercised, and (iii) payment,
+if required, in the form required by the foregoing provisions of this Paragraph
+7, of an amount necessary to satisfy any withholding tax liability that may
+result from the exercise of such Option, a certificate representing the number
+of shares of stock with respect to which such Option has been so exercised,
+reduced, to the extent applicable by the number of shares retained by the
+Company to pay any required withholding tax, such certificate to be registered
+in the name of such optionee, provided that such delivery shall be considered to
+have been made when such certificate shall have been mailed, postage prepaid, to
+such optionee at the address specified for such purpose in such written notice
+from the optionee to the Company.
+--------------------------------------------------------------------------------
+Page 3
+For purposes of this Paragraph 7, the "fair market value" of a share of
+stock as of any particular date shall mean the closing sale price of a share of
+Common Stock on that date as reported by the principal national securities
+exchange on which the Common Stock is listed if the Common Stock is then listed
+on a national securities exchange, or if the Common Stock is not so listed, the
+average of the bid and asked price of a share of Common Stock on that date and
+reported in the National Association of Securities Dealers Automated Quotation
+system (the "NASDAQ System"); provided that if no such closing price or quotes
+are so reported on that date or if in the discretion of the Committee another
+means of determining the fair market value of a share of stock at such date
+shall be necessary or advisable, the Committee may provide for another means for
+determining such fair market value.
+8. Transferability of Options. Options shall not be transferable by the
+optionee otherwise than by will or under the laws of descent and distribution,
+and shall be exercisable, during his lifetime, only by him.
+9. Termination. Except as may be otherwise expressly provided herein,
+each Option, to the extent it shall not previously have been exercised, shall
+terminate on the earlier of the following:
+(a) On the last day within the three month period commencing on the date on
+which the optionee ceases to be a member of the Company's Board of
+Directors, for any reason other than the death, disability or retirement
+of the optionee, during which period the optionee shall be entitled to
+exercise all Options fully vested as described in Paragraph 6 by the
+optionee on which the optionee ceased on the date on which the optionee
+ceased be a member of the Company's Board of Directors;
+(b) On the last day within the one year period commencing on the date on
+which the optionee ceases to be a member of the Company's Board of
+Directors because of permanent disability, during which period the
+optionee shall be entitled to exercise all Options fully vested as
+described in Paragraph 6 by the optionee on the date on which the
+optionee ceased to be a member of the Company's Board of Directors
+because of such disability;
+(c) On the last day within the one year period commencing on the date of the
+optionee's death while serving as a member of the Company's Board of
+Directors, during which period the executor or administrator of the
+optionee's estate or the person or persons to whom the optionee's Option
+shall have been transferred by will or the laws of descent or
+distribution, shall be entitled to exercise all Options in respect of
+the number of shares that the optionee would have been entitled to
+purchase had the optionee exercised such Options on the date of his
+death;
+(d) On the last day within the one year period commencing on the date an
+optionee who has had at least five years of service on the Board of
+Directors of the Company retires from the Board of Directors of the
+Company, during which period the optionee, or the executor or
+administrator of the optionee's estate or the person or persons to whom
+such Option shall have been transferred by the will or the laws of
+descent or distribution in the event of the optionee's death within such
+one year period, as the case may be, shall be entitled to exercise all
+Options in respect of the number of shares that the optionee would have
+been
+--------------------------------------------------------------------------------
+Page 4
+entitled to purchase had the optionee exercised such Options on the
+date of such retirement; and
+(e) Ten years after the date of grant of such Option.
+10. Requirements of Law. The Company shall not be required to sell or issue
+any shares under any Option if the issuance of such shares shall constitute a
+violation by the optionee or the Company of any provisions of any law or
+regulation of any governmental authority. Each Option granted under the Plan
+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, no
+such Option may 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,
+an Option may not be exercised until the optionee 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), upon exercise of
+any 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 holder of such Option will not transfer such shares except pursuant to a
+registration statement in effect under such Act or unless an opinion of counsel
+satisfactory to the Company has been received by the Committee 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 an Option are not registered under the Securities Act of
+1933, the Company may imprint on the certificate for such shares the following
+legend or any other legend which counsel for the Company considers necessary or
+advisable to comply with the Securities Act of 1933:
+"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, in
+form and substance 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 Securities Act of 1933 (as now in effect or as
+hereafter amended) and, in the event any shares are so registered, the Company
+may remove any legend on certificates representing such shares. The Company
+shall not be obligated to take any other affirmative action in order to cause
+the exercise of an Option or the issuance of shares pursuant thereto to comply
+with any law or regulation of any governmental authority.
+11. No Rights as Stockholder. No optionee shall have rights as a stockholder
+with respect to shares covered by his Option until the date of issuance of a
+stock certificate for such shares; and,
+--------------------------------------------------------------------------------
+Page 5
+except as otherwise provided in Paragraph 12 hereof, no adjustment for
+dividends, or otherwise, shall be made if the record date therefor is prior to
+the date of issuance of such certificate.
+12. Changes in the Company's Capital Structure. The existence of outstanding
+Options shall not affect in any way the right or power of the Company or its
+stockholders to make or authorize any or all adjustments, recapitalizations,
+reorganizations or other changes in the Company's capital structure or its
+business, or any merger or consolidation of the Company, or any issue of bonds,
+debentures, preferred or prior preference stock ahead of or affecting the Common
+Stock or the rights thereof, or the dissolution or liquidation of the Company,
+or any sale or transfer of all or any part of its assets or business, or any
+other corporate act or proceeding, whether of a similar character or otherwise.
+If the Company shall effect a subdivision or consolidation of shares or
+other capital adjustment of, or the payment of a dividend in capital stock or
+other equity securities of the Company on, its Common Stock, or other increase
+or reduction of the number of shares of the Common Stock without receiving
+consideration therefor in money, services, or property, or the reclassification
+of its Common Stock, in whole or in part, into other equity securities of the
+Company, then (a) the number, class and per share price of shares of stock
+subject to outstanding Options hereunder shall be appropriately adjusted (or in
+the case of the issuance of equity securities as a dividend on, or in a
+reclassification of, the Common Stock, the Options shall extend to such other
+securities) in such a manner as to entitle an optionee to receive, upon exercise
+of an Option, for the same aggregate cash compensation, the same total number
+and class or classes of shares (or in the case of a dividend of, or
+reclassification into, other equity securities, such other securities) he would
+have held after such adjustment if he had exercised his Option in full
+immediately prior to the event requiring the adjustment, or, if applicable, the
+record date for determining stockholders to be affected by such adjustment; and
+(b) the number and class of shares then reserved for issuance under the Plan (or
+in the case of a dividend of, or reclassification into, other equity securities,
+such other securities) shall be adjusted by substituting for the total number
+and class of shares of stock then received, the number and class or classes of
+shares of stock (or in the case of a dividend of, or reclassification into,
+other equity securities, such other securities) that would have been received by
+the owner of an equal number of outstanding shares of Common Stock as the result
+of the event requiring the adjustment. Comparable rights shall accrue to each
+optionee in the event of successive subdivisions, consolidations, capital
+adjustment, dividends or reclassifications of the character described above.
+If the Company shall distribute to all holders of its shares of Common Stock
+(including any such distribution made to non-dissenting stockholders in
+connection with a consolidation or merger in which the Company is the surviving
+corporation and in which holders of shares of Common Stock continue to hold
+shares of Common Stock after such merger or consolidation) evidences of
+indebtedness or cash or other assets (other than cash dividends payable out of
+consolidated retained earnings not in excess of, in any one year period, the
+greater of (a) $.10 per share of Common Stock and (b) two times the aggregate
+amount of dividends per share paid during the preceding calendar year and
+dividends or distributions payable in shares of Common Stock or other equity
+securities of the Company described in the immediately preceding paragraph),
+then in each case the Option Price shall be adjusted by reducing the Option
+Price in
+--------------------------------------------------------------------------------
+Page 6
+effect immediately prior to the record date for the determination of
+stockholders entitled to receive such distribution by the fair market value, as
+determined in good faith by the Board of Directors of the Company (whose
+determination shall be described in a statement filed in the Company's corporate
+records and be available for inspection by any holder of an Option) of the
+portion of the evidence of indebtedness or cash or other assets so to be
+distributed applicable to one share of Common Stock; provided that in no event
+shall the Option Price be less than the par value of a share of Common Stock.
+Such adjustment shall be made whenever any such distribution is made, and shall
+become effective on the date of the distribution retroactive to the record date
+for the determination of the stockholders entitled to receive such distribution.
+Comparable adjustments shall be made in the event of successive distributions of
+the character described above.
+After the Company shall make a tender offer for, or grant to all of its
+holders of its shares of Common Stock the right to require the Company to
+acquire from such stockholders shares of, Common Stock, at a price in excess of
+the Current Market Price (a "Put Right") or the Company shall grant to all of
+its holders of its shares of Common Stock the right to acquire shares of Common
+Stock for less than the Current Market Price (a "Purchase Right") then, in the
+case of a Put Right, the Option Price shall be adjusted by multiplying the
+Option Price in effect immediately prior to the record date for the
+determination of stockholders entitled to receive such Put Right by a fraction,
+the numerator of which shall be the number of shares of Common Stock then
+outstanding minus the number of shares of Common Stock which could be purchased
+at the Current Market Price for the aggregate amount which would be paid if all
+Put Rights are exercised and the denominator of which is the number of shares of
+Common Stock which would be outstanding if all Put Rights are exercised; and, in
+the case of a Purchase Right, the Option Price shall be adjusted by multiplying
+the Option Price in effect immediately prior to the record date for the
+determination of the stockholders entitled to receive such Purchase Right by a
+fraction, the numerator of which shall be the number of shares of Common Stock
+then outstanding plus the number of shares of Common Stock which could be
+purchased at the Current Market Price for the aggregate amount which would be
+paid if all Purchase Rights are exercised and the denominator of which is the
+number of shares of Common Stock which would be outstanding if all Purchase
+Rights are exercised. In addition, the number of shares subject to the Option
+shall be increased by multiplying the number of shares then subject to the
+Option by a fraction which is the inverse of the fraction used to adjust the
+Option Price. Notwithstanding the foregoing if any such Put Rights or Purchase
+Rights shall terminate without being exercised, the Option Price and number of
+shares subject to Option shall be appropriately readjusted to reflect the Option
+Price and number of shares subject to the Option which would have been in effect
+if such unexercised Rights had never existed. Comparable adjustments shall be
+made in the event of successive transactions of the character described above.
+After the merger of one or more corporations into the Company, after any
+consolidation of the Company and one or more corporations, or after any other
+corporate transaction described in Section 424(a) of the Internal Revenue Code
+of 1986, as amended (the "Code") in which the Company shall be the surviving
+corporation, each optionee, at no additional cost, shall be entitled to receive,
+upon any exercise of his Option, in lieu of the number of shares as to which the
+Option shall then be so exercised, the number and class of shares of stock or
+other equity securities to which the optionee would have been entitled pursuant
+to the terms of the agreement
+--------------------------------------------------------------------------------
+Page 7
+of merger or consolidation if at the time of such merger or consolidation such
+optionee had been a holder of a number of shares of Common Stock equal to the
+number of shares as to which the Option shall then be so exercised and, if as a
+result of such merger, consolidation or other transaction, the holders of Common
+Stock are not entitled to receive any shares of Common Stock pursuant to the
+terms thereof, each optionee, at no additional cost, shall be entitled to
+receive, upon exercise of his Option, such other assets and property, including
+cash, to which he would have been entitled if at the time of such merger,
+consolidation or other transaction he had been the holder of the number of
+shares of Common Stock equal to the number of shares as to which the Option
+shall then be so exercised. Comparable rights shall accrue to each optionee in
+the event of successive mergers or consolidations of the character described
+above.
+After a merger of the Company into one or more corporations, after any
+consolidation of the Company and any one or more corporations, or after any
+other corporate transaction described in Section 424(a) of the Code in which the
+Company is not the surviving corporation, each optionee shall, at no additional
+cost, be entitled at the option of the surviving corporation, (i) to have his
+then existing Option assumed or to have a new option substituted for the
+existing Option by the surviving corporation to the transaction which is then
+employing him, or a parent or subsidiary of such corporation, on a basis where
+the excess of the aggregate fair market value of the shares subject to the
+option immediately after the substitution or assumption over the aggregate
+option price of such option is equal to the excess of the aggregate fair market
+value of all shares subject to the option immediately before such substitution
+or assumption over the aggregate option price of such shares, provided that the
+shares subject to the new option must be traded on the New York Stock Exchange
+or the American Stock Exchange or quoted on the NASDAQ, or (ii) to receive upon
+any exercise of his Option, in lieu of the number of shares as to which the
+Option shall then be so exercised, the securities, property and other assets,
+including cash, to which the Optionee would have been entitled pursuant to the
+terms of the agreement of merger or consolidation or the agreement giving rise
+to the other corporate transaction if at the time of such merger, consolidation
+or other transaction such optionee had been the holder of the number of shares
+of Common Stock equal to the number of shares as to which the Option shall then
+be so exercised.
+If a corporate transaction described in Section 424(a) of the Code which
+involves the Company is to take place and there is to be no surviving
+corporation while an Option remains in whole or in part unexercised, it shall be
+cancelled by the Board of Directors as of the effective date of any such
+corporate transaction but before the date each optionee shall be provided with a
+notice of such cancellation and each optionee shall have the right to exercise
+such Option in full (without regard to any limitations set forth in or imposed
+pursuant to Paragraph 9 of the Plan) to the extent it is then still unexercised
+during a 30-day period preceding the effective date of such corporate
+transaction.
+For purposes of this Paragraph 12, "Current Market Price per share of Common
+Stock" shall mean the closing price of a share of Common Stock on the principal
+national securities exchange on which the Common Stock is listed or, if the
+Common Stock is not so listed, the average bid and asked price of a share of
+Common Stock as reported in the NASDAQ System, in each case on the trading day
+immediately preceding the first trading day on which, as a result of the
+establishment of a record date or otherwise, the trading price reflects that an
+acquiror of
+--------------------------------------------------------------------------------
+Page 8
+Common Stock in the public market will not participate in or receive the payment
+of any applicable dividend or distribution.
+Except a hereinbefore expressly provided, the issue by the Company of shares
+of Common Stock of any class, or securities convertible into shares of stock of
+any class, for cash or property, or for labor or services either upon direct
+sale or upon the exercise of rights or warrants to subscribe therefor, or upon
+conversion of shares or obligations of the Company convertible into such shares
+or other securities, shall not affect, and no adjustment by reason thereof shall
+be made with respect to, the number or price of shares of Common Stock then
+subject to outstanding Options.
+13. Amendment or Termination of Plan. The Board of Directors may modify,
+revise or terminate the Plan at any time and from time to time; provided,
+however, that without the further approval of the holders of a majority of the
+shares of voting stock present in person or by proxy at a meeting of
+stockholders, or if the provisions of the corporate charter, by-laws or
+applicable state law prescribes a greater degree of stockholder approval for
+this action, without the degree of stockholder approval thus required, the Board
+of Directors may not (a) change the aggregate number of shares which may be
+issued under Options pursuant to the provisions of the Plan; (b) reduce the
+option price permitted for the Options; (c) extend the term during which an
+option may be exercised or the termination date of the Plan; or (d) materially
+increase any other benefits accruing to directors under the Plan or materially
+modify the requirements as to eligibility for participation in the Plan unless,
+in each such case, the Board of Directors of the Company shall have obtained an
+opinion of legal counsel to the effect that stockholder approval of the
+amendment is not required (i) by law, (ii) by the applicable rules and
+regulations of, or any agreement with, any national securities exchange that the
+Common Stock is then listed on or if the Common Stock is not so listed, the
+rules and regulations, or any agreement with, the National Association of
+Securities Dealers, Inc., and (iii) in order to make available to the optionee
+with respect to any option granted under the Plan, the benefits of Rule 16b-3 of
+the Rules and Regulations under the Securities Exchange Act of 1934, or any
+similar or successor rule. In addition, the terms of the Plan relating to the
+number of shares that may be subject to an Option, the times at which Options
+shall be granted, and the means by which the Option Price for Options granted is
+to be determined shall not be amended more than once every six months, other
+than to comport with changes in the Code, the Employee Retirement Income
+Security Act or the rules thereunder.
+14. Written Agreement. Each Option granted hereunder shall be embodied in a
+written option agreement, which shall be subject to the terms and conditions
+prescribed above, and shall be signed by the optionee and by the appropriate
+officer of the Company for and in the name and on behalf of the Company. Such an
+option agreement shall contain such other provisions as the Committee in its
+discretion shall deem advisable.
+15. Indemnification of Committee. The Company shall indemnify each present
+and future member of the Committee against, and each member of the Committee
+shall be entitled without further act on his part to indemnity from the Company
+for, all expenses (including the amount of judgments and the amount of approved
+settlements made with a view to the curtailment of costs of litigation, other
+than amounts paid to the Company itself) reasonably incurred by him in
+--------------------------------------------------------------------------------
+Page 9
+connection with or arising out of any action, suit or proceeding in which he may
+be involved by reason of his being or having been a member of the Committee,
+whether or not he continues to be such member of the Committee at the time of
+incurring such expenses; provided, however, that such indemnity shall not
+include any expenses incurred by any such member of the Committee (a) in respect
+of matters as to which he shall be finally adjudged in any such action, suit or
+proceeding to have been guilty of gross negligence or willful misconduct in the
+performance of his duty as such member of the Committee, or (b) in respect of
+any matter in which any settlement is effected, to an amount in excess of the
+amount approved by the Company on the advice of its legal counsel; and provided
+further, that no right of indemnification under the provisions set forth herein
+shall be available to or enforceable by any such member of the Committee unless,
+within sixty (60) days after institution of any such action, suit or proceeding,
+he shall have offered the Company, in writing, the opportunity to handle and
+defend same at its own expense. The foregoing right of indemnification shall
+inure to the benefit of the heirs, executors or administrators of each such
+member of the Committee and shall be in addition to all other rights to which
+such member of the Committee may be entitled to as a matter of law, contract, or
+otherwise. Nothing in this Section 15 shall be construed to limit or otherwise
+affect any right to indemnification, or payment of expense, or any provisions
+limiting the liability of any officer or director of the Company or any member
+of the Committee, provided by law, the Certificate of Incorporation of the
+Company or otherwise.
+16. Effective Date of Plan. The Plan shall be deemed to have been adopted
+and effective on December 19, 1995.
+--------------------------------------------------------------------------------
+Page 10
+AMENDMENT
+TO THE AMENDED AND RESTATED PATTERSON-UTI ENERGY, INC.
+NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
+THIS AGREEMENT by Patterson-UTI Energy, Inc. (the "Sponsor"),
+WITNESSETH
+WHEREAS, the Sponsor maintains the Plan known as the "Amended and
+Restated Patterson-UTI Energy, Inc. Non-Employee Director Stock Option Plan"
+(the "Plan"); and
+WHEREAS, the Sponsor retained the right in Section 13 of the Plan to
+amend the Plan from time to time; and
+WHEREAS, the Board of Directors of the Sponsor approved resolutions on
+the 17th day of March, 2003, to amend the Plan;
+NOW, THEREFORE, the Sponsor agrees that, effective upon the approval of
+a majority of the stockholders of the Sponsor, Section 4 of the Plan is hereby
+amended in its entirety to read as follows:
+4. Grant of Options. Subject to the provisions of Paragraph 16 and the
+availability under the Plan of a sufficient number of shares of Common Stock
+that may be issuable upon the exercise of outstanding Options, there shall be
+granted the following Options:
+(a) To each Non-Employee Director as of the date he is first elected as
+a director of the Company, an Option to purchase 20,000 shares, subject to
+adjustment as provided in Paragraph 12 hereof, of Common Stock at a purchase
+price per share of Common Stock (the "Option Price") equal to the fair market
+value of the Common Stock as defined in Paragraph 7 hereof as of the date of
+grant; and
+(b) Each Non-Employee Director who has served as a non-employee
+director for a period of at least one year shall receive on each December 31 on
+which such person is a Non-Employee Director, an Option to purchase 10,000
+shares, subject to adjustment as provided in Paragraph 12 hereof, of Common
+Stock at an Option Price equal to the fair market value of the Common Stock as
+defined in Paragraph 7 hereof as of the date of grant.
+Please mark
+your votes [X]
+like this
+PROXY BY MAIL
+THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE NOMINEES FOR ELECTION
+AS DIRECTORS AND "FOR" PROPOSALS 2, 3 AND 4.
+THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED BY THE PROXIES IN THE MANNER
+DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE,
+THE PROXIES WILL VOTE "FOR" THE NOMINEES FOR ELECTION AS
+DIRECTORS NOTED BELOW AND "FOR" PROPOSALS 2, 3 AND 4.
+FOR all nominees WITHHOLD
+listed below (except AUTHORITY to vote
+1. ELECTION OF BOARD as indicated to the for all nominees listed
+OF DIRECTORS. contrary below) below
+[ ] [ ]
+Nominees for election to the Board of Directors: 01 Mark S. Siegel, 02 Cloyce A.
+Talbott, 03 A. Glenn Patterson, 04 Kenneth N. Berns, 05 Robert C. Gist, 06
+Curtis W. Huff, 07 Terry H. Hunt, 08 Kenneth R. Peak, and 09 Nadine C. Smith.
+(INSTRUCTION: To withhold authority to vote for any one or more individual
+nominees, write the name of each such nominee in the space provided below.)
+--------------------------------------------------------------------------------
+FOR AGAINST ABSTAIN
+2. Approve an amendment to the Company's Amended and Restated 1997 Long-Term [ ] [ ] [ ]
+Incentive Plan increasing the number of shares available for issuance under
+the plan;
+3. Approve an amendment to the Company's Amended and Restated Non-Employee [ ] [ ] [ ]
+Director Stock Option Plan increasing the number of options issued to new
+directors and also increasing the number of options issued to directors
+annually; and
+4. Ratify the selection of PricewaterhouseCoopers LLP as independent [ ] [ ] [ ]
+accountants of the Company for the fiscal year ending December 31, 2003.
+5. In their discretion, the Proxies are authorized to vote upon such other [ ] [ ] [ ]
+business as may properly come before the Meeting or any adjournment or
+adjournments thereof.
+IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE INSTRUCTIONS BELOW.
+-------------------------------------------------------------------------------- =========================================
+COMPANY NUMBER:
+PROXY NUMBER:
+ACCOUNT NUMBER:
+-------------------------------------------------------------------------------- =========================================
+SIGNATURE SIGNATURE DATE
+------------------------------------- ------------------------------------ ----------------------------------
+NOTE: Please sign exactly as your name or names appear on this card. Joint owners should each sign personally. When signing as
+attorney, executor, administrator, personal representative, trustee or guardian, please give your full title as such. For a
+corporation or a partnership, please sign in the full corporate name by the President or other authorized officer or the full
+partnership name by an authorized person, as the case may be. (Please mark, sign, date, and return this proxy in the enclosed
+envelope.)
+------------------------------------------------------------------------------------------------------------------------------------
+o FOLD AND DETACH HERE AND READ THE REVERSE SIDE o
+(TELEPHONE LOGO) VOTE BY TELEPHONE OR INTERNET (COMPUTER LOGO)
+QUICK *** EASY *** IMMEDIATE
+PATTERSON-UTI ENERGY, INC.
+[ ] You can now vote your shares electronically through the Internet or the
+telephone.
+[ ] This eliminates the need to return the proxy card.
+[ ] Your electronic vote authorizes the named proxies to vote your shares in
+the same manner as if you marked, signed, dated and returned the proxy
+card.
+TO VOTE YOUR PROXY BY INTERNET
+www.continentalstock.com
+Have your proxy card in hand when you access the above website. You will be
+prompted to enter the company number, proxy number and account number to create
+an electronic ballot. Follow the prompts to vote your shares.
+TO VOTE YOUR PROXY BY MAIL
+Mark, sign and date your proxy card above, detach it and return it in the
+postage-paid envelope provided.
+TO VOTE YOUR PROXY BY PHONE 1-800-293-8533
+Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
+when you call. You will be prompted to enter the company number, proxy number
+and account number. Follow the voting instructions to vote your shares.
+PLEASE DO NOT RETURN THE ABOVE CARD IF YOU VOTED
+ELECTRONICALLY
+PROXY PROXY
+PATTERSON-UTI ENERGY, INC.
+PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
+TO BE HELD ON APRIL 30, 2003
+THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the "Company") hereby
+appoints Mark S. Siegel and Cloyce A. Talbott, and each of them, attorneys and
+proxies of the undersigned, each with full power to act without the other and
+with full power of substitution, to vote all of the shares which the undersigned
+is entitled to vote at the annual meeting of stockholders of the Company (the
+"Meeting") to be held Wednesday, April 30, 2003, at 11:30 a.m., local time, at
+the Wyndham Greenspoint Hotel, 12400 Greenspoint Drive, Houston, Texas 77060,
+and at any and all adjournments thereof, with the same force and effect as if
+the undersigned were personally present. The undersigned hereby instructs the
+above-named Attorneys and Proxies to vote the shares represented by this proxy
+in the manner as directed by the undersigned on the reverse side of this proxy
+card. If no directions are made, the Proxies will vote "FOR" the nominees for
+directors set forth on the reverse side and "FOR" proposals 2, 3 and 4.
+PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
+ENVELOPE, OR FOLLOW THE INSTRUCTIONS ON THE REVERSE SIDE TO VOTE YOUR SHARES BY
+INTERNET OR BY TELEPHONE.
+(CONTINUED ON THE REVERSE SIDE)
+--------------------------------------------------------------------------------
+o FOLD AND DETACH HERE o
+YOUR VOTE IS IMPORTANT!
+FOLLOW INSTRUCTIONS ON THE REVERSE SIDE.
+PLEASE VOTE
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950134-03-004404/proxy_rpt.txt b/raw/proxies/0000889900/0000950134-03-004404/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0000889900/0000950134-06-011431/proxy.txt b/raw/proxies/0000889900/0000950134-06-011431/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..ec59e1582d93788844cc0cf58af8ca1fd78d7ece
--- /dev/null
+++ b/raw/proxies/0000889900/0000950134-06-011431/proxy.txt
@@ -0,0 +1,2462 @@
+DEF 14A
+1
+d35766ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+def14a 
+Table of Contents 
+SCHEDULE 14A
+Proxy Statement Pursuant to Section 14(a) 
+of the Securities Exchange Act of 1934
+Filed by the Registrant þ 
+Filed by a Party other than the Registrant o 
+Check the appropriate box:
+o 
+Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+þ 
+Definitive Proxy Statement 
+o 
+Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+PATTERSON-UTI ENERGY, INC. 
+(Name of Registrant as Specified in Its Charter) 
+Not Applicable 
+(Name of Person(s) Filing Proxy Statement if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box):
+þ 
+No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange
+Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it
+was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+o 
+Fee paid previously with preliminary materials. 
+o 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
+identify the filing for which the offsetting fee was paid previously. Identify the previous
+filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Table of Contents 
+June 12, 2006
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual
+meeting will be held Wednesday, July 12, 2006, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder,
+Texas 79549.
+At the annual meeting, stockholders will vote to elect directors
+to the Board of Directors of Patterson- UTI Energy, Inc. Please
+take the time to carefully read the proposal concerning the
+election of directors described in the attached proxy statement.
+Thank you for your support.
+Sincerely,
+Mark S. Siegel 
+Chairman of the Board 
+Cloyce A. Talbott 
+President and Chief Executive Officer 
+This proxy statement and the accompanying proxy card are being
+mailed to Patterson-UTI Energy, Inc. stockholders
+beginning on or about June 12, 2006.
+TABLE OF CONTENTS 
+NOTICE OF 2006 ANNUAL MEETING OF STOCKHOLDERS 
+ANNUAL MEETING OF STOCKHOLDERS To Be Held July 12, 2006 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 ELECTION OF DIRECTORS 
+Meetings and Committees of the Board of Directors 
+Corporate Governance Documents Available on Patterson-UTI’s Website 
+Compensation of Directors 
+EXECUTIVE OFFICERS 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; INDEMNIFICATION AGREEMENTS 
+CERTAIN TRANSACTIONS 
+COMPENSATION COMMITTEE REPORT 
+PERFORMANCE GRAPH 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+OTHER MATTERS 
+Table of Contents 
+PATTERSON-UTI ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+NOTICE OF 2006 ANNUAL MEETING OF STOCKHOLDERS 
+The 2006 annual meeting of the stockholders of Patterson-UTI
+Energy, Inc. (“Patterson-UTI”), a Delaware
+corporation, will be held Wednesday, July 12, 2006, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549 (the “Meeting”). At the Meeting, the
+stockholders will be asked to:
+• 
+elect eight directors to the Board of Directors of Patterson-UTI
+to serve until the next annual meeting of the stockholders or
+until their respective successors are elected and qualified; and 
+• 
+take action upon any other matters which may properly come
+before the Meeting. 
+Stockholders of record at the close of business on June 8,
+2006, are entitled to vote at the Meeting and any adjournment
+thereof.
+It is important that your shares be represented at the Meeting.
+I urge you to sign, date and promptly return the enclosed proxy
+card in the enclosed postage paid envelope or vote by following
+the Internet or telephone instructions included on the proxy
+card.
+By order of the Board of Directors 
+John E. Vollmer III
+Senior Vice President — Corporate 
+Development, Chief Financial Officer, 
+Secretary and Treasurer 
+June 12, 2006
+Table of Contents 
+PATTERSON-UTI ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+PROXY STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held July 12, 2006 
+The Board of Directors of
+Patterson-UTI Energy,
+Inc.
+(“Patterson-UTI”), 
+a Delaware corporation, prepared this proxy statement for the
+purpose of soliciting proxies for
+Patterson-UTI’s 
+2006 annual meeting of stockholders (the “Meeting”) to
+be held Wednesday, July 12, 2006, at 10:00 a.m., local
+time, at the corporate offices of
+Patterson-UTI Energy,
+Inc., 4510 Lamesa Highway, Snyder, Texas 79549, and at
+any adjournment thereof. This proxy statement and the
+accompanying proxy are being mailed to stockholders on or about
+June 12, 2006.
+The Board of Directors is making this solicitation by mail. In
+addition to the solicitation of proxies by mail,
+Patterson-UTI’s 
+officers and other employees, without compensation other than
+regular compensation, may solicit proxies by telephone,
+electronic means and personal interview. Patterson-UTI does not
+intend to retain a proxy solicitation firm to assist in the
+solicitation of proxies of stockholders whose shares are held in
+street name by brokers, banks and other institutions, but may do
+so if circumstances warrant.
+Patterson-UTI will pay
+all costs associated with this solicitation.
+Properly submitted proxies received either by mail, Internet,
+telephone or in person, in time for the Meeting will be voted as
+you have directed in your proxy, unless you revoke your proxy in
+the manner provided below. As to any matter for which you give
+no direction in your proxy, your shares will be voted as follows:
+• 
+“FOR” the election of all of the nominees to the Board
+of Directors; and 
+• 
+“FOR” or “AGAINST” any other proposals which
+may be submitted at the Meeting at the discretion of the persons
+named in the proxy. 
+You may revoke your proxy at any time before the proxy is voted
+by either:
+• 
+submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone; 
+• 
+notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or 
+• 
+attending the Meeting and voting in person. 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of
+Patterson-UTI’s 
+common stock, $.01 par value per share (the “Common
+Stock”), at the close of business on June 8, 2006 are
+entitled to notice of and to vote at the Meeting or any
+adjournment thereof. At the close of business on June 8,
+2006, there were 168,235,960 shares of Common Stock issued
+and outstanding. Holders of record of Common Stock on
+June 8, 2006 will be entitled to one vote per share on all
+matters to come before the Meeting. A list of stockholders
+entitled to notice of and to vote at the Meeting will be made
+available during regular business hours at the offices of
+Patterson-UTI Energy,
+Inc., 4510 Lamesa Highway, Snyder, Texas 79549, from
+June 30, 2006 through July 11, 2006 and at the Meeting
+for inspection by any stockholder for any purpose regarding the
+Meeting.
+A quorum is necessary to transact business at the Meeting. A
+majority of the shares of Common Stock outstanding on
+June 8, 2006 will constitute a quorum. The shares held by
+each stockholder who signs and
+Table of Contents 
+returns the enclosed form of proxy or properly votes using the
+Internet or telephone will be counted for purposes of
+determining the presence of a quorum at the Meeting.
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the number of members
+of the Board of Directors of Patterson-UTI shall be fixed either
+by amendment to the bylaws or by resolution of the Board of
+Directors. Directors are elected to serve until the next annual
+meeting of stockholders or until their successors are elected
+and qualified. Patterson-UTI’s bylaws provide that the
+affirmative vote of a plurality of the votes cast at the meeting
+at which a quorum is present is required for the election of
+directors. Shares as to which a stockholder withholds authority
+to vote on the election of directors and shares as to which a
+broker indicates that it does not have discretionary authority
+to vote on the election of directors will not be counted as
+voting thereon and will not affect the election of the nominees
+receiving a plurality of the votes cast.
+The enclosed form of proxy provides a means for you to either:
+• 
+vote “FOR” the election of the nominees to the Board
+of Directors listed below, 
+• 
+withhold authority to vote for one or more of the
+nominees, or 
+• 
+withhold authority to vote for all of the nominees. 
+The Board of Directors recommends that you vote
+“FOR” all of the nominees. Unless you give
+contrary instructions in your proxy, your proxy will be voted
+“FOR” the election of all of the nominees to the Board
+of Directors. If any nominee should become unable or unwilling
+to accept nomination or election, the person acting under the
+proxy will vote for the election of such other person as the
+Board of Directors may recommend. The Board has no reason,
+however, to believe that any of the nominees will be unable or
+unwilling to serve if elected.
+There are no arrangements or understandings between any person
+and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no
+family relationships among any of the directors or executive
+officers of Patterson-UTI, other than between
+Messrs. Talbott and Patterson, who are
+brothers-in -law.
+Set forth below is the name, age, position and a brief
+description of the business experience during at least the past
+five years of each of the members of Patterson-UTI’s Board
+of Directors. Each current member of Patterson-UTI’s Board
+of Directors is a nominee for election to the Board of
+Directors, except for A. Glenn Patterson who has chosen not to
+stand for re-election.
+Name 
+Age 
+Position 
+Mark S. Siegel 
+55 
+Chairman of the Board and Director 
+Cloyce A. Talbott 
+70 
+President, Chief Executive Officer and Director 
+A. Glenn Patterson 
+59 
+Former President and Chief Operating Officer and Current
+Director (not standing for re-election) 
+Kenneth N. Berns 
+46 
+Senior Vice President and Director 
+Robert C. Gist 
+65 
+Director 
+Curtis W. Huff 
+48 
+Director 
+Terry H. Hunt 
+58 
+Director 
+Kenneth R. Peak 
+60 
+Director 
+Nadine C. Smith 
+49 
+Director 
+Mark S. Siegel — Mr. Siegel has served as
+Chairman of the Board and as a director of Patterson-UTI since
+May 2001. Mr. Siegel served as Chairman of the Board and as
+a director of UTI Energy Corp. (“UTI”) from 1995 to
+May 2001, when UTI merged with and into Patterson-UTI.
+Mr. Siegel has been President of
+2
+Table of Contents 
+REMY Investors & Consultants, Incorporated (“REMY
+Investors”) since 1993. From 1992 to 1993, Mr. Siegel
+was President, Music Division, Blockbuster Entertainment Corp.
+From 1988 through 1992, Mr. Siegel was an Executive Vice
+President of Shamrock Holdings, Inc., a private investment
+company, and Managing Director of Shamrock Capital Advisors,
+Incorporated. Mr. Siegel holds a Bachelor of Arts degree
+from Colgate University and a J.D. from the University of
+California, Berkeley (Boalt Hall) School of Law.
+Cloyce A. Talbott — Mr. Talbott has served
+as a director of Patterson-UTI since its incorporation in 1978,
+as its Chief Executive Officer since 1983 and as its President
+since May 2006. Mr. Talbott co-founded Patterson-UTI,
+served as Vice President from 1978 to 1983, and served as
+Chairman of the Board from 1983 to May 2001. Mr. Talbott
+holds a Bachelor of Science degree in petroleum engineering from
+Texas Tech University.
+A. Glenn Patterson — Mr. Patterson
+has served as a director of Patterson-UTI since its
+incorporation in 1978. Mr. Patterson co-founded
+Patterson-UTI and served as its President from 1978 to May 2006
+and also as Chief Operating Officer from 1983 to May 2006.
+Mr. Patterson holds a Bachelor of Science degree in
+business from Angelo State University.
+Kenneth N. Berns — Mr. Berns has served as
+Senior Vice President of Patterson-UTI since April 2003 and as a
+director of Patterson-UTI since May 2001. Mr. Berns served
+as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns
+holds a Bachelors Degree in Business Administration from
+San Diego State University and a Masters Degree in Taxation
+from Golden Gate University.
+Robert C. Gist — Mr. Gist has served as a
+director of Patterson-UTI since 1985. He was general legal
+counsel and advisor to Patterson-UTI from 1987 to May 2001.
+Mr. Gist holds a Bachelor of Science degree in economics
+and a J.D. from Southern Methodist University. He has been
+self-employed as an attorney for more than five years and has
+over 20 years experience in the oil and gas industry.
+Curtis W. Huff — Mr. Huff has served as a
+director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1997 to May 2001. Mr. Huff is the
+President and Chief Executive Officer of Freebird Investments
+LLC, a private investment company, and has served in that
+capacity since October 2002. Mr. Huff served as the
+President and Chief Executive Officer of Grant Prideco, Inc., a
+provider of drill pipe and other drill stem products, from
+February 2001 to June 2002. From January 2000 to February 2001,
+Mr. Huff served as Executive Vice President, Chief
+Financial Officer and General Counsel of Weatherford
+International, Inc., an oilfield services company. He served as
+Senior Vice President and General Counsel of Weatherford from
+May 1998 to January 2000. Prior to that time, Mr. Huff was
+a partner with the law firm of Fulbright & Jaworski
+L.L.P. and held that position for more than five years.
+Terry H. Hunt — Mr. Hunt has served as a
+director of Patterson-UTI since April 2003 and served as a
+director of UTI from 1994 to May 2001. Mr. Hunt is an
+energy consultant and investor. Mr. Hunt served as Senior
+Vice President — Strategic Planning of PPL
+Corporation, an international energy and utility holding
+company, from 1998 to 2000. Mr. Hunt served as the
+President and Chief Executive Officer of Penn Fuel Gas, Inc., a
+natural gas and propane distribution company, from 1992 to 1999.
+Previously, Mr. Hunt was President and Chairman of Carnegie
+Natural Gas Company, a gas distribution and transmission
+company, and of Apollo Gas Company, a natural gas distributor.
+Mr. Hunt holds a Bachelor of Engineering degree from the
+University of Saskatchewan, Canada and a Masters of Business
+Administration from Southern Methodist University.
+Kenneth R. Peak — Mr. Peak has served as a
+director of Patterson-UTI since November 2000. Mr. Peak is
+the Chairman of the Board, President, Chief Executive Officer
+and Chief Financial Officer of Contango Oil & Gas
+Company and has served in that capacity since 1999.
+Mr. Peak served as the President of Peak Enernomics,
+Incorporated, an oil and gas industry consulting company, from
+1990 to 1999. Prior to that time, Mr. Peak served as the
+Treasurer of Tosco Corporation, an independent oil refiner, and
+as Chief Financial Officer of Texas International Company, an
+independent oil and gas exploration and production company. His
+tenure at Texas International Company included serving as
+President of TIPCO, the domestic operating subsidiary of Texas
+International’s oil and natural gas operations.
+Mr. Peak’s energy career began in 1973 as a
+3
+Table of Contents 
+commercial banker with First Chicago’s energy group.
+Mr. Peak holds a Bachelor of Science in physics from Ohio
+University and a Masters of Business Administration from
+Columbia University.
+Nadine C. Smith — Ms. Smith has served as
+a director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1995 to May 2001. Ms. Smith is a
+private investor and business consultant. During the past ten
+years, Ms. Smith served as president of several companies,
+including, most recently, Final Arrangements, LLC, a company
+providing software and web-based internet services to the
+funeral industry. Prior to that time, Ms. Smith was an
+investment banker with NC Smith & Co. and The First
+Boston Corporation and a management consultant with
+McKinsey & Co. Ms. Smith is a director of American
+Retirement Corporation, a New York Stock Exchange listed company
+that owns and manages senior housing properties, and Gran
+Tierra, an independent international energy company involved in
+oil and natural gas exploration and exploitation. Ms. Smith
+holds a Bachelor of Science degree in economics from Smith
+College and a Masters of Business Administration from Yale
+University.
+Meetings and Committees of the Board of Directors 
+The Board of Directors met eleven times during the year ended
+December 31, 2005. Each director attended, in person or by
+telephone, at least 75% of the aggregate of all meetings held by
+the Board and all meetings of each committee for which such
+director was eligible to attend. A majority of the members of
+the Board of Directors are independent within the meaning of the
+National Association of Securities Dealers’
+(“NASD”) published listing standards. Specifically,
+the Board has determined that Messrs. Peak, Gist, Huff and
+Hunt and Ms. Smith are independent within the meaning of
+the NASD published listing standards.
+The Board of Directors has an Executive Committee, Audit
+Committee, Compensation Committee and a Nominating and Corporate
+Governance Committee.
+The Executive Committee, which currently is composed of
+Messrs. Siegel, Talbott and Berns, has the authority, to
+the extent permitted by applicable law, to act for the Board in
+all matters arising between regular or special meetings of the
+Board of Directors.
+The Audit Committee oversees management’s conduct of
+Patterson-UTI’s accounting and financial reporting process
+including review of the financial reports and other financial
+information provided by Patterson-UTI to the public and
+government and regulatory bodies, Patterson-UTI’s system of
+internal accounting, Patterson-UTI’s financial controls,
+and the annual independent audit of Patterson-UTI’s
+financial statements. The Audit Committee also oversees
+compliance with Patterson-UTI’s codes of conduct and ethics
+and with legal and regulatory requirements. The Audit Committee
+members are Messrs. Peak, Gist and Huff and Ms. Smith.
+The Board has confirmed that all members of the Audit Committee
+are “independent” within the meaning of
+Item 7(d)(3)(iv) of Schedule 14A under the Securities
+Exchange Act of 1934, as amended (the “Exchange Act”)
+and within the meaning of the NASD’s published listing
+standards. The Board has determined that Mr. Peak is an
+“audit committee financial expert” within the meaning
+of applicable Securities and Exchange Commission
+(“SEC”) rules. The Audit Committee selects, subject to
+the Board’s approval, the independent accountants to audit
+Patterson-UTI’s books and records and considers and acts
+upon accounting matters as they arise. The Board of Directors
+has adopted a written charter for the Audit Committee, a copy of
+which is attached to this proxy statement as Appendix A and
+is available on Patterson-UTI’s website at
+www.patenergy.com. The Audit Committee met ten times during the
+year ended December 31, 2005. Please see the Audit
+Committee Report on page 18 for further information about
+the Audit Committee.
+The Compensation Committee members are Messrs. Huff and
+Hunt and Ms. Smith, each of whom is independent as defined
+in the NASD’s published listing standards. Among other
+things, the Compensation Committee administers the incentive
+compensation plans, including stock option plans of
+Patterson-UTI and determines the annual compensation of the
+executive officers and directors of Patterson-UTI. The
+Compensation Committee held two meetings during the year ended
+December 31, 2005. Please see the Compensation Committee
+Report beginning on page 12 for further information about
+the Compensation Committee.
+4
+Table of Contents 
+The Nominating and Corporate Governance Committee members are
+Messrs. Gist, Huff and Hunt, each of whom is independent as
+defined in the NASD’s published listing standards. The
+purpose of the Nominating and Corporate Governance Committee is
+to identify individuals qualified to become Board members, to
+recommend for selection by the Board director nominees for the
+next annual meeting of stockholders, to review
+Patterson-UTI’s Code of Business Conduct, to develop and
+continually make recommendations with respect to the best
+corporate governance principles and to oversee the evaluation of
+the Board and management. The Board of Directors has adopted a
+written charter for the Nominating and Corporate Governance
+Committee. The Nominating and Corporate Governance Committee
+held one meeting during the year ended December 31, 2005.
+On behalf of the Board, the Nominating and Governance Committee
+considers director nominees recommended by Patterson-UTI’s
+stockholders if the recommendations are made in accordance with
+all legal requirements, including applicable provisions of
+Patterson-UTI’s restated certificate of incorporation and
+bylaws. In accordance with Patterson-UTI’s bylaws, in
+addition to any other applicable requirements, any person
+recommending a nominee for Patterson-UTI’s Board must be a
+stockholder of record on the date of the giving of the notice
+provided for below and on the record date for the determination
+of stockholders entitled to vote at such annual meeting and must
+give timely notice of such nomination in writing to the
+Secretary of Patterson-UTI. To be timely with respect to the
+2007 annual meeting, a stockholder’s notice must be
+delivered to or mailed and received at Patterson-UTI’s
+principal executive offices not earlier than March 14, 2007
+and not later than April 13, 2007; provided, however, that
+in the event that the annual meeting is called for a date that
+is not within 30 days before or after July 12, 2007,
+notice by the stockholder to be timely must be received not
+later than the close of business on the tenth day following the
+day on which such notice of the date of the meeting was mailed
+or public disclosure of the annual meeting date was made,
+whichever occurs first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+as to each person whom the stockholder proposes to nominate for
+election or re-election 
+as director, all information relating to such person that is
+required to be disclosed in solicitations of proxies for
+election of directors, or is otherwise required, in each case
+pursuant to Regulation 14A promulgated under the Exchange
+Act, or any successor regulation thereto, 
+• 
+the name and record address of the stockholder proposing such
+nomination, 
+• 
+the class and number of shares of
+Patterson-UTI that are
+beneficially owned by the stockholder, 
+• 
+a description of all arrangements or understandings between such
+stockholder and each proposed nominee and any other person or
+persons (including their names) pursuant to which the nomination
+or nominations are to be made by such stockholder, and 
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the meeting to nominate the persons named
+in the notice. 
+Such notice must be accompanied by a written consent of each
+proposed nominee to being named as a nominee and to serve as a
+director if elected.
+The Nominating and Corporate Governance Committee determines
+qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of
+Patterson-UTI. The
+Nominating and Corporate Governance Committee relies on the
+knowledge and relationships of
+Patterson-UTI and its
+officers and directors, as well as third parties when it deems
+necessary, to identify and evaluate nominees for director,
+including nominees recommended by stockholders.
+Communication with the Board and Its Independent Members 
+Persons may communicate with the Board, or directly with its
+Chairman, Mr. Siegel, by submitting such communication in
+writing in care of Chairman of the Board of Directors,
+Patterson-UTI Energy,
+Inc., P.O. Box 1416, Snyder, Texas 79550. Persons may
+communicate with the independent members of the Board by
+submitting such communication in writing to the Nominating and
+Corporate Governance Committee of the Board of Directors of
+Patterson-UTI Energy,
+Inc., P.O. Box 1416, Snyder, Texas 79550.
+5
+Table of Contents 
+Corporate Governance Documents Available on
+Patterson-UTI’s 
+Website 
+Copies of each of the following documents are available on the
+Patterson-UTI website
+at www.patenergy.com and in print to any stockholder who
+requests them from the Secretary of
+Patterson-UTI: 
+• 
+Audit Committee Charter; 
+• 
+Compensation Committee Charter; 
+• 
+Nominating and Corporate Governance Committee Charter; 
+• 
+Code of Business Conduct for its employees, officers and
+directors; and 
+• 
+Code of Business Conduct and Ethics for Senior Financial
+Executives. 
+Compensation of Directors 
+Directors who are also employees of
+Patterson-UTI do not
+receive compensation for serving as a director or as a member of
+a committee of the Board of Directors. All directors are
+reimbursed for reasonable
+out-of -pocket expenses
+incurred in connection with attendance at Board of Directors
+meetings and committee meetings. Each non-employee director
+receives annual cash compensation of $35,000 and
+(i) 3,000 shares of restricted stock subject to
+one-year vesting (subject to acceleration in certain limited
+situations, including a change of control) and (ii) an
+option to purchase 10,000 shares of common stock,
+$0.01 par value per share, of
+Patterson-UTI 
+(“Common Stock”) at an exercise price equal to the
+closing price of Common Stock on the grant date. The option has
+a 10-year term, vests
+after one-year (subject to acceleration in certain limited
+situations, including a change of control) and contains a right
+to exercise for three years following cessation of the holder as
+a director (but not beyond the
+10-year term). Each
+non-employee director that serves on the Audit Committee or the
+Compensation Committee receives additional annual cash
+compensation of $10,000 per committee on which he or she
+serves, with the chairman of each such committee receiving
+$15,000. Additionally, each member of the Audit Committee will
+receive cash compensation of $500 per meeting attended,
+beginning with the first Audit Committee meeting following the
+identification of the embezzlement by Jonathan D. Nelson
+and continuing until the conclusion of the Audit
+Committee’s investigation. The Board of Directors formed a
+special litigation committee to review the allegations in
+certain derivative actions that the Board of Directors breached
+their fiduciary duty to
+Patterson-UTI for
+failing to timely discover the embezzlement by Mr. Nelson.
+Each member of the Special Litigation Committee receives cash
+compensation of $500 per meeting attended.
+EXECUTIVE OFFICERS 
+Set forth below is the name, age and position followed by a
+brief description of the business experience during at least the
+past five years for the executive officer of
+Patterson-UTI who is
+not also a member of the Board of Directors.
+Name 
+Age 
+Position 
+John E. Vollmer III 
+50 
+Senior Vice President — Corporate Development, Chief
+Financial Officer, Secretary and Treasurer 
+John E. Vollmer III — Mr. Vollmer has
+served as Chief Financial Officer, Secretary and Treasurer of
+Patterson-UTI since
+November 2005 and Senior Vice President — Corporate
+Development of
+Patterson-UTI since May
+2001. Mr. Vollmer served as Senior Vice President, Chief
+Financial Officer, Secretary and Treasurer of UTI from 1998 to
+May 2001. From 1992 until 1997, Mr. Vollmer served in a
+variety of capacities at Blockbuster Entertainment, including
+Senior Vice President — Finance and Chief Financial
+Officer of Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+6
+Table of Contents 
+Summary Compensation Table 
+The following table sets forth information concerning
+compensation for 2005, 2004 and 2003 earned by or paid to the
+Chief Executive Officer and the other named executive officers
+of Patterson-UTI:
+Annual Compensation 
+Securities 
+Other Annual 
+Restricted 
+Underlying 
+All Other 
+Salary 
+Bonus 
+Compensation(1) 
+Stock 
+Options Granted 
+Compensation(2) 
+Name and Principal Position(s) 
+Year 
+($) 
+($) 
+($) 
+Award(s) 
+(#) 
+($) 
+Mark S. Siegel 
+2005 
+350,000 
+1,650,000 
+30,000 
+(3) 
+150,000 
+— 
+Chairman of the Board 
+2004 
+350,000 
+645,798 
+— 
+50,000 
+(4) 
+120,000 
+— 
+2003 
+298,333 
+411,530 
+— 
+— 
+380,000 
+— 
+Cloyce A. Talbott 
+2005 
+450,000 
+1,000,000 
+102,238 
+30,000 
+(3) 
+150,000 
+6,422 
+Chief Executive Officer 
+2004 
+450,000 
+645,798 
+53,858 
+50,000 
+(4) 
+120,000 
+5,644 
+and President 
+2003 
+413,750 
+411,530 
+— 
+— 
+380,000 
+4,935 
+A. Glenn Patterson 
+2005 
+450,000 
+1,000,000 
+30,000 
+(3) 
+150,000 
+6,422 
+Former President and 
+2004 
+450,000 
+645,798 
+— 
+50,000 
+(4) 
+120,000 
+5,644 
+Chief Operating Officer 
+2003 
+413,750 
+411,530 
+— 
+— 
+380,000 
+4,935 
+Kenneth N. Berns 
+2005 
+215,000 
+900,000 
+15,000 
+(3) 
+75,000 
+— 
+Senior Vice President 
+2004 
+215,000 
+322,899 
+— 
+25,000 
+(4) 
+60,000 
+— 
+2003 
+182,333 
+205,765 
+— 
+— 
+190,000 
+— 
+John E. Vollmer III 
+2005 
+275,000 
+1,250,000 
+15,000 
+(3) 
+75,000 
+4,500 
+Senior Vice President — 
+2004 
+275,000 
+322,899 
+— 
+25,000 
+(4) 
+60,000 
+3,745 
+Corporate Development 
+2003 
+251,908 
+205,765 
+— 
+— 
+190,000 
+3,935 
+Chief Financial Officer, 
+Secretary and Treasurer 
+(1) 
+With respect to Mr. Talbott, consists entirely of personal
+use of Patterson-UTI’s airplane, other than $900 for
+personal use of Patterson-UTI automobile in each of 2004 and
+2005. Due to an administrative error in last year’s Proxy
+Statement, Mr. Talbott’s personal use of the
+Patterson-UTI airplane and automobile was incorrectly reported
+for 2004 as $0. The aggregate amounts of perquisites and other
+personal benefits, securities or property received by each of
+the other executive officers does not exceed the lesser of
+$50,000 or ten percent of that executive officer’s combined
+annual salary and bonus during the applicable year. 
+(2) 
+Amounts set forth reflect Patterson-UTI’s contributions to
+defined contribution plans. 
+(3) 
+Represents restricted stock grants on April 27, 2005, under
+Patterson-UTI’s 1997 Long-Term Incentive Plan, as amended.
+The terms of the restricted stock awards provide that dividends
+may be paid on the shares of restricted stock granted. The
+vesting periods for the restricted stock awards are 50% after
+three years and the remaining 50% after four years, in
+each case from the date of grant. Based on the last reported
+sales price on the Nasdaq Stock Market on December 31, 2005
+of $32.95, the value of the restricted stock was $988,500 for
+each of Messrs. Siegel, Talbott and Patterson and $494,250
+for each of Messrs. Berns and Vollmer. 
+(4) 
+Represents restricted stock grants on April 28, 2004, under
+Patterson-UTI’s 1997 Long-Term Incentive Plan, as amended.
+The terms of the restricted stock awards provide that dividends
+may be paid on the shares of restricted stock granted. The
+vesting periods for the restricted stock awards are 50% after
+three years and the remaining 50% after four years, in each
+case from the date of grant. Based on the last reported sales
+price on the Nasdaq Stock Market on December 31, 2005 of
+$32.95, the value of the restricted stock was $1,647,500 for
+each of Messrs. Siegel, Talbott and Patterson and $823,750
+for each of Messrs. Berns and Vollmer. 
+7
+Table of Contents 
+The following table sets forth information regarding grants of
+stock options during 2005 to the executive officers listed in
+the Summary Compensation Table:
+Options Granted During Fiscal Year 2005 
+Number of 
+% of Total Options 
+Exercise or 
+Securities Underlying 
+Granted to Employees 
+Base Price 
+Expiration 
+Grant Date 
+Name 
+Options Granted 
+in Fiscal Year 
+($/Sh) 
+Date 
+Present Value(2) 
+Mark S. Siegel 
+150,000 
+(1) 
+22.22% 
+$ 
+24.63 
+4/26/15 
+$ 
+949,710 
+Cloyce A. Talbott 
+150,000 
+(1) 
+22.22% 
+$ 
+24.63 
+4/26/15 
+$ 
+949,710 
+A. Glenn Patterson 
+150,000 
+(1) 
+22.22% 
+$ 
+24.63 
+4/26/15 
+$ 
+949,710 
+Kenneth N. Berns 
+75,000 
+(1) 
+11.11% 
+$ 
+24.63 
+4/26/15 
+$ 
+474,855 
+John E. Vollmer III 
+75,000 
+(1) 
+11.11% 
+$ 
+24.63 
+4/26/15 
+$ 
+474,855 
+(1) 
+These options were granted pursuant to the terms and conditions
+of the Patterson-UTI Energy, Inc. Amended and Restated 1997 Long
+Term Incentive Plan. These options vest over a three year period
+as follows: 33.33% on April 27, 2006, and then in equal
+monthly installments over the twenty-four months following
+April 27, 2006. 
+(2) 
+The value of the options were estimated using the Black-Scholes
+option valuation model. The following assumptions were used in
+the calculation: dividend yield of 0.65%, risk-free interest
+rate of 3.84%, volatility of 26.95% and an expected term of
+4 years. No discount was considered for the
+non-transferability or the risk of forfeiture of the options.
+The actual value, if any, of any option will depend on the
+amount, if any, by which the stock price exceeds the exercise
+price on the date the option is exercised. Thus, this valuation
+may not be a reliable indication as to the value and there is no
+assurance the value realized will be at or near the value
+estimated by the Black-Scholes model. 
+The following table sets forth information concerning stock
+options exercised in 2005 and stock options unexercised at
+December 31, 2005 for the executive officers listed in the
+Summary Compensation Table during 2005:
+Aggregated Option Exercises in 2005 
+and Value Table at December 31, 2005 
+Number of Securities 
+Value of Unexercised 
+Underlying Unexercised 
+In-the-Money 
+Options at 
+Options at 
+December 31, 2005(2) 
+December 31, 2005(3) 
+Shares Acquired 
+Value 
+Name 
+on Exercise 
+Realized(1) 
+Exercisable 
+Unexercisable 
+Exercisable 
+Unexercisable 
+Mark S. Siegel 
+824,100 
+$ 
+14,702,052 
+622,011 
+303,889 
+$ 
+11,089,300 
+$ 
+4,150,705 
+Cloyce A. Talbott 
+580,000 
+$ 
+10,016,494 
+866,111 
+303,889 
+$ 
+16,016,895 
+$ 
+4,150,705 
+A. Glenn Patterson 
+570,000 
+$ 
+9,254,101 
+720,111 
+303,889 
+$ 
+13,127,395 
+$ 
+4,150,705 
+Kenneth N. Berns 
+416,400 
+$ 
+7,672,119 
+306,655 
+151,945 
+$ 
+5,458,716 
+$ 
+2,075,352 
+John E. Vollmer III 
+300,000 
+$ 
+6,469,962 
+677,222 
+157,778 
+$ 
+13,054,594 
+$ 
+2,216,606 
+(1) 
+Calculated by subtracting actual option exercise price from the
+market price at the respective dates of exercise and multiplying
+the difference by the number of shares in each category. 
+(2) 
+The total number of unexercised options held as of
+December 31, 2005, separated between those options that
+were exercisable and those options that were not exercisable. 
+(3) 
+Calculated by subtracting the actual option exercise price from
+the market price at December 31, 2005 ($32.95 per
+share) and multiplying the difference by the number of shares in
+each category. 
+8
+Table of Contents 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; 
+INDEMNIFICATION AGREEMENTS 
+On January 29, 2004, Patterson-UTI entered into change in
+control agreements (each, an “Agreement” and
+collectively, the “Agreements”) with
+Messrs. Siegel, Talbott, Berns and Vollmer, (each, an
+“Employee” and collectively, the
+“Employees”). The Agreements were entered into to
+protect the Employees should a change in control occur, thereby
+encouraging the Employee to remain in the employ of
+Patterson-UTI and not be distracted from the performance of his
+duties to Patterson-UTI by the possibility of a change in
+control.
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other
+than for cause or by the Employee for good reason, the terms of
+the Agreement would entitle the Employee to, among other things:
+• 
+a bonus payment equal to the greater of the highest bonus paid
+after the Agreement was entered into and the average of the two
+annual bonuses earned in the two fiscal years immediately
+preceding a change in control (such bonus payment prorated for
+the portion of the fiscal year preceding the termination date), 
+• 
+a payment equal to 2.5 times (in the case of Messrs. Siegel
+and Talbott) or 1.5 times (in the case of Messrs. Berns and
+Vollmer) of the sum of (1) the highest annual salary in
+effect for such Employee and (2) the average of the three
+annual bonuses earned by the Employee for the three fiscal years
+preceding the termination date, and 
+• 
+continued coverage under Patterson-UTI’s welfare plans for
+up to three years (in the case of Messrs. Siegel and
+Talbott) or two years (in the case of Messrs. Berns and
+Vollmer). 
+Each Agreement provides the Employee with a full
+gross-up payment for
+any excise taxes imposed on payments and benefits received under
+the Agreements or otherwise including other taxes that may be
+imposed as a result of the
+gross-up payment.
+A change in control is principally defined by the Agreement as:
+• 
+an acquisition by any individual, entity or group of beneficial
+ownership of 35% or more of either Patterson-UTI’s then
+outstanding Common Stock or the combined voting power of the
+then outstanding voting securities of Patterson-UTI entitled to
+vote in the election of directors, 
+• 
+a change occurs in which the members of the Board of Directors
+as of the date of the Agreement cease to constitute at least a
+majority of Patterson-UTI’s Board of Directors unless that
+change occurs through a vote of at least a majority of the
+incumbent members of the Board of Directors, or 
+• 
+a change in the beneficial ownership of Patterson-UTI following
+consummation of a reorganization, merger, consolidation, sale of
+Patterson-UTI or any subsidiary of Patterson-UTI or a
+disposition of all or substantially all of the assets of
+Patterson-UTI in which the beneficial owners immediately prior
+to the transaction own 65% or less of outstanding Common Stock
+of the newly combined or merged entity. 
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or retirement, 
+• 
+the termination of the Employee’s employment, or 
+• 
+three years from the date the Agreement was signed although,
+unless otherwise terminated, the Agreements will automatically
+renew for successive twelve-month periods unless Patterson-UTI
+notifies the Employee at least 90 days before the
+expiration of the initial term or the renewal period, as
+applicable, that the term will not be extended. 
+All unvested stock options held by executive officers vest upon
+a change of control as defined by the underlying stock option
+plan.
+9
+Table of Contents 
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer confirming and
+evidencing the existing agreements between Patterson-UTI and
+each of them pursuant to which Patterson-UTI has agreed to pay
+each such person within ten days of the termination of his
+employment with Patterson-UTI for any reason (including
+voluntary termination by him), an amount in cash equal to his
+annual base salary at the time of such termination. Any such
+payment made by Patterson-UTI pursuant to the agreement
+evidenced in these letter agreements will reduce dollar for
+dollar any payment owed to such person, if any, pursuant to the
+change in control agreements discussed above.
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer following Mr. Nelson’s embezzlement
+(which is described in Note 2 of Notes to Consolidated
+Financial Statements included as a part of Item 8 of
+Patterson-UTI’s 
+Annual Report on
+Form 10-K, as
+amended, for the year ended December 31, 2005),
+Patterson-UTI delivered a letter to Mr. Vollmer dated
+February 6, 2006 (the “Letter Agreement”).
+Pursuant to the Letter Agreement, Patterson-UTI agreed, to the
+extent permitted by law and provided that the applicable
+accounting restatement has not resulted from
+Patterson-UTI’s material non-compliance with financial
+reporting requirements under the federal securities laws as a
+result of knowing misconduct by Mr. Vollmer:
+• 
+Patterson-UTI is not entitled to and will not make any claim
+against Mr. Vollmer for reimbursement of any bonus or other
+incentive or equity based compensation received by him or any
+profits realized by him from the sale of securities of
+Patterson-UTI, under Section 304 of the Sarbanes-Oxley Act
+of 2002 (“Section 304”) on account of the
+restatement of any financial statements of Patterson-UTI
+covering any accounting period ending on or prior to
+September 30, 2005; 
+• 
+Patterson-UTI will not make any claim against Mr. Vollmer
+for any profits realized from the sale of securities of
+Patterson-UTI that were owned by him prior to his becoming Chief
+Financial Officer or were acquired by him on account of the
+exercise of options or the settling of restricted stock units
+that were held by him immediately prior to his becoming Chief
+Financial Officer, under Section 304 on account of the
+restatement of any financial statements of Patterson-UTI
+covering any period during which he was Chief Financial
+Officer; and 
+• 
+Patterson-UTI will indemnify Mr. Vollmer against all losses
+in connection with his defense of any claim against him under
+Section 304 in contravention of the two immediately
+preceding bullets, to the extent he is obligated to reimburse
+Patterson-UTI for any bonus or other incentive or equity
+compensation received by him or any profits realized by him for
+the sale of Patterson-UTI securities. 
+Notwithstanding recent court decisions that Patterson-UTI’s
+right to make any such claims appears doubtful, Patterson-UTI
+has entered into this agreement because of the breadth of
+language of Section 304 and the uncertainty as to how the
+statute may be interpreted by the courts in the future and the
+importance of Mr. Vollmer’s continued service as Chief
+Financial Officer.
+Patterson-UTI has entered into an employment agreement with A.
+Glenn Patterson pursuant to which Patterson-UTI will employ
+Mr. Patterson for five years at an annual compensation of
+$250,000 per year.
+Patterson-UTI has entered into an indemnification agreement with
+each of its executive officers and directors containing
+provisions that may require Patterson-UTI, among other things,
+to indemnify such executive officers and directors against
+liabilities that may arise by reason of their status or service
+as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN TRANSACTIONS 
+In connection with the acquisition by REMY Capital
+Partners III, L.P. (“REMY Capital”) of an
+ownership interest in UTI in March 1995, REMY Capital succeeded
+to a registration rights agreement with UTI. As the
+successor-in -interest
+to UTI, Patterson-UTI assumed this registration rights agreement
+pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares
+held by REMY Capital under the Securities Act of 1933, as
+amended. In the event that such rights are
+10
+Table of Contents 
+exercised in connection with a primary offering proposed by
+Patterson-UTI (or a
+secondary offering with which Patterson-UTI agrees to
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elected to exercise such rights other than in
+connection with an offering in which Patterson-UTI participates,
+REMY Capital would bear all costs of the offering. These rights
+continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is
+President and sole stockholder of REMY Investors, which is the
+general partner of REMY Capital. Mr. Berns, a director and
+Senior Vice President of Patterson-UTI, is an executive of REMY
+Investors.
+During 2005,
+Patterson-UTI paid
+approximately $424,000 to TMP Truck and Trailer LP
+(“TMP”), during the period it was owned by
+Thomas M. Patterson (son of A. Glenn Patterson,
+Patterson-UTI’s former President and Chief Operating
+Officer), for certain equipment and metal fabrication services.
+Purchases from TMP were at current market prices.
+During 2005,
+Patterson-UTI paid
+approximately $273,000 to Melco Services (“Melco”) for
+dirt contracting services and $59,000 to L&N Transportation
+(“L&N”) for water hauling services. Both entities
+are owned by Lance D. Nelson, brother of Jonathan D.
+Nelson, Patterson-UTI’s former Chief Financial Officer.
+Purchases from Melco and L&N were at current market prices.
+Patterson-UTI operates certain oil and natural gas properties in
+which certain of its officers, former officers and members of
+their respective families have participated, either individually
+or through entities they control, in the prospects or properties
+in which Patterson-UTI 
+has an interest. These participations, which have been on a
+working interest basis, have been in prospects or properties
+originated or acquired by
+Patterson-UTI. At
+December 31, 2005, affiliated persons were working interest
+owners of 254 of the 305 wells operated by
+Patterson-UTI. Sales of
+working interests are made by
+Patterson-UTI to reduce
+its economic risk in the properties. Generally, it is more
+efficient for
+Patterson-UTI to sell
+the working interests to these affiliated persons than to market
+them to unrelated third parties. Sales were made by
+Patterson-UTI at its
+cost, including
+Patterson-UTI’s 
+costs of acquiring and preparing the working interests for sale.
+These costs were paid by the working interest owners on a pro
+rata basis based upon their working interest ownership
+percentage. The price at which working interests were sold to
+affiliated persons was the same price at which working interests
+were sold to unaffiliated persons.
+11
+Table of Contents 
+The following table sets forth production revenues received and
+joint interest costs of each of the affiliated persons during
+2005 for all wells operated by
+Patterson-UTI in which
+they have working interests. These amounts do not necessarily
+represent their profits or losses from these interests because
+the joint interest costs do not include the parties’
+related drilling and leasehold acquisition costs incurred prior
+to January 1, 2005. These activities resulted in a payable
+to the affiliated persons of approximately $1.5 million at
+December 31, 2005 and a receivable from the affiliated
+persons of approximately $1.2 million at December 31,
+2005.
+Year Ended December 31, 2005 
+Joint 
+Production 
+Interest 
+Name 
+Revenues(1) 
+Costs(2) 
+Cloyce A. Talbott 
+$ 
+195,491 
+$ 
+49,668 
+Anita Talbott(3) 
+88,824 
+21,389 
+Jana Talbott, Executrix to the Estate of Steve Talbott(3) 
+19,373 
+2,871 
+Stan Talbott(3) 
+7,639 
+3,163 
+John Evan Talbott Trust(3) 
+3,725 
+987 
+Lisa Beck and Stacy Talbott(3) 
+1,158,657 
+492,839 
+SSI Oil & Gas, Inc.(4) 
+210,825 
+97,152 
+IDC Enterprises, Ltd.(5) 
+13,432,098 
+8,460,393 
+Subtotal 
+15,116,632 
+9,128,462 
+A. Glenn Patterson, former President and Chief Operating Officer 
+122,348 
+29,075 
+Robert Patterson(6) 
+7,719 
+4,396 
+Thomas M. Patterson(6) 
+7,719 
+4,396 
+Subtotal 
+137,786 
+37,867 
+Jonathan D. Nelson, former Chief Financial Officer 
+290,506 
+381,506 
+Total 
+$ 
+15,544,924 
+$ 
+9,547,835 
+(1) 
+Revenues for production of oil and natural gas, net of state
+severance taxes. 
+(2) 
+Includes leasehold costs, tangible equipment costs, intangible
+drilling costs, and lease operating expense billed during that
+period. All joint interest costs have been paid on a timely
+basis. 
+(3) 
+Anita Talbott is the wife of Cloyce A. Talbott. Stan Talbott,
+Lisa Beck, and Stacy Talbott are Mr. Talbott’s adult
+children. Steve Talbott is the deceased son of Mr. Talbott.
+John Evan Talbott is Mr. Talbott’s grandson. 
+(4) 
+SSI Oil & Gas, Inc. is beneficially owned 50% by
+Cloyce A. Talbott and directly owned 50% by A. Glenn
+Patterson. 
+(5) 
+IDC Enterprises, Ltd. is 50% owned by Cloyce A. Talbott and
+50% owned by A. Glenn Patterson. 
+(6) 
+Robert and Thomas M. Patterson are A. Glenn
+Patterson’s adult children. 
+See Note 2 of Notes to Consolidated Financial Statements
+included as part of Item 8 of
+Patterson-UTI’s 
+Annual Report on
+Form 10-K, as
+amended, for the year ended December 31, 2005 for
+information pertaining to fraudulent payments made to or for the
+benefit of Jonathan D. Nelson, our former Chief Financial
+Officer.
+COMPENSATION COMMITTEE REPORT 
+Overview. The Compensation Committee sets and
+administers the policies that govern the compensation of
+executive officers and directors of
+Patterson-UTI. As part
+of its duties, the Compensation Committee determines the base
+compensation of executive officers, the total amount of bonuses
+to be paid annually and grants all awards of restricted stock,
+and stock options under
+Patterson-UTI’s 
+long-term incentive plan. The Compensation Committee consists of
+Messrs. Huff and Hunt, and Ms. Smith, each of whom is
+an
+12
+Table of Contents 
+independent director as defined by the NASD published listing
+standards. In performing its duties, the Compensation Committee
+receives recommendations and advice from senior management and
+the Audit Committee on individual performance and compensation
+matters. The Committee has also retained an independent
+compensation consultant who reports directly to the Compensation
+Committee.
+The Compensation Committee’s policy is to provide to the
+executives competitive compensation packages that will permit
+Patterson-UTI to
+attract and retain highly qualified individuals and to motivate
+and reward
+Patterson-UTI’s 
+executives for performance that benefits the Company and its
+shareholders.
+Patterson-UTI’s 
+executive compensation package has in recent years consisted of
+a combination of base salary, a 401(k) plan, cash bonus awards
+and long-term incentive opportunities in the form of restricted
+stock and stock options. The Compensation Committee is also
+currently engaged in a complete review of its compensation
+policies and structures for 2006 in light of market and other
+factors.
+In fixing the compensation plan for 2005, the Compensation
+Committee considered a wide variety of information, including
+(i) compensation for executive officers at similarly
+situated oilfield service companies, (ii) historical and
+projected financial and operational results at
+Patterson-UTI, 
+including margin improvements, rig activations, net income and
+earnings before interest, taxes, depreciation and amortization
+(“EBITDA”) and return on equity and capital,
+(iii) historical stock performance and (iv) individual
+performance. In addition, in reviewing bonuses for 2005, the
+Compensation Committee considered the record financial and
+operating results of
+Patterson-UTI in 2005,
+including $738 million in EBITDA, a 295% increase in net
+income to $373 million in 2005 from $94 million in
+2004, an increase in the average number of operating rigs to 276
+in 2005 from 211 in 2004, a 116% increase in average margin per
+rig operating day to $7,050 in 2005 from $3,270 in 2004, and
+record results in
+Patterson-UTI’s 
+pressure pumping, fluids and oil and gas operations.
+In November 2005 we discovered that our prior Chief Financial
+Officer, Jonathan D. Nelson, had engaged in a multi-year
+embezzlement scheme in which over $77 million was stolen by
+him from Patterson-UTI. 
+Following the discovery of the embezzlement, the Audit Committee
+of Patterson-UTI 
+engaged in an investigation of the circumstances surrounding the
+embezzlement and determined that certain material weaknesses and
+significant deficiencies existed in our internal controls,
+including our control environment. The embezzlement also
+resulted in a concerted effort by
+Patterson-UTI to trace
+the stolen assets and to reflect properly the effects of the
+embezzlement in a restatement of the historical financial
+statements of
+Patterson-UTI for prior
+periods. As discussed below, bonus decisions for 2005 took into
+account the existence and circumstances of the embezzlement and
+the efforts of senior and other management in responding to it.
+Executive Salaries. Executive salaries are
+reviewed annually by the Compensation Committee and are
+determined generally for each officer based on
+(i) subjective evaluations of the officer’s functional
+position and specific performance, (ii) assessment of the
+relative importance of each position at
+Patterson-UTI, 
+(iii) a comparison to salary ranges for executives of other
+companies in the oilfield service industry with market,
+financial and operational characteristics similar to those of
+Patterson-UTI, 
+(iv) Patterson-UTI’s 
+financial results and position and
+(v) Patterson-UTI’s 
+performance compared to similar companies. The process applied
+by the Compensation Committee is intended to allow the committee
+to set salaries in a manner that is both competitive and
+reasonable within the industry. Historically, the Compensation
+Committee has tried to emphasize performance based compensation
+in the form of incentive bonuses and equity compensation so that
+salary adjustments have been minimized. As a result, the base
+compensation of our Chief Executive Officer and Chairman have
+historically been in the lower quartile against similarly
+situated companies with bonuses and equity incentives targeted
+to provide potential upper quartile compensation if the
+Company’s operational, financial and stock performance were
+similarly strong.
+Executive Bonuses. In recent years, including
+2005,
+Patterson-UTI’s 
+bonus plan for its executive officers has been tied to a bonus
+pool based on 1% of
+Patterson-UTI’s 
+EBITDA. The bonus pool would then be allocated among the
+executive officers of
+Patterson-UTI based on
+a pre-determined sharing percentage of the bonus that reflected
+a team-based philosophy as well as the organizational structure
+of the top management team. The allocations have also been
+subject to modification by the Compensation Committee based on
+individual and corporate performance. In 2005 the potential
+executive bonus pool was $7.4 million, but it was
+13
+Table of Contents 
+adjusted down to $5.8 million in light of the Nelson
+embezzlement. In addition, the allocations under the bonus pool
+were adjusted in light of Nelson embezzlement, including the
+previously reported results of the Audit Committee’s
+investigation and the significant efforts of management in
+responding to and addressing the financial and operational
+impacts of the embezzlement.
+Stock Based Compensation. Equity based
+compensation consists of both awards of options to purchase
+Common Stock and shares of restricted stock. It is the policy of
+the Compensation Committee to review stock-based compensation of
+Patterson-UTI on at
+least an annual basis. Awards of stock-based compensation
+reflect the Board’s and the Compensation Committee’s
+desire to provide
+Patterson-UTI’s 
+employees who have substantial responsibility for management and
+growth with additional incentives by increasing their
+proprietary interest in the success of
+Patterson-UTI. The
+Compensation Committee believes that there should be an emphasis
+on equity-based compensation in order to provide incentives and
+rewards that are closely aligned with shareholders.
+Patterson-UTI’s 
+equity-based compensation has historically been given more
+weight in our executive’s overall compensation package than
+cash compensation. Grants of options and restricted stock vest
+over time, with restricted stock grants currently having a four
+year vesting schedule whereby no shares vest until
+three years after grant subject to certain acceleration
+events. The allocation of equity-based compensation among the
+executive officers of
+Patterson-UTI is made
+by the Compensation Committee based on various factors,
+including the executive’s position and contribution to the
+overall goals and objectives of
+Patterson-UTI. The
+allocation and mix of equity-based compensation between
+restricted stock and options in 2005 followed this approach,
+with an emphasis on option based compensation over restricted
+stock in order to ensure that the greatest awards would only be
+earned for increasing the Company’s equity value.
+CEO 2005 Compensation. The compensation of the
+Chief Executive Officer of
+Patterson-UTI for 2005
+was determined in accordance with the policies described above.
+Mr. Talbott’s base annual salary was fixed at $450,000
+in 2005 reflecting
+Patterson-UTI’s 
+emphasis on incentive compensation. Mr. Talbott also
+received a cash bonus for 2005 of $1,000,000 from the executive
+bonus pool discussed above. This bonus reflected the significant
+contribution that Mr. Talbott provided to
+Patterson-UTI in
+achieving operational successes, including record earnings,
+margins and profitability. However, this bonus was less than it
+otherwise would have been without the occurrence of the Nelson
+embezzlement. The Compensation Committee in 2005 also awarded
+Mr. Talbott 30,000 shares of restricted stock having a
+four-year vesting period and options to
+purchase 150,000 shares of Common Stock at the then
+current market price.
+Share Ownership Guidelines. The Compensation
+Committee in 2004, with the approval of the Board, enacted share
+ownership guidelines applicable to all executive officers and
+directors of
+Patterson-UTI. Under
+this policy and subject to a four-year phase-in, each of
+Patterson-UTI’s 
+Chairman, Chief Executive Officer and President is required to
+hold shares of Common Stock having a value equal to at least
+five times the officer’s base compensation and each of
+Patterson-UTI’s 
+other executive officers is required to hold shares of Common
+Stock having a value equal to at least three times the
+officer’s base compensation. The Compensation Committee
+also imposed share ownership guidelines for directors. Under
+those guidelines, subject to a four-year phase-in, each director
+of Patterson-UTI is
+required to hold shares of Common Stock having a value equal to
+at least four times the cash compensation provided to the
+director.
+Section 162(m) Considerations. In considering
+compensation decisions for the executive management of
+Patterson-UTI, the
+Compensation Committee of
+Patterson-UTI routinely
+considers the potential effect of section 162(m) of the tax
+code. Section 162(m) imposes a limitation on corporate tax
+deductions for non-performance based compensation to certain
+officers that exceeds $1 million that can be taken by a
+publicly held corporation for compensation paid to certain of
+its executive officers. The Committee believes that tax
+deduction limitations should not compromise the Company’s
+ability to establish and maintain appropriate executive
+compensation programs and reserves the right to award
+non-deductible pay in certain situations.
+14
+Table of Contents 
+PERFORMANCE GRAPH 
+The following graph compares the cumulative stockholder return
+on the Common Stock of Patterson-UTI, for the period from
+December 31, 2000 through December 31, 2005, with the
+cumulative total return of the Standard and Poors 500 Stock
+Index, the Standard and Poors MidCap Index, the Oilfield Service
+Index, and a Patterson-UTI determined peer group.
+Patterson-UTI’s 2005 peer group consists of Grey Wolf,
+Inc., Helmerich & Payne, Inc., Nabors Industries, Ltd.,
+Pioneer Drilling Co. and Unit Corp. Patterson-UTI’s 2004
+peer group index comprised the companies in its 2005 peer group
+plus Precision Drilling Corp. Precision Drilling Corp. was not
+included in Patterson-UTI’s 2005 peer group index because
+it was converted to a trust during 2005. All of the companies in
+Patterson-UTI’s 2005 peer group are providers of land-based
+drilling services. The graph assumes investment of $100 on
+December 31, 2000 and reinvestment of all dividends.
+COMPARISON OF CUMULATIVE TOTAL RETURNS 
+(Total return based on $100 initial investment and
+reinvestment of all dividends) 
+Basis 
+2000 
+2001 
+2002 
+2003 
+2004 
+2005 
+Description 
+($) 
+($) 
+($) 
+($) 
+($) 
+($) 
+Patterson-UTI Energy, Inc. 
+100.00 
+62.58 
+80.99 
+88.40 
+105.34 
+179.46 
+2005 Peer Group Index 
+100.00 
+61.43 
+63.42 
+72.01 
+92.85 
+141.93 
+2004 Peer Group Index 
+100.00 
+62.47 
+66.40 
+77.60 
+102.13 
+156.22 
+S&P 500 Index 
+100.00 
+88.12 
+68.64 
+88.33 
+97.94 
+102.75 
+S&P MidCap Index 
+100.00 
+99.39 
+84.97 
+115.23 
+134.23 
+151.08 
+Oilfield Service Index (OSX) 
+100.00 
+69.25 
+63.37 
+74.50 
+99.55 
+149.24 
+The foregoing graph is based on historical data and is not
+necessarily indicative of future performance. This graph shall
+not be deemed to be “soliciting material” or to be
+“filed” with the SEC or subject to the Regulations of
+14A or 14C under the Exchange Act or to the liabilities of
+Section 18 under such act.
+15
+Table of Contents 
+SECURITY OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of June 8, 2006, the
+stock ownership of (i) the named executive officers,
+directors and Board nominees individually, (ii) all
+directors, Board nominees and named executive officers as a
+group and (iii) each person known by Patterson-UTI to be
+the beneficial owner of more than 5% of Common Stock.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common
+Stock: 
+Barclays Global Investors(1) 
+17,790,892 
+10.6 
+% 
+Directors, Board nominees and Named Executive Officers Listed
+in 
+Summary Compensation Table: 
+Mark S. Siegel 
+2,489,948 
+(2) 
+1.5 
+% 
+Cloyce A. Talbott 
+1,347,632 
+(3) 
+* 
+A. Glenn Patterson 
+1,056,648 
+(4) 
+* 
+Kenneth N. Berns 
+459,850 
+(5) 
+* 
+Robert C. Gist 
+124,772 
+(6) 
+* 
+Curtis W. Huff 
+53,880 
+(7) 
+* 
+Terry H. Hunt 
+31,800 
+(8) 
+* 
+Kenneth R. Peak 
+3,000 
+(9) 
+* 
+Nadine C. Smith 
+81,000 
+(10) 
+* 
+John E. Vollmer III 
+805,750 
+(11) 
+* 
+All directors and named executive officers as a group 
+6,454,280 
+(12) 
+3.7 
+% 
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G filed jointly by Barclays
+Global Investors, NA (“Barclays Investors”), Barclays
+Global Fund Advisors (“Barclays Advisors”),
+Barclays Global Investors, Ltd. (“Barclays Ltd.”) and
+Barclays Global Investors Japan Trust and Banking Company
+Limited (“Barclays Japan”) with the Securities and
+Exchange Commission on January 26, 2006. According to the
+report, Barclays Investors has sole voting power with respect to
+11,466,241 shares and sole dispositive power with respect
+to 13,780,856 shares. Barclays Advisors has sole voting
+power with respect to 1,835,792 shares and sole dispositive
+power with respect to 1,840,020 shares. Barclays Ltd. has
+sole voting power with respect to 1,869,503 shares and sole
+dispositive power with respect to 2,027,585 shares.
+Barclays Japan has sole voting and dispositive power with
+respect to 142,431 shares. The address of the principal
+business office of Barclays Investors and Barclays Advisors is
+45 Fremont Street, San Francisco, California 94105.
+The address of the principal business office of Barclays Ltd. is
+Murray House, 1 Royal Mint Court, London EC3N 4HH. The
+address of the principal business office of Barclays Japan is
+Ebisu Prime Square Tower 8th Floor, 1-1-39 Hiroo
+Shibuya-Ku, Tokyo, Japan
+150-0012. 
+(2) 
+Mr. Siegel is the President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital
+Partners III, L.P. (“REMY Capital”). The Common
+Stock beneficially owned by Mr. Siegel includes
+1,541,548 shares of Common Stock owned by REMY Capital. The
+Common Stock beneficially owned by Mr. Siegel also includes
+stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within sixty days, to
+purchase 808,400 shares of Common Stock, but does not
+include 117,500 shares underlying stock options held by
+Mr. Siegel that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+80,000 shares of restricted Common Stock held by
+Mr. Siegel, over which he presently has voting power. 
+(3) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 1,052,500 shares. Does not include shares
+underlying stock options held by Mr. Talbott to
+purchase 117,500 shares each that are not presently
+exercisable and will 
+16
+Table of Contents 
+not become exercisable within sixty days. Includes
+80,000 shares of restricted Common Stock held by
+Mr. Talbott, over which he presently has voting power. 
+(4) 
+Includes shares underlying stock options held by
+Mr. Patterson, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 906,500 shares. Does not include shares
+underlying stock options held by Mr. Patterson to purchase
+117,500 shares each that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+80,000 shares of restricted Common Stock held by
+Mr. Patterson, over which he presently has voting power. 
+(5) 
+Includes shares underlying stock options owned by
+Mr. Berns, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 399,850 shares. Does not include
+58,750 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 40,000 shares of restricted Common
+Stock held by Mr. Berns, over which he presently has voting
+power. Does not include shares of Common Stock beneficially
+owned by REMY Investors. Mr. Berns disclaims beneficial
+ownership of such shares beneficially owned by REMY Investors. 
+(6) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Gist to purchase 70,000 shares.
+Includes 3,000 shares of restricted Common Stock held by
+Mr. Gist, over which he presently has voting power. Does
+not include 10,000 shares underlying stock options held by
+Mr. Gist that are not presently exercisable and will not
+become exercisable within sixty days. 
+(7) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Huff to purchase 20,000 shares.
+Includes 3,000 shares of restricted Common Stock held by
+Mr. Huff, over which he presently has voting power. Does
+not include 10,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days. 
+(8) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Hunt to purchase 20,000 shares.
+Includes 800 shares of Common Stock owned by
+Mr. Hunt’s
+mother-in -law, over
+which Mr. Hunt presently has shared voting power. Includes
+3,000 shares of restricted Common Stock held by
+Mr. Hunt, over which he presently has voting power. Does
+not include 10,000 shares underlying stock options held by
+Mr. Hunt that are not presently exercisable and will not
+become exercisable within sixty days. 
+(9) 
+Includes 3,000 shares of restricted Common Stock held by
+Mr. Peak, over which he presently has voting power. Does
+not include 10,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days. 
+(10) 
+Includes shares underlying presently exercisable stock options
+held by Ms. Smith to purchase 70,000 shares.
+Includes 3,000 shares of restricted Common Stock held by
+Ms. Smith, over which she presently has voting power. Does
+not include 10,000 shares underlying stock options held by
+Ms. Smith that are not presently exercisable and will not
+become exercisable within sixty days. 
+(11) 
+Includes shares underlying stock options owned by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to
+purchase 765,750 shares. Does not include
+69,250 shares underlying stock options held by
+Mr. Vollmer that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+40,000 shares of restricted Common Stock held by
+Mr. Vollmer, over which he presently has voting power. 
+(12) 
+Includes shares underlying stock options, which are presently
+exercisable or become exercisable within sixty days, to
+purchase 4,113,000 shares of Common Stock. Does not
+include shares underlying stock options to
+purchase 530,500 shares owned by such individuals that
+are not presently exercisable and will not become exercisable
+within sixty days. Includes 800 shares of Common Stock over
+which a director presently has shared voting power. Includes an
+aggregate of 335,000 shares of restricted Common Stock held
+by certain directors and executive officers, over which they
+presently have voting power. 
+Except as stated herein, each stockholder has sole voting and
+investment power with respect to Common Stock included in the
+above table. There are no arrangements known to Patterson-UTI
+which may result in a change in control.
+17
+Table of Contents 
+AUDIT COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute
+soliciting material and should not be deemed filed or
+incorporated by reference into any other
+Patterson-UTI filing
+under the Securities Act of 1933, as amended, or the Exchange
+Act, except to the extent
+Patterson-UTI 
+specifically incorporates this report by reference therein.
+The Audit Committee has reviewed and discussed the audited
+financial statements with management and the Company’s
+independent auditors.
+The Audit Committee has discussed with the independent auditors
+the matters required to be discussed by Statement on Auditing
+Standards No. 61, Communication with Audit
+Committees, as amended, by the Auditing Standards Board of
+the American Institute of Certified Public Accountants.
+The Audit Committee has received and reviewed the written
+disclosures and the letter from the independent auditors
+required by Independence Standard No. 1, Independence
+Discussions with Audit Committees , as amended, by the
+Independence Standards Board, and has discussed with the
+auditors the auditors’ independence.
+Taking the foregoing into consideration, the undersigned Audit
+Committee members recommended to the Board of Directors that the
+Board approve the inclusion of the
+Patterson-UTI’s 
+audited financial statements in the Annual Report on
+Form 10-K, as
+amended, for the fiscal year ended December 31, 2005.
+Audit Committee of the Board of Directors: 
+Kenneth R. Peak, Chairman 
+Robert C. Gist 
+Curtis W. Huff 
+Nadine C. Smith 
+PricewaterhouseCoopers Fees for Fiscal Years 2005 and 2004 
+In 2005 and 2004,
+Patterson-UTI and its
+subsidiaries incurred fees for services provided relating to
+(i) professional services rendered for the audit of
+Patterson-UTI’s 
+annual financial statements, review of quarterly financial
+statements, and assessment of Patterson-UTI’s internal
+controls over financial reporting, (ii) professional
+services rendered for assurance and related services that are
+reasonably related to the performance of the audit or review of
+Patterson-UTI’s 
+financial statements, (iii) professional services rendered
+for tax compliance, advice and planning, and (iv) products
+and services provided by PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2005 
+2004 
+Audit fees 
+$ 
+2,396,000 
+$ 
+1,434,000 
+Audit-related fees 
+— 
+126,000 
+Tax fees 
+83,000 
+573,000 
+All other fees 
+1,600 
+19,000 
+Total 
+$ 
+2,480,600 
+$ 
+2,152,000 
+The Audit Committee approves the appointment of the independent
+audit firm. The Audit Committee or Mr. Peak, as Chairman of
+the Audit Committee, approves all other engagements of the
+independent audit firm in advance. In the event Mr. Peak
+approves any such engagement, he discusses such approval with
+the Audit Committee at its next meeting.
+18
+Table of Contents 
+Fiscal 2005 
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2005 consisting of the
+examination of
+Patterson-UTI’s 
+consolidated financial statements, quarterly reviews of
+Patterson-UTI’s 
+interim financial statements, services to assess
+Patterson-UTI’s 
+internal control over financial reporting and for the
+restatement of financial statements for prior years and the
+first three quarterly periods of 2005. “Tax fees”
+include federal, state, local and foreign tax compliance and
+related matters. “All other fees” includes other
+non-audit related
+matters. The Audit Committee or Mr. Peak, as Chairman of
+the Audit Committee, approved all of the services described
+above.
+Fiscal 2004 
+“Audit Fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2004 consisting of the
+examination of
+Patterson-UTI’s 
+consolidated financial statements, quarterly reviews of
+Patterson-UTI’s 
+interim financial statements and services provided to assess
+Patterson-UTI’s 
+internal controls over financial reporting. “Audit-related
+Fees” includes services provided which relate to the
+acquisition of TMBR/ Sharp Drilling, Inc. and associated filings
+made with the SEC. “Tax Fees” includes federal, state,
+local and foreign tax compliance and related matters. “All
+Other Fees” includes other
+non-audit related
+matters. The Audit Committee or Mr. Peak, as Chairman of
+the Audit Committee, approved all of the services described
+above.
+The Audit Committee has discussed the non-audit services
+provided by PricewaterhouseCoopers LLP and the related fees and
+has considered whether those services and fees are compatible
+with maintaining auditor independence. The Audit Committee
+determined that such non-audit services were consistent with the
+independence of PricewaterhouseCoopers LLP.
+Independent Accountants 
+The Board of Directors, acting upon the recommendation and
+approval of the Audit Committee, voted to engage
+PricewaterhouseCoopers LLP as independent accountants to audit
+the financial statements of Patterson-UTI for the fiscal year
+ending December 31, 2006. It is expected that one or more
+representatives of PricewaterhouseCoopers LLP will be present at
+the Meeting and will be given the opportunity to make a
+statement if they so desire. It is also expected that the
+representatives will be available to respond to appropriate
+questions from the stockholders.
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting
+Compliance 
+Section 16(a) of the Securities Exchange Act requires
+Patterson-UTI’s 
+officers and directors and persons who own more than 10% of a
+registered class of
+Patterson-UTI’s 
+equity securities, to file reports of ownership and changes in
+ownership with the SEC. Each of these persons is required by SEC
+regulation to furnish
+Patterson-UTI with
+copies of Section 16(a) filings.
+Based solely on its review of copies of such forms received by
+it, Patterson-UTI 
+believes that, during the year ended December 31, 2005, its
+officers, directors and beneficial owners of more than ten
+percent of a registered class of its equity securities complied
+with all applicable filing requirements.
+Other Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not
+aware of any matter to be presented at the Meeting other than as
+set forth herein. If any other matters are properly brought
+before the Meeting, however, the shares represented by valid
+proxies will be voted with respect to such matters in accordance
+with the judgment of the persons voting them.
+19
+Table of Contents 
+Stockholder Proposals for 2007 Annual Meeting 
+All proposals submitted by stockholders for presentation at the
+2007 annual meeting must comply with the SEC’s rules
+regarding shareholder proposals. In addition,
+Patterson-UTI’s 
+bylaws provide that for business to be properly brought before
+an annual meeting by a stockholder, the stockholder, in addition
+to any other applicable requirements, must be a stockholder of
+record on the date of the giving of the notice provided for
+below and on the record date for the determination of
+stockholders entitled to vote at such annual meeting and must
+give timely notice of such business in writing to the Secretary
+of Patterson-UTI. To be
+timely with respect to the 2007 annual meeting, a
+stockholder’s notice must be delivered to or mailed and
+received at
+Patterson-UTI’s 
+principal executive offices not earlier than March 14, 2007
+and not later than April 13, 2007; provided, however, that
+in the event that the annual meeting is called for a date that
+is not within 30 days before or after July 12, 2007,
+notice by the stockholder to be timely must be received not
+later than the close of business on the tenth day following
+the day on which such notice of the date of the meeting was
+mailed or public disclosure of the annual meeting date was made,
+whichever occurs first.
+A stockholder’s notice to the Secretary of
+Patterson-UTI shall set
+forth:
+• 
+a brief description of each matter desired to be brought before
+the annual meeting and the reasons for conducting such business
+at the annual meeting, 
+• 
+the name and record address of the stockholder proposing such
+business, 
+• 
+the class and number of shares of
+Patterson-UTI that are
+beneficially owned by the stockholder, 
+• 
+any material interest of the stockholder in such
+business, and 
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the annual meeting to bring such business
+before the meeting. 
+The proxies will have discretionary authority to vote on any
+matter that properly comes before the meeting if the stockholder
+has not provided timely written notice as required by the
+Patterson-UTI bylaws.
+Any proposal by a stockholder to be presented at
+Patterson-UTI’s 
+2007 annual meeting of stockholders must be received by
+Patterson-UTI no later
+than February 12, 2007, in order to be eligible for
+inclusion in Patterson-UTI’s proxy statement and proxy used
+in connection with the 2007 annual meeting.
+Patterson-UTI reserves
+the right to reject, rule out of order, or take other
+appropriate action with respect to any proposal or nomination
+that does not comply with these and other applicable
+requirements.
+Annual Report 
+You are referred to Patterson-UTI’s annual report to
+stockholders with a copy of its Annual Report on
+Form 10-K, as
+amended, for the year ended December 31, 2005, filed with
+the SEC, enclosed herewith for your information. The annual
+report to stockholders is not incorporated in this proxy
+statement and is not to be considered part of the soliciting
+material.
+20
+Table of Contents 
+Appendix A 
+PATTERSON-UTI ENERGY, INC. 
+AUDIT COMMITTEE OF THE BOARD OF DIRECTORS 
+CHARTER 
+Purpose 
+The Audit Committee shall oversee management’s conduct of
+the Corporation’s accounting and financial reporting
+process including review of the financial reports and other
+financial information provided by the Corporation to the public
+and government and regulatory bodies, the Corporation’s
+system of internal accounting, the Corporations’ financial
+controls, and the annual independent audit of the
+Corporation’s financial statements. The Audit Committee
+shall also oversee compliance with the Corporation’s codes
+of conduct and ethics and with legal and regulatory requirements.
+In discharging its role, the Audit Committee is empowered to
+investigate any matter brought to its attention or developed on
+its own initiative, with full access to all books, records,
+facilities and personnel to the Corporation and the power to
+retain outside counsel, auditors or other experts for this
+purpose. The Board and the Audit Committee are in place to
+represent the corporation’s stockholders; and, accordingly,
+the independent auditors are ultimately accountable to the Board
+through the Audit Committee.
+Composition 
+The Audit Committee shall be comprised of three or more
+directors as determined by the Board, each of whom shall meet
+the independence requirements of Rules 4200(a)(15) and
+4350(d)(2) of the NASDAQ Stock Market, Inc. and
+Rule 10A-3(b)(1) of the rules and regulations under the
+Securities Exchange Act of 1934. All members of the Audit
+Committee shall have a working familiarity with basic finance
+and accounting practices, and at least one member of the Audit
+Committee shall have accounting or related financial management
+expertise.
+The members of the Audit Committee shall be elected by the Board
+at the annual organizational meeting of the Board and until
+their successors shall be duly elected and qualified. Unless a
+Chairperson is elected by the full Board, the members of the
+Audit Committee may designate a Chairperson by majority vote of
+the full Audit Committee membership. A member of the Audit
+Committee may be removed at any time by the Board.
+Additionally, the Audit Committee shall have at least one audit
+committee financial expert within the meaning of
+item 401(h)(2) of Schedule SK of the Securities and
+Exchange Commission and meeting the requirements of
+Rule 4350(d)(2)(iv) of the NASDAQ Stock Market, Inc.
+Meetings 
+The Audit Committee shall meet at least four times annually, or
+more frequently as circumstances dictate. As part of its job to
+foster open communication, the Audit Committee should meet at
+least quarterly with management, including the Chief Financial
+Officer, the Company’s internal auditors and the
+independent auditors separately to discuss any matters that the
+Audit Committee or each of these groups believes should be
+discussed privately. In addition, the Audit Committee or at
+least its Chairperson should meet with the independent auditors
+and management quarterly to review the Corporation’s
+financial statements consistent with paragraph number 3
+below.
+Responsibilities and Duties 
+The Audit Committee’s job is one of review and it
+recognizes that the Corporation’s management is responsible
+for preparing the Corporations’ financial statements and
+that the independent auditors are responsible for auditing those
+financial statements. Additionally, the Audit Committee
+recognizes that
+A-1
+Table of Contents 
+management, the internal auditors and the independent auditors
+have more time, knowledge, and detailed information concerning
+the Corporation than do Audit Committee members. Consequently,
+in performing its functions, the Audit Committee is not
+providing any expert or special assurance as to the
+Corporation’s financial statements or any professional
+certification as to the independent auditors’ work.
+The following functions will be the common recurring activities
+of the Audit Committee. These functions are set forth as a guide
+with the understanding that the Audit Committee may diverge from
+this guide as appropriate given the circumstances.
+Documents/ Reports Review 
+1. Review and reassess, at least annually, the adequacy of
+this Charter. Make recommendations to the Board, as conditions
+dictate, to update this Charter.
+2. Review with management and the independent auditors the
+Corporation’s audited financial statements, including a
+discussion with the independent auditors of the matters required
+to be discussed by Statement of Auditing Standards No. 61
+(“SAS No. 61”).
+3. Review with management and the independent auditors the
+interim financial results prior to the release of earnings and
+filing of the Quarterly Report on
+Form 10-Q, and
+including a discussion with the independent auditors of the
+matters to be discussed by SAS No. 61. The Chairperson of
+the Audit Committee may represent the entire Audit Committee for
+purposes of this review.
+4. Review with management, the Company’s internal
+auditors and the independent auditors, the quality and adequacy
+of the Corporation’s internal controls.
+5. Discuss with management its philosophy and approach to
+earnings releases and guidance given to analysts and rating
+agencies.
+Independent Auditors 
+6. Pre-approve all audit and non-audit services provided by
+the independent auditors to the Corporation (subject to any de
+minimis exceptions permitted by law for non-audit services,
+which must, in any event, be approved annually by the Audit
+Committee prior to completion of the annual audit). The Audit
+Committee may take any measures that it determines to be
+appropriate to assure that the independent auditors are not
+engaged to perform specific non-audit services proscribed by law
+or regulation. The Audit Committee may delegate pre-approval
+authority to a member or members of the Audit Committee or to a
+subcommittee of the Audit Committee. The decisions of any Audit
+Committee member or members or subcommittee to whom pre-approval
+authority is delegated must be presented to the full Audit
+Committee at its next scheduled meeting.
+7. Review the performance of the independent auditors and
+make decisions with respect to the appointment, compensation,
+retention and oversight of the independent auditors (including
+resolutions of disagreements between management and the
+independent auditors). The independent auditors shall report
+directly to the Audit Committee.
+8. Oversee independence of the accountants by:
+• 
+receiving from the independent auditors, on an annual basis, a
+formal written statement delineating all relationships between
+the accountants and the Corporation consistent with Independence
+Standards Board Standard 1; 
+• 
+reviewing, and actively discussing with the Board, if necessary,
+and the independent auditors, on a periodic basis, any disclosed
+relationships or services between the independent auditors and
+the Corporation or any other disclosed relationships or services
+that may impact the objectivity and independence of the
+independent auditors; and 
+• 
+taking appropriate action to satisfy itself of the
+accountant’s independence. 
+A-2
+Table of Contents 
+9. Based on the review and discussions referred to in
+Paragraphs numbered 2, 4, 7 and 8 above, the Audit
+Committee shall determine whether to recommend to the Board that
+the Corporations’ audited financial statements be included
+in the Corporations’ Annual Report on
+Form 10-K. 
+10. The Audit Committee shall receive quarterly reports,
+and other reports as requested by it from time to time, from the
+independent auditors on, and assess, (i) the critical
+accounting policies and practices of the Corporation and
+(ii) all alternative treatments of financial information
+within generally accepted accounting principles that have been
+discussed with management, the ramifications thereof and the
+preferred treatment thereof and shall receive from both (at the
+time they are sent) all material written communications between
+the independent auditors and the Corporation’s management.
+Internal Audit 
+11. Review with the appropriate internal audit personnel,
+the internal audit plan for each fiscal year.
+12. Meet at least quarterly with the most senior internal
+audit person to review the work against the internal audit plan
+and review any significant reports to management.
+13. Review at least annually with the independent auditor
+and the most senior internal audit person the Corporation’s
+internal audit function, including the adequacy of personnel and
+resources, and consider any recommendation with regard thereto.
+14. Review and concur on the appointment, replacement,
+reassignment or dismissal of the senior internal audit person
+and approve the compensation arrangement therefore.
+15. Meet in executive session at least quarterly with the
+senior internal audit person.
+Financial Reporting Process 
+16. In conjunction with the independent auditors, the
+internal auditors and the Chief Financial Officer, review at
+least annually the operation and integrity of the
+Corporation’s financial reporting processes, both internal
+and external.
+17. Consider and approve, if appropriate, major changes to
+the Corporation’s auditing and accounting principles and
+practices as recommended by the independent auditors,
+management, or the internal auditing department.
+18. Establish regular systems of reporting to the Audit
+Committee by each of management, the independent auditors and
+the internal auditors regarding any significant judgments made
+in management’s preparation of the financial statements and
+any significant difficulties encountered during the course of
+the review or audit; including any restrictions on the scope of
+the work or access to required information.
+19. Review any significant disagreement among management
+and the independent auditors or the internal auditing department
+in connection with the preparation of the financial statements.
+Legal Compliance/ General 
+20. The Audit Committee shall, from time to time, discuss
+with management (including the person charged with the
+responsibility to oversee corporate compliance by the
+Corporation), the internal auditors and the independent auditors
+the Corporation’s adherence to legal and ethical compliance
+programs (e.g., Corporation’s code of conduct) and the
+steps management has taken to require and monitor such adherence
+by Corporation employees and agents. The person charged with the
+responsibility to oversee corporate compliance shall report at
+least annually to the Committee with respect to the foregoing.
+21. The Audit Committee shall, from time to time as it
+deems appropriate, discuss with Corporation counsel matters that
+may have a material impact on the Corporation’s financial
+statements and compliance with legal requirements and shall
+receive any attorney’s report, required by law to be
+submitted to the committee or the Board of Directors, of
+evidence of a material violation of securities laws or breaches
+of fiduciary duty or similar violation by the Corporation or any
+agent thereof.
+A-3
+Table of Contents 
+22. The Audit Committee shall periodically require each of
+its members to certify that such person meets the independence
+requirements prescribed by law and NASDAQ rules, including that
+such person has received no compensation from the Company other
+than director and Board committee fees.
+23. The Audit Committee shall report through its
+Chairperson to the Board following meetings of the Audit
+Committee.
+24. The Audit Committee shall maintain minutes or other
+records of meetings and activities of the Audit Committee.
+25. The Audit Committee shall have full authority to engage
+and cause the Corporation to compensate, as and when deemed
+necessary or appropriate by the Audit Committee, independent
+counsel and other advisers, including accounting advisers.
+26. The Corporation shall provide appropriate funding, as
+determined by the Audit Committee, for the payment of
+compensation to the independent accountant, and to any advisers
+engaged by the Audit Committee and for the ordinary
+administrative expenses of the Audit Committee necessary or
+appropriate to the carrying out of its duties.
+27. No Audit Committee member shall simultaneously serve on
+the audit committee of more than two other public companies
+without notice to and approval by the Board of Directors.
+While the Audit Committee has the responsibilities and powers
+set forth in this Charter, it is not the duty of the Audit
+Committee to plan or conduct audits or to determine that the
+Corporation’s financial statements are complete and
+accurate and are in accordance with generally accepted
+accounting principles. This is the responsibility of management
+and the independent auditors.
+A-4
+Table of Contents 
+Your
+Vote Is Important! 
+Follow
+Instructions on The Reverse Side. 
+PLEASE VOTE 
+▼ FOLD AND DETACH
+HERE ▼ 
+▼ FOLD AND DETACH
+HERE ▼ 
+PROXY 
+PROXY 
+PATTERSON-UTI ENERGY, INC. 
+PROXY FOR ANNUAL MEETING OF STOCKHOLDERS 
+TO BE HELD ON JULY 12, 2006 
+THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS 
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby appoints Mark
+S. Siegel, Cloyce A. Talbott and John E. Vollmer III, and each of them, proxies of the
+undersigned, each with full power to act without the other and with full power of substitution, to
+vote all of the shares which the undersigned is entitled to vote at the annual meeting of
+stockholders of the Company to be held Wednesday, July 12, 2006, at 10:00 a.m., local time, at the
+corporate offices of Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas, 79549, and at
+any and all adjournments thereof, with the same force and effect as if the undersigned were
+personally present. The undersigned hereby instructs the above-named
+proxies to vote
+the shares represented by this proxy in the manner as directed by the undersigned on the reverse
+side of this proxy card. If no directions are made, the Proxies will vote “FOR” the nominees for
+directors set forth on the reverse side.
+Please mark, sign, date and return this proxy card promptly using the enclosed
+envelope, or follow the instructions on the reverse side to vote your shares by
+Internet or by telephone. 
+(continued on the reverse side) 
+- 1 -
+Table of Contents 
+PATTERSON-UTI ENERGY, INC. 
+• 
+You can now vote your shares electronically through the Internet or the telephone. 
+• 
+This eliminates the need to return the proxy card. 
+• 
+Your electronic vote authorizes the named proxies to vote your shares in the same
+manner as if you marked, signed, dated and returned the proxy card. 
+TO VOTE YOUR PROXY BY INTERNET 
+www.continentalstock.com 
+Have your proxy card in hand when you access the above website. You will be prompted to enter the
+company number, proxy number and account number to create an electronic ballot. Follow the prompts
+to vote your shares.
+TO VOTE YOUR PROXY BY MAIL 
+Mark, sign and date your proxy card below, detach it and return it in the postage-paid envelope
+provided.
+TO VOTE YOUR PROXY BY PHONE 
+1-866-894-0537 
+Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. You
+will be prompted to enter the company number, proxy number and account number. Follow the voting
+instructions to vote your shares.
+PLEASE DO NOT RETURN THE CARD BELOW IF YOU VOTED ELECTRONICALLY 
+▼ FOLD AND DETACH
+HERE AND READ THE REVERSE SIDE ▼ 
+PROXY BY MAIL 
+THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE
+NOMINEES FOR ELECTION AS DIRECTORS. 
+THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN BY
+THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXIES WILL VOTE “FOR” THE NOMINEES FOR
+ELECTION AS DIRECTORS NOTED BELOW. 
+Please mark 
+your votes 
+like this
+x 
+1.
+ELECTION OF BOARD
+OF DIRECTORS.
+FOR all nominees listed
+below (except as indicated
+to the contrary below)
+o 
+WITHHOLD AUTHORITY to
+vote for all nominees listed
+below
+o 
+- 2 -
+Table of Contents 
+Nominees for election to the Board of Directors: 01 Mark S. Siegel, 02 Cloyce A. Talbott, 03
+Kenneth N. Berns, 04 Robert C. Gist, 05 Curtis W. Huff, 06 Terry H. Hunt, 07 Kenneth R. Peak, and
+08 Nadine C. Smith.
+(INSTRUCTION: To withhold authority to vote for any one or more individual nominees, write the name
+of each such nominee in the space provided below.)
+2.
+In their discretion, the
+Proxies are authorized to vote
+upon such other business as may
+properly come before the
+Meeting or any adjournment or
+adjournments thereof. 
+IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE INSTRUCTIONS ABOVE. 
+COMPANY ID: 
+PROXY NUMBER: 
+ACCOUNT NUMBER: 
+Signature 
+Signature 
+Date 
+NOTE: Please sign exactly as your name or names appear on this card. Joint owners should each
+sign personally. When signing as attorney, executor, administrator, personal representative,
+trustee or guardian, please give your full title as such. For a corporation, partnership or other entity,
+please sign in the full corporate name by the President or other authorized officer or the full
+partnership or other entity name by an authorized person, as the case may be. (Please mark, sign, date, and return
+this proxy in the enclosed envelope.)
+- 3 -
\ No newline at end of file
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new file mode 100644
index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
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@@ -0,0 +1,2840 @@
+DEF 14A
+1
+d45918def14a.htm
+DEFINITIVE PROXY STATEMENT
+def14a 
+Table of Contents 
+OMB APPROVAL 
+OMB Number:
+3235-0059 
+Expires:
+January 31, 2008 
+Estimated average burden 
+hours per
+response 
+14. 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the Securities 
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant
+þ 
+Filed by a Party other than the Registrant
+o 
+Check the appropriate box: 
+o Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by
+Rule 14a-6(e)(2)) 
+þ Definitive Proxy Statement 
+o Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+Patterson-UTI Energy,
+Inc. 
+(Name
+of Registrant as Specified In Its Charter) 
+(Name
+of Person(s) Filing Proxy Statement, if other than the
+Registrant) 
+Payment of Filing Fee (Check the appropriate box):
+þ No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
+0-11. 
+1) Title of each class of securities to which transaction applies: 
+2) Aggregate number of securities to which transaction applies: 
+3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+4) Proposed maximum aggregate value of transaction: 
+5) Total fee paid: 
+o Fee paid previously with preliminary materials. 
+o Check box if any part of the fee is offset as provided by Exchange Act
+Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration
+statement number, or the Form or Schedule and the date of its filing. 
+1) Amount Previously Paid: 
+2) Form, Schedule or Registration Statement No.: 
+3) Filing Party: 
+4) Date Filed: 
+Table of Contents 
+May 1, 2007
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual
+meeting will be held Thursday, June 7, 2007, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549.
+At the annual meeting, stockholders will vote to elect directors
+to the Board of Directors of Patterson-UTI Energy, Inc. and to
+ratify the appointment of the Company’s independent
+registered public accounting firm. Please take the time to
+carefully read the proposals described in the attached proxy
+statement.
+Thank you for your support.
+Sincerely,
+Mark S.
+Siegel
+Cloyce
+A. Talbott
+Chairman of the Board 
+President and Chief Executive
+Officer 
+This proxy statement and the accompanying proxy card are being
+mailed to Patterson-UTI Energy, Inc. stockholders
+beginning on or about May 1, 2007.
+TABLE OF CONTENTS 
+NOTICE OF 2007 ANNUAL MEETING OF STOCKHOLDERS 
+ANNUAL MEETING OF STOCKHOLDERS 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 
+Meetings and Committees of the Board of Directors 
+Communication with the Board and Its Independent Members 
+Corporate Governance Documents Available on Patterson-UTI’s Website 
+PROPOSAL NO. 2 
+EXECUTIVE OFFICERS 
+COMPENSATION DISCUSSION AND ANALYSIS 
+Overview 
+Elements of Compensation 
+Share Ownership Guidelines 
+Change in Control Agreements 
+Section 162(m) Considerations 
+COMPENSATION COMMITTEE REPORT 
+Summary Compensation Table 
+Grants of Plan-Based Awards 
+Outstanding Equity Awards at Fiscal Year-End 
+DIRECTOR COMPENSATION 
+Director Compensation Table 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+CERTAIN TRANSACTIONS 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+OTHER MATTERS 
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+NOTICE OF
+2007 ANNUAL MEETING OF STOCKHOLDERS 
+The 2007 annual meeting of the stockholders of Patterson-UTI
+Energy, Inc. (“Patterson-UTI”), a Delaware
+corporation, will be held Thursday, June 7, 2007, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549 (the “Meeting”). At the Meeting, the
+stockholders will be asked to:
+• 
+elect seven directors to the Board of Directors of Patterson-UTI
+to serve until the next annual meeting of the stockholders or
+until their respective successors are elected and qualified;
+• 
+ratify the selection of PricewaterhouseCoopers LLP as the
+independent registered public accounting firm of Patterson-UTI
+for the fiscal year ending December 31, 2007; and
+• 
+take action upon any other matters which may properly come
+before the Meeting.
+Stockholders of record at the close of business on
+April 10, 2007, are entitled to vote at the Meeting and any
+adjournment thereof.
+It is important that your shares be represented at the Meeting.
+I urge you to sign, date and promptly return the enclosed proxy
+card in the enclosed postage paid envelope or vote by following
+the Internet or telephone instructions included on the proxy
+card.
+By order of the Board of Directors
+William L. Moll, Jr.
+General Counsel and Secretary 
+May 1, 2007
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+P. O. Box 1416 
+Snyder, Texas 79550 
+PROXY
+STATEMENT 
+ANNUAL
+MEETING OF STOCKHOLDERS 
+To Be Held June 7,
+2007 
+The Board of Directors of Patterson-UTI Energy, Inc.
+(“Patterson-UTI”), a Delaware corporation, prepared
+this proxy statement for the purpose of soliciting proxies for
+Patterson-UTI’s 2007 annual meeting of stockholders (the
+“Meeting”) to be held Thursday, June 7, 2007, at
+10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas
+79549, and at any adjournment thereof. This proxy statement and
+the accompanying proxy are being mailed to stockholders on or
+about May 1, 2007.
+The Board of Directors is making this solicitation by mail. In
+addition to the solicitation of proxies by mail,
+Patterson-UTI’s officers and other employees, without
+compensation other than regular compensation, may solicit
+proxies by telephone, electronic means and personal interview.
+Patterson-UTI does not intend to retain a proxy solicitation
+firm to assist in the solicitation of proxies of stockholders
+whose shares are held in street name by brokers, banks and other
+institutions, but may do so if circumstances warrant.
+Patterson-UTI will pay all costs associated with this
+solicitation.
+Properly submitted proxies received either by mail, Internet,
+telephone or in person, in time for the Meeting will be voted as
+you have directed in your proxy, unless you revoke your proxy in
+the manner provided below. As to any matter for which you give
+no direction in your proxy, your shares will be voted as follows:
+• 
+“FOR” the election of all of the nominees to the Board
+of Directors;
+• 
+“FOR” the ratification of PricewaterhouseCoopers LLP
+as the independent registered public accounting firm of
+Patterson-UTI for the fiscal year ending December 31, 2007;
+and
+• 
+“FOR” or “AGAINST” any other proposals which
+may be submitted at the Meeting at the discretion of the persons
+named in the proxy.
+You may revoke your proxy at any time before the proxy is voted
+by either:
+• 
+submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone;
+• 
+notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or
+• 
+attending the Meeting and voting in person.
+SHARES OUTSTANDING
+AND VOTING RIGHTS 
+Only stockholders of record of Patterson-UTI’s common
+stock, $.01 par value per share (the “Common
+Stock”), at the close of business on April 10, 2007
+are entitled to notice of and to vote at the Meeting or any
+adjournment thereof. At the close of business on April 10,
+2007, there were 156,718,214 shares of Common Stock issued
+and outstanding. Holders of record of Common Stock on
+April 10, 2007 will be entitled to one vote per share on
+all matters to come before the Meeting. A list of stockholders
+entitled to notice of and to vote at the Meeting will be made
+available during regular business hours at the offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder,
+Texas 79549, from May 21, 2007 through June 6, 2007
+and at the Meeting for inspection by any stockholder for any
+purpose regarding the Meeting.
+A quorum is necessary to transact business at the Meeting. A
+majority of the shares of Common Stock outstanding on
+April 10, 2007 will constitute a quorum. The shares held by
+each stockholder who signs and returns
+Table of Contents 
+the enclosed form of proxy or properly votes using the Internet
+or telephone will be counted for purposes of determining the
+presence of a quorum at the Meeting.
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the number of members
+of the Board of Directors of Patterson-UTI shall be fixed either
+by amendment to the bylaws or by resolution of the Board of
+Directors. Directors are elected to serve until the next annual
+meeting of stockholders or until their successors are elected
+and qualified. Patterson-UTI’s bylaws provide that the
+affirmative vote of a plurality of the votes cast at the meeting
+at which a quorum is present is required for the election of
+directors. Shares as to which a stockholder withholds authority
+to vote on the election of directors and shares as to which a
+broker indicates that it does not have discretionary authority
+to vote on the election of directors will not be counted as
+voting thereon and will not affect the election of the nominees
+receiving a plurality of the votes cast.
+The enclosed form of proxy provides a means for you to either:
+• 
+vote “FOR” the election of the nominees to the Board
+of Directors listed below,
+• 
+withhold authority to vote for one or more of the
+nominees, or
+• 
+withhold authority to vote for all of the nominees.
+The Board of Directors recommends that you vote
+“FOR” all of the nominees. Unless you
+give contrary instructions in your proxy, your proxy will be
+voted “FOR” the election of all of the nominees to the
+Board of Directors. If any nominee should become unable or
+unwilling to accept nomination or election, the person acting
+under the proxy will vote for the election of such other person
+as the Board of Directors may recommend. The Board has no
+reason, however, to believe that any of the nominees will be
+unable or unwilling to serve if elected.
+There are no arrangements or understandings between any person
+and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no
+family relationships among any of the directors or executive
+officers of Patterson-UTI.
+Set forth below is the name, age, position and a brief
+description of the business experience during at least the past
+five years of each of the members of Patterson-UTI’s Board
+of Directors. Each current member of Patterson-UTI’s Board
+of Directors is a nominee for election to the Board of
+Directors, except for Robert C. Gist and Nadine C. Smith.
+Mr. Gist and Ms. Smith have indicated their desire to
+retire effective at the Meeting and to not stand for re-election.
+Name 
+Age 
+Position 
+Mark S. Siegel
+56
+Chairman of the Board and Director
+Cloyce A. Talbott
+71
+President, Chief Executive Officer
+and Director
+Kenneth N. Berns
+47
+Senior Vice President and Director
+Charles O. Buckner
+62
+Director
+Robert C. Gist
+66
+Director (not a nominee)
+Curtis W. Huff
+49
+Director
+Terry H. Hunt
+58
+Director
+Kenneth R. Peak
+61
+Director
+Nadine C. Smith
+49
+Director (not a nominee)
+Mark S. Siegel — Mr. Siegel has served as
+Chairman of the Board and as a director of Patterson-UTI since
+May 2001. Mr. Siegel served as Chairman of the Board and as
+a director of UTI Energy Corp. (“UTI”) from 1995 to
+May 2001, when UTI merged with and into Patterson-UTI.
+Mr. Siegel has been President of REMY Investors &
+Consultants, Incorporated (“REMY Investors”) since
+1993. From 1992 to 1993, Mr. Siegel was President, Music
+Division, Blockbuster Entertainment Corp. From 1988 through
+1992, Mr. Siegel was an Executive Vice President of
+Shamrock Holdings, Inc., a private investment company, and
+Managing Director of Shamrock Capital Advisors,
+2
+Table of Contents 
+Incorporated. Mr. Siegel holds a Bachelor of Arts degree
+from Colgate University and a J.D. from the University of
+California, Berkeley (Boalt Hall) School of Law.
+Cloyce A. Talbott — Mr. Talbott has served
+as a director of Patterson-UTI since its incorporation in 1978,
+as its Chief Executive Officer since 1983 and as its President
+since May 2006. Mr. Talbott co-founded Patterson-UTI,
+served as Vice President from 1978 to 1983, and served as
+Chairman of the Board from 1983 to May 2001. Mr. Talbott
+holds a Bachelor of Science degree in petroleum engineering from
+Texas Tech University.
+Kenneth N. Berns — Mr. Berns has served as
+Senior Vice President of Patterson-UTI since April 2003 and as a
+director of Patterson-UTI since May 2001. Mr. Berns served
+as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns
+holds a Bachelors Degree in Business Administration from
+San Diego State University and a Masters Degree in Taxation
+from Golden Gate University.
+Charles O. Buckner — Mr. Buckner has
+served as a director of Patterson-UTI since February 2007.
+Mr. Buckner, a private investor, retired from the public
+accounting firm of Ernst & Young LLP in 2002 after
+35 years of service in a variety of client service and
+administrative roles, including chairmanship of Ernst &
+Young’s United States energy practice. He presently serves
+as a director of Horizon Offshore, Incorporated, a marine
+construction services company for the offshore oil and gas
+industry. Mr. Buckner is a CPA and holds a Bachelor of
+Business Administration from the University of Texas and a
+Masters of Business Administration from the University of
+Houston.
+Robert C. Gist — Mr. Gist has served as a
+director of Patterson-UTI since 1985. He was general legal
+counsel and advisor to Patterson-UTI from 1987 to May 2001.
+Mr. Gist holds a Bachelor of Science degree in economics
+and a J.D. from Southern Methodist University. He has been
+self-employed as an attorney for more than five years and has
+over 20 years experience in the oil and gas industry.
+Curtis W. Huff — Mr. Huff has served as a
+director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1997 to May 2001. Mr. Huff is the
+President and Chief Executive Officer of Freebird Investments
+LLC, a private investment company, and has served in that
+capacity since October 2002. Mr. Huff is also a Managing
+Director of Intervale Capital, an oilfield service private
+equity firm that Mr. Huff co-founded in 2006. Mr. Huff
+served as the President and Chief Executive Officer of Grant
+Prideco, Inc., a provider of drill pipe and other drill stem
+products, from February 2001 to June 2002. From January 2000 to
+February 2001, Mr. Huff served as Executive Vice President,
+Chief Financial Officer and General Counsel of Weatherford
+International, Inc., an oilfield services company. He served as
+Senior Vice President and General Counsel of Weatherford from
+May 1998 to January 2000. Prior to that time, Mr. Huff was
+a partner with the law firm of Fulbright & Jaworski
+L.L.P. and held that position for more than five years.
+Mr. Huff holds a Bachelor of Arts degree and Juris
+Doctorate from the University of New Mexico and a Masters of Law
+from New York University School of Law.
+Terry H. Hunt — Mr. Hunt has served as a
+director of Patterson-UTI since April 2003 and served as a
+director of UTI from 1994 to May 2001. Mr. Hunt is an
+energy consultant and investor. Mr. Hunt served as Senior
+Vice President — Strategic Planning of PPL
+Corporation, an international energy and utility holding
+company, from 1998 to 2000. Mr. Hunt served as the
+President and Chief Executive Officer of Penn Fuel Gas, Inc., a
+natural gas and propane distribution company, from 1992 to 1999.
+Previously, Mr. Hunt was President and Chairman of Carnegie
+Natural Gas Company, a gas distribution and transmission
+company, and of Apollo Gas Company, a natural gas distributor.
+Mr. Hunt holds a Bachelor of Engineering degree from the
+University of Saskatchewan, Canada and a Masters of Business
+Administration from Southern Methodist University.
+Kenneth R. Peak — Mr. Peak has served as a
+director of Patterson-UTI since November 2000. Mr. Peak has
+served as Chairman and Chief Executive Officer of Contango
+Oil & Gas Company since September 1999. Mr. Peak
+entered the energy industry in 1972 as a commercial banker and
+has held a variety of financial and executive positions in the
+oil and gas industry prior to starting Contango in 1999.
+Mr. Peak served as an officer in the U.S. Navy from
+1968 to 1971. Mr. Peak received a Bachelor of Science in
+physics from Ohio University in 1967 and a Masters of Business
+Administration from Columbia University in 1972.
+Nadine C. Smith — Ms. Smith has served as
+a director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1995 to May 2001. Ms. Smith is a
+private investor and business consultant. During the past ten
+years, Ms. Smith served as president of several companies,
+including, most recently, Final Arrangements, LLC, a
+3
+Table of Contents 
+company providing software and web-based internet services to
+the funeral industry. Prior to that time, Ms. Smith was an
+investment banker with NC Smith & Co. and The First
+Boston Corporation and a management consultant with
+McKinsey & Co. Ms. Smith is a director of Gran
+Tierra, an independent international energy company involved in
+oil and natural gas exploration and exploitation. Ms. Smith
+holds a Bachelor of Science degree in economics from Smith
+College and a Masters of Business Administration from Yale
+University.
+Meetings
+and Committees of the Board of Directors 
+The Board of Directors met eleven times during the year ended
+December 31, 2006. Each director attended, in person or by
+telephone, at least 75% of the aggregate of all meetings held by
+the Board and all meetings of each committee for which such
+director was eligible to attend. A majority of the members of
+the Board of Directors are independent within the meaning of the
+National Association of Securities Dealers’
+(“NASD”) published listing standards. Specifically,
+the Board has determined that Messrs. Peak, Gist, Huff,
+Hunt, Buckner and Ms. Smith are independent within the
+meaning of the NASD published listing standards. In reaching
+this conclusion, the Board considered that Mr. Huff
+indirectly has an interest in, and has participated in the
+management of, a company which owns oilfield service companies
+including one that supplies parts and equipment to Patterson-UTI
+in the ordinary course of business consistent with customary
+terms in the industry. The Board has determined that these
+transactions are not material to Patterson-UTI, the company in
+which Mr. Huff has the indirect interest or Mr. Huff
+and that such transactions do not affect Mr. Huff’s
+independence under applicable rules and regulations.
+The Board of Directors has established four standing committees,
+an Executive Committee, Audit Committee, Compensation Committee
+and a Nominating and Corporate Governance Committee.
+The Executive Committee, which currently is composed of
+Messrs. Siegel, Talbott and Berns, has the authority, to
+the extent permitted by applicable law, to act for the Board in
+all matters arising between regular or special meetings of the
+Board of Directors.
+The Audit Committee members are Messrs. Huff (chairman),
+Buckner, Hunt and Ms. Smith, each of whom is independent
+within the meaning of Item 7(d)(3)(iv) of Schedule 14A
+under the Securities Exchange Act of 1934, as amended (the
+“Exchange Act”) and within the meaning of the
+NASD’s published listing standards. The Audit Committee
+oversees management’s conduct of Patterson-UTI’s
+accounting and financial reporting process including review of
+the financial reports and other financial information provided
+by Patterson-UTI to the public and government and regulatory
+bodies, Patterson-UTI’s system of internal accounting,
+Patterson-UTI’s financial controls, and the annual
+independent audit of Patterson-UTI’s financial statements.
+The Audit Committee also oversees compliance with
+Patterson-UTI’s codes of conduct and ethics and with legal
+and regulatory requirements. The Board has determined that
+Messrs. Huff and Buckner are “audit committee
+financial experts” within the meaning of applicable
+Securities and Exchange Commission (“SEC”) rules. The
+Audit Committee selects the independent registered public
+accounting firm to audit Patterson-UTI’s books and records
+and considers and acts upon accounting matters as they arise.
+The Board of Directors has adopted a written charter for the
+Audit Committee. The Audit Committee met sixteen times during
+the year ended December 31, 2006.
+The Compensation Committee members are Mr. Peak (chairman)
+and Ms. Smith, each of whom is independent as defined in
+the NASD’s published listing standards. Among other things,
+the Compensation Committee administers the incentive
+compensation plans, including stock option plans of
+Patterson-UTI and determines the annual compensation of the
+executive officers and directors of Patterson-UTI. The Board of
+Directors has adopted a written charter for the Compensation
+Committee. The Compensation Committee held three meetings during
+the year ended December 31, 2006. Please see
+“Compensation, Discussion and Analysis” beginning on
+page 7 of this proxy statement and “Compensation
+Committee Report” on page 10 of this proxy statement
+for further information about the Compensation Committee.
+The Nominating and Corporate Governance Committee members are
+Messrs. Hunt (chairman) and Huff, each of whom is
+independent as defined in the NASD’s published listing
+standards. The purpose of the Nominating and Corporate
+Governance Committee is to identify individuals qualified to
+become Board members, to recommend for selection by the Board
+director nominees for the next annual meeting of stockholders,
+to review Patterson-UTI’s Code of Business Conduct, to
+develop and continually make recommendations with respect to the
+best corporate
+4
+Table of Contents 
+governance principles and to oversee the evaluation of the Board
+and management. The Board of Directors has adopted a written
+charter for the Nominating and Corporate Governance Committee.
+The Nominating and Corporate Governance Committee held one
+meeting during the year ended December 31, 2006.
+All of the director nominees are existing directors of
+Patterson-UTI standing for re-election to the Board of Directors
+except for Mr. Buckner who is standing for election for the
+first time. The Board of Directors determined during 2006 that
+the addition of a new director was beneficial to Patterson-UTI.
+Mr. Buckner was initially recommended as a director nominee
+to the Nominating and Governance Committee by management of
+Patterson-UTI. Mr. Buckner is a retired partner of a
+national accounting firm and has extensive experience in public
+accounting and the oil and gas industry. Based on his
+qualifications and following the recommendation of the
+Nominating and Governance Committee, the Board appointed
+Mr. Buckner as a director in February 2007.
+On behalf of the Board, the Nominating and Governance Committee
+considers director nominees recommended by Patterson-UTI’s
+stockholders if the recommendations are made in accordance with
+all legal requirements, including applicable provisions of
+Patterson-UTI’s restated certificate of incorporation and
+bylaws. In accordance with Patterson-UTI’s bylaws, in
+addition to any other applicable requirements, any person
+recommending a nominee for Patterson-UTI’s Board must be a
+stockholder of record on the date of the giving of the notice
+provided for below and on the record date for the determination
+of stockholders entitled to vote at such annual meeting and must
+give timely notice of such nomination in writing to the
+Secretary of Patterson-UTI. To be timely with respect to the
+2008 annual meeting, a stockholder’s notice must be
+delivered to or mailed and received at Patterson-UTI’s
+principal executive offices not earlier than February 8,
+2008 and not later than March 9, 2008; provided, however,
+that in the event that the annual meeting is called for a date
+that is not within 30 days before or after June 7,
+2008, notice by the stockholder to be timely must be received
+not later than the close of business on the tenth day following
+the day on which such notice of the date of the meeting was
+mailed or public disclosure of the annual meeting date was made,
+whichever occurs first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+as to each person whom the stockholder proposes to nominate for
+election or re-election as director, all information relating to
+such person that is required to be disclosed in solicitations of
+proxies for election of directors, or is otherwise required, in
+each case pursuant to Regulation 14A promulgated under the
+Exchange Act, or any successor regulation thereto,
+• 
+the name and record address of the stockholder proposing such
+nomination,
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+a description of all arrangements or understandings between such
+stockholder and each proposed nominee and any other person or
+persons (including their names) pursuant to which the nomination
+or nominations are to be made by such stockholder, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the meeting to nominate the persons named
+in the notice.
+Such notice must be accompanied by a written consent of each
+proposed nominee to being named as a nominee and to serve as a
+director if elected.
+The Nominating and Corporate Governance Committee determines
+qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of
+Patterson-UTI. The Nominating and Corporate Governance Committee
+relies on the knowledge and relationships of Patterson-UTI and
+its officers and directors, as well as third parties when it
+deems necessary, to identify and evaluate nominees for director,
+including nominees recommended by stockholders.
+Communication
+with the Board and Its Independent Members 
+Persons may communicate with the Board, or directly with its
+Chairman, Mr. Siegel, by submitting such communication in
+writing in care of Chairman of the Board of Directors,
+Patterson-UTI Energy, Inc., P.O. Box 1416, Snyder, Texas
+79550. Persons may communicate with the independent members of
+the Board by submitting such
+5
+Table of Contents 
+communication in writing to the Nominating and Corporate
+Governance Committee of the Board of Directors of Patterson-UTI
+Energy, Inc., P.O. Box 1416, Snyder, Texas 79550.
+Although Patterson-UTI does not have a formal policy regarding
+attendance by members of the Board at its annual meetings of
+stockholders, directors are invited to attend annual meetings of
+Patterson-UTI stockholders. Two directors attended the 2006
+annual meeting of stockholders.
+Corporate
+Governance Documents Available on Patterson-UTI’s
+Website 
+Copies of each of the following documents are available on the
+Patterson-UTI website at www.patenergy.com and in print
+to any stockholder who requests them from the Secretary of
+Patterson-UTI:
+• 
+Audit Committee Charter;
+• 
+Compensation Committee Charter;
+• 
+Nominating and Corporate Governance Committee Charter;
+• 
+Code of Business Conduct for its employees, officers and
+directors; and
+• 
+Code of Business Conduct and Ethics for Senior Financial
+Executives.
+PROPOSAL NO. 2 
+RATIFICATION
+OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as the
+independent registered public accounting firm to audit the
+financial statements of Patterson-UTI for the fiscal year ending
+December 31, 2007, and directed that such engagement be
+submitted to the stockholders of Patterson-UTI for ratification.
+In recommending ratification by the stockholders of such
+engagement, the Board of Directors is acting upon the
+recommendation of the Audit Committee, which has satisfied
+itself as to the firm’s professional competence and
+standing. Although ratification by stockholders of the
+engagement of PricewaterhouseCoopers LLP is not required by
+Delaware corporate law or Patterson-UTI’s restated
+certificate of incorporation or bylaws, the Audit Committee
+believes a decision of this nature should be made with the
+consideration of Patterson-UTI’s stockholders. If the
+stockholders fail to ratify the appointment, the Audit Committee
+will reconsider whether to retain PricewaterhouseCoopers LLP and
+may retain that firm or another without re-submitting the matter
+to our stockholders. Even if the appointment is ratified, the
+Audit Committee may, in its discretion, direct the appointment
+of a different independent registered public accounting firm at
+any time during the year if it determines that such change would
+be in Patterson-UTI’s best interests and in the best
+interests of Patterson-UTI’s stockholders.
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and
+will be given the opportunity to make a statement if they so
+desire. It also is expected that the representatives will be
+available to respond to appropriate questions from the
+stockholders.
+The Board of Directors recommends a vote “FOR” the
+ratification of PricewaterhouseCoopers LLP as the independent
+registered public accounting firm. Ratification
+of the selection of PricewaterhouseCoopers LLP requires the
+affirmative vote of the holders of a majority of the shares of
+Common Stock present in person or by proxy, and entitled to vote
+at the Meeting. Unless you give contrary instructions in your
+proxy, your proxy will be voted “FOR” such
+ratification. Abstentions will be counted as shares entitled to
+vote on the proposal and will have the same effect as a vote
+“AGAINST” the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be
+treated as a share entitled to vote on the proposal. This will
+have the effect of reducing the absolute number of shares
+necessary to approve the proposal.
+6
+Table of Contents 
+EXECUTIVE
+OFFICERS 
+Set forth below is the name, age and position followed by a
+brief description of the business experience during at least the
+past five years for each executive officer of Patterson-UTI who
+is not also a member of the Board of Directors.
+Name 
+Age 
+Position 
+Douglas J. Wall
+54
+Chief Operating Officer
+John E. Vollmer III
+51
+Senior Vice President —
+Corporate Development, Chief Financial Officer and Treasurer
+William L. Moll, Jr. 
+40
+General Counsel and Secretary
+Douglas J. Wall — Mr. Wall has served as
+Chief Operating Officer of Patterson-UTI since April 2007. From
+2005 to April 2007, Mr. Wall served as Group President,
+Completion and Production of Baker Hughes Incorporated, an
+oilfield service company. In that capacity, Mr. Wall was
+responsible for the combined activities of Baker Oil Tools,
+Baker Petrolite, Centrilift and ProductionQuest divisions. From
+2003 to 2005 he served as President of Baker Oil Tools, a
+division of Baker Hughes, and from 1997 to 2003 he served as
+President of Hughes Christensen Company, a division of Baker
+Hughes. Mr. Wall holds a Bachelor Degree in Economics from
+the University of Calgary and a Masters of Business
+Administration in Finance and Marketing from the University of
+Alberta.
+John E. Vollmer III — Mr. Vollmer has
+served as Chief Financial Officer and Treasurer of Patterson-UTI
+since November 2005 and Senior Vice President —
+Corporate Development of Patterson-UTI since May 2001.
+Mr. Vollmer also served as Secretary of Patterson-UTI from
+November 2005 to February 2007. Mr. Vollmer served as
+Senior Vice President, Chief Financial Officer, Secretary and
+Treasurer of UTI from 1998 to May 2001. From 1992 until 1997,
+Mr. Vollmer served in a variety of capacities at
+Blockbuster Entertainment, including Senior Vice
+President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+William L. Moll, Jr. — Mr. Moll
+has served as General Counsel and Secretary of Patterson-UTI
+since February 2007. From July 2006 to February 2007,
+Mr. Moll served as Vice President and Counsel of
+Stewart & Stevenson LLC, an oilfield equipment
+manufacturing company. From January 1996 to July 2006,
+Mr. Moll served in a variety of capacities in the legal
+department of Stewart & Stevenson Services, Inc., an
+equipment manufacturing company, including Deputy General
+Counsel from March 2005 to July 2006 and Managing Attorney from
+September 2001 to March 2005. From September 1991 to January
+1996, Mr. Moll was an associate with the law firm of
+Andrews & Kurth LLP. Mr. Moll holds Bachelor of
+Business Administration in Accounting from the University of
+Texas and a J.D. from the University of Houston Law Center.
+COMPENSATION
+DISCUSSION AND ANALYSIS 
+Overview 
+Compensation
+Committee 
+The Compensation Committee (the “Committee”) sets and
+administers the policies that govern the compensation of
+executive officers and directors of Patterson-UTI. As part of
+its duties, the Committee determines the compensation of
+Patterson-UTI’s executive officers who are named in the
+Summary Compensation Table appearing elsewhere in this proxy
+statement (the “Named Executive Officers”) and grants
+all awards of restricted stock and stock options under
+Patterson-UTI’s long-term incentive plan.
+The Committee currently consists of Mr. Peak (chairman) and
+Ms. Smith, each of whom is an independent director as
+defined by the NASD published listing standards.
+Compensation
+Objectives 
+The Committee’s objectives are to provide to the Named
+Executive Officers competitive compensation packages that will
+permit Patterson-UTI to attract and retain highly qualified
+individuals and to motivate and reward the Named Executive
+Officers for performance that benefits Patterson-UTI and its
+stockholders.
+7
+Table of Contents 
+Role
+of Management and Compensation Consultant 
+All compensation decisions with respect to the Named Executive
+Officers of Patterson-UTI are made solely by the Committee. The
+Committee is permitted under its charter to delegate any of its
+powers to a subcommittee of the Committee. In performing its
+duties, the Committee considers input from senior management on
+individual performance and compensation matters.
+In determining compensation for the Named Executive Officers for
+2006, the Committee considered a variety of information,
+including (i) compensation for executive officers at
+similarly situated oilfield service companies,
+(ii) historical and projected financial and operational
+results at Patterson-UTI, including margins achieved, rig
+activations, net income and earnings before interest, taxes,
+depreciation and amortization (“EBITDA”) and return on
+equity and capital, (iii) historical stock performance,
+(iv) operational and strategic objectives of Patterson-UTI
+and (v) individual performance.
+In recent years, the Committee has engaged an independent
+compensation consultant who reports directly to the Committee.
+In 2006 the Committee retained Frederic W. Cook & Co.,
+Inc. (“Cook”) to evaluate and make recommendations to
+the Committee regarding Patterson-UTI’s executive
+compensation philosophy and practices. Cook reviewed the
+executive salaries, non-equity incentive compensation and
+long-term incentives for competitiveness with similarly situated
+companies. Cook was provided a proposed representative peer
+group within the oilfield services industry based on various
+criteria and was provided information as to the responsibilities
+of the members of Patterson-UTI’s executive team in
+relationship to its peers. Cook also reviewed
+Patterson-UTI’s valuation analysis of stock options against
+its peers for purposes of valuing compensation under
+Patterson-UTI’s incentive plans. Cook was asked to provide
+its advice as to Patterson-UTI’s incentive plans and the
+Committee’s proposed compensation of the Named Executive
+Officers and the reasonableness of that compensation.
+For 2006, the Committee reviewed compensation data from the
+following companies: BJ Services Company, Cameron International
+Corporation, Diamond Offshore Drilling Inc., Ensco International
+Inc., FMC Technologies Inc., Globalsantafe Corp., Grant Prideco
+Inc., Helmerich & Payne Inc., Nabors Industries Ltd.,
+National Oilwell Varco Inc., Noble Corp., Rowan Companies Inc.,
+Smith International Inc. and Weatherford International Ltd.
+Elements
+of Compensation 
+Patterson-UTI’s compensation program for its Named
+Executive Officers includes three primary elements:
+(1) base salary, (2) non-equity incentive compensation
+in the form of cash bonuses and (3) long-term incentive
+opportunities in the form of restricted stock and stock options.
+Below is a summary of each element of compensation. The general
+intent of the base salary for the Named Executive Officers was
+for that compensation to be around the 50th percentile of
+the peer group and for incentive and equity based compensation
+to be above the 75th percentile. These objectives were
+established based on Patterson-UTI’s historical top tier
+performance on returns on assets and equity and long-term share
+value creation against peers.
+Base
+Salary 
+Historically, the Committee has emphasized performance-based
+compensation in the form of non-equity and equity incentive
+compensation and has minimized salary adjustments. From 2004
+through 2006 there were no increases to the base salaries of the
+Named Executive Officers. In February 2007, the base salary of
+Mr. Berns was increased to $265,000.
+Although adjustments to the base salaries of the Named Executive
+Officers have been minimized in recent years, the base salaries
+of Named Executive Officers are reviewed and determined annually
+by the Committee based on (i) subjective evaluations of the
+officer’s functional position and specific performance,
+(ii) assessment of the relative importance of each position
+at Patterson-UTI, (iii) a comparison to salary ranges for
+executives of other companies in the oilfield service industry
+with market, financial and operational characteristics similar
+to those of Patterson-UTI, (iv) Patterson-UTI’s
+financial results and position and (v) Patterson-UTI’s
+performance compared to similar companies.
+8
+Table of Contents 
+Non-Equity
+Incentive Compensation 
+The Named Executive Officers have historically received
+non-equity incentive compensation in the form of annual cash
+bonuses designed to put a meaningful portion of total
+compensation at risk. In recent years, non-equity incentive
+compensation for the Named Executive Officers has been tied to a
+bonus pool based upon Patterson-UTI’s EBITDA. For target
+bonus purposes, the bonus pool would then be allocated among the
+Named Executive Officers of Patterson-UTI pursuant to a
+pre-determined sharing percentage that reflected a team-based
+philosophy as well as the organizational structure of the top
+management team. The total bonus and target allocation is
+subject to modification by the Committee at its discretion.
+EBITDA has been chosen as the performance measure for the annual
+cash bonus because Patterson-UTI believes it is an important
+measure of current year financial performance.
+In 2006, the target bonus pool for the Named Executive Officers,
+subject to a minimum threshold, was two-thirds of one percent of
+Patterson-UTI’s EBITDA adjusted within the discretion of
+the Committee. The target allocation of the bonus pool for each
+Named Executive Officer was as follows: one-third to Cloyce A.
+Talbott, one-third to Mark S. Siegel, one-sixth to John E.
+Vollmer III and one-sixth to Kenneth N. Berns.
+The aggregate bonus pool paid to the Named Executive Officers
+for 2006 was $8,250,000, and the amount of individual cash
+bonuses paid to each Named Executive Officer is included in the
+“Summary Compensation Table” on page 11 of this
+proxy statement. Consistent with Patterson-UTI’s emphasis
+on performance-based compensation, non-equity incentive
+compensation for 2006 represented more than 80% of each Named
+Executive Officer’s total cash compensation from
+Patterson-UTI for the year.
+Long-Term
+Incentive Compensation 
+Long-term incentive compensation for the Named Executive
+Officers consists of both awards of shares of restricted stock
+and options to purchase Common Stock, each of which typically
+vest over three or four years. Awards of such equity-based
+compensation reflect the Committee’s desire to provide the
+Named Executive Officers with additional incentives by
+increasing their proprietary interest in the success of
+Patterson-UTI. The Committee believes that there should be an
+emphasis on equity-based compensation in order to provide
+incentives and rewards that are closely aligned with
+stockholders. The Committee reviews equity-based compensation of
+the Named Executive Officers on an annual basis.
+Patterson-UTI’s equity-based compensation has historically
+been given significant weight, along with non-equity incentive
+compensation, in the overall compensation package of the Named
+Executive Officers. The allocation of equity-based compensation
+among the Named Executive Officers is made by the Committee
+based on various factors, including the executive’s
+position and contribution to the overall goals and objectives of
+Patterson-UTI. The allocation and mix of equity-based
+compensation between restricted stock and options in 2006
+followed this approach, with an emphasis on option-based
+compensation over restricted stock in order to ensure that the
+greatest awards would only be earned for increases in
+Patterson-UTI’s equity value.
+The Committee’s practice has generally been to grant stock
+options
+and/or 
+restricted stock to Named Executive Officers at a meeting
+following the conclusion of Patterson-UTI’s first or second
+quarter. Such meetings are typically held prior to regular
+quarterly Board meetings and Patterson-UTI’s public release
+of quarterly earnings information. Options have been granted at
+an exercise price equal to the closing price of
+Patterson-UTI’s stock on the date of grant.
+Retirement
+Plans 
+Patterson-UTI offers a 401(k) plan to its employees, including
+its Named Executive Officers. In 2007, participants may
+contribute a portion of their base salary to the 401(k) plan,
+subject to federal limits. Patterson-UTI makes matching
+contributions up to four percent of each participant’s
+eligible base salary. The Named Executive Officers of
+Patterson-UTI are eligible to participate in the 401(k) plan on
+the same basis as other employees. Patterson-UTI does not have
+any other retirement plan.
+9
+Table of Contents 
+Perquisites
+and Personal Benefits 
+Patterson-UTI provides limited perquisites to its Named
+Executive Officers. Mr. Talbott is given limited use of
+Patterson-UTI’s airplane for his personal travel. The
+incremental cost to Patterson-UTI of Mr. Talbott’s
+personal use of the airplane is included as “All Other
+Compensation” to him in the Summary Compensation Table on
+page 11 of this proxy statement. The lack of commercial
+airline service in Snyder, Texas is a substantial factor in the
+decision to provide this benefit to Mr. Talbott.
+Mr. Talbott is also provided with certain other limited
+perquisites, including occasional personal use of
+Patterson-UTI’s suite at a sporting venue, the use of a
+Company automobile and membership dues at a country club, each
+of which is included in “All Other Compensation” to
+him in the Summary Compensation Table on page 11 of this
+proxy statement.
+Share
+Ownership Guidelines 
+The Committee in 2004, with the approval of the Board, enacted
+share ownership guidelines applicable to all executive officers
+and directors of Patterson-UTI. Under this policy and subject to
+a four-year phase-in, each of Patterson-UTI’s Chairman,
+Chief Executive Officer and President is required to hold shares
+of Common Stock having a value equal to at least five times the
+officer’s base salary and each of Patterson-UTI’s
+other executive officers is required to hold shares of Common
+Stock having a value equal to at least three times the
+officer’s base salary. The Committee also imposed share
+ownership guidelines for directors. Under those guidelines,
+subject to a four-year phase-in, each director of Patterson-UTI
+is required to hold shares of Common Stock having a value equal
+to at least four times the cash compensation provided to the
+director. Each of the Named Executive Officers is in compliance
+with the share ownership guidelines as of the date of this proxy
+statement.
+Change in
+Control Agreements 
+Patterson-UTI has entered into change in control agreements with
+its Named Executive Officers as further described in this proxy
+statement under the heading “Change in Control
+Arrangements; Employment Contracts; Indemnification
+Agreements.” Further, Patterson-UTI has entered into
+written letter agreements with each of Messrs. Siegel,
+Berns and Vollmer confirming and evidencing the existing
+agreements between Patterson-UTI and each of them pursuant to
+which Patterson-UTI has agreed to pay each such person within
+ten days of the termination of his employment with Patterson-UTI
+for any reason (including voluntary termination by him), an
+amount in cash equal to his annual base salary at the time of
+such termination. Any such payment made by Patterson-UTI
+pursuant to the agreement evidenced in these letter agreements
+will reduce dollar for dollar any payment owed to such person,
+if any, pursuant to the change in control agreements discussed
+above.
+Section 162(m)
+Considerations 
+In considering compensation decisions for the executive
+management of Patterson-UTI, the Committee routinely considers
+the potential effect of section 162(m) of the Internal
+Revenue Code. Section 162(m) imposes a limitation on
+corporate tax deductions for non-performance based compensation
+to certain officers that exceeds $1 million that can be
+taken by a publicly held corporation for compensation paid to
+certain of its executive officers. The Committee believes that
+tax deduction limitations should not compromise
+Patterson-UTI’s ability to establish and maintain
+appropriate executive compensation programs and reserves the
+right to award non-deductible compensation.
+COMPENSATION
+COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the
+Compensation Discussion and Analysis included in this proxy
+statement required by Item 402(b) of
+Regulation S-K 
+with management and, based upon such review and discussion, the
+Compensation Committee has recommended to the Board that the
+Compensation Discussion and Analysis be included in this proxy
+statement.
+Kenneth R. Peak, Chairman 
+Nadine C. Smith
+10
+Table of Contents 
+The following table sets forth information concerning
+compensation for 2006 with respect to the Principal Executive
+Officer, the Principal Financial Officer and the other Named
+Executive Officers of Patterson-UTI:
+Summary
+Compensation Table 
+Non-equity 
+Stock 
+Option 
+Incentive plan 
+All Other 
+Salary 
+Awards 
+Awards 
+Compensation 
+Compensation 
+Total 
+Name and Principal Position(s) 
+Year 
+($) 
+($)(1) 
+($)(2) 
+($)(3) 
+($) 
+($) 
+Cloyce A. Talbott 
+2006
+$
+450,000
+$
+597,918
+$
+1,398,886
+$
+2,750,000
+$
+86,672
+(4)
+$
+5,271,705
+President & Chief
+Executive Officer
+John E.
