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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed pursuant to Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934
UTI ENERGY CORP.
----------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Commission File No. 1-12542
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for
the year ended December 31, 1998 as set forth in the pages attached hereto:
Part III, Items 10, 11, 12 and 13
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below is the name, age as of April 1, 1999, and position of
each of the directors and executive officers of the Company Class I directors'
terms expire in 2001, Class II directors' terms expire in 1999 and Class III
directors' terms expire in 2000.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Mark S. Siegel 48 Chairman of the Board and Class II Director
(director since 1995)
Vaughn E. Drum 53 President, Chief Executive Officer and Class III
Director (director since 1986)
Kenneth N. Berns 39 Class II Director (director since 1995)
Curtis W. Huff 41 Class I Director (director since 1997)
Terry H. Hunt 50 Class I Director (director since 1994)
Nadine C. Smith 41 Class I Director (director since 1995)
Robert B. Spears 72 Class III Director (director since 1994)
John E. Vollmer III 43 Vice President, Secretary, Treasurer and Chief
Financial Officer
Bruce Sauers 35 Vice President and Corporate Controller
Royce W. Elliot 48 Vice President and Controller of Drilling
Operations
</TABLE>
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Mark S. Siegel - Mr. Siegel has served as Chairman of the Board and a
director of the Company since March 14, 1995. Mr. Siegel has been President of
Remy Investors and 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 a Director of Applause Enterprises, Inc.,
Modern Videofilm, Inc. and Variflex Inc. Mr. Siegel holds a B.A. from Colgate
University and a J.D. from Boalt Hall School of Law.
Vaughn E. Drum - Mr. Drum has served as President, Chief Executive Officer
and a director of the Company since December 1986. From 1980 through November
1986, Mr. Drum served in various capacities for UGI Development Company
("UGIDC"), a subsidiary of UGI Corporation. Mr. Drum holds a B.S. in Petroleum
Engineering from Marietta College.
Kenneth N. Berns - Mr. Berns has served as a director of the Company since
May 24, 1995. Mr. Berns has been an employee of Remy Investors since 1994. From
1990 through 1994, Mr. Berns was employed by affiliated real estate development
and management companies, including Ridge Properties, Ltd., Ridge Development,
Ltd. and Spound
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Company. Prior to 1990, Mr. Berns was a senior manager of Spicer & Oppenheim and
a Vice President of Cantor Fitzgerald Financial Corporation. Mr. Berns is the
majority stockholder of RD Management, Inc., which is the general partner of
Ridge Properties, Ltd. 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.
Curtis W. Huff - Mr. Huff has served as a director of the Company since
December 1997. Mr. Huff has served as Senior Vice President and General Counsel
of Weatherford International, Inc. since June 1998.. Prior to such time, Mr.
Huff was a partner at the law firm of Fulbright & Jaworski L.L.P., Houston,
Texas.
Terry H. Hunt - Mr. Hunt is Senior Vice President - Strategic Planning of
PP&L Resources, Inc. 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 April 1999. From 1989 to 1992, Mr. Hunt was the President and
Chairman of Carnegie Natural Gas Company, a gas distribution and transportation
company, and of Apollo Gas Company, a natural gas distributor. From 1984 through
1988, he served as Vice President of Delhi Gas Pipeline Corporation, an
intrastate pipeline company. Mr. Hunt holds a Bachelor of Engineering degree
from the University of Saskatchewan, Canada and a M.B.A. from Southern Methodist
University.
Nadine C. Smith - Ms. Smith is President and Chief Executive Officer of
Enidan Capital, an investment company that makes equity investments in public
and privately held companies, Prior to co-founding Enidan Capital in 1997, 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
also is President and Chief Executive Officer of Sirrom Resource Funding LP,
which finances environmental companies. Ms. Smith is a director of American
Retirement Corporation, Sirrom Partners, L.P. and Carson Private Capital, G.P.,
L.L.C. and Shield Life Insurance Company. Ms. Smith earned a Bachelors Degree in
economics from Smith College and a Masters degree in business from Yale
University.
Robert B. Spears - Since 1989, Mr. Spears has served as the Chairman and
Vice President, Business Development of Spears & Associates, Inc., a firm which
he founded in 1965. Spears & Associates is a leading research-based consulting
firm to the oil and natural gas industry worldwide.
