Employment Letter Agreement between Pioneer Drilling Company and Lorne E. Phillips
This agreement outlines the terms of employment for Lorne E. Phillips as Executive Vice President and Chief Financial Officer of Pioneer Drilling Company. It details compensation, including a $150,000 sign-on bonus, a $320,000 annual salary, eligibility for annual and long-term incentive bonuses, stock options, and standard executive benefits. Additional terms include an auto allowance, vacation, severance, indemnification, relocation assistance, and certain club dues reimbursements. The agreement specifies that employment is at-will and not a contract for guaranteed employment. Both parties have signed to acknowledge acceptance of these terms.
Exhibit 10.1
1250 N.E. Loop 410, Suite 1000
San Antonio, Texas 78209
210 ###-###-####
January 5, 2009
Lorne E. Phillips
4119 Ruskin
Houston, TX 77005
Dear Lorne:
On behalf of Pioneer Drilling Company and its subsidiaries (collectively, “Pioneer” or the “Company”), I am very pleased to offer you this opportunity to join the Pioneer team. I have described below the general terms of your employment, upon which I believe we have agreed.
| Employer: | Pioneer Drilling Company | |
| Positions: | Executive Vice President and Chief Financial Officer; reports to the President and Chief Executive Officer of Pioneer Drilling Company. | |
| Sign-On Bonus: | $150,000 | |
| Base Salary: | $320,000 per annum; payable according to the Company’s regular payroll schedule for salaried employees. | |
| Annual Bonus: | You will participate in the Company’s annual incentive compensation plan as a Level II Executive Officer (as defined by the Compensation Committee of the Board of Directors of Pioneer Drilling Company (the “Committee”)), with a current target bonus of 50% of base salary and a current maximum bonus of 100% of base salary. | |
| LTI Compensation: | On or about the employment date, you will be granted options to purchase 100,000 shares of Pioneer Drilling Company common stock at the closing price on the day of such grant, subject to the approval of such option grant by the Committee. | |
| The options will be subject to vesting restrictions and other customary terms and conditions of Pioneer Drilling Company’s option grants. | ||
| You will participate in the Company’s long-term incentive plan as a Level II Executive Officer (as defined by the Committee). For fiscal year ending 12/31/08, the target annual long-term incentive award was based on a LTI multiple of 1.7 times base salary and was comprised of 70% stock options and 30% restricted stock shares. | ||
| Benefits: | Participation in all health, benefit, welfare and retirement programs generally available to executive officers of the Company, including, without limitation, group medical/dental available upon commencement of employment with waiting period or exclusion of preexisting conditions (to the extent the Company’s plans permit the Company to waive such waiting periods and exclusions). | |
| Auto Allowance: | $1,200 per month plus fuel card. | |
| Vacation: | Four weeks. | |
| Severance: | On or as soon as practicable after your initial date of employment, the Company will enter into a Severance Agreement with you (or make you a participant in the Company’s Executive Severance Plan) on terms generally available to executive officers of the Company. | |
| Indemnification: | On or as soon as practicable, after your initial date of employment, the Company will enter into an indemnification agreement with you on terms that are mutually agreeable. | |
| Relocation: | In accordance with the Company’s Executive Officer Relocation Policy. | |
| Other: | Company will pay for monthly dues at a golf club, provided that you pay for any upfront initiation or membership fee(s). In addition, Company will reimburse you for the initiation fee paid to the Briar Club in Houston, Texas (estimated to be approximately $10,000 to $12,000), in the event the | |
| fee is not reimbursed to you. Also, the Company will pay for the final tax consultation service fee(s), if any exist, to complete your tax and advisory work with Goldman Sachs for 2008 (estimated to be less than $3,000). |
THIS IS NOT A CONTRACT FOR EMPLOYMENT OR AN OFFER TO ENTER INTO SUCH A CONTRACT. You will serve as an at-will employee of the Company. Except for the specific provisions of any Severance Agreement to which you and the Company may become parties, nothing herein or in any compensation or other arrangement referred to herein shall change your status as an at-will employee.
Lorne, I am truly excited about the prospect of your joining our team at Pioneer. If the terms outlined above are agreeable, please execute two copies of this letter and return one to me at your earliest convenience.
| Yours very truly, |
| /s/ Wm. Stacy Locke |
| Wm. Stacy Locke |
| President and Chief Executive Officer |
| cc: | Mr. Dean A. Burkhardt |
| AGREED AND ACCEPTED: |
| /s/ Lorne E. Phillips |
| Lorne E. Phillips |
| 1/7/09 |
| Date |