+Vollmer III 
+2006
+$
+275,000
+$
+298,959
+$
+759,341
+$
+1,375,000
+$
+6,641
+(5)
+$
+2,714,941
+Senior Vice
+President — 
+Corporate Development, 
+Chief Financial Officer 
+& Treasurer
+Mark S. Siegel 
+2006
+$
+350,000
+$
+597,918
+$
+1,398,886
+$
+2,750,000
+$
+—
+$
+5,096,804
+Chairman of the Board
+Kenneth N. Berns 
+2006
+$
+215,000
+$
+298,959
+$
+699,443
+$
+1,375,000
+$
+—
+$
+2,588,402
+Senior Vice President
+A. Glenn
+Patterson (6)
+2006
+$
+318,917
+$
+494,621
+$
+1,101,142
+$
+—
+$
+6,700
+(5)
+$
+1,921,380
+Former President and 
+Chief Operating Officer
+(1) 
+Amounts set forth represent the dollar amount of compensation
+expense recognized for financial statement reporting purposes in
+2006 in accordance with Statement of Financial Accounting
+Standards No. 123(R)(FAS 123R) with respect to
+restricted stock held by the Named Executive Officer. For
+additional information related to the assumptions used and
+valuation of restricted stock, see Note 11 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the year ended December 31, 2006. 
+(2) 
+Amounts set forth represent the dollar amount of compensation
+expense recognized for financial statement reporting purposes in
+2006 in accordance with FAS 123R with respect to stock
+options held by the Named Executive Officer. For additional
+information related to the assumptions used in connection with
+the valuation of stock options using the Black-Scholes option
+pricing model see Note 11 to the consolidated financial
+statements in Patterson-UTI’s Annual Report on
+Form 10-K 
+for the year ended December 31, 2006. 
+(3) 
+Represents annual bonuses earned for the year ended
+December 31, 2006. The bonus plan for Named Executive
+Officers in 2006 provided for a bonus pool based on earnings
+before interest, taxes, depreciation and amortization (EBITDA)
+subject to a minimum EBITDA of $400 million. The bonus pool
+was allocated among the Named Executive Officers based on a
+pre-determined sharing percentage. The total amount paid out
+pursuant to the executive bonus pool for 2006 at the direction
+of the Compensation Committee was $8.25 million. 
+(4) 
+With respect to Mr. Talbott, includes personal use of
+Patterson-UTI’s airplane in the amount of $67,056 which is
+the incremental cost to Patterson-UTI based on the number of
+hours of personal use by Mr. Talbott. Other perquisites
+included in this column consist of the personal use of
+Patterson-UTI’s suite at a sporting venue, the use of a
+Company automobile and membership dues at a country club.
+Includes $6,090 in contributions to a 401(k) plan by
+Patterson-UTI on Mr. Talbott’s behalf. 
+(5) 
+Amounts set forth reflect contributions to a 401(k) plan by
+Patterson-UTI on behalf of the Named Executive Officer. 
+(6) 
+Through May 3, 2006, A. Glenn Patterson was
+Patterson-UTI’s President and Chief Operating Officer.
+Mr. Patterson resigned as an officer of Patterson-UTI on
+May 3, 2006 and Patterson-UTI entered into an employment
+agreement with him whereby he continues to be employed as an
+advisor to Patterson-UTI through May 2011. 
+11
+Table of Contents 
+The following table sets forth information regarding grants of
+plan-based awards during 2006 to the Named Executive Officers
+listed in the Summary Compensation Table:
+Grants of
+Plan-Based Awards 
+All Other 
+All Other 
+Option Awards: 
+Stock Awards: 
+Number of 
+Exercise or 
+Grant Date 
+Number of 
+Securities 
+Base Price 
+Fair Value of 
+Estimated Possible Payouts under Non-equity Incentive Plan
+Awards(1) 
+Shares of 
+Underlying 
+of Option 
+Stock and 
+Grant 
+Threshold 
+Target 
+Maximum 
+Stock or Units 
+Options 
+Awards 
+Option Awards 
+Name 
+Date 
+($) 
+($) 
+($) 
+(#)(2) 
+(#)(3) 
+($/Sh) 
+($)(4) 
+Cloyce A. Talbott
+8/1/06 
+$
+888,889
+$
+2,764,967
+—
+—
+—
+—
+—
+8/1/06 
+—
+—
+—
+30,000
+—
+$
+28.16
+$
+844,800
+8/1/06 
+—
+—
+—
+—
+250,000
+$
+28.16
+$
+2,144,928
+John E. Vollmer III
+8/1/06 
+$
+444,444
+$
+1,382,484
+—
+—
+—
+—
+—
+8/1/06 
+—
+—
+—
+15,000
+—
+$
+28.16
+$
+422,400
+8/1/06 
+—
+—
+—
+—
+125,000
+$
+28.16
+$
+1,072,464
+Mark S. Siegel
+8/1/06 
+$
+888,889
+$
+2,764,967
+—
+—
+—
+—
+—
+8/1/06 
+—
+—
+—
+30,000
+—
+$
+28.16
+$
+844,800
+8/1/06 
+—
+—
+—
+—
+250,000
+$
+28.16
+$
+2,144,928
+Kenneth N. Berns
+8/1/06 
+$
+444,444
+$
+1,382,484
+—
+—
+—
+—
+—
+8/1/06 
+—
+—
+—
+15,000
+—
+$
+28.16
+$
+422,400
+8/1/06 
+—
+—
+—
+—
+125,000
+$
+28.16
+$
+1,072,464
+(1) 
+For the year ended December 31, 2006, the bonus plan for
+Named Executive Officers provided for a bonus pool based on
+earnings before interest, taxes, depreciation and amortization
+(EBITDA) subject to a minimum EBITDA of $400 million. The
+bonus pool was allocated among the Named Executive Officers
+based on a pre-determined sharing percentage. The threshold
+amount presented in this table is calculated for each Named
+Executive Officer based on an assumed EBITDA of
+$400 million and the allocation formula applied to the
+bonus pool for distribution among the Named Executive Officers,
+although the bonus plan for Named Executive Officers provides
+for no payment if the minimum EBITDA of $400 million is not
+satisfied. The target amount is calculated based on
+Patterson-UTI’s actual EBITDA for 2006 and the allocation
+formula applied to the bonus pool for distribution among the
+Named Executive Officers. The target amounts presented in the
+table differ from the actual amounts earned presented in the
+Summary Compensation Table as a result of a discretionary
+adjustment to the total bonus pool by the Compensation
+Committee. The cash bonuses awarded from the bonus pool are
+awarded under the 2005 Long-Term Incentive Plan (the “2005
+Plan”), which has been designed to meet the requirements of
+section 162(m) of the Internal Revenue Code. Although the
+bonus pool for the Named Executive Officers does not have an
+EBITDA cap, the maximum amount that may be awarded to an
+individual under any cash-based performance award granted under
+the 2005 Plan during a
+12-month 
+period is $5,000,000. 
+(2) 
+Shares of restricted stock were awarded pursuant to the terms
+and conditions of the Patterson-UTI Energy, Inc. 2005 Long Term
+Incentive Plan. These shares vest over a four year period as
+follows: 50% on August 1, 2009 and 50% on August 1,
+2010. 
+(3) 
+Options were granted pursuant to the terms and conditions of the
+Patterson-UTI Energy, Inc. 2005 Long Term Incentive Plan. Those
+options vest over a three year period as follows: 33.33% on
+August 1, 2007, and then in equal monthly installments over
+the twenty-four months following August 1, 2007. 
+(4) 
+The grant-date fair value of restricted stock is based on the
+closing price of Patterson-UTI Common Stock on the date of grant
+which is consistent with the valuation used by Patterson-UTI for
+the recognition of compensation expense under FAS 123R. The
+grant-date fair value of stock options was determined using the
+Black-Scholes option pricing model, which is consistent with the
+valuation used by Patterson-UTI for the recognition of
+compensation expense under FAS 123R, with assumptions that
+are more fully described in Note 11 to the consolidated
+financial statements in Patterson-UTI’s Annual Report on
+Form 10-K 
+for the year ended December 31, 2006. 
+12
+Table of Contents 
+The following table sets forth information concerning
+outstanding equity awards at December 31, 2006 for the
+executive officers listed in the Summary Compensation Table:
+Outstanding
+Equity Awards 
+at Fiscal Year-End 
+Option Awards 
+Stock Awards 
+Option 
+Number of Shares 
+Market Value of 
+Exercise 
+Option 
+or Units of Stock 
+Shares or Units of 
+Number of Securities Underlying Unexercised Options (#) 
+Price 
+Expiration 
+That Have 
+Stock That Have 
+Name 
+Exercisable 
+Unexercisable 
+($) 
+Date 
+Not Vested (#) 
+Not Vested ($)(1) 
+Cloyce A. Talbott
+120,000
+—
+$
+7.925
+7/19/11 
+110,000
+(2)
+$
+2,555,300
+400,000
+—
+$
+13.195
+7/17/12 
+380,000
+—
+$
+16.220
+4/28/13 
+106,667
+13,333
+(3)
+$
+19.140
+4/27/14 
+83,333
+66,667
+(4)
+$
+24.630
+4/26/15 
+—
+250,000
+(5)
+$
+28.160
+7/31/16 
+John E. Vollmer III
+110,000
+—
+$
+8.060
+10/22/11 
+55,000
+(6)
+$
+1,277,650
+400,000
+—
+$
+13.195
+7/17/12 
+190,000
+—
+$
+16.220
+4/28/13 
+53,333
+6,667
+(3)
+$
+19.140
+4/27/14 
+41,667
+33,333
+(4)
+$
+24.630
+4/26/15 
+—
+125,000
+(5)
+$
+28.160
+7/31/16 
+Mark S. Siegel
+100,000
+—
+$
+7.925
+7/19/11 
+110,000
+(2)
+$
+2,555,300
+175,900
+—
+$
+13.195
+7/17/12 
+380,000
+—
+$
+16.220
+4/28/13 
+106,667
+13,333
+(3)
+$
+19.140
+4/27/14 
+83,333
+66,667
+(4)
+$
+24.630
+4/26/15 
+—
+250,000
+(5)
+$
+28.160
+7/31/16 
+Kenneth N. Berns
+50,000
+—
+$
+7.925
+7/19/11 
+55,000
+(6)
+$
+1,277,650
+83,600
+—
+$
+13.195
+7/17/12 
+190,000
+—
+$
+16.220
+4/28/13 
+53,333
+6,667
+(3)
+$
+19.140
+4/27/14 
+41,667
+33,333
+(4)
+$
+24.630
+4/26/15 
+—
+125,000
+(5)
+$
+28.160
+7/31/16 
+A. Glenn Patterson
+119,000
+—
+$
+7.925
+7/19/11 
+80,000
+(7)
+$
+1,858,400
+255,000
+—
+$
+13.195
+7/17/12 
+380,000
+—
+$
+16.220
+4/28/13 
+106,667
+13,333
+(3)
+$
+19.140
+4/27/14 
+83,333
+66,667
+(4)
+$
+24.630
+4/26/15 
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on
+December 29, 2006 of $23.23 per share. 
+(2) 
+These shares of restricted stock vest as follows:
+25,000 shares on April 28, 2007, 15,000 shares on
+April 27, 2008, 25,000 shares on April 28, 2008,
+15,000 shares on April 27, 2009, 15,000 shares on
+August 1, 2009 and 15,000 shares on August 1,
+2010. 
+(3) 
+These options vest in equal monthly installments of
+3,333 shares per month for Messrs. Talbott, Siegel and
+Patterson and in equal monthly installments of 1,667 shares
+per month for Messrs. Vollmer and Berns. The options will
+be fully vested on April 28, 2007. 
+(4) 
+These options vest in equal monthly installments of
+4,167 shares per month for Messrs. Talbott, Siegel and
+Patterson and in equal monthly installments of 2,083 shares
+per month for Messrs. Vollmer and Berns. The options will
+be fully vested on April 27, 2008. 
+(5) 
+These options vest as follows: 33.33% on August 1, 2007,
+and then in equal monthly installments of 6,944 shares per
+month for Messrs. Talbott and Siegel and in equal monthly
+installments of 3,472 shares per month for
+Messrs. Vollmer and Berns over the twenty-four months
+following August 1, 2007. 
+(6) 
+These shares of restricted stock vest as follows:
+12,500 shares on April 28, 2007, 7,500 shares on
+April 27, 2008, 12,500 shares on April 28, 2008,
+7,500 shares on April 27, 2009, 7,500 shares on
+August 1, 2009 and 7,500 shares on August 1, 2010. 
+13
+Table of Contents 
+(7) 
+These shares of restricted stock vest as follows:
+25,000 shares on April 28, 2007, 15,000 shares on
+April 27, 2008, 25,000 shares on April 28, 2008,
+and 15,000 shares on April 27, 2009. 
+There were no options exercised or stock that vested with
+respect to any of the Named Executive Officers during 2006.
+Patterson-UTI provides no pension benefits for any of the Named
+Executive Officers. None of the Named Executive Officers had any
+items of nonqualified deferred compensation during 2006. As a
+result, tables with respect to options exercised and stock
+vested, pension benefits and nonqualified deferred compensation
+have not been provided.
+DIRECTOR
+COMPENSATION 
+The following table sets forth information concerning
+compensation for 2006 with respect to non-employee directors of
+Patterson-UTI:
+Director
+Compensation Table 
+Fees Earned 
+or Paid in Cash 
+Stock Awards 
+Option Awards 
+Total 
+Name 
+($) 
+($)(1) 
+($)(2) 
+($) 
+Robert C. Gist
+$
+52,000
+$
+102,157
+$
+91,536
+$
+245,693
+Curtis W. Huff
+$
+76,167
+$
+102,157
+$
+91,536
+$
+269,860
+Terry H. Hunt
+$
+52,000
+$
+102,157
+$
+91,536
+$
+245,693
+Kenneth R. Peak
+$
+57,500
+$
+102,157
+$
+91,536
+$
+251,193
+Nadine C. Smith
+$
+61,500
+$
+102,157
+$
+91,536
+$
+255,193
+(1) 
+Amounts set forth represent the dollar amount of expense
+recognized for financial statement reporting purposes in 2006 in
+accordance with FAS 123R with respect to restricted stock
+held by the director. For additional information related to the
+assumptions used and valuation of restricted stock, see
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on
+Form 10-K 
+for the year ended December 31, 2006. 
+During 2006, each director received an award of
+3,000 shares of restricted stock on January 3, 2006
+which fully vested on January 3, 2007. The grant-date fair
+values of these awards were $35.72 per share, or an
+aggregate of $107,160 per director, of which $102,157 was
+recognized as expense during 2006. As of December 31, 2006,
+none of these shares had vested and all 15,000 total shares
+remained outstanding. Each director received an award of
+3,000 shares of restricted stock on January 3, 2007
+and as of the date of this proxy statement none of these shares
+had vested and all 15,000 total shares awarded in 2007 remained
+outstanding. 
+(2) 
+Amounts set forth represent the dollar amount of expense
+recognized for financial statement reporting purposes in 2006 in
+accordance with FAS 123R with respect to stock options held
+by the director. For additional information related to the
+assumptions used in connection with the valuation of stock
+options using the Black-Scholes option pricing model, see
+Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report for the year ended
+December 31, 2006. 
+Each director received an award of options to purchase
+10,000 shares of Common Stock on January 3, 2006 which
+fully vested on January 3, 2007. The grant-date fair value
+of these awards were $9.23 per share, or an aggregate of
+$92,300 per director, of which $91,536 was recognized as
+expense during 2006. As of December 31, 2006, none of these
+options had vested and all 50,000 total options remained
+outstanding and unexercised. Each director received an award of
+options to purchase 10,000 shares of Common Stock on
+January 3, 2007 and as of the date of this proxy statement
+none of these options had vested and all 50,000 total options
+awarded in 2007 remained outstanding and unexercised. 
+Directors who are also employees of Patterson-UTI do not receive
+compensation for serving as a director or as a member of a
+committee of the Board of Directors. All directors are
+reimbursed for reasonable
+out-of-pocket 
+expenses incurred in connection with attendance at Board of
+Directors meetings and committee meetings. Each non-employee
+director receives annual cash compensation of $35,000 and
+(i) 3,000 shares of restricted stock subject to
+one-year vesting (subject to acceleration in certain limited
+situations, including a change of control) and (ii) an
+option to purchase 10,000 shares of Common Stock at an
+exercise price equal to the closing price of Common
+14
+Table of Contents 
+Stock on the grant date. The option has a
+10-year 
+term, vests after one-year (subject to acceleration in certain
+limited situations, including a change of control) and contains
+a right to exercise for three years following cessation of the
+holder as a director (but not beyond the
+10-year 
+term). Each non-employee director that serves on the Audit
+Committee or the Compensation Committee receives additional
+annual cash compensation of $10,000 per committee on which
+he or she serves, with the chairman of each such committee
+receiving $15,000. Additionally, each member of the Audit
+Committee received cash compensation of $500 per meeting
+attended, beginning with the first Audit Committee meeting
+following the identification of the embezzlement by
+Patterson-UTI’s former Chief Financial Officer, Jonathan D.
+Nelson in 2005 and continuing until the conclusion of the Audit
+Committee’s investigation in 2006. The Board of Directors
+formed a special litigation committee in 2005 to review the
+allegations in certain derivative actions that the Board of
+Directors breached their fiduciary duty to Patterson-UTI for
+failing to timely discover the embezzlement by Mr. Nelson.
+Each member of the Special Litigation Committee received cash
+compensation of $500 per meeting attended. The Special
+Litigation Committee completed its review in 2006.
+CHANGE IN
+CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; 
+INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+On January 29, 2004, Patterson-UTI entered into change in
+control agreements with Messrs. Siegel, Talbott, Berns and
+Vollmer (each agreement, an “Agreement” and
+collectively, the “Agreements”; and each individual,
+an “Employee and collectively, the “Employees”).
+The Agreements were entered into to protect the Employees should
+a change in control occur, thereby encouraging the Employee to
+remain in the employ of Patterson-UTI and not be distracted from
+the performance of his duties to Patterson-UTI by the
+possibility of a change in control.
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other
+than for cause or by the Employee for good reason, the terms of
+the Agreement would entitle the Employee to, among other things:
+• 
+a bonus payment equal to the greater of the highest bonus paid
+after the Agreement was entered into and the average of the two
+annual bonuses earned in the two fiscal years immediately
+preceding a change in control (such bonus payment prorated for
+the portion of the fiscal year preceding the termination date),
+• 
+a payment equal to 2.5 times (in the case of Messrs. Siegel
+and Talbott) or 1.5 times (in the case of Messrs. Berns and
+Vollmer) of the sum of (1) the highest annual salary in
+effect for such Employee and (2) the average of the three
+annual bonuses earned by the Employee for the three fiscal years
+preceding the termination date, and
+• 
+continued coverage under Patterson-UTI’s welfare plans for
+up to three years (in the case of Messrs. Siegel and
+Talbott) or two years (in the case of Messrs. Berns and
+Vollmer).
+Each Agreement provides the Employee with a full
+gross-up 
+payment for any excise taxes imposed on payments and benefits
+received under the Agreements or otherwise including other taxes
+that may be imposed as a result of the
+gross-up 
+payment.
+A change in control is principally defined by the Agreement as:
+• 
+an acquisition by any individual, entity or group of beneficial
+ownership of 35% or more of either Patterson-UTI’s then
+outstanding Common Stock or the combined voting power of the
+then outstanding voting securities of Patterson-UTI entitled to
+vote in the election of directors,
+• 
+a change occurs in which the members of the Board of Directors
+as of the date of the Agreement cease to constitute at least a
+majority of Patterson-UTI’s Board of Directors unless that
+change occurs through a vote of at least a majority of the
+incumbent members of the Board of Directors, or
+• 
+a change in the beneficial ownership of Patterson-UTI following
+consummation of a reorganization, merger, consolidation, sale of
+Patterson-UTI or any subsidiary of Patterson-UTI or a
+disposition of all or substantially all of the assets of
+Patterson-UTI in which the beneficial owners immediately prior
+to the transaction own 65% or less of outstanding Common Stock
+of the newly combined or merged entity.
+15
+Table of Contents 
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or retirement,
+• 
+the termination of the Employee’s employment, or
+• 
+three years from the date the Agreement was signed although,
+unless otherwise terminated, the Agreements will automatically
+renew for successive twelve-month periods unless Patterson-UTI
+notifies the Employee at least 90 days before the
+expiration of the initial term or the renewal period, as
+applicable, that the term will not be extended. Patterson-UTI
+did not provide any such notification to the Employees before
+the expiration of the initial term.
+All unvested stock options and restricted stock awards held by
+Named Executive Officers vest upon a change of control as
+defined by the underlying award agreements. All restricted stock
+awards held by Named Executive Officers contain provisions that
+in the event of termination due to death or disability, the
+Named Executive Officer would vest in a portion of the unvested
+restricted stock. See footnote 4 in the table below.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer confirming and
+evidencing the existing agreements between Patterson-UTI and
+each of them pursuant to which Patterson-UTI has agreed to pay
+each such person within ten days of the termination of his
+employment with Patterson-UTI for any reason (including
+voluntary termination by him), an amount in cash equal to his
+annual base salary at the time of such termination. Any such
+payment made by Patterson-UTI pursuant to the agreement
+evidenced in these letter agreements will reduce dollar for
+dollar any payment owed to such person, if any, pursuant to the
+change in control agreements discussed above.
+Amounts that each of the Named Executive Officers would be
+entitled to under the existing agreements if a change in control
+were to occur as of December 31, 2006 are reflected in the
+following table:
+Cash Payments 
+Other Benefits 
+Bonus 
+Salary and 
+Option 
+Stock 
+Continued 
+Payment 
+Bonus 
+Awards 
+Awards 
+Benefits 
+Total 
+Name 
+($)(2) 
+($)(3) 
+($)(4) 
+($)(4) 
+($)(5) 
+($) 
+Cloyce A. Talbott
+$
+1,000,000
+$
+2,839,440
+$
+54,532
+$
+2,555,300
+$
+5,439
+$
+6,454,711
+John E. Vollmer III
+$
+1,250,000
+$
+1,301,832
+$
+27,268
+$
+1,277,650
+$
+2,908
+$
+3,859,658
+Mark S. Siegel
+$
+1,650,000
+$
+3,131,107
+$
+54,532
+$
+2,555,300
+$
+—
+$
+7,390,939
+Kenneth N. Berns
+$
+900,000
+$
+1,036,832
+$
+27,268
+$
+1,277,650
+$
+—
+$
+3,241,750
+A. Glenn Patterson(1)
+—
+—
+$
+54,532
+$
+1,858,400
+—
+$
+1,912,932
+(1) 
+A. Glenn Patterson’s Agreement terminated when he ceased to
+be President and Chief Operating Officer in May 2006. The terms
+of his option and stock awards remained unchanged and such award
+agreements include a provision that unvested shares will
+automatically vest upon a change in control. 
+(2) 
+The assumed bonus payment is equal to the highest annual bonus
+paid after the Agreements were entered into. 
+(3) 
+The assumed salary and bonus payment represents 2.5 times
+(in the case of Messrs. Siegel and Talbott) or
+1.5 times (in the case of Messrs. Berns and Vollmer)
+of the sum of the 2006 salary in effect for each employee and
+the average of the annual bonuses earned by each employee for
+2005, 2004 and 2003. Bonus amounts earned in 2006 were not
+considered in this calculation as they were not determined until
+subsequent to December 31, 2006. 
+(4) 
+Each of the Named Executive Officers’ option and stock
+award agreements provide that unvested options and awards will
+immediately vest upon a change in control. Amounts presented in
+the table represent the value of unvested option and stock
+awards using the market price of Patterson-UTI Common Stock at
+December 31, 2006. All restricted stock awards held by
+Named Executive Officers provide that in the event of
+termination of employment due to death or disability, the Named
+Executive Officer would vest in a portion of the unvested
+restricted stock. With respect to Messrs. Talbott and
+Siegel, such a termination at December 31, 2006 would have
+resulted in the accelerated vesting of 57,355 shares with a
+fair value of $1,332,357. With respect to Messrs. Vollmer
+and Berns, such a termination at December 31, 2006 would
+have resulted in the accelerated 
+16
+Table of Contents 
+vesting of 28,677 shares with a fair value of $666,167.
+With respect to Mr. Patterson, such a termination would
+have resulted in the accelerated vesting of 53,713 shares
+with a fair value of $1,247,753. 
+(5) 
+Messrs. Talbott and Vollmer participate in the
+Company’s health and welfare plans as of December 31,
+2006. The amounts presented represent the Company portion of the
+premiums for three years in the case of Mr. Talbott and two
+years in the case of Mr. Vollmer based on the rates in
+effect at December 31, 2006. 
+In May 2006, Patterson-UTI entered into an employment agreement
+with A. Glenn Patterson pursuant to which Patterson-UTI will
+employ Mr. Patterson for five years at an annual
+compensation of $250,000 per year.
+Patterson-UTI has entered into an indemnification agreement with
+each of its Named Executive Officers and directors containing
+provisions that may require Patterson-UTI, among other things,
+to indemnify such executive officers and directors against
+liabilities that may arise by reason of their status or service
+as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN
+TRANSACTIONS 
+In connection with the acquisition by REMY Capital
+Partners III, L.P. (“REMY Capital”) of an
+ownership interest in UTI in March 1995, REMY Capital succeeded
+to a registration rights agreement with UTI. As the
+successor-in-interest 
+to UTI, Patterson-UTI assumed this registration rights agreement
+pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares
+held by REMY Capital under the Securities Act of 1933, as
+amended. In the event that such rights are exercised in
+connection with a primary offering proposed by Patterson-UTI (or
+a secondary offering with which Patterson-UTI agrees to
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elected to exercise such rights other than in
+connection with an offering in which Patterson-UTI participates,
+REMY Capital would bear all costs of the offering. These rights
+continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995. As of the date of this
+proxy statement, REMY Capital continues to hold
+1,541,548 shares of Common Stock.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is
+President and sole stockholder of REMY Investors, which is the
+general partner of REMY Capital. Mr. Berns, a director and
+Senior Vice President of Patterson-UTI, is an executive of REMY
+Investors.
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer, Patterson-UTI delivered a letter to
+Mr. Vollmer dated February 6, 2006 (the “Letter
+Agreement”). Pursuant to the Letter Agreement,
+Patterson-UTI agreed, to the extent permitted by law and
+provided that the applicable accounting restatement pending at
+that time did not result from Patterson-UTI’s material
+non-compliance with financial reporting requirements under the
+federal securities laws as a result of knowing misconduct by
+Mr. Vollmer:
+• 
+Patterson-UTI is not entitled to and will not make any claim
+against Mr. Vollmer for reimbursement of any bonus or other
+incentive or equity based compensation received by him or any
+profits realized by him from the sale of securities of
+Patterson-UTI, under Section 304 of the Sarbanes-Oxley Act
+of 2002 (“Section 304”) on account of the
+restatement of any financial statements of Patterson-UTI
+covering any accounting period ending on or prior to
+September 30, 2005;
+• 
+Patterson-UTI will not make any claim against Mr. Vollmer
+for any profits realized from the sale of securities of
+Patterson-UTI that were owned by him prior to his becoming Chief
+Financial Officer or were acquired by him on account of the
+exercise of options or the settling of restricted stock units
+that were held by him immediately prior to his becoming Chief
+Financial Officer, under Section 304 on account of the
+restatement of any financial statements of Patterson-UTI
+covering any period during which he was Chief Financial
+Officer; and
+• 
+Patterson-UTI will indemnify Mr. Vollmer against all losses
+in connection with his defense of any claim against him under
+Section 304 in contravention of the two immediately
+preceding bullets, to the extent he is
+17
+Table of Contents 
+obligated to reimburse Patterson-UTI for any bonus or other
+incentive or equity compensation received by him or any profits
+realized by him for the sale of Patterson-UTI securities.
+Notwithstanding court decisions that Patterson-UTI’s right
+to make any such claims appears doubtful, Patterson-UTI has
+entered into this agreement because of the breadth of language
+of Section 304 and the uncertainty as to how the statute
+may be interpreted by the courts in the future and the
+importance of Mr. Vollmer’s continued service as Chief
+Financial Officer.
+Patterson-UTI operates certain oil and natural gas properties in
+which certain of Patterson-UTI’s affiliated persons have
+participated, either individually or through entities they
+control. These participations have typically been through
+working interests in prospects or properties Patterson-UTI
+originated or acquired. At December 31, 2006, affiliated
+persons were working interest owners in 281 of the 330 total
+wells Patterson-UTI operated. Patterson-UTI makes sales of
+working interests to reduce its economic risk in the properties.
+Generally, it is more efficient for Patterson-UTI to sell the
+working interests to these affiliated persons than to market
+them to unrelated third parties. Sales of working interests to
+affiliated parties were made at cost, comprised of
+Patterson-UTI’s costs of acquiring and preparing the
+working interests for sale plus a promote fee in some cases.
+These costs were paid by the working interest owners on a pro
+rata basis based upon their working interest ownership
+percentage. The price at which working interests were sold to
+affiliated persons was the same price at which working interests
+were sold to unaffiliated persons, except that in some cases the
+affiliated persons also paid a promote fee.
+Production revenues and joint interest costs of each of the
+affiliated persons during 2006 for all wells operated by
+Patterson-UTI in which the affiliated persons have working
+interests are presented in the table below. These amounts do not
+necessarily represent their profits or losses from these
+interests because the joint interest costs do not include the
+parties’ related drilling and leasehold acquisition costs
+incurred prior to January 1, 2006. These activities
+resulted in a payable to the affiliated persons of approximately
+$1.5 million at December 31, 2006 and a receivable
+from the affiliated persons of approximately $1.6 million
+at December 31, 2006.
+Year Ended December 31, 2006 
+Joint 
+Production 
+Interest 
+Name 
+Revenues(1) 
+Costs(2) 
+Cloyce A. Talbott
+$
+301,445
+$
+95,074
+Jana Talbott, Executrix to the
+Estate of Steve Talbott(3)
+20,621
+5,513
+Stan Talbott(3)
+8,597
+4,043
+John Evan Talbott Trust(3)
+3,825
+875
+Lisa Beck and Stacy Talbott(3)
+1,311,651
+893,903
+SSI Oil & Gas, Inc.(4)
+225,360
+181,970
+IDC Enterprises, Ltd.(5)
+13,741,205
+12,829,963
+Subtotal
+15,612,704
+14,011,341
+A. Glenn Patterson(6)
+125,390
+40,104
+Robert Patterson(6)
+9,071
+4,904
+Thomas M. Patterson(6)
+9,071
+4,904
+Subtotal
+143,532
+49,912
+Total
+$
+15,756,236
+$
+14,061,253
+(1) 
+Revenues for production of oil and natural gas, net of state
+severance taxes. 
+(2) 
+Includes leasehold costs, tangible equipment costs, intangible
+drilling costs, and lease operating expense billed during that
+period. All joint interest costs have been paid on a timely
+basis. 
+(3) 
+Stan Talbott, Lisa Beck, and Stacy Talbott are
+Mr. Talbott’s adult children. Steve Talbott is the
+deceased son of Mr. Talbott. John Evan Talbott is
+Mr. Talbott’s grandson. 
+(4) 
+SSI Oil & Gas, Inc. is beneficially owned 50% by Cloyce
+A. Talbott and directly owned 50% by A. Glenn Patterson. 
+18
+Table of Contents 
+(5) 
+IDC Enterprises, Ltd. is 50% owned by Cloyce A. Talbott and 50%
+owned by A. Glenn Patterson. 
+(6) 
+Through April 2006, A. Glenn Patterson was Patterson-UTI’s
+President and Chief Operating Officer. Robert and Thomas M.
+Patterson are A. Glenn Patterson’s adult children. 
+Historically Patterson-UTI has had a policy, set forth in
+various resolutions and recorded actions of the Board of
+Directors, pursuant to which the Board reviewed, approved and in
+limited cases ratified related party transactions, including use
+of the Patterson-UTI airplane by executive officers and family
+members, co-investment in oil and gas properties by executive
+officers and other persons related to them, the sale to or
+purchase from Patterson-UTI of goods and services by entities
+related to executive officers or directors and similar matters.
+In approving or disapproving such matters the Board considered
+whether they were in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+they were on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available from a third
+party. The related party transactions included transactions
+between Patterson-UTI or one of its subsidiaries and an
+executive officer, a director, an immediate family member of an
+executive officer or a director or any entity in which any of
+the foregoing had a 5% or greater interest or in which they were
+an executive officer or director.
+Patterson-UTI is in the process of consolidating its policies
+and procedures with respect to related party transactions into a
+single written policy and including appropriate modifications in
+light of changing legal requirements.
+19
+Table of Contents 
+SECURITY
+OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of April 28, 2007, the
+stock ownership of (i) the Named Executive Officers,
+directors and Board nominees individually, (ii) all
+directors, Board nominees and executive officers as a group and
+(iii) each person known by Patterson-UTI to be the
+beneficial owner of more than 5% of Common Stock.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5%
+of Patterson-UTI’s Common Stock:
+Barclays Global Investors, NA
+19,232,171
+(1)
+12.3
+%
+First Pacific Advisors, LLC
+8,857,739
+(2)
+5.7
+%
+Directors and Executive Officers:
+Mark S. Siegel
+2,645,781
+(3)
+1.7
+%
+Cloyce A. Talbott
+1,498,465
+(4)
+*
+A. Glenn Patterson
+1,132,481
+(5)
+*
+Kenneth N. Berns
+537,767
+(6)
+*
+John E. Vollmer III
+894,167
+(7)
+*
+Robert C. Gist
+122,772
+(8)
+*
+Curtis W. Huff
+66,880
+(9)
+*
+Terry H. Hunt
+44,800
+(10)
+*
+Kenneth R. Peak
+16,000
+(11)
+*
+Nadine C. Smith
+94,000
+(12)
+*
+Charles O. Buckner
+3,000
+(13)
+*
+All directors and executive
+officers as a group
+7,176,113
+(14)
+4.5
+%
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G filed jointly by Barclays
+Global Investors, NA (“Barclays Investors”), Barclays
+Global Fund Advisors (“Barclays Advisors”),
+Barclays Global Investors, Ltd. (“Barclays Ltd.”),
+Barclays Global Investors Japan Trust and Banking Company
+Limited (“Barclays Japan Trust”) and Barclays Global
+Investors Japan Limited (“Barclays Japan”) with the
+Securities and Exchange Commission on January 23, 2007.
+According to the report, Barclays Investors has sole voting
+power with respect to 12,049,144 shares and sole
+dispositive power with respect to 14,595,090 shares.
+Barclays Advisors has sole voting and dispositive power with
+respect to 2,034,170 shares. Barclays Ltd. has sole voting
+and dispositive power with respect to 1,801,995 shares.
+Barclays Japan Trust has sole voting and dispositive power with
+respect to 213,185 shares. Barclays Japan has sole voting
+and dispositive power with respect to 587,731 shares. The
+address of the principal business office of Barclays Investors
+and Barclays Advisors is 45 Fremont Street, San Francisco,
+California 94105. The address of the principal business office
+of Barclays Ltd. is Murray House, 1 Royal Mint Court, London
+EC3N 4HH. The address of the principal business office of
+Barclays Japan Trust and Barclays Japan is Ebisu Prime Square
+Tower 8th Floor, 1-1-39 Hiroo Shibuya-Ku, Tokyo, Japan
+150-0012. 
+The address of the principal business office of Barclays Japan
+is Ebisu Prime Square Tower 8th Floor, 1-1-39 Hiroo
+Shibuya-Ku, Tokyo, Japan
+150-0012. 
+(2) 
+Based solely on a Schedule 13G jointly filed by First
+Pacific Advisors, LLC (“First Pacific”), Robert L.
+Rodriguez and J. Richard Atwood with the Securities and Exchange
+Commission on February 14, 2007. According to the report,
+First Pacific has shared voting power with respect to
+3,294,739 shares and shared dispositive power with respect
+to 8,857,739 shares. Robert L. Rodriguez has shared voting
+power with respect to 8,857,739 shares and shared
+dispositive power with respect to 3,294,739 shares. J.
+Richard Atwood has shared voting power with respect to
+8,857,739 shares and shared dispositive power with respect
+to 3,294,739 shares. Robert L. Rodriguez and J. Richard
+Atwood are each part owners and managing members 
+20
+Table of Contents 
+of First Pacific and are deemed to beneficially own
+8,857,739 shares of Patterson-UTI owned by First
+Pacific’s clients. Robert L. Rodriguez and J. Richard
+Atwood disclaim beneficial ownership of the securities owned by
+First Pacific’s clients. The address of the principal
+business office of First Pacific and of Robert L. Rodriguez and
+J. Richard Atwood is 11400 West Olympic Blvd.,
+Suite 1200, Los Angeles, CA 90064. 
+(3) 
+Mr. Siegel is the President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital
+Partners III, L.P. (“REMY Capital”). The Common
+Stock beneficially owned by Mr. Siegel includes
+1,541,548 shares of Common Stock owned by REMY Capital. The
+Common Stock beneficially owned by Mr. Siegel also includes
+stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within sixty days, to purchase
+884,233 shares of Common Stock, but does not include
+591,667 shares underlying stock options held by
+Mr. Siegel that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+135,000 shares of unvested restricted Common Stock held by
+Mr. Siegel, over which he presently has voting power. 
+(4) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to purchase
+1,128,333 shares. Does not include shares underlying stock
+options held by Mr. Talbott to purchase 591,667 shares
+each that are not presently exercisable and will not become
+exercisable within sixty days. Includes 135,000 shares of
+unvested restricted Common Stock held by Mr. Talbott, over
+which he presently has voting power. 
+(5) 
+Includes shares underlying stock options held by
+Mr. Patterson, which are presently exercisable or become
+exercisable within sixty days, to purchase 982,333 shares.
+Does not include shares underlying stock options held by
+Mr. Patterson to purchase 41,667 shares each that are
+not presently exercisable and will not become exercisable within
+sixty days. Includes 55,000 shares of unvested restricted
+Common Stock held by Mr. Patterson, over which he presently
+has voting power. 
+(6) 
+Includes shares underlying stock options held by Mr. Berns,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 437,767 shares. Does not include
+295,833 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 67,500 shares of unvested restricted
+Common Stock held by Mr. Berns, over which he presently has
+voting power. Does not include shares of Common Stock
+beneficially owned by REMY Investors. Mr. Berns disclaims
+beneficial ownership of such shares beneficially owned by REMY
+Investors. 
+(7) 
+Includes shares underlying stock options held by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to purchase 814,167 shares.
+Does not include 295,833 shares underlying stock options
+held by Mr. Vollmer that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+67,500 shares of unvested restricted Common Stock held by
+Mr. Vollmer, over which he presently has voting power. 
+(8) 
+Includes shares underlying stock options held by Mr. Gist,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 65,000 shares. Does not include
+10,000 shares underlying stock options held by Mr. Gist
+that are not presently exercisable and will not become
+exercisable within sixty days. Includes 3,000 shares of
+unvested restricted Common Stock held by Mr. Gist, over
+which he presently has voting power. 
+(9) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Huff to purchase 30,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Huff, over
+which he presently has voting power. 
+(10) 
+Includes 800 shares of Common Stock owned by
+Mr. Hunt’s
+mother-in-law, 
+over which Mr. Hunt presently has shared voting power.
+Includes shares underlying presently exercisable stock options
+held by Mr. Hunt to purchase 30,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Hunt that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Hunt, over
+which he presently has voting power. 
+(11) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Peak to purchase 10,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Peak, over
+which he presently has voting power. 
+21
+Table of Contents 
+(12) 
+Includes shares underlying stock options held by Ms. Smith,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 65,000 shares. Does not include
+10,000 shares underlying stock options held by Ms. Smith
+that are not presently exercisable and will not become
+exercisable within sixty days. Includes 3,000 shares of
+unvested restricted Common Stock held by Ms. Smith, over
+which she presently has voting power. 
+(13) 
+Does not include 10,000 shares underlying stock options
+held by Mr. Buckner that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+3,000 shares of unvested restricted Common Stock held by
+Mr. Buckner, over which he presently has voting power. 
+(14) 
+Includes shares underlying stock options, which are presently
+exercisable or become exercisable within sixty days, to purchase
+4,446,833 shares of Common Stock. Does not include shares
+underlying stock options to purchase 1,876,667 shares held
+by such individuals that are not presently exercisable and will
+not become exercisable within sixty days. Includes
+800 shares of Common Stock over which a director presently
+has shared voting power. Includes an aggregate of
+448,000 shares of unvested restricted Common Stock held by
+certain directors and executive officers, over which they
+presently have voting power. 
+Except as stated herein, each stockholder has sole voting and
+investment power with respect to Common Stock included in the
+above table. There are no arrangements known to Patterson-UTI
+which may result in a change in control.
+22
+Table of Contents 
+AUDIT
+COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute
+soliciting material and should not be deemed filed or
+incorporated by reference into any other Patterson-UTI filing
+under the Securities Act of 1933, as amended, or the Exchange
+Act, except to the extent Patterson-UTI specifically
+incorporates this report by reference therein.
+The Audit Committee has reviewed and discussed the audited
+financial statements with management and Patterson-UTI’s
+independent auditors.
+The Audit Committee has discussed with the independent auditors
+the matters required to be discussed by Statement on Auditing
+Standards No. 61, Communication with Audit Committees,
+as amended.
+The Audit Committee has received and reviewed the written
+disclosures and the letter from the independent auditors
+required by Independence Standard No. 1, Independence
+Discussions with Audit Committees , as amended, by the
+Independence Standards Board, and has discussed with the
+auditors the auditors’ independence.
+Taking the foregoing into consideration, the undersigned Audit
+Committee members recommended to the Board of Directors that the
+Board approve the inclusion of the Patterson-UTI’s audited
+financial statements in the Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2006.
+Audit Committee of the Board of Directors:
+Curtis W. Huff, Chairman 
+Charles O. Buckner 
+Terry H. Hunt 
+Nadine C. Smith
+PricewaterhouseCoopers
+Fees for Fiscal Years 2006 and 2005 
+In 2006 and 2005, Patterson-UTI and its subsidiaries incurred
+fees for services provided relating to (i) professional
+services rendered for the audit of Patterson-UTI’s annual
+financial statements, review of quarterly financial statements,
+and assessment of Patterson-UTI’s internal controls over
+financial reporting, (ii) professional services rendered
+for assurance and related services that are reasonably related
+to the performance of the audit or review of
+Patterson-UTI’s financial statements,
+(iii) professional services rendered for tax compliance,
+advice and planning, and (iv) products and services
+provided by PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2006 
+2005 
+Audit fees
+$
+1,228,500
+$
+2,396,000
+Tax fees
+38,000
+83,000
+All other fees
+1,600
+1,600
+Total
+$
+1,268,100
+$
+2,480,600
+The Audit Committee approves the appointment of the independent
+registered public accounting firm. The Audit Committee or
+Mr. Huff, as Chairman of the Audit Committee, approves all
+other engagements of the independent registered public
+accounting firm in advance. In the event Mr. Huff approves
+any such engagement, he discusses such approval with the Audit
+Committee at its next meeting.
+Fiscal
+2006 
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2006 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements, quarterly reviews of Patterson-UTI’s interim
+financial statements and services to assess Patterson-UTI’s
+internal control over financial reporting. “Tax fees”
+include federal, state, local and foreign tax compliance and
+related matters. “All other fees” includes other
+non-audit
+23
+Table of Contents 
+related matters. The Audit Committee or Mr. Peak, as
+Chairman of the Audit Committee during fiscal 2006, approved all
+of the services described above.
+Fiscal
+2005 
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2005 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements, quarterly reviews of Patterson-UTI’s interim
+financial statements, services to assess Patterson-UTI’s
+internal control over financial reporting and for the
+restatement of financial statements for prior years and the
+first three quarterly periods of 2005. “Tax fees”
+include federal, state, local and foreign tax compliance and
+related matters. “All other fees” includes other
+non-audit related matters. The Audit Committee or Mr. Peak,
+as Chairman of the Audit Committee during fiscal 2005, approved
+all of the services described above.
+The Audit Committee has discussed the non-audit services
+provided by PricewaterhouseCoopers LLP and the related fees and
+has considered whether those services and fees are compatible
+with maintaining auditor independence. The Audit Committee
+determined that such non-audit services were consistent with the
+independence of PricewaterhouseCoopers LLP.
+OTHER
+MATTERS 
+Section 16(a)
+Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires
+Patterson-UTI’s officers and directors and persons who own
+more than 10 percent of a registered class of
+Patterson-UTI’s equity securities, to file reports of
+ownership and changes in ownership with the SEC. Each of these
+persons is required by SEC regulation to furnish Patterson-UTI
+with copies of Section 16(a) filings.
+Based solely on its review of copies of such forms received by
+it, Patterson-UTI believes that, during the year ended
+December 31, 2006, its officers, directors and beneficial
+owners of more than ten percent of a registered class of its
+equity securities complied with all applicable filing
+requirements.
+Other
+Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not aware of any matter to be presented at the
+Meeting other than as set forth herein. If any other matters are
+properly brought before the Meeting, however, the shares
+represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting
+them.
+Stockholder
+Proposals for 2008 Annual Meeting 
+All proposals submitted by stockholders for presentation at the
+2008 annual meeting must comply with the SEC’s rules
+regarding shareholder proposals. In addition,
+Patterson-UTI’s bylaws provide that for business to be
+properly brought before an annual meeting by a stockholder, the
+stockholder, in addition to any other applicable requirements,
+must be a stockholder of record on the date of the giving of the
+notice provided for below and on the record date for the
+determination of stockholders entitled to vote at such annual
+meeting and must give timely notice of such business in writing
+to the Secretary of Patterson-UTI. To be timely with respect to
+the 2008 annual meeting, a stockholder’s notice must be
+delivered to or mailed and received at Patterson-UTI’s
+principal executive offices not earlier than February 8,
+2008 and not later than March 8, 2008; provided, however,
+that in the event that the annual meeting is called for a date
+that is not within 30 days before or after June 7,
+2008, notice by the stockholder to be timely must be received
+not later than the close of business on the tenth day following
+the day on which such notice of the date of the meeting was
+mailed or public disclosure of the annual meeting date was made,
+whichever occurs first.
+24
+Table of Contents 
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+a brief description of each matter desired to be brought before
+the annual meeting and the reasons for conducting such business
+at the annual meeting,
+• 
+the name and record address of the stockholder proposing such
+business,
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+any material interest of the stockholder in such
+business, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the annual meeting to bring such business
+before the meeting.
+The proxies will have discretionary authority to vote on any
+matter that properly comes before the meeting if the stockholder
+has not provided timely written notice as required by the
+Patterson-UTI bylaws.
+Any proposal by a stockholder to be presented at
+Patterson-UTI’s 2008 annual meeting of stockholders must be
+received by Patterson-UTI no later than February 8, 2008,
+in order to be eligible for inclusion in Patterson-UTI’s
+proxy statement and proxy used in connection with the 2008
+annual meeting.
+Patterson-UTI reserves the right to reject, rule out of order,
+or take other appropriate action with respect to any proposal or
+nomination that does not comply with these and other applicable
+requirements.
+Annual
+Report 
+You are referred to Patterson-UTI’s annual report to
+stockholders with a copy of its Annual Report on
+Form 10-K, 
+for the year ended December 31, 2006, filed with the SEC,
+enclosed herewith for your information. The annual report to
+stockholders is not incorporated in this proxy statement and is
+not to be considered part of the soliciting material.
+25
+Table of Contents 
+PATTERSON-UTI ENERGY, INC. 
+§ 
+You can now vote your shares electronically through the Internet or the telephone. 
+§ 
+This eliminates the need to return the proxy card. 
+§ 
+Your electronic vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed, dated and returned the proxy card. 
+TO VOTE YOUR PROXY BY INTERNET 
+www.continentalstock.com 
+Have your proxy card in hand when you access the above website. You will be prompted to
+enter the company number, proxy number and account number to create an electronic ballot. Follow the prompts to vote your shares.
+TO VOTE YOUR PROXY BY TELEPHONE 
+1-866-894-0537 
+Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
+You will be prompted to enter the company number, proxy number and account number. Follow the voting instructions to vote your shares.
+TO VOTE YOUR PROXY BY MAIL 
+Mark, sign and date your proxy card below, detach it and return it in the postage-paid
+envelope provided.
+PLEASE DO NOT RETURN THE CARD BELOW IF YOU VOTED 
+ELECTRONICALLY 
+6 FOLD AND DETACH HERE AND READ THE REVERSE SIDE 6 
+PROXY BY MAIL 
+THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE NOMINEES FOR ELECTION AS DIRECTORS. 
+THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN BY
+THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THE PROXIES WILL VOTE “FOR” THE NOMINEES FOR
+ELECTION AS DIRECTORS NOTED BELOW. 
+Please mark 
+your votes 
+like this
+x 
+1.
+ELECTION OF BOARD
+OF DIRECTORS.
+FOR all nominees listed
+below (except as indicated
+to the contrary below)
+o 
+WITHHOLD AUTHORITY to 
+vote for all nominees listed below
+o 
+Nominees for election to the Board of Directors: 01 Mark S. Siegel, 02 Cloyce A. Talbott,
+03 Kenneth N. Berns, 04 Charles O. Buckner, 05 Curtis W. Huff, 06 Terry H. Hunt and
+07 Kenneth R. Peak.
+(INSTRUCTION: To withhold authority to vote for any one or more individual nominees,
+write the name of each such nominee in the space provided below.)
+2.
+Ratify
+the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the
+fiscal year ending December 31, 2007; and
+FOR 
+o 
+AGAINST 
+o 
+ABSTAIN 
+o 
+3. 
+In their discretion, the Proxies are authorized to vote upon such
+other business as may properly come before the Meeting or any adjournment
+or adjournments thereof. 
+IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE INSTRUCTIONS ABOVE. 
+COMPANY ID: 
+PROXY NUMBER: 
+ACCOUNT NUMBER: 
+Signature 
+Signature 
+Date 
+NOTE: Please sign exactly as your name or names appear on this card. Joint owners should each
+sign personally. When signing as attorney, executor, administrator, personal representative,
+trustee or guardian, please give your full title as such. For a corporation, partnership or other
+entity, please sign in the full corporate name by the President or other authorized officer or
+the full partnership or other entity name by an authorized person, as the case may be. (Please
+mark, sign, date, and return this proxy in the enclosed envelope.) 
+Table of Contents 
+Your Vote is Important! 
+Follow Instructions on The Reverse Side. 
+PLEASE VOTE 
+6 FOLD AND DETACH HERE 6 
+PROXY 
+PROXY 
+PATTERSON-UTI
+ENERGY, INC. 
+PROXY FOR ANNUAL MEETING OF STOCKHOLDERS 
+TO BE HELD ON JUNE 7, 2007 
+THIS
+PROXY IS SOLICITED BY THE BOARD OF DIRECTORS 
+The
+undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby appoints Mark S.
+Siegel, Cloyce A. Talbott and John E. Vollmer III, and each of them, proxies of the undersigned,
+each with full power to act without the other and with full power of substitution, to vote all of
+the shares which the undersigned is entitled to vote at the annual meeting of stockholders of the
+Company to be held Thursday, June 7, 2007, at 10:00 a.m., local time, at the corporate offices of
+Patterson-UTI Energy, Inc., 4510 Lamesa Highway, Snyder, Texas, 79549, and at any and all
+adjournments thereof, with the same force and effect as if the undersigned were personally
+present. The undersigned hereby instructs the above-named proxies to vote the shares
+represented by this proxy in the manner as directed by the undersigned on the reverse side of this
+proxy card. If no directions are made, the Proxies will vote “FOR” the nominees for directors set
+forth on the reverse side.
+Please mark, sign, date and return this proxy card promptly using the enclosed envelope, or
+follow the instructions on the reverse side to vote your shares by Internet or by telephone. 
+(continued on the reverse side)
\ No newline at end of file
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@@ -0,0 +1,13 @@
+party. The related party transactions included transactions
+between Patterson-UTI or one of its subsidiaries and an
+executive officer, a director, an immediate family member of an
+executive officer or a director or any entity in which any of
+the foregoing had a 5% or greater interest or in which they were
+an executive officer or director.
+Patterson-UTI is in the process of consolidating its policies
+and procedures with respect to related party transactions into a
+single written policy and including appropriate modifications in
+light of changing legal requirements.
+19
+Table of Contents 
+SECURITY
\ No newline at end of file
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@@ -0,0 +1,5023 @@
+DEF 14A
+1
+d56031ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+def14a 
+Table of Contents 
+OMB APPROVAL 
+OMB Number:
+3235-0059 
+Expires:
+January 31, 2008 
+Estimated average burden 
+hours per
+response 
+14. 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the Securities 
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant
+þ 
+Filed by a Party other than the Registrant
+o 
+Check the appropriate box: 
+o Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by
+Rule 14a-6(e)(2)) 
+þ Definitive Proxy Statement 
+o Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+Patterson-UTI Energy,
+Inc. 
+(Name
+of Registrant as Specified In Its Charter) 
+(Name
+of Person(s) Filing Proxy Statement, if other than the
+Registrant) 
+Payment of Filing Fee (Check the appropriate box):
+þ No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
+0-11. 
+1) Title of each class of securities to which transaction applies: 
+2) Aggregate number of securities to which transaction applies: 
+3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+4) Proposed maximum aggregate value of transaction: 
+5) Total fee paid: 
+o Fee paid previously with preliminary materials. 
+o Check box if any part of the fee is offset as provided by Exchange Act
+Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration
+statement number, or the Form or Schedule and the date of its filing. 
+1) Amount Previously Paid: 
+2) Form, Schedule or Registration Statement No.: 
+3) Filing Party: 
+4) Date Filed: 
+Table of Contents 
+April 24,
+2008
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual
+meeting will be held Thursday, June 5, 2008, at
+10:00 a.m., local time, at the Wyndham Hotel Greenspoint,
+12400 Greenspoint Drive, Houston, Texas 77060.
+At the annual meeting, stockholders will vote on a number of
+important matters. Please take the time to carefully read the
+proposals described in the attached proxy statement.
+Thank you for your support.
+Sincerely,
+Mark S. Siegel
+Douglas J. Wall
+Chairman of the Board 
+President and Chief Executive Officer 
+This proxy statement and the accompanying proxy card are being
+mailed to Patterson-UTI Energy, Inc. stockholders
+beginning on or about April 30, 2008.
+TABLE OF CONTENTS 
+NOTICE OF 2008 ANNUAL MEETING OF STOCKHOLDERS 
+ANNUAL MEETING OF STOCKHOLDERS 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 
+Meetings and Committees of the Board of Directors 
+Communication with the Board and its Independent Members 
+Corporate Governance Documents Available on Patterson-UTI’s Website 
+PROPOSAL NO. 2 
+Reasons for the Amendment to the 2005 Plan 
+Administration 
+General Terms 
+Effect of Certain Transactions and Change of Control 
+Performance Criteria 
+Federal Income Tax Consequences 
+Summary Information Pertaining to all Stock Option and Related Plans of Patterson-UTI 
+Additional Information Regarding the 2005 Plan 
+PROPOSAL NO. 3 
+EXECUTIVE OFFICERS 
+COMPENSATION DISCUSSION AND ANALYSIS 
+Overview 
+Elements of Compensation 
+Share Ownership Guidelines 
+Change in Control and Severance Agreements 
+Section 162(m) Considerations 
+COMPENSATION COMMITTEE REPORT 
+Summary Compensation Table 
+Grants of Plan-Based Awards 
+Outstanding Equity Awards at Fiscal Year-End 
+Option Exercises and Stock Vested 
+DIRECTOR COMPENSATION 
+Director Compensation Table 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+CERTAIN TRANSACTIONS 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+PricewaterhouseCoopers Fees for Fiscal Years 2007 and 2006 
+Fiscal 2007 
+Fiscal 2006 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Other Business 
+Stockholder Proposals for 2009 Annual Meeting 
+Annual Report 
+APPENDIX A 
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+NOTICE OF
+2008 ANNUAL MEETING OF STOCKHOLDERS 
+The 2008 annual meeting of the stockholders of Patterson-UTI
+Energy, Inc., a Delaware corporation
+(“Patterson-UTI”), will be held Thursday, June 5,
+2008, at 10:00 a.m., local time, at the Wyndham Hotel
+Greenspoint, 12400 Greenspoint Drive, Houston, Texas 77060 (the
+“Meeting”). At the Meeting, the stockholders will be
+asked to:
+• 
+elect seven directors to the Board of Directors of Patterson-UTI
+to serve until the next annual meeting of the stockholders or
+until their respective successors are elected and qualified;
+• 
+approve an amendment to Patterson-UTI’s 2005 Long-Term
+Incentive Plan to increase the number of shares available for
+issuance under the plan;
+• 
+ratify the selection of PricewaterhouseCoopers LLP as the
+independent registered public accounting firm of Patterson-UTI
+for the fiscal year ending December 31, 2008; and
+• 
+take action upon any other matters which may properly come
+before the Meeting.
+Stockholders of record at the close of business on
+April 18, 2008, are entitled to vote at the Meeting and any
+adjournment or postponement thereof.
+It is important that your shares be represented at the Meeting.
+I urge you to sign, date and promptly return the enclosed proxy
+card in the enclosed postage paid envelope or vote by following
+the Internet or telephone instructions included on the proxy
+card.
+By order of the Board of Directors
+William L. Moll, Jr.
+General Counsel and Secretary 
+April 24, 2008
+Important Notice Regarding the Availability of Proxy
+Materials for the Stockholder Meeting To Be Held on June 5,
+2008: 
+The 2008 Proxy Statement and 2007 Annual Report to Stockholders
+are available at 
+http://www.patenergy.com/proxy 
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+PROXY
+STATEMENT 
+ANNUAL
+MEETING OF STOCKHOLDERS 
+To Be Held June 5, 2008 
+The Board of Directors of Patterson-UTI Energy, Inc., a Delaware
+corporation (“Patterson-UTI”), prepared this proxy
+statement for the purpose of soliciting proxies for
+Patterson-UTI’s 2008 annual meeting of stockholders (the
+“Meeting”) to be held Thursday, June 5, 2008, at
+10:00 a.m., local time, at the Wyndham Hotel Greenspoint,
+12400 Greenspoint Drive, Houston, Texas 77060, and at any
+adjournment or postponement thereof. This proxy statement and
+the accompanying proxy card are being mailed to stockholders on
+or about April 30, 2008.
+The Board of Directors is making this solicitation by mail. In
+addition to the solicitation of proxies by mail,
+Patterson-UTI’s officers and other employees, without
+compensation other than regular compensation, may solicit
+proxies by telephone, electronic means and personal interview.
+Patterson-UTI does not intend to retain a proxy solicitation
+firm to assist in the solicitation of proxies of stockholders
+whose shares are held in street name by brokers, banks and other
+institutions, but may do so if circumstances warrant.
+Patterson-UTI will pay all costs associated with this
+solicitation.
+Properly submitted proxies received either by mail, Internet,
+telephone or in person, in time for the Meeting will be voted as
+you have directed in your proxy, unless you revoke your proxy in
+the manner provided below. As to any matter for which you give
+no direction in your proxy, your shares will be voted as follows:
+• 
+“FOR” the election of all of the nominees to the Board
+of Directors;
+• 
+“FOR” the approval of the amendment to
+Patterson-UTI’s 2005 Long-Term Incentive Plan to increase
+the number of shares authorized for issuance under the plan;
+• 
+“FOR” the ratification of PricewaterhouseCoopers LLP
+as the independent registered public accounting firm of
+Patterson-UTI for the fiscal year ending December 31,
+2008; and
+• 
+“FOR” or “AGAINST” any other proposals that
+may be properly submitted at the Meeting at the discretion of
+the persons named in the proxy.
+You may revoke your proxy at any time before the proxy is voted
+by either:
+• 
+submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone;
+• 
+notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or
+• 
+attending the Meeting and voting in person.
+SHARES
+OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of Patterson-UTI’s common
+stock, $.01 par value per share (the “Common
+Stock”), at the close of business on April 18, 2008
+are entitled to notice of and to vote at the Meeting or any
+adjournment or postponement thereof. At the close of business on
+April 18, 2008, there were 154,242,165 shares of
+Common Stock issued and outstanding. Holders of record of Common
+Stock on April 18, 2008 will be entitled to one vote per
+share on all matters to properly come before the Meeting. A list
+of stockholders entitled to notice of and to vote at the Meeting
+will be made available during regular business hours at the
+offices of Patterson-UTI Energy, Inc., 450 Gears Road,
+Suite 500, Houston, Texas 77067, from May 21, 2008
+through June 4, 2008 and at the Meeting for inspection by
+any stockholder for any purpose regarding the Meeting.
+Table of Contents 
+A quorum is necessary to transact business at the Meeting. A
+majority of the shares of Common Stock outstanding on
+April 18, 2008 will constitute a quorum. The shares held by
+each stockholder who attends the Meeting in person, signs and
+returns the enclosed form of proxy or properly votes using the
+Internet or telephone will be counted for purposes of
+determining the presence of a quorum at the Meeting.
+PROPOSAL NO. 1 
+ELECTION
+OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the number of members
+of the Board of Directors of Patterson-UTI (the
+“Board” or “Board of Directors”) shall be
+fixed either by amendment to the bylaws or by resolution of the
+Board of Directors. Directors are elected to serve until the
+next annual meeting of stockholders and until their successors
+are elected and qualified. Patterson-UTI’s bylaws provide
+that the affirmative vote of a plurality of the votes cast at
+the meeting at which a quorum is present is required for the
+election of directors. Shares as to which a stockholder
+withholds authority to vote on the election of directors and
+shares as to which a broker indicates that it does not have
+discretionary authority to vote on the election of directors
+will not be counted as voting thereon and will not affect the
+election of the nominees receiving a plurality of the votes cast.
+The enclosed form of proxy provides a means for you to either:
+• 
+vote “FOR” the election of the nominees to the Board
+of Directors listed below,
+• 
+withhold authority to vote for one or more of the
+nominees, or
+• 
+withhold authority to vote for all of the nominees.
+The Board of Directors recommends that you vote
+“FOR” all of the nominees. Unless you
+give contrary instructions in your proxy, your proxy will be
+voted “FOR” the election of all of the nominees to the
+Board of Directors. If any nominee should become unable or
+unwilling to accept nomination or election, the person acting
+under the proxy will vote for the election of such other person
+as the Board of Directors may recommend. The Board has no
+reason, however, to believe that any of the nominees will be
+unable or unwilling to serve if elected.
+There are no arrangements or understandings between any person
+and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no
+family relationships among any of the directors or executive
+officers of Patterson-UTI.
+Set forth below is the name, age, position and a brief
+description of the business experience during at least the past
+five years of each of the members of Patterson-UTI’s Board
+of Directors. Each current member of Patterson-UTI’s Board
+of Directors is a nominee for election to the Board of Directors.
+Name 
+Age 
+Position 
+Mark S. Siegel
+57
+Chairman of the Board and Director
+Kenneth N. Berns
+48
+Senior Vice President and Director
+Charles O. Buckner
+63
+Director
+Curtis W. Huff
+50
+Director
+Terry H. Hunt
+59
+Director
+Kenneth R. Peak
+62
+Director
+Cloyce A. Talbott
+72
+Director
+Mark S. Siegel — Mr. Siegel has served as
+Chairman of the Board and as a director of Patterson-UTI since
+May 2001. Mr. Siegel served as Chairman of the Board and as
+a director of UTI Energy Corp. (“UTI”) from 1995 to
+May 2001, when UTI merged with and into Patterson-UTI.
+Mr. Siegel has been President of REMY Investors &
+Consultants, Incorporated (“REMY Investors”) since
+1993. From 1992 to 1993, Mr. Siegel was President of
+Blockbuster Entertainment Corp.’s Music Division. From 1988
+through 1992, Mr. Siegel was an Executive Vice President of
+Shamrock Holdings, Inc., a private investment company, and
+Managing Director of Shamrock Capital Advisors, Incorporated.
+Mr. Siegel holds a Bachelor of Arts degree from Colgate
+University and a J.D. from the University of California,
+Berkeley (Boalt Hall) School of Law.
+2
+Table of Contents 
+Kenneth N. Berns — Mr. Berns has served as
+Senior Vice President of Patterson-UTI since April 2003 and as a
+director of Patterson-UTI since May 2001. Mr. Berns served
+as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns
+holds a Bachelors Degree in Business Administration from
+San Diego State University and a Masters Degree in Taxation
+from Golden Gate University.
+Charles O. Buckner — Mr. Buckner has
+served as a director of Patterson-UTI since February 2007.
+Mr. Buckner, a private investor, retired from the public
+accounting firm of Ernst & Young LLP in 2002 after
+35 years of service in a variety of client service and
+administrative roles, including chairmanship of
+Ernst & Young’s United States energy practice.
+Mr. Buckner is a Certified Public Accountant and holds a
+Bachelor of Business Administration from the University of Texas
+and a Masters of Business Administration from the University of
+Houston.
+Curtis W. Huff — Mr. Huff has served as a
+director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1997 to May 2001. Mr. Huff is a
+Managing Partner of Intervale Capital, an oilfield service
+private equity firm that Mr. Huff co-founded in 2006.
+Mr. Huff is also the President and Chief Executive Officer
+of Freebird Investments LLC, a private investment company, and
+has served in that capacity since October 2002. Mr. Huff
+served as the President and Chief Executive Officer of Grant
+Prideco, Inc., a provider of drill pipe and other drill stem
+products, from February 2001 to June 2002. From January 2000 to
+February 2001, Mr. Huff served as Executive Vice President,
+Chief Financial Officer and General Counsel of Weatherford
+International, Inc., an oilfield services company. He served as
+Senior Vice President and General Counsel of Weatherford from
+May 1998 to January 2000. Prior to that time, Mr. Huff was
+a partner with the law firm of Fulbright & Jaworski
+L.L.P. Mr. Huff holds a Bachelor of Arts degree and Juris
+Doctorate from the University of New Mexico and a Masters of Law
+from New York University School of Law.
+Terry H. Hunt — Mr. Hunt has served as a
+director of Patterson-UTI since April 2003 and served as a
+director of UTI from 1994 to May 2001. Mr. Hunt is an
+energy consultant and investor. Mr. Hunt served as Senior
+Vice President — Strategic Planning of PPL
+Corporation, an international energy and utility holding
+company, from 1998 to 2000. Mr. Hunt served as the
+President and Chief Executive Officer of Penn Fuel Gas, Inc., a
+natural gas and propane distribution company, from 1992 to 1999.
+Previously, Mr. Hunt was President and Chairman of Carnegie
+Natural Gas Company, a gas distribution and transmission
+company, and of Apollo Gas Company, a natural gas distributor.
+Mr. Hunt holds a Bachelor of Engineering degree from the
+University of Saskatchewan, Canada and a Masters of Business
+Administration from Southern Methodist University.
+Kenneth R. Peak — Mr. Peak has served as a
+director of Patterson-UTI since November 2000. Mr. Peak has
+served as Chairman and Chief Executive Officer of Contango
+Oil & Gas Company since September 1999. Mr. Peak
+entered the energy industry in 1972 as a commercial banker and
+has held a variety of financial and executive positions in the
+oil and gas industry prior to starting Contango in 1999.
+Mr. Peak served as an officer in the U.S. Navy from
+1968 to 1971. Mr. Peak received a Bachelor of Science in
+Physics from Ohio University in 1967 and a Masters of Business
+Administration from Columbia University in 1972.
+Cloyce A. Talbott — Mr. Talbott has served
+as a director of Patterson-UTI since its incorporation in 1978.
+Additionally, he served as its Chief Executive Officer from 1983
+until September 2007 and as its President from May 2006 until
+September 2007 and is currently employed as a consultant to
+Patterson-UTI. Mr. Talbott co-founded Patterson-UTI, served
+as Vice President from 1978 to 1983, and served as Chairman of
+the Board from 1983 to May 2001. Mr. Talbott holds a
+Bachelor of Science degree in petroleum engineering from Texas
+Tech University.
+Meetings
+and Committees of the Board of Directors 
+The Board of Directors met eight times during the year ended
+December 31, 2007. Each director attended, in person or by
+telephone, at least 75% of the aggregate of all meetings held by
+the Board and meetings of each committee on which such director
+served. A majority of the members of the Board of Directors are
+independent within the meaning of the NASDAQ Stock Market, Inc.
+(“NASDAQ”) listing standards. Specifically, the Board
+has determined that Messrs. Buckner, Huff, Hunt and Peak
+are independent within the meaning of the NASDAQ listing
+standards. In reaching this conclusion, the Board considered
+that Mr. Huff controls and manages two investment
+companies, which have interests in oilfield service portfolio
+companies that supply parts and equipment to Patterson-UTI in
+the ordinary course of their businesses consistent with
+customary terms in the industry. The Board
+3
+Table of Contents 
+has determined that these transactions are not material to such
+companies, Patterson-UTI or Mr. Huff and that such
+transactions do not affect Mr. Huff’s independence
+under applicable rules and regulations.
+The Board of Directors has established four standing committees,
+an Executive Committee, an Audit Committee, a Compensation
+Committee and a Nominating and Corporate Governance Committee.
+The Executive Committee, which currently is composed of
+Messrs. Siegel, Talbott and Berns, has the authority, to
+the extent permitted by applicable law, to act for the Board in
+all matters arising between regular or special meetings of the
+Board of Directors.
+The Audit Committee members are Messrs. Huff (chairman),
+Buckner and Hunt, each of whom is independent within the meaning
+of applicable Securities Exchange Act of 1934, as amended (the
+“Exchange Act”), rules and within the meaning of the
+NASDAQ listing standards. The Audit Committee oversees
+management’s conduct of Patterson-UTI’s accounting and
+financial reporting process, including review of the financial
+reports and other financial information provided by
+Patterson-UTI to the public and government and regulatory
+bodies, Patterson-UTI’s system of internal accounting,
+Patterson-UTI’s financial controls, and the annual
+independent audit of Patterson-UTI’s financial statements.
+The Audit Committee also oversees compliance with
+Patterson-UTI’s codes of conduct and ethics and with legal
+and regulatory requirements. The Board has determined that
+Messrs. Huff and Buckner are “audit committee
+financial experts” within the meaning of applicable
+Securities and Exchange Commission (“SEC”) rules. The
+Audit Committee selects the independent auditors to audit
+Patterson-UTI’s books and records and considers and acts
+upon accounting matters as they arise. The Board of Directors
+has adopted a written charter for the Audit Committee. The Audit
+Committee held seven meetings during the year ended
+December 31, 2007. Please see “Audit Committee
+Report” elsewhere in this proxy statement.
+The Compensation Committee members are Messrs. Peak
+(chairman), Buckner and Huff, each of whom is independent as
+defined in the NASDAQ listing standards. Among other things, the
+Compensation Committee sets and administers the policies that
+govern the compensation of executive officers and directors of
+Patterson-UTI. The Board of Directors has adopted a written
+charter for the Compensation Committee. The Compensation
+Committee held six meetings during the year ended
+December 31, 2007. Please see “Compensation Discussion
+and Analysis” and “Compensation Committee Report”
+elsewhere in this proxy statement for further information about
+the Compensation Committee.
+The Nominating and Corporate Governance Committee members are
+Messrs. Hunt (chairman), Huff and Peak, each of whom is
+independent as defined in the NASDAQ listing standards. The
+purpose of the Nominating and Corporate Governance Committee is
+to identify individuals qualified to become Board members, to
+recommend for selection by the Board director nominees for the
+next annual meeting of stockholders, to review
+Patterson-UTI’s Code of Business Conduct, to develop and
+continually make recommendations with respect to the best
+corporate governance principles and to oversee the evaluation of
+the Board and management. The Board of Directors has adopted a
+written charter for the Nominating and Corporate Governance
+Committee. The Nominating and Corporate Governance Committee
+held two meetings during the year ended December 31, 2007.
+All of the director nominees are existing directors of
+Patterson-UTI standing for re-election to the Board of Directors.
+On behalf of the Board, the Nominating and Governance Committee
+considers director nominees recommended by Patterson-UTI’s
+stockholders if the recommendations are made in accordance with
+all legal requirements, including applicable provisions of
+Patterson-UTI’s restated certificate of incorporation and
+bylaws. In accordance with Patterson-UTI’s bylaws, in
+addition to any other applicable requirements, any person
+recommending a nominee for Patterson-UTI’s Board must be a
+stockholder of record on the date of the giving of the notice
+provided for below and on the record date for the determination
+of stockholders entitled to vote at such annual meeting and must
+give timely notice of such nomination in writing to the
+Secretary of Patterson-UTI. To be timely with respect to the
+2009 annual meeting of stockholders, a stockholder’s notice
+must be delivered to or mailed and received at
+Patterson-UTI’s principal executive offices not earlier
+than February 5, 2009 and not later than March 7,
+2009; provided, however, that in the event that the annual
+meeting is called for a date that is not within 30 days
+before or after June 5, 2009, notice must be received not
+later than the close of business on the tenth day following
+4
+Table of Contents 
+the day on which such notice of the date of the meeting was
+mailed or public disclosure of the annual meeting date was made,
+whichever occurs first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+as to each person whom the stockholder proposes to nominate for
+election or re-election as director, all information relating to
+such person that is required to be disclosed in solicitations of
+proxies for election of directors, or is otherwise required, in
+each case pursuant to Regulation 14A promulgated under the
+Exchange Act, or any successor regulation thereto,
+• 
+the name and record address of the stockholder proposing such
+nomination,
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+a description of all arrangements or understandings between such
+stockholder and each proposed nominee and any other person or
+persons (including their names) pursuant to which the nomination
+or nominations are to be made by such stockholder, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the meeting to nominate the persons named
+in the notice.
+Such notice must be accompanied by a written consent of each
+proposed nominee to being named as a nominee and to serve as a
+director if elected.
+The Nominating and Corporate Governance Committee determines
+qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of
+Patterson-UTI. The Nominating and Corporate Governance Committee
+relies on the knowledge and relationships of Patterson-UTI and
+its officers and directors, as well as third parties when it
+deems appropriate, to identify and evaluate nominees for
+director, including nominees recommended by stockholders.
+Communication
+with the Board and its Independent Members 
+Persons may communicate with the Board, or directly with its
+Chairman, Mr. Siegel, by submitting such communication in
+writing in care of Chairman of the Board of Directors,
+Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500,
+Houston, Texas 77067. Persons may communicate with the
+independent members of the Board by submitting such
+communication in writing to the Nominating and Corporate
+Governance Committee of the Board of Directors of Patterson-UTI
+Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas
+77067.
+Although Patterson-UTI does not have a formal policy regarding
+attendance by members of the Board at its annual meetings of
+stockholders, directors are invited to attend annual meetings of
+Patterson-UTI stockholders. Two directors attended the 2007
+annual meeting of stockholders in person and the remaining
+directors attended the 2007 annual meeting of stockholders via
+telephone.
+Corporate
+Governance Documents Available on Patterson-UTI’s
+Website 
+Copies of each of the following documents are available on the
+Patterson-UTI website at www.patenergy.com and in print
+to any stockholder who requests them from the Secretary of
+Patterson-UTI:
+• 
+Audit Committee Charter;
+• 
+Compensation Committee Charter;
+• 
+Nominating and Corporate Governance Committee Charter;
+• 
+Code of Business Conduct for its employees, officers and
+directors; and
+• 
+Code of Business Conduct and Ethics for Senior Financial
+Executives.
+5
+Table of Contents 
+PROPOSAL NO. 2 
+AMENDMENT
+TO 2005 LONG-TERM INCENTIVE PLAN 
+On April 10, 2008, our Board of Directors adopted, subject
+to stockholder approval, an amendment to the 2005 Long-Term
+Incentive Plan (the “2005 Plan”) that would increase
+the number of shares of Common Stock reserved for issuance under
+the 2005 Plan by 4,000,000 shares (the
+“Amendment”). The 2005 Plan was approved by the
+Patterson-UTI stockholders in June 2005, and at the Meeting, the
+Patterson-UTI stockholders will be asked to vote on a proposal
+to approve the Amendment. Approval of the Amendment requires the
+affirmative vote of the holders of a majority of the shares of
+Common Stock that are present in person or by proxy and entitled
+to vote at the Meeting.
+On April 10, 2008, our Board of Directors also adopted,
+subject to stockholder approval of the Amendment, an amendment
+to the 2005 Plan regarding the determination of the number of
+shares available for grant at any particular time under the 2005
+Plan (the “Share Multiple Amendment”). Each share that
+is subject to awards other than options and stock appreciation
+rights (“SARs”) is currently counted as one and six
+tenths (1.6) shares of Common Stock against the number of shares
+available for grant under the 2005 Plan. Additionally, each
+share of Common Stock that is subject to awards other than
+options and SARs that again becomes available for grant under
+the 2005 Plan is currently added back to the number of shares
+available for grant under the 2005 Plan as one and six tenths
+(1.6) shares. The Share Multiple Amendment would increase the
+multiplier from one and six tenths (1.6) to two (2.0), and will
+become effective upon, and is subject to, the approval by the
+Patterson-UTI stockholders of the Amendment described in this
+Proposal No. 2. Unless otherwise stated, the
+description of the 2005 Plan below does not give effect to the
+Amendment or the Share Multiple Amendment.
+Certain material features of the 2005 Plan are discussed below;
+however, the description is subject to, and qualified by the
+full text of the 2005 Plan, attached as Appendix A ,
+which includes the Amendment highlighted in bold and the Share
+Multiple Amendment in italics.
+Reasons
+for the Amendment to the 2005 Plan 
+The Board of Directors believes that the ability to grant
+stock-based compensation to its employees is crucial to its
+continuing ability to attract and retain qualified employees.
+Historically, the Board of Directors has relied on awards of
+stock options and restricted stock as part of its compensation
+philosophy and structure to recruit and retain certain key
+employees.
+The Board of Directors believes that the 2005 Plan advances the
+best interests of Patterson-UTI and its stockholders by helping
+to attract, retain and motivate its employees and directors. The
+2005 Plan provides for the grant of awards to selected
+employees, officers and non-employee directors, thereby
+increasing the personal stake of such persons in the continued
+success and growth of Patterson-UTI.
+As of December 31, 2007, only 2,283,045 shares of
+Common Stock remained available for grant under the 2005 Plan.
+The Board of Directors has determined that an increase in the
+number of shares available for grant under the 2005 Plan is
+necessary in order to continue to provide an adequate level of
+performance-based incentives to Patterson-UTI’s executive
+management and other employees and to continue the Board of
+Directors’ ongoing philosophy of utilizing stock-based
+compensation awards as part of Patterson-UTI’s overall
+compensation structure. Therefore, the Board of Directors has
+approved an amendment to the 2005 Plan to increase the number of
+shares available for grant under the 2005 Plan by
+4,000,000 shares.
+Administration 
+The 2005 Plan is administered by the Compensation Committee of
+Patterson-UTI’s Board of Directors, which comprises
+exclusively non-employee independent directors. The 2005 Plan
+provides for the granting of incentive stock options
+(“ISOs”) that are intended to meet the provisions of
+Section 422 of the Internal Revenue Code, as amended (the
+“Code”), and non-incentive stock options
+(“NQSOs”), as well as other awards, such as tandem and
+freestanding SARs, restricted stock awards, other stock unit
+awards, performance shares, performance units and dividend
+equivalents. Certain awards under the 2005 Plan may be paid in
+cash or Common Stock, as determined by the Compensation
+Committee. The Compensation Committee has exclusive authority to
+select the participants to
+6
+Table of Contents 
+whom awards may be granted, and to determine the type, size and
+terms of each award. The Compensation Committee also makes all
+determinations that it decides are necessary or desirable in the
+interpretation and administration of the 2005 Plan. In addition,
+the Compensation Committee may, if consistent with applicable
+rules, regulations and NASDAQ requirements, delegate to a
+committee of one or more directors or to one or more executive
+officers the right to grant, cancel and suspend awards to
+employees who are not directors or executive officers of
+Patterson-UTI.
+General
+Terms 
+• 
+Without giving effect to the Amendment, the aggregate number of
+shares of Common Stock authorized for grant under the 2005 Plan
+is 6,250,000, reduced by the number of shares that are subject
+to awards granted under equity plans of Patterson-UTI existing
+during the period commencing on January 1, 2005 and ending
+on the date the 2005 Plan was approved by the Patterson-UTI
+stockholders. Shares that are subject to options or SARs count
+as one share of Common Stock against the aggregate number.
+Without giving effect to the Share Multiple Amendment, shares
+that are subject to other awards count as one and six tenths
+(1.6) shares of Common Stock against the aggregate number.
+• 
+Generally, if an award granted under the 2005 Plan or the other
+existing equity plans of Patterson-UTI 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 2005 Plan. Without giving effect to
+the Share Multiple Amendment, any shares of Common Stock that
+again become available for grant again under the 2005 Plan will
+be added back as one (1) share if the shares were subject
+to options or SARs, and as one and six tenths (1.6) shares if
+the shares were subject to awards other than options or SARs.
+• 
+Directors, employees, including officers, consultants and
+advisors are eligible for awards.
+• 
+The 2005 Plan provides for awards of NQSOs, ISO, tandem and
+freestanding SARs, restricted stock awards, other stock unit
+awards, performance awards and dividend equivalents.
+• 
+The Board of Directors, at any time, may amend the terms of the
+2005 Plan, subject to the stockholder approval requirements of
+NASDAQ and other rules and regulations applicable to
+Patterson-UTI.
+• 
+Under the 2005 Plan, no participant may be granted
+(i) options or SARs during any
+12-month 
+period with respect to more than 1,000,000 shares of Common
+Stock 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. In
+addition to the foregoing limits, the maximum dollar value
+payable to any participant in any
+12-month 
+period with respect to performance awards is $5,000,000.
+Options 
+• 
+The vesting schedule for options is set by the Compensation
+Committee; however, options may not fully vest sooner than one
+year from the date of grant, except for certain limited
+exceptions.
+• 
+The term of options is set by the Compensation Committee, but
+may be no longer than 10 years.
+• 
+The exercise price for options may be paid in cash, with
+previously acquired shares of Common Stock, or by other means
+approved by the Compensation Committee.
+• 
+All options granted under the 2005 Plan are granted with an
+exercise price equal to or greater than the fair market value of
+the Common Stock at the time the option is granted.
+SARs 
+• 
+SARs may be granted alone or in connection with the grant of any
+option.
+• 
+SARs granted alone may be exercised at such times and be subject
+to such terms and conditions as the Compensation Committee may
+impose. SARs that are granted in tandem with options may be
+exercised only on the surrender of the right to purchase an
+equivalent number of shares under the related options and may be
+7
+Table of Contents 
+exercised only with respect to the shares of Common Stock for
+which the related options are then exercisable.
+• 
+The term of SARs may be no longer than 10 years.
+• 
+A SAR entitles a participant to surrender any then exercisable
+portion of the SAR and, if applicable, the related option, in
+exchange for an amount equal to the product of (1) the
+excess of the fair market value of a share of Common Stock on
+the date preceding the date of surrender over the fair market
+value of a share of Common Stock on the date that the SAR was
+granted, or, if the SAR is related to an option, the per share
+exercise price of the option, multiplied by (2) the number
+of shares of Common Stock subject to the SAR and being
+surrendered. Payment on exercise of an SAR shall be in shares of
+Common Stock.
+Restricted
+Stock Awards 
+• 
+The Compensation Committee determines the material terms of the
+restricted stock awards, including the price, if any, to be paid
+by the recipient, and the vesting schedule and conditions, which
+may include the attainment of specified performance objectives
+described below.
+• 
+A restricted stock award that is subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions.
+• 
+Beginning on the date of grant, a participant receiving a
+restricted stock award will become a stockholder of
+Patterson-UTI with respect to all shares of Common Stock subject
+to the restricted stock award, which, unless the Committee
+determines otherwise at the time of the grant, includes the
+right to vote the shares and receive dividends in respect of the
+shares.
+Other
+Stock Units 
+• 
+The Compensation Committee may grant other stock unit awards
+under the 2005 Plan, which have a value equal to an identical
+number of shares of Common Stock. Other stock unit awards may
+also be a form of payment for other awards granted under the
+2005 Plan and other earned cash-based incentive compensation.
+• 
+The payment of other stock units may be in cash, shares of
+Common Stock, other property, or any combination of the
+foregoing, and may be made in a lump sum or, in accordance with
+procedures established by the Compensation Committee, on a
+deferred basis subject to the requirements of Section 409A
+of the Code.
+• 
+Other stock unit awards that are subject solely to continued
+employment restrictions of employees of Patterson-UTI may not
+fully vest sooner than three years from the date of grant,
+except for certain limited exceptions.
+Dividend
+Equivalent Rights 
+• 
+The Compensation Committee may grant dividend equivalent rights
+either in connection with awards or as separate awards under the
+2005 Plan. Amounts payable in respect of dividend equivalent
+rights may be payable currently or, if applicable, deferred
+until the lapsing of restrictions on the dividend equivalent
+rights or until the vesting, exercise, payment, settlement or
+other lapse of restrictions on the award to which the dividend
+equivalent rights relate.
+Performance
+Awards 
+• 
+Performance awards are payable in cash, shares of Common Stock,
+other property, or a combination of the foregoing, and may be
+paid in a lump sum, in installments, or on a deferred basis in
+accordance with procedures established by the Compensation
+Committee.
+8
+Table of Contents 
+• 
+The Compensation Committee determines the material terms of the
+performance awards, including a performance period over which
+the performance goal of such award shall be measured, which must
+be at least 12 months and no longer than five years.
+Deferrals 
+• 
+The Compensation Committee may require or permit a participant
+to defer the receipt of cash or shares pursuant to any awards
+under the 2005 Plan. Any deferral permitted under the 2005 Plan
+will be administered in a manner that is intended to comply with
+Section 409A of the Code.
+Effect of
+Certain Transactions and Change of Control 
+The Compensation Committee may provide in the terms of an award
+under the 2005 Plan that, on a change of control as defined in
+the award agreement,
+• 
+options and SARs outstanding on the date of the change of
+control immediately vest;
+• 
+options and SARs outstanding on the date of the change of
+control may be cancelled and terminated without payment if the
+fair market value of a share of Common Stock on the date of the
+change of control is less than the per share option exercise
+price or SAR grant price;
+• 
+restrictions and deferral limitations on restricted stock lapse
+and the restricted stock becomes free of all restrictions and
+limitations and becomes fully vested;
+• 
+all performance awards shall be considered to be earned and
+payable and any deferral or other restriction shall lapse and
+the performance awards shall be immediately settled or
+distributed; and
+• 
+such other additional benefits as the Compensation Committee
+deems appropriate shall apply.
+The Compensation Committee, in its discretion, may determine
+that, upon a change of control, each option and SAR shall
+terminate within a specified period of days after notice to the
+participant, or that with respect to such option or SAR each
+participant shall receive an amount equal to the excess of the
+fair market value of such share immediately prior to the
+occurrence of the change of control over the exercise price per
+share of such option or SAR. The payment may be made in one or
+more kinds of stock or property or a combination of stock or
+property. Further, the event of changes in the capital or
+corporate structure of Patterson-UTI due to events such as
+recapitalization, stock split, merger, spin-off or similar
+transaction, that affect the shares of Common Stock, the
+Compensation Committee, in its sole discretion, may determine
+that it is equitable or appropriate to make adjustments or
+substitutions to the Plan or outstanding options and awards,
+including to the number, class, kind and option or exercise
+price or securities subject to awards.
+Performance
+Criteria 
+If the Compensation Committee determines that
+Section 162(m) of the Code (see “Federal Income Tax
+Consequences — Performance-Based Compensation”
+below) applies (or is likely to apply) to a restricted stock
+award, performance award or other stock unit award, the lapsing
+of restrictions on the award and the distribution of cash,
+shares or other property pursuant to such award, shall be
+subject to the achievement of one or more objective performance
+goals established by the Compensation Committee, which shall be
+based on attaining specified levels in one or more areas, such
+as: net sales; revenue growth; pre-tax income before allocation
+of corporate overhead and bonus; earnings per share; operating
+income or net income; return on stockholders’ equity;
+attainment of strategic and operational initiatives;
+appreciation in
+and/or 
+maintenance of the price of the Common Stock or other
+publicly-traded securities of Patterson-UTI; market share; gross
+profits; earnings before taxes or before interest and taxes or
+before interest, taxes, depreciation, depletion and
+amortization; comparisons with various stock market indices;
+improvement in or attainment of expense levels or working
+capital levels; cash margins; safety records; and rig
+utilization and rig count growth. Performance goals may be
+measured solely by reference to Patterson-UTI’s performance
+or the performance of a subsidiary, division, business segment
+or business unit of Patterson-UTI, or based upon the relative
+performance of other companies or upon comparisons of any of the
+indicators of performance relative to other companies, in each
+case as specified by the Compensation Committee in the award.
+9
+Table of Contents 
+The Compensation Committee also may adjust performance goals to
+reflect the impact of specified events, occurrences or
+transactions, accounting or tax law changes or other
+extraordinary or nonrecurring events.
+Federal
+Income Tax Consequences 
+The following discussion summarizes certain federal income tax
+consequences of the issuance and receipt of awards pursuant to
+the 2005 Plan under the law as in effect on the date of this
+proxy statement. The rules governing the tax treatment of such
+awards are quite technical, so the following discussion of tax
+consequences is necessarily general in nature and is not
+complete. In addition, statutory provisions are subject to
+change, as are their interpretations, and their application may
+vary in individual circumstances. This summary does not purport
+to cover all federal employment tax or other federal tax
+consequences associated with the 2005 Plan, nor does it address
+state, local, or
+non-U.S. taxes. 
+ISOs 
+In general, a participant will not recognize income upon the
+grant or exercise of an ISO. However, if the participant is
+subject to federal “alternative minimum tax,” the
+exercise of an ISO will be treated essentially the same as a
+NQSO for purposes of the alternative minimum tax ( see NQSOs,
+SARs, Performance Award, and Other Stock Unit Award below).
+Subject to certain exceptions for death or disability, if a
+participant exercises an ISO more than three months after
+termination of employment, the exercise of the option will be
+taxed as the exercise of a NQSO, as described below.
+The general rule is that gain or loss from the sale or exchange
+of shares acquired on the exercise of an ISO will be treated as
+capital gain or loss. However, if shares acquired upon the
+exercise of an ISO are disposed of within two years from the
+date of grant or within one year after exercise (a
+“disqualifying disposition”), the participant
+generally will recognize ordinary income in the year of
+disposition in an amount equal to the fair market value of the
+shares at the time of exercise (or, if less, the amount realized
+on the disposition of the shares) less the exercise price. Any
+further gain (or loss) realized by the participant generally
+will be taxed as short- or long-term capital gain (or loss)
+depending on the holding period.
+NQSOs,
+SARs, Performance Award, and Other Stock Unit
+Award 
+A participant generally is not required to recognize income on
+the grant of a NQSO, a SAR, performance award or other stock
+unit award. Instead, ordinary income generally is required to be
+recognized on the date the NQSO or SAR is exercised, or in the
+case of performance awards or other stock unit awards, upon the
+issuance of shares
+and/or the
+payment of cash pursuant to the terms of the award. In general,
+the amount of ordinary income required to be recognized is,
+(a) in the case of a NQSO, an amount equal to the excess,
+if any, of the fair market value of the shares on the exercise
+date over the exercise price, (b) in the case of a SAR, the
+fair market value of any shares received upon exercise plus the
+amount of taxes withheld from such amounts, and (c) in the
+case of performance awards or other stock unit awards, the
+amount of cash
+and/or the
+fair market value of any shares received in respect thereof,
+plus the amount of taxes withheld from such amounts.
+Restricted
+Common Stock 
+Unless a participant who receives an award of restricted Common
+Stock makes an election under Section 83(b) of the Code as
+described below, the participant generally is not required to
+recognize ordinary income on the award of restricted Common
+Stock. Instead, on the date the shares vest ( i.e. , become
+transferable and no longer subject to forfeiture), the
+participant will be required to recognize ordinary income in an
+amount equal to the excess, if any, of the fair market value of
+the shares on such date over the amount, if any, paid for such
+shares. If a Section 83(b) election has not been made, any
+dividends received with respect to restricted Common Stock that
+are subject at that time to a risk of forfeiture or restrictions
+on transfer generally will be treated as compensation that is
+taxable as ordinary income to the recipient. If a participant
+makes a Section 83(b) election within 30 days of the
+date of transfer of the restricted Common Stock, the participant
+will recognize ordinary income on the date the shares are
+awarded. The amount of ordinary income required to be recognized
+is an amount equal to the excess, if any, of the fair market
+value of the shares on the date of award over the amount, if
+any, paid for such shares. In such case, the participant
+10
+Table of Contents 
+will not be required to recognize additional ordinary income
+when the shares vest. However, if the shares are later
+forfeited, a loss can only be recognized up to the amount the
+participant paid, if any, for the shares.
+Gain
+or Loss on Sale or Exchange of Shares 
+In general, gain or loss from the sale or exchange of shares
+granted or awarded under the 2005 Plan will be treated as
+capital gain or loss, provided that the shares are held as
+capital assets at the time of the sale or exchange. However, if
+certain holding period requirements are not satisfied at the
+time of a sale or exchange of shares acquired upon exercise of
+an ISO (a “disqualifying disposition,” see
+above), a participant generally will be required to
+recognize ordinary income upon such disposition.
+Deductibility
+by Patterson-UTI 
+To the extent that a participant recognizes ordinary income in
+the circumstances described above, Patterson-UTI or its
+subsidiary for which the participant performs services will be
+entitled to a corresponding deduction, provided that, among
+other things, the income meets the test of reasonableness, is an
+ordinary and necessary business expense, is not an “excess
+parachute payment” within the meaning of Section 280G
+of the Code and is not disallowed by the $1,000,000 limitation
+on certain executive compensation under Section 162(m) of
+the Code ( see Performance Based Compensation and
+Parachute Payments below).
+Performance
+Based Compensation 
+In general, under Section 162(m) of the Code, remuneration
+paid by a public corporation to its principal executive officer
+or its three most highly compensated executive officers
+(excluding the principal executive officer and the principal
+financial officer of the corporation), ranked by pay, is not
+deductible to the extent it exceeds $1 million for any
+year. Taxable payments or benefits under the 2005 Plan may be
+subject to this deduction limit. However, under
+Section 162(m) of the Code, qualifying performance-based
+compensation, including income from stock options and other
+performance-based awards that are made under shareholder
+approved plans and that meet certain other requirements, is
+exempt from the deduction limitation. The 2005 Plan has been
+designed so that the Compensation Committee in its discretion
+may grant qualifying exempt performance-based awards under the
+2005 Plan.
+Parachute
+Payments 
+Under the so-called “golden parachute” provisions of
+the Code, the accelerated vesting of stock options and benefits
+paid under other awards in connection with a change of control
+of a corporation may be required to be valued and taken into
+account in determining whether participants have received
+compensatory payments, contingent on the change of control, in
+excess of certain limits. If these limits are exceeded, a
+portion of the amounts payable to the participant may be subject
+to an additional 20% federal tax and may be nondeductible to the
+corporation.
+Withholding 
+Awards under the 2005 Plan may be subject to tax withholding.
+Where an award results in income subject to withholding,
+Patterson-UTI may require the participant to remit the
+withholding amount to Patterson-UTI or cause shares of Common
+Stock to be withheld or sold in order to satisfy the tax
+withholding obligations.
+Section 409A 
+Awards of SARs, performance awards, or other stock unit awards
+under the 2005 Plan may, in some cases, result in the deferral
+of compensation that is subject to the requirements of
+Section 409A of the Code. Generally, to the extent that
+deferrals of these awards fail to meet certain requirements
+under Section 409A of the Code, such awards will be subject
+to immediate taxation and tax penalties in the year they vest
+unless the requirements of Section 409A of the Code are
+satisfied. It is the intent of the Company that awards under the
+2005 Plan will be structured and administered in a manner that
+complies with the requirements of Section 409A of the Code.
+11
+Table of Contents 
+Summary
+Information Pertaining to all Stock Option and Related Plans of
+Patterson-UTI 
+The following information summarizes as of December 31,
+2007 certain information regarding equity compensation under our
+stock option plans. For a more detailed description of the stock
+option plans, see Note 11 of Patterson-UTI’s audited
+financial statements contained in its Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2007.
+Equity Compensation Plan Information 
+Number of 
+Number of 
+Securities 
+Securities to 
+Weighted- 
+Remaining Available 
+be Issued upon 
+Average Exercise 
+for Future Issuance 
+Exercise of 
+Price of 
+Under Equity 
+Outstanding 
+Outstanding 
+Compensation Plans 
+Options, 
+Options, 
+(Excluding 
+Warrants and 
+Warrants and 
+Securities Reflected 
+Plan Category 
+Rights 
+Rights 
+in Column(a)) 
+(a) 
+(b) 
+(c) 
+Equity compensation plans approved by security holders(1)
+6,733,337
+$
+18.27
+2,283,045
+Equity compensation plans not approved by security holders(2)
+669,747
+$
+9.91
+—
+Total
+7,403,084
+$
+17.52
+2,283,045
+(1) 
+The 2005 Plan provides for awards of incentive stock options,
+non-incentive stock options, tandem and freestanding stock
+appreciation rights, restricted stock awards, other stock unit
+awards, performance share awards, performance unit awards and
+dividend equivalents to key employees, officers and directors,
+which are subject to certain vesting and forfeiture provisions.
+All options are granted with an exercise price equal to or
+greater than the fair market value of the common stock at the
+time of grant. The vesting schedule and term are set by the
+Compensation Committee of the Board of Directors. All securities
+remaining available for future issuance under equity
+compensation plans approved by security holders in column
+(c) are available under this plan. Patterson-UTI has
+granted stock options, but not warrants or rights under the 2005
+Plan or any other equity compensation plan approved by security
+holders. No stock options have been granted with rights to
+receive cash dividends or dividend equivalent rights. 
+(2) 
+The Amended and Restated Patterson-UTI Energy, Inc. 2001
+Long-Term Incentive Plan (the “2001 Plan”) was
+approved by the Board of Directors in July 2001. In connection
+with the approval of the 2005 Plan, the Board of Directors
+approved a resolution that no further options, restricted stock
+or other awards would be granted under any equity compensation
+plan, other than the 2005 Plan. The terms of the 2001 Plan
+provided for grants of stock options, stock appreciation rights,
+shares of restricted stock and performance awards to eligible
+employees other than officers and directors. No Incentive Stock
+Options could be awarded under the Plan. All options were
+granted with an exercise price equal to or greater than the fair
+market value of the common stock at the time of grant. The
+vesting schedule and term were set by the Compensation Committee
+of the Board of Directors. Patterson-UTI has granted stock
+options, but not warrants or rights under the 2001 Plan. No
+stock options have been granted with rights to receive cash
+dividends or dividend equivalent rights. 
+Additional
+Information Regarding the 2005 Plan 
+As of April 18, 2008, the closing price of
+Patterson-UTI’s common stock on the NASDAQ Global Select
+Market was $29.56 per share. Except for receipt of the option
+exercise price when and if options are exercised, Patterson-UTI
+receives no consideration in connection with the award of
+options or restricted stock under the 2005 Plan. Patterson-UTI
+has not determined the type, number and other terms of awards
+under the 2005 Plan that will be granted in the future to
+eligible directors and nominees, executive officers, officers as
+a group, or non-officer employees as a group as that
+determination is subject to the discretion of the Compensation
+Committee of the Board of Directors.
+The Board of Directors recommends a vote “FOR” the
+approval of the Amendment to the 2005 Plan. Approval of the
+Amendment requires the affirmative vote of the holders of a
+majority of the shares of Common
+12
+Table of Contents 
+Stock present in person or by proxy and entitled to vote at the
+Meeting. If you do not vote against or abstain from voting on
+the Amendment to the 2005 Plan, your proxy will be voted
+“FOR” approval of the Amendment to the 2005 Plan.
+Abstentions will be counted as shares entitled to vote on the
+proposal and will have the same effect as a vote
+“AGAINST” the proposal. A broker non-vote will be
+counted for purposes of establishing a quorum, but will not be
+treated as a share entitled to vote on the proposal. This will
+have the effect of reducing the absolute number of shares
+necessary to approve the proposal.
+PROPOSAL NO. 3 
+RATIFICATION
+OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as
+independent registered public accounting firm to audit the
+financial statements of Patterson-UTI for the fiscal year ending
+December 31, 2008, and directed that such engagement be
+submitted to the stockholders of Patterson-UTI for ratification.
+In recommending ratification by the stockholders of such
+engagement, the Board of Directors is acting upon the
+recommendation of the Audit Committee, which has satisfied
+itself as to PricewaterhouseCoopers LLP’s independence,
+professional competence and standing. Although ratification by
+stockholders of the engagement of PricewaterhouseCoopers LLP is
+not required by Delaware corporate law or Patterson-UTI’s
+restated certificate of incorporation or bylaws, the Audit
+Committee believes a decision of this nature should be made with
+the consideration of Patterson-UTI’s stockholders. If the
+stockholders fail to ratify the appointment, the Audit Committee
+will reconsider whether to retain PricewaterhouseCoopers LLP and
+may retain that firm or another without re-submitting the matter
+to our stockholders. Even if the appointment is ratified, the
+Audit Committee may, in its discretion, direct the appointment
+of a different independent registered public accounting firm at
+any time during the year if it determines that such change would
+be in the best interests of Patterson-UTI and its stockholders.
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and
+will be given the opportunity to make a statement if they so
+desire. It also is expected that the representative(s) will be
+available to respond to appropriate questions from the
+stockholders.
+The Board of Directors recommends a vote “FOR” the
+ratification of PricewaterhouseCoopers LLP as
+Patterson-UTI’s independent registered public accounting
+firm. Ratification of the selection of
+PricewaterhouseCoopers LLP requires the affirmative vote of the
+holders of a majority of the shares of Common Stock present in
+person or by proxy, and entitled to vote at the Meeting. Unless
+you give contrary instructions in your proxy, your proxy will be
+voted “FOR” such ratification. Abstentions will be
+counted as shares entitled to vote on the proposal and will have
+the same effect as a vote “AGAINST” the proposal. A
+broker non-vote will be counted for purposes of establishing a
+quorum, but will not be treated as a share entitled to vote on
+the proposal. This will have the effect of reducing the absolute
+number of shares necessary to approve the proposal.
+EXECUTIVE
+OFFICERS 
+Set forth below is the name, age and position followed by a
+brief description of the business experience during at least the
+past five years for each executive officer of Patterson-UTI who
+is not also a member of the Board of Directors.
+Name 
+Age 
+Position 
+Douglas J. Wall
+55
+President and Chief Executive Officer
+John E. Vollmer III
+52
+Senior Vice President — Corporate Development,
+Chief Financial Officer and Treasurer
+William L. Moll, Jr. 
+41
+General Counsel and Secretary
+Gregory W. Pipkin
+36
+Chief Accounting Officer and Assistant Secretary
+Douglas J. Wall — Mr. Wall has served as
+President and Chief Executive Officer of Patterson-UTI since
+October 2007. From April 2007 to October 2007, Mr. Wall
+served as Chief Operating Officer of Patterson-UTI. From 1997 to
+April 2007, Mr. Wall served in a variety of capacities at
+Baker Hughes Incorporated, an oilfield
+13
+Table of Contents 
+service company, including most recently as Group President,
+Completion and Production. Mr. Wall holds a Bachelor Degree
+in Economics from the University of Calgary and a Masters of
+Business Administration in Finance and Marketing from the
+University of Alberta.
+John E. Vollmer III — Mr. Vollmer has
+served as Chief Financial Officer and Treasurer of Patterson-UTI
+since November 2005 and Senior Vice President —
+Corporate Development of Patterson-UTI since May 2001.
+Mr. Vollmer also served as Secretary of Patterson-UTI from
+November 2005 to February 2007. Mr. Vollmer served as
+Senior Vice President, Chief Financial Officer, Secretary and
+Treasurer of UTI from 1998 to May 2001. From 1992 until 1997,
+Mr. Vollmer served in a variety of capacities at
+Blockbuster Entertainment, including Senior Vice
+President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+William L. Moll, Jr. — Mr. Moll has
+served as General Counsel and Secretary of Patterson-UTI since
+February 2007. From July 2006 to February 2007, Mr. Moll
+served as Vice President and Counsel of Stewart &
+Stevenson LLC, an oilfield equipment manufacturing company. From
+January 1996 to July 2006, Mr. Moll served in a variety of
+capacities in the legal department of Stewart &
+Stevenson Services, Inc., an equipment manufacturing company,
+including Deputy General Counsel from March 2005 to July 2006
+and Managing Attorney from September 2001 to March 2005. From
+September 1991 to January 1996, Mr. Moll was an associate
+with the law firm of Andrews & Kurth LLP.
+Mr. Moll holds a Bachelor of Business Administration in
+Accounting from the University of Texas and a J.D. from the
+University of Houston Law Center.
+Gregory W. Pipkin — Mr. Pipkin has served
+as Chief Accounting Officer and Assistant Secretary of
+Patterson-UTI since August 2007. From June 2006 to August 2007,
+Mr. Pipkin served as Director of Financial Reporting of
+Patterson-UTI. From April 2001 through May 2006, Mr. Pipkin
+was Controller and Vice President of Accounting and Reporting
+for Alamosa Holdings, Inc., a publicly traded wireless
+telecommunications company. Prior to April 2001, Mr. Pipkin
+was in the practice of public accounting. Mr. Pipkin is a
+Certified Public Accountant and holds a Bachelor of Business
+Administration in Accounting from Texas Tech University.
+COMPENSATION
+DISCUSSION AND ANALYSIS 
+Overview 
+Compensation
+Committee 
+The Compensation Committee (the “Committee”) sets and
+administers the policies that govern the compensation of
+executive officers and directors of Patterson-UTI. As part of
+its duties, the Committee determines the compensation of
+Patterson-UTI’s executive officers who are named in the
+Summary Compensation Table appearing elsewhere in this proxy
+statement (the “Named Executive Officers”) and grants
+all awards of restricted stock and stock options under
+Patterson-UTI’s long-term incentive plan.
+The Committee currently consists of Messrs. Peak
+(chairman), Buckner and Huff, each of whom is an independent
+director as defined by the NASDAQ listing standards.
+Compensation
+Objectives 
+The Committee’s objectives are to provide to the Named
+Executive Officers competitive compensation packages that will
+permit Patterson-UTI to attract and retain highly qualified
+individuals and to motivate and reward the Named Executive
+Officers for performance that benefits Patterson-UTI and its
+stockholders.
+Role
+of Management and Compensation Consultant 
+All compensation decisions with respect to the Named Executive
+Officers of Patterson-UTI are made solely by the Committee. The
+Committee is permitted under its charter to delegate any of its
+powers to a subcommittee of the Committee. In performing its
+duties, the Committee considers input from senior management on
+individual performance and compensation matters.
+14
+Table of Contents 
+In determining compensation for the Named Executive Officers for
+2007, the Committee considered a variety of information,
+including (1) compensation for executive officers at
+similarly situated oilfield service companies,
+(2) historical and projected financial and operational
+results at Patterson-UTI, including margins achieved, rig
+utilization, net income and earnings before interest, taxes,
+depreciation and amortization (“EBITDA”) and return on
+equity and assets, (3) historical stock performance,
+(4) operational and strategic objectives of Patterson-UTI
+and (5) individual performance.
+For 2007, the Committee engaged Towers Perrin, an independent
+compensation consultant, who reported directly to the Committee
+to evaluate and make recommendations to the Committee regarding
+Patterson-UTI’s executive compensation philosophy and
+practices. Towers Perrin reviewed the executive salaries,
+non-equity incentive compensation and long-term incentives for
+competitiveness with similarly situated oilfield service
+companies. Towers Perrin was provided a proposed representative
+peer group within the oilfield services industry based on
+various criteria and was provided information as to the
+responsibilities of the members of Patterson-UTI’s
+executive team in relationship to its peers. Towers Perrin also
+analyzed Patterson-UTI’s share utilization as compared to
+its peers for purposes of assessing dilution resulting from
+awards under Patterson-UTI’s incentive plans. Towers Perrin
+was asked to provide its advice as to Patterson-UTI’s
+incentive plans and the Committee’s proposed compensation
+of the Named Executive Officers and the reasonableness of that
+compensation.
+For 2007, the Committee reviewed compensation data from the
+following peer group of companies: BJ Services Company, Cameron
+International Corporation, Diamond Offshore Drilling Inc., Ensco
+International Inc., FMC Technologies Inc., GlobalSantaFe Corp.,
+Grant Prideco Inc., Helmerich & Payne Inc., Nabors
+Industries Ltd., National Oilwell Varco Inc., Noble Corp., Pride
+International, Inc., Rowan Companies Inc., Smith International
+Inc., Transocean Inc. and Weatherford International Ltd.
+Elements
+of Compensation 
+Patterson-UTI’s compensation program for its Named
+Executive Officers includes three primary elements:
+(1) base salary, (2) non-equity incentive compensation
+in the form of cash bonuses and (3) long-term incentive
+opportunities in the form of restricted stock and stock options.
+Below is a summary of each element of compensation. The general
+intent of the base salary for the Named Executive Officers was
+for that compensation to be around the 50th percentile of
+the peer group and for incentive and equity based compensation
+to be above the 75th percentile. These objectives were
+established based on Patterson-UTI’s historical top tier
+performance on returns on assets and equity and long-term share
+value creation as compared to peers.
+Base
+Salary 
+Historically, the Committee has emphasized performance-based
+compensation in the form of non-equity and equity incentive
+compensation and has minimized salary adjustments. From 2004
+through 2006 there were no increases to the base salaries of the
+Named Executive Officers. In February 2007, the base salary of
+Mr. Berns was increased from $215,000 to $265,000. In
+October 2007, upon being named President and Chief Executive
+officer of Patterson-UTI, Mr. Wall’s base salary was
+increased from $450,000 to $600,000.
+Although adjustments to the base salaries of the Named Executive
+Officers have been minimized in recent years, the base salaries
+of Named Executive Officers are reviewed and determined annually
+by the Committee based on (i) subjective evaluations of the
+officer’s functional position and specific performance,
+(ii) assessment of the relative importance of each position
+at Patterson-UTI, (iii) a comparison to salary ranges for
+executives of other companies in the oilfield service industry
+with market, financial and operational characteristics similar
+to those of Patterson-UTI, (iv) Patterson-UTI’s
+financial results and position and (v) Patterson-UTI’s
+performance compared to similarly situated companies.
+Non-Equity
+Incentive Compensation 
+The Named Executive Officers have historically received
+non-equity incentive compensation in the form of annual cash
+bonuses designed to put a meaningful portion of total
+compensation at risk. In recent years, non-equity incentive
+compensation for Messrs. Siegel, Talbott, Vollmer and Berns
+has been tied to a bonus pool based upon Patterson-UTI’s
+EBITDA. For target bonus purposes, the bonus pool would then be
+allocated among the four
+15
+Table of Contents 
+officers pursuant to a pre-determined sharing percentage that
+reflected a team-based philosophy as well as the organizational
+structure of the top management team. The total bonus and target
+allocation is subject to modification by the Committee at its
+discretion. EBITDA has been chosen as the performance measure
+for the annual cash bonus because Patterson-UTI believes it is
+an important measure of current year financial performance.
+Non-equity incentive compensation for Messrs. Wall and Moll
+during 2007 was determined at the discretion of the Committee,
+consistent with the target bonuses specified in their employment
+offer letters.
+In 2007, the target bonus pool for Messrs. Siegel, Talbott,
+Vollmer and Berns, subject to a minimum threshold, was
+two-thirds of one percent of Patterson-UTI’s EBITDA. The
+target allocation of the bonus pool was as follows: one-third to
+Mr. Siegel, one-third to Mr. Talbott, one-sixth to
+Mr. Vollmer and one-sixth to Mr. Berns.
+The aggregate bonus pool paid to Messrs. Siegel, Talbott,
+Vollmer and Berns for 2007 was $6,132,300, and the amount of
+individual cash bonuses paid to such Named Executive Officer is
+included in the “Summary Compensation Table” elsewhere
+in this proxy statement. Consistent with Patterson-UTI’s
+emphasis on performance-based compensation, non-equity incentive
+compensation for 2007 represented a significant portion of each
+Named Executive Officer’s total cash compensation from
+Patterson-UTI for the year. The Committee has established a
+target bonus pool for 2008 for Messrs. Siegel, Wall,
+Vollmer and Berns, subject to a minimum threshold of
+approximately 0.611 of one percent of Patterson-UTI’s
+EBITDA. The target allocation of the bonus pool for 2008 is as
+follows: 0.222 to Mr. Siegel, 0.167 to Mr. Wall, 0.111
+to Mr. Vollmer and 0.111 to Mr. Berns.
+Long-Term
+Incentive Compensation 
+Long-term incentive compensation for the Named Executive
+Officers consists of both awards of shares of restricted stock
+and options to purchase Common Stock, each of which typically
+vest over three or four years. Awards of such equity-based
+compensation reflect the Committee’s desire to provide the
+Named Executive Officers with additional incentives by
+increasing their proprietary interest in the success of
+Patterson-UTI. The Committee believes that there should be an
+emphasis on equity-based compensation in order to provide
+incentives and rewards that are closely aligned with
+stockholders. The Committee reviews equity-based compensation of
+the Named Executive Officers on an annual basis.
+Patterson-UTI’s equity-based compensation has historically
+been given significant weight, along with non-equity incentive
+compensation, in the overall compensation package of the Named
+Executive Officers. The allocation of equity-based compensation
+among the Named Executive Officers is made by the Committee
+based on various factors, including the executive’s
+position and contribution to the overall goals and objectives of
+Patterson-UTI. The allocation and mix of equity-based
+compensation between restricted stock and options in 2007
+followed this approach, with an emphasis on option-based
+compensation over restricted stock in order to ensure that the
+greatest awards would only be earned for increases in
+Patterson-UTI’s equity value.
+The Committee’s practice has generally been to grant stock
+options
+and/or 
+restricted stock to Named Executive Officers at a meeting
+following the conclusion of Patterson-UTI’s first or second
+quarter. Such meetings are typically held in conjunction with
+regular quarterly Board meetings that are held prior to
+Patterson-UTI’s public release of quarterly earnings
+information. Options are granted at an exercise price equal to
+the closing price of Patterson-UTI’s stock on the date of
+grant.
+Retirement
+Plans 
+Patterson-UTI offers a 401(k) plan to its employees, including
+its Named Executive Officers. Participants may contribute a
+portion of their base salary to the 401(k) plan, subject to
+federal limits. Patterson-UTI makes matching contributions up to
+four percent of each participant’s eligible base salary.
+The Named Executive Officers of Patterson-UTI are eligible to
+participate in the 401(k) plan on the same basis as other
+employees. Patterson-UTI does not have any other retirement plan.
+Perquisites
+and Personal Benefits 
+Patterson-UTI provides limited perquisites to its Named
+Executive Officers. Prior to his retirement as President and
+Chief Executive Officer in September 2007, Mr. Talbott was
+given limited use of Patterson-UTI’s
+16
+Table of Contents 
+airplane for his personal travel. The incremental cost to
+Patterson-UTI of Mr. Talbott’s personal use of the
+airplane is included as “All Other Compensation” to
+him in the Summary Compensation Table elsewhere in this proxy
+statement. The lack of commercial airline service in Snyder,
+Texas was a substantial factor in the decision to provide this
+benefit to Mr. Talbott during the time that he served as
+President and Chief Executive Officer of Patterson-UTI.
+Mr. Talbott was also provided with certain other limited
+perquisites during his tenure as President and Chief Executive
+Officer, including occasional personal use of a sporting venue
+suite, the use of a Patterson-UTI automobile and membership dues
+at a country club, each of which is included in “All Other
+Compensation” for Mr. Talbott in the Summary
+Compensation Table elsewhere in this proxy statement.
+Share
+Ownership Guidelines 
+The Committee in 2004, with the approval of the Board, enacted
+share ownership guidelines applicable to all executive officers
+and directors of Patterson-UTI. Under this policy and subject to
+a four-year phase-in, each of Patterson-UTI’s Chairman,
+Chief Executive Officer and President is required to hold shares
+of Common Stock having a value equal to at least five times the
+officer’s base salary and each of Patterson-UTI’s
+other executive officers is required to hold shares of Common
+Stock having a value equal to at least three times the
+officer’s base salary. The Committee also imposed share
+ownership guidelines for directors. Under those guidelines,
+subject to a four-year phase-in, each director of Patterson-UTI
+is required to hold shares of Common Stock having a value equal
+to at least four times the annual cash compensation provided to
+the director. Each of the Named Executive Officers is in
+compliance with the share ownership guidelines as of the date of
+this proxy statement.
+Change in
+Control and Severance Agreements 
+Patterson-UTI has entered into change in control agreements with
+its Named Executive Officers as further described elsewhere in
+this proxy statement. The Committee believes that the change in
+control agreements help Patterson-UTI to attract and retain the
+Named Executive Officers by reducing the personal uncertainty
+and anxiety that arises from the possibility of a future
+business combination. The Committee also believes the change in
+control agreements should prevent the Named Executive Officers
+from leaving employment out of concern for the security of their
+jobs or being unable to concentrate on their work.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer, which confirm
+and evidence the existing agreements between Patterson-UTI and
+each of them pursuant to which Patterson-UTI has agreed to pay
+each such person within ten days of the termination of his
+employment with Patterson-UTI for any reason (including
+voluntary termination by him), an amount in cash equal to his
+annual base salary at the time of such termination.
+Patterson-UTI has entered into a severance agreement with
+Mr. Wall that generally has a three-year term and provides
+for a lump-sum cash payment of $750,000 to be payable to
+Mr. Wall within ten days of the date of a qualifying
+termination of his employment with Patterson-UTI. A qualifying
+termination for Mr. Wall is defined in the severance
+agreement generally as a termination by Patterson-UTI for any
+reason other than cause or, if certain conditions are met, a
+termination by Mr. Wall due to a reduction in his annual
+base salary below a defined threshold amount. Any payment made
+by Patterson-UTI pursuant to these letter agreements or the
+severance agreement will reduce dollar for dollar any payment
+owed to such person, if any, pursuant to the change in control
+agreements discussed above.
+Section 162(m)
+Considerations 
+In considering compensation decisions for the executive
+management of Patterson-UTI, the Committee routinely considers
+the potential effect of Section 162(m) of the Internal
+Revenue Code. Section 162(m) imposes a limitation on
+corporate tax deductions for non-performance based compensation
+to certain officers that exceeds $1 million that can be
+taken by a publicly held corporation for compensation paid to
+certain of its executive officers. The Committee believes that
+tax deduction limitations should not compromise
+Patterson-UTI’s ability to establish and maintain
+appropriate executive compensation programs and reserves the
+right to award non-deductible compensation.
+COMPENSATION
+COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the
+Compensation Discussion and Analysis included in this proxy
+statement required by Item 402(b) of
+Regulation S-K 
+with management and, based upon such
+17
+Table of Contents 
+review and discussion, the Compensation Committee has
+recommended to the Board that the Compensation Discussion and
+Analysis be included in this proxy statement.
+Kenneth R. Peak, Chairman 
+Charles O. Buckner 
+Curtis W. Huff
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2007
+with respect to the Principal Executive Officer, the Principal
+Financial Officer and the other Named Executive Officers of
+Patterson-UTI:
+Summary
+Compensation Table 
+Non-equity 
+Stock 
+Option 
+Incentive plan 
+All Other 
+Salary 
+Bonus 
+Awards 
+Awards 
+Compensation 
+Compensation 
+Total 
+Name and Principal Position(s) 
+Year 
+($) 
+($) 
+($)(1) 
+($)(2) 
+($)(3) 
+($) 
+($) 
+Douglas J. Wall 
+2007
+$
+365,625
+$
+1,075,000
+(5)
+$
+1,015,694
+$
+135,444
+$
+—
+$
+—
+$
+2,591,763
+President & Chief Executive Officer(4)
+Cloyce A. Talbott 
+2007
+$
+400,000
+$
+—
+$
+1,098,069
+$
+1,616,823
+$
+2,044,100
+$
+81,078
+(7)
+$
+5,240,070
+Former President &
+2006
+$
+450,000
+$
+—
+$
+597,918
+$
+1,398,886
+$
+2,750,000
+$
+198,268
+(7)
+$
+5,395,072
+Chief Executive Officer(6)
+John E. Vollmer III 
+2007
+$
+275,000
+$
+—
+$
+549,034
+$
+808,411
+$
+1,022,050
+$
+10,735
+(8)
+$
+2,665,230
+Senior Vice President —
+2006
+$
+275,000
+$
+—
+$
+298,959
+$
+759,341
+$
+1,375,000
+$
+6,641
+(8)
+$
+2,714,941
+Corporate Development, Chief Financial Officer &
+Treasurer
+Mark S. Siegel 
+2007
+$
+350,000
+$
+—
+$
+1,098,069
+$
+1,616,823
+$
+2,044,100
+$
+—
+$
+5,108,992
+Chairman of the Board
+2006
+$
+350,000
+$
+—
+$
+597,918
+$
+1,398,886
+$
+2,750,000
+$
+—
+$
+5,096,804
+Kenneth N. Berns 
+2007
+$
+258,055
+$
+—
+$
+549,034
+$
+808,411
+$
+1,022,050
+$
+—
+$
+2,637,550
+Senior Vice President
+2006
+$
+215,000
+$
+—
+$
+298,959
+$
+699,443
+$
+1,375,000
+$
+—
+$
+2,588,402
+William L. Moll, Jr. 
+2007
+$
+222,538
+$
+100,000
+$
+251,261
+$
+—
+$
+—
+$
+—
+$
+573,799
+General Counsel and Secretary
+(1) 
+Amounts set forth represent the dollar amount of compensation
+expense recognized for financial statement reporting purposes
+for the fiscal years ended December 31, 2007 and 2006 in
+accordance with Statement of Financial Accounting Standards
+No. 123(R) (“FAS 123R”) with respect to
+restricted stock held by the Named Executive Officer. For
+additional information related to the assumptions used and
+valuation of restricted stock, see Note 11 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the fiscal year ended December 31, 2007. 
+(2) 
+Amounts set forth represent the dollar amount of compensation
+expense recognized for financial statement reporting purposes
+for the fiscal years ended December 31, 2007 and 2006 in
+accordance with FAS 123R with respect to stock options held
+by the Named Executive Officer. For additional information
+related to the assumptions used in connection with the valuation
+of stock options using the Black-Scholes option pricing model
+see Note 11 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2007. 
+(3) 
+Represents annual bonuses earned for the fiscal years ended
+December 31, 2007 and 2006. The bonus plan in each of those
+fiscal years for Messrs. Talbott, Vollmer, Siegel and Berns
+provided for a bonus pool based on EBITDA, subject to a minimum
+EBITDA of $400 million. The bonus pool was allocated among
+Messrs. Talbott, Vollmer, Siegel and Berns based on a
+pre-determined sharing percentage. At the direction of the
+Compensation Committee, the total amount paid out pursuant to
+the executive bonus pool was $6.13 million for 2007 and
+$8.25 million for 2006. 
+(4) 
+Mr. Wall was appointed as Patterson-UTI’s Chief
+Executive Officer and President on October 1, 2007. From
+April 9, 2007 through September 30, 2007,
+Mr. Wall served as Patterson-UTI’s Chief Operating
+Officer. 
+(5) 
+Amount includes a signing bonus of $275,000 paid to
+Mr. Wall following the commencement of his employment with
+Patterson-UTI and an annual bonus for the fiscal year ended
+December 31, 2007 of 
+18
+Table of Contents 
+$800,000, which was paid pursuant to the terms of the offer
+letter provided to Mr. Wall prior to his employment with
+Patterson-UTI. 
+(6) 
+Mr. Talbott retired as Patterson-UTI’s Chief Executive
+Officer and President on September 30, 2007. Effective
+October 1, 2007 Patterson-UTI entered into an employment
+agreement with Mr. Talbott whereby he currently serves as a
+consultant to Patterson-UTI through September 2012.
+Mr. Talbott is a director of Patterson-UTI. 
+(7) 
+Includes personal use of Patterson-UTI’s airplane in the
+amount of $61,678 and $178,652 in 2007 and 2006, respectively,
+which is the incremental cost to Patterson-UTI, including the
+related income tax impact, based on the number of hours of
+personal use by Mr. Talbott. Other perquisites consist of
+the personal use of a sporting venue suite, the use of a
+Patterson-UTI automobile and membership dues at a country club.
+Includes $9,750 and $6,090 in 2007 and 2006, respectively, in
+contributions to a 401(k) plan by Patterson-UTI on
+Mr. Talbott’s behalf. 
+(8) 
+Amounts set forth reflect contributions to a 401(k) plan by
+Patterson-UTI on behalf of Mr. Vollmer. 
+The following table sets forth information concerning grants of
+plan-based awards during the fiscal year ended December 31,
+2007 to the Named Executive Officers:
+Grants of
+Plan-Based Awards 
+All Other 
+All other 
+Option Awards: 
+Stock Awards: 
+Number of 
+Exercise or 
+Grant Date 
+Estimated Possible Payouts under 
+Number of 
+Securities 
+Base Price 
+Fair Value of 
+Non-equity Incentive Plan Awards(1) 
+Shares of 
+Underlying 
+of Option 
+Stock and 
+Grant 
+Threshold 
+Target 
+Maximum 
+Stock or Units 
+Options 
+Awards 
+Option Awards 
+Name 
+Date 
+($) 
+($) 
+($) 
+(#)(2) 
+(#)(3) 
+($/Sh) 
+($)(4) 
+Douglas J. Wall
+4/9/07
+$
+—
+$
+—
+$
+—
+100,000
+—
+$
+—
+$
+2,272,000
+4/9/07
+—
+—
+—
+—
+75,000
+$
+22.72
+$
+501,409
+10/1/07
+—
+—
+—
+—
+25,000
+$
+22.99
+$
+163,810
+Cloyce A. Talbott
+2/20/07
+$
+888,889
+$
+2,044,100
+$
+5,000,000
+—
+—
+—
+—
+4/23/07
+—
+—
+—
+50,000
+—
+$
+—
+$
+1,208,500
+4/23/07
+—
+—
+—
+—
+300,000
+$
+24.17
+$
+2,145,681
+John E. Vollmer III
+2/20/07
+$
+444,444
+$
+1,022,050
+$
+5,000,000
+—
+—
+—
+—
+4/23/07
+—
+—
+—
+25,000
+—
+$
+—
+$
+604,250
+4/23/07
+—
+—
+—
+—
+150,000
+$
+24.17
+$
+1,072,841
+Mark S. Siegel
+2/20/07
+$
+888,889
+$
+2,044,100
+$
+5,000,000
+—
+—
+—
+—
+4/23/07
+—
+—
+—
+50,000
+—
+$
+—
+$
+1,208,500
+4/23/07
+—
+—
+—
+—
+300,000
+$
+24.17
+$
+2,145,681
+Kenneth N. Berns
+2/20/07
+$
+444,444
+$
+1,022,050
+$
+5,000,000
+—
+—
+—
+—
+4/23/07
+—
+—
+—
+25,000
+—
+$
+—
+$
+604,250
+4/23/07
+—
+—
+—
+—
+150,000
+$
+24.17
+$
+1,072,841
+William L. Moll, Jr. 
+2/12/07
+—
+—
+—
+20,000
+—
+$
+—
+$
+464,600
+(1) 
+For the fiscal year ended December 31, 2007, the bonus plan
+for Messrs. Talbott, Vollmer, Siegel and Berns provided for
+a bonus pool based on EBITDA, subject to a minimum EBITDA of
+$400 million. The bonus pool was allocated among
+Messrs. Talbott, Vollmer, Siegel and Berns based on a
+pre-determined sharing percentage. The threshold amount
+presented in this table is calculated for the respective officer
+based on an assumed EBITDA of $400 million and the
+allocation formula applied to the bonus pool for distribution,
+although the bonus plan provides for no payment if the minimum
+EBITDA of $400 million is not satisfied. The target amount
+is calculated based on Patterson-UTI’s actual EBITDA for
+the fiscal year ended December 31, 2007 and the allocation
+formula applied to the bonus pool for distribution. The cash
+bonuses awarded from the bonus pool were awarded under the 2005
+Plan, which has been designed to meet the requirements of
+Section 162(m) of the Code. Although the bonus pool for
+Messrs. Talbott, Vollmer, Siegel and Berns did not have an
+EBITDA cap, the maximum amount that could be awarded to an
+individual under any cash-based performance award granted under
+the 2005 Plan during a
+12-month 
+period is $5,000,000. 
+(2) 
+Shares of restricted stock were awarded pursuant to the 2005
+Plan. The shares awarded to Messrs. Talbott, Vollmer,
+Siegel and Berns vest over a three year period as follows:
+one-third on April 23, 2008, and the remaining two-thirds
+in equal monthly installments over the twenty-four months
+following April 23, 2008. The shares awarded to
+Mr. Wall vest over a three year period as follows:
+one-third on April 9, 2008, one-third on 
+19
+Table of Contents 
+April 9, 2009 and one-third on April 9, 2010. The
+shares awarded to Mr. Moll vest over a three year period as
+follows: one-third on February 12, 2008, one-third on
+February 12, 2009 and one-third on February 12, 2010. 
+(3) 
+Options were granted pursuant to the terms and conditions of the
+2005 Plan. Those options vest over a three year period as
+follows: one-third on the first anniversary of the date of
+grant, and the remaining two-thirds in equal monthly
+installments over the twenty-four months following the first
+anniversary of the date of grant. 
+(4) 
+The grant date fair value of restricted stock is based on the
+closing price of Patterson-UTI Common Stock on the date of
+grant, which is consistent with the valuation used by
+Patterson-UTI for the recognition of compensation expense under
+FAS 123R. The grant date fair value of stock options was
+determined using the Black-Scholes option pricing model, which
+is consistent with the valuation used by Patterson-UTI for the
+recognition of compensation expense under FAS 123R, with
+assumptions that are more fully described in Note 11 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the fiscal year ended December 31, 2007. 
+The following table sets forth information concerning
+outstanding equity awards at December 31, 2007 for the
+Named Executive Officers:
+Outstanding
+Equity Awards 
+at Fiscal Year-End 
+Option Awards 
+Stock Awards 
+Number of Securities 
+Option 
+Number of Shares 
+Market Value of 
+Underlying Unexercised 
+Exercise 
+Option 
+or Units of Stock 
+Shares or Units of 
+Options (#) 
+Price 
+Expiration 
+That Have 
+Stock That Have 
+Name 
+Exercisable 
+Unexercisable 
+($) 
+Date 
+Not Vested (#) 
+Not Vested ($)(1) 
+Douglas J. Wall
+—
+75,000
+$
+22.720
+4/08/17
+100,000
+(2)
+$
+1,952,000
+—
+25,000
+$
+22.990
+9/30/17
+Cloyce A. Talbott
+120,000
+—
+$
+7.925
+7/19/11
+135,000
+(3)
+$
+2,635,200
+400,000
+—
+$
+13.195
+7/17/12
+380,000
+—
+$
+16.220
+4/28/13
+120,000
+—
+$
+19.140
+4/27/14
+133,333
+16,667
+(4)
+$
+24.630
+4/26/15
+111,111
+138,889
+(5)
+$
+28.160
+7/31/16
+—
+300,000
+(6)
+$
+24.170
+4/22/17
+John E. Vollmer III
+110,000
+—
+$
+8.060
+10/22/11
+67,500
+(7)
+$
+1,317,600
+400,000
+—
+$
+13.195
+7/17/12
+190,000
+—
+$
+16.220
+4/28/13
+60,000
+—
+$
+19.140
+4/27/14
+66,667
+8,333
+(4)
+$
+24.630
+4/26/15
+55,556
+69,444
+(5)
+$
+28.160
+7/31/16
+—
+150,000
+(6)
+$
+24.170
+4/22/17
+Mark S. Siegel
+100,000
+—
+$
+7.925
+7/19/11
+135,000
+(3)
+$
+2,635,200
+175,900
+—
+$
+13.195
+7/17/12
+380,000
+—
+$
+16.220
+4/28/13
+120,000
+—
+$
+19.140
+4/27/14
+133,333
+16,667
+(4)
+$
+24.630
+4/26/15
+111,111
+138,889
+(5)
+$
+28.160
+7/31/16
+—
+300,000
+(6)
+$
+24.170
+4/22/17
+Kenneth N. Berns
+50,000
+—
+$
+7.925
+7/19/11
+67,500
+(7)
+$
+1,317,600
+83,600
+—
+$
+13.195
+7/17/12
+190,000
+—
+$
+16.220
+4/28/13
+60,000
+—
+$
+19.140
+4/27/14
+66,667
+8,333
+(4)
+$
+24.630
+4/26/15
+55,556
+69,444
+(5)
+$
+28.160
+7/31/16
+—
+150,000
+(6)
+$
+24.170
+4/22/17
+William L. Moll, Jr. 
+—
+—
+$
+—
+—
+20,000
+(8)
+$
+390,400
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on
+December 31, 2007 of $19.52 per share. 
+20
+Table of Contents 
+(2) 
+These shares of restricted stock vest as follows:
+33,333 shares on April 9, 2008, 33,333 shares on
+April 9, 2009 and 33,334 shares on April 9, 2010. 
+(3) 
+These shares of restricted stock vest as follows:
+16,666 shares on April 23, 2008, 15,000 shares on
+April 27, 2008, 25,000 shares on April 28, 2008,
+15,000 shares on April 27, 2009, 15,000 shares on
+August 1, 2009, 15,000 shares on August 1, 2010
+and 33,334 shares that vest in equal monthly installments
+of 1,388 shares per month from May 23, 2008 through
+April 23, 2010. 
+(4) 
+These options vest in equal monthly installments of
+4,167 shares per month for Messrs. Talbott and Siegel
+and in equal monthly installments of 2,083 shares per month
+for Messrs. Vollmer and Berns. The options became fully
+vested on April 27, 2008. 
+(5) 
+These options vest in equal monthly installments of
+6,944 shares per month for Messrs. Talbott and Siegel
+and in equal monthly installments of 3,472 shares per month
+for Messrs. Vollmer and Berns. The options become fully
+vested on August 1, 2009. 
+(6) 
+These options vest as follows: one-third on April 23, 2008,
+and then in equal monthly installments of 8,333 shares per
+month for Messrs. Talbott and Siegel and in equal monthly
+installments of 4,166 shares per month for
+Messrs. Vollmer and Berns over the twenty-four months
+following April 23, 2008. 
+(7) 
+These shares of restricted stock vest as follows:
+8,333 shares on April 23, 2008, 7,500 shares on
+April 27, 2008, 12,500 shares on April 28, 2008,
+7,500 shares on April 27, 2009, 7,500 shares on
+August 1, 2009, 7,500 shares on August 1, 2010
+and 16,667 shares that vest in equal monthly installments
+of 694 shares per month from May 23, 2008 through
+April 23, 2010. 
+(8) 
+These shares of restricted stock vest as follows:
+6,666 shares on February 12, 2008, 6,666 shares
+on February 12, 2009, and 6,668 shares on
+February 12, 2010. 
+The following table sets forth information concerning option
+exercises and stock awards vested during the fiscal year ended
+December 31, 2007 for the Named Executive Officers:
+Option
+Exercises 
+and Stock Vested 
+Option Awards 
+Stock Awards 
+Number of 
+Number of 
+Shares Acquired 
+Value Realized 
+Shares Acquired 
+Value Realized 
+Name 
+on Exercise (#) 
+on Exercise ($) 
+on Vesting (#)(1) 
+on Vesting ($)(2) 
+Douglas J. Wall
+—
+$
+—
+—
+$
+—
+Cloyce A. Talbott
+—
+$
+—
+25,000
+$
+626,000
+John E. Vollmer III
+—
+$
+—
+12,500
+$
+313,000
+Mark S. Siegel
+—
+$
+—
+25,000
+$
+626,000
+Kenneth N. Berns
+—
+$
+—
+12,500
+$
+313,000
+William L. Moll, Jr. 
+—
+$
+—
+—
+$
+—
+(1) 
+All shares listed became fully vested on April 28, 2007. 
+(2) 
+Value realized on vesting is based on a market price of $25.04
+per share, which was the closing price of Patterson-UTI Common
+Stock on April 27, 2007. 
+Patterson-UTI provides no pension benefits for any of the Named
+Executive Officers. None of the Named Executive Officers had any
+items of nonqualified deferred compensation during 2007. As a
+result, tables with respect to pension benefits and nonqualified
+deferred compensation have not been provided.
+21
+Table of Contents 
+DIRECTOR
+COMPENSATION 
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2007
+with respect to non-employee directors of Patterson-UTI:
+Director
+Compensation Table 
+Fees Earned or Paid 
+in Cash 
+Stock Awards 
+Option Awards 
+Total 
+Name 
+($) 
+($)(1) 
+($)(2) 
+($) 
+Charles O. Buckner
+$
+44,167
+$
+56,244
+(3)
+$
+58,193
+(3)
+$
+158,604
+Robert C. Gist
+$
+18,750
+$
+66,413
+(4)
+$
+69,457
+(5)
+$
+154,620
+Curtis W. Huff
+$
+64,333
+$
+66,052
+(6)
+$
+68,893
+(7)
+$
+199,278
+Terry H. Hunt
+$
+51,000
+$
+66,052
+(6)
+$
+68,893
+(7)
+$
+185,945
+Kenneth R. Peak
+$
+50,000
+$
+66,052
+(6)
+$
+68,893
+(7)
+$
+184,945
+Nadine C. Smith
+$
+22,958
+$
+66,413
+(4)
+$
+69,457
+(5)
+$
+158,828
+(1) 
+Amounts set forth represent the dollar amount of expense
+recognized for financial statement reporting purposes for the
+fiscal year ended December 31, 2007 in accordance with
+FAS 123R with respect to restricted stock held by the
+director. For additional information related to the assumptions
+used and valuation of restricted stock, see Note 11 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the fiscal year ended December 31, 2007. 
+(2) 
+Amounts set forth represent the dollar amount of expense
+recognized for financial statement reporting purposes for the
+fiscal year ended December 31, 2007 in accordance with
+FAS 123R with respect to stock options held by the
+director. For additional information related to the assumptions
+used in connection with the valuation of stock options using the
+Black-Scholes option pricing model, see Note 11 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report for the fiscal year ended December 31, 2007. 
+(3) 
+Mr. Buckner received an award of 3,000 shares of
+restricted stock and options to purchase 10,000 shares of
+Common Stock on February 28, 2007 upon his joining the
+Board of Directors. The stock award and options fully vested on
+February 28, 2008. The grant date fair value of the stock
+award was $22.29 per share, or an aggregate of $66,870. The
+grant date fair value of the options was $6.94 per share, or an
+aggregate of $69,413. For the fiscal year ended
+December 31, 2007, $56,244 was recognized as expense
+associated with the stock award and $58,193 was recognized as
+expense associated with the options. As of December 31,
+2007, Mr. Buckner held options to purchase a total of
+10,000 shares of Common Stock, all of which were unvested.
+As of December 31, 2007, Mr. Buckner held
+3,000 shares of unvested restricted stock. 
+(4) 
+Mr. Gist and Ms. Smith retired from the Board of
+Directors in June 2007. Each held 3,000 shares of
+restricted stock that were granted on January 3, 2006 with
+a market value of $34.24 per share, which fully vested on
+January 3, 2007, and each received an award of
+3,000 shares of restricted stock on January 3, 2007
+with a market value of $21.95 per share, which were scheduled to
+fully vest on January 3, 2008. The shares granted on
+January 3, 2007 were vested by the Board of Directors upon
+Mr. Gist’s and Ms. Smith’s retirement from
+the Board of Directors. The amount presented includes $65,850
+related to the January 3, 2007 grant and includes $563
+related to the January 3, 2006 grant. As of
+December 31, 2007, Mr. Gist and Ms. Smith held no
+shares of unvested restricted stock. 
+(5) 
+Mr. Gist and Ms. Smith each held options to purchase
+10,000 shares of stock that were granted on January 3,
+2006 with a market value of $9.23 per share, which fully vested
+on January 3, 2007 and each received an option to purchase
+10,000 shares of stock on January 3, 2007 with a
+market value of $6.87 per share, which were scheduled to fully
+vest on January 3, 2008. The options granted on
+January 3, 2007 were vested by the Board of Directors upon
+Mr. Gist’s and Ms. Smith’s retirement from
+the Board of Directors. The amount presented includes $68,699
+related to the January 3, 2007 option and includes $758
+related to the January 3, 2006 option. As of
+December 31, 2007, Mr. Gist and Ms. Smith each
+held options to purchase a total of 60,000 shares of Common
+Stock, all of which were vested. 
+(6) 
+Messrs. Huff, Hunt and Peak each received an award of
+3,000 shares of restricted stock on January 3, 2006
+with a market value of $34.24 per share which fully vested on
+January 3, 2007, and each received an award of
+3,000 shares of restricted stock on January 3, 2007
+with a market value of $21.95 per share which fully vested on
+January 3, 2008. The amount presented includes $65,489
+related to the January 3, 2007 grant and includes 
+22
+Table of Contents 
+$563 related to the January 3, 2006 grant. As of
+December 31, 2007, Messrs. Huff, Hunt and Peak each
+held 3,000 unvested shares of restricted stock 
+(7) 
+Messrs. Huff, Hunt and Peak each received options to
+purchase 10,000 shares of stock on January 3, 2006
+with a market value of $9.23 per share which fully vested on
+January 3, 2007, and each received options to purchase
+10,000 shares of stock on January 3, 2007 with a
+market value of $6.87 per share, which fully vested on
+January 3, 2008. The amount presented includes $68,135
+related to the January 3, 2007 options and includes $758
+related to the January 3, 2006 options. As of
+December 31, 2007, Messrs. Huff and Hunt each held
+options to purchase a total of 40,000 shares of Common
+Stock, of which options to purchase 10,000 shares were
+unvested. As of December 31, 2007, Mr. Peak held
+options to purchase a total of 20,000 shares of Common
+Stock, of which options to purchase 10,000 shares were
+unvested. 
+Directors who are also employees of Patterson-UTI do not receive
+compensation for serving as a director or as a member of a
+committee of the Board of Directors. All directors are
+reimbursed for reasonable out-of-pocket expenses incurred in
+connection with serving as a member of the Board of Directors.
+Each non-employee director receives annual cash compensation of
+$35,000 and (i) 3,000 shares of restricted stock
+subject to one-year vesting (subject to acceleration in certain
+limited situations, including a change of control) and
+(ii) an option to purchase 10,000 shares of Common
+Stock at an exercise price equal to the closing price of Common
+Stock on the grant date. The option has a
+10-year 
+term, vests after one-year (subject to acceleration in certain
+limited situations, including a change of control) and contains
+a right to exercise for three years following cessation of the
+holder as a director (but not beyond the
+10-year 
+term). Each non-employee director that serves on the Audit
+Committee or the Compensation Committee receives additional
+annual cash compensation of $10,000 per committee on which he
+serves, with the chairman of each such committee receiving
+$15,000.
+CHANGE IN
+CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; 
+INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+Patterson-UTI has entered into change in control agreements with
+Messrs. Siegel, Wall, Berns, Vollmer and Moll (each
+agreement, an “Agreement” and collectively, the
+“Agreements”; and each individual, an “Employee
+and collectively, the “Employees”). The Agreements
+were entered into to protect the Employees should a change in
+control occur, thereby encouraging the Employee to remain in the
+employ of Patterson-UTI and not be distracted from the
+performance of his duties to Patterson-UTI by the possibility of
+a change in control.
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other
+than for cause or by the Employee for good reason, the terms of
+the Agreements would entitle the Employee to, among other things:
+• 
+a bonus payment equal to the highest bonus paid after the
+Agreement was entered into or a benchmark bonus in the case of
+Messrs. Wall and Moll (such bonus payment prorated for the
+portion of the fiscal year preceding the termination date),
+• 
+a payment equal to 2.5 times (in the case of Messrs. Siegel
+and Wall), 2.0 times (in the case of Messrs. Berns and
+Vollmer) or 1.5 times (in the case of Mr. Moll) of the sum
+of (i) the highest annual salary in effect for such
+Employee during the term of the Agreement and (ii) the
+average of the three annual bonuses earned by the Employee for
+the three fiscal years preceding the termination date (or a
+benchmark bonus in the case of Messrs. Wall and
+Moll), and
+• 
+continued coverage under Patterson-UTI’s welfare plans for
+up to three years (in the case of Messrs. Siegel and Wall)
+or two years (in the case of Messrs. Berns, Vollmer and
+Moll).
+Each Agreement provides the Employee with a full
+gross-up 
+payment for any excise taxes imposed on payments and benefits
+received under the Agreements or otherwise, including other
+taxes that may be imposed as a result of the
+gross-up 
+payment.
+A “change in control” is principally defined by the
+Agreement as:
+• 
+an acquisition by any individual, entity or group of beneficial
+ownership of 35% or more of either Patterson-UTI’s then
+outstanding Common Stock or the combined voting power of the
+then outstanding voting securities of Patterson-UTI entitled to
+vote in the election of directors,
+23
+Table of Contents 
+• 
+a change occurs in which the members of the Board of Directors
+as of the date of the Agreement cease to constitute at least a
+majority of Patterson-UTI’s Board of Directors unless that
+change occurs through a vote of at least a majority of the
+incumbent members of the Board of Directors, or
+• 
+a change in the beneficial ownership of Patterson-UTI following
+consummation of a reorganization, merger, consolidation, sale of
+Patterson-UTI or any subsidiary of Patterson-UTI or a
+disposition of all or substantially all of the assets of
+Patterson-UTI, in which the beneficial owners immediately prior
+to the transaction own 65% or less of outstanding Common Stock
+of the newly combined or merged entity.
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or retirement,
+• 
+the termination of the Employee’s employment, or
+• 
+January 29, 2009 although, unless otherwise terminated, the
+Agreements automatically renew for successive twelve-month
+periods until Patterson-UTI notifies the Employee at least
+90 days before the expiration of the initial term or the
+renewal period, as applicable, that the term will not be
+extended. Patterson-UTI has not provided any such notification
+to the Employees.
+The Company previously entered into a similar change in control
+agreement with Mr. Talbott. The change in control agreement
+with Mr. Talbott terminated upon his retirement as
+President and Chief Executive Officer of Patterson-UTI in
+September 2007.
+All unvested stock options and restricted stock awards held by
+Named Executive Officers vest upon a change of control as
+defined by the underlying award agreements. All restricted stock
+awards held by Named Executive Officers contain provisions that
+in the event of termination due to death or disability, the
+Named Executive Officer would vest in a portion of the unvested
+restricted stock.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer, which confirm
+and evidence the existing agreements between Patterson-UTI and
+each of them pursuant to which Patterson-UTI has agreed to pay
+each such person within ten days of the termination of his
+employment with Patterson-UTI for any reason (including
+voluntary termination by him), an amount in cash equal to his
+annual base salary at the time of such termination.
+Patterson-UTI has entered into a severance agreement with
+Mr. Wall that generally has a three-year term and provides
+for a lump-sum cash payment of $750,000 to be payable to
+Mr. Wall within ten days of the date of a qualifying
+termination of his employment with Patterson-UTI. A qualifying
+termination for Mr. Wall is defined in the severance
+agreement generally as a termination by Patterson-UTI for any
+reason other than cause or, if certain conditions are met, a
+termination by Mr. Wall due to a reduction in his annual
+base salary below a defined threshold amount. Any payment made
+by Patterson-UTI pursuant to these letter agreements or the
+severance agreement will reduce dollar for dollar any payment
+owed to such person, if any, pursuant to the change in control
+agreements discussed above.
+Amounts that each of the Named Executive Officers would be
+entitled to under the existing agreements if a change in control
+had occurred as of December 31, 2007 are reflected in the
+following table:
+Cash Payments 
+Other Benefits 
+Bonus 
+Salary and 
+Option 
+Stock 
+Continued 
+Statutory 
+Payment 
+Bonus 
+Awards 
+Awards 
+Benefits 
+Tax Gross-up 
+Total 
+Name 
+($)(1) 
+($)(2) 
+($)(3) 
+($)(3) 
+($)(4) 
+($)(5) 
+($) 
+Douglas J. Wall
+$
+800,000
+$
+3,500,000
+$
+—
+$
+1,952,000
+$
+7,423
+$
+1,272,454
+$
+7,531,877
+Cloyce A. Talbott(6)
+$
+—
+$
+—
+$
+—
+$
+2,635,200
+$
+—
+$
+—
+$
+2,635,200
+John E. Vollmer III
+$
+1,375,000
+$
+2,515,266
+$
+—
+$
+1,317,600
+$
+6,589
+$
+—
+$
+5,214,455
+Mark S. Siegel
+$
+2,750,000
+$
+5,079,832
+$
+—
+$
+2,635,200
+$
+—
+$
+—
+$
+10,465,032
+Kenneth N. Berns
+$
+1,375,000
+$
+2,261,933
+$
+—
+$
+1,317,600
+$
+—
+$
+—
+$
+4,954,533
+William L. Moll, Jr. 
+$
+100,000
+$
+525,000
+$
+—
+$
+390,400
+$
+13,220
+$
+147,668
+$
+1,176,288
+(1) 
+The assumed bonus payment is equal to the highest annual bonus
+paid after the agreements were entered into. 
+24
+Table of Contents 
+(2) 
+The assumed salary and bonus payment represents 2.5 times (in
+the case of Messrs. Siegel and Wall), 2.0 times (in the
+case of Messrs. Berns and Vollmer) or 1.5 times (in the
+case of Mr. Moll) of the sum of the 2007 salary in effect
+for each employee and the average of the annual bonuses earned
+by each employee for 2006, 2005 and 2004 (or a benchmark bonus
+in the case of Messrs. Wall and Moll). Bonus amounts earned
+by Messrs. Talbott, Vollmer, Siegel and Berns in 2007 were
+not considered in this calculation as they were not determined
+until after December 31, 2007. 
+(3) 
+Each of the Named Executive Officers’ option and stock
+award agreements provide that unvested options and awards will
+immediately vest upon a change in control. Amounts presented in
+the table represent the value of unvested option and stock
+awards using the market price of Patterson-UTI Common Stock at
+December 31, 2007. All unvested options held by the Named
+Executive Officers as of December 31, 2007 had exercise
+prices that were greater than the current market price of the
+underlying stock. 
+(4) 
+Messrs. Wall, Vollmer and Moll participate in
+Patterson-UTI’s health and welfare plans as of
+December 31, 2007. The amounts presented represent
+Patterson-UTI’s portion of the premiums for three years in
+the case of Mr. Wall and two years in the case of
+Messrs. Vollmer and Moll based on the rates in effect at
+December 31, 2007. 
+(5) 
+Assumes Messrs. Wall and Moll would be subject to an excise
+tax on payments received under the existing agreements if a
+change in control had occurred as of December 31, 2007.
+Amounts presented in the table represent the gross-up payment
+that each would be entitled to as a result of the imposition of
+the excise tax. 
+(6) 
+Mr. Talbott’s change in control agreement terminated
+upon the execution of his employment agreement upon his
+retirement as President and Chief Executive Officer in 2007. The
+terms of his option and stock awards remained unchanged and such
+award agreements include a provision that unvested shares or
+options will automatically vest upon a change in control. 
+All restricted stock awards held by Named Executive Officers
+provide that in the event of termination of employment due to
+death or disability, the Named Executive Officer would vest in a
+portion of the unvested restricted stock. With respect to
+Messrs. Talbott and Siegel, such a termination at
+December 31, 2007 would have resulted in the accelerated
+vesting of 70,287 shares with a fair value of $1,372,002.
+With respect to Messrs. Vollmer and Berns, such a
+termination at December 31, 2007 would have resulted in the
+accelerated vesting of 35,143 shares with a fair value of
+$685,991. With respect to Mr. Wall, such a termination
+would have resulted in the accelerated vesting of
+24,270 shares with a fair value of $473,750. With respect
+to Mr. Moll, such a termination would have resulted in the
+accelerated vesting of 5,875 shares with a fair value of
+$114,680.
+In October 2007, Patterson-UTI entered into an employment
+agreement with Mr. Talbott pursuant to which Patterson-UTI
+will employ Mr. Talbott for five years as a consultant at
+an annual compensation of $250,000 per year.