John E. Vollmer -Mr Vollmer has served as Vice President and Chief
Financial Officer of the Company since July 1998. Mr. Vollmer was a financial
consultant from October 1997 until joining the Company 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 Entertainments' Music Division. Mr. Vollmer is a
Certified Public Accountant and holds a B. A., Accounting from Michigan State
University.
Bruce Sauers - Mr. Sauers has served as Vice President of the Company
since August 1998 and as Corporate Controller since December 1996. Prior to
joining the Company in 1996, Mr. Sauers was a Manager in a regional public
accounting firm. Mr. Sauers is a Certified Public Accountant and holds a B. S.
in Business Administration from Shippensburg University of Pennsylvania.
Royce W. Elliot - Mr. Elliott has served as Vice President and Controller
of Drilling Operations since August of 1998. From December 1986 through July of
1998, Mr. Elliott was Division Controller for UTI drilling operations. From 1981
through November 1986, he was a Division Controller for UGI Development Company,
a subsidiary of UGI Corporation. Mr. Elliott is a Certified Public Accountant
and holds a B.S. in Business Administration from Wichita State University.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who beneficially own more than ten
percent of a registered class of the Company's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than ten-percent stockholders are
required by the regulations promulgated under Section 16(a) to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during 1998, all filing
requirements applicable to officers, directors, and greater than ten-percent
stockholders were complied with, except that Mr. Drum reported the exercise of a
stock option to purchase 12,500 shares on Form 5 rather than on Form 4.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation for
1998, 1997 and 1996 earned by or paid to the Company's Chief Executive Officer,
the Company's other executive officers whose total annual salary and bonus
exceeded $100,000 in 1998, and each employee for whom disclosure would be
required except for the fact such individual was not serving as an executive
officer of the Company as of December 31, 1998 (collectively, the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation Awards
----------------------------------- -----------------------------------------
Restricted Securities
Other Annual Stock Underlying All Other
Compensation Award(s) Options Compensation
Name and Principal Position Year Salary $ Bonus $ (1) $ R SARs(#)(2) (3) $
- ------------------------------------- ---- -------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Vaughn E. Drum ...................... 1998 $170,040 $200,000 -- -- 12,500(4) $ 3,229
President and Chief ................. 1997 156,530 115,681 -- -- 42,500 5,959
Executive Officer ................... 1996 144,950 58,912 -- -- 291,960(5) 2,899
Mark S. Siegel ...................... 1998 100,000 -- -- -- 385,000(4) --
Chairman of the Board ............... 1997 -- -- -- -- 550,000 --
1996 -- -- -- -- -- --
Royce Elliot(6) ..................... 1998 84,085 36,706 -- -- 7,500(4) 2,303
Vice President and Controller of .... 1997 73,292 28,158 -- -- 8,000 3,054
Drilling Operations ................. 1996 58,974 20,401 -- -- -- 1,876
</TABLE>
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1. The aggregate amounts of perquisites and other personal benefits,
securities or property is less than 10% of each executive officer's
combined annual salary and bonus during the applicable year.
2. Share amounts have been adjusted to reflect the Company's three-for-one
stock dividend effected in September 1997.
3. Amounts set forth for 1998, 1997 and 1996 reflect the Company's
contributions or other allocations to defined contribution plans.
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4. In August 1998, the Board of Directors of the Company approved the
repricing of substantially all options granted to employees of the
Company during 1997. Pursuant to such action, Messrs. Drum, Siegel and
Elliott each had options to purchase 12,500, 385,000 and 5,000 shares
of Common Stock repriced, which are included in this table as new
grants during 1998.
5. Relates to stock options repriced during 1995 and approved by the
stockholders of the Company during 1996.
6. Mr. Elliot became an officer of the Company in August, 1998. Prior to
such time he was an employee of the Company.
Compensation Pursuant to Employee Benefit Plans
The Company maintains several plans intended to provide incentives to its
key employees. These plans are described below (share amounts have been adjusted
to reflect the Company's three-for-one stock dividend effected in September
1997).
