UNITED
STATES




SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K/A






Amendment
No. 1





(Mark
One)


x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934






For
the fiscal year ended December 31, 2008




or




 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the transition period from
                    
to




Commission
file number 000-51471





Bronco
Drilling Company, Inc.




(Exact
name of registrant as specified in its charter)






Delaware
            20-2902156(State
      or Other Jurisdiction of
              Incorporation
      or Organization)
            (I.R.S.
      Employer
              Identification
      No.)16217
      North May Avenue
            73013(Address
      of Registrant’s Principal Executive Offices)
            (Zip
      Code)


(405)
242-4444


(Registrant’s
telephone number, including area code)





Securities
      Registered Pursuant to Section 12(b) of the Act:Title
      of Each Class
            
            Name
      of Each Exchange on Which RegisteredCommon
      Stock $0.01 Par Value per Share
            
            The
      Nasdaq Stock Market LLCSecurities
      Registered Pursuant to Section 12(g) of the Act:None




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.    Yes   ̈    No x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  x    No   ̈




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K.   ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, non-accelerated filer or a smaller reporting company. See
definitions of “accelerated filer and large accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (check one):




Large
      Accelerated Filer   ̈
            Accelerated
      Filer  x
            Non-Accelerated
      Filer   ̈
            Smaller
      Reporting Company   ̈




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes   ̈    No  x




The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant as of the most recently completed second fiscal
quarter based on the closing price on the Nasdaq Stock Market on June 30, 2008
was approximately $480,662,493.




As of
February 27, 2009, 27,217,459 shares of common stock were
outstanding.












Documents
Incorporated By Reference




None.


-2-


BRONCO
DRILLING COMPANY, INC.




INDEX




Item
              No.
            
            Form
              10-K/A
              Report
              PageEXPLANATORY
      NOTE......................................................................................................................................................................................
              
              PART
      III10.
            Directors,
      Executive Officers and Corporate
      Governance............................................................................................................................
            411.
            Executive
      Compensation.......................................................................................................................................................................
            512.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters..................................................................
            1013.
            Certain
      Relationships and Related Transactions, and Director
      Independence...................................................................................................
            1214.
            Principal
      Accounting Fees and
      Services...................................................................................................................................................
            12PART
      IV15.
            Exhibits
      and Financial Statement Schedules
            12




EXPLANATORY
NOTE




Bronco
Drilling Company, Inc. is filing this Amendment No. 1 on Form 10-K/A (this
“Amendment”) to its Annual Report on Form 10-K for the fiscal year ended
December 31, 2008, originally filed on March 16, 2009, for the purpose of
including the information required by Part III of Form 10-K.  In
addition, we are also including as exhibits to this Amendment the certifications
required under Section 302 of the Sarbanes-Oxley Act of 2002.  In
accordance with the rules of the Securities and Exchange Commission, we are not
including certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 because no financial statements are contained within this
Amendment.  Except as set forth herein, no other changes are made to
our Annual Report on Form 10-K for the year ended December 31,
2008.


-3-


PART
III




Item 10.
Directors, Executive Officers and Corporate Governance.




Directors




The following
table sets forth the name, age and position of each of our directors elected by
our stockholders.





Name
            Age
            PositionD.
      Frank Harrison
            61
            Chairman
      and Chief Executive OfficerDr.
      Gary C. Hill (2)(3)
            60
            DirectorDavid
      W. House (1)(2)
            57
            DirectorDavid
      L. Houston (1)(3)
            56
            DirectorWilliam
      R. Snipes (1)(2)(3)
            56
            Director




(1)
            Member
      of audit committee


(2)
            Member
      of compensation committee


(3)
            Member
      of nominating and corporate governance
committee




D. Frank
Harrisonhas served as the Chairman of our Board of Directors since
August 2007, and Chief Executive Officer and a director of our company
since May 2005. From 2002 until joining our Company, Mr. Harrison served as
an agent for the purchase and sale of oil and gas properties for entities
controlled by Wexford Capital LLC. From 1999 to 2002, Mr. Harrison served
as President of Harding & Shelton, Inc., a privately held oil and
natural gas exploration, drilling and development firm. He graduated from
Oklahoma State University with a Bachelor of Science degree in
Sociology.