+Patterson-UTI has entered into an indemnification agreement with
+each of its Named Executive Officers and directors containing
+provisions that may require Patterson-UTI, among other things,
+to indemnify such executive officers and directors against
+liabilities that may arise by reason of their status or service
+as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN
+TRANSACTIONS 
+In connection with the acquisition by REMY Capital Partners III,
+L.P. (“REMY Capital”) of an ownership interest in UTI
+in March 1995, REMY Capital succeeded to a registration rights
+agreement with UTI. As the
+successor-in-interest 
+to UTI, Patterson-UTI assumed this registration rights agreement
+pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares
+held by REMY Capital under the Securities Act of 1933, as
+amended. In the event that such rights are exercised in
+connection with a primary offering proposed by Patterson-UTI (or
+a secondary offering with which Patterson-UTI agrees to
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elects to exercise such rights other than in
+connection with an offering in which Patterson-UTI participates,
+REMY Capital would bear all
+25
+Table of Contents 
+costs of the offering. These rights continue so long as REMY
+Capital continues to own the Common Stock that it acquired in
+March 1995. As of the date of this proxy statement, REMY Capital
+continues to hold 1,541,548 shares of Common Stock.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is
+President and sole stockholder of REMY Investors, which is the
+general partner of REMY Capital. Mr. Berns, a director and
+Senior Vice President of Patterson-UTI, is an executive of REMY
+Investors.
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer, Patterson-UTI delivered a letter to
+Mr. Vollmer dated February 6, 2006 (the “Letter
+Agreement”). Pursuant to the Letter Agreement,
+Patterson-UTI agreed, to the extent permitted by law and
+provided that the applicable accounting restatement pending at
+that time did not result from Patterson-UTI’s material
+non-compliance with financial reporting requirements under the
+federal securities laws as a result of knowing misconduct by
+Mr. Vollmer:
+• 
+Patterson-UTI is not entitled to and will not make any claim
+against Mr. Vollmer for reimbursement of any bonus or other
+incentive or equity based compensation received by him or any
+profits realized by him from the sale of securities of
+Patterson-UTI, under Section 304 of the Sarbanes-Oxley Act
+of 2002 (“Section 304”) on account of the
+restatement of any financial statements of Patterson-UTI
+covering any accounting period ending on or prior to
+September 30, 2005;
+• 
+Patterson-UTI will not make any claim against Mr. Vollmer
+for any profits realized from the sale of securities of
+Patterson-UTI that were owned by him prior to his becoming Chief
+Financial Officer or were acquired by him on account of the
+exercise of options or the settling of restricted stock units
+that were held by him immediately prior to his becoming Chief
+Financial Officer, under Section 304 on account of the
+restatement of any financial statements of Patterson-UTI
+covering any period during which he was Chief Financial
+Officer; and
+• 
+Patterson-UTI will indemnify Mr. Vollmer against all losses
+in connection with his defense of any claim against him under
+Section 304 in contravention of the two immediately
+preceding bullets, to the extent he is obligated to reimburse
+Patterson-UTI for any bonus or other incentive or equity
+compensation received by him or any profits realized by him for
+the sale of Patterson-UTI securities.
+Notwithstanding court decisions that Patterson-UTI’s right
+to make any such claims appears doubtful, Patterson-UTI has
+entered into this agreement because of the breadth of language
+of Section 304 and the uncertainty as to how the statute
+may be interpreted by the courts in the future and the
+importance at the time of Mr. Vollmer’s continued
+service as Chief Financial Officer.
+Through October 31, 2007, Patterson-UTI served as operator
+with respect to several properties and was actively involved in
+the development, exploration, acquisition and production of oil
+and natural gas. Effective November 1, 2007, Patterson-UTI
+sold the operations portion of its exploration and production
+business. Patterson-UTI continues to own and invest in oil and
+natural gas assets as a working interest owner. During the time
+that Patterson-UTI served as operator, it served as operator
+with respect to certain oil and natural gas properties in which
+certain of its affiliated persons have participated, either
+individually or through entities they control. These
+participations have typically been through working interests in
+prospects or properties originated or acquired by Patterson
+Petroleum, LLC, a wholly owned subsidiary of Patterson-UTI.
+During the time that Patterson-UTI served as operator, sales of
+working interests to affiliated parties were made by
+Patterson-UTI at its cost, comprised of Patterson-UTI’s
+costs of acquiring and preparing the working interests for sale
+plus a promote fee in some cases. These costs were paid by the
+working interest owners on a pro rata basis based upon their
+working interest ownership percentage. The price at which
+working interests were sold to affiliated persons was the same
+price at which working interests were sold to unaffiliated
+persons except that in some cases the affiliated persons also
+paid a promote fee.
+Production revenues and joint interest costs of each of the
+affiliated persons during 2007 for all wells operated by
+Patterson-UTI in which the affiliated persons have working
+interests are presented in the table below. These amounts do not
+necessarily represent their profits or losses from these
+interests because the joint interest costs do not
+26
+Table of Contents 
+include the parties’ related drilling and leasehold
+acquisition costs incurred prior to January 1, 2007. These
+activities resulted in no payable to or receivable from the
+affiliated persons at December 31, 2007.
+Year Ended December 31, 2007 
+Joint 
+Production 
+Interest 
+Name 
+Revenues(1) 
+Costs(2) 
+Cloyce A. Talbott
+$
+220,262
+$
+(89,037
+)
+Jana Talbott, Executrix to the Estate of Steve Talbott(3)
+15,904
+(4,302
+)
+Stan Talbott(3)
+5,174
+4,020
+John Evan Talbott Trust(3)
+2,351
+(3,620
+)
+Lisa Beck and Stacy Talbott(3)
+1,539,523
+631,363
+SSI Oil & Gas, Inc.(4)
+182,711
+(6,198
+)
+IDC Enterprises, Ltd.(5)
+16,934,697
+8,689,417
+Subtotal
+18,900,622
+9,221,643
+A. Glenn Patterson(6)
+104,145
+16,478
+Total
+$
+19,004,767
+$
+9,238,121
+(1) 
+Revenues for production of oil and natural gas, net of state
+severance taxes. 
+(2) 
+Includes leasehold costs, tangible equipment costs, intangible
+drilling costs, and lease operating expense billed during that
+period and is reduced by the interest holders’ share of
+proceeds received on the sale of certain oil and natural gas
+properties. All joint interest costs have been paid on a timely
+basis. 
+(3) 
+Stan Talbott, Lisa Beck and Stacy Talbott are Cloyce A.
+Talbott’s adult children. Steve Talbott is the deceased son
+of Cloyce A. Talbott. John Evan Talbott is Cloyce A.
+Talbott’s grandson. 
+(4) 
+SSI Oil & Gas, Inc. is beneficially owned 50% by
+Cloyce A. Talbott and 50% by his
+brother-in-law 
+A. Glenn Patterson. 
+(5) 
+IDC Enterprises, Ltd. is 50% owned by Cloyce A. Talbott and 50%
+owned by his
+brother-in-law 
+A. Glenn Patterson. 
+(6) 
+A. Glenn Patterson, former President and Chief Operating Officer
+of Patterson-UTI is the
+brother-in-law 
+of Cloyce A. Talbott. 
+Patterson-UTI has a written policy with respect to related
+person transactions. In accordance with this policy, related
+person transactions are reviewed by the Lead Director or the
+chair of the Audit Committee, each of whom has full delegated
+authority to approve, disapprove, ratify, amend, terminate or
+rescind any such transaction, or direct that such transaction be
+submitted to the Audit Committee or the full Board of Directors
+for consideration. In approving or disapproving related person
+transactions, the relevant facts and circumstances of the
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater beneficial
+ownership interest or in which they are an executive officer,
+general partner, principal or engaged in a similar position.
+Certain related person transactions have been pre-approved under
+the terms of the policy, including, subject to certain
+exceptions and limitations, the personal use of the
+Patterson-UTI airplane by executive officers, co-investment in
+oil and gas properties by Mr. Talbott and other persons
+related to him, and the sale to or purchase from Patterson-UTI
+of goods and services by entities related to directors in the
+ordinary course of business that are immaterial to Patterson-UTI
+and with respect to which the director has no direct economic
+interest or decision making authority.
+27
+Table of Contents 
+SECURITY
+OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of April 24, 2008, the
+stock ownership of (i) the Named Executive Officers,
+directors and Board nominees, individually, (ii) all
+directors, Board nominees and executive officers as a group and
+(iii) each person known by Patterson-UTI to be the
+beneficial owner of more than 5% of Common Stock.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common
+Stock:
+Barclays Global Investors, NA
+17,515,647
+(1)
+11.4
+%
+FMR LLC
+10,778,280
+(2)
+7.0
+%
+First Pacific Advisors, LLC
+9,473,100
+(3)
+6.1
+%
+LSV Asset Management
+8,102,886
+(4)
+5.3
+%
+Directors and Executive Officers:
+Mark S. Siegel
+2,956,891
+(5)
+1.9
+%
+Douglas J. Wall
+117,709
+(6)
+*
+John E. Vollmer III
+1,049,722
+(7)
+*
+Kenneth N. Berns
+693,322
+(8)
+*
+William L. Moll, Jr. 
+20,000
+(9)
+*
+Charles O. Buckner
+16,000
+(10)
+*
+Curtis W. Huff
+79,880
+(11)
+*
+Terry H. Hunt
+57,800
+(12)
+*
+Kenneth R. Peak
+34,000
+(13)
+*
+Cloyce A. Talbott
+1,809,575
+(14)
+1.2
+%
+All directors and executive officers as a group (11 persons)
+6,849,399
+(15)
+4.3
+%
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G filed jointly by Barclays
+Global Investors, NA (“Barclays Investors”), Barclays
+Global Fund Advisors (“Barclays Advisors”),
+Barclays Global Investors, Ltd. (“Barclays Ltd.”),
+Barclays Global Investors Japan Limited (“Barclays
+Japan”) and Barclays Global Investors Canada Limited
+(“Barclays Canada”) with the SEC on February 6,
+2008. According to the report, Barclays Investors has sole
+voting power with respect to 10,302,256 shares and sole
+dispositive power with respect to 12,213,060 shares.
+Barclays Advisors has sole voting and dispositive power with
+respect to 2,712,031 shares. Barclays Ltd. has sole voting
+power with respect to 1,396,252 shares and sole dispositive
+power with respect to 1,796,568 shares. Barclays Japan has
+sole voting and dispositive power with respect to
+623,267 shares. Barclays Canada has sole voting and
+dispositive power with respect to 170,721 shares. The
+address of the principal business office of Barclays Investors
+and Barclays Advisors is 45 Fremont Street, San Francisco,
+California 94105. The address of the principal business office
+of Barclays Ltd. is Murray House, 1 Royal Mint Court, London
+EC3N 4HH. The address of the principal business office of
+Barclays Japan is Ebisu Prime Square Tower 8th Floor,
+1-1-39 Hiroo Shibuya-Ku, Tokyo, Japan
+150-0012. 
+The address of the principal business office of Barclays Canada
+is Brookfield Place 161 Bay Street, Suite 2500, Toronto,
+Canada Ontario M5J 2S1. 
+(2) 
+Based solely on a Schedule 13G jointly filed by FMR LLC
+(“FMR”) and Edward C. Johnson 3d with the SEC on
+February 14, 2008. According to the report, FMR has sole
+voting power with respect to 4,980 shares and sole
+dispositive power with respect to 10,778,280 shares. Edward
+C. Johnson 3d is Chairman of FMR and is deemed to beneficially
+own 10,778,280 shares held by FMR. The address of the
+principal business office of FMR and Edward C. Johnson 3d is 82
+Devonshire Street, Boston, Massachusetts 02109. 
+(3) 
+Based solely on a Schedule 13G jointly filed by First
+Pacific Advisors, LLC (“First Pacific”), Robert L.
+Rodriguez and J. Richard Atwood with the SEC on
+February 12, 2008. According to the report, First Pacific,
+in its capacity as investment advisor to various of its clients,
+has shared voting power with respect to 
+28
+Table of Contents 
+3,652,600 shares and shared dispositive power with respect
+to 9,473,100 shares. Robert L. Rodriguez has shared voting
+power with respect to 3,652,600 shares and shared
+dispositive power with respect to 9,473,100 shares. J.
+Richard Atwood has shared voting power with respect to
+3,652,600 shares and shared dispositive power with respect
+to 9,473,100 shares. Robert L. Rodriguez and J. Richard
+Atwood are each part owners and managing members of First
+Pacific and are deemed to beneficially own 9,473,100 shares
+of Patterson-UTI owned by First Pacific’s clients. Robert
+L. Rodriguez and J. Richard Atwood disclaim beneficial ownership
+of the securities owned by First Pacific’s clients. The
+address of the principal business office of First Pacific and of
+Robert L. Rodriguez and J. Richard Atwood is 11400 West
+Olympic Blvd., Suite 1200, Los Angeles, CA 90064. 
+(4) 
+Based solely on a Schedule 13G filed by LSV Asset
+Management (“LSV”) with the SEC on February 12,
+2008. According to the report, LSV has sole voting and
+dispositive power with respect to 8,102,886 shares. The
+address of the principal business office of LSV is
+1 N. Wacker Drive, Suite 4000, Chicago, Illinois
+60606. 
+(5) 
+Mr. Siegel is the President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital Partners
+III, L.P. (“REMY Capital”). The Common Stock
+beneficially owned by Mr. Siegel includes
+1,541,548 shares of Common Stock owned by REMY Capital. The
+Common Stock beneficially owned by Mr. Siegel also includes
+stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within sixty days, to purchase
+1,195,343 shares of Common Stock, but does not include
+280,557 shares underlying stock options held by
+Mr. Siegel that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+78,334 shares of unvested restricted Common Stock held by
+Mr. Siegel, over which he presently has voting power. 
+(6) 
+Includes shares underlying stock options held by Mr. Wall,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 29,167 shares of Common Stock, but
+does not include 70,833 shares underlying stock options
+held by Mr. Wall that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+66,667 shares of unvested restricted Common Stock held by
+Mr. Wall, over which he presently has voting power. 
+(7) 
+Includes shares underlying stock options held by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to purchase 969,722 shares.
+Does not include 140,278 shares underlying stock options
+held by Mr. Vollmer that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+39,167 shares of unvested restricted Common Stock held by
+Mr. Vollmer, over which he presently has voting power. 
+(8) 
+Includes shares underlying stock options held by Mr. Berns,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 593,322 shares. Does not include
+140,278 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 39,167 shares of unvested restricted
+Common Stock held by Mr. Berns, over which he presently has
+voting power. Does not include shares of Common Stock
+beneficially owned by REMY Investors. Mr. Berns disclaims
+beneficial ownership of such shares beneficially owned by REMY
+Investors. 
+(9) 
+Includes 13,334 shares of unvested restricted Common Stock
+held by Mr. Moll, over which he presently has voting power. 
+(10) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Buckner to purchase 10,000 shares. Does
+not include 10,000 shares underlying stock options held by
+Mr. Buckner that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Buckner,
+over which he presently has voting power. 
+(11) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Huff to purchase 40,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Huff, over
+which he presently has voting power. 
+(12) 
+Includes 800 shares of Common Stock owned by
+Mr. Hunt’s
+mother-in-law, 
+over which Mr. Hunt presently has shared voting power.
+Includes shares underlying presently exercisable stock options
+held by Mr. Hunt to purchase 40,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Hunt that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Hunt, over
+which he presently has voting power. 
+29
+Table of Contents 
+(13) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Peak to purchase 20,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Peak, over
+which he presently has voting power. 
+(14) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to purchase
+1,439,443 shares. Does not include 280,557 shares
+underlying stock options held by Mr. Talbott that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 78,334 shares of unvested restricted
+Common Stock held by Mr. Talbott, over which he presently
+has voting power. 
+(15) 
+Includes shares underlying stock options, which are presently
+exercisable or become exercisable within sixty days, to purchase
+4,336,997 shares of Common Stock. Does not include shares
+underlying stock options to purchase 952,503 shares held by
+such individuals that are not presently exercisable and will not
+become exercisable within sixty days. Includes 800 shares
+of Common Stock over which a director presently has shared
+voting power. Includes an aggregate of 341,502 shares of
+unvested restricted Common Stock held by certain directors and
+executive officers, over which they presently have voting power. 
+Except as stated herein, each stockholder has sole voting and
+investment power with respect to Common Stock included in the
+above table. There are no arrangements known to Patterson-UTI
+which may result in a change in control.
+30
+Table of Contents 
+AUDIT
+COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute
+soliciting material and should not be deemed filed or
+incorporated by reference into any other Patterson-UTI filing
+under the Securities Act of 1933, as amended, or the Exchange
+Act, except to the extent Patterson-UTI specifically
+incorporates this report by reference therein.
+The Audit Committee has reviewed and discussed the audited
+financial statements with management and Patterson-UTI’s
+independent auditors.
+The Audit Committee has discussed with the independent auditors
+the matters required to be discussed by Statement on Auditing
+Standards No. 114, The Auditor’s Communication with
+those Charged with Governance (superseded Statement on
+Auditing Standards No. 61, Communication with Audit
+Committees, as amended), as adopted by the Public Company
+Accounting Oversight Board in Rule 3200T.
+The Audit Committee has received and reviewed the written
+disclosures and the letter from the independent auditors
+required by Independence Standard Board Standard No. 1,
+Independence Discussions with Audit Committees , as
+amended, as adopted by the Public Company Accounting Oversight
+Board in Rule 3600T, and has discussed with the independent
+auditors the auditors’ independence.
+Taking the foregoing into consideration, the undersigned Audit
+Committee members recommended to the Board of Directors that the
+Board approve the inclusion of the Patterson-UTI’s audited
+financial statements in the Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2007.
+Audit Committee of the Board of Directors:
+Curtis W. Huff, Chairman 
+Charles O. Buckner 
+Terry H. Hunt
+PricewaterhouseCoopers
+Fees for Fiscal Years 2007 and 2006 
+In 2007 and 2006, Patterson-UTI and its subsidiaries incurred
+fees for services provided relating to (i) professional
+services rendered for the audit of Patterson-UTI’s annual
+financial statements, review of quarterly financial statements,
+and assessment of Patterson-UTI’s internal controls over
+financial reporting, (ii) professional services rendered
+for assurance and related services that are reasonably related
+to the performance of the audit or review of
+Patterson-UTI’s financial statements,
+(iii) professional services rendered for tax compliance,
+advice and planning, and (iv) products and services
+provided by PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2007 
+2006 
+Audit fees
+$
+1,150,000
+$
+1,228,500
+Tax fees
+45,000
+38,000
+All other fees
+1,600
+1,600
+Total
+$
+1,196,600
+$
+1,268,100
+The Audit Committee appoints the independent registered public
+accounting firm. The Audit Committee or Mr. Huff, as
+Chairman of the Audit Committee, approves all other engagements
+of the independent registered public accounting firm in advance.
+In the event Mr. Huff approves any such engagement, he
+discusses such approval with the Audit Committee at its next
+meeting.
+Fiscal
+2007 
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2007 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements, quarterly reviews of Patterson-UTI’s interim
+financial statements and services to assess Patterson-UTI’s
+internal control over financial reporting. “Tax fees”
+31
+Table of Contents 
+include federal, state, local and foreign tax compliance and
+related matters. “All other fees” consists of an
+annual subscription fee to a software product. The Audit
+Committee or Mr. Huff, as Chairman of the Audit Committee
+during fiscal 2007, approved all of the services described above.
+Fiscal
+2006 
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2006 consisting of the
+examination of Patterson-UTI’s consolidated financial
+statements, quarterly reviews of Patterson-UTI’s interim
+financial statements and services to assess Patterson-UTI’s
+internal control over financial reporting. “Tax fees”
+include federal, state, local and foreign tax compliance and
+related matters. “All other fees” consists of an
+annual subscription fee to a software product. The Audit
+Committee or Mr. Peak, as Chairman of the Audit Committee
+during fiscal 2006, approved all of the services described above.
+The Audit Committee has discussed the non-audit services
+provided by PricewaterhouseCoopers LLP and the related fees and
+has considered whether those services and fees are compatible
+with maintaining auditor independence. The Audit Committee
+determined that such non-audit services were consistent with the
+independence of PricewaterhouseCoopers LLP.
+OTHER
+MATTERS 
+Section 16(a)
+Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires
+Patterson-UTI’s officers and directors and persons who own
+more than 10 percent of a registered class of
+Patterson-UTI’s equity securities, to file reports of
+ownership and changes in ownership with the SEC. Each of these
+persons is required by SEC regulation to furnish Patterson-UTI
+with copies of Section 16(a) filings. Based solely upon a
+review of Forms 3 and 4 and amendments thereto furnished to
+Patterson-UTI during 2007 and Forms 5 and amendments
+thereto furnished to Patterson-UTI with respect to 2007, or a
+written representation from the reporting person that no
+Form 5 is required, all filings required to be made by such
+officers, directors, and beneficial owners of more than
+10 percent of a registered class of Patterson-UTI’s
+common stock were timely made.
+Other
+Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not aware of any matter to be presented at the
+Meeting other than as set forth herein. If any other matters are
+properly brought before the Meeting, however, the shares
+represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting
+them.
+Stockholder
+Proposals for 2009 Annual Meeting 
+All proposals submitted by stockholders for presentation at the
+2009 annual meeting must comply with the SEC’s rules
+regarding shareholder proposals. In addition,
+Patterson-UTI’s bylaws provide that for business to be
+properly brought before an annual meeting by a stockholder, the
+stockholder, in addition to any other applicable requirements,
+must be a stockholder of record on the date of the giving of the
+notice provided for below and on the record date for the
+determination of stockholders entitled to vote at such annual
+meeting and must give timely notice of such business in writing
+to the Secretary of Patterson-UTI. To be timely with respect to
+the 2009 annual meeting, a stockholder’s notice must be
+delivered to or mailed and received at Patterson-UTI’s
+principal executive offices not earlier than February 5,
+2009 and not later than March 7, 2009; provided, however,
+that in the event that the annual meeting is called for a date
+that is not within 30 days before or after June 5,
+2009, notice by the stockholder to be timely must be received
+not later than the close of business on the tenth day following
+the day on which such notice of the date of the meeting was
+mailed or public disclosure of the annual meeting date was made,
+whichever occurs first.
+32
+Table of Contents 
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+a brief description of each matter desired to be brought before
+the annual meeting and the reasons for conducting such business
+at the annual meeting,
+• 
+the name and record address of the stockholder proposing such
+business,
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+any material interest of the stockholder in such
+business, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the annual meeting to bring such business
+before the meeting.
+The proxies will have discretionary authority to vote on any
+matter that properly comes before the meeting if the stockholder
+has not provided timely written notice as required by the
+Patterson-UTI bylaws.
+Any proposal by a stockholder to be presented at
+Patterson-UTI’s 2009 annual meeting of stockholders must be
+received by Patterson-UTI no later than December 31, 2008,
+in order to be eligible for inclusion in Patterson-UTI’s
+proxy statement and proxy used in connection with the 2009
+annual meeting.
+Patterson-UTI reserves the right to reject, rule out of order,
+or take other appropriate action with respect to any proposal or
+nomination that does not comply with these and other applicable
+requirements.
+Annual
+Report 
+You are referred to Patterson-UTI’s annual report to
+stockholders with a copy of its Annual Report on
+Form 10-K, 
+for the year ended December 31, 2007, filed with the SEC,
+enclosed herewith for your information. The annual report to
+stockholders is not incorporated in this proxy statement and is
+not to be considered part of the soliciting material.
+33
+Table of Contents 
+APPENDIX A 
+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.
+2.12. “ Freestanding Stock Appreciation
+Right ” shall have the meaning set forth in
+Section 6.1.
+A-1
+Table of Contents 
+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
+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.
+A-2
+Table of Contents 
+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 10,250,000 , 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 prior to June 5, 2008 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. Any Shares that are subject to Awards
+other than Options or Stock Appreciation Rights awarded under
+this Plan on or after June 5, 2008 shall be counted against
+this limit as two (2) 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 ( x ) 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, ( y ) 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 that are forfeited, expire or otherwise
+terminate prior to June 5, 2008 or (z) as two
+(2) Shares if such Shares were subject to Awards other than
+Options or Stock Appreciation Rights granted under the Plan that
+are forfeited, expire or otherwise terminate on or after
+June 5, 2008 .
+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 the Employees and
+Directors to whom Awards may from time to time be granted
+hereunder; (ii) determine the type or types of Awards,
+A-3
+Table of Contents 
+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 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.
+A-4
+Table of Contents 
+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. Not-withstanding 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.
+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.
+A-5
+Table of Contents 
+(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.
+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)
+A-6
+Table of Contents 
+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 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
+2 1 / 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
+A-7
+Table of Contents 
+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
+2 1 / 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 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
+A-8
+Table of Contents 
+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 therefore 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 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
+A-9
+Table of Contents 
+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 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.
+A-10
+Table of Contents 
+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 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.
+A-11
+Table of Contents 
+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.
+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.
+A-12
+Table of Contents 
+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 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.
+A-13
+Table of Contents 
+PATTERSON-UTI ENERGY, INC. VOTE BY INTERNET OR TELEPHONE QUICK EASY IMMEDIATE As a
+stockholder of Patterson-UTI Energy, Inc., you have the option of voting your shares electronically
+through the Internet or on the telephone, eliminating the need to return the proxy card. Your
+electronic vote authorizes the named proxies to vote your shares in the same manner as if you
+marked, signed, dated and returned the proxy card. Votes submitted electronically over the Internet
+or by telephone must be received by 7:00 p.m., Eastern Time, on June 4, 2008. 3 Vote Your Proxy on
+the Internet: Vote Your Proxy by Phone: Vote Your Proxy by Mail: Call 1 (866) 894-0537 Go to
+www.continentalstock.com OR Use any touch-tone telephone to vote OR Mark, sign, and date your proxy
+card, Have your proxy card available when your proxy. Have your proxy card then detach it, and
+return it in the you access the above website. Follow available when you call. Follow the
+postage-paid envelope provided. the prompts to vote your shares. voting instructions to vote your
+shares. PLEASE DO NOT RETURN THE PROXY CARD IF YOU ARE VOTING ELECTRONICALLY OR BY PHONE FOLD AND
+DETACH HERE AND READ THE REVERSE SIDE PROXY Please mark THE BOARD OF DIRECTORS RECOMMENDS THAT
+YOU VOTE “FOR” THE NOMINEES FOR ELECTION AS DIRECTORS, “FOR” THE APPROVAL OF THE AMENDMENT TO THE
+PATTERSON — your votes X UTI 2005 LONG-TERM INCENTIVE PLAN AND “FOR” THE RATIFICATION OF THE
+SELECTION OF PRICEWATERHOUSECOOPERS LLP. like this THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE
+VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
+IS MADE, THE PROXIES WILL VOTE “FOR” THE NOMINEES FOR ELECTION AS DIRECTORS, “FOR” THE APPROVAL OF
+THE AMENDMENT TO THE PATTERSON — UTI 2005 LONG-TERM INCENTIVE PLAN AND “FOR” THE RATIFICATION OF
+THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS NOTED BELOW. FOR AGAINST ABSTAIN 1. ELECTION OF
+BOARD FOR all nominees listed WITHHOLD AUTHORITY to 2. Approve the amendment to the Patterson-UTI
+2005 Long-Term OF DIRECTORS. below (except as indicated vote for all nominees listed Incentive Plan
+to increase the number of shares authorized for issuance to the contrary below) below under the
+plan. FOR AGAINST ABSTAIN Nominees for election to the Board of Directors: 01 Mark S. Siegel, 02
+Cloyce A. Talbott, 03 Kenneth N. Berns, 04 Charles O. Buckner, 05 Curtis W. Huff, 06 Terry H. Hunt
+and 07 Kenneth R. Peak. 3. Ratify the selection of PricewaterhouseCoopers LLP as the independent
+registered public accounting firm of the Company for the fiscal year (INSTRUCTION: To withhold
+authority to vote for any one or more individual nominees, ending December 31, 2008; and write the
+name of each such nominee in the space provided below.) 4. In their discretion, the Proxies are
+authorized to vote upon such other business as may properly come before the Meeting or any and all
+adjournments or postponements thereof. IF YOU WISH TO VOTE ELECTRONICALLY, PLEASE READ THE
+INSTRUCTIONS ABOVE. COMPANY ID: PROXY NUMBER: ACCOUNT NUMBER: Signature Signature Date , 2008.
+NOTE: Please sign exactly as your name or names appear on this card. Joint owners should each sign
+personally. When signing as attorney, executor, administrator, personal representative, trustee or
+guardian, please give your full title as such. For a corporation, partnership or other entity,
+please sign in the full corporate name by the President or other authorized officer or the full
+partnership or other entity name by an authorized person, as the case may be. (Please mark, sign,
+date, and return this proxy in the enclosed envelope.) 
+Table of Contents 
+Your Vote Is Important! Follow Instructions on The Reverse Side. PLEASE VOTE Important Notice
+Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on June 5,
+2008. The 2008 Proxy Statement and 2007 Annual Report to Stockholders are available at
+http://www.patenergy.com/proxy FOLD AND DETACH HERE AND READ THE REVERSE SIDE PROXY PROXY
+PATTERSON-UTI ENERGY, INC. PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 5, 2008 THIS
+PROXY IS SOLICITED BY THE BOARD OF DIRECTORS The undersigned stockholder of Patterson-UTI Energy,
+Inc. (the “Company”) hereby appoints Mark S. Siegel, Douglas J. Wall and John E. Vol mer III, and
+each of them, proxies of the undersigned, each with full power to act without the other and with
+ful power of substitution, to vote all of the shares which the undersigned is entit led to vote at
+the annual meeting of stockholders of the Company to be held Thursday, June 5, 2008, at 10:00 a.m.,
+lo cal time, at the Wyndham Hotel Greenspoint, 12400 Greenspoint Drive, Houston, Texas, 77060, and
+at any and all adjournments or postponements thereof, with the same force and effect as if the
+undersig ned were personally present. The undersigned hereby instructs the above-named proxies to
+vote the shares represented by this proxy in the manner as directed by the undersigned on the
+reverse side of this proxy card. If no dir ections are made, the Proxies will vote “FOR” the
+nominees for dir ectors, “FOR” the approval of the amendment to the Patterson — UTI 2005 Long-Term
+Incentiv e Plan and “FOR” the ratific atio n of the selection of PricewaterhouseCoopers LLP as set
+forth on the reverse side. Please mark, sign, date and return this proxy card promptly using the
+enclosed envelope, or follow the instructions on the reverse side to vote your shares by Internet
+or by telephone. (continued on the reverse side)
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950134-08-007299/proxy_rpt.txt b/raw/proxies/0000889900/0000950134-08-007299/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..62c18181dddc029d81f5591ac1cdb7e14e357689
--- /dev/null
+++ b/raw/proxies/0000889900/0000950134-08-007299/proxy_rpt.txt
@@ -0,0 +1,27 @@
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater beneficial
+ownership interest or in which they are an executive officer,
+general partner, principal or engaged in a similar position.
+Certain related person transactions have been pre-approved under
+the terms of the policy, including, subject to certain
+exceptions and limitations, the personal use of the
+Patterson-UTI airplane by executive officers, co-investment in
+oil and gas properties by Mr. Talbott and other persons
+related to him, and the sale to or purchase from Patterson-UTI
+of goods and services by entities related to directors in the
+ordinary course of business that are immaterial to Patterson-UTI
+and with respect to which the director has no direct economic
+interest or decision making authority.
+27
+Table of Contents 
+SECURITY
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950134-09-007684/proxy.txt b/raw/proxies/0000889900/0000950134-09-007684/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..703e231a39938c7da294116008c7130e7c889bb6
--- /dev/null
+++ b/raw/proxies/0000889900/0000950134-09-007684/proxy.txt
@@ -0,0 +1,3185 @@
+DEF 14A
+1
+d67252ddef14a.htm
+DEF 14A
+def14a 
+Table of Contents 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the Securities 
+Exchange Act of 1934 (Amendment No. )
+Filed by the Registrant
+þ 
+Filed by a Party other than the Registrant
+o 
+Check the appropriate box: 
+o Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by
+Rule 14a-6(e)(2)) 
+þ Definitive Proxy Statement 
+o Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+Patterson-UTI Energy,
+Inc. 
+(Name
+of Registrant as Specified In Its Charter) 
+(Name
+of Person(s) Filing Proxy Statement, if other than the
+Registrant) 
+Payment of Filing Fee (Check the appropriate box):
+þ No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
+0-11. 
+1) Title of each class of securities to which transaction applies: 
+2) Aggregate number of securities to which transaction applies: 
+3) Per unit price or other underlying value of transaction computed
+pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+4) Proposed maximum aggregate value of transaction: 
+5) Total fee paid: 
+o Fee paid previously with preliminary materials. 
+o Check box if any part of the fee is offset as provided by Exchange Act
+Rule 0-11(a)(2) and identify the filing for which the offsetting fee
+was paid previously. Identify the previous filing by registration
+statement number, or the Form or Schedule and the date of its filing. 
+1) Amount Previously Paid: 
+2) Form, Schedule or Registration Statement No.: 
+3) Filing Party: 
+4) Date Filed: 
+Table of Contents 
+April 16,
+2009
+Dear Stockholder:
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual
+meeting will be held Wednesday, June 3, 2009, at
+10:00 a.m., local time, at the Hilton Houston North Hotel,
+12400 Greenspoint Drive, Houston, Texas 77060.
+This year we are pleased to take advantage of Securities and
+Exchange Commission rules that allow us to furnish these proxy
+materials and our annual report primarily over the Internet. We
+believe that posting these materials on the Internet enables us
+to provide stockholders with the information that they need
+quickly, while lowering our costs of printing and delivery and
+conserving natural resources. We encourage you to vote via the
+Internet and follow the links to our proxy statement and annual
+report, which are both available at www.proxyvote.com.
+For those stockholders who have elected to receive their proxy
+materials in the mail, please review our proxy statement and
+annual report and vote via the Internet, by telephone or using
+your proxy card.
+Your vote is important to us. Please review your proxy materials
+carefully and send in your vote today.
+Thank you for your support.
+Sincerely,
+Mark S. Siegel
+Douglas J. Wall
+Chairman of the Board 
+President and Chief Executive Officer 
+TABLE OF CONTENTS 
+NOTICE OF 2009 ANNUAL MEETING OF STOCKHOLDERS To Be Held June 3, 2009 
+ANNUAL MEETING OF STOCKHOLDERS To Be Held June 3, 2009 
+GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+PROPOSAL NO. 1 ELECTION OF DIRECTORS 
+Meetings and Committees of the Board of Directors 
+Communication with the Board and its Independent Members 
+Corporate Governance Documents Available on Patterson-UTI’s Website 
+PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+EXECUTIVE OFFICERS 
+COMPENSATION DISCUSSION AND ANALYSIS 
+Overview 
+Elements of Compensation 
+Share Ownership Guidelines 
+Change in Control and Severance Agreements 
+Section 162(m) Considerations 
+COMPENSATION COMMITTEE REPORT 
+Summary Compensation Table 
+Grants of Plan-Based Awards 
+Outstanding Equity Awards at Fiscal Year-End 
+Option Exercises and Stock Vested 
+DIRECTOR COMPENSATION 
+Director Compensation Table 
+CHANGE IN CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+CERTAIN TRANSACTIONS 
+SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 
+AUDIT COMMITTEE REPORT 
+PricewaterhouseCoopers Fees for Fiscal Years 2008 and 2007 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Other Business 
+Stockholder Proposals for 2010 Annual Meeting 
+Annual Report 
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+NOTICE OF
+2009 ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 3, 2009 
+The 2009 annual meeting of the stockholders of Patterson-UTI
+Energy, Inc., a Delaware corporation
+(“Patterson-UTI”), will be held Wednesday,
+June 3, 2009, at 10:00 a.m., local time, at the Hilton
+Houston North Hotel, 12400 Greenspoint Drive, Houston, Texas
+77060 (the “Meeting”), for the following purposes:
+• 
+to elect seven directors to the Board of Directors of
+Patterson-UTI to serve until the next annual meeting of the
+stockholders or until their respective successors are elected
+and qualified;
+• 
+to ratify the selection of PricewaterhouseCoopers LLP as the
+independent registered public accounting firm of Patterson-UTI
+for the fiscal year ending December 31, 2009; and
+• 
+transact such other business as may properly come before the
+Meeting or any adjournment or postponement thereof.
+Stockholders of record at the close of business on April 6,
+2009 are entitled to vote at the Meeting and any adjournment or
+postponement thereof.
+Your vote is important to us. Whether or not you plan to attend
+the Meeting in person, we urge you to promptly vote your shares
+via the Internet, by telephone, or if the accompanying proxy
+statement was mailed to you, by completing, signing, dating and
+returning your proxy card as soon as possible in the enclosed
+postage prepaid envelope.
+By order of the Board of Directors
+William L. Moll, Jr.
+General Counsel and Secretary 
+April 16, 2009
+Table of Contents 
+PATTERSON-UTI
+ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+PROXY
+STATEMENT 
+ANNUAL
+MEETING OF STOCKHOLDERS 
+To Be Held June 3, 2009 
+GENERAL
+INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 
+The Board of Directors (the “Board” or “Board of
+Directors”) of Patterson-UTI Energy, Inc., a Delaware
+corporation (“Patterson-UTI”), has made these proxy
+materials available to you on the Internet, or, upon your
+request has delivered printed versions of these materials to you
+by mail. Patterson-UTI is furnishing this proxy statement in
+connection with the solicitation by the Board of Directors of
+proxies to be voted at the 2009 annual meeting of stockholders
+of Patterson-UTI (the “Meeting”). The Meeting will be
+held Wednesday, June 3, 2009, at 10:00 a.m., local
+time, at the Hilton Houston North Hotel, 12400 Greenspoint
+Drive, Houston, Texas 77060, or at any adjournment thereof. The
+Notice of Internet Availability of Proxy Materials (the
+“Notice”) was mailed to each of Patterson-UTI’s
+stockholders (other than those who previously requested
+electronic delivery) entitled to vote at the Meeting on or about
+April 20, 2009.
+Pursuant to the “notice and access” rules adopted by
+the Securities and Exchange Commission (the “SEC”),
+Patterson-UTI has elected to provide stockholders access to its
+proxy materials over the Internet. Accordingly, Patterson-UTI
+sent a Notice to all of its stockholders as of the record date.
+The Notice includes instructions on how to access
+Patterson-UTI’s proxy materials over the Internet and how
+to request a printed copy of these materials. In addition, by
+following the instructions in the Notice, stockholders may
+request to receive proxy materials in printed form by mail or
+electronically by email on an ongoing basis.
+Choosing to receive your future proxy materials by email will
+save us the cost of printing and mailing documents to you and
+will help conserve natural resources. If you choose to receive
+future proxy materials by email, you will receive an email next
+year with instructions containing a link to those materials and
+a link to the proxy voting site. Your election to receive proxy
+materials by email will remain in effect until you
+terminate it.
+If your shares are registered directly in your name with our
+transfer agent, Continental Stock Transfer &
+Trust Company, you are considered the “stockholder of
+record” with respect to those shares, and the Notice was
+sent directly to you.
+If your shares are held in an account at a brokerage firm, bank,
+broker-dealer, or other similar organization, then you are the
+beneficial owner of shares held in “street name,” and
+the Notice was forwarded to you by that organization. As a
+beneficial owner, you have the right to direct that organization
+on how to vote the shares held in your account.
+Whether you are a “stockholder of record” or hold your
+shares in “street name,” you may direct your vote
+without attending the Meeting in person.
+If you are a stockholder of record, you may vote by Internet or
+by telephone by following the instructions on the Notice. If you
+request printed copies of the proxy materials by mail, you may
+also vote by signing and submitting your proxy card and
+returning by mail or by submitting your vote by telephone. You
+should sign your name exactly as it appears on the proxy card.
+If you are signing in a representative capacity (for example, as
+guardian, executor, trustee, custodian, attorney or officer of a
+corporation), you should indicate your name and title or
+capacity.
+If you are the beneficial owner of shares held in street name,
+you may be eligible to vote your shares electronically over the
+Internet or by telephone by following the instructions on the
+Notice. If you request printed copies of the proxy materials by
+mail, you may also vote by signing the voter instruction card
+provided by your bank
+Table of Contents 
+or broker and returning it by mail. If you provide specific
+voting instructions by mail, telephone or the Internet, your
+shares will be voted by your broker or nominee as you have
+directed.
+Properly submitted proxies received either by mail, Internet,
+telephone or in person, in time to be counted for the Meeting
+will be voted as you have directed in your proxy, unless you
+revoke your proxy in the manner provided below. As to any matter
+for which you give no direction in your proxy, your shares will
+be voted as follows:
+• 
+“FOR” the election of all of the nominees to the Board
+of Directors;
+• 
+“FOR” the ratification of PricewaterhouseCoopers LLP
+as the independent registered public accounting firm of
+Patterson-UTI for the fiscal year ending December 31,
+2009; and
+• 
+“FOR” or “AGAINST” any other proposals that
+may be properly submitted at the Meeting at the discretion of
+the persons named in the proxy.
+If you are a stockholder of record, you may revoke your proxy
+before the proxy is voted by either:
+• 
+submitting a new proxy with a later date, including a proxy
+submitted by the Internet or by telephone, in time to be counted
+for the meeting;
+• 
+notifying the Secretary of Patterson-UTI in writing before the
+Meeting that you have revoked your proxy; or
+• 
+attending the Meeting and voting in person.
+If your shares are held in street name, you must obtain a proxy
+executed in your favor from the stockholder of record (that is,
+your brokerage firm, bank, broker-dealer or similar
+organization) to be able to vote at the Meeting.
+The Board of Directors is making this solicitation.
+Patterson-UTI’s officers and other employees, without
+compensation other than regular compensation, may solicit
+proxies by mail, email, the Internet, telephone, electronic
+means and personal interview. Patterson-UTI does not intend to
+retain a proxy solicitation firm to assist in the solicitation
+of proxies of stockholders, but may do so if circumstances
+warrant. Patterson-UTI will pay all costs associated with this
+solicitation.
+SHARES
+OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of Patterson-UTI’s common
+stock, $.01 par value per share (the “Common
+Stock”), at the close of business on April 6, 2009 are
+entitled to notice of and to vote at the Meeting or any
+adjournment or postponement thereof. At the close of business on
+April 6, 2009, there were 153,100,199 shares of Common
+Stock issued and outstanding. Holders of record of Common Stock
+on April 6, 2009 will be entitled to one vote per share on
+all matters to properly come before the Meeting. A list of
+stockholders entitled to notice of and to vote at the Meeting
+will be made available during regular business hours at the
+offices of Patterson-UTI Energy, Inc., 450 Gears Road,
+Suite 500, Houston, Texas 77067, from May 19, 2009
+through June 2, 2009 and at the Meeting for examination by
+any stockholder for any purpose germane to the Meeting.
+A quorum is necessary to transact business at the Meeting. A
+majority of the shares of Common Stock outstanding on
+April 6, 2009 will constitute a quorum. The shares held by
+each stockholder who attends the Meeting in person, signs and
+timely returns the form of proxy or properly votes using the
+Internet or telephone will be counted for purposes of
+determining the presence of a quorum at the Meeting.
+PROPOSAL NO. 1 
+ELECTION
+OF DIRECTORS 
+Patterson-UTI’s bylaws provide that the number of members
+of the Board of Directors shall be fixed either by amendment to
+the bylaws or by resolution of the Board of Directors. Directors
+are elected to serve until the next annual meeting of
+stockholders and until their successors are elected and
+qualified. Patterson-UTI’s bylaws provide that the
+affirmative vote of a plurality of the votes cast at the meeting
+at which a quorum is present is required for the election of
+directors. Shares as to which a stockholder withholds authority
+to vote on the election of directors and shares as to which a
+broker indicates that it does not have discretionary authority
+to vote on the election of directors
+2
+Table of Contents 
+will not be counted as voting thereon and will not affect the
+election of the nominees receiving a plurality of the votes cast.
+The enclosed form of proxy provides a means for you to either:
+• 
+vote “FOR” the election of the nominees to the Board
+of Directors listed below,
+• 
+withhold authority to vote for one or more of the
+nominees, or
+• 
+withhold authority to vote for all of the nominees.
+The Board of Directors recommends that you vote
+“FOR” all of the nominees. Unless you
+give contrary instructions in your proxy, your proxy will be
+voted “FOR” the election of all of the nominees to the
+Board of Directors. If any nominee should become unable or
+unwilling to accept nomination or election, the person acting
+under the proxy will vote for the election of such other person
+as the Board of Directors may recommend. The Board has no
+reason, however, to believe that any of the nominees will be
+unable or unwilling to serve if elected.
+There are no arrangements or understandings between any person
+and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no
+family relationships among any of the directors or executive
+officers of Patterson-UTI.
+Set forth below is the name, age, position and a brief
+description of the business experience during at least the past
+five years of each of the members of Patterson-UTI’s Board
+of Directors. Each current member of Patterson-UTI’s Board
+of Directors is a nominee for election to the Board of Directors.
+Name 
+Age 
+Position 
+Mark S. Siegel
+58
+Chairman of the Board and Director
+Kenneth N. Berns
+49
+Senior Vice President and Director
+Charles O. Buckner
+64
+Director
+Curtis W. Huff
+51
+Director
+Terry H. Hunt
+60
+Director
+Kenneth R. Peak
+63
+Director
+Cloyce A. Talbott
+73
+Director
+Mark S. Siegel — Mr. Siegel has served as
+Chairman of the Board and as a director of Patterson-UTI since
+May 2001. Mr. Siegel served as Chairman of the Board
+and as a director of UTI Energy Corp. (“UTI”) from
+1995 to May 2001, when UTI merged with and into Patterson-UTI.
+Mr. Siegel has been President of REMY
+Investors & Consultants, Incorporated (“REMY
+Investors”) since 1993. From 1992 to 1993, Mr. Siegel
+was President, Music Division, Blockbuster Entertainment Corp.
+From 1988 through 1992, Mr. Siegel was an Executive Vice
+President of Shamrock Holdings, Inc., a private investment
+company, and Managing Director of Shamrock Capital Advisors,
+Incorporated. Mr. Siegel holds a Bachelor of Arts degree
+from Colgate University and a J.D. from the University of
+California, Berkeley (Boalt Hall) School of Law.
+Kenneth N. Berns — Mr. Berns has served as
+Senior Vice President of Patterson-UTI since April 2003 and as a
+director of Patterson-UTI since May 2001. Mr. Berns served
+as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns
+holds a Bachelors Degree in Business Administration from
+San Diego State University and a Masters Degree in Taxation
+from Golden Gate University.
+Charles O. Buckner — Mr. Buckner has
+served as a director of Patterson-UTI since February 2007.
+Mr. Buckner, a private investor, retired from the public
+accounting firm of Ernst & Young LLP in 2002 after
+35 years of service in a variety of client service and
+administrative roles, including chairmanship of
+Ernst & Young’s United States energy practice. He
+presently serves as a director of Gateway Energy Corporation, a
+public company in the oil and gas pipeline business.
+Mr. Buckner is a Certified Public Accountant and holds a
+Bachelor of Business Administration from the University of Texas
+and a Masters of Business Administration from the University of
+Houston.
+Curtis W. Huff — Mr. Huff has served as a
+director of Patterson-UTI since May 2001 and served as a
+director of UTI from 1997 to May 2001. Mr. Huff is the
+President and Chief Executive Officer of Freebird Investments
+LLC, a
+3
+Table of Contents 
+private investment company, and has served in that capacity
+since October 2002. Mr. Huff is also a Managing Director of
+Intervale Capital, an oilfield service private equity firm that
+Mr. Huff co-founded in 2006. Mr. Huff served as the
+President and Chief Executive Officer of Grant Prideco, Inc., a
+provider of drill pipe and other drill stem products, from
+February 2001 to June 2002. From January 2000 to February 2001,
+Mr. Huff served as Executive Vice President, Chief
+Financial Officer and General Counsel of Weatherford
+International, Inc., an oilfield services company. He served as
+Senior Vice President and General Counsel of Weatherford from
+May 1998 to January 2000. Prior to that time, Mr. Huff was
+a partner with the law firm of Fulbright & Jaworski
+L.L.P. and held that position for more than five years.
+Mr. Huff holds a Bachelor of Arts degree and Juris
+Doctorate from the University of New Mexico and a Masters of Law
+from New York University School of Law.
+Terry H. Hunt — Mr. Hunt has served as a
+director of Patterson-UTI since April 2003 and served as a
+director of UTI from 1994 to May 2001. Mr. Hunt is an
+energy consultant and investor. Mr. Hunt served as Senior
+Vice President — Strategic Planning of PPL
+Corporation, an international energy and utility holding
+company, from 1998 to 2000. Mr. Hunt served as the
+President and Chief Executive Officer of Penn Fuel Gas, Inc., a
+natural gas and propane distribution company, from 1992 to 1999.
+Previously, Mr. Hunt was President and Chairman of Carnegie
+Natural Gas Company, a gas distribution and transmission
+company, and of Apollo Gas Company, a natural gas distributor.
+Mr. Hunt holds a Bachelor of Engineering degree from the
+University of Saskatchewan, Canada and a Masters of Business
+Administration from Southern Methodist University.
+Kenneth R. Peak — Mr. Peak has served as a
+director of Patterson-UTI since November 2000. Mr. Peak has
+served as Chairman and Chief Executive Officer of Contango
+Oil & Gas Company since September 1999. Mr. Peak
+entered the energy industry in 1972 as a commercial banker and
+has held a variety of financial and executive positions in the
+oil and gas industry prior to starting Contango in 1999.
+Mr. Peak served as an officer in the U.S. Navy from
+1968 to 1971. Mr. Peak received a Bachelor of Science in
+Physics from Ohio University in 1967 and a Masters of Business
+Administration from Columbia University in 1972.
+Cloyce A. Talbott — Mr. Talbott has served
+as a director of Patterson-UTI since its incorporation in 1978.
+Mr. Talbott co-founded Patterson-UTI and has served in
+various capacities, including as its Chief Executive Officer
+from 1983 until his retirement from that position on
+September 30, 2007. He also served as Chairman of the Board
+from 1983 to May 2001. Mr. Talbott is currently employed as
+a consultant by Patterson-UTI. Mr. Talbott holds a Bachelor
+of Science degree in petroleum engineering from Texas Tech
+University.
+Meetings
+and Committees of the Board of Directors 
+The Board of Directors met seven times during the year ended
+December 31, 2008. Each director attended, in person or by
+telephone, at least 75% of the aggregate of all meetings held by
+the Board and meetings of each committee on which such director
+served. A majority of the members of the Board of Directors are
+independent within the meaning of the NASDAQ Stock Market, Inc.
+(“NASDAQ”) listing standards. Specifically, the Board
+has determined that Messrs. Buckner, Huff, Hunt and Peak
+are independent within the meaning of the NASDAQ listing
+standards. In reaching this conclusion, the Board considered
+that Mr. Huff controls and manages two investment
+companies, which have interests in oilfield service portfolio
+companies that supply parts and equipment to Patterson-UTI in
+the ordinary course of their businesses consistent with
+customary terms in the industry. The Board has determined that
+these transactions are not material to such companies,
+Patterson-UTI or Mr. Huff and that such transactions do not
+affect Mr. Huff’s independence under applicable rules
+and regulations.
+The Board of Directors has established four standing committees,
+an Executive Committee, an Audit Committee, a Compensation
+Committee and a Nominating and Corporate Governance Committee.
+The Executive Committee, which currently is composed of
+Messrs. Siegel, Talbott and Berns, has the authority, to
+the extent permitted by applicable law, to act for the Board in
+all matters arising between regular or special meetings of the
+Board of Directors.
+The Audit Committee members are Messrs. Huff (chairman),
+Buckner and Hunt, each of whom is independent within the meaning
+of applicable Securities Exchange Act of 1934, as amended (the
+“Exchange Act”), rules and within the meaning of the
+NASDAQ listing standards. The Audit Committee oversees
+management’s conduct of Patterson-UTI’s accounting and
+financial reporting process, including review of the financial
+reports and other
+4
+Table of Contents 
+financial information provided by Patterson-UTI to the public
+and government and regulatory bodies, Patterson-UTI’s
+system of internal accounting, Patterson-UTI’s financial
+controls, and the annual independent audit of
+Patterson-UTI’s financial statements. The Audit Committee
+also oversees compliance with Patterson-UTI’s codes of
+conduct and ethics and with legal and regulatory requirements.
+The Board has determined that Messrs. Huff and Buckner are
+“audit committee financial experts” within the meaning
+of applicable SEC rules. The Audit Committee selects the
+independent registered public accounting firm to audit
+Patterson-UTI’s books and records and considers and acts
+upon accounting matters as they arise. The Board of Directors
+has adopted a written charter for the Audit Committee. The Audit
+Committee held seven meetings during the year ended
+December 31, 2008. Please see “Audit Committee
+Report” elsewhere in this proxy statement.
+The Compensation Committee members are Messrs. Peak
+(chairman), Buckner and Huff, each of whom is independent as
+defined in the NASDAQ listing standards. Among other things, the
+Compensation Committee sets and administers the policies that
+govern the compensation of executive officers and directors of
+Patterson-UTI. The Board of Directors has adopted a written
+charter for the Compensation Committee. The Compensation
+Committee held four meetings during the year ended
+December 31, 2008. Please see “Compensation Discussion
+and Analysis” and “Compensation Committee Report”
+elsewhere in this proxy statement for further information about
+the Compensation Committee.
+The Nominating and Corporate Governance Committee members are
+Messrs. Hunt (chairman), Huff and Peak, each of whom is
+independent as defined in the NASDAQ listing standards. The
+purpose of the Nominating and Corporate Governance Committee is
+to identify individuals qualified to become Board members, to
+recommend for selection by the Board director nominees for the
+next annual meeting of stockholders, to review
+Patterson-UTI’s Code of Business Conduct, to develop and
+continually make recommendations with respect to the best
+corporate governance principles and to oversee the evaluation of
+the Board and management. The Board of Directors has adopted a
+written charter for the Nominating and Corporate Governance
+Committee. The Nominating and Corporate Governance Committee
+held one meeting during the year ended December 31, 2008.
+All of the director nominees are existing directors of
+Patterson-UTI standing for re-election to the Board of Directors.
+On behalf of the Board, the Nominating and Governance Committee
+considers director nominees recommended by Patterson-UTI’s
+stockholders if the recommendations are made in accordance with
+all legal requirements, including applicable provisions of
+Patterson-UTI’s restated certificate of incorporation and
+bylaws. In accordance with Patterson-UTI’s bylaws, in
+addition to any other applicable requirements, nominations of
+persons for election to the Board may be made at a meeting of
+stockholders only by or at the direction of the Board or by a
+stockholder who is a stockholder of record on the date of the
+giving of the notice provided for below and on the record date
+for the determination of stockholders entitled to vote at such
+annual meeting and gives timely notice of such nomination in
+writing to the Secretary of Patterson-UTI. To be timely with
+respect to the 2010 annual meeting of stockholders, a
+stockholder’s notice must be delivered to or mailed and
+received at Patterson-UTI’s principal executive offices not
+earlier than February 3, 2010 and not later than
+March 5, 2010; provided, however, that in the event that
+the annual meeting is called for a date that is not within
+30 days before or after June 3, 2010, notice by the
+stockholder must be received not later than the close of
+business on the tenth day following the day on which such notice
+of the date of the meeting was mailed or public disclosure of
+the annual meeting date was made, whichever occurs first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+as to each person whom the stockholder proposes to nominate for
+election or re-election as director, all information relating to
+such person that is required to be disclosed in solicitations of
+proxies for election of directors, or is otherwise required, in
+each case pursuant to Regulation 14A promulgated under the
+Exchange Act, or any successor regulation thereto,
+• 
+the name and record address of the stockholder proposing such
+nomination,
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+5
+Table of Contents 
+• 
+a description of all arrangements or understandings between such
+stockholder and each proposed nominee and any other person or
+persons (including their names) pursuant to which the nomination
+or nominations are to be made by such stockholder, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the meeting to nominate the persons named
+in the notice.
+Such notice must be accompanied by a written consent of each
+proposed nominee to being named as a nominee and to serve as a
+director if elected.
+The Nominating and Corporate Governance Committee determines
+qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of
+Patterson-UTI. The Nominating and Corporate Governance Committee
+relies on the knowledge and relationships of Patterson-UTI and
+its officers and directors, as well as third parties when it
+deems appropriate, to identify and evaluate nominees for
+director, including nominees recommended by stockholders.
+Communication
+with the Board and its Independent Members 
+Persons may communicate with the Board, or directly with its
+Chairman, Mr. Siegel, by submitting such communication in
+writing in care of Chairman of the Board of Directors,
+Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500,
+Houston, Texas 77067. Persons may communicate with the
+independent members of the Board by submitting such
+communication in writing to the Nominating and Corporate
+Governance Committee of the Board of Directors of Patterson-UTI
+Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas
+77067.
+Although Patterson-UTI does not have a formal policy regarding
+attendance by members of the Board at its annual meetings of
+stockholders, directors are invited to attend annual meetings of
+Patterson-UTI stockholders. All directors attended the 2008
+annual meeting of stockholders with one director attending in
+person and the remaining directors attending via telephone.
+Corporate
+Governance Documents Available on Patterson-UTI’s
+Website 
+Copies of each of the following documents can be accessed
+electronically in the “Governance” section of the
+Patterson-UTI website at www.patenergy.com and in print
+to any stockholder who requests them from the Secretary of
+Patterson-UTI:
+• 
+Audit Committee Charter;
+• 
+Compensation Committee Charter;
+• 
+Nominating and Corporate Governance Committee Charter;
+• 
+Code of Business Conduct for its employees, officers and
+directors; and
+• 
+Code of Business Conduct and Ethics for Senior Financial
+Executives.
+PROPOSAL NO. 2 
+RATIFICATION
+OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as
+independent registered public accounting firm to audit the
+financial statements of Patterson-UTI for the fiscal year ending
+December 31, 2009, and directed that such engagement be
+submitted to the stockholders of Patterson-UTI for ratification.
+In recommending ratification by the stockholders of such
+engagement, the Board of Directors is acting upon the
+recommendation of the Audit Committee, which has satisfied
+itself as to PricewaterhouseCoopers LLP’s independence,
+professional competence and standing. Although ratification by
+stockholders of the engagement of PricewaterhouseCoopers LLP is
+not required by Delaware corporate law or Patterson-UTI’s
+restated certificate of incorporation or bylaws, the Audit
+Committee believes a decision of this nature should be made with
+the consideration of Patterson-UTI’s stockholders. If the
+stockholders fail to ratify the appointment, the Audit Committee
+will reconsider whether to retain PricewaterhouseCoopers LLP and
+may retain that firm or another without re-submitting the matter
+to our
+6
+Table of Contents 
+stockholders. Even if the appointment is ratified, the Audit
+Committee may, in its discretion, direct the appointment of a
+different independent registered public accounting firm at any
+time during the year if it determines that such change would be
+in the best interests of Patterson-UTI and its stockholders.
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and
+will be given the opportunity to make a statement if they so
+desire. It also is expected that the representative(s) will be
+available to respond to appropriate questions from the
+stockholders.
+The Board of Directors recommends a vote “FOR” the
+ratification of PricewaterhouseCoopers LLP as
+Patterson-UTI’s independent registered public accounting
+firm. Ratification of the selection of
+PricewaterhouseCoopers LLP requires the affirmative vote of the
+holders of a majority of the shares of Common Stock present in
+person or by proxy, and entitled to vote at the Meeting. Unless
+you give contrary instructions in your proxy, your proxy will be
+voted “FOR” such ratification. Abstentions will be
+counted as shares entitled to vote on the proposal and will have
+the same effect as a vote “AGAINST” the proposal. A
+broker non-vote will be counted for purposes of establishing a
+quorum, but will not be treated as a share entitled to vote on
+the proposal.
+EXECUTIVE
+OFFICERS 
+Set forth below is the name, age and position followed by a
+brief description of the business experience during at least the
+past five years for each executive officer of Patterson-UTI who
+is not also a member of the Board of Directors.
+Name 
+Age 
+Position 
+Douglas J. Wall
+56
+President and Chief Executive Officer
+John E. Vollmer III
+53
+Senior Vice President — Corporate Development, Chief
+Financial Officer and Treasurer
+William L. Moll, Jr. 
+42
+General Counsel and Secretary
+Gregory W. Pipkin
+37
+Chief Accounting Officer and Assistant Secretary
+Douglas J. Wall — Mr. Wall has served as
+President and Chief Executive Officer of Patterson-UTI since
+October 1, 2007. From April through September 2007 he
+served as Chief Operating Officer of Patterson-UTI. From 2005 to
+April 2007, Mr. Wall served as Group President, Completion
+and Production of Baker Hughes Incorporated, an oilfield service
+company. In that capacity, Mr. Wall was responsible for the
+combined activities of Baker Oil Tools, Baker Petrolite,
+Centrilift and ProductionQuest divisions. From 2003 to 2005 he
+served as President of Baker Oil Tools, a division of Baker
+Hughes, and from 1997 to 2003 he served as President of Hughes
+Christensen Company, a division of Baker Hughes. Mr. Wall
+holds a Bachelor Degree in Economics from the University of
+Calgary and a Masters of Business Administration in Finance and
+Marketing from the University of Alberta.
+John E. Vollmer III — Mr. Vollmer has
+served as Chief Financial Officer and Treasurer of Patterson-UTI
+since November 2005 and Senior Vice President —
+Corporate Development of Patterson-UTI since May 2001.
+Mr. Vollmer also served as Secretary of Patterson-UTI from
+November 2005 to February 2007. Mr. Vollmer served as
+Senior Vice President, Chief Financial Officer, Secretary and
+Treasurer of UTI from 1998 to May 2001. From 1992 until 1997,
+Mr. Vollmer served in a variety of capacities at
+Blockbuster Entertainment, including Senior Vice
+President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division.
+Mr. Vollmer holds a Bachelor of Arts in Accounting from
+Michigan State University.
+William L. Moll, Jr. — Mr. Moll has
+served as General Counsel and Secretary of Patterson-UTI since
+February 2007. From July 2006 to February 2007, Mr. Moll
+served as Vice President and Counsel of Stewart &
+Stevenson LLC, an oilfield equipment manufacturing company. From
+January 1996 to July 2006, Mr. Moll served in a variety of
+capacities in the legal department of Stewart &
+Stevenson Services, Inc., an equipment manufacturing company,
+including Deputy General Counsel from March 2005 to July 2006
+and Managing Attorney from September 2001 to March 2005. From
+September 1991 to January 1996, Mr. Moll was an associate
+with the law firm of Andrews & Kurth LLP.
+Mr. Moll holds a Bachelor of Business Administration in
+Accounting from the University of Texas and a J.D. from the
+University of Houston Law Center.
+7
+Table of Contents 
+Gregory W. Pipkin — Mr. Pipkin has served
+as Chief Accounting Officer and Assistant Secretary of
+Patterson-UTI 
+since August 2007. From June 2006 to August 2007,
+Mr. Pipkin served as Director of Financial Reporting of
+Patterson-UTI. From April 2001 through May 2006, Mr. Pipkin
+was Controller and Vice President of Accounting and Reporting
+for Alamosa Holdings, Inc., a publicly traded wireless
+telecommunications company. Prior to April 2001, Mr. Pipkin
+was in the practice of public accounting. Mr. Pipkin is a
+Certified Public Accountant and holds a Bachelor of Business
+Administration in Accounting from Texas Tech University.
+COMPENSATION
+DISCUSSION AND ANALYSIS 
+Overview 
+Compensation
+Committee 
+The Compensation Committee (the “Committee”) sets and
+administers the policies that govern the compensation of
+executive officers and directors of Patterson-UTI. As part of
+its duties, the Committee determines the compensation of
+Patterson-UTI’s executive officers who are named in the
+Summary Compensation Table appearing elsewhere in this proxy
+statement (the “Named Executive Officers”) and grants
+all awards of restricted stock and stock options under
+Patterson-UTI’s long-term incentive plan.
+The Committee currently consists of Messrs. Peak
+(chairman), Buckner and Huff, each of whom is an independent
+director as defined by the NASDAQ listing standards.
+Compensation
+Objectives 
+The Committee’s objectives are to provide to the Named
+Executive Officers competitive compensation packages that will
+permit Patterson-UTI to attract and retain highly qualified
+individuals and to motivate and reward the Named Executive
+Officers for performance that benefits Patterson-UTI and its
+stockholders.
+Role
+of Management and Compensation Consultant 
+All compensation decisions with respect to the Named Executive
+Officers of Patterson-UTI are made solely by the Committee. The
+Committee is permitted under its charter to delegate any of its
+powers to a subcommittee of the Committee. In performing its
+duties, the Committee considers input from senior management on
+individual performance and compensation matters.
+In determining compensation for the Named Executive Officers for
+2008, the Committee considered a variety of information,
+including (1) compensation for executive officers at
+similarly situated oilfield service companies,
+(2) historical and projected financial and operational
+results at Patterson-UTI, including margins achieved, rig
+utilization, net income and earnings before interest, taxes,
+depreciation and amortization (“EBITDA”) and return on
+equity and assets, (3) historical stock performance,
+(4) operational and strategic objectives of Patterson-UTI
+and (5) individual performance.
+For 2008, the Committee engaged Towers Perrin, an independent
+compensation consultant, who reported directly to the Committee
+to evaluate and make recommendations to the Committee regarding
+Patterson-UTI’s executive compensation philosophy and
+practices. Towers Perrin reviewed the executive salaries,
+non-equity incentive compensation and long-term incentives for
+competitiveness with similarly situated oilfield service
+companies. Towers Perrin was provided a proposed representative
+peer group within the oilfield services industry based on
+various criteria and was provided information as to the
+responsibilities of the members of Patterson-UTI’s
+executive team in relationship to its peers. Towers Perrin also
+analyzed Patterson-UTI’s share utilization as compared to
+its peers for purposes of assessing dilution resulting from
+awards under Patterson-UTI’s incentive plans. Towers Perrin
+was asked to provide its advice as to Patterson-UTI’s
+incentive plans and the Committee’s proposed compensation
+of the Named Executive Officers and the reasonableness of that
+compensation.
+For 2008, the Committee reviewed compensation data from the
+following peer group of companies: BJ Services Company, Cameron
+International Corporation, Diamond Offshore Drilling Inc., Ensco
+International Inc., FMC Technologies Inc., Helmerich &
+Payne Inc., Nabors Industries Ltd., National Oilwell Varco Inc.,
+Noble Corp.,
+8
+Table of Contents 
+Pride International, Inc., Rowan Companies Inc., Smith
+International Inc., Transocean Inc. and Weatherford
+International Ltd.
+Elements
+of Compensation 
+Patterson-UTI’s compensation program for its Named
+Executive Officers includes three primary elements:
+(1) base salary, (2) non-equity incentive compensation
+in the form of cash bonuses and (3) long-term incentive
+opportunities in the form of restricted stock and stock options.
+Below is a summary of each element of compensation. The general
+intent of the base salary for the Named Executive Officers was
+for that compensation to be around the 50th percentile of
+the peer group and for incentive and equity based compensation
+to be above the 75th percentile. These objectives were
+established based on Patterson-UTI’s historical top tier
+performance on returns on assets and equity and long-term share
+value creation as compared to peers.
+Base
+Salary 
+Historically, the Committee has emphasized performance-based
+compensation in the form of non-equity and equity incentive
+compensation and has minimized salary adjustments. From 2004
+through 2006 there were no increases to the base salaries of the
+Named Executive Officers. In February 2007, the base salary of
+Mr. Berns was increased from $215,000 to $265,000. In
+October 2007, upon being named President and Chief Executive
+officer of Patterson-UTI, Mr. Wall’s base salary was
+increased from $450,000 to $600,000. In February 2008, the base
+salary of Mr. Vollmer was increased from $275,000 to
+$350,000.
+The base salaries of Named Executive Officers are reviewed and
+determined annually by the Committee based on
+(i) subjective evaluations of the officer’s functional
+position and specific performance, (ii) assessment of the
+relative importance of each position at Patterson-UTI,
+(iii) a comparison to salary ranges for executives of other
+companies in the oilfield service industry with market,
+financial and operational characteristics similar to those of
+Patterson-UTI, (iv) Patterson-UTI’s financial results
+and position and (v) Patterson-UTI’s performance
+compared to similarly situated companies.
+Non-Equity
+Incentive Compensation 
+The Named Executive Officers have historically received
+non-equity incentive compensation in the form of annual cash
+bonuses designed to put a meaningful portion of total
+compensation at risk. In 2008, non-equity incentive compensation
+for Messrs. Siegel, Wall, Vollmer and Berns was tied to a
+bonus pool based upon Patterson-UTI’s EBITDA. The bonus
+pool was allocated among the four officers pursuant to a
+pre-determined sharing percentage that reflected a team-based
+philosophy as well as the organizational structure of the top
+management team. The bonus pool and allocation are subject to
+modification by the Committee at its discretion. EBITDA has been
+chosen as the performance measure for the annual cash bonus
+because Patterson-UTI believes it is an important measure of
+current year financial performance. Non-equity incentive
+compensation for Mr. Moll during 2008 was determined at the
+discretion of the Committee based on the operating performance
+of the Company and the individual performance of Mr. Moll.
+In 2008, the bonus pool for Messrs. Siegel, Wall, Vollmer
+and Berns, subject to a minimum threshold of $400 million
+of EBITDA, was approximately 0.611 of one percent of
+Patterson-UTI’s EBITDA. The allocation of the bonus pool as
+a percentage of 2008 EBITDA was as follows: 0.222 of one percent
+to Mr. Siegel, 0.167 of one percent to Mr. Wall and
+0.111 of one percent to each of Messrs. Vollmer and Berns.
+While, the Committee did not establish a specific threshold
+bonus amount for each such officer; the Grants of Plan-Based
+Awards table presents a threshold bonus amount for each such
+officer based on an assumed EBITDA at the minimum EBITDA
+threshold of $400 million and the allocation formula. The
+maximum amount that can be awarded to an individual under any
+cash-based performance award granted under the 2005 Plan during
+a 12-month 
+period is $5,000,000. In order to reach this maximum amount,
+EBITDA of $2.25 billion in the case of Mr. Siegel,
+$3.00 billion in the case of Mr. Wall and
+$4.50 billion in the case of Messrs. Vollmer and Berns
+would have been needed. The Committee did not establish a target
+bonus amount. The target bonus amount presented in the Grants of
+Plan-Based Awards table is calculated for the respective officer
+based on Patterson-UTI’s actual EBITDA for the fiscal year
+ended December 31, 2008 and the allocation formula applied
+to the bonus pool for distribution.
+9
+Table of Contents 
+The aggregate bonus pool paid to Messrs. Siegel, Wall,
+Vollmer and Berns for 2008 was $5,013,720 based on
+Patterson-UTI’s 2008 EBITDA of $820,427,000. Based on the
+target allocation above, Mr. Siegel received $1,823,171;
+Mr. Wall received $1,367,378 and Messrs. Vollmer and
+Berns each received $911,586. Consistent with
+Patterson-UTI’s emphasis on performance-based compensation,
+non-equity incentive compensation for 2008 represented a
+significant portion of each Named Executive Officer’s total
+cash compensation from Patterson-UTI for the year.
+The Committee has established a target bonus pool for 2009 for
+Messrs. Siegel, Wall, Vollmer and Berns, subject to a
+minimum EBITDA threshold of $200 million, of approximately
+0.611 of one percent of Patterson-UTI’s EBITDA. The target
+allocation of the bonus pool as a percentage of 2009 EBITDA, is
+as follows: 0.222 of one percent to Mr. Siegel, 0.167 of
+one percent to Mr. Wall and 0.111 of one percent to each of
+Messrs. Vollmer and Berns.
+Long-Term
+Incentive Compensation 
+Long-term incentive compensation for the Named Executive
+Officers consists of both awards of shares of restricted stock
+and options to purchase Common Stock, each of which vest over
+three or four years. Awards of such equity-based compensation
+reflect the Committee’s desire to provide the Named
+Executive Officers with additional incentives by increasing
+their proprietary interest in the success of Patterson-UTI. The
+Committee believes that there should be an emphasis on
+equity-based compensation in order to provide incentives and
+rewards that are closely aligned with stockholders. The
+Committee reviews equity-based compensation of the Named
+Executive Officers on an annual basis.
+Patterson-UTI’s equity-based compensation has historically
+been given significant weight, along with non-equity incentive
+compensation, in the overall compensation package of the Named
+Executive Officers. The allocation of equity-based compensation
+among the Named Executive Officers is made by the Committee
+based on various factors, including the executive’s
+position and contribution to the overall goals and objectives of
+Patterson-UTI. 
+The allocation and mix of equity-based compensation between
+restricted stock and stock options in 2008 followed this
+approach, with an emphasis on stock options over restricted
+stock for the four most highly compensated Named Executive
+Officers in order to ensure that the greatest awards would only
+be earned for increases in Patterson-UTI’s equity value.
+The Committee’s practice has generally been to grant stock
+options
+and/or 
+restricted stock to Named Executive Officers at a meeting
+following the conclusion of Patterson-UTI’s first quarter.
+Such meetings are typically held in conjunction with regular
+quarterly Board meetings that are held prior to
+Patterson-UTI’s public release of quarterly earnings
+information. Options are granted at an exercise price equal to
+the closing price of Patterson-UTI’s stock on the date of
+grant.
+Retirement
+Plans 
+Patterson-UTI offers a 401(k) plan to its employees, including
+its Named Executive Officers. Participants may contribute a
+portion of their base salary to the 401(k) plan, subject to
+federal limits. Patterson-UTI makes matching contributions up to
+four percent of each participant’s eligible base salary.
+The Named Executive Officers of Patterson-UTI are eligible to
+participate in the 401(k) plan on the same basis as other
+employees. Patterson-UTI does not have any other retirement plan.
+Perquisites
+and Personal Benefits 
+No Named Executive Officer received perquisites totaling more
+than $10,000. Accordingly, the perquisites do not meet the
+threshold which would require disclosure in the Summary
+Compensation Table below.
+Share
+Ownership Guidelines 
+The Committee in 2004, with the approval of the Board, enacted
+share ownership guidelines applicable to all executive officers
+and directors of Patterson-UTI. Under these guidelines and
+subject to a four-year phase-in, each of Patterson-UTI’s
+Chairman, Chief Executive Officer and President was required to
+hold shares of Common Stock
+10
+Table of Contents 
+having a value equal to at least five times the officer’s
+base salary and each of Patterson-UTI’s other executive
+officers was required to hold shares of Common Stock having a
+value equal to at least three times the officer’s base
+salary. The Committee also enacted share ownership guidelines
+for directors. Under those guidelines, subject to a four-year
+phase-in, each director of Patterson-UTI was required to hold
+shares of Common Stock having a value equal to at least four
+times the annual base retainer provided to the director. Each of
+the Named Executive Officers and Directors was in compliance
+with these guidelines as of December 31, 2008.
+In April 2009, in response to significant volatility in the
+market price of the Common Stock, the Nominating and Corporate
+Governance Committee modified the share ownership guidelines.
+The modified guidelines require the holding of a minimum number
+of shares of Common Stock rather than a specified dollar value
+of Common Stock. The modified guidelines require officers and
+directors to hold at all times, subject to a four year phase-in
+from the date first elected as an officer or director, at least
+the following number of shares of Common Stock:
+•
+Chairman
+120,000 shares
+•
+President and Chief Executive Officer
+90,000 shares
+•
+Senior Vice Presidents
+60,000 shares
+•
+General Counsel
+7,500 shares
+•
+Chief Accounting Officer
+7,500 shares
+•
+Outside Directors
+10,000 shares
+•
+Non-executive Inside Director
+10,000 shares
+Each of the Named Executive Officers and Directors is in
+compliance with the modified guidelines as of the date of this
+proxy statement.
+Change in
+Control and Severance Agreements 
+Patterson-UTI has entered into change in control agreements with
+its Named Executive Officers as further described elsewhere in
+this proxy statement. The Committee believes that the change in
+control agreements help Patterson-UTI to attract and retain the
+Named Executive Officers by reducing the personal uncertainty
+and anxiety that arises from the possibility of a future
+business combination. The Committee also believes the change in
+control agreements should prevent the Named Executive Officers
+from leaving employment out of concern for the security of their
+jobs or being unable to concentrate on their work.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer pursuant to which
+Patterson-UTI has agreed to pay each such person within ten days
+of the termination of his employment with Patterson-UTI for any
+reason (including voluntary termination by him), an amount in
+cash equal to his annual base salary at the time of such
+termination. Patterson-UTI has entered into a severance
+agreement with Mr. Wall that generally has a three-year
+term and provides for a lump-sum cash payment of $750,000 to be
+payable to Mr. Wall within ten days of the date of a
+qualifying termination of his employment with Patterson-UTI. A
+qualifying termination for Mr. Wall is defined in the
+severance agreement generally as a termination by Patterson-UTI
+for any reason other than cause or, if certain conditions are
+met, a termination by Mr. Wall due to a reduction in his
+annual base salary below a defined threshold amount. Any payment
+made by Patterson-UTI pursuant to these letter agreements or the
+severance agreement will reduce dollar for dollar any payment
+owed to such person, if any, pursuant to the change in control
+agreements discussed above.
+Section 162(m)
+Considerations 
+In considering compensation decisions for the executive
+management of Patterson-UTI, the Committee routinely considers
+the potential effect of Section 162(m) of the Internal
+Revenue Code. Section 162(m) imposes a limitation on
+corporate tax deductions for non-performance based compensation
+to certain officers that exceeds $1 million that can be
+taken by a publicly held corporation for compensation paid to
+certain of its executive officers. The Committee believes that
+tax deduction limitations should not compromise
+Patterson-UTI’s ability to establish and maintain
+appropriate executive compensation programs and reserves the
+right to award non-deductible compensation.
+11
+Table of Contents 
+COMPENSATION
+COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the
+Compensation Discussion and Analysis included in this proxy
+statement required by Item 402(b) of
+Regulation S-K 
+with management and, based upon such review and discussion, the
+Compensation Committee has recommended to the Board that the
+Compensation Discussion and Analysis be included in this proxy
+statement.
+Kenneth R. Peak, Chairman 
+Charles O. Buckner 
+Curtis W. Huff
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2008
+with respect to the Principal Executive Officer, the Principal
+Financial Officer and the other Named Executive Officers of
+Patterson-UTI:
+Summary
+Compensation Table 
+Non-equity 
+Stock 
+Option 
+Incentive plan 
+All Other 
+Salary 
+Bonus 
+Awards 
+Awards 
+Compensation 
+Compensation 
+Total 
+Name and Principal Position(s) 
+Year 
+($) 
+($) 
+($)(1) 
+($)(2) 
+($)(3) 
+($)(4) 
+($) 
+Douglas J. Wall 
+2008
+$
+600,000
+$
+—
+$
+1,314,966
+$
+554,820
+$
+1,367,378
+$
+9,200
+$
+3,846,364
+President & Chief 
+Executive Officer
+2007
+$
+365,625
+$
+1,075,000
+(5)
+$
+1,015,694
+$
+135,444
+$
+—
+$
+—
+$
+2,591,763
+John E. Vollmer III 
+2008
+$
+326,125
+$
+—
+$
+724,222
+$
+987,847
+$
+911,586
+$
+9,200
+$
+2,958,980
+Senior Vice President —
+2007
+$
+275,000
+$
+—
+$
+549,034
+$
+808,411
+$
+1,022,050
+$
+10,735
+$
+2,665,230
+Corporate Development, Chief 
+Financial Officer & Treasurer
+2006
+$
+275,000
+$
+—
+$
+298,959
+$
+759,341
+$
+1,375,000
+$
+6,641
+$
+2,714,941
+Mark S. Siegel 
+2008
+$
+350,000
+$
+—
+$
+1,448,444
+$
+1,975,694
+$
+1,823,171
+$
+—
+$
+5,597,309
+Chairman of the Board
+2007
+$
+350,000
+$
+—
+$
+1,098,069
+$
+1,616,823
+$
+2,044,100
+$
+—
+$
+5,108,992
+2006
+$
+350,000
+$
+—
+$
+597,918
+$
+1,398,886
+$
+2,750,000
+$
+—
+$
+5,096,804
+Kenneth N. Berns 
+2008
+$
+265,000
+$
+—
+$
+724,222
+$
+987,847
+$
+911,586
+$
+—
+$
+2,888,655
+Senior Vice President
+2007
+$
+258,055
+$
+—
+$
+549,034
+$
+808,411
+$
+1,022,050
+$
+—
+$
+2,637,550
+2006
+$
+215,000
+$
+—
+$
+298,959
+$
+699,443
+$
+1,375,000
+$
+—
+$
+2,588,402
+William L. Moll, Jr. 
+2008
+$
+250,000
+$
+50,000
+$
+171,587
+$
+—
+$
+—
+$
+—
+$
+471,587
+General Counsel and Secretary
+2007
+$
+222,538
+$
+100,000
+$
+251,261
+$
+—
+$
+—
+$
+—
+$
+573,799
+(1) 
+Amounts set forth represent the dollar amount of compensation
+expense recognized for financial statement reporting purposes
+for the fiscal years ended December 31, 2008, 2007 and 2006
+in accordance with Statement of Financial Accounting Standards
+No. 123(R) (“FAS 123R”) with respect to
+restricted stock held by the Named Executive Officer. For
+additional information related to the assumptions used and
+valuation of restricted stock, see Note 10 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the fiscal year ended December 31, 2008. 
+(2) 
+Amounts set forth represent the dollar amount of compensation
+expense recognized for financial statement reporting purposes
+for the fiscal years ended December 31, 2008, 2007 and 2006
+in accordance with FAS 123R with respect to stock options
+held by the Named Executive Officer. For additional information
+related to the assumptions used in connection with the valuation
+of stock options using the Black-Scholes option pricing model
+see Note 10 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2008. 
+(3) 
+Represents annual bonuses earned for the fiscal years ended
+December 31, 2008, 2007 and 2006. The bonus plan in each of
+those fiscal years provided for a bonus pool based on EBITDA,
+subject to a minimum EBITDA of $400 million. The bonus pool
+was allocated among the participants based on a pre-determined
+sharing percentage. At the direction of the Compensation
+Committee, the total amount paid out pursuant to the executive
+bonus pool was $5.01 million for 2008, $6.13 million
+for 2007 and $8.25 million for 2006. 
+(4) 
+Amounts set forth reflect contributions to a 401(k) plan by
+Patterson-UTI on behalf of the Named Executive Officer. 
+12
+Table of Contents 
+(5) 
+Amount includes a signing bonus of $275,000 paid to
+Mr. Wall following the commencement of his employment with
+Patterson-UTI and an annual bonus for the fiscal year ended
+December 31, 2007 of $800,000, which was paid pursuant to
+the terms of the offer letter provided to Mr. Wall prior to
+his employment with Patterson-UTI. 
+The following table sets forth information concerning grants of
+plan-based awards during the fiscal year ended December 31,
+2008 to the Named Executive Officers:
+Grants of
+Plan-Based Awards 
+All Other 
+All other 
+Option Awards: 
+Stock Awards: 
+Number of 
+Exercise or 
+Grant Date 
+Estimated Possible Payouts under 
+Number of 
+Securities 
+Base Price 
+Fair Value of 
+Non-equity Incentive Plan Awards(1) 
+Shares of 
+Underlying 
+of Option 
+Stock and 
+Grant 
+Threshold 
+Target 
+Maximum 
+Stock or Units 
+Options 
+Awards 
+Option Awards 
+Name 
+Date 
+($) 
+($) 
+($) 
+(#)(2) 
+(#)(3) 
+($/Sh) 
+($)(4) 
+Douglas J. Wall
+2/11/08
+$
+666,667
+$
+1,367,378
+$
+5,000,000
+—
+—
+—
+—
+4/25/08
+—
+—
+—
+71,250
+—
+—
+$
+2,088,338
+4/25/08
+—
+—
+—
+—
+178,500
+$
+29.31
+$
+1,458,584
+John E. Vollmer III
+2/11/08
+$
+444,444
+$
+911,586
+$
+5,000,000
+—
+—
+—
+—
+4/25/08
+—
+—
+—
+47,500
+—
+—
+$
+1,392,225
+4/25/08
+—
+—
+—
+—
+119,000
+$
+29.31
+$
+972,389
+Mark S. Siegel
+2/11/08
+$
+888,889
+$
+1,823,171
+$
+5,000,000
+—
+—
+—
+—
+4/25/08
+—
+—
+—
+95,000
+—
+—
+$
+2,784,450
+4/25/08
+—
+—
+—
+—
+238,000
+$
+29.31
+$
+1,944,779
+Kenneth N. Berns
+2/11/08
+$
+444,444
+$
+911,586
+$
+5,000,000
+—
+—
+—
+—
+4/25/08
+—
+—
+—
+47,500
+—
+—
+$
+1,392,225
+4/25/08
+—
+—
+—
+—
+119,000
+$
+29.31
+$
+972,389
+William L. Moll, Jr. 
+6/4/08
+—
+—
+—
+4,000
+—
+—
+$
+126,400
+(1) 
+For the fiscal year ended December 31, 2008, the bonus plan
+for Messrs. Wall, Vollmer, Siegel and Berns provided for a
+bonus pool based on EBITDA, subject to a minimum EBITDA of
+$400 million. The bonus pool was allocated among
+Messrs. Wall, Vollmer, Siegel and Berns based on a
+pre-determined sharing percentage. The threshold amount
+presented in this table is calculated for the respective officer
+based on an assumed EBITDA of $400 million and the
+allocation formula applied to the bonus pool for distribution
+due to the fact that the bonus plan provides for no payment if
+the minimum EBITDA of $400 million is not satisfied. The
+target amount is calculated based on Patterson-UTI’s actual
+EBITDA for the fiscal year ended December 31, 2008 and the
+allocation formula applied to the bonus pool for distribution.
+The cash bonuses awarded from the bonus pool were awarded under
+the 2005 Plan, which has been designed to meet the requirements
+of Section 162(m) of the Code. Although the bonus pool for
+Messrs. Wall, Vollmer, Siegel and Berns did not have an
+EBITDA cap, the maximum amount that could be awarded to an
+individual under any cash-based performance award granted under
+the 2005 Plan during a
+12-month 
+period is $5,000,000. 
+(2) 
+Shares of restricted stock were awarded pursuant to the 2005
+Plan. Ordinary dividends are paid on unvested shares of
+restricted stock. The rate at which these dividends are paid is
+the same rate at which ordinary dividends are paid on all other
+shares of common stock of Patterson-UTI. The right to receive
+these dividends has been included in the grant date fair value
+of stock awards presented in the table. The shares awarded to
+Messrs. Wall, Vollmer, Siegel and Berns vest over a three
+year period as follows: one-third on April 25, 2009, and
+the remaining two-thirds in equal monthly installments over the
+twenty-four months following April 25, 2009. The shares
+awarded to Mr. Moll vest over a three year period as
+follows: one-third on June 9, 2009, one-third on
+June 9, 2010 and one-third on June 9, 2011. 
+(3) 
+Options were granted pursuant to the 2005 Plan. Those options
+vest over a three year period as follows: one-third on
+April 25, 2009, and the remaining two-thirds in equal
+monthly installments over the twenty-four months following
+April 25, 2009. 
+(4) 
+The grant date fair value of restricted stock is based on the
+closing price of Patterson-UTI Common Stock on the date of
+grant, which is consistent with the valuation used by
+Patterson-UTI for the recognition of compensation expense under
+FAS 123R. The grant date fair value of stock options was
+determined using the Black-Scholes option pricing model, which
+is consistent with the valuation used by Patterson-UTI for the
+recognition of 
+13
+Table of Contents 
+compensation expense under FAS 123R, with assumptions that
+are more fully described in Note 10 to the consolidated
+financial statements in Patterson-UTI’s Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2008. 
+The following table sets forth information concerning
+outstanding equity awards at December 31, 2008 for the
+Named Executive Officers:
+Outstanding
+Equity Awards 
+at Fiscal Year-End 
+Option Awards 
+Stock Awards 
+Number of Securities 
+Option 
+Number of Shares 
+Market Value of 
+Underlying Unexercised 
+Exercise 
+Option 
+or Units of Stock 
+Shares or Units of 
+Options (#) 
+Price 
+Expiration 
+That Have 
+Stock That Have 
+Name 
+Exercisable 
+Unexercisable 
+($) 
+Date 
+Not Vested (#) 
+Not Vested ($)(1) 
+Douglas J. Wall
+41,667
+33,333
+(2)
+$
+22.720
+4/08/17
+137,917
+(3)
+$
+1,587,425
+9,723
+15,277
+(4)
+$
+22.990
+9/30/17
+—
+178,500
+(5)
+$
+29.310
+4/24/18
+John E. Vollmer III
+210,000
+—
+$
+13.195
+7/17/12
+81,115
+(6)
+$
+933,634
+190,000
+—
+$
+16.220
+4/29/13
+60,000
+—
+$
+19.140
+4/27/14
+75,000
+—
+$
+24.630
+4/26/15
+97,222
+27,778
+(7)
+$
+28.160
+7/31/16
+83,333
+66,667
+(8)
+$
+24.170
+4/22/17
+—
+119,000
+(5)
+$
+29.310
+4/24/18
+Mark S. Siegel
+380,000
+—
+$
+16.220
+4/29/13
+162,230
+(9)
+$
+1,867,267
+120,000
+—
+$
+19.140
+4/27/14
+150,000
+—
+$
+24.630
+4/26/15
+194,444
+55,556
+(7)
+$
+28.160
+7/31/16
+166,666
+133,334
+(8)
+$
+24.170
+4/22/17
+—
+238,000
+(5)
+$
+29.310
+4/24/18
+Kenneth N. Berns
+190,000
+—
+$
+16.220
+4/29/13
+81,115
+(6)
+$
+933,634
+60,000
+—
+$
+19.140
+4/27/14
+75,000
+—
+$
+24.630
+4/26/15
+97,222
+27,778
+(7)
+$
+28.160
+7/31/16
+83,333
+66,667
+(8)
+$
+24.170
+4/22/17
+—
+119,000
+(5)
+$
+29.310
+4/24/18
+William L. Moll, Jr. 
+—
+—
+$
+—
+—
+17,334
+(10)
+$
+199,514
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on
+December 31, 2008 of $11.51 per share. 
+(2) 
+These options vest in equal monthly installments from
+January 9, 2009 through April 9, 2010. 
+(3) 
+These shares of restricted stock vest as follows:
+33,333 shares on April 9, 2009, 23,750 shares on
+April 25, 2009, 33,334 shares on April 9, 2010
+and 47,500 shares that vest in equal monthly installments
+from May 25, 2009 through April 25, 2011. 
+(4) 
+These options vest in equal monthly installments from
+January 1, 2009 through October 1, 2010. 
+(5) 
+These options vest as follows: one-third on April 25, 2009,
+and the remainder in equal monthly installments over the
+twenty-four months following April 25, 2009. 
+(6) 
+These shares of restricted stock vest as follows:
+11,115 shares in equal monthly installments from
+January 23, 2009 through April 23, 2010;
+15,833 shares on April 25, 2009; 7,500 shares on
+April 27, 2009; 31,667 shares in equal monthly
+installments from May 25, 2009 through April 25, 2011;
+7,500 shares on August 1, 2009; 7,500 shares on
+August 1, 2010. 
+(7) 
+These options vest in equal monthly installments from
+January 1, 2009 through August 1, 2009. 
+(8) 
+These options vest in equal monthly installments from
+January 23, 2009 through April 23, 2010. 
+(9) 
+These shares of restricted stock vest as follows:
+22,230 shares in equal monthly installments from
+January 23, 2009 through April 23, 2010;
+31,666 shares on April 25, 2009; 15,000 shares on
+April 27, 2009; 63,334 shares 
+14
+Table of Contents 
+in equal monthly installments from May 25, 2009 through
+April 25, 2011; 15,000 shares on August 1, 2009;
+15,000 shares on August 1, 2010. 
+(10) 
+These shares of restricted stock vest as follows:
+6,666 shares on February 12, 2009; 1,333 shares
+on June 9, 2009; 6,668 shares on February 12,
+2010; 1,333 shares on June 9, 2010; 1,334 shares
+on June 9, 2011. 
+The following table sets forth information concerning option
+exercises and stock awards vested during the fiscal year ended
+December 31, 2008 for the Named Executive Officers:
+Option
+Exercises 
+and Stock Vested 
+Option Awards 
+Stock Awards 
+Number of 
+Number of 
+Shares Acquired 
+Value Realized 
+Shares Acquired 
+Value Realized 
+Name 
+on Exercise (#) 
+on Exercise ($) 
+on Vesting (#) 
+on Vesting ($)(1) 
+Douglas J. Wall
+—
+$
+—
+33,333
+$
+904,658
+John E. Vollmer III
+300,000
+(2)
+$
+6,267,640
+(3)
+33,885
+$
+957,242
+Mark S. Siegel
+275,900
+(4)
+$
+5,342,421
+(5)
+67,770
+$
+1,914,484
+Kenneth N. Berns
+133,600
+(6)
+$
+2,596,276
+(7)
+33,885
+$
+957,242
+William L. Moll, Jr. 
+—
+$
+—
+6,666
+$
+147,252
+(1) 
+Value realized on vesting is based on the closing price of
+Patterson-UTI Common Stock on the day immediately prior to the
+date at which the respective shares vested. 
+(2) 
+Options were exercised on May 13, 2008. Includes 190,000
+options with an exercise price of $13.195 per share and 110,000
+options with an exercise price of $8.06 per share. 
+(3) 
+Value is based on the price at which shares received on exercise
+were sold. The weighted average sales price was $32.20 per share. 
+(4) 
+Options were exercised on May 6, 2008. Includes 175,900
+options with an exercise price of $13.195 per share and 100,000
+options with an exercise price of $7.925 per share. 
+(5) 
+Value is based on the price at which shares received on exercise
+were sold. The weighted average sales price was $30.65 per share. 
+(6) 
+Options were exercised on May 6, 2008. Includes 83,600
+options with an exercise price of $13.195 per share and 50,000
+options with an exercise price of $7.925 per share. 
+(7) 
+Value is based on the price at which shares received on exercise
+were sold. The weighted average sales price was $30.66 per share. 
+Patterson-UTI provides no pension benefits for any of the Named
+Executive Officers. None of the Named Executive Officers had any
+items of nonqualified deferred compensation during 2008. As a
+result, tables with respect to pension benefits and nonqualified
+deferred compensation have not been provided.
+15
+Table of Contents 
+DIRECTOR
+COMPENSATION 
+The following table sets forth information concerning
+compensation for the fiscal year ended December 31, 2008
+with respect to the directors of Patterson-UTI who are not
+executive officers:
+Director
+Compensation Table 
+Fees Earned or Paid 
+All Other 
+in Cash 
+Stock Awards 
+Option Awards 
+Compensation 
+Total 
+Name 
+($) 
+($)(1) 
+($)(2) 
+($) 
+($) 
+Charles O. Buckner
+$
+55,000
+$
+69,186
+(3)
+$
+62,258
+(3)
+$
+—
+$
+186,444
+Curtis W. Huff
+$
+60,000
+$
+58,921
+(4)
+$
+51,603
+(5)
+$
+—
+$
+170,524
+Terry H. Hunt
+$
+45,000
+$
+58,921
+(4)
+$
+51,603
+(5)
+$
+—
+$
+155,524
+Kenneth R. Peak
+$
+50,000
+$
+58,921
+(4)
+$
+51,603
+(5)
+$
+—
+$
+160,524
+Cloyce A. Talbott
+$
+—
+$
+810,054
+(6)
+$
+1,531,592
+(7)
+$
+250,000
+(8)
+$
+2,591,646
+(1) 
+Amounts set forth represent the dollar amount of expense
+recognized for financial statement reporting purposes for the
+fiscal year ended December 31, 2008 in accordance with
+FAS 123R with respect to restricted stock held by the
+director. For additional information related to the assumptions
+used and valuation of restricted stock, see Note 10 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report on
+Form 10-K 
+for the fiscal year ended December 31, 2008. 
+(2) 
+Amounts set forth represent the dollar amount of expense
+recognized for financial statement reporting purposes for the
+fiscal year ended December 31, 2008 in accordance with
+FAS 123R with respect to stock options held by the
+director. For additional information related to the assumptions
+used in connection with the valuation of stock options using the
+Black-Scholes option pricing model, see Note 10 to the
+consolidated financial statements in Patterson-UTI’s Annual
+Report for the fiscal year ended December 31, 2008. 
+(3) 
+Mr. Buckner received an award of 3,000 shares of
+restricted stock and options to purchase 10,000 shares of
+Common Stock on February 28, 2007 upon his joining the
+Board of Directors. The stock award and options fully vested on
+February 28, 2008. The grant date fair value of the stock
+award was $22.29 per share. The grant date fair value of the
+options was $6.94 per share. Mr. Buckner received an
+additional award of 3,000 shares of restricted stock and
+options to purchase 10,000 shares of Common Stock on
+January 1, 2008. This award of restricted stock and options
+fully vested on January 1, 2009. The grant date fair value
+of the stock award was $19.52 per share. The grant date fair
+value of the options was $5.10 per share. For the fiscal year
+ended December 31, 2008, $10,626 was recognized as expense
+associated with the February 28, 2007 stock award and
+$58,560 was recognized as expense associated with the
+January 1, 2008 stock award. For the fiscal year ended
+December 31, 2008, $11,220 was recognized as expense
+associated with the February 28, 2007 stock options and
+$51,038 was recognized as expense associated with the
+January 1, 2008 options. As of December 31, 2008,
+Mr. Buckner held options to purchase a total of
+20,000 shares of Common Stock, of which options to purchase
+10,000 shares were unvested. As of December 31, 2008,
+Mr. Buckner held 3,000 shares of unvested restricted
+stock. 
+(4) 
+Messrs. Huff, Hunt and Peak each received an award of
+3,000 shares of restricted stock on January 3, 2007
+with a market value of $21.95 per share which fully vested on
+January 3, 2008, and each received an award of
+3,000 shares of restricted stock on January 1, 2008
+with a market value of $19.52 per share which fully vested on
+January 1, 2009. The amount presented includes $58,560
+related to the January 1, 2008 grant and includes $361
+related to the January 3, 2007 grant. As of
+December 31, 2008, Messrs. Huff, Hunt and Peak each
+held 3,000 unvested shares of restricted stock. 
+(5) 
+Messrs. Huff, Hunt and Peak each received options to
+purchase 10,000 shares of stock on January 3, 2007
+with a market value of $6.87 per share which fully vested on
+January 3, 2008, and each received options to purchase
+10,000 shares of stock on January 1, 2008 with a
+market value of $5.10 per share, which fully vested on
+January 1, 2009. The amount presented includes $51,038
+related to the January 1, 2008 options and includes $565
+related to the January 3, 2007 options. As of
+December 31, 2008, Messrs. Huff and Hunt each held
+options to purchase a total of 50,000 shares of Common
+Stock, of which options to purchase 10,000 shares were
+unvested. As of December 31, 2008, Mr. Peak held
+options to purchase a total of 30,000 shares of Common
+Stock, of which options to purchase 10,000 shares were
+unvested. 
+16
+Table of Contents 
+(6) 
+Mr. Talbott was formerly the Chief Executive Officer of
+Patterson-UTI. In this role, he was awarded 50,000 shares
+of restricted stock on April 28, 2004 with a market value
+of $19.14 per share, 30,000 shares of restricted stock on
+April 27, 2005 with a market value of $24.63 per share,
+30,000 shares of restricted stock on August 1, 2006
+with a market value of $28.16 per share and 50,000 shares
+of restricted stock on April 23, 2007 with a market value
+of $24.17 per share. During 2008, a total of 67,770 shares
+of Mr. Talbott’s restricted stock vested consisting of
+25,000 shares from the April 28, 2004 grant,
+15,000 shares from the April 27, 2005 grant and
+27,770 shares from the April 23, 2007 grant. The
+expense amount presented in the table includes $38,345 related
+to the April 28, 2004 grant, $131,750 related to the
+April 27, 2005 grant, $247,061 related to the
+August 1, 2006 grant and $392,898 related to the
+April 23, 2007 grant. As of December 31, 2008,
+Mr. Talbott held 67,230 shares of unvested restricted
+stock. 
+(7) 
+In Mr. Talbott’s former role as the Chief Executive
+Officer of Patterson-UTI, he was awarded options to purchase
+150,000 shares of stock on April 27, 2005 with a
+market value of $6.33 per share, options to purchase
+250,000 shares of stock on August 1, 2006 with a
+market value of $8.58 per share and options to purchase
+300,000 shares of stock on April 23, 2007 with a
+market value of $7.15 per share. During 2008, options to
+purchase a total of 266,666 shares vested consisting of
+16,667 shares from the April 27, 2005 option,
+83,333 shares from the August 1, 2006 option and
+166,666 shares from the April 23, 2007 option. The
+expense amount presented in the table includes $101,466 related
+to the April 27, 2005 option, $714,904 related to the
+August 1, 2006 option and $715,222 related to the
+April 23, 2007 option. As of December 31, 2008,
+Mr. Talbott held options to purchase a total of
+1,200,000 shares of Common Stock, of which options to
+purchase 188,890 shares were unvested. 
+(8) 
+Mr. Talbott retired from his position as President and
+Chief Executive Officer of Patterson-UTI on September 30,
+2007. Patterson-UTI entered into an employment agreement with
+Mr. Talbott effective October 1, 2007 which provided
+for the employment of Mr. Talbott on a part-time basis for
+a period of five years. Mr. Talbott’s salary during
+the term of this employment agreement is $250,000 per year. 
+Directors who are also employees of Patterson-UTI do not receive
+compensation for serving as a director or as a member of a
+committee of the Board of Directors. All directors are
+reimbursed for reasonable
+out-of-pocket 
+expenses incurred in connection with serving as a member of the
+Board of Directors. Each non-employee director receives annual
+cash compensation of $35,000 and (i) 3,000 shares of
+restricted stock subject to one-year vesting (subject to
+acceleration in certain limited situations, including a change
+of control) and (ii) an option to purchase
+10,000 shares of Common Stock at an exercise price equal to
+the closing price of Common Stock on the grant date. The option
+has a
+10-year 
+term, vests after one-year (subject to acceleration in certain
+limited situations, including a change of control) and contains
+a right to exercise for three years following cessation of the
+holder as a director (but not beyond the
+10-year 
+term). Each non-employee director that serves on the Audit
+Committee or the Compensation Committee receives additional
+annual cash compensation of $10,000 per committee on which he
+serves, with the chairman of each such committee receiving
+$15,000.
+CHANGE IN
+CONTROL ARRANGEMENTS; EMPLOYMENT CONTRACTS; 
+INDEMNIFICATION AGREEMENTS; CERTAIN PAYMENTS 
+Patterson-UTI has entered into change in control agreements with
+Messrs. Siegel, Wall, Berns, Vollmer and Moll (each
+agreement, an “Agreement” and collectively, the
+“Agreements”; and each individual, an “Employee
+and collectively, the “Employees”). The Agreements
+were entered into to protect the Employees should a change in
+control occur, thereby encouraging the Employee to remain in the
+employ of Patterson-UTI and not be distracted from the
+performance of his duties to Patterson-UTI by the possibility of
+a change in control.
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other
+than for cause or by the Employee for good reason, the terms of
+the Agreements would entitle the Employee to, among other things:
+• 
+a bonus payment equal to the highest bonus paid after the
+Agreement was entered into (such bonus payment prorated for the
+portion of the fiscal year preceding the termination date),
+• 
+a payment equal to 2.5 times (in the case of Messrs. Siegel
+and Wall), 2.0 times (in the case of Messrs. Berns and
+Vollmer) or 1.5 times (in the case of Mr. Moll) of the sum
+of (i) the highest annual salary in effect for
+17
+Table of Contents 
+such Employee during the term of the Agreement and (ii) the
+average of the three annual bonuses earned by the Employee for
+the three fiscal years preceding the termination date (or a
+benchmark bonus in the case of Messrs. Wall and
+Moll), and
+• 
+continued coverage under Patterson-UTI’s welfare plans for
+up to three years (in the case of Messrs. Siegel and Wall)
+or two years (in the case of Messrs. Berns, Vollmer and
+Moll).
+Each Agreement provides the Employee with a full
+gross-up 
+payment for any excise taxes imposed on payments and benefits
+received under the Agreements or otherwise, including other
+taxes that may be imposed as a result of the
+gross-up 
+payment.
+A “change in control” is principally defined by the
+Agreement as:
+• 
+an acquisition by any individual, entity or group of beneficial
+ownership of 35% or more of either
+Patterson-UTI’s 
+then outstanding Common Stock or the combined voting power of
+the then outstanding voting securities of Patterson-UTI entitled
+to vote in the election of directors,
+• 
+a change occurs in which the members of the Board of Directors
+as of the date of the Agreement cease to constitute at least a
+majority of Patterson-UTI’s Board of Directors unless that
+change occurs through a vote of at least a majority of the
+incumbent members of the Board of Directors, or
+• 
+a change in the beneficial ownership of Patterson-UTI following
+consummation of a reorganization, merger, consolidation, sale of
+Patterson-UTI or any subsidiary of Patterson-UTI or a
+disposition of all or substantially all of the assets of
+Patterson-UTI, in which the beneficial owners immediately prior
+to the transaction own 65% or less of outstanding Common Stock
+of the newly combined or merged entity.
+The Agreements terminate on the first to occur of:
+• 
+the Employee’s death, disability or retirement,
+• 
+the termination of the Employee’s employment, or
+• 
+January 29, 2010 although, unless otherwise terminated, the
+Agreements automatically renew for successive twelve-month
+periods until Patterson-UTI notifies the Employee at least
+90 days before the expiration of the initial term or the
+renewal period, as applicable, that the term will not be
+extended. Patterson-UTI has not provided any such notification
+to the Employees.
+All unvested stock options and restricted stock awards held by
+Named Executive Officers vest upon a change of control as
+defined by the underlying award agreements. All restricted stock
+awards held by Named Executive Officers contain provisions that
+in the event of termination due to death or disability, the
+Named Executive Officer would vest in a portion of the unvested
+restricted stock.
+Patterson-UTI has entered into written letter agreements with
+each of Messrs. Siegel, Berns and Vollmer pursuant to which
+Patterson-UTI has agreed to pay each such person within ten days
+of the termination of his employment with Patterson-UTI for any
+reason (including voluntary termination by him), an amount in
+cash equal to his annual base salary at the time of such
+termination. Patterson-UTI has entered into a severance
+agreement with Mr. Wall that generally has a three-year
+term and provides for a lump-sum cash payment of $750,000 to be
+payable to Mr. Wall within ten days of the date of a
+qualifying termination of his employment with Patterson-UTI. A
+qualifying termination for Mr. Wall is defined in the
+severance agreement generally as a termination by Patterson-UTI
+for any reason other than cause or, if certain conditions are
+met, a termination by Mr. Wall due to a reduction in his
+annual base salary below a defined threshold amount. Any payment
+made by Patterson-UTI pursuant to these letter agreements or the
+severance agreement will reduce dollar for dollar any payment
+owed to such person, if any, pursuant to the change in control
+agreements discussed above.
+18
+Table of Contents 
+Amounts that each of the Named Executive Officers would be
+entitled to under the existing Agreements if a change in control
+had occurred as of December 31, 2008 and the
+employee’s employment was terminated by Patterson-UTI other
+than for cause or by the employee for good reason (as defined in
+the Agreements) are reflected in the following table:
+Cash Payments 
+Other Benefits 
+Bonus 
+Salary and 
+Option 
+Stock 
+Continued 
+Payment 
+Bonus 
+Awards 
+Awards 
+Benefits 
+Total 
+Name 
+($)(1) 
+($)(2) 
+($)(3) 
+($)(3) 
+($)(4) 
+($) 
+Douglas J. Wall
+$
+800,000
+$
+3,500,000
+$
+—
+$
+1,587,425
+$
+9,126
+$
+5,896,551
+John E. Vollmer III
+$
+1,375,000
+$
+3,131,367
+$
+—
+$
+933,634
+$
+6,075
+$
+5,446,076
+Mark S. Siegel
+$
+2,750,000
+$
+6,245,083
+$
+—
+$
+1,867,267
+$
+—
+$
+10,862,350
+Kenneth N. Berns
+$
+1,375,000
+$
+2,728,033
+$
+—
+$
+933,634
+$
+—
+$
+5,036,667
+William L. Moll, Jr. 
+$
+100,000
+$
+525,000
+$
+—
+$
+199,514
+$
+15,350
+$
+839,864
+(1) 
+The assumed bonus payment is equal to the highest annual bonus
+paid from the time the Agreements were entered into through
+December 31, 2008. 
+(2) 
+The assumed salary and bonus payment represents 2.5 times (in
+the case of Messrs. Siegel and Wall), 2.0 times (in the
+case of Messrs. Berns and Vollmer) or 1.5 times (in the
+case of Mr. Moll) of the sum of the 2008 salary in effect
+for each employee and the average of the annual bonuses earned
+by each employee for 2007, 2006 and 2005 (or a benchmark bonus
+in the case of Messrs. Wall and Moll). Bonus amounts earned
+in 2008 were not considered in this calculation as they were not
+determined until after December 31, 2008. 
+(3) 
+Each of the Named Executive Officers’ option and stock
+award agreements provide that unvested options and awards will
+immediately vest upon a change in control. Amounts presented in
+the table represent the value of unvested option and stock
+awards using the market price of Patterson-UTI Common Stock at
+December 31, 2008. All unvested options held by the Named
+Executive Officers as of December 31, 2008 had exercise
+prices that were greater than the market price of Patterson-UTI
+Common Stock at December 31, 2008. 
+(4) 
+Messrs. Wall, Vollmer and Moll participated in
+Patterson-UTI’s health and welfare plans as of
+December 31, 2008. The amounts presented represent
+Patterson-UTI’s portion of the premiums for three years in
+the case of Mr. Wall and two years in the case of
+Messrs. Vollmer and Moll based on the rates in effect at
+December 31, 2008. 
+All restricted stock awards held by Named Executive Officers
+provide that in the event of termination of employment due to
+death or disability, the Named Executive Officer would vest in a
+portion of the unvested restricted stock. With respect to
+Mr. Siegel, such a termination at December 31, 2008
+would have resulted in the accelerated vesting of
+60,462 shares with a fair value of $695,918. With respect
+to Messrs. Vollmer and Berns, such a termination at
+December 31, 2008 would have resulted in the accelerated
+vesting of 30,229 shares with a fair value of $347,936.
+With respect to Mr. Wall, such a termination would have
+resulted in the accelerated vesting of 40,583 shares with a
+fair value of $467,110. With respect to Mr. Moll, such a
+termination would have resulted in the accelerated vesting of
+6,654 shares with a fair value of $76,588.
+Patterson-UTI has entered into an indemnification agreement with
+each of its Named Executive Officers and directors containing
+provisions that may require Patterson-UTI, among other things,
+to indemnify such executive officers and directors against
+liabilities that may arise by reason of their status or service
+as executive officers or directors (subject to certain
+exceptions) and to advance expenses incurred as a result of any
+proceeding against them as to which they could be indemnified.
+CERTAIN
+TRANSACTIONS 
+In connection with the acquisition by REMY Capital Partners III,
+L.P. (“REMY Capital”) of an ownership interest in UTI
+in March 1995, REMY Capital succeeded to a registration rights
+agreement with UTI. As the
+successor-in-interest 
+to UTI, Patterson-UTI assumed this registration rights agreement
+pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares
+held by REMY Capital under the Securities Act of 1933, as
+amended. In the event that such rights are exercised in
+connection with a primary offering proposed by Patterson-UTI (or
+a secondary offering with which Patterson-UTI agrees to
+19
+Table of Contents 
+participate), REMY Capital would bear its pro rata share of the
+costs of the offering, other than legal, accounting and printing
+costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elects to exercise such rights other than in
+connection with an offering in which Patterson-UTI participates,
+REMY Capital would bear all costs of the offering. These rights
+continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995. As of the date of this
+proxy statement, REMY Capital continues to hold
+1,000,000 shares of Common Stock.
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is
+President and sole stockholder of REMY Investors, which is the
+general partner of REMY Capital. Mr. Berns, a director and
+Senior Vice President of Patterson-UTI, is an executive of REMY
+Investors.
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer, Patterson-UTI delivered a letter to
+Mr. Vollmer dated February 6, 2006 (the “Letter
+Agreement”). Pursuant to the Letter Agreement,
+Patterson-UTI agreed, to the extent permitted by law and
+provided that the applicable accounting restatement pending at
+that time did not result from Patterson-UTI’s material
+non-compliance with financial reporting requirements under the
+federal securities laws as a result of knowing misconduct by
+Mr. Vollmer:
+• 
+Patterson-UTI is not entitled to and will not make any claim
+against Mr. Vollmer for reimbursement of any bonus or other
+incentive or equity based compensation received by him or any
+profits realized by him from the sale of securities of
+Patterson- UTI, under Section 304 of the Sarbanes-Oxley Act
+of 2002 (“Section 304”) on account of the
+restatement of any financial statements of Patterson-UTI
+covering any accounting period ending on or prior to
+September 30, 2005;
+• 
+Patterson-UTI will not make any claim against Mr. Vollmer
+for any profits realized from the sale of securities of
+Patterson-UTI that were owned by him prior to his becoming Chief
+Financial Officer or were acquired by him on account of the
+exercise of options or the settling of restricted stock units
+that were held by him immediately prior to his becoming Chief
+Financial Officer, under Section 304 on account of the
+restatement of any financial statements of Patterson-UTI
+covering any period during which he was Chief Financial
+Officer; and
+• 
+Patterson-UTI will indemnify Mr. Vollmer against all losses
+in connection with his defense of any claim against him under
+Section 304 in contravention of the two immediately
+preceding bullets, to the extent he is obligated to reimburse
+Patterson-UTI for any bonus or other incentive or equity
+compensation received by him or any profits realized by him for
+the sale of Patterson-UTI securities.
+Notwithstanding court decisions that Patterson-UTI’s right
+to make any such claims appears doubtful, Patterson-UTI has
+entered into this agreement because of the breadth of language
+of Section 304 and the uncertainty as to how the statute
+may be interpreted by the courts in the future and the
+importance at the time of Mr. Vollmer’s continued
+service as Chief Financial Officer.
+Patterson-UTI has a written policy with respect to related
+person transactions. In accordance with this policy, related
+person transactions are reviewed by the Lead Director or the
+chair of the Audit Committee, each of whom has full delegated
+authority to approve, disapprove, ratify, amend, terminate or
+rescind any such transaction, or direct that such transaction be
+submitted to the Audit Committee or the full Board of Directors
+for consideration. In approving or disapproving related person
+transactions, the relevant facts and circumstances of the
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater beneficial
+ownership interest or in which they are an executive officer,
+general partner, principal or engaged in a similar position.
+Certain related person transactions have been pre-approved under
+the terms of the policy, including, subject to certain
+exceptions and limitations, the sale to or purchase from
+Patterson-UTI of goods and services by entities related to
+directors in the ordinary course of business that are immaterial
+to Patterson-UTI and with respect to which the director has no
+direct economic interest or decision making authority.
+20
+Table of Contents 
+SECURITY
+OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of April 16, 2009, the
+stock ownership of (i) the Named Executive Officers,
+directors and Board nominees, individually, (ii) all
+directors, Board nominees and executive officers as a group and
+(iii) each person known by Patterson-UTI to be the
+beneficial owner of more than 5% of Common Stock.
+Amount and 
+Nature of 
+Name of 
+Beneficial 
+Percent 
+Beneficial Owner 
+Ownership 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common
+Stock:
+First Pacific Advisors, LLC
+11,261,076
+(1)
+7.4
+%
+FMR LLC
+9,931,445
+(2)
+6.5
+%
+Barclays Global Investors, NA
+9,363,768
+(3)
+6.1
+%
+Directors and Executive Officers:
+Mark S. Siegel
+2,447,388
+(4)
+1.6
+%
+Douglas J. Wall
+292,306
+(5)
+*
+John E. Vollmer III
+920,695
+(6)
+*
+Kenneth N. Berns
+718,695
+(7)
+*
+William L. Moll, Jr. 
+21,823
+(8)
+*
+Charles O. Buckner
+29,000
+(9)
+*
+Curtis W. Huff
+92,880
+(10)
+*
+Terry H. Hunt
+70,800
+(11)
+*
+Kenneth R. Peak
+47,000
+(12)
+*
+Cloyce A. Talbott
+1,443,920
+(13)
+*
+All directors and executive officers as a group (11 persons)
+6,102,389
+(14)
+3.9
+%
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G jointly filed by First
+Pacific Advisors, LLC (“First Pacific”),
+Robert L. Rodriguez and J. Richard Atwood with the SEC
+on February 11, 2009. According to the report, First
+Pacific, in its capacity as investment advisor to various of its
+clients, has shared voting power with respect to
+4,996,900 shares and shared dispositive power with respect
+to 11,261,076 shares. Robert L. Rodriguez has shared voting
+power with respect to 4,996,900 shares and shared
+dispositive power with respect to 11,261,076 shares. J.
+Richard Atwood has shared voting power with respect to
+4,996,900 shares and shared dispositive power with respect
+to 11,261,076 shares. Robert L. Rodriguez and J. Richard
+Atwood are each part owners and managing members of First
+Pacific and are deemed to beneficially own
+11,261,076 shares of Patterson-UTI owned by First
+Pacific’s clients. Robert L. Rodriguez and J. Richard
+Atwood disclaim beneficial ownership of the securities owned by
+First Pacific’s clients. The address of the principal
+business office of First Pacific and of Robert L. Rodriguez and
+J. Richard Atwood is 11400 West Olympic Blvd., Suite 1200,
+Los Angeles, CA 90064. 
+(2) 
+Based solely on a Schedule 13G/A filed March 10, 2009,
+jointly on behalf of FMR LLC (“FMR”), Edward C.
+Johnson 3d, and Fidelity Management & Research
+Company, a wholly-owned subsidiary of FMR
+(“Fidelity”). According to the report, the shares are
+beneficially owned as follows: Fidelity —
+9,727,440 shares; Pyramis Global Advisors LLC, an indirect
+wholly-owned subsidiary of FMR (“PGALLC”) —
+50,600 shares; Pyramis Global Advisors Trust Company, an
+indirect wholly-owned subsidiary of FMR
+(“PGATC”) — 152,700 shares; FIL Limited
+(“FIL”) — 705 shares. FMR and FIL are
+of the view that the shares held by the other entity need not be
+aggregated for purposes of Section 13(d) under the
+Securities Exchange Act of 1934, but FMR filed the report on a
+voluntary basis as if all of the shares are beneficially owned
+by FMR and FIL on a joint basis. The Fidelity Funds’ Board
+of Trustees has sole voting power over the shares that are
+beneficially owned by Fidelity, and Edward C. Johnson 3d and
+FMR, through control of Fidelity and the Fidelity Funds, each
+has sole dispositive power over the 9,727,440 shares owned
+by the Fidelity Funds. Edward C. Johnson 3d and FMR, through
+control of PGALLC, PGATC, and FMR LLC subsidiaries, each has
+sole dispositive power and sole 
+21
+Table of Contents 
+power to vote or direct the voting of the shares beneficially
+owned by PGALLC and PGATC. FIL and various foreign-based
+subsidiaries of FMR provide investment advisory and management
+services to a number of
+non-U.S. 
+investment companies and certain institutional investors.
+Partnerships controlled predominantly by members of the family
+of Edward C. Johnson 3d, or trusts for their benefit, own shares
+of voting stock of FIL with the right to cast approximately 47%
+of the total votes which may be cast by all holders of FIL
+voting stock. FMR and FIL are separate and independent corporate
+entities and their Boards of Directors are generally composed of
+different individuals. The address of FMR, Edward C. Johnson 3d
+and Fidelity is 82 Devonshire Street, Boston, MA 02109. The
+address of PGALLC and PGATC is 53 State Street, Boston, MA
+02109. The address of FIL is Pembroke Hall, 42 Crow Lane,
+Hamilton, Bermuda. 
+(3) 
+Based solely on a Schedule 13G filed jointly by Barclays
+Global Investors, NA (“Barclays Investors”), Barclays
+Global Fund Advisors (“Barclays Advisors”),
+Barclays Global Investors, Ltd. (“Barclays Ltd.”),
+Barclays Global Investors Japan Limited (“Barclays
+Japan”), Barclays Global Investors Canada Limited
+(“Barclays Canada”) and Barclays Global Investors
+Australia Limited (“Barclays Australia”) with the SEC
+on February 5, 2009. According to the report, Barclays
+Investors has sole voting power with respect to
+3,306,441 shares and sole dispositive power with respect to
+3,897,757 shares. Barclays Advisors has sole voting power
+with respect to 3,750,730 shares and sole dispositive power
+with respect to 4,623,764 shares. Barclays Ltd. has sole
+voting power with respect to 416,698 shares and sole
+dispositive power with respect to 563,976 shares. Barclays
+Japan has sole voting and dispositive power with respect to
+252,771 shares. Barclays Canada has sole voting and
+dispositive power with respect to 4,887 shares. Barclays
+Australia has sole voting and dispositive power with respect to
+20,613 shares. The address of the principal business office
+of Barclays Investors and Barclays Advisors is 400 Howard
+Street, San Francisco, California 94105. The address of the
+principal business office of Barclays Ltd. is Murray House, 1
+Royal Mint Court, London EC3N 4HH. The address of the principal
+business office of Barclays Japan is Ebisu Prime Square Tower
+8th Floor, 1-1-39 Hiroo Shibuya-Ku, Tokyo, Japan
+150-0012. 
+The address of the principal business office of Barclays Canada
+is Brookfield Place 161 Bay Street, Suite 2500, Toronto,
+Canada Ontario M5J 2S1. The address of the principal business
+office of Barclays Australia is Level 43, Grosvenor Place,
+225 George Street, Sydney, Australia NSW 1220. 
+(4) 
+Mr. Siegel is the President and sole stockholder of REMY
+Investors, which is the general partner of REMY Capital Partners
+III, L.P. (“REMY Capital”). The Common Stock
+beneficially owned by Mr. Siegel includes
+1,000,000 shares of Common Stock owned by REMY Capital. The
+Common Stock beneficially owned by Mr. Siegel also includes
+stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within sixty days, to purchase
+1,180,388 shares of Common Stock, but does not include
+257,612 shares underlying stock options held by
+Mr. Siegel that are not presently exercisable and will not
+become exercisable within sixty days. Includes
+158,066 shares of unvested restricted Common Stock held by
+Mr. Siegel, over which he presently has voting power. 
+(5) 
+Includes shares underlying stock options held by Mr. Wall,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 132,514 shares of Common Stock, but
+does not include 145,986 shares underlying stock options
+held by Mr. Wall that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+104,584 shares of unvested restricted Common Stock held by
+Mr. Wall, over which he presently has voting power. 
+(6) 
+Includes shares underlying stock options held by
+Mr. Vollmer, which are presently exercisable or become
+exercisable within sixty days, to purchase 800,195 shares.
+Does not include 128,805 shares underlying stock options
+held by Mr. Vollmer that are not presently exercisable and
+will not become exercisable within sixty days. Includes
+79,033 shares of unvested restricted Common Stock held by
+Mr. Vollmer, over which he presently has voting power. 
+(7) 
+Includes shares underlying stock options held by Mr. Berns,
+which are presently exercisable or become exercisable within
+sixty days, to purchase 590,195 shares. Does not include
+128,805 shares underlying stock options that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 79,033 shares of unvested restricted
+Common Stock held by Mr. Berns, over which he presently has
+voting power. Does not include shares of Common Stock
+beneficially owned by REMY Investors. Mr. Berns disclaims
+beneficial ownership of such shares beneficially owned by REMY
+Investors. 
+22
+Table of Contents 
+(8) 
+Includes 10,668 shares of unvested restricted Common Stock
+held by Mr. Moll, over which he presently has voting power. 
+(9) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Buckner to purchase 20,000 shares. Does
+not include 10,000 shares underlying stock options held by
+Mr. Buckner that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Buckner,
+over which he presently has voting power. 
+(10) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Huff to purchase 50,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Huff that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Huff, over
+which he presently has voting power. 
+(11) 
+Includes 800 shares of Common Stock owned by
+Mr. Hunt’s
+mother-in-law, 
+over which Mr. Hunt presently has shared voting power.
+Includes shares underlying presently exercisable stock options
+held by Mr. Hunt to purchase 50,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Hunt that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Hunt, over
+which he presently has voting power. 
+(12) 
+Includes shares underlying presently exercisable stock options
+held by Mr. Peak to purchase 30,000 shares. Does not
+include 10,000 shares underlying stock options held by
+Mr. Peak that are not presently exercisable and will not
+become exercisable within sixty days. Includes 3,000 shares
+of unvested restricted Common Stock held by Mr. Peak, over
+which he presently has voting power. 
+(13) 
+Includes shares underlying stock options held by
+Mr. Talbott, which are presently exercisable or become
+exercisable within sixty days, to purchase
+1,094,444 shares. Does not include 105,556 shares
+underlying stock options held by Mr. Talbott that are not
+presently exercisable and will not become exercisable within
+sixty days. Includes 63,066 shares of unvested restricted
+Common Stock held by Mr. Talbott, over which he presently
+has voting power. 
+(14) 
+Includes shares underlying stock options, which are presently
+exercisable or become exercisable within sixty days, to purchase
+3,947,736 shares of Common Stock. Does not include shares
+underlying stock options to purchase 806,764 shares held by
+such individuals that are not presently exercisable and will not
+become exercisable within sixty days. Includes 800 shares
+of Common Stock over which a director presently has shared
+voting power. Includes an aggregate of 524,332 shares of
+unvested restricted Common Stock held by certain directors and
+executive officers, over which they presently have voting power. 
+Except as stated herein, each stockholder has sole voting and
+investment power with respect to Common Stock included in the
+above table. There are no arrangements known to Patterson-UTI
+which may result in a change in control.
+23
+Table of Contents 
+AUDIT
+COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute
+soliciting material and should not be deemed filed or
+incorporated by reference into any other Patterson-UTI filing
+under the Securities Act of 1933, as amended, or the Exchange
+Act, except to the extent Patterson-UTI specifically
+incorporates this report by reference therein.
+The Audit Committee has reviewed and discussed the audited
+financial statements with management and Patterson-UTI’s
+independent registered public accounting firm.
+The Audit Committee has discussed with the independent
+registered public accounting firm the matters required to be
+discussed by Statement on Auditing Standards No. 114,
+The Auditor’s Communication with those Charged with
+Governance (superseded Statement on Auditing Standards
+No. 61, Communication with Audit Committees, as
+amended), as adopted by the Public Company Accounting Oversight
+Board in Rule 3200T.
+The Audit Committee has received and reviewed the written
+disclosures and the letter from the independent registered
+public accounting firm required by applicable requirements of
+the Public Company Accounting Oversight Board regarding the
+independent registered public accounting firm’s
+communications with the Audit Committee concerning independence,
+and has discussed with the independent registered public
+accounting firm their independence.
+Taking the foregoing into consideration, the undersigned Audit
+Committee members recommended to the Board of Directors that the
+Board approve the inclusion of the Patterson-UTI’s audited
+financial statements in the Annual Report on
+Form 10-K 
+for the fiscal year ended December 31, 2008.
+Audit Committee of the Board of Directors:
+Curtis W. Huff, Chairman 
+Charles O. Buckner 
+Terry H. Hunt
+PricewaterhouseCoopers
+Fees for Fiscal Years 2008 and 2007 
+In 2008 and 2007, Patterson-UTI and its subsidiaries incurred
+fees for services provided relating to (i) professional
+services rendered for the audit of Patterson-UTI’s annual
+financial statements, review of quarterly financial statements,
+and assessment of Patterson-UTI’s internal controls over
+financial reporting, (ii) professional services rendered
+for tax compliance, advice and planning, and (iii) products
+and services provided by PricewaterhouseCoopers LLP.
+Fees Incurred in 
+Fees Incurred in 
+Fiscal Year 
+Fiscal Year 
+Description 
+2008 
+2007 
+Audit fees
+$
+1,201,750
+$
+1,150,000
+Tax fees
+45,000
+45,000
+All other fees
+1,600
+1,600
+Total
+$
+1,248,350
+$
+1,196,600
+The Audit Committee appoints the independent registered public
+accounting firm. The Audit Committee or Mr. Huff, as
+Chairman of the Audit Committee, approves all other engagements
+of the independent registered public accounting firm in advance.
+In the event Mr. Huff approves any such engagement, he
+discusses such approval with the Audit Committee at its next
+meeting.
+“Audit fees” relate to audit services of
+PricewaterhouseCoopers LLP for fiscal 2008 and 2007 consisting
+of the examination of Patterson-UTI’s consolidated
+financial statements, quarterly reviews of Patterson-UTI’s
+interim financial statements and services to assess
+Patterson-UTI’s internal control over financial reporting.
+“Tax fees” include federal, state, local and foreign
+tax compliance and related matters. “All other fees”
+consists of an annual
+24
+Table of Contents 
+subscription fee to a software product. The Audit Committee or
+Mr. Huff, as Chairman of the Audit Committee, approved all
+of the services described above.
+The Audit Committee has discussed the non-audit services
+provided by PricewaterhouseCoopers LLP and the related fees and
+has considered whether those services and fees are compatible
+with maintaining auditor independence. The Audit Committee
+determined that such non-audit services were consistent with the
+independence of PricewaterhouseCoopers LLP.
+OTHER
+MATTERS 
+Section 16(a)
+Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires
+Patterson-UTI’s officers and directors and persons who own
+more than 10 percent of a registered class of
+Patterson-UTI’s equity securities, to file reports of
+ownership and changes in ownership with the SEC. Each of these
+persons is required by SEC regulation to furnish Patterson-UTI
+with copies of Section 16(a) filings. Based solely upon a
+review of Forms 3 and 4 and amendments thereto furnished to
+Patterson-UTI during 2008 and Forms 5 and amendments
+thereto furnished to Patterson-UTI with respect to 2008, or a
+written representation from the reporting person that no
+Form 5 is required, all filings required to be made by such
+officers, directors, and beneficial owners of more than
+10 percent of a registered class of Patterson-UTI’s
+common stock were timely made.
+Other
+Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not aware of any matter to be presented at the
+Meeting other than as set forth herein. If any other matters are
+properly brought before the Meeting, however, the shares
+represented by valid proxies will be voted with respect to such
+matters in accordance with the judgment of the persons voting
+them.
+Stockholder
+Proposals for 2010 Annual Meeting 
+Proposals or Director Nominations for Inclusion in the Proxy
+Statement. Pursuant to
+Rule 14a-8 
+under the Exchange Act, stockholders may present proper
+proposals or director nominations for inclusion in
+Patterson-UTI’s proxy statement and for consideration at
+the next annual meeting of stockholders by submitting their
+proposals or director nominations to Patterson-UTI in a timely
+manner. In order to be included in Patterson-UTI’s proxy
+statement for the 2010 annual meeting of stockholders, proposals
+or director nominations from stockholders must be received by
+Patterson-UTI no later than December 17, 2009, and must
+otherwise comply with the requirements of
+Rule 14a-8. 
+Proposals or Director Nominations not Included in the Proxy
+Statement. In addition, Patterson-UTI’s
+bylaws establish an advance notice procedure with regard to
+stockholder proposals and director nominations not included in
+Patterson-UTI’s proxy statement. For director nominations
+not included in Patterson-UTI’s proxy statement, please
+refer to “Election of Directors — Meetings and
+Committees of the Board of Directors.” For stockholder
+proposals to be properly brought before the 2010 annual meeting,
+by a stockholder, the stockholder must be a stockholder of
+record on the date of the giving of the notice provided for
+below and on the record date for the determination of
+stockholders entitled to vote at such annual meeting and must
+give timely notice of such business in writing to the Secretary
+of Patterson-UTI. To be timely with respect to the 2010 annual
+meeting, a stockholder’s notice must be delivered to or
+mailed and received at Patterson-UTI’s principal executive
+offices not earlier than February 3, 2010 and not later
+than March 5, 2010; provided, however, that in the event
+that the annual meeting is called for a date that is not within
+30 days before or after June 3, 2010, notice by the
+stockholder to be timely must be received not later than the
+close of business on the tenth day following the day on which
+such notice of the date of the meeting was mailed or public
+disclosure of the annual meeting date was made, whichever occurs
+first.
+A stockholder’s notice to the Secretary of Patterson-UTI
+shall set forth:
+• 
+a brief description of each matter desired to be brought before
+the annual meeting and the reasons for conducting such business
+at the annual meeting,
+• 
+the name and record address of the stockholder proposing such
+business,
+25
+Table of Contents 
+• 
+the class and number of shares of Patterson-UTI that are
+beneficially owned by the stockholder,
+• 
+any material interest of the stockholder in such
+business, and
+• 
+a representation that such stockholder intends to appear in
+person or by proxy at the annual meeting to bring such business
+before the meeting.
+The proxies will have discretionary authority to vote on any
+matter that properly comes before the meeting if the stockholder
+has not provided timely written notice as required by the
+Patterson-UTI bylaws.
+Patterson-UTI reserves the right to reject, rule out of order,
+or take other appropriate action with respect to any proposal or
+nomination that does not comply with these and other applicable
+requirements.
+Annual
+Report 
+A copy of Patterson-UTI’s annual report on
+Form 10-K 
+(the “Annual Report on
+Form 10-K”) 
+accompanies this proxy statement only if you have requested that
+a copy of this proxy statement be mailed to you. The Annual
+Report on
+Form 10-K 
+also is available electronically by following the instructions
+in the Notice. The Annual Report on
+Form 10-K 
+is not incorporated into this proxy statement and is not
+considered proxy-soliciting material.
+A copy of the Annual Report on
+Form 10-K, 
+excluding exhibits, may be obtained by stockholders without
+charge by written request to the Secretary of Patterson-UTI at
+450 Gears Road, Suite 500, Houston, Texas 77067 or may be
+accessed on Patterson-UTI’s website at www.patenergy.com in
+the investors section under the “financial reports”
+link.
+26
+Table of Contents 
+TO VOTE, MARK BLOCKS BELOW
+IN BLUE OR BLACK INK AS FOLLOWS: x 
+KEEP THIS PORTION FOR YOUR RECORDS 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+DETACH
+AND RETURN THIS PORTION
+ONLY 
+For 
+All 
+Withhold 
+All 
+For All 
+Except 
+To withhold authority to vote for any individual 
+nominee(s), mark “For All Except”
+and write the 
+number(s) of the nominee(s) on the line below. 
+c 
+The
+Board of Directors recommends that you 
+vote FOR the following: 
+1. Election of Directors 
+o 
+o 
+o 
+Nominees 
+01 
+Mark S. Siegel 
+02 
+Kenneth N. Berns 
+03 
+Charles O. Buckner 
+04 
+Curtis W. Huff 
+05 
+Terry H. Hunt 
+06 
+Kenneth R. Peak 
+07 
+Cloyce A. Talbott 
+The
+Board of Directors recommends you vote FOR the following proposal(s) : 
+For 
+Against 
+Abstain 
+2 
+Ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2009. 
+o 
+o 
+o 
+NOTE: In their discretion, the Proxies are authorized to vote upon such other
+business as may properly come before the Meeting or any and all adjournments or postponements thereof. 
+Please sign exactly as your name(s) appear(s) hereon. When signing as attorney,
+executor, administrator, or other fiduciary, please give full title as such. Joint owners
+should each sign personally. All holders must sign. If a corporation,
+partnership or other entity, please sign in
+full corporate, partnership or other entity name, by authorized officer. 
+SHARES 
+CUSIP # 
+SEQUENCE # 
+Signature [PLEASE SIGN WITHIN
+BOX] 
+Date 
+JOB # 
+Signature (Joint Owners) 
+Date 
+Table of Contents 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice &
+Proxy Statement, Annual Report is/ are available at www.proxyvote.com . 
+PATTERSON-UTI ENERGY, INC. 
+This Proxy is Solicited on Behalf of the Board of Directors
+Proxy for Annual Meeting of Stockholders 
+To be Held on June 3, 2009 
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby appoints Mark S.
+Siegel, Douglas J. Wall and John E. Vollmer III, and each of them, proxies of the undersigned, each
+with full power to act without the other and with full power of substitution, to vote all of the
+shares which the undersigned is entitled to vote at the annual meeting of stockholders of the
+Company to be held on Wednesday, June 3, 2009, at 10:00 a.m., local time, at the Hilton Houston
+North Hotel, 12400 Greenspoint Drive, Houston, Texas 77060, and at any and all adjournments or
+postponements thereof, with the same force and effect as if the undersigned were personally
+present. The undersigned hereby instructs the above-named proxies to vote the shares represented by
+this proxy in the manner as directed for the undersigned on the reverse side of this proxy card. If
+no directions are made, the proxies will vote “FOR” the nominees for directors and “FOR” the
+ratification of the selection of PricewaterhouseCoopers LLP as set forth on the reverse side. If
+any other matter should be presented properly, this proxy will be voted in accordance with the
+discretion of the above-named proxies. 
+Continued and to be marked, dated and signed on the reverse side
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0000950134-09-007684/proxy_rpt.txt b/raw/proxies/0000889900/0000950134-09-007684/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..df3c93ffc7d871a8f4432bb45f474988f7d07797
--- /dev/null
+++ b/raw/proxies/0000889900/0000950134-09-007684/proxy_rpt.txt
@@ -0,0 +1,24 @@
+related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best
+interest of Patterson-UTI and whether, in appropriate cases,
+such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees
+generally. Related person transactions generally include
+transactions in an amount that exceeds $50,000 between
+Patterson-UTI or any of its subsidiaries and an executive
+officer, a director (or nominee to become director), an
+immediate family member of any of the foregoing or any entity in
+which any of the foregoing has a 10% or greater beneficial
+ownership interest or in which they are an executive officer,
+general partner, principal or engaged in a similar position.
+Certain related person transactions have been pre-approved under
+the terms of the policy, including, subject to certain
+exceptions and limitations, the sale to or purchase from
+Patterson-UTI of goods and services by entities related to
+directors in the ordinary course of business that are immaterial
+to Patterson-UTI and with respect to which the director has no
+direct economic interest or decision making authority.
+20
+Table of Contents 
+SECURITY
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0001193125-12-164768/proxy.txt b/raw/proxies/0000889900/0001193125-12-164768/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..b1000f92a33bccf14757a2d1753ea636593c5f12
--- /dev/null
+++ b/raw/proxies/0000889900/0001193125-12-164768/proxy.txt
@@ -0,0 +1,2656 @@
+DEF 14A
+1
+d332772ddef14a.htm
+NOTICE & PROXY STATEMENT
+<![CDATA[Notice & Proxy Statement]]> 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549
+SCHEDULE 14A 
+Proxy Statement Pursuant to Section 14(a) of the Securities 
+Exchange Act of
+1934 (Amendment No. ) 
+Filed by the Registrant þ 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+þ 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material Pursuant to §240.14a-12 
+Patterson-UTI Energy, Inc. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy
+Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+þ 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+1) 
+Title of each class of securities to which transaction applies: 
+2) 
+Aggregate number of securities to which transaction applies: 
+3) Per unit
+price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): 
+4) 
+Proposed maximum aggregate value of transaction: 
+5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ Check box if any part of the fee is offset as provided by
+Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+1) 
+Amount Previously Paid: 
+2) 
+Form, Schedule or Registration Statement No.: 
+3) 
+Filing Party: 
+4) 
+Date Filed: 
+April 16, 2012 
+Dear Stockholder: 
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual meeting will be held Thursday, June 7, 2012, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060. 
+We are pleased to take advantage of Securities and Exchange Commission rules that allow us to furnish these proxy materials and our annual
+report primarily over the Internet. We believe that posting these materials on the Internet enables us to provide stockholders with the information that they need quickly, while lowering our costs of printing and delivery and conserving natural
+resources. We encourage you to vote via the Internet and follow the links to our proxy statement and annual report, which are both available at www.proxyvote.com . 
+For those stockholders who have elected to receive their proxy materials in the mail, please review our proxy statement and annual report and vote via the Internet, by telephone or using your proxy card.
+Your vote is important to us. Please review your proxy materials carefully and send in your vote today. 
+Thank you for your support. 
+Sincerely, 
+M ARK S. S IEGEL 
+Chairman of the Board 
+D OUGLAS J. W ALL 
+President and Chief Executive Officer 
+PATTERSON-UTI ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+NOTICE OF 2012
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 7, 2012 
+The 2012 annual meeting of the stockholders of Patterson-UTI Energy, Inc., a Delaware corporation (“Patterson-UTI”), will be
+held Thursday, June 7, 2012, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060 (the “Meeting”), for the following purposes: 
+Ÿ 
+to elect the seven directors named in this proxy statement to the Board of Directors of Patterson-UTI to serve until the next annual meeting of the
+stockholders or until their respective successors are elected and qualified; 
+Ÿ 
+to approve, on an advisory basis, Patterson-UTI’s executive compensation; 
+Ÿ 
+to ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for the fiscal year ending
+December 31, 2012; and 
+Ÿ 
+to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof. 
+Stockholders of record at the close of business on April 10, 2012 are entitled to notice of and to vote at the Meeting and any
+adjournment or postponement thereof. 
+Your vote is important to us. Whether or not you plan to attend the Meeting in person, we
+urge you to promptly vote your shares via the Internet, by telephone, or if the accompanying proxy statement was mailed to you, by completing, signing, dating and returning your proxy card as soon as possible in the enclosed postage prepaid
+envelope. 
+By order of the Board of Directors 
+S ETH D. W EXLER 
+General Counsel and Secretary 
+April 16, 2012 
+Important Notice Regarding the Availability of Proxy
+Materials for the Stockholder Meeting 
+to Be Held on June 7, 2012 
+The proxy statement and annual report to stockholders are available at www.proxyvote.com . 
+PATTERSON-UTI ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+PROXY
+STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 7, 2012 
+GENERAL INFORMATION ABOUT THE ANNUAL
+MEETING AND VOTING 
+The Board of Directors (the “Board” or “Board of Directors”) of Patterson-UTI
+Energy, Inc., a Delaware corporation (“Patterson-UTI”), has made this proxy statement and its 2011 annual report to stockholders available to you on the Internet or, upon your request has delivered printed versions of these materials to
+you by mail beginning on or about April 24, 2012. Patterson-UTI is furnishing this proxy statement in connection with the solicitation by the Board of Directors of proxies to be voted at the 2012 annual meeting of stockholders of Patterson-UTI
+(the “Meeting”). The Meeting will be held Thursday, June 7, 2012, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060, or at any adjournment thereof. The Notice of
+Internet Availability of Proxy Materials (the “Notice”) was mailed to each of Patterson-UTI’s stockholders (other than those who previously requested electronic delivery) entitled to vote at the Meeting on or about April 24,
+2012. 
+Pursuant to the “notice and access” rules adopted by the Securities and Exchange Commission (the
+“SEC”), Patterson-UTI has elected to provide stockholders access to its proxy materials over the Internet. Accordingly, Patterson-UTI sent a Notice to all of its stockholders as of the record date. The Notice includes instructions on how
+to access Patterson-UTI’s proxy materials over the Internet and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form by
+mail or electronically by email on an ongoing basis. 
+Choosing to receive your future proxy materials by email will save us the
+cost of printing and mailing documents to you and will help conserve natural resources. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link
+to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it. 
+If
+your shares are registered directly in your name with our transfer agent, Continental Stock Transfer & Trust Company, you are considered the “stockholder of record” with respect to those shares, and the Notice was sent directly to
+you. 
+If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you
+are the beneficial owner of shares held in “street name,” and the Notice was forwarded to you by that organization. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.
+Whether you are a “stockholder of record” or hold your shares in “street name,” you may direct your vote
+without attending the Meeting in person. 
+If you are a stockholder of record, you may vote by Internet or by telephone by
+following the instructions in the Notice. If you request printed copies of the proxy materials by mail, you may also vote by signing and submitting your proxy card and returning it by mail. You should sign your name exactly as it appears on the
+proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity. 
+If you are the beneficial owner of shares held in street name, you may be eligible to vote your shares electronically over the Internet or
+by telephone by following the instructions in the Notice. If you request printed 
+1 
+copies of the proxy materials by mail, you may also vote by signing the voter instruction card provided by your brokerage firm, bank, broker-dealer, or other similar organization and returning it
+by mail. If you provide specific voting instructions by mail, telephone or the Internet, your shares will be voted by your brokerage firm, bank, broker-dealer, or similar organization as you have directed. 
+Properly submitted proxies received either by mail, Internet, telephone or in person, in time to be counted for the Meeting will be voted
+as you have directed in your proxy, unless you revoke your proxy in the manner provided below. As to any matter for which you give no direction in your proxy, your shares will be voted as follows: 
+Ÿ 
+“FOR” the election of all of the nominees to the Board of Directors; 
+Ÿ 
+“FOR” the approval, on an advisory basis, of Patterson-UTI’s executive compensation; 
+Ÿ 
+“FOR” the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for the fiscal
+year ending December 31, 2012; and 
+Ÿ 
+“FOR” or “AGAINST” any other proposals that may be properly submitted at the Meeting at the discretion of the persons named in the
+proxy. 
+If you are a stockholder of record, you may revoke your proxy before the proxy is voted by either:
+Ÿ 
+submitting a new proxy with a later date, including a proxy submitted by the Internet or by telephone, in time to be counted for the meeting;
+Ÿ 
+notifying the Secretary of Patterson-UTI in writing before the Meeting that you have revoked your proxy; or 
+Ÿ 
+attending the Meeting and voting in person. 
+If your shares are held in street name, you must obtain a proxy executed in your favor from the stockholder of record (that is, your brokerage firm, bank, broker-dealer or similar organization) to be able
+to vote at the Meeting. 
+The Board of Directors is making this solicitation. Patterson-UTI’s officers and other employees,
+without compensation other than regular compensation, may solicit proxies by mail, email, the Internet, telephone, electronic means and personal interview. Patterson-UTI does not intend to retain a proxy solicitation firm to assist in the
+solicitation of proxies of stockholders, but may do so if circumstances warrant. Patterson-UTI will pay all costs associated with this solicitation. 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of
+Patterson-UTI’s common stock, $.01 par value per share (the “Common Stock”), at the close of business on April 10, 2012 are entitled to notice of and to vote at the Meeting or any adjournment or postponement thereof. At the close
+of business on April 10, 2012, there were 155,926,760 shares of Common Stock issued and outstanding. Holders of record of Common Stock on April 10, 2012 will be entitled to one vote per share on all matters to properly come before the
+Meeting. A list of stockholders entitled to notice of and to vote at the Meeting will be made available during regular business hours at the offices of Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067, for the 10 days
+prior to, and at, the Meeting for examination by any stockholder for any purpose germane to the Meeting. 
+A quorum is necessary
+to transact business at the Meeting. A majority of the shares of Common Stock outstanding on April 10, 2012 will constitute a quorum. The shares held by each stockholder who attends the Meeting in person, signs and timely returns the form of
+proxy or properly votes using the Internet or telephone will be counted for purposes of determining the presence of a quorum at the Meeting. 
+“Broker non-votes” will be considered present at the Meeting but will not be counted to determine the total number of votes cast. Broker non-votes occur when nominees, such as brokerage firms,
+banks, broker-dealers, or other similar organizations holding shares on behalf of the beneficial owners, are prohibited from exercising 
+2 
+discretionary voting authority for beneficial owners who have not provided voting instructions. If you do not give instructions to your bank, brokerage firm or other agent, the bank, brokerage
+firm or other agent will nevertheless be entitled to vote your shares of Common Stock in its discretion on “routine matters” and may give or authorize the giving of a proxy to vote the shares of Common Stock in its discretion on such
+matters. The ratification of an independent registered public accounting firm is generally considered a routine matter, whereas the election of directors and advisory approval of executive compensation are not considered routine matters. For these
+reasons, please promptly vote in accordance with the instructions provided by your brokerage firm, bank, broker-dealer, or other similar organization. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.
+Patterson-UTI’s bylaws provide that the affirmative vote of a plurality of the votes cast at the meeting at which a quorum is present is required for the election of directors. Shares as to which a stockholder withholds authority to vote on the
+election of directors and shares as to which a broker indicates that it does not have discretionary authority to vote on the election of directors will not be counted as voting thereon and will not affect the election of the nominees receiving a
+plurality of the votes cast. 
+The enclosed form of proxy provides a means for you to either: 
+Ÿ 
+vote “FOR” the election of the nominees to the Board of Directors listed below, 
+Ÿ 
+withhold authority to vote for one or more of the nominees, or 
+Ÿ 
+withhold authority to vote for all of the nominees. 
+The Board of Directors recommends that you vote “FOR” all of the nominees. Unless you give contrary instructions in your proxy, your proxy will be voted
+“FOR” the election of all of the nominees to the Board of Directors. If any nominee should become unable or unwilling to accept nomination or election, the person acting under the proxy will vote for the election of such other person as
+the Board of Directors may recommend. The Board has no reason, however, to believe that any of the nominees will be unable or unwilling to serve if elected. Abstentions will have no effect with respect to the election of directors. A broker non-vote
+will be counted for purposes of establishing a quorum, but will not be treated as a vote cast with respect to the election of directors. This will have the effect of reducing the absolute number of votes cast for the election of directors.
+There are no arrangements or understandings between any person and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no family relationships among any of the directors or executive officers of Patterson-UTI. 
+Our corporate governance guidelines require that if a director receives in an uncontested election a greater number of “withhold” votes than votes cast “for” his or her election, the
+Nominating and Corporate Governance Committee of the Board of Directors will undertake a prompt evaluation of the appropriateness of the director’s continued service on the Board of Directors. In performing this evaluation, the Nominating and
+Corporate Governance Committee will review all factors it deems relevant, including the stated reasons why votes were withheld, the director’s length of service, his or her past contributions to Patterson-UTI and the availability of other
+qualified candidates. The Nominating and Corporate Governance Committee will then make its recommendation to the Board. The Board of Directors will review the Nominating and Corporate Governance Committee’s recommendation and consider such
+further factors and information as it deems relevant. The Board of Directors will act on the Nominating and Corporate Governance Committee’s recommendation no later than 90 days following the date of the stockholders’ meeting. If the Board
+of Directors determines remedial action is appropriate, the director shall promptly take whatever action is requested by the Board. If the director does not promptly take the recommended remedial action or if the Board of Directors determines that
+immediate resignation is in the best interests of Patterson-UTI and its stockholders, the Board of Directors may accept the director’s resignation that will have been tendered as follows. Each director will, as a condition to his or her
+appointment or election as a director or nomination as a director, agree in writing to comply with the terms of 
+3 
+Patterson-UTI’s majority voting policy and provide to the Board of Directors an irrevocable resignation that will be effective upon (i) the failure to receive the required vote at the
+next annual meeting at which such director faces re-election and (ii) the Board of Directors’ acceptance of such resignation. 
+Set forth below is the name, age, position and a brief description of the business experience during at least the past five years of each of the members of Patterson-UTI’s Board of Directors, as well
+as specific qualifications, attributes and skills of such member that were identified by the Nominating and Corporate Governance Committee when concluding such member should be nominated to serve on the Board of Directors. Each current member of
+Patterson-UTI’s Board of Directors is a nominee for election to the Board of Directors. 
+Name 
+Age 
+Position 
+Mark S. Siegel 
+61 
+Chairman of the Board and Director 
+Kenneth N. Berns 
+52 
+Senior Vice President and Director 
+Charles O. Buckner 
+67 
+Director 
+Curtis W. Huff 
+54 
+Director 
+Terry H. Hunt 
+63 
+Director 
+Kenneth R. Peak 
+66 
+Director 
+Cloyce A. Talbott 
+76 
+Director 
+When considering whether directors and nominees have the experience, qualifications, attributes and
+skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of Patterson-UTI’s business and structure, the Nominating and Corporate Governance Committee and the Board of Directors
+focused primarily on the information discussed in each of the directors’ individual biographies set forth below. 
+In
+particular, with regard to Mr. Siegel, the Board of Directors considered his broad business and legal experience, as well as his expertise with respect to Patterson-UTI’s business. In addition, the Board considered Mr. Siegel’s
+demonstrated leadership for more than 15 years of both Patterson-UTI and one of its predecessor companies, UTI Energy Corp. (“UTI”). In addition, the Board considered Mr. Siegel’s prior leadership experience in other public
+companies and in the oil services industry, and in numerous other businesses and industries. Mr. Siegel also brings substantial experience and expertise in mergers and acquisitions, capital structure transactions, strategic planning, and board
+and business management. Mr. Siegel’s broad and deep experience and expertise allows him to provide Patterson-UTI with valuable leadership in all areas of its business endeavors. 