Incentive Compensation Plan. The Company maintains an Incentive
Compensation Plan established in 1987 (the "ICP"). Under the ICP, specified
management employees of the Company or any subsidiary with at least 90 days of
service may be eligible to receive a cash bonus following each plan year based
on a comparison of financial performance against targets established for each
plan year.
1996 Employee Stock Option Plan. In August 1996, the Company's
shareholders approved the Company's 1996 Employee Stock Option Plan (the "1996
Plan"). In November 1997, the 1996 Plan was amended and restated by the Board of
Directors to reflect the Company's three-for-one stock split approved by the
stockholders at the 1997 Annual Meeting of Stockholders. Under the 1996 Plan,
the Company can award options on up to 900,000 shares of Common Stock to certain
employees at a price equal to the fair market value of the stock at the date the
option is granted. During 1997 and 1998, the Company awarded options to purchase
813,700 shares of Common Stock under the 1996 Plan. The 1996 Plan currently is
administered by the Company's Compensation Committee. There are currently only
86,300 shares of Common Stock available for grant under the 1996 Plan.
1997 Long-Term Incentive Plan. In August 1997, the stockholders approved
the 1997 Plan. In November 1997, the 1997 Plan was amended and restated by the
Board of Directors to reflect the Company's three-for-one stock split approved
by the stockholders at the 1997 Annual Meeting of Stockholders. Under the 1997
Plan, the Company may grant stock options, stock appreciation rights issued
independent or in tandem with such options ("SAR"), restricted stock awards and
performance awards to certain employees of the Company and its subsidiaries.
Currently, there are 600,000 shares of Common Stock authorized for issuance
under the 1997 Plan. Options are to be granted at a price not less than the fair
market value of the Common Stock on the date the option is granted, and the
exercise price of any SAR is to be determined by the Compensation Committee on
the date of grant. During 1998, the Company awarded options to purchase 534,625
shares of Common Stock pursuant to the 1997 Plan. The options granted in 1997
vest over one to five years. The 1997 Plan currently is administered by the
Company's Compensation Committee. There are currently only 65,375 shares of
Common Stock available for grant under the 1997 Plan.
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The following table sets forth information regarding grants of stock
options to the Named Executive Officers during 1998. Except for options to
purchase 2,500 shares of Common Stock granted to Mr. Elliott in connection with
his promotion to Vice President and Controller of Drilling Operations in August
1998, all stock options reflected in this table relate to the repricing of stock
options originally granted in 1997, which are considered new grants for the
purpose of this table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF PERCENT OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ------------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- -------------------- ------------ ---------------- ------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Vaughn E. Drum ..... 12,500 1.2% 9.875 8/12/03 34,104 75,360
Mark S. Siegel ..... 385,000 38.3% 9.875 8/12/03 1,050,388 2,321,083
Royce W. Elliot .... 7,500(5) 0.891% $ 9.875(6) 8/12/03 20,462 45,216
</TABLE>
The following table sets forth information concerning stock options
exercised in 1998 and stock options unexercised at December 31, 1998 for the
Named Executive Officers:
AGGREGATED OPTION/SAR EXERCISES IN 1998 AND VALUE TABLE AT DECEMBER 31,1998
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED VALUE OPTIONS/SARS AT OPTIONS/SARS
ON REALIZED DECEMBER 31, 1998 AT DECEMBER 31,1998
NAME EXERCISE ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------- -------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Vaughn E. Drum ..... 50,000 342,710 271,960 / 12,500 $1,292,657 / $0
Mark S. Siegel ..... -- -- 350,000 / 200,000 242,970 / 0
Royce W. Elliot .... -- -- 3,000 / 7,500 0 / 0
</TABLE>
Employment Contracts
The Company has an employment agreement with Mr. Drum. The annual salary
currently payable under such agreement is $170,000, which may be increased by
the Company's Board of Directors or the Compensation Committee. The agreement
has an initial term of five years continuing through December 2000, and
automatically extends for an additional year upon the completion of the
five-year term unless either party provides notice to the other of the intention
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to terminate such contract 120 days prior to the termination date. In addition,
the employment agreement entitles Mr. Drum to receive four weeks paid vacation
per year and to participate fully in all employee plans and fringe benefit
programs established by the Company after the date of the contract in which
other senior executives of the Company are eligible to participate.