Dr. Gary C. Hillhas served as a director of our company since August 2006. Dr. Hill
has served as the Chief of Surgery Service and Chief of Staff at
Edmond Medical Center. He also has served as the President of the
Edmond Medical Center Hospital Board. Dr. Hill served as the Chief of
Surgery Service and Chief of Staff at St. Joseph’s Regional Hospital in
Ponca City, Oklahoma. Dr. Hill is a graduate of
Oklahoma State University, where he received his Bachelor of Arts in
Humanities, and the University of Oklahoma Health Sciences Center. He served
both his Surgery Internship and Residency in Otolaryngology, Head and Neck
Surgery at the University of Texas Health Science Center, Parkland Hospital
in Dallas before performing his Plastic and Reconstructive Surgery Residency at
the University of Kansas Health Sciences Center in Kansas
City.


David W. Househas served as a director of our company since September 2008.
Mr. House served as the President of Primary Natural Resources, Inc. from
2004 to 2008, and as the Chief Financial Officer of Primary Natural Resources,
Inc. from 2000 until being appointed its President. From 1996 to 2000,
Mr. House served as Senior Vice President of El Paso Corporation’s
Mid-Continent Gas Group. From 1979 to 1996, Mr. House served in various
positions with Samson Resources Company, including Vice President of
Administration and President of Premier Gas Company, a wholly owned subsidiary
of Samson Resources Company. Mr. House previously served as an auditor with
Arthur Young & Co., received a Bachelor of Science degree in Accounting
from Harding University and is a licensed Certified Public
Accountant.


David L. Houstonhas served as a director of our company since May 2005. Since 1991,
Mr. Houston has been the principal financial and investment advisor of
Houston Financial, a firm that offers life and disability insurance,
compensation and benefits plans and estate planning. He currently serves on the
board of directors of Gulfport Energy Corporation. He served on the board of
directors and executive committee of Deaconess Hospital, located in
Oklahoma City, Oklahoma from 1994 to2008. Mr. Houston is the former chair
of the Oklahoma State Ethics Commission and the Oklahoma League of Savings
Institutions. Prior to 1991, Mr. Houston was President and Chief Executive
Officer of Equity Bank for Savings, F.A., an Oklahoma-based savings bank. He
received a Bachelor of Science degree in Business from
Oklahoma State University and a graduate degree in Banking from
Louisiana State University.


William R. Snipeshas served as a director of our company since February 2006.
Mr. Snipes has served as the owner and President of Snipes Insurance
Agency, Inc., an independent insurance agency concentrating in property and
liability insurance, since 1991. From 1981 to 1991, Mr. Snipes was the
owner and President of William R. Snipes, CPA, Inc., a public
accounting firm concentrating in financial accounting and tax services. He
received a Bachelor of Science degree and a Masters degree in Accounting from
Oklahoma State University and is a licensed Certified Public
Accountant.




Executive
Officers




The following
table sets forth the name, age and position of each of our executive officers,
other than Mr. Harrison, whose information is set forth above under the caption
“Directors.”





Name
            Age
            PositionMark
      Dubberstein
            55
            PresidentZachary
      M. Graves
            33
            Chief
      Financial Officer, Secretary and TreasurerSteven
      R. Starke
            31
            Chief
      Accounting Officer




Mark Dubbersteinhas served as our President since June 2007. He served as our General
Counsel from January 2006 to June 2007. Prior to joining our company,
Mr. Dubberstein was in private legal practice for twenty-five years, most
recently as the senior member of Dubberstein, Heinen & Morris PC in
Oklahoma City. His previous experience includes serving as Mid-Continent Counsel
at Sohio Petroleum Company in Dallas. He received a Juris Doctorate from the
University of Oklahoma College of Law and a Bachelor of Arts degree in English
from Oklahoma State University.


Zachary M. Graveshas served as our Chief Financial Officer, Secretary and Treasurer since
April 2005. He served previously as our Controller and the Controller of
Gulfport Energy Corporation from April 2003 to March 2005. Prior to joining our
company, Mr. Graves served as an accountant with KPMG LLP from 2000 to
2003. He received a Bachelor of Business Administration degree in Accounting
from the University of Oklahoma and is a licensed Certified Public
Accountant.


Steven R. Starkehas served as our Chief Accounting Officer since June 2007.
Mr. Starke served previously as our Controller from May 2005 to June 2007.
Prior to joining our company, Mr. Starke served as an accountant with Grant
Thornton LLP in Oklahoma City from January 2000 to May 2005. He received a
Bachelor of Business Administration degree in Accounting and Management
Information Systems from the University of Oklahoma and is a licensed Certified
Public Accountant.