+With regard to Mr. Berns, the Board of Directors considered his more than 30 years of financial, mergers and acquisitions and
+transactional experience, including over fifteen years in the oil and gas industry. This experience and background, provides perspective on the cyclical nature of the oil and gas industry and allows Mr. Berns to provide valuable direction with
+respect to Patterson-UTI’s financial affairs, corporate transactions and strategic decisions. 
+With regard to
+Mr. Buckner, the Board of Directors considered his past and current service as a director of oil and gas companies, as well as his experience, expertise and background with regard to accounting matters, which includes his role as the former
+chairman of Ernst & Young LLP’s United States energy practice. 
+With regard to Mr. Huff, the Board of
+Directors considered his background as an executive of publicly traded oilfield services companies and as an owner and manager of a private equity firm and investment firm focused on the oilfield service industry. The Board noted his knowledge and
+experience in a broad range of oilfield products and services and his current and historical experience in managing operations in both the United States and internationally. The Board also considered Mr. Huff’s expertise and background
+with regard to accounting and legal matters, which, among other things, provides guidance to Patterson-UTI in assessing its corporate governance structure, policies and procedures. 
+With regard to Mr. Hunt, the Board of Directors considered his over 25 years of experience covering most phases of the upstream oil
+and natural gas industry in the United States and Canada, including the evaluation of exploration and development programs, oil and natural gas production and pipeline operations, and project 
+4 
+development and major production facility construction. This experience and background provides Patterson-UTI with an invaluable perspective of the oil and natural gas industry and its customers.
+In addition, Mr. Hunt’s many years of senior executive experience leading natural gas distribution, storage and marketing companies provides insight into the management of multi-faceted businesses and the markets for natural gas in North
+America. 
+With regard to Mr. Peak, the Board of Directors considered his nearly 40 years in the energy industry, including
+in a financial capacity, as well as his current role as the chairman and chief executive officer of a publicly traded oil and gas exploration and production company. This experience and background provides Patterson-UTI with an important perspective
+into its customers, current industry conditions and expectations of where the oil and natural gas market is headed. 
+With
+regard to Mr. Talbott, the Board of Directors considered his more than 50 years of experience in the oil and gas industry, more than thirty of which has been with Patterson-UTI, which provides unique and valuable knowledge of the U.S. land
+drilling industry and a historical perspective of the cyclical nature of the oil and natural gas industry. 
+Mark S.
+Siegel — Mr. Siegel has served as Chairman of the Board and as a director of Patterson-UTI since May 2001. Mr. Siegel served as Chairman of the Board and as a director of UTI from 1995 to May 2001, when UTI merged with
+and into Patterson-UTI. Mr. Siegel has been President of REMY Investors & Consultants, Incorporated (“REMY Investors”) since 1993. From 1992 to 1993, Mr. Siegel was President, Music Division, Blockbuster Entertainment
+Corp. From 1988 through 1992, Mr. Siegel was an Executive Vice President of Shamrock Holdings, Inc., a private investment company, and Managing Director of Shamrock Capital Advisors, Incorporated. Mr. Siegel holds a Bachelor of Arts degree
+from Colgate University and a J.D. from the University of California, Berkeley (Boalt Hall) School of Law. 
+Kenneth N.
+Berns — Mr. Berns has served as Senior Vice President of Patterson-UTI since April 2003 and as a director of Patterson-UTI since May 2001. Mr. Berns served as a director of UTI from 1995 to May 2001. Mr. Berns has
+been an executive with REMY Investors since 1994. Mr. Berns holds a Bachelors Degree in Business Administration from San Diego State University and a Masters Degree in Taxation from Golden Gate University. 
+Charles O. Buckner — Mr. Buckner has served as a director of Patterson-UTI since February 2007.
+Mr. Buckner, a private investor, retired from the public accounting firm of Ernst & Young LLP in 2002 after 35 years of service in a variety of client service and administrative roles, including chairmanship of Ernst &
+Young’s United States energy practice. He presently serves as a director of Energy Partners, Ltd., a publicly held company with oil and natural gas exploration and production on the continental shelf in the Gulf of Mexico. Mr. Buckner
+served as a director of Global Industries, Ltd., a marine construction services company with global operations from 2010 to 2011, Gateway Energy Corporation, a publicly held oil and gas pipeline company from 2008 to 2010, Horizon Offshore,
+Incorporated, a marine construction services company for the offshore oil and gas industry from 2003 to 2007, and Whittier Energy Corporation, a publicly held company with domestic onshore oil and natural gas exploration and production from 2003 to
+2007. Mr. Buckner is a Certified Public Accountant and holds a Bachelor of Business Administration from the University of Texas and a Masters of Business Administration from the University of Houston. 
+Curtis W. Huff — Mr. Huff has served as a director of Patterson-UTI since May 2001 and served as a director of
+UTI from 1997 to May 2001. Mr. Huff is the co-founder and advisor of Intervale Capital, an oilfield service private equity firm that Mr. Huff created in 2006. Mr. Huff is also the President and Chief Executive Officer of Freebird
+Investments LLC, a private family office investment company that was created in October 2002. Mr. Huff also serves as Chief Executive Officer of Impact Fluid Solutions LLC, which provides drilling and production solutions for oil and gas
+operators and fluid companies. Mr. Huff served as the President and Chief Executive Officer of Grant Prideco, Inc., a provider of drill pipe and other drill stem products, from February 2001 to June 2002. From January 2000 to February 2001,
+Mr. Huff served as Executive Vice President, Chief Financial Officer and General Counsel of Weatherford International, Inc., one of the world’s largest international oilfield services companies. He served as Senior Vice President and
+General Counsel of Weatherford from May 1998 to January 2000. Mr. Huff began his professional career in 1983 with the law firm of Fulbright & Jaworski L.L.P. where he specialized in corporate, securities and merger and acquisition
+matters. Mr. Huff was made a 
+5 
+partner in that firm in 1989 where he served until 1998 when he joined Weatherford. Mr. Huff holds a Bachelor of Arts degree and J.D. from the University of New Mexico, where he graduated as
+a member of the order of the coif and cum laude, and a Masters of Law from New York University School of Law. 
+Terry H.
+Hunt — Mr. Hunt has served as a director of Patterson-UTI since April 2003 and served as a director of UTI from 1994 to May 2001. Mr. Hunt is an energy consultant. Mr. Hunt served as Senior Vice President —
+Strategic Planning of PPL Corporation, an international energy and utility holding company, from 1998 to 2000. Mr. Hunt served as the President and Chief Executive Officer of Penn Fuel Gas, Inc., a Pennsylvania-based natural gas and propane
+distribution company, from 1992 to 1999. Previously, Mr. Hunt was President of Carnegie Natural Gas and Apollo Gas Company, both Appalachian natural gas distribution companies. He also previously served in senior management positions in natural
+gas project and venture development, oil and natural gas exploration and development evaluation and operations and major production facilities construction with Texas Oil & Gas Corp. and Atlantic Richfield. Mr. Hunt holds a Bachelor of
+Engineering degree from the University of Saskatchewan, Canada and a Masters of Business Administration from Southern Methodist University. 
+Kenneth R. Peak — Mr. Peak has served as a director of Patterson-UTI since November 2000. Mr. Peak has served as Chairman and Chief Executive Officer of Contango
+Oil & Gas Company since September 1999. Mr. Peak entered the energy industry in 1972 as a commercial banker and has held a variety of financial and executive positions in the oil and gas industry prior to starting Contango in 1999.
+Mr. Peak served as an officer in the U.S. Navy from 1968 to 1971. Mr. Peak received a Bachelor of Science in Physics from Ohio University in 1967 and a Masters of Business Administration from Columbia University in 1972. 
+Cloyce A. Talbott — Mr. Talbott has served as a director of Patterson-UTI since its incorporation in 1978.
+Mr. Talbott co-founded Patterson-UTI and has served in various capacities, including as its Chief Executive Officer from 1983 until his retirement from that position in September 2007. He also served as Chairman of the Board from 1983 to May
+2001. Mr. Talbott is currently employed as a consultant by Patterson-UTI. Mr. Talbott holds a Bachelor of Science degree in petroleum engineering from Texas Tech University. 
+Board Leadership Structure, Lead Director and Board Role in Risk Oversight 
+The Board evaluates its leadership structure and role in risk oversight on an ongoing basis. The decision on whether to combine or
+separate the Chairman and Chief Executive Officer (“CEO”) role is determined on the basis of what the Board considers to be best for Patterson-UTI at any given point in time. Patterson-UTI’s current Board leadership structure
+separates the role of Chairman and CEO. 
+The Board also believes part of an effective Board leadership structure is to have a
+lead independent director, the “Lead Director.” The Board has appointed Mr. Huff as the Lead Director. The independent directors meet regularly in executive sessions at which only independent directors are present, and the Lead
+Director chairs those sessions. The Lead Director serves as a liaison between the Chairman and the independent directors, consults with regard to Board and agenda items, and works with the chairpersons of Board committees as appropriate. 
+The Nominating and Corporate Governance Committee and the Board currently believe that the Board’s leadership structure, which
+includes the separation of the role of CEO and Chairman and the appointment of an independent Lead Director, is appropriate because it, among other things, provides for sufficient independence between the Board and management and for an independent
+director who provides board member leadership. 
+The Board has adopted Corporate Governance Guidelines, which can be accessed
+electronically in the “Governance” section of Patterson-UTI’s website at www.patenergy.com The Guidelines describe one of the Board’s primary responsibilities as overseeing Patterson-UTI’s processes for assessing and
+managing risks. The Board discharges this responsibility, in part, through regular inquiries from the Chairman of the Board and/or the Lead Director to management, periodic communications from management to the Board of Directors of particular risks
+and events, and discussions during Board meetings with and without management of general and specific risks to Patterson-UTI. 
+6 
+Meetings and Committees of the Board of Directors 
+The Board of Directors met seven times during the year ended December 31, 2011. Each director attended, in person or by telephone, at
+least 75% of the aggregate of all meetings held by the Board and meetings of each committee on which such director served. A majority of the members of the Board of Directors are independent within the meaning of the Nasdaq Stock Market, Inc.
+(“Nasdaq”) listing standards. Specifically, the Board has determined that Messrs. Buckner, Huff, Hunt and Peak are independent within the meaning of the Nasdaq listing standards. In reaching this conclusion, the Board considered that
+Mr. Huff controls and manages two investment companies, which have interests in oilfield service portfolio companies that, prior to 2010, have supplied parts and equipment to Patterson-UTI in the ordinary course of their businesses consistent
+with customary terms in the industry. In reaching this conclusion, the Board also considered that Mr. Peak is the Chairman and Chief Executive Officer of a publicly traded independent natural gas and oil company, which has a subsidiary that has
+obtained contract drilling services from Patterson-UTI in the ordinary course of their businesses consistent with customary terms in the industry. The Board has determined that these transactions are not material to such companies, Patterson-UTI or
+Messrs. Huff or Peak and that such transactions do not affect either director’s independence under applicable rules and regulations. 
+The Board of Directors has established four standing committees, an Executive Committee, an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. 
+The Executive Committee, which currently is composed of Messrs. Siegel, Talbott and Berns, has the authority, to the extent permitted by
+applicable law, to act for the Board in all matters arising between regular or special meetings of the Board of Directors. 
+The
+Audit Committee members are Messrs. Buckner (chairman), Huff and Hunt, each of whom is independent within the meaning of applicable rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and within the meaning of
+the Nasdaq listing standards. The Audit Committee oversees management’s conduct of Patterson-UTI’s accounting and financial reporting process, including review of the financial reports and other financial information provided by
+Patterson-UTI to the public and government and regulatory bodies, Patterson-UTI’s system of internal accounting, Patterson-UTI’s financial controls, and the annual independent audit of Patterson-UTI’s financial statements and internal
+control over financial reporting. The Audit Committee also oversees compliance with Patterson-UTI’s codes of conduct and ethics and with legal and regulatory requirements. The Board has determined that Messrs. Buckner and Huff are “audit
+committee financial experts” within the meaning of applicable SEC rules. The Audit Committee selects the independent registered public accounting firm to audit Patterson-UTI’s books and records and considers and acts upon accounting
+matters as they arise. The Board of Directors has adopted a written charter for the Audit Committee. The Audit Committee held five meetings during the year ended December 31, 2011. Please see “Audit Committee Report” elsewhere in this
+proxy statement. 
+The Compensation Committee members are Messrs. Hunt (chairman), Buckner, Huff and Peak, each of whom is
+independent as defined in the Nasdaq listing standards. Among other things, the Compensation Committee sets and administers the policies that govern the compensation of executive officers and directors of Patterson-UTI. The Board of Directors has
+adopted a written charter for the Compensation Committee. The Compensation Committee held six meetings during the year ended December 31, 2011. Please see “Compensation Discussion and Analysis” and “Compensation Committee
+Report” elsewhere in this proxy statement for further information about the Compensation Committee. 
+The Nominating and
+Corporate Governance Committee members are Messrs. Huff (chairman), Buckner and Peak, each of whom is independent as defined in the Nasdaq listing standards. The purpose of the Nominating and Corporate Governance Committee is to identify individuals
+qualified to become Board members, to recommend for selection by the Board director nominees for the next annual meeting of stockholders, to review Patterson-UTI’s Code of Business Conduct, to develop and continually make recommendations with
+respect to the best corporate governance principles and to oversee the evaluation of the Board and management. The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee. The Nominating and Corporate
+Governance Committee held one meeting during the year ended December 31, 2011. 
+7 
+On behalf of the Board, the Nominating and Governance Committee considers director nominees
+recommended by Patterson-UTI’s stockholders if the recommendations are made in accordance with all legal requirements, including applicable provisions of Patterson-UTI’s restated certificate of incorporation and bylaws. In accordance with
+Patterson-UTI’s bylaws, in addition to any other applicable requirements, nominations of persons for election to the Board may be made at a meeting of stockholders only by or at the direction of the Board or by a stockholder who is a
+stockholder of record on the date of the giving of the notice provided for below and on the record date for the determination of stockholders entitled to vote at such annual meeting and gives timely notice of such nomination in writing to the
+Secretary of Patterson-UTI. To be timely with respect to the 2013 annual meeting of stockholders, a stockholder’s notice must be delivered to or mailed and received at Patterson-UTI’s principal executive offices not earlier than
+February 7, 2013 and not later than March 9, 2013; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after June 7, 2013, notice by the stockholder must be received
+not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or public disclosure of the annual meeting date was made, whichever occurs first. 
+A stockholder’s notice to the Secretary of Patterson-UTI shall set forth: 
+Ÿ 
+as to each person whom the stockholder proposes to nominate for election or re-election as director, all information relating to such person that is
+required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A promulgated under the Exchange Act, or any successor regulation thereto, 
+Ÿ 
+the name and record address of the stockholder proposing such nomination, 
+Ÿ 
+the class and number of shares of Patterson-UTI that are beneficially owned by the stockholder, 
+Ÿ 
+a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their
+names) pursuant to which the nomination or nominations are to be made by such stockholder, and 
+Ÿ 
+a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in the notice.
+Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee
+and to serve as a director if elected. 
+The Nominating and Corporate Governance Committee determines qualification criteria and
+procedures for the identification and recruitment of candidates for election to serve as directors of Patterson-UTI. The Nominating and Corporate Governance Committee relies on the knowledge and relationships of Patterson-UTI and its officers and
+directors, as well as third parties when it deems appropriate, to identify and evaluate nominees for director, including nominees recommended by stockholders. In evaluating a nominee for director, the Nominating and Corporate Governance Committee
+considers the nominee’s skills, expertise, industry and other knowledge, personal and professional ethics, integrity and values, sound business judgment and willingness to commit sufficient time to the Board and be committed to representing the
+long-term interests of Patterson-UTI’s stockholders. Although the Nominating and Corporate Governance Committee does not have a stand-alone policy with regard to consideration of diversity in identifying director nominees, it considers
+diversity in professional background, experience, expertise (including as to financial matters) and perspective (including as to age, gender and ethnicity) with respect to the Board of Directors composition as a whole when evaluating a director
+nominee. 
+Succession Planning 
+The Board of Directors oversees processes and procedures to provide continuity of well-qualified executive leadership and to assess whether such leadership possesses the skill and talent to execute
+Patterson-UTI’s long term business strategies. The Board of Directors reviews the succession plan for the Chief Executive Officer and the senior executives tailored to reflect the Board’s standards for executive leadership and
+Patterson-UTI’s business strategy and vision. The succession plan addresses (i) both current and long term needs of Patterson-UTI and establishes a process for identifying and assessing potential internal candidates; (ii) periodic
+review and 
+8 
+assessment of readiness: (iii) contingency planning for temporary absences of the Chief Executive Officer due to disability or other unexpected event; and (iv) long term continuity
+planning for succession to the Chief Executive Officer position. Patterson-UTI’s current President and Chief Executive Officer, Douglas J. Wall, has announced his intention to retire later this calendar year, and it is expected that
+Patterson-UTI’s current Chief Operating Officer, William Andrew Hendricks, Jr., will assume the position of President and Chief Executive Officer upon Mr. Wall’s retirement. 
+Political Contributions 
+Patterson-UTI has a policy prohibiting the
+contribution of company funds to political parties or organizations or to candidates for any public office or to influence the general public, or segments thereof, with respect to public elections or referenda. Patterson-UTI participates in certain
+trade organizations with purposes that include enhancement of the public image of our industry, education about the industry and issues that affect the industry and industry best practices and standards. Many of the trade organizations also engage
+in legislative or political activity related to matters that affect the industry as a whole and not a specific company. Patterson-UTI, as one of many members in various trade associations, does not direct the legislative activities of any trade
+organization of which it is a member. 
+Communication with the Board and its Independent Members 
+Persons may communicate with the Board, or directly with its Chairman, Mr. Siegel, by submitting such communication in writing in
+care of Chairman of the Board of Directors, Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067. Persons may communicate with the independent members of the Board by submitting such communication in writing to the Nominating
+and Corporate Governance Committee of the Board of Directors of Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067. 
+Although Patterson-UTI does not have a formal policy regarding attendance by members of the Board at its annual meetings of stockholders, directors are invited to attend annual meetings of Patterson-UTI
+stockholders. All of the directors attended the 2011 annual meeting of stockholders, with four directors attending in person and three directors attending via telephone. 
+Corporate Governance Documents Available on Patterson-UTI’s Website 
+Copies of each of the following documents can be accessed electronically in the “Governance” section of the Patterson-UTI
+website at www.patenergy.com and in print to any stockholder who requests them from the Secretary of Patterson-UTI: 
+Ÿ 
+Audit Committee Charter; 
+Ÿ 
+Compensation Committee Charter; 
+Ÿ 
+Nominating and Corporate Governance Committee Charter; 
+Ÿ 
+Corporate Governance Guidelines; 
+Ÿ 
+Code of Business Conduct for its employees, officers and directors; and 
+Ÿ 
+Code of Business Conduct and Ethics for Senior Financial Executives. 
+PROPOSAL NO. 2 
+ADVISORY APPROVAL OF EXECUTIVE COMPENSATION 
+In accordance with
+Section 14A of the Exchange Act, the Board of Directors is asking stockholders to approve a non-binding, advisory resolution on the compensation of Patterson-UTI’s executive officers who are named in the Summary Compensation Table
+appearing in this proxy statement (the “Named Executive Officers”). The compensation of the Named Executive Officers is described in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of
+this proxy statement. 
+9 
+The compensation program for the Named Executive Officers is designed to attract and retain
+highly qualified individuals and to motivate and reward them for performance that benefits Patterson-UTI and its stockholders. The Compensation Committee and the Board of Directors believe that the policies and procedures detailed in the
+“Compensation Discussion and Analysis” achieve these goals by: 
+Ÿ 
+providing a mix of short-term compensation in the form of base salary and cash bonuses and long-term compensation in the form of restricted stock,
+stock options and performance units, which strikes a balance between offering competitive compensation packages and aligning compensation with long-term growth and creating value for stockholders; 
+Ÿ 
+setting annual base salaries, in part, based on Patterson-UTI’s financial results and position and performance compared to similarly situated
+companies; 
+Ÿ 
+providing performance-based cash bonuses designed to put a meaningful portion of total compensation at risk; 
+Ÿ 
+awarding stock options and performance units, whose value is tied to the achievement of certain performance goals and/or an increase in the price of
+the Common Stock; 
+Ÿ 
+awarding stock options and restricted stock with vesting periods of three years; and 
+Ÿ 
+establishing stock ownership guidelines. 
+The Board of Directors is asking stockholders to approve the following non-binding, advisory resolution at the Meeting: 
+“RESOLVED, that the stockholders of Patterson-UTI Energy, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed
+pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and other narrative discussion in the Proxy Statement for the 2012 Annual Meeting of
+Stockholders of the Company.” 
+This advisory resolution, commonly referred to as a “say-on-pay” resolution, is
+non-binding on the Board of Directors. Although non-binding, the Board of Directors and the Compensation Committee value the views of Patterson-UTI’s stockholders and will review and consider the voting results when (i) evaluating the
+effectiveness of Patterson-UTI’s compensation policies and practices and (ii) making future compensation decisions for the Named Executive Officers. 
+The Board of Directors recommends a vote “FOR” the approval of the advisory resolution on executive compensation . Approval of the advisory resolution requires the affirmative vote of the
+holders of a majority of the shares of Common Stock present in person or by proxy, and entitled to vote at the Meeting. Unless you give contrary instructions in your proxy, your properly submitted proxy will be voted “FOR” such approval.
+Abstentions will be counted as shares entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. A broker non-vote will be counted for purposes of establishing a quorum, but will not be treated as a
+share entitled to vote on the proposal. This will have the effect of reducing the absolute number of shares necessary to approve the proposal. 
+PROPOSAL NO. 3 
+RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
+FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm to
+audit the financial statements and internal control over financial reporting of Patterson-UTI for the fiscal year ending December 31, 2012, and directed that such engagement be submitted to the stockholders of Patterson-UTI for ratification. In
+recommending ratification by the stockholders of such engagement, the Board of Directors is acting upon the recommendation of the Audit Committee, which has satisfied itself as to PricewaterhouseCoopers LLP’s independence, professional
+competence and standing. Although ratification by stockholders of the engagement of PricewaterhouseCoopers LLP is not required by 
+10 
+Delaware corporate law or Patterson-UTI’s restated certificate of incorporation or bylaws, the Audit Committee believes a decision of this nature should be made with the consideration of
+Patterson-UTI’s stockholders. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain PricewaterhouseCoopers LLP and may retain that firm or another without re-submitting the matter to our
+stockholders. Even if the appointment is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such change would be
+in the best interests of Patterson-UTI and its stockholders. 
+It is expected that one or more representatives of
+PricewaterhouseCoopers LLP will be present at the Meeting and will be given the opportunity to make a statement if they so desire. It also is expected that the representative(s) will be available to respond to appropriate questions from the
+stockholders. 
+The Board of Directors recommends a vote “FOR” the ratification of PricewaterhouseCoopers LLP as
+Patterson-UTI’s independent registered public accounting firm. Ratification of the selection of PricewaterhouseCoopers LLP requires the affirmative vote of the holders of a majority of the shares of Common Stock present in person or by
+proxy, and entitled to vote at the Meeting. Unless you give contrary instructions in your proxy, your properly submitted proxy will be voted “FOR” such ratification. Abstentions will be counted as shares entitled to vote on the proposal
+and will have the same effect as a vote “AGAINST” the proposal. Because the ratification of an independent registered public accounting firm is considered a routine matter, if you do not give instructions to your brokerage firm, bank,
+broker-dealer, or other similar organization, the brokerage firm, bank, broker-dealer, or other similar organization will nevertheless be entitled to vote your shares in its discretion and may give or authorize the giving of a proxy to vote the
+shares in its discretion on this proposal. 
+EXECUTIVE OFFICERS 
+Set forth below is the name, age and position followed by a brief description of the business experience during at least the past five
+years for each executive officer of Patterson-UTI who is not also a member of the Board of Directors. 
+Name 
+Age 
+Position 
+Douglas J. Wall 
+59 
+President and Chief Executive Officer 
+William Andrew Hendricks, Jr. 
+47 
+Chief Operating Officer 
+John E. Vollmer III 
+56 
+Senior Vice President — Corporate Development, Chief Financial Officer and Treasurer 
+Seth D. Wexler 
+40 
+General Counsel and Secretary 
+Gregory W. Pipkin 
+40 
+Chief Accounting Officer and Assistant Secretary 
+James M. Holcomb 
+49 
+President — Patterson-UTI Drilling Company LLC 
+Douglas J. Wall — Mr. Wall has served as President and Chief Executive Officer
+of Patterson-UTI since October 2007. From April through September 2007 he served as Chief Operating Officer of Patterson-UTI. From 2005 to April 2007, Mr. Wall served as Group President, Completion and Production of Baker Hughes Incorporated,
+an oilfield service company. In that capacity, Mr. Wall was responsible for the combined activities of Baker Oil Tools, Baker Petrolite, Centrilift and ProductionQuest divisions. From 2003 to 2005, he served as President of Baker Oil Tools, a
+division of Baker Hughes, and from 1997 to 2003 he served as President of Hughes Christensen Company, a division of Baker Hughes. Mr. Wall holds a Bachelor Degree in Economics from the University of Calgary and a Masters of Business
+Administration in Finance and Marketing from the University of Alberta. 
+William Andrew Hendricks,
+Jr. — Mr. Hendricks has served as Chief Operating Officer of Patterson-UTI since April 2012. From May 2010 through March 2012, Mr. Hendricks served as President of Schlumberger Drilling & Measurements, a
+division of Schlumberger Limited, a global provider of oilfield services. Prior to that date, Mr. Hendricks worked for Schlumberger in various worldwide locations and capacities since 1988, including serving in numerous executive positions
+since 2003. Mr. Hendricks holds a Bachelor of Science in Petroleum Engineering from Texas A&M University. 
+11 
+John E. Vollmer III — Mr. Vollmer has served as Chief Financial
+Officer and Treasurer of Patterson-UTI since November 2005 and Senior Vice President — Corporate Development of Patterson-UTI since May 2001. Mr. Vollmer also served as Secretary of Patterson-UTI from November 2005 to February 2007.
+Mr. Vollmer served as Senior Vice President, Chief Financial Officer, Secretary and Treasurer of UTI from 1998 to May 2001. From 1992 until 1997, Mr. Vollmer served in a variety of capacities at Blockbuster Entertainment, including Senior
+Vice President — Finance and Chief Financial Officer of Blockbuster Entertainment’s Music Division. Mr. Vollmer holds a Bachelor of Arts in Accounting from Michigan State University. 
+Seth D. Wexler — Mr. Wexler has served as General Counsel and Secretary of Patterson-UTI since August 2009.
+From March 1998 to August 2009, he specialized in securities law and mergers and acquisitions for the law firm of Fulbright & Jaworski L.L.P., including as a partner of such law firm since January 2007. Mr. Wexler holds a Bachelor of
+Business Administration in Finance from the University of Texas at Austin, a Juris Doctorate from the University of Houston Law Center and a Masters of Business Administration from the University of Houston. 
+Gregory W. Pipkin — Mr. Pipkin has served as Chief Accounting Officer and Assistant Secretary of Patterson-UTI
+since August 2007. From June 2006 to August 2007, Mr. Pipkin served as Director of Financial Reporting of Patterson-UTI. From April 2001 through May 2006, Mr. Pipkin was Controller and Vice President of Accounting and Reporting for Alamosa
+Holdings, Inc., a publicly traded wireless telecommunications company. Prior to April 2001, Mr. Pipkin was in the practice of public accounting. Mr. Pipkin is a Certified Public Accountant and holds a Bachelor of Business Administration in
+Accounting from Texas Tech University. 
+James M. Holcomb — Mr. Holcomb has served as President of
+Patterson-UTI Drilling Company LLC since January 2012. Mr. Holcomb came to 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 most recently as Senior Vice President of Operations of Patterson-UTI Drilling Company LLC from April 2006 to January 2012. Mr. Holcomb has over 28 years of experience in contract drilling operations. Mr. Holcomb holds
+a Bachelor of Science Degree in Business Management from LeTourneau University. 
+COMPENSATION DISCUSSION AND ANALYSIS
+Our Business 
+Patterson-UTI is one of the largest land contract drilling companies in the United States, with operations in most of the major oil and gas regions in the United States and western Canada. We also are a
+major provider of pressure pumping services in selected markets within the United States. Our industry is subject to wide swings in activity based on oil and natural gas prices, demand for oil and natural gas and general economic activity. In recent
+years, we have seen our rig count fluctuate from a high monthly average of 283 drilling rigs operating in October 2008 to a low monthly average of 60 drilling rigs operating in June 2009, with revenue and earnings being similarly affected.
+The North American oil and natural gas industry has experienced a significant transformation in recent years due to
+technological advances in the horizontal drilling and completion of oil and natural gas wells in shale formations. Today, more than 60% of U.S. land drilling is focused on these type of wells, which typically require higher specification rigs and
+large amounts of horsepower for pressure pumping equipment. With oil prices in the $100 per barrel range and natural gas prices at or below $3.00 per mcf, U.S. drilling activity has become increasingly focused on the exploration and development of
+oil and liquid hydrocarbon reservoirs versus natural gas. 
+2009 Strategic Plan 
+In 2009, our Board adopted a long term strategic plan that was designed to position our company for the future. Our plan contemplated an
+aggressive upgrade of our drilling rig fleet to address the need for higher specification equipment and an expansion of our pressure pumping business to participate in the growing horizontal pressure pumping frac market. On the rig side of our
+business, we sought to add at least 75 new, higher technology rigs to our existing rig fleet over a multi-year period, increase and protect our contract drilling market share in our key markets and diversify our customer base. We also sought to
+become a recognized 
+12 
+provider of high-end pressure pumping services in the markets in which we participate. In addition, our strategic plan focused on providing excellent value to our customers, being nimble both in
+operations and in strategic decisions and providing superior returns to our stockholders. 
+Since the beginning of 2009, we have
+expended over $2.3 billion for capital expenditures and acquisitions in our core businesses, resulting in the addition of 64 new, high technology rigs and the upgrade of many of our existing rigs to serve the horizontal shale market, and we more
+than quadrupled the horsepower of our pressure pumping fleet. We financed this growth primarily with internal cash flow and provided a financial underpinning for our new build program through term contracts. 
+Our efforts have translated into solid financial performance and growth since 2009, with 2011 being a record year for revenues and our
+highest level of earnings before interest, taxes, depreciation and amortization (“EBITDA”) in the last five years. For more information about our business, please see “Business” and “Management’s Discussion and Analysis
+of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on February 10, 2012. 
+(Dollars in millions) 
+2011 Financial and Business Highlights 
+2011 was a year of significant
+accomplishments for our company. Among the key accomplishments in 2011, were the following: 
+Ÿ 
+Revenues increased 76% from $1.46 billion in 2010 to $2.57 billion in 2011. 
+Ÿ 
+EBITDA increased 80% from $536 million in 2010 to $963 million in 2011. 
+Ÿ 
+Net income increased 175% from $117 million in 2010 to $322 million in 2011. 
+Ÿ 
+Stockholders equity increased to $2.52 billion from $2.19 billion. 
+Ÿ 
+Our return on assets increased from 3.8% in 2010 to 8.4% in 2011. 
+Ÿ 
+Our return on equity increased from 5.5% in 2010 to 13.7% in 2011. 
+Ÿ 
+Our average active rig count grew from an average of 196 rigs for the month of December 2010 to 233 rigs for the month of December 2011.
+Ÿ 
+We increased the number of drilling rigs under term contracts by 44% to 144 rigs from 100 at year end 2010. 
+Ÿ 
+We completed 25 new APEX™ rigs, bringing our total fleet of premium electric rigs to a total of 145 rigs, and we positioned the Company to be able
+to add 30 more high technology rigs in 2012. 
+13 
+Ÿ 
+We increased our pressure pumping horsepower by 196,000 (or 45%) to 631,000 horsepower, with an additional 140,000 horsepower scheduled to be added in
+2012. 
+Ÿ 
+We strengthened the supply chain for our pressure pumping business through long-term purchase arrangements for proppants. 
+Ÿ 
+We substantially completed the implementation of a new enterprise resource planning system. 
+Ÿ 
+We disposed of the non-core wireline operations acquired by us in our acquisition of Key Energy’s pressure pumping business.
+Ÿ 
+We strengthened our management teams with key hires, including in both operations and safety. 
+Ÿ 
+We maintained our quarterly dividend of $0.05 per share. 
+We also maintained our focus on financial discipline and effective capital management and benefited from a strong balance sheet. Maintaining a flexible and conservative capital structure, along with a
+strong liquidity position, provides us with a protective cushion to operate through difficult market conditions, as well as the ability to take advantage of new opportunities when they arise. 
+Consideration of Last Year’s “Say on Pay” Vote 
+We have
+reviewed the results of the stockholder “say on pay” advisory vote on executive compensation that was held at our last Annual Meeting with respect to the 2010 compensation actions and decisions for Mr. Wall and other Named Executive
+Officers set forth in the CD&A, the summary compensation table and the related compensation tables and narratives in last year’s proxy statement. 80% of the votes cast (excluding broker non-votes) on the proposal were voted in support of
+our compensation structure as described in the last year’s proxy statement. Based upon our analysis of the appropriate compensation structure for the Named Executive Officers and consistent with the results of the “say on pay” vote,
+we elected to make no material changes in the general structure and philosophy of the Company’s compensation policy for key executives for 2011 or for the compensation structure for 2012. 
+Opportunity for Stockholder Feedback 
+The Committee carefully considers feedback from our stockholders regarding our executive compensation program. Stockholders are invited to express their views to the Committee as described under the
+heading “Communication with Directors” in this proxy statement. The advisory vote on the compensation of the Named Executive Officers provides stockholders with an opportunity to communicate their views on our executive compensation
+program, and we will consider those views in structuring our compensation arrangements. 
+You should read this CD&A in
+conjunction with the advisory vote that we are conducting on the compensation of the Named Executive Officers. This CD&A, as well as the accompanying compensation tables, contains information that is relevant to your voting decision. 
+Compensation Philosophy and Objectives 
+Our overriding philosophy for the compensation of our key executives is to link their compensation with the operational and market performance of the Company and to establish incentives that reward
+them for their efforts in achieving both short-term tactical and long-term strategic objectives. In doing so, we seek to offer competitive compensation packages designed to attract and retain highly qualified individuals and to motivate and reward
+our executives in achieving the Company’s goals. Our compensation program also seeks to reward excellence in performance and foster a collaborative team framework among our top executives. 
+Emphasis on Long-Term Incentives. 
+Our compensation program places a strong emphasis on creating long-term value through the use of long-term incentives. We seek to achieve a proper balance in our compensation program between long-term and
+current compensation by using a combination of time-vested equity awards for long-term incentives and fixed and 
+14 
+variable cash for short-term incentives. Our compensation arrangements take into account the cyclical and volatile nature of our industry. 
+Our long-term compensation incentives rely on equity-based awards over cash as a means of aligning the interests of management with the
+Company’s stockholders. Historically, equity awards for long-term incentives has represented between 60-75% of total compensation, while fixed and variable cash for short-term incentives has represented between 25-40% of total compensation.
+Variations in these percentages may occur due to either an exceptionally strong or weak year in which the Company’s EBITDA and related cash bonus compensation fluctuate in tandem or there is market volatility affecting the grant date valuation
+of options and performance units using the methodologies required for reporting equity based compensation. 
+In 2011, the mix
+between long-term equity awards and fixed and variable cash and short term incentives for our top four Named Executive Officers was within the middle of our targeted range at 67% and 33%, respectively. 
+2011 Split Between Short-Term and Long-Term Compensation (Top Four Named Executive Officers) 
+We believe that our management and compensation policies have over the long run delivered superior
+returns to our stockholders, with total stockholder returns having been between the 47th and 66th percentiles in each of the past one, two and three year periods when measured against our peer group. We also have delivered consistent top quartile
+returns on assets and equity over our history, while maintaining a strong and low leveraged balance sheet. 
+Details of the
+specific components of our executive compensation program follow. 
+Key Compensation Principles and Objectives 
+Our executive compensation program has historically emphasized the following key principles: (i) low comparative base compensation
+with variable incentive cash compensation, (ii) emphasis on equity-based compensation for long-term value creation and (iii) team compensation and incentives. 
+Cash Compensation Emphasizes Low Base Salaries with Higher Variable Cash Compensation Tied to Financial Results 
+We have designed the cash component of our compensation program to be mostly variable by using comparatively low base salaries and higher cash bonuses tied to the Company’s EBITDA. We enacted this
+program over ten years ago and have historically allocated between 0.6111% and 1% of total EBITDA to an executive management pool that is then allocated among the top executive officers. Our allocation in 2011 was a team bonus potential of up to
+0.80% of EBITDA, which for 2011 was allocated among Messrs. Siegel, Wall, Vollmer and Berns. 
+15 
+We do not typically make changes to the base compensation of our top Named Executive
+Officers from year to year to promote the idea that management should not be focused on the fixed component of their compensation, but rather they should expect that variable compensation – tied to the Company’s performance – will be
+the most significant part of their cash remuneration. 
+We believe that the use of lower market-based salaries with higher
+variable bonuses aligns our executives’ annual cash compensation with our actual financial results. During periods of low earnings, such as we had in 2009, total cash compensation will be materially lower and typically be in the lower quartiles
+against our peers but reflective of our results. During periods of higher earnings, such as we experienced in 2011, cash compensation will typically be in the top quartiles and be reflective of the Company’s higher cash generation. Accordingly,
+we look at our compensation program as a multi-year program that is targeted to provide cash compensation to our top four Named Executive Officers that is (i) aligned with changes in earnings from year to year, and (ii) on a full cycle
+basis aligned with stockholder returns compared to our peers. 
+2007-2011 Allocation of Cash Compensation Between Base and Incentive 
+(Top Four Named Executive
+Officers) 
+(Dollars in millions) 
+Correlation of Total Executive Compensation to 
+EBITDA 2007-2011 
+(Top Four Named Executive Officers) 
+(Dollars in millions) 
+Although there will be years where the cash compensation paid to our executives will be in the higher
+quartiles and our relative stock performance may be at a lower quartile or vice versa, this result generally will occur during a period of transition within the industry where there exists a lag between market expectations and current activity. A
+good example of this was at the end of 2008 where our drilling activity and operating results were at high levels, but the public market valuations of land drillers was falling on the expectation of a severe downturn that occurred months later in
+2009. 
+We have considered in the past the use of more traditional bonus plans tied to annual budgets and performance against
+those budgets. We, however, have concluded that given the extreme volatility in our industry those plans do not provide the incentives that we seek to achieve and could in fact create incentives for our management to focus only on the short-term. By
+tying a meaningful portion of the top four Named Executive Officers’ compensation to EBITDA, we believe that their compensation and the stockholders’ interests become especially well aligned. 
+Emphasis on Equity for Long-term Incentive Compensation 
+We have historically targeted more than 60% of total compensation to be in the form of time-vested equity or equity-based awards. This
+emphasis on equity-based compensation is aimed at aligning the financial interest of the top four Named Executive Officers with our stockholders and the total returns provided to stockholders. We believe that by making a large portion of
+compensation tied to equity, our top four Named Executive Officers can only fully realize the potential benefits of the compensation if our stockholders also benefit. 
+16 
+Over the years we have adjusted the form of the equity incentives we provide to our top four
+Named Executive Officers from solely options to a mix of options, restricted stock and performance units. We believe that this mix allows us to tailor our program to encourage the building of long-term value and, in the case of performance units,
+achievement of stockholder returns in excess of our peer group. 
+The following charts set forth the allocation of the various
+forms of long-term equity-based incentives that we have granted from 2007-2011 and the allocation of these incentives that we used for 2011: 
+Equity-Based Incentive Allocations 2007-2011 
+2011 Equity-Based Incentive Allocations 
+Restricted Stock. We consider restricted stock as an additional form of
+basic compensation that provides value to the executive only if the executive remains in the employment of the Company during the vesting period, with that value being subject to increases and decreases in value depending on the performance of our
+stock. We typically target restricted stock awards to represent approximately 30-50% of total equity-based compensation depending on stock prices and volatility at the time of grant. 
+Stock Options. Our grant of stock options is intended to provide value to the executive only if the value of
+the Company’s stock appreciates. When we approve grants of options to our executives, we take into account a number of different factors, including the stock price at the time of grant, the Black-Scholes value of the option grant for accounting
+purposes and prior option grant amounts. In addition to considering the Black-Scholes option value, we may also consider other option valuation models and modifications to the Black-Scholes model to address situations where the historical volatility
+used in the valuation model may not be representative of a normalized market. We believe that the high market volatility that we have seen in our and other companies’ stock prices since the financial crisis in 2008 has created a situation where
+the impact of volatility on value must be considered as it can skew the calculated value on any given date and therefore the perceived value of an executive’s compensation package. 
+Ultimately, our decision on the number of options to be granted in any year will be based on the circumstances at the time of grant and
+our consideration of a variety of other factors, with the overriding objective being the potential value of the option in light of current market prices, where we are in the business cycle and our long-term value creation objectives. 
+Performance Units. We added performance units to the mix of equity-based compensation in 2009. We added this
+component in lieu of a portion of restricted stock and options that we would have otherwise granted. Our use of performance units is intended to provide a direct link in the compensation of our top four Named Executive Officers’ to the relative
+outperformance of our stock to our peer group. This component assures that the value provided to those Named Executive Officers will not be created solely by an increase in stock price due to market conditions, but there must also be a relative
+outperformance. 
+We have considered the potential risks associated with tying a large portion of executive compensation to
+equity. We do not believe that our program creates unreasonable risks for the following reasons. First, the long-term nature of our equity based awards and the required vesting periods help minimize the potential for excessive risk taking and
+actions aimed at short-term stock gains. Second, our use of different types of equity grants, in particular restricted stock, help offset these risks. Finally, the top four Named Executive Officers each have
+17 
+worked with the Company for many years and three of them have worked with the Company for more than ten years. We believe our management to be highly ethical and focused on creating true
+long-term value for stockholders and not focused on just short-term gains. We and the Board monitor and consider risks associated with the Company’s compensation plans on a regular basis. 
+Team Compensation Structure 
+Our senior executive management has had the philosophy that they operate as a team, with each member being an important part of the team. As a result, for more than the past ten years they have requested,
+and we and the Board have agreed, that as a general proposition our awards of cash and equity incentive compensation should be allocated and shared among them as a team. Although the allocations among the team members have changed over time due to
+changes in the executive management team, the allocations among the existing team have generally remained consistent. 
+In the
+past, when allocating the incentive compensation among our top four Named Executive Officers, we have allocated 2/5.5th to Mr. Siegel, our Executive Chairman, 1.5/5.5th to Mr. Wall, our President and Chief Executive Officer, and 1/5.5th to
+each of Mr. Vollmer, our Senior Vice President-Corporate Development, Chief Financial Officer and Treasurer, and Mr. Berns, our Senior Vice President, respectively. 
+We believe that the above approach for compensating our top four Named Executive Officers fosters effective decision-making and collaborative efforts in executing Patterson-UTI’s long-term strategic
+and short-term tactical objectives. This approach has worked well for Patterson-UTI for over ten years. Although we will continue to monitor the team compensation approach to make sure that it continues to work in practice, we expect to maintain
+this approach in the future. 
+Board and Committee Processes and Policies for Compensation Decisions 
+Committee Review Process 
+The Board of Directors has delegated the management of the Company’s executive compensation programs to the Compensation Committee. We meet on a regular basis to consider compensation matters and to
+review how the Company’s plans and policies work in practice. Each of our current members is an independent director as defined by the Nasdaq listing standards. 
+Our compensation determinations and equity awards are conducted through a process that solicits the input from management through Mr. Siegel as our executive Chairman as well as from outside
+compensation consultants retained by us. In addition to the recommendations of management and our consultants, we consider reported trends in compensation, internal budgets, historical data for the Company and its peers, strategic planning updates
+and other information that we consider relevant. 
+Role of Chairman in Compensation Decision
+Process. Our Chairman periodically provides us with his review of the performance of other executive officers, including the other Named Executive Officers. We also engage him in an annual dialog with our Committee
+Chairman and our Lead Director on our compensation program and seek his input on and review of our proposals for long-term incentive grants. This process results in a recommendation that is presented to and approved by our Committee as whole.
+Use of Outside Compensation Consultants. Our Committee regularly utilizes outside compensation
+consultants in assessing and designing our executive compensation program. Our consultants are independent and are paid on a basic fixed fee structure plus expenses. We use our outside consultant reports as a tool for obtaining information on
+historical compensation and stockholder returns, market trends and peer compensation practices. 
+We retained Pearl
+Meyer & Partners as our consultant and advisor for executive compensation matters for 2011 and 2012. In 2011, Pearl Meyer provided us with information on the compensation practices of our peer group and other oilfield service companies and
+on the reasonableness of our program as compared to the compensation practices of our peer group. In so doing, Pearl Meyer provided us with information on each 
+18 
+element of the total compensation of our executive officers as well as a comparison of our compensation against our peers based on data gathered from proxy statements and other SEC filings. This
+comparison provided us with various comparative market levels of compensation for our executive management team as well as a comparative position for each executive officer. Pearl Meyer also provided us with information on the cost and potential
+dilution to our stockholders of our equity-based incentives and compared that to our peer group. 
+When reviewing the peer
+compensation data provided to us by our consultants, we have generally given greater weight to the comparative data for the team as a whole versus the data for individual positions at our peers given the team management approach followed by us as
+described above. We have found that total compensation for our top four Named Executive Officers as a group has typically been between the 50-75th percentile range depending on the year and that under our team-based approach there has typically been
+a shift of compensation from the top two Named Executive Officers to the rest of the team. 
+Peer
+Group. In 2011 we used the following peer group for compensation matters: 
+Ÿ 
+Atwood Oceanics 
+Ÿ 
+Basic Energy Services, Inc. 
+Ÿ 
+Cameron International Corporation 
+Ÿ 
+Ensco International Inc. 
+Ÿ 
+Helmerich & Payne Inc. 
+Ÿ 
+Nabors Industries Ltd. 
+Ÿ 
+Noble Corp. 
+Ÿ 
+Pioneer Drilling Company 
+Ÿ 
+Rowan Companies Inc. 
+Ÿ 
+Union Drilling, Inc. 
+Ÿ 
+Weatherford International Ltd.
+Ÿ 
+Baker Hughes Incorporated 
+Ÿ 
+Bronco Drilling Company, Inc. 
+Ÿ 
+Diamond Offshore Drilling Inc. 
+Ÿ 
+FMC Technologies Inc. 
+Ÿ 
+Key Energy Services, Inc. 
+Ÿ 
+National Oilwell Varco Inc. 
+Ÿ 
+Parker Drilling Company 
+Ÿ 
+Pride International, Inc. 
+Ÿ 
+Transocean Inc. 
+Ÿ 
+Unit Corp
+Pride International
+and Bronco Drilling will be eliminated from the peer group going forward due to their having been acquired in 2011. 
+Our peer
+group for 2011 was selected in an effort to provide a broad based range of similarly based companies of different sizes that are involved in the markets that we compete or to which we believe our investors compare us with or benchmark our results
+against. We review our peer group annually to determine whether changes should be made to the group. 
+Cash Compensation
+We will generally review base compensation and the terms for bonus cash compensation for management in the fourth
+quarter of the preceding year or in the first quarter of the year. When reviewing cash compensation we will look at the total cash compensation received by the executives over a multi-year period, as well as the total cash compensation projected for
+the current year. This approach allows us to look at the cash compensation paid over a full cycle in order to obtain comparable data for benchmarking purposes. 
+We also annually establish the performance criteria for the cash bonus compensation paid to the Company’s executives in order to meet the requirements for the performance-based compensation exception
+to the limitation on deductions under Section 162(m) of the Internal Revenue Code (as further described elsewhere in this proxy statement). Although a wide range of criteria may be used, the criterion we have used historically has been the
+achievement of a threshold EBITDA amount. 
+19 
+Equity Compensation 
+Our practice for grants of equity-based compensation has generally been to consider the grant of stock options, restricted stock and
+performance units to executive management at a meeting following the conclusion of our first quarter. This meeting is typically held in conjunction with regular quarterly Board meetings held prior to the Company’s public release of its
+quarterly earnings. This timing also allows us to receive market data from our consultants for prior year grants. 
+When making
+grants of equity-based compensation, we consider a number of factors, including competitive peer data, prior year grants and current and historical stock prices. We also take into consideration the advice of our consultants as to peer and market
+practices on the use and mix of restricted stock, options and performance units. 
+For restricted stock and stock options, these
+awards are subject to three-year vesting with one-third vesting after the first year and 1/36th of the grant vesting each month over the next two years. The performance units granted in 2011 are to be settled with shares of stock, with the number of
+shares to be issued based on the Company’s total stockholder return at the end of the third year following the grant relative to the total stockholder return for our peer group of companies. Subject to limited exceptions, no payout will be
+provided on performance units unless the Company’s relative total stockholder return against its peers is at least at the 25th percentile and the Company has a positive stockholder return. 
+We have also adopted the following additional practices regarding equity grants: 
+Ÿ 
+Grants will not vest in less than one year. 
+Ÿ 
+Options will not be re-priced or exchanged. 
+Ÿ 
+Equity grants are subject to claw-back in the event that the Board learns that any misconduct by the Named Executive Officer contributed to the Company
+having to restate all or a portion of its financial statements. 
+Ÿ 
+Options are to have exercise prices equal to or greater than the fair market value on the date of grant. 
+Ÿ 
+Performance targets are not to be modified other than to give effect to acquisition or disposition of businesses or similar structural changes –
+market condition changes will not result in changes in performance targets. 
+Overview of 2011 Performance and
+Compensation 
+As noted above under “2011 Financial and Business Highlights”, the Company had an excellent year in
+2011 during which significant progress was realized against our long-term strategic objectives as well as against our short-term operational and financial objectives. These positive results were realized by both of the Company’s core businesses
+and at the corporate level. In addition, to the financial and operational successes, the Company’s stock performed at between the 47th and 66th percentiles against our peer group during each of the past one, two and three year periods.
+Cash Compensation 
+Under the terms of the Company’s cash compensation plan described above, the top four Named Executives Officers earned the following cash payments in respect of 2011. These payments were determined
+using a total bonus pool equal to 0.77% of the Company’s $963 million of EBITDA for 2011 reduced from the maximum total bonus potential under the plan of 0.80% of EBITDA. This bonus pool amount reflected the exemplary performance by management
+in 2011 in achieving the Company’s current and long-term objectives. In accordance with past practice, the bonus pool was allocated among the top four Named Executive Officers as described under “Team Compensation Structure” above.
+The Committee had fixed a $400 million minimum EBITDA threshold for 2011, which was exceeded. 
+20 
+CASH COMPENSATION 
+Name 
+Salary 
+EBITDA Incentive 
+(Percentage of 
+Company 
+EBITDA) 
+Variable Cash 
+Compensation 
+Based
+on 
+EBITDA 
+Total Cash 
+Compensation 
+Douglas J. Wall 
+$ 
+600,000 
+0.21 
+% 
+$ 
+2,022,060 
+$ 
+2,622,060 
+John E. Vollmer III 
+$ 
+350,000 
+0.14 
+% 
+$ 
+1,348,040 
+$ 
+1,698,040 
+Mark S. Siegel 
+$ 
+350,000 
+0.28 
+% 
+$ 
+2,696,080 
+$ 
+3,046,080 
+Kenneth N. Berns 
+$ 
+265,000 
+0.14 
+% 
+$ 
+1,348,040 
+$ 
+1,613,040 
+The maximum amount that can be awarded to an individual under our cash-based incentive plan during a
+12-month period is $5,000,000. In order to reach this maximum amount and assuming a total bonus pool equal to 0.80% of EBITDA, EBITDA of $1.7 billion in the case of Mr. Siegel, $2.3 billion in the case of Mr. Wall and
+$3.4 billion in the case of Messrs. Vollmer and Berns would have been needed. We did not establish a target bonus amount for the executives given the variable nature of our plan and its direct relationship to our financial results. The
+target bonus amount presented in the Grants of Plan-Based Awards table is calculated for the respective officer based on Patterson-UTI’s actual EBITDA for the fiscal year ended December 31, 2011, and the allocation formula applied to the
+bonus pool for distribution as noted above. 
+Equity-Based Compensation 
+We made the following equity-based grants to the top four Named Executive Officers, considering the Company’s total shareholder
+return outperformance over the one and three year periods ending in 2010 and with the objective that these grants would be at approximately the 75th percentile against our peer group, consistent with total shareholder return performance, based on
+information available at the time of grant. 
+EQUITY-BASED GRANTS 
+Restricted Stock(1) 
+Stock Options(2) 
+Performance Unit 
+Awards(3) 
+Total 
+Value 
+Name 
+# Shares 
+Value 
+# Shares 
+Value 
+# Shares 
+Value 
+Douglas J. Wall 
+71,000 
+$ 
+2,215,200 
+103,500 
+$ 
+1,306,481 
+19,688 
+$ 
+1,518,732 
+$ 
+5,040,413 
+John E. Vollmer III 
+47,500 
+$ 
+1,482,000 
+69,000 
+$ 
+870,987 
+13,125 
+$ 
+1,012,463 
+$ 
+3,365,450 
+Mark S. Siegel 
+95,000 
+$ 
+2,964,000 
+138,000 
+$ 
+1,741,974 
+26,250 
+$ 
+2,024,925 
+$ 
+6,730,899 
+Kenneth N. Berns 
+47,500 
+$ 
+1,482,000 
+69,000 
+$ 
+870,987 
+13,125 
+$ 
+1,012,463 
+$ 
+3,365,450 
+(1) 
+Shares of restricted stock were awarded on April 26, 2011 and the value indicated in the table is the value on the date of grant based on the closing price of
+Patterson-UTI’s common stock on April 26, 2011. 
+(2) 
+Options were awarded on April 26, 2011, and the value indicated in the table was determined using the Black-Scholes option pricing model as of the date of grant.
+(3) 
+Performance Units were awarded on April 26, 2011. The number of shares indicated in the table represents the base number of shares for each respective award.
+According to the terms of the awards, the actual number of shares earned by the recipient can range from zero to four times the base number depending on how Patterson-UTI performs in terms of total stockholder return relative to its peer group. The
+value indicated in the table was determined based on a Monte-Carlo simulation model and represents the estimate of fair value on the date of grant. 
+The grant of restricted stock, options and performance units to such officers were made following the vesting, term and other criteria described above. 
+In making the above grants, we included an additional 68,500 shares of restricted stock in the grants to the top four Named Executive
+Officers having an aggregate value of approximately $2.1 million. These additional shares were granted in recognition of the management’s achievements over the past few years in executing our strategic plan and were made as additional incentive
+for the management team to deliver similar results in the 
+21 
+future. Among the achievements that we took into consideration in making these additional 2011 grants were the Company’s successful acquisition and integration of the pressure pumping
+business acquired from Key Energy in 2010, the smooth execution by management in bringing a large number of new premium rigs to market and expanding market share, the execution of our long-term contract strategy for rigs and the on time
+implementation of the first phase of our new ERP system. 
+The performance units granted in 2011 to the top four Named Executive
+Officers provide for the issuance of 26,250 shares of Common Stock to Mr. Siegel, 19,688 shares of Common Stock to Mr. Wall and 13,125 shares of Common Stock to each of Messrs. Vollmer and Berns, respectively, if Patterson-UTI’s
+total stockholder return is at or above the 25th percentile but less than the 50th percentile, two times that number of shares if Patterson-UTI’s total stockholder return is at or above the 50th percentile but less than the
+75th percentile and four times that amount if Patterson-UTI’s total stockholder return is at the 75th percentile or higher. The grant of shares when achievement is between the 25th and 75th percentile will be determined on a pro-rata
+basis. 
+Total stockholder return for Patterson-UTI for the 2011 performance unit grants is measured based on $100 invested in
+Common Stock on the first day of the performance period, with dividends reinvested. The performance period is the period from April 1, 2011 through March 31, 2014, subject to certain exceptions that could extend the performance period up
+to two additional years. No shares will be issued in respect of the performance units unless Patterson-UTI has positive total stockholder return as of the end of the performance period; except that if during the two-year period ending after the
+performance period, Patterson-UTI’s total stockholder return for any 30 consecutive day period equals or exceeds 18% on an annualized basis from the beginning of the performance period through the end of such 30 consecutive day period, then
+shares issued under the grant will be made as set forth above based on Patterson-UTI’s total stockholder return relative to the peer group as of end of the performance period. 
+Total Compensation and Relationship to Performance 
+The Committee considered the advice of Pearl Meyer & Partners when establishing its 2011 compensation program. In doing so, the Committee sought to offer a total compensation package (cash and
+long-term) for the top four Named Executive Officers as a group that would be between the 50th and 75th percentile. This compensation range is consistent with Patterson-UTI’s 47th, 66th and 57th percentiles for total stockholder return for the
+one, two and three year periods ended December 31, 2011, respectively. 
+We believe that Patterson-UTI has a strong and
+cohesive management team and that the compensation policies that it has implemented provide the proper mix of current compensation and long-term incentives for building stockholder value. The Company’s above market performance has supported the
+use of these policies and aligns the interest of management with the Company’s stockholders. 
+With respect to the
+Company’s executive officers other than the top Named Executive Officers, the Committee has historically determined their compensation with a philosophy of using a combination of fixed and variable cash in the form of base salary and cash
+bonuses for short-term incentives and time-vested equity awards in the form of restricted stock and/or, stock options for long-term incentives. With respect to Mr. Wexler, non-equity incentive compensation for 2011 was determined based on the
+operating performance of Patterson-UTI and his individual performance, and his equity-based, long-term incentive compensation was awarded in the form of restricted stock. 
+Benefits, Ownership Guidelines, Employment-Related Agreements and Other Matters 
+Retirement Plans 
+Patterson-UTI offers a 401(k) plan to its
+employees, including its Named Executive Officers. Participants may contribute a portion of their base salary to the 401(k) plan, subject to federal limits. Patterson-UTI makes matching contributions up to four percent of each participant’s
+eligible base salary. The Named Executive Officers of Patterson-UTI are eligible to participate in the 401(k) plan on the same basis as other employees. Patterson-UTI does not have any other retirement plan. 
+22 
+Perquisites and Personal Benefits 
+No Named Executive Officer received perquisites totaling more than $10,000. Accordingly, the perquisites do not meet the threshold that
+would require disclosure in the Summary Compensation Table below. 
+Share Ownership Guidelines 
+Our Nominating and Corporate Governance Committee has enacted share ownership guidelines applicable to all executive officers and
+directors of Patterson-UTI. The guidelines require officers and directors to hold at all times, subject to a four year phase-in from the date first elected as an officer or director, at least the following number of shares of Common Stock:
+• 
+Executive Chairman 
+120,000 shares 
+• 
+President and Chief Executive Officer 
+90,000 shares 
+• 
+COO/Senior Vice Presidents 
+60,000 shares 
+• 
+President - Drilling 
+30,000 shares 
+• 
+General Counsel 
+20,000 shares 
+• 
+Chief Accounting Officer 
+7,500 shares 
+• 
+Outside Directors 
+10,000 shares 
+• 
+Non-executive Inside Director 
+10,000 shares 
+Each of the Named Executive Officers and Directors was in compliance with these guidelines as of the date
+of this proxy statement. 
+Change in Control and Severance Agreements 
+Patterson-UTI has entered into change in control agreements with its Named Executive Officers as further described elsewhere in this proxy
+statement The Company believes that such agreements may under certain circumstances protect the interest of the Company by discouraging such Named Executive Officers from leaving employment out of concern for the security of their jobs or being
+unable to concentrate on their work. We believe that the change in control agreements may also help Patterson-UTI attract and retain new key employees by reducing the personal uncertainty and anxiety that arises from the possibility of a future
+business combination. Any future change in control or severance agreements will be approved subject to the circumstances existing at the time. 
+Patterson-UTI has also entered into written letter agreements with each of Messrs. Siegel, Berns and Vollmer pursuant to which Patterson-UTI has agreed to pay each such person within ten days of the
+termination of his employment with Patterson-UTI for any reason (including voluntary termination by him), an amount in cash equal to his annual base salary at the time of such termination. Any payment made by Patterson-UTI pursuant to these letter
+agreements will reduce dollar for dollar any payment owed to such person, if any, pursuant to the change in control agreements discussed above. 
+Agreements with the Company’s Chief Executive Officer and Chief Operating Officer 
+In March 2012, Mr. Wall informed the Company’s Board of Directors of his intention to retire as President and Chief Executive Officer later this calendar year. The Company expects to enter into
+an agreement with Mr. Wall, effective upon his retirement as President and Chief Executive Officer, pursuant to which the Company will employ Mr. Wall as a consultant at an annual compensation of $250,000 per year for two years.
+Mr. Wall will be entitled to continue to participate in the Company’s 2012 annual EBITDA-based cash bonus incentive plan through December 31, 2012, and his outstanding equity awards would continue to vest in accordance with their
+terms through the term of the respective equity award agreements. Mr. Wall’s change in control agreement would be superseded by his employment agreement and no longer be in effect. Please see “Employment-Related Agreements” for
+further description of this agreement. 
+In March 2012, the Company hired William Andrew Hendricks, Jr. as its Chief Operating
+Officer. Mr. Hendricks is expected to assume the position of President and Chief Executive Officer of the Company upon 
+23 
+Mr. Wall’s retirement. Effective upon the commencement of Mr. Hendricks employment with the Company, Mr. Hendricks received grants of options to purchase 100,000 shares of the
+Company’s common stock at an exercise price equal to the closing stock price on the grant date and 100,000 shares of restricted stock. The options and restricted stock were granted under the Company’s 2005 Long-Term Incentive Plan with
+substantially similar vesting provisions as the other Named Executive Officers. In addition, Mr. Hendricks’ base salary is $450,000 per year, and his discretionary target annual bonus amount for 2012 will be $800,000, which will be
+determined by the Compensation Committee and paid at the same time in 2013 as other senior executives of the Company. Mr. Hendricks was also paid a starting bonus of $275,000. Mr. Hendricks has entered into a Severance Agreement providing,
+in general, that in the event his employment is terminated by the Company without cause at any time during the first three years of his employment by the Company, then he will be paid the sum of $750,000. Mr. Hendricks has also entered into a
+Change in Control Agreement and an Indemnity Agreement. Please see “Employment-Related Agreements” for further description of these agreements. 
+Section 162(m) Considerations 
+In considering compensation
+decisions for the executive management of Patterson-UTI, we routinely consider the potential effect of Section 162(m) of the Internal Revenue Code. Section 162(m) imposes a limitation on corporate tax deductions for non-performance based
+compensation to certain officers that exceeds $1 million that can be taken by a publicly held corporation for compensation paid to certain of its executive officers. While Patterson-UTI does not design its compensation programs for tax
+purposes, Patterson-UTI does design its plans to be tax efficient for Patterson-UTI where possible. However, the Committee believes that tax deduction limitations should not compromise Patterson-UTI’s ability to establish and maintain
+appropriate executive compensation programs and reserves the right to award non-deductible compensation. 
+Compensation
+Committee Interlocks and Insider Participation 
+No member of the Committee was, during the year ended December 31,
+2011, an officer or employee of Patterson-UTI or any of its subsidiaries, or was formerly an officer of Patterson-UTI or any of its subsidiaries, or had any relationships requiring disclosure by Patterson-UTI under Item 404 of
+Regulation S-K. 
+During the year ended December 31, 2011, none of Patterson-UTI’s executive officers served as
+(i) a member of the compensation committee (or other Board committee performing equivalent functions) of another entity, one of whose executive officers served on the Compensation Committee, (ii) a director of another entity, one of whose
+executive officers served on the Compensation Committee, or (iii) a member of the compensation committee (or other Board committee performing equivalent functions) of another entity, one of whose executive officers served as a director of
+Patterson-UTI. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement required by Item 402(b) of Regulation S-K with management and, based
+upon such review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. 
+Terry H. Hunt, Chairman 
+Charles O. Buckner 
+Curtis W. Huff 
+Kenneth R. Peak 
+24 
+EXECUTIVE COMPENSATION 
+The following table sets forth information concerning compensation for the fiscal year ended December 31, 2011 with respect to the
+principal executive officer, the principal financial officer and the other Named Executive Officers of Patterson-UTI: 
+Summary Compensation Table 
+Name and Principal Position(s) 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Stock 
+Awards 
+($)(1) 
+Option 
+Awards 
+($)(2) 
+Non-equity 
+Incentive plan 
+Compensation 
+($)(3) 
+All Other 
+Compensation 
+($)(4) 
+Total 
+($) 
+Douglas J. Wall 
+2011 
+$ 
+600,000 
+$ 
+— 
+$ 
+3,728,252 
+(5) 
+$ 
+1,306,481 
+$ 
+2,022,060 
+$ 
+9,800 
+$ 
+7,666,593 
+President & Chief 
+2010 
+$ 
+600,000 
+$ 
+— 
+$ 
+1,962,206 
+$ 
+1,510,223 
+$ 
+893,611 
+$ 
+9,800 
+$ 
+4,975,840 
+Executive Officer 
+2009 
+$ 
+600,000 
+$ 
+— 
+$ 
+1,558,620 
+$ 
+1,253,149 
+$ 
+396,347 
+$ 
+9,800 
+$ 
+3,817,916 
+John E. Vollmer III 
+2011 
+$ 
+350,000 
+$ 
+— 
+$ 
+2,490,663 
+(6) 
+$ 
+870,987 
+$ 
+1,348,040 
+$ 
+9,800 
+$ 
+5,069,490 
+Senior Vice President — 
+2010 
+$ 
+350,000 
+$ 
+— 
+$ 
+1,308,138 
+$ 
+1,006,816 
+$ 
+595,741 
+$ 
+9,800 
+$ 
+3,270,495 
+Corporate Development, 
+2009 
+$ 
+350,000 
+$ 
+— 
+$ 
+1,039,080 
+$ 
+835,433 
+$ 
+264,231 
+$ 
+9,800 
+$ 
+2,498,544 
+Chief Financial Officer & Treasurer 
+Mark S. Siegel 
+2011 
+$ 
+350,000 
+$ 
+— 
+$ 
+4,981,325 
+(7) 
+$ 
+1,741,974 
+$ 
+2,696,080 
+$ 
+— 
+$ 
+9,769,379 
+Chairman of the Board 
+2010 
+$ 
+350,000 
+$ 
+— 
+$ 
+2,616,275 
+$ 
+2,013,631 
+$ 
+1,191,482 
+$ 
+— 
+$ 
+6,171,388 
+2009 
+$ 
+350,000 
+$ 
+— 
+$ 
+2,078,160 
+$ 
+1,670,865 
+$ 
+528,462 
+$ 
+— 
+$ 
+4,627,487 
+Kenneth N. Berns 
+2011 
+$ 
+265,000 
+$ 
+— 
+$ 
+2,490,663 
+(6) 
+$ 
+870,987 
+$ 
+1,348,040 
+$ 
+— 
+$ 
+4,974,690 
+Senior Vice President 
+2010 
+$ 
+265,000 
+$ 
+— 
+$ 
+1,308,138 
+$ 
+1,006,816 
+$ 
+595,741 
+$ 
+— 
+$ 
+3,175,695 
+2009 
+$ 
+265,000 
+$ 
+— 
+$ 
+1,039,080 
+$ 
+835,433 
+$ 
+264,231 
+$ 
+— 
+$ 
+2,403,744 
+Seth D. Wexler 
+2011 
+$ 
+250,000 
+$ 
+225,000 
+$ 
+612,600 
+$ 
+— 
+$ 
+— 
+$ 
+5,385 
+$ 
+1,092,985 
+General Counsel and 
+2010 
+$ 
+250,000 
+$ 
+250,000 
+$ 
+276,200 
+$ 
+— 
+$ 
+— 
+$ 
+5,385 
+$ 
+781,585 
+Secretary 
+2009 
+$ 
+96,554 
+$ 
+125,000 
+$ 
+213,900 
+$ 
+79,856 
+$ 
+— 
+$ 
+— 
+$ 
+515,310 
+(1) 
+Amounts set forth include the fair value of awards at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to restricted stock awarded to
+the Named Executive Officer in the fiscal years ended December 31, 2011, 2010 and 2009 and with respect to performance units awarded to Messrs. Wall, Vollmer, Siegel and Berns in the fiscal years ended December 31, 2011, 2010 and 2009.
+Performance conditions for all awards of restricted stock had been satisfied as of December 31, 2011. For additional information related to the assumptions used and valuation of restricted stock and performance units see Note 11 to the
+consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. 
+(2) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to stock options awarded to the Named
+Executive Officer in the fiscal years ended December 31, 2011, 2010 and 2009. For additional information related to the assumptions used in connection with the valuation of stock options using the Black-Scholes option pricing model see Note 11
+to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. 
+(3) 
+Represents annual bonuses earned for the fiscal years ended December 31, 2011, 2010 and 2009. The bonus plan in each of those fiscal years provided for a bonus
+pool based on EBITDA, subject to a minimum EBITDA of $400 million for 2011 and $200 million for 2010 and 2009. The bonus pool was allocated among the participants based on a pre-determined sharing percentage. At the direction of the Compensation
+Committee, the total amount paid out pursuant to the executive bonus pool was $7.41 million for 2011, $3.28 million for 2010 and $1.45 million for 2009. 
+(4) 
+Amounts set forth reflect contributions to a 401(k) plan by Patterson-UTI on behalf of the Named Executive Officer. 
+(5) 
+Includes $2,209,520 related to an award of shares of restricted stock and $1,518,732 related to an award of performance units during 2011. 
+25 
+(6) 
+Includes $1,478,200 related to an award of shares of restricted stock and $1,012,463 related to an award of performance units during 2011. 
+(7) 
+Includes $2,956,400 related to an award of shares of restricted stock and $2,024,925 related to an award of performance units during 2011. 
+The following table sets forth information concerning grants of plan-based awards during the fiscal year ended December 31, 2011 to
+the Named Executive Officers: 
+Grants of Plan-Based Awards 
+Estimated Future
+Payouts 
+under 
+Non-equity Incentive Plan Awards 
+Estimated Future Payouts under 
+Equity Incentive Plan Awards 
+All Other 
+Stock Awards: 
+Number of 
+Shares of 
+Stock or
+Units 
+(#)(3) 
+All Other 
+Option Awards: 
+Number of 
+Securities 
+Underlying 
+Options
+(#)(4) 
+Exercise or 
+Base Price 
+of Option 
+Awards 
+($/Sh) 
+Grant Date 
+Fair Value of 
+Stock
+and 
+Option Awards 
+($)(5) 
+Name 
+Grant 
+Date 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Threshold 
+(#) 
+Target 
+(#) 
+Maximum 
+(#) 
+Douglas J. Wall 
+2/01/11 
+(1) 
+$ 
+600,000 
+$ 
+2,022,060 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/26/11 
+(2) 
+— 
+— 
+— 
+19,688 
+39,376 
+78,752 
+— 
+— 
+— 
+$ 
+1,518,732 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+71,000 
+— 
+— 
+$ 
+2,215,200 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+103,500 
+$ 
+31.20 
+$ 
+1,306,481 
+John E. Vollmer III 
+2/01/11 
+(1) 
+$ 
+400,000 
+$ 
+1,348,040 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/26/11 
+(2) 
+— 
+— 
+— 
+13,125 
+26,250 
+52,500 
+— 
+— 
+— 
+$ 
+1,012,463 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+47,500 
+— 
+— 
+$ 
+1,482,000 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+69,000 
+$ 
+31.20 
+$ 
+870,987 
+Mark S. Siegel 
+2/01/11 
+(1) 
+$ 
+800,000 
+$ 
+2,696,080 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/26/11 
+(2) 
+— 
+— 
+— 
+26,250 
+52,500 
+105,000 
+— 
+— 
+— 
+$ 
+2,024,925 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+95,000 
+— 
+— 
+$ 
+2,964,000 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+138,000 
+$ 
+31.20 
+$ 
+1,741,974 
+Kenneth N. Berns 
+2/01/11 
+(1) 
+$ 
+400,000 
+$ 
+1,348,040 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/26/11 
+(2) 
+— 
+— 
+— 
+13,125 
+26,250 
+52,500 
+— 
+— 
+— 
+$ 
+1,012,463 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+47,500 
+— 
+— 
+$ 
+1,482,000 
+4/26/11 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+69,000 
+$ 
+31.20 
+$ 
+870,987 
+Seth D. Wexler 
+6/09/11 
+— 
+— 
+— 
+— 
+— 
+— 
+20,000 
+— 
+— 
+$ 
+612,600 
+(1) 
+The 2011 bonus plan for Named Executive Officers for the fiscal year ended December 31, 2011 was approved on February 1, 2011. The 2011 bonus plan for Messrs.
+Wall, Vollmer, Siegel and Berns provided for a bonus pool based on a percentage of EBITDA for the fiscal year ended December 31, 2011, subject to a minimum EBITDA of $400 million. The Compensation Committee set the EBITDA percentage at a
+maximum of 0.80% based on the Committee’s assessment of the Company’s and executive management’s progress toward and achievement of certain strategic and other objectives, subject to a downward adjustment in the EBITDA percentage to
+0.55% based on relative underperformance against strategic measures. The Compensation Committee adjusted the EBITDA percentage downward to 0.77% based on these criteria. The bonus pool was allocated among Messrs. Wall, Vollmer, Siegel and Berns
+based on a pre-determined sharing percentage. The threshold amount presented in this table is calculated for the respective officer based on the approved allocation formula and an assumed EBITDA of $400 million using the minimum percentage of 0.55%
+of EBITDA as set forth when the plan was approved in February 2011 due to the fact that the bonus plan provides for no payment if the minimum EBITDA of $400 million is not satisfied. The target amount is calculated based on Patterson-UTI’s
+actual EBITDA for the fiscal year ended December 31, 2011, the EBITDA percentage as approved by the Compensation Committee and the allocation formula applied to the bonus pool for distribution. The cash bonuses awarded from the bonus pool were
+awarded under the LTIP, which has been designed to meet the requirements of Section 162(m) of the Code. Although the bonus pool for Messrs. Wall, Vollmer, Siegel and Berns did not have an EBITDA cap, the maximum amount that could be awarded to
+an individual under any cash-based performance award granted under the LTIP during a 12-month period is $5,000,000. 
+(2) 
+On April 26, 2011, Patterson-UTI granted performance unit awards to Messrs. Wall, Vollmer, Siegel and Berns. These awards provide for the
+recipients to receive shares of Common Stock upon the achievement of certain performance goals established by Patterson-UTI during a specified period. The performance period is the period from April 1, 2011 through March 31, 2014, subject
+to certain exceptions that could extend the performance period up to two additional years, as described in “Compensation Discussion and Analysis” 
+26 
+above. The performance goals are tied to Patterson-UTI’s total shareholder return for the performance period as compared to total shareholder return for a peer group determined by the
+Compensation Committee. If Patterson-UTI’s total shareholder return for the performance period is positive and at or above the 25 th percentile but less than the 50 th percentile in relation to the peer group, the awards provide for the grant of a base number of shares. If
+Patterson-UTI’s total shareholder return for the performance period is positive and above the 50 th percentile but less than the 75 th percentile in relation to the peer group, the awards provide for the grant of two times the base number of shares. If Patterson-UTI’s total shareholder return for the performance period is positive
+and above the 75 th percentile in relation to the peer
+group, the awards provide for the grant of four times the base number of shares. The grant of shares when achievement is between the 25 th and 75 th percentile will be determined on a pro-rata basis. The target number of shares presented in the table are based on
+Patterson-UTI’s total shareholder return at the end of the performance period being positive and at the
+50 th percentile in relation to the peer group.
+(3) 
+Shares of restricted stock were awarded pursuant to the LTIP. Ordinary dividends are paid on unvested shares of restricted stock. The rate at which these dividends are
+paid is the same rate at which ordinary dividends are paid on all other shares of common stock of Patterson-UTI. The right to receive these dividends has been included in the grant date fair value of stock awards presented in the table. The shares
+awarded to Messrs. Wall, Vollmer, Siegel and Berns vest over a three-year period as follows: one-third on April 26, 2012, and the remaining two-thirds in equal monthly installments over the 24 months following April 26, 2012. The shares
+awarded to Mr. Wexler vest over a three-year period as follows: one-third on June 9, 2012, one-third on June 9, 2013 and one-third on June 9, 2014. 
+(4) 
+Options were granted pursuant to the LTIP. Options awarded to Messrs. Wall, Vollmer, Siegel and Berns vest over a three year period as follows: one-third on
+April 26, 2012, and the remaining two-thirds in equal monthly installments over the 24 months following April 26, 2012. 
+(5) 
+The grant date fair value of restricted stock is based on the closing price of Patterson-UTI Common Stock on the date of grant, which is consistent with the valuation
+used by Patterson-UTI for the recognition of compensation expense under FASB ASC Topic 718. The grant date fair value of stock options was determined using the Black-Scholes option pricing model, which is consistent with the valuation used by
+Patterson-UTI for the recognition of compensation expense under FASB ASC Topic 718, with assumptions that are more fully described in Note 11 to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal
+year ended December 31, 2011. The grant date fair value of performance unit awards was determined based on a Monte-Carlo simulation model which is consistent with the valuation used by Patterson-UTI for the recognition of compensation expense
+under FASB ASC Topic 718. 
+27 
+The following table sets forth information concerning outstanding equity awards at
+December 31, 2011 for the Named Executive Officers: 
+Outstanding Equity Awards 
+at Fiscal Year-End 
+Stock Awards 
+Option Awards 
+Equity Incentive 
+Plan Awards: 
+Number of 
+Unearned Shares, 
+Units or
+Other 
+Rights that 
+Have Not Vested(2) 
+Equity Incentive 
+Plan Awards: Market 
+or Payout Value of 
+Unearned
+Shares, 
+Units or Other 
+Rights that Have 
+Not Vested ($)(3) 
+Number of Securities 
+Underlying Unexercised 
+Options (#) 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date 
+Number of Shares 
+or Units of Stock 
+That Have 
+Not Vested (#) 
+Market Value of 
+Shares or Units of 
+Stock That Have 
+Not Vested
+($)(1) 
+Name 
+Exercisable 
+Unexercisable 
+Douglas J. Wall 
+75,000 
+— 
+$ 
+22.72 
+4/08/17 
+112,501 
+(4) 
+$ 
+2,247,770 
+44,063 
+$ 
+1,349,129 
+(5) 
+25,000 
+— 
+$ 
+22.99 
+9/30/17 
+178,500 
+— 
+$ 
+29.31 
+4/24/18 
+233,334 
+29,166 
+(6) 
+$ 
+13.17 
+4/27/19 
+147,917 
+118,333 
+(7) 
+$ 
+14.83 
+4/26/20 
+— 
+103,500 
+(8) 
+$ 
+31.20 
+4/25/21 
+John E. Vollmer III 
+190,000 
+— 
+$ 
+16.22 
+4/29/13 
+75,168 
+(9) 
+$ 
+1,501,857 
+29,375 
+$ 
+899,413 
+(10) 
+60,000 
+— 
+$ 
+19.14 
+4/27/14 
+75,000 
+— 
+$ 
+24.63 
+4/26/15 
+125,000 
+— 
+$ 
+28.16 
+7/31/16 
+150,000 
+— 
+$ 
+24.17 
+4/22/17 
+119,000 
+— 
+$ 
+29.31 
+4/24/18 
+155,556 
+19,444 
+(6) 
+$ 
+13.17 
+4/27/19 
+98,612 
+78,888 
+(7) 
+$ 
+14.83 
+4/26/20 
+— 
+69,000 
+(8) 
+$ 
+31.20 
+4/25/21 
+Mark S. Siegel 
+380,000 
+— 
+$ 
+16.22 
+4/29/13 
+150,334 
+(11) 
+$ 
+3,003,673 
+58,750 
+$ 
+1,798,825 
+(12) 
+120,000 
+— 
+$ 
+19.14 
+4/27/14 
+150,000 
+— 
+$ 
+24.63 
+4/26/15 
+250,000 
+— 
+$ 
+28.16 
+7/31/16 
+300,000 
+— 
+$ 
+24.17 
+4/22/17 
+238,000 
+— 
+$ 
+29.31 
+4/24/18 
+311,111 
+38,889 
+(6) 
+$ 
+13.17 
+4/27/19 
+197,222 
+157,778 
+(7) 
+$ 
+14.83 
+4/26/20 
+— 
+138,000 
+(8) 
+$ 
+31.20 
+4/25/21 
+Kenneth N. Berns 
+190,000 
+— 
+$ 
+16.22 
+4/29/13 
+75,168 
+(9) 
+$ 
+1,501,857 
+29,375 
+$ 
+899,413 
+(10) 
+60,000 
+— 
+$ 
+19.14 
+4/27/14 
+75,000 
+— 
+$ 
+24.63 
+4/26/15 
+125,000 
+— 
+$ 
+28.16 
+7/31/16 
+150,000 
+— 
+$ 
+24.17 
+4/22/17 
+119,000 
+— 
+$ 
+29.31 
+4/24/18 
+155,556 
+19,444 
+(6) 
+$ 
+13.17 
+4/27/19 
+98,612 
+78,888 
+(7) 
+$ 
+14.83 
+4/26/20 
+— 
+69,000 
+(8) 
+$ 
+31.20 
+4/25/21 
+Seth D. Wexler 
+11,667 
+3,333 
+(13) 
+$ 
+14.41 
+8/09/19 
+38,334 
+(14) 
+$ 
+765,913 
+— 
+$ 
+— 
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on December 31, 2011 of $19.98 per share. 
+(2) 
+As discussed in footnote (2) to the Grants of Plan Based Awards table, on April 26, 2011, Patterson-UTI granted performance unit awards to Messrs. Wall,
+Vollmer, Siegel and Berns. Similar awards were granted in April 2010. The number of shares presented in this column represents the base number of shares for the respective awards. Based on Patterson-UTI’s total shareholder return during the
+performance period, the recipients could receive a number of shares ranging from no shares to four times the base number of shares. Performance unit awards were granted in 2009 to Messrs. Wall, Vollmer, Siegel and Berns which were denominated in
+dollars and provided for a cash payout based on Patterson-UTI’s total shareholder return during the performance period ending March 31, 2012. Since these awards provide for no issuance of shares they are not included in this column.
+28 
+(3) 
+As of December 31, 2011, performance unit awards had been granted to Messrs. Wall, Vollmer, Siegel and Berns. The 2009 performance unit awards were granted on
+April 28, 2009 and provide for a cash payment to the recipient based on Patterson-UTI’s total shareholder return compared to a peer group of companies for the performance period from April 1, 2009 through March 31, 2012. The 2010
+performance unit awards were granted on April 27, 2010 and provide for an award of shares of Patterson-UTI common stock to the recipient based on Patterson-UTI’s total shareholder return compared to a peer group of companies for the
+performance period from April 1, 2010 through March 31, 2013. The 2011 performance unit awards were granted on April 26, 2011 and provide for an award of shares of Patterson-UTI common stock to the recipient based on
+Patterson-UTI’s total shareholder return compared to a peer group of companies for the performance period from April 1, 2011 through March 31, 2014. All performance unit awards provide for a threshold payout (in dollars for the 2009
+awards and in shares for the 2010 and 2011 awards) based on threshold level of total shareholder return compared to the peer group. Due to the fact that the performance periods for all awards had not been completed as of December 31, 2011, the
+amounts presented in this column represent the threshold payout under the performance unit awards. For the 2010 and 2011 performance unit awards, the threshold number of shares is valued at the December 31, 2011 closing price of Patterson-UTI
+common stock which was $19.98 per share. 
+(4) 
+These shares of restricted stock vest as follows: 8,167 shares that vest in equal monthly installments from January 28, 2012 through April 28, 2012; 33,334
+shares that vest in equal monthly installments from January 27, 2012 through April 27, 2013; 23,666 shares that vest on April 26, 2012 and 47,334 shares that vest in equal monthly installments from May 26, 2012 through
+April 26, 2014. 
+(5) 
+Amount includes $468,750 related to the 2009 performance unit award, $487,013 related to the 2010 performance unit award and $393,366 related to the 2011 performance
+unit award. 
+(6) 
+These options vest in equal monthly installments from January 28, 2012 through April 28, 2012. 
+(7) 
+These options vest in equal monthly installments from January 27, 2012 through April 27, 2013. 
+(8) 
+These options vest as follows: one-third on April 26, 2012, and the remainder in equal monthly installments over the 24 months following April 26, 2012.
+(9) 
+These shares of restricted stock vest as follows: 5,445 shares in equal monthly installments from January 28, 2012 through April 28, 2012; 22,223 shares in
+equal monthly installments from January 27, 2012 through April 27, 2013; 15,833 shares on April 26, 2012 and 31,667 shares in equal monthly installments from May 26, 2012 through April 26, 2014. 
+(10) 
+Amount includes $312,500 related to the 2009 performance unit award, $324,675 related to the 2010 performance unit award and $262,238 related to the 2011 performance
+unit award. 
+(11) 
+These shares of restricted stock vest as follows: 10,889 shares in equal monthly installments from January 28, 2012 through April 28, 2012; 44,445 shares in
+equal monthly installments from January 27, 2012 through April 27, 2013; 31,666 shares on April 26, 2012 and 63,334 shares in equal monthly installments from May 26, 2012 through April 26, 2014. 
+(12) 
+Amount includes $625,000 related to the 2009 performance unit award, $649,350 related to the 2010 performance unit award and $524,475 related to the 2011 performance
+unit award. 
+(13) 
+These options vest in equal monthly installments from January 9, 2012 through August 9, 2012. 
+(14) 
+These shares of restricted stock vest as follows: 18,333 shares on June 9, 2012; 13,334 shares on June 9, 2013 and 6,667 shares on June 9, 2014.
+29 
+The following table sets forth information concerning option exercises and stock awards
+vested during the fiscal year ended December 31, 2011 for the Named Executive Officers: 
+Option Exercises and Stock
+Vested 
+Option Awards 
+Stock Awards 
+Name 
+Number of 
+Shares Acquired 
+on Exercise (#) 
+Value Realized 
+on Exercise ($)(1) 
+Number of 
+Shares Acquired 
+on Vesting (#) 
+Value Realized 
+on Vesting ($)(2) 
+Douglas J. Wall 
+— 
+$ 
+— 
+74,082 
+$ 
+2,017,380 
+John E. Vollmer III 
+210,000 
+$ 
+1,496,250 
+49,389 
+$ 
+1,344,919 
+Mark S. Siegel 
+— 
+$ 
+— 
+98,779 
+$ 
+2,689,861 
+Kenneth N. Berns 
+— 
+$ 
+— 
+49,389 
+$ 
+1,344,919 
+Seth D. Wexler 
+— 
+$ 
+— 
+11,666 
+$ 
+351,263 
+(1) 
+Value realized on option exercise is based on the closing price of Patterson-UTI common stock on the day of exercise less the exercise price of the options.
+(2) 
+Value realized on vesting is based on the closing price of Patterson-UTI common stock on the day immediately prior to the date at which the respective shares vested.
+Patterson-UTI provides no pension benefits for any of the Named Executive Officers. None of the Named Executive
+Officers had any items of nonqualified deferred compensation during 2011. As a result, tables with respect to pension benefits and nonqualified deferred compensation have not been provided. 
+DIRECTOR COMPENSATION 
+The following table sets forth information concerning compensation for the fiscal year ended December 31, 2011 with respect to the directors of Patterson-UTI who are not executive officers:
+Director Compensation Table 
+Fees Earned or Paid 
+in Cash 
+Stock Awards 
+Option Awards 
+All Other 
+Compensation 
+Total 
+Name 
+($) 
+($)(1) 
+($)(2) 
+($) 
+($) 
+Charles O. Buckner 
+$ 
+60,000 
+$ 
+64,650 
+$ 
+86,429 
+$ 
+— 
+$ 
+211,079 
+Curtis W. Huff 
+$ 
+75,000 
+$ 
+64,650 
+$ 
+86,429 
+$ 
+— 
+$ 
+226,079 
+Terry H. Hunt 
+$ 
+60,000 
+$ 
+64,650 
+$ 
+86,429 
+$ 
+— 
+$ 
+211,079 
+Kenneth R. Peak 
+$ 
+45,000 
+$ 
+64,650 
+$ 
+86,429 
+$ 
+— 
+$ 
+196,079 
+Cloyce A. Talbott 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+250,000 
+(3) 
+$ 
+250,000 
+(1) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to restricted stock awarded to the
+directors in the fiscal year ended December 31, 2011. For additional information related to the assumptions used and valuation of restricted stock, see Note 11 to the consolidated financial statements in Patterson-UTI’s Annual Report on
+Form 10-K for the fiscal year ended December 31, 2011. Messrs. Buckner, Huff, Hunt and Peak each received an award of 3,000 shares of restricted stock on January 1, 2011 with a market value of $21.55 per share which fully vested on
+January 1, 2012. As of December 31, 2011, Messrs. Buckner, Huff, Hunt and Peak each held 3,000 unvested shares of restricted stock. 
+(2) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to stock options
+awarded to the directors in the fiscal year ended December 31, 2011. For additional information related to the assumptions used in connection with the valuation of stock options
+30 
+using the Black-Scholes option pricing model see Note 11 to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31,
+2011. Messrs. Buckner, Huff, Hunt and Peak each received options to purchase 10,000 shares of stock on January 1, 2011 with a market value of $8.64 per share, which fully vested on January 1, 2012. As of December 31, 2011, Messrs.
+Huff, Hunt and Peak each held options to purchase a total of 60,000 shares of Common Stock, of which options to purchase 10,000 shares were unvested. As of December 31, 2011, Mr. Buckner held options to purchase a total of 50,000 shares of
+Common Stock, of which options to purchase 10,000 shares were unvested. 
+(3) 
+Mr. Talbott retired from his position as President and Chief Executive Officer of Patterson-UTI on September 30, 2007. Patterson-UTI entered into an
+employment agreement with Mr. Talbott effective October 1, 2007 which provided for the employment of Mr. Talbott on a part-time basis for a period of five years. Mr. Talbott’s salary during the term of this employment
+agreement is $250,000 per year. 
+Directors who are also employees of Patterson-UTI do not receive compensation
+for serving as a director or as a member of a committee of the Board of Directors. All directors are reimbursed for reasonable out-of-pocket expenses incurred in connection with serving as a member of the Board of Directors. Each non-employee
+director receives annual cash compensation of $35,000 and (i) 3,000 shares of restricted stock subject to one-year vesting (subject to acceleration in certain limited situations, including a change of control) and (ii) an option to
+purchase 10,000 shares of Common Stock at an exercise price equal to the closing price of Common Stock on the grant date. The option has a 10-year term, vests after one-year (subject to acceleration in certain limited situations, including a change
+of control) and contains a right to exercise for three years following cessation of the holder as a director (but not beyond the 10-year term). Each non-employee director that serves on the Audit Committee or the Compensation Committee receives
+additional annual cash compensation of $10,000 per committee on which he serves, with the chairman of each such committee receiving $15,000. The Lead Director receives additional annual cash compensation of $20,000. 
+EMPLOYMENT-RELATED AGREEMENTS 
+Change in Control 
+Patterson-UTI has entered into change in control
+agreements with Messrs. Siegel, Wall, Hendricks, Berns, Vollmer and Wexler (each agreement, an “Agreement” and collectively, the “Agreements”; and each individual, an “Employee” and collectively, the
+“Employees”). The Agreements were entered into to protect the Employees should a change in control occur, thereby encouraging the Employee to remain in the employ of Patterson-UTI and not be distracted from the performance of his duties to
+Patterson-UTI by the possibility of a change in control. 
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other than for cause or by the Employee for good reason, the terms of the Agreements would entitle the Employee to, among other things: 
+Ÿ 
+a bonus payment equal to the highest annual bonus paid after the Agreement was entered into (such bonus payment prorated for the portion of the fiscal
+year preceding the termination date), 
+Ÿ 
+a payment equal to 2.5 times (in the case of Messrs. Siegel, Wall and Hendricks), 2.0 times (in the case of Messrs. Berns and Vollmer) or 1.5 times (in
+the case of Mr. Wexler) of the sum of (i) the highest annual salary in effect for such Employee during the term of the Agreement and (ii) the average of the three annual bonuses earned by the Employee for the three fiscal years
+preceding the termination date (or a benchmark bonus in the case of Mr. Hendricks), and 
+Ÿ 
+continued coverage under Patterson-UTI’s welfare plans for up to three years (in the case of Messrs. Siegel, Wall and Hendricks) or two years (in
+the case of Messrs. Berns, Vollmer and Wexler). 
+Each Agreement with Messrs. Siegel, Wall, Berns, Vollmer and
+Wexler provides the Employee with a full gross-up payment for any excise taxes imposed on payments and benefits received under the Agreements or otherwise, including other taxes that may be imposed as a result of the gross-up payment. 
+31 
+A “change in control” is principally defined by the Agreement as: 
+Ÿ 
+an acquisition by any individual, entity or group of beneficial ownership of 35% or more of either Patterson-UTI’s then outstanding Common Stock
+or the combined voting power of the then outstanding voting securities of Patterson-UTI entitled to vote in the election of directors, 
+Ÿ 
+a change occurs in which the members of the Board of Directors as of the date of the Agreement cease to constitute at least a majority of
+Patterson-UTI’s Board of Directors unless that change occurs through a vote of at least a majority of the incumbent members of the Board of Directors, or 
+Ÿ 
+a change in the beneficial ownership of Patterson-UTI following consummation of a reorganization, merger, consolidation, sale of Patterson-UTI or any
+subsidiary of Patterson-UTI or a disposition of all or substantially all of the assets of Patterson-UTI, in which the beneficial owners immediately prior to the transaction own 65% or less of outstanding common stock of the newly combined or merged
+entity. 
+The Agreements terminate on the first to occur of: 
+Ÿ 
+the Employee’s death, disability or retirement, 
+Ÿ 
+the termination of the Employee’s employment, or 
+Ÿ 
+January 29, 2013 although, unless otherwise terminated, the Agreements automatically renew for successive 12-month periods until Patterson-UTI
+notifies the Employee at least 90 days before the expiration of the initial term or the renewal period, as applicable, that the term will not be extended. Patterson-UTI has not provided any such notification to the Employees.
+All unvested stock options and restricted stock awards held by Named Executive Officers vest upon a change
+of control as defined by the underlying award agreements. Upon a change in control as defined in the underlying performance unit award grants, Messrs. Wall, Vollmer, Siegel and Berns would receive two times the base payment payable thereunder. All
+restricted stock and performance unit awards held by Named Executive Officers contain provisions that in the event of termination due to death or disability, the Named Executive Officer would vest in a portion of the award. 
+Amounts that each of the Named Executive Officers would be entitled to under the existing Agreements if a change in control had occurred
+as of December 31, 2011 and the employee’s employment was terminated by Patterson-UTI other than for cause or by the employee for good reason (as defined in the Agreements) are reflected in the following table: 
+Cash Payments 
+Other Benefits 
+Name 
+Bonus 
+Payment 
+($)(1) 
+Salary and 
+Bonus 
+($)(2) 
+2009 
+Performance 
+Unit
+Awards 
+($)(3) 
+Option 
+Awards 
+($)(4) 
+Stock 
+Awards 
+($)(4) 
+2010 and 
+2011 
+Performance 
+Unit Awards 
+($)(5) 
+Continued 
+Benefits 
+($)(6) 
+Total 
+($) 
+Douglas J. Wall 
+$ 
+1,367,378 
+$ 
+3,241,632 
+$ 
+937,500 
+$ 
+808,035 
+$ 
+2,247,770 
+$ 
+1,760,757 
+$ 
+16,785 
+$ 
+10,379,857 
+John E. Vollmer III 
+$ 
+1,375,000 
+$ 
+1,881,039 
+$ 
+625,000 
+$ 
+538,687 
+$ 
+1,501,857 
+$ 
+1,173,825 
+$ 
+13,350 
+$ 
+7,108,758 
+Mark S. Siegel 
+$ 
+2,750,000 
+$ 
+3,827,596 
+$ 
+1,250,000 
+$ 
+1,077,391 
+$ 
+3,003,673 
+$ 
+2,347,650 
+$ 
+— 
+$ 
+14,256,310 
+Kenneth N. Berns 
+$ 
+1,375,000 
+$ 
+1,711,039 
+$ 
+625,000 
+$ 
+538,687 
+$ 
+1,501,857 
+$ 
+1,173,825 
+$ 
+— 
+$ 
+6,925,408 
+Seth D. Wexler 
+$ 
+250,000 
+$ 
+656,250 
+$ 
+— 
+$ 
+18,565 
+$ 
+765,913 
+$ 
+— 
+$ 
+13,350 
+$ 
+1,704,078 
+(1) 
+The assumed bonus payment is equal to the highest annual bonus paid from the time the Agreements were entered into through December 31, 2011.
+(2) 
+The assumed salary and bonus payment represents 2.5 times (in the case of Messrs. Siegel and Wall), 2.0 times (in the case of Messrs. Berns and Vollmer) or 1.5 times
+(in the case of Mr. Wexler) of the sum of the 2011 salary in effect for each employee and the average of the annual bonuses earned by each employee for 2010, 2009 and 2008. Bonus amounts earned in 2011 were not considered in this calculation as
+they were not determined until after December 31, 2011. 
+(3) 
+Cash settled performance units awarded to Messrs. Wall, Vollmer, Siegel and Berns in 2009 include a provision that upon a change in control as defined
+in the respective award agreements, the Named Executive 
+32 
+Officer will receive a cash payment equal to two times the base amount set forth in each agreement. Amounts presented in the table represent the assumed payment of two times the base amount if a
+change in control had occurred on December 31, 2011. 
+(4) 
+Each of the Named Executive Officers’ option and stock award agreements provide that unvested options and awards will immediately vest upon a change in control.
+Amounts presented in the table represent the value of unvested option and stock awards using the market price of Patterson-UTI Common Stock at December 31, 2011. 
+(5) 
+Share settled performance units awarded to Messrs. Wall, Vollmer, Siegel and Berns in 2010 and 2011 include a provision that upon a change in control as defined in the
+respective award agreements, the Named Executive Officer will receive an award of shares equal to two times the base amount set forth in each agreement. Amounts presented in the table represent the assumed award of two times the base number of
+shares if a change in control had occurred on December 31, 2011 valued at the December 31, 2011 closing price of Patterson-UTI common stock of $19.98 per share. 
+(6) 
+Messrs. Wall, Vollmer and Wexler participated in Patterson-UTI’s health and welfare plans as of December 31, 2011. The amounts presented represent
+Patterson-UTI’s portion of the premiums for three years in the case of Mr. Wall and two years in the case of Messrs. Vollmer and Wexler based on the rates in effect at December 31, 2011. 
+Term Sheet with Mr. Wall 
+Mr. Wall has informed the Board of Directors of his intention to retire as President and Chief Executive Officer later this calendar year. The Term Sheet for Mr. Wall relating to his intended
+retirement provides for Patterson-UTI and Mr. Wall to enter into an employment agreement (the “Employment Agreement”) to be effective as of the date of his retirement as President and Chief Executive Officer (the “Effective
+Date”). Pursuant to the Employment Agreement, Patterson-UTI will employ Mr. Wall as a special consultant to the Company beginning on the Effective Date for two years at an annual compensation of $250,000 per year. Mr. Wall will agree
+to restrictions regarding Patterson-UTI’s proprietary information and to not compete with Patterson-UTI for eighteen months following the termination of his employment under the Employment Agreement, subject to certain exceptions. The
+Employment Agreement will supersede all other agreements between Patterson-UTI and Mr. Wall relating to his employment by Patterson-UTI, including the agreements relating to payments upon a change of control; provided that it does not change or
+otherwise affect agreements related to stock options or restricted stock or stock units granted to him or Patterson-UTI’s agreement, assuming and subject to compliance with the terms of the Employment Agreement, that he will be entitled to
+participate in Patterson-UTI’s 2012 annual EBITDA-based cash bonus incentive plan in the same manner as he would have participated if he remained the Chief Executive Officer of Patterson-UTI through December 31, 2012. 
+Severance Agreements 
+Patterson-UTI has entered into written letter agreements with each of Messrs. Siegel, Berns and Vollmer pursuant to which Patterson-UTI
+has agreed to pay each such person within ten days of the termination of his employment with Patterson-UTI for any reason (including voluntary termination by him), an amount in cash equal to his annual base salary at the time of such termination.
+Any payment made by Patterson-UTI pursuant to these letter agreements will reduce dollar for dollar any payment owed to such person, if any, pursuant to the change in control agreements discussed above. 
+Patterson-UTI has entered into a Severance Agreement with Mr. Hendricks (the “Severance Agreement”). The term of the
+Severance Agreement generally ends on the third anniversary of the effective date of the Severance Agreement. If during the term of the Severance Agreement Mr. Hendricks’ employment terminates by reason of a Qualifying Termination,
+Patterson-UTI will pay Mr. Hendricks a lump-sum cash payment of $750,000 less any Severance Payment (as defined in the Severance Agreement) received by or payable to Mr. Hendricks under his change in control agreement described above or
+any other similar change in control agreement. 
+Under the Severance Agreement, “Qualifying Termination” means a
+termination of Mr. Hendricks’ employment (1) by Patterson-UTI for any reason other than cause or (2) if certain conditions are met, by Mr. Hendricks due to Patterson-UTI reducing his annual base salary to an amount that is
+less than $450,000 per year. 
+33 
+Death or Disability 
+All restricted stock and performance unit awards held by Named Executive Officers provide that in the event of termination of employment due to death or disability, the Named Executive Officer would vest
+in a portion of the award. With respect to Mr. Wall, such a termination would have resulted in the accelerated vesting of 16,597 shares of restricted stock with a fair value of $331,608. With respect to Messrs. Vollmer and Berns, such a
+termination at December 31, 2011 would have resulted in the accelerated vesting of 11,103 shares of restricted stock with a fair value of $221,838. With respect to Mr. Siegel, such a termination at December 31, 2011 would have
+resulted in the accelerated vesting of 22,206 shares of restricted stock with a fair value of $443,676. With respect to Mr. Wexler, such a termination would have resulted in the accelerated vesting of 9,422 shares of restricted stock with a
+fair value of $188,252. In the event of termination of employment due to death or disability, the Named Executive Officer would vest in the portion of the performance unit award that was earned at the time of death or disability. This payment would
+be determined at the end of the performance period and would equal the amount that the Named Executive Officer would have received at that time, pro-rated for the amount of time from the date of grant through the date of death or disability.
+Indemnification Agreements 
+Patterson-UTI has entered into an indemnification agreement with each of its Named Executive Officers and directors containing provisions that may require Patterson-UTI, among other things, to indemnify
+such executive officers and directors against liabilities that may arise by reason of their status or service as executive officers or directors (subject to certain exceptions) and to advance expenses incurred as a result of any proceeding against
+them as to which they could be indemnified. 
+CERTAIN TRANSACTIONS 
+In connection with the acquisition by REMY Capital Partners III, L.P. (“REMY Capital”) of an ownership interest in UTI Energy
+Corp. in March 1995, REMY Capital succeeded to a registration rights agreement with UTI. As the successor-in-interest to UTI, Patterson-UTI assumed this registration rights agreement pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares held by REMY Capital under the Securities Act of 1933, as amended. In the event that such rights are exercised in connection with a primary offering proposed by Patterson-UTI (or a
+secondary offering with which Patterson-UTI agrees to participate), REMY Capital would bear its pro rata share of the costs of the offering, other than legal, accounting and printing costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elects to exercise such rights other than in connection with an offering in which Patterson-UTI participates, REMY Capital would bear all costs of the offering. These rights continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995. As of the date of this proxy statement, REMY Capital continues to hold 1,000,000 shares of such Common Stock. 
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is President and sole stockholder of REMY Investors, which is the general partner of REMY Capital. Mr. Berns, a director and Senior Vice
+President of Patterson-UTI, is an executive of REMY Investors. 
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer, Patterson-UTI delivered a letter to Mr. Vollmer dated February 6, 2006 (the “Letter Agreement”). Pursuant to the Letter Agreement, Patterson-UTI generally agreed, to the extent permitted by law and provided
+that the applicable accounting restatement pending at that time did not result from Patterson-UTI’s material non-compliance with financial reporting requirements under the federal securities laws as a result of knowing misconduct by
+Mr. Vollmer, not to make any claim against Mr. Vollmer for certain compensation received or profits realized, or relating to securities acquired, prior to September 30, 2005. Patterson-UTI also generally agreed to indemnify Mr. Vollmer against
+all losses in connection with his defense of any claim against him under Section 304 of the Sarbanes-Oxley Act of 2002 (“Section 304”) in contravention of the immediately preceding sentence. Notwithstanding court decisions that
+Patterson-UTI’s right to make any such claims appears doubtful, Patterson-UTI entered into this agreement because of the breadth of language of Section 304 and the uncertainty as to how the statute may be interpreted by the courts in the
+future. 
+34 
+During 2011, Patterson-UTI purchased and made pre-payments for approximately $53.4 million
+of drill pipe, related tubular and other equipment from, and sold approximately $9.3 million of drill pipe to, a vendor that employs Mr. Holcomb’s son. Based upon information from the vendor, sales to Patterson-UTI accounted for approximately
+37% of the vendor’s revenue in 2011 and Mr. Holcomb’s son does not receive any commission or other compensation for any sales to Patterson-UTI. 
+Patterson-UTI has a written policy with respect to related person transactions. In accordance with this policy, related person transactions are reviewed by the Lead Director or the chair of the Audit
+Committee, each of whom has full delegated authority to approve, disapprove, ratify, amend, terminate or rescind any such transaction, or direct that such transaction be submitted to the Audit Committee or the full Board of Directors for
+consideration. In approving or disapproving related person transactions, the relevant facts and circumstances of the related person transaction are considered, including whether such transaction is in, or not inconsistent with, the best interest of
+Patterson-UTI and whether, in appropriate cases, such transaction is on commercial terms at least as favorable to Patterson-UTI as would otherwise be available to or from an unrelated third party or to Patterson-UTI’s employees generally.
+Related person transactions generally include transactions in an amount that exceeds $50,000 between Patterson-UTI or any of its subsidiaries and an executive officer, a director (or nominee to become director), an immediate family member of any of
+the foregoing or any entity in which any of the foregoing has a 10% or greater beneficial ownership interest or in which they are an executive officer, general partner, principal or engaged in a similar position. Certain related person transactions
+have been pre-approved under the terms of the policy, including, subject to certain exceptions and limitations, the sale to or purchase from Patterson-UTI of goods and services by entities related to directors in the ordinary course of business that
+are immaterial to Patterson-UTI and with respect to which the director has no direct economic interest or decision making authority. 
+35 
+SECURITY OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of April 10, 2012, the stock ownership of (i) the Named Executive Officers, directors and Board nominees, individually, (ii) all directors, Board nominees
+and executive officers as a group and (iii) each person known by Patterson-UTI to be the beneficial owner of more than 5% of Common Stock. 
+Name of 
+Beneficial Owner 
+Amount and 
+Nature of 
+Beneficial 
+Ownership 
+Percent 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common Stock: 
+BlackRock, Inc. 
+9,951,939 
+(1) 
+6.4 
+% 
+Directors and Named Executive Officers: 
+Mark S. Siegel 
+3,627,860 
+(2) 
+2.3 
+% 
+Douglas J. Wall 
+1,132,705 
+(3) 
+* 
+John E. Vollmer III 
+1,512,682 
+(4) 
+* 
+Kenneth N. Berns 
+1,309,282 
+(5) 
+* 
+Seth D. Wexler 
+65,665 
+(6) 
+* 
+Charles O. Buckner 
+68,000 
+(7) 
+* 
+Curtis W. Huff 
+111,880 
+(8) 
+* 
+Terry H. Hunt 
+89,000 
+(9) 
+* 
+Kenneth R. Peak 
+86,000 
+(10) 
+* 
+Cloyce A. Talbott 
+1,484,476 
+(11) 
+* 
+All directors and executive officers as a group (13 persons) 
+9,781,542 
+(12) 
+6.0 
+% 
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 13, 2012. According to the report, BlackRock, Inc. has sole
+voting and dispositive power with respect to 9,951,939 shares. The address of the principal business office of BlackRock, Inc. is 40 East 52 nd Street, New York, New York 10022. 
+(2) 
+Mr. Siegel is the President and sole stockholder of REMY Investors, which is the general partner of REMY Capital Partners III, L.P. (“REMY Capital”). The
+Common Stock beneficially owned by Mr. Siegel includes 1,000,000 shares of Common Stock owned by REMY Capital. The Common Stock beneficially owned by Mr. Siegel also includes stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within 60 days, to purchase 2,084,360 shares. Does not include 196,640 shares underlying stock options held by Mr. Siegel that are not presently exercisable and will not become exercisable within 60 days.
+Includes 133,835 shares of unvested restricted Common Stock held by Mr. Siegel, over which he presently has voting power. 
+(3) 
+Includes shares underlying stock options held by Mr. Wall, which are presently exercisable or become exercisable within 60 days, to purchase 763,271 shares. Does
+not include 147,479 shares underlying stock options held by Mr. Wall that are not presently exercisable and will not become exercisable within 60 days. Includes 100,126 shares of unvested restricted Common Stock held by Mr. Wall, over
+which he presently has voting power. 
+(4) 
+Includes shares underlying stock options held by Mr. Vollmer, which are presently exercisable or become exercisable within 60 days, to purchase 1,042,182 shares.
+Does not include 98,318 shares underlying stock options held by Mr. Vollmer that are not presently exercisable and will not become exercisable within 60 days. Includes 66,918 shares of unvested restricted Common Stock held by Mr. Vollmer,
+over which he presently has voting power. 
+36 
+(5) 
+Includes shares underlying stock options held by Mr. Berns, which are presently exercisable or become exercisable within 60 days, to purchase 1,042,182 shares.
+Does not include 98,318 shares underlying stock options that are not presently exercisable and will not become exercisable within 60 days. Includes 66,918 shares of unvested restricted Common Stock held by Mr. Berns, over which he presently has
+voting power. Does not include shares of Common Stock beneficially owned by REMY Investors. Mr. Berns disclaims beneficial ownership of such shares beneficially owned by REMY Investors. 
+(6) 
+Includes shares underlying stock options held by Mr. Wexler, which are presently exercisable or become exercisable within 60 days, to purchase 13,751 shares. Does
+not include 1,249 shares underlying stock options that are not presently exercisable and will not become exercisable within 60 days. Includes 38,334 shares of unvested restricted Common Stock held by Mr. Wexler, over which he presently has
+voting power. 
+(7) 
+Includes shares underlying presently exercisable stock options held by Mr. Buckner to purchase 50,000 shares. Does not include 10,000 shares underlying stock
+options held by Mr. Buckner that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Buckner, over which he presently has voting power.
+(8) 
+Includes shares underlying presently exercisable stock options held by Mr. Huff to purchase 60,000 shares. Does not include 10,000 shares underlying stock options
+held by Mr. Huff that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Huff, over which he presently has voting power.
+(9) 
+Includes shares underlying presently exercisable stock options held by Mr. Hunt to purchase 60,000 shares. Does not include 10,000 shares underlying stock options
+held by Mr. Hunt that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Hunt, over which he presently has voting power.
+(10) 
+Includes shares underlying presently exercisable stock options held by Mr. Peak to purchase 60,000 shares. Does not include 10,000 shares underlying stock options
+held by Mr. Peak that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Peak, over which he presently has voting power.
+(11) 
+Includes shares underlying stock options held by Mr. Talbott, which are presently exercisable or become exercisable within 60 days, to purchase 1,200,000 shares.
+(12) 
+Includes shares underlying stock options, which are presently exercisable or become exercisable within 60 days, to purchase 6,416,303 shares of Common Stock. Does not
+include shares underlying stock options to purchase 595,892 shares held by such individuals that are not presently exercisable and will not become exercisable within 60 days. Includes an aggregate of 596,479 shares of unvested restricted Common
+Stock held by certain directors and executive officers, over which they presently have voting power. 
+Except as
+stated herein, each stockholder has sole voting and investment power with respect to Common Stock included in the above table. There are no arrangements known to Patterson-UTI which may result in a change in control. 
+37 
+AUDIT COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by
+reference into any other Patterson-UTI filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent Patterson-UTI specifically incorporates this report by reference therein. 
+The Audit Committee has reviewed and discussed the audited financial statements with management and Patterson-UTI’s independent
+registered public accounting firm. 
+The Audit Committee has discussed with the independent registered public accounting firm
+the matters required to be discussed by Auditing Standard 380, The Auditor’s Communication with those Charged with Governance , as adopted by the Public Company Accounting Oversight Board in Rule 3200T. 
+The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting
+firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the
+independent registered public accounting firm their independence. 
+Taking the foregoing into consideration, the undersigned
+Audit Committee members recommended to the Board of Directors that the Board approve the inclusion of Patterson-UTI’s audited financial statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2011. 
+Audit Committee of the Board of Directors: 
+Charles O. Buckner, Chairman 
+Curtis W. Huff 
+Terry H. Hunt 
+PricewaterhouseCoopers Fees for Fiscal Years 2011 and 2010 
+In 2011 and 2010, Patterson-UTI and its subsidiaries incurred fees for services provided by PricewaterhouseCoopers LLP. 
+Description 
+Fees Incurred in 
+Fiscal
+Year 
+2011 
+Fees Incurred in 
+Fiscal
+Year 
+2010 
+Audit fees 
+$ 
+1,090,000 
+$ 
+1,431,400 
+Tax fees 
+45,075 
+45,600 
+All other fees 
+1,919 
+1,600 
+Total 
+$ 
+1,136,994 
+$ 
+1,478,600 
+The Audit Committee appoints the independent registered public accounting firm. The Audit Committee or
+Mr. Buckner, as Chairman of the Audit Committee, approves all other engagements of the independent registered public accounting firm in advance. In the event Mr. Buckner approves any such engagement, he discusses such approval with the
+Audit Committee at its next meeting. 
+“Audit fees” relate to audit services of PricewaterhouseCoopers LLP for fiscal
+2011 and 2010 consisting of the examination of Patterson-UTI’s consolidated financial statements, quarterly reviews of Patterson-UTI’s interim financial statements and services to assess Patterson-UTI’s internal control over financial
+reporting. “Tax fees” include federal, state, local and foreign tax compliance and related matters. “All other fees” consists of an annual subscription fee to a software product. The Audit Committee or Mr. Buckner, as
+Chairman of the Audit Committee, approved in advance all of the services described above. 
+The Audit Committee has discussed
+the non-audit services provided by PricewaterhouseCoopers LLP and the related fees and has considered whether those services and fees are compatible with maintaining auditor 
+38 
+independence. The Audit Committee determined that such non-audit services were consistent with the independence of PricewaterhouseCoopers LLP. 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires Patterson-UTI’s officers and directors and persons who own more than 10 percent of a registered class of Patterson-UTI’s equity securities, to
+file reports of ownership and changes in ownership with the SEC. Each of these persons is required by SEC regulation to furnish Patterson-UTI with copies of Section 16(a) filings. Based solely upon a review of Forms 3 and 4 and amendments
+thereto furnished to Patterson-UTI during 2011 and Forms 5 and amendments thereto furnished to Patterson-UTI with respect to 2011, or a written representation from the reporting person that no Form 5 is required, all filings required to be made by
+such officers, directors, and beneficial owners of more than 10 percent of a registered class of Patterson-UTI’s common stock were timely made. 
+Other Business 
+As of the date of this proxy statement, management of
+Patterson-UTI was not aware of any matter to be presented at the Meeting other than as set forth herein. If any other matters are properly brought before the Meeting, however, the shares represented by valid proxies will be voted with respect to
+such matters in accordance with the judgment of the persons voting them. 
+Stockholder Proposals for 2013 Annual Meeting 
+Proposals or Director Nominations for Inclusion in the Proxy Statement. Pursuant to Rule 14a-8 under the
+Exchange Act, stockholders may present proper proposals or director nominations for inclusion in Patterson-UTI’s proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals or director
+nominations to Patterson-UTI in a timely manner. In order to be included in Patterson-UTI’s proxy statement for the 2013 annual meeting of stockholders, proposals or director nominations from stockholders must be received by Patterson-UTI no
+later than December 17, 2012, and must otherwise comply with the requirements of Rule 14a-8. 
+Proposals or Director
+Nominations not Included in the Proxy Statement. In addition, Patterson-UTI’s bylaws establish an advance notice procedure with regard to stockholder proposals and director nominations not included in
+Patterson-UTI’s proxy statement. For director nominations not included in Patterson-UTI’s proxy statement, please refer to “Election of Directors – Meetings and Committees of the Board of Directors.” For stockholder
+proposals to be properly brought before the 2013 annual meeting, by a stockholder, the stockholder must be a stockholder of record on the date of the giving of the notice provided for below and on the record date for the determination of
+stockholders entitled to vote at such annual meeting and must give timely notice of such business in writing to the Secretary of Patterson-UTI. To be timely with respect to the 2013 annual meeting, a stockholder’s notice must be delivered to or
+mailed and received at Patterson-UTI’s principal executive offices not earlier than February 7, 2013 and not later than March 9, 2013; provided, however, that in the event that the annual meeting is called for a date that is not
+within 30 days before or after June 7, 2013, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or public
+disclosure of the annual meeting date was made, whichever occurs first. 
+A stockholder’s notice to the Secretary of
+Patterson-UTI shall set forth: 
+Ÿ 
+a brief description of each matter desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting,
+Ÿ 
+the name and record address of the stockholder proposing such business, 
+Ÿ 
+the class and number of shares of Patterson-UTI that are beneficially owned by the stockholder, 
+39 
+Ÿ 
+any material interest of the stockholder in such business, and 
+Ÿ 
+a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the annual meeting.
+Patterson-UTI reserves the right to reject, rule out of order, or take other appropriate action with respect
+to any proposal or nomination that does not comply with these and other applicable requirements. 
+Annual Report 
+A copy of Patterson-UTI’s annual report on Form 10-K accompanies this proxy statement only if you have requested that a copy of this
+proxy statement be mailed to you. The annual report on Form 10-K also is available electronically by following the instructions in the Notice. The annual report on Form 10-K is not incorporated into this proxy statement and is not considered
+proxy-soliciting material. 
+A copy of the annual report on Form 10-K, including the financial statements and financial
+statement schedules, but excluding exhibits, may be obtained by stockholders without charge by written request to the Secretary of Patterson-UTI at 450 Gears Road, Suite 500, Houston, Texas 77067 or by accessing it on Patterson-UTI’s website at
+www.patenergy.com in the investors section under the “financial reports” link. Patterson-UTI will furnish the exhibits to Form 10-K upon request and upon receipt of a reproduction fee. 
+Delivery of Documents to Stockholders Sharing an Address 
+The SEC’s rules allow companies to send a single Notice or single copy of annual reports, proxy statements, prospectuses and other disclosure documents to two or more stockholders sharing the same
+address, subject to certain conditions. These rules are intended to provide greater convenience for stockholders, and cost savings for companies, by reducing the number of duplicate documents that stockholders receive. If instructions for separate
+delivery have been received from any stockholder, Patterson-UTI will deliver promptly separate copies of the relevant disclosure materials. Similarly, if multiple copies of disclosure materials are being delivered to a single address, stockholders
+can request a single copy for future deliveries. Written requests should be submitted to the Secretary of Patterson-UTI at 450 Gears Road, Suite 500, Houston, Texas 77067. 
+40 
+PATTERSON-UTI ENERGY,
+INC. 
+450 GEARS ROAD, SUITE 500 
+HOUSTON, TX 77067 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when
+you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. 
+Electronic Delivery Of Future Proxy Materials 
+If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the
+Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. 
+VOTE BY PHONE - 1-800-690-6903 
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the
+instructions. 
+VOTE BY MAIL 
+Mark, sign and
+date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR 
+RECORDS 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND 
+DATED. 
+DETACH AND RETURN THIS PORTION ONLY 
+. 
+For
+All 
+Withhold
+All 
+For All
+Except 
+To withhold
+authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 
+The Board of Directors recommends you vote FOR the following: 
+¨ 
+¨ 
+¨ 
+1. Election of Directors 
+Nominees 
+01 Mark S. Siegel 02 Kenneth N. Berns
+03 Charles O. Buckner 04 Curtis
+W. Huff 05 Terry H. Hunt 
+06
+Kenneth R. Peak 07 Cloyce A. Talbott 
+The Board of Directors recommends you vote FOR proposals 2 and 3. 
+For 
+Against 
+Abstain 
+2. Approval of an advisory resolution on executive compensation. 
+¨ 
+¨ 
+¨ 
+3. Ratification of the selection of PricewaterhouseCoopers LLP as the independent registered
+public accounting firm of Patterson-UTI for the fiscal year ending December 31, 2012. 
+¨ 
+¨ 
+¨ 
+NOTE: Such other business as may properly come before the meeting or any adjournment thereof. 
+Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title
+as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com .
+PATTERSON-UTI ENERGY, INC. 
+Annual Meeting of Stockholders 
+June 7, 2012 10:00 AM 
+This proxy is solicited by the Board of
+Directors 
+The undersigned
+stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby appoints Mark S. Siegel, Douglas J. Wall and John E. Vollmer III, and each of them, proxies to the undersigned, each with full power to act without the other and with full
+power of substitution, to vote all of the shares which the undersigned is entitled to vote at the annual meeting of stockholders of the Company to be held Thursday, June 7, 2012, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N.
+Sam Houston Parkway East, Houston, Texas 77060, and at any and all adjournments or postponements thereof, with the same force and effect as if the undersigned were personally present. The undersigned hereby instructs the above-named proxies to
+vote the shares represented by this proxy in the manner as directed for the undersigned on the reverse side of this proxy card. If no directions are made, the proxies will vote “FOR” the nominees for directors, “FOR” the approval
+of the advisory resolution on executive compensation, and “FOR” the ratification of the selection of PricewaterhouseCoopers LLP as set forth on the reverse side. If any other matter should be presented properly, this proxy will be voted in
+accordance with the discretion of the above-named proxies. 
+Continued and to be marked, dated and signed on reverse side
\ No newline at end of file
diff --git a/raw/proxies/0000889900/0001193125-12-164768/proxy_rpt.txt b/raw/proxies/0000889900/0001193125-12-164768/proxy_rpt.txt
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index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
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+DEF 14A
+1
+d517215ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A
+INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the Registrant ¨ 
+Filed by a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material under § 240.14a-12 
+Patterson-UTI Energy, Inc. 
+(Name of
+Registrant as Specified In Its Charter) 
+(Name of
+Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+¨ 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
+filing fee is calculated and state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify
+the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+April 10, 2013 
+Dear Stockholder: 
+We cordially invite you to attend Patterson-UTI Energy,
+Inc.’s annual stockholders’ meeting. The annual meeting will be held Wednesday, June 5, 2013, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060. 
+We are pleased to take advantage of Securities and Exchange Commission rules that allow us to furnish these proxy materials and our annual
+report primarily over the Internet. We believe that posting these materials on the Internet enables us to provide stockholders with the information that they need quickly, while lowering our costs of printing and delivery and supporting
+sustainability. We encourage you to vote via the Internet and follow the links to our proxy statement and annual report, which are both available at www.proxyvote.com . 
+For those stockholders who have elected to receive their proxy materials in the mail, please review our proxy statement and annual report and vote via the Internet, by telephone or using your proxy card.
+Your vote is important to us. Please review your proxy materials carefully and send in your vote today. 
+Thank you for your support. 
+Sincerely, 
+M ARK S. S IEGEL 
+Chairman of the Board 
+W ILLIAM A NDREW H ENDRICKS , J R . 
+President and Chief Executive Officer 
+PATTERSON-UTI ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+NOTICE OF 2013
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 5, 2013 
+The 2013 annual meeting of the stockholders of Patterson-UTI Energy, Inc., a Delaware corporation (“Patterson-UTI”), will be
+held Wednesday, June 5, 2013, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060 (the “Meeting”), for the following purposes: 
+Ÿ 
+to elect seven directors named in this proxy statement to the Board of Directors of Patterson-UTI to serve until the next annual meeting of the
+stockholders or until their respective successors are elected and qualified; 
+Ÿ 
+to approve, on an advisory basis, Patterson-UTI’s compensation of its named executive officers; 
+Ÿ 
+to ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for the fiscal year ending
+December 31, 2013; and 
+Ÿ 
+to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof. 
+Stockholders of record at the close of business on April 9, 2013 are entitled to notice of and to vote at the Meeting and any
+adjournment or postponement thereof. 
+Your vote is important to us. Whether or not you plan to attend the Meeting in person, we
+urge you to promptly vote your shares via the Internet, by telephone, or if the accompanying proxy statement was mailed to you, by completing, signing, dating and returning your proxy card as soon as possible in the enclosed postage prepaid
+envelope. 
+By order of the Board of Directors 
+S ETH D. W EXLER 
+General Counsel and Secretary 
+April 10, 2013 
+Important Notice Regarding the Availability of Proxy
+Materials for the Stockholder Meeting 
+to Be Held on June 5, 2013 
+The proxy statement and annual report to stockholders are available at www.proxyvote.com . 
+PATTERSON-UTI ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+PROXY
+STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held June 5, 2013 
+GENERAL INFORMATION ABOUT THE ANNUAL
+MEETING AND VOTING 
+The Board of Directors (the “Board” or “Board of Directors”) of Patterson-UTI
+Energy, Inc., a Delaware corporation (“Patterson-UTI”), has made this proxy statement and its 2012 annual report to stockholders available to you on the Internet or, upon your request has delivered printed versions of these materials to
+you by mail beginning on or about April 15, 2013. Patterson-UTI is furnishing this proxy statement in connection with the solicitation by the Board of Directors of proxies to be voted at the 2013 annual meeting of stockholders of Patterson-UTI
+(the “Meeting”). The Meeting will be held Wednesday, June 5, 2013, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060, or at any adjournment or postponement thereof. The
+Notice of Internet Availability of Proxy Materials (the “Notice”) was mailed to each of Patterson-UTI’s stockholders (other than those who previously requested electronic delivery) entitled to vote at the Meeting on or about
+April 15, 2013. 
+Pursuant to the “notice and access” rules adopted by the Securities and Exchange Commission
+(the “SEC”), Patterson-UTI has elected to provide stockholders access to its proxy materials over the Internet. Accordingly, Patterson-UTI sent a Notice to all of its stockholders as of the record date. The Notice includes instructions on
+how to access Patterson-UTI’s proxy materials over the Internet and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form
+by mail or electronically by email on an ongoing basis. 
+Choosing to receive your future proxy materials by email will save us
+the cost of printing and mailing documents to you and will support sustainability. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the
+proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it. 
+If your
+shares are registered directly in your name with our transfer agent, Continental Stock Transfer & Trust Company, you are considered the “stockholder of record” with respect to those shares, and the Notice was sent directly to you.
+If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are
+the beneficial owner of shares held in “street name,” and the Notice was forwarded to you by that organization. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.
+Whether you are a “stockholder of record” or hold your shares in “street name,” you may direct your vote
+without attending the Meeting in person. 
+If you are a stockholder of record, you may vote by Internet or by telephone by
+following the instructions in the Notice. If you request printed copies of the proxy materials by mail, you may also vote by signing and submitting your proxy card and returning it by mail. You should sign your name exactly as it appears on the
+proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity. 
+If you are the beneficial owner of shares held in street name, you may be eligible to vote your shares electronically over the Internet or
+by telephone by following the instructions in the Notice. If you request printed 
+1 
+copies of the proxy materials by mail, you may also vote by signing the voter instruction card provided by your brokerage firm, bank, broker-dealer, or other similar organization and returning it
+by mail. If you provide specific voting instructions by mail, telephone or the Internet, your shares will be voted by your brokerage firm, bank, broker-dealer, or similar organization as you have directed. 
+Properly submitted proxies received either by mail, Internet, telephone or in person in time to be counted for the Meeting will be voted
+as you have directed in your proxy, unless you revoke your proxy in the manner provided below. As to any matter for which you give no direction in your proxy, your shares will be voted as follows: 
+Ÿ 
+“FOR” the election of all of the nominees to the Board of Directors named in this proxy statement; 
+Ÿ 
+“FOR” the approval, on an advisory basis, of Patterson-UTI’s compensation of its named executive officers; 
+Ÿ 
+“FOR” the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for the fiscal
+year ending December 31, 2013; and 
+Ÿ 
+“FOR” or “AGAINST” any other proposals that may be properly submitted at the Meeting at the discretion of the persons named in the
+proxy. 
+If you are a stockholder of record, you may revoke your proxy before the proxy is voted by either:
+Ÿ 
+submitting a new proxy with a later date, including a proxy submitted by the Internet or by telephone, in time to be counted for the meeting;
+Ÿ 
+notifying the Secretary of Patterson-UTI in writing before the Meeting that you have revoked your proxy; or 
+Ÿ 
+attending the Meeting and voting in person. 
+If your shares are held in street name, you must obtain a proxy executed in your favor from the stockholder of record (that is, your brokerage firm, bank, broker-dealer or similar organization) to be able
+to vote at the Meeting. 
+The Board of Directors is making this solicitation. Patterson-UTI’s officers and other employees,
+without compensation other than regular compensation, may solicit proxies by mail, email, the Internet, telephone, electronic means and personal interview. Patterson-UTI does not intend to retain a proxy solicitation firm to assist in the
+solicitation of proxies of stockholders, but may do so if circumstances warrant. Patterson-UTI will pay all costs associated with this solicitation. 
+SHARES OUTSTANDING AND VOTING RIGHTS 
+Only stockholders of record of
+Patterson-UTI’s common stock, $.01 par value per share (the “Common Stock”), at the close of business on April 9, 2013 are entitled to notice of and to vote at the Meeting or any adjournment or postponement thereof. At the close
+of business on April 9, 2013, there were 146,427,968 shares of Common Stock issued and outstanding. Holders of record of Common Stock on April 9, 2013 will be entitled to one vote per share on all matters to properly come before the
+Meeting. A list of stockholders entitled to notice of and to vote at the Meeting will be made available during regular business hours at the offices of Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067, for the 10 days
+prior to, and at, the Meeting for examination by any stockholder for any purpose germane to the Meeting. 
+A quorum is necessary
+to transact business at the Meeting. A majority of the shares of Common Stock outstanding on April 9, 2013 will constitute a quorum. The shares held by each stockholder who attends the Meeting in person, signs and timely returns the form of
+proxy or properly votes using the Internet or telephone will be counted for purposes of determining the presence of a quorum at the Meeting. 
+“Broker non-votes” will be considered present at the Meeting but will not be counted to determine the total number of votes cast. Broker non-votes occur when nominees, such as brokerage firms,
+banks, broker-dealers, or 
+2 
+other similar organizations holding shares on behalf of the beneficial owners, are prohibited from exercising discretionary voting authority for beneficial owners who have not provided voting
+instructions. If you do not give instructions to your bank, brokerage firm or other agent, the bank, brokerage firm or other agent will nevertheless be entitled to vote your shares of Common Stock in its discretion on “routine matters” and
+may give or authorize the giving of a proxy to vote the shares of Common Stock in its discretion on such matters. The ratification of an independent registered public accounting firm is generally considered a routine matter, whereas the election of
+directors and advisory approval of executive compensation are not considered routine matters. For these reasons, please promptly vote in accordance with the instructions provided by your brokerage firm, bank, broker-dealer, or other similar
+organization. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+Directors are elected to serve until the next annual
+meeting of stockholders and until their successors are elected and qualified. Patterson-UTI’s bylaws provide that the affirmative vote of a plurality of the votes cast at the meeting at which a quorum is present is required for the election of
+directors. Shares as to which a stockholder withholds authority to vote on the election of directors and shares as to which a broker indicates that it does not have discretionary authority to vote on the election of directors will not be counted as
+voting thereon and will not affect the election of the nominees receiving a plurality of the votes cast. 
+The enclosed form of
+proxy provides a means for you to either: 
+Ÿ 
+vote “FOR” the election of the nominees to the Board of Directors listed below, 
+Ÿ 
+withhold authority to vote for one or more of the nominees, or 
+Ÿ 
+withhold authority to vote for all of the nominees. 
+The Board of Directors recommends that you vote “FOR” all of the nominees. Unless you give contrary instructions in your proxy, your proxy will be voted
+“FOR” the election of all of the nominees to the Board of Directors. If any nominee should become unable or unwilling to accept nomination or election, the person acting under the proxy will vote for the election of such other person as
+the Board of Directors may recommend. The Board has no reason, however, to believe that any of the nominees will be unable or unwilling to serve if elected. Abstentions will have no effect with respect to the election of directors. A broker non-vote
+will be counted for purposes of establishing a quorum, but will not be treated as a vote cast with respect to the election of directors. This will have the effect of reducing the absolute number of votes cast for the election of directors.
+There are no arrangements or understandings between any person and any of the directors pursuant to which such director was
+selected as a nominee for election at the Meeting. There are no family relationships among any of the directors or executive officers of Patterson-UTI. 
+Our corporate governance guidelines require that if a director receives in an uncontested election a greater number of “withhold” votes than votes cast “for” his or her election, the
+Nominating and Corporate Governance Committee of the Board of Directors will undertake a prompt evaluation of the appropriateness of the director’s continued service on the Board of Directors. In performing this evaluation, the Nominating and
+Corporate Governance Committee will review all factors it deems relevant, including the stated reasons why votes were withheld, the director’s length of service, his or her past contributions to Patterson-UTI and the availability of other
+qualified candidates. The Nominating and Corporate Governance Committee will then make its recommendation to the Board. The Board of Directors will review the Nominating and Corporate Governance Committee’s recommendation and consider such
+further factors and information as it deems relevant. The Board of Directors will act on the Nominating and Corporate Governance Committee’s recommendation no later than 90 days following the date of the stockholders’ meeting. If the Board
+of Directors determines remedial action is appropriate, the director shall promptly take whatever action is requested by the Board. If the director does not promptly take the recommended remedial action or if the Board of Directors determines that
+immediate resignation is in the best interests of Patterson-UTI and its stockholders, the Board of Directors may accept the director’s resignation that will have been tendered as follows. Each director will, as a condition to his or her
+3 
+appointment or election as a director or nomination as a director, agree in writing to comply with the terms of Patterson-UTI’s majority voting policy and provide to the Board of Directors
+an irrevocable resignation that will be effective upon (i) the failure to receive the required vote at the next annual meeting at which such director faces re-election and (ii) the Board of Directors’ acceptance of such resignation.
+Set forth below is the name, age, position and a brief description of the business experience during at least the past five
+years of each of the members of Patterson-UTI’s Board of Directors, as well as specific qualifications, attributes and skills of such member that were identified by the Nominating and Corporate Governance Committee when concluding such member
+should be nominated to serve on the Board of Directors. Each current member of Patterson-UTI’s Board of Directors is a nominee for election to the Board of Directors, except for Kenneth R. Peak. Mr. Peak is not standing for re-election due
+to health reasons, and the size of the Board of Directors will be reduced to seven directors effective as of the time of the Meeting. 
+Name 
+Age 
+Position 
+Mark S. Siegel 
+62 
+Chairman of the Board and Director 
+Kenneth N. Berns 
+53 
+Senior Vice President and Director 
+Charles O. Buckner 
+68 
+Director 
+Michael W. Conlon 
+66 
+Director 
+Curtis W. Huff 
+55 
+Director 
+Terry H. Hunt 
+64 
+Director 
+Cloyce A. Talbott 
+77 
+Director 
+When considering whether directors and nominees have the experience, qualifications, attributes and
+skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of Patterson-UTI’s business and structure, the Nominating and Corporate Governance Committee and the Board of Directors
+focused primarily on the information discussed in each of the directors’ individual biographies set forth below. 
+In
+particular, with regard to Mr. Siegel, the Board of Directors considered his broad business and legal experience, as well as his expertise with respect to Patterson-UTI’s business. In addition, the Board considered Mr. Siegel’s
+demonstrated leadership for more than 15 years of both Patterson-UTI and one of its predecessor companies, UTI Energy Corp. (“UTI”). In addition, the Board considered Mr. Siegel’s prior leadership experience in other public
+companies and in the oil services industry, and in numerous other businesses and industries. Mr. Siegel also brings substantial experience and expertise in mergers and acquisitions, capital structure transactions, strategic planning, and board
+and business management. Mr. Siegel’s broad and deep experience and expertise allows him to provide Patterson-UTI with valuable leadership in all areas of its business endeavors. 
+With regard to Mr. Berns, the Board of Directors considered his more than 30 years of financial, mergers and acquisitions and
+transactional experience, including over fifteen years in the oil and gas industry. This experience and background, provides perspective on the cyclical nature of the oil and gas industry and allows Mr. Berns to provide valuable direction with
+respect to Patterson-UTI’s financial affairs, corporate transactions and strategic decisions. 
+With regard to
+Mr. Buckner, the Board of Directors considered his past and current service as a director of oil and gas companies, as well as his experience, expertise and background with regard to accounting matters, which includes his role as the former
+chairman of Ernst & Young LLP’s United States energy practice. 
+With regard to Mr. Conlon, the Board of
+Directors considered his more than 40 years of experience handling corporate, securities and mergers and acquisition matters as a lawyer with an international law firm, as well as his service in a number of management roles throughout his tenure at
+the firm. The Board noted Mr. Conlon’s experience in representing numerous public companies, including Patterson-UTI, and other energy services companies, allows him to provide valuable insight on legal, governance and regulatory issues
+facing Patterson-UTI. 
+4 
+With regard to Mr. Huff, the Board of Directors considered his background as an
+executive of publicly traded oilfield services companies and as an owner and manager of a private equity firm and investment firm focused on the oilfield service industry. The Board noted his knowledge and experience in a broad range of oilfield
+products and services and his current and historical experience in managing operations in both the United States and internationally. The Board also considered Mr. Huff’s expertise and background with regard to accounting and legal
+matters, which, among other things, provides guidance to Patterson-UTI in assessing its corporate governance structure, policies and procedures. 
+With regard to Mr. Hunt, the Board of Directors considered his over 25 years of experience covering most phases of the upstream oil and natural gas industry in the United States and Canada, including
+the evaluation of exploration and development programs, oil and natural gas production and pipeline operations, and project development and major production facility construction. This experience and background provides Patterson-UTI with an
+invaluable perspective of the oil and natural gas industry and its customers. In addition, Mr. Hunt’s many years of senior executive experience leading natural gas distribution, storage and marketing companies provides insight into the
+management of multi-faceted businesses and the markets for natural gas in North America. 
+With regard to Mr. Talbott, the
+Board of Directors considered his more than 50 years of experience in the oil and gas industry, more than thirty of which has been with Patterson-UTI, which provides unique and valuable knowledge of the U.S. land drilling industry and a historical
+perspective of the cyclical nature of the oil and natural gas industry. 
+Mark S. Siegel — Mr. Siegel
+has served as Chairman of the Board and as a director of Patterson-UTI since May 2001. Mr. Siegel served as Chairman of the Board and as a director of UTI from 1995 to May 2001, when UTI merged with and into Patterson-UTI. Mr. Siegel has
+been President of REMY Investors & Consultants, Incorporated (“REMY Investors”) since 1993. From 1992 to 1993, Mr. Siegel was President, Music Division, Blockbuster Entertainment Corp. From 1988 through 1992, Mr. Siegel
+was an Executive Vice President of Shamrock Holdings, Inc., a private investment company, and Managing Director of Shamrock Capital Advisors, Incorporated. Mr. Siegel holds a Bachelor of Arts degree from Colgate University and a J.D. from the
+University of California, Berkeley (Boalt Hall) School of Law. 
+Kenneth N. Berns — Mr. Berns has
+served as Senior Vice President of Patterson-UTI since April 2003 and as a director of Patterson-UTI since May 2001. Mr. Berns served as a director of UTI from 1995 to May 2001. Mr. Berns has been an executive with REMY Investors since
+1994. Mr. Berns holds a Bachelors Degree in Business Administration from San Diego State University and a Masters Degree in Taxation from Golden Gate University. 
+Charles O. Buckner — Mr. Buckner has served as a director of Patterson-UTI since February 2007. Mr. Buckner, a private investor, retired from the public accounting firm of
+Ernst & Young LLP in 2002 after 35 years of service in a variety of client service and administrative roles, including chairmanship of Ernst & Young’s United States energy practice. He presently serves as a director of Energy
+Partners, Ltd., a publicly held company with oil and natural gas exploration and production on the continental shelf in the Gulf of Mexico. Mr. Buckner served as a director of Global Industries, Ltd., a marine construction services company with
+global operations from 2010 to 2011, Gateway Energy Corporation, a publicly held oil and gas pipeline company from 2008 to 2010, Horizon Offshore, Incorporated, a marine construction services company for the offshore oil and gas industry from 2003
+to 2007, and Whittier Energy Corporation, a publicly held company with domestic onshore oil and natural gas exploration and production from 2003 to 2007. Mr. Buckner is a Certified Public Accountant and holds a Bachelor of Business
+Administration from the University of Texas and a Masters of Business Administration from the University of Houston. 
+Michael W. Conlon — Mr. Conlon has served as a director of Patterson-UTI since September 2012. Mr. Conlon
+retired as a partner of the law firm, Fulbright & Jaworski L.L.P., in January 2012 after 40 years with the firm. Mr. Conlon specialized in corporate, securities and merger and acquisition matters. Mr. Conlon was partner-in-charge
+of the firm’s Houston office from 2007 to 2011 and was co-partner-in-charge from 2001 to 
+5 
+2007. Mr. Conlon currently acts as Secretary to the Board of Directors of The Men’s Wearhouse Inc., a specialty retailer of men’s apparel and an NYSE listed company.
+Mr. Conlon holds a Bachelor of Arts degree in Economics from Catholic University of America, where he graduated magna cum laude, and a Juris Doctorate from the Duke University School of Law. 
+Curtis W. Huff — Mr. Huff has served as a director of Patterson-UTI since May 2001 and served as a director of
+UTI from 1997 to May 2001. Mr. Huff is the co-founder and advisor of Intervale Capital, an oilfield service private equity firm that Mr. Huff created in 2006. Mr. Huff is also the President and Chief Executive Officer of Freebird
+Investments LLC, a private family office investment company that was created in October 2002. Mr. Huff also serves as Chief Executive Officer of Impact Fluid Solutions LLC, which provides drilling and production solutions for oil and gas
+operators and fluid companies. Mr. Huff served as the President and Chief Executive Officer of Grant Prideco, Inc., a provider of drill pipe and other drill stem products, from February 2001 to June 2002. From January 2000 to February 2001,
+Mr. Huff served as Executive Vice President, Chief Financial Officer and General Counsel of Weatherford International, Inc., one of the world’s largest international oilfield services companies. He served as Senior Vice President and
+General Counsel of Weatherford from May 1998 to January 2000. Mr. Huff began his professional career in 1983 with the law firm of Fulbright & Jaworski L.L.P. where he specialized in corporate, securities and merger and acquisition
+matters. Mr. Huff was made a partner in that firm in 1989 where he served until 1998 when he joined Weatherford. Mr. Huff holds a Bachelor of Arts degree and J.D. from the University of New Mexico, where he graduated as a member of the
+order of the coif and cum laude, and a Masters of Law from New York University School of Law. 
+Terry H.
+Hunt — Mr. Hunt has served as a director of Patterson-UTI since April 2003 and served as a director of UTI from 1994 to May 2001. Mr. Hunt is an energy consultant. Mr. Hunt served as Senior Vice President —
+Strategic Planning of PPL Corporation, an international energy and utility holding company, from 1998 to 2000. Mr. Hunt served as the President and Chief Executive Officer of Penn Fuel Gas, Inc., a Pennsylvania-based natural gas and propane
+distribution company, from 1992 to 1999. Previously, Mr. Hunt was President of Carnegie Natural Gas and Apollo Gas Company, both Appalachian natural gas distribution companies. He also previously served in senior management positions in natural
+gas project and venture development, oil and natural gas exploration and development evaluation and operations and major production facilities construction with Texas Oil & Gas Corp. and Atlantic Richfield. Mr. Hunt holds a Bachelor of
+Engineering degree from the University of Saskatchewan, Canada and a Masters of Business Administration from Southern Methodist University. 
+Cloyce A. Talbott — Mr. Talbott has served as a director of Patterson-UTI since its incorporation in 1978. Mr. Talbott co-founded Patterson-UTI and has served in various
+capacities, including as its Chief Executive Officer from 1983 until his retirement from that position in September 2007. He also served as Chairman of the Board from 1983 to May 2001. Mr. Talbott was employed by Patterson-UTI as a consultant
+from September 2007 through September 2012. Mr. Talbott holds a Bachelor of Science degree in petroleum engineering from Texas Tech University. 
+Board Leadership Structure, Lead Director and Board Role in Risk Oversight 
+The Board evaluates its leadership structure and role in risk oversight on an ongoing basis. The decision on whether to combine or
+separate the Chairman and Chief Executive Officer (“CEO”) role is determined on the basis of what the Board considers to be best for Patterson-UTI at any given point in time. Patterson-UTI’s current Board leadership structure
+separates the role of Chairman and CEO. 
+The Board also believes part of an effective Board leadership structure is to have a
+lead independent director, the “Lead Director.” The Board has appointed Mr. Huff as the Lead Director. The independent directors meet regularly in executive sessions at which only independent directors are present, and the Lead
+Director chairs those sessions. The Lead Director serves as a liaison between the Chairman and the independent directors, consults with regard to Board and agenda items, and works with the chairpersons of Board committees as appropriate. 
+The Nominating and Corporate Governance Committee and the Board currently believe that the Board’s leadership structure, which
+includes the separation of the role of CEO and Chairman and the appointment of an independent Lead Director, is appropriate because it, among other things, provides for sufficient independence between the Board and management and for an independent
+director who provides board member leadership. 
+6 
+The Board has adopted Corporate Governance Guidelines, which can be accessed electronically
+in the “Governance” section of Patterson-UTI’s website at www.patenergy.com The Guidelines describe one of the Board’s primary responsibilities as overseeing Patterson-UTI’s processes for assessing and managing risks.
+The Board discharges this responsibility, in part, through regular inquiries from the Chairman of the Board and/or the Lead Director to management, periodic communications from management to the Board of Directors of particular risks and events, and
+discussions during Board meetings with and without management of general and specific risks to Patterson-UTI. 
+Meetings and Committees of
+the Board of Directors 
+The Board of Directors met ten times during the year ended December 31, 2012. Each director
+attended, in person or by telephone, at least 75% of the aggregate of all meetings held by the Board during his service and meetings of each committee on which such director served, except that Mr. Peak did not attend any meetings during the
+fourth quarter due to health reasons. A majority of the members of the Board of Directors are independent within the meaning of the Nasdaq Stock Market, Inc. (“Nasdaq”) listing standards. Specifically, the Board has determined that Messrs.
+Buckner, Conlon, Huff, Hunt and Peak are independent within the meaning of the Nasdaq listing standards. In reaching this conclusion, the Board considered that Mr. Peak is the Chairman of a publicly traded independent natural gas and oil
+company, which has a subsidiary that has obtained contract drilling services from Patterson-UTI in the ordinary course of their businesses consistent with customary terms in the industry. In reaching this conclusion, the Board also considered that
+Mr. Conlon retired in January 2012 as partner of a law firm that has provided legal services to the Company. The Board has determined that these transactions are not material to such companies, firms, Patterson-UTI or Messrs. Conlon or Peak and
+that such transactions do not affect any such director’s independence under applicable rules and regulations. 
+The Board
+of Directors has established four standing committees, an Executive Committee, an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. 
+The Executive Committee, which currently is composed of Messrs. Siegel, Talbott and Berns, has the authority, to the extent permitted by applicable law, to act for the Board in all matters arising between
+regular or special meetings of the Board of Directors. 
+The Audit Committee members are Messrs. Buckner (chairman), Huff and
+Hunt, each of whom is independent within the meaning of applicable rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and within the meaning of the Nasdaq listing standards. The Audit Committee oversees
+management’s conduct of Patterson-UTI’s accounting and financial reporting process, including review of the financial reports and other financial information provided by Patterson-UTI to the public and government and regulatory bodies,
+Patterson-UTI’s system of internal accounting, Patterson-UTI’s financial controls, and the annual independent audit of Patterson-UTI’s financial statements and internal control over financial reporting. The Audit Committee also
+oversees compliance with Patterson-UTI’s codes of conduct and ethics and with legal and regulatory requirements. The Board has determined that Messrs. Buckner and Huff are “audit committee financial experts” within the meaning of
+applicable SEC rules. The Audit Committee selects the independent registered public accounting firm to audit Patterson-UTI’s books and records and considers and acts upon accounting matters as they arise. The Board of Directors has adopted a
+written charter for the Audit Committee. The Audit Committee held nine meetings during the year ended December 31, 2012. Please see “Audit Committee Report” elsewhere in this proxy statement. 
+The Compensation Committee members are Messrs. Hunt (chairman), Buckner, Conlon, Huff and Peak, each of whom is independent as defined in
+the Nasdaq listing standards. Among other things, the Compensation Committee sets and administers the policies that govern the compensation of executive officers and directors of Patterson-UTI. The Board of Directors has adopted a written charter
+for the Compensation Committee. The Compensation Committee held eight meetings during the year ended December 31, 2012. Please see “Compensation Discussion and Analysis” and “Compensation Committee Report” elsewhere in this
+proxy statement for further information about the Compensation Committee. 
+7 
+The Nominating and Corporate Governance Committee members are Messrs. Huff (chairman),
+Buckner, Conlon and Peak, each of whom is independent as defined in the Nasdaq listing standards. The purpose of the Nominating and Corporate Governance Committee is to identify individuals qualified to become Board members, to recommend for
+selection by the Board director nominees for the next annual meeting of stockholders, to review Patterson-UTI’s Code of Business Conduct, to develop and continually make recommendations with respect to the best corporate governance principles
+and to oversee the evaluation of the Board and management. The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee held three meetings during the
+year ended December 31, 2012. 
+On behalf of the Board, the Nominating and Governance Committee considers director nominees
+recommended by Patterson-UTI’s stockholders if the recommendations are made in accordance with all legal requirements, including applicable provisions of Patterson-UTI’s restated certificate of incorporation and bylaws. In accordance with
+Patterson-UTI’s bylaws, in addition to any other applicable requirements, nominations of persons for election to the Board may be made at a meeting of stockholders only by or at the direction of the Board or by a stockholder who is a
+stockholder of record on the date of the giving of the notice provided for below and on the record date for the determination of stockholders entitled to vote at such annual meeting and gives timely notice of such nomination in writing to the
+Secretary of Patterson-UTI. To be timely with respect to the 2014 annual meeting of stockholders, a stockholder’s notice must be delivered to or mailed and received at Patterson-UTI’s principal executive offices not earlier than
+February 5, 2014 and not later than March 7, 2014; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after June 5, 2014, notice by the stockholder must be received
+not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or public disclosure of the annual meeting date was made, whichever occurs first. 
+A stockholder’s notice to the Secretary of Patterson-UTI shall set forth: 
+Ÿ 
+as to each person whom the stockholder proposes to nominate for election or re-election as director, all information relating to such person that is
+required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A promulgated under the Exchange Act, or any successor regulation thereto, 
+Ÿ 
+the name and record address of the stockholder proposing such nomination, 
+Ÿ 
+the class and number of shares of Patterson-UTI that are beneficially owned by the stockholder, 
+Ÿ 
+a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their
+names) pursuant to which the nomination or nominations are to be made by such stockholder, and 
+Ÿ 
+a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in the notice.
+Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee
+and to serve as a director if elected. 
+The Nominating and Corporate Governance Committee determines qualification criteria and
+procedures for the identification and recruitment of candidates for election to serve as directors of Patterson-UTI. The Nominating and Corporate Governance Committee relies on the knowledge and relationships of Patterson-UTI and its officers and
+directors, as well as third parties when it deems appropriate, to identify and evaluate nominees for director, including nominees recommended by stockholders. In evaluating a nominee for director, the Nominating and Corporate Governance Committee
+considers the nominee’s skills, expertise, industry and other knowledge, personal and professional ethics, integrity and values, sound business judgment and willingness to commit sufficient time to the Board and be committed to representing the
+long-term interests of Patterson-UTI’s stockholders. Although the Nominating and Corporate Governance Committee does not have a stand-alone policy with regard to consideration of diversity in identifying director nominees, it considers
+diversity in professional background, experience, expertise (including as to financial matters) and perspective (including as to age, gender and ethnicity) with respect to the Board of Directors composition as a whole when evaluating a director
+nominee. 