In the event of a termination due to Mr. Drum's death or disability, his
estate is entitled to receive unused vacation pay, a pro-rated portion of the
bonus (the "Pro-rated Bonus") which would have been payable to Mr. Drum under
the ICP Plan had he been employed at the end of the year in which the
termination occurred (the "Annual Bonus"), and a separation payment equal to the
product of Mr. Drum's compensation in the most recent calendar year (such amount
is referred to herein as a "Year's Compensation"), and a fraction, the
denominator of which is 260, and the numerator of which is the number of months
of Mr. Drum's service with the Company and a previous parent, UGI Corporation,
but in any event not more than six months of compensation (the "Separation
Payment"). Additionally, Mr. Drum is entitled to the vesting of all of the
employee's interests, if any, under the Company's stock option plans and any
other employee plans of the Company ("Plan Vesting"). In the event an employee
retires in accordance with the Company's retirement policies, such employee is
entitled to receive unused vacation pay, Pro-rated Bonus, Separation Payment and
Plan Vesting (but only to the extent provided in the Company's employee benefit
plans for retiring employees).
If Mr. Drum is terminated by the Company without cause, he is entitled to
receive termination pay of one year's salary, unused vacation pay, Separation
Payment, Annual Bonus and Plan Vesting. In addition, Mr. Drum is entitled to the
continuation of all employee benefits, without any increase in cost to him, for
a period of 18 months following termination.
In connection with the Company's relocation of its corporate headquarters
from Wayne, Pennsylvania to Houston, Texas, the Company agreed in January 1997
to increase Mr. Drum's annual salary to $170,000 per year, accelerated vesting
on any unvested options held by him, and agreed to provide relocation assistance
if and when Mr. Drum's employment with the Company is terminated.
In 1997, the Compensation Committee approved employed arrangements with
Mr. Siegel and Mr. Berns providing for annual salaries of $100,000 and $50,000
for a period of five years. In the event of a change in control of the Company,
the Company's obligation to pay such salaries would end and Mr. Siegel and Mr.
Berns would each be entitled to payment of one year's salary and vesting of all
options granted in connection with such employment agreements. Both Mr. Siegel
and Mr. Berns are entitled to receive bonuses for extraordinary services solely
within the discretion of the Board of Directors and Compensation Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to November 1997, grants of stock options to the Company's executive
officers and Mr. Siegel and Mr. Berns as well as salary levels of the Company's
executive officers were approved by the full Board of Directors. In November
1997, the Board of Directors delegated these responsibilities to the
Compensation Committee, which is comprised of Messrs. Hunt and Spears. Although
the full Board of Directors authorized the repricing of options during 1998
(with Messrs. Siegel, Drum and Berns abstaining), it is intended that the
Compensation Committee will determine compensation awarded to the Company's
executive officers, as well as Mr. Siegel and Mr. Berns, in the future. Item 13
sets forth certain transactions between members of the Board of Directors and
the Company.
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ITEM 12. SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth, as of the April 30, 1999, the stock
ownership of the Company's named executive officers and directors individually,
all directors and executive officers as a group, and each person known by the
Company to be the beneficial owner of more than 5% of the Company's Common
Stock.
<TABLE>
<CAPTION>
Amount and Nature of
Name of Beneficial Ownership Percent
Beneficial Owner of Class
- ------------------------------------------------ -------------------- --------
<S> <C> <C>
Other Beneficial Owners:
REMY Capital Partners III, L.P. 3,514,762(1) 21.9%
1801 Century Park East, Suite 1111
Los Angeles, CA 90067
REMY Investors & Consultants, 3,580,762(1) 22.3
Incorporated
1801 Century Park East, Suite 1111
Los Angeles, CA 90067
Pilgrim Baxter & Associates Ltd. 1,289,200(2) 7.8
825 Duportail Road
Wayne, PA 19087
Directors and Executive Officers:
Mark S. Siegel 3,930,762(1) 23.9
Vaughn E. Drum 398,360(3) 2.4
Kenneth N. Berns 67,000(4) [*]
Curtis W. Huff 7,500(5) [*]
Terry H. Hunt 17,100(6) [*]
Nadine C. Smith 19,000(6) [*]
Robert B. Spears 15,900(6) [*]
Royce W. Elliott 5,500(3) [*]
(All Directors and Executive Officers as a group 4,461,122(7) 26.5
- -- 10 persons)
* indicates less than 1.0%
</TABLE>
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(1) The Common Stock beneficially owned by Remy Investors, which is the
general partner of Remy, includes the 3,514,762 shares of Common Stock
owned by Remy as well as presently exercisable options to purchase
66,000 shares of Common Stock held by Remy Investors. The Common Stock
beneficially owned by Mr. Siegel, who is the President and sole
stockholder of Remy Investors, includes the 3,580,762 shares of Common
Stock and warrants beneficially owned by Remy Investors as well as
presently exercisable options to purchase 350,000 shares of Common
Stock held by Mr. Siegel, but does not include 200,000 shares
underlying stock options held by Mr. Siegel, which options are not
presently exercisable and will not become exercisable with sixty days.