Section
16(a) Beneficial Ownership Reporting Compliance




Section 16(a)
of the Securities Exchange Act of 1934, or the Exchange Act, requires our
executive officers and directors, and persons who own more than 10% of a
registered class of our equity securities, to file reports of ownership and
changes of ownership with  the Securities and Exchange Commission, or
SEC.  Our officers, directors and 10% stockholders are required by SEC
regulations to furnish us with copies of all Section 16(a) forms so
filed.  Based solely on our review of such forms received, we believe
that, during the last fiscal year, all filing requirements under 16(a)
applicable to our officers, directors and 10% stockholders were timely met, with
the exception of the filing of the initial statement of beneficial ownership for
Mr. House triggered upon his election to our board of directors, which was
inadvertently filed untimely.




Code
of Business Conduct and Ethics




Our Code of
Business Conduct and Ethics is designed to help directors and employees resolve
ethical issues and to help us conduct our business in accordance with all
applicable laws, rules and regulations and with the highest ethical standards.
Our Code of Business Conduct and Ethics applies to all directors and employees,
including our principal executive officer, principal financial officer,
principal accounting officer and all other executive officers. We also expect
that any consultants we retain to abide by our Code of Business Conduct and
Ethics. Our Code of Business Conduct and Ethics sets forth our policies with
respect to public disclosure of Company conflicts of interest, corporate
opportunities, fair dealing, confidentiality, equal employment opportunity and
harassment, protection and proper use of our assets and employee complaint
procedures. Our Code of Business Conduct and Ethics is posted on our website
at www.broncodrill.com
under the “Corporate Governance” caption. Any amendments to, or a waiver from, a
provision of our Code of Business Conduct and Ethics that is applicable to our
principal executive officer, principal financial officer, principal accounting
officer or controller (or persons performing similar functions) and is required
to be disclosed by the relevant rules and regulations of the SEC will be posted
on our website.


Stockholder
Nominations for Director Nominees
  No material
changes have been made to the procedures by which our stockholders may recommend
nominees to our board of directors since we described the procedures in our
Proxy Statement for our Annual Meeting of Stockholders held on November 17,
2008.  Our nominating and corporate governance committee will propose
the slate of directors to be put up for election at our annual meeting of
stockholders.


-4-






Audit
Committee


We currently
maintain an audit committee.  The audit committee of our board of
directors is composed of Messrs. House (chair), Houston and Snipes. Our board of
directors has determined that each current member of the audit committee is
independent for purposes of serving on such committee under NASDAQ listing
standards and applicable federal law. Our board of directors has also determined
that each current member of the audit committee is financially literate under
NASDAQ listing standards and that Messrs. House, Houston and Snipes
each qualify as an “audit committee financial expert,” as such term is defined
in Item 407(d) of Regulation S-K. We believe that the composition and
functioning of our audit committee complies with all applicable requirements of
the Sarbanes-Oxley Act of 2002, as well as NASDAQ listing standards and SEC
rules and regulations.





Item 11.
Executive Compensation.




Compensation
Discussion and Analysis





Overview
of Compensation Program




The
compensation committee of our board of directors, which we refer to as the
Committee, was established by our board of directors effective as of
March 25, 2007. Until that date, we relied on the “controlled company”
exemption from the requirement to have a compensation committee and the
applicable transition rules, in each case as provided by NASDAQ listing
standards.




The Committee
is composed entirely of independent directors and has the responsibility for
establishing, implementing and monitoring our compensation
programs.  The Committee annually reviews and recommends to our board
of directors the compensation and benefits for our executive officers,
administers our equity incentive plans, and assists with the establishment of
general policies relating to compensation and benefits for all our
employees.  The Committee ensures that the total compensation paid to
our officers is fair, reasonable and competitive.  Generally, the
types of compensation and benefits provided to our executive officers are
similar to those provided to our other officers and employees.  We do
not have compensation plans that are solely for executive
officers.  Prior to the formation of the Committee, all compensation
programs, including those for our named executive officers, were administered by
our board of directors and all functions of the Committee described below were
performed by our board of directors.