+8 
+Succession Planning 
+The Board of Directors oversees processes and procedures to provide continuity of well-qualified executive leadership and to assess whether such leadership possesses the skill and talent to execute
+Patterson-UTI’s long term business strategies. The Board of Directors reviews the succession plan for the Chief Executive Officer and the senior executives tailored to reflect the Board’s standards for executive leadership and
+Patterson-UTI’s business strategy and vision. The succession plan addresses (i) both current and long term needs of Patterson-UTI and establishes a process for identifying and assessing potential internal candidates; (ii) periodic
+review and assessment of readiness: (iii) contingency planning for temporary absences of the Chief Executive Officer due to disability or other unexpected event; and (iv) long term continuity planning for succession to the Chief Executive
+Officer position. As evidence of the benefits of the Board’s succession planning efforts, Patterson-UTI achieved a successful management transition in 2012 by hiring a new Chief Operating Officer, Mr. Hendricks, who later replaced our
+retiring President and Chief Executive Officer, Mr. Wall. 
+Political Contributions 
+Patterson-UTI has a policy prohibiting the contribution of company funds to political parties or organizations or to candidates for any
+public office or to influence the general public, or segments thereof, with respect to public elections or referenda. Patterson-UTI participates in certain trade organizations with purposes that include enhancement of the public image of our
+industry, education about the industry and issues that affect the industry and industry best practices and standards. Many of the trade organizations also engage in legislative or political activity related to matters that affect the industry as a
+whole and not a specific company. Patterson-UTI, as one of many members in various trade associations, does not direct the legislative activities of any trade organization of which it is a member. 
+Sustainability 
+Patterson-UTI is committed to long-term sustainability with respect to the environment, our society and our long-term corporate success. A
+copy of Patterson-UTI’s sustainability commitment can be accessed electronically in the “Values” section of the Patterson-UTI website at www.patenergy.com and in print to any stockholder who requests it from the Secretary of
+Patterson-UTI. 
+Communication with the Board and its Independent Members 
+Persons may communicate with the Board, or directly with its Chairman, Mr. Siegel, by submitting such communication in writing in
+care of Chairman of the Board of Directors, Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067. Persons may communicate with the independent members of the Board by submitting such communication in writing to the Nominating
+and Corporate Governance Committee of the Board of Directors of Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067. 
+Although Patterson-UTI does not have a formal policy regarding attendance by members of the Board at its annual meetings of stockholders, directors are invited to attend annual meetings of Patterson-UTI
+stockholders. All of the directors attended the 2012 annual meeting of stockholders, with three directors attending in person and four directors attending via telephone. 
+Corporate Governance Documents Available on Patterson-UTI’s Website 
+Copies of each of the following documents can be accessed electronically in the “Governance” section of the Patterson-UTI
+website at www.patenergy.com and in print to any stockholder who requests them from the Secretary of Patterson-UTI: 
+Ÿ 
+Audit Committee Charter; 
+Ÿ 
+Compensation Committee Charter; 
+Ÿ 
+Nominating and Corporate Governance Committee Charter; 
+Ÿ 
+Corporate Governance Guidelines; 
+9 
+Ÿ 
+Code of Business Conduct for its employees, officers and directors; and 
+Ÿ 
+Code of Business Conduct and Ethics for Senior Financial Executives. 
+PROPOSAL NO. 2 
+ADVISORY APPROVAL OF EXECUTIVE COMPENSATION 
+In accordance with
+Section 14A of the Exchange Act, the Board of Directors is asking stockholders to approve a non-binding, advisory resolution on the compensation of Patterson-UTI’s executive officers who are named in the Summary Compensation Table
+appearing in this proxy statement (the “Named Executive Officers”). The compensation of the Named Executive Officers is described in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of
+this proxy statement. 
+The compensation program for the Named Executive Officers is designed to attract and retain highly
+qualified individuals and to motivate and reward them for performance that benefits Patterson-UTI and its stockholders. The Compensation Committee and the Board of Directors believe that the policies and procedures detailed in the “Compensation
+Discussion and Analysis” achieve these goals by, among other things: 
+Ÿ 
+providing a mix of short-term compensation in the form of base salary and cash bonuses and long-term compensation in the form of restricted stock,
+stock options and performance units, which strikes a balance between offering competitive compensation packages and aligning compensation with long-term growth and creating value for stockholders; 
+Ÿ 
+emphasizing variable equity and cash compensation to link realized compensation to results; 
+Ÿ 
+using a team-based compensation model for our top executives; 
+Ÿ 
+reviewing annual base salaries, in part, based on Patterson-UTI’s financial results and position and performance compared to similarly situated
+companies, while recognizing that Patterson-UTI’s executive compensation program has historically emphasized low comparative base compensation; 
+Ÿ 
+providing performance-based cash bonuses designed to put a meaningful portion of total compensation at risk; 
+Ÿ 
+awarding stock options and performance units, whose value is tied to the achievement of certain performance goals and/or an increase in the price of
+the Common Stock; 
+Ÿ 
+awarding stock options and restricted stock with vesting periods of three years; and 
+Ÿ 
+establishing stock ownership guidelines. 
+The Board of Directors is asking stockholders to approve the following non-binding, advisory resolution at the Meeting: 
+“RESOLVED, that the stockholders of Patterson-UTI Energy, Inc. (the “Company”) approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed
+pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and other narrative discussion in the Proxy Statement for the 2013 Annual Meeting of
+Stockholders of the Company.” 
+This advisory resolution, commonly referred to as a “say-on-pay” resolution, is
+non-binding on the Board of Directors. Although non-binding, the Board of Directors and the Compensation Committee value the views of Patterson-UTI’s stockholders and will review and consider the voting results when (i) evaluating the
+effectiveness of Patterson-UTI’s compensation policies and practices and (ii) making future compensation decisions for the Named Executive Officers. 
+The Board of Directors recommends a vote “FOR” the approval of the advisory resolution on executive compensation . Approval of the advisory resolution requires the affirmative vote of the
+holders of a majority of the shares of Common Stock present in person or by proxy, and entitled to vote at the Meeting. Unless you 
+10 
+give contrary instructions in your proxy, your properly submitted proxy will be voted “FOR” such approval. Abstentions will be counted as shares entitled to vote on the proposal and
+will have the same effect as a vote “AGAINST” the proposal. A broker non-vote will be counted for purposes of establishing a quorum, but will not be treated as a share entitled to vote on the proposal. This will have the effect of reducing
+the absolute number of shares necessary to approve the proposal. 
+PROPOSAL NO. 3 
+RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the financial
+statements and internal control over financial reporting of Patterson-UTI for the fiscal year ending December 31, 2013, and directed that such engagement be submitted to the stockholders of Patterson-UTI for ratification. In recommending
+ratification by the stockholders of such engagement, the Board of Directors is acting upon the recommendation of the Audit Committee, which has satisfied itself as to PricewaterhouseCoopers LLP’s independence, professional competence and
+standing. Although ratification by stockholders of the engagement of PricewaterhouseCoopers LLP is not required by Delaware corporate law or Patterson-UTI’s restated certificate of incorporation or bylaws, the Audit Committee believes a
+decision of this nature should be made with the consideration of Patterson-UTI’s stockholders. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain PricewaterhouseCoopers LLP and may retain
+that firm or another without re-submitting the matter to our stockholders. Even if the appointment is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any
+time during the year if it determines that such change would be in the best interests of Patterson-UTI and its stockholders. 
+It is expected that one or more representatives of PricewaterhouseCoopers LLP will be present at the Meeting and will be given the
+opportunity to make a statement if they so desire. It also is expected that the representative(s) will be available to respond to appropriate questions from the stockholders. 
+The Board of Directors recommends a vote “FOR” the ratification of PricewaterhouseCoopers LLP as Patterson-UTI’s independent registered public accounting firm. Ratification of the
+selection of PricewaterhouseCoopers LLP requires the affirmative vote of the holders of a majority of the shares of Common Stock present in person or by proxy, and entitled to vote at the Meeting. Unless you give contrary instructions in your proxy,
+your properly submitted proxy will be voted “FOR” such ratification. Abstentions will be counted as shares entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. Because the ratification
+of an independent registered public accounting firm is considered a routine matter, if you do not give instructions to your brokerage firm, bank, broker-dealer, or other similar organization, the brokerage firm, bank, broker-dealer, or other similar
+organization will nevertheless be entitled to vote your shares in its discretion and may give or authorize the giving of a proxy to vote the shares in its discretion on this proposal. 
+EXECUTIVE OFFICERS 
+Set forth below is the name, age and position followed by a brief description of the business experience during at least the past five years for each executive officer of Patterson-UTI who is not also a
+member of the Board of Directors. 
+Name 
+Age 
+Position 
+William Andrew Hendricks, Jr. 
+48 
+President and Chief Executive Officer 
+John E. Vollmer III 
+57 
+Senior Vice President — Corporate Development, Chief Financial Officer and Treasurer 
+Seth D. Wexler 
+41 
+General Counsel and Secretary 
+James M. Holcomb 
+50 
+President — Patterson-UTI Drilling Company LLC 
+William Andrew Hendricks, Jr. — Mr. Hendricks has served as President and Chief Executive
+Officer of Patterson-UTI since October 2012. From April 2012 through September 2012, he served as Chief Operating 
+11 
+Officer of Patterson-UTI. From May 2010 through March 2012, Mr. Hendricks served as President of Schlumberger Drilling & Measurements, a division of Schlumberger Limited, a global
+provider of oilfield services. Prior to that date, Mr. Hendricks worked for Schlumberger in various worldwide locations and capacities since 1988, including serving in numerous executive positions since 2003. Mr. Hendricks holds a Bachelor
+of Science in Petroleum Engineering from Texas A&M University. 
+John E. Vollmer III — Mr. Vollmer has
+served as Chief Financial Officer and Treasurer of Patterson-UTI since November 2005 and Senior Vice President — Corporate Development of Patterson-UTI since May 2001. Mr. Vollmer also served as Secretary of Patterson-UTI from November
+2005 to February 2007. Mr. Vollmer served as Senior Vice President, Chief Financial Officer, Secretary and Treasurer of UTI from 1998 to May 2001. From 1992 until 1997, Mr. Vollmer served in a variety of capacities at Blockbuster
+Entertainment, including Senior Vice President — Finance and Chief Financial Officer of Blockbuster Entertainment’s Music Division. Mr. Vollmer holds a Bachelor of Arts in Accounting from Michigan State University. 
+Seth D. Wexler — Mr. Wexler has served as General Counsel and Secretary of Patterson-UTI since August 2009. From March
+1998 to August 2009, he specialized in securities law and mergers and acquisitions for the law firm of Fulbright & Jaworski L.L.P., including as a partner of such law firm since January 2007. Mr. Wexler holds a Bachelor of Business
+Administration in Finance from the University of Texas at Austin, a Juris Doctorate from the University of Houston Law Center and a Masters of Business Administration from the University of Houston. 
+James M. Holcomb — Mr. Holcomb has served as President of Patterson-UTI Drilling Company LLC since January
+2012. Mr. Holcomb came to 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 Senior Vice President of Operations
+of Patterson-UTI Drilling Company LLC from April 2006 to January 2012. Mr. Holcomb has over 28 years of experience in contract drilling operations. Mr. Holcomb holds a Bachelor of Science Degree in Business Management from
+LeTourneau University. 
+12 
+COMPENSATION DISCUSSION AND ANALYSIS 
+Basic Compensation Philosophy and Executive Summary 
+Compensation at Patterson-UTI has always been tied to our company’s performance. It has been our policy to utilize a balanced mix of short-term cash compensation and long-term equity compensation,
+with over 70% of total compensation for the highest paid executive officers being variable tied to our financial and stock price performance both on an absolute and peer basis. Our annual compensation review and the related grants and allocation of
+the various components of compensation are based on industry and peer data, targeted performance objectives, a balanced allocation of incentives for both short and long-term performance and individual and team objectives. 
+We believe that our compensation program has been successful in aligning the interests of our management with
+shareholders and in creating shareholder value. Our equity based grants are typically made in April of each year and in making these grants we have generally looked to Patterson-UTI’s total shareholder returns through March 31 of each
+year. Our total shareholder returns were at the
+100 th , 63 rd , 94 th and 66 th percentiles for the one, two, three and five year periods ending March 31, 2013, respectively, with our
+management participating in this performance through their equity based compensation. We also note that in circumstances where our TSR has not been in the higher percentiles, management’s realizable equity compensation has been
+significantly less than that reported for proxy purposes because of the lower realizable value of the equity based compensation. Accordingly, through our emphasis on equity based and variable compensation we have historically seen a direct
+correlation between performance and realizable compensation. 
+Key Components of Patterson-UTI’s Compensation Program 
+Short-Term Current Cash Compensation 
+(Targeted at Between
+25-40% of Total Compensation) 
+Ÿ 
+Base salaries 
+Ÿ 
+Relatively low salary compensation — For the past ten years, salary compensation has amounted to less than 10% of total annual compensation. 
+Ÿ 
+Annual cash bonuses 
+Ÿ 
+Directly tied to financial performance linked to annual EBITDA and the achievement of specific annual milestones. 
+Long-Term Equity Based Compensation 
+(Targeted at Between 60-75%
+of Total Compensation) 
+Provided through a balanced mix of time-vested stock options 
+and restricted stock and performance units 
+Ÿ 
+Restricted stock 
+Ÿ 
+Grants of restricted stock targeted at between 30% and 50% of equity based compensation — shares vest over three years and are sized in relation to the prior year’s performance. This component aligns interests with shareholders by
+tying future value to share price. 
+Ÿ 
+Stock options 
+Ÿ 
+Grants of stock options targeted at between 25% and 40% of equity based compensation. Options vest over three years and are sized in relation to the prior year’s performance. Grant valuation based on Black-Scholes, but provides no value
+unless stock price increases. 
+Ÿ Performance units 
+Ÿ Annual grants of performance units targeted at between 25% and 35% of equity based compensation. Performance units directly tied to performance through targeted total shareholder return
+against our peer group. The potential value realized by the executive scales up or down depending on our performance relative to our peer group. 
+In managing our compensation program for our named executive officers, we have established a number of key
+procedural policies and design criteria that we follow. These policies and criteria have evolved over the years 
+13 
+and reflect what we believe are both best practices and the most appropriate manner for which our executive management should be compensated. We further believe that our compensation structure
+strongly links pay and performance through its emphasis on variable and equity based compensation. This link of pay to performance is reflected in the operational achievements and superior returns that our company achieved consistently over the past
+15 years as noted below. 
+Long-Term
+Goals To Be Fostered Under Patterson — UTI Compensation Program 
+Ÿ Providing quality services for our customers in a safe and efficient manner 
+Ÿ Generating strong financial performance for our shareholders 
+Ÿ Attracting and retaining highly qualified individuals, with a strong emphasis on teams working together to capitalize on opportunities and solve problems 
+Ÿ Being a model corporate citizen in the communities in which we work 
+Key Procedural
+Policies 
+Key Design Criteria 
+Ÿ We do not re-price options 
+Ÿ Options will have exercise prices equal to or greater than market and will not have vesting under one
+year 
+Ÿ We do not provide new single trigger 
+severance arrangements 
+Ÿ We do not issue new agreements or grants with tax gross ups 
+Ÿ We have claw-back provisions for financial statement restatements 
+Ÿ We have share ownership requirements for our officers and directors 
+Ÿ We use a team-based compensation model for our top executives 
+Ÿ We target the approximate quartile for total compensation to match the quartile of performance that is actually achieved 
+Ÿ We emphasize variable equity and cash compensation to link realized compensation to results 
+Ÿ We tie 60% or more of total compensation to long-term incentives 
+Significant Operational and Financial Achievements at Patterson — UTI 
+Over Past 15 Years 
+Ÿ Our company grew from a small regional firm to a position of national industry leadership 
+Ÿ We have grown and diversified our fleet of drilling rigs and significantly expanded our pressure pumping operations 
+Ÿ We have diversified our customer and geographical base as well as regional capabilities 
+Ÿ We have positioned our company to take advantage of the growing shale revolution 
+Ÿ We increased revenue from approximately $374 million to more than $2.7 billion 
+Ÿ Our shareholders’ equity grew from $291 million to more than $2.6 billion 
+Ÿ We have returned more than $1.1 billion back to our shareholders in the form of share repurchases and
+dividends 
+Ÿ Since January 1, 2012, through March 31, 2013, our total shareholder return has been
+28.2% 
+Ÿ During 2012, we returned approximately $201 million to our shareholders in the form of share repurchases and
+dividends 
+Our Business 
+Patterson-UTI is one of the largest land contract drilling companies in the United States, with operations in most of the major oil and gas regions in the continental United States, Alaska and western and
+northern Canada. 
+14 
+We also are a major provider of pressure pumping services in selected markets within the United States. Our industry is subject to wide swings in activity based on oil and natural gas prices,
+demand for oil and natural gas and general economic activity. The North American oil and natural gas industry has experienced a significant transformation in recent years due to technological advances in the horizontal drilling and completion of oil
+and natural gas wells in shale formations. Today, approximately 70% of U.S. land drilling is focused on these type of wells, which typically require higher specification rigs and large amounts of horsepower for pressure pumping equipment. With
+recent oil prices in the $80-100 per barrel range and natural gas prices in the $2.00-4.00 per mcf range, U.S. drilling activity has become increasingly focused on the exploration and development of oil and liquid hydrocarbon reservoirs
+versus natural gas. 
+Progress on Long-Term Strategic Plan 
+In 2009, our Board adopted a long term strategic plan that was designed to position our company for the future in light of the “shale revolution”. Our plan contemplated an aggressive upgrade of
+our drilling rig fleet to address the need for higher specification equipment and an expansion of our pressure pumping business to participate in the growing horizontal pressure pumping frac market. On the rig side of our business, we sought to add
+new, higher technology rigs to our existing rig fleet over a multi-year period, increase and protect our contract drilling market share in our key markets and diversify our customer base. We also sought to become a recognized provider of high-end
+pressure pumping services in the markets in which we participate. In addition, our strategic plan focused on providing excellent value to our customers, being nimble both in operations and in strategic decisions and providing superior returns to our
+stockholders. Our Board has reviewed the long-term strategic plan each year to assess both our progress on the plan and any need for changes in the plan. 
+Since the beginning of 2009, we have expended over $3.3 billion for capital expenditures and acquisitions in our core businesses, resulting in the addition of 86 new, high technology rigs and the upgrade
+of many of our existing rigs to serve the horizontal shale market, and we have increased the horsepower of our pressure pumping fleet by more than 500%. We financed this growth primarily with internal cash flow and provided a financial underpinning
+for our new build program through term contracts. Importantly, during 2012, more than 50% of our drilling earnings before interest, taxes, depreciation and amortization (“EBITDA”) comes from the operation of our new, advanced technology
+APEX ® rigs, demonstrating the significance of the strategic change we have undergone. 
+Our efforts have translated into solid financial performance and growth since 2009, with 2012 being a record year for revenues and our
+highest level of EBITDA in the last four years. For more information about our business, please see “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report
+on Form 10-K filed with the SEC on February 13, 2013. 
+(Dollars in millions) 
+15 
+2012 Financial and Business Highlights 
+As shown in the chart below, 2012 was a year of significant accomplishments for our company. Patterson-UTI achieved record revenues and
+sequential increases in EBITDA and stockholders’ equity, despite facing intense competitive pressures due to an industry decline in the number of rigs drilling for natural gas and excess pressure pumping equipment. In 2012, Patterson-UTI
+increased its organizational capability, improved its workforce through new recruiting and training programs, returned over $200 million to its stockholders and invested almost $1 billion in capital expenditures, all of which should position the
+Company well for 2013. 
+We also maintained our focus on financial discipline and effective capital management and
+maintained our strong balance sheet. Maintaining a flexible and conservative capital structure, along with a strong liquidity position, provides us with a protective cushion to operate through difficult market conditions, as well as the ability to
+take advantage of new opportunities when they arise. 
+We are especially pleased that we were able to accomplish this level of
+achievement at the same time as we experienced a management transition. Mr. Wall, Patterson-UTI’s former Chief Executive Officer, notified the Company of his desire to retire in 2012, and Mr. Hendricks was recruited with the plan that
+he would commence his employment in April 2012 as Patterson-UTI’s Chief Operating Officer, and if successful, would be promoted to the position of Chief Executive Officer upon Mr. Wall’s retirement, which occurred on October 1,
+2012. 
+In sum, Patterson-UTI’s executive management led the businesses to excellent performance in a challenging
+marketplace during 2012. 
+Significant 2012 Accomplishments 
+Ÿ 
+Revenues increased 6.1% from $2.57 billion in 2011 to $2.72 billion in 2012. 
+Ÿ 
+EBITDA increased 6.4% from $963 million in 2011 to $1.02 billion in 2012. 
+Ÿ 
+Net income of $299 million achieved in 2012. 
+Ÿ 
+Stockholders’ equity increased from $2.52 billion in 2011 to $2.64 billion in 2012, despite share repurchases and dividends totaling $201 million.
+Ÿ 
+We significantly improved our total recordable incident rate in our businesses. 
+Ÿ 
+We increased our contract drilling revenues and added significant new customers, despite the significant decrease in the number of rigs drilling for
+natural gas in United States and Canada. 
+Ÿ 
+We completed 22 new
+APEX ® rigs and introduced the new APEX-XK™ rigs, bringing our total fleet of premium electric rigs to a
+total of 167 rigs. 
+Ÿ 
+We increased our pressure pumping horsepower by approximately 125,000 (or 20%) to approximately 758,000 horsepower. 
+Ÿ 
+Our pressure pumping business maintained good margins and profitability despite oversupplied industry conditions and intense price competition.
+Ÿ 
+We strengthened our management teams with key hires, including in operations, rig design and safety. 
+Ÿ 
+We have implemented new recruiting and training programs resulting in improvements in the quality, diversity and retention of our workforce.
+Ÿ 
+Our operational achievements were complemented by financial achievements, which included the issuance of $300 million of aggregate principal amount
+4.27% fixed rate, 10-year senior unsecured notes, and the refinancing of our credit agreement, which includes a 5-year, $500 million revolving line of credit and a $100 million term loan. 
+Ÿ 
+We repurchased approximately 10.7 million shares for $170 million, which reduced the outstanding shares by approximately 7%.
+Ÿ 
+We maintained our quarterly dividend of $0.05 per share. 
+Ÿ 
+We achieved a successful management transition by hiring a new Chief Operating Officer, who later replaced our retiring President and Chief Executive
+Officer. 
+Consideration of Last Year’s “Say on Pay” Vote 
+We have reviewed the results of the stockholder “say on pay” advisory vote on executive compensation that was held at our last
+Annual Meeting with respect to the 2011 compensation actions and decisions for our current and former Chief Executive Officers and other Named Executive Officers set forth in the CD&A, the summary
+16 
+compensation table and the related compensation tables and narratives in last year’s proxy statement. 80% of the votes cast (excluding abstentions and broker non-votes) on the proposal were
+voted in support of our compensation structure as described in the last year’s proxy statement. Based upon our analysis of the appropriate compensation structure for the Named Executive Officers and consistent with the results of the “say
+on pay” vote, we elected to make no material changes in the general structure and philosophy of the Company’s compensation policy for key executives for 2012 or for the compensation structure for 2013. 
+Opportunity for Stockholder Feedback 
+The Committee carefully considers feedback from our stockholders regarding our executive compensation program. Stockholders are invited to express their views to the Committee as described under the
+heading “Communication with Directors” in this proxy statement. The advisory vote on the compensation of the Named Executive Officers provides stockholders with an opportunity to communicate their views on our executive compensation
+program, and we will consider those views in structuring our compensation arrangements. 
+You should read this CD&A in
+conjunction with the advisory vote that we are conducting on the compensation of the Named Executive Officers. This CD&A, as well as the accompanying compensation tables, contains information that is relevant to your voting decision. 
+Compensation Philosophy and Objectives 
+Our overriding philosophy for the compensation of our key executives is to link their compensation with the operational and market performance of the Company and to establish incentives that reward
+them for their efforts in achieving both short-term tactical and long-term strategic objectives. In doing so, we seek to offer competitive compensation packages designed to attract and retain highly qualified individuals and to motivate and reward
+our executives in achieving the Company’s goals. Our compensation program also seeks to reward excellence in performance and foster a collaborative team framework among our top executives. 
+Emphasis on Long-Term Incentives. 
+Our compensation program places a strong emphasis on creating long-term value through the use of long-term incentives. We seek to achieve a proper balance in our compensation program between long-term and
+current compensation by using a combination of time-vested and performance based equity awards for long-term incentives and fixed and variable cash for short-term incentives. Our compensation arrangements take into account the cyclical and volatile
+nature of our industry. 
+Our long-term incentive compensation relies on equity-based awards over cash as a means of aligning
+the interests of management with the Company’s stockholders. Historically, equity awards for long-term incentives have represented between 60-75% of total compensation, while fixed and variable cash for short-term incentives has typically
+represented between 25-40% of total compensation. Variations in these percentages may occur due to either an exceptionally strong or weak year in which the Company’s EBITDA and related cash bonus compensation fluctuate in tandem or there is
+market volatility affecting the grant date valuation of options and performance units using the methodologies required for reporting equity based compensation. 
+In 2012, the mix between long-term equity awards and fixed and variable cash and short term incentives for our top four Named Executive Officers was within our targeted range at 61% and 39%, respectively.
+For purposes of this Compensation and Discussion Analysis, all references to the “top four Named Executive Officers”
+refer to Mr. Hendricks (our current Chief Executive Officer) and Messrs. Siegel, Vollmer and Berns, except for periods prior to 2012 in which case the term refers to Mr. Wall (our former Chief Executive Officer) and Messrs. Siegel, Vollmer
+and Berns. 
+17 
+2012 Split Between Short-Term Compensation 
+(Fixed-Salary and Annual Cash Incentive) and Long-Term Compensation 
+(Top Four Named Executive Officers) 
+We believe that our management and compensation policies have over the long run delivered superior
+returns to our stockholders. Our total stockholder returns over the one year, three year and five year periods ended March 31, 2013 have been at the 100th, 94th and 66th percentiles, respectively, when measured against our peer group. We also
+have delivered consistent upper quartile returns on assets and equity over our history, while maintaining a strong and low leveraged balance sheet. 
+Details of the specific components of our executive compensation program follow. 
+Key
+Compensation Principles and Objectives 
+Our executive compensation program has historically emphasized the following key
+principles: (i) low comparative base compensation with variable incentive cash compensation, (ii) emphasis on equity-based compensation for long-term value creation and (iii) team compensation and incentives. 
+Cash Compensation Emphasizes Low Base Salaries with Higher Variable Cash Compensation Tied to Financial Results 
+We have designed the cash component of our compensation program to be mostly variable by using comparatively low base salaries and higher
+cash bonuses tied to the Company’s EBITDA. We enacted this program over ten years ago and have historically allocated between 0.6111% and 1% of total EBITDA to an executive management pool that is then allocated among the top executive
+officers. Our allocation in 2012 was a team bonus potential of up to 0.81% of EBITDA, which for 2012 was allocated among Messrs. Siegel, Wall, Vollmer and Berns. Our allocation in 2013 is a team bonus potential of up to 0.81% of EBITDA, which will
+be allocated among the top four Named Executive Officers. 
+Pursuant to Mr. Wall’s Employment Agreement and
+conditioned upon his satisfaction of his obligations thereunder, Mr. Wall received his allocation of the team bonus for 2012 as though he had remained Chief Executive Officer during the last three months of the year. Mr. Wall did not
+receive any equity-based grants in 2012 as a result of his announcement in March 2012 that he planned to retire from his role as President and Chief Executive Officer later in the calendar year. 
+We do not typically make changes to the base compensation of our top Named Executive Officers from year to year to promote the idea that
+management should not be focused on the fixed component of their compensation, but rather they should expect that variable compensation — tied to the Company’s performance — will be the most significant part of their cash
+remuneration. 
+We believe that the use of lower market-based salaries with higher variable bonuses aligns our executives’
+annual cash compensation with our actual financial results. During periods of low earnings, such as we had in 2009, total cash compensation will be materially lower and typically be in the lower quartiles against our peers but reflective of our
+results. During periods of higher earnings, such as we experienced in 2011 and 2012, cash compensation will typically be in the top quartiles and be reflective of the Company’s higher cash generation.
+18 
+Accordingly, we look at our compensation program as a multi-year program that is targeted to provide cash compensation to our top four Named Executive Officers that is (i) aligned with
+changes in earnings from year to year, and (ii) on a full cycle basis aligned with stockholder returns compared to our peers. 
+Although there will be years where the cash compensation paid to our executives will be in the higher
+quartiles and our relative stock performance may be at a lower quartile or vice versa, this result generally will occur during a period of transition within the industry where there exists a lag between market expectations and current activity. A
+good example of this was at the end of 2008 where our drilling activity and operating results were at high levels, but the public market valuations of land drillers was falling on the expectation of a severe downturn that occurred months later in
+2009. 
+We have considered in the past the use of more traditional bonus plans tied to annual budgets and performance against
+those budgets. We, however, have concluded that given the extreme volatility in our industry those plans do not provide the incentives that we seek to achieve and could in fact create incentives for our management to focus only on the short-term. By
+tying a meaningful portion of the top four Named Executive Officers’ compensation to EBITDA, we believe that their compensation and the stockholders’ interests become especially well aligned. 
+Emphasis on Equity for Long-Term Incentive Compensation 
+We have historically targeted 60% or more of total compensation to be in the form of time-vested equity or equity-based awards. This
+emphasis on equity-based compensation is aimed at aligning the financial interest of the top four Named Executive Officers with our stockholders and the total returns provided to stockholders. We believe that by making a large portion of
+compensation tied to equity, our top four Named Executive Officers can only fully realize the potential benefits of the compensation if our stockholders also benefit. 
+Over the years we have adjusted the form of the equity incentives we provide to our top four Named Executive Officers from solely options to a mix of options, restricted stock and performance units. We
+believe that this mix allows us to tailor our program to encourage the building of long-term value and, in the case of performance units, achievement of stockholder returns in excess of our peer group. 
+19 
+The following charts set forth the allocation of the various forms of long-term equity-based
+incentives that we have granted the top four Named Executive Officers from 2008-2012 and the allocation of these incentives that we used for 2012: 
+62% of equity awards are entirely performance-based and require positive total shareholder returns in
+order for our executives to realize any value. Performance units also require outperformance of our stock relative to our peer group. 
+Restricted Stock. We consider restricted stock as an additional form of basic compensation that provides value to the executive only if the executive remains in the
+employment of the Company during the vesting period, with that value being subject to increases and decreases in value depending on the performance of our stock. We typically target restricted stock awards to represent approximately 30-50% of total
+equity-based compensation depending on stock prices and volatility at the time of grant. 
+Stock
+Options. Our grant of stock options is intended to provide value to the executive only if the value of the Company’s stock appreciates. Consequently, we consider these awards to be performance-based. When we approve
+grants of options to our executives, we take into account a number of different factors, including the stock price at the time of grant, the Black-Scholes value of the option grant for accounting purposes and prior option grant amounts. In addition
+to considering the Black-Scholes option value, we may also consider other option valuation models and modifications to the Black-Scholes model to address situations where the historical volatility used in the valuation model may not be
+representative of a normalized market. We believe that the high market volatility that we have seen in our and other companies’ stock prices since the financial crisis in 2008 has created a situation where the impact of volatility on value must
+be considered as it can skew the calculated value on any given date and therefore the perceived value of an executive’s compensation package. 
+Ultimately, our decision on the number of options to be granted in any year will be based on the circumstances at the time of grant and our consideration of a variety of other factors, with the overriding
+objective being the potential value of the option in light of current market prices, where we are in the business cycle and our long-term value creation objectives. 
+Performance Units . We added performance units to the mix of equity-based compensation in 2009. We added this component in lieu of a portion of restricted stock and options
+that we would have otherwise granted. Our use of performance units is intended to provide a direct link in the compensation of our top four Named Executive Officers to the relative outperformance of our stock to our peer group. This component
+assures that the value provided to those Named Executive Officers will not be created solely by an increase in stock price due to market conditions, but there must also be a relative outperformance. 
+We have considered the potential risks associated with tying a large portion of executive compensation to equity. We do not believe that
+our program creates unreasonable risks for the following reasons. First, the long- 
+20 
+term nature of our equity based awards and the required vesting periods help minimize the potential for excessive risk taking and actions aimed at short-term stock gains. Second, our use of
+different types of equity grants, in particular restricted stock, helps offset these risks. Finally, three of the top four Named Executive Officers have worked with the Company for more than ten years. We believe our management to be highly ethical
+and focused on creating true long-term value for stockholders and not focused on just short-term gains. We and the Board monitor and consider risks associated with the Company’s compensation plans on a regular basis. 
+Alignment of Realized Long-Term Incentive Value with Performance 
+In order to demonstrate the alignment of realizable pay with performance relative to peers, we compared: 
+(1) 
+realizable long-term incentive value as a percent of grant date/target value for the three-year period from March 2010 — March 2013, and the five-year period from
+March 2008 — March 2013, to 
+(2) 
+our performance relative to our peer group over the same two periods. 
+Components of Relative Alignment Review 
+Target/Grant Date Value 
+Realizable Long-term Incentive value 
+Stock Options 
+Grant date value of target annual award 
+In-the-money value of options granted during period — valued at 03/31/2013 
+Restricted Stock 
+Grant date value of target annual award 
+Value of all shares granted during period at 03/31/2013 
+Performance Units 
+Grant date value of target annual award 
+Ÿ Amount earned: for plans granted and earned based on performance during period 
+Ÿ Target award: for plans granted during period
+but still outstanding at end of period — valued 03/31/2013 
+As shown in the two charts below, realizable long-term incentive value for our top four Named Executive
+Officers as a percent of the original grant date value has been well aligned with our performance relative to peers over the last three and five year periods. 
+Top Four Named Executive Officers Realizable Long-term Incentive Value Well Aligned with Performance Against Peers 
+21 
+Team Compensation Structure 
+Our senior executive management has had the philosophy that they operate as a team, with each member being an important part of the team.
+As a result, for more than the past ten years they have requested, and we and the Board have agreed, that as a general proposition our awards of cash and equity incentive compensation should be allocated and shared among them as a team. Although the
+allocations among the team members have changed over time due to changes in the executive management team, the allocations among the existing team have generally remained consistent. 
+In the past, when allocating the incentive compensation among our top four Named Executive Officers, we have
+allocated 2/5.5 th to Mr. Siegel, our Executive
+Chairman, 1.5/5.5 th to Mr. Wall, our former President
+and Chief Executive Officer, and 1/5.5 th to each of
+Mr. Vollmer, our Senior Vice President-Corporate Development, Chief Financial Officer and Treasurer, and Mr. Berns, our Senior Vice President, respectively. For 2013, the allocation of incentive compensation among the top four Named
+Executive Officers will be the same, with Mr. Hendricks, our current President and Chief Executive Officer, receiving the same allocation as Mr. Wall received. 
+We believe that the above approach for compensating our top four Named Executive Officers fosters effective decision-making and collaborative efforts in executing Patterson-UTI’s long-term strategic
+and short-term tactical objectives. This approach has worked well for Patterson-UTI for over ten years. Although we will continue to monitor the team compensation approach to make sure that it continues to work in practice, we expect to maintain
+this approach in the future. 
+Board and Committee Processes and Policies for Compensation Decisions 
+Committee Review Process 
+The Board of Directors has delegated the management of the Company’s executive compensation programs to the Compensation Committee. We meet on a regular basis to consider compensation matters and to
+review how the Company’s plans and policies work in practice. Each of our current members is an independent director as defined by the Nasdaq listing standards. 
+Our compensation determinations and equity awards are conducted through a process that solicits the input from management through Mr. Siegel as our Executive Chairman as well as from outside
+compensation consultants retained by us. In addition to the recommendations of management and our consultants, we consider reported trends in compensation, internal budgets, historical data for the Company and its peers, strategic planning updates
+and other information that we consider relevant. 
+Role of Chairman in Compensation Decision
+Process . Our Chairman periodically provides us with his review of the performance of other executive officers, including the other Named Executive Officers. We also engage him in an annual dialog with our Committee
+Chairman and our Lead Director on our compensation program and seek his input on and review of our proposals for long-term incentive grants. This process results in a recommendation that is presented to and approved by our Committee as whole.
+Use of Independent, Outside Compensation Consultants . Our Compensation Committee regularly
+utilizes outside compensation consultants in assessing and designing our executive compensation program. Our consultants are paid on a basic fixed fee structure plus expenses. We use our outside consultant reports as a tool for obtaining information
+on historical compensation and stockholder returns, market trends and peer compensation practices. We retained Pearl Meyer & Partners (“Pearl Meyer”) as our consultant and advisor for executive compensation matters for 2011, 2012
+and 2013. 
+Our Compensation Committee regularly reviews the services provided by its outside consultants and has determined
+that Pearl Meyer is independent in providing executive compensation consulting services. In making this determination, our Compensation Committee noted that during fiscal 2012: 
+Ÿ 
+Pearl Meyer did not provide any services to Company or management other than services requested by or with the approval of the Compensation Committee,
+and it its services were limited to executive compensation consulting. Specifically, Pearl Meyer does not provide, directly or indirectly through affiliates, any non-executive compensation services, including pension consulting or human
+resource outsourcing. 
+22 
+Ÿ 
+Fees we paid to Pearl Meyer were less than 1% of Pearl Meyer’s total revenue; 
+Ÿ 
+Pearl Meyer maintains a conflicts policy, which was provided to the Compensation Committee with specific policies and procedures designed to ensure
+independence. 
+Ÿ 
+None of the Pearl Meyer consultants working on Company matters had any business or personal relationship with Compensation Committee members.
+Ÿ 
+None of the Pearl Meyer consultants working on Company matters (or any consultants at Pearl Meyer) had any business or personal relationship with any
+executive officer of the Company. 
+Ÿ 
+None of the Pearl Meyer consultants working on Company matters directly own Company stock. 
+The Compensation Committee continues to monitor the independence of its compensation consultant on a periodic basis. 
+In 2012, Pearl Meyer provided us with information on the compensation practices of our peer group and other oilfield service companies and
+on the reasonableness of our program as compared to the compensation practices of our peer group. In so doing, Pearl Meyer provided us with information on each element of the total compensation of our executive officers as well as a comparison of
+our compensation against our peers based on data gathered from proxy statements and other SEC filings. This comparison provided us with various comparative market levels of compensation for our executive management team as well as a comparative
+position for each executive officer. Pearl Meyer also provided us with information on the cost and potential dilution to our stockholders of our equity-based incentives and compared that to our peer group. 
+When reviewing the peer compensation data provided to us by our consultants, we have generally given greater weight
+to the comparative data for the team as a whole versus the data for individual positions at our peers given the team management approach followed by us as described above. We have found that total compensation for our top four Named Executive
+Officers as a group has typically been between the 50-75 th 
+percentile range depending on the year and that under our team-based approach there has typically been a shift of compensation from the top two Named Executive Officers to the rest of the team. 
+Peer Group . In 2012 we used the following peer group for compensation matters: 
+Ÿ 
+Atwood Oceanics Inc. 
+Ÿ 
+Basic Energy Services, Inc. 
+Ÿ 
+Diamond Offshore Drilling Inc. 
+Ÿ 
+FMC Technologies Inc. 
+Ÿ 
+Helmerich & Payne Inc. 
+Ÿ 
+Nabors Industries Ltd. 
+Ÿ 
+Noble Corp. 
+Ÿ 
+Pioneer Energy Services Corp. 
+Ÿ 
+Rowan Companies Inc. 
+Ÿ 
+Union Drilling, Inc. 
+Ÿ 
+Weatherford International Ltd.
+Ÿ 
+Baker Hughes Incorporated 
+Ÿ 
+Cameron International Corporation 
+Ÿ 
+Ensco plc 
+Ÿ 
+Halliburton Company 
+Ÿ 
+Key Energy Services, Inc. 
+Ÿ 
+National Oilwell Varco Inc. 
+Ÿ 
+Parker Drilling Company 
+Ÿ 
+Precision Drilling Corporation 
+Ÿ 
+Transocean Ltd. 
+Ÿ 
+Unit Corp.
+Union Drilling, Inc.
+will be eliminated from the peer group going forward due to their having been acquired in 2012. 
+Our peer group for 2012 was
+selected in an effort to provide a broad based range of similarly based companies of different sizes that are involved in the markets that we compete or to which we believe our investors compare us with or benchmark our results against. We review
+our peer group annually to determine whether changes should be made to the group. Importantly, our peer group included Helmerich & Payne, Inc. and Nabors Industries, Ltd., which are our nearest direct competitors in domestic land drilling
+services, and other comparable 
+23 
+drilling companies such as Atwood Oceanics Inc., Basic Energy Services, Inc., Diamond Offshore Drilling, Inc., Ensco, Inc., Noble Corp., Parker Drilling Company, Pioneer Drilling Company (n/k/a
+Pioneer Energy Services Corp.), Precision Drilling Corporation, Rowan Companies, Transocean Ltd., Union Drilling Inc. and Unit Corp. Our peer group also included Baker Hughes Incorporated, Halliburton Company and Weatherford International Ltd.,
+which are sizeable competitors of ours in the North American pressure pumping service market; Basic Energy Services, Inc. and Nabors Industries Ltd. are also competitors in this business. The remainder of our peer group included other energy service
+and manufacturing companies with which we are often compared by investors, such as Cameron International Corporation, FMC Technologies, Inc., Key Energy Services, Inc. and National Oilwell Varco Inc. 
+Cash Compensation 
+We will generally review base compensation and the terms for bonus cash compensation for management in the fourth quarter of the preceding year or in the first quarter of the year. When reviewing cash
+compensation we will look at the total cash compensation received by the executives over a multi-year period, as well as the total cash compensation projected for the current year. This approach allows us to look at the cash compensation paid over a
+full cycle in order to obtain comparable data for benchmarking purposes. 
+We also annually establish the performance criteria
+for the cash bonus compensation paid to the Company’s executives in order to meet the requirements for the performance-based compensation exception to the limitation on deductions under Section 162(m) of the Internal Revenue Code (as
+further described elsewhere in this proxy statement). Although a wide range of criteria may be used, the criterion we have used historically has been the achievement of a threshold EBITDA amount. 
+Equity Compensation 
+Our practice for grants of equity-based compensation has generally been to consider the grant of stock options, restricted stock and performance units to executive management at a meeting following the
+conclusion of our first quarter. This meeting is typically held in conjunction with regular quarterly Board meetings held prior to the Company’s public release of its quarterly earnings. This timing also allows us to receive market data from
+our consultants for prior year grants. 
+When making grants of equity-based compensation, we consider a number of factors,
+including competitive peer data, prior year grants and current and historical stock prices. We also take into consideration the advice of our consultants as to peer and market practices on the use and mix of restricted stock, options and performance
+units. 
+For restricted stock and stock options granted to the top four Named Executive Officers, these
+awards are subject to three-year vesting with one-third vesting after the first year and 1/36th of the grant vesting each month over the next two years. The restricted stock grants also have a performance-based vesting component, which for 2012
+required that the Company achieve EBITDA of at least $300,000,000 for the nine months ended December 31, 2012, $400,000,000 for the twelve months ended December 31, 2013 or $400,000,000 for the twelve months ended December 31, 2014.
+The performance units granted in 2012 are to be settled with shares of stock, with the number of shares to be issued based on the Company’s total stockholder return at the end of the third year following the grant relative to the total
+stockholder return for our peer group of companies. Subject to limited exceptions, no payout will be provided on performance units unless the Company’s relative total stockholder return against its peers is at least at the 25 th percentile and the Company has a positive stockholder return.
+We have also adopted the following additional practices regarding equity grants: 
+Ÿ 
+Grants will not vest in less than one year. 
+Ÿ 
+Options will not be re-priced or exchanged. 
+Ÿ 
+Equity grants are subject to claw-back in the event that the Board learns that any misconduct by the Named Executive Officer contributed to the Company
+having to restate all or a portion of its financial statements. 
+Ÿ 
+Options are to have exercise prices equal to or greater than the fair market value on the date of grant. 
+24 
+Ÿ 
+Performance targets are not to be modified other than to give effect to acquisition or disposition of businesses or similar structural changes —
+market condition changes will not result in changes in performance targets. 
+Overview of 2012 Performance and
+Compensation 
+As noted above under “2012 Financial and Business Highlights”, the Company had
+an excellent year in 2012 during which significant progress was realized against our long-term strategic objectives as well as against our short-term operational and financial objectives. These positive results were realized by both of the
+Company’s core businesses and at the corporate level. In addition, to the financial and operational successes, the Company’s stock performed at between the 63 rd and 100 th percentiles against our peer group during each of the past one, two and three year periods ended March 31, 2013.
+Cash Compensation 
+Under the terms of the Company’s cash compensation plan described above and the offer letter with Mr. Hendricks, the top four Named Executives Officers and Mr. Wall earned the following
+cash payments in respect of 2012. The payments under the plan were determined using a total bonus pool equal to 0.75% of the Company’s $1.02 billion of EBITDA for 2012, reduced from the maximum total bonus potential under the plan of 0.81% of
+EBITDA. This bonus pool amount reflected the exemplary performance by management in 2012 in achieving the Company’s current and long-term objectives. In accordance with past practice, the bonus pool was allocated among the top four Named
+Executive Officers as described under “Team Compensation Structure” above. The Committee had fixed a $400 million minimum EBITDA threshold for 2012, which was exceeded. The payments to Mr. Hendricks were made pursuant to the terms of
+the offer letter provided to Mr. Hendricks prior to his employment with the Company. 
+CASH COMPENSATION 
+Name 
+Salary 
+EBITDA Incentive 
+(Percentage 
+of 
+Company 
+EBITDA) 
+Variable
+Cash 
+Compensation 
+Based
+on 
+EBITDA(1) 
+Total Cash 
+Compensation 
+William A. Hendricks, Jr. 
+$ 
+375,000 
+(2) 
+— 
+— 
+$ 
+1,450,000 
+(3) 
+John E. Vollmer III 
+$ 
+350,000 
+0.1363 
+% 
+$ 
+1,397,022 
+$ 
+1,747,022 
+Mark S. Siegel 
+$ 
+350,000 
+0.2727 
+% 
+$ 
+2,794,044 
+$ 
+3,144,044 
+Kenneth N. Berns 
+$ 
+265,000 
+0.1363 
+% 
+$ 
+1,397,022 
+$ 
+1,662,022 
+(1) 
+The maximum amount that can be awarded to an individual under our cash-based incentive plan during a 12–month period is $5,000,000. In order to reach this maximum
+amount and assuming a total bonus pool equal to 0.81% of EBITDA, EBITDA of $1.7 billion in the case of Mr. Siegel and $3.4 billion in the case of Messrs. Vollmer and Berns would have been needed. We did not establish a target
+bonus amount for the executives given the variable nature of our plan and its direct relationship to our financial results. The target bonus amount presented in the Grants of Plan-Based Awards table is calculated for the respective officer based on
+Patterson-UTI’s actual EBITDA for the fiscal year ended December 31, 2012, and the allocation formula applied to the bonus pool for distribution as noted above. 
+(2) 
+Mr. Hendricks’ base salary was $450,000 upon commencement of his employment with Patterson-UTI as Chief Operating Officer on April 1, 2012. His base
+salary was increased to $600,000 when he was promoted to President and Chief Executive Officer effective October 1, 2012. 
+(3) 
+Amount includes a signing bonus of $275,000 paid to Mr. Hendricks following the commencement of his employment with Patterson-UTI and an annual bonus for the
+fiscal year ended December 31, 2012 of $800,000, which was paid pursuant to the terms of the offer letter provided to Mr. Hendricks prior to his employment with Patterson-UTI. 
+25 
+Equity-Based Compensation 
+We made the following equity-based grants to Mr. Hendricks pursuant to the terms of the offer letter provided to him prior to his
+employment with the Company and later in 2012 in connection with his promotion to Chief Executive Officer. Mr. Wall did not receive any equity-based grants in 2012 as a result of his announcement in March 2012 that he planned to retire from his
+role as President and Chief Executive Officer later in the calendar year. 
+We made the following equity-based grants to Messrs.
+Vollmer, Siegel and Berns, considering the Company’s 2011 financial results and comparative total shareholder return performance over the one, two and three year periods ended in 2011 and with the objective that these grants would be
+commensurate with the Company’s percentile performance, based on information available at the time of grant. 
+EQUITY-BASED GRANTS 
+Restricted Stock(1) 
+Stock Options(2) 
+Performance 
+Unit 
+Awards(3) 
+Total 
+Value 
+Name 
+# Shares 
+Value 
+# Shares 
+Value 
+# Shares 
+Value 
+William A. Hendricks, Jr. 
+100,000 
+$ 
+1,727,000 
+125,000 
+$ 
+820,723 
+— 
+$ 
+— 
+$ 
+2,547,723 
+John E. Vollmer III 
+48,000 
+$ 
+777,600 
+160,000 
+$ 
+998,704 
+48,000 
+$ 
+766,320 
+$ 
+2,542,624 
+Mark S. Siegel 
+96,000 
+$ 
+1,555,200 
+320,000 
+$ 
+1,997,408 
+96,000 
+$ 
+1,532,640 
+$ 
+5,085,248 
+Kenneth N. Berns 
+48,000 
+$ 
+777,600 
+160,000 
+$ 
+998,704 
+48,000 
+$ 
+766,320 
+$ 
+2,542,624 
+(1) 
+Shares of restricted stock were awarded on April 2, 2012 in the case of Mr. Hendricks and on April 24, 2012 in the case of Messrs. Vollmer, Siegel and
+Berns. The value indicated in the table is the value on the date of grant based on the closing price of Patterson-UTI’s common stock on the date of grant. 
+(2) 
+Options were awarded on April 2, 2012 and October 1, 2012 in the case of Mr. Hendricks and on April 24, 2012 in the case of Messrs. Vollmer, Siegel
+and Berns, and the value indicated in the table was determined using the Black-Scholes option pricing model as of the date of grant. 
+(3) 
+Performance Units were awarded on April 24, 2012. The number of shares indicated in the table represents the target number of shares for each respective award.
+According to the terms of the awards, the actual number of shares earned by the recipient can range from zero shares to two times the target number of shares depending on how Patterson-UTI performs in terms of total stockholder return relative to
+its peer group. The value indicated in the table was determined based on a Monte-Carlo simulation model and represents the estimate of fair value on the date of grant. 
+The grant of restricted stock, options and performance units to the top four Named Executive Officers were made following the vesting,
+term and other criteria described above. 
+The performance units granted in 2012 to Messrs. Siegel, Vollmer
+and Berns provide for the issuance of a target of 96,000 shares of Common Stock to Mr. Siegel and 48,000 shares of Common Stock to each of Messrs. Vollmer and Berns, respectively, if Patterson-UTI’s total stockholder return is
+positive and, when compared to the peer group, is at the
+50 th percentile and two times the target if at the
+75 th percentile or higher. If the Company’s total
+stockholder return is positive, and, when compared to the peer group, is at the 25 th percentile, the recipients will only receive one-half of the target number of shares. The grant of shares when achievement is between the 25th and 75th percentile will be determined on a pro-rata basis.
+Total stockholder return for Patterson-UTI for the 2012 performance unit grants is measured based on $100 invested in Common
+Stock on the first day of the performance period, with dividends reinvested. The performance period is the period from April 1, 2012 through March 31, 2015, subject to certain exceptions that could extend the performance period up to two
+additional years. No shares will be issued in respect of the performance units unless Patterson-UTI has positive total stockholder return as of the end of the performance period; except that if during the two-year period ending after the performance
+period, Patterson-UTI’s total stockholder return for any 30 consecutive day period equals or exceeds 18% on an annualized basis from the beginning of the performance period 
+26 
+through the end of such 30 consecutive day period, then shares issued under the grant will be made as set forth above based on Patterson-UTI’s total stockholder return relative to the peer
+group as of end of the performance period. 
+Total Compensation and Relationship to Performance 
+The Committee considered the advice of Pearl Meyer when establishing its 2012 compensation program. In doing so, the Committee sought to
+offer a total compensation package (cash and long-term) for the top four Named Executive Officers as a group that would be commensurate with the Company’s percentile performance versus peers. The Committee looked primarily at one year financial
+results and total shareholder return, but also shareholder returns over a two year and three year period, as noted below, in establishing the long-term incentive equity grants for 2012. When determining the size of 2012 equity incentive awards in
+April 2012, the Committee considered the following measures of relative performance for Patterson-UTI against our peers: 
+Ÿ 
+1 year Total shareholder Return through December 31, 2011: 47 th percentile 
+Ÿ 
+2 year Total shareholder Return through December 31, 2011: 66 th percentile 
+Ÿ 
+3 year Total shareholder Return through December 31, 2011: 57 th percentile 
+Ÿ 
+2011 Return on Equity (ROE): 74 th percentile 
+Ÿ 
+2011 Return on Assets (ROA): 74 th percentile 
+As a result, the Committee targeted the grant date value of 2012 equity incentive awards within this range of the competitive market (as defined by the Committee in consultation with Pearl Meyer).
+We believe that Patterson-UTI has a strong and cohesive management team and that the compensation policies that it has
+implemented provide the proper mix of current compensation and long-term incentives for building stockholder value. The Company’s above market performance has supported the use of these policies and aligns the interest of management with the
+Company’s stockholders. 
+With respect to the Company’s executive officers other than the top Named Executive
+Officers, the Committee has historically determined their compensation with a philosophy of using a combination of fixed and variable cash in the form of base salary and cash bonuses for short-term incentives and time-vested equity awards in the
+form of restricted stock and/or, stock options for long-term incentives. With respect to Mr. Holcomb, who serves as the President of the Company’s contract drilling subsidiaries, the Committee determined his non-equity incentive
+compensation for 2012 based on his individual performance and the following factors specific to the Company’s contract drilling business: 
+Ÿ 
+EBITDA for 2012; 
+Ÿ 
+Improved safety and operational metrics; 
+Ÿ 
+Improved recruiting and training programs; 
+Ÿ 
+Generation and retention of customers; and 
+Ÿ 
+Development of new rig designs and rig construction. 
+Mr. Holcomb’s equity-based, long-term incentive compensation was awarded in the form of restricted stock that vests in one-third increments over a three year period and is set forth in the
+“Grants of Plan-Based Awards Table” below. 
+Benefits, Ownership Guidelines, Employment-Related Agreements and Other Matters
+Retirement Plans 
+Patterson-UTI offers a 401(k) plan to its employees, including its Named Executive Officers. Participants may contribute a portion of their base salary to the 401(k) plan, subject to federal limits.
+Patterson-UTI makes matching contributions up to four percent of each participant’s eligible base salary. The Named Executive Officers of Patterson-UTI are eligible to participate in the 401(k) plan on the same basis as other employees.
+Patterson-UTI does not have any other retirement plan. 
+27 
+Perquisites and Personal Benefits 
+No Named Executive Officer received perquisites totaling more than $10,000. Accordingly, the perquisites do not meet the threshold that
+would require disclosure in the Summary Compensation Table below. 
+Share Ownership Guidelines 
+Our Nominating and Corporate Governance Committee has enacted share ownership guidelines applicable to all executive officers and
+directors of Patterson-UTI. The guidelines require officers and directors to hold at all times, subject to a four year phase-in from the date first elected as an officer or director, at least the following number of shares of Common Stock:
+• 
+Executive Chairman 
+120,000 shares 
+• 
+President and Chief Executive Officer 
+90,000 shares 
+• 
+COO/Senior Vice Presidents 
+60,000 shares 
+• 
+President — Drilling 
+30,000 shares 
+• 
+General Counsel 
+20,000 shares 
+• 
+Chief Accounting Officer 
+7,500 shares 
+• 
+Outside Directors 
+10,000 shares 
+• 
+Non-executive Inside Director 
+10,000 shares 
+Each of the Named Executive Officers and Directors was in compliance with these guidelines as of the date
+of this proxy statement. 
+Change in Control, Severance and Employment Agreements 
+Change in Control Agreements and Tax Gross-Up Payments. Patterson-UTI has entered into change in control agreements with its top
+four Named Executive Officers as further described elsewhere in this proxy statement The Company believes that such agreements may under certain circumstances protect the interest of the Company by discouraging such Named Executive Officers from
+leaving employment out of concern for the security of their jobs or being unable to concentrate on their work. We believe that the change in control agreements may also help Patterson-UTI attract and retain new key employees by reducing the personal
+uncertainty and anxiety that arises from the possibility of a future business combination. Any future change in control or severance agreements will be approved subject to the circumstances existing at the time. 
+The change in control agreements with Messrs. Vollmer, Siegel and Berns contain a tax gross-up for the excise tax imposed on parachute
+payments, which were customary when these agreements were entered into more than nine years ago. While the Committee believes the tax gross-up provision is a valuable tool for executive retention, the Committee recognizes that tax gross-up
+provisions may no longer be viewed as customary. Going forward, the Committee does not plan to provide tax gross-ups in connection with compensation arrangements, and the change in control agreement entered into in April 2012 with Mr. Hendricks
+does not include a tax gross-up provision. 
+Severance Agreements . Patterson-UTI has also entered into written letter
+agreements with each of Messrs. Siegel, Berns and Vollmer pursuant to which Patterson-UTI has agreed to pay each such person within ten days of the termination of his employment with Patterson-UTI for any reason (including voluntary termination
+by him), an amount in cash equal to his annual base salary at the time of such termination. Any payment made by Patterson-UTI pursuant to these letter agreements will reduce dollar for dollar any payment owed to such person, if any, pursuant to the
+change in control agreements referenced above. 
+Patterson-UTI has entered into a severance agreement with Mr. Hendricks.
+The term of the severance agreement generally ends on the third anniversary of the effective date of the severance agreement. If during the term of the severance agreement Mr. Hendricks’ employment terminates by reason of a Qualifying
+Termination (as defined in the severance agreement), Patterson-UTI will pay Mr. Hendricks a lump-sum cash payment of $750,000 less any severance payment received by or payable to Mr. Hendricks under his change in control
+28 
+agreement referenced above or any other similar change in control agreement. Under the severance agreement, “Qualifying Termination” means a termination of Mr. Hendricks’
+employment (1) by Patterson-UTI for any reason other than cause or (2) if certain conditions are met, by Mr. Hendricks due to Patterson-UTI reducing his annual base salary to an amount that is less than $450,000 per year. 
+Employment Agreements. Patterson-UTI entered into an employment agreement with Mr. Holcomb in January 2012 in connection with
+his promotion to President of Patterson-UTI Drilling Company LLC. Pursuant to his employment agreement, Patterson-UTI will employ Mr. Holcomb for an initial term of three years beginning January 1, 2012 at an annualized salary of $325,000
+per year, subject to any increases that may be granted in the future. After the three year initial term, the employment agreement will renew on a year to year basis unless either party notifies the other party at least 90 days before the expiration
+of the then-current initial term or renewal term. If during the term of the employment agreement, Mr. Holcomb’s employment is terminated due to his death or disability, by Patterson-UTI without cause or by Mr. Holcomb for good reason
+(as such terms are defined in the employment agreement), he will continue to receive his base salary for 12 months following the date of termination, or, in the case of termination of his employment by Patterson-UTI without cause or by
+Mr. Holcomb for good reason where there is more than 12 months remaining in the term, then for the remainder of the term. Please see “Employment-Related Agreements” for further description of this agreement. 
+In September 2012, Patterson-UTI entered into an employment agreement with Mr. Wall in connection with his retirement as President
+and Chief Executive Officer. Pursuant to his employment agreement, Patterson-UTI will employ Mr. Wall as a special consultant for two years at an annual compensation of $250,000 per year. Mr. Wall agreed to restrictions regarding
+Patterson-UTI’s proprietary information and to not compete with Patterson-UTI for eighteen months following the termination of his employment under the employment agreement, subject to certain exceptions. The employment agreement superseded all
+other agreements between Patterson-UTI and Mr. Wall relating to his employment by Patterson-UTI, including the agreements relating to payments upon a change of control; provided that it did not change or otherwise affect agreements related to
+stock options or restricted stock or performance units granted to him, and it allowed him to participate in Patterson-UTI’s 2012 annual EBITDA-based cash bonus incentive plan in the same manner as he would have participated if he remained the
+Chief Executive Officer of Patterson-UTI through December 31, 2012. 
+Section 162(m) Considerations
+In considering compensation decisions for the executive management of Patterson-UTI, we routinely consider the
+potential effect of Section 162(m) of the Internal Revenue Code. Section 162(m) imposes a limitation on corporate tax deductions for non-performance based compensation to certain officers that exceeds $1 million that can be taken by a
+publicly held corporation for compensation paid to certain of its executive officers. While Patterson-UTI does not design its compensation programs for tax purposes, Patterson-UTI does design its plans to be tax efficient for Patterson-UTI where
+possible. However, the Committee believes that tax deduction limitations should not compromise Patterson-UTI’s ability to establish and maintain appropriate executive compensation programs and reserves the right to award non-deductible
+compensation. 
+Compensation Committee Interlocks and Insider Participation 
+No member of the Committee was, during the year ended December 31, 2012, an officer or employee of Patterson-UTI or any of its
+subsidiaries, or was formerly an officer of Patterson-UTI or any of its subsidiaries, or had any relationships requiring disclosure by Patterson-UTI under Item 404 of Regulation S-K. 
+During the year ended December 31, 2012, none of Patterson-UTI’s executive officers served as (i) a member of the
+compensation committee (or other Board committee performing equivalent functions) of another entity, one of whose executive officers served on the Compensation Committee, (ii) a director of another entity, one of whose executive officers served
+on the Compensation Committee, or (iii) a member of the compensation committee (or other Board committee performing equivalent functions) of another entity, one of whose executive officers served as a director of Patterson-UTI. 
+29 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement required
+by Item 402(b) of Regulation S-K with management and, based upon such review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. 
+Terry H. Hunt, Chairman 
+Charles O. Buckner 
+Michael W. Conlon 
+Curtis W. Huff 
+Kenneth R. Peak 
+30 
+EXECUTIVE COMPENSATION 
+The following table sets forth information concerning compensation for the fiscal year ended December 31, 2012 with respect to the
+principal executive officer, the principal financial officer and the other Named Executive Officers of Patterson-UTI: 
+SUMMARY COMPENSATION TABLE 
+Name and Principal Position(s) 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Stock 
+Awards 
+($)(1) 
+Option 
+Awards 
+($)(2) 
+Non-equity 
+Incentive plan 
+Compensation 
+($)(3) 
+All Other 
+Compensation 
+($)(4) 
+Total 
+($) 
+William Andrew Hendricks, Jr. 
+2012 
+$ 
+375,000 
+$ 
+1,075,000 
+(6) 
+$ 
+1,727,000 
+(7) 
+$ 
+820,723 
+$ 
+— 
+$ 
+— 
+$ 
+3,997,723 
+President & Chief 
+Executive Officer(5) 
+Douglas J. Wall 
+2012 
+$ 
+512,500 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+2,095,533 
+$ 
+10,000 
+(4) 
+$ 
+2,618,033 
+Former President & 
+2011 
+$ 
+600,000 
+$ 
+— 
+$ 
+3,728,252 
+$ 
+1,306,481 
+$ 
+2,022,060 
+$ 
+9,800 
+(4) 
+$ 
+7,666,593 
+Chief Executive Officer(8) 
+2010 
+$ 
+600,000 
+$ 
+— 
+$ 
+1,962,206 
+$ 
+1,510,223 
+$ 
+893,611 
+$ 
+9,800 
+(4) 
+$ 
+4,975,840 
+John E. Vollmer III 
+2012 
+$ 
+350,000 
+$ 
+— 
+$ 
+1,543,920 
+(9) 
+$ 
+998,704 
+$ 
+1,397,022 
+$ 
+10,000 
+(4) 
+$ 
+4,299,646 
+Senior Vice President — 
+2011 
+$ 
+350,000 
+$ 
+— 
+$ 
+2,490,663 
+$ 
+870,987 
+$ 
+1,348,040 
+$ 
+9,800 
+(4) 
+$ 
+5,069,490 
+Corporate Development, Chief 
+2010 
+$ 
+350,000 
+$ 
+— 
+$ 
+1,308,138 
+$ 
+1,006,816 
+$ 
+595,741 
+$ 
+9,800 
+(4) 
+$ 
+3,270,495 
+Financial Officer & Treasurer 
+Mark S. Siegel 
+2012 
+$ 
+350,000 
+$ 
+— 
+$ 
+3,087,840 
+(10) 
+$ 
+1,997,408 
+$ 
+2,794,044 
+$ 
+— 
+$ 
+8,229,292 
+Chairman of the Board 
+2011 
+$ 
+350,000 
+$ 
+— 
+$ 
+4,981,325 
+$ 
+1,741,974 
+$ 
+2,696,080 
+$ 
+— 
+$ 
+9,769,379 
+2010 
+$ 
+350,000 
+$ 
+— 
+$ 
+2,616,275 
+$ 
+2,013,631 
+$ 
+1,191,482 
+$ 
+— 
+$ 
+6,171,388 
+Kenneth N. Berns 
+2012 
+$ 
+265,000 
+$ 
+— 
+$ 
+1,543,920 
+(9) 
+$ 
+998,704 
+$ 
+1,397,022 
+$ 
+— 
+$ 
+4,204,646 
+Senior Vice President 
+2011 
+$ 
+265,000 
+$ 
+— 
+$ 
+2,490,663 
+$ 
+870,987 
+$ 
+1,348,040 
+$ 
+— 
+$ 
+4,974,690 
+2010 
+$ 
+265,000 
+$ 
+— 
+$ 
+1,308,138 
+$ 
+1,006,816 
+$ 
+595,741 
+$ 
+— 
+$ 
+3,175,695 
+James M. Holcomb 
+2012 
+$ 
+325,000 
+$ 
+310,000 
+$ 
+484,575 
+$ 
+— 
+$ 
+— 
+$ 
+14,050 
+(11) 
+$ 
+1,133,625 
+President — Patterson-UTI 
+Drilling Company LLC 
+(1) 
+Amounts set forth include the fair value of awards at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to restricted stock awarded to
+the Named Executive Officer in the fiscal years ended December 31, 2012, 2011 and 2010 and with respect to performance units awarded to Messrs. Vollmer, Siegel and Berns in the fiscal year ended December 31, 2012 and performance units
+awarded to Messrs. Wall, Vollmer, Siegel and Berns in the fiscal years ended December 31, 2011 and 2010. Performance conditions for all awards of restricted stock had been satisfied as of December 31, 2012. Performance units were awarded
+to Messrs. Wall, Vollmer, Siegel and Berns in the fiscal year ended December 31, 2009. The performance period for these awards ended on March 31, 2012, and these awards were settled in cash in April 2012 with payments made as follows: Wall
+— $468,750, Vollmer — $312,500, Siegel — $625,000, Berns — $312,500. Compensation related to these awards was reported for the fiscal year ended December 31, 2009, and no compensation for the 2009 awards is included in
+subsequent years. For additional information related to the assumptions used and valuation of restricted stock and performance units see Note 11 to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the
+fiscal year ended December 31, 2012. 
+(2) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to stock options awarded to the Named
+Executive Officer in the fiscal years ended December 31, 2012, 2011 and 2010. For additional information related to the assumptions used in connection with the valuation of stock options using the Black-Scholes option pricing model see Note 11
+to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. 
+(3) 
+Represents annual bonuses earned for the fiscal years ended December 31, 2012, 2011 and 2010. The bonus plan in each of those fiscal years provided for a bonus
+pool based on EBITDA, subject to a minimum EBITDA of $400 million for 2012 and 2011 and $200 million for 2010. The bonus pool was allocated among the participants based on a pre-determined sharing percentage. At the direction of the Compensation
+Committee, the total amount paid out pursuant to the executive bonus pool was $7.68 million for 2012, $7.41 million for 2011 and $3.28 million for 2010. 
+31 
+(4) 
+Amounts set forth reflect contributions to a 401(k) plan by Patterson-UTI on behalf of the Named Executive Officer. 
+(5) 
+Mr. Hendricks was appointed as Patterson-UTI’s Chief Executive Officer and President on October 1, 2012. From April 1, 2012 through
+September 30, 2012, Mr. Hendricks served as Patterson-UTI’s Chief Operating Officer. 
+(6) 
+Amount includes a signing bonus of $275,000 paid to Mr. Hendricks following the commencement of his employment with Patterson-UTI and an annual bonus for the
+fiscal year ended December 31, 2012 of $800,000, which was paid pursuant to the terms of the offer letter provided to Mr. Hendricks prior to his employment with Patterson-UTI. 
+(7) 
+Relates to an award of shares of restricted stock during 2012. 
+(8) 
+Mr. Wall retired as Patterson-UTI’s President and Chief Executive Officer on September 30, 2012. Effective October 1, 2012, Patterson-UTI entered
+into an employment agreement with Mr. Wall whereby he currently serves as a consultant to Patterson-UTI through September 2014. 
+(9) 
+Includes $777,600 related to an award of shares of restricted stock and $766,320 related to an award of performance units during 2012. 
+(10) 
+Includes $1,555,200 related to an award of shares of restricted stock and $1,532,640 related to an award of performance units during 2012. 
+(11) 
+Includes $10,000 contributed to a 401(k) plan by Patterson-UTI on behalf of Mr. Holcomb and $4,050 for the use of a Patterson-UTI automobile.
+The following table sets forth information concerning grants of plan-based awards during the fiscal year ended
+December 31, 2012 to the Named Executive Officers: 
+Grants of Plan-Based Awards 
+Estimated Future Payouts 
+under 
+Non-equity Incentive Plan Awards 
+Estimated Future Payouts under 
+Equity Incentive Plan Awards 
+All Other 
+Stock Awards: 
+Number of 
+Shares of 
+Stock or
+Units 
+(#)(3) 
+All
+Other 
+Option: Awards 
+Number
+of 
+Securities 
+Underlying 
+Options 
+(#)(4) 
+Exercise or 
+Base
+Price 
+of Option 
+Awards 
+($/Sh) 
+Grant
+Date 
+Fair Value of 
+Stock
+and 
+Option Awards 
+($)(5) 
+Name 
+Grant 
+Date 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Threshold 
+(#) 
+Target 
+(#) 
+Maximum 
+(#) 
+William Andrew Hendricks, Jr 
+4/2/12 
+— 
+— 
+— 
+— 
+— 
+— 
+100,000 
+— 
+— 
+$ 
+1,727,000 
+4/2/12 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+100,000 
+$ 
+17.27 
+$ 
+673,750 
+10/1/12 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+25,000 
+$ 
+15.82 
+$ 
+146,973 
+Douglas J. Wall 
+1/31/12 
+(1) 
+$ 
+600,000 
+$ 
+2,095,533 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+John E. Vollmer III 
+1/31/12 
+(1) 
+$ 
+400,000 
+$ 
+1,397,022 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/24/12 
+(2) 
+— 
+— 
+— 
+24,000 
+48,000 
+96,000 
+— 
+— 
+— 
+$ 
+766,320 
+4/24/12 
+— 
+— 
+— 
+— 
+— 
+— 
+48,000 
+— 
+— 
+$ 
+777,600 
+4/24/12 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+160,000 
+$ 
+16.20 
+$ 
+998,704 
+Mark S. Siegel 
+1/31/12 
+(1) 
+$ 
+800,000 
+$ 
+2,794,044 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/24/12 
+(2) 
+— 
+— 
+— 
+48,000 
+96,000 
+192,000 
+— 
+— 
+— 
+$ 
+1,532,640 
+4/24/12 
+— 
+— 
+— 
+— 
+— 
+— 
+96,000 
+— 
+— 
+$ 
+1,555,200 
+4/24/12 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+320,000 
+$ 
+16.20 
+$ 
+1,997,408 
+Kenneth N. Berns 
+1/31/12 
+(1) 
+$ 
+400,000 
+$ 
+1,397,022 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/24/12 
+(2) 
+— 
+— 
+— 
+24,000 
+48,000 
+96,000 
+— 
+— 
+— 
+$ 
+766,320 
+4/24/12 
+— 
+— 
+— 
+— 
+— 
+— 
+48,000 
+— 
+— 
+$ 
+777,600 
+4/24/12 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+160,000 
+$ 
+16.20 
+$ 
+998,704 
+James M. Holcomb 
+6/09/12 
+— 
+— 
+— 
+— 
+— 
+— 
+32,500 
+— 
+— 
+$ 
+484,575 
+(1) 
+The 2012 bonus plan for Named Executive Officers for the fiscal year ended December 31, 2012 was approved on January 31, 2012. The 2012 bonus
+plan for Messrs. Wall, Vollmer, Siegel and Berns provided for a bonus pool based on a percentage of EBITDA for the fiscal year ended December 31, 2012, subject to a minimum EBITDA of $400 million. The Compensation Committee set the EBITDA
+percentage at a maximum of 0.81% based on the Committee’s assessment of the Company’s and executive management’s progress toward and achievement of certain strategic and other objectives, subject to a downward adjustment in the EBITDA
+percentage to 0.55% based on relative underperformance against strategic measures. The Compensation Committee adjusted the EBITDA percentage downward to 0.75% based on these criteria. The bonus pool was allocated among Messrs. Wall, Vollmer, Siegel
+and Berns based on a pre-determined sharing percentage. The threshold amount presented in this table is calculated for the respective officer based on the approved allocation formula and an assumed EBITDA of $400 million using the minimum percentage
+of 0.55% of 
+32 
+EBITDA as set forth when the plan was approved due to the fact that the bonus plan provides for no payment if the minimum EBITDA of $400 million is not satisfied. The target amount is calculated
+based on Patterson-UTI’s actual EBITDA for the fiscal year ended December 31, 2012, the EBITDA percentage as approved by the Compensation Committee and the allocation formula applied to the bonus pool for distribution. The cash bonuses
+awarded from the bonus pool were awarded under the LTIP, which has been designed to meet the requirements of Section 162(m) of the Code. Although the bonus pool for Messrs. Wall, Vollmer, Siegel and Berns did not have an EBITDA cap, the maximum
+amount that could be awarded to an individual under any cash-based performance award granted under the LTIP during a 12-month period is $5,000,000. 
+(2) 
+On April 24, 2012, Patterson-UTI granted performance unit awards to Messrs. Vollmer, Siegel and Berns. These awards provide for the recipients to
+receive shares of Common Stock upon the achievement of certain performance goals established by Patterson-UTI during a specified period. The performance period is the period from April 1, 2012 through March 31, 2015, subject to certain
+exceptions that could extend the performance period up to two additional years, as described in “Compensation Discussion and Analysis” above. The performance goals are tied to Patterson-UTI’s total shareholder return for the
+performance period as compared to total shareholder return for a peer group determined by the Compensation Committee. The recipients will receive a target number of shares if the Company’s total shareholder return is positive and, when compared
+to the peer group, is at the 50 th percentile and two times
+the target if at the 75 th percentile or higher. If the
+Company’s total shareholder return is positive, and, when compared to the peer group, is at the 25 th percentile, the recipients will only receive one-half of the target number of shares. The grant of shares when achievement is between the 25 th and 75 th percentile will be determined on a pro-rata basis. 
+(3) 
+Shares of restricted stock were awarded pursuant to the LTIP. Ordinary dividends are paid on unvested shares of restricted stock. The rate at which these dividends are
+paid is the same rate at which ordinary dividends are paid on all other shares of Common Stock. The right to receive these dividends has been included in the grant date fair value of stock awards presented in the table. The shares awarded to Messrs.
+Vollmer, Siegel and Berns vest over a three-year period as follows: one-third on April 24, 2013, and the remaining two-thirds in equal monthly installments over the 24 months following April 24, 2013. The shares awarded to Mr. Hendricks
+vest over a slightly longer than three-year period as follows: one-third on April 24, 2013, one-third on April 24, 2014 and one-third on April 24, 2015. The shares awarded to Mr. Holcomb vest over a three-year period as follows: one-third on
+June 9, 2013, one-third on June 9, 2014 and one-third on June 9, 2015. 
+(4) 
+Options were granted pursuant to the LTIP. Options awarded to Messrs. Hendricks, Vollmer, Siegel and Berns vest over a three year period (and slightly over a three-year
+period in the case of Mr. Hendricks) as follows: one-third on April 24, 2013, and the remaining two-thirds in equal monthly installments over the 24 months following April 24, 2013. Options awarded in October to Mr. Hendricks vest
+over a three year period as follows: one-third on October 1, 2014, and the remaining two-thirds in equal monthly installments over the 24 months following October 1, 2014. 
+(5) 
+The grant date fair value of restricted stock is based on the closing price of Patterson-UTI Common Stock on the date of grant, which is consistent with the valuation
+used by Patterson-UTI for the recognition of compensation expense under FASB ASC Topic 718. The grant date fair value of stock options was determined using the Black-Scholes option pricing model, which is consistent with the valuation used by
+Patterson-UTI for the recognition of compensation expense under FASB ASC Topic 718, with assumptions that are more fully described in Note 11 to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal
+year ended December 31, 2011. The grant date fair value of performance unit awards was determined based on a Monte-Carlo simulation model which is consistent with the valuation used by Patterson-UTI for the recognition of compensation expense
+under FASB ASC Topic 718. 
+33 
+The following table sets forth information concerning outstanding equity awards at
+December 31, 2012 for the Named Executive Officers: 
+Outstanding Equity Awards 
+at Fiscal Year-End 
+Name 
+Option Awards 
+Stock Awards 
+Number of 
+Shares 
+or Units of Stock 
+That Have 
+Not
+Vested (#) 
+Market Value 
+of 
+Shares or Units of 
+Stock That Have 
+Not Vested ($)(1) 
+Equity Incentive 
+Plan
+Awards: 
+Number of 
+Unearned Shares, 
+Units
+or Other 
+Rights that 
+Have Not Vested(2) 
+Equity 
+Incentive 
+Plan Awards: Market 
+or Payout Value of 
+Unearned Shares, 
+Units or
+Other 
+Rights that Have 
+Not Vested ($)(1) 
+Number of Securities 
+Underlying
+Unexercised 
+Options (#) 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date 
+Exercisable 
+Unexercisable 
+William Andrew Hendricks, Jr. 
+— 
+100,000 
+(3) 
+$ 
+17.27 
+04/01/22 
+100,000 
+(4) 
+$ 
+1,863,000 
+— 
+$ 
+— 
+— 
+25,000 
+(5) 
+$ 
+15.82 
+09/30/22 
+Douglas J. Wall 
+75,000 
+— 
+$ 
+22.72 
+04/08/17 
+39,890 
+(6) 
+$ 
+743,151 
+88,125 
+(7) 
+$ 
+1,641,769 
+25,000 
+— 
+$ 
+22.99 
+09/30/17 
+178,500 
+— 
+$ 
+29.31 
+04/24/18 
+262,500 
+— 
+$ 
+13.17 
+04/27/19 
+236,667 
+29,583 
+(8) 
+$ 
+14.83 
+04/26/20 
+57,500 
+46,000 
+(9) 
+$ 
+31.20 
+04/25/21 
+John E. Vollmer III 
+190,000 
+— 
+$ 
+16.22 
+04/29/13 
+74,667 
+(10) 
+$ 
+1,391,046 
+106,750 
+(11) 
+$ 
+1,988,753 
+60,000 
+— 
+$ 
+19.14 
+04/27/14 
+75,000 
+— 
+$ 
+24.63 
+04/26/15 
+125,000 
+— 
+$ 
+28.16 
+07/31/16 
+150,000 
+— 
+$ 
+24.17 
+04/22/17 
+119,000 
+— 
+$ 
+29.31 
+04/24/18 
+175,000 
+— 
+$ 
+13.17 
+04/27/19 
+157,778 
+19,722 
+(8) 
+$ 
+14.83 
+04/26/20 
+38,333 
+30,667 
+(9) 
+$ 
+31.20 
+04/25/21 
+— 
+160,000 
+(3) 
+$ 
+16.20 
+04/23/22 
+Mark S. Siegel 
+380,000 
+— 
+$ 
+16.22 
+04/29/13 
+149,334 
+(12) 
+$ 
+2,782,092 
+213,500 
+(13) 
+$ 
+3,977,505 
+120,000 
+— 
+$ 
+19.14 
+04/27/14 
+150,000 
+— 
+$ 
+24.63 
+04/26/15 
+250,000 
+— 
+$ 
+28.16 
+07/31/16 
+300,000 
+— 
+$ 
+24.17 
+04/22/17 
+238,000 
+— 
+$ 
+29.31 
+04/24/18 
+350,000 
+— 
+$ 
+13.17 
+04/27/19 
+315,555 
+39,445 
+(8) 
+$ 
+14.83 
+04/26/20 
+76,667 
+61,333 
+(9) 
+$ 
+31.20 
+04/25/21 
+— 
+320,000 
+(3) 
+$ 
+16.20 
+04/23/22 
+Kenneth N. Berns 
+190,000 
+— 
+$ 
+16.22 
+04/29/13 
+74,667 
+(10) 
+$ 
+1,391,046 
+106,750 
+(11) 
+$ 
+1,988,753 
+60,000 
+— 
+$ 
+19.14 
+04/27/14 
+75,000 
+— 
+$ 
+24.63 
+04/26/15 
+125,000 
+— 
+$ 
+28.16 
+07/31/16 
+150,000 
+— 
+$ 
+24.17 
+04/22/17 
+119,000 
+— 
+$ 
+29.31 
+04/24/18 
+175,000 
+— 
+$ 
+13.17 
+04/27/19 
+157,778 
+19,722 
+(8) 
+$ 
+14.83 
+04/26/20 
+38,333 
+30,667 
+(9) 
+$ 
+31.20 
+04/25/21 
+— 
+160,000 
+(3) 
+$ 
+16.20 
+04/23/22 
+James M. Holcomb 
+44,445 
+— 
+$ 
+12.32 
+10/28/18 
+62,500 
+(14) 
+$ 
+1,164,375 
+— 
+$ 
+— 
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on December 31, 2012 of $18.63 per share. 
+(2) 
+As of December 31, 2012, performance unit awards had been granted to Messrs. Wall, Vollmer, Siegel and Berns. The 2010 performance unit awards
+were granted on April 27, 2010 and provide for an award of shares of Patterson-UTI common stock to the recipient based on Patterson-UTI’s total shareholder return compared to a peer group of companies for the performance period from
+April 1, 2010 through March 31, 2013. The 2011 performance unit awards were granted on April 26, 2011 and provide for an award of shares of Patterson-UTI common stock to the recipient based on Patterson-UTI’s total shareholder
+return compared to a peer group of companies for the performance period from April 1, 2011 through March 31, 2014. The 2012 performance unit awards were granted on April 24, 2012 and provide for an award of shares of Patterson-UTI
+common stock to the recipient based on Patterson-UTI’s total shareholder return compared to a 
+34 
+peer group of companies for the performance period from April 1, 2012 through March 31, 2015. All performance unit awards provide for a target payout based on a target level of total
+shareholder return compared to the peer group. The amounts presented in this column represent the target payout under the performance unit awards. Based on Patterson-UTI’s total shareholder return during the performance period, the recipients
+could receive a number of shares ranging from no shares to two times the target number of shares. 
+(3) 
+These options vest as follows: one-third on April 24, 2013 and the remainder in equal monthly installments over the 24 months following April 24, 2013.
+(4) 
+These shares of restricted stock vest as follows: one-third on April 24, 2013, one-third on April 24, 2014, and one-third on April 24, 2015.
+(5) 
+These options vest as follows: one-third on October 1, 2013 and the remainder in equal monthly installments over the 24 months following October 1, 2013
+(6) 
+These shares of restricted stock vest as follows: 8,334 shares that vest in equal monthly installments from January 27, 2013 through April 27, 2013 and 31,556
+shares that vest in equal monthly installments from January 26, 2013 through April 26, 2014. 
+(7) 
+Amount includes 48,750 shares related to the 2010 performance unit award and 39,375 shares related to the 2011 performance unit award. 
+(8) 
+These options vest in equal monthly installments from January 27, 2013 through April 27, 2013. 
+(9) 
+These options vest in equal monthly installments from January 26, 2013 through April 26, 2014. 
+(10) 
+These shares of restricted stock vest as follows: 5,556 shares in equal monthly installments from January 27, 2013 through April 27, 2013; 21,111 shares in
+equal monthly installments from January 26, 2013 through April 26, 2014; 16,000 shares on April 24, 2013 and 32,000 shares in equal monthly installments from May 24, 2013 through April 24, 2015. 
+(11) 
+Amount includes 32,500 shares related to the 2010 performance unit award, 26,250 shares related to the 2011 performance unit award and 48,000 shares related to the 2012
+performance unit award. 
+(12) 
+These shares of restricted stock vest as follows: 11,112 shares in equal monthly installments from January 27, 2013 through April 27, 2013; 42,222 shares in
+equal monthly installments from January 26, 2013 through April 26, 2014; 32,000 shares on April 24, 2013 and 64,000 shares in equal monthly installments from May 24, 2013 through April 24, 2015. 
+(13) 
+Amount includes 65,000 shares related to the 2010 performance unit award, 52,500 shares related to the 2011 performance unit award and 96,000 shares related to the 2012
+performance unit award. 
+(14) 
+These shares of restricted stock vest as follows: 30,833 shares on June 9, 2013; 20,833 shares on June 9, 2014 and 10,834 shares on June 9, 2015.
+35 
+The following table sets forth information concerning option exercises and stock awards
+vested during the fiscal year ended December 31, 2012 for the Named Executive Officers: 
+OPTION EXERCISES AND STOCK
+VESTED 
+Option awards 
+Stock awards 
+Name 
+Number of 
+shares acquired 
+on exercise (#) 
+Value realized 
+on exercise
+($) 
+Number of 
+shares 
+acquired 
+on vesting (#) 
+Value realized 
+on vesting ($)(1) 
+William Andrew Hendricks, Jr. 
+— 
+$ 
+— 
+— 
+$ 
+— 
+Douglas J. Wall 
+— 
+$ 
+— 
+72,611 
+$ 
+1,219,417 
+John E. Vollmer III 
+— 
+$ 
+— 
+48,501 
+$ 
+814,478 
+Mark S. Siegel 
+— 
+$ 
+— 
+97,000 
+$ 
+1,628,943 
+Kenneth N. Berns 
+— 
+$ 
+— 
+48,501 
+$ 
+814,478 
+James M. Holcomb 
+— 
+$ 
+— 
+28,334 
+$ 
+422,460 
+(1) 
+Value realized on vesting is based on the closing price of Patterson-UTI common stock on the day immediately prior to the date at which the respective shares vested.
+Patterson-UTI provides no pension benefits for any of the Named Executive Officers. None of the Named Executive
+Officers had any items of nonqualified deferred compensation during 2012. As a result, tables with respect to pension benefits and nonqualified deferred compensation have not been provided. 
+DIRECTOR COMPENSATION 
+The following table sets forth information concerning compensation for the fiscal year ended December 31, 2012 with respect to the directors of Patterson-UTI who are not executive officers:
+DIRECTOR COMPENSATION TABLE 
+Name 
+Fees earned or 
+paid 
+in cash 
+($) 
+Stock awards 
+($)(1) 
+Option awards 
+($)(2) 
+All
+other 
+compensation 
+($) 
+Total 
+($) 
+Charles O. Buckner 
+$ 
+60,000 
+$ 
+59,940 
+$ 
+78,231 
+$ 
+— 
+$ 
+198,171 
+Michael W. Conlon 
+$ 
+12,750 
+$ 
+51,660 
+$ 
+64,801 
+$ 
+— 
+$ 
+129,211 
+Curtis W. Huff 
+$ 
+75,000 
+$ 
+59,940 
+$ 
+78,231 
+$ 
+— 
+$ 
+213,171 
+Terry H. Hunt 
+$ 
+60,000 
+$ 
+59,940 
+$ 
+78,231 
+$ 
+— 
+$ 
+198,171 
+Kenneth R. Peak 
+$ 
+45,000 
+$ 
+59,940 
+$ 
+78,231 
+$ 
+— 
+$ 
+183,171 
+Cloyce A. Talbott 
+$ 
+8,750 
+$ 
+— 
+$ 
+— 
+$ 
+189,904 
+(3) 
+$ 
+198,654 
+(1) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to restricted stock awarded to the
+directors in the fiscal year ended December 31, 2012. For additional information related to the assumptions used and valuation of restricted stock, see Note 11 to the consolidated financial statements in Patterson-UTI’s Annual Report on
+Form 10-K for the fiscal year ended December 31, 2012. Messrs. Buckner, Huff, Hunt and Peak each received an award of 3,000 shares of restricted stock on January 1, 2012 with a market value of $19.98 per share which fully vested on
+January 1, 2013. Mr. Conlon received an award of 3,000 shares of restricted stock on September 19, 2012 with a market value of $17.22 per share which will fully vest on September 19, 2013. As of December 31, 2012, Messrs.
+Buckner, Conlon, Huff, Hunt and Peak each held 3,000 unvested shares of restricted stock. 
+(2) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to stock options
+awarded to the directors in the fiscal year ended December 31, 2012. For additional information related to the assumptions used in connection with the valuation of stock options
+36 
+using the Black-Scholes option pricing model see Note 11 to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31,
+2012. Messrs. Buckner, Huff, Hunt and Peak each received options to purchase 10,000 shares of stock on January 1, 2012 with a market value of $7.82 per share, which fully vested on January 1, 2013. Mr. Conlon received options to
+purchase 10,000 shares of stock on September 19, 2012 with a market value of $6.48 per share, which will fully vest on September 19, 2013. As of December 31, 2012, Messrs. Huff, Hunt and Peak each held options to purchase a total of
+70,000 shares of Common Stock, of which options to purchase 10,000 shares were unvested. As of December 31, 2012, Mr. Buckner held options to purchase a total of 60,000 shares of Common Stock, of which options to purchase 10,000 shares
+were unvested. As of December 31, 2012, Mr. Conlon held options to purchase a total of 10,000 shares of Common Stock which were all unvested. 
+(3) 
+Mr. Talbott retired from his position as President and Chief Executive Officer of Patterson-UTI on September 30, 2007. Patterson-UTI entered into an
+employment agreement with Mr. Talbott effective October 1, 2007 which provided for the employment of Mr. Talbott on a part-time basis until September 30, 2012. Mr. Talbott’s salary during the term of this employment
+agreement was $250,000 per year. 
+Directors who are also employees of Patterson-UTI do not receive compensation
+for serving as a director or as a member of a committee of the Board of Directors. All directors are reimbursed for reasonable out-of-pocket expenses incurred in connection with serving as a member of the Board of Directors. Each non-employee
+director receives annual cash compensation of $35,000 and (i) 3,000 shares of restricted stock subject to one-year vesting (subject to acceleration in certain limited situations, including a change of control) and (ii) an option to
+purchase 10,000 shares of Common Stock at an exercise price equal to the closing price of Common Stock on the grant date. The option has a 10-year term, vests after one-year (subject to acceleration in certain limited situations, including a change
+of control) and contains a right to exercise for three years following cessation of the holder as a director (but not beyond the 10-year term). Each non-employee director that serves on the Audit Committee or the Compensation Committee receives
+additional annual cash compensation of $10,000 per committee on which he serves, with the chairman of each such committee receiving $15,000. The Lead Director receives additional annual cash compensation of $20,000. 
+EMPLOYMENT-RELATED AGREEMENTS 
+Change in Control 
+Patterson-UTI has entered into change in control
+agreements with Messrs. Siegel, Hendricks, Berns and Vollmer (each agreement, a “CIC Agreement” and collectively, the “CIC Agreements”; and each individual, an “Employee” and collectively, the “Employees”).
+The CIC Agreements were entered into to protect the Employees should a change in control occur, thereby encouraging the Employee to remain in the employ of Patterson-UTI and not be distracted from the performance of his duties to Patterson-UTI by
+the possibility of a change in control. 
+In the event of a change in control of Patterson-UTI in which an Employee’s
+employment is terminated by Patterson-UTI other than for cause or by the Employee for good reason, the terms of the CIC Agreements would entitle the Employee to, among other things: 
+Ÿ 
+a bonus payment equal to the highest annual bonus paid after the CIC Agreement was entered into or a benchmark bonus in the case of Mr. Hendricks
+(such bonus payment prorated for the portion of the fiscal year preceding the termination date), 
+Ÿ 
+a payment equal to 2.5 times (in the case of Messrs. Siegel and Hendricks) or 2.0 times (in the case of Messrs. Berns and Vollmer) the sum of
+(i) the highest annual salary in effect for such Employee during the term of the CIC Agreement and (ii) the average of the three annual bonuses earned by the Employee for the three fiscal years preceding the termination date (or a
+benchmark bonus in the case of Mr. Hendricks), and 
+Ÿ 
+continued coverage under Patterson-UTI’s welfare plans for up to three years (in the case of Messrs. Siegel and Hendricks) or two years (in the
+case of Messrs. Berns and Vollmer). 
+37 
+The CIC Agreements with Messrs. Vollmer, Siegel and Berns contain a tax gross-up for the
+excise tax imposed on parachute payments, which were customary when these agreements were entered into more than nine years ago. While the Compensation Committee believes the tax gross-up provision is a valuable tool for executive retention, the
+Compensation Committee recognizes that tax gross-up provisions may no longer be viewed as customary. Going forward, the Compensation Committee does not plan to provide tax gross-ups in connection with compensation arrangements, and the CIC Agreement
+entered into in April 2012 with Mr. Hendricks does not include a tax gross-up provision. 
+A “change in control”
+is principally defined by the CIC Agreement as: 
+Ÿ 
+an acquisition by any individual, entity or group of beneficial ownership of 35% or more of either Patterson-UTI’s then outstanding Common Stock
+or the combined voting power of the then outstanding voting securities of Patterson-UTI entitled to vote in the election of directors, 
+Ÿ 
+a change occurs in which the members of the Board of Directors as of the date of the CIC Agreement cease to constitute at least a majority of
+Patterson-UTI’s Board of Directors unless that change occurs through a vote of at least a majority of the incumbent members of the Board of Directors, or 
+Ÿ 
+a change in the beneficial ownership of Patterson-UTI following consummation of a reorganization, merger, consolidation, sale of Patterson-UTI or any
+subsidiary of Patterson-UTI or a disposition of all or substantially all of the assets of Patterson-UTI, in which the beneficial owners immediately prior to the transaction own 65% or less of outstanding common stock of the newly combined or merged
+entity. 
+The CIC Agreements terminate on the first to occur of: 
+Ÿ 
+the Employee’s death, disability or retirement, 
+Ÿ 
+the termination of the Employee’s employment, or 
+Ÿ 
+January 29, 2014 although, unless otherwise terminated, the CIC Agreements automatically renew for successive 12-month periods until Patterson-UTI
+notifies the Employee at least 90 days before the expiration of the initial term or the renewal period, as applicable, that the term will not be extended. Patterson-UTI has not provided any such notification to the Employees.
+All unvested stock options and restricted stock awards held by Messrs. Siegel, Hendricks, Wall, Berns and
+Vollmer vest upon a change of control as defined by the underlying award agreements. Upon a change in control as defined in the underlying performance unit award grants, Messrs. Wall, Vollmer, Siegel and Berns would receive the target number of
+shares issuable thereunder. All restricted stock and performance unit awards held by Messrs. Siegel, Hendricks, Wall, Berns and Vollmer contain provisions that in the event of termination due to death or disability, the Named Executive Officer would
+vest in a portion of the award. 
+Amounts that each of the Named Executive Officers would be entitled to under the existing
+Agreements (or in the case of Mr. Holcomb, his employment agreement) if a change in control had occurred as of December 31, 2012 and the employee’s employment was terminated by Patterson-UTI other than for cause or terminated by the
+employee for good reason (as defined in the Agreements or in the case of Mr. Holcomb, his employment agreement) are reflected in the following table: 
+Cash Payments 
+Other Benefits 
+Name 
+Bonus 
+Payment 
+($)(1) 
+Salary and 
+Bonus 
+($)(2) 
+Option 
+Awards 
+($)(3) 
+Stock 
+Awards 
+($)(3) 
+Performance 
+Unit
+Awards 
+($)(4) 
+Continued 
+Benefits 
+($)(5) 
+Total 
+($) 
+William Andrew Hendricks, Jr 
+$ 
+800,000 
+$ 
+3,500,000 
+$ 
+206,250 
+$ 
+1,863,000 
+$ 
+— 
+$ 
+20,456 
+$ 
+6,389,706 
+Douglas J. Wall(6) 
+$ 
+— 
+$ 
+— 
+$ 
+112,415 
+$ 
+743,151 
+$ 
+1,641,774 
+$ 
+— 
+$ 
+2,497,340 
+John E. Vollmer III 
+$ 
+1,375,000 
+$ 
+2,172,008 
+$ 
+463,744 
+$ 
+1,391,046 
+$ 
+1,988,756 
+$ 
+13,638 
+$ 
+7,404,192 
+Mark S. Siegel 
+$ 
+2,750,000 
+$ 
+4,555,020 
+$ 
+927,491 
+$ 
+2,782,092 
+$ 
+3,977,512 
+$ 
+— 
+$ 
+14,992,115 
+Kenneth N. Berns 
+$ 
+1,375,000 
+$ 
+2,002,008 
+$ 
+463,744 
+$ 
+1,391,046 
+$ 
+1,988,756 
+$ 
+— 
+$ 
+7,220,554 
+James M. Holcomb(7) 
+$ 
+— 
+$ 
+650,000 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+6,819 
+$ 
+656,819 
+38 
+(1) 
+The assumed bonus payment is equal to the highest annual bonus paid from the time the CIC Agreements were entered into through December 31, 2012 or a benchmark
+bonus in the case of Mr. Hendricks. 
+(2) 
+The assumed salary and bonus payment represents 2.5 times (in the case of Messrs. Siegel and Hendricks) or 2.0 times (in the case of Messrs. Berns and Vollmer) of the
+sum of the 2012 salary in effect for each employee and the average of the annual bonuses earned by each employee for 2011, 2010 and 2009 or a benchmark bonus in the case of Mr. Hendricks. Bonus amounts earned in 2012 were not considered in this
+calculation as they were not determined until after December 31, 2012. In the case of Mr. Holcomb, the payment represents twenty-four months of his base salary as determined in accordance with his employment agreement.
+(3) 
+Each of the option and stock award agreements for Messrs. Hendricks, Wall, Vollmer, Siegel and Berns provide that unvested options and awards will immediately vest upon
+a change in control. Amounts presented in the table represent the value of unvested option and stock awards using the market price of Patterson-UTI Common Stock at December 31, 2012. 
+(4) 
+Share settled performance units awarded to Messrs. Wall, Vollmer, Siegel and Berns in 2010 and 2011 and to Messrs. Vollmer, Siegel and Berns in 2012 include a provision
+that upon a change in control as defined in the respective award agreements, the Named Executive Officer will receive an award of shares equal to the target amount set forth in each agreement. Amounts presented in the table represent the assumed
+award of the target number of shares if a change in control had occurred on December 31, 2012 valued at the December 31, 2012 closing price of Patterson-UTI common stock of $18.63 per share. 
+(5) 
+Messrs. Hendricks, Vollmer and Holcomb participated in Patterson-UTI’s health and welfare plans as of December 31, 2012. The amounts presented represent
+Patterson-UTI’s portion of the premiums for three years in the case of Mr. Hendricks, two years in the case of Mr. Vollmer and one year in the case of Mr. Holcomb based on the rates in effect at December 31, 2012.
+(6) 
+Mr. Wall’s change in control agreement terminated upon the execution of his employment agreement upon his retirement as President and Chief Executive Officer
+in 2012. The terms of his option and stock awards remained unchanged and such award agreements include a provision that unvested shares or options will automatically vest upon a change in control. 
+(7) 
+Patterson-UTI has entered into an employment agreement with Mr. Holcomb that provides certain benefits if his employment is terminated by Patterson-UTI other than
+for cause or by him for good reason. 
+Severance Agreements 
+Patterson-UTI has entered into written letter agreements with each of Messrs. Siegel, Berns and Vollmer pursuant to which Patterson-UTI
+has agreed to pay each such person within ten days of the termination of his employment with Patterson-UTI for any reason (including voluntary termination by him), an amount in cash equal to his annual base salary at the time of such termination.
+Any payment made by Patterson-UTI pursuant to these letter agreements will reduce dollar for dollar any payment owed to such person, if any, pursuant to the change in control agreements discussed above. 
+Patterson-UTI has entered into a Severance Agreement with Mr. Hendricks (the “Severance Agreement”). The term of the
+Severance Agreement expires on the third anniversary of the effective date of the Severance Agreement. If during the term of the Severance Agreement Mr. Hendricks’ employment terminates by reason of a Qualifying Termination (as defined in
+the Severance Agreement), Patterson-UTI will pay Mr. Hendricks a lump-sum cash payment of $750,000 less any Severance Payment received by or payable to Mr. Hendricks under his change in control agreement described above or any other
+similar change in control agreement. 
+Under the Severance Agreement, “Qualifying Termination” means a termination of
+Mr. Hendricks’ employment (1) by Patterson-UTI for any reason other than cause or (2) if certain conditions are met, by Mr. Hendricks due to Patterson-UTI reducing his annual base salary to an amount that is less than
+$450,000 per year. 
+39 
+Employment Agreement with Mr. Wall 
+In September 2012, Patterson-UTI entered into an employment agreement with Mr. Wall in connection with his retirement as President
+and Chief Executive Officer. Pursuant to his employment agreement, Patterson-UTI will employ Mr. Wall as a special consultant for two years at an annual compensation of $250,000 per year. Mr. Wall agreed to restrictions regarding
+Patterson-UTI’s proprietary information and to not compete with Patterson-UTI for eighteen months following the termination of his employment under the employment agreement, subject to certain exceptions. The employment agreement superseded all
+other agreements between Patterson-UTI and Mr. Wall relating to his employment by Patterson-UTI, including the agreements relating to payments upon a change of control; provided that it did not change or otherwise affect agreements related to
+stock options or restricted stock or performance units granted to him, and it allowed him to participate in Patterson-UTI’s 2012 annual EBITDA-based cash bonus incentive plan in the same manner as he would have participated if he remained the
+Chief Executive Officer of Patterson-UTI through December 31, 2012. 
+Employment Agreement with Mr. Holcomb 
+In January 2012, Patterson-UTI entered into an employment agreement with Mr. Holcomb in connection with his promotion to President of
+Patterson-UTI Drilling Company, LLC. Pursuant to his employment agreement, Patterson-UTI will employ Mr. Holcomb for an initial term of three years beginning January 1, 2012 at an annualized salary of $325,000 per year, subject to any
+increases that may be granted in the future. Such employment shall continue on a year to year basis unless either party notifies the other party at least 90 days before the expiration of the then-current initial term or renewal term.
+Mr. Holcomb agreed to restrictions regarding Patterson-UTI’s confidential information and to not compete with Patterson-UTI or solicit its employees or customers for two years following the date of termination of his employment. If during
+the term of the employment agreement, Mr. Holcomb’s employment is terminated due to his death or disability, by Patterson-UTI without cause or by Mr. Holcomb for good reason (as such terms are defined in the employment agreement), he
+will continue to receive his base salary for 12 months following the date of termination, or, in the case of termination of his employment by Patterson-UTI without cause or by Mr. Holcomb for good reason where there is more than 12 months
+remaining in the term, then for the remainder of the term. During the 12 month period following his termination, Mr. Holcomb and his eligible dependents as of the date of termination shall continue to be covered by all medical, vision and
+dental plans (but not including life or disability insurance) at the same active employee premium cost as a similarly situated active employee; provided that such benefits shall cease if he becomes entitled to any group health benefits from a new
+employer. 
+Death or Disability 
+All restricted stock and performance unit awards held by Messrs. Hendricks, Wall, Vollmer, Siegel and Berns provide that in the event of termination of employment due to death or disability, the holder
+would vest in a portion of the award. With respect to Mr. Hendricks, such a termination would have resulted in the accelerated vesting of 24,418 shares of restricted stock with a fair value of $454,907. With respect to Mr. Wall, such a
+termination would have resulted in the accelerated vesting of 723 shares of restricted stock with a fair value of $13,469. With respect to Messrs. Vollmer and Berns, such a termination at December 31, 2012 would have resulted in the accelerated
+vesting of 11,474 shares of restricted stock with a fair value of $213,761. With respect to Mr. Siegel, such a termination at December 31, 2012 would have resulted in the accelerated vesting of 22,950 shares of restricted stock with a fair
+value of $427,559. In the event of termination of employment due to death or disability, the holders of performance units would vest in the portion of the performance unit award that was earned at the time of death or disability. This payment would
+be determined at the end of the performance period and would equal the amount that the holder would have received at that time, pro-rated for the amount of time from the date of grant through the date of death or disability. 
+Indemnification Agreements 
+Patterson-UTI has entered into an indemnification agreement with Messrs. Hendricks, Wall, Vollmer, Siegel and Berns and each of its directors containing provisions that may require Patterson-UTI, among
+other things, to indemnify such executive officers and directors against liabilities that may arise by reason of their status or service as executive officers or directors (subject to certain exceptions) and to advance expenses incurred as a result
+of any proceeding against them as to which they could be indemnified. 
+40 
+CERTAIN TRANSACTIONS 
+In connection with the acquisition by REMY Capital Partners III, L.P. (“REMY Capital”) of an ownership interest in UTI Energy
+Corp. in March 1995, REMY Capital succeeded to a registration rights agreement with UTI. As the successor-in-interest to UTI, Patterson-UTI assumed this registration rights agreement pursuant to which REMY Capital has the right to require
+Patterson-UTI to use its reasonable efforts to register shares held by REMY Capital under the Securities Act of 1933, as amended. In the event that such rights are exercised in connection with a primary offering proposed by Patterson-UTI (or a
+secondary offering with which Patterson-UTI agrees to participate), REMY Capital would bear its pro rata share of the costs of the offering, other than legal, accounting and printing costs, all of which Patterson-UTI would bear. In the event that
+REMY Capital elects to exercise such rights other than in connection with an offering in which Patterson-UTI participates, REMY Capital would bear all costs of the offering. These rights continue so long as REMY Capital continues to own the Common
+Stock that it acquired in March 1995. As of the date of this proxy statement, REMY Capital continues to hold 1,000,000 shares of such Common Stock. 
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is President and sole stockholder of REMY Investors, which is the general partner of REMY Capital. Mr. Berns, a director and Senior Vice
+President of Patterson-UTI, is an executive of REMY Investors. 
+In connection with Mr. Vollmer’s appointment as Chief
+Financial Officer, Patterson-UTI delivered a letter to Mr. Vollmer dated February 6, 2006 (the “Letter Agreement”). Pursuant to the Letter Agreement, Patterson-UTI generally agreed, to the extent permitted by law and provided
+that the applicable accounting restatement pending at that time did not result from Patterson-UTI’s material non-compliance with financial reporting requirements under the federal securities laws as a result of knowing misconduct by
+Mr. Vollmer, not to make any claim against Mr. Vollmer for certain compensation received or profits realized, or relating to securities acquired, prior to September 30, 2005. Patterson-UTI also generally agreed to indemnify
+Mr. Vollmer against all losses in connection with his defense of any claim against him under Section 304 of the Sarbanes-Oxley Act of 2002 (“Section 304”) in contravention of the immediately preceding sentence. Notwithstanding
+court decisions that Patterson-UTI’s right to make any such claims appears doubtful, Patterson-UTI entered into this agreement because of the breadth of language of Section 304 and the uncertainty as to how the statute may be interpreted
+by the courts in the future. 
+During the first nine months of 2012, Patterson-UTI purchased approximately $29.4 million of
+drill pipe, related tubular and other equipment from, and sold approximately $6.4 million of drill pipe to, a vendor that employed Mr. Holcomb’s son until October 2012. Based upon information from the vendor, sales to Patterson-UTI
+accounted for approximately 28% of the vendor’s revenue for the first nine months of 2012. Mr. Holcomb’s son did not receive any commission or other compensation for any sales to Patterson-UTI. 
+Patterson-UTI has a written policy with respect to related person transactions. In accordance with this policy, related person
+transactions are reviewed by the Lead Director or the chair of the Audit Committee, each of whom has full delegated authority to approve, disapprove, ratify, amend, terminate or rescind any such transaction, or direct that such transaction be
+submitted to the Audit Committee or the full Board of Directors for consideration. In approving or disapproving related person transactions, the relevant facts and circumstances of the related person transaction are considered, including whether
+such transaction is in, or not inconsistent with, the best interest of Patterson-UTI and whether, in appropriate cases, such transaction is on commercial terms at least as favorable to Patterson-UTI as would otherwise be available to or from an
+unrelated third party or to Patterson-UTI’s employees generally. Related person transactions generally include transactions in an amount that exceeds $50,000 between Patterson-UTI or any of its subsidiaries and an executive officer, a director
+(or nominee to become director), an immediate family member of any of the foregoing or any entity in which any of the foregoing has a 10% or greater beneficial ownership interest or in which they are an executive officer, general partner, principal
+or engaged in a similar position. Certain related person transactions have been pre-approved under the terms of the policy, including, subject to certain exceptions and limitations, the sale to or purchase from Patterson-UTI of goods and services by
+entities related to directors in the ordinary course of business that are immaterial to Patterson-UTI and with respect to which the director has no direct economic interest or decision making authority. 
+41 
+SECURITY OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of April 7, 2013, the stock ownership of (i) the Named Executive Officers, directors and Board nominees, individually, (ii) all directors, Board nominees
+and executive officers as a group and (iii) each person known by Patterson-UTI to be the beneficial owner of more than 5% of Common Stock. 
+Name of 
+Beneficial Owner 
+Amount and 
+Nature of 
+Beneficial 
+Ownership 
+Percent 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common Stock: 
+Wellington Management Company, LLP. 
+12,365,886 
+(1) 
+8.4 
+% 
+Artisan Partners Holdings LP 
+10,728,000 
+(2) 
+7.3 
+% 
+BlackRock, Inc. 
+9,837,233 
+(3) 
+6.7 
+% 
+Directors and Named Executive Officers: 
+Mark S. Siegel 
+3,671,970 
+(4) 
+2.5 
+% 
+William Andrew Hendricks, Jr. 
+136,111 
+(5) 
+* 
+Douglas J. Wall 
+1,248,559 
+(6) 
+* 
+John E. Vollmer III 
+1,540,947 
+(7) 
+1.0 
+% 
+Kenneth N. Berns 
+1,331,335 
+(8) 
+* 
+James M. Holcomb 
+202,009 
+(9) 
+* 
+Charles O. Buckner 
+81,000 
+(10) 
+* 
+Michael W. Conlon 
+9,000 
+(11) 
+* 
+Curtis W. Huff 
+124,880 
+(12) 
+* 
+Terry H. Hunt 
+102,000 
+(13) 
+* 
+Kenneth R. Peak 
+99,000 
+(14) 
+* 
+Cloyce A. Talbott 
+1,107,476 
+(15) 
+* 
+All directors and executive officers as a group (13 persons) 
+9,748,701 
+(16) 
+6.4 
+% 
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G filed by Wellington Management Company, LLP (“Wellington Management”) with the SEC on February 14, 2013. According to the
+report, Wellington Management, in its capacity as investment adviser, may be deemed to beneficially own 12,365,886 shares that are held of record by clients of Wellington Management. Wellington Management has shared power to vote or to direct the
+vote of 9,447,926 shares and shared power to dispose or to direct the disposition of 12,365,886 shares. The address of the principal business office of Wellington Management is 280 Congress Street, Boston, Massachusetts 02210.
+(2) 
+Based solely on a Schedule 13G filed with the SEC on February 7, 2013 (the “Artisan Schedule 13G”). According to the report, Artisan Partners Holdings LP
+(“Artisan Holdings”) reports beneficial ownership of the shares, with shared dispositive power over 10,728,000 shares and shared power to vote 10,311,974 shares. Artisan Holdings filed the Artisan Schedule 13G jointly with Artisan
+Investment Corporation (“Artisan Corp”), Artisan Partners Limited Partnership (“Artisan Partners”), Artisan Investments GP LLC (“Artisan Investments”), ZFIC, Inc. (“ZFIC”), Andrew A. Ziegler, Carlene M.
+Ziegler and Artisan Partners Funds, Inc. (“Artisan Funds”). Artisan Holdings is the sole limited partner of Artisan Partners; Artisan Investments is the general partner of Artisan Partners; Artisan Corp is the general partner of Artisan
+Holdings; ZFIC is the sole stockholder of Artisan Corp.; Mr. Ziegler and Ms. Ziegler are the principal stockholders of ZFIC. The address of the principal business office of Artisan Holdings, Artisan Corp., Artisan Partners, Artisan
+Investments, ZFIC, Mr. Ziegler and Ms. Ziegler is 875 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202. 
+42 
+(3) 
+Based solely on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 5, 2013. According to the report, BlackRock, Inc. has sole
+voting and dispositive power with respect to 9,837,233 shares. The address of the principal business office of BlackRock, Inc. is 40 East 52 nd Street, New York, New York 10022. 
+(4) 
+Mr. Siegel is the President and sole stockholder of REMY Investors, which is the general partner of REMY Capital Partners III, L.P. (“REMY Capital”). The
+Common Stock beneficially owned by Mr. Siegel includes 1,000,000 shares of Common Stock owned by REMY Capital. The Common Stock beneficially owned by Mr. Siegel also includes stock options held by Mr. Siegel, which are presently
+exercisable or become exercisable within 60 days, to purchase 1,974,388 shares. Does not include 246,612 shares underlying stock options held by Mr. Siegel that are not presently exercisable and will not become exercisable within 60 days.
+Includes 133,084 shares of unvested restricted Common Stock held by Mr. Siegel, over which he presently has voting power. The Common Stock beneficially owned by Mr. Siegel includes 49,900 shares held in trusts for which he is the trustee.
+(5) 
+Includes shares underlying stock options held by Mr. Hendricks, which become exercisable within 60 days, to purchase 36,111 shares. Does not include 88,889 shares
+underlying stock options held by Mr. Hendricks that are not presently exercisable and will not become exercisable within 60 days. Includes 100,000 shares of unvested restricted Common Stock held by Mr. Hendricks, over which he presently
+has voting power. 
+(6) 
+Includes shares underlying stock options held by Mr. Wall, which are presently exercisable or become exercisable within 60 days, to purchase 879,125 shares. Does
+not include 31,625 shares underlying stock options held by Mr. Wall that are not presently exercisable and will not become exercisable within 60 days. Includes 27,722 shares of unvested restricted Common Stock held by Mr. Wall, over which
+he presently has voting power. 
+(7) 
+Includes shares underlying stock options held by Mr. Vollmer, which are presently exercisable or become exercisable within 60 days, to purchase 987,194 shares.
+Does not include 123,306 shares underlying stock options held by Mr. Vollmer that are not presently exercisable and will not become exercisable within 60 days. Includes 66,542 shares of unvested restricted Common Stock held by Mr. Vollmer,
+over which he presently has voting power. The Common Stock beneficially owned by Mr. Vollmer includes 200,000 shares held in trusts for which he is a trustee. 
+(8) 
+Includes shares underlying stock options held by Mr. Berns, which are presently exercisable or become exercisable within 60 days, to purchase 987,194 shares. Does
+not include 123,306 shares underlying stock options that are not presently exercisable and will not become exercisable within 60 days. Includes 66,542 shares of unvested restricted Common Stock held by Mr. Berns, over which he presently has
+voting power. The Common Stock beneficially owned by Mr. Berns includes 140,000 shares held in trusts for which he is the trustee. Does not include shares of Common Stock beneficially owned by REMY Investors. Mr. Berns disclaims beneficial
+ownership of such shares beneficially owned by REMY Investors. 
+(9) 
+Includes shares underlying stock options held by Mr. Holcomb, which are presently exercisable to purchase 44,445 shares. Includes 62,500 shares of unvested
+restricted Common Stock held by Mr. Holcomb, over which he presently has voting power. 
+(10) 
+Includes shares underlying presently exercisable stock options held by Mr. Buckner to purchase 60,000 shares. Does not include 10,000 shares underlying stock
+options held by Mr. Buckner that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Buckner, over which he presently has voting power.
+(11) 
+Does not include 20,000 shares underlying stock options held by Mr. Conlon that are not presently exercisable and will not become exercisable within 60 days.
+Includes 6,000 shares of unvested restricted Common Stock held by Mr. Conlon, over which he presently has voting power. 
+(12) 
+Includes shares underlying presently exercisable stock options held by Mr. Huff to purchase 70,000 shares. Does not include 10,000 shares underlying stock options
+held by Mr. Huff that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Huff, over which he presently has voting power.
+43 
+(13) 
+Includes shares underlying presently exercisable stock options held by Mr. Hunt to purchase 70,000 shares. Does not include 10,000 shares underlying stock options
+held by Mr. Hunt that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Hunt, over which he presently has voting power.
+(14) 
+Includes shares underlying presently exercisable stock options held by Mr. Peak to purchase 70,000 shares. Does not include 10,000 shares underlying stock options
+held by Mr. Peak that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Peak, over which he presently has voting power.
+(15) 
+Includes shares underlying stock options held by Mr. Talbott, which are presently exercisable to purchase 820,000 shares. Does not include 10,000 shares underlying
+stock options held by Mr. Talbott that are not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Talbott, over which he presently has voting power.
+(16) 
+Includes shares underlying stock options, which are presently exercisable or become exercisable within 60 days, to purchase 6,013,457 shares of Common Stock. Does not
+include shares underlying stock options to purchase 683,738 shares held by such individuals that are not presently exercisable and will not become exercisable within 60 days. Includes an aggregate of 524,892 shares of unvested restricted Common
+Stock held by certain directors and executive officers, over which they presently have voting power. 
+Except as
+stated herein, each stockholder has sole voting and investment power with respect to Common Stock included in the above table. There are no arrangements known to Patterson-UTI which may result in a change in control. The business address of each of
+our directors and officers is 450 Gears Road, Suite 500, Houston, Texas 77067. 
+44 
+AUDIT COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by
+reference into any other Patterson-UTI filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent Patterson-UTI specifically incorporates this report by reference therein. 
+The Audit Committee has reviewed and discussed the audited financial statements with management and Patterson-UTI’s independent
+registered public accounting firm. 
+The Audit Committee has discussed with the independent registered public accounting firm
+the matters required to be discussed by Auditing Standard 380, The Auditor’s Communication with those Charged with Governance , as adopted by the Public Company Accounting Oversight Board in Rule 3200T. 
+The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting
+firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the
+independent registered public accounting firm their independence. 
+Taking the foregoing into consideration, the undersigned
+Audit Committee members recommended to the Board of Directors that the Board approve the inclusion of Patterson-UTI’s audited financial statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012. 
+Audit Committee of the Board of Directors: 
+Charles O. Buckner, Chairman 
+Curtis W. Huff 
+Terry H. Hunt 
+PricewaterhouseCoopers Fees for Fiscal Years 2012 and 2011 
+In 2012 and 2011, Patterson-UTI and its subsidiaries incurred fees for services provided by PricewaterhouseCoopers LLP. 
+Description 
+Fees Incurred in 
+Fiscal
+Year 
+2012 
+Fees Incurred in 
+Fiscal
+Year 
+2011 
+Audit fees 
+$ 
+1,090,000 
+$ 
+1,090,000 
+Tax fees 
+40,000 
+45,075 
+All other fees 
+1,919 
+1,919 
+Total 
+$ 
+1,131,919 
+$ 
+1,136,994 
+The Audit Committee appoints the independent registered public accounting firm. The Audit Committee or
+Mr. Buckner, as Chairman of the Audit Committee, approves all other engagements of the independent registered public accounting firm in advance. In the event Mr. Buckner approves any such engagement, he discusses such approval with the
+Audit Committee at its next meeting. 
+“Audit fees” relate to audit services of PricewaterhouseCoopers LLP for fiscal
+2012 and 2011 consisting of the examination of Patterson-UTI’s consolidated financial statements, quarterly reviews of Patterson-UTI’s interim financial statements and services to assess Patterson-UTI’s internal control over financial
+reporting. “Tax fees” include federal, state, local and foreign tax compliance and related matters. “All other fees” consists of an annual subscription fee to a software product. The Audit Committee or Mr. Buckner, as
+Chairman of the Audit Committee, approved in advance all of the services described above. 
+The Audit Committee has discussed
+the non-audit services provided by PricewaterhouseCoopers LLP and the related fees and has considered whether those services and fees are compatible with maintaining auditor independence. The Audit Committee determined that such non-audit services
+were consistent with the independence of PricewaterhouseCoopers LLP. 
+45 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires Patterson-UTI’s officers and directors and persons who own more than 10 percent of a
+registered class of Patterson-UTI’s equity securities, to file reports of ownership and changes in ownership with the SEC. Each of these persons is required by SEC regulation to furnish Patterson-UTI with copies of Section 16(a) filings.
+Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to Patterson-UTI during 2011 and Forms 5 and amendments thereto furnished to Patterson-UTI with respect to 2011, or a written representation from the reporting person that
+no Form 5 is required, all filings required to be made by such officers, directors, and beneficial owners of more than 10 percent of a registered class of Patterson-UTI’s common stock were timely made. 
+Other Business 
+As of
+the date of this proxy statement, management of Patterson-UTI was not aware of any matter to be presented at the Meeting other than as set forth herein. If any other matters are properly brought before the Meeting, however, the shares represented by
+valid proxies will be voted with respect to such matters in accordance with the judgment of the persons voting them. 
+Stockholder Proposals
+for 2014 Annual Meeting 
+Proposals or Director Nominations for Inclusion in the Proxy
+Statement. Pursuant to Rule 14a-8 under the Exchange Act, stockholders may present proper proposals or director nominations for inclusion in Patterson-UTI’s proxy statement and for consideration at the next annual
+meeting of stockholders by submitting their proposals or director nominations to Patterson-UTI in a timely manner. In order to be included in Patterson-UTI’s proxy statement for the 2014 annual meeting of stockholders, proposals or director
+nominations from stockholders must be received by Patterson-UTI no later than December 16, 2013, and must otherwise comply with the requirements of Rule 14a-8. 
+Proposals or Director Nominations not Included in the Proxy Statement. In addition, Patterson-UTI’s bylaws establish an advance notice procedure with regard to
+stockholder proposals and director nominations not included in Patterson-UTI’s proxy statement. For director nominations not included in Patterson-UTI’s proxy statement, please refer to “Election of Directors — Meetings and
+Committees of the Board of Directors.” For stockholder proposals to be properly brought before the 2013 annual meeting, by a stockholder, the stockholder must be a stockholder of record on the date of the giving of the notice provided for below
+and on the record date for the determination of stockholders entitled to vote at such annual meeting and must give timely notice of such business in writing to the Secretary of Patterson-UTI. To be timely with respect to the 2014 annual meeting, a
+stockholder’s notice must be delivered to or mailed and received at Patterson-UTI’s principal executive offices not earlier than February 5, 2014 and not later than March 7, 2014; provided, however, that in the event that the
+annual meeting is called for a date that is not within 30 days before or after June 5, 2014, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of
+the date of the meeting was mailed or public disclosure of the annual meeting date was made, whichever occurs first. 
+A
+stockholder’s notice to the Secretary of Patterson-UTI shall set forth: 
+Ÿ 
+a brief description of each matter desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting,
+Ÿ 
+the name and record address of the stockholder proposing such business, 
+Ÿ 
+the class and number of shares of Patterson-UTI that are beneficially owned by the stockholder, 
+Ÿ 
+any material interest of the stockholder in such business, and 
+Ÿ 
+a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the annual meeting.
+46 
+Patterson-UTI reserves the right to reject, rule out of order, or take other appropriate
+action with respect to any proposal or nomination that does not comply with these and other applicable requirements. 
+Annual Report
+A copy of Patterson-UTI’s annual report on Form 10-K accompanies this proxy statement only if you have requested that
+a copy of this proxy statement be mailed to you. The annual report on Form 10-K also is available electronically by following the instructions in the Notice. The annual report on Form 10-K is not incorporated into this proxy statement and is not
+considered proxy-soliciting material. 
+A copy of the annual report on Form 10-K, including the financial statements and
+financial statement schedules, but excluding exhibits, may be obtained by stockholders without charge by written request to the Secretary of Patterson-UTI at 450 Gears Road, Suite 500, Houston, Texas 77067 or by accessing it on Patterson-UTI’s
+website at www.patenergy.com in the investors section under the “financial reports” link. Patterson-UTI will furnish the exhibits to Form 10-K upon request and upon receipt of a reproduction fee. 
+Delivery of Documents to Stockholders Sharing an Address 
+The SEC’s rules allow companies to send a single Notice or single copy of annual reports, proxy statements, prospectuses and other disclosure documents to two or more stockholders sharing the same
+address, subject to certain conditions. These rules are intended to provide greater convenience for stockholders, and cost savings for companies, by reducing the number of duplicate documents that stockholders receive. If instructions for separate
+delivery have been received from any stockholder, Patterson-UTI will deliver promptly separate copies of the relevant disclosure materials. Similarly, if multiple copies of disclosure materials are being delivered to a single address, stockholders
+can request a single copy for future deliveries. Written requests should be submitted to the Secretary of Patterson-UTI at 450 Gears Road, Suite 500, Houston, Texas 77067. 
+47 
+PATTERSON-UTI ENERGY, INC. 
+450 GEARS ROAD, SUITE 500 
+HOUSTON, TX 77067 
+VOTE BY INTERNET - www.proxyvote.com 
+Use the Internet to
+transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to
+obtain your records and to create an electronic voting instruction form. 
+Electronic Delivery
+of Future PROXY MATERIALS 
+If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future
+proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or
+access proxy materials electronically in future years. 
+VOTE BY PHONE -
+1-800-690-6903 
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting
+date. Have your proxy card in hand when you call and then follow the instructions. 
+VOTE BY
+MAIL 
+Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51
+Mercedes Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK
+INK AS FOLLOWS: 
+KEEP THIS PORTION FOR YOUR RECORDS 
+— — — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — — — — 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+DETACH AND RETURN THIS PORTION ONLY 
+For 
+All 
+Withhold 
+All 
+For All 
+Except 
+To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the
+number(s) of the nominee(s) on the line below. 
+The Board of Directors recommends you vote FOR the following: 
+1. Election of Directors 
+¨ 
+¨ 
+¨ 
+Nominees 
+01 
+Mark S. Siegel 
+02 
+Kenneth N. Berns 
+03 Charles O. Buckner 04 Michael W. Conlon
+05 Curtis W. Huff 
+06 
+Terry H. Hunt 
+07 
+Cloyce A. Talbott 
+The Board of Directors recommends you vote FOR proposals 2. and
+3. 
+For 
+Against 
+Abstain 
+2. Approval of an advisory resolution on
+Patterson – UTI’s compensation of its named executive officers. 
+¨ 
+¨ 
+¨ 
+3. Ratification of the selection of PricewaterhouseCoopers LLP as the
+independent registered public accounting firm of Patterson-UTI for the fiscal year ending December 31, 2013. 
+¨ 
+¨ 
+¨ 
+NOTE: Such other business as may properly come
+before the meeting or any adjournment thereof. 
+Please sign exactly as your name(s) appear(s) hereon. When signing
+as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by
+authorized officer. 
+Signature [PLEASE SIGN WITHIN BOX] 
+Date 
+Signature (Joint Owners) 
+Date 
+Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual
+Report, Notice & Proxy Statement is/are available at www.proxyvote.com . 
+— — — — — — — — — — — — 
+— — — — — — — — — — — — — — — — — — — — 
+— — — — — — — — — — 
+PATTERSON-UTI ENERGY, INC. 
+Annual Meeting of
+Stockholders 
+June 5, 2013 10:00 AM 
+This proxy is solicited by the Board of Directors 
+The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby appoints Mark S. Siegel, William Andrew Hendricks, Jr. and
+John E. Vollmer III, and each of them, proxies to the undersigned, each with full power to act without the other and with full power of substitution, to vote all of the shares which the undersigned is entitled to vote at the annual meeting of
+stockholders of the Company to be held Wednesday, June 5, 2013, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060, and at any and all adjournments or postponements thereof, with the
+same force and effect as if the undersigned were personally present. The undersigned hereby instructs the above-named proxies to vote the shares represented by this proxy in the manner as directed for the undersigned on the reverse side of this
+proxy card. If no directions are made, the proxies will vote “FOR” the nominees for directors, “FOR” the approval of the advisory resolution on executive compensation, and “FOR” the ratification of the selection of
+PricewaterhouseCoopers LLP as set forth on the reverse side. If any other matter should be presented properly, this proxy will be voted in accordance with the discretion of the above-named proxies. 
+Continued and to be marked, dated and signed on reverse side
\ No newline at end of file
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new file mode 100644
index 0000000000000000000000000000000000000000..68a0e23d915b51f3461cae30d16faaa1ba9a6e05
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+++ b/raw/proxies/0000889900/0001193125-14-072935/proxy.txt
@@ -0,0 +1,3616 @@
+DEF 14A
+1
+d681519ddef14a.htm
+DEFINITIVE PROXY STATEMENT
+Definitive Proxy Statement 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A
+INFORMATION 
+Proxy Statement Pursuant to Section 14(a) of the 
+Securities Exchange Act of 1934 
+(Amendment No. ) 
+Filed by the
+Registrant ¨ Filed by
+a Party other than the Registrant ¨ 
+Check the appropriate box: 
+¨ 
+Preliminary Proxy Statement 
+¨ 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+¨ 
+Definitive Additional Materials 
+¨ 
+Soliciting Material under Rule 14a-12 
+PATTERSON-UTI ENERGY,
+INC. 
+(Name of registrant as specified in its charter) 
+(Name of person(s) filing proxy statement, if other than the registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+¨ 
+No fee required. 
+¨ 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
+fee is calculated and state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+¨ 
+Fee paid previously with preliminary materials. 
+¨ 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement
+number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+February 27, 2014 
+Dear Stockholder: 
+We cordially invite you to
+attend Patterson-UTI Energy, Inc.’s annual stockholders’ meeting. The annual meeting will be held Thursday, April 17, 2014, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas
+77060. 
+We are pleased to take advantage of Securities and Exchange Commission rules that allow us to furnish these proxy materials and our
+annual report primarily over the Internet. We believe that posting these materials on the Internet enables us to provide stockholders with the information that they need quickly, while lowering our costs of printing and delivery and supporting
+sustainability. We encourage you to vote via the Internet and follow the links to our proxy statement and annual report, which are both available at www.proxyvote.com . 
+For those stockholders who have elected to receive their proxy materials in the mail, please review our proxy statement and annual report and
+vote via the Internet, by telephone or using your proxy card. 
+Your vote is important to us. Please review your proxy materials carefully
+and send in your vote today. 
+Thank you for your support. 
+Sincerely, 
+M ARK S. S IEGEL 
+Chairman of the Board 
+W ILLIAM A NDREW H ENDRICKS , J R . 
+President and Chief Executive Officer 
+PATTERSON-UTI ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+NOTICE OF 2014
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held April 17, 2014 
+The 2014 annual meeting of the stockholders of Patterson-UTI Energy, Inc., a Delaware corporation (“Patterson-UTI”), will be held
+Thursday, April 17, 2014, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060 (the “Meeting”), for the following purposes: 
+Ÿ 
+to elect seven directors named in this proxy statement to the Board of Directors of Patterson-UTI to serve until the next annual meeting of the stockholders or until their respective successors are elected and
+qualified; 
+Ÿ 
+to approve the Patterson-UTI Energy, Inc. 2014 Long-Term Incentive Plan; 
+Ÿ 
+to approve, on an advisory basis, Patterson-UTI’s compensation of its named executive officers; 
+Ÿ 
+to ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for the fiscal year ending December 31, 2014; and 
+Ÿ 
+to transact such other business as may properly come before the Meeting or any adjournment or postponement thereof. 
+Stockholders of record at the close of business on February 20, 2014 are entitled to notice of and to vote at the Meeting and any
+adjournment or postponement thereof. 
+Your vote is important to us. Whether or not you plan to attend the Meeting in person, we urge you to
+promptly vote your shares via the Internet, by telephone, or if the accompanying proxy statement was mailed to you, by completing, signing, dating and returning your proxy card as soon as possible in the enclosed postage prepaid envelope. 
+By order of the Board of Directors 
+S ETH D. W EXLER 
+General Counsel and Secretary 
+February 27, 2014 
+Important Notice
+Regarding the Availability of Proxy Materials for the Stockholder Meeting 
+to Be Held on April 17, 2014 
+The proxy statement and annual report to stockholders are available at www.proxyvote.com . 
+PATTERSON-UTI ENERGY, INC. 
+450 Gears Road, Suite 500 
+Houston, Texas 77067 
+PROXY
+STATEMENT 
+ANNUAL MEETING OF STOCKHOLDERS 
+To Be Held April 17, 2014 
+GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 
+The Board of Directors (the “Board” or “Board of Directors”) of Patterson-UTI Energy, Inc., a Delaware corporation
+(“Patterson-UTI”), has made this proxy statement and its 2013 annual report to stockholders available to you on the Internet or, upon your request has delivered printed versions of these materials to you by mail beginning on or about
+March 3, 2014. Patterson-UTI is furnishing this proxy statement in connection with the solicitation by the Board of Directors of proxies to be voted at the 2014 annual meeting of stockholders of Patterson-UTI (the “Meeting”). The
+Meeting will be held Thursday, April 17, 2014, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060, or at any adjournment or postponement thereof. The Notice of Internet
+Availability of Proxy Materials (the “Notice”) was mailed to each of Patterson-UTI’s stockholders (other than those who previously requested electronic delivery) entitled to vote at the Meeting on or about March 3, 2014. 
+Pursuant to the “notice and access” rules adopted by the Securities and Exchange Commission (the “SEC”), Patterson-UTI has
+elected to provide stockholders access to its proxy materials over the Internet. Accordingly, Patterson-UTI sent a Notice to all of its stockholders as of the record date. The Notice includes instructions on how to access Patterson-UTI’s proxy
+materials over the Internet and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an
+ongoing basis. 
+Choosing to receive your future proxy materials by email will save us the cost of printing and mailing documents to you and
+will support sustainability. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy
+materials by email will remain in effect until you terminate it. 
+If your shares are registered directly in your name with our transfer
+agent, Continental Stock Transfer & Trust Company, you are considered the “stockholder of record” with respect to those shares, and the Notice was sent directly to you. 
+If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial
+owner of shares held in “street name,” and the Notice was forwarded to you by that organization. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account. 
+Whether you are a “stockholder of record” or hold your shares in “street name,” you may direct your vote without attending
+the Meeting in person. 
+If you are a stockholder of record, you may vote by Internet or by telephone by following the instructions in the
+Notice. If you request printed copies of the proxy materials by mail, you may also vote by signing and submitting your proxy card and returning it by mail. You should sign your name exactly as it appears on the proxy card. If you are signing in a
+representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity. 
+If you are the beneficial owner of shares held in street name, you may be eligible to vote your shares electronically over the Internet or by
+telephone by following the instructions in the Notice. If you request printed 
+1 
+copies of the proxy materials by mail, you may also vote by signing the voter instruction card provided by your brokerage firm, bank, broker-dealer, or other similar organization and returning it
+by mail. If you provide specific voting instructions by mail, telephone or the Internet, your shares will be voted by your brokerage firm, bank, broker-dealer, or similar organization as you have directed. 
+Properly submitted proxies received either by mail, Internet, telephone or in person in time to be counted for the Meeting will be voted as you
+have directed in your proxy, unless you revoke your proxy in the manner provided below. As to any matter for which you give no direction in your proxy, your shares will be voted as follows: 
+Ÿ 
+“FOR” the election of all of the nominees to the Board of Directors named in this proxy statement; 
+Ÿ 
+“FOR” the approval of the Patterson-UTI Energy, Inc. 2014 Long-Term Incentive Plan; 
+Ÿ 
+“FOR” the approval, on an advisory basis, of Patterson-UTI’s compensation of its named executive officers; 
+Ÿ 
+“FOR” the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for the fiscal year ending December 31, 2014; and 
+Ÿ 
+“FOR” or “AGAINST” any other proposals that may be properly submitted at the Meeting at the discretion of the persons named in the proxy. 
+If you are a stockholder of record, you may revoke your proxy before the proxy is voted by either: 
+Ÿ 
+submitting a new proxy with a later date, including a proxy submitted by the Internet or by telephone, in time to be counted for the meeting; 
+Ÿ 
+notifying the Secretary of Patterson-UTI in writing before the Meeting that you have revoked your proxy; or 
+Ÿ 
+attending the Meeting and voting in person. 
+If your shares are held in street name, you must
+obtain a proxy executed in your favor from the stockholder of record (that is, your brokerage firm, bank, broker-dealer or similar organization) to be able to vote at the Meeting. 
+The Board of Directors is making this solicitation. Patterson-UTI’s officers and other employees, without compensation other than regular
+compensation, may solicit proxies by mail, email, the Internet, telephone, electronic means and personal interview. Patterson-UTI does not intend to retain a proxy solicitation firm to assist in the solicitation of proxies of stockholders, but may
+do so if circumstances warrant. Patterson-UTI will pay all costs associated with this solicitation. 
+SHARES OUTSTANDING AND VOTING
+RIGHTS 
+Only stockholders of record of Patterson-UTI’s common stock, $.01 par value per share (the “Common Stock”), at
+the close of business on February 20, 2014 are entitled to notice of and to vote at the Meeting or any adjournment or postponement thereof. At the close of business on February 20, 2014, there were 144,230,886 shares of Common Stock issued
+and outstanding. Holders of record of Common Stock on February 20, 2014 will be entitled to one vote per share on all matters to properly come before the Meeting. A list of stockholders entitled to notice of and to vote at the Meeting will be
+made available during regular business hours at the offices of Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067, for the 10 days prior to, and at, the Meeting for examination by any stockholder for any purpose germane to
+the Meeting. 
+A quorum is necessary to transact business at the Meeting. A majority of the shares of Common Stock outstanding on
+February 20, 2014 will constitute a quorum. The shares held by each stockholder who attends the Meeting in person, signs and timely returns the form of proxy or properly votes using the Internet or telephone will be counted for purposes of
+determining the presence of a quorum at the Meeting. 
+“Broker non-votes” will be considered present at the Meeting but will not
+be counted to determine the total number of votes cast. Broker non-votes occur when nominees, such as brokerage firms, banks, broker-dealers, or 
+2 
+other similar organizations holding shares on behalf of the beneficial owners, are prohibited from exercising discretionary voting authority for beneficial owners who have not provided voting
+instructions. If you do not give instructions to your bank, brokerage firm or other agent, the bank, brokerage firm or other agent will nevertheless be entitled to vote your shares of Common Stock in its discretion on “routine matters” and
+may give or authorize the giving of a proxy to vote the shares of Common Stock in its discretion on such matters. The ratification of an independent registered public accounting firm is generally considered a routine matter, whereas the election of
+directors, approval of a long-term incentive plan and advisory approval of executive compensation are not considered routine matters. For these reasons, please promptly vote in accordance with the instructions provided by your brokerage firm, bank,
+broker-dealer, or other similar organization. 
+PROPOSAL NO. 1 
+ELECTION OF DIRECTORS 
+Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.
+Patterson-UTI’s bylaws provide that the affirmative vote of a plurality of the votes cast at the meeting at which a quorum is present is required for the election of directors. Shares as to which a stockholder withholds authority to vote on the
+election of directors and shares as to which a broker indicates that it does not have discretionary authority to vote on the election of directors will not be counted as voting thereon and will not affect the election of the nominees receiving a
+plurality of the votes cast. 
+The enclosed form of proxy provides a means for you to either: 
+Ÿ 
+vote “FOR” the election of the nominees to the Board of Directors listed below, 
+Ÿ 
+withhold authority to vote for one or more of the nominees, or 
+Ÿ 
+withhold authority to vote for all of the nominees. 
+The Board of Directors recommends that
+you vote “FOR” all of the nominees. Unless you give contrary instructions in your proxy, your proxy will be voted “FOR” the election of all of the nominees to the Board of Directors. If any nominee
+should become unable or unwilling to accept nomination or election, the person acting under the proxy will vote for the election of such other person as the Board of Directors may recommend. The Board has no reason, however, to believe that any of
+the nominees will be unable or unwilling to serve if elected. Abstentions will have no effect with respect to the election of directors. A broker non-vote will be counted for purposes of establishing a quorum, but will not be treated as a vote cast
+with respect to the election of directors. This will have the effect of reducing the absolute number of votes cast for the election of directors. 
+There are no arrangements or understandings between any person and any of the directors pursuant to which such director was selected as a
+nominee for election at the Meeting. There are no family relationships among any of the directors or executive officers of Patterson-UTI. 
+Our corporate governance guidelines require that if a director receives in an uncontested election a greater number of “withhold”
+votes than votes cast “for” his or her election, the Nominating and Corporate Governance Committee of the Board of Directors will undertake a prompt evaluation of the appropriateness of the director’s continued service on the Board of
+Directors. In performing this evaluation, the Nominating and Corporate Governance Committee will review all factors it deems relevant, including the stated reasons why votes were withheld, the director’s length of service, his or her past
+contributions to Patterson-UTI and the availability of other qualified candidates. The Nominating and Corporate Governance Committee will then make its recommendation to the Board. The Board of Directors will review the Nominating and Corporate
+Governance Committee’s recommendation and consider such further factors and information as it deems relevant. The Board of Directors will act on the Nominating and Corporate Governance Committee’s recommendation no later than 90 days
+following the date of the stockholders’ meeting. If the Board of Directors determines remedial action is appropriate, the director shall promptly take whatever action is requested by the Board. If the director does not promptly take the
+recommended remedial action or if the Board of Directors determines that immediate resignation is in the best interests of Patterson-UTI and its stockholders, the Board of Directors may accept the director’s resignation that will have been
+tendered as follows. Each director will, as a condition to his or her 
+3 
+appointment or election as a director or nomination as a director, agree in writing to comply with the terms of Patterson-UTI’s majority voting policy and provide to the Board of Directors
+an irrevocable resignation that will be effective upon (i) the failure to receive the required vote at the next annual meeting at which such director faces re-election and (ii) the Board of Directors’ acceptance of such resignation.
+Set forth below is the name, age, position and a brief description of the business experience during at least the past five years of each
+of the members of Patterson-UTI’s Board of Directors, as well as specific qualifications, attributes and skills of such member that were identified by the Nominating and Corporate Governance Committee when concluding such member should be
+nominated to serve on the Board of Directors. Each current member of Patterson-UTI’s Board of Directors is a nominee for election to the Board of Directors. 
+Name 
+Age 
+Position 
+Mark S. Siegel 
+62 
+Chairman of the Board and Director 
+Kenneth N. Berns 
+54 
+Senior Vice President and Director 
+Charles O. Buckner 
+69 
+Director 
+Michael W. Conlon 
+67 
+Director 
+Curtis W. Huff 
+56 
+Director 
+Terry H. Hunt 
+65 
+Director 
+Cloyce A. Talbott 
+78 
+Director 
+When considering whether directors and nominees have the experience, qualifications, attributes and skills,
+taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of Patterson-UTI’s business and structure, the Nominating and Corporate Governance Committee and the Board of Directors focused
+primarily on the information discussed in each of the directors’ individual biographies set forth below. 
+In particular, with regard
+to Mr. Siegel, the Board of Directors considered his broad business and legal experience, as well as his expertise with respect to Patterson-UTI’s business. In addition, the Board considered Mr. Siegel’s demonstrated leadership
+for more than 15 years of both Patterson-UTI and one of its predecessor companies, UTI Energy Corp. (“UTI”). In addition, the Board considered Mr. Siegel’s prior leadership experience in other public companies and in the oil
+services industry, and in numerous other businesses and industries. Mr. Siegel also brings substantial experience and expertise in mergers and acquisitions, capital structure transactions, strategic planning, and board and business management.
+Mr. Siegel’s broad and deep experience and expertise allows him to provide Patterson-UTI with valuable leadership in all areas of its business endeavors. 
+With regard to Mr. Berns, the Board of Directors considered his more than 30 years of financial, mergers and acquisitions and
+transactional experience, including over 15 years in the oil and gas industry. This experience and background, provides perspective on the cyclical nature of the oil and gas industry and allows Mr. Berns to provide valuable direction with
+respect to Patterson-UTI’s financial affairs, corporate transactions and strategic decisions. 
+With regard to Mr. Buckner, the
+Board of Directors considered his past and current service as a director of oil and gas companies, as well as his experience, expertise and background with regard to accounting matters, which includes his role as the former chairman of
+Ernst & Young LLP’s United States energy practice. 
+With regard to Mr. Conlon, the Board of Directors considered his
+more than 40 years of experience handling corporate, securities and mergers and acquisition matters as a lawyer with an international law firm, as well as his service in a number of management roles throughout his tenure at the firm. The Board noted
+Mr. Conlon’s experience in representing numerous public companies, including Patterson-UTI, and other energy services companies, allows him to provide valuable insight on legal, governance and regulatory issues facing Patterson-UTI. 
+With regard to Mr. Huff, the Board of Directors considered his background as an executive of publicly traded oilfield services companies
+and as an owner and manager of a private equity firm and investment firm focused on the oilfield service industry. The Board noted his knowledge and experience in a broad range of oil- 
+4 
+field products and services and his current and historical experience in managing operations in both the United States and internationally. The Board also considered Mr. Huff’s
+expertise and background with regard to accounting and legal matters, which, among other things, provides guidance to Patterson-UTI in assessing its corporate governance structure, policies and procedures. 
+With regard to Mr. Hunt, the Board of Directors considered his over 25 years of experience covering most phases of the upstream oil and
+natural gas industry in the United States and Canada, including the evaluation of exploration and development programs, oil and natural gas production and pipeline operations, and project development and major production facility construction. This
+experience and background provides Patterson-UTI with an invaluable perspective of the oil and natural gas industry and its customers. In addition, Mr. Hunt’s many years of senior executive experience leading natural gas distribution,
+storage and marketing companies provides insight into the management of multi-faceted businesses and the markets for natural gas in North America. 
+With regard to Mr. Talbott, the Board of Directors considered his more than 50 years of experience in the oil and gas industry, more than
+35 of which has been with Patterson-UTI, which provides unique and valuable knowledge of the U.S. land drilling industry and a historical perspective of the cyclical nature of the oil and natural gas industry. 
+Mark S. Siegel — Mr. Siegel has served as Chairman of the Board and as a director of Patterson-UTI since May 2001.
+Mr. Siegel served as Chairman of the Board and as a director of UTI from 1995 to May 2001, when UTI merged with and into Patterson-UTI. Mr. Siegel has been President of REMY Investors & Consultants, Incorporated (“REMY
+Investors”) since 1993. From 1992 to 1993, Mr. Siegel was President, Music Division, Blockbuster Entertainment Corp. From 1988 through 1992, Mr. Siegel was an Executive Vice President of Shamrock Holdings, Inc., a private investment
+company, and Managing Director of Shamrock Capital Advisors, Incorporated. Mr. Siegel holds a Bachelor of Arts degree from Colgate University and a J.D. from the University of California, Berkeley (Boalt Hall) School of Law. 
+Kenneth N. Berns — Mr. Berns has served as Senior Vice President of Patterson-UTI since April 2003 and as a director
+of Patterson-UTI since May 2001. Mr. Berns served as a director of UTI from 1995 to May 2001. Mr. Berns has been an executive with REMY Investors since 1994. Mr. Berns holds a Bachelors Degree in Business Administration from San Diego
+State University and a Masters Degree in Taxation from Golden Gate University. 
+Charles O. Buckner — Mr. Buckner
+has served as a director of Patterson-UTI since February 2007. Mr. Buckner, a private investor, retired from the public accounting firm of Ernst & Young LLP in 2002 after 35 years of service in a variety of client service and
+administrative roles, including chairmanship of Ernst & Young’s United States energy practice. He presently serves as a director of Energy Partners, Ltd., a publicly held company with oil and natural gas exploration and production on
+the continental shelf in the Gulf of Mexico. Mr. Buckner served as a director of Global Industries, Ltd., a marine construction services company with global operations from 2010 to 2011, Gateway Energy Corporation, a publicly held oil and gas
+pipeline company from 2008 to 2010, Horizon Offshore, Incorporated, a marine construction services company for the offshore oil and gas industry from 2003 to 2007, and Whittier Energy Corporation, a publicly held company with domestic onshore oil
+and natural gas exploration and production from 2003 to 2007. Mr. Buckner is a Certified Public Accountant and holds a Bachelor of Business Administration from the University of Texas and a Masters of Business Administration from the University
+of Houston. 
+Michael W. Conlon — Mr. Conlon has served as a director of Patterson-UTI since September 2012.
+Mr. Conlon retired as a partner of the law firm, Fulbright & Jaworski L.L.P., in January 2012 after 40 years with the firm. Mr. Conlon specialized in corporate, securities and merger and acquisition matters. Mr. Conlon was
+partner-in-charge of the firm’s Houston office from 2007 to 2011, was co-partner-in-charge from 2001 to 2007 and partner-in-charge of its Washington, D.C. office from 1992 to 1998. Mr. Conlon currently acts as Secretary to the Board of
+Directors of The Men’s Wearhouse Inc., a specialty retailer of men’s apparel and an NYSE listed company. Mr. Conlon holds a Bachelor of Arts degree in Economics from Catholic University of America, where he graduated magna cum laude,
+and a Juris Doctorate from the Duke University School of Law, where he graduated as a member of the Order of the Coif. 
+5 
+Curtis W. Huff — Mr. Huff has served as a director of Patterson-UTI
+since May 2001 and served as a director of UTI from 1997 to May 2001. Mr. Huff is the co-founder and advisor of Intervale Capital, an oilfield service private equity firm that Mr. Huff created in 2006. Mr. Huff is also the President
+and Chief Executive Officer of Freebird Investments LLC, a private family office investment company that was created in October 2002. Mr. Huff also serves as Chief Executive Officer of Impact Fluid Solutions LLC, which provides drilling and
+production solutions for oil and gas operators and fluid companies. Mr. Huff served as the President and Chief Executive Officer of Grant Prideco, Inc., a provider of drill pipe and other drill stem products, from February 2001 to June 2002.
+From January 2000 to February 2001, Mr. Huff served as Executive Vice President, Chief Financial Officer and General Counsel of Weatherford International, Inc., one of the world’s largest international oilfield services companies. He
+served as Senior Vice President and General Counsel of Weatherford from May 1998 to January 2000. Mr. Huff began his professional career in 1983 with the law firm of Fulbright & Jaworski L.L.P. where he specialized in corporate,
+securities and merger and acquisition matters. Mr. Huff was made a partner in that firm in 1989 where he served until 1998 when he joined Weatherford. Mr. Huff holds a Bachelor of Arts degree and J.D. from the University of New Mexico,
+where he graduated as a member of the Order of the Coif and cum laude, and a Masters of Law from New York University School of Law. 
+Terry H. Hunt — Mr. Hunt has served as a director of Patterson-UTI since April 2003 and served as a director of UTI
+from 1994 to May 2001. Mr. Hunt is an energy consultant. Mr. Hunt served as Senior Vice President — Strategic Planning of PPL Corporation, an international energy and utility holding company, from 1998 to 2000. Mr. Hunt served as
+the President and Chief Executive Officer of Penn Fuel Gas, Inc., a Pennsylvania-based natural gas and propane distribution company, from 1992 to 1999. Previously, Mr. Hunt was President of Carnegie Natural Gas and Apollo Gas Company, both
+Appalachian natural gas distribution companies. He also previously served in senior management positions in natural gas project and venture development, oil and natural gas exploration and development evaluation and operations and major production
+facilities construction with Texas Oil & Gas Corp. and Atlantic Richfield. Mr. Hunt holds a Bachelor of Engineering degree from the University of Saskatchewan, Canada and a Masters of Business Administration from Southern Methodist
+University. 
+Cloyce A. Talbott — Mr. Talbott has served as a director of Patterson-UTI since its incorporation
+in 1978. Mr. Talbott co-founded Patterson-UTI and has served in various capacities, including as its Chief Executive Officer from 1983 until his retirement from that position in September 2007. He also served as Chairman of the Board from 1983
+to May 2001. Mr. Talbott was employed by Patterson-UTI as a consultant from September 2007 through September 2012. Mr. Talbott holds a Bachelor of Science degree in petroleum engineering from Texas Tech University. 
+Board Leadership Structure, Lead Director and Board Role in Risk Oversight 
+The Board evaluates its leadership structure and role in risk oversight on an ongoing basis. The decision on whether to combine or separate the
+Chairman and Chief Executive Officer (“CEO”) role is determined on the basis of what the Board considers to be best for Patterson-UTI at any given point in time. Patterson-UTI’s current Board leadership structure separates the role of
+Chairman and CEO. 