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(2) Based solely upon Schedule 13G filed with the Securities and Exchange
Commission.
(3) Includes shares underlying presently exercisable stock options held by
the following individuals in the following amounts: Mr. Drum, 271,960
shares; and Mr. Elliott, 3,000 shares. Does not include shares
underlying stock options held by the following individuals which
options are not presently exercisable and will not become exercisable
within sixty days in the following amounts: Mr. Drum, 12,500 shares;
and Mr. Elliott, 7,500 shares.
(4) Represents presently exercisable warrants and options to purchase
67,000 shares owned by Mr. Berns. Does not include 50,000 shares
underlying options that are not presently exercisable within 60 days
and does not include shares of Common Stock or warrants beneficially
owned by Remy Investors by whom Mr. Berns is employed. Mr. Berns
disclaims beneficial ownership of such shares and warrants.
(5) Includes presently exercisable options to purchase 7,500 shares owned
by Mr. Huff. Does not include 3,750 shares underlying stock options
held by Mr. Huff which options are not presently exercisable and will
not become exercisable within sixty days.
(6) Includes presently exercisable options to purchase 15,000 shares owned
by each of Mr. Hunt, Ms. Smith and Mr. Spears. Does not include options
to purchase 3,750 shares owned by each of such individuals, which are
not exercisable within sixty days.
(7) Includes presently exercisable options to purchase 810,460 shares of
Common Stock. Does not include options to purchase 417,500 shares and
by such individuals which are not exercisable within 60 days
Except as stated herein, there are no arrangements known to the Company
which may result in a change in control of the Company and each shareholder has
sole voting and investment power with respect to the Company's Common Stock
included in the above table.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with Remy Capital Partners III, L.P.'s ("Remy")
acquisition of its ownership interest in the Company in March 1995, Remy
succeeded to a registration rights agreement with the Company (the "Registration
Agreement") which provides Remy with the right to require the Company to use its
best efforts to register shares held by Remy under the Securities Act. In the
event that such rights are exercised in connection with a primary offering
proposed by the Company (or a secondary offering with which the Company agrees
to participate), Remy would bear its pro-rata share of the costs of the
offering, other than legal, accounting and printing costs which are to be borne
by the Company. In the event that Bear, Stearns elected to exercise such rights
otherwise than in connection with an offering proposed by the Company, all costs
of the offering will be borne by it. These rights continue so long as Remy
continues to own Common Stock acquired by it. The right to a demand registration
may be exercised three times.
Mr. Mark S. Siegel, Chairman of the Company, is President and sole
stockholder of Remy Investors, which is the General Partner of Remy. Kenneth N.
Berns, a director and employee of the Company, is an employee of Remy Investors.
On April 27, 1999, the Company and Remy announced that they had agreed
to form a new joint venture that will purchase substantially all of the assets
of Fracmaster, Ltd., a Canadian corporation. The terms and conditions of this
joint venture have not yet been established.
The law firm of Fulbright & Jaworski L.L.P., of which Mr. Huff, a
director of the Company, was a partner until June 1998, acted as the Company's
principal outside legal counsel in 1998 and is continuing to do so in 1999.
Mr. Huff is currently Of-Counsel to Fulbright & Jaworski L.L.P.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
UTI ENERGY CORP.
Dated: April 30, 1999 By: /s/ John E. Vollmer
-------------------------------------------
John E. Vollmer
Chief Financial Officer
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