Compensation
Philosophy and Objectives




The
objectives of our compensation programs are to attract and retain key
executives, align the interests of our executives with those of our
stockholders, and motivate and reward individual performance and
contributions.  The key elements of our compensation program are
salary, annual bonus and long-term incentive compensation. We use these elements
to meet our compensation objectives as follows:




·
            Attract
      and retain key executives. We believe that to attract and retain talented
      executives, we must offer compensation that is competitive. We also
      believe that our executive officers are critical to the long-term success
      of our company. To facilitate their retention, we entered into employment
      agreements with Messrs. Harrison, Dubberstein and Graves during 2006,
      and Larry Bartlett, our former Senior Vice President of Rig Operations,
      and Mr. Starke during 2007, on terms that we believe are competitive. In
      setting the salary and bonus for each of these individuals pursuant to
      such employment agreements, our board of directors believed that the
      combined value of base salary and bonus was competitive with that paid to
      similarly situated executives.




·
            Align
      the interests of our executives with those of our stockholders. In 2008,
      the Company used restricted stock awards to provide long-term incentive
      compensation and to align the financial interests of our executives with
      those of our stockholders. For a discussion of the Company’s long-term
      incentive policy, equity awards and the offer to exchange outstanding
      options for restricted stock awards, see “Long Term Incentive
      Compensation” below.




·
            Motivate
      and reward individual performance and contributions. The Company’s
      evaluation of the individual performance of each executive officer affects
      most aspects of the executive’s compensation. Individual performance and
      level of responsibility are considered in determining an executive’s
      annual salary, and are important factors in deciding discretionary bonuses
      and equity awards.




Compensation
Benchmarking




To ensure our
compensation is competitive, the Committee considers the competitive market for
talent and compensation levels provided by comparable companies and seeks to
minimize significant differences that could negatively impact our ability to
attract and retain exceptional executive officers. During the third and fourth
quarters of 2008, the Committee, with the assistance of an external compensation
consultant, Equilar, Inc., reviewed the compensation practices at peer companies
with which we compete for business and/or talent.  Equilar, Inc. was
retained to provide a competitive market pay analysis, which included total
compensation measurement services, proxy data studies, board of directors pay
studies and market trends. The Committee chose the companies listed below to
serve as the peer group for its review because those companies, in the
Committee’s opinion, consisted of direct competitors, similar sized companies
within the energy industry, and Oklahoma-based energy companies with which we
compete for talent.




·
            Atwood
      Oceanics, Inc.




·
            Basic
      Energy Services Inc.




·
            Chesapeake
      Energy Corporation




·
            Complete
      Production Services Inc.




·
            Devon
      Energy Corporation




·
            Grey
      Wolf Inc.




·
            Helmerich
      & Payne Inc.




·
            Key
      Energy Services Inc.




·
            Patterson
      UTI Energy




·
            Pioneer
      Drilling Company




·
            Sandridge
      Energy Corporation




·
            Union
      Drilling Inc.





After
completing its review, the Committee determined that 2008 compensation for our
executive officers was appropriate and competitive with similarly situated
companies, and, therefore, decided to make no changes to our compensation
structure or policies.   The Committee plans to retain Equilar,
Inc. or another compensation consultant during 2009 to provide further analysis
of our compensation structure and philosophy.


-5-




Role
of Executive Officers




In 2008, the
Committee, made all compensation decisions for our Chief Executive Officer and,
after receiving input from the Chief Executive Officer, all other named
executive officers of the Company. Our board of directors and the Committee
reviewed the performance of our Chief Executive Officer, and following such
review, determined to maintain the compensation of our Chief Executive Officer
pursuant to his employment agreement, which is described in more detail below.
The board of directors and the Committee, together with our Chief Executive
Officer, reviewed the performance of our other named executive officers, and our
Chief Executive Officer made compensation recommendations to the board of
directors and the Committee with respect to our other named executive officers.
No other executive officers were present at the time of such discussions. The
board and the Committee considered such recommendations when making its final
compensation decision for all named executive officers other than our Chief
Executive Officer.





Base
Salary




Prior to the
establishment of the Committee, our board of directors annually reviewed the
base salaries of our named executive officers.  Since its
establishment, the Committee has reviewed the base salaries of our named
executive officers and, with respect to future salary determinations, will be
reviewed by the Committee on an annual basis. Our board of directors and the
Committee considered various factors, including with regard to the position of
the named executive officer, the compensation of executive officers of companies
within the peer group described above, the performance of such executive
officer, increases in responsibilities and recommendations of our Chief
Executive Officer with respect to base salaries of other named executive
officers.