+The Board also believes part of an effective Board leadership structure is to have a lead independent director, the
+“Lead Director.” The Board has appointed Mr. Huff as the Lead Director. The independent directors meet regularly in executive sessions at which only independent directors are present, and the Lead Director chairs those sessions. The
+Lead Director serves as a liaison between the Chairman and the independent directors, consults with regard to Board and agenda items, and works with the chairpersons of Board committees as appropriate. 
+The Nominating and Corporate Governance Committee and the Board currently believe that the Board’s leadership structure, which includes
+the separation of the role of CEO and Chairman and the appointment of an independent Lead Director, is appropriate because it, among other things, provides for sufficient independence between the Board and management and for an independent director
+who provides board member leadership. 
+The Board has adopted Corporate Governance Guidelines, which can be accessed electronically in the
+“Governance” section of Patterson-UTI’s website at www.patenergy.com . The Guidelines describe one of the Board’s primary responsibilities as overseeing Patterson-UTI’s processes for assessing and managing risks. The
+6 
+Board discharges this responsibility, in part, through regular inquiries from the Chairman of the Board and/or the Lead Director to management, periodic communications from management to the
+Board of Directors of particular risks and events, and discussions during Board meetings with and without management of general and specific risks to Patterson-UTI. 
+Meetings and Committees of the Board of Directors 
+The Board of Directors met ten times during the year ended December 31, 2013. Each director attended, in person or by telephone, at least
+75% of the aggregate of all meetings held by the Board during his service and meetings of each committee on which such director served. A majority of the members of the Board of Directors are independent within the meaning of the Nasdaq Stock
+Market, Inc. (“Nasdaq”) listing standards. Specifically, the Board has determined that Messrs. Buckner, Conlon, Huff and Hunt are independent within the meaning of the Nasdaq listing standards. In reaching this conclusion, the Board
+considered that Mr. Conlon retired in January 2012 as partner of a law firm that has provided legal services to the Company. The Board has determined that these transactions are not material to such firm, Patterson-UTI or Mr. Conlon and
+that such transactions do not affect his independence under applicable rules and regulations. 
+The Board of Directors has established four
+standing committees: an Executive Committee, an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. 
+The Executive Committee, which currently is composed of Messrs. Siegel, Talbott and Berns, has the authority, to the extent permitted by
+applicable law, to act for the Board in all matters arising between regular or special meetings of the Board of Directors. 
+The Audit
+Committee members are Messrs. Buckner (chairman), Huff and Hunt, each of whom is independent within the meaning of applicable rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and within the meaning of the
+Nasdaq listing standards. The Audit Committee oversees management’s conduct of Patterson-UTI’s accounting and financial reporting process, including review of the financial reports and other financial information provided by Patterson-UTI
+to the public and government and regulatory bodies, Patterson-UTI’s system of internal accounting, Patterson-UTI’s financial controls, and the annual independent audit of Patterson-UTI’s financial statements and internal control over
+financial reporting. The Audit Committee also oversees compliance with Patterson-UTI’s codes of conduct and ethics and with legal and regulatory requirements. The Board has determined that Messrs. Buckner and Huff are “audit committee
+financial experts” within the meaning of applicable SEC rules. The Audit Committee selects the independent registered public accounting firm to audit Patterson-UTI’s books and records and considers and acts upon accounting matters as they
+arise. The Board of Directors has adopted a written charter for the Audit Committee. The Audit Committee held seven meetings during the year ended December 31, 2013. Please see “Audit Committee Report” elsewhere in this proxy
+statement. 
+The Compensation Committee members are Messrs. Hunt (chairman), Buckner, Conlon and Huff, each of whom is independent as
+defined in the Nasdaq listing standards. Among other things, the Compensation Committee sets and administers the policies that govern the compensation of executive officers and directors of Patterson-UTI. The Board of Directors has adopted a written
+charter for the Compensation Committee. The Compensation Committee held seven meetings during the year ended December 31, 2013. Please see “Compensation Discussion and Analysis” and “Compensation Committee Report” elsewhere
+in this proxy statement for further information about the Compensation Committee. 
+The Nominating and Corporate Governance Committee
+members are Messrs. Huff (chairman), Buckner and Conlon, each of whom is independent as defined in the Nasdaq listing standards. The purpose of the Nominating and Corporate Governance Committee is to identify individuals qualified to become Board
+members, to recommend for selection by the Board director nominees for the next annual meeting of stockholders, to review Patterson-UTI’s Code of Business Conduct, to develop and continually make recommendations with respect to the best
+corporate governance principles and to oversee the evaluation of the Board and management. The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee
+held one meeting during the year ended December 31, 2013. 
+7 
+On behalf of the Board, the Nominating and Governance Committee considers director nominees
+recommended by Patterson-UTI’s stockholders if the recommendations are made in accordance with all legal requirements, including applicable provisions of Patterson-UTI’s restated certificate of incorporation and bylaws. In accordance with
+Patterson-UTI’s bylaws, in addition to any other applicable requirements, nominations of persons for election to the Board may be made at a meeting of stockholders only by or at the direction of the Board or by a stockholder who is a
+stockholder of record on the date of the giving of the notice provided for below and on the record date for the determination of stockholders entitled to vote at such annual meeting and gives timely notice of such nomination in writing to the
+Secretary of Patterson-UTI. To be timely with respect to the 2015 annual meeting of stockholders, a stockholder’s notice must be delivered to or mailed and received at Patterson-UTI’s principal executive offices not earlier than
+December 15, 2014 and not later than January 14, 2015; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after April 17, 2015, notice by the stockholder must be
+received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or public disclosure of the annual meeting date was made, whichever occurs first. 
+A stockholder’s notice to the Secretary of Patterson-UTI shall set forth: 
+Ÿ 
+as to each person whom the stockholder proposes to nominate for election or re-election as director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of
+directors, or is otherwise required, in each case pursuant to Regulation 14A promulgated under the Exchange Act, or any successor regulation thereto, 
+Ÿ 
+the name and record address of the stockholder proposing such nomination, 
+Ÿ 
+the class and number of shares of Patterson-UTI that are beneficially owned by the stockholder, 
+Ÿ 
+a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination or nominations are to be
+made by such stockholder, and 
+Ÿ 
+a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in the notice. 
+Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if
+elected. 
+The Nominating and Corporate Governance Committee determines qualification criteria and procedures for the identification and
+recruitment of candidates for election to serve as directors of Patterson-UTI. The Nominating and Corporate Governance Committee relies on the knowledge and relationships of Patterson-UTI and its officers and directors, as well as third parties when
+it deems appropriate, to identify and evaluate nominees for director, including nominees recommended by stockholders. In evaluating a nominee for director, the Nominating and Corporate Governance Committee considers the nominee’s skills,
+expertise, industry and other knowledge, personal and professional ethics, integrity and values, sound business judgment and willingness to commit sufficient time to the Board and be committed to representing the long-term interests of
+Patterson-UTI’s stockholders. Although the Nominating and Corporate Governance Committee does not have a stand-alone policy with regard to consideration of diversity in identifying director nominees, it considers diversity in professional
+background, experience, expertise (including as to financial matters) and perspective (including as to age, gender and ethnicity) with respect to the Board of Directors composition as a whole when evaluating a director nominee. 
+Succession Planning 
+The Board of
+Directors oversees processes and procedures to provide continuity of well-qualified executive leadership and to assess whether such leadership possesses the skill and talent to execute Patterson-UTI’s long term business strategies. The Board of
+Directors reviews the succession plan for the Chief Executive Officer and the senior executives tailored to reflect the Board’s standards for executive leadership and Patterson-UTI’s business strategy and vision. The succession plan
+addresses (i) both current and long term needs of Patterson-UTI and establishes a process for identifying and assessing potential internal candidates; (ii) periodic review and 
+8 
+assessment of readiness: (iii) contingency planning for temporary absences of the Chief Executive Officer due to disability or other unexpected event; and (iv) long term continuity
+planning for succession to the Chief Executive Officer position. As evidence of the benefits of the Board’s succession planning efforts, Patterson-UTI achieved a successful management transition in 2012 by hiring a new Chief Operating Officer,
+Mr. Hendricks, who later that year became President and Chief Executive Officer. 
+Political Contributions 
+Patterson-UTI has a policy prohibiting the contribution of company funds to political parties or organizations or to candidates for any public
+office or to influence the general public, or segments thereof, with respect to public elections or referenda. Patterson-UTI participates in certain trade organizations with purposes that include enhancement of the public image of our industry,
+education about the industry and issues that affect the industry and industry best practices and standards. Many of the trade organizations also engage in legislative or political activity related to matters that affect the industry as a whole and
+not a specific company. Patterson-UTI, as one of many members in various trade associations, does not direct the legislative activities of any trade organization of which it is a member. 
+Sustainability 
+Patterson-UTI is
+committed to long-term sustainability with respect to the environment, our society and our long-term corporate success. A copy of Patterson-UTI’s sustainability commitment can be accessed electronically in the “Values” section of the
+Patterson-UTI website at www.patenergy.com and in print to any stockholder who requests it from the Secretary of Patterson-UTI. 
+Communication
+with the Board and its Independent Members 
+Persons may communicate with the Board, or directly with its Chairman, Mr. Siegel, by
+submitting such communication in writing in care of Chairman of the Board of Directors, Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067. Persons may communicate with the independent members of the Board by submitting such
+communication in writing to the Nominating and Corporate Governance Committee of the Board of Directors of Patterson-UTI Energy, Inc., 450 Gears Road, Suite 500, Houston, Texas 77067. 
+Although Patterson-UTI does not have a formal policy regarding attendance by members of the Board at its annual meetings of stockholders,
+directors are invited to attend annual meetings of Patterson-UTI stockholders. All of the directors attended the 2013 annual meeting of stockholders, with two directors attending in person and five directors attending via telephone. 
+Corporate Governance Documents Available on Patterson-UTI’s Website 
+Copies of each of the following documents can be accessed electronically in the “Governance” section of the Patterson-UTI website at
+www.patenergy.com and in print to any stockholder who requests them from the Secretary of Patterson-UTI: 
+Ÿ 
+Audit Committee Charter; 
+Ÿ 
+Compensation Committee Charter; 
+Ÿ 
+Nominating and Corporate Governance Committee Charter; 
+Ÿ 
+Corporate Governance Guidelines; 
+Ÿ 
+Code of Business Conduct for its employees, officers and directors; and 
+Ÿ 
+Code of Business Conduct and Ethics for Senior Financial Executives. 
+9 
+PROPOSAL NO. 2 
+APPROVAL OF THE PATTERSON-UTI ENERGY, INC. 
+2014 LONG-TERM INCENTIVE PLAN 
+General
+On February 21, 2014, Patterson-UTI’s Board of Directors adopted the Patterson-UTI Energy, Inc. 2014 Long-Term Incentive
+Plan (the “2014 Plan”), subject to approval by Patterson-UTI’s stockholders. In addition, on the same date, the Board of Directors approved, subject to and effective upon the approval by the stockholders of the 2014 Plan, the
+termination of any future grants under all existing equity plans of Patterson-UTI. Participation in the Company’s long-term incentive plan is broad based, with more than 300 employees participating in 2013. 
+The primary objective of the 2014 Plan is to promote stockholder value by providing appropriate incentives to certain employees, consultants,
+advisors, officers and directors of Patterson-UTI and its subsidiaries. With respect to awards to participants other than directors, the 2014 Plan is administered by the Compensation Committee of Patterson-UTI’s Board of Directors, which
+comprises exclusively non-employee independent directors. With respect to awards to directors, the 2014 Plan is administered by the Board of Directors. The 2014 Plan provides for the granting of incentive and non-incentive stock options, as well as
+other awards, such as tandem and freestanding stock appreciation rights, restricted stock awards, other stock unit awards, performance shares, performance units and dividend equivalents. Certain awards under the 2014 Plan may be paid in cash or
+Common Stock, as determined by the Compensation Committee. The Compensation Committee has exclusive authority to select the participants to whom awards may be granted, and to determine the type, size and terms of each award, subject to the
+limitations set forth in the 2014 Plan. The Compensation Committee will also make all determinations that it decides are necessary or desirable in the interpretation and administration of the 2014 Plan. In addition, the Compensation Committee may,
+if consistent with applicable rules, regulations and NASDAQ requirements, delegate to a committee of one or more directors or to one or more executive officers the right to grant, cancel and suspend awards to employees who are not directors or
+executive officers of Patterson-UTI. 
+As of February 26, 2014, the equity awards outstanding under the existing Patterson-UTI equity
+plans, and their respective features, were as follows (1): 
+Options outstanding 
+7,129,895 
+Full-value awards outstanding 
+2,061,352 
+Weighted-average exercise price of outstanding options 
+$ 
+21.39 
+Weighted-average remaining contractual term of outstanding options 
+4.99 years 
+(1) 
+No awards have been granted under the 2014 Plan, and this table excludes the 9.1 million shares requested in this proposal. 
+The following summary of the material features of the 2014 Plan is qualified by reference to the copy of the 2014 Plan that is attached as
+Annex A to this proxy statement. 
+General Terms 
+Ÿ 
+The aggregate number of shares of Common Stock authorized for grant under the 2014 Plan is 9,100,000, reduced by the number of shares that are subject to awards granted under existing equity plans of Patterson-UTI
+during the period commencing on January 1, 2014 and ending on the date the 2014 Plan is approved by the stockholders. Shares that are subject to options or SARs count as one share of Common Stock against the aggregate number. Shares that are
+subject to other awards count as two shares of Common Stock against the aggregate number. 
+Ÿ 
+Generally, if an award granted under the 2014 Plan or the existing equity plans of Patterson-UTI 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
+2014 Plan. Any shares of 
+10 
+Common Stock that again become available for grant under the 2014 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. 
+Ÿ 
+If any shares subject to an award are used to exercise options, are not issued upon the settlement of a SAR, or are withheld by the Company for income or employment taxes on exercise of an option or SAR, such shares
+will not become available for grant under the 2014 Plan. 
+Ÿ 
+With respect to awards to participants other than directors, the 2014 Plan is administered by the Compensation Committee of Patterson-UTI’s Board of Directors, which comprises exclusively non-employee independent
+directors. With respect to awards to directors, the 2014 Plan is administered by the Board of Directors. 
+Ÿ 
+Directors, employees, including officers, consultants and advisors are eligible for awards under the 2014 Plan. 
+Ÿ 
+The 2014 Plan provides for awards of non-qualified stock options (“NQSOs”), Incentive Stock Options (“ISOs”), tandem and freestanding stock appreciation rights (“SARs”), restricted stock
+awards, other stock unit awards, performance awards and dividend equivalents. 
+Ÿ 
+The Board of Directors, at any time, may amend the terms of the 2014 Plan, subject to the stockholder approval requirements of the NASDAQ Stock Market and other rules and regulations applicable to Patterson-UTI.
+Ÿ 
+Under the 2014 Plan, no participant may be granted options or SARs during any 12-month period with respect to more than 1,000,000 shares of Common Stock or restricted stock, performance awards denominated in shares
+and/or other stock unit awards that are denominated in shares in any 12-month period with respect to more than 500,000 shares. In addition to the foregoing limits, the maximum dollar value payable to any participant in any 12-month period with
+respect to performance awards denominated in cash 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 value
+determined on the date of grant in excess of $500,000. 
+Ÿ 
+Except in connection with certain corporate transactions involving Patterson-UTI, the terms of outstanding options or SARs may not be amended to reduce the exercise price of outstanding options or SARs and outstanding
+options and SARs may not be cancelled in exchange for cash, other awards or options or SARs with an exercise price that is less than the exercise price of the original options or SARs without stockholder approval. 
+Ÿ 
+Subject to the exceptions in this bullet, no award and no shares subject to other stock unit awards 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 Compensation 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); provided that certain administrative conditions are met.
+Notwithstanding the foregoing, no ISOs granted under the 2014 Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, all ISOs granted to a
+participant under the 2014 Plan shall be exercisable during his or her lifetime only by such participant. 
+Options
+Ÿ 
+The vesting schedule for options is set by the Compensation Committee; however, options may not fully vest sooner than one year from the date of grant for directors and three years from the date of grant for employees,
+except for certain limited exceptions involving substitute awards and newly hired employees. 
+11 
+Ÿ 
+The term of options is set by the Compensation Committee, but may be no longer than 10 years. 
+Ÿ 
+The exercise price for options may be paid in cash, with previously acquired shares of Common Stock, or by other means approved by the Compensation Committee. 
+Ÿ 
+All options granted under the 2014 Plan are granted with an exercise price equal to or greater than the fair market value of the Common Stock at the time the option is granted. 
+SARs 
+Ÿ 
+SARs may be granted alone or in connection with the grant of any option. 
+Ÿ 
+The vesting schedule for SARs is set by the Compensation Committee; however, SARs may not fully vest sooner than one year from the date of grant for directors and three years from the date of grant for employees, except
+for certain limited exceptions involving substitute awards and newly hired employees. 
+Ÿ 
+SARs granted alone may be exercised at such times and be subject to such terms and conditions as the Compensation Committee may impose. SARs that are granted in tandem with options may be exercised only on the surrender
+of the right to purchase an equivalent number of shares under the related options and may be exercised only with respect to the shares of Common Stock for which the related options are then exercisable. 
+Ÿ 
+The term of SARs under the 2014 Plan may be no longer than 10 years. 
+Ÿ 
+A SAR entitles a participant to surrender any then exercisable portion of the SAR and, if applicable, the related option, in exchange for an amount equal to the product of (1) the excess of the fair market value of
+a share of Common Stock on the date of surrender over the fair market value of a share of Common Stock on the date that the SAR was granted, or, if the SAR is related to an option, the per share exercise price of the option, multiplied by
+(2) the number of shares of Common Stock subject to the SAR and being surrendered. Payment on exercise of a SAR shall be, in the discretion of the Compensation Committee, shares of Common Stock, cash, or a combination of shares of Common Stock
+and cash. 
+Ÿ 
+All SARs granted under the 2014 Plan are granted with an exercise price equal to or greater than the fair market value of the Common Stock at the time the SAR is granted. 
+Restricted Stock Awards 
+Ÿ 
+The Compensation Committee determines the material terms of the restricted stock awards, including the price, if any, to be paid by the recipient, and the vesting schedule and conditions, which may include the
+attainment of specified performance objectives described below. 
+Ÿ 
+A restricted stock award that is subject solely to continued employment restrictions of employees of Patterson-UTI may not fully vest sooner than three years from the date of grant, except for certain limited exceptions
+involving substitute awards and newly hired employees. Notwithstanding the foregoing, five percent of the shares available for grant under the 2014 Plan will not be subject to this restriction. 
+Ÿ 
+Beginning on the date of grant, a participant receiving a restricted stock award will become a stockholder of Patterson-UTI with respect to all shares of Common Stock subject to the restricted stock award, which, unless
+the Committee determines otherwise at the time of the grant, includes the right to vote the shares and receive dividends in respect of the shares. 
+Other Stock Units 
+Ÿ 
+The Compensation Committee may grant other stock unit awards under the 2014 Plan, which have a value equal to an identical number of shares of Common Stock. Other stock unit awards may also be a form of payment for
+other awards granted under the 2014 Plan and other earned cash-based incentive compensation. 
+Ÿ 
+The payment of other stock units may be in cash, shares of Common Stock, other property, or any combination of the foregoing, and may be made in a lump
+sum or, in accordance with procedures established by 
+12 
+the Compensation Committee, on a deferred basis subject to the requirements of section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). 
+Ÿ 
+Other stock unit awards that are subject solely to continued employment restrictions of employees of Patterson-UTI may not fully vest sooner than three years from the date of grant, except for certain limited exceptions
+involving substitute awards and newly hired employees. Notwithstanding the foregoing, five percent of the shares available for grant under the 2014 Plan will not be subject to this restriction. 
+Dividend Equivalent Rights 
+Ÿ 
+The Compensation Committee may grant dividend equivalent rights either in connection with awards or as separate awards under the 2014 Plan. Amounts payable in respect of dividend equivalent rights may be payable
+currently or, if applicable, deferred until the lapsing of restrictions on the dividend equivalent rights or until the vesting, exercise, payment, settlement or other lapse of restrictions on the award to which the dividend equivalent rights relate.
+Ÿ 
+No award of options or SARs will have dividend equivalent rights. 
+Ÿ 
+Dividend equivalent rights on performance awards will be subject to the same performance conditions as the underlying award. 
+Performance Awards 
+Ÿ 
+Performance awards are payable in cash, shares of Common Stock, other property, or a combination of the foregoing, and may be paid in a lump sum, in installments, or on a deferred basis in accordance with procedures
+established by the Compensation Committee. 
+Ÿ 
+The Compensation Committee determines the material terms of the performance awards, including a performance period over which the performance goal of such award shall be measured, which must be at least 12 months and no
+longer than five years. 
+Deferrals 
+Ÿ 
+The Compensation Committee may require or permit a participant to defer the receipt of cash or shares pursuant to any awards under the 2014 Plan. Any deferral permitted under the 2014 Plan will be administered in a
+manner that is intended to comply with Section 409A of the Code. 
+Effect of Certain Transactions and Change of Control 
+The Compensation Committee may provide in the terms of an award under the 2014 Plan that, on a change of control (as defined in the 2014 Plan),
+Ÿ 
+options and SARs outstanding on the date of the change of control immediately vest; 
+Ÿ 
+options and SARs outstanding on the date of the change of control may be cancelled and terminated without payment if the fair market value of a share of Common Stock on the date of the change of control is less than the
+per share exercise price of the option or SAR; 
+Ÿ 
+restrictions and deferral limitations on restricted stock lapse and the restricted stock becomes free of all restrictions and limitations and becomes fully vested; 
+Ÿ 
+all performance awards shall be considered to be earned and payable and any deferral or other restriction shall lapse and the performance awards shall be immediately settled or distributed; and 
+Ÿ 
+such other additional benefits as the Compensation Committee deems appropriate shall apply. 
+The Compensation Committee, in its discretion, may determine that, upon a change of control, each option and SAR shall terminate within a
+specified period of days after notice to the participant, or that with respect to such option or SAR each participant shall receive an amount equal to the excess of the fair market value of such share immediately prior to the occurrence of the
+change of control over the exercise price per share of such 
+13 
+option or SAR. The payment may be made in one or more kinds of stock or property or a combination of stock or property. Further, in the event of changes in the capital or corporate structure of
+Patterson-UTI due to events such as recapitalization, stock split, merger, spin-off or similar transaction, that affect the shares of Common Stock, the Compensation Committee, in its sole discretion, may determine that it is equitable or appropriate
+to make adjustments or substitutions to the 2014 Plan or outstanding options and awards, including to the number, class, kind and option or exercise price or securities subject to awards. 
+Performance Criteria 
+If the Compensation
+Committee determines that section 162(m) (see “Federal Income Tax Consequences — Performance Based Compensation” below) of the Code applies (or is likely to apply) to a restricted stock award, performance award or other stock unit
+award, the lapsing of restrictions on the award and the distribution of cash, shares or other property pursuant to such award, shall be subject to the achievement of one or more objective performance goals established by the Compensation Committee,
+which shall be based on attaining specified levels in one or more areas, such as: net sales; revenue growth; pre-tax income before allocation of corporate overhead and bonus; earnings per share; operating income or net income; return on
+stockholders’ equity; attainment of strategic and operational initiatives; appreciation in and/or maintenance of the price of the Common Stock or other publicly-traded securities of Patterson-UTI; market share; gross profits; earnings before
+taxes or before interest and taxes or before interest, taxes, depreciation, depletion and amortization; comparisons with various stock market indices; improvement in or attainment of expense levels or working capital levels; cash margins; safety
+records; and rig utilization and rig count growth. Performance goals may be measured solely by reference to Patterson-UTI’s performance or the performance of a subsidiary, division, business segment or business unit of Patterson-UTI, or based
+upon the relative performance of other companies or upon comparisons of any of the indicators of performance relative to other companies, in each case as specified by the Compensation Committee in the award. The Compensation Committee also may
+adjust performance goals to reflect the impact of specified events, occurrences or transactions, accounting or tax law changes or other extraordinary or nonrecurring events. 
+Awards Currently Contemplated Under the 2014 Plan 
+The Compensation Committee currently contemplates that on January 1, 2015, it will grant to each non-employee director of Patterson-UTI
+(1) 3,000 shares of restricted stock subject to one-year vesting (subject to acceleration in certain limited situations, including a change of control), and (2) an option to purchase 10,000 shares of Common Stock at an exercise price equal
+to the closing price of the Common Stock on the grant date. The option would have a 10-year term, vest after one year (subject to acceleration in certain limited situations, including a change of control), and contain a right to exercise for three
+years following cessation of the holder as a director (but not beyond the 10-year term). The closing price of the Common Stock on February 26, 2014 was $29.21 per share. 
+14 
+The following table sets forth information relating to the benefits and amounts that would be
+received by or allocated to the executive officers named in the Summary Compensation Table and directors under the 2014 Plan, to the extent that such benefits or amounts are determinable as of the date of this proxy statement: 
+NEW PLAN BENEFITS 
+Patterson-UTI Energy, Inc. 2014 Long-Term Incentive Plan (1) 
+Number of Units 
+Name and Position 
+Dollar 
+Value ($) 
+Shares of 
+Restricted Stock 
+Option to Purchase 
+Common Stock 
+Mark S. Siegel, Chairman of the Board and Director 
+— 
+— 
+— 
+William Andrew Hendricks, Jr., President and Chief Executive Officer 
+— 
+— 
+— 
+John E. Vollmer III, Senior Vice President — Corporate Development, Chief Financial Officer & Treasurer 
+— 
+— 
+— 
+Kenneth N. Berns, Senior Vice President and Director 
+— 
+— 
+— 
+James M. Holcomb, President — Patterson-UTI Drilling Company LLC 
+— 
+— 
+— 
+Executive Group 
+— 
+— 
+— 
+Non-Executive Director Group 
+n/a 
+(2) 
+15,000 
+50,000 
+Non-Executive Officer Employee Group 
+— 
+— 
+— 
+(1) 
+No awards have been made pursuant to the 2014 Plan because the 2014 Plan remains subject to stockholder approval. Upon approval of the 2014 Plan by the stockholders of Patterson-UTI, it is contemplated that the
+respective awards set forth in this table will be granted as described above on January 1, 2015. Additional amounts ultimately allocated under the 2014 Plan are not determinable at this time. Likewise, it is not possible to provide information
+about specific additional grants of awards that may be made under the 2014 Plan. 
+(2) 
+The dollar value of an award granted under the 2014 Plan will be equal to the Fair Market Value, as that term is defined in the 2014 Plan, of the Company’s Common Stock on the date of such award. As such, the
+dollar amount of any stock award is not currently determinable. 
+Federal Income Tax Consequences 
+The following discussion summarizes certain federal income tax consequences of the issuance and receipt of options and awards pursuant to the
+2014 Plan under the law as in effect on the date of this proxy statement. The rules governing the tax treatment of such options and awards are quite technical, so the following discussion of tax consequences is necessarily general in nature and is
+not complete. In addition, statutory provisions are subject to change, as are their interpretations, and their application may vary in individual circumstances. This summary does not purport to cover all federal employment tax or other federal tax
+consequences associated with the 2014 Plan, nor does it address state, local, or non-U.S. taxes. 
+ISOs. In
+general, a participant will not recognize income upon the grant or exercise of an ISO. However, if the participant is subject to federal “alternative minimum tax,” the exercise of an ISO will be treated essentially the same as a NQSO for
+purposes of the alternative minimum tax (see NQSOs, SARs, Performance Award, and Other Stock Unit Award below). Subject to certain exceptions for death or disability, if a participant exercises an ISO more than three months after termination of
+employment, the exercise of the option will be taxed as the exercise of a NQSO, as described below. 
+The general rule is that gain or loss
+from the sale or exchange of shares acquired on the exercise of an ISO will be treated as capital gain or loss. However, if shares acquired upon the exercise of an ISO are disposed of within two years from the date of grant or within one year after
+exercise (a “disqualifying disposition”), the participant generally will recognize ordinary income in the year of disposition in an amount equal to the fair market value of the shares at the time of exercise (or, if less, the amount
+realized on the disposition of the shares) 
+15 
+less the exercise price. Any further gain (or loss) realized by the participant generally will be taxed as short- or long-term capital gain (or loss) depending on the holding period. 
+NQSOs, SARs, Performance Award, and Other Stock Unit Award . A participant generally is not required to recognize
+income on the grant of a NQSO, a SAR, performance award or other stock unit award. Instead, ordinary income generally is required to be recognized on the date the NQSO or SAR is exercised, or in the case of performance awards or other stock unit
+awards, upon the issuance of shares and/or the payment of cash pursuant to the terms of the award. In general, the amount of ordinary income required to be recognized is, (a) in the case of a NQSO or a SAR, an amount equal to the excess, if
+any, of the fair market value of the shares on the exercise date over the exercise price, and (b) in the case of performance awards or other stock unit awards, the amount of cash and/or the fair market value of any shares received in respect
+thereof, plus the amount of taxes withheld from such amounts. 
+Restricted Common Stock . Unless a participant
+who receives an award of restricted Common Stock makes an election under section 83(b) of the Code as described below, the participant generally is not required to recognize ordinary income on the award of restricted Common Stock. Instead, on the
+date the shares vest (i.e., become transferable and no longer subject to forfeiture), the participant will be required to recognize ordinary income in an amount equal to the excess, if any, of the fair market value of the shares on such date over
+the amount, if any, paid for such shares. If a section 83(b) election has not been made, any dividends received with respect to restricted Common Stock that are subject at that time to a risk of forfeiture or restrictions on transfer generally will
+be treated as compensation that is taxable as ordinary income to the recipient. If a participant makes a section 83(b) election within 30 days of the date of transfer of the restricted Common Stock, the participant will recognize ordinary income on
+the date the shares are awarded. The amount of ordinary income required to be recognized is an amount equal to the excess, if any, of the fair market value of the shares on the date of award over the amount, if any, paid for such shares. In such
+case, the participant will not be required to recognize additional ordinary income when the shares vest. However, if the shares are later forfeited, a loss can only be recognized up to the amount the participant paid, if any, for the shares. 
+Gain or Loss on Sale or Exchange of Shares . In general, gain or loss from the sale or exchange of shares granted
+or awarded under the 2014 Plan will be treated as capital gain or loss, provided that the shares are held as capital assets at the time of the sale or exchange. However, if certain holding period requirements are not satisfied at the time of a sale
+or exchange of shares acquired upon exercise of an ISO (a “disqualifying disposition,” see above), a participant generally will be required to recognize ordinary income upon such disposition. 
+Deductibility by Patterson-UTI . To the extent that a participant recognizes ordinary income in the circumstances
+described above, Patterson-UTI or the subsidiary for which the participant performs services will be entitled to a corresponding deduction, provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary
+business expense, is not an “excess parachute payment” within the meaning of section 280G of the Code and is not disallowed by the $1,000,000 limitation on certain executive compensation under section 162(m) of the Code (see Performance
+Based Compensation and Parachute Payments below). 
+Performance Based Compensation . In general, under section
+162(m) of the Code, remuneration paid by a public corporation to its chief executive officer or any of its other top three named executive officers other than its chief financial officer, ranked by pay, is not deductible to the extent it exceeds $1
+million for any year. Taxable payments or benefits under the 2014 Plan may be subject to this deduction limit. However, under section 162(m), qualifying performance-based compensation, including income from stock options and other performance-based
+awards that are made under stockholder approved plans and that meet certain other requirements, is exempt from the deduction limitation. The 2014 Plan has been designed so that the Compensation Committee in its discretion may grant qualifying exempt
+performance-based awards under the 2014 Plan. 
+Parachute Payments . Under the so-called “golden
+parachute” provisions of the Code, the accelerated vesting of stock options and benefits paid under other awards in connection with a change of control of a corporation may be required to be valued and taken into account in determining whether
+participants have received compensatory payments, contingent on the change of control, in excess of certain limits. If these limits are exceeded, a portion of the amounts payable to the participant may be subject to an additional 20% federal tax and
+may be nondeductible to the corporation. 
+16 
+Withholding . Awards under the 2014 Plan may be subject to tax
+withholding. Where an award results in income subject to withholding, Patterson-UTI may require the participant to remit the withholding amount to Patterson-UTI or cause shares of Common Stock to be withheld or sold in order to satisfy the tax
+withholding obligations. 
+Section 409A . Section 409A of the Code generally provides that any
+deferred compensation arrangement must satisfy specific requirements, both in operation and in form, regarding (i) the timing of payment, (ii) the election of deferrals and (iii) restrictions on the acceleration of payment. Failure to
+comply with section 409A may result in the early taxation (plus interest) to the participant of deferred compensation and the imposition of a 20% tax on the participant of the deferred amounts included in the participant’s income. Patterson-UTI
+intends to structure awards under the 2014 Plan in a manner that is designed to be exempt from or comply with section 409A. 
+Recommendation 
+The Board of Directors recommends a vote “FOR” the approval of the 2014 Plan. Approval of the proposal requires the
+affirmative vote of the holders of a majority of the shares of Common Stock present in person or by proxy and 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 will be counted as shares entitled to vote on the proposal and will have the same effect as a vote “AGAINST” the proposal. A broker non-vote will be counted for purposes of establishing
+a quorum, but will not be treated as a share entitled to vote on the proposal. Therefore, broker non-votes will have the effect of reducing the absolute number of shares necessary to approve the proposal. 
+PROPOSAL NO. 3 
+ADVISORY
+APPROVAL OF EXECUTIVE COMPENSATION 
+In accordance with Section 14A of the Exchange Act, the Board of Directors is asking
+stockholders to approve a non-binding, advisory resolution on the compensation of Patterson-UTI’s executive officers who are named in the Summary Compensation Table appearing in this proxy statement (the “Named Executive Officers”).
+The compensation of the Named Executive Officers is described in the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this proxy statement. 
+The compensation program for the Named Executive Officers is designed to attract and retain highly qualified individuals and to motivate and
+reward them for performance that benefits Patterson-UTI and its stockholders. The Compensation Committee and the Board of Directors believe that the policies and procedures detailed in the “Compensation Discussion and Analysis” achieve
+these goals by, among other things: 
+Ÿ 
+providing a mix of short-term compensation in the form of base salary and cash bonuses and long-term compensation in the form of restricted stock, stock options and performance units, which strikes a balance between
+offering competitive compensation packages and aligning compensation with long-term growth and creating value for stockholders; 
+Ÿ 
+emphasizing variable equity and cash compensation to link realized compensation to results; 
+Ÿ 
+using a team-based compensation model for our top executives; 
+Ÿ 
+reviewing annual base salaries, in part, based on Patterson-UTI’s financial results and position and performance compared to similarly situated companies, while recognizing that Patterson-UTI’s executive
+compensation program has historically emphasized low comparative base compensation; 
+Ÿ 
+providing performance-based cash bonuses designed to put a meaningful portion of total compensation at risk; 
+Ÿ 
+awarding stock options and performance units, whose value is tied to the achievement of certain performance goals and/or an increase in the price of the Common Stock; 
+Ÿ 
+awarding stock options and restricted stock with vesting periods of three years; and 
+Ÿ 
+establishing stock ownership guidelines. 
+17 
+The Board of Directors is asking stockholders to approve the following non-binding, advisory
+resolution at the Meeting: 
+“RESOLVED, that the stockholders of Patterson-UTI Energy, Inc. (the “Company”) approve, on an
+advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the
+compensation tables and other narrative discussion in the Proxy Statement for the 2014 Annual Meeting of Stockholders of the Company.” 
+This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board of Directors. Although
+non-binding, the Board of Directors and the Compensation Committee value the views of Patterson-UTI’s stockholders and will review and consider the voting results when (i) evaluating the effectiveness of Patterson-UTI’s compensation
+policies and practices and (ii) making future compensation decisions for the Named Executive Officers. 
+The Board of Directors
+recommends a vote “FOR” the approval of the advisory resolution on executive compensation . Approval of the advisory resolution requires the affirmative vote of the holders of a majority of the shares of Common Stock present in person
+or by proxy, and entitled to vote at the Meeting. Unless you give contrary instructions in your proxy, your properly submitted proxy will be voted “FOR” such approval. Abstentions will be counted as shares entitled to vote on the proposal
+and will have the same effect as a vote “AGAINST” the proposal. A broker non-vote will be counted for purposes of establishing a quorum, but will not be treated as a share entitled to vote on the proposal. This will have the effect of
+reducing the absolute number of shares necessary to approve the proposal. 
+PROPOSAL NO. 4 
+RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm to audit the financial statements
+and internal control over financial reporting of Patterson-UTI for the fiscal year ending December 31, 2014, and directed that such engagement be submitted to the stockholders of Patterson-UTI for ratification. In recommending ratification by
+the stockholders of such engagement, the Board of Directors is acting upon the recommendation of the Audit Committee, which has satisfied itself as to PricewaterhouseCoopers LLP’s independence, professional competence and standing. Although
+ratification by stockholders of the engagement of PricewaterhouseCoopers LLP is not required by Delaware corporate law or Patterson-UTI’s restated certificate of incorporation or bylaws, the Audit Committee believes a decision of this nature
+should be made with the consideration of Patterson-UTI’s stockholders. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider whether to retain PricewaterhouseCoopers LLP and may retain that firm or another
+without re-submitting the matter to our stockholders. Even if the appointment is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if
+it determines that such change would be in the best interests of Patterson-UTI and its stockholders. 
+It is expected that one or more
+representatives of PricewaterhouseCoopers LLP will be present at the Meeting and will be given the opportunity to make a statement if they so desire. It also is expected that the representative(s) will be available to respond to appropriate
+questions from the stockholders. 
+The Board of Directors recommends a vote “FOR” the ratification of PricewaterhouseCoopers
+LLP as Patterson-UTI’s independent registered public accounting firm. Ratification of the selection of PricewaterhouseCoopers LLP requires the affirmative vote of the holders of a majority of the shares of Common Stock present in person or
+by proxy, and entitled to vote at the Meeting. Unless you give contrary instructions in your proxy, your properly submitted proxy will be voted “FOR” such ratification. Abstentions will be counted as shares entitled to vote on the proposal
+and will have the same effect as a vote “AGAINST” the proposal. Because the ratification of an independent registered public accounting firm is considered a routine matter, if you do not give instructions to your brokerage firm, bank,
+broker-dealer, or other similar organization, the brokerage firm, bank, broker-dealer, or other similar organization will nevertheless be entitled to vote your shares in its discretion and may give or authorize the giving of a proxy to vote the
+shares in its discretion on this proposal. 
+18 
+EXECUTIVE OFFICERS 
+Set forth below is the name, age and position followed by a brief description of the business experience during at least the past five years
+for each executive officer of Patterson-UTI who is not also a member of the Board of Directors. 
+Name 
+Age 
+Position 
+William Andrew Hendricks, Jr. 
+49 
+President and Chief Executive Officer 
+John E. Vollmer III 
+58 
+Senior Vice President — Corporate Development, Chief Financial Officer and Treasurer 
+Seth D. Wexler 
+42 
+General Counsel and Secretary 
+James M. Holcomb 
+51 
+President — Patterson-UTI Drilling Company LLC 
+William Andrew Hendricks, Jr. — Mr. Hendricks has served as President and Chief Executive
+Officer of Patterson-UTI since October 2012. From April 2012 through September 2012, he served as Chief Operating Officer of Patterson-UTI. From May 2010 through March 2012, Mr. Hendricks served as President of Schlumberger Drilling &
+Measurements, a division of Schlumberger Limited, a global provider of oilfield services. Prior to that date, Mr. Hendricks worked for Schlumberger in various worldwide locations and capacities since 1988, including serving in numerous
+executive positions since 2003. Mr. Hendricks holds a Bachelor of Science in Petroleum Engineering from Texas A&M University. 
+John E. Vollmer III — Mr. Vollmer has served as Chief Financial Officer and Treasurer of Patterson-UTI since November 2005 and
+Senior Vice President — Corporate Development of Patterson-UTI since May 2001. Mr. Vollmer also served as Secretary of Patterson-UTI from November 2005 to February 2007. Mr. Vollmer served as Senior Vice President, Chief Financial
+Officer, Secretary and Treasurer of UTI from 1998 to May 2001. From 1992 until 1997, Mr. Vollmer served in a variety of capacities at Blockbuster Entertainment, including Senior Vice President — Finance and Chief Financial Officer of
+Blockbuster Entertainment’s Music Division. Mr. Vollmer holds a Bachelor of Arts in Accounting from Michigan State University. 
+Seth D. Wexler — Mr. Wexler has served as General Counsel and Secretary of Patterson-UTI since August 2009. From March 1998 to
+August 2009, he specialized in securities law and mergers and acquisitions for the law firm of Fulbright & Jaworski L.L.P., including as a partner of such law firm since January 2007. Mr. Wexler holds a Bachelor of Business
+Administration in Finance from the University of Texas at Austin, a Juris Doctorate from the University of Houston Law Center and a Masters of Business Administration from the University of Houston. 
+James M. Holcomb — Mr. Holcomb has served as President of Patterson-UTI Drilling Company LLC since January
+2012. Mr. Holcomb came to 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 Senior Vice President of Operations
+of Patterson-UTI Drilling Company LLC from April 2006 to January 2012. Mr. Holcomb has over 30 years of experience in contract drilling operations. Mr. Holcomb holds a Bachelor of Science Degree in Business Management from
+LeTourneau University. 
+19 
+COMPENSATION DISCUSSION AND ANALYSIS 
+For purposes of this Compensation and Discussion Analysis, all references to the “top four Named Executive Officers” refer to
+Mr. Hendricks (our current Chief Executive Officer) and Messrs. Siegel, Vollmer and Berns, except for periods prior to 2012 in which case the term refers to our former Chief Executive Officer and Messrs. Siegel, Vollmer and Berns. 
+Basic Compensation Philosophy and Executive Summary 
+Compensation at Patterson-UTI has always been tied to our company’s performance. It has been our policy to utilize a balanced mix of
+short-term cash compensation and long-term equity compensation, with over 70% of total compensation for the highest paid executive officers being variable and directly tied to our financial and stock price performance, both on an absolute basis and
+relative to peer basis. Our annual compensation review and the related grants and allocation of the various components of compensation are based on industry and peer data, targeted performance objectives, a balanced allocation of incentives for both
+short and long-term performance and individual and team objectives. 
+We believe that our compensation program has been successful in
+aligning the interests of our management with shareholders and in creating shareholder value. Our equity based grants are typically made in April of each year and in making these grants we have generally looked to Patterson-UTI’s total
+shareholder returns through March 31 of each year. Our total shareholder returns were at the 71 st , 77 th , 79 th and 64 th percentiles for the one, two, three and five year periods ended December 31, 2013, respectively, with our management
+participating in this performance through their equity based compensation. We also note that in circumstances where our total shareholder return has not been in the higher percentiles, management’s realizable equity compensation has
+been significantly less than that reported for proxy purposes because of the lower realizable value of the equity based compensation. Accordingly, through our emphasis on equity based and variable compensation we have historically seen a direct
+correlation between performance and realizable compensation. 
+20 
+Key Components of Patterson-UTI’s Compensation Program 
+Short-Term Cash Compensation 
+(25% to 40% of total direct compensation) 
+Base Salaries 
+Ÿ Relatively low
+fixed component 
+Ÿ Less than 10% of the total mix over the past 10 years 
+Fixed 
+Annual Cash Bonus 
+Ÿ Variable incentive compensation directly tied to
+financial performance (annual EBITDA) and the achievement of specific annual milestones (limited to $5 million per person with no minimum bonus guaranteed) 
+Variable 
+Long-Term Equity Compensation 
+(60% to 75% of total direct compensation) 
+Restricted Stock 
+Ÿ 30% to 50% of equity based
+compensation 
+Ÿ Grant size aligned with prior year’s performance 
+Ÿ Shares vest over three years 
+Ÿ Aligns officers with shareholders by tying realized value to share price and facilitating long-term share ownership 
+Variable 
+Stock Options 
+Ÿ 25% to 40% of equity based
+compensation 
+Ÿ Grant size (Black-Scholes value) aligned with prior year’s performance 
+Ÿ Options vest over three years 
+Ÿ Aligns officers with shareholders by providing no value unless stock price increases from the date of grant and ten year term encourages a focus on longer-term
+performance 
+Variable 
+Performance Units 
+Ÿ 25% to 35% of equity based
+compensation 
+Ÿ Directly tied to performance with payout contingent upon total shareholder relative return against our peer group 
+Ÿ Aligns officers with shareholders by enforcing relative performance standards and by emphasizing the importance of strong total shareholder return performance 
+Variable 
+21 
+2013 Pay Mix — Top Four Named Executive Officers 
+In managing our compensation program for our named executive officers, we have established a number of key
+procedural policies and design criteria that we follow. These policies and criteria, which have evolved over the years, incorporate what we believe are best practices and the appropriate way to administer executive compensation for the benefit of
+our company and its shareholders. We further believe that our compensation structure strongly links pay and performance through its emphasis on variable and equity based compensation. This link of pay to performance has helped to drive operational
+achievements and superior returns that our company has achieved consistently over the past 15 years as noted below. 
+Long-Term Goals Supported by our Compensation Program 
+Ÿ Providing quality services for
+our customers in a safe and efficient manner 
+Ÿ Generating strong financial performance for our shareholders 
+Ÿ Attracting and retaining highly
+qualified individuals, with a strong emphasis on teams working together to capitalize on opportunities and solve problems 
+Ÿ Being a model corporate citizen
+in the communities in which we work 
+Key Governance Policies 
+Key Design Criteria 
+Ÿ No re-pricing of options 
+Ÿ No single trigger severance arrangements 
+Ÿ No new agreements with tax gross
+ups since 2009 
+Ÿ Claw-back provisions that apply to all executive officers for financial statement restatements 
+Ÿ Share ownership requirements for
+our executive officers and directors 
+Ÿ Share holding requirements for our executive officers and directors 
+Ÿ Anti-pledging policy for our
+executive officers and directors 
+Ÿ Anti-hedging policy for our executive officers and directors 
+Ÿ Options have exercise price equal
+to or greater than market price at time of grant and do not have vesting under one year 
+Ÿ Team-based compensation model for our top executives 
+Ÿ Total compensation targeted at
+the approximate quartile of performance that is actually achieved 
+Ÿ Emphasis on variable equity and
+cash compensation to link realized compensation to results 
+Ÿ 60% or more of total compensation
+in the form of long-term incentives 
+Ÿ We do not provide any perquisites to Named Executive Officers that are not widely available to our other employees 
+Ÿ The Committee engages an independent compensation advisor 
+22 
+Significant Operational and Financial Achievements over Past 15 Years 
+Ÿ Our company grew from a small
+regional firm to a position of national industry leadership 
+Ÿ We have grown and diversified our
+fleet of drilling rigs and significantly expanded our pressure pumping operations 
+Ÿ We have diversified our customer
+and geographical base as well as regional capabilities 
+Ÿ We have positioned our company to
+take advantage of the growing shale revolution 
+Ÿ We increased revenue from
+approximately $373 million to more than $2.7 billion 
+Ÿ Our shareholders’ equity
+grew from $301 million to approximately $2.8 billion 
+Ÿ We have returned more than $1.2
+billion back to our shareholders in the form of share repurchases and dividends 
+Ÿ From
+January 1, 2013 to December 31, 2013, our total shareholder return was 37.1%, with a 35.9% increase in our share price. 
+Ÿ During 2013, we
+returned approximately $115 million to our shareholders in the form of share repurchases and dividends 
+Our Business 
+Patterson-UTI is one of the largest land contract drilling companies in the United States, with operations in most of the major oil and gas
+regions in the continental United States, Alaska and western and northern Canada. We also are a major provider of pressure pumping services in selected markets within the United States. Our industry is subject to wide swings in activity based on oil
+and natural gas prices, demand for oil and natural gas and general economic activity. The North American oil and natural gas industry has experienced a significant transformation in recent years due to technological advances in the horizontal
+drilling and completion of oil and natural gas wells. Today, approximately two-thirds of U.S. land drilling is focused on these types of wells, which typically require higher specification rigs and large amounts of horsepower for pressure pumping
+equipment. During the last few years, with oil prices in the $80-100 per barrel range and natural gas prices in the $2.00-4.00 per mcf range, U.S. drilling activity has become increasingly focused on the exploration and development of oil
+and liquid hydrocarbon reservoirs versus natural gas. 
+Progress on Long-Term Strategic Plan 
+In 2009, our Board adopted a long term strategic plan that was designed to position our company for the future in light of the “shale
+revolution.” Our plan contemplated an aggressive upgrade of our drilling rig fleet to address the need for higher specification equipment and an expansion of our pressure pumping business to participate in the growing hydraulic fracturing
+market for horizontal wells. On the contract drilling side of our business, we sought to add new, higher technology rigs to our existing rig fleet over a multi-year period, increase and protect our contract drilling market share in our key markets
+and diversify our customer base. We also sought to become a recognized provider of high-end pressure pumping services in the markets in which we participate. In addition, our strategic plan focused on providing excellent value to our customers,
+being nimble both in operations and in strategic decisions and providing superior returns to our stockholders. Our Board has reviewed the long-term strategic plan each year to assess both our progress on the plan and any need for changes in the
+plan. 
+Since the beginning of 2009, we have expended over $3.9 billion for capital expenditures and acquisitions in our core businesses,
+resulting in the addition of 97 new, high technology rigs and the upgrade of many of our existing rigs to serve the horizontal well market. We financed this growth primarily with internal cash flow and provided a financial underpinning for our new
+build program through term contracts. Importantly, during 2013, more than 70% of our drilling earnings before interest, taxes, depreciation and amortization (“EBITDA”) comes from the operation of our new, advanced technology APEX ® rigs, demonstrating the significance of the strategic change we have undergone. 
+23 
+During this same period, we also dramatically increased both the size and geographic footprint of
+our pressure pumping business, which is an important core business. In October 2010, we completed an acquisition of pressure pumping assets, which essentially doubled the size of our fleet and expanded our operations into the Southwest. In 2011 and
+2012, we added substantial capacity through internal organic growth and modestly expanded our fleet again in 2013, such that we have increased the horsepower of our pressure pumping fleet by more than 500% since 2009. These efforts resulted in a
+pressure pumping business that had achieved its three highest revenue years in 2010, 2011 and 2012, and again achieved record revenues in 2013 despite the fact that many of our competitors had to idle some of their pressure pumping equipment for
+prolonged periods. 
+In 2013, our Board and management engaged in a thorough, detailed review of our strategic direction, including: 
+Ÿ 
+Accomplishments since 2009, 
+Ÿ 
+The competitive landscape, 
+Ÿ 
+Opportunities to improve execution, 
+Ÿ 
+An evaluation of international markets, and 
+Ÿ 
+An evaluation of complementary service businesses. 
+Our Board determined that excellent
+progress had been made on the initial strategic plan and determined to continue the development of our two core businesses, contract land drilling and pressure pumping. Our Board also endorsed expenditures to evaluate and prepare for international
+growth opportunities. Lastly, we retained our focus on providing excellent value to our customers, being nimble both in operations and in strategic decisions and providing superior returns to our stockholders. 
+Our efforts have translated into solid financial performance and growth since 2009. As seen in the chart below, our average revenue for the
+past three years (2011 through 2013) has grown by 86% as compared to the three prior years (2008-2010), and our average EBITDA has increased by 81% during that same period. For more information about our business, please see “Business” and
+“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on February 14, 2014. 
+24 
+2013 Financial and Business Highlights 
+As shown in the table below, 2013 was a year of significant accomplishments for our company. Patterson-UTI achieved a 37.1% total shareholder
+return in 2013, despite the fact that the overall U.S. land rig count decreased by 9%, rigs drilling horizontal wells decreased by 4%, and rigs drilling vertical wells decreased by 22%.
+In 2013, we achieved the second highest revenue in our company’s history, record revenue in
+our pressure pumping business, and the fourth highest level of EBITDA — despite the decrease in land drilling rig count and the industry oversupply of pressure pumping equipment. We had another year in which we significantly improved our safety
+statistics and overall operational performance. Moreover, in 2013, Patterson-UTI continued to increase its organizational capability and improved its workforce through innovative recruiting and training programs. We also returned over $100 million
+to its stockholders during 2013 and invested over $660 million in capital expenditures, all of which should position our company well for 2014. 
+We also maintained our focus on financial discipline and effective capital management and maintained our strong balance sheet.
+Maintaining a flexible and conservative capital structure, along with a strong liquidity position, provides us with a protective cushion to operate through difficult market conditions, as well as the ability to take advantage of new opportunities
+when they arise. In sum, Patterson-UTI’s executive management led the businesses to excellent performance in a challenging marketplace during 2013.
+Significant 2013 Accomplishments 
+Excellent Performance in a Challenging Marketplace 
+Ÿ 
+Revenues were $2.72 billion in 2013, virtually equal to the record level of revenue achieved in 2012. 
+Ÿ 
+EBITDA of $921 million in 2013, which was the fourth highest in our 30+ year history. 
+Ÿ 
+Net income of $188 million achieved in 2013. 
+Ÿ 
+Stockholders’ equity increased from $2.64 billion in 2012 to $2.76 billion in 2013, despite share repurchases and dividends totaling $115 million. 
+Ÿ 
+We significantly improved our total recordable incident rate in our businesses. 
+Ÿ 
+Our contract drilling revenues were $1.68 billion, and we added significant new customers, despite the significant decrease in the average number of rigs drilling in the United States and the continued decrease in the
+number of rigs drilling for natural gas in United States and Canada. 
+Ÿ 
+We completed 11 new APEX ® rigs, including nine new APEX-XK™ rigs, bringing our total fleet of premium electric rigs to a total of 180 rigs as of the end of
+2013. 
+Ÿ 
+We established a leadership position in natural gas and bi-fuel powered rigs and pressure pumping equipment. 
+Ÿ 
+We increased our pressure pumping horsepower to approximately 763,000 horsepower. 
+Ÿ 
+Our pressure pumping business maintained reasonably good margins and profitability despite oversupplied industry conditions and intense price competition. 
+Ÿ 
+We continued to improve and implement new recruiting and training programs to enhance the quality, diversity and retention of our workforce. 
+Ÿ 
+We repurchased approximately 4.1 million shares which reduced the outstanding shares by approximately 3%. 
+Ÿ 
+We maintained our quarterly dividend of $0.05 per share, further returning cash to our shareholders.
+Alignment of Realized Long-Term Incentive Value with Performance 
+We believe that the compensation realized by our executive officers is well aligned with our performance. In order to demonstrate the alignment of realizable
+pay with performance relative to peers, we compared: 
+(1) 
+realizable long-term incentive value as a percent of grant date/target value for the three-year period from December 2010 — December 2013, and the five-year period from December 2008 — December 2013, to
+(2) 
+our performance relative to our peer group over the same two periods. 
+25 
+Components of Relative Alignment Review 
+Target/Grant Date Value 
+Realizable Long-term Incentive Value 
+Stock
+Options 
+Grant date value of target annual award 
+In-the-money value of options granted during period — valued at 12/31/2013 
+Restricted Stock 
+Grant date value of target annual award 
+Value of all shares granted during period at 12/31/2013 
+Performance Units 
+Grant date value of target annual award 
+Ÿ Amount earned: for plans granted and earned based on performance during period 
+Ÿ Target award: for plans
+granted during period but still outstanding at end of period — valued 12/31/2013 
+As shown in the two charts below, realizable long-term incentive value for our top four Named Executive
+Officers as a percent of the original grant date value has been well aligned with our performance relative to peers over the last three and five year periods. 
+Top Four Named Executive Officers Realizable Long-term Incentive Value Well Aligned with Performance Against Peers 
+Consideration of Last Year’s “Say on Pay” Vote 
+In the April 2011 proxy statement, our Board recommended an annual advisory (nonbinding) vote on executive compensation that received 87%
+support, including abstentions and excluding broker non-votes, and therefore determined to hold advisory (nonbinding) votes on executive compensation annually. For fiscal 2012, the advisory vote to ratify Named Executive Officer compensation
+received 96% support, including abstentions and excluding broker non-votes. 
+We have reviewed the results of the stockholder “say on
+pay” advisory vote with respect to the 2012 compensation actions and decisions for our current and former Chief Executive Officers and other Named Executive Officers set forth in the CD&A, the summary compensation table and the related
+compensation tables and narratives in last year’s proxy statement. Ninety-six percent of the votes cast (including abstentions and excluding broker non-votes) on the proposal were voted in support of our compensation structure as described in
+the last year’s proxy statement. Based upon our analysis of the appropriate compensation structure for the Named Executive Officers and consistent with the results of the “say on pay” vote, we elected to make no material changes in
+26 
+the general structure and philosophy of the Company’s compensation policy for key executives for 2013 or for the compensation structure for 2014. 
+The Committee values shareholder feedback and carefully considers that feedback regarding our executive compensation program. Stockholders are
+invited to express their views to the Committee as described under the heading “Communication with Directors” in this proxy statement. The advisory vote on the compensation of the Named Executive Officers provides stockholders with an
+opportunity to communicate their views on our executive compensation program, and we will consider those views in structuring our compensation arrangements. 
+You should read this CD&A in conjunction with the advisory vote that we are conducting on the compensation of the Named Executive Officers.
+This CD&A, as well as the accompanying compensation tables, contains information that is relevant to your voting decision. 
+Compensation Philosophy
+and Objectives 
+Our overriding philosophy for the compensation of our key executives is to link their compensation with the operational
+and market performance of the Company and to establish incentives that reward them for their efforts in achieving both short-term tactical and long-term strategic objectives. In doing so, we seek to offer competitive compensation packages
+designed to attract and retain highly qualified individuals and to motivate and reward our executives in achieving the Company’s goals. Our compensation program also seeks to reward excellence in performance and foster a collaborative team
+framework among our top executives. 
+Key Compensation Principles and Objectives 
+Our executive compensation program has historically emphasized the following key principles: (i) low comparative base compensation with
+variable incentive cash compensation, (ii) emphasis on equity-based compensation for long-term value creation and (iii) team compensation and incentives. 
+Emphasis on Long-Term Incentives 
+Our compensation program places a strong emphasis on creating long-term value through the use of long-term incentives. We seek to achieve a
+proper balance in our compensation program between long-term and current compensation by using a combination of time-vested and performance based equity awards for long-term incentives and fixed and variable cash for short-term incentives. Our
+compensation arrangements take into account the cyclical and volatile nature of our industry. 
+Our long-term incentive compensation relies
+on equity-based awards over cash as a means of aligning the interests of management with the Company’s stockholders. Historically, equity awards for long-term incentives have represented between 60-75% of total compensation, while fixed and
+variable cash for short-term incentives has typically represented between 25-40% of total compensation. Variations in these percentages may occur due to either an exceptionally strong or weak year in which the Company’s EBITDA and related cash
+bonus compensation fluctuate in tandem or there is market volatility affecting the grant date valuation of options and performance units using the methodologies required for reporting equity based compensation. 
+27 
+In 2013, the mix between long-term equity awards and fixed and variable cash and short term
+incentives for our top four Named Executive Officers was within our targeted range at 69% and 31%, respectively. 
+2013 Split Between
+Short-Term Compensation 
+(Fixed-Salary and Annual Cash Incentive) and Long-Term Compensation 
+(Top Four Named Executive Officers) 
+Cash Compensation Emphasizes Low Base Salaries with Higher Variable Cash Compensation Tied to
+Financial Results 
+We have designed the cash component of our compensation program to be mostly variable by using comparatively low
+base salaries and potentially higher cash bonuses tied to the Company’s EBITDA. We enacted this program over ten years ago whereby we target a percentage of total EBITDA for a potential executive management bonus pool that is then allocated
+among the top executive officers. Our allocation in 2013 was a team bonus potential of up to 0.81% of EBITDA, which was allocated among the top four Named Executive Officers. No bonuses are guaranteed under this program and the maximum permitted
+payout to a person is $5 million in a year. For 2013, the Compensation Committee set a targeted EBITDA percentage range of 0.55% to 0.81%. The actual percentage awarded was based on the Compensation Committee’s assessment of the Company’s
+and executive management’s progress toward achievement of certain strategic and other objectives. 
+We do not typically make changes to
+the base compensation of our top Named Executive Officers from year to year to promote the idea that management should not be focused on the fixed component of their compensation, but rather they should expect that variable compensation — tied
+to the Company’s performance — will be the most significant part of their cash remuneration. 
+We believe that the use of lower
+market-based salaries with higher variable bonuses aligns our executives’ annual cash compensation with our actual financial results. During periods of low earnings, such as we had in 2009, total cash compensation will be materially lower and
+typically be in the lower quartiles against our peers but reflective of our results. During periods of higher earnings, such as we experienced in 2011, 2012 and 2013, cash compensation will typically be in the top quartiles and be reflective of the
+Company’s higher cash generation. Accordingly, we look at our compensation program as a multi-year program that is targeted to provide cash compensation to our top four Named Executive Officers that is (i) aligned with changes in earnings
+from year to year, and (ii) on a full cycle basis aligned with stockholder returns compared to our peers. 
+28 
+Total executive compensation for our top four Named Executive Officers decreased in 2012 primarily as a
+result of our Chief Executive Officer not receiving any equity compensation grants that year due to his notification to us of his desire to retire later that year. 
+Although there will be years where the cash compensation paid to our executives will be in the higher quartiles and our relative stock
+performance may be at a lower quartile or vice versa, this result generally will occur during a period of transition within the industry where there exists a lag between market expectations and current activity. A good example of this was at the end
+of 2008 when our drilling activity and operating results were at high levels, but the public market valuations of land drillers was falling on the expectation of a severe downturn that occurred months later in 2009. 
+We have considered in the past the use of more traditional bonus plans tied to annual budgets and performance against those budgets. We,
+however, have concluded that given the extreme volatility in our industry those plans do not provide the incentives that we seek to achieve and could in fact create incentives for our management to focus only on the short-term. By tying a meaningful
+portion of the top four Named Executive Officers’ compensation to EBITDA, we believe that their compensation and the stockholders’ interests become especially well aligned. 
+Emphasis on Equity for Long-Term Incentive Compensation 
+We have historically targeted 60% or more of total compensation to be in the form of time-vested equity or equity-based awards. This emphasis
+on equity-based compensation is aimed at aligning the financial interest of the top four Named Executive Officers with our stockholders and the total returns provided to stockholders. We believe that by making a large portion of compensation tied to
+equity, our top four Named Executive Officers can only fully realize the potential benefits of the compensation if our stockholders also benefit. 
+Over the years we have adjusted the form of the equity incentives we provide to our top four Named Executive Officers from solely options to a
+mix of options, restricted stock and performance units. We believe that this mix allows us to tailor our program to encourage the building of long-term value and, in the case of performance units, achievement of positive stockholder returns in
+excess of our peer group. 
+29 
+The following charts set forth the allocation of the various forms of long-term equity-based
+incentives that we have granted the top four Named Executive Officers from 2009-2013 and the allocation of these incentives that we used for 2013: 
+Award Type 
+Discussion 
+Key Benefits to Shareholders and 
+Shareholder Alignment 
+Restricted Stock 
+We consider restricted stock as an additional form of basic compensation that provides value to the executive only if the executive remains in the employment of the Company during the
+vesting period, with that value being subject to increases and decreases in value depending on the performance of our stock. We typically target restricted stock awards to represent approximately 30-50% of total equity-based compensation depending
+on stock prices and volatility at the time of grant. 
+Ÿ Value dependent upon stock price
+performance 
+Ÿ Enhances retention of executive talent 
+Ÿ Encourages long-term share
+ownership 
+Stock Options 
+Stock options provide value to the executive only if the value of the Company’s stock appreciates. Consequently, we consider these awards to be performance-based. When we approve
+grants of options to our executives, we take into account a number of different factors, including the stock price at the time of grant, the expected value of the option grant and prior option grant amounts. We typically target stock options to
+represent 25% to 40% of total equity-based compensation. 
+Ÿ Inherently performance-based 
+Ÿ Value contingent upon positive
+stock price performance 
+Ÿ Ten year term encourages a focus on longer-term performance 
+Performance 
+Units 
+We added performance units to the mix of equity-based compensation in 2009. We added this component in lieu of a portion of restricted stock and options that we would have otherwise
+granted. Our use of performance units is intended to provide a direct link in the compensation of our top four Named Executive Officers to the relative performance of our stock to our peer group. This component assures that the value provided to
+those Named Executive Officers will not be created solely by an increase in stock price due to favorable market conditions, while it also provides an incentive to continue to outperform peers even in down cycles for the market or our industry. We
+typically target performance units to represent 25% to 35% of total equity-based compensation. 
+Ÿ Performance-contingent 
+Ÿ Payout contingent on positive
+stockholder returns and satisfying relative performance standards 
+Ÿ Value of shares dependent upon
+stock price 
+30 
+We have considered the potential risks associated with tying a large portion of executive
+compensation to equity. We do not believe that our program creates unreasonable risks for the following reasons: 
+Ÿ 
+The long-term nature of our equity based awards and the required vesting periods help minimize the potential for excessive risk taking and actions aimed at short-term stock gains. 
+Ÿ 
+Our use of different types of equity grants, in particular restricted stock, helps offset these risks. 
+Ÿ 
+We have meaningful share ownership guidelines. 
+Ÿ 
+We maintain an anti-hedging policy. 
+Ÿ 
+We maintain a clawback policy that applies to all of our executive officers for both cash and equity incentives. 
+Ÿ 
+Three of the top four Named Executive Officers have been with the Company for more than fifteen years and have an established track record of focus on growing long-term sustainable growth for the Company.
+We believe our management to be highly ethical and focused on creating true long-term value for stockholders and not focused
+on just short-term gains. We and the Board monitor and consider risks associated with the Company’s compensation plans on a regular basis. 
+Team Compensation Structure 
+Our senior executive management has had the philosophy that they operate as a team, with each member being an important part of the team. As a
+result, for more than the past ten years they have requested, and we and the Board have agreed, that as a general proposition our awards of cash and equity incentive compensation should be pooled and allocated among them as a team. Although the
+allocations among the team members have changed over time due to changes in the executive management team, the allocations among the existing team have generally remained consistent. 
+In the past five years, when allocating the incentive compensation among our top four Named Executive Officers, we have allocated 4/11 th to Mr. Siegel, our Executive Chairman, 3/11 th to Mr. Hendricks or his predecessor, our President and Chief Executive Officer, and 2/11 th to each of Mr. Vollmer, our Senior Vice President-Corporate Development, Chief Financial Officer and Treasurer, and Mr. Berns, our Senior Vice President, respectively. For 2014, the
+allocation of incentive compensation among the top four Named Executive Officers will be the same as 2013. 
+We believe that the above
+approach for compensating our top four Named Executive Officers fosters effective decision-making and collaborative efforts in executing Patterson-UTI’s long-term strategic and short-term tactical objectives. This approach has worked well for
+Patterson-UTI for over ten years. Although we will continue to monitor the team compensation approach to make sure that it continues to work in practice, we expect to maintain this approach in the future. 
+Board and Committee Processes and Policies for Compensation Decisions 
+Committee Review Process 
+The Board of Directors has delegated the management of the Company’s executive compensation programs to the Compensation Committee. We
+meet on a regular basis to consider compensation matters and to review how the Company’s plans and policies work in practice. Each of our current members is an independent director as defined by the Nasdaq listing standards. 
+Our compensation determinations and equity awards are conducted through a process that solicits the input from management through
+Mr. Siegel as our Executive Chairman as well as from outside compensation consultants retained by us. In addition to the recommendations of management and our consultants, we consider reported trends in compensation, internal budgets,
+historical data for the Company and its peers, strategic planning updates and other information that we consider relevant. 
+31 
+Role of Chairman in Compensation Decision Process. Our Chairman
+periodically provides us with his review of the performance of other executive officers, including the other Named Executive Officers. We also engage him in an annual dialog with our Committee Chairman and our Lead Director on our compensation
+program and seek his input on and review of our proposals for long-term incentive grants. This process results in a recommendation that is considered by our Compensation Committee as whole. 
+Use of Independent, Outside Compensation Consultants. Our Compensation Committee regularly utilizes outside
+compensation consultants in assessing and designing our executive compensation program. Our consultants are paid on a basic fixed fee structure plus expenses. We use our outside consultant reports as a tool for obtaining information on historical
+compensation and stockholder returns, market trends and peer compensation practices. We retained Pearl Meyer & Partners (“Pearl Meyer”) as our consultant and advisor for executive compensation matters for 2012, 2013 and 2014. 
+Our Compensation Committee regularly reviews the services provided by its outside consultants and has determined that Pearl Meyer is
+independent in providing executive compensation consulting services. In making this determination, our Compensation Committee noted that during fiscal 2013: 
+Ÿ 
+Pearl Meyer did not provide any services to Company or management other than services requested by or with the approval of the Compensation Committee, and it its services were limited to executive compensation
+consulting. Specifically, Pearl Meyer does not provide, directly or indirectly through affiliates, any non-executive compensation services, including pension consulting or human resource outsourcing. 
+Ÿ 
+Fees we paid to Pearl Meyer were less than 1% of Pearl Meyer’s total revenue; 
+Ÿ 
+Pearl Meyer maintains a conflicts policy, which was provided to the Compensation Committee with specific policies and procedures designed to ensure independence. 
+Ÿ 
+None of the Pearl Meyer consultants working on Company matters had any business or personal relationship with Compensation Committee members. 
+Ÿ 
+None of the Pearl Meyer consultants working on Company matters (or any consultants at Pearl Meyer) had any business or personal relationship with any executive officer of the Company. 
+Ÿ 
+None of the Pearl Meyer consultants working on Company matters directly own Company stock. 
+The
+Compensation Committee continues to monitor the independence of its compensation consultant on a periodic basis. 
+In 2013, Pearl Meyer
+provided us with information on the compensation practices of our peer group and other oilfield service companies and on the reasonableness of our program as compared to the compensation practices of our peer group. In so doing, Pearl Meyer provided
+us with information on each element of the total compensation of our executive officers as well as a comparison of our compensation against our peers based on data gathered from proxy statements and other SEC filings. This comparison provided us
+with various comparative market levels of compensation for our executive management team as well as a comparative position for each executive officer. Pearl Meyer also provided us with information on the cost and potential dilution to our
+stockholders of our equity-based incentives and compared that to our peer group. 
+When reviewing the peer compensation data provided to us
+by our consultants, we have generally given greater weight to the comparative data for the team as a whole versus the data for individual positions at our peers given the team management approach followed by us as described above. We have found that
+total compensation for our top four Named Executive Officers as a group has typically been between the 50-75 th percentile range depending on the year (a range of outcomes that is well aligned with
+our performance relative to peers over that period). We have also found that under our team-based approach there has typically been a shift of compensation from the top two Named Executive Officers to the rest of the team. 
+32 
+Peer Group. In 2013 we used the following peer group for
+compensation matters: 
+Ÿ Atwood Oceanics
+Inc. 
+Ÿ Basic Energy Services, Inc. 
+Ÿ Diamond Offshore Drilling Inc. 
+Ÿ FMC Technologies Inc. 
+Ÿ Helmerich & Payne Inc. 
+Ÿ Nabors Industries Ltd. 
+Ÿ Noble Corp. 
+Ÿ Pioneer Energy Services Corp. 
+Ÿ Rowan Companies Inc. 
+Ÿ Weatherford International Ltd. 
+Ÿ Baker Hughes
+Incorporated 
+Ÿ Cameron International Corporation 
+Ÿ Ensco plc 
+Ÿ Halliburton Company 
+Ÿ Key Energy Services, Inc. 
+Ÿ National Oilwell Varco Inc. 
+Ÿ Parker Drilling Company 
+Ÿ Precision Drilling Corporation 
+Ÿ Transocean Ltd. 
+Ÿ Unit Corp. 
+Our peer group for 2013 was selected in an effort to provide a broad base of companies of different sizes that
+are involved in the markets that we compete or to which we believe our investors compare us with or benchmark our results against. We review our peer group annually to determine whether changes should be made to the group. Importantly, our peer
+group included Helmerich & Payne, Inc. and Nabors Industries, Ltd., which are our nearest direct competitors in domestic land drilling services, and other comparable drilling companies such as Atwood Oceanics Inc., Basic Energy Services,
+Inc., Diamond Offshore Drilling, Inc., Ensco, Inc., Noble Corp., Parker Drilling Company, Pioneer Energy Services Corp., Precision Drilling Corporation, Rowan Companies, Transocean Ltd. and Unit Corp. Our peer group also included Baker Hughes
+Incorporated, Halliburton Company and Weatherford International Ltd., which are sizeable competitors of ours in the North American pressure pumping service market; Basic Energy Services, Inc. and Nabors Industries Ltd. are also competitors in this
+business. Many of the companies we view as our most direct competitors in both land drilling and pressure pumping, as well as for talent, are companies significantly larger than us in market capitalization. We are not aware of any public company
+primarily in either business that is similarly sized to us and not included in our peer group. The remainder of our peer group included other energy service and manufacturing companies (some larger and some smaller than our company) with which we
+are often compared by investors, such as Cameron International Corporation, FMC Technologies, Inc., Key Energy Services, Inc. and National Oilwell Varco Inc. 
+Cash Compensation 
+We will generally review base compensation and the terms for bonus cash compensation for management in the fourth quarter of the preceding year
+or in the first quarter of the year. When reviewing cash compensation we will look at the total cash compensation received by the executives over a multi-year period, as well as the total cash compensation projected for the current year. This
+approach allows us to look at the cash compensation paid over a full cycle in order to obtain comparable data for benchmarking purposes. 
+We also annually establish the performance criteria for the cash bonus compensation paid to the Company’s executives in order to meet the
+requirements for the performance-based compensation exception to the limitation on deductions under Section 162(m) of the Internal Revenue Code (as further described elsewhere in this proxy statement). Although a wide range of criteria may be
+used, the criterion we have used historically has been the achievement of a threshold EBITDA amount. 
+Equity Compensation
+Our practice for grants of equity-based compensation has generally been to consider the grant of stock options, restricted stock
+and performance units to executive management at a meeting following the conclusion of our first quarter. This meeting is typically held in conjunction with regular quarterly Board meetings held prior to the Company’s public release of its
+quarterly earnings. This timing also allows us to receive market data from our consultants for prior year grants. 
+33 
+When making grants of equity-based compensation, we consider a number of factors, including
+competitive peer data, prior year grants (both in terms of number of shares and total value), and potential dilution impact and current and historical stock prices. We also take into consideration the advice of our consultants as to peer and market
+practices on the use and mix of restricted stock, options and performance units. 
+For restricted stock and stock options granted to the top
+four Named Executive Officers, these awards are subject to three-year vesting with one-third vesting after the first year and 1/36th of the grant vesting each month over the next two years. The restricted stock grants also have a performance-based
+vesting component, which for 2013 required that the Company achieve EBITDA of at least $300 million for the nine months ended December 31, 2013, $400 million for the twelve months ended December 31, 2014 or $400 million for the twelve
+months ended December 31, 2015. The performance units granted in 2013 are to be settled with shares of stock, with the number of shares to be issued based on the Company’s total stockholder return at the end of the third year following the
+grant relative to the total stockholder return for our peer group of companies. Subject to limited exceptions, no payout will be provided on performance units unless the Company’s relative total stockholder return against its peers is at least
+at the 25 th percentile and the Company has a positive stockholder return. 
+We have
+also adopted the following additional practices regarding equity grants: 
+Ÿ 
+Grants will not vest in less than one year. 
+Ÿ 
+Options will not be re-priced or exchanged. 
+Ÿ 
+Equity grants are subject to claw-back in the event that the Board learns that any misconduct by the Named Executive Officer contributed to the Company having to restate all or a portion of its financial statements.
+Ÿ 
+Options are to have exercise prices equal to or greater than the fair market value on the date of grant. 
+Ÿ 
+Performance targets are not to be modified other than to give effect to acquisition or disposition of businesses or similar structural changes — market condition changes will not result in changes in performance
+targets. 
+Overview of 2013 Performance and Compensation 
+As noted above under “2013 Financial and Business Highlights,” the Company had an excellent year in 2013 during which significant
+progress was realized against our long-term strategic objectives as well as against our short-term operational and financial objectives. These positive results were realized by both of the Company’s core businesses and at the corporate level.
+In addition to the financial and operational successes, the Company’s stock performed at between the 71 st and 79 th percentiles against our
+peer group during each of the past one, two and three year periods ended December 31, 2013. 
+Cash Compensation 
+Under the terms of the Company’s cash compensation plan described above, the top four Named Executives Officers earned the following cash
+payments in respect of 2013. The payments under the plan were determined using a total bonus pool equal to 0.70% of the Company’s $921 million of EBITDA for 2013, reduced from the maximum target bonus potential under the plan of 0.81% of
+EBITDA. This bonus pool amount reflected the exemplary performance by management in 2013 in achieving the Company’s current and long-term objectives, but also took into account a decrease both in EBITDA and certain other measures of
+performance. As a result, variable cash compensation in respect of 2013 decreased 16% for the Named Executive Officers who participated in the plan in both 2012 and 2013. In accordance with past practice, the bonus pool was allocated among the top
+four Named Executive Officers as described under “Team Compensation Structure” above. The Committee had fixed a $400 million minimum EBITDA threshold for 2013, which was exceeded. 
+34 
+CASH COMPENSATION 
+Name 
+Salary 
+EBITDA Incentive 
+(Percentage of 
+Company 
+EBITDA) 
+Variable Cash 
+Compensation 
+Based on 
+EBITDA(1) 
+Total Cash 
+Compensation 
+William A. Hendricks, Jr. 
+$ 
+600,000 
+0.1909 
+% 
+$ 
+1,758,943 
+$ 
+2,358,943 
+John E. Vollmer III 
+$ 
+350,000 
+0.1273 
+% 
+$ 
+1,172,628 
+$ 
+1,522,628 
+Mark S. Siegel 
+$ 
+350,000 
+0.2545 
+% 
+$ 
+2,345,257 
+$ 
+2,695,257 
+Kenneth N. Berns 
+$ 
+265,000 
+0.1273 
+% 
+$ 
+1,172,628 
+$ 
+1,437,628 
+(1) 
+The maximum amount that can be awarded to an individual under our cash-based incentive plan during a 12–month period is $5,000,000. In order to reach this maximum amount and assuming a total bonus pool equal to the
+top end of the target range (equal to 0.81% of EBITDA), EBITDA of $2.3 billion in the case of Mr. Hendricks, $1.7 billion in the case of Mr. Siegel and $3.4 billion in the case of Messrs. Vollmer and Berns would have been
+needed. We did not establish a target bonus amount for the executives given the variable nature of our plan and its direct relationship to our financial results. The target bonus amount presented in the Grants of Plan-Based Awards table is
+calculated for the respective officer based on Patterson-UTI’s actual EBITDA for the fiscal year ended December 31, 2013, and the allocation formula applied to the bonus pool for distribution as noted above. 
+Equity-Based Compensation 
+We made the following equity-based grants to Messrs. Hendricks, Vollmer, Siegel and Berns, considering the Company’s 2012 financial
+results and comparative total shareholder return performance over the one, two and three year periods ended in 2012 and with the objective that these grants would be commensurate with the Company’s percentile performance, based on information
+available at the time of grant. 
+EQUITY-BASED GRANTS 
+Restricted Stock(1) 
+Stock Options(2) 
+Performance Unit 
+Awards(3) 
+Total 
+Value 
+Name 
+# Shares 
+Value 
+# Shares 
+Value 
+# Shares 
+Value 
+William A. Hendricks, Jr. 
+86,250 
+$ 
+1,973,400 
+172,500 
+$ 
+1,321,454 
+64,500 
+$ 
+1,517,363 
+$ 
+4,812,217 
+John E. Vollmer III 
+57,500 
+$ 
+1,315,600 
+115,000 
+$ 
+880,969 
+43,000 
+$ 
+1,011,575 
+$ 
+3,208,144 
+Mark S. Siegel 
+115,000 
+$ 
+2,631,200 
+230,000 
+$ 
+1,761,938 
+86,000 
+$ 
+2,023,150 
+$ 
+6,416,288 
+Kenneth N. Berns 
+57,500 
+$ 
+1,315,600 
+115,000 
+$ 
+880,969 
+43,000 
+$ 
+1,011,575 
+$ 
+3,208,144 
+(1) 
+Shares of restricted stock were awarded on April 22, 2013. The value indicated in the table is the value on the date of grant based on the closing price of Patterson-UTI’s common stock on the date of grant.
+(2) 
+Options were awarded on April 22, 2013. The value indicated in the table was determined using the Black-Scholes option pricing model as of the date of grant. 
+(3) 
+Performance Units were awarded on April 22, 2013. The number of shares indicated in the table represents the target number of shares for each respective award. According to the terms of the awards, the actual
+number of shares earned by the recipient can range from zero shares to two times the target number of shares depending on how Patterson-UTI performs in terms of total stockholder return relative to its peer group. The value indicated in the table
+was determined based on a Monte-Carlo simulation model and represents the estimate of fair value on the date of grant. 
+The
+grant of restricted stock, options and performance units to the top four Named Executive Officers were made following the vesting, term and other criteria described above. 
+The performance units granted in 2013 to Messrs. Siegel, Hendricks, Vollmer and Berns provide for the issuance of a target of 86,000 shares of
+Common Stock to Mr. Siegel, 64,500 shares of Common Stock to Mr. Hendricks and 43,000 shares of Common Stock to each of Messrs. Vollmer and Berns, respectively, if 
+35 
+Patterson-UTI’s total stockholder return is positive and, when compared to the peer group, is at the 50 th percentile and two times the
+target if at the 75 th percentile or higher. If the Company’s total stockholder return is positive, and, when compared to the peer group, is at the 25 th percentile, the recipients will only receive one-half of the target number of shares. The grant of shares when achievement is between the 25th and 75th percentile will be determined on a pro-rata
+basis. 
+Total stockholder return for Patterson-UTI for the 2013 performance unit grants is measured based on $100 invested in Common Stock
+on the first day of the performance period, with dividends reinvested. The performance period is the period from April 1, 2013 through March 31, 2016, subject to certain exceptions that could extend the performance period up to two
+additional years. No shares will be issued in respect of the performance units unless Patterson-UTI has positive total stockholder return as of the end of the performance period; except that if during the two-year period ending after the performance
+period, Patterson-UTI’s total stockholder return for any 30 consecutive day period equals or exceeds 18% on an annualized basis from the beginning of the performance period through the end of such 30 consecutive day period, then shares issued
+under the grant will be made as set forth above based on Patterson-UTI’s total stockholder return relative to the peer group as of end of the performance period. Any performance units granted after 2013 will not provide for an extension of the
+initial three-year performance period. 
+Total Compensation and Relationship to Performance 
+The Committee considered the advice of Pearl Meyer when establishing its 2013 compensation program. In doing so, the Committee sought to offer
+a total compensation package (cash and long-term) for the top four Named Executive Officers as a group that would be commensurate with the Company’s percentile performance versus peers. The Committee looked primarily at one year financial
+results and total shareholder return, but also shareholder returns over a two year and three year period, as noted below, in establishing the long-term incentive equity grants for 2013. When determining the size of 2013 equity incentive awards in
+April 2013, the Committee considered the following measures of relative performance for Patterson-UTI against our peers: 
+Ÿ 
+1 year Total shareholder Return through March 31, 2013: 100 th percentile 
+Ÿ 
+3 year Total shareholder Return through March 31, 2013: 94 th percentile 
+Ÿ 
+2012 Return on Equity (ROE): 66 th percentile 
+Ÿ 
+2012 Return on Assets (ROA): 64 th percentile 
+As a result, the Committee targeted the grant date value of 2013 equity incentive awards within this range of the competitive market (as
+defined by the Committee in consultation with Pearl Meyer). 
+We believe that Patterson-UTI has a strong and cohesive management team and
+that the compensation policies that it has implemented provide the proper mix of current compensation and long-term incentives for building stockholder value. The Company’s above market performance has supported the use of these policies and
+aligns the interest of management with the Company’s stockholders. 
+With respect to the Company’s executive officers other than
+the top four Named Executive Officers, the Committee has historically determined their compensation with a philosophy of using a combination of fixed and variable cash in the form of base salary and cash bonuses for short-term incentives and
+time-vested equity awards in the form of restricted stock and/or stock options for long-term incentives. With respect to Mr. Holcomb, who serves as the President of the Company’s contract drilling subsidiaries, the Committee determined his
+non-equity incentive compensation for 2013 based on the level of EBITDA for the contract drilling business for 2013. In particular, the Committee considered a range of between 0.032% and 0.048% of EBITDA for the contract drilling business and
+determined Mr. Holcomb’s non-equity incentive compensation to be .0424% of EBITDA for the contract drilling business based on his individual performance and the following factors specific to the Company’s contract drilling business:
+Ÿ 
+Safety and operational metrics; 
+Ÿ 
+Recruiting and training programs; 
+36 
+Ÿ 
+Generation and retention of customers; and 
+Ÿ 
+Development and management of new rig designs and rig construction. 
+The amount reflects
+efforts towards achieving the Company’s current and long-term objectives in its contract drilling business. 
+Mr. Holcomb’s
+equity-based, long-term incentive compensation was awarded in the form of restricted stock that vests in one-third increments over a three year period and is set forth in the “Grants of Plan-Based Awards Table” below. 
+Retirement Plans 
+Patterson-UTI offers a 401(k) plan to its employees, including its Named Executive Officers. Participants may contribute a portion of their
+base salary to the 401(k) plan, subject to federal limits. Patterson-UTI makes matching contributions up to four percent of each participant’s eligible base salary. The Named Executive Officers of Patterson-UTI are eligible to participate in
+the 401(k) plan on the same basis as other employees. Patterson-UTI does not have any other retirement plan. 
+Other Policies and Practices Supporting
+Strong Compensation Governance 
+Share Ownership Guidelines and Stock Holding Requirements for Chief Executive Officer, Other
+Executive Officers and Directors 
+Our Nominating and Corporate Governance Committee has enacted share ownership guidelines
+applicable to all executive officers and directors of Patterson-UTI. The guidelines require our Chief Executive Officer to own a number of shares of our Common Stock having a value at least equal to five times his or her base salary. The Chief
+Executive Officer has five years from the adoption of these guidelines, or the date of appointment to the chief executive position, whichever is later, to satisfy the ownership guidelines. 
+The guidelines also require officers and directors to hold at all times, subject to a five year phase-in from the date first elected as an
+officer or director, at least the following number of shares of Common Stock: 
+• 
+President and Chief Executive Officer 
+Number of shares equal to 5 times base salary 
+• 
+Executive Chairman 
+120,000 shares 
+• 
+COO/Senior Vice Presidents 
+60,000 shares 
+• 
+President — Drilling 
+30,000 shares 
+• 
+General Counsel 
+20,000 shares 
+• 
+Chief Accounting Officer 
+7,500 shares 
+• 
+Outside Directors 
+10,000 shares 
+• 
+Non-executive Inside Director 
+10,000 shares 
+For purposes of these ownership guidelines, equity incentive awards that have both time-based vesting and
+performance-based vesting are counted when the performance-based component has been satisfied. Unvested equity incentive awards that have only time-based vesting are counted and unearned performance-based incentive awards are not counted. In
+addition, each executive officer and director is required to maintain ownership of the net after-tax shares of Common Stock acquired from Patterson-UTI pursuant to any equity-based awards received from Patterson-UTI, unless such person has met his
+or her individual ownership requirement. 
+Each of the Named Executive Officers and Directors was in compliance with these guidelines as of
+the date of this proxy statement. 
+Clawback Policy 
+As provided for in Patterson-UTI’s Corporate Governance Guidelines and set forth in written agreements with its executive officers,
+Patterson-UTI has implemented a clawback policy that allows for the recovery of 
+37 
+bonus, severance or incentive compensation-based compensation from an executive officer in the event the Board of Directors learns that any misconduct by such executive officer contributed to
+Patterson-UTI having to restate all or a portion of its financial statements. The Board will take such action as it deems necessary to remedy the misconduct, prevent its recurrence, and if it deems appropriate based on the relevant facts and
+circumstances, take remedial action against such executive officer, which may include requiring the reimbursement of any bonus or incentive compensation awarded to such executive officer or effect the cancellation of stock awards previously granted
+to such executive officer if: (i) the amount of the bonus, incentive compensation or stock award was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement, (ii) such
+executive officer engaged in intentional misconduct that caused or partially caused the need for the restatement, and (iii) the amount of the bonus, incentive compensation or stock award that would have been awarded to such executive officer
+had the financial results been properly reported would have been lower than the amount actually awarded. 
+In addition to a stand-alone
+policy, Patterson-UTI’s 2005 Long-Term Incentive Plan and 2014 Long-Term Incentive Plan provide that if Patterson-UTI is required to prepare an accounting restatement due to the material noncompliance of Patterson-UTI, 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
+Patterson-UTI that 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 SEC (whichever just occurred) of the financial document embodying such
+financial statement requirement. 
+Pay for Performance 
+The Compensation Committee feels that the actual pay received by our Named Executive Officers is appropriately linked to the results that were
+achieved, as a significant amount of pay is at risk for our Named Executive Officers through utilization of our incentive compensation plan design. 
+Anti-Hedging Policy 
+Patterson-UTI has an anti-hedging policy. Our directors and executive officers may not purchase, sell or write options on Patterson-UTI
+securities or engage in transactions in other third-party derivative securities with respect to Company securities. 
+Anti-Pledging
+Policy 
+Patterson-UTI has an anti-pledging policy. Our directors and executive officers may not engage in transactions in which
+Patterson-UTI securities are used as collateral for any loan, including, but not limited to, “margin loans” in a brokerage account. 
+Perquisites and Personal Benefits 
+The Compensation Committee believes that benefits to executives should generally be aligned with those provided for other employees. No Named
+Executive Officer received perquisites totaling more than $10,000. Accordingly, the perquisites do not meet the threshold that would require disclosure in the Summary Compensation Table below. 
+Employment-Related Agreements and Other Matters 
+Change in Control, Severance and Employment Agreements 
+Change in Control Agreements and Tax Gross-Up Payments. Patterson-UTI has entered into change in control agreements with its top four
+Named Executive Officers as further described elsewhere in this proxy statement The Company believes that such agreements may under certain circumstances protect the interest of the Company by discouraging such Named Executive Officers from leaving
+employment out of concern for the security of their jobs or being unable to concentrate on their work. We believe that the change in control agree- 
+38 
+ments may also help Patterson-UTI attract and retain new key employees by reducing the personal uncertainty and anxiety that arises from the possibility of a future business combination. Any
+future change in control or severance agreements will be approved subject to the circumstances existing at the time. 
+The change in control
+agreements with Messrs. Vollmer, Siegel and Berns contain a tax gross-up for the excise tax imposed on parachute payments, which were customary when these agreements were entered into more than nine years ago. While the Committee believes the tax
+gross-up provision is a valuable tool for executive retention, the Committee recognizes that tax gross-up provisions may no longer be viewed as customary. Going forward, the Committee does not plan to provide tax gross-ups in connection with
+compensation arrangements, and the change in control agreement entered into in April 2012 with Mr. Hendricks does not include a tax gross-up provision. 
+Severance Agreements . Patterson-UTI has also entered into written letter agreements with each of Messrs. Siegel, Berns and
+Vollmer pursuant to which Patterson-UTI has agreed to pay each such person within ten days of the termination of his employment with Patterson-UTI for any reason (including voluntary termination by him), an amount in cash equal to his annual base
+salary at the time of such termination. Any payment made by Patterson-UTI pursuant to these letter agreements will reduce dollar for dollar any payment owed to such person, if any, pursuant to the change in control agreements referenced above. 
+Patterson-UTI has entered into a severance agreement with Mr. Hendricks. The term of the severance agreement generally ends on the third
+anniversary of the effective date of the severance agreement. If during the term of the severance agreement Mr. Hendricks’ employment terminates by reason of a Qualifying Termination (as defined in the severance agreement), Patterson-UTI
+will pay Mr. Hendricks a lump-sum cash payment of $750,000 less any severance payment received by or payable to Mr. Hendricks under his change in control agreement referenced above or any other similar change in control agreement. Under
+the severance agreement, “Qualifying Termination” means a termination of Mr. Hendricks’ employment (1) by Patterson-UTI for any reason other than cause or (2) if certain conditions are met, by Mr. Hendricks due to
+Patterson-UTI reducing his annual base salary to an amount that is less than $450,000 per year. 
+Employment Agreements.
+Patterson-UTI entered into an employment agreement with Mr. Holcomb in January 2012 in connection with his promotion to President of Patterson-UTI Drilling Company LLC. Pursuant to his employment agreement, Patterson-UTI will employ
+Mr. Holcomb for an initial term of three years beginning January 1, 2012 at an annualized salary of $325,000 per year, subject to any increases that may be granted in the future. After the three year initial term, the employment agreement
+will renew on a year to year basis unless either party notifies the other party at least 90 days before the expiration of the then-current initial term or renewal term. If during the term of the employment agreement, Mr. Holcomb’s
+employment is terminated due to his death or disability, by Patterson-UTI without cause or by Mr. Holcomb for good reason (as such terms are defined in the employment agreement), he will continue to receive his base salary for 12 months
+following the date of termination, or, in the case of termination of his employment by Patterson-UTI without cause or by Mr. Holcomb for good reason where there is more than 12 months remaining in the term, then for the remainder of the term.
+Please see “Employment-Related Agreements” for further description of this agreement. 
+Section 162(m) Considerations
+In considering compensation decisions for the executive management of Patterson-UTI, we routinely consider the potential effect of
+Section 162(m) of the Internal Revenue Code. Section 162(m) imposes a limitation on corporate tax deductions for non-performance based compensation to certain officers that exceeds $1 million that can be taken by a publicly held
+corporation for compensation paid to certain of its executive officers. While Patterson-UTI does not design its compensation programs for tax purposes, Patterson-UTI does design its plans to be tax efficient for Patterson-UTI where possible.
+However, the Committee believes that tax deduction limitations should not compromise Patterson-UTI’s ability to establish and maintain appropriate executive compensation programs and reserves the right to award non-deductible compensation. 
+39 
+Compensation Committee Interlocks and Insider Participation 
+No member of the Committee was, during the year ended December 31, 2013, an officer or employee of Patterson-UTI or any of its
+subsidiaries, or was formerly an officer of Patterson-UTI or any of its subsidiaries, or had any relationships requiring disclosure by Patterson-UTI under Item 404 of Regulation S-K. 
+During the year ended December 31, 2013, none of Patterson-UTI’s executive officers served as (i) a member of the compensation
+committee (or other Board committee performing equivalent functions) of another entity, one of whose executive officers served on the Compensation Committee, (ii) a director of another entity, one of whose executive officers served on the
+Compensation Committee, or (iii) a member of the compensation committee (or other Board committee performing equivalent functions) of another entity, one of whose executive officers served as a director of Patterson-UTI. 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis included in this proxy statement required by
+Item 402(b) of Regulation S-K with management and, based upon such review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement. 
+Terry H. Hunt, Chairman 
+Charles O. Buckner 
+Michael W. Conlon 
+Curtis W. Huff 
+40 
+EXECUTIVE COMPENSATION 
+The following table sets forth information concerning compensation for the fiscal year ended December 31, 2013 with respect to the
+principal executive officer, the principal financial officer and the other Named Executive Officers of Patterson-UTI: 
+SUMMARY
+COMPENSATION TABLE 
+Name and Principal Position(s) 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Stock 
+Awards 
+($)(1) 
+Option 
+Awards 
+($)(2) 
+Non-equity 
+Incentive plan 
+Compensation 
+($)(3) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+William Andrew Hendricks, Jr. 
+2013 
+$ 
+600,000 
+$ 
+— 
+$ 
+3,490,763 
+(4) 
+$ 
+1,321,454 
+$ 
+1,758,943 
+$ 
+— 
+$ 
+7,171,160 
+President & Chief 
+2012 
+$ 
+375,000 
+$ 
+1,075,000 
+(5) 
+$ 
+1,727,000 
+$ 
+820,723 
+$ 
+— 
+$ 
+— 
+$ 
+3,997,723 
+Executive Officer 
+John E. Vollmer III 
+2013 
+$ 
+350,000 
+$ 
+— 
+$ 
+2,327,175 
+(6) 
+$ 
+880,969 
+$ 
+1,172,628 
+$ 
+10,200 
+(7) 
+$ 
+4,740,972 
+Senior Vice President — 
+2012 
+$ 
+350,000 
+$ 
+— 
+$ 
+1,543,920 
+$ 
+998,704 
+$ 
+1,397,022 
+$ 
+10,000 
+(7) 
+$ 
+4,299,646 
+Corporate Development, Chief 
+2011 
+$ 
+350,000 
+$ 
+— 
+$ 
+2,490,663 
+$ 
+870,987 
+$ 
+1,348,040 
+$ 
+9,800 
+(7) 
+$ 
+5,069,490 
+Financial Officer & Treasurer 
+Mark S. Siegel 
+2013 
+$ 
+350,000 
+$ 
+— 
+$ 
+4,654,350 
+(8) 
+$ 
+1,761,938 
+$ 
+2,345,257 
+$ 
+— 
+$ 
+9,111,545 
+Chairman of the Board 
+2012 
+$ 
+350,000 
+$ 
+— 
+$ 
+3,087,840 
+$ 
+1,997,408 
+$ 
+2,794,044 
+$ 
+— 
+$ 
+8,229,292 
+2011 
+$ 
+350,000 
+$ 
+— 
+$ 
+4,981,325 
+$ 
+1,741,974 
+$ 
+2,696,080 
+$ 
+— 
+$ 
+9,769,379 
+Kenneth N. Berns 
+2013 
+$ 
+265,000 
+$ 
+— 
+$ 
+2,327,175 
+(6) 
+$ 
+880,969 
+$ 
+1,172,628 
+$ 
+— 
+$ 
+4,645,772 
+Senior Vice President 
+2012 
+$ 
+265,000 
+$ 
+— 
+$ 
+1,543,920 
+$ 
+998,704 
+$ 
+1,397,022 
+$ 
+— 
+$ 
+4,204,646 
+2011 
+$ 
+265,000 
+$ 
+— 
+$ 
+2,490,663 
+$ 
+870,987 
+$ 
+1,348,040 
+$ 
+— 
+$ 
+4,974,690 
+James M. Holcomb 
+2013 
+$ 
+325,000 
+$ 
+300,738 
+$ 
+759,240 
+$ 
+— 
+$ 
+— 
+$ 
+14,511 
+(9) 
+$ 
+1,399,489 
+President — Patterson-UTI 
+Drilling Company LLC 
+2012 
+$ 
+325,000 
+$ 
+310,000 
+$ 
+484,575 
+$ 
+— 
+$ 
+— 
+$ 
+14,050 
+(9) 
+$ 
+1,133,625 
+(1) 
+Amounts set forth include the fair value of awards at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to restricted stock awarded to the Named Executive Officer in the fiscal years
+ended December 31, 2013, 2012 and 2011 and with respect to performance units awarded to Messrs. Hendricks, Vollmer, Siegel and Berns in the fiscal year ended December 31, 2013 and performance units awarded to Messrs. Vollmer, Siegel and
+Berns in the fiscal years ended December 31, 2012 and 2011. Performance conditions for all awards of restricted stock had been satisfied as of December 31, 2013. Performance units were awarded to Messrs. Vollmer, Siegel and Berns in the
+fiscal year ended December 31, 2010 with a performance period that ended on March 31, 2013. According to the terms of the 2010 awards, the actual number of shares earned by the recipients were equal to two times the target number of
+shares, based upon Patterson-UTI achieving a 93 rd percentile total stockholder return relative to its peer group. Shares of the Company’s Common Stock were issued to settle the 2010
+performance units as follows: Vollmer — 65,000 shares, Siegel — 130,000 shares, Berns — 65,000 shares. Compensation related to these awards was reported for the fiscal year ended December 31, 2010, and no compensation for the
+2010 awards is included in subsequent years. For additional information related to the assumptions used and valuation of restricted stock and performance units see Note 10 to the consolidated financial statements in Patterson-UTI’s Annual
+Report on Form 10-K for the fiscal year ended December 31, 2013. 
+(2) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to stock options awarded to the Named Executive Officer in the fiscal years ended
+December 31, 2013, 2012 and 2011. For additional information related to the assumptions used in connection with the valuation of stock options using the Black-Scholes option pricing model see Note 10 to the consolidated financial statements in
+Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. 
+(3) 
+Represents annual bonuses earned for the fiscal years ended December 31, 2013, 2012 and 2011. The bonus plan in each of those fiscal years provided for a bonus pool based on EBITDA, subject to a minimum EBITDA of
+$400 million for 2013, 2012 and 2011. The bonus pool was allocated among the participants based on a pre-determined sharing percentage. At the direction of the Compensation Committee, the total amount paid out pursuant to the executive bonus pool
+was $6.45 million for 2013, $7.68 million for 2012 and $7.41 million for 2011. 
+(4) 
+Includes $1,973,400 related to an award of shares of restricted stock and $1,517,363 related to an award of performance units during 2013. 
+41 
+(5) 
+Amount includes a signing bonus of $275,000 paid to Mr. Hendricks following the commencement of his employment with Patterson-UTI and an annual bonus for the fiscal year ended December 31, 2012 of $800,000,
+which was paid pursuant to the terms of the offer letter provided to Mr. Hendricks prior to his employment with Patterson-UTI. 
+(6) 
+Includes $1,315,600 related to an award of shares of restricted stock and $1,011,575 related to an award of performance units during 2013. 
+(7) 
+Amounts set forth reflect contributions to a 401(k) plan by Patterson-UTI on behalf of Mr. Vollmer. 
+(8) 
+Includes $2,631,200 related to an award of shares of restricted stock and $2,023,150 related to an award of performance units during 2013. 
+(9) 
+Includes $10,200 in 2013 and $10,000 in 2012 contributed to a 401(k) plan by Patterson-UTI on behalf of Mr. Holcomb and $4,311 in 2013 and $4,050 in 2012 for the use of a Patterson-UTI automobile.
+The following table sets forth information concerning grants of plan-based awards during the fiscal year ended
+December 31, 2013 to the Named Executive Officers: 
+Grants of Plan-Based Awards 
+Estimated Future Payouts 
+under 
+Non-equity Incentive Plan 
+Awards 
+Estimated Future Payouts under 
+Equity Incentive Plan Awards 
+All Other 
+Stock Awards: 
+Number of 
+Shares of 
+Stock or Units 
+(#)(3) 
+All Other 
+Option: Awards 
+Number
+of 
+Securities 
+Underlying 
+Options (#)(4) 
+Exercise or 
+Base Price 
+of Option 
+Awards 
+($/Sh) 
+Grant Date 
+Fair Value of 
+Stock and 
+Option Awards 
+($)(5) 
+Name 
+Grant 
+Date 
+Threshold 
+($) 
+Target 
+($) 
+Maximum 
+($) 
+Threshold 
+(#) 
+Target 
+(#) 
+Maximum 
+(#) 
+William Andrew Hendricks, Jr 
+2/05/13 
+(1) 
+$ 
+600,000 
+$ 
+1,758,943 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/22/13 
+(2) 
+— 
+— 
+— 
+32,250 
+64,500 
+129,000 
+— 
+— 
+— 
+$ 
+1,517,363 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+86,250 
+— 
+— 
+$ 
+1,973,400 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+172,500 
+$ 
+22.88 
+$ 
+1,321,454 
+John E. Vollmer III 
+2/05/13 
+(1) 
+$ 
+400,000 
+$ 
+1,172,628 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/22/13 
+(2) 
+— 
+— 
+— 
+21,500 
+43,000 
+86,000 
+— 
+— 
+— 
+$ 
+1,011,575 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+57,500 
+— 
+— 
+$ 
+1,315,600 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+115,000 
+$ 
+22.88 
+$ 
+880,969 
+Mark S. Siegel 
+2/05/13 
+(1) 
+$ 
+800,000 
+$ 
+2,345,257 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/22/13 
+(2) 
+— 
+— 
+— 
+43,000 
+86,000 
+172,000 
+— 
+— 
+— 
+$ 
+2,023,150 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+115,000 
+— 
+— 
+$ 
+2,631,200 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+230,000 
+$ 
+22.88 
+$ 
+1,761,938 
+Kenneth N. Berns 
+2/05/13 
+(1) 
+$ 
+400,000 
+$ 
+1,172,628 
+$ 
+5,000,000 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+4/22/13 
+(2) 
+— 
+— 
+— 
+21,500 
+43,000 
+86,000 
+— 
+— 
+— 
+$ 
+1,011,575 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+57,500 
+— 
+— 
+$ 
+1,315,600 
+4/22/13 
+— 
+— 
+— 
+— 
+— 
+— 
+— 
+115,000 
+$ 
+22.88 
+$ 
+880,969 
+James M. Holcomb 
+6/09/13 
+— 
+— 
+— 
+— 
+— 
+— 
+36,000 
+— 
+— 
+$ 
+759,240 
+(1) 
+The 2013 bonus plan for Named Executive Officers for the fiscal year ended December 31, 2013 was approved on February 5, 2013. The 2013 bonus plan for Messrs. Hendricks, Vollmer, Siegel and Berns provided for
+a bonus pool based on a percentage of EBITDA for the fiscal year ended December 31, 2013, subject to a minimum EBITDA of $400 million. The Compensation Committee set a targeted EBITDA percentage range of 0.55% to 0.81%. The actual percentage
+awarded was based on the Compensation Committee’s assessment of the Company’s and executive management’s progress toward and achievement of certain strategic and other objectives. The Compensation Committee set the EBITDA payment
+percentage at 0.70% based on these criteria. The bonus pool was allocated among Messrs. Hendricks, Vollmer, Siegel and Berns based on a pre-determined sharing percentage. The threshold amount presented in this table is calculated for the respective
+officer based on the approved allocation formula and an assumed EBITDA of $400 million using 0.55% of EBITDA (the bottom of the target range) as set forth when the plan was approved due to the fact that the bonus plan provided for no payment if the
+minimum EBITDA of $400 million is not satisfied (for 2014, the minimum EBITDA has been increased to $500 million). The target amount is calculated based on Patterson-UTI’s actual EBITDA for the fiscal year ended December 31, 2013, the
+EBITDA percentage as approved by the Compensation Committee and the allocation formula applied to the bonus pool for distribution. The cash bonuses awarded from the bonus pool were awarded under the LTIP, which has been designed to meet the
+requirements of Section 162(m) of the Code. Although the bonus pool for Messrs. Hendricks, Vollmer, Siegel and Berns did not have an EBITDA cap, the maximum amount that could be awarded to an individual under any cash-based performance award
+granted under the LTIP during a 12-month period is $5,000,000. 
+42 
+(2) 
+On April 22, 2013, Patterson-UTI granted performance unit awards to Messrs. Hendricks, Vollmer, Siegel and Berns. These awards provide for the recipients to receive shares of Common Stock upon the achievement of
+certain performance goals established by Patterson-UTI during a specified period. The performance period is the period from April 1, 2013 through March 31, 2016, subject to certain exceptions that could extend the performance period up to
+two additional years, as described in “Compensation Discussion and Analysis” above (any performance units granted after 2013 will not provide for an extension of the initial three-year performance period). The performance goals are tied to
+Patterson-UTI’s total shareholder return for the performance period as compared to total shareholder return for a peer group determined by the Compensation Committee. The recipients will receive a target number of shares if the Company’s
+total shareholder return is positive and, when compared to the peer group, is at the 50 th percentile and two times the target if at the 75 th 
+percentile or higher. If the Company’s total shareholder return is positive, and, when compared to the peer group, is at the 25 th percentile, the recipients will only receive one-half of the
+target number of shares. The grant of shares when achievement is between the 25 th and 75 th percentile will be determined on a pro-rata basis.
+(3) 
+Shares of restricted stock were awarded pursuant to the 2005 Long-Term Incentive Plan. Ordinary dividends are paid on unvested shares of restricted stock. The rate at which these dividends are paid is the same rate at
+which ordinary dividends are paid on all other shares of Common Stock. The right to receive these dividends has been included in the grant date fair value of stock awards presented in the table. The shares awarded to Messrs. Hendricks, Vollmer,
+Siegel and Berns vest over a three-year period as follows: one-third on April 22, 2014, and the remaining two-thirds in equal monthly installments over the 24 months following April 22, 2014. The shares awarded to Mr. Holcomb vest
+over a three-year period as follows: one-third on June 9, 2014, one-third on June 9, 2015 and one-third on June 9, 2016. 
+(4) 
+Options were granted pursuant to the 2005 Long-Term Incentive Plan. Options awarded to Messrs. Hendricks, Vollmer, Siegel and Berns vest over a three year period as follows: one-third on April 22, 2014, and the
+remaining two-thirds in equal monthly installments over the 24 months following April 22, 2014. 
+(5) 
+The grant date fair value of restricted stock is based on the closing price of Patterson-UTI Common Stock on the date of grant, which is consistent with the valuation used by Patterson-UTI for the recognition of
+compensation expense under FASB ASC Topic 718. The grant date fair value of stock options was determined using the Black-Scholes option pricing model, which is consistent with the valuation used by Patterson-UTI for the recognition of compensation
+expense under FASB ASC Topic 718, with assumptions that are more fully described in Note 10 to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013. The grant date
+fair value of performance unit awards was determined based on a Monte-Carlo simulation model which is consistent with the valuation used by Patterson-UTI for the recognition of compensation expense under FASB ASC Topic 718. 
+43 
+The following table sets forth information concerning outstanding equity awards at
+December 31, 2013 for the Named Executive Officers: 
+Outstanding Equity Awards 
+at Fiscal Year-End 
+Name 
+Option Awards 
+Stock Awards 
+Number of Shares 
+or Units of Stock 
+That Have 
+Not Vested (#) 
+Market Value of 
+Shares or Units 
+of 
+Stock That Have 
+Not Vested ($)(1) 
+Equity Incentive 
+Plan Awards: 
+Number of 
+Unearned Shares, 
+Units or Other 
+Rights that 
+Have Not Vested(2) 
+Equity Incentive 
+Plan Awards: 
+Market 
+or Payout Value of 
+Unearned Shares, 
+Units or
+Other 
+Rights that Have 
+Not Vested ($)(1) 
+Number of Securities 
+Underlying Unexercised 
+Options (#) 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date 
+Exercisable 
+Unexercisable 
+William Andrew Hendricks, Jr. 
+55,557 
+44,443 
+(3) 
+$ 
+17.27 
+04/01/22 
+152,917 
+(4) 
+$ 
+3,871,858 
+64,500 
+(5) 
+$ 
+1,633,140 
+9,722 
+15,278 
+(6) 
+$ 
+15.82 
+09/30/22 
+— 
+172,500 
+(7) 
+$ 
+22.88 
+04/21/23 
+John E. Vollmer III 
+60,000 
+— 
+$ 
+19.14 
+04/27/14 
+84,111 
+(8) 
+$ 
+2,129,691 
+117,250 
+(9) 
+$ 
+2,968,770 
+75,000 
+— 
+$ 
+24.63 
+04/26/15 
+125,000 
+— 
+$ 
+28.16 
+07/31/16 
+150,000 
+— 
+$ 
+24.17 
+04/22/17 
+119,000 
+— 
+$ 
+29.31 
+04/24/18 
+175,000 
+— 
+$ 
+13.17 
+04/27/19 
+177,500 
+— 
+$ 
+14.83 
+04/26/20 
+61,333 
+7,667 
+(10) 
+$ 
+31.20 
+04/25/21 
+88,888 
+71,112 
+(3) 
+$ 
+16.20 
+04/23/22 
+— 
+115,000 
+(7) 
+$ 
+22.88 
+04/21/23 
+Mark S. Siegel 
+120,000 
+— 
+$ 
+19.14 
+04/27/14 
+168,222 
+(11) 
+$ 
+4,259,381 
+234,500 
+(12) 
+$ 
+5,937,540 
+150,000 
+— 
+$ 
+24.63 
+04/26/15 
+250,000 
+— 
+$ 
+28.16 
+07/31/16 
+300,000 
+— 
+$ 
+24.17 
+04/22/17 
+238,000 
+— 
+$ 
+29.31 
+04/24/18 
+350,000 
+— 
+$ 
+13.17 
+04/27/19 
+355,000 
+— 
+$ 
+14.83 
+04/26/20 
+122,667 
+15,333 
+(10) 
+$ 
+31.20 
+04/25/21 
+177,777 
+142,223 
+(3) 
+$ 
+16.20 
+04/23/22 
+— 
+230,000 
+(7) 
+$ 
+22.88 
+04/21/23 
+Kenneth N. Berns 
+60,000 
+— 
+$ 
+19.14 
+04/27/14 
+84,111 
+(8) 
+$ 
+2,129,691 
+117,250 
+(9) 
+$ 
+2,968,770 
+75,000 
+— 
+$ 
+24.63 
+04/26/15 
+125,000 
+— 
+$ 
+28.16 
+07/31/16 
+150,000 
+— 
+$ 
+24.17 
+04/22/17 
+119,000 
+— 
+$ 
+29.31 
+04/24/18 
+175,000 
+— 
+$ 
+13.17 
+04/27/19 
+177,500 
+— 
+$ 
+14.83 
+04/26/20 
+61,333 
+7,667 
+(10) 
+$ 
+31.20 
+04/25/21 
+88,888 
+71,112 
+(3) 
+$ 
+16.20 
+04/23/22 
+— 
+115,000 
+(7) 
+$ 
+22.88 
+04/21/23 
+James M. Holcomb 
+44,445 
+— 
+$ 
+12.32 
+10/28/18 
+67,667 
+(13) 
+$ 
+1,713,328 
+— 
+— 
+(1) 
+Based on the closing price of Patterson-UTI Common Stock on December 31, 2013 of $25.32 per share. 
+(2) 
+As of December 31, 2013, performance unit awards had been granted to Messrs. Hendricks, Vollmer, Siegel and Berns. The 2011 performance unit awards were granted on April 26, 2011 and provide for an award of
+shares of Patterson-UTI common stock to the recipient based on Patterson-UTI’s total shareholder return compared to a peer group of companies for the performance period from April 1, 2011 through March 31, 2014. The 2012 performance
+unit awards were granted on April 24, 2012 and provide for an award of shares of Patterson-UTI common stock to the recipient based on Patterson-UTI’s total shareholder return compared to a peer group of companies for the performance period
+from April 1, 2012 through March 31, 2015. The 2013 performance unit awards were granted on April 22, 2013 and provide for an award of shares of Patterson-UTI common stock to the recipient based on Patterson-UTI’s total
+shareholder return compared to a peer group of companies for the performance period from April 1, 2013 through March 31, 2016. All performance unit awards provide for a target payout based on a target level of total shareholder return
+compared to the peer group. The amounts presented in this column represent the target payout under the performance unit awards. Based on Patterson-UTI’s total shareholder return during the performance period, the recipients could receive a
+number of shares ranging from no shares to two times the target number of shares. 
+44 
+(3) 
+These options vest in equal monthly installments from January 24, 2014 through April 24, 2015. 
+(4) 
+These shares of restricted stock vest as follows: 66,667 shares that vest in equal annual installments on April 24, 2014 and April 24, 2015; 28,750 shares that vest on April 22, 2014 and 57,500 shares
+that vest in equal monthly installments from May 22, 2014 through April 22, 2016. 
+(5) 
+These are shares related to the 2013 performance unit award. 
+(6) 
+These options vest in equal monthly installments from January 1, 2014 through October 1, 2015. 
+(7) 
+These options vest as follows: one-third on April 22, 2014 and the remainder in equal monthly installments over the 24 months following April 22, 2014. 
+(8) 
+These shares of restricted stock vest as follows: 5,278 shares in equal monthly installments from January 26, 2014 through April 26, 2014; 21,333 shares in equal monthly installments from January 24, 2014
+through April 24, 2015; 19,166 shares on April 22, 2014 and 38,334 shares in equal monthly installments from May 22, 2014 through April 22, 2016. 
+(9) 
+Amount includes 26,250 shares related to the 2011 performance unit award, 48,000 shares related to the 2012 performance unit award and 43,000 shares related to the 2013 performance unit award. 
+(10) 
+These options vest in equal monthly installments from January 26, 2014 through April 26, 2014. 
+(11) 
+These shares of restricted stock vest as follows: 10,556 shares in equal monthly installments from January 26, 2014 through April 26, 2014; 42,666 shares in equal monthly installments from January 24,
+2014 through April 24, 2015; 38,333 shares on April 22, 2014 and 76,667 shares in equal monthly installments from May 22, 2014 through April 22, 2016. 
+(12) 
+Amount includes 52,500 shares related to the 2011 performance unit award, 96,000 shares related to the 2012 performance unit award and 86,000 shares related to the 2013 performance unit award. 
+(13) 
+These shares of restricted stock vest as follows: 32,833 shares on June 9, 2014; 22,834 shares on June 9, 2015 and 12,000 shares on June 9, 2016. 
+The following table sets forth information concerning option exercises and stock awards vested during the fiscal year ended December 31,
+2013 for the Named Executive Officers: 
+OPTION EXERCISES AND STOCK VESTED 
+Option awards 
+Stock awards 
+Name 
+Number of 
+shares acquired 
+on exercise (#) 
+Value realized 
+on exercise ($) 
+Number of 
+shares acquired 
+on vesting (#) 
+Value realized 
+on vesting ($)(1) 
+William Andrew Hendricks, Jr. 
+— 
+$ 
+— 
+33,333 
+$ 
+776,326 
+John E. Vollmer III 
+190,000 
+$ 
+1,447,800 
+113,056 
+$ 
+2,564,434 
+Mark S. Siegel 
+380,000 
+$ 
+2,895,600 
+226,112 
+$ 
+5,128,865 
+Kenneth N. Berns 
+190,000 
+$ 
+1,447,800 
+113,056 
+$ 
+2,564,434 
+James M. Holcomb 
+— 
+$ 
+— 
+30,833 
+$ 
+650,268 
+(1) 
+Value realized on vesting is based on the closing price of Patterson-UTI common stock on the day immediately prior to the date at which the respective shares vested. 
+Patterson-UTI provides no pension benefits for any of the Named Executive Officers. None of the Named Executive Officers had any items of
+nonqualified deferred compensation during 2013. As a result, tables with respect to pension benefits and nonqualified deferred compensation have not been provided. 
+45 
+DIRECTOR COMPENSATION 
+The following table sets forth information concerning compensation for the fiscal year ended December 31, 2013 with respect to the
+directors of Patterson-UTI who are not executive officers: 
+DIRECTOR COMPENSATION TABLE 
+Name 
+Fees earned or paid 
+in cash 
+($) 
+Stock awards 
+($)(1) 
+Option awards 
+($)(2) 
+All other 
+compensation 
+($) 
+Total 
+($) 
+Charles O. Buckner 
+$ 
+60,000 
+$ 
+55,890 
+$ 
+68,729 
+$ 
+— 
+$ 
+184,619 
+Michael W. Conlon 
+$ 
+45,000 
+$ 
+55,890 
+$ 
+68,729 
+$ 
+— 
+$ 
+169,619 
+Curtis W. Huff 
+$ 
+75,000 
+$ 
+55,890 
+$ 
+68,729 
+$ 
+— 
+$ 
+199,619 
+Terry H. Hunt 
+$ 
+60,000 
+$ 
+55,890 
+$ 
+68,729 
+$ 
+— 
+$ 
+184,619 
+Cloyce A. Talbott 
+$ 
+35,000 
+$ 
+55,890 
+$ 
+68,729 
+$ 
+— 
+$ 
+159,619 
+(1) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to restricted stock awarded to the directors in the fiscal year ended December 31,
+2013. For additional information related to the assumptions used and valuation of restricted stock, see Note 10 to the consolidated financial statements in Patterson-UTI’s Annual Report on Form 10-K for the fiscal year ended December 31,
+2013. Messrs. Buckner, Conlon, Huff, Hunt and Talbott each received an award of 3,000 shares of restricted stock on January 1, 2013 with a market value of $18.63 per share which fully vested on January 1, 2014. As of December 31,
+2013, Messrs. Buckner, Conlon, Huff, Hunt and Talbott each held 3,000 unvested shares of restricted stock. 
+(2) 
+Amounts set forth represent the fair value at the date of grant as determined in accordance with FASB ASC Topic 718 with respect to stock options awarded to the directors in the fiscal year ended December 31, 2013.
+For additional information related to the assumptions used in connection with the valuation of stock options using the Black-Scholes option pricing model see Note 10 to the consolidated financial statements in Patterson-UTI’s Annual Report on
+Form 10-K for the fiscal year ended December 31, 2013. Messrs. Buckner, Conlon, Huff, Hunt and Talbott each received options to purchase 10,000 shares of stock on January 1, 2013 with a fair value of $6.87 per share, which fully vested on
+January 1, 2014. As of December 31, 2013, Messrs. Huff and Hunt each held options to purchase a total of 80,000 shares of Common Stock, of which options to purchase 10,000 shares were unvested. As of December 31, 2013,
+Mr. Buckner held options to purchase a total of 70,000 shares of Common Stock, of which options to purchase 10,000 shares were unvested. As of December 31, 2013, Mr. Conlon held options to purchase a total of 20,000 shares of Common
+Stock, of which options to purchase 10,000 shares were unvested. As of December 31, 2013, Mr. Talbott held options to purchase a total of 830,000 shares of Common Stock, of which options to purchase 10,000 shares were unvested.
+Directors who are also employees of Patterson-UTI do not receive compensation for serving as a director or as a member of a
+committee of the Board of Directors. All directors are reimbursed for reasonable out-of-pocket expenses incurred in connection with serving as a member of the Board of Directors. Each non-employee director receives annual cash compensation of
+$35,000 and (i) 3,000 shares of restricted stock subject to one-year vesting (subject to acceleration in certain limited situations, including a change of control) and (ii) an option to purchase 10,000 shares of Common Stock at an exercise
+price equal to the closing price of Common Stock on the grant date. The option has a 10-year term, vests after one-year (subject to acceleration in certain limited situations, including a change of control) and contains a right to exercise for three
+years following cessation of the holder as a director (but not beyond the 10-year term). Each non-employee director that serves on the Audit Committee or the Compensation Committee receives additional annual cash compensation of $10,000 per
+committee on which he serves, with the chairman of each such committee receiving $15,000. The Lead Director receives additional annual cash compensation of $20,000. 
+46 
+EMPLOYMENT-RELATED AGREEMENTS 
+Change in Control 
+Patterson-UTI has
+entered into change in control agreements with Messrs. Siegel, Hendricks, Berns and Vollmer (each agreement, a “CIC Agreement” and collectively, the “CIC Agreements”; and each individual, an “Employee” and collectively,
+the “Employees”). The CIC Agreements were entered into to protect the Employees should a change in control occur, thereby encouraging the Employee to remain in the employ of Patterson-UTI and not be distracted from the performance of his
+duties to Patterson-UTI by the possibility of a change in control. 
+In the event of a change in control of Patterson-UTI in which an
+Employee’s employment is terminated by Patterson-UTI other than for cause or by the Employee for good reason, the terms of the CIC Agreements would entitle the Employee to, among other things: 
+Ÿ 
+a bonus payment equal to the highest annual bonus paid after the CIC Agreement was entered into (such bonus payment prorated for the portion of the fiscal year preceding the termination date), 
+Ÿ 
+a payment equal to 2.5 times (in the case of Messrs. Siegel and Hendricks) or 2.0 times (in the case of Messrs. Berns and Vollmer) the sum of (i) the highest annual salary in effect for such Employee during the
+term of the CIC Agreement and (ii) the average of the three annual bonuses earned by the Employee for the three fiscal years preceding the termination date (or a benchmark bonus in the case of Mr. Hendricks), and 
+Ÿ 
+continued coverage under Patterson-UTI’s welfare plans for up to three years (in the case of Messrs. Siegel and Hendricks) or two years (in the case of Messrs. Berns and Vollmer). 
+The CIC Agreements with Messrs. Vollmer, Siegel and Berns contain a tax gross-up for the excise tax imposed on parachute payments, which were
+customary when these agreements were entered into more than ten years ago. While the Compensation Committee believes the tax gross-up provision is a valuable tool for executive retention, the Compensation Committee recognizes that tax gross-up
+provisions may no longer be viewed as customary. Going forward, the Compensation Committee does not plan to provide tax gross-ups in connection with compensation arrangements, and the CIC Agreement entered into in April 2012 with Mr. Hendricks
+does not include a tax gross-up provision. 
+A “change in control” is principally defined by the CIC Agreement as: 
+Ÿ 
+an acquisition by any individual, entity or group of beneficial ownership of 35% or more of either Patterson-UTI’s then outstanding Common Stock or the combined voting power of the then outstanding voting
+securities of Patterson-UTI entitled to vote in the election of directors, 
+Ÿ 
+a change occurs in which the members of the Board of Directors as of the date of the CIC Agreement cease to constitute at least a majority of Patterson-UTI’s Board of Directors unless that change occurs through a
+vote of at least a majority of the incumbent members of the Board of Directors, or 
+Ÿ 
+a change in the beneficial ownership of Patterson-UTI following consummation of a reorganization, merger, consolidation, sale of Patterson-UTI or any subsidiary of Patterson-UTI or a disposition of all or substantially
+all of the assets of Patterson-UTI, in which the beneficial owners immediately prior to the transaction own 65% or less of outstanding common stock of the newly combined or merged entity. 
+The CIC Agreements terminate on the first to occur of: 
+Ÿ 
+the Employee’s death, disability or retirement, 
+Ÿ 
+the termination of the Employee’s employment, or 
+Ÿ 
+January 29, 2015 although, unless otherwise terminated, the CIC Agreements automatically renew for successive 12-month periods until Patterson-UTI notifies the Employee at least 90 days before the expiration of the
+initial term or the renewal period, as applicable, that the term will not be extended. Patterson-UTI has not provided any such notification to the Employees. 
+47 
+All unvested stock options and restricted stock awards held by Messrs. Siegel, Hendricks, Berns
+and Vollmer vest upon a change of control as defined by the underlying award agreements. Upon a change in control as defined in the underlying performance unit award grants, Messrs. Hendricks, Vollmer, Siegel and Berns would receive the target
+number of shares issuable thereunder. All restricted stock and performance unit awards held by Messrs. Siegel, Hendricks, Berns and Vollmer contain provisions that in the event of termination due to death or disability, the Named Executive Officer
+would vest in a portion of the award. 
+Amounts that each of the Named Executive Officers would be entitled to under the existing Agreements
+(or in the case of Mr. Holcomb, his employment agreement) if a change in control had occurred as of December 31, 2013 and the employee’s employment was terminated by Patterson-UTI other than for cause or terminated by the employee for
+good reason (as defined in the Agreements or in the case of Mr. Holcomb, his employment agreement) are reflected in the following table: 
+Cash Payments 
+Other Benefits 
+Name 
+Bonus 
+Payment 
+($)(1) 
+Salary and 
+Bonus 
+($)(2) 
+Option 
+Awards 
+($)(3) 
+Stock 
+Awards 
+($)(3) 
+Performance 
+Unit Awards 
+($)(4) 
+Continued 
+Benefits 
+($)(5) 
+Total 
+($) 
+William Andrew Hendricks, Jr 
+$ 
+800,000 
+$ 
+3,500,000 
+$ 
+923,807 
+$ 
+3,871,858 
+$ 
+1,633,140 
+$ 
+21,479 
+$ 
+10,750,284 
+John E. Vollmer III 
+$ 
+1,397,022 
+$ 
+2,927,202 
+$ 
+1,946,684 
+$ 
+2,129,691 
+$ 
+2,968,770 
+$ 
+14,319 
+$ 
+11,383,688 
+Mark S. Siegel 
+$ 
+2,794,044 
+$ 
+6,443,005 
+$ 
+3,893,378 
+$ 
+4,259,381 
+$ 
+5,937,540 
+$ 
+— 
+$ 
+23,327,348 
+Kenneth N. Berns 
+$ 
+1,397,022 
+$ 
+2,757,202 
+$ 
+1,946,684 
+$ 
+2,129,691 
+$ 
+2,968,770 
+$ 
+— 
+$ 
+11,199,369 
+James M. Holcomb(6) 
+$ 
+— 
+$ 
+325,000 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+7,160 
+$ 
+332,160 
+(1) 
+The assumed bonus payment is equal to the highest annual bonus paid from the time the CIC Agreements were entered into through December 31, 2013. 
+(2) 
+The assumed salary and bonus payment represents 2.5 times (in the case of Messrs. Siegel and Hendricks) or 2.0 times (in the case of Messrs. Berns and Vollmer) of the sum of the 2013 salary in effect for each employee
+and the average of the annual bonuses earned by each employee for 2012, 2011 and 2010 or a benchmark bonus in the case of Mr. Hendricks. Bonus amounts earned for 2013 were not considered in this calculation as they were not determined until
+after December 31, 2013. In the case of Mr. Holcomb, the payment represents 12 months of his base salary as determined in accordance with his employment agreement. 
+(3) 
+Each of the option and stock award agreements for Messrs. Hendricks, Vollmer, Siegel and Berns provide that unvested options and awards will immediately vest upon a change in control. Amounts presented in the table
+represent the value of unvested option and stock awards using the market price of Patterson-UTI Common Stock at December 31, 2013. 
+(4) 
+Share settled performance units awarded to Messrs. Vollmer, Siegel and Berns in 2011, 2012 and 2013 and to Mr. Hendricks in 2013 include a provision that upon a change in control as defined in the respective award
+agreements, the Named Executive Officer will receive an award of shares equal to the target amount set forth in each agreement. Amounts presented in the table represent the assumed award of the target number of shares if a change in control had
+occurred on December 31, 2013 valued at the December 31, 2013 closing price of Patterson-UTI Common Stock of $25.32 per share. 
+(5) 
+Messrs. Hendricks, Vollmer and Holcomb participated in Patterson-UTI’s health and welfare plans as of December 31, 2013. The amounts presented represent Patterson-UTI’s portion of the premiums for three
+years in the case of Mr. Hendricks, two years in the case of Mr. Vollmer and one year in the case of Mr. Holcomb based on the rates in effect at December 31, 2013. 
+(6) 
+Patterson-UTI has entered into an employment agreement with Mr. Holcomb that provides certain benefits if his employment is terminated by Patterson-UTI other than for cause or by him for good reason.
+Severance Agreements 
+Patterson-UTI has entered into written letter agreements with each of Messrs. Siegel, Berns and Vollmer pursuant to which Patterson-UTI has
+agreed to pay each such person within ten days of the termination of his employment with Patterson-UTI for any reason (including voluntary termination by him), an amount in cash equal to his annual base salary at the time of such termination. Any
+payment made by Patterson-UTI pursuant to 
+48 
+these letter agreements will reduce dollar for dollar any payment owed to such person, if any, pursuant to the change in control agreements discussed above. 
+Patterson-UTI has entered into a Severance Agreement with Mr. Hendricks (the “Severance Agreement”). The term of the Severance
+Agreement expires on the third anniversary of the effective date of the Severance Agreement. If during the term of the Severance Agreement Mr. Hendricks’ employment terminates by reason of a Qualifying Termination (as defined in the
+Severance Agreement), Patterson-UTI will pay Mr. Hendricks a lump-sum cash payment of $750,000 less any Severance Payment received by or payable to Mr. Hendricks under his change in control agreement described above or any other similar
+change in control agreement. 
+Under the Severance Agreement, “Qualifying Termination” means a termination of
+Mr. Hendricks’ employment (1) by Patterson-UTI for any reason other than cause or (2) if certain conditions are met, by Mr. Hendricks due to Patterson-UTI reducing his annual base salary to an amount that is less than
+$450,000 per year. 
+Employment Agreement with Mr. Holcomb 
+In January 2012, Patterson-UTI entered into an employment agreement with Mr. Holcomb in connection with his promotion to President of
+Patterson-UTI Drilling Company LLC. Pursuant to his employment agreement, Patterson-UTI will employ Mr. Holcomb for an initial term of three years beginning January 1, 2012 at an annualized salary of $325,000 per year, subject to any
+increases that may be granted in the future. Such employment shall continue on a year to year basis unless either party notifies the other party at least 90 days before the expiration of the then-current initial term or renewal term.
+Mr. Holcomb agreed to restrictions regarding Patterson-UTI’s confidential information and to not compete with Patterson-UTI or solicit its employees or customers for two years following the date of termination of his employment. If during
+the term of the employment agreement, Mr. Holcomb’s employment is terminated due to his death or disability, by Patterson-UTI without cause or by Mr. Holcomb for good reason (as such terms are defined in the employment agreement), he
+will continue to receive his base salary for 12 months following the date of termination, or, in the case of termination of his employment by Patterson-UTI without cause or by Mr. Holcomb for good reason where there is more than 12 months
+remaining in the term, then for the remainder of the term. During the 12 month period following his termination, Mr. Holcomb and his eligible dependents as of the date of termination shall continue to be covered by all medical, vision and
+dental plans (but not including life or disability insurance) at the same active employee premium cost as a similarly situated active employee; provided that such benefits shall cease if he becomes entitled to any group health benefits from a new
+employer. 
+Death or Disability 
+All
+restricted stock and performance unit awards held by Messrs. Hendricks, Vollmer, Siegel and Berns provide that in the event of termination of employment due to death or disability, the holder would vest in a portion of the award. With respect to
+Mr. Hendricks, such a termination would have resulted in the accelerated vesting of 43,661 shares of restricted stock with a fair value of $1,105,497. With respect to Messrs. Vollmer and Berns, such a termination at December 31, 2013 would
+have resulted in the accelerated vesting of 13,846 shares of restricted stock with a fair value of $350,581. With respect to Mr. Siegel, such a termination at December 31, 2013 would have resulted in the accelerated vesting of 27,693
+shares of restricted stock with a fair value of $701,187. In the event of termination of employment due to death or disability, the holders of performance units would vest in the portion of the performance unit award that was earned at the time of
+death or disability. This payment would be determined at the end of the performance period and would equal the amount that the holder would have received at that time, pro-rated for the amount of time from the date of grant through the date of death
+or disability. 
+Indemnification Agreements 
+Patterson-UTI has entered into an indemnification agreement with Messrs. Hendricks, Vollmer, Siegel and Berns and each of its directors
+containing provisions that may require Patterson-UTI, among other things, to indemnify such executive officers and directors against liabilities that may arise by reason of their status or service as executive officers or directors (subject to
+certain exceptions) and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. 
+49 
+CERTAIN TRANSACTIONS 
+In connection with the acquisition by REMY Capital Partners III, L.P. (“REMY Capital”) of an ownership interest in UTI Energy Corp.
+in March 1995, REMY Capital succeeded to a registration rights agreement with UTI. As the successor-in-interest to UTI, Patterson-UTI assumed this registration rights agreement pursuant to which REMY Capital has the right to require Patterson-UTI to
+use its reasonable efforts to register shares held by REMY Capital under the Securities Act of 1933, as amended. In the event that such rights are exercised in connection with a primary offering proposed by Patterson-UTI (or a secondary offering
+with which Patterson-UTI agrees to participate), REMY Capital would bear its pro rata share of the costs of the offering, other than legal, accounting and printing costs, all of which Patterson-UTI would bear. In the event that REMY Capital elects
+to exercise such rights other than in connection with an offering in which Patterson-UTI participates, REMY Capital would bear all costs of the offering. These rights continue so long as REMY Capital continues to own the Common Stock that it
+acquired in March 1995. As of the date of this proxy statement, REMY Capital continues to hold 1,000,000 shares of such Common Stock. 
+Mr. Siegel, Chairman of the Board of Patterson-UTI, is President and sole stockholder of REMY Investors, which is the general partner of
+REMY Capital. Mr. Berns, a director and Senior Vice President of Patterson-UTI, is an executive of REMY Investors. 
+In connection with
+Mr. Vollmer’s appointment as Chief Financial Officer, Patterson-UTI delivered a letter to Mr. Vollmer dated February 6, 2006 (the “Letter Agreement”). Pursuant to the Letter Agreement, Patterson-UTI generally agreed, to
+the extent permitted by law and provided that the applicable accounting restatement pending at that time did not result from Patterson-UTI’s material non-compliance with financial reporting requirements under the federal securities laws as a
+result of knowing misconduct by Mr. Vollmer, not to make any claim against Mr. Vollmer for certain compensation received or profits realized, or relating to securities acquired, prior to September 30, 2005. Patterson-UTI also
+generally agreed to indemnify Mr. Vollmer against all losses in connection with his defense of any claim against him under Section 304 of the Sarbanes-Oxley Act of 2002 (“Section 304”) in contravention of the immediately
+preceding sentence. Notwithstanding court decisions that Patterson-UTI’s right to make any such claims appears doubtful, Patterson-UTI entered into this agreement because of the breadth of language of Section 304 and the uncertainty as to
+how the statute may be interpreted by the courts in the future. 
+Patterson-UTI has a written policy with respect to related person
+transactions. In accordance with this policy, related person transactions are reviewed by the Lead Director or the chair of the Audit Committee, each of whom has full delegated authority to approve, disapprove, ratify, amend, terminate or rescind
+any such transaction, or direct that such transaction be submitted to the Audit Committee or the full Board of Directors for consideration. In approving or disapproving related person transactions, the relevant facts and circumstances of the related
+person transaction are considered, including whether such transaction is in, or not inconsistent with, the best interest of Patterson-UTI and whether, in appropriate cases, such transaction is on commercial terms at least as favorable to
+Patterson-UTI as would otherwise be available to or from an unrelated third party or to Patterson-UTI’s employees generally. Related person transactions generally include transactions in an amount that exceeds $50,000 between Patterson-UTI or
+any of its subsidiaries and an executive officer, a director (or nominee to become director), an immediate family member of any of the foregoing or any entity in which any of the foregoing has a 10% or greater beneficial ownership interest or in
+which they are an executive officer, general partner, principal or engaged in a similar position. Certain related person transactions have been pre-approved under the terms of the policy, including, subject to certain exceptions and limitations, the
+sale to or purchase from Patterson-UTI of goods and services by entities related to directors in the ordinary course of business that are immaterial to Patterson-UTI and with respect to which the director has no direct economic interest or decision
+making authority. 
+50 
+SECURITY OWNERSHIP OF CERTAIN 
+BENEFICIAL OWNERS AND MANAGEMENT 
+The following table sets forth, as of February 26, 2014, the stock ownership of (i) the Named Executive Officers, directors and Board
+nominees, individually, (ii) all directors, Board nominees and executive officers as a group and (iii) each person known by Patterson-UTI to be the beneficial owner of more than 5% of Common Stock. 
+Name of 
+Beneficial Owner 
+Amount and 
+Nature of 
+Beneficial 
+Ownership 
+Percent 
+of Class 
+Beneficial Owners of more than 5% of Patterson-UTI’s Common Stock: 
+Artisan Partners Holdings LP 
+11,745,246 
+(1) 
+8.1 
+% 
+BlackRock, Inc. 
+10,045,129 
+(2) 
+7.0 
+% 
+Wellington Management Company, LLP. 
+9,997,172 
+(3) 
+6.9 
+% 
+The Vanguard Group 
+8,025,427 
+(4) 
+5.6 
+% 
+Directors and Named Executive Officers: 
+Mark S. Siegel 
+4,049,049 
+(5) 
+2.8 
+% 
+William Andrew Hendricks, Jr. 
+310,157 
+(6) 
+* 
+John E. Vollmer III 
+1,745,499 
+(7) 
+1.2 
+% 
+Kenneth N. Berns 
+1,519,874 
+(8) 
+1.0 
+% 
+James M. Holcomb. 
+229,576 
+(9) 
+* 
+Charles O. Buckner 
+84,000 
+(10) 
+* 
+Michael W. Conlon 
+32,000 
+(11) 
+* 
+Curtis W. Huff 
+137,880 
+(12) 
+* 
+Terry H. Hunt 
+115,000 
+(13) 
+* 
+Cloyce A. Talbott 
+1,120,476 
+(14) 
+* 
+All directors and executive officers as a group (11 persons) 
+9,473,925 
+(15) 
+6.3 
+% 
+* 
+indicates less than 1.0% 
+(1) 
+Based solely on a Schedule 13G/A filed with the SEC on January 30, 2014 (the “Artisan Schedule 13G”). According to the report, Artisan Partners Limited Partnership (“APLP”) reports beneficial
+ownership of the shares, with shared dispositive power over 11,745,246 shares and shared power to vote 11,463,146 shares. APLP filed the Artisan Schedule 13G/A jointly with Artisan Investments GP LLC (“Artisan Investments”), Artisan
+Partners Holdings LP (“Artisan Holdings”), Artisan Partners Asset Management Inc. (“APAM”), Artisan Investment Corporation (“AIC”), ZFIC, Inc. (“ZFIC”), Andrew A. Ziegler, Carlene M. Ziegler and Artisan
+Partners Funds, Inc. (“Artisan Funds”). Artisan Holdings is the sole limited partner of APLP and the sole member of Artisan Investments; Artisan Investments is the general partner of APLP; APAM is the general partner of Artisan Holdings;
+AIC is a control person of APAM; ZFIC is the sole stockholder of AIC; Mr. Ziegler and Ms. Ziegler are the principal stockholders of ZFIC. The address of the principal business office of APLP, Artisan Investments, Artisan Holdings, APAM,
+AIC, ZFIC, Mr. Ziegler, Ms. Ziegler and Artisan Funds is 875 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202. 
+(2) 
+Based solely on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 30, 2014. According to the report, BlackRock, Inc. has sole voting power with respect to 9,336,207 shares and sole dispositive power
+with respect to 10,045,129 shares. The address of the principal business office of BlackRock, Inc. is 40 East 52 nd Street, New York, New York 10022. 
+(3) 
+Based solely on a Schedule 13G/A filed by Wellington Management Company, LLP (“Wellington Management”) with the SEC on February 14, 2014. According to the report, Wellington Management, in its capacity as
+investment adviser, may be deemed to beneficially own 9,997,172 shares that are held of record by clients of Wellington Management. Wellington Management has shared power to vote or to direct the vote of 6,930,198 shares and shared power to dispose
+or to direct the disposition of 9,997,172 shares. The address of the principal business office of Wellington Management is 280 Congress Street, Boston, Massachusetts 02210. 
+51 
+(4) 
+Based solely on a Schedule 13G filed by The Vanguard Group with the SEC on February 12, 2014. According to the report, The Vanguard Group has sole voting power with respect to 91,071 shares, sole dispositive power
+with respect to 7,944,156 shares and shared dispositive power with respect to 81,271 shares. The address of the principal business office of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. 
+(5) 
+Mr. Siegel is the President and sole stockholder of REMY Investors, which is the general partner of REMY Capital Partners III, L.P. (“REMY Capital”). The Common Stock beneficially owned by Mr. Siegel
+includes 1,000,000 shares of Common Stock owned by REMY Capital. The Common Stock beneficially owned by Mr. Siegel also includes stock options held by Mr. Siegel, which are presently exercisable or become exercisable within 60 days, to
+purchase 2,190,999 shares. Does not include 260,001 shares underlying stock options held by Mr. Siegel that are not presently exercisable and will not become exercisable within 60 days. Includes 157,611 shares of unvested restricted Common
+Stock held by Mr. Siegel, over which he presently has voting power. The Common Stock beneficially owned by Mr. Siegel includes 49,900 shares held in trusts for which he is the trustee. 
+(6) 
+Includes shares underlying stock options held by Mr. Hendricks, which are presently exercisable or become exercisable within 60 days, to purchase 136,668 shares. Does not include 160,832 shares underlying stock
+options held by Mr. Hendricks that are not presently exercisable and will not become exercisable within 60 days. Includes 152,917 shares of unvested restricted Common Stock held by Mr. Hendricks, over which he presently has voting power.
+(7) 
+Includes shares underlying stock options held by Mr. Vollmer, which are presently exercisable or become exercisable within 60 days, to purchase 1,095,499 shares. Does not include 130,001 shares underlying stock
+options held by Mr. Vollmer that are not presently exercisable and will not become exercisable within 60 days. Includes 78,805 shares of unvested restricted Common Stock held by Mr. Vollmer, over which he presently has voting power. The
+Common Stock beneficially owned by Mr. Vollmer includes 200,000 shares held in trusts for which he is a trustee. 
+(8) 
+Includes shares underlying stock options held by Mr. Berns, which are presently exercisable or become exercisable within 60 days, to purchase 1,095,499 shares. Does not include 130,001 shares underlying stock
+options that are not presently exercisable and will not become exercisable within 60 days. Includes 78,805 shares of unvested restricted Common Stock held by Mr. Berns, over which he presently has voting power. The Common Stock beneficially
+owned by Mr. Berns includes 140,000 shares held in trusts for which he is the trustee. Does not include shares of Common Stock beneficially owned by REMY Investors. Mr. Berns disclaims beneficial ownership of such shares beneficially owned
+by REMY Investors. 
+(9) 
+Includes shares underlying stock options held by Mr. Holcomb, which are presently exercisable to purchase 44,445 shares. Includes 67,667 shares of unvested restricted Common Stock held by Mr. Holcomb, over
+which he presently has voting power. 
+(10) 
+Includes shares underlying presently exercisable stock options held by Mr. Buckner to purchase 70,000 shares. Does not include 10,000 shares underlying stock options held by Mr. Buckner that are not presently
+exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Buckner, over which he presently has voting power. 
+(11) 
+Includes shares underlying presently exercisable stock options held by Mr. Conlon to purchase 20,000 shares. Does not include 10,000 shares underlying stock options held by Mr. Conlon that are not presently
+exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Conlon, over which he presently has voting power. 
+(12) 
+Includes shares underlying presently exercisable stock options held by Mr. Huff to purchase 80,000 shares. Does not include 10,000 shares underlying stock options held by Mr. Huff that are not presently
+exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Huff, over which he presently has voting power. 
+(13) 
+Includes shares underlying presently exercisable stock options held by Mr. Hunt to purchase 80,000 shares. Does not include 10,000 shares underlying stock options held by Mr. Hunt that are not presently
+exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Hunt, over which he presently has voting power. 
+52 
+(14) 
+Includes shares underlying stock options held by Mr. Talbott, which are presently exercisable to purchase 830,000 shares. Does not include 10,000 shares underlying stock options held by Mr. Talbott that are
+not presently exercisable and will not become exercisable within 60 days. Includes 3,000 shares of unvested restricted Common Stock held by Mr. Talbott, over which he presently has voting power. 
+(15) 
+Includes shares underlying stock options, which are presently exercisable or become exercisable within 60 days, to purchase 5,658,110 shares of Common Stock. Does not include shares underlying stock options to purchase
+730,835 shares held by such individuals that are not presently exercisable and will not become exercisable within 60 days. Includes an aggregate of 611,807 shares of unvested restricted Common Stock held by directors and executive officers, over
+which they presently have voting power. 
+Except as stated herein, each stockholder has sole voting and investment power with
+respect to Common Stock included in the above table. There are no arrangements known to Patterson-UTI which may result in a change in control. The business address of each of our directors and officers is 450 Gears Road, Suite 500, Houston, Texas
+77067. 
+Equity Compensation Plan Information 
+Equity compensation plan information as of December 31, 2013 follows: 
+Equity Compensation Plan Information 
+Plan Category 
+Number of 
+Securities to 
+be Issued upon 
+Exercise
+of 
+Outstanding 
+Options, 
+Warrants and 
+Rights 
+Weighted- 
+Average Exercise 
+Price
+of 
+Outstanding 
+Options, 
+Warrants and 
+Rights 
+Number of 
+Securities 
+Remaining Available 
+for Future Issuance 
+under Equity 
+Compensation Plans 
+(Excluding 
+Securities
+Reflected 
+in Column(a)) 
+(a) 
+(b) 
+(c) 
+Equity compensation plans approved by security holders(1) 
+7,319,695 
+$ 
+21.23 
+274,071 
+Equity compensation plans not approved by security holders 
+— 
+$ 
+— 
+— 
+Total 
+7,319,695 
+$ 
+21.23 
+274,071 
+(1) 
+The Patterson-UTI Energy, Inc. 2005 Long-Term Incentive Plan, as amended (the “2005 Plan”), provides for awards of incentive stock options, non-incentive stock options, tandem and freestanding stock
+appreciation rights, restricted stock awards, other stock unit awards, performance share awards, performance unit awards and dividend equivalents to key employees, officers and directors, which are subject to certain vesting and forfeiture
+provisions. All options are granted with an exercise price equal to or greater than the fair market value of the common stock at the time of grant. The vesting schedule and term are set by the Compensation Committee of the Board of Directors. All
+securities remaining available for future issuance under equity compensation plans approved by security holders in column (c) are available under this plan. In addition to the 2005 Plan, this Plan category also includes the Patterson-UTI
+Energy, Inc. Amended and Restated 1997 Long-Term Incentive Plan, as amended (the “1997 Plan”). In connection with the approval of the 2005 Plan, the Board of Directors approved a resolution that no further options, restricted stock or
+other awards would be granted under any equity compensation plan, other than the 2005 Plan. Options granted under the 1997 Plan typically vested over three or five years as dictated by the Compensation Committee. All options were granted with an
+exercise price equal to the fair market value of the related common stock at the time of grant. 
+53 
+AUDIT COMMITTEE REPORT 
+The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference
+into any other Patterson-UTI filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent Patterson-UTI specifically incorporates this report by reference therein. 
+The Audit Committee has reviewed and discussed the audited financial statements with management and Patterson-UTI’s independent registered
+public accounting firm. 
+The Audit Committee has discussed with the independent registered public accounting firm the matters required to
+be discussed by Auditing Standard 380, The Auditor’s Communication with those Charged with Governance , as adopted by the Public Company Accounting Oversight Board in Rule 3200T. 
+The Audit Committee has received and reviewed the written disclosures and the letter from the independent registered public accounting firm
+required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with the
+independent registered public accounting firm their independence. 
+Taking the foregoing into consideration, the undersigned Audit Committee
+members recommended to the Board of Directors that the Board approve the inclusion of Patterson-UTI’s audited financial statements in the Annual Report on Form 10-K for the fiscal year ended December 31, 2013. 
+Audit Committee of the Board of Directors: 
+Charles O. Buckner, Chairman 
+Curtis W. Huff 
+Terry H. Hunt 
+PricewaterhouseCoopers Fees for Fiscal Years 2013 and 2012 
+In 2013 and 2012, Patterson-UTI and its subsidiaries incurred fees for services provided by PricewaterhouseCoopers LLP. 
+Description 
+Fees Incurred in 
+Fiscal Year 
+2013 
+Fees Incurred in 
+Fiscal Year 
+2012 
+Audit fees 
+$ 
+1,284,400 
+$ 
+1,090,000 
+Tax fees 
+40,000 
+40,000 
+All other fees 
+1,919 
+1,919 
+Total 
+$ 
+1,326,319 
+$ 
+1,131,919 
+The Audit Committee appoints the independent registered public accounting firm. The Audit Committee or
+Mr. Buckner, as Chairman of the Audit Committee, approves all other engagements of the independent registered public accounting firm in advance. In the event Mr. Buckner approves any such engagement, he discusses such approval with the
+Audit Committee at its next meeting. 
+“Audit fees” relate to audit services of PricewaterhouseCoopers LLP for fiscal 2013 and
+2012 consisting of the examination of Patterson-UTI’s consolidated financial statements, quarterly reviews of Patterson-UTI’s interim financial statements and services to assess Patterson-UTI’s internal control over financial
+reporting. “Tax fees” include federal, state, local and foreign tax compliance and related matters. “All other fees” consists of an annual subscription fee to a software product. The Audit Committee or Mr. Buckner, as
+Chairman of the Audit Committee, approved in advance all of the services described above. 
+The Audit Committee has discussed the non-audit
+services provided by PricewaterhouseCoopers LLP and the related fees and has considered whether those services and fees are compatible with maintaining auditor independence. The Audit Committee determined that such non-audit services were consistent
+with the independence of PricewaterhouseCoopers LLP. 
+54 
+OTHER MATTERS 
+Section 16(a) Beneficial Ownership Reporting Compliance 
+Section 16(a) of the Exchange Act requires Patterson-UTI’s officers and directors and persons who own more than 10 percent of a
+registered class of Patterson-UTI’s equity securities, to file reports of ownership and changes in ownership with the SEC. Each of these persons is required by SEC regulation to furnish Patterson-UTI with copies of Section 16(a) filings.
+Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to Patterson-UTI during 2011 and Forms 5 and amendments thereto furnished to Patterson-UTI with respect to 2011, or a written representation from the reporting person that
+no Form 5 is required, all filings required to be made by such officers, directors, and beneficial owners of more than 10 percent of a registered class of Patterson-UTI’s common stock were timely made, with the exception of one amended Form 4
+that was filed by Mr. Holcomb to reflect the omission on the original filing of the surrender of shares of Common Stock to Patterson-UTI to satisfy payroll tax withholding obligations that arose from the vesting of shares. 
+Other Business 
+As of the date of this
+proxy statement, management of Patterson-UTI was not aware of any matter to be presented at the Meeting other than as set forth herein. If any other matters are properly brought before the Meeting, however, the shares represented by valid proxies
+will be voted with respect to such matters in accordance with the judgment of the persons voting them. 
+Stockholder Proposals for 2015 Annual Meeting
+Proposals or Director Nominations for Inclusion in the Proxy Statement. Pursuant to Rule 14a-8 under the
+Exchange Act, stockholders may present proper proposals or director nominations for inclusion in Patterson-UTI’s proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals or director
+nominations to Patterson-UTI in a timely manner. In order to be included in Patterson-UTI’s proxy statement for the 2015 annual meeting of stockholders, proposals or director nominations from stockholders must be received by Patterson-UTI no
+later than October 30, 2014, and must otherwise comply with the requirements of Rule 14a-8. 
+Proposals or Director Nominations not
+Included in the Proxy Statement. In addition, Patterson-UTI’s bylaws establish an advance notice procedure with regard to stockholder proposals and director nominations not included in Patterson-UTI’s proxy
+statement. For director nominations not included in Patterson-UTI’s proxy statement, please refer to “Election of Directors — Meetings and Committees of the Board of Directors.” For stockholder proposals to be properly brought
+before the 2014 annual meeting, by a stockholder, the stockholder must be a stockholder of record on the date of the giving of the notice provided for below and on the record date for the determination of stockholders entitled to vote at such annual
+meeting and must give timely notice of such business in writing to the Secretary of Patterson-UTI. To be timely with respect to the 2015 annual meeting, a stockholder’s notice must be delivered to or mailed and received at Patterson-UTI’s
+principal executive offices not earlier than December 15, 2014 and not later than January 14, 2015; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after April 17,
+2015, notice by the stockholder to be timely must be received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or public disclosure of the annual meeting date was
+made, whichever occurs first. 
+A stockholder’s notice to the Secretary of Patterson-UTI shall set forth: 
+Ÿ 
+a brief description of each matter desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, 
+Ÿ 
+the name and record address of the stockholder proposing such business, 
+Ÿ 
+the class and number of shares of Patterson-UTI that are beneficially owned by the stockholder, 
+Ÿ 
+any material interest of the stockholder in such business, and 
+Ÿ 
+a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the annual meeting. 
+55 
+Patterson-UTI reserves the right to reject, rule out of order, or take other appropriate action
+with respect to any proposal or nomination that does not comply with these and other applicable requirements. 
+Annual Report 
+A copy of Patterson-UTI’s annual report on Form 10-K accompanies this proxy statement only if you have requested that a copy of this proxy
+statement be mailed to you. The annual report on Form 10-K also is available electronically by following the instructions in the Notice. The annual report on Form 10-K is not incorporated into this proxy statement and is not considered
+proxy-soliciting material. 
+A copy of the annual report on Form 10-K, including the financial statements and financial statement
+schedules, but excluding exhibits, may be obtained by stockholders without charge by written request to the Secretary of Patterson-UTI at 450 Gears Road, Suite 500, Houston, Texas 77067 or by accessing it on Patterson-UTI’s website at
+www.patenergy.com in the investors section under the “financial reports” link. Patterson-UTI will furnish the exhibits to Form 10-K upon request and upon receipt of a reproduction fee. 
+Delivery of Documents to Stockholders Sharing an Address 
+The SEC’s rules allow companies to send a single Notice or single copy of annual reports, proxy statements, prospectuses and other
+disclosure documents to two or more stockholders sharing the same address, subject to certain conditions. These rules are intended to provide greater convenience for stockholders, and cost savings for companies, by reducing the number of duplicate
+documents that stockholders receive. If instructions for separate delivery have been received from any stockholder, Patterson-UTI will deliver promptly separate copies of the relevant disclosure materials. Similarly, if multiple copies of disclosure
+materials are being delivered to a single address, stockholders can request a single copy for future deliveries. Written requests should be submitted to the Secretary of Patterson-UTI at 450 Gears Road, Suite 500, Houston, Texas 77067. 
+56 
+ANNEX A 
+PATTERSON-UTI ENERGY, INC. 
+2014 LONG-TERM INCENTIVE PLAN 
+Patterson-UTI Energy, Inc. (the “ Company ”), a Delaware corporation, hereby establishes and adopts the following 2014
+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 “ Change of Control of the
+Company ” shall mean the occurrence of any of the following: 
+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 2.4, the following acquisitions shall not constitute a Change of 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 2.4; or 
+ii 
+Individuals who, as of the effective date of the Plan, constitute the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a
+majority of the Board; provided, however, that any individual becoming a director subsequent to the effective date of the Plan 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 Out- 
+A-1
+standing 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, providing for such Business Combination.
+2.5 “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time.
+2.6 “ 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. 
+2.7
+“ Covered Employee ” shall mean a “covered employee” within the meaning of Section 162(m) of the Code. 
+2.8 “ Director ” shall mean a non-employee member of the Board. 
+2.9 “ Dividend Equivalents ” shall have the meaning set forth in Section 12.6. 
+2.10 “ 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. 
+2.11 “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended. 
+2.12 “ 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.
+2.13 “ Freestanding Stock Appreciation Right ” shall have the meaning set forth in Section 6.1.
+2.14 “ Limitations ” shall have the meaning set forth in Section 10.5. 
+2.15 “ 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. 
+2.16 “ Other
+Stock Unit Award ” shall have the meaning set forth in Section 8.1. 
+A-2
+2.17 “ Participant ” shall mean an Employee or Director who is
+selected by the Committee to receive an Award under the Plan. 
+2.18 “ Payee ” shall have the meaning set
+forth in Section 13.1. 
+2.19 “ Performance Award ” shall mean any Award of Performance Shares or
+Performance Units granted pursuant to Article 9. 
+2.20 “ 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. 
+2.21 “ Performance Share ” shall mean any grant pursuant to Section 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. 
+2.22
+“ 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. 
+2.23 “ Permitted Assignee ” shall have the meaning set forth in Section 12.3. 
+2.24 “ Prior Plans ” shall mean, collectively, the Company’s Amended and Restated 1997 Long-Term Incentive Plan
+and the 2005 Long-Term Incentive Plan, as amended. 
+2.25 “ 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 in its sole discretion. 
+2.26 “ Restriction Period ” shall have the meaning set forth in Section 7.1. 
+2.27 “ Restricted Stock Award ” shall have the meaning set forth in Section 7.1. 
+2.28 “ Shares ” shall mean the shares of common stock of the Company, par value $.01 per share. 
+2.29 “ Stock Appreciation Right ” shall mean the right granted to a Participant pursuant to Section 6. 
+2.30 “ 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. 
+2.31 “ 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 awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines. 
+2.32 “ 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 9,100,000, 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, 2014 and ending on the effective
+date of the Plan (the “ Pre-Effective Period ”). Any Shares that are subject to Awards of Options or Stock Appreciation Rights, whether granted under the Prior Plans during the Pre-Effective Period or under the Plan shall be counted
+against this limit as one (1) Share for every one (1) Share granted. Any Shares 
+A-3
+that are subject to Awards other than Options or Stock Appreciation Rights awarded under the Prior Plans during the Pre-Effective Period shall be counted against this limit as one and 35
+one-hundredths (1.35) Shares for every one (1) Share awarded. Any Shares that are subject to Awards other than Options or Stock Appreciation Rights awarded under the Plan after the effective date of the Plan shall be counted against this
+limit as two (2) Shares for every one (1) Share awarded. 
+(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 on exercise of an Option or Stock Appreciation Right, 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 only be made (i) until the last date that awards or grants could have been made under the terms of
+the pre-existing plan, absent the acquisition or combination, and (ii) 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 (x) as one
+(1) Share if such Shares were subject to Options or Stock Appreciation Rights granted under the Prior Plans or the Plan, (y) as one and thirty-five one hundredths (1.35) Shares if such Shares were subject to Awards other than Options
+or Stock Appreciation Rights granted under Prior Plans that are forfeited, expire or otherwise terminate during the Pre-Effective Period or (z) as two (2) Shares if such Shares were subject to Awards other than Options or Stock
+Appreciation Rights granted under the Plan or the Prior Plans that are forfeited, expire or otherwise terminate on or after the effective date of 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, in its sole discretion,: (i) select 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 Agree- 
+A-4
+ment; (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 (other than Options or Stock Appreciation Rights) 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. Notwithstanding the foregoing, the Board shall have the same powers as
+the Committee with respect to Awards to Directors. 
+(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 determine in its sole discretion. 
+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 or an adjustment in connection with Section 12.2, 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. 
+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 
+A-5
+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 to provide so 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 (i) one year from date of grant for Directors or (ii) three years from the date of grant for Employees; provided that such
+vesting shall not be required for any grants to new hires or with respect to any Substitute Awards. Options may vest ratably over such vesting periods in any increments, including but not limited to annual increments, quarterly increments, monthly
+increments, or a combination thereof. 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. 
+5.9 No Repricing. Notwithstanding anything in the Plan to the contrary, except in connection with a
+corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of
+shares), the terms of outstanding Awards may not be amended to reduce the option price of outstanding Options or cancel outstanding Options in exchange for cash, other awards or Options with an option price that is less than the option price of the
+original Options without stockholder approval. 
+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 (“ Tandem Stock Appreciation Right ”), (b) in conjunction with all or part of any Award (other than an Option) granted under the Plan, 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. 
+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) Except in the case of Substitute
+Awards or in connection with an adjustment provided in Section 12.2, the grant price of a Stock Appreciation Right shall not be less than the Fair Market Value of one Share on such date of grant of the right. 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 over (ii) the grant price of the right on the date of grant. 
+(b) Upon the exercise of a Stock Appreciation Right, payment shall be made in the sole discretion of the Committee in
+(i) whole Shares, (ii) cash or (iii) a combination of (i) or (ii). 
+A-6
+(c) Any Tandem Stock Appreciation Right shall be granted at the same time as
+the related Option is granted. 
+(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) Subject to Section 12.2, a Freestanding Stock Appreciation Right shall 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 (1) one year from the date of grant
+to a Director or (2) three years from the date of grant to an Employee, except for grants to new hires or 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. Stock Appreciation Rights may vest ratably over such vesting periods in any
+increments, including but not limited to annual increments, quarterly increments, monthly increments, or a combination thereof. 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. 
+6.3 No Repricing. Notwithstanding anything in the Plan to the contrary, except in connection with a corporate transaction involving the Company (including, without
+limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding awards may not be amended to reduce
+the exercise price of outstanding Stock Appreciation Rights or cancel outstanding Stock Appreciation Rights in exchange for cash, other awards or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original
+Stock Appreciation Rights without stockholder approval. 
+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 sole 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 
+A-7
+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 shall have a Restriction Period of not less than three years from date of grant. Restricted Stock
+Awards may vest ratably over such vesting period in any increments, including but not limited to annual increments, quarterly increments, monthly increments, or a combination thereof. Notwithstanding the foregoing, the provisions of this Section
+shall not be applicable to any grants to new hires, Substitute Awards or grants of Restricted Stock in payment of Performance Awards and other earned cash-based incentive compensation or grants to 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 in its sole
+discretion. The maximum aggregate number of Shares with respect to which Restricted Stock Awards or Other Stock Units that are subject solely to continued employment or service restrictions of Employees or directors of the Company or any Subsidiary
+with a Restriction Period of less than three years from date of grant (but permitting pro rata vesting over such time) shall be five percent (5%) of the number of Shares authorized for grant under Section 3.1 (as such number may be
+adjusted as provided in Sections 3.1 and 12.2); provided that this limit shall not be applicable to any grants to new hires, Substitute Awards or grants of Restricted Stock in payment of Performance Awards and other earned cash-based incentive
+compensation or grants to Directors. Any Restricted Stock Award or portion of such award that is subject to a Restriction Period of three years or more (notwithstanding the fact that a portion of such award may vest within three years of the date of
+grant due to pro rata vesting over the Restriction Period) or that meets the requirements of a Performance Award under Section 9 shall not be subject to the foregoing five-percent (5%) limitation. 
+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 shall be subject to restrictions imposed by the Committee
+for a period of not less than three years from date of grant. Other Stock Unit Awards may vest ratably over such vesting period in any increments, including but not limited to annual increments, quarterly increments, monthly increments, or a
+combination thereof. Notwithstanding the foregoing, such restrictions shall not be applicable to any grants to new hires, 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 
+A-8
+deferred basis. The maximum aggregate number of Shares with respect to which Restricted Stock Awards or Other Stock Units that are subject solely to continued employment or service restrictions
+of Employees or directors of the Company or any Subsidiary with a Restriction Period of less than three years from date of grant (but permitting pro rata vesting over such time) shall be five percent (5%) of the number of Shares authorized for
+grant under Section 3.1 (as such number may be adjusted as provided in Sections 3.1 and 12.2); provided that this limit shall not be applicable to any grants to new hires, 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. Any Other Stock Unit Award or portion of such award that is subject to a Restriction Period of
+three years or more (notwithstanding the fact that a portion of such award may vest within three years of the date of grant due to pro rata vesting over the Restriction Period) or that meets the requirements of a Performance Award under
+Section 9 shall not be subject to the foregoing five-percent (5%) limitation. 
+8.4
+Payment. Except as provided in Article 11 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 2 1 / 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, 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 2 1 / 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. 
+9.5 Performance Award Dividend Equivalents. Subject to the provisions of the Plan and any Award Agreement, the Committee in its sole discretion may award currently or
+on a deferred basis, Dividend Equivalents with respect to the number of Shares covered by a Performance Unit or Performance Share Award, provided, that such Dividend Equivalents (if any) shall be deemed to have been reinvested in additional Shares
+or Units and shall provide that such Dividend Equivalents are subject to the same performance conditions as the underlying Award. 
+A-9
+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 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 in its sole discretion 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 denominated in Shares 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 denominated in cash is $5,000,000. For the avoidance of doubt, any Award shall only be subject to one of the applicable per person limitations set forth in the previous two sentences. If an Award is
+cancelled, the cancelled Award shall continue to be counted toward the applicable Limitations. Further, no Director may be granted during any calendar year Awards having a value determined on the date of grant in excess of $500,000. 
+A-10
+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,
+(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 in its sole discretion shall apply, subject in each case to any terms and conditions contained in the Award Agreement evidencing such Award. Notwithstanding any other provision of the Plan, the Committee, in its sole
+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, if any, 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 sole 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 in its sole
+discretion, 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 5.9, (e) increase the maximum permissible term of any Option specified by Section 5.4, (f) amend any provision of Section 6.3 or
+(g) amend any provision of Section 10.5. 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. No adjustment or substitution pursuant to this Section 12.2 shall be made in a manner that results in noncompliance with the requirements of Section 409A of the Code, to the
+extent applicable. 
+A-11
+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 hypothecated, other than by will or by the laws of descent and distribution. Further, all Incentive Stock Options
+granted to a Participant under the 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. 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. 
+12.6 Dividend Equivalents. 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 conditions as the underlying Award; provided, however, that with respect to Dividend Equivalents (if
+any) awarded in connection with a Performance Unit Award or Performance Share Award, such Dividend Equivalents (if any) shall be deemed to have been reinvested in additional Shares or Units and shall provide that such Dividend Equivalents are
+subject to the same performance conditions as the underlying Award. Notwithstanding the foregoing, Dividend Equivalents shall not be made part of any Options or Stock Appreciation Rights. 
+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 with- 
+A-12
+holding 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 Award, until and unless such recipient shall have executed an agreement or other instrument (in written or
+electronic form, in such manner as may be designated by the Committee) 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 may 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 in its sole discretion 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. 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), welfare benefit plans or other employee benefit plans unless such plan expressly provides that
+such compensation shall be taken into account in computing a participant’s benefit. 
+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 
+A-13
+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. 
+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 Committee’s sole discretion, 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 Section 409A of the Code . 
+(a) Awards made under the Plan are intended to comply with or be exempt from Section 409A of the Code, and ambiguous
+provisions hereof, if any, shall be construed and interpreted in a manner consistent with such intent. No payment, benefit or consideration shall be substituted for an Award if such action would result in the imposition of taxes under
+Section 409A of the Code. Notwithstanding anything in the Plan to the contrary, if any Plan provision or Award under the Plan would result in the imposition of an additional tax under Section 409A of the Code, that Plan provision or Award
+shall be reformed, to the extent permissible under Code Section 409A, to avoid imposition of the additional tax, and no such action shall be deemed to adversely affect the Participant’s rights to an Award. 
+(b) Unless the Committee provides otherwise in an Award Agreement, each Other Stock Unit Award or Performance Unit (or
+portion thereof if the Award is subject to a vesting schedule) shall be settled no later than the 15th day of the third month after the end of the first calendar year in which the Award (or such portion thereof) is no longer subject to a
+“substantial risk of forfeiture” within the meaning of Section 409A of the Code. If the Committee determines that an Other Stock Unit Award or Performance Unit is intended to be subject to Section 409A of the Code, the applicable
+Award Agreement shall include terms that are designed to satisfy the requirements of Section 409A of the Code. 
+A-14
+(c) If the Participant is identified by the Company as a “specified
+employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date on which the Participant has a “separation from service” (other than due to death) within the meaning of Treasury Regulation § 1.409A-1(h), any
+Award payable or settled on account of a separation from service that is deferred compensation subject to Section 409A of the Code shall be paid or settled on the earliest of (1) the first business day following the expiration of six
+months from the Participant’s separation from service, (2) the date of the Participant’s death, or (3) such earlier date as complies with the requirements of 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 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 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. 
+A-15
+PATTERSON-UTI ENERGY, INC. 450 GEARS ROAD, SUITE 500 HOUSTON, TX 77067 VOTE BY INTERNET - www.proxyvote.com Use the
+Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the
+instructions to obtain your records and to create an electronic voting instruction form. Electronic Delivery of Future PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to
+receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that
+you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or
+meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,
+51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. CARD IS VALID ONLY WHEN
+SIGNED AND DATED. KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: Signature Signature [PLEASE SIGN WITHIN BOX] Date (Joint Owners) Date To withhold authority to vote
+for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 0000193083_1 R1.0.0.51160 For Withhold For All All All Except The Board of Directors recommends you vote FOR the following:
+1. Election of Directors Nominees 01 Mark S. Siegel 02 Kenneth N. Berns 03 Charles O. Buckner 04 Michael W. Conlon 05 Curtis W. Huff 06 Terry H. Hunt 07 Cloyce A. Talbott PATTERSON-UTI ENERGY, INC. 450 GEARS ROAD, SUITE 500 HOUSTON, TX 77067 VOTE BY
+INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you
+access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. Electronic Delivery of Future PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy
+materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and,
+when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day
+before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote
+Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The Board of Directors recommends you vote FOR proposals 2, 3 and 4. For Against Abstain 2. Approval of the Patterson-UTI Energy, Inc. 2014 Long-Term Incentive Plan. 3. Approval of an
+advisory resolution on Patterson-UTI’s compensation of its named executive officers. 4. Ratification of the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Patterson-UTI for the fiscal year ending
+December 31, 2014. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give
+full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature Signature [PLEASE SIGN WITHIN BOX] Date (Joint
+Owners) Date 0000193083_1 R1.0.0.51160 
+Important
+Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com. PATTERSON-UTI ENERGY, INC. Annual Meeting of Stockholders April 17, 2014 10:00 AM
+This proxy is solicited by the Board of Directors The undersigned stockholder of Patterson-UTI Energy, Inc. (the “Company”) hereby appoints Mark S. Siegel, William Andrew Hendricks, Jr. and John E. Vollmer III, and each of them, proxies to
+the undersigned, each with full power to act without the other and with full power of substitution, to vote all of the shares which the undersigned is entitled to vote at the annual meeting of stockholders of the Company to be held Thursday, April
+17, 2014, at 10:00 a.m., local time, at the Hyatt North Houston Hotel, 425 N. Sam Houston Parkway East, Houston, Texas 77060, and at any and all adjournments or postponements thereof, with the same force and effect as if the undersigned were
+personally present. The undersigned hereby instructs the above-named proxies to vote the shares represented by this proxy in the manner as directed for the undersigned on the reverse side of this proxy card. If no directions are made, the proxies
+will vote “FOR” the nominees for directors, “FOR the approval of the Patterson-UTI Energy, Inc. 2014 Long-Term Incentive Plan, “FOR” the approval of the advisory resolution on executive compensation, and “FOR” the
+ratification of the selection of PricewaterhouseCoopers LLP as set forth on the reverse side. If any other matter should be presented properly, this proxy will be voted in accordance with the discretion of the above-named proxies. Continued and to
+be marked, dated and signed on reverse side
\ No newline at end of file
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index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391
diff --git a/raw/proxies/0001334036/0001047469-10-004586/proxy.txt b/raw/proxies/0001334036/0001047469-10-004586/proxy.txt
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@@ -0,0 +1,1910 @@
+DEF 14A
+1
+a2198411zdef14a.htm
+DEF 14A
+QuickLinks 
+-- Click here to rapidly navigate through this document 
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy
+Statement Pursuant to Section 14(a) of 
+the Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant ý 
+Filed by a Party other than the Registrant o 
+Check the appropriate box: 
+o 
+Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) 
+ý 
+Definitive Proxy Statement 
+o 
+Definitive Additional Materials 
+o 
+Soliciting Material under §240.14a-12 
+CROCS, INC. 
+(Name of Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+ý 
+No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which transaction applies: 
+(2) 
+Aggregate number of securities to which transaction applies: 
+(3) 
+Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+o 
+Fee paid previously with preliminary materials. 
+o 
+Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
+statement number, or the Form or Schedule and the date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Crocs, Inc. 
+6328 Monarch Park Place 
+Niwot, Colorado 80503 
+NOTICE OF THE 2010 ANNUAL MEETING OF STOCKHOLDERS 
+TO BE HELD JUNE 29, 2010 
+To the Stockholders of Crocs, Inc.: 
+We
+will hold the 2010 Annual Meeting of Stockholders of Crocs, Inc. at our headquarters at 6328 Monarch Park Place, Niwot, Colorado, on June 29, 2010, at
+9:00 a.m. Mountain Time. 
+The
+meeting's purpose is to: 
+1. elect
+three Class II directors;
+2. ratify
+the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2010; and
+3. consider
+any other matters that properly come before the meeting or any postponement or adjournment thereof. 
+Only
+stockholders of record of our common stock at the close of business on April 30, 2010 are entitled to receive notice of and to vote at the meeting. Each share of common stock
+is entitled to one vote. 
+A
+list of the stockholders entitled to vote at the meeting will be available for examination at the meeting by any stockholder for any purpose relevant to the meeting. The list will also
+be available on the same basis for ten days prior to the meeting at our principal executive office, 6328 Monarch Park Place, Niwot, Colorado 80503. 
+All
+stockholders are cordially invited to attend the meeting in person. Whether or not you plan to attend the meeting in person, please vote your shares, as instructed in the Notice of
+Internet Availability of Proxy Materials, over the Internet, or by telephone after your receipt of hard copies of the proxy materials, as promptly as possible. You may also request a paper proxy card,
+which will include a reply envelope, to submit your vote by mail, as described in the Notice of Internet Availability of Proxy Materials. Stockholders who are present at the Annual Meeting may
+withdraw their proxy and vote in person if they so desire. 
+BY ORDER OF THE BOARD OF DIRECTORS 
+John McCarvel 
+President and Chief Executive Officer 
+Niwot,
+Colorado 
+April 30, 2010 
+Crocs, Inc. 
+6328 Monarch Park Place 
+Niwot, Colorado 80503 
+2010 ANNUAL MEETING OF STOCKHOLDERS 
+PROXY STATEMENT 
+This proxy statement will first be sent to stockholders on or about May 12, 2010. It is furnished to stockholders of
+Crocs, Inc., a Delaware corporation (the "Company," "we," "us," or "our"), in connection with the solicitation of proxies by our Board of Directors. The proxies being solicited will be voted at
+the 2010 Annual Meeting of Stockholders (the "Annual Meeting"), to be held on June 29, 2010 at 9:00 a.m., Mountain time, at our headquarters at 6328 Monarch Park Place, Niwot, Colorado
+or at any postponement or adjournment thereof, for the purpose of voting on proposals as set forth herein as well as other business matters which may properly come before the meeting. 
+Under
+the rules of the Securities and Exchange Commission, we are furnishing proxy materials to our stockholders on the Internet, rather than mailing printed copies. If you received a
+Notice of Internet Availability of Proxy Materials by mail, you will not receive a printed copy of the proxy materials unless you request one as instructed in that notice. Instead, the Notice of
+Internet Availability of Proxy Materials will instruct you as to how you may access and review the proxy materials on the Internet. If you received a Notice of Internet Availability of Proxy Materials
+by mail and would like to receive a printed copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. 
+GENERAL INFORMATION REGARDING ANNUAL MEETING 
+Record Date 
+Stockholders of record at the close of business on April 30, 2010 are entitled to notice of and to vote at the Annual Meeting.
+On the record date, there were 85,794,003 shares of our common stock outstanding. Each such share is entitled to one vote on each matter submitted to a vote at the Annual Meeting. 
+Quorum Requirements 
+A quorum is required to conduct business at the Annual Meeting. The holders of a majority of the outstanding shares entitled to vote
+generally in the election of directors must be present in person or by proxy at the Annual Meeting in order for a quorum to exist. Abstentions and broker non-votes count as present for
+purposes of determining a quorum. A broker non-vote occurs when a broker returns a proxy card but does not vote on one or more matters because the broker does not have the authority to do
+so without instructions from the beneficial owner. Shares represented by proxies that are marked WITHHOLD with respect to the ratification of our independent registered public accounting firm will be
+counted as present in determining whether there is a quorum. 
+1 
+Vote Requirements 
+If a quorum is present at the Annual Meeting, the following vote is required for approval of each matter to be voted on: 
+Election of Directors: The election of the director nominees will require a plurality of the votes cast in person or by proxy at the
+Annual Meeting.
+"Plurality" means that the nominees who receive the highest number of votes cast are elected as directors up to the maximum number of directors to be elected at the Annual Meeting. Proxies marked
+withhold and broker non-votes will have no effect on the outcome of the election of directors. Cumulative voting is not permitted. 
+Ratification of Appointment of Deloitte & Touche LLP: The affirmative vote of the holders of a majority of the shares of
+our common
+stock present in person or by proxy and entitled to vote on the matter is required for the ratification of the appointment of Deloitte & Touche LLP as our independent registered public
+accounting firm for fiscal year 2010. Proxies marked ABSTAIN will have the effect of voting against this proposal. Broker non-votes will have no impact on the proposal. 
+Approval of all Other Proposals: With respect to any other matters properly brought before the Annual Meeting, the affirmative vote of
+a majority of
+the shares of common stock present in person or by proxy and entitled to vote on the matter will be the act of the stockholders. Broker non-votes will have no effect on these proposals,
+and abstentions will have the effect of voting against these proposals. 
+Your Proxy 
+Whether or not you are able to personally attend the Annual Meeting, you are encouraged to vote your shares as instructed in the Notice
+of Internet Availability of Proxy Materials. Shares represented by properly executed methods, and not revoked prior to the Annual Meeting, will be voted at the Annual Meeting as directed in the proxy. If no directions are
+specified, such proxies will be voted FOR each of the proposals described in this proxy statement and in the best judgment of the proxy holders as to other
+matters that may properly come before the Annual Meeting. 
+If
+your shares are held in the name of a bank or brokerage firm, your bank or broker will send you a separate package describing the procedures and options for voting your shares. You
+should follow the instructions provided by your bank or brokerage firm. On routine matters, such as the ratification of the appointment of our independent registered public accounting firm, your
+broker will vote your shares for you at his or her discretion if you do not instruct your broker how to vote. For non-routine matters, such as the election of directors, your broker may
+not vote your shares without specific voting instructions from you. 
+Revocation 
+Any stockholder giving a proxy has the power to revoke the proxy, or change the proxy, at any time before the proxy is voted at the
+Annual Meeting by (i) re-voting online at www.proxyvote.com, (ii) sending another properly executed proxy bearing a later date or a written notice of revocation of the proxy
+to Corporate Secretary, Crocs, Inc., 6328 Monarch Park Place, Niwot, Colorado 80503 or (iii) voting in person at the Annual Meeting. 
+Attending the Annual Meeting 
+You are invited to personally attend the Annual Meeting. 
+2 
+Cost of Proxy Solicitation 
+We will bear the entire cost of this proxy solicitation. We may reimburse brokers, custodians, nominees and other fiduciaries for
+normal handling charges incurred for forwarding proxy materials to beneficial owners. Solicitation of proxies may be made personally or by mail or telephone by our directors, officers and other
+employees, who will receive no additional compensation for such services. 
+PROPOSAL 1—ELECTION OF DIRECTORS 
+Our Board of Directors currently consists of seven members divided into three classes, with each director elected to a
+three-year term. Class II consists of Raymond D. Croghan, Peter Jacobi and Richard L. Sharp, whose terms will expire at the Annual Meeting. Class III consists of Thomas J.
+Smach and John McCarvel, whose terms will expire at the annual meeting to be held in 2011. Class I consists of Ronald L. Frasch and W. Stephen Cannon, whose terms will expire at the annual
+meeting to be held in 2012. Under our amended and restated bylaws, each of our directors holds office until his or her successor has been elected and qualified or until such director's earlier death,
+resignation, disqualification or removal. 
+Upon
+the recommendation of the Governance and Nominating Committee, the Board of Directors has nominated Messrs. Croghan, Jacobi and Sharp for election as Class II
+directors to serve for a three-year term expiring at the 2013 annual meeting of stockholders. 
+A
+stockholder cannot vote for more than three nominees. Each of the director nominees has consented to serve for a three-year term. We do not contemplate that any of the
+nominees will be unable to stand for election, but should any nominee become unable to serve or will not serve for any reason, all proxies (except proxies marked to the contrary) will be voted for the
+election of a substitute nominee as our Board of Directors may recommend. 
+Class II Director Nominees 
+Raymond D. Croghan (Class II), age 60, has served as a member of our Board of Directors since August 2004. Since
+1999,
+Mr. Croghan has been retired. From 1991 to 1999, Mr. Croghan managed Croghan & Associates, Inc., a healthcare information technology consulting firm, which merged with
+Margolis Health Enterprise to form The TriZetto Group. Mr. Croghan serves on the boards of directors of several privately-held companies. We believe Mr. Croghan's executive
+and business expertise give him the qualifications and skills to serve as a director. 
+Peter Jacobi (Class II), age 66, has served as a member of our Board of Directors since
+October 2008. Mr. Jacobi was employed by Levi Strauss & Company ("Levi Strauss"), a jeans and casual wear manufacturer, from 1970 until his retirement in 1999. During his nearly
+30-year tenure at Levi Strauss, Mr. Jacobi held various senior levels positions, including President of the Men's Jeans Division, President of Global Sourcing, President of Levi
+Strauss International, and from 1996 until his retirement, President and Chief Operating Officer. We believe that Mr. Jacobi's executive and business expertise, including his background at Levi
+Strauss, which is in a similar industry to ours, give him the qualifications and skills to serve as a director. 
+Richard L. Sharp (Class II), age 63, has served as the Chairman of our Board of Directors since April 2005. From
+1982
+to 2002, Mr. Sharp served in various positions with Circuit City Stores, Inc., a retailer of consumer electronics, most recently as President from 1984 to 1997, Chief Executive Officer
+from 1986 to 2000 and Chairman of the Board from 1994 to 2002. Mr. Sharp served as Chairman and Chief Executive Officer of CarMax, Inc., the nation's largest specialty retailer of used
+cars and light trucks, from 1994 to 2000 and Chairman from October 2002 to June 2007. In 1992, he was a founding investor of Flextronics International ("Flextronics"), a NASDAQ-listed (Nasdaq: FLEX)
+leading Electronics Manufacturing Services (EMS) provider. He served as a director of Flextronics from 1993 
+3 
+to
+October 2008 and as Chairman of the Board from January 2003 to January 2006. We believe that Mr. Sharp's executive and business expertise, including his diversified background in
+manufacturing and retail companies, give him the qualifications and skills to serve as a director. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL 
+OF THE ABOVE-NAMED NOMINEES FOR DIRECTOR. 
+Information About Continuing Directors 
+Thomas J. Smach (Class III), age 49, has served as a member of our Board of Directors since April 2005.
+Mr. Smach is currently a co-founding partner of Riverwood Capital Management, a private equity firm. From January 2005 to June 2008, Mr. Smach served as the Chief Financial
+Officer of Flextronics. From April 2000 to December 2004, Mr. Smach served as Senior Vice President—Finance of Flextronics. From 1997 to April 2000, he served as the Senior Vice
+President, Chief Financial Officer and Treasurer of The Dii Group, Inc., an EMS provider and publicly-traded company that merged with Flextronics in early 2000 ("The Dii Group").
+Mr. Smach is a certified public accountant and also serves on the Board of Directors of ADVA AG Optical Networking, a publicly-traded company in Germany. We believe Mr. Smach is
+qualified to serve on our board of directors and serve as chair of our audit committee based on his executive experience with public companies and his financial and accounting expertise as described
+above. 
+John P. McCarvel (Class III), age 53, was appointed as a director effective March 1, 2010. He has served as
+our
+President and Chief Executive Officer since March 1, 2010 and, prior to that appointment, he served as our Chief Operating Officer and Executive Vice President since February 2007. Previously,
+Mr. McCarvel served as our Senior Vice President—Global Operations from October 2005 to February 2007 and as our Vice President—Asian & Australian Operations from
+January 2005 to September 2005, after providing consulting services to us during 2004. From October 2001 to January 2005, Mr. McCarvel served as Vice President for the Design, Test and
+Semiconductor division of Flextronics, where he was responsible for building Flextronics' engineering infrastructure in Asia and growing Flextronics' business in the region. From 1999 to October 2001,
+he served as President of U.S. Operations and Senior Vice President of Worldwide Sales and Marketing for Singapore Technology Assembly Test Services Ltd., a semiconductor services company. He
+previously worked in executive level positions with Micron Custom Manufacturing Services, Inc., a manufacturer of electronic products for computing and digital applications, and The Dii Group.
+We believe Mr. McCarvel's executive, financial and business expertise, including his extensive history working for us, as well as his background in manufacturing and retail, give him the
+qualifications and skills to serve as a director. 
+Ronald L. Frasch (Class I), age 61, has served as a member of our Board of Directors since October 2006. Since
+February 2007, Mr. Frasch has served as President and Chief Merchandising Officer of Saks Fifth Avenue, a division of Saks, Incorporated, a NYSE-listed luxury fashion retailer. He
+held the post of Vice Chairman and Chief Merchant of Saks Fifth Avenue from November 2004 until January 2007. From January 2004 to November 2004, Mr. Frasch was employed by Saks in a
+non-executive capacity. From April 2000 to January 2004, Mr. Frasch served as Chairman and Chief Executive Officer of Bergdorf Goodman (a subsidiary of Neiman Marcus
+Group, Inc.) and served as President of GFT North America (a subsidiary of Gruppo GFT, based in Turin, Italy, a global producer, marketer and distributor of fine men's and women's clothing,
+sportswear and furnishings) from 1996 to 2000. Mr. Frasch also served as President and Chief Executive Officer of Escada USA from 1994 to 1996. We believe Mr. Frasch's executive and
+business expertise, including his diversified background in retail and consumer products, give him the qualifications and skills to serve as a director. 
+4 
+W. Stephen Cannon (Class I), age 58, was appointed as a member of our Board of Directors in February 2009. Since
+2005,
+he has served as the Chairman of Constantine Cannon LLP, a law firm, and the Managing Partner of Constantine Cannon's Washington D.C. office. From 1994 to 2005, Mr. Cannon was the Senior
+Vice President, General Counsel and Secretary of Circuit City Stores, Inc., a retailer of consumer electronics, which, at the time, was publicly traded on the New York Stock Exchange. Prior to
+joining Circuit City Stores, Inc., Mr. Cannon served as a partner at the law firm of Wunder, Diefenderfer, Ryan, Cannon and Thelen and spent 10 years in government service,
+including serving as Chief Antitrust Counsel to the United States Senate Judiciary Committee. We believe Mr. Cannon's executive, legal and business expertise, including his background as a
+general counsel of a public company, give him the qualifications and skills to serve as a director. 
+EXECUTIVE OFFICERS 
+In addition to John McCarvel, our President and Chief Executive Officer, whose biographical information is disclosed above under
+"Election of Directors," our executive officers as of March 31, 2010 include the following individuals: 
+Name
+Age 
+Position(s) 
+Daniel P. Hart 
+51 
+Executive Vice President, Chief Legal and Administrative Officer 
+Russell C. Hammer 
+53 
+Chief Financial Officer, Senior Vice President—Finance and Treasurer 
+Daniel Hart has served as our Executive Vice President, Chief Legal and Administrative Officer since January 1, 2010. From May 2009 through
+December 2009, he served as our Executive Vice President of Administration and Corporate Development. Prior to joining us, Mr. Hart was employed by Océ North America, a digital
+printing and document management division of Océ, N.V., a manufacturing and engineering company publicly traded on the Euronext Amsterdam stock exchange, where he served as
+Senior Vice President and General Counsel from 2006 to 2009. From 2004 to 2006, Mr. Hart served as Senior Vice President—General Counsel and Human Resources for Invensys Controls, a
+global manufacturing and engineering operation within Invensys plc, a public U.K. conglomerate. From 2002 to 2004, Mr. Hart served as Chief Staff Officer for the Development Division of
+Invensys, a large portfolio of disposal companies within Invensys plc. Previously, Mr. Hart's experience included service in senior legal positions at Dictaphone Corporation and Brooke
+Group Ltd. and private legal practice New York City. He was an executive officer of Dictaphone Corporation in Nov 2000 when it filed for protection under Chapter 11 of the U.S.
+bankruptcy code. 
+Russell C. Hammer has served as our Chief Financial Officer, Senior Vice President of Finance and Treasurer since January 2008. Prior to joining us,
+Mr. Hammer was employed for 28 years at Motorola, Inc. ("Motorola"), a global supplier of wireless handsets and mobile communication products. Mr. Hammer served as Chief
+Financial Officer and Corporate Vice President of Motorola's Connected Home Solutions Business from April 2005 to August 2007. From August 2002 to March 2005, he served as Chief Audit Officer for
+Motorola, and from August 1998 to July 2002, he served as the Chief Financial Officer of the Asia Cellular Subscriber Business of Motorola. Mr. Hammer also served as the Chief Financial Officer
+of the Global Subscriber Paging Business and in other executive roles for Motorola's various divisions during his tenure with the company. 
+5 
+BENEFICIAL OWNERSHIP OF OUR COMMON STOCK 
+The following table sets forth information with respect to the beneficial ownership of our common stock as of March 31, 2010
+by: 
+• each person (or group of affiliated persons) who is known by us to own beneficially more than 5% of our common stock; 
+• each current director or nominee; 
+• each of the named executive officers listed in the Summary Compensation Table below (each, an "NEO"); and 
+• all directors and executive officers as a group. 
+Beneficial
+ownership is determined in accordance with the Securities and Exchange Commission ("SEC") rules. In computing percentage ownership of each person, shares of common stock
+subject to options held by that person that are currently exercisable or convertible, or exercisable or convertible within 60 days after March 31, 2010, are deemed to be outstanding and
+beneficially owned by that person. In addition, shares that are required to be issued by us to any person pursuant to a restricted stock award agreement within 60 days after March 31,
+2010 are also deemed to be outstanding and beneficially owned by that person. None of these shares, however, are deemed outstanding for the purpose of computing the percentage ownership of any other
+person. 
+Except
+as indicated in this table and pursuant to applicable community property laws, each stockholder named in the table has sole voting and investment power with respect to the shares
+set forth opposite such stockholder's name. Percentage ownership is based on 85,704,194 shares of our common stock outstanding on March 31, 2010. Unless otherwise indicated below, the address
+for each person who owns more than 5% of our voting securities and for each director and named executive officer listed below is in care of Crocs, Inc., 6328 Monarch Park Place, Niwot, Colorado
+80503. 
+Beneficial Ownership 
+Name of Beneficial Owner
+Shares 
+Percent 
+5% Stockholders: 
+Blackrock, Inc.(1) 
+6,345,077 
+7.4 
+% 
+Directors: 
+Richard L. Sharp(2) 
+1,577,880 
+1.8 
+% 
+Peter Jacobi 
+70,910 
+* 
+Thomas J. Smach(3) 
+264,320 
+* 
+Raymond D. Croghan(4) 
+231,785 
+* 
+W. Stephen Cannon 
+52,409 
+* 
+Ronald L. Frasch 
+61,914 
+* 
+Officers: 
+John P. McCarvel(5) 
+534,175 
+* 
+John Duerden(6) 
+368,920 
+* 
+Ron Snyder(7) 
+1,267,333 
+1.5 
+% 
+Russell C. Hammer(8) 
+163,288 
+* 
+Daniel Hart 
+154,500 
+* 
+Erik Rebich (9) 
+290,900 
+* 
+All current directors and executive officers as a group (11 persons)(10) 
+3,424,884 
+4.0 
+% 
+* Less
+than 1% 
+6 
+(1) Based
+solely on a Schedule 13G filed with the SEC on January 29, 2010. The address for Blackrock, Inc. is 40 East
+52 nd Street, New York, New York, 10055.
+(2) Shares
+beneficially owned include 352,430 shares subject to options exercisable within 60 days of March 31, 2010, 874,520 shares beneficially
+owned by The RLS Trust, 87,610 shares beneficially owned by BES & RS, LLC, 87,610 shares beneficially owned by EGG & RS, LLC, 87,610 shares beneficially owned by
+RBG & RS, LLC, 29,200 shares beneficially owned by CSS & RS, LLC, and 58,400 shares beneficially owned by the April S. Garnett Irrevocable Trust (GS). Mr. Sharp is
+the sole trustee of The RLS Trust and the April S. Garnett Irrevocable Trust (GS) and is the sole manager of each of BES & RS, LLC, EGG & RS, LLC, and RBG &
+RS, LLC and CSS & RS, LLC, and he exercises voting and investment power over all of the shares beneficially owned by each trust and each company. The address for Mr. Sharp
+is 9020 Stony Point Parkway, #180, Richmond, VA 23235.
+(3) Shares
+beneficially owned include 234,420 shares subject to options exercisable within 60 days of March 31, 2010 and 4,400 shares held as
+custodian for Mr. Smach's two children under the New York Uniform Gifts to Minors Act. Mr. Smach exercises voting and investment power over the shares.
+(4) Shares
+beneficially owned include 163,510 shares subject to options exercisable within 60 days of March 31, 2010 and an aggregate of 4,960
+shares of common stock beneficially owned by two trusts for the benefit of Mr. Croghan's two daughters. Mr. Croghan's spouse is the trustee of both trusts and she exercises sole voting
+and investment power over the shares. Mr. Croghan disclaims beneficial ownership of such shares.
+(5) Mr. McCarvel
+was appointed as our President and Chief Executive Officer and a director effective March 1, 2010. Shares beneficially owned
+include 173,711 shares subject to options exercisable within 60 days of March 31, 2010 and 360,464 shares held jointly with his spouse.
+(6) Mr. Duerden
+was appointed as our President and Chief Executive Officer and a director effective March 18, 2009 and resigned from these
+positions effective March 1, 2010. Pursuant to Mr. Duerden's Separation Agreement, described in further detail in "Employment Agreements" 
+later in this document, 100,000 shares of restricted stock and 100,000 stock options vested on an accelerated basis as of March 31, 2010.
+(7) Mr. Snyder
+resigned as our President and Chief Executive Officer effective March 16, 2010 and resigned as a Board member effective
+June 30, 2010. Pursuant to Mr. Snyder's Separation Agreement, described in further detail in " Employment Agreements" later in this
+document, we accelerated the vesting of certain options to purchase our common stock as well as restricted stock awards.
+(8) Shares
+beneficially owned include 53,229 shares subject to options exercisable within 60 days of March 31, 2010.
+(9) Shares
+beneficially owned include 96,226 shares subject to options exercisable within 60 days of March 31, 2010. Mr. Rebich resigned as
+our Vice President, General Counsel and Secretary on December 31, 2009. His options continue to vest during the term of his consulting relationship with us.
+(10) Shares
+beneficially owned include 780,063 shares of common stock subject to options issued to seven directors and 323,166 shares of common stock subject to
+options issued or restricted stock awards granted to five named executive officers that are exercisable or issuable within 60 days of March 31, 2010. 
+7 
+BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD 
+Board Composition 
+Our Board of Directors currently consists of seven members divided into three classes, with each director elected to a
+three-year term. Under our amended and restated bylaws, each of our directors holds office until his or her successor is elected and qualified or until such director's earlier death,
+resignation, disqualification or removal. 
+At
+each annual meeting of stockholders, the successors to directors whose terms expire at such meeting will be elected, or such directors will be re-elected, and will serve
+from the time of election and qualification until the third annual meeting following their election or until their successors are duly elected and qualified. The current authorized number of directors
+is seven. The authorized number of directors may be changed by resolution of the Board. Any additional directorships resulting from an increase in the number of directors will be distributed among the
+three classes so that, as nearly as possible, each class will consist of one-third of the directors. Vacancies on the Board can be filled by resolution of the Board of Directors. 
+NASDAQ
+listing standards require that our Board of Directors have a majority of independent directors. The Board of Directors has determined that all of the current
+non-management members of our Board of Directors (Messrs. Sharp, Jacobi, Smach, Croghan, Cannon and Frasch) are independent directors as defined by NASDAQ listing standards. The
+Board makes a determination regarding the independence of each director annually based on the relevant facts and circumstances. Applying the standards and independence criteria defined by the NASDAQ
+listing standards, the Board has made a subjective determination as to each independent director that no relationships exist that, in the opinion of the Board, would interfere with the exercise of his
+or her independent judgment in carrying out the responsibilities of a director. 
+During
+2009, the Board of Directors met eleven times and acted by written consent once. All directors attended 75% or more of the meetings of the Board of Directors and the meetings of
+the committees of the Board on which they serve, with the exception of Mr. Croghan, who attended one of the three Audit Committee meetings occurring before February 24, 2009, when he
+left the Audit Committee. The independent directors of the Board hold executive sessions without members of management present. We encourage, but do not require, our directors to attend the annual
+meeting. Messrs. Sharp, Cannon, Croghan, Duerden, Frasch, Jacobi and Smach attended our 2009 annual meeting of stockholders. 
+Stockholders
+who wish to communicate with the Board of Directors or with specified individual directors may do so by mailing such written communication to: Corporate Secretary,
+Crocs, Inc., 6328 Monarch Park Place, Niwot, Colorado 80503. The Corporate Secretary will review all correspondence and will forward to the Board or an individual director a
+summary of the correspondence received and copies of correspondence that the Corporate Secretary determines requires the attention of the Board or such individual director. The Board or an individual
+director may at any time request copies and review all correspondence received by the Corporate Secretary that is intended for the Board or such individual director. 
+Board Leadership 
+The Board does not have a policy regarding separation of the roles of Chief Executive Officer and Chairman of the Board. The Board
+believes it is in our best interests to make that determination based on our current circumstances. The Board has determined that an independent director serving as Chairman is in the best interests
+of our stockholders at this time. This structure ensures a greater role of independent directors in the active oversight of our management and in setting agendas and 
+8 
+establishing
+Board priorities and procedures. This structure also allows the Chief Executive Officer to focus to a greater extent on the management of our day-to-day
+operations. 
+Risk Oversight 
+The Board of Directors oversees our risk management activities. The Board implements its risk oversight function both as a whole and
+through delegation to various committees. These committees meet regularly and report back to the full Board. The Audit Committee has primary oversight responsibility with respect to financial risks as
+well as oversight responsibility for our overall risk assessment and risk management policies and systems. The Audit Committee oversees the our procedures for the receipt, retention and treatment of
+complaints relating to accounting and auditing matters and oversees our management of legal and regulatory compliance systems. The Compensation Committee also oversees risks relating to our
+compensation plans and programs. The Compensation Committee reviewed and considered our compensation policies and programs in light of the board of directors' risk assessment and management
+responsibilities and will do so in the future on an annual basis. The Compensation Committee believes that we have no compensation policies and programs that give rise to risks reasonably likely to
+have a material adverse effect on us. 
+Our
+Director of Internal Audit coordinates the day-to-day risk management process for us and reports directly to the Chief Financial Officer and to the Audit
+Committee. The Director of Internal Audit updates the Audit Committee at least quarterly and updates the full Board at least annually regarding our risk analyses and assessments and risk mitigation
+strategies and activities. In addition, our Treasury Director updates the Audit Committee at least annually, or more frequently as needed, regarding our Directors and Officers Insurance program. The
+Treasury Director also updates the Audit Committee at least annually, or more frequently as needed, regarding certain financial risks. 
+Board Committees 
+Our Board of Directors has the authority to appoint committees to perform certain management and administrative functions. Our Board of
+Directors has established the following committees: 
+Audit Committee. Messrs. Smach (Chairman), Frasch and Jacobi are the current members of our Audit Committee. Mr. Croghan
+served as an
+Audit Committee member until February 24, 2009. The Audit Committee met ten times in 2009. The functions of the Audit Committee include oversight of the integrity of our financial statements,
+our compliance with legal and regulatory requirements, the performance, qualifications and independence of our independent auditors and the performance of our
+internal audit function. Our Audit Committee is directly responsible for the appointment, retention, compensation, evaluation, termination and oversight of the work of any independent auditor engaged
+for the purpose of preparing or issuing an audit report or related work. The purpose and responsibilities of our Audit Committee are set forth in the Audit Committee Charter, which was amended and
+restated by our Board of Directors on February 18, 2008. The amended and restated Audit Committee Charter can be found on our website at www.crocs.com. 
+All
+of the members of the Audit Committee are independent, as determined in accordance with NASDAQ listing standards and relevant federal securities laws and regulations. Our Board of
+Directors has determined that Mr. Smach qualifies as an "audit committee financial expert" as defined by the applicable regulations of the SEC. 
+Compensation Committee. Messrs Croghan (Chairman), Sharp and Cannon are the current members of our Compensation Committee. The
+Compensation
+Committee met thirteen times in 2009. The Compensation Committee has overall responsibility for evaluating and approving our executive officer compensation, benefits, severance, equity-based or other
+compensation plans, policies and programs. The Compensation Committee is also responsible for approving our Compensation Discussion and Analysis for inclusion in our proxy statement. The purpose and
+responsibilities of our 
+9 
+Compensation
+Committee are set forth in the Compensation Committee Charter, which was approved by our Board of Directors on June 30, 2005. The Compensation Committee Charter can be found on our
+website at www.crocs.com. All of the current members of the Compensation Committee are independent, as determined in accordance with NASDAQ listing standards and relevant federal securities laws and
+regulations. 
+Role of the Compensation Committee. The Compensation Committee has the authority to establish and monitor our executive compensation
+programs and to
+make decisions regarding the compensation of each of the executive officers named in the Summary Compensation Table set forth later in this document ("named executive officer" or "NEO"). The
+Compensation Committee sets the Chief Executive Officer's compensation. The Compensation Committee also reviews the recommendations of the Chief Executive Officer with respect to compensation of the
+other NEOs and, after reviewing such recommendations, sets the compensation of the other NEOs. The Compensation Committee also monitors, administers and approves awards under our various incentive
+compensation plans for all levels of our employees, including awards under our 2007 Equity Incentive Plan and 2008 Cash Incentive Plan. 
+The
+Compensation Committee relies on its judgment in making compensation decisions after reviewing our performance and evaluating each executive's performance against established goals,
+leadership
+ability and responsibilities, and current compensation arrangements. When setting total compensation for each of the NEOs, the Compensation Committee reviews the NEO's current compensation, which
+includes equity and non-equity based compensation. The Compensation Committee also evaluates surveys and other available data regarding the executive compensation programs of comparative
+companies. The compensation program for NEOs and the Compensation Committee assessment process are designed to be flexible so as to better respond to the evolving business environment and individual
+circumstances. 
+Role of Consultants. During 2008, the Compensation Committee and management engaged a third party consultant, Mercer, to provide an
+overall
+evaluation of our NEO compensation, including a comparison against our peers, on elements of compensation including base pay, performance based bonuses and long-term equity awards. The
+peer group information, which includes peers utilized in 2007 (detailed in Executive Compensation and Analysis later in this document), was collected
+and presented to the Compensation Committee by Mercer in 2008. Considering the data in the study, the Compensation Committee awarded restricted stock awards and stock options late in 2008 to certain
+NEOs, which the Compensation Committee deemed sufficient to address the near-term retention imperatives of its key executives. In 2009, the Compensation Committee determined that no
+additional restricted stock awards or stock option grants were required. As a result, the only stock option and restricted stock awards granted to NEOs in 2009 were to new NEOs (Messrs. Duerden
+and Hart) with the exception of Mr. Snyder, who did not receive a grant in late 2008. 
+In
+2010, the Compensation Committee and management engaged a third party consultant, Buck Consultants, to provide an evaluation of the 2010 executive bonus plan and other executive
+compensation matters. While the 2010 executive bonus plan was approved, the result of the review by Buck Consultants is not yet final. (See "Compensation Discussion and
+Analysis" for further description of 2010 bonus metrics.) 
+Employment and Severance Agreements. Certain of our NEOs have employment agreements, as described more fully later in this document. In
+addition,
+unvested options and restricted stock may become vested on a change in control pursuant to individual option or restricted stock award agreements. The NEOs serve at the will of the Board, which
+enables us to terminate their employment with discretion and to determine the terms of any severance. This is consistent with our performance-based employment and compensation philosophy. 
+10 
+Governance and Nominating Committee. Our Governance and Nominating Committee currently consists of Messrs. Sharp (Chairman) and
+Cannon. The
+Governance and Nominating Committee met twice in 2009. The Governance and Nominating Committee assists our Board of Directors in promoting the best interests of the Company and our stockholders
+through the implementation of sound corporate governance principles and practices. In furtherance of this purpose, the Governance and Nominating Committee identifies individuals qualified to become
+board members and recommends to our Board of Directors the director nominees for election at each annual meeting of stockholders. It also reviews the qualifications and independence of the members of
+our Board of Directors and its various committees and makes any recommendations the Governance and Nominating Committee members may deem appropriate concerning any recommended changes in the
+composition of our Board of Directors and its committees. The Governance and Nominating Committee also recommends to our Board of Directors the corporate governance guidelines and standards regarding
+the independence of outside directors applicable to us and reviews the provisions of the Governance and Nominating Committee Charter on a regular basis to confirm that such guidelines, standards and
+charter remain consistent with sound corporate governance practices and with any legal or regulatory requirements of NASDAQ. The Governance and Nominating Committee also monitors and leads our Board
+of Directors in its annual review of our Board of Directors' performance. 
+The
+purpose and responsibilities of our Governance and Nominating Committee are set forth in the Governance and Nominating Committee Charter, which was approved by our Board of Directors
+on June 30, 2005. The Governance and Nominating Committee Charter can be found on our website at www.crocs.com. All of the members of the Governance and Nominating Committee are independent, as
+determined in accordance with the NASDAQ listing standards. 
+Director Nomination Process. In identifying potential director candidates, the Governance and Nominating Committee relies on
+recommendations from a
+number of sources, including current directors and officers. The Governance and Nominating Committee may also hire outside consultants, search firms or other advisors to assist in identifying director
+candidates. The Governance and Nominating Committee will consider director candidates recommended by stockholders on the same basis as it considers other candidates. Any stockholder wishing to
+recommend a candidate for consideration by the Governance and Nominating Committee may do so by submitting a written recommendation to the Governance and Nominating Committee in accordance with the
+procedures set forth under "Stockholder Proposals and Nominations for 2011 Annual Meeting." 
+In
+evaluating a candidate for director, the Governance and Nominating Committee considers, among other things, the candidate's judgment, knowledge, integrity, business and industry
+experience, and expertise, which are likely to enhance the Board of Directors' ability to govern our affairs and business. The Governance and Nominating Committee also takes into account independence
+requirements imposed by law or regulations (including the NASDAQ listing standards). In the case of director candidates recommended by stockholders, the Governance and Nominating Committee may also
+consider the number of shares held by the recommending stockholder, the length of time that such shares have been held and the relationship, if any, between the recommending stockholder and the
+recommended director nominee. 
+Code of Business Conduct and Ethics and Committee Charters 
+We have adopted a Code of Business Conduct and Ethics that applies to all directors and employees, including our principal executive,
+financial and accounting officers. The Amended and Restated Code of Business Conduct and Ethics is posted on our website at www.crocs.com. We intend to satisfy the requirements under Item 5.05
+of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of our Amended and Restated Code of Business Conduct and Ethics that apply to our directors and
+principal executive, financial and accounting officers by posting such information on our website. The Audit Committee Charter, Compensation Committee Charter and 
+11 
+Governance
+and Nominating Committee Charter are also available on our website at www.crocs.com. Any person may request a copy of the Amended and Restated Code of Business Conduct and Ethics or
+committee charters free of charge by submitting a written request to: Corporate Secretary, Crocs, Inc., 6328 Monarch Park Place, Niwot, Colorado 80503. 
+Compensation of Directors 
+The table below summarizes the total compensation paid or earned by each of the non-employee directors for the fiscal year
+ended December 31, 2009. 
+Name
+Fees Earned 
+or Paid 
+in Cash 
+Stock 
+Awards(1) 
+Option 
+Awards(1) 
+Total 
+W. Stephen Cannon 
+$ 
+80,000 
+$ 
+99,999 
+$ 
+— 
+$ 
+179,999 
+Raymond D. Croghan 
+62,500 
+184,997 
+— 
+247,497 
+Ronald L. Frasch 
+60,000 
+179,999 
+— 
+239,999 
+Peter Jacobi 
+60,000 
+179,999 
+— 
+239,999 
+Richard L. Sharp 
+63,750 
+224,996 
+17,964 
+306,710 
+Thomas J. Smach 
+110,000 
+150,001 
+— 
+260,001 
+(1) Amounts
+reflect the aggregate grant date fair value of grants made in each respective fiscal year, valued in accordance with ASC Topic 718
+"Compensation—Stock Compensation" ("ASC Topic 718"). Assumptions used in the calculations of these amounts are included in Footnote 10 to our Consolidated Financial Statements included in
+our Annual Report on Form 10-K for the year ended December 31, 2009. For Mr. Sharp, amount includes approximately $40,000 related to a one-time grant he
+received for the additional services he performed during the transition of Mr. Duerden as Chief Executive Officer. Also included above is approximately $100,000 related to the annual stock
+grant made to each director, with the balance for certain directors who elected to receive a portion of their cash compensation in stock. 
+As
+of December 31, 2009, each non-employee director had the following number of stock options and unvested shares of restricted stock outstanding. All information
+regarding options outstanding have been restated, as appropriate, to reflect to the 2-for-1 stock split that occurred on June 14, 2007, which was effected as a 100%
+common stock dividend distributed on that date. 
+Options 
+Outstanding at 
+December 31, 2009 
+Unvested Restricted 
+Stock Awards 
+Outstanding at 
+December 31, 2009 
+W. Stephen Cannon 
+— 
+— 
+Raymond D. Croghan 
+163,510 
+11,905 
+Ronald L. Frasch 
+— 
+11,205 
+Peter Jacobi 
+— 
+11,205 
+Richard L. Sharp 
+370,430 
+11,905 
+Thomas J. Smach 
+268,623 
+7,004 
+On
+June 25, 2009, the Board of Directors approved a new compensation plan for non-employee directors, effective as of that date. Pursuant to the plan, each of our
+non-employee directors receives $80,000 in annual compensation (a) in cash (payable quarterly in $20,000 installments), (b) in shares of restricted stock (based on the fair
+market value of our common stock on the date of grant) that vest in four successive quarterly installments from the date of grant or (c) in a combination of cash and restricted stock, at the
+election of each non-employee director. During 2009, Mr. Sharp, Mr. Frasch, Mr. Jacobi and Mr. Croghan elected to receive their director compensation in stock,
+Mr. Cannon elected to receive his director compensation in cash, and Mr. Smach elected to receive a portion of his 
+12 
+director
+compensation in stock and a portion in cash. In addition, each non-employee director is awarded an annual grant of $100,000 of our common stock based on the fair market value of
+our common stock on the date of grant. 
+In
+addition to the annual compensation and annual grant of common stock described above, the Chairman of the Board is awarded an annual option to purchase 10,000 shares of the our common
+stock at an exercise price equal to the fair market value of the shares on the date of grant. This option will vest and become exercisable in four equal installments on the respective dates of each of
+the four annual meetings of stockholders following the year of grant. In 2009, Mr. Sharp, our Chairman of the Board, also received a one-time grant of $40,000 of our common stock,
+based on the closing price of our common stock on June 25, 2009, for the additional services he performed during the transition of our Mr. Duerden as Chief Executive Officer. 
+The
+chairperson of the Audit Committee receives an additional $50,000 and each of the chairpersons of the Compensation Committee and the Governance and Nominating Committee receives an
+additional $5,000 in annual compensation. Similarly to the payment of the annual compensation to non-employee directors, each chairperson may elect to receive his or her additional annual
+compensation in cash, in restricted stock or in a combination of cash and restricted stock. 
+All
+directors are reimbursed for their reasonable out-of-pocket expenses incurred in attending meetings of the Board of Directors and its committees. 
+EXECUTIVE COMPENSATION 
+COMPENSATION DISCUSSION AND ANALYSIS 
+The following discussion and analysis provides information regarding our executive compensation objectives and principles, procedures,
+practices and decisions, and is provided to help give perspective to the numbers and narratives that follow in the tables within this section. This discussion will focus on our objectives, principles,
+practices and decisions with respect to the compensation of the following named executive officers (the "NEOs"): 
+• John P. McCarvel, Director, Chief Executive Officer and President and former Chief Operating Officer and Executive Vice
+President 
+• John H. Duerden, former Director, Chief Executive Officer and President 
+• Ronald R. Snyder, former Director, Chief Executive Officer and President 
+• Daniel Hart, Executive Vice President of Administration and Corporate Development 
+• Russell C. Hammer, Chief Financial Officer, Senior Vice President—Finance and Treasurer 
+• Erik Rebich, former Vice President, General Counsel and Secretary 
+Note
+that Mr. McCarvel served as our Chief Operating Officer and Executive Vice President from February 2007 to March 1, 2010, when he was appointed as our President and Chief
+Executive Officer and as a Director. Mr. Duerden served as our President and Chief Executive Officer and as a Director from March 18, 2009 to March 1, 2010, when he resigned from
+all of these positions. Mr. Snyder served as our President and Chief Executive Officer until March 16, 2009 and ceased to serve as an executive officer on such date. Mr. Snyder
+also served as a Director until June 30, 2009, when he resigned from the Board of Directors. 
+Executive Compensation Objectives and Principles 
+The overall objective of our executive compensation program is to create long-term value for our stockholders by attracting
+and retaining talented executives, rewarding superior operating and financial 
+13 
+performance,
+and aligning the long-term interests of our executives with those of our stockholders. Accordingly, our executive compensation program incorporates the following
+principles: 
+• Compensation should be based on individual job responsibility, demonstrated leadership ability, management experience,
+individual performance and our performance. Employees in positions of leadership and broad responsibility are generally compensated by elements that are linked to our overall performance and
+stockholder returns. 
+• Compensation should reflect the fair market value of the services received. We believe that a fair and competitive pay
+package for our NEOs is essential to attract and retain talented executives in key positions. 
+• Compensation is designed to reward NEOs based on both our short-term and long-term performance.
+Base pay is tied to individual performance and market conditions for similar positions. Bonuses are tied to achievement of short-term quantitative performance goals that we believe closely
+correlate to share value. Long-term performance is rewarded through equity-based awards such as stock options, the value of which depends on future share prices, and the realization of
+which is contingent on satisfaction of vesting schedules requiring continued service with us. 
+• Compensation should foster long-term focus. Compensation is designed to align executives' interests with those
+of our stockholders. A significant percentage of total compensation is allocated to non-cash compensation as a result of this philosophy. We do not use an exact formula for allocating
+between cash and non-cash compensation. 
+The
+Compensation Committee forms its judgments regarding the levels and component mix of executive compensation by considering the market competition for executive talent, the risk to an
+executive inherent in employment with a company that has a relatively short operating history, and our financial goals. For the year ended December 31, 2009, we awarded cash incentive bonuses
+due to our financial performance during the year. Specifically, cash incentive bonuses for our NEOs were payable contingent upon the achievement of certain milestones related to growth in our diluted
+earnings per share. 
+Elements of Compensation 
+Our executive compensation objectives and principles are implemented through the use of the following elements of compensation, each of
+which is discussed more fully below: 
+• Base Pay 
+• Performance-Based Bonus 
+• Long-Term Equity Awards 
+• Other Personal Benefits 
+Our
+executive compensation program seeks to attract, retain, and motivate exemplary executive talent who are able to succeed in our fast paced, rapidly evolving company. Our executive
+compensation program also seeks to hold our executives accountable and reward them appropriately for successful business results. We are firmly committed to our stockholders and our executive
+compensation program is structured to align our executives' compensation with our stockholders' interests. To meet each of these objectives, our core executive compensation program encompasses base
+salaries, annual performance-based incentive compensation and long term equity incentive awards. We believe that the total compensation opportunities offered to our executives are sufficient to reduce
+the need for anything other than executive perquisites (which are detailed later in this report) or enhanced benefit programs beyond those that are typically available to all other employees. 
+14 
+The Compensation Committee does not utilize an exact calculation in determining the break-down of NEO compensation among base pay, annual performance-based bonus and
+long-term equity awards; rather, the Compensation Committee takes into consideration all forms of compensation. Because we are a rapidly evolving company, we believe that a substantial
+portion of each NEO's compensation should be in the form of annual performance-based bonus and equity awards. In general, base pay of the NEOs is set at levels where we are competitive with our market
+peers of the S&P 600 Footwear Index and two similar companies due to either their multi-brand business model or similar growth patterns (collectively, "Peers"), with the expectation that
+shortfalls in base pay, if any, will be recouped through performance bonuses should our performance entitle the NEO to receive performance bonuses. The Peers and the criteria for their inclusion are
+listed below: 
+Company
+Criteria 
+Brown Shoe Co., Inc. 
+S&P 600 Footwear 
+K-Swiss, Inc. 
+S&P 600 Footwear 
+Quiksilver, Inc. 
+Similar Multi-Brand Business Model 
+Skechers USA, Inc. 
+S&P 600 Footwear 
+Stride Rite CP 
+S&P 600 Footwear 
+Timberland Co. 
+S&P 600 Footwear 
+Under Armour, Inc. 
+Similar Growth Pattern 
+Wolverine World Wide, Inc. 
+S&P 600 Footwear 
+Base Pay. The Compensation Committee established base pay in 2009 by considering the size of our operations, the responsibilities of
+the NEOs and the
+competitive marketplace for executive talent in similar positions. The Compensation Committee sets the base pay of the Chief Executive Officer. Base pay for other NEOs is set by the Compensation
+Committee after reviewing the recommendation of the Chief Executive Officer. Annual adjustments are influenced by growth of our operations, revenues and profitability, individual performance, changes
+in responsibility and other factors. During 2009, we entered into employment agreements with Messrs. Duerden, Hart and McCarvel which set forth base pay and performance-based bonus targets,
+among other things. The salary and bonus targets set forth in those agreements were determined based on the needs of the Company, the level of responsibility of each NEO's position, and the amount
+required to attract (in the case of Messrs. Duerden and Hart) and retain (in the case of Mr. McCarvel) talented NEOs. 
+Performance-Based Bonuses. In an effort to encourage achievement of our performance objectives, the amount of potential bonus to be
+paid to the NEOs
+for the year upon achievement of these performance objectives is set at a level which the Compensation Committee believes is in excess of the bonuses paid by our Peers. The combination of base pay and
+performance-based bonuses is intended to result in an aggregate rate of salary and bonus compensation exceeding competitive market standards when we exceed the performance objectives set by the
+Compensation Committee. The Compensation Committee believes that a compensation plan exceeding competitive market standards offers NEOs additional incentive to outperform our Peers and ensures that we
+attract and retain talented NEOs. 
+For
+2009, the target bonus amount for each NEO was expressed as a percentage of the NEO's base pay ranging up to 200% contingent on us achieving certain operating loss, net cash,
+receivables, inventory and working capital targets, with 50% of the target bonus contingent upon achieving an improvement of $24 million over the aggregate operating loss earned during our 2008
+fiscal second, third and fourth quarters, and 12.5% each upon achieving each of the following: a net cash target of $49.3 million, a receivables target of $48.8 million, an inventory
+target of $94.1 million and a working capital target of $136.5 million. These targets did not anticipate the effect of one-time items, including, but not limited to,
+impairments, restructuring and additional expense related to the 2008 Tender Offer. If we did not reach the minimum targets, the NEOs would not have been eligible for that portion of the bonus. The
+percentages were determined by the Compensation Committee based on the estimated 
+15 
+contribution
+and responsibility of the individual NEO. The Compensation Committee also takes into consideration the inherent employment risk accepted by an officer of a rapidly evolving company with a
+limited operating history. The Compensation Committee has discretion to depart from the formula in approving the bonuses and decrease bonuses after general results are known. 
+After
+reviewing 2009 actual results, the Compensation Committee determined that our NEOs would be paid bonuses at 50% of target. Our annual performance-based bonuses are paid pursuant to
+our 2008 Cash Incentive Plan. This plan qualifies as a performance-based compensation plan in accordance with Section 162(m) of the Internal Revenue Code (hereafter referred to as "the Code").
+See "Deductibility of Executive Compensation" below for further discussion. 
+In
+March 2010, the Compensation Committee approved bonus metrics for the 2010 fiscal year. Under the approved 2010 bonus metrics, the bonus amount for each NEO is expressed as a
+percentage of the NEO's base pay ranging up to 175% contingent upon us achieving certain sales growth, earnings per share, inventory turnover and net unrestricted cash targets (net of short- and
+long-term debt). These targets are weighted, with 50% of the target bonus contingent upon achieving our GAAP earnings per share target, 20% contingent upon achieving our sales growth
+target, and 15% each contingent upon achieving our inventory turnover and net unrestricted cash targets. 
+Senior Executive Deferred Compensation Plan. Certain senior executives, including NEOs, are eligible to participate in the 2007 Senior
+Executive
+Deferred Compensation Plan (the "Senior Executive Plan"). Under the Senior Executive Plan, a participant may defer all or a part of his or her bonus amount exceeding 200% of such participant's target
+bonus in accordance with the applicable deferral agreement executed by the participant. The deferred compensation is credited to a deferral account established for each participant under the Senior
+Executive Plan for recordkeeping purposes. Under the Senior Executive Plan, we established an irrevocable trust into which we are required to deposit cash or other assets as specified in the
+applicable deferral agreement, equal to the aggregate amount required to be credited to the participant's deferral account, less any applicable taxes required to be withheld. In 2008,
+Messrs. Snyder and McCarvel elected to participate in the Senior Executive Plan and deferred $1.6 million and $640,000, respectively, of their 2007 performance-based bonuses. The
+deferred bonus
+for Mr. McCarvel will vest ratably on a quarterly basis over a three year period, with a pro rata amount vesting on each calendar quarter, providing a long-term retention incentive.
+The deferred bonus for Mr. McCarvel will be 100% vested upon a change of control (as defined in the Senior Executive Plan) if he is employed at that time or if his employment is terminated as a
+result of death or disability. Mr. Snyder resigned from his position as President and Chief Executive Officer effective March 2009, and, pursuant to his June 2009 separation agreement, he was
+paid the vested and unvested portion of his deferred compensation, which totaled $2.1 million. 
+Long-Term Equity Awards. Discretionary long-term equity awards, in the form of stock options and restricted stock, are
+granted annually, at the Compensation Committee's discretion, to the NEOs in order to provide long-term performance-based compensation, to encourage the NEOs to continue their employment
+throughout the vesting periods of the awards, and to align management and stockholder interests. The Compensation Committee considers the number of shares in the grant and the appropriate combination
+of equity-based awards in making NEO grant decisions. For 2009, the amount of long-term equity awards granted to NEOs was based on the Compensation Committee's assessment of each NEO's
+expected future contributions, giving consideration to recent grants made in late 2008. 
+16 
+In
+2009, the Compensation Committee approved stock option and restricted stock grants for the NEOs as listed below: 
+Name
+2009 Stock Option 
+Awards: Number 
+of Securities 
+Underlying 
+Options 
+(#) 
+2009 Restricted Stock 
+Awards: Number 
+of Securities 
+Underlying 
+Options 
+(#) 
+John H. Duerden 
+400,000 
+400,000 
+Ronald R. Snyder 
+317,000 
+197,000 
+Daniel Hart 
+200,000 
+150,000 
+John P. McCarvel 
+— 
+— 
+Russell C. Hammer 
+— 
+— 
+Erik Rebich 
+— 
+— 
+In
+2008, we assessed our long-term equity award program and, in late 2008, made certain adjustments to align our long-term equity award program with our Peers.
+The Compensation Committee believes that the awards made to NEOs in 2008 were made at levels consistent with those of our Peers and the anticipated contribution and responsibility of the NEO in future
+years. Because the long-term equity awards were made late in 2008, no long-term equity awards were made to NEOs during 2009, except for Messrs. Duerden and Hart, who
+were given long-term equity awards in conjunction with their initial hiring, and Mr. Snyder, who was given long-term equity awards as a method of retaining
+Mr. Snyder's services. The Compensation Committee has not yet made any equity awards to NEOs in 2010. 
+Options
+are generally granted with an exercise price equal to the closing price per share on the date of grant and vest pro rata over four years, with the first year vesting on a "cliff"
+basis followed by monthly vesting for the remaining three years. Stock options only have economic value to the grantee to the extent the market price of the underlying shares on the exercise date
+exceeds the exercise price. Accordingly, options provide compensation only if the underlying share price increases over the option term and the NEO's employment continues until the vesting date.
+Restricted stock awards typically vest in three successive equal annual installments of thirty-three percent upon the grantee's completion of each year of continuous employment. 
+Other Benefits. Other benefits are provided to the NEOs in order to achieve a competitive pay package. The Compensation Committee
+believes that those
+benefits, which are detailed in the Summary Compensation Table under the heading "All Other Compensation," are reasonable, competitive and consistent with our overall executive compensation program.
+Those benefits consist principally of employer-paid premiums on health insurance, company vehicles and travel costs. In addition, from time to time, our directors and executive officers
+may use our company-owned aircraft for personal purposes, provided they fully reimburse us for related expenses, including fuel and other variable costs. 
+John P. McCarvel Employment Agreement. Effective March 1, 2010, John P. McCarvel was appointed as our President and Chief
+Executive Officer.
+Prior to his appointment as President and Chief Executive Officer, Mr. McCarvel served as Executive Vice President and Chief Operating Officer. We entered into an employment agreement with John
+McCarvel in February 2009. The employment agreement was intended to provide incentive for Mr. McCarvel to remain with the Company. (See Employment
+Agreements later in this document for a more robust description of Mr. McCarvel's employment agreement.) Upon his appointment as our President and Chief Executive
+Officer, Mr. McCarvel's base pay was increased to $800,000, his target bonus was increased to 100% of base salary, and he will be reimbursed for reasonable costs related to his relocation from
+Singapore to the Niwot, Colorado area. 
+17 
+John H. Duerden Employment and Severance Agreements. John H. Duerden served as our President and Chief Executive Officer from
+March 18, 2009
+to March 1, 2010. Concurrent with the appointment, we entered into an employment agreement with Mr. Duerden. On March 31, 2010, we and Mr. Duerden entered into a separation
+agreement. Both agreements are described in detail in Employment Agreements later in this document. 
+Daniel Hart Employment Agreement. In May 2009, we entered into an employment agreement with Daniel Hart, concurrent with his
+appointment as our
+current ExecutiveVice President of Administration and Corporate Development. This agreement is intended to provide Mr. Hart with incentive to remain with the Company. 
+Deductibility of Executive Compensation 
+Section 162(m) of the Code imposes a $1 million annual limit on the amount that a public company may deduct for
+compensation paid to the company's chief executive officer during a tax year or to any of the company's four other most highly compensated executive officers who are still employed at the end of the
+tax year. The limit does not apply to compensation that meets the requirements of the Code for "qualified performance-based" compensation (i.e., compensation paid only if the executive meets
+pre-established, objective goals based on performance criteria approved by the company's stockholders). 
+The
+Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Code. In certain situations, the Compensation Committee
+may approve compensation that does not meet the requirements of the Code in order to ensure competitive levels of total compensation for our executive officers. Stock option grants in 2009 were
+intended to constitute "qualified performance-based compensation" under Section 162(m). The annual performance bonuses, if any, payable in 2010 under our 2008 Cash Incentive Plan also met the
+requirements for consideration as "qualified performance-based compensation" under Section 162(m). 
+COMPENSATION COMMITTEE REPORT 
+The Compensation Committee has reviewed the foregoing Compensation Discussion and Analysis required by Item 402(b) of
+Regulation S-K and discussed the Compensation Discussion and Analysis with the Company's management. Based on such review and discussions with management, the Compensation Committee
+recommended to the Board that the foregoing Compensation Discussion and Analysis be included in this proxy statement. 
+THE
+COMPENSATION COMMITTEE 
+Ray Croghan (Chairman) 
+Richard Sharp 
+W. Stephen Cannon 
+18 
+Summary Compensation Table 
+The following summary compensation table indicates the cash and non-cash compensation of (i) the individuals who
+served as our Chief Executive Officer during 2009, (ii) our Chief Financial Officer, (iii) the two most highly compensated executive officers other than the Chief Executive Officer and
+Chief Financial Officer who were serving as executive officers at the end of 2009, and (iv) our former Vice President, General Counsel and Secretary, who would have been provided pursuant to
+(iii) above but for the fact that he was not serving as an executive officer at the end of 2009, during our fiscal years ended December 31, 2009, 2008, and 2007. The compensation
+described in this table does not include benefits that are generally available to all of our salaried employees. All information regarding stock and option awards has been restated, as appropriate, to
+reflect the 2-for-1 stock split that occurred on June 14, 2007, which was effected as a 100% common stock dividend distributed on that date. 
+Name and Principal Position
+Year 
+Salary 
+($) 
+Bonus 
+($)(1) 
+Stock 
+Awards 
+($)(2) 
+Option 
+Awards 
+($)(2) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($)(3) 
+All Other 
+Compensation 
+($)(4) 
+Total 
+($) 
+John H. Duerden(5) 
+2009 
+$ 
+670,191 
+$ 
+338,836 
+$ 
+548,000 
+$ 
+237,440 
+$ 
+— 
+$ 
+434,535 
+$ 
+2,229,002 
+Former Chief Executive Officer and President 
+Ronald R. Snyder(6) 
+2009 
+500,000 
+— 
+236,400 
+162,526 
+— 
+2,138,831 
+3,037,757 
+Former Chief Executive Officer 
+2008 
+1,000,000 
+— 
+2,950,800 
+— 
+18,874 
+3,969,674 
+and President 
+2007 
+800,000 
+— 
+3,925,390 
+3,200,000 
+19,325 
+7,944,715 
+Russell C. Hammer(7) 
+2009 
+450,000 
+135,000 
+— 
+— 
+— 
+80,739 
+665,739 
+Chief Financial Officer, Senior Vice President-Finance and Treasurer 
+2008 
+413,221 
+— 
+614,880 
+2,525,188 
+— 
+66,386 
+3,619,675 
+Daniel Hart(8) 
+2009 
+259,119 
+208,220 
+598,500 
+403,680 
+— 
+130,565 
+1,600,084 
+Executive Vice President of Administration and Corporate Development 
+John P. McCarvel(9) 
+2009 
+595,833 
+240,000 
+— 
+— 
+— 
+42,211 
+878,044 
+Executive Vice President and 
+2008 
+500,000 
+— 
+136,800 
+2,284,672 
+— 
+14,230 
+2,935,702 
+Chief Operating Officer 
+2007 
+400,000 
+— 
+— 
+2,803,850 
+1,280,000 
+15,398 
+4,499,248 
+Erik Rebich(10) 
+2009 
+250,000 
+— 
+— 
+— 
+— 
+385,333 
+635,333 
+Former Vice President, General 
+2008 
+250,000 
+— 
+57,000 
+477,655 
+— 
+10,096 
+794,751 
+Counsel and Secretary 
+(1) Amounts
+reflect earnings in 2009 which were paid in 2010.
+(2) Amounts
+reflect the aggregate grant date fair value of grants made in each respective fiscal year, valued in accordance with ASC Topic 718. Assumptions used
+in the calculations of these amounts are included in Footnote 10 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended
+December 31, 2009.
+(3) Amounts
+for Mr. Snyder and Mr. McCarvel in 2007 include deferred compensation under the Senior Executive Plan of $1.6 million and
+$640,000, respectively, and vest over a three year period. Mr. Snyder resigned from his position as President and Chief Executive Officer effective March 2009, and, pursuant to his June 2009
+separation agreement, he was paid the vested and unvested portion of his deferred compensation, which totaled $2.1 million and is included in "Other Compensation" in the table above.
+(4) All
+other compensation represents the following: 
+• Incremental healthcare premiums paid by us on behalf of the NEO. We cover 100% of
+the healthcare premiums for certain executives, a benefit that is not offered to other employees. 
+19 
+• Amounts received by each NEO for shares tendered during our April 2009 Tender
+Offer, including $20,000 for Mr. McCarvel. 
+• For Messrs Duerden, Hammer and Hart, $73,248, $58,889 and $22,792,
+respectively, in company-paid costs for vehicles provided for their personal use, travel costs to and from their respective places of residence, certain living costs such as rent and a
+gross-up of taxes for these expenses. 
+• For Messrs. Duerden and Hart, $350,000 and $100,000, respectively, in
+signing bonuses paid pursuant to their respective employment agreements. 
+• For Mr. Rebich, the amount stated above includes $375,000 in severance pay
+related to his December 2009 resignation as our Vice President, General Counsel and Secretary. This amount was paid in 2010. 
+• For Mr. Snyder, the amount stated above includes $2,100,461 in deferred
+compensation paid to him pursuant to his separation agreement. This amount was paid in 2010. 
+In
+addition, we own, operate and maintain our own aircraft. From time to time, our directors and executive officers have used the aircraft for personal purposes. These directors and executive officers
+have fully reimbursed us for expenses related to their personal use of this aircraft during the year ended December 31, 2009, determined based on the cost of fuel and other variable costs
+associated with the flights under FAR 91-501(d). Accordingly, no amounts related to personal aircraft usage has been reflected in the table above. 
+(5) Mr. Duerden
+was appointed as our President and Chief Executive Officer effective March 16, 2009. Mr. Duerden resigned from his position
+as President and Chief Executive Officer effective March 1, 2010.
+(6) Mr. Snyder
+resigned from his position as President and Chief Executive Officer in March 2009. Pursuant to Mr. Snyder's separation agreement,
+we accelerated the vesting of certain options to purchase our common stock as well as restricted stock awards, as explained further in "Employment
+Agreements" later in this document.
+(7) Mr. Hammer
+was appointed as our Chief Financial Officer in January 2008. Accordingly, no compensation information is presented for 2007.
+(8) Mr. Hart
+was appointed as our Executive Vice President of Administration and Corporate Development in June 2009. Effective January 1, 2010,
+Mr. Hart was appointed as our Executive Vice President, Chief Legal and Administrative Officer and Secretary.
+(9) Mr. McCarvel
+was appointed as our President and Chief Executive Officer effective March 1, 2010. During 2009, he served as our Executive Vice
+President and Chief Operation Officer.
+(10) Mr. Rebich
+became an executive officer on May 5, 2008. Mr. Rebich resigned from his position as Vice President, General Counsel and
+Secretary effective December 31, 2009. Concurrent with Mr. Rebich's resignation, we entered into a Confidential Separation Agreement and General Release, under which we paid
+Mr. Rebich $375,000, which equates to one year's annual salary and target 2009 bonus. No additional bonus amount could be paid related to 2009. In addition, we agreed to accelerate the vesting
+of 33,334 unvested shares of restricted stock held by Mr. Rebich. 
+20 
+Grants of Plan-Based Awards Table 
+The table below summarizes the plan-based awards granted during the year ended December 31, 2009 to each of the NEOs
+listed in the Summary Compensation Table. 
+Estimated Future 
+Payouts Under 
+Non-Equity Incentive 
+Plan Awards(1) 
+All Other 
+Stock Awards: 
+Number of 
+Shares of 
+Stock or 
+Units 
+(#) 
+All Other 
+Option Awards: 
+Number of 
+Securities 
+Underlying 
+Options 
+(#) 
+Exercise or 
+Base Price 
+of Option 
+Awards 
+($/Sh) 
+Grant Date 
+Fair Value 
+of Stock 
+and Option 
+Awards(2) 
+Name
+Grant 
+Date 
+Target 
+($) 
+Maximum 
+($) 
+John H. Duerden 
+3/16/09 
+$ 
+850,000 
+$ 
+1,700,000 
+2/24/09 
+400,000 
+$ 
+548,000 
+2/24/09 
+400,000 
+$ 
+1.37 
+$ 
+237,440 
+Ronald R. Snyder(3) 
+3/16/09 
+— 
+— 
+197,000 
+$ 
+236,400 
+1/13/09 
+317,000 
+$ 
+1.20 
+$ 
+162,526 
+1/4/09 
+Daniel Hart 
+3/16/09 
+380,000 
+760,000 
+6/15/09 
+150,000 
+$ 
+598,500 
+6/15/09 
+200,000 
+$ 
+3.99 
+$ 
+403,680 
+John P. McCarvel 
+3/16/09 
+480,000 
+960,000 
+Russell C. Hammer 
+3/16/09 
+270,000 
+540,000 
+Erik Rebich(3) 
+3/16/09 
+— 
+— 
+(1) Awards
+represent possible payments under our Cash Incentive Plan. Payments are based on specified target levels of diluted earnings per share, as described
+in the Compensation Discussion and Analysis. The target payments were based on achieving the target level of performance with ranges up to 200% of the NEO's base salary. Actual amounts paid in 2010
+related to 2009 performance are reflected in the Summary Compensation Table set forth previously.
+(2) Grant
+date fair value for stock and option awards was determined pursuant to ASC Topic 178. Assumptions used in the calculations of these amounts are set
+forth in Footnote 10 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2009.
+(3) Messrs. Snyder
+and Rebich were no longer employed by us at the end of 2009; therefore, no potential bonus amount could be paid. 
+Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table 
+Employment Arrangements 
+We have entered into employment agreements with Mr. McCarvel, Mr. Hart, and Mr. Hammer, as set forth below. We
+have also entered into severance agreements with Mr. Snyder, Mr. Rebich and Mr. Duerden in connection with each such NEO's separation from employment. 
+John P. McCarvel. In February 2009, we entered into an employment agreement with Mr. McCarvel, our current President and
+Chief Executive
+Officer and former Chief Operating Officer and Executive Vice President, ("Mr. McCarvel's Agreement") the term of which is two years. Mr. McCarvel's Agreement provides that
+Mr. McCarvel will receive an annual base salary of $600,000, subject to annual adjustments. He will also be eligible to receive bonuses pursuant to our 2008 Cash Incentive Plan based on
+performance criteria established by the Compensation Committee. Mr. McCarvel's bonus target will be eighty percent of his base salary. Mr. McCarvel will also be eligible to receive
+equity awards under our 2007 Equity Incentive Plan. He is also entitled to participate in all 
+21 
+employee
+benefits plans and programs generally available to our executives, including our Senior Executive Plan. 
+Mr. McCarvel's
+Agreement also provides that if Mr. McCarvel is terminated by us involuntarily without cause during the two year term of the employment agreement, he will
+receive: (a) all base salary that would have been paid to him had he remained employed by us for the remainder of the two year term, (b) the bonus payment that would have been paid to
+him in accordance with the terms and conditions of the bonus plan for the year in which he was terminated, (c) if the bonus plan payment criteria for Mr. McCarvel were not established
+for a fiscal year at the time of Mr. McCarvel's termination, the target bonus plan payment set forth in the employment agreement, and (d) immediate vesting of all unvested stock options
+held by Mr. McCarvel, which will remain exercisable for one year following the termination. 
+During
+the term of Mr. McCarvel's Agreement, he will be restricted from participating in certain competitive businesses. During his employment and for a period of twelve months
+after the termination of his employment with us, Mr. McCarvel will be restricted from soliciting our customers. 
+Upon
+his appointment as our President and Chief Executive Officer, Mr. McCarvel's base compensation was increased to $800,000, his target bonus was increased to 100% of base
+salary, and he will be reimbursed for reasonable costs related to his relocation from Singapore to the Niwot area. 
+Daniel Hart. In May 2009, we entered into an employment agreement with Mr. Hart ("Mr. Hart's Agreement"), our current
+Executive Vice
+President, Chief Legal and Administrative Officer. Mr. Hart's Agreement provides that Mr. Hart will receive an annual base salary of $475,000, subject to annual adjustments. The Board
+may reduce Mr. Hart's base salary only if such reduction is a uniformly applied reduction affecting all senior executives and is no greater than 10% of Mr. Hart's base salary. In any
+case, the Board may not reduce Mr. Hart's base salary by greater than $47,500 in total during his employment with us. Mr. Hart is also eligible for a bonus pursuant to our 2008 Cash
+Incentive Plan. Mr. Hart's bonus target under the Bonus Plan will be 60% in 2010. For the 2009 fiscal year only,
+Mr. Hart's Agreement provides that Mr. Hart is entitled to receive a guaranteed bonus of not less than 50% of his 80% bonus target for 2009. Additionally, Mr. Hart received a
+$100,000 signing bonus. He is also entitled to participate in all employee benefit plans and programs generally available to the Company's executives, including the Company's 2007 Senior Executive
+Deferred Compensation Plan. 
+Effective
+upon the commencement of Mr. Hart's employment with us, Mr. Hart was granted options to purchase 200,000 shares of our common at the fair market value as of the
+date of grant, subject to the Company's 2007 Equity Incentive Plan. Any and all stock options granted to Mr. Hart during his employment shall remain exercisable for 10 years after the
+date of grant, including if Mr. Hart ceases to be employed by us for any reason other than termination for "cause," as defined in Mr. Hart's Agreement. In the event of a "Change of
+Control," all unvested stock options and unvested restricted stock then held by Mr. Hart, and which are scheduled to vest over the 24 months following such event, shall immediately vest
+upon the effective date of such Change in Control. 
+In
+addition, effective upon the commencement of Mr. Hart's employment with us, we granted to Mr. Hart 150,000 shares of restricted stock pursuant to the Company's 2007
+Equity Incentive Plan and our standard written restricted stock award agreement. We have also agreed to pay for all expenses related to Mr. Hart's commute from Connecticut to our headquarters
+in Niwot, Colorado until such time as we and Mr. Hart agree upon Mr. Hart's relocation. 
+Mr. Hart's
+Agreement also provides that if Mr. Hart is terminated by the Company involuntarily without cause (as defined in the employment agreement), or if he resigns for
+good reason (as defined in the Mr. Hart's Agreement), he will receive: (A) a lump sum payment equal to one year of his base salary as of the termination date; (B) a lump sum
+payment equal to 80% of his base salary in effect as of the termination date, pro-rated to equal the proportion of the year that he was employed by us; 
+22 
+(C) a
+lump sum payment equal to his annual incentive (bonus) compensation equal to 80% of his base salary as of the termination date, and (D) immediate vesting of any unvested stock
+options or unvested restricted stock then held by him that would have been vested had he remained employed for 24 months after the termination date. 
+Mr. Hart's
+Agreement requires Mr. Hart to maintain confidential information regarding us and to assign certain inventions and intellectual property to us. During his
+employment with us and for twelve months after the termination of his employment with us, Mr. Hart will be restricted from participating in certain competitive businesses. During his employment
+with us and for a period of twelve months after the termination of his employment with us, Mr. Hart will be restricted from soliciting our employees and customers. 
+Russell C. Hammer. In January 2008, we entered into an employment agreement with Mr. Hammer, our current Chief Financial
+Officer, Senior Vice
+President—Finance, and Treasurer ("Mr. Hammer's Agreement"). Mr. Hammer's Agreement provides that Mr. Hammer will receive a monthly salary of $31,250, subject to
+annual adjustments. He will also be eligible to receive bonuses pursuant to our 2008 Cash Incentive Plan based on performance criteria established by the Compensation Committee. Mr. Hammer's
+bonus target will be sixty percent of his base salary. As of December 31, 2009, Mr. Hammer's base salary was $37,500 per month. 
+Pursuant
+to Mr. Hammer's Agreement, Mr. Hammer will receive reimbursement for relocation and housing expenses when and if he relocates to the Niwot, Colorado area and is
+entitled to participate in all employee benefit plans and programs generally available to our executives, including our Senior Executive Plan. Mr. Hammer's Agreement also provides that
+Mr. Hammer will receive a lump sum equal to six months base salary if he is terminated by us involuntarily without cause, as defined in Mr. Hammer's Agreement. During his employment with
+us and for a period of six months after the termination of his employment, Mr. Hammer will be restricted from participating in certain competitive businesses. 
+Pursuant
+to our 2007 Equity Incentive Plan and the terms of Mr. Hammer's Agreement, we also awarded Mr. Hammer options to purchase 150,000 shares of our common stock at an
+exercise price of $30.05, the closing price of our common stock on the grant date. Twenty-five percent of the options vest on the first anniversary of the grant date and the remaining
+options vest in 36 equal monthly installments upon his completion of each additional month of continuous employment with us after the first anniversary of the grant date. 
+During
+Mr. Hammer's employment with us and for a period of six consecutive months from and after the termination of his employment, he will be restricted from participating in any
+competitive businesses. In addition, during his employment with us and for a period of twelve months after the termination of his employment with us, Mr. Hammer will be restricted from
+soliciting our employees and customers. 
+John Duerden. On February 24, 2009, John Duerden was appointed as our President and Chief Executive Officer effective
+March 16, 2009.
+Upon his initial appointment in February, we entered into an employment agreement with Mr. Duerden ("Mr. Duerden's Employment Agreement"). Mr. Duerden's Employment Agreement
+provided that Mr. Duerden would receive an annual base salary of $850,000, subject to annual adjustments. Mr. Duerden's bonus target was 100% of his base salary, with a possible payout
+of up to 200% of his annual base salary pursuant to our 2008 Cash Incentive Plan. Mr. Duerden's Employment Agreement also provided for a $350,000 signing bonus within five business days of
+commencing his employment with us as well as relocation benefits. 
+In
+connection with the execution of Mr. Duerden's Employment Agreement, Mr. Duerden was granted 400,000 shares of restricted common stock and options to purchase 400,000
+shares of our common stock. Pursuant to the terms of the grants, twenty-five percent of the restricted stock and 
+23 
+options
+vested on the first anniversary of the grant date and the remaining options would vest in 36 equal monthly installments upon Mr. Duerden's completion of each additional month of
+continuous employment with us after the first anniversary of the grant date. 
+On
+March 31, 2010, we and Mr. Duerden entered into a separation agreement ("Mr. Duerden's Separation Agreement"). Mr. Duerden's Separation Agreement provides
+that we will (i) pay Mr. Duerden lump sum payments totaling approximately $1.77 million on our first regular payroll date after September 1, 2010; (ii) accelerate
+the vesting of 100,000 unvested options to purchase our common stock and 100,000 unvested restricted shares of our common stock previously granted to Mr. Duerden, which would have vested if
+Mr. Duerden had remained employed by us for one year following his retirement date; and (iii) pay the employer portion of Mr. Duerden's health insurance until the earlier of
+February 28, 2011 or until Mr. Duerden is no longer eligible for COBRA continuation. Mr. Duerden may exercise any of the vested options within three months after March 1,
+2010. 
+The
+payments pursuant to Mr. Duerden's Separation Agreement are conditioned upon Mr. Duerden's compliance with the noncompetition, nonsolicitation, confidentiality,
+invention assignment and certain other covenants in the employment agreement between us and Mr. Duerden dated February 24, 2009. Mr. Duerden also agreed to release us from all
+claims relating to Mr. Duerden's service to us through the date of the separation agreement. 
+Ronald R. Snyder. Effective June 30, 2009, Mr. Snyder resigned as a member of our Board of Directors. Mr. Snyder
+had previously
+resigned as President and Chief Executive Officer of the Company effective March 16, 2009, and had remained as a Director and an employee of the Company to assist with the transition to the
+Company's new Chief Executive Officer. Pursuant to Mr. Snyder's resignation from the Board of Directors, we also entered into a separation agreement with Mr. Snyder dated June 30,
+2009. The separation agreement provided: 
+1. Accelerated
+vesting of 321,195 options to purchase our common stock, as specified in the agreement. Stock options subject to acceleration may be exercised by
+Mr. Snyder until the original expiration date of such options.
+2. Accelerated
+vesting of 114,917 restricted stock awards.
+3. Accelerated
+vesting of all unvested deferred bonus amounts, totaling $0.9 million, under our Amended and Restated 2007 Senior Executive Deferred
+Compensation Plan (the "2007 Plan"). Payments under the 2007 Plan shall be made at the time and in the form provided for in Mr. Snyder's deferral agreement under the 2007 Plan.
+4. Cancellation,
+pursuant to their terms, of 282,293 options to purchase our common stock with exercise prices greater than $10.50. 
+Additionally,
+under the terms of the separation agreement, until December 31, 2010, Mr. Snyder is restricted from participating in certain competitive businesses and from
+soliciting our employees and customers, either directly or indirectly. The separation agreement also requires that Mr. Snyder forever keep confidential all Confidential Information, as defined
+in the separation agreement, and prohibits Mr. Snyder from disparaging us. Mr. Snyder also agreed to release us from all claims he may have against us. 
+24 
+Erik Rebich. On December 31, 2009, Erik Rebich resigned as our Vice President, General Counsel and Secretary. In connection
+with
+Mr. Rebich's resignation, we and Mr. Rebich entered into a Confidential Separation Agreement and General Release dated December 31, 2009 ("Mr. Rebich's Separation
+Agreement"). Pursuant to Mr. Rebich's Separation Agreement, we will pay Mr. Rebich $375,000, which equates to one year's annual salary and target 2009 bonus. In addition, we agreed to
+accelerate the vesting of 33,334 unvested shares of restricted stock held by Mr. Rebich. Mr. Rebich will also be entitled to participate in certain health insurance programs applicable
+to officers who retire from the Company. Mr. Rebich's Separation Agreement provides for a general release and waiver of all claims held by Mr. Rebich relating to us and an agreement by
+Mr. Rebich to treat certain information regarding us as confidential. Mr. Rebich has also agreed to serve as a consultant to us to provide transition assistance through
+December 31, 2010, unless the consulting relationship is terminated by us prior thereto. Mr. Rebich's stock options will continue to vest during this consulting relationship. 
+2009 Awards 
+On January 13, 2009, the Compensation Committee granted 317,000 stock option awards and 197,000 restricted stock awards to
+Mr. Snyder as a method of retaining Mr. Snyder's services. Mr. Snyder's stock option awards vest one-fourth after the first anniversary of the grant date with the
+remainder vesting in 36 equal and successive monthly installments after the applicable initial vesting date. Mr. Snyder's restricted stock awards were originally subject to the following
+vesting schedule: thirty-three percent on each of the first, second and third anniversary dates of the grant date. These stock options and restricted stock awards were subject to accelerated vesting
+pursuant to Mr. Snyder's separation agreement, effective June 30, 2009. 
+The
+Compensation Committee granted 400,000 stock option awards and 400,000 restricted stock awards to Mr. Duerden on February 24, 2009 in connection with his appointment as
+our President and Chief
+Executive Officer. Mr. Duerden's stock option and restricted stock awards were originally subject to the following vesting schedule: one-fourth after the first anniversary of the
+grant date with the remainder vesting in 36 equal and successive monthly installments after the applicable initial vesting date. Pursuant to Mr. Duerden's separation agreement, we accelerated
+the vesting of 100,000 of these stock option awards and 100,000 of these restricted stock awards. 
+In
+addition, the Compensation Committee granted 200,000 stock option awards and 150,000 restricted stock awards to Mr. Hart on June 15, 2009 in connection with his
+appointment as our Executive Vice President of Administration and Corporate Development. Mr. Hart's stock option awards vest one-fourth after the first anniversary of the grant date
+with the remainder vesting in 36 equal and successive monthly installments after the applicable initial vesting date. Mr. Hart's restricted stock awards vest thirty-three percent on each of the
+first, second and third anniversary dates of the grant date. 
+No
+other restricted stock or stock options were awarded to NEOs in the year ended December 31, 2009. 
+Salary and Bonus in Proportion to Total Compensation 
+As noted in "Compensation Discussion and Analysis" above, we believe that a substantial portion of each NEO's compensation should be in
+the form of equity awards. Our Compensation Committee believes that our current program substantially aligns the compensation of our NEOs with the compensation of executive officers of our Peers,
+while also permitting our Compensation Committee to provide incentives to the NEOs to pursue performance that increases stockholder value. Please see "Compensation Discussion and Analysis" for a
+description of the objectives of our compensation program and overall compensation philosophy. 
+25 
+The
+table below summarizes the unexercised options and unvested stock awards as of December 31, 2009 for each of the NEOs listed in the Summary Compensation Table. The information
+below accounts for the 2-for-1 stock split that occurred on June 14, 2007, which was effected as a 100% common stock dividend on that date. 
+Outstanding Equity Awards at Fiscal Year End Table 
+Option Awards 
+Stock Awards 
+Name
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) 
+Exercisable(1) 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) 
+Unexercisable 
+Option 
+Exercise 
+Price 
+($) 
+Option 
+Expiration 
+Date 
+Number of 
+Shares or 
+Units of 
+Stock That 
+Have Not 
+Vested 
+(#) 
+Market Value 
+of Shares 
+or Units of 
+Stock That 
+Have Not 
+Vested 
+($) 
+John H. Duerden 
+— 
+400,000 
+(2) 
+$ 
+1.37 
+2/24/2019 
+400,000 
+(2) 
+$ 
+2,300,000 
+Ronald R. Snyder 
+428,699 
+(3) 
+— 
+$ 
+10.50 
+2/7/2016 
+— 
+— 
+317,000 
+(3) 
+— 
+$ 
+1.20 
+1/13/2019 
+Daniel Hart 
+— 
+200,000 
+(4) 
+$ 
+3.99 
+6/15/2019 
+150,000 
+(10) 
+$ 
+862,500 
+John P. McCarvel 
+38,729 
+104,271 
+(7) 
+$ 
+1.14 
+11/17/2018 
+80,000 
+(11) 
+$ 
+460,000 
+117,585 
+2,501 
+(6) 
+$ 
+10.50 
+2/7/2016 
+Russell C. Hammer 
+23,021 
+61,979 
+(7) 
+$ 
+1.14 
+11/17/2018 
+33,334 
+(11) 
+$ 
+191,671 
+37,500 
+62,500 
+(9) 
+$ 
+10.03 
+6/2/2018 
+44,667 
+(11) 
+$ 
+256,835 
+Erik Rebich 
+18,958 
+(8) 
+51,042 
+(7) 
+$ 
+1.14 
+11/17/2018 
+—(12 
+) 
+— 
+19,166 
+(8) 
+10,832 
+(5) 
+$ 
+22.92 
+1/9/2017 
+16,790 
+(8) 
+730 
+(6) 
+$ 
+10.50 
+2/7/2016 
+29,124 
+(8) 
+— 
+$ 
+0.85 
+1/1/2015 
+(1) Options
+granted from inception through September 20, 2006 are exercisable immediately on the grant date. In order to preserve the vesting provisions
+of the options, the shares of our common stock underlying options that are exercised early are subject to a repurchase right by us at the lower of exercise price or fair market value of the underlying
+stock at the date of repurchase.
+(2) Twenty-five
+percent of the stock awards vested on February 24, 2010. Thereafter, the awards vest in 36 successive equal monthly
+installments upon the grantee's completion of each additional month of continuous employment. Pursuant to Mr. Duerden's separation agreement, we accelerated the vesting of 100,000 of these
+stock option awards and 100,000 of these restricted stock awards.
+(3) Vesting
+with respect to 321,195 option shares was accelerated pursuant to Mr. Snyder's separation agreement.
+(4) Twenty-five
+percent of the options will vest on June 15, 2010. Thereafter, the options vest in 36 successive equal monthly installments
+upon the optionee's completion of each additional month of continuous employment.
+(5) Twenty-five
+percent of the options vested on January 9, 2008. Thereafter, the options vest in 36 successive equal monthly installments
+upon the optionee's completion of each additional month of continuous employment.
+(6) Twenty-five
+percent of the options vested on February 7, 2007. Thereafter, the options vest in 36 successive equal monthly installments
+upon the optionee's completion of each additional month of continuous employment.
+(7) Twenty-five
+percent of the options vested on November 17, 2009. Thereafter, the options vest in 36 successive equal monthly installments
+upon the optionee's completion of each additional month of continuous employment.
+(8) Mr. Rebich
+resigned from his position as Vice President, General Counsel and Secretary effective December 31, 2009. Mr. Rebich agreed
+to serve as a consultant to us to provide transition assistance through December 31, 2010, unless the consulting relationship is terminated by us prior thereto. His stock options will continue
+to vest pursuant to their original terms through the end of his consulting agreement. 
+26 
+(9) Twenty-five
+percent of the options vested on June 2, 2009. Thereafter, the options vest in 36 successive equal monthly installments upon
+the optionee's completion of each additional month of continuous employment.
+(10) Thirty-three
+percent of the stock award will vest on June 15, 2010. Thereafter, the awards vest in two successive equal annual installments of
+thirty-three percent upon the grantee's completion of each additional year of continuous employment.
+(11) Thirty-three
+percent of the stock award will vest on November 17, 2009. Thereafter, the awards vest in two successive equal annual installments of
+thirty-three percent upon the grantee's completion of each additional year of continuous employment.
+(12) Mr. Rebich
+resigned from his position as Vice President, General Counsel and Secretary effective December 31, 2009. Pursuant to
+Mr. Rebich's Separation Agreement, we agreed to accelerate the vesting of 33,334 unvested shares of restricted stock held by Mr. Rebich effective December 31, 2009. 
+Option Exercises and Stock Vested Table 
+The table below summarizes the options exercised and stock awards vested during the year ended December 31, 2009 for each of the
+NEOs listed in the Summary Compensation Table. 
+Option Awards 
+Stock Awards 
+Name
+Number of 
+Shares Acquired 
+on Exercise 
+(#) 
+Value Realized 
+on Exercise 
+($) 
+Number of 
+Shares Acquired 
+on Vesting 
+(#) 
+Value Realized 
+on Vesting 
+($) 
+John H. Duerden 
+— 
+— 
+— 
+— 
+Ronald R. Snyder 
+116,810 
+$ 
+147,181 
+197,000 
+(1) 
+$ 
+563,912 
+Daniel Hart 
+— 
+— 
+— 
+— 
+John P. McCarvel 
+— 
+— 
+40,000 
+230,800 
+Russell C. Hammer 
+— 
+— 
+38,999 
+172,026 
+Erik Rebich 
+— 
+— 
+50,000 
+(2) 
+287,833 
+(1) Includes
+114,917 shares of restricted stock subject to accelerated vesting pursuant to Mr. Snyder's separation agreement.
+(2) Includes
+33,334 shares of restricted stock subject to accelerated vesting pursuant to Mr. Rebich's separation agreement. 
+Nonqualified Deferred Compensation 
+The table below summarizes the non-equity incentive compensation that was deferred relating to the year ended
+December 31, 2009 for each of the NEOs listed in the Summary Compensation Table. 
+Name
+Executive 
+Contributions 
+in Last 
+Fiscal Year(1) 
+$ 
+Crocs, Inc. 
+Contributions 
+in Last 
+Fiscal Year 
+$ 
+Aggregate 
+Earnings 
+in Last 
+Fiscal Year(3) 
+$ 
+Aggregate 
+Withdrawals/ 
+Distributions 
+$ 
+Aggregate 
+Balance at 
+Last Fiscal 
+Year End 
+$ 
+John H. Duerden 
+— 
+— 
+$ 
+— 
+$ 
+— 
+$ 
+— 
+Ronald R. Snyder(2) 
+— 
+— 
+466,312 
+— 
+2,072,029 
+Daniel Hart 
+— 
+— 
+— 
+— 
+— 
+John P. McCarvel 
+— 
+— 
+8,080 
+— 
+651,747 
+Russell C. Hammer 
+— 
+— 
+— 
+— 
+— 
+Erik Rebich 
+— 
+— 
+— 
+— 
+— 
+(1) Under
+our Senior Executive Plan, participants have the option to defer any bonus amount exceeding 200% of the participant's target bonus. The deferred
+amount will vest ratably on a 
+27 
+quarterly
+basis over a three year period, with a pro rata amount vesting on each calendar quarter. Any unvested balance will vest immediately upon the death or disability of the participant or upon a
+Change in Control, as defined in the plan. The total amounts shown above for Messrs. Snyder and McCarvel are included in the Non Equity Incentive Compensation Plan column of the Summary
+Compensation Table in 2007. 
+(2) Mr. Snyder
+resigned from his position as President and Chief Executive Officer effective March 2009 and was paid out the entire balance of his
+deferred compensation pursuant to the terms of his severance agreement in January 2010, as described previously in Employment Agreements.
+(3) Each
+participant in the Senior Executive Plan may choose, at his or her discretion, a portfolio of investments in which their contributions may be
+hypothetically invested. We are not obligated to actually invest the participant's contributions into these accounts; however, upon the participant's withdrawl, we are obligated to pay the amount,
+inclusive of earnings, interest, and capital gains, that the participant's contributions would have earned had we actually invested the money as the participant directed. Earnings on each individual's
+contribution varies widely depending on the portfolio of investments the participant chooses. We received investment direction from Mr. Snyder and Mr. McCarvel and the aggregate earnings
+from those hypothetical investments are reflected in the table above. 
+Potential Payments on Terminations or Change in Control 
+Certain of our NEOs have employment agreements with us that provide for special guaranteed payments upon a change in control or
+involuntarily termination for other than "cause" (as described in each respective NEO's employment agreement, summarized previously). Likewise, all stock option and restricted stock awards made under
+the 2005 Equity Incentive Plan have an acceleration clause that provides that all unvested outstanding equity awards will immediately vest in the event of a change in control (the 2007 equity
+incentive plan does not have any acceleration provisions). A summary of the potential payments that each of our NEOs would have received upon involuntary termination for other than "cause" and upon a
+termination related to change in control, assuming that each triggering event occurred on December 31, 2009, follows: 
+Involuntary Termination for Other Than Cause 
+Change in Control 
+Severance 
+Bonus 
+Perquisites 
+Stock Options 
+and Awards 
+Unvested and 
+Accelerated(1) 
+Total 
+Stock Options 
+and Awards 
+Unvested and 
+Accelerated(1) 
+John H. Duerden(2) 
+$ 
+850,000 
+$ 
+850,000 
+$ 
+14,257 
+$ 
+1,013,000 
+$ 
+2,727,257 
+$ 
+— 
+Ron Snyder(3) 
+— 
+— 
+— 
+— 
+— 
+— 
+Daniel Hart 
+855,000 
+285,000 
+— 
+751,000 
+1,891,000 
+— 
+John P. McCarvel 
+650,000 
+720,000 
+— 
+659,230 
+2,029,230 
+659,230 
+Russell C. Hammer 
+225,000 
+— 
+— 
+— 
+— 
+— 
+Erik Rebich(4) 
+— 
+— 
+— 
+— 
+— 
+— 
+(1) All
+stock options and restricted stock granted under the 2005 Equity Incentive Plan vests on a change in control pursuant to individual option or restricted
+stock award agreements. In addition, Mr. McCarvel's employment agreement provides for an acceleration of vesting for all unvested stock options as of the date of termination, inclusive of
+options granted under our 2007 Equity Incentive Plan, for involuntary termination for other than cause. The calculation of the amount shown herein is based on the number of unvested shares at
+December 31, 2009 multiplied by the closing price of our common stock on the Nasdaq Global Select Market on December 31, 2009, less the exercise price for such stock options. Where the
+aggregate exercise price of the option was more than the market value of the underlying stock, those amounts have been excluded from the calculation of the net benefit shown above. 
+28 
+(2) Mr. Duerden
+resigned from his position as President and Chief Executive Officer effective March 1, 2010. Amounts reflected in the table above
+represent potential contractual amounts under Mr. Duerden's Employment Agreement. Upon a change in control, Mr. Duerden's Employment Agreement provided for an additional $14,257 in
+perquisites, representing health insurance continuation for an additional 12 months in addition to the 12 months provided should Mr. Duerden be involuntarily terminated without
+cause. Pursuant to Mr. Duerden's separation agreement dated March 31, 2010, we agreed to pay Mr. Duerden $1.77 million in cash and accelerated the vesting of 100,000 shares
+of restricted stock and 100,000 stock options awarded to Mr. Duerden in 2009. For a description of the agreement, refer to " Employment Agreements "
+presented previously in this document.
+(3) Mr. Snyder
+resigned from his position as our President and Chief Executive Officer effective March 16, 2009 and as a director effective
+June 30, 2009. Pursuant to his separation agreement, dated June 30, 2009, we accelerated the vesting of 321,195 stock options and 114,917 shares of restricted stock held by
+Mr. Snyder. We also accelerated the vesting of $0.9 million of Mr. Snyder's deferred bonus amounts under the 2007 Plan. See "Employment Agreements" above for a summary of
+Mr. Snyder's separation agreement.
+(4) Mr. Rebich
+resigned from his position as our Vice President, General Counsel and Secretary effective December 31, 2009. Pursuant to his
+separation agreement, dated December 31, 2009, we paid Mr. Rebich severance in the aggregate amount of $375,000, which included Mr. Rebich's target bonus amount of $125,000 for
+2009. See "Employment Agreements" above for a summary of Mr. Rebich's separation agreement. 
+CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 
+Related Party Transactions 
+None. 
+Policy on Transactions with Related Persons 
+Our Business Code of Conduct and Ethics requires that any transaction involving us in which one of our directors, nominees for
+director, executive officers, or greater than five percent stockholders, or one of the aforementioned's immediate family members (each, a "related person"), have a material interest be approved or
+ratified by the Audit Committee if the amount involved, when aggregated with the amount of all other transactions between the related person and us, exceeds $100,000 in a fiscal year. The full Board
+reviews ordinary course of business transactions in which directors have an interest as part of the Board's annual director independence review, and our Business Code of Conduct and Ethics permits the
+full Board to waive any conflicts of interest between us and any director or officer. In determining whether to approve or ratify any such transaction, the Audit Committee must consider, in addition
+to other factors it deems appropriate, whether the transaction is on terms no less favorable to us than those involving unrelated parties. 
+All
+transactions disclosed above were reviewed and approved in accordance with this policy. 
+Director and Officer Indemnification 
+We have entered into agreements to indemnify certain directors and executive officers in addition to the indemnification provided for
+in our certificate of incorporation and bylaws. These agreements, among other things, provide for indemnification of our directors and executive officers for certain expenses (including attorneys'
+fees), judgments, fines and settlement amounts incurred by any such person in any action or proceeding, including any action by or in the right of the Company, arising out of such person's services as
+a director or executive officer of ours, any subsidiary of ours or any other company or enterprise to which the person provided services at our request. We believe that these provisions and agreements
+are necessary to attract and retain qualified persons as directors and executive officers. 
+29 
+SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 
+Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who
+own more than ten percent of our common stock to file with the SEC and any exchange or other system on which such securities are traded or quoted, initial reports of ownership and reports of changes
+in ownership of our common stock. 
+To
+our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, we believe that all required
+reports of our officers, directors and greater than ten percent stockholders under Section 16(a) were timely filed during the year ended December 31, 2009, except for one Form 4
+for Ronald R. Snyder, our former chief executive officer, relating to the exercise of stock options. 
+REPORT OF THE AUDIT COMMITTEE 
+The Audit Committee has reviewed and discussed the audited financial statements for the fiscal year ended December 31, 2009 with
+the Company's management and Deloitte & Touche LLP, the Company's independent registered public accounting firm. Management is responsible for the preparation, presentation and integrity
+of the financial statements, accounting and financial reporting principles and internal control over financial reporting. Deloitte & Touche LLP is responsible for performing an
+independent audit of the financial statements in accordance with generally accepted auditing standards and for expressing opinions on the conformity of the financial statements with accounting
+principles generally accepted in the United States. 
+The
+Audit Committee has discussed with Deloitte & Touche LLP the matters required to be discussed by Statement on Auditing Standards No. 114, Communication With Those Charged With Governance , and PCAOB AU Section 380, Communications with Audit
+Committees , and has received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the Public Company
+Accounting Oversight Board regarding the independent auditor's communications with the Audit Committee concerning independence. The Audit Committee has also discussed with Deloitte &
+Touche LLP their independence. 
+Based
+on its reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company's
+Annual Report on Form 10-K for the year ended December 31, 2009, for filing with the SEC. 
+The
+Audit Committee: 
+Thomas
+J. Smach (Chairman) 
+Peter A. Jacobi 
+Ronald L. Frasch 
+PROPOSAL 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The Audit Committee has appointed Deloitte & Touche LLP as the independent registered public accounting firm for the
+fiscal year ending December 31, 2010. Deloitte & Touche LLP has served as our independent public accounting firm since 2005. We are not required to submit this appointment to the
+stockholders for approval, but the Board believes it is desirable as a matter of policy. We expect that a representative of Deloitte & Touche LLP will attend the Annual Meeting and will
+have the opportunity to make any statements if he or she so desires and to respond to appropriate stockholder questions. 
+If
+the stockholders do not ratify this appointment, the Audit Committee will investigate the reasons for the rejection and consider other independent registered public accounting firms.
+Even if the 
+30 
+appointment
+is ratified, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm. 
+PRINCIPAL ACCOUNTING FIRM FEES AND SERVICES 
+The following table sets forth the aggregate fees we paid to Deloitte & Touche LLP, our independent registered public
+accounting firm, and other member firms of Deloitte Touche Tohmatsu and their respective affiliates, which we refer to collectively as Deloitte entities, for professional services provided during 2008
+and 2009 and billed through the date of this filing. The Audit Committee is required to pre-approve all non-audit services provided by Deloitte & Touche LLP. All
+fees paid to the Deloitte entities were pre-approved by the Audit Committee, which concluded that the provision of such services by the Deloitte entities was compatible with the
+maintenance of that firm's independence in the conduct of its auditing functions. 
+2009 
+2008 
+Audit fees(1) 
+$ 
+1,648,901 
+$ 
+2,276,922 
+Audit-related fees 
+— 
+— 
+Tax fees(2) 
+518,413 
+504,534 
+All other fees 
+— 
+— 
+Total fees 
+$ 
+2,167,314 
+$ 
+2,781,456 
+(1) Audit
+fees relate to professional services rendered in connection with the audit of our annual financial statements and internal controls over financial
+reporting, both of which are included in our Annual Report on Form 10-K and services attendant to, or required by, statute or regulation, such as: (i) comfort letters,
+consents and other audit services related to SEC and other regulatory filings; (ii) accounting consultation related to the audit. Audit fees consisted of audit work performed and billed through
+the date of this filing; and (iii) statutory audit requirements in foreign countries.
+(2) Tax
+fees include professional services rendered in connection with tax compliance, tax advice, tax consulting and tax planning. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR
+2010. 
+STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2011 ANNUAL MEETING 
+Any proposal of a stockholder intended to be included in our proxy statement for the 2011 Annual Meeting of Stockholders pursuant to
+Rule 14a-8 of the SEC's rules, must be received by us no later than January 12, 2011, unless the date of our 2011 annual meeting is more than 30 days before or after
+June 29, 2011, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials. All proposals should be addressed to the Corporate Secretary,
+Crocs, Inc., 6328 Monarch Park Place, Niwot, Colorado 80503. 
+In
+order for a stockholder to nominate a candidate for director for election or to bring other business before the 2011 annual meeting, we must receive timely notice of the nomination or
+business in writing by the close of business not later than 90 days nor earlier than 120 days prior to the anniversary date of the immediately preceding annual meeting of stockholders.
+However, in the event that the annual meeting is called for a date that is not within 30 days before or 60 days after such anniversary date, notice by the stockholder to be timely must
+be received not earlier than the close of 
+31 
+business
+on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the
+date on which notice of the date of the annual meeting was made public. 
+OTHER MATTERS 
+We do not intend to bring before the Annual Meeting any matters other than the proposals specifically described above, and we know of
+no matters other than those to come before the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote
+such proxy in accordance with the recommendation of the our management on such matters, including any matters dealing with the conduct of the Annual Meeting. 
+32 
+VOTE BY INTERNET— www.proxyvote.com 
+Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and
+follow the instructions to obtain your records and to create an electronic voting instruction form. 
+6328 MONARCH PARK PLACE 
+NIWOT, CO 80503 
+ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS 
+If you would like to reduce the costs incurred by Crocs, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for
+electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. 
+VOTE BY PHONE—1-800-690-6903 
+Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. 
+VOTE BY MAIL 
+Mark, sign and date your proxy card and return it in the postage- paid envelope we have provided or return it to Crocs, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. 
+TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: 
+CROCS1 KEEP THIS PORTION FOR YOUR RECORDS 
+DETACH AND RETURN THIS PORTION ONLY 
+THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. 
+CROCS, INC. 
+THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2. 
+Vote on Directors 
+ForAll 
+o 
+Withhold 
+All 
+o 
+For All 
+Except 
+o 
+To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. 
+1. 
+ELECTION OF DIRECTORS 
+Nominees: 
+01) Raymond D. Croghan 
+02) Peter Jacobi 
+03) Richard L. Sharp 
+Vote on Proposal 
+For 
+Against 
+Abstain 
+2. 
+Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2010. 
+o 
+o 
+o 
+3. 
+Such other business as may properly come before the meeting or any postponement or adjournment thereof. 
+The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted FOR Proposals 1 and 2. 
+For address changes and/or comments, please check this box and write them on the back where indicated. 
+o 
+Please indicate if you plan to attend this meeting. 
+o 
+o 
+Yes 
+No 
+(NOTE: Please sign exactly as your name(s) appear(s) hereon. All holders must sign. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation,
+please sign in full corporate name, by authorized officer. If a partnership, please sign in partnership name by authorized person.) 
+Signature [PLEASE SIGN WITHIN o BOX] 
+Date 
+Signature (Joint Owners)
+Date 
+Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available
+at www.proxyvote.com. 
+CROCS, INC. 
+THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS 
+ANNUAL MEETING OF STOCKHOLDERS 
+June 29, 2010 
+The undersigned hereby appoints John McCarvel and Russell C. Hammer, and each of them, with power of substitution, as proxies of the undersigned, to attend the Annual Meeting of
+Stockholders of Crocs, Inc. (the "Company"), to be held at the Company's headquarters at 6328 Monarch Park Place, Niwot, Colorado, on June 29, 2010 at 9:00 a.m., Mountain Time,
+and all adjournments thereof, and to vote, as indicated on the reverse side, the shares of Common Stock of the Company which the undersigned is entitled to vote with all the powers the undersigned
+would possess if present at the meeting. 
+THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF NO SPECIFIC DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR
+PROPOSALS 1 AND 2. 
+PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE 
+Address Changes/Comments: 
+(If
+you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) 
+CONTINUED AND TO BE SIGNED ON REVERSE SIDE 
+QuickLinks 
+PROXY STATEMENT 
+GENERAL INFORMATION REGARDING ANNUAL MEETING 
+Record Date 
+Quorum Requirements 
+Vote Requirements 
+Your Proxy 
+Revocation 
+Attending the Annual Meeting 
+Cost of Proxy Solicitation 
+PROPOSAL 1—ELECTION OF DIRECTORS 
+Class II Director Nominees 
+Information About Continuing Directors 
+EXECUTIVE OFFICERS 
+BENEFICIAL OWNERSHIP OF OUR COMMON STOCK 
+BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD 
+Board Composition 
+Board Leadership 
+Risk Oversight 
+Board Committees 
+Code of Business Conduct and Ethics and Committee Charters 
+Compensation of Directors 
+EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS 
+Executive Compensation Objectives and Principles 
+Elements of Compensation 
+Deductibility of Executive Compensation 
+COMPENSATION COMMITTEE REPORT 
+Summary Compensation Table 
+Grants of Plan-Based Awards Table 
+Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table 
+Outstanding Equity Awards at Fiscal Year End Table 
+Option Exercises and Stock Vested Table 
+Nonqualified Deferred Compensation 
+Potential Payments on Terminations or Change in Control 
+CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 
+Related Party Transactions 
+Policy on Transactions with Related Persons 
+Director and Officer Indemnification 
+SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 
+REPORT OF THE AUDIT COMMITTEE 
+PROPOSAL 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+PRINCIPAL ACCOUNTING FIRM FEES AND SERVICES 
+STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2011 ANNUAL MEETING 
+OTHER MATTERS
\ No newline at end of file
diff --git a/raw/proxies/0001334036/0001104659-07-046324/proxy.txt b/raw/proxies/0001334036/0001104659-07-046324/proxy.txt
new file mode 100644
index 0000000000000000000000000000000000000000..8e5a95f0b46125f49f116078f1c265e71f25d1b7
--- /dev/null
+++ b/raw/proxies/0001334036/0001104659-07-046324/proxy.txt
@@ -0,0 +1,3991 @@
+DEF 14A
+1
+a07-15270_1def14a.htm
+DEF 14A
+UNITED STATES 
+SECURITIES AND EXCHANGE COMMISSION 
+Washington, D.C. 20549 
+SCHEDULE 14A 
+Proxy Statement
+Pursuant to Section 14(a) of 
+the Securities Exchange Act of 1934 (Amendment No. ) 
+Filed by the Registrant x 
+Filed by a Party other
+than the Registrant o 
+Check the appropriate
+box: 
+o 
+Preliminary Proxy Statement 
+o 
+Confidential, for Use of the Commission Only (as
+permitted by Rule 14a-6(e)(2)) 
+x 
+Definitive Proxy Statement 
+o 
+Definitive Additional Materials 
+o 
+Soliciting Material Pursuant to §240.14a-12 
+CROCS,
+INC. 
+(Name of
+Registrant as Specified In Its Charter) 
+(Name of Person(s) Filing
+Proxy Statement, if other than the Registrant) 
+Payment of Filing Fee (Check the appropriate box): 
+x 
+No fee required. 
+o 
+Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 
+(1) 
+Title of each class of securities to which
+transaction applies: 
+(2) 
+Aggregate number of securities to which transaction
+applies: 
+(3) 
+Per unit price or other underlying value of
+transaction computed pursuant to Exchange Act Rule 0-11 (set forth the
+amount on which the filing fee is calculated and state how it was
+determined): 
+(4) 
+Proposed maximum aggregate value of transaction: 
+(5) 
+Total fee paid: 
+o 
+Fee paid previously with preliminary materials. 
+o 
+Check box if any part of the fee is offset as
+provided by Exchange Act Rule 0-11(a)(2) and identify the filing
+for which the offsetting fee was paid previously. Identify the previous
+filing by registration statement number, or the Form or Schedule and the
+date of its filing. 
+(1) 
+Amount Previously Paid: 
+(2) 
+Form, Schedule or Registration Statement No.: 
+(3) 
+Filing Party: 
+(4) 
+Date Filed: 
+Crocs, Inc. 
+6328 Monarch
+Park Place 
+Niwot, Colorado 80503 
+NOTICE OF THE 2007 ANNUAL MEETING OF STOCKHOLDERS TO 
+BE HELD JULY 9, 2007 
+To the Stockholders of Crocs, Inc.: 
+We will hold the 2007 Annual Meeting of Stockholders
+of Crocs, Inc. at the Beaver Creek Lodge, 26 Avondale Lane, Beaver
+Creek, Colorado, on July 9, 2007, at 9:00 a.m. Mountain time. 
+At the Annual
+Meeting our Stockholders will be asked to: 
+1. Elect three Class II
+directors; 
+2. Approve the Crocs, Inc.
+2008 Cash Incentive Plan; 
+3. Approve the Crocs, Inc.
+2007 Incentive Plan; 
+4. Approve the Crocs, Inc. 2007
+Equity Incentive Plan; 
+5. Approve the
+amendment to the Restated Certificate of Incorporation of Crocs, Inc. to
+increase the number of authorized shares of capital stock from 130,000,000 to
+255,000,000; 
+6. Ratify the
+selection of Deloitte & Touche LLP as our registered independent
+accounting firm for fiscal year 2007; and 
+7. Consider any other
+matters that properly come before the meeting and any adjournments. 
+Only stockholders of record of our common stock at the
+close of business on May 31, 2007 are entitled to receive notice of and to
+vote at the meeting. Each share of common stock is entitled to one vote. 
+A list of the stockholders entitled to vote at the
+meeting will be available for examination at the meeting by any stockholder for
+any purpose relevant to the meeting. The list will also be available on the
+same basis for ten days prior to the meeting at our principal executive office,
+6328 Monarch Park Place, Niwot, Colorado 80503. 
+All stockholders are cordially invited to attend the
+meeting in person. Whether or not you plan to
+attend the meeting in person, please mark, sign and date the enclosed proxy
+promptly and return it in the envelope provided. No postage is required if the
+proxy card is mailed in the United States. Stockholders who are
+present at the Annual Meeting may withdraw their proxy and vote in person if
+they so desire. 
+BY ORDER OF THE BOARD OF
+DIRECTORS 
+Ronald R. Snyder 
+President and Chief Executive Officer 
+Niwot, Colorado 
+June 8, 2007 
+Crocs, Inc. 
+6328 Monarch Park
+Place 
+Niwot, Colorado 80503 
+2007 ANNUAL MEETING
+OF STOCKHOLDERS 
+PROXY STATEMENT 
+This proxy statement is
+furnished to stockholders of Crocs, Inc., a Delaware corporation, in
+connection with the solicitation of proxies by our board of directors. The
+proxies being solicited will be voted at the 2007 Annual Meeting of
+Stockholders (the “Annual Meeting”), to be held on July 9, 2007 at 9:00 a.m.,
+Mountain time, at the Beaver Creek Lodge, 26 Avondale Lane, Beaver Creek,
+Colorado, or at any postponement or adjournment thereof, for the purpose of
+voting on proposals as set forth herein as well as other business matters which
+may arise. This proxy statement and the accompanying proxy card will first be
+mailed to stockholders on or about June 8, 2007. 
+GENERAL INFORMATION
+REGARDING ANNUAL MEETING 
+Record Date 
+Stockholders of record at
+the close of business on May 31, 2007, the record date for the Annual
+Meeting, are entitled to notice of and to vote at the Annual Meeting. On the
+record date, there were 40,224,098 shares of our common stock outstanding. Each
+such share is entitled to one vote on each matter submitted to a vote at the
+Annual Meeting. References to shares of our common stock throughout this proxy
+statement have not been adjusted to give effect to our previously announced
+two-for-one stock split in the form of a stock dividend, which will be
+distributed on June 14, 2007 to holders of record on May 31, 2007. 
+Quorum Requirements 
+A quorum is required to
+conduct the Annual Meeting. A majority of the outstanding shares entitled to
+vote must be present in person or by proxy at the Annual Meeting in order for a
+quorum to exist. Abstentions and broker non-votes count as present and
+represented for purposes of determining whether a quorum exists. A broker
+non-vote occurs when a broker or representative returns a proxy card but does
+not vote on one or more matters because the broker does not have the authority
+to do so without instructions from the beneficial owner. Shares represented by
+proxies that are marked WITHHOLD with respect to the election of directors will
+be counted as present in determining whether there is a quorum. 
+1 
+Vote Requirements 
+If a quorum is present at the Annual Meeting, the
+following vote is required for approval of each matter to be voted on: 
+Election
+of Directors: A plurality of the shares present
+in person or by proxy and entitled to vote at the Annual Meeting must be voted
+FOR a director nominee. “Plurality” means that the nominees who receive the
+largest number of votes cast are elected as
+directors up to the maximum number of directors to be elected at the Annual
+Meeting. Consequently, proxies marked WITHHOLD and broker non-votes will have
+no impact on the election of directors. 
+Approval
+of the amendment to the Restated Certificate of Incorporation: A
+majority of the outstanding shares of our common stock must be voted FOR the
+proposal. Proxies marked ABSTAIN and broker non-votes will have the practical
+effect of voting against this proposal. 
+Approval of all other
+proposals: A
+majority of the shares of our common stock present in person or by proxy at the
+Annual Meeting and entitled to vote on the proposals must be voted FOR the
+proposals. Proxies marked ABSTAIN will have the practical effect of voting
+against these proposals. Broker non-votes will have no impact on these
+proposals. 
+Your Proxy 
+Whether or not you are able to personally attend the
+Annual Meeting, you are encouraged to vote your shares by completing, signing
+and returning the enclosed proxy card. Shares represented by properly executed
+proxy cards received by us, and not revoked prior to the Annual Meeting, will
+be voted at the Annual Meeting as directed in the signed proxy. If no
+directions are specified, such proxies will be voted FOR each of the proposals
+and in the best judgment of the proxy holders as to other matters that may
+properly come before the Annual Meeting. 
+If your shares are held in
+the name of a bank or brokerage firm, your bank or broker will send you a
+separate package describing the procedures and options for voting your shares.
+You should follow the instructions provided by your bank or brokerage firm. If
+you do not instruct your broker how to vote, your broker will vote your shares
+for you at his or her discretion on routine matters such as the election of
+directors and ratification of the independent registered public accounting
+firm. 
+Revocation 
+Any stockholder giving a
+proxy has the power to revoke the proxy, or change the proxy, at any time
+before the proxy is voted at the Annual Meeting by (i) sending another
+properly executed proxy bearing a later date or a written notice of revocation
+of the proxy to Corporate Secretary, Crocs, Inc., 6328 Monarch Park Place,
+Niwot, Colorado 80503 or (ii) voting in person at the Annual Meeting. 
+Attending the
+Annual Meeting 
+You are invited to personally
+attend the Annual Meeting. 
+Cost of Proxy
+Solicitation 
+We will bear the entire
+cost of this proxy solicitation. We may reimburse brokers, custodians, nominees
+and other fiduciaries for normal handling charges incurred for forwarding proxy
+materials to beneficial owners. Solicitation of proxies may be made personally
+or by mail or telephone by our directors, officers and other employees, who
+will receive no additional compensation for such services. 
+2 
+PROPOSAL 1—ELECTION
+OF DIRECTORS 
+Our board of directors currently consists of seven
+members divided into three classes, with each director elected to a three year
+term. Under our amended and restated bylaws, each of our directors holds office
+until their successors have been elected and qualified or until their earlier
+death, resignation, disqualification or removal. We have divided the terms of
+office of the directors into three classes. Class I consists of Ronald
+L. Frasch and Marie Holman-Rao, whose terms will expire at the annual
+meeting to be held in 2009. Class II consists of Raymond D. Croghan,
+Michael E. Marks and Richard L. Sharp, whose terms will expire at the Annual
+Meeting. Class III consists of Thomas J. Smach and Ronald R. Snyder,
+whose terms will expire at the annual meeting of stockholders to be held in
+2008. Messrs. Croghan, Marks and Sharp will all stand for re-election to
+the board of directors at the Annual Meeting. 
+Upon recommendation of the governance and nominating
+committee, the board of directors has nominated Messrs. Croghan, Marks and
+Sharp for election as Class II directors to serve for a three year term
+expiring at the 2010 annual meeting of stockholders. 
+Proxies cannot be voted
+for more than three nominees. Each of the director nominees has consented to
+serve for a three year term. We do not contemplate that any of the nominees
+will be unable to stand for election, but should any nominee become unable to
+serve or will not serve for any reason, all proxies (except proxies marked to
+the contrary) will be voted for the election of a substitute nominee as our
+board of directors, upon the recommendation of our governance and nominating
+committee, may select. 
+Class II
+Director Nominees 
+Raymond D. Croghan, 
+age 57, has served as a member of our board of directors since August 2004.
+Since 1999, Mr. Croghan has been retired. From 1991 to 1999, Mr. Croghan
+ran Croghan & Associates, Inc., a healthcare information
+technology consulting firm, which merged with Margolis Health Enterprise to
+form The TriZetto Group. Mr. Croghan serves on the boards of directors of
+several privately-held companies, and is a member of the board of trustees at
+Doane College in Crete, Nebraska. 
+Michael E. Marks, 
+age 56, has served as a member of our board of directors since August 2004.
+On January 1, 2006, Mr. Marks joined Kohlberg Kravis Roberts &
+Co., a private equity firm, as a member of the firm. From January 1994 to January 1,
+2006, Mr. Marks served as the Chief Executive Officer of
+Flextronics International Ltd., a NASDAQ-listed electronics
+equipment manufacturer. He was appointed Chairman of the Board of Flextronics
+effective upon his retirement as Chief Executive Officer on January 1,
+2006, and he previously served as Chairman of the Board of Flextronics from
+1993 to January 2003. Mr. Marks has served as a member of the board
+of directors of Flextronics since 1991, and also serves as a director of
+SanDisk Corporation, Schlumberger Limited and Sun Microsystems, Inc. 
+Richard L. Sharp, 
+age 60, has served as Chairman of our board of directors since April 2005.
+From 1982 to 2002, Mr. Sharp served in various positions with Circuit City
+Stores, Inc., a consumer electronics and personal computer retailer, most
+recently as President from 1984 to 1997, Chief Executive Officer from 1986 to
+2000 and Chairman of the Board from 1994 to 2002. He is also a director of
+Flextronics International Ltd. and Chairman of the Board of Carmax, Inc.,
+the nation’s largest specialty retailer of used cars and light trucks. 
+THE
+BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” ALL 
+OF THE ABOVE-NAMED NOMINEES FOR
+DIRECTOR. 
+Information About
+Continuing Directors 
+Ronald R. Snyder 
+( Class III ), age 50, has
+served as our Chief Executive Officer since January 2005, was appointed as
+our President and a director in June 2004, and served as a consultant to
+our company from October 2003 to June 2004. From March 2004 to December 2004,
+he was Chief Executive Officer of 
+3 
+Vinci Corporation, a
+home theater equipment company. From April 2000 to December 2003, Mr. Snyder
+served as a senior executive with Flextronics International Ltd., a NASDAQ-listed
+electronics equipment manufacturer, where he was most recently President of the
+Flextronics Design division. Mr. Snyder joined Flextronics upon its
+acquisition of The Dii Group, Inc., of which he was a founder and officer
+and where he had previously led various groups, including manufacturing
+operations, mergers and acquisitions, and sales and marketing. 
+Thomas J. Smach 
+( Class III ), age 46, has
+served as a member of our board of directors since April 2005. Since January 2005,
+Mr. Smach has served as the Chief Financial Officer of
+Flextronics International Ltd. From April 2000 to December 2004,
+Mr. Smach served as Senior Vice President—Finance of
+Flextronics. From 1997 to April 2000, he served as the Senior Vice President,
+Chief Financial Officer and Treasurer of The Dii Group, Inc. Mr. Smach
+is a certified public accountant. Mr. Smach serves on the board of
+directors of ADVA AG Optical Networking. 
+Ronald L. Frasch ( Class I ), age 58, has served as a
+member of our board of directors since October 2006. Since November 2004,
+Mr. Frasch has served as Vice Chairman and Chief Merchant of Saks Fifth Avenue,
+a division of Saks, Incorporated, a NYSE-listed luxury fashion retailer. From January 2004
+to November 2004, Mr. Frasch was employed by Saks in a non-executive
+capacity. From April 2000 to January 2004, Mr. Frasch served as
+Chairman and Chief Executive Officer of Bergdorf Goodman (a subsidiary of
+Neiman Marcus Group, Inc.) and served as President of GFT North America (a
+subsidiary of Gruppo GFT, based in Turin, Italy, a global producer, marketer
+and distributor of fine men’s and women’s clothing, sportswear and furnishings)
+from 1996 to 2000. Mr. Frasch also served as President and Chief Executive
+Officer of Escada USA from 1994 to 1996. 
+Marie Holman-Rao ( Class I ), age 58, has served as a
+member of our board of directors since October 2006. Since March 2006,
+Ms. Holman-Rao has served as Chief Executive Officer and President of
+M. Rao Design Consulting Group. From 1997 to March 2006
+Ms. Holman-Rao served as President, Design Services of Limited Brands, Inc.,
+a NYSE-listed specialty retailer. From 1993 until 1997, she served in various
+management positions at Gap, Inc., including Executive Vice President,
+Design, Banana Republic, and President, Banana Republic in 1997. Ms. Holman-Rao
+also served as Senior Vice President and General Merchandise Manager at Ann
+Taylor from 1992 until 1993, and Vice President, Creative Development, Sport at
+Adrienne Vittadini, Inc. from 1989 to 1992. From 1986 to 1989, Ms. Holman-Rao
+served as President of Perry Ellis. 
+EXECUTIVE OFFICERS 
+In
+addition to Ronald R. Snyder, our President and Chief Executive Officer, whose
+biographical information is disclosed above under “Information About Continuing
+Directors,” our executive officers include the following individuals: 
+Name 
+Age 
+Position(s) 
+John P. McCarvel 
+50 
+Chief Operating Officer
+and Executive Vice President 
+Peter S. Case 
+46 
+Chief Financial Officer,
+Senior Vice President—Finance and Treasurer 
+Michael C. Margolis 
+55 
+Vice President—Sales & Marketing 
+John P.
+McCarvel has served as Chief Operating Officer and
+Executive Vice President since February 2007 and as our Senior Vice
+President—Global Operations from October 2005 to February 2007 and
+served as our Vice President—Asian & Australian Operations from
+January 2005 to September 2005, after providing consulting services
+to us during 2004. From October 2001 to January 2005,
+Mr. McCarvel served as Vice President for the Design, Test and
+Semiconductor division of Flextronics International Ltd., where he
+was responsible for building Flextronics’ engineering infrastructure in Asia
+and growing 
+4 
+Flextronics’ business in
+the region. From 1999 to October 2001, he served as President of U.S.
+Operations and Senior Vice President of Worldwide Sales and Marketing for
+Singapore Technology Assembly Test Services Ltd., a semiconductor services
+company. He previously worked in executive level positions with Micron Custom
+Manufacturing Services, Inc. and The Dii Group, Inc. 
+Peter S. Case 
+has served as our Chief Financial Officer and Treasurer since April 2006
+and has served as our Senior Vice President—Finance since February 2006.
+Mr. Case served as the Executive Vice President, Chief Financial Officer
+and Treasurer of Ashworth, Inc., a NASDAQ-listed sports apparel and
+accessories company, from September 2005 to February 2006. From
+June 2000 to September 2005, Mr. Case served in several
+executive and managerial positions with Ashworth, including Director of
+Finance, Vice President of Finance, and Senior Vice President of Finance and
+Information Technology. 
+Michael C. Margolis has served as our
+Vice President—Sales & Marketing since January 2005, and led our
+sales group as an independent consultant from October 2003 to
+December 2004. From May 1995 to December 2004, Mr. Margolis
+was a founder and served as Vice President of Source Solutions, Inc., an
+apparel and merchandising company. He also successfully founded and ran a
+number of sporting goods and apparel companies prior to Source Solutions, and
+has extensive experience establishing and maintaining sales relationships with
+large retail chains. 
+BENEFICIAL
+OWNERSHIP OF OUR COMMON STOCK 
+The
+following table sets forth information with respect to the beneficial ownership
+of our common stock as of April 30, 2007 by: 
+· each
+person (or group of affiliated persons) who is known by us to own beneficially
+more than 5% of our voting securities; 
+· each
+current director; 
+· each
+of the named executive officers; and 
+· all
+current directors and executive officers as a group. 
+Beneficial ownership is
+determined in accordance with the Securities and Exchange Commission’s (“SEC”)
+rules. In computing percentage ownership of each person, shares of common stock
+subject to options held by that person that are currently exercisable or
+convertible, or exercisable or convertible within 60 days of
+April 30, 2007, are deemed to be outstanding and beneficially owned by
+that person. In addition, shares that are required to be issued by us to any
+person pursuant a restricted stock award agreement within 60 days of
+April 30, 2007 are also deemed to be outstanding and beneficially owned by
+that person. None of these shares, however, are deemed outstanding for the
+purpose of computing the percentage ownership of any other person. The share
+numbers in the table below have not been
+adjusted to give effect to our previously announced two-for-one stock split in
+the form of a stock dividend, which will be distributed on June 14, 2007
+to holders of record on May 31, 2007. 
+5 
+Except as indicated in
+this table and pursuant to applicable community property laws, each stockholder
+named in the table has sole voting and investment power with respect to the
+shares set forth opposite such stockholder’s name. Percentage ownership is based
+on 39,965,682 shares of our common stock outstanding on April 30, 2007.
+Unless otherwise indicated below, the address for each person who owns more
+than 5% of our voting securities and for each director and named executive
+officer listed below is in care of Crocs, Inc., 6328 Monarch Park Place,
+Niwot, Colorado 80503. 
+Beneficial 
+Ownership 
+Name of Beneficial Owner 
+Shares 
+Percent 
+5%
+Stockholders: 
+Mazama Capital Management, Inc.(1) 
+4,597,271 
+11.5 
+% 
+OppenheimerFunds, Inc.(2) 
+3,432,340 
+8.6 
+% 
+Oppenheimer Global Opportunities Fund(3) 
+3,000,000 
+7.5 
+% 
+George B. Boedecker Jr.(4) 
+2,234,229 
+5.7 
+% 
+Non-Employee Directors: 
+Raymond D. Croghan(5) 
+147,830 
+* 
+Ronald L. Frasch 
+— 
+* 
+Marie Holman-Rao 
+— 
+* 
+Michael E. Marks(6) 
+1,349,271 
+3.4 
+% 
+Richard L. Sharp(7) 
+983,529 
+2.5 
+% 
+Thomas J. Smach(8) 
+126,613 
+* 
+Named Executive Officers: 
+Ronald R. Snyder(9) 
+1,711,770 
+4.2 
+% 
+John P. McCarvel(10) 
+171,796 
+* 
+Peter S. Case(11) 
+120,000 
+* 
+Michael C. Margolis(12) 
+150,744 
+* 
+Caryn D. Ellison(13) 
+59,717 
+* 
+All current directors and executive officers as a
+group (10 persons)(14) 
+4,849,582 
+11.7 
+% 
+* Less than 1% 
+(1) Based solely on a Schedule 13G filed with the SEC. The address
+for Mazama Capital Management, Inc. is One Southwest Columbia Street, Suite 1500,
+Portland, Oregon 97258. 
+(2) Based solely on a Schedule 13G filed with the SEC. The address
+for OppenheimerFunds, Inc. is Two World Financial Center, 225 Liberty Street,
+11 th Floor, New York, New York 10281-1008.
+The Schedule 13G filed by OppenheimerFunds, Inc. reports that it shares
+voting and investment power with respect to these shares. 
+(3) Based solely on a Schedule 13G filed with the SEC. The address
+for Oppenheimer Global Opportunities Fund is 6803 South Tucson Way, Centennial,
+Colorado 80112. The Schedule 13G filed by Oppenheimer Global Opportunities Fund
+reports that it shares voting and investment power with respect to these
+shares. 
+(4) Based solely on a Schedule 13G filed with the SEC. Shares
+beneficially owned include 1,587,621 shares owned by the estate of Anthony
+Kruse, for which Mr. Boedecker serves as personal representative from August 11,
+2006. Mr. Boedecker disclaims beneficial ownership of these shares except
+to the extent of his pecuniary interest in them. The address for George B.
+Boedecker Jr. is 4450 Arapahoe, Suite 100, Boulder, Colorado 80303. 
+(5) Shares beneficially owned include 87,608 shares subject to options
+exercisable within 60 days of April 30, 2007. Also includes an
+aggregate of 18,480 shares of common stock beneficially owned by two trusts for
+the benefit of Mr. Croghan’s two daughters. Mr. Croghan’s spouse is
+the trustee of both 
+6 
+trusts and she exercises
+sole voting and investment power over the shares. Mr. Croghan disclaims
+beneficial ownership of such shares. 
+(6) Shares beneficially owned include 87,608 shares subject to options
+exercisable within 60 days of April 30, 2007 and 1,157,404 shares
+beneficially owned by WB Investors, LLC. Mr. Marks is the managing member
+of WB Investors, LLC and exercises voting and investment power over the shares
+beneficially owned by WB Investors, LLC. 
+(7) Shares beneficially owned include 175,215 shares subject to options
+exercisable within 60 days of April 30, 2007, 533,099 shares
+beneficially owned by The RLS Trust dated 9/14/05, 100,000 shares beneficially
+owned by The RLS 2000 Charitable Remainder Unitrust, 58,405 shares beneficially
+owned by BES & RS, LLC, 58,405 shares beneficially owned by EGG &
+RS, LLC, and 58,405 shares beneficially owned by RBG & RS, LLC. Mr. Sharp
+is the sole trustee of the trusts and is the sole manager of each of BES &
+RS, LLC, EGG & RS, LLC, and RBG & RS, LLC and he exercises
+voting and investment power over all of the shares beneficially owned by the
+trusts and each company. The address for Mr. Sharp is 9020 Stony Point
+Parkway, #180, Richmond, Virginia 23235. 
+(8) Shares beneficially owned include 124,113 shares subject to options
+exercisable within 60 days of April 30, 2007, 2,500 shares held as
+custodian for Mr. Smach’s two children and nephew under the New York
+Uniform Gifts to Minors Act. Mr. Smach exercises voting and investment
+power over all of these shares. 
+(9) Shares beneficially owned include 652,189 shares subject to options
+exercisable within 60 days of April 30, 2007 and 9,736 shares that
+will be issued pursuant to a restricted stock award agreement within
+60 days of April 30, 2007. Also includes 170,499 shares held in the
+name of Union Bank of California, custodian f/b/o Ronald R. Snyder, 16,580
+shares held by Mr. Snyder’s spouse, Kimberly Snyder, and 43,494
+shares beneficially owned by Mr. Snyder’s four minor children and
+stepchildren under the Colorado Uniform Transfer to Minors Act. Mr. Snyder
+disclaims beneficial ownership of all shares held by Ms. Snyder. 
+(10) Shares beneficially owned include 60,043 shares subject to options
+exercisable within 60 days of April 30, 2007. Also includes 111,753
+shares held jointly with his spouse. 
+(11) Shares beneficially owned include 120,000 shares subject to options
+exercisable within 60 days of April 30, 2007. 
+(12) Shares beneficially owned include 122,515 shares subject to options
+exercisable within 60 days of April 30, 2007. Also includes 200
+shares held of record by Mr. Margolis’ daughter, and 28,029 shares held
+jointly with his spouse. Mr. Margolis disclaims beneficial ownership of
+the shares held by his daughter. 
+(13) Shares beneficially owned include 35,043 shares subject to options
+exercisable within 60 days of April 30, 2007. Also includes 4,674
+shares held as custodian for Ms. Ellison’s two minor children under the
+Colorado Uniform Transfer to Minors Act. Ms. Ellison served as our Chief
+Financial Officer and Treasurer from November 2004 to April 2006. 
+(14) Shares
+beneficially owned include 474,544 shares of common stock subject to options
+issued to four non-employee directors and 1,032,776 shares of common stock
+subject to options or restricted stock award agreements issued to four
+executive officers and one executive officer’s spouse that are exercisable or
+issuable within 60 days of April 30, 2007. 
+7 
+BOARD OF DIRECTORS
+AND COMMITTEES OF THE BOARD 
+Board Composition 
+Our board of directors currently consists of seven
+members divided into three classes, with each director elected to a three year
+term. Under our amended and restated bylaws, each of our directors holds office
+until his or her successor has been elected and qualified or until his or her
+earlier death, resignation, disqualification or removal. We have divided the
+terms of office of the directors into three classes. 
+At each annual meeting of stockholders, the successors
+to directors whose terms expire at such meetings will be elected and will serve
+from the time of election and qualification until the third annual meeting
+following election and until their successors are duly elected and qualified.
+The current number of directors fixed by the board of directors is seven. The
+number of directors may be changed by resolution of the board. Any additional directorships
+resulting from an increase in the number of directors will be distributed among
+the three classes so that, as nearly as possible, each class will consist of
+one-third of the directors. Vacancies on the board can be filled by resolution
+of the board of directors. 
+NASDAQ rules require that our board of directors
+have a majority of independent directors. The board of directors has determined
+that all of the current members of our board of directors except Mr. Snyder
+are “independent directors” as defined under NASDAQ Rule 4200(a)(15). The
+board makes a determination regarding the independence of each director
+annually based on the relevant facts and circumstances. Applying these
+standards and the independence criteria defined by NASDAQ rules, the board has
+made a subjective determination as to each independent director that no
+relationships exist that in the opinion of the board would interfere with the
+exercise of his or her independent judgment in carrying out the
+responsibilities of a director. 
+During 2006, the board of directors met six times and
+acted by written consent on various other occasions. All directors attended 75%
+or more of the meetings of the board of directors or the committees of the
+board on which they serve. We encourage, but do not require, our directors to
+attend the Annual Meeting. Last year one director attended our annual meeting
+of stockholders. 
+Stockholders who wish to
+communicate with the board of directors or with specified individual directors
+may do so by mailing such written communication to: Corporate Secretary, Crocs, Inc.,
+6328 Monarch Park Place, Niwot, Colorado 80503. The Corporate Secretary will
+review all correspondence, and will forward to the board or an individual
+director a summary of the correspondence received and copies of correspondence
+that the Corporate Secretary determines requires the attention of the board or
+an individual director. The board or an individual director may at any time
+request copies and review all correspondence received by the Corporate
+Secretary that is intended for the board or such individual director. 
+Board Committees 
+Our board of directors has the authority to appoint
+committees to perform certain management and administrative functions. Our
+board of directors has established the following standing committees: 
+Audit
+Committee. Messrs. Smach
+(Chairman), Croghan and Frasch are the current members of our audit committee. The
+audit committee met six times in 2006. The functions of the audit committee
+include oversight of the integrity of our financial statements, our compliance
+with legal and regulatory requirements, the performance, qualifications and
+independence of our independent auditors and the performance of our internal
+audit function. Our audit committee is directly responsible, subject to
+stockholder ratification, for the appointment, retention, compensation,
+evaluation, termination and oversight of the work of any independent auditor
+engaged for the purpose of preparing or issuing an audit report or related
+work. The purpose and responsibilities of our audit committee are set forth in
+the Audit Committee Charter. 
+8 
+All of the members of the audit committee are
+independent as determined in accordance with NASDAQ rules and relevant
+federal securities laws and regulations. Our board of directors has determined
+that Mr. Smach qualifies as an “audit committee financial expert” as
+defined by the applicable regulations of the SEC. 
+Compensation
+Committee. Our
+compensation committee consists of Messrs. Marks (Chairman) and Croghan.
+The compensation committee met eight times in 2006 and acted by written consent
+on various other occasions. The compensation committee has overall
+responsibility for evaluating and approving our executive officer incentive
+compensation, benefit, severance, equity-based or other compensation
+plans, policies and programs, including awards under our incentive bonus plan
+and stock option plan. The compensation committee is also responsible for
+discussing and reviewing our compensation discussion and analysis with
+management and including a report to such effect in our proxy statement. The
+compensation committee sets the Chief Executive Officer’s and the non-employee
+directors’ compensation and reviews the recommendations of the Chief Executive
+Officer with respect to compensation of our other executive officers. After
+reviewing such recommendations, the compensation committee sets the
+compensation of the other executive officers. Neither the compensation
+committee nor our management has contracted with a third party consultant for
+determining the amount or particular form of any executive officer’s
+compensation, but may seek the advice of such persons in the future. The
+purpose and responsibilities of our compensation committee are set forth in the
+Compensation Committee Charter. All of the members of the compensation
+committee are independent as determined in accordance with NASDAQ rules and
+relevant federal securities laws and regulations. 
+Governance
+and Nominating Committee. Our governance and nominating committee consists of Mr. Sharp
+(Chairman) and Ms. Holman-Rao. The governance and nominating committee met
+once in 2006 and acted by written consent on one other occasion. The governance
+and nominating committee assists our board of directors in promoting our best
+interests and the best interests of our stockholders through the implementation
+of sound corporate governance principles and practices. In furtherance of this
+purpose, the governance and nominating committee identifies individuals
+qualified to become board members and recommends to our board of directors the
+director nominees for the next annual meeting of stockholders. The governance
+and nominating committee has engaged a third party search firm to assist it in
+identifying qualified nominees. The governance and nominating committee also
+reviews the qualifications and independence of the members of our board of
+directors and its various committees on a regular basis and makes any
+recommendations the committee members may deem appropriate from time to time
+concerning any recommended changes in the composition of our board of directors
+and its committees. The governance and nominating committee also recommends to
+our board of directors the corporate governance guidelines and standards
+regarding the independence of outside directors applicable to us and reviews
+such guidelines and standards and the provisions of the governance and
+nominating committee charter on a regular basis to confirm that such
+guidelines, standards and charter remain consistent with sound corporate
+governance practices and with any legal or regulatory requirements of NASDAQ.
+The governance and nominating committee also monitors our board of directors
+and leads our board of directors in its annual review of our board of directors’
+performance. 
+The purpose and
+responsibilities of our governance and nominating committee are set forth in
+the Governance and Nominating Committee Charter. All of the members of the
+governance and nominating committee are independent as determined in accordance
+with the NASDAQ rules. 
+Director Nomination
+Process 
+In identifying potential director candidates, the
+governance and nominating committee relies on recommendations from a number of
+sources, including current directors and officers. The governance and
+nominating committee may also hire outside consultants or search firms or other
+advisors to assist in identifying director candidates. The governance and
+nominating committee will consider director 
+9 
+candidates recommended by
+stockholders on the same basis as it considers other candidates. Any
+stockholder wishing to recommend a candidate for consideration by the
+governance and nominating committee may do so by submitting a written
+recommendation to the committee in accordance with the procedures as set forth
+under “Stockholder Proposals and Nominations for 2008 Annual Meeting.” 
+In evaluating a candidate
+for director, the governance and nominating committee considers, among other
+things, the candidate’s judgment, knowledge, integrity, business and industry
+experience, and expertise which are likely to enhance our board of director’s
+ability to manage and direct our affairs and business. The governance and
+nominating committee also takes into account independence requirements imposed
+by law or regulations (including the NASDAQ rules). In the case of director
+candidates recommended by stockholders, the governance and nominating committee
+may also consider the number of shares held by the recommending stockholder,
+the length of time that such shares have been held and the relationship, if
+any, between the recommending stockholder and the recommended director nominee. 
+Code of Business
+Conduct and Ethics and Committee Charters 
+We have adopted a Code of
+Business Conduct and Ethics that applies to all directors and employees,
+including our principal executive, financial and accounting officers. The Code
+of Business Conduct and Ethics is posted on our website at www.crocs.com. We
+intend to satisfy the requirements under Item 5.05 of Form 8-K regarding
+disclosure of amendments to, or waivers from, provisions of our Code of
+Business Conduct and Ethics that apply to our directors and principal
+executive, financial and accounting officers by posting such information on our
+website. Current copies of our Audit Committee Charter, Compensation Committee
+Charter and Governance and Nominating Committee Charter are also available on
+our website at www.crocs.com. Any person may request a copy of the Code of
+Business Conduct and Ethics or committee charters free of charge by writing:
+Corporate Secretary, Crocs, Inc., 6328 Monarch Park Place, Niwot, Colorado
+80503. 
+Compensation of
+Directors 
+The
+table below summarizes the total compensation paid or earned by each of the
+non-employee directors for the fiscal year ended December 31, 2006. 
+Name 
+Fees Earned or 
+Paid in Cash ($) 
+Option 
+Awards ($)(1) 
+All Other 
+Compensation ($)(2) 
+Total ($) 
+Raymond D.
+Croghan 
+$ 
+10,000 
+$ 
+416,264 
+$ 
+3,292,968 
+$ 
+3,719,232 
+Ronald L. Frasch 
+10,000 
+36,357 
+159,200 
+205,557 
+Marie Holman-Rao 
+10,000 
+36,357 
+159,200 
+205,557 
+Michael E. Marks 
+11,250 
+416,264 
+3,292,968 
+3,720,482 
+Richard L. Sharp 
+11,250 
+199,509 
+5,689,061 
+5,899,820 
+Thomas J. Smach 
+12,250 
+394,905 
+5,072,192 
+5,469,347 
+George B.
+Boedecker, Jr.(3)(4) 
+— 
+117,130 
+— 
+117,130 
+Mark A. Retzloff(4) 
+— 
+168,405 
+— 
+168,405 
+Bradley L. Stoffer(4) 
+— 
+168,405 
+— 
+168,405 
+(1) Amounts reflect the
+dollar amount recognized for financial statement reporting purposes for the
+year ended December 31, 2006, in accordance with SFAS 123R and includes
+amounts from awards granted in and prior to 2006. Assumptions used in the
+calculations of these amounts are included in Footnote 5 to our
+Consolidated Financial Statements for the year ended December 31, 2006. 
+10 
+As of December 31,
+2006, each non-employee director had the following number of stock options
+outstanding along with the grant date fair value for the respective grant. 
+Name 
+Options 
+Outstanding at 
+December 31, 2006 
+Grant Date 
+Fair Value 
+Raymond D.
+Croghan 
+10,000 
+$ 
+19.19 
+Raymond D.
+Croghan 
+29,203 
+7.67 
+Raymond D.
+Croghan 
+116,810 
+5.91 
+Ronald L. Frasch 
+40,000 
+19.19 
+Marie Holman-Rao 
+40,000 
+19.19 
+Michael E. Marks 
+10,000 
+19.19 
+Michael E. Marks 
+29,203 
+7.67 
+Michael E. Marks 
+116,810 
+5.91 
+Richard L. Sharp 
+10,000 
+19.19 
+Richard L. Sharp 
+29,203 
+14.33 
+Richard L. Sharp 
+175,215 
+5.91 
+Thomas J. Smach 
+10,000 
+19.19 
+Thomas J. Smach 
+58,406 
+14.33 
+Thomas J. Smach 
+29,203 
+6.67 
+Thomas J. Smach 
+116,810 
+5.91 
+George B.
+Boedecker, Jr. 
+— 
+— 
+Mark A. Retzloff 
+7,300 
+7.67 
+Mark A. Retzloff 
+58,404 
+5.91 
+Bradley L. Stoffer 
+— 
+— 
+(2) All of our unvested
+stock options and restricted stock will vest on a change in control pursuant to
+individual option or restricted stock award agreements. The calculation of the
+amount disclosed is based on the number of unvested shares at December 31,
+2006 multiplied by the closing price of our common stock on the NASDAQ Global
+Select Market on December 29, 2006 less the exercise price for stock
+options. 
+(3) Excluded from the table
+above is severance and insurance payments of $168,000 made in 2006 to Mr. Boedecker
+in accordance with the terms of the separation and release agreement signed in January 1,
+2005. See “Certain Relationships and Related Transactions” for details of
+payments made and terms of the agreement. 
+(4) Mr. Boedecker
+resigned from our board of directors on May 24, 2006. Messrs. Retzloff and
+Stoffer did not stand for reelection to our board of directors at our annual meeting
+held on October 30, 2006. 
+Until October 2006, we granted our non-employee
+directors options to purchase 116,810 shares of our common stock on their
+initial election to our board of directors and options to purchase an
+additional 29,203 shares of our common stock for each year of service. The
+chairman of the board of directors also received options to purchase an
+additional 58,405 shares of our common stock on his initial election as
+chairman. The chairman of the audit committee received options to purchase an
+additional 29,203 shares of common stock for each year of service. The options
+were granted at the fair market value of our common stock on the date of grant
+and have terms of seven years. Each option grant vests in equal annual
+installments over four years, so long as such person remains a director. 
+In October 2006, our board of directors approved
+a new compensation arrangement for non-employee directors to be effective September 1,
+2006. Under the new arrangement, directors who are not our employees receive
+annual cash compensation of $40,000, payable quarterly. Additional annual cash
+compensation is paid to the chairperson of each committee of the board of
+directors as follows: $10,000 for 
+11 
+the chair of the audit
+committee and $5,000 for each of the compensation committee chair and the
+governance and nominating committee chair. All directors are reimbursed for
+their reasonable out-of-pocket expenses incurred in attending meetings of the
+board of directors and its committees. 
+In addition, each new
+non-employee director will now be awarded options to purchase 40,000 shares of
+our common stock on their initial election to our board of directors and
+continuing directors will be awarded options to purchase an additional 10,000
+shares of our common stock for each year of service. The chairman of the board
+of directors will now receive options to purchase an additional 10,000 shares
+of our common stock on initial election as chairman. The options are granted at
+the fair market value of our common stock on the date of grant and have a term
+of seven years. Each option grant vests in equal annual installments over four
+years, so long as such person remains a director. 
+EXECUTIVE
+COMPENSATION 
+COMPENSATION
+DISCUSSION AND ANALYSIS 
+The following
+discussion and analysis provides information regarding our executive
+compensation objectives and principles, procedures, practices and decisions,
+and is provided to help give perspective to the numbers and narratives that
+follow in the tables in this section. This discussion will focus on our
+objectives, principles, practices and decisions with regards to the
+compensation of the following five named executive officers (the “NEOs”): 
+· Ronald R. Snyder,
+Chief Executive Officer and President 
+· John P.
+McCarvel, Chief Operating Officer and Executive Vice President 
+· Peter S. Case, Chief
+Financial Officer, Senior Vice President-Finance and Treasurer 
+· Michael C. Margolis,
+Vice President-Sales and Marketing 
+· Caryn D. Ellison,
+Former Chief Financial Officer, was an NEO until April 6, 2006. 
+Executive
+Compensation Objectives and Principles 
+The overall
+objective of our executive compensation program is to create long-term value
+for our stockholders by attracting and retaining talented executives, rewarding
+superior operating and financial performance, and aligning the long-term
+interests of our executives with those of our stockholders. Accordingly, our
+executive compensation program incorporates the following principles: 
+· Compensation
+should be based on individual job responsibility, demonstrated leadership
+ability, management experience, individual performance and our performance.
+Employees in positions of leadership and broad responsibility are generally
+compensated by elements that are linked to our overall performance and
+stockholder returns. 
+· Compensation
+should reflect the fair market value of the services received. We believe that
+a fair and competitive pay package for the NEOs is essential to attract and
+retain talented executives in key positions. 
+· Compensation
+is designed to reward NEOs based on both our short-term and long-term performance.
+Base pay is tied to individual performance and market conditions for similar
+positions. Bonuses are tied to achievement of short-term quantitative
+performance goals that we believe closely correlate to share value. Long-term
+performance is rewarded through equity-based awards such as stock options, the
+value of which depends on future share prices, and the realization of which is
+contingent on satisfaction of vesting schedules requiring continued service
+with us. 
+12 
+· Compensation
+should foster long-term focus. Compensation
+is designed to align executives’ interests with those of the stockholders. A
+significant percentage of total compensation is allocated to non-cash
+compensation as a result of this philosophy. We do not use an exact formula for
+allocating between cash and non-cash compensation. 
+The compensation
+committee forms its judgments regarding the levels and component mix of
+executive compensation by considering the market competition for executive
+talent, the risk to an executive inherent in employment with a company that has
+a relatively short operating history, and our financial goals. Several specific
+financial metrics were used by the compensation committee in determining the
+final 2006 compensation for executives include the following: 
+· Revenues
+increased 226.6% to $354.7 million in 2006 from $108.6 million in 2005. 
+· Net
+income increased 278.8% to $64.4 million in 2006 from $17.0 million in 2005. 
+· Diluted earnings per share
+increased 215.7% to $1.61 in 2006 from $0.51 in 2005. 
+Executive
+Compensation Procedures 
+To attain our executive compensation objectives and
+implement the underlying compensation principles, we follow the procedures
+described below. 
+Role
+of the Compensation Committee. The compensation committee has
+responsibility for establishing and monitoring the executive compensation
+programs and for making decisions regarding the compensation of the NEOs. The
+agenda for meetings of the compensation committee is determined jointly by the
+chairman of the compensation committee and the Chief Executive Officer.
+Compensation committee meetings are held regularly and attended by the Chief
+Executive Officer. The compensation committee also meets in executive session.
+The compensation committee sets the Chief Executive Officer’s compensation. The
+compensation committee also reviews the recommendations of the Chief Executive
+Officer with respect to compensation of the other NEOs and, after reviewing
+such recommendations, sets the compensation of the other NEOs. The compensation
+committee also monitors, administers and approves awards under our various
+incentive compensation plans for all levels of our employees, including awards
+under our incentive bonus plan and stock option plan. 
+The compensation committee relies on its judgment in
+making compensation decisions after reviewing our performance and evaluating
+each executive’s performance against established goals, leadership ability and
+responsibilities, and current compensation arrangements. When setting total
+compensation for each of the NEOs, the compensation committee reviews the NEO’s
+current compensation, including equity and non-equity based compensation. The
+compensation committee also evaluates surveys and other available data
+regarding the executive compensation programs of comparative companies. The
+compensation program for NEOs and the compensation committee assessment process
+are designed to be flexible so as to better respond to the evolving business
+environment and individual circumstances. 
+Role
+of Consultants. Neither
+the compensation committee nor management has contracted with a third party
+consultant for determining the amount or particular form of any NEO
+compensation, but may seek the advice of such persons in the future. 
+No Employment and
+Severance Agreements. The
+current NEOs do not have employment, severance or change-in-control agreements,
+although unvested options and restricted stock may become vested on a change in
+control pursuant to individual option or restricted stock award agreements. The
+NEOs serve at the will of the board of directors, which enables us to terminate
+their employment with discretion and to determine the terms of any severance.
+This is consistent with our performance-based employment and compensation
+philosophy. 
+13 
+Elements of Compensation 
+Our executive
+compensation objectives and principles are implemented through the use of the
+following elements of compensation, each discussed more fully below: 
+· Base Pay 
+· Performance-Based Bonus 
+· Long-Term Equity Awards 
+· Other Personal Benefits 
+Our executive compensation program seeks to attract,
+retain, and motivate exemplary executive talent able to succeed in our fast
+paced high growth company. Our executive compensation program also seeks to
+hold our executives accountable and reward them appropriately for successful
+business results. We are firmly committed to our stockholders and our executive
+compensation program is structured to align our executives with our
+stockholders’ interests. To meet each of these objectives, our core executive
+compensation program encompasses base salaries, annual performance-based
+incentive compensation, and long-term equity incentive awards. We believe the
+total compensation opportunities offered to our executives are sufficient to
+reduce the need for anything other than limited executive perquisites (which
+are detailed later in this proxy statement) or enhanced benefit programs beyond
+those that are typically available to all other employees. 
+The compensation committee does not utilize an exact
+calculation in determining the break down of NEO compensation between base pay,
+annual performance-based bonus, and long-term equity awards. However, the
+compensation committee takes into consideration all forms of compensation and
+because we are a rapidly growing company, we believe that a substantial portion
+of each NEOs compensation should be in the form of annual performance-based
+bonus and equity awards. 
+Base
+Pay. For
+2006, the compensation committee established base pay by considering the size
+of our operations, the responsibilities of the NEO’s and the competitive
+marketplace for executive talent in similar positions. In general, base pay of
+the NEOs is set at levels where we are competitive with our market peers of the
+S&P 600 Footwear Index (“Peers”), with the expectation that shortfalls in
+base pay, if any, will be recouped through performance bonuses should our
+performance warrant the NEO to receive performance bonuses. The compensation
+committee sets the base pay of the Chief Executive Officer. Base pay for other
+NEOs is set by the compensation committee after reviewing the recommendation of
+the Chief Executive Officer. Annual adjustments are influenced by growth of our
+operations, revenues and profitability, individual performance, changes in
+responsibility and other factors. 
+Performance-Based
+Bonuses. We
+maintained a performance-based bonus program (the “2006 Bonus Plan”) for our
+NEOs. Under the 2006 Bonus Plan, NEOs were eligible to receive cash bonuses,
+contingent on the attainment during that year of our predetermined performance
+goals. 
+In an effort to encourage achievement of our
+performance objectives, the amount of bonus paid to the NEOs for the year was
+set at a level which the compensation committee believes was in excess of our
+Peers. The combination of base pay and performance-based bonuses was intended
+to result in an aggregate rate of salary and bonus compensation exceeding
+competitive, market standards when we exceeded the performance objectives set
+by the compensation committee. The compensation committee believes that a
+compensation plan exceeding competitive, market standards offered NEOs
+additional incentive to outperform our market peers. 
+Under the 2006 Bonus Plan, the targeted bonus amount
+for each NEO was expressed as a percentage of the NEO’s base pay. The
+compensation committee determined the minimum, target and maximum bonus levels
+for the NEOs. The target bonus level for the NEOs in 2006 were between 50% and
+100% of 
+14 
+base pay and were
+contingent on us achieving diluted earnings per share of $0.78, excluding
+share-based compensation expense. The maximum bonus levels for NEO’s in 2006
+were between 90% and 200% and were contingent on us achieving diluted earnings
+per share of $0.98, excluding share-based compensation expense. 
+The full amount of the targeted bonus was earned by
+the NEOs only if we met the targeted financial objectives approved by the
+compensation committee. If we exceeded or failed to meet the targeted financial
+objectives set by the compensation committee, the amount of bonuses paid to the
+NEOs would be increased or decreased, as applicable. For NEOs, the 2006
+financial targets were based on our diluted earnings per share, with the
+exception of Michael Margolis’s incentive bonus where 75% was contingent on us
+achieving revenues of at least $240 million for the year ended December 31,
+2006. The diluted earnings per share targets were established by the
+compensation committee based on our internal forecast for the year. The payment
+of target bonuses to the NEOs in 2006 were made quarterly based on quarterly
+results, because those results were in line with the target bonus level
+performance objectives. Any unpaid earned bonuses are paid soon after the close
+of the fiscal year to which the bonuses relate, once the compensation committee
+has determined the amount actually earned and payable. For 2006, our
+performance entitled the NEOs to the maximum bonus levels under the 2006 Bonus
+Plan. 
+The compensation committee and board of directors have
+discretion to depart from the formula in approving the bonus and increase or
+decrease bonuses after general results are known. In addition to bonuses paid under the 2006 Bonus Plan, the
+compensation committee approved a discretionary bonus for the NEO’s due to
+operating results that significantly exceeded the maximum bonus level
+performance objectives. The discretionary bonuses approved ranged between 25%
+and 100% of base pay. The percentages were determined by the compensation
+committee based on the extent to which our operating results exceeded the
+maximum bonus level performance objectives and the estimated contribution and
+responsibility of the individual NEO. Bonuses earned under the 2006 Bonus Plan
+and discretionary bonuses are reported under the headings “Non-Equity Incentive
+Plan Compensation” and “Bonuses,” respectively, in the Summary Compensation
+Table below. 
+In March 2007, the
+compensation committee approved the 2007 Bonus Plan with several differences in
+calculation from the 2006 Bonus Plan. The 2007 Bonus Plan is still based on the
+achievement of diluted earnings per share. However, instead of the target
+objective based on the internal forecast for the year, the plan is based on
+achieving earnings per share growth of between 10% to 175% over our fully
+diluted earnings per share for the year ended December 31, 2006. The 2007
+Bonus Plan awards a bonus expressed as a percentage of 2007 base salary ranging
+from 25% to 800% depending on the particular executive and the growth rate
+achieved. If we do not reach the minimum earnings per share target of 10%, the
+NEOs will not be eligible for bonuses under the plan. The percentages were
+determined by the compensation committee based on the estimated contribution
+and responsibility of the individual NEO. The compensation committee also took
+into consideration the inherent employment risk accepted by an officer of a
+rapidly growing company with a limited operating history. 
+Long-Term Equity Awards. Discretionary long-term equity
+awards, in the form of stock options and restricted stock, are granted at the
+compensation committee’s discretion to the NEOs annually in order to provide
+long-term performance-based compensation, to encourage the NEOs to continue
+their employment throughout the vesting periods of the awards, to align
+management and stockholder interests, and to retain executives through the
+vesting periods. In making such awards, the compensation committee considers
+grant size and the appropriate combination of equity-based awards in making NEO
+grant decisions. The amount of long-term equity awards granted to NEOs in 2006
+was based on the compensation committee’s assessment of each NEO’s expected
+future contributions and award levels of our market peers. We intend to grant
+long-term equity awards at the compensation committee meeting held in
+connection with our annual meeting of stockholders or meetings held at the
+conclusion of each year. In 2006, the grant was made on February 7, in
+conjunction with our initial public offering. In 2007, 
+15 
+the compensation committee approved stock option
+grants in January and February for the NEOs, as listed below: 
+Name and Principal Position 
+2007 Stock Option Awards: 
+Number of Securities 
+Underlying Options 
+(#) 
+2006 Stock Option Awards: 
+Number of Securities 
+Underlying Options 
+(#) 
+Ronald R. Snyder 
+175,000 
+467,240 
+John P. McCarvel 
+125,000 
+60,043 
+Peter S. Case 
+40,000 
+120,000 
+Michael C. Margolis 
+30,000 
+— 
+We compared our long-term
+equity award program for 2006 against the equity-based compensation programs of
+our market peers to assist in determining both the structure and amount of
+awards to be made in 2007. The compensation committee believes that the awards
+made to NEOs in 2007 were made at levels consistent with those of our market
+peers and the anticipated contribution and responsibility of the NEO in future
+years. 
+Options are granted with
+an exercise price equal to the closing price per share on the date of grant and
+vest over four-years with the first year a “cliff” basis and monthly vesting
+for the remaining three years. Beginning in 2006, we did not grant options with
+an exercise price below 100% of the trading price of the underlying shares of
+common stock on the date of grant or grant options that are priced on a date
+other than the date of grant. Stock options only have economic value to the
+grantee to the extent the market price of the underlying shares on the exercise
+date exceeds the exercise price. Accordingly, options provide compensation only
+if the underlying share price increases over the option term and the NEO’s
+employment continues until the vesting date. In 2006, the compensation
+committee only granted stock option awards as the component of equity compensation.
+The compensation committee believes the granting of stock options with an
+exercise price equal to the market value on the date of grant represents a
+preferred method of equity incentive compensation when compared to stock awards
+because the value of the award to the NEO is based solely on future increases
+in the market value of our stock. 
+Other Benefits. Other benefits are provided to the
+NEOs in order to achieve a competitive pay package as detailed in the Summary
+Compensation Table below. The compensation committee believes that those
+benefits, which are detailed in the Summary Compensation Table under the
+heading “All Other Compensation,” are reasonable, competitive and consistent
+with our overall executive compensation program. Those benefits consist
+principally of employer-paid premiums on health insurance and country club
+dues. 
+Deductibility of
+Executive Compensation 
+Section 162(m) of the Internal Revenue Code
+imposes a $1 million annual limit on the amount that a public company may
+deduct for compensation paid to the company’s chief executive officer during a
+tax year or to any of the company’s four other most highly compensated
+executive officers who are still employed at the end of the tax year. The limit
+does not apply to compensation that the meets the requirements of Code Section 162(m) for
+“qualified performance-based” compensation (i.e., compensation paid only
+if the executive meets pre-established, objective goals based on performance
+criteria approved by the company’s stockholders). 
+The compensation committee
+reviews and considers the deductibility of executive compensation under Section 162(m) of
+the Internal Revenue Code. In certain situations, the compensation committee
+may approve compensation that does not meet the requirements of Code Section 162(m) in
+order to ensure competitive levels of total compensation for its executive
+officers. Stock option grants in 2006 were intended to constitute “qualified
+performance-based compensation” under Section 162(m). Our 2006 annual
+performance bonuses, however, were not “qualified performance-based
+compensation.” 
+16 
+Summary Compensation Table 
+The following summary
+compensation table indicates the cash and non-cash compensation paid to our
+Chief Executive Officer, and Chief Financial Officer, our two other most highly
+compensated executive officers and our former Chief Financial Officer
+collectively referred to as the NEOs during our fiscal year ended December 31,
+2006. The compensation described in this table does not include benefits that
+are generally available to all of our salaried employees. 
+Name and Principal Position 
+Year 
+Salary 
+($) 
+Bonus 
+($) 
+Stock 
+Awards 
+($)(1) 
+Option 
+Awards 
+($)(1) 
+Non-Equity 
+Incentive Plan 
+Compensation 
+($) 
+All Other 
+Compensation 
+($) 
+Total 
+($) 
+Ronald R. Snyder 
+Chief Executive Officer and President(2) 
+2006 
+$ 
+500,000 
+500,000 
+$ 
+344,937 
+$ 
+1,603,296 
+$ 
+1,000,000 
+$ 
+10,711 
+$ 
+3,958,944 
+John P. McCarvel 
+Chief Operating
+Officer and Executive Vice President 
+2006 
+275,000 
+220,000 
+460,333 
+132,655 
+440,000 
+— 
+1,527,988 
+Peter S. Case 
+Chief Financial
+Officer, Senior Vice President—Finance and Treasurer(3) 
+2006 
+249,000 
+82,500 
+— 
+258,034 
+230,000 
+10,116 
+829,650 
+Michael C. Margolis 
+Vice
+President—Sales & Marketing 
+2006 
+231,000 
+57,500 
+66,185 
+475,992 
+230,000 
+— 
+1,060,677 
+Caryn D.
+Ellison 
+Vice
+President—Finance(4) 
+2006 
+200,000 
+50,000 
+177,601 
+77,421 
+150,000 
+— 
+655,022 
+(1) Amounts reflect the dollar amount recognized for
+financial statement reporting purposes for the year ended December 31,
+2006, in accordance with SFAS 123R and includes amounts from awards granted in
+and prior to 2006. Assumptions used in the calculations of these amounts are
+included in Footnote 5 to our Consolidated Financial Statements for the year
+ended December 31, 2006. 
+(2) All other compensation represents $6,179
+for incremental healthcare premiums paid by the company on behalf of the
+employee and $4,521 for golf club membership fees. We cover 100% of the
+healthcare premiums for certain executives, a benefit that is not offered to
+other employees. 
+(3) Mr. Case began his employment with us
+on February 6, 2006, as such the compensation disclosed is only for the
+period from February 6, 2006 to December 31, 2006. All other
+compensation represents $6,179 for incremental healthcare premiums paid by the
+company on behalf of the employee and $3,937 for golf club membership fees. We
+cover 100% of the healthcare premiums for certain executives, a benefit that is
+not offered to other employees. 
+(4) On April 4, 2006, Ms. Ellison changed roles
+from Vice President of Finance and Chief Financial Officer to Vice President of
+Finance. 
+17 
+Grants of
+Plan-Based Awards Table 
+The table below summarizes
+the options granted during the year ended December 31, 2006 to each of the
+NEOs listed in the Summary Compensation Table. 
+Grant 
+Estimated Possible Payouts 
+Under Non-Equity 
+Incentive Plan Awards(1) 
+All Other Option 
+Awards: Number 
+of Securities 
+Underlying 
+Options 
+Exercise or 
+Base Price of 
+Option Awards 
+Grant Date Fair 
+Value of Option 
+Name 
+Date 
+Target ($) 
+Maximum ($) 
+(#) 
+($/Sh) 
+Awards(2) 
+Ronald R. Snyder 
+2/7/2006 
+$ 
+500,000 
+$ 
+1,000,000 
+467,240 
+$ 
+21.00 
+$ 
+4,784,817 
+John P. McCarvel 
+2/7/2006 
+220,000 
+440,000 
+60,043 
+21.00 
+614,876 
+Peter S. Case 
+2/7/2006 
+165,000 
+230,000 
+120,000 
+21.00 
+1,228,872 
+Michael C. Margolis 
+— 
+115,000 
+230,000 
+— 
+— 
+— 
+Caryn D. Ellison 
+2/7/2006 
+100,000 
+150,000 
+35,043 
+21.00 
+358,861 
+(1) Awards represent
+possible payments under our 2006 Bonus Plan. Payments are based on specified
+target levels of diluted earnings per share, as described in the Compensation
+Discussion and Analysis. The actual amounts earned for fiscal year 2006 are
+reported in the Summary Compensation Table as Non-Equity Incentive Plan
+Compensation. Executives must have been employed on the date the payments were
+made to have been eligible for a payment. The target payments were based on
+achieving the target level of performance with ranges from 50% to 100% of
+salary. The maximum payments were based on the plan maximum, which ranges from
+75% to 200% of salary. 
+(2) Grant
+date fair value for stock options was determined pursuant to FAS 123R.
+Assumptions used in the calculations of these amounts are included in Footnote
+5 to our Consolidated Financial Statements for the year ended December 31,
+2006. 
+Narrative to
+Summary Compensation Table and Grants of Plan-Based Awards Table 
+Employment
+Arrangements 
+We have entered into employment agreements with Mr. Case
+and Ms. Ellison as set forth below. 
+On February 2, 2005, we entered into an at-will
+employment arrangement with Mr. Case, our Chief Financial Officer, Senior
+Vice President—Finance and Treasurer, pursuant to which we paid Mr. Case a
+monthly salary of $22,917, as well as a performance based bonus target of
+$41,250 per quarter, prorated for the first quarter. Under the terms of the
+arrangement, on February 7, 2006, we granted Mr. Case options to
+purchase 120,000 shares of our common stock at $21.00 per share, which was the
+initial public offering price of our common stock and the fair market value of
+our common stock at the time of grant. 
+On October 18, 2004,
+we entered into an at-will employment arrangement with Caryn Ellison, our Vice
+President—Finance. The arrangement called for Ms. Ellison to be
+compensated at a rate of $16,000 per month and provides that we will pay
+six months severance in the event Ms. Ellison’s employment is
+terminated by us. 
+Awards 
+On February 7, 2006,
+the compensation committee granted stock option awards to several of our NEOs.
+The awards vest one-fourth after the first anniversary of the grant date with
+the remainder vesting in 36 equal and successive monthly installments after the
+applicable initial vesting date. 
+18 
+No other restricted stock
+or stock options were awarded to NEOs in the year ended December 31, 2006,
+however, we issued shares of our common stock pursuant to the vesting terms of
+restricted stock awards made prior to 2006. 
+Salary and Bonus in Proportion to Total Compensation 
+In 2006, our NEOs received
+less than 57% of their total compensation reported in the Summary Compensation
+Table in the form of base salary and cash incentive awards. As noted in “Compensation
+Discussion and Analysis” above, we believe that a substantial portion of each
+NEOs compensation should be in the form of equity awards. Our compensation
+committee believes that our current program substantially aligns our NEOs
+compensation with our peers, while also permitting our compensation committee
+to provide incentives to the NEOs to pursue performance that increases
+stockholder value. Please see “Compensation Discussion and Analysis” for a
+description of the objectives of our compensation program and overall
+compensation philosophy. 
+Outstanding
+Equity Awards at Fiscal Year-End Table 
+The
+table below summarizes the unexercised options and unvested stock awards as of December 31,
+2006 for each of the NEOs listed in the Summary Compensation Table. 
+Option Awards 
+Stock Awards 
+Name 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) Exercisable(1) 
+Number of 
+Securities 
+Underlying 
+Unexercised 
+Options 
+(#) Unexercisable 
+Option 
+Exercise 
+Price ($) 
+Option 
+Expiration 
+Date 
+Number of 
+Shares or Units 
+of Stock That 
+Have Not 
+Vested (#) 
+Market Value 
+of Shares or 
+Units of Stock 
+That Have Not 
+Vested ($) 
+Ronald R. Snyder 
+467,240 
+(2) 
+— 
+$ 
+21.00 
+2/7/2016 
+102,228 
+(4) 
+$ 
+4,416,250 
+467,240 
+(3) 
+1.02 
+8/31/2011 
+John P. McCarvel 
+60,043 
+(5) 
+— 
+21.00 
+2/7/2016 
+78,029 
+(6) 
+3,370,810 
+Peter S. Case 
+120,000 
+(7) 
+— 
+21.00 
+2/7/2016 
+— 
+— 
+Michael C. Margolis 
+151,685 
+(8) 
+— 
+5.69 
+7/31/2015 
+— 
+— 
+Caryn D. Ellison 
+35,043 
+(9) 
+— 
+21.00 
+2/7/2016 
+116,810 
+(10) 
+5,046,192 
+(1) Options awarded from inception through September 20, 2006 under
+the Plan are exercisable immediately on the date grant with the exception of
+233,624 shares granted to members of the board of directors. In order to
+preserve the vesting provisions of the options, the shares of our common stock
+underlying options that are exercised early are subject to a repurchase right
+by us at the lower of exercise price or fair market value of the underlying
+stock at the date of repurchase. 
+(2) None of the shares of our common stock underlying options from this
+grant were vested at December 31, 2006. 116,811 shares of our common stock
+underlying the options vested on January 1, 2007 and the remainder of the
+shares will vest and will no longer be subject to repurchase in equal monthly
+installments over the 36 months beginning February 1, 2007. 
+(3) 262,823 of the shares of our common stock underlying options from
+this grant were vested at December 31, 2006. The remainder of the shares
+of our common stock underlying the options will vest and will no longer be
+subject to repurchase in equal monthly installments over the 21 months,
+beginning January 1, 2007. 
+(4) The shares from this grant vest and will be issued in equal monthly
+installments over the 21 months, beginning January 1, 2007. 
+19 
+(5) None of the shares of our common stock
+underlying options from this grant were vested at December 31, 2006.
+15,012 shares of our common stock underlying the options vested on January 1,
+2007 and the remainder of the shares will vest and will no longer be subject to
+repurchase in equal monthly installments over the 36 months beginning February 1,
+2007. 
+(6) The shares from this grant will vest and will be issued on July 1,
+2007. 
+(7) None of the shares of our common stock underlying options from this
+grant were vested at December 31, 2006. 30,000 shares of our common stock
+underlying the options vested on February 1, 2007 and the remainder of the
+shares will vest and will no longer be subject to repurchase in equal monthly
+installments over the 36 months beginning March 1, 2007. 
+(8) 5,835 of the shares of our common stock underlying options from this
+grant were vested at December 31, 2006. The remainder of the shares of our
+common stock underlying options will vest and will no longer be subject to
+repurchase in equal monthly installments over the 24 months beginning January 1,
+2007. 
+(9) None of the shares of our common stock underlying options from this
+grant were vested at December 31, 2006. On January 1, 2007, 8,762
+shares of our common stock underlying options vested and the remainder of the
+shares will vest and will no longer be subject to repurchase in equal monthly
+installments over the 36 months beginning February 1, 2007. 
+(10) The shares from this grant will vest and will
+be issued on October 1, 2007. 
+Option Exercises
+and Stock Vested Table 
+The
+table below summarizes the options exercised and stock awards vested during the
+year ended December 31, 2006 for each of the named executive officers
+listed in the Summary Compensation Table. 
+Option Awards 
+Stock Awards 
+Name 
+Number of Shares 
+Acquired on 
+Exercise (#) 
+Value Realized on 
+Exercise ($) 
+Number of Shares 
+Acquired on 
+Vesting (#) 
+Value Realized on 
+Vesting ($) 
+Ronald R. Snyder 
+— 
+$ 
+— 
+58,416 
+$ 
+1,671,915 
+John P. McCarvel 
+— 
+— 
+77,796 
+1,956,569 
+Peter S. Case 
+— 
+— 
+— 
+— 
+Michael C.
+Margolis 
+128,660 
+4,762,130 
+78,029 
+1,962,429 
+Caryn D. Ellison 
+— 
+— 
+116,810 
+3,965,700 
+20 
+Potential Payments
+on Terminations or Change-In-Control 
+Our
+NEOs do not have employment contracts or any special guaranteed payments due on
+retirement, with the exception of Ms. Ellison. However, based on the terms
+of our stock option and restricted stock awards, all awards have an
+acceleration clause that provides that all unvested outstanding equity grants
+will immediately vest in the event of a change-in-control. The following table
+summaries potential payments on termination or change-in-control at December 31,
+2006. 
+Termination for Cause 
+Change-In-Control 
+Name 
+Stock Options 
+Unvested 
+and Accelerated 
+Severance(1) 
+Stock Options 
+and Awards 
+Unvested and 
+Accelerated ($)(2) 
+Severance 
+Ronald R. Snyder 
+— 
+— 
+23,410,466 
+— 
+John P. McCarvel 
+— 
+— 
+4,703,764 
+— 
+Peter S. Case 
+— 
+— 
+2,664,000 
+— 
+Michael C.
+Margolis 
+— 
+— 
+5,470,834 
+— 
+Caryn D. Ellison 
+— 
+$ 
+100,000 
+5,824,147 
+— 
+(1) Based on our employment
+arrangement with Ms. Ellison, we will pay six months severance in the
+event Ms. Ellison’s employment is terminated by us. 
+(2) All
+of our stock options and restricted stock becomes vested on a change in control
+pursuant to individual option or restricted stock award agreements. The
+calculation of the amount disclosed is based on the number of unvested shares
+at December 31, 2006 multiplied by the closing price of our common stock
+on the NASDAQ Global Select Market on December 29, 2006 less the exercise
+price for stock options. 
+COMPENSATION
+COMMITTEE REPORT 
+The compensation committee
+has reviewed the foregoing Compensation Discussion and Analysis required by
+Item 402(b) of Regulation S-K and discussed the Compensation
+Discussion and Analysis with the Company’s management. Based on such review and
+discussions with management, the compensation committee recommended to the
+board that the foregoing Compensation Discussion and Analysis be included in
+this proxy statement. 
+THE COMPENSATION COMMITTEE 
+Michael E. Marks, Chairman 
+Raymond D. Croghan 
+CERTAIN
+RELATIONSHIPS AND RELATED TRANSACTIONS 
+Related Transactions 
+On January 1, 2005,
+we entered into a separation and release agreement with George B.
+Boedecker, Jr., relating to his resignation as our Chief Executive Officer.
+In exchange for certain releases granted by Mr. Boedecker, we agreed to
+pay him a severance amount of $600,000, less all legally required deductions
+and withholdings, in 16 equal quarterly installments at the beginning of each
+calendar quarter for a four year period. The agreement provides that
+Mr. Boedecker is entitled to participate in our standard medical benefits
+package until December 31, 2009, and that Mr. Boedecker is entitled
+to a reimbursement of business expenses he incurred before January 1, 2005.
+In accordance with the terms of the agreement, Mr. Boedecker remained on
+our board of directors, but there is no agreement requiring us to nominate him
+to the board in any future period. Mr. Boedecker resigned from our board
+of directors in May 2006. 
+21 
+Under the terms of the separation and release
+agreement, on April 1, 2005, we entered into a distribution agreement with
+Crocodile Distribution, LLC, an entity controlled by Mr. Boedecker, which
+granted Crocodile Distribution the exclusive rights to distribute our products
+in Mexico, the Dominican Republic, Costa Rica and, to the extent it complies
+with United States law in the future, Cuba. The initial term of the agreement
+is 10 years from July 1, 2005 and it is renewable on a non-exclusive
+basis for an additional five year term. The exclusivity portion of the
+agreement may be terminated by us if Crocodile Distribution fails to purchase
+certain minimum amounts of our products. Crocodile Distribution will receive a
+discount from our standard wholesale list price for the purchase of our
+products. In addition, on July 1, 2005, we entered into a kiosk agreement
+with Crocodile Kiosk, LLC, an entity controlled by Mr. Boedecker, which
+granted Crocodile Kiosk exclusive rights to license or sell certain crocs-related
+franchises to third parties. The license or franchise rights will give the
+licensee or franchisee the right to establish retail kiosks in airport
+locations. The term of the license agreement is 10 years but the
+termination of the kiosk agreement will not have an effect on a licensee’s or
+franchisee’s right to operate the kiosk for a term of up to 15 years. If
+Crocodile Kiosk fails to license or franchise a minimum number of kiosks during
+the term, the agreement will become non-exclusive. In 2006, we recognized $2.3
+million of revenue related to these agreements. 
+In May 2005, we
+subleased an office building from Flextronics USA, Inc. Two of our
+directors, Messrs. Marks and Sharp, also serve as directors of Flextronics
+and Mr. Smach serves as its Chief Financial Officer. We paid Flextronics
+$215,000 and $91,000 for lease payments and common area maintenance charges for
+the years ended December 31, 2006 and 2005, respectively. This lease
+expired on March 31, 2007. We paid $40,000 in lease payments in 2007. 
+Policy on
+Transactions with Related Persons 
+Our audit committee has adopted a written policy which
+requires that any transaction involving us in which one of our directors,
+nominees for director, executive officers, or greater than five percent
+stockholders, or their immediate family members, have a material interest be
+approved or ratified by the audit committee if the amount involved exceeds
+$100,000. The full board of directors reviews ordinary course of business
+transactions in which directors have an interest as part of the board’s annual
+director independence review. In determining whether to approve or ratify any
+such transaction, the audit committee must consider, in addition to other
+factors it deems appropriate, whether the transaction is on terms no less
+favorable to us than those involving unrelated parties. 
+All transactions disclosed
+above were reviewed and approved or ratified in accordance with
+this policy. 
+Director and
+Officer Indemnification 
+We have entered into
+agreements to indemnify our directors and executive officers, in addition to
+the indemnification provided for in our certificate of incorporation and
+bylaws. These agreements, among other things, provide for indemnification of
+our directors and executive officers for certain expenses (including attorneys’
+fees), judgments, fines and settlement amounts incurred by any such person in
+any action or proceeding, including any action by or in the right of our
+company, arising out of such person’s services as a director or executive
+officer of ours, any subsidiary of ours or any other company or enterprise to
+which the person provided services at our request. We believe that these
+provisions and agreements are necessary to attract and retain qualified persons
+as directors and executive officers. 
+SECTION 16(a) BENEFICIAL
+OWNERSHIP REPORTING COMPLIANCE 
+Section 16(a) of
+the Securities Exchange Act of 1934 requires our executive officers, directors
+and beneficial owners of more than 10% of our common stock to file initial
+reports of ownership and reports of 
+22 
+changes
+in ownership of our securities with the Securities and Exchange Commission.
+Those persons are required to furnish us with copies of these reports. Based
+solely on copies of reports we have received and representations from our
+executive officers and directors, we believe that all Section 16(a) filing
+requirements applicable to our executive officers, directors and beneficial
+owners of more than 10% of our common stock were timely made in 2006, except
+for one late Form 4 filed by John P. McCarvel reporting a sale
+transaction. 
+REPORT OF THE AUDIT
+COMMITTEE 
+The audit committee has reviewed and discussed the
+audited financial statements for the fiscal year ended December 31, 2006
+with the company’s management and Deloitte & Touche LLP, the company’s
+independent registered public accounting firm. Management is primarily
+responsible for the preparation, presentation and integrity of the financial
+statements, accounting and financial reporting principles and internal control
+over financial reporting. Deloitte & Touche LLP is responsible for
+performing an independent audit of the financial statements in accordance with
+generally accepted auditing standards and for expressing opinions on the
+conformity of the financial statements with accounting principles generally
+accepted in the United States. 
+The audit committee has discussed with Deloitte &
+Touche LLP the matters required to be discussed by Statement on Auditing
+Standards No. 61, Communication with
+Audit Committees, as amended, and has received the written
+disclosures and the letter from Deloitte & Touche LLP required by
+Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees. The audit
+committee has also discussed with Deloitte & Touche LLP its
+independence. 
+Based on its reviews and
+discussions referred to above, the audit committee has recommended to the board
+of directors that the audited financial statements be included in the company’s
+Annual Report on Form 10-K for the year ended December 31,
+2006, for filing with the Securities and Exchange Commission. 
+The Audit Committee: 
+Thomas J. Smach (Chairman) 
+Raymond D. Croghan 
+Ronald L. Frasch 
+Securities
+Authorized for Issuance under Equity Compensation Plans 
+As
+shown in the table below, as of December 31, 2006, we reserved 4,542,718
+shares of common stock for future issuance on exercise of outstanding options
+under equity compensation plans. 
+Number of 
+Securities 
+to be Issued 
+on Exercise of 
+Outstanding Options 
+Weighted Average 
+Exercise Price of 
+Outstanding 
+Options 
+Number of Shares 
+Remaining Available 
+for Issuance Under 
+Equity Compensation 
+Plans, Excluding 
+Securities Available 
+in First Column 
+Equity
+compensation plans approved by stockholders(1) 
+3,577,902 
+$ 
+19.88 
+1,352,873 
+(3) 
+Equity
+compensation plans not approved by stockholders(2) 
+964,816 
+1.16 
+— 
+Total 
+4,542,718 
+15.91 
+1,352,873 
+(1) On April 27, 2005,
+our board of directors adopted the 2005 Equity Incentive Plan, referred to as
+the 2005 Plan. On January 10, 2006, our board of directors amended the
+2005 Plan to increase the number 
+23 
+of shares of our common
+stock available for issuance under the 2005 Plan from 5,840,500 shares to
+7,008,600 shares. The 2005 Plan provides for the grant of incentive stock
+options, within the meaning of Section 422 of the Internal Revenue Code of
+1986, as amended, to our employees, and nonstatutory stock options, restricted
+stock, performance units, and other stock based awards to our employees,
+directors, and consultants. 
+(2) Represents non-plan
+stock options granted to our officers, directors and employees prior to the
+adoption of the 2005 Equity Incentive Plan. 
+(3) Includes
+441,098 shares of common stock reserved for issuance under our 2005 Plan to
+employees and consultants in the future under restricted stock award
+agreements. 
+PROPOSAL 2—APPROVAL
+OF THE CROCS, INC. 2008 CASH INCENTIVE PLAN 
+The Crocs, Inc. 2008 Cash Incentive Plan is
+designed to: 
+· advance
+our interests by promoting our pay for performance philosophy; 
+· attract
+and retain key employees; and 
+· stimulate the efforts of
+such employees toward the continued success and growth of our business. 
+Introduction 
+On May 2, 2007, our board of directors approved
+the Crocs, Inc. 2008 Cash Incentive Plan (the “2008 Incentive Plan”). At
+that time, our board of directors directed that the 2008 Incentive Plan be
+submitted to our stockholders for approval at the Annual Meeting. If the
+stockholders approve the 2008 Incentive Plan, it will be effective as of January 1,
+2008. A copy of the 2008 Incentive Plan is
+attached to this proxy statement as Appendix A, and this discussion is
+qualified in its entirety by reference to the full text of the 2008 Incentive Plan. 
+Our stockholders are being asked to approve the
+adoption of the 2008 Incentive Plan in order to preserve our federal income tax
+deduction for incentive compensation paid to our executive officers based on
+the attainment of established performance goals. We generally seek to preserve
+our ability to claim tax deductions for compensation paid to executives to the
+greatest extent practicable. 
+Section 162(m) of
+the Internal Revenue Code generally does not allow a publicly held company to
+obtain a tax deduction for compensation of more than $1,000,000 paid in any
+fiscal year to certain “covered employees” unless such compensation is
+considered “performance-based” in accordance with Section 162(m) and
+its implementing regulations published by the Treasury Department. Each of our
+executive officers is currently a “covered employee”. Cash bonuses and
+incentive payments will qualify as performance-based compensation if: 
+· they
+are payable solely on account of the attainment of one or more objective
+performance goals; 
+· the
+performance goals are determined by a compensation committee comprised solely
+of outside directors at a time when the achievement of the goals is still
+substantially uncertain; 
+· the
+material terms under which the bonuses are to be paid, including the nature of
+the performance goals, are approved by the stockholders; and 
+· the
+compensation committee certifies that the performance goals and other material
+terms have been satisfied before the bonuses are paid. 
+Our board of directors
+maintains a compensation committee comprised solely of outside directors with a
+view toward satisfying the requirements of Section 162(m), and we have
+structured the 2008 Incentive Plan in a manner intended to comply with the
+requirements of Section 162(m). The 2008 
+24 
+Incentive
+Plan is now being submitted to our stockholders for their approval so that we
+will be able to qualify compensation paid to our executive officers under the
+2008 Incentive Plan as performance-based compensation and deduct the entire
+amount of such compensation paid. 
+Description of the
+2008 Incentive Plan 
+The significant features
+of the 2008 Incentive Plan are described below. 
+Administration 
+Our compensation
+committee, all of whose members are outside directors, will administer the 2008
+Incentive Plan. The compensation committee will have the authority to grant
+awards upon such terms, not inconsistent with the terms of the 2008 Incentive
+Plan, as it considers appropriate. In addition, the compensation committee will
+have complete authority to interpret all provisions of the 2008 Incentive Plan,
+to adopt, amend, and rescind rules and regulations pertaining to the
+administration of the 2008 Incentive Plan, and to make all other determinations
+necessary or advisable for the administration of the 2008 Incentive Plan, and
+to reduce or eliminate, in its discretion, the amount of any award otherwise
+payable under the 2008 Incentive Plan. 
+Eligibility 
+All of our employees, who
+currently number approximately 3,400, will be eligible to participate under the
+2008 Incentive Plan. Our compensation committee determines which employees will
+be participants under the 2008 Incentive Plan. However, the criteria for
+participation may change in subsequent years. Other annual or short-term bonus
+arrangements will be made available to employees who are not considered “covered
+employees” for purposes of Section 162(m). 
+Performance Measures 
+Participants will receive awards under the 2008
+Incentive Plan whose payout will be contingent upon the degree of attainment of
+specified performance measures over the applicable performance period. The
+performance measures are set by our compensation committee at the start of each
+performance period and are based on one or a combination of two or more of the
+following performance criteria: net sales; net earnings; earnings before income
+taxes; earnings before interest and taxes; earnings before interest, taxes,
+depreciation and amortization; earnings per share (basic or diluted);
+profitability as measured by return ratios (including return on assets, return
+on equity, return on investment and return on net sales) or by the degree to
+which any of the foregoing earnings measures exceed a percentage of net sales;
+cash flow; market share; margins (including one or more of gross, operating and
+net earnings margins); stock price; total stockholder return; asset quality;
+non-performing assets; revenue growth; operating income; pre- or after-tax
+income; cash flow per share; operating assets; improvement in or attainment of
+expense levels or cost savings; economic value added; and improvement in or
+attainment of working capital levels. 
+Any performance measure
+utilized may be expressed in absolute amounts, on a per share basis, as a
+change from preceding performance periods, as a percentage of another criteria,
+or as a comparison to the performance of specified companies or other external
+measures, and may relate to corporate, group, unit, division, affiliate or
+individual performance. 
+Performance Periods 
+A performance period is
+the measure of time specified by our compensation committee over which the
+degree of attainment of the specified performance measures will be measured. 
+25 
+Payment of Awards 
+All awards under the 2008
+Incentive Plan for a performance period will be paid in cash following the end
+of such performance period and our compensation committee’s certification of
+the degree to which applicable performance measures were attained. The maximum
+individual award payment that can be made under the 2008 Incentive Plan may not
+exceed $2 million for a quarterly performance period or the corresponding
+multiple of that amount for any performance period that is more than one
+quarter in duration. 
+Termination of
+Employment 
+Except as otherwise
+provided below, no award for a performance period will be paid to a participant
+who is not actively employed by us at the end of the performance period. If a
+participant’s employment ends during a performance period, our compensation
+committee has the discretion to approve payment to the participant, or his or
+her beneficiaries, of a pro rata portion of the award payment the participant
+would have received but for the fact that the participant’s employment ended. 
+Amendment and
+Termination 
+Our compensation committee
+or board of directors may amend, suspend or terminate the 2008 Incentive Plan
+from time to time. An amendment will be subject to the approval of our
+stockholders only if such approval is necessary to maintain the 2008 Incentive
+Plan in compliance with Section 162(m) or other applicable laws and
+regulations. 
+Federal Income Tax
+Consequences 
+All cash award payments
+made under the 2008 Incentive Plan are taxable to the participant when made.
+The 2008 Incentive Plan has been designed to comply with Section 162(m) such
+that all award payments under the 2008 Incentive Plan will qualify as
+performance-based compensation and, therefore, we will be entitled to claim a
+federal income tax deduction for the full amount of any cash award paid under
+the 2008 Incentive Plan. 
+New Plan Benefits 
+The specific individuals who will be granted awards
+under the 2008 Incentive Plan and the type and amount of any such awards will
+be determined by the compensation committee, subject to limits on the maximum
+amounts that may be awarded to any individual, as described above. Accordingly,
+future awards to be received by or allocated to particular individuals under
+the 2008 Incentive Plan are not presently determinable. 
+The approval of the 2008
+Incentive Plan requires the affirmative vote of the majority of shares present
+in person or represented by proxy at the meeting and entitled to vote on the
+proposal. 
+THE BOARD OF
+DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 2. 
+PROPOSAL 3—APPROVAL
+OF THE CROCS, INC. 2007 INCENTIVE PLAN 
+The Crocs, Inc.
+2007 Incentive Plan (“2007 Incentive Plan”), is designed to: 
+· encourage
+teamwork and individual performance by providing annual incentive compensation
+based on our diluted earnings per share; 
+· advance
+our interests by attracting and retaining key executives; and 
+26 
+· reward
+contributions made by the our Chief Executive Officer and other executive
+officers in optimizing long-term value to our stockholders by connecting a
+portion of each such executive’s total potential cash compensation to the
+attainment of objective our financial goals. 
+Effective March 30, 2007, our compensation
+committee approved the 2007 Incentive Plan. At that time, our compensation
+committee directed that the 2007 Incentive Plan be submitted to our
+stockholders for approval at the Annual Meeting. If the stockholders approve
+the 2007 Incentive Plan, it will be effective as of March 30, 2007. 
+Our stockholders are being asked to approve the
+adoption of the 2007 Incentive Plan in order to preserve our federal income tax
+deduction for incentive compensation paid to our executive officers based on
+the attainment of established performance goals. We generally seek to preserve
+our ability to claim tax deductions for compensation paid to executives to the
+greatest extent practicable. 
+As described in Proposal 2, Section 162(m) of
+the Internal Revenue Code generally does not allow a publicly held company to
+obtain a tax deduction for compensation of more than $1,000,000 paid in any
+fiscal year to certain “covered employees” unless such compensation is
+considered “performance-based” in accordance with Section 162(m) and
+its implementing regulations. 
+Our board of directors
+maintains a compensation committee comprised solely of outside directors with a
+view toward satisfying the requirements of Section 162(m), and have set
+the awards under the 2007 Incentive Plan in a manner intended to comply with
+the requirements of Section 162(m). The 2007 Incentive Plan is now being
+submitted to our stockholders for their approval so that we will be able to
+qualify compensation paid to our executive officers under the 2007 Incentive
+Plan as performance-based compensation and deduct the entire amount of such
+compensation paid. The payment of the awards to our executive officers
+described below are contingent upon receipt of stockholder approval for the
+2007 Incentive Plan. 
+Description of the
+2007 Incentive Plan 
+Our four current executive officers, including our
+Chief Executive Officer, are eligible to receive cash bonus payments under the
+2007 Incentive Plan. No other employees are eligible to participate in the 2007
+Incentive Plan. The bonus levels under the 2007 Incentive Plan expressed as a
+percentage of 2007 base salary range from 25% to 800% based on achieving
+earnings per share growth of 10% to 175% in the year ending December 31,
+2007 over our earnings per share for the year ended December 31, 2006. If
+we do not reach the minimum earnings per share target, the executive officers
+will not be eligible for bonuses under the plan. 
+Our board of directors is
+considering adopting a new deferred compensation plan, pursuant to
+which a group of participating employees selected by the compensation
+committee may elect to defer certain compensation otherwise due them. The
+initial group of selected participating employees is expected to include the
+persons eligible to participate in the 2007 Incentive Plan. We currently
+anticipate that the board of directors will take action on the proposed
+deferred compensation plan in June 2007. If we adopt the proposed deferred
+compensation plan, any bonus amount exceeding a set portion of the executive
+officer’s 2007 base salary will be treated as deferred compensation and each
+executive officer will vest in such amount over a three year period.
+Participants in the deferred compensation plan may also be allowed to defer
+other bonus and salary amounts. The proposed deferred compensation plan will be
+administered by the compensation committee. Under the terms of
+the proposed deferred compensation plan, we will maintain a
+recordkeeping account in the name of each participant in the proposed plan
+for deferrals made by a participant pursuant to a deferral election
+and will deposit all deferred amounts in a trust administered by a
+third party financial institution. Amounts deferred under the proposed deferred
+compensation plan will be paid to the plan participants after their employment
+with us ends, in accordance with a schedule or upon certain other events, in
+accordance with their payout elections as permitted under the proposed plan. At
+all times, participants in 
+27 
+the proposed
+deferred compensation plan will be our unsecured creditors and the assets
+of the trust will be available to our creditors in the event of our
+insolvency or bankruptcy. 
+Amounts credited to a participant’s deferral
+account will be deemed to be invested, at the participant’s direction, in
+an array of hypothetical investments selected from a list established by
+the compensation committee. The hypothetical investments will be
+used for measurement purposes only and will not represent an actual
+investment of a participant’s deferral account. The taxable income and losses
+of the trust established for the deferred compensation plan will
+be included in the computation of our taxable income. Our tax
+deductions for any compensation deferred under the proposed deferred
+compensation plan will be delayed until the funds held in the trust are distributed
+to the participants. We are not seeking stockholder approval for the proposed
+deferred compensation plan. 
+Set forth below are the maximum
+incentive awards that were determined by the compensation committee for our
+Chief Executive Officer and the other executive officers in 2007 if we meet all
+established target performance levels. 
+New
+Plan Benefits 
+2007 Incentive Plan 
+Name and Position 
+Maximum 
+Ronald R. Snyder,
+Chief Executive Officer and President 
+$ 
+6,400,000 
+John P. McCarvel, Chief Operating Officer 
+$ 
+2,560,000 
+Peter S. Case, Chief Financial Officer, Senior Vice
+President—Finance and Treasurer 
+$ 
+1,440,000 
+Michael Margolis, Vice President—Sales &
+Marketing 
+$ 
+1,200,000 
+Executive
+officers as a group 
+$ 
+11,600,000 
+The approval of the 2007
+Incentive Plan requires the affirmative vote of the majority of shares present
+in person or represented by proxy at the meeting and entitled to vote on the
+proposal. 
+THE BOARD OF
+DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 3. 
+PROPOSAL 4—APPROVAL
+OF THE CROCS 2007 EQUITY INCENTIVE PLAN 
+Introduction 
+On May 2, 2007, our board of directors, upon
+recommendation of the compensation committee of the board, approved the Crocs, Inc.
+2007 Equity Incentive Plan (the “2007 Plan”). At that time, our board of directors
+directed that the 2007 Plan be submitted to our stockholders for approval at
+the Annual Meeting. 
+The 2007 Plan is
+similar to our prior 2005 Plan, although it contains certain new or revised
+terms, including: 
+· No
+more than 1,500,000 of shares of our common stock reserved for issuance under
+the 2007 Plan may be issued in the form of “full value” share awards, which are
+awards other than stock options and stock appreciation rights. 
+· Repricing
+of stock options and stock appreciation rights is prohibited without
+stockholder approval. 
+· Awards
+that are not subject to the satisfaction of performance measures, such as
+restricted stock awards and stock options, must have a minimum vesting period
+of three years, except in limited circumstances. 
+28 
+· Awards
+that are subject to the satisfaction of performance measures, such as
+performance units, must have a performance period of at least one year. 
+· Awards
+will generally terminate immediately if a participant’s employment is
+terminated for cause. 
+· Shares
+tendered to us or retained by us in settlement of an award may not become
+available again for issuance under the 2007 Plan because we have prohibited
+liberal share counting provisions. 
+Consistent with our prior equity compensation plans,
+the 2007 Plan continues to provide the following terms: 
+· All
+stock options must be issued at fair market value; as a result, the 2007 Plan
+prohibits discounted awards. 
+· Our
+compensation committee, consisting of independent directors, administers the
+2007 Plan. 
+In addition, because the
+vesting and payout of awards under the 2007 Plan may be conditioned upon the
+satisfaction of performance measures specified in the 2007 Plan, such awards
+are intended to meet the requirements of Section 162(m) of the
+Internal Revenue Code (“Section 162(m)”) regarding the deductibility of
+executive compensation that is “performance-based.” We are therefore seeking
+approval from stockholders of the performance measures set forth in the 2007
+Plan. 
+Summary of the 2007 Plan 
+The 2007 Plan will be
+effective when approved by our stockholders at the Annual Meeting. A copy of
+the 2007 Plan is attached to this proxy statement as Appendix B, and this
+discussion is qualified in its entirety by reference to the full text of the
+2007 Plan. 
+Purpose of the 2007 Plan 
+The purpose of the 2007
+Plan is to promote our interests by aligning the interests of participants in
+the 2007 Plan with those of our stockholders; to provide participants with
+incentive to put forth maximum efforts for our continued growth and success;
+and to assist us in attracting, motivating and retaining the best available
+individuals. 
+Administration 
+The 2007 Plan will be
+administered by our compensation committee. The compensation committee has the
+authority to establish, amend and waive rules relating to the 2007 Plan
+and to determine the identity of participants, the timing and amount of any
+awards and other terms and conditions of awards. The compensation committee may
+delegate its responsibilities under the 2007 Plan to members of our management
+or to others with respect to the selection and grants of awards to employees
+who are not deemed to be officers, directors or 10% stockholders under
+applicable federal securities laws. 
+The regulations under Section 162(m) require
+that the directors who serve as members of the compensation committee must be “outside
+directors.” The 2007 Plan provides that directors serving on the compensation
+committee are to be “outside directors” within the meaning of Section 162(m).
+This limitation would exclude from the compensation committee directors who are
+(i) our current employees or an affiliate, (ii) our former employees
+or an affiliate receiving compensation for past services, other than benefits
+under a tax-qualified retirement plan, (iii) our current and former
+officers or an affiliate, (iv) our directors currently receiving direct or
+indirect remuneration or an affiliate in any capacity, other than as a
+director, and (v) any other person who is not otherwise considered an “outside
+director” for purposes of Section 162(m). The definition of an “outside
+director” under Section 162(m) is generally narrower than the
+definition of a “non-employee director” under Rule 16b-3 of the
+Securities Exchange Act of 1934. 
+29 
+Eligibility 
+All of our employees and
+those of our affiliates are eligible to receive awards under the 2007 Plan. We
+currently have approximately 3,400 employees. Awards other than incentive stock
+options (see “Types of Awards” below) also may be awarded by the compensation
+committee to individuals who are not employees but who provide services to us
+or our affiliates in the capacity of a non-employee director or an independent
+contractor. 
+Number of Shares Available
+for Issuance under 2007 Plan 
+The total number of shares of our common stock
+available for distribution under the 2007 Plan is 4,500,000, subject to
+adjustment for future stock splits, stock dividends and similar changes in the
+our capitalization. This number of shares has not been, but will be, adjusted
+to give effect to our previously announced two-for-one stock split in the form
+of a stock dividend, which will be distributed on June 14, 2007 to holders
+of record on May 31, 2007. Any shares of our common stock subject to an
+award under the 2007 Plan that is forfeited or expires or terminates
+unexercised or unearned, that is settled in cash or other property, or
+otherwise does not result in the issuance of shares of common stock, may again
+be used for an award under the 2007 Plan; provided that the gross number of
+shares with respect to which a stock appreciation right has been exercised may
+not again be awarded under the 2007 Plan if such exercise is settled in shares. 
+The maximum number of
+shares that may be the subject of awards other than options and stock
+appreciation rights is 1,500,000, while the maximum number of shares that may
+be issued pursuant to incentive stock options is 4,500,000. The aggregate
+number of shares subject to options and/or stock appreciation rights granted
+during any calendar year to any one participant shall not exceed 500,000. The
+aggregate number of shares subject to restricted stock and/or restricted stock
+unit awards granted during any calendar year to any one participant shall not
+exceed 500,000. These share numbers have not been, but will be, adjusted to
+give effect to our previously announced two-for-one stock split in the form of
+a stock dividend, which will be distributed on June 14, 2007 to holders of
+record on May 31, 2007. The closing sale price of a share of our common
+stock on the NASDAQ Global Select Market on May 31, 2007 was $81.45 per share. 
+Types of Awards 
+The types of awards that may be granted under the 2007
+Plan include incentive and non-qualified stock options, stock appreciation
+rights, restricted stock, restricted stock units, performance units, and other
+stock-based awards. Subject to certain restrictions applicable to incentive
+stock options, awards will be exercisable by the recipients at such times as
+are determined by the compensation committee, but in no event may the term of
+an award be longer than ten years after the date of grant. 
+In addition to the general characteristics of all of
+the awards described in this proxy statement, the basic characteristics of
+awards that may be granted under the 2007 Plan are as follows: 
+Incentive
+and Non-Qualified Stock Options. Both incentive
+and non-qualified stock options may be granted to recipients at such exercise
+prices as the compensation committee may determine but not less than 100% of
+the fair market value (as defined in the 2007 Plan) of a share of our common
+stock as of the date the option is granted. We determine fair market value of
+our common stock based on the closing price of our common stock on the NASDAQ
+Global Select Market on the date of grant; however, if no sale of our stock
+occurred on that date, we will use the closing price on the next preceding date
+on which a sale of our stock occurred. Stock options may be granted and
+exercised at such times as the compensation committee may determine, except
+that, unless applicable federal tax laws are modified, the aggregate fair
+market value of the shares our common stock with respect to which incentive
+stock options may first become exercisable in any calendar year for any
+employee may not exceed $100,000 under the 2007 Plan 
+30 
+and any other plan we have
+in effect. Additional restrictions apply to an incentive stock option granted
+to an individual who beneficially owns more than 10% of the combined voting
+power of all classes of our stock. 
+The purchase price payable upon exercise of options
+may be paid in cash, or, if the compensation committee permits, by reducing the
+number of shares delivered to the participant or by delivering stock already
+owned by the participant (where the fair market value of the shares withheld or
+delivered on the date of exercise is equal to the option price of the stock
+being purchased), or in a combination of cash and such stock, unless otherwise
+provided in the related agreement. The participants may also simultaneously
+exercise options and sell the stock purchased upon such exercise pursuant to
+brokerage or similar relationships and use the sale proceeds to pay the
+purchase price. 
+Stock
+Appreciation Rights. The value of a stock
+appreciation right granted to a recipient is determined by the appreciation in
+our common stock, subject to any limitations upon the amount or percentage of
+total appreciation that the compensation committee may determine at the time
+the right is granted. The recipient receives all or a portion of the amount by
+which the fair market value of a specified number of shares, as of the date the
+stock appreciation right is exercised, exceeds a base price specified by the
+compensation committee at the time the right is granted. The base price
+specified by the compensation committee must be at least 100% of the fair
+market value (determined as described above) of the specified number of shares
+of our common stock to which the right relates determined as of the date the
+stock appreciation right is granted. A stock appreciation right may be granted
+in connection with a previously or contemporaneously granted option, or
+independent of any option. 
+Performance
+Units. Performance units entitle the recipient
+to payment in amounts determined by the compensation committee based upon the
+achievement of specified performance measures during a specified term. With
+respect to recipients who are “covered employees” under Section 162(m) of
+the Code, the performance measures are set by our compensation committee at the
+start of each performance period and are based on one or a combination of two
+or more of the following performance criteria: net sales; net earnings;
+earnings before income taxes; earnings before interest and taxes; earnings
+before interest, taxes, depreciation and amortization; earnings per share
+(basic or diluted); profitability as measured by return ratios (including
+return on assets, return on equity, return on investment and return on net
+sales) or by the degree to which any of the foregoing earnings measures exceed
+a percentage of net sales; cash flow; market share; margins (including one or
+more of gross, operating and net earnings margins); stock price; total
+stockholder return; asset quality; non-performing assets; revenue growth;
+operating income; pre- or after-tax income; cash flow per share; operating
+assets; improvement in or attainment of expense levels or cost savings;
+economic value added; and improvement in or attainment of working capital
+levels. 
+Any performance measure utilized may be expressed in
+absolute amounts, on a per share basis, as a change from preceding performance
+periods, as a percentage of another criteria, or as a comparison to the performance
+of specified companies or other external measures, and may relate to corporate,
+group, unit, division, affiliate or individual performance. No participant may receive awards of performance
+units relating to more than 500,000 shares in any year under the 2007 Plan. 
+Payments with respect to stock appreciation rights and
+performance units may be paid, as determined by the compensation committee, in
+cash, shares of our common stock, or a combination of cash and shares. 
+Restricted
+Stock, Restricted Stock Units and Other Stock-Based Awards. Our
+common stock granted to recipients may contain such restrictions as the
+compensation committee may determine, including provisions requiring forfeiture
+and imposing restrictions upon stock transfer. Awards of restricted stock may,
+in the discretion of the compensation committee, provide the participant with
+dividends and voting rights prior to vesting. Restricted stock unit awards
+entitle the recipient to receive a number of shares of our common stock equal
+to the number of units awarded (or the fair market value of such shares in
+cash) following the lapse of any forfeiture conditions and the satisfaction of
+any performance measures that may 
+31 
+be imposed by the
+compensation committee. The compensation committee may also from time to time
+grant awards of unrestricted stock or other stock-based awards such as awards
+denominated in stock units, securities convertible into stock, and phantom
+securities. 
+No Grants of Reload
+Options. The 2007 Plan prohibits the issuance of
+“reload” options, which involve the automatic grant of a new option when the
+payment of the exercise price of the original option, or the payment of tax
+withholdings, is made through the delivery to us of shares held by such optionee. 
+Acceleration of
+Awards, Lapse of Restrictions 
+Consistent with the terms
+of the 2007 Plan, the compensation committee may accelerate vesting
+requirements, performance periods, and the expiration of the applicable term or
+restrictions, and adjust performance targets and payments, upon such terms and
+conditions as are set forth in the participant’s award agreement, or otherwise
+in the compensation committee’s discretion, which may include, without
+limitation, acceleration resulting from a “change of control” or a “fundamental
+change” (as those terms are defined in the 2007 Plan), or the participant’s
+death, disability, or retirement. 
+Duration,
+Adjustments, Modifications, Terminations 
+The 2007 Plan provides
+that all awards are subject to agreements containing the terms and conditions
+of the awards. Such agreements will be entered into by the recipients of the
+awards and us on or after the time the awards are granted and are subject to
+amendment, including unilateral amendment by the compensation committee, unless
+any such amendment is determined by the compensation committee to be materially
+adverse to the participant and not required as a matter of law. No amendment
+shall reduce the exercise price of, or “reprice,” any outstanding award,
+without stockholder approval. 
+The 2007 Plan will remain
+in effect until the tenth anniversary of its effectiveness, which will occur
+upon stockholder approval, or such earlier date on which the 2007 Plan is
+terminated. The 2007 Plan also gives the board of directors the right to amend,
+modify, terminate or suspend the 2007 Plan, except that amendments to the 2007
+Plan are subject to stockholder approval if needed to comply with the NASDAQ rules. 
+In the event of any “equity
+restructuring” within the meaning of FAS 123R, such as a stock dividend or a
+stock split, the 2007 Plan requires the compensation committee to adjust the
+number and type of shares available for awards or subject to outstanding
+awards, and the exercise or strike price of such awards. In the event of any
+other change in corporate capitalization, which may include a merger or
+consolidation, the compensation committee has the discretion to make such
+equitable adjustments similar to those described above as it deems appropriate
+to prevent enlargement or diminution of participants’ rights. Adjustments in
+performance targets and payments on performance units are also permitted upon
+the occurrence of such events as may be specified in the related agreements,
+which may include a “change of control.” Under the 2007 Plan, the compensation
+committee may cancel outstanding options and stock appreciation rights
+generally in exchange for cash payments to the recipients in the event of a “fundamental
+change” (defined as certain dissolutions, liquidations, mergers,
+consolidations, statutory share exchanges, or other similar events involving
+us). 
+Federal Tax
+Considerations 
+The following summary sets
+forth the tax events generally expected for United States citizens under
+current United States federal income tax laws in connection with awards under
+the 2007 Plan. 
+Incentive Stock Options. A
+recipient will realize no taxable income, and we will not be entitled to any
+related deduction, at the time an incentive stock option is granted under the
+2007 Plan. If certain statutory employment and holding period conditions are
+satisfied before the recipient disposes of shares acquired pursuant to the
+exercise of such an option, then no taxable income will result upon the
+exercise of such 
+32 
+option, and we will
+not be entitled to any deduction in connection with such exercise. Upon
+disposition of the shares after expiration of the statutory holding periods,
+any gain or loss realized by a recipient will be a long-term capital gain or
+loss. We will not be entitled to a deduction with respect to a disposition of
+the shares by a recipient after the expiration of the statutory holding
+periods. 
+Except in the event of death, if shares acquired by a
+recipient upon the exercise of an incentive stock option are disposed of by
+such recipient before the expiration of the statutory holding periods (a “disqualifying
+disposition”), such recipient will be considered to have realized as
+compensation, taxable as ordinary income in the year of disposition, an amount,
+not exceeding the gain realized on such disposition, equal to the difference
+between the exercise price and the fair market value of the shares on the date
+of exercise of the option. We will be entitled to a deduction at the same time
+and in the same amount as the recipient is deemed to have realized ordinary
+income. Any gain realized on the disposition in excess of the amount treated as
+compensation or any loss realized on the disposition will constitute capital
+gain or loss, respectively. Such capital gain or loss will be long-term or
+short-term based upon how long the shares were held. If the recipient pays the
+option price with shares that were originally acquired pursuant to the exercise
+of an incentive stock option and the statutory holding periods for such shares
+have not been met, the recipient will be treated as having made a disqualifying
+disposition of such shares, and the tax consequence of such disqualifying
+disposition will be as described above. 
+The foregoing discussion applies only for regular tax
+purposes. For alternative minimum tax purposes, an incentive stock option will
+be treated as if it were a non-qualified stock option, the tax consequences of
+which are discussed below. 
+Non-Qualified
+Stock Options. A recipient will realize no
+taxable income, and we will not be entitled to any related deduction, at the
+time a non-qualified stock option is granted under the 2007 Plan. At the time
+of exercise of a non-qualified stock option, the recipient will realize
+ordinary income, and we will be entitled to a deduction, equal to the excess of
+the fair market value of the stock on the date of exercise over the option
+price. Upon disposition of the shares, any additional gain or loss realized by
+the recipient will be taxed as a capital gain or loss, long-term or short-term,
+based upon how long the shares are held. 
+Stock
+Appreciation Rights and Performance Units. Generally:
+(a) the recipient will not realize income upon the grant of a stock
+appreciation right or performance unit award; (b) the recipient will
+realize ordinary income, and we will be entitled to a corresponding deduction,
+in the year cash or shares of common stock are delivered to the recipient upon
+exercise of a stock appreciation right or in payment of the performance unit
+award; and (c) the amount of such ordinary income and deduction will be
+the amount of cash received plus the fair market value of the shares of common
+stock received on the date of issuance. The federal income tax consequences of
+a disposition of unrestricted shares received by the recipient upon exercise of
+a stock appreciation right or in payment of a performance unit award are the
+same as described below with respect to a disposition of unrestricted shares. 
+Restricted
+and Unrestricted Stock; Restricted Stock Units. Unless
+the recipient files an election to be taxed under Section 83(b) of
+the Code: (a) the recipient will not realize income upon the grant of
+restricted stock; (b) the recipient will realize ordinary income, and we
+will be entitled to a corresponding deduction, when the restrictions have been
+removed or expire; and (c) the amount of such ordinary income and
+deduction will be the fair market value of the restricted stock on the date the
+restrictions are removed or expire. If the recipient files an election to be
+taxed under Section 83(b) of the Code, the tax consequences to the
+recipient will be determined as of the date of the grant of the restricted
+stock rather than as of the date of the removal or expiration of the
+restrictions. 
+With respect to awards of unrestricted stock: (a) the
+recipient will realize ordinary income, and we will be entitled to a
+corresponding deduction upon the grant of the unrestricted stock and (b) the
+amount of such ordinary income and deduction will be the fair market value of
+such unrestricted stock on the date of grant. 
+33 
+When the recipient disposes of restricted or
+unrestricted stock, the difference between the amount received upon such
+disposition and the fair market value of such shares on the date the recipient
+realizes ordinary income will be treated as a capital gain or loss, long-term
+or short-term, based upon how long the shares are held. 
+A recipient will not
+realize income upon the grant of restricted stock units, but will realize
+ordinary income, and we will be entitled to a corresponding deduction, when the
+restricted stock units have vested and been settled in cash and/or shares of our
+common stock. The amount of such ordinary income and deduction will be the
+amount of cash received plus the fair market value of the shares of our common
+stock received on the date of issuance. 
+Withholding. The
+2007 Plan permits us to withhold from awards an amount sufficient to cover any
+required withholding taxes. In lieu of cash, the compensation committee may
+permit a participant to cover withholding obligations through a reduction in
+the number of shares to be delivered to such participant or by delivery of
+shares already owned by the participant. 
+New Plan Benefits 
+The specific individuals
+who will be granted awards under the 2007 Plan and the type and amount of any
+such awards will be determined by the compensation committee, subject to annual
+limits on the maximum amounts that may be awarded to any individual, as
+described above. Accordingly, future awards to be received by or allocated to
+particular individuals under the 2007 Plan are not presently determinable. 
+The approval of the 2007
+Plan requires the affirmative vote of the majority of shares present in person
+or represented by proxy at the meeting and entitled to vote on the proposal. 
+THE BOARD OF DIRECTORS
+RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 4. 
+PROPOSAL
+5 — APPROVAL
+OF THE AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION OF CROCS, INC. TO
+INCREASE THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK FROM 130,000,000 TO
+255,000,000. 
+On May 2, 2007, our
+board of directors approved a two-for-one stock split of our common stock in
+the form of a stock dividend to be distributed on June 14, 2007 to
+stockholders of record at the close of business on May 31, 2007. Our board
+of directors also approved an amendment of our Restated Certificate of
+Incorporation (the “Restated Certificate”) to increase our authorized capital
+stock from 130,000,000 shares, of which 125,000,000 are common stock and
+5,000,000 are preferred stock, to 255,000,000 shares, of which 250,000,000
+would be common stock and 5,000,000 would be preferred stock. At that time, our
+board of directors directed that the amendment to our Restated Certificate be
+submitted to our stockholders for approval at the Annual Meeting. This increase
+would be effected by amending Section 1 of Article IV of the Restated
+Certificate to read as follows in its entirety: 
+“Section 1.
+Authorization . The Corporation
+shall be authorized to issue 255,000,000 shares of capital stock, of which
+250,000,000 shares shall be shares of Common Stock, par value $0.001 per share
+(“Common Stock”), and 5,000,000 shares shall be shares of Preferred Stock,
+par value $0.001 per share (“Preferred Stock”).” 
+The additional shares will
+be used both to replenish the shares used to implement the stock split and to
+authorize shares of common stock to be used for general corporate purposes. The
+board of directors considers it desirable to have additional authorized shares
+of capital stock available for possible future stock offerings, acquisitions,
+stock awards and options, stock dividends or stock splits and for other general
+corporate purposes. Authorization of additional shares of capital stock will
+allow the board of directors to move promptly to issue additional shares, if
+appropriate opportunities should arise, without the delay and expense of
+calling a special meeting of stockholders. 
+34 
+We have no current plans, arrangements or
+understandings regarding the issuance of any of the additional shares of
+capital stock for which authorization is sought, and there are no negotiations
+pending with respect to the issuance thereof for any purpose. If the
+stockholders approve the increase in the authorized number of shares of capital
+stock, the additional shares may be issued at such time and on such terms and
+conditions as the board of directors may determine without further approval by
+the stockholders. Stockholders do not have preemptive rights with respect to
+the current authorized capital stock. 
+Stockholders should be aware that the increase in our
+authorized capital stock could have an anti-takeover effect since new shares
+could be issued to dilute the stock ownership of a person attempting to acquire
+control of us. The proposed increase has not, however, been proposed for an
+anti-takeover-related purpose, and the board of directors has no current
+knowledge of any current efforts by a third party to effect a change in our
+control. 
+The approval of the amendment to the Restated
+Certificate requires the affirmative vote of the majority of the outstanding
+shares of our common stock entitled to vote at the Annual Meeting. 
+THE
+BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL 5. 
+PROPOSAL 6—RATIFICATION
+OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
+The audit committee has selected Deloitte &
+Touche LLP, as the independent registered public accounting firm for the fiscal
+year ending December 31, 2007. Deloitte & Touche LLP has served
+as our independent registered public accounting firm since 2005. We are not
+required to submit this appointment to the stockholders for approval but our
+board of directors believes it is desirable as a matter of policy. 
+If the stockholders do not
+ratify this appointment, the audit committee will investigate the reasons for
+the rejection and consider other independent registered public accounting
+firms. Even if the appointment is ratified, the audit committee may, in its
+discretion, appoint a different independent registered public accounting firm. 
+PRINCIPAL
+ACCOUNTING FIRM FEES AND SERVICES 
+The
+following table sets forth the aggregate fees we paid to Deloitte &
+Touche LLP, our independent registered public accounting firm, and other member
+firms of Deloitte Touche Tohmatsu and their respective affiliates, which we
+refer to collectively as Deloitte entities, for professional services provided
+during 2006 and 2005. All fees paid to the Deloitte entities were pre-approved
+by the Audit Committee, which concluded that the provision of such services by
+the Deloitte entities was compatible with the maintenance of that firm’s
+independence in the conduct of its auditing functions. We expect that a
+representative of Deloitte & Touche LLP will attend the Annual
+Meeting, respond to appropriate questions, and be given an opportunity to
+speak. 
+2006 
+2005 
+Audit fees(1) 
+$ 
+851,767 
+$ 
+977,710 
+Audit-related
+fees 
+— 
+— 
+Tax fees(2) 
+138,597 
+65,763 
+All other fees 
+— 
+— 
+Total fees 
+$ 
+990,364 
+$ 
+1,043,473 
+(1) Audit fees relate to
+professional services rendered in connection with the audit of our annual
+financial statements included in our Annual Report on Form 10-K and
+services attendant to, or required by, statute or regulation, such as: (i) comfort
+letters, consents and other audit services related to SEC and other regulatory
+filings; and (ii) accounting consultation related to the audit. 
+35 
+(2) Tax fees include
+professional services rendered in connection with tax compliance, tax advice,
+tax consulting and tax planning. 
+THE BOARD OF DIRECTORS
+RECOMMENDS A VOTE “FOR” PROPOSAL 6. 
+STOCKHOLDERS
+SHARING THE SAME ADDRESS 
+To reduce the expense of
+delivering duplicate proxy solicitation materials, we and some brokers may take
+advantage of the SEC’s “householding” rules. These householding rules permit
+the delivery of only one set of proxy solicitation materials to stockholders
+who share the same address, unless otherwise requested. Any stockholder of
+record who shares an address with another stockholder of record and who has
+received only one set of proxy solicitation materials may receive a separate
+copy of those materials, without charge and/or request future delivery of
+separate materials upon writing the Corporate Secretary, Crocs, Inc., 6328
+Monarch Park Place, Niwot, Colorado 80503 or calling 303-848-7000.
+Likewise, any stockholder of record who shares an address with another
+stockholder of record and who has received multiple sets of proxy solicitation
+materials may request future delivery of a single copy of those materials upon
+writing the Corporate Secretary, Crocs, Inc., 6328 Monarch Park Place,
+Niwot, Colorado 80503 or calling 303-848-7000. 
+STOCKHOLDER
+PROPOSALS AND NOMINATIONS FOR 2008 ANNUAL MEETING 
+Any proposal of a stockholder intended to be included
+in our proxy statement for the 2008 annual meeting of stockholders pursuant to Rule 14a-8
+of the SEC’s rules, must be received by us no later than February 14,
+2008, unless the date of our 2008 annual meeting is more than 30 days
+before or after July 9, 2008, in which case the proposal must be received
+a reasonable time before we begin to print and mail our proxy materials. All
+proposals should be addressed to the Corporate Secretary, Crocs, Inc.,
+6328 Monarch Park Place, Niwot, Colorado 80503. 
+In order for a stockholder
+to nominate a candidate for director for election or to bring other business
+before the 2008 annual meeting, we must receive timely notice of the nomination
+or business in writing by the close of business not less than 90 days nor
+more than 120 days prior to the anniversary date of the immediately
+preceding annual meeting of stockholders. However, in the event that the annual
+meeting is called for a date that is not within 30 days before or
+60 days after such anniversary date, notice by the stockholder to be
+timely must be received not earlier than the close of business on the 120th day
+prior to such annual meeting and not later than the close of business on the
+later of the 90th day prior to such annual meeting or the tenth day following
+the date on which notice of the date of the annual meeting was made public. 
+OTHER MATTERS 
+We do not intend to bring before the Annual Meeting
+any matters other than the proposals specifically described above and we know
+of no matters other than those to come before the Annual Meeting. If any other
+matters properly come before the Annual Meeting, it is the intention of the
+persons named in the accompanying proxy to vote such proxy in accordance with
+the recommendation of the our management or board of directors on such matters,
+including any matters dealing with the conduct of the meeting. 
+36 
+Appendix A 
+CROCS,
+INC. 
+2008 CASH INCENTIVE
+PLAN 
+1. Purpose. The purpose of the
+Crocs, Inc. 2008 Cash Incentive Plan (the “Plan”) is to advance the
+interests of Crocs, Inc. (“Crocs”) and its stockholders by promoting Crocs’s
+pay for performance philosophy, attracting and retaining key employees of Crocs
+and its subsidiaries, and stimulating the efforts of such employees toward the
+continued success and growth of Crocs’s business. Amounts paid pursuant to the
+Plan are intended to qualify as performance-based compensation within the
+meaning of Section 162(m) of the Internal Revenue Code of 1986, as
+amended. 
+2. Definitions. When the following
+terms are used with capital letters in this Plan, they will have the meanings
+indicated: 
+(a) “ Award ” means an annual incentive award which, subject to the
+terms and conditions prescribed by the Committee, entitles a Participant to
+receive a cash payment from the Company in accordance with Section 3. 
+(b) “ Board ” means the Board of Directors of Crocs. 
+(c) “ Code ” means the Internal Revenue Code of 1986, as amended. 
+(d) “ Committee ”
+means the Compensation Committee of the Board or such other committee as may be
+designated by the Board to administer the Plan. 
+(e) “ Company ” means Crocs and its subsidiaries. 
+(f) “ Covered Officer ”
+means any Participant whose compensation, in the Performance Period for which
+the annual incentive is calculated, is subject to the compensation expense
+deduction limitations set forth in Section 162(m) of the Code. 
+(g) “ Eligible Employee ”
+means any employee of the Company. 
+(h) “ Participant ”
+means an Eligible Employee designated by the Committee to participate in the
+Plan as provided in Section 3.1. Designation by the Committee as a
+Participant for a specific Performance Period or series of Performance Periods
+does not confer on the Participant the right to participate in the Plan for any
+other Performance Periods. 
+(i) “Performance -Based
+Compensation ” means an Award that is intended to constitute “performance-based
+compensation” within the meaning of Section 162(m)(4)(C) of the Code
+and the regulations promulgated thereunder. 
+(j) “Performance Measures ”
+means one or a combination of two or more of the following performance
+criteria: net sales; net earnings; earnings before income taxes; earnings
+before interest and taxes; earnings before interest, taxes, depreciation and
+amortization; earnings per share (basic or diluted); profitability as measured
+by return ratios (including return on assets, return on equity, return on
+investment and return on net sales) or by the degree to which any of the
+foregoing earnings measures exceed a percentage of net sales; cash flow; market
+share; margins (including one or more of gross, operating and net earnings
+margins); stock price; total stockholder return; asset quality; non-performing
+assets; revenue growth; operating income; pre- or after-tax income; cash flow
+per share; operating assets; improvement in or attainment of expense levels or
+cost savings; economic value added; and improvement in or attainment of working
+capital levels. In addition, for any Award to a Participant who is not a
+Covered Officer or that is not intended to constitute Performance-Based
+Compensation, Performance Measures may include, alone or in combination with
+any of the foregoing Performance Measures, any other measure of performance as
+determined by the Committee. Any Performance Measure utilized may be expressed
+in 
+A- 1 
+absolute amounts, on a per
+share basis, as a change from preceding Performance Periods, as a comparison to
+the performance of specified companies or other external measures, and may
+relate to one or any combination of corporate (including such direct and
+indirect subsidiaries of the Company as the Committee may determine or on such
+consolidated basis as the Committee may determine), group, unit, division,
+affiliate or individual performance. 
+(k) “Performance Period ”
+means the period of time specified by the Committee over which the degree of
+attainment of specified Performance Measures will be measured. 
+3. Awards. 
+3.1 Allocation of Awards. Prior
+to the earlier of (i) 90 days following the commencement of a Performance
+Period or (ii) the passage of 25 percent of the duration of such
+Performance Period, the Committee will designate such Eligible Employees as it
+deems appropriate to participate in the Plan for such Performance Period. The
+Committee’s designation of an Eligible Employee as entitled to participate in
+the Plan may be for a single Performance Period, or for a fixed or indefinite
+series of future Performance Periods, in its discretion. A designation for more
+than one Performance Period shall be subject to the Participant’s continued
+employment by the Company, and may be rescinded at any time as to future
+Performance Periods by the Committee. Awards may be granted to a Participant in
+such amounts and on such terms as may be determined by the Committee. At the
+time an Award is made, the Committee will specify the terms and conditions that
+will govern the Award, which will include that the Award will be earned only
+upon, and to the extent that, the applicable Performance measures as described
+in Section 3.2 are satisfied over the course of the applicable Performance
+Period. Different terms and conditions may be established by the Committee for
+different Awards and for different Participants. 
+3.2 Performance Measures. The
+payment of an Award will be contingent upon the degree of attainment of such
+Performance Measures over the applicable Performance Period as are specified by
+the Committee. Performance Measures for any Performance Period will be
+established by the Committee prior to the earlier of (i) 90 days following
+the commencement of the Performance Period or (ii) the passage of 25
+percent of the duration of the Performance Period. The Committee may, in its
+discretion, modify the Performance Measures applicable to a Performance Period
+if it determines that as a result of changed circumstances, such modification
+is required to reflect the original intent of such Performance Measures. However,
+no such modification may be made to the extent it would increase the amount of
+compensation that would otherwise be payable to any Participant who is a
+Covered Officer. 
+3.3 Maximum Amount of Awards. No
+Participant who is a Covered Officer shall be entitled to receive an Award
+payment for any Performance Period that exceeds $2,000,000 for a quarterly
+Performance Period or the corresponding multiple of that amount for any Performance
+Period that is more than one quarter in duration. 
+3.4 Adjustments. The Committee is authorized at any time
+during or after a Performance Period, in its sole and absolute discretion, to
+reduce or eliminate the amount of an Award otherwise payable to any Participant
+for any reason. No reduction in the amount of an Award payable to any
+Participant shall increase the amount of an Award payable to any other
+Participant. 
+3.5 Payment of Awards. Following the completion of each
+Performance Period, the Committee shall certify in writing the degree to which
+the Performance Measures were attained and the Awards payable to Participants. Each
+Participant shall receive payment in cash of the Award as soon as practicable
+following the Committee’s determination and certification made pursuant to this
+Section 3.5. 
+4. Administration. 
+4.1 Authority of Committee. The
+Committee shall administer this Plan. The Committee shall have exclusive power,
+subject to the limitations contained in this Plan, to make Awards and to
+determine when 
+A- 2 
+and to whom Awards will be
+granted, and the form, amount and other terms and conditions of each Award,
+subject to the provisions of this Plan. The Committee shall have the authority
+to interpret this Plan and any Award made under this Plan, to establish, amend,
+waive and rescind any rules and regulations relating to the administration
+of this Plan, and to make all other determinations necessary or advisable for
+the administration of this Plan. The Committee may correct any defect, supply
+any omission or reconcile any inconsistency in this Plan or in any Award in the
+manner and to the extent it shall deem desirable. The determinations of the
+Committee in the administration of this Plan, as described herein, shall be
+final, binding and conclusive, subject to the provisions of this Plan. A
+majority of the members of the Committee shall constitute a quorum for any
+meeting of the Committee. 
+4.2 Indemnification. To
+the greatest extent permitted by law, (i) no member or former member of
+the Committee shall be liable for any action or determination taken or made in
+good faith with respect to the Plan or any Award made under the Plan, and (ii) the
+members or former members of the Committee shall be entitled to indemnification
+by the Company against and from any loss incurred by such members by reason of
+any such actions and determinations. 
+5. Effective Date of the Plan. The
+Plan shall become effective as of January 1, 2008; provided that this Plan
+is approved and ratified by Crocs’s stockholders before such date. The Plan
+shall remain in effect until it has been terminated pursuant to Section 8. 
+6. Right to Terminate
+Employment. Nothing in the Plan shall confer upon any
+Participant the right to continue in the employment of the Company or affect
+any right which the Company may have to terminate the employment of a
+Participant with or without cause. 
+7. Tax Withholding. The
+Company shall have the right to withhold from cash payments under the Plan to a
+Participant or other person an amount sufficient to cover any required
+withholding taxes. 
+8. Amendment, Modification
+and Termination of the Plan. The Board or Committee may at any
+time terminate, suspend or modify the Plan and the terms and provisions of any
+Award to any Participant which has not been paid. Amendments are subject to
+approval of Crocs’s stockholders only if such approval is necessary to maintain
+the Plan in compliance with the requirements of Section 162(m) of the
+Code, its successor provisions or any other applicable law or regulation. No
+Award may be granted during any suspension of the Plan or after its
+termination. 
+9. Unfunded Plan. The
+Plan shall be unfunded, and the Company shall not be required to segregate any
+assets that may at any time be represented by Awards under the Plan. No
+Participant shall, by virtue of this Plan, have any interest in any specific
+assets of the Company. 
+10. Other Benefit and
+Compensation Programs. Neither the adoption of the Plan by the
+Board nor its submission to the stockholders of the Company shall be construed
+as creating any limitation on the power of the Board or Committee to adopt such
+other incentive arrangements as it may deem appropriate. Payments received by a
+Participant under an Award made pursuant to the Plan shall not be deemed a part
+of a Participant’s regular recurring compensation for purposes of the
+termination, indemnity or severance pay law of any state and shall not be
+included in, nor have any effect on, the determination of benefits under any
+other employee benefit plan, contract or similar arrangement provided by the
+Company unless expressly so provided by such other plan, contract or
+arrangement, or unless the Committee expressly determines otherwise. 
+11. Governing Law. To
+the extent that Federal laws do not otherwise control, the Plan and all
+determinations made and actions taken pursuant to the Plan shall be governed by
+the laws of the State of Colorado and construed accordingly. 
+A- 3 
+12. Other Provisions. 
+12.1 Non-transferability. Participants and
+beneficiaries shall not have the right to assign, pledge or otherwise dispose
+of any part of an Award under this Plan. 
+12.2 Termination of Employment. Except as otherwise
+provided in this section, no Award shall be paid to a Participant who is not
+actively employed by the Company as of the end of the applicable Performance
+Period. If a Participant’s employment with the Company ends during a
+Performance Period, the Committee may, in its discretion, determine that the
+Participant (or his or her beneficiaries) shall be paid a pro rata portion of
+the Award payment that the Participant would have received but for the fact
+that the Participant’s employment ended. Any such pro rated Award payment will
+be paid at the same time as other Award payments with respect to the applicable
+Performance Period. 
+A- 4 
+Appendix B 
+CROCS,
+INC. 
+2007 EQUITY
+INCENTIVE PLAN 
+1. Purpose . The purpose of the
+Crocs, Inc. 2007 Equity Incentive Plan (the “Plan”) is to promote the
+interests of the Company and its stockholders by aligning the interests of
+employees and others who are selected to be Participants with those of the
+Company’s stockholders, providing Participants with a strong incentive to put
+forth maximum effort for the continued success and growth of the Company and
+its Affiliates, and assisting the Company in attracting, motivating and
+retaining the best available individuals for service to the Company. 
+2. Definitions . The
+capitalized terms used in the Plan have the meanings set forth below. 
+(a) “Affiliate”
+means any corporation that is a “parent corporation” or “subsidiary corporation”
+of the Company, as those terms are defined in Code Sections 424(e) and
+(f), or any successor provisions, and for purposes other than the grant of
+Incentive Stock Options, any joint venture in which the Company or any such “parent
+corporation” or “subsidiary corporation” owns an equity interest. 
+(b) “Agreement”
+means any written or electronic agreement, instrument or document evidencing
+the grant of an Award in such form as has been approved by the Committee,
+including all amendments thereto. 
+(c) “Award”
+means a grant made under the Plan in the form of Restricted Stock, Restricted
+Stock Units, Options, Stock Appreciation Rights, Performance Units, Stock or
+any other stock-based award. 
+(d) “Board”
+means the Board of Directors of the Company. 
+(e) “Cause”
+means (i) the Participant’s material breach of any confidentiality,
+non-disclosure, non-solicitation, non-competition, invention assignment
+or similar agreement with the Company or any Affiliate; (ii) an act or
+acts of dishonesty undertaken by the Participant resulting in gain or personal
+enrichment of the Participant at the expense of the Company; (iii) persistent
+failure by the Participant to perform the duties of the Participant’s
+employment, which failure is demonstrably deliberate on the part of the
+Participant and constitutes gross neglect of duties by the Participant; (iv) any
+failure by the Participant to materially conform to the Company’s Code of
+Business Conduct and Ethics; or (v) the indictment or conviction of the
+Participant for a felony if the act or acts constituting the felony are
+substantially detrimental to the Company or its reputation. 
+(f) “Change of Control” means one of the following: 
+(1) a majority
+of the directors of the Company shall be persons other than persons 
+(i) for whose
+election proxies shall have been solicited by the Board, or 
+(ii) who are
+then serving as directors appointed by the Board to fill vacancies on the Board
+caused by death or resignation (but not by removal) or to fill newly created
+directorships; 
+(2) 35% or more
+of (1) the combined voting power of the then outstanding voting securities
+of the Company entitled to vote generally in the election of directors (“Outstanding
+Company Voting Securities”) or (2) the then outstanding Shares of Stock (“Outstanding
+Company Common Stock”) is acquired or beneficially owned (as defined in Rule 13d-3
+under the Exchange Act, or any successor rule thereto) by any individual,
+entity or group (within the meaning of Section 13d(3) or 14(d)(2) of
+the Exchange Act), provided, however, that the following acquisitions and
+beneficial ownership shall not constitute Changes of Control pursuant to this Section 2(f)(2): 
+(i) any
+acquisition or beneficial ownership by the Company or a subsidiary of the
+Company, or 
+B- 1 
+(ii) any
+acquisition or beneficial ownership by any employee benefit plan (or related
+trust) sponsored or maintained by the Company or one or more of its
+subsidiaries, or 
+(iii) any
+acquisition or beneficial ownership by a parent entity of the Company (after
+giving effect to the merger or statutory shore exchange) or its wholly-owned
+subsidiaries, as long as they shall remain wholly-owned subsidiaries, directly
+or indirectly of 100% of the Outstanding Company Voting Securities as a result
+of a merger or statutory share exchange that complies with Section 2(f)(3)(i)(A),
+(B) and (C) or the exception in Section 2(f)(3)(ii) in all respects; 
+(3) the Company
+consummates 
+(i) a merger
+of the Company with or into another entity, other than a merger in which: 
+(A) the persons
+who were the beneficial owners, respectively, of the Outstanding Company Voting
+Securities and Outstanding Company Common Stock immediately prior to such
+merger beneficially own, directly or indirectly, immediately after the merger,
+more than 50% of, respectively, the then outstanding common stock and the then
+outstanding voting power of the voting securities (or comparable equity
+interests) of the surviving entity in the merger or its direct or indirect
+parent entity in substantially the same proportions (except for those
+exercising statutory dissenters’ rights) as their ownership of the Outstanding
+Company Voting Securities and Outstanding Company Common Stock immediately
+prior to the merger, 
+(B) if voting
+securities of the direct or indirect parent entity of the Company (after giving
+effect to the merger) are exchanged for Outstanding Company Voting Securities
+in the merger, all holders of any class or series of Outstanding Company Voting
+Securities immediately prior to the merger have the right to receive
+substantially the same per share consideration in exchange for their
+Outstanding Company Voting Securities as all other holders of such class or
+series (except for those exercising statutory dissenters’ rights), and 
+(C) no
+individual, entity or group (other than a direct or indirect, parent entity
+that, after giving effect to the merger, directly or indirectly through one or
+more wholly owned subsidiaries, beneficially owns 100% of the outstanding
+voting securities of the entity resulting from the merger) beneficially owns,
+directly or indirectly, immediately after the merger, 35% or more of the voting
+power of the outstanding voting securities or the outstanding common stock of
+the entity (or comparable equity interests) resulting from the merger. 
+(ii) an
+exchange, pursuant to a statutory exchange of Outstanding Company Voting
+Securities held by stockholders of the Company immediately prior to the
+exchange, of shares of one or more classes or series of Outstanding Company
+Voting Securities for cash, securities or other property, except for voting
+securities of a direct or indirect parent entity of the Company (after giving
+effect to the statutory share exchange) owning directly, or indirectly through
+wholly-owned subsidiaries, both beneficially and of record 100% of the
+Outstanding Company Voting Securities immediately after the statutory share
+exchange if (1) the persons who were the beneficial owners, respectively,
+of the Outstanding Company Voting Securities and the Outstanding Common Stock
+of the Company immediately before such statutory share exchange own, directly
+or indirectly, immediately after the statutory share exchange more than 50% of,
+respectively, the voting power of the then outstanding voting securities and
+the then outstanding common stock (or comparable equity interests) of such
+parent entity, and (2) all holders of any class or series of Outstanding
+Company Voting Securities immediately prior to the statutory share exchange
+have the right to receive substantially the same per share consideration in 
+B- 2 
+exchange for their
+Outstanding Company Voting Securities as all other holders of such class or
+series (except for those exercising statutory dissenters’ rights), or 
+(iii) a sale or
+other disposition of all or substantially all of the assets of the Company (in
+one transaction or a series of transactions); or 
+(4) the
+stockholders of the Company approve a definitive agreement or plan to liquidate
+or dissolve the Company. 
+Notwithstanding anything herein stated, no Change of
+Control shall be deemed to occur unless it would be deemed to constitute a
+change in ownership or effective control, or a change in the ownership of a
+substantial portion of the assets, of a business under Section 409A of the
+Code. 
+(g) “Code”
+means the Internal Revenue Code of 1986, as amended and in effect from time to
+time or any successor statute, and the regulations promulgated thereunder. 
+(h) “Committee”
+means two or more Non-Employee Directors designated by the Board to
+administer the Plan under Section 3.1, each member of which shall be (i) an
+independent director within the meaning of Rule 4200(15) of the Nasdaq
+Marketplace Rules, (ii) considered a non-employee director within
+the meaning of Exchange Act Rule 16b-3, and (iii) an outside
+director for purposes of Code Section 162(m). 
+(i) “Company”
+means Crocs, Inc., a Delaware corporation, or any successor to all or
+substantially all of its businesses by merger, consolidation, purchase of
+assets or otherwise. 
+(j) “Disability”
+means the disability of a Participant such that the Participant is considered
+disabled under any retirement plan of the Company which is qualified under Section 401
+of the Code, or as otherwise determined by the Committee. 
+(k) “Employee”
+means an employee (including an officer or director who is also an employee) of
+the Company or an Affiliate. 
+(l) “Exchange
+Act” means the Securities Exchange Act of 1934, as amended and in effect from
+time to time or any successor statute. 
+(m) “Fair Market
+Value” as of any date means, unless otherwise expressly provided in the Plan,
+the closing sale price of a Share on the Nasdaq Global Select Market (or such
+other national securities exchange as may at the time be the principal market
+for the Shares) on that date or, if no sale of the Company’s Shares occurred on
+that date, on the next preceding day on which a sale of Shares occurred. If the Shares are not then listed and
+traded upon the Nasdaq Global Select Market or other national securities
+exchange, F air Market Value shall be
+what the Committee determines in good faith to be 100% of the fair market value
+of a Share on that date, using such criteria as it shall determine, in its sole
+discretion, to be appropriate for valuation. 
+(n) “Fundamental
+Change” means a dissolution or liquidation of the Company, a sale of
+substantially all of the assets of the Company, a merger or consolidation of
+the Company with or into any other corporation, regardless of whether the
+Company is the surviving corporation, or a statutory share exchange involving
+capital stock of the Company. 
+(o) “Grant Date”
+means the date on which the Committee approves the grant of an Award under the
+Plan, or such later date as may be specified by the Committee on the date the
+Committee approves the Award. 
+(p) “Incentive
+Stock Option” means any Option designated as such and granted in accordance
+with the requirements of Code Section 422. 
+B- 3 
+(q) “Insider”
+as of a particular date means any person who, as of that date is an officer of
+the Company as defined under Exchange Act Rule 16a-1(f). 
+(r) “Non-Employee
+Director” means a member of the Board who is not an Employee. 
+(s) “Non-Statutory
+Stock Option” means an Option other than an Incentive Stock Option. 
+(t) “Option”
+means a right to purchase a number of Shares at a specified price. 
+(u) “Participant”
+means a person to whom an Award is or has been made in accordance with the
+Plan. 
+(v) “Performance-Based
+Compensation” means an Award to a “covered officer” (as defined in Section 162(m)(3) of
+the Code) that is intended to constitute “performance-based compensation”
+within the meaning of Section 162(m)(4)(c) of the Code. 
+(w) “Performance
+Period” means the period of time as specified in an Agreement over which
+Performance Units or any other Award subject to Performance Measures are to be
+earned. 
+(x) “Performance
+Measures” means any measures of performance established by the Committee in
+connection with the grant of an Award. In the case of any such grant intended
+to constitute Performance-Based Compensation, the Performance Measures shall consist of one or a combination of two or
+more of the following performance criteria: net sales; net earnings; earnings
+before income taxes; earnings before interest and taxes; earnings before
+interest, taxes, depreciation and amortization; earnings per share (basic or
+diluted); profitability as measured by return ratios (including return on
+assets, return on equity, return on investment and return on net sales) or by
+the degree to which any of the foregoing earnings measures exceed a percentage
+of net sales; cash flow; market share; margins (including one or more of gross,
+operating and net earnings margins); stock price; total stockholder return;
+asset quality; non-performing assets; revenue growth; operating income; pre- or
+after-tax income; cash flow per share; operating assets; improvement in or
+attainment of expense levels or cost savings; economic value added; and
+improvement in or attainment of working capital levels. Any Performance
+Measure utilized may be expressed in absolute amounts, on a per share basis, as
+a growth rate or change from preceding periods, or as a comparison to the
+performance of specified companies or other external measures, and may relate
+to one or any combination of corporate,
+group, unit, division, Affiliate or individual performance. 
+(y) “Performance
+Unit” means the right to receive the Fair Market Value of one Share upon the
+achievement of specified levels of one or more Performance Measures in
+accordance with an Award granted under Section 11. 
+(z) “Plan”
+means this Crocs, Inc. 2007 Equity Incentive Plan, as amended and in
+effect from time to time. 
+(aa) “Restricted
+Stock” means Shares issued in accordance with an Award granted under Section 7
+so long as the retention and/or vesting of such Shares remains subject to
+conditions or restrictions. 
+(bb) “Restricted
+Stock Unit” means a derivative security provided in accordance with an Award
+granted under Section 8 which represents the right to receive, in cash
+and/or Stock as determined by the Committee, the Fair Market Value of one
+Share, and the retention, vesting and/or settlement of which is subject to
+conditions or restrictions. 
+(cc) “Retirement”
+means termination of an Employee’s employment, other than for Cause, at or
+after age 65. 
+(dd) “Share”
+means a share of Stock. 
+(ee) “Stock”
+means the common stock, no par value, of the Company. 
+B- 4 
+(ff) “Stock
+Appreciation Right” means a right, the value of which is determined in relation
+to the appreciation in value of Shares in accordance with an Award granted
+under Section 10. 
+(gg) “Subsidiary”
+means a “subsidiary corporation” as that term is defined in Code Section 424(f) or
+any successor provision. 
+(hh) “Successor”
+means the legal representative of an incompetent Participant, or if the
+Participant is deceased means the estate of the Participant or the person or
+persons who may, by bequest or inheritance, or pursuant to the terms of an
+Award, acquire the right to exercise an Option or Stock Appreciation Right or
+to receive cash and/or Shares issuable in satisfaction of an Award in the event
+of the Participant’s death. 
+(ii) “Transferee”
+means any “family member” (as defined by the general instructions to Form S-8
+under the Securities Act of 1933) of the Participant. 
+3. Administration and
+Indemnification . 
+(a) Administration . 
+(1) The
+Committee shall administer the Plan. The Committee shall have exclusive power
+to (i) make Awards; (ii) determine when and to whom Awards will be
+granted, the form of each Award, the amount of each Award, and any other terms
+or conditions of each Award consistent with the Plan; (iii) prescribe and
+amend the terms of Agreements evidencing Awards; and (iv) determine
+whether, to what extent and under what circumstances, Awards may be settled,
+paid or exercised in cash, Shares or other Awards, or other property or
+canceled, forfeited or suspended. A majority of the members of the Committee
+shall constitute a quorum for any meeting of the Committee, and acts of a
+majority of the members present at any meeting at which a quorum is present or
+the acts unanimously approved in writing by all members of the Committee shall
+be the acts of the Committee. Notwithstanding the foregoing, the Board shall
+perform the duties and have the responsibilities of the Committee with respect
+to Awards made to Non-Employee Directors. 
+(2) Solely for
+purposes of determining and administering Awards to Participants who are not
+Insiders, the Committee may delegate all or any portion of its authority under
+the Plan to one or more persons who are not Non-Employee Directors. 
+(3) To the
+extent within its discretion and subject to Sections 16 and 17, the Committee
+may amend the terms and conditions of any outstanding Award. 
+(4) It is the
+intent that the Plan and all Awards granted pursuant to it shall be
+administered by the Committee so as to permit the Plan and Awards to comply
+with Exchange Act Rule 16b-3, except in such instances as the
+Committee, in its discretion, may so provide. If any provision of the Plan or
+of any Award would otherwise frustrate or conflict with the intent expressed in
+this Section 3(a)(4), that provision to the extent possible shall be
+interpreted and deemed amended in the manner determined by the Committee so as
+to avoid the conflict. To the extent of any remaining irreconcilable conflict
+with this intent, the provision shall be deemed void as applied to Insiders to
+the extent permitted by law and in the manner deemed advisable by the
+Committee. 
+(5) The
+Committee’s interpretation of the Plan and of any Award or Agreement made under
+the Plan and all related decisions or resolutions of the Board or Committee
+shall be final and binding on all parties with an interest therein. Consistent
+with its terms, the Committee shall have the power to establish, amend or waive
+regulations to administer the Plan. In carrying out any of its
+responsibilities, the Committee shall have discretionary authority to construe
+the terms of the Plan and any Award or Agreement made under the Plan. 
+(6) In order to
+facilitate compliance with the applicable provisions of the laws in other
+countries in which the Company or its Affiliates operate or have Employees or
+non-employee consultants and 
+B- 5 
+advisors, and
+notwithstanding any other provision of this Plan, the Committee shall have the
+power and authority to (i) determine which (if any) individuals rendering
+services or employed outside the United States are eligible to participate in
+the Plan or to receive any type of Award hereunder; (ii) determine which
+non-U.S.-based Affiliates or operations may participate in the Plan; (iii) modify
+the terms and conditions of any Awards made to such individuals or with respect
+to such non-U.S.-based Affiliates or operations; and (iv) establish
+sub-plans, modify methods of exercise, modify payment restrictions on sale or
+transfer of Shares and other terms and procedures to the extent deemed
+necessary or desirable by the Committee to comply with applicable laws of the
+non-U.S. jurisdiction. 
+(b) Indemnification . Each person who is or shall have been
+a member of the Committee, or of the Board, and any other person to whom the
+Committee delegates authority under the Plan, shall be indemnified and held
+harmless by the Company, to the extent permitted by law, against and from any
+loss, cost, liability or expense that may be imposed upon or reasonably
+incurred by such person in connection with or resulting from any claim, action,
+suit or proceeding to which such person may be a party or in which such person
+may be involved by reason of any action taken or failure to act, made in good
+faith, under the Plan and against and from any and all amounts paid by such
+person in settlement thereof, with the Company’s approval, or paid by such
+person in satisfaction of any judgment in any such action, suit or proceeding
+against such person, provided such person shall give the Company an
+opportunity, at the Company’s expense, to handle and defend the same before
+such person undertakes to handle and defend it on such person’s own behalf. The
+foregoing right of indemnification shall not be exclusive of any other rights
+of indemnification to which such person or persons may be entitled under the
+Company’s Certificate of Incorporation or Bylaws, as a matter of law, or
+otherwise, or any power that the Company may have to indemnify them or hold
+them harmless. 
+4. Shares Available Under the Plan . 
+(a) Subject to
+adjustment pursuant to Section 17, the number of Shares that may be
+granted under the Plan shall not exceed 4,500,000, of which not more than 1,500,000
+Shares may be the subject of Awards other than Options and Stock Appreciation
+Rights. The Shares issued under the Plan
+may come from authorized and unissued shares or treasury shares. 
+(b) Any Shares
+subject to that portion of an Award which, for any reason, is forfeited or
+expires or terminates unexercised or unearned may again be used for future
+Awards. 
+(c) Any Shares
+subject to an Award settled in cash or other property in lieu of Shares may
+again be used for future Awards. 
+(d) For the
+purposes of computing the total number of Shares granted under the Plan, the
+following rules shall apply to Awards payable in Shares where appropriate: 
+(1) Each Award
+shall initially be deemed to involve the grant of the maximum number of Shares
+in which the particular Award is denominated. 
+(2) If a Stock
+Appreciation Right has been exercised and settled in Shares, the gross number
+of Shares with respect to which such exercise occurred shall be deemed granted
+and may not again be the subject of Awards under the Plan. 
+(3) To the extent
+an Award is paid or settled in some other security, it shall be deemed to have
+involved the grant of the number of Shares in which that portion of the Award
+was denominated. 
+(4) Where the
+number of Shares available under the Award is variable on the Grant Date, the
+number of Shares granted shall be deemed, prior to the settlement of the Award,
+to be the maximum number of Shares that could be received under that particular
+Award. 
+B- 6 
+(5) Where two or more types of Awards (all of which are payable in
+Shares) are granted to a Participant in tandem with each other, such that the
+exercise of one type of Award with respect to a number of Shares cancels at
+least an equal number of Shares of the other, such joint Awards shall be deemed
+to involve the grant of the maximum number of Shares available under the
+largest single Award. 
+(6) Shares tendered or withheld in payment of an Option exercise price
+or to satisfy any tax withholding obligation shall not be added to the total
+number of Shares available for grant under the Plan. 
+(7) Shares that are repurchased by the Company with Option proceeds
+shall not be added to the total number of Shares available for grant under the
+Plan. 
+(e) No fractional Shares may be issued under the Plan; however, cash
+shall be paid in lieu of any fractional Share in settlement of an Award. 
+(g) The maximum number of Shares that may be issued pursuant to
+Incentive Stock Options shall be 4,500,000, which limit will be subject to
+adjustment under Section 17 to the extent such adjustment is consistent
+with adjustments permitted of a plan authorizing the grant of incentive stock
+options under Code Section 422. The aggregate number of Shares subject to
+Options and/or Stock Appreciation Rights granted during any calendar year to
+any one Participant shall not exceed 500,000. The aggregate number of Shares
+subject to Restricted Stock and/or Restricted Stock Unit Awards granted during
+any calendar year to any one Participant shall not exceed 500,000. The
+foregoing limits shall be subject to adjustment under Section 17, but only
+to the extent that such adjustment will not affect the status of any Award
+intended to qualify as performance-based compensation under Code Section 162(m). 
+5. Eligibility . Participation
+in the Plan shall be limited to (i) Employees, (ii) individuals who
+are not Employees but who provide services to the Company or an Affiliate,
+including services provided in the capacity of a consultant, advisor or
+director, such as a Non-Employee Director, and (iii) any individual the
+Company desires to induce to become an Employee or Non-Employee Director,
+provided that any such grant shall be contingent upon such individual becoming
+an Employee or Non-Employee Director, as the case may be. The granting of
+Awards is solely at the discretion of the Committee, except that Incentive
+Stock Options may only be granted to Employees. References herein to “employed,”
+“employment” or similar terms (except “Employee”) shall include the providing
+of services in any capacity, including as a director. Neither the transfer of employment of a Participant between any of the
+Company or its Affiliates, nor a leave of absence granted to such Participant
+and approved by the Committee, nor any change in status from an Employee to a
+consultant of the Company shall be deemed a termination of employment for
+purposes of the Plan. 
+6. General Terms of Awards . 
+(a) Amount of Award . Each Award
+shall be evidenced by an Agreement setting forth the number of Shares subject
+to the Award together with such other terms and conditions applicable to the
+Award (and not inconsistent with the Plan) as determined by the Committee,
+which may include conditions on vesting, exercisability, lapsing of
+restrictions or payment that are tied to Performance Measures. 
+(b) Vesting and Term . Each
+Agreement, other than those relating solely to Awards of Shares without
+restrictions, shall set forth the period until the applicable Award is
+scheduled to expire, which shall not be more than ten years from the Grant
+Date, and any applicable Performance Period. The Committee may provide for such
+vesting conditions as it may determine, subject to the following limitations: 
+(1) an Award that is not subject to the satisfaction of Performance
+Measures may not fully vest or become fully exercisable earlier than three
+years from the Grant Date; and 
+(2) the
+Performance Period of a Performance Unit or other Award subject to Performance
+Measures may not be shorter than one year. 
+B- 7 
+The
+limitations in clauses (1) and (2) above will not, however, apply in
+the following situations: (i) an Award made to attract a key executive to
+join the Company; (ii) upon a Change of Control; (iii) termination of
+employment due to death, Disability or Retirement; (iv) Restricted Stock
+or Restricted Stock Units issued in exchange for other compensation; (v) a
+substitute Award granted pursuant to Section 20; and (vi) Awards
+issued to Non-Employee Directors. 
+(c) Transferability . Except as provided in this Section, (i) during
+the lifetime of a Participant, only that Participant (or that Participant’s
+Successor) may exercise an Option or Stock Appreciation Right, or receive
+payment with respect to any other Award, and (ii) no Award may be sold,
+assigned, transferred, exchanged or otherwise encumbered other than to a
+Successor in the event of a Participant’s death or pursuant to a qualified
+domestic relations order as defined in the Code or Title 1 of the Employee
+Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules thereunder.
+Any attempted transfer in violation of this Section 6(c) shall be of
+no effect. The Committee may, however, provide in an Agreement or otherwise
+that an Award (other than an Incentive Stock Option) may be transferable, to
+the extent permitted by law, to a Transferee if the Participant does not
+receive any consideration for the transfer. Any Award held by a Transferee
+shall continue to be subject to the same terms and conditions that were applicable
+to that Award immediately before the transfer thereof to the Transferee. For
+purposes of any provision of the Plan relating to notice to a Participant or to
+acceleration or termination of an Award upon the death or termination of
+employment of a Participant, the references to “Participant” shall mean the
+original grantee of an Award and not any Transferee. 
+(d) Termination of Employment . Except as otherwise
+determined by the Committee or provided by the Committee in an Agreement, in
+case of a Participant’s termination of employment with the Company and all of
+its Affiliates, the following provisions shall apply: 
+(1) Options and Stock Appreciation Rights . 
+(i) Death or Disability . If a Participant’s employment
+terminates because of death or Disability before an Award of an Option or Stock
+Appreciation Right has expired, the portion of such Award that was exercisable
+immediately prior to such termination shall remain exercisable for one year
+after the date of such termination of employment (but not after the scheduled
+expiration date of such Award). The unexercisable portion of such Award shall
+terminate at the date of termination of employment. 
+(ii) Retirement . If the employment of a Participant who is
+an Employee terminates because of Retirement before an Award of an Option or
+Stock Appreciation Right has expired, the portion of such Award that was
+exercisable immediately prior to such termination shall remain exercisable for
+one year after the date of such termination of employment (but not after the
+scheduled expiration date of such Award). The unexercisable portion of such
+Award shall terminate at the date of termination of employment. 
+(iii) Cause . If a Participant’s employment is terminated for
+Cause, all Awards to the Participant will terminate immediately upon such
+termination. 
+(iv) Termination for Other Reasons . If a Participant’s
+employment terminates for any reason other than death, Disability, Retirement
+or Cause, then the unexercisable portion of any Award of an Option or Stock
+Appreciation Right held by such Participant shall terminate at the date of
+termination of employment, and any portion of such Award that was exercisable
+immediately prior to such termination shall remain exercisable for three months
+after termination of the Participant’s employment (but not after the scheduled
+expiration date of such Award) if the Participant is not a Non-Employee
+Director, and shall remain exercisable until the scheduled expiration of the
+Award if the Participant is a Non-Employee Director. 
+B- 8 
+(2) Performance Units . If a Participant’s employment with
+the Company and all of its Affiliates terminates during a Performance Period
+because of death, Disability or Retirement, the Participant shall be entitled
+to a payment of Performance Units at the end of the Performance Period based
+upon the extent to which achievement of Performance Measures was satisfied at
+the end of such period and prorated for the portion of the Performance Period
+during which the Participant was employed by the Company or any Affiliate. Except
+as provided in this Section 6(d)(2) or in the applicable Agreement,
+if a Participant’s employment terminates with the Company and all of its
+Affiliates during a Performance Period, then such Participant shall not be
+entitled to any payment with respect to that Performance Period. 
+(3) Restricted Stock and Restricted Stock Unit Awards . If
+a Participant’s employment with the Company and all of its Affiliates terminates
+because of death, Disability or Retirement, a pro rata portion of any
+outstanding Award of Restricted Stock or Restricted Stock Units shall
+immediately vest. The portion of the Award that will vest will involve that
+number of Shares or Units which, when combined with the number of Shares or
+Units subject to the Award that have previously vested, will represent the same
+ratio to the total number of Shares or Units subject to the original Award as
+the portion of the scheduled vesting period of the Award during which the
+Participant was employed by the Company and its Affiliates bears to the
+scheduled vesting period. The portion of any Award of Restricted Stock or
+Restricted Stock Units that does not vest as provided in the preceding sentence
+will terminate at the date of the Participant’s termination of employment, and
+any Shares of Restricted Stock will be forfeited to the Company. 
+(e) Rights as Stockholder . Each Agreement shall provide
+that a Participant shall have no rights as a stockholder with respect to any
+securities covered by an Award unless and until the date the Participant
+becomes the holder of record of the Stock, if any, to which the Award relates. 
+(f) Performance-Based Awards . Any Award may be granted as
+a performance-based Award if the Committee establishes one or more Performance
+Measures upon which vesting, the lapse of restrictions or settlement in cash or
+Shares is contingent. With respect to any Award intended to be
+Performance-Based Compensation, the Committee shall establish and administer
+Performance Measures in the manner described in Section 162(m) of the
+Code and the then current regulations of the Secretary of the Treasury. 
+7. Restricted Stock Awards . 
+(a) An Award of
+Restricted Stock under the Plan shall consist of Shares subject to restrictions
+on transfer and conditions of forfeiture, which restrictions and conditions
+shall be included in the applicable Agreement. The Committee may provide for
+the vesting of such Shares and the corresponding lapse or waiver of any such
+restrictions or conditions based on such factors or criteria as the Committee,
+in its sole discretion, may determine. 
+(b) Except as
+otherwise provided in the applicable Agreement, the Shares subject to an Award
+of Restricted Stock shall be evidenced by a book-entry in the name of the
+Participant with the Company’s transfer agent or by one or more Stock
+certificates issued in the name of the Participant. Any such Stock certificate
+shall either be deposited with the Company or its designee, together with an
+assignment separate from the certificate, in blank, signed by the Participant,
+or bear such legend with respect to the restricted nature of the Restricted
+Stock evidenced thereby as shall be provided for in the applicable Agreement. Any
+book-entry shall be accompanied by a similar legend. 
+(c) Upon the
+vesting of Restricted Stock and the corresponding lapse of the restrictions and
+conditions, unrestricted Shares shall be issued to the Participant or a
+Successor or Transferee. 
+(d) Unless
+otherwise provided in an Agreement, a Participant or a Transferee with a
+Restricted Stock Award shall have all the other rights of a stockholder
+including, but not limited to, the right to receive dividends and the right to
+vote the Shares of Restricted Stock. 
+B- 9 
+8. Restricted Stock Unit Awards . An
+Award of Restricted Stock Units under the Plan shall be subject to restrictions
+on transfer and conditions of forfeiture, which restrictions and conditions
+shall be included in the applicable Agreement. The Committee may provide for
+the vesting of Restricted Stock Units and the corresponding lapse or waiver of
+any such restrictions or conditions based on such factors or criteria as the
+Committee, in its sole discretion, may determine. Following the vesting of a
+Restricted Stock Unit Award, payment to the Participant or a Successor or
+Transferee shall be made at such time or times as shall be provided in the
+Agreement in the form of cash, Shares or a combination of cash and Shares as
+determined by the Committee. 
+9. Stock Options . 
+(a) Terms of All Options . 
+(1) An Option
+shall be granted pursuant to an Agreement as either an Incentive Stock Option
+or a Non-Statutory Stock Option. The purchase price of each Share subject to an
+Option shall be determined by the Committee and set forth in the Agreement, but
+shall not be less than the Fair Market Value of a Share as of the Grant Date
+(except as provided in Section 20). 
+(2) The
+purchase price of the Shares with respect to which an Option is exercised shall
+be payable in full at the time of exercise, which may include, to the extent
+permitted by the Committee, payment under a broker-assisted sale and remittance
+program acceptable to the Committee. The
+purchase price may be paid in cash or, if the Committee so permits, by
+withholding Shares otherwise issuable to the Participant upon exercise of the
+Option or by delivery to the Company of Shares (by actual delivery or
+attestation) already owned by the Participant (in each case, such Shares having
+a Fair Market Value as of the date the Option is exercised equal to the purchase
+price of the Shares being purchased), or a combination thereof, unless
+otherwise provided in the Agreement. A Participant exercising an Option
+shall not be permitted to pay any portion of the purchase price with Shares if,
+in the opinion of the Committee, payment in such manner could have adverse
+financial accounting consequences for the Company. 
+(3) Each Option
+shall be exercisable in whole or in part on the terms provided in the Agreement.
+In no event shall any Option be exercisable at any time after its scheduled
+expiration. When an Option is no longer exercisable, it shall be deemed to have
+terminated. 
+(4) Options
+will not be granted under the Plan in consideration for, and the grant of
+Options will not be conditioned on, the delivery of Shares to the Company in
+payment of the exercise price and/or tax withholding obligation under any other
+Option. 
+(b) Incentive Stock Options . In addition to the other
+terms and conditions applicable to all Options: 
+(1) The
+aggregate Fair Market Value (determined as of Option Grant Date) of the Shares
+with respect to which Incentive Stock Options held by an individual first
+become exercisable in any calendar year (under the Plan and all other incentive
+stock option plans of the Company and its Affiliates) shall not exceed $100,000
+(or such other limit as may be required by the Code) if this limitation is
+necessary to qualify the Option as an Incentive Stock Option. To the extent an
+Option granted to a Participant exceeds this limit, the Option shall be treated
+as a Non-Statutory Stock Option. 
+(2) An
+Incentive Stock Option shall not be exercisable more than 10 years after its
+Grant Date (or such other limit as may be required by the Code) if this
+limitation is necessary to qualify the Option as an Incentive Stock Option. 
+(3) An
+Incentive Stock Option shall not be exercisable more than one year after
+termination of the Participant’s employment with the Company and its Affiliates
+if such termination is due to the 
+B- 10 
+Participant’s death or
+Disability, or more than three months after termination of the Participant’s
+employment if such termination is due to any other reason. 
+(4) The
+Agreement covering an Incentive Stock Option shall contain such other terms and
+provisions that the Committee determines necessary to qualify the Option as an
+Incentive Stock Option. 
+(5) No
+Participant may receive an Incentive Stock Option under the Plan if,
+immediately after the grant of such Award, the Participant would own (after
+application of the rules contained in Code Section 424(d)) Shares
+possessing more than 10% of the total combined voting power of all classes of
+stock of the Company or its Subsidiaries, unless (i) the option price for
+that Incentive Stock Option is at least 110% of the Fair Market Value of the
+Shares subject to that Incentive Stock Option on the Grant Date and (ii) that
+Option is not exercisable after the date five years from its Grant Date. 
+10. Stock Appreciation Rights . An
+Award of a Stock Appreciation Right shall entitle the Participant (or a
+Successor or Transferee), subject to terms and conditions determined by the
+Committee, to receive upon exercise of the Stock Appreciation Right all or a
+portion of the excess of (i) the Fair Market Value of a specified number
+of Shares as of the date of exercise of the Stock Appreciation Right over (ii) a
+specified price that shall not be less than 100% of the Fair Market Value of
+such Shares as of the Grant Date of the Stock Appreciation Right. Each Stock
+Appreciation Right may be exercisable in whole or in part on the terms provided
+in the Agreement. No Stock Appreciation Right shall be exercisable at any time
+after its scheduled expiration. When a Stock Appreciation Right is no longer
+exercisable, it shall be deemed to have terminated. Upon exercise of a Stock
+Appreciation Right, payment to the Participant or a Successor or Transferee
+shall be made at such time or times as shall be provided in the Agreement in
+the form of cash, Shares or a combination of cash and Shares as determined by
+the Committee. The Agreement may provide for a limitation upon the amount or
+percentage of the total appreciation on which payment (whether in cash and/or
+Shares) may be made in the event of the exercise of a Stock Appreciation Right. 
+11. Performance Units . 
+(a) Initial Award . 
+(1) An Award of
+Performance Units under the Plan shall entitle the Participant (or a Successor
+or Transferee) to future payments of cash, Shares or a combination thereof, as
+determined by the Committee, based upon the achievement of specified levels of
+one or more Performance Measures. The Agreement may provide that a portion of a
+Participant’s Award will be paid for performance that exceeds the minimum
+target but falls below the maximum target applicable to the Award. The
+Agreement shall also provide for the timing of the payment. 
+(2) Following
+the conclusion or acceleration of each Performance Period, the Committee shall
+determine the extent to which (i) Performance Measures have been attained,
+(ii) any other terms and conditions with respect to an Award relating to
+the Performance Period have been satisfied and (iii) payment is due with
+respect to an Award of Performance Units. 
+(3) No
+Participant may receive Awards of Performance Units relating to more than
+500,000 Shares in any year under this Plan. 
+(b) Acceleration and Adjustment . The Agreement may permit
+an acceleration of the Performance Period and an adjustment of Performance
+Measures and payments with respect to some or all of the Performance Units
+awarded to a Participant upon the occurrence of certain events, which may
+include a Change of Control, a Fundamental Change, a recapitalization, a change
+in the accounting practices of the Company, a change in the Participant’s title
+or employment responsibilities, the Participant’s death, Disability or
+Retirement or, with respect to payments in Shares, a reclassification, stock
+dividend, stock 
+B- 11 
+split or stock combination
+as provided in Section 17. The Agreement also may provide for a limitation
+on the value of an Award of Performance Units that a Participant may receive. 
+12. Other Awards . The Committee may from time to time
+grant Stock and other Awards under the Plan including, without limitation,
+those Awards pursuant to which Shares are or may in the future be acquired,
+Awards denominated in Stock units, securities convertible into Stock and
+phantom securities. The Committee, in its sole discretion, shall determine the
+terms and conditions of such Awards provided that such Awards shall not be
+inconsistent with the terms and purposes of the Plan. The Committee may, in its
+sole discretion, direct the Company to issue Shares subject to restrictive
+legends and/or stop transfer instructions that are consistent with the terms
+and conditions of the Award to which the Shares relate. 
+13. Effective Date and Duration of the Plan . 
+(a) Effective Date . The Plan shall become effective on the
+date it is approved by the requisite vote of Company’s stockholders at the 2007
+Annual Meeting of Stockholders or any adjournment thereof. 
+(b) Duration of the Plan . The Plan shall remain in effect
+until all Shares subject to it shall be distributed, all Awards have expired or
+terminated, the Plan is terminated pursuant to Section 16, or the tenth
+anniversary of the date of stockholder approval of the Plan, whichever occurs
+first (the “Termination Date”). Awards made before the Termination Date may be
+exercised, vested or otherwise effectuated beyond the Termination Date unless
+limited in the Agreement or otherwise. 
+14. Plan Participation and Employment Status . 
+(a) Status as
+an eligible Employee shall not be construed as a commitment that any Award will
+be made under the Plan to that eligible Employee or to eligible Employees
+generally. 
+(b) Nothing in
+the Plan or in any Agreement or related documents shall confer upon any
+Employee or Participant any right to continue in the employment of the Company
+or any Affiliate or constitute any contract of employment or affect any right
+that the Company or any Affiliate may have to change such person’s
+compensation, other benefits, job responsibilities, or title, or to terminate
+the employment of such person with or without cause. 
+15. Tax Withholding . The
+Company shall have the right to withhold from any cash payment under the Plan
+to a Participant or other person (including a Successor or a Transferee) an
+amount sufficient to cover any required withholding taxes. The Company shall
+have the right to require a Participant or other person receiving Shares under
+the Plan to pay the Company a cash amount sufficient to cover any required
+withholding taxes before actual receipt of those Shares. In lieu of all or any
+part of a cash payment from a person receiving Shares under the Plan, the
+Committee may permit the individual to cover all or any part of the required
+withholdings through a reduction in the number of Shares delivered or a
+delivery or tender to the Company of Shares held by the Participant or other
+person, in each case valued in the same manner as used in computing the
+withholding taxes under applicable laws. 
+16. Amendment and Termination of the Plan and
+Agreements . 
+(a) Except as
+limited in (b) below, (i) the Board may at any time and from time to
+time terminate, suspend or amend the Plan and (ii) the Committee may at
+any time alter or amend any or all Agreements under the Plan. The Company shall
+submit any amendment of the Plan to its stockholders for approval if the rules of
+the Nasdaq Global Select Market or other applicable laws or regulations require
+stockholder approval of such amendment. 
+(b) No
+termination, suspension, or amendment of the Plan will materially and adversely
+affect any right acquired by any Participant or Successor or Transferee under
+an Award granted before the date of termination, suspension, or amendment,
+unless otherwise agreed to by the Participant in the Agreement or otherwise, or
+required as a matter of law; but it will be conclusively presumed that any
+adjustment for 
+B- 12 
+changes in capitalization
+provided for in Sections 11(b) or 17 does not adversely affect these
+rights. Except as provided in Section 17, no Option or Stock Appreciation
+Right granted under the Plan may be amended to decrease the exercise price
+thereof, or be cancelled in conjunction with the grant of any new Option or
+Stock Appreciation Right with a lower exercise price, or otherwise be subject
+to any action that would be treated under accounting rules or otherwise as
+a “repricing” of such Option or Stock Appreciation Right, unless such action is
+approved by the Company’s stockholders. 
+17. Adjustment for Changes in Capitalization . In the event
+of any equity restructuring (within the meaning of Statement of Financial
+Accounting Standards No. 123 (revised 2004), referred to as “FAS 123R”)
+that causes the per Share value of Shares to change, such as a stock dividend
+or stock split, the Committee shall cause there to be made an equitable
+adjustment to the number and kind of Shares or other securities issued or
+reserved for issuance pursuant to the Plan and to outstanding Awards (including
+but not limited to the number and kind of Shares to which such Awards are
+subject, and the exercise or strike price of such Awards) to the extent such
+other Awards would not otherwise automatically adjust in the equity
+restructuring; provided, in each case, that with respect to Incentive Stock
+Options, no such adjustment shall be authorized to the extent that such
+adjustment would cause such Incentive Stock Options to violate Section 422(b) of
+the Code or any successor provision; provided further, that no such adjustment
+shall be authorized under this Section to the extent that such adjustment
+would cause an Award to be subject to adverse tax
+consequences under Section 409A of the Code. In the event of any
+other change in corporate capitalization, which may include a merger,
+consolidation, any reorganization (whether or not such reorganization comes
+within the definition of such term in Section 368 of the Code), or any
+partial or complete liquidation of the Company to the extent such events do not
+constitute equity restructurings or business combinations within the meaning of
+FAS No. 123R, such equitable adjustments described in the foregoing
+sentence may be made as determined to be appropriate and equitable by the
+Committee to prevent dilution or enlargement of rights. In either case, any
+such adjustment shall be conclusive and binding for all purposes of the Plan. Unless
+otherwise determined by the Committee, the number of Shares subject to an Award
+shall always be a whole number. 
+18. Fundamental Change . In the
+event of a proposed Fundamental Change, the Committee may, but shall not be
+obligated to: 
+(a) if the
+Fundamental Change is a merger or consolidation or statutory share exchange,
+make appropriate provision for the protection of the outstanding Options and
+Stock Appreciation Rights by the substitution of options, stock appreciation
+rights and appropriate voting common stock of the corporation surviving any
+merger or consolidation or, if appropriate, the parent corporation of the
+Company or such surviving corporation; or 
+(b) at least
+ten days before the occurrence of the Fundamental Change, declare, and provide
+written notice to each holder of an Option or Stock Appreciation Right of the
+declaration, that each outstanding Option and Stock Appreciation Right, whether
+or not then exercisable, shall be canceled at the time of, or immediately
+before the occurrence of the Fundamental Change in exchange for payment to each
+holder of an Option or Stock Appreciation Right, within ten days after the
+Fundamental Change, of cash equal to (i) for each Share covered by the
+canceled Option, the amount, if any, by which the Fair Market Value (as defined
+in this Section) per Share exceeds the exercise price per Share covered by such
+Option or (ii) for each Stock Appreciation Right, the price determined
+pursuant to Section 10, except that Fair Market Value of the Shares as of
+the date of exercise of the Stock Appreciation Right, as used in clause (i) of
+Section 10, shall be deemed to mean Fair Market Value for each Share with
+respect to which the Stock Appreciation Right is calculated determined in the
+manner hereinafter referred to in this Section. At the time of the declaration
+provided for in the immediately preceding sentence, each Stock Appreciation
+Right and each Option shall immediately become exercisable in full and each
+person holding an Option or a Stock Appreciation Right shall have the right,
+during the period preceding the time of cancellation of the Option or Stock
+Appreciation Right, to exercise the Option as to all or any part of the Shares
+covered 
+B- 13 
+thereby or the Stock
+Appreciation Right in whole or in part, as the case may be. In the event of a
+declaration pursuant to Section 17(b), each outstanding Option and Stock
+Appreciation Right granted pursuant to the Plan that shall not have been
+exercised before the Fundamental Change shall be canceled at the time of, or
+immediately before, the Fundamental Change, as provided in the declaration. Notwithstanding
+the foregoing, no person holding an Option or a Stock Appreciation Right shall
+be entitled to the payment provided for in this Section 17(b) if such
+Option or Stock Appreciation Right shall have terminated, expired or been
+cancelled. For purposes of this Section only, “Fair Market Value” per
+Share means the cash plus the fair market value, as determined in good faith by
+the Committee, of the non-cash consideration to be received per Share by
+the stockholders of the Company upon the occurrence of the Fundamental Change. 
+19. Dividends and Dividend Equivalents . An
+Award may, if so determined by the Committee, provide the Participant with the
+right to receive dividend payments or dividend equivalent payments with respect
+to Shares subject to the Award (both before and after the Shares subject to the
+Award are earned, vested or acquired), which payments may be either made
+currently or credited to an account for the Participant, and may be settled in
+cash or Shares, as determined by the Committee. Any such settlements, and any
+such crediting of dividends or dividend equivalents or reinvestment in Shares,
+may be subject to such conditions, restrictions and contingencies as the
+Committee shall establish, including the reinvestment of such credited amounts
+in Share equivalents. 
+20. Corporate Mergers, Acquisitions, Etc . The
+Committee may also grant Awards under the Plan in substitution for, or in
+connection with the assumption of, existing awards granted or issued by another
+corporation and assumed or otherwise agreed to be provided for by the Company
+pursuant to or by reason of a transaction involving a corporate merger,
+consolidation, acquisition of property or stock, separation, reorganization or
+liquidation to which the Company or a Subsidiary is a party. The terms and
+conditions of the substitute Awards may vary from the terms and conditions set
+forth in the Plan to the extent as the Board at the time of the grant may deem
+appropriate to conform, in whole or in part, to the provisions of the awards in
+substitution for which they are granted. 
+21. Unfunded Plan . The Plan
+shall be unfunded and the Company shall not be required to segregate any assets
+that may at any time be represented by Awards under the Plan. Neither the
+Company, its Affiliates, the Committee, nor the Board of Directors shall be
+deemed to be a trustee of any amounts to be paid under the Plan nor shall
+anything contained in the Plan or any action taken pursuant to its provisions
+create or be construed to create a fiduciary relationship between the Company
+and/or its Affiliates, and a Participant or Successor or Transferee. To the
+extent any person acquires a right to receive an Award under the Plan, this
+right shall be no greater than the right of an unsecured general creditor of
+the Company. 
+22. Limits of Liability . 
+(a) Any
+liability of the Company to any Participant with respect to an Award shall be
+based solely upon contractual obligations created by the Plan and the Award
+Agreement. 
+(b) Except as
+may be required by law, neither the Company nor any member of the Board of
+Directors or of the Committee, nor any other person participating (including
+participation pursuant to a delegation of authority under Section 3(a)(2) of
+the Plan) in any determination of any question under the Plan, or in the
+interpretation, administration or application of the Plan, shall have any
+liability to any party for any action taken, or not taken, in good faith under
+the Plan. 
+23. Compliance with Applicable Legal
+Requirements . No Shares distributable pursuant to the Plan
+shall be issued and delivered unless the issuance of the Shares complies with
+all applicable legal requirements including, without limitation, compliance
+with the provisions of applicable state securities laws, the Securities Act of
+1933, as amended and in effect from time to time or any successor statute, the 
+B- 14 
+Exchange
+Act and the requirements of the exchanges on which the Company’s Shares may, at
+the time, be listed. 
+24. Deferrals and Settlements . The
+Committee may require or permit Participants to elect to defer the issuance of
+Shares or the settlement of Awards in cash under such rules and procedures
+as it may establish under the Plan. It may also provide that deferred
+settlements include the payment or crediting of interest on the deferral
+amounts. 
+25. Other Benefit and Compensation Programs . Payments
+and other benefits received by a Participant under an Award made pursuant to
+the Plan shall not be deemed a part of a Participant’s regular, recurring
+compensation for purposes of the termination, indemnity or severance pay laws
+of any country and shall not be included in, nor have any effect on, the
+determination of benefits under any other employee benefit plan, contract or
+similar arrangement provided by the Company or an Affiliate unless expressly so
+provided by such other plan, contract or arrangement, or unless the Committee
+expressly determines that an Award or portion of an Award should be included to
+accurately reflect competitive compensation practices or to recognize that an
+Award has been made in lieu of a portion of competitive cash compensation. 
+26. Beneficiary Upon Participant’s Death . To the extent
+that the transfer of a Participant’s Award at death is permitted by this Plan
+or under an Agreement, (i) a Participant’s Award shall be transferable to
+the beneficiary, if any, designated on forms prescribed by and filed with the
+Committee and (ii) upon the death of the Participant, such beneficiary
+shall succeed to the rights of the Participant to the extent permitted by law
+and this Plan. If no such designation of a beneficiary has been made, the
+Participant’s legal representative shall succeed to the Awards, which shall be
+transferable by will or pursuant to laws of descent and distribution to the
+extent permitted by this Plan or under an Agreement. 
+27. Requirements of Law . 
+(a) To the
+extent that federal laws do not otherwise control, the Plan and all
+determinations made and actions taken pursuant to the Plan shall be governed by
+the laws of the State of Minnesota without regard to its conflicts-of-law
+principles and shall be construed accordingly. 
+(b) If any
+provision of the Plan shall be held illegal or invalid for any reason, the
+illegality or invalidity shall not effect the remaining parts of the Plan, and
+the Plan shall be construed and enforced as if the illegal or invalid provision
+had not been included. 
+B- 15 
+Annual Meeting Proxy Card 
+A. Proposals—The
+Board of Directors recommends a vote FOR all of the nominees listed and FOR
+Proposals 2-6. 
+1. Election of Directors 
+For 
+Withhold 
+Raymond D.
+Croghan 
+o 
+o 
+Michael E. Marks 
+o 
+o 
+Richard L. Sharp 
+o 
+o 
+For 
+Against 
+Abstain 
+2. Approval
+of the Crocs, Inc. 2008 Cash Incentive Plan 
+o 
+o 
+o 
+3. Approval
+of the Crocs, Inc. 2007 Incentive Plan 
+o 
+o 
+o 
+4. Approval
+of the Crocs, Inc. 2007 Equity Incentive Plan 
+o 
+o 
+o 
+5. Approval
+of the amendment to the Restated Certificate of Incorporation of Crocs, Inc.
+to increase the number of authorized shares of capital stock from 130,000,000
+to 255,000,000 
+o 
+o 
+o 
+6. Ratification
+of the selection of Deloitte & Touche LLP as our independent registered
+public accounting firm for fiscal year 2007 
+o 
+o 
+o 
+7. In their discretion, to transact other business as may
+properly come before the meeting or any postponement or adjournment thereof 
+B. 
+Authorized Signatures - This section must be
+completed for your vote to be counted. Date and sign below. 
+The undersigned hereby
+revokes all proxies heretofore given by the undersigned for said meeting. The
+proxy may be revoked prior to its exercise. 
+Note: Please sign exactly
+as your name or names appear hereon. When shares are held by joint tenants,
+both should sign. When signing as attorney, executor, administrator, trustee or
+guardian, please give full title as such. If a corporation, please sign in full
+corporate name by President or other authorized officer. If a partnership,
+please sign in partnership name by an authorized person. 
+Name:_____________________ Date:_____________ 
+Proxy
+- Crocs, Inc. 
+PROXY
+SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
+STOCKHOLDERS ON JULY 9, 2007 
+The undersigned hereby appoints
+Ronald R. Snyder and Peter S. Case, and each of them, with power of
+substitution, as proxies of the undersigned, to attend the Annual Meeting of
+Stockholders of Crocs, Inc. (the “Company”), to be held at the Beaver Creek
+Lodge, Beaver Creek, Colorado, on July 9, 2007 at 9:00 a.m., Mountain time, and
+all adjournments thereof, and to vote, as indicated on the reverse side, the
+shares of common stock of the Company which the undersigned is entitled to vote
+with all the powers the undersigned would possess if present at the meeting. 
+This
+proxy, when properly executed, will be voted in the manner directed herein by
+the undersigned stockholder(s). If no specific direction is given, this proxy
+will be voted FOR each of the proposals. 
+PLEASE
+DATE AND SIGN ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE. 
+(Continued
+and to be signed on reverse side.)
\ No newline at end of file
diff --git a/raw/proxies/0001334036/0001104659-07-046324/proxy_rpt.txt b/raw/proxies/0001334036/0001104659-07-046324/proxy_rpt.txt
new file mode 100644
index 0000000000000000000000000000000000000000..004d4236fc99796be7af721a84b6d74daf115db5
--- /dev/null
+++ b/raw/proxies/0001334036/0001104659-07-046324/proxy_rpt.txt
@@ -0,0 +1,29 @@
+Transactions with Related Persons 
+Our audit committee has adopted a written policy which
+requires that any transaction involving us in which one of our directors,
+nominees for director, executive officers, or greater than five percent
+stockholders, or their immediate family members, have a material interest be
+approved or ratified by the audit committee if the amount involved exceeds
+$100,000. The full board of directors reviews ordinary course of business
+transactions in which directors have an interest as part of the board’s annual
+director independence review. In determining whether to approve or ratify any
+such transaction, the audit committee must consider, in addition to other
+factors it deems appropriate, whether the transaction is on terms no less
+favorable to us than those involving unrelated parties. 
+All transactions disclosed
+above were reviewed and approved or ratified in accordance with
+this policy. 
+Director and
+Officer Indemnification 
+We have entered into
+agreements to indemnify our directors and executive officers, in addition to
+the indemnification provided for in our certificate of incorporation and
+bylaws. These agreements, among other things, provide for indemnification of
+our directors and executive officers for certain expenses (including attorneys’
+fees), judgments, fines and settlement amounts incurred by any such person in
+any action or proceeding, including any action by or in the right of our
+company, arising out of such person’s services as a director or executive
+officer of ours, any subsidiary of ours or any other company or enterprise to
+which the person provided services at our request. We believe that these
+provisions and agreements are necessary to attract and retain qualified persons
+as directors and executive officers.
\ No newline at end of file