Each of our
named executive officer’s annual base salary is set forth in his respective
employment agreement discussed in more detail below. The annual base salary may
be increased, but not decreased, at the discretion of the board of directors or
the Committee. Based on the considerations described above, in August 2006, our
board of directors established the annual base salary for Mr. Harrison at
$450,000.  The Committee decided to maintain such annual base salary
for Mr. Harrison in 2007 and 2008.  Based on the considerations
described above, Mr. Dubberstein’s annual base salary was increased to $325,000
in April 2007, and Mr. Graves’ annual base salary was increased to $325,000 in
July 2007.  The Committee decided to maintain such annual base
salaries for 2008.  Based on the considerations described above, Mr.
Starke’s annual base salary was increased to $150,000 in September
2008.  See “Summary Compensation Table” below.  The terms of
each executive officer’s employment agreement are discussed in more detail under
the heading “Employment Agreements” below.





Bonus




Under the
terms of his employment agreement, our Chief Executive Officer is eligible to
receive an annual bonus in an amount not less than 66.7% of his annual base
salary. The compensation provided in that employment agreement was established
by our board of directors based upon an assessment of the compensation practices
and competitive market conditions existing at such time.  See
“Employment Agreements” below.  In 2008, we paid our Chief Executive
Officer the compensation required under his employment agreement, including the
minimum bonus required under that agreement, which was $300,000.  The
Committee did not make any determination whether or not to pay such bonus,
as it was required under the employment agreement.  The Committee did
determine not to pay a bonus that was higher than the minimum amount required
because it believed that such amount was sufficient, when aggregated with his
base salary, to cause the cash component of his compensation to be comparable to
similarly situated executives of our competitors.  The Committee did
not consider any other factors in making such determination.




In 2008, our
other named executive officers were eligible to receive an annual bonus if
recommended by the Chief Executive Officer and approved by the Committee in its
discretion. Our President, Chief Financial Officer, and Chief Accounting Officer
received bonuses of $100,000, $100,000 and $20,000, respectively. These bonuses
were discretionary and based on various factors, including our profitability,
growth, market share, and safety record achieved, and each individual’s
contributions to the Company, in 2008.  In determining these bonuses,
the Committee did not assign any particular weight to any of these factors
relative to one another, nor did it establish any targets or benchmarks that
were required to be achieved with respect to any of these factors for a bonus to
be earned.  Ultimately, the Committee determined that the bonuses paid
were appropriate compensation based upon all of these factors considered as a
whole and consistent with our compensation philosophy and
objectives.  Further details regarding 2008 bonuses for our Chief
Executive Officer and other named executive officers are set forth under the
heading “Summary Compensation Table” below.





Long-Term
Incentive Compensation




2008
Awards.  In January 2008, the Committee approved restricted
stock awards of 50,000 shares to our Chief Executive Officer, 33,333 shares to
our President, 48,333 shares to our Chief Financial Officer, 28,333 shares to
our former Senior Vice President of Rig Operations, 10,042 shares to our Chief
Accounting Officer, and 5,000 shares to each of Messrs. Hill, Snipes and
Houston, under our 2006 Stock Incentive Plan described in more detail
below.  These shares of restricted stock vest in two equal annual
installments beginning on February 25, 2009, subject to earlier vesting or
forfeiture in certain circumstances.  These awards were made in the
discretion of the Committee to help incentivize these directors and executive
officers by maintaining a comparable amount of unvested shares of restricted
stock as they had prior to recent vestings.




2009
Awards.In January 2009,
the Committee approved restricted stock awards of 112,395 shares to our Chief
Executive Officer, 71,429 shares to our President, 81,148 shares to our Chief
Financial Officer, and 22,573 shares to our Chief Accounting Officer, under our
2006 Stock Incentive Plan described in more detail below.  These
shares of restricted stock vest in two equal annual installments beginning on
February 25, 2010, subject to earlier vesting or forfeiture in certain
circumstances.  In February 2009, the Committee approved restricted
stock awards of 11,240 shares to each of Messrs. Hill, House, Houston and
Snipes. These shares of restricted stock vest on February 25, 2010 or
immediately prior to our 2009 annual meeting of stockholders, subject to earlier
vesting or forfeiture in certain circumstances. The awards were
made at the discretion of the Committee to help incentivize these directors
and executive officers by maintaining a comparable value of unvested shares of
restricted stock as they had prior to recent vestings.




Long-Term Incentive
Policy. Although in the past we awarded both options and restricted stock
as part of our long-term incentive compensation program, our board of directors
and the Committee believe that restricted stock awards are an essential
component of our compensation strategy, and we intend to continue offering such
awards in the future. Further, we anticipate that any equity awards granted to
our directors and executive officers during the remainder of 2009 will be in the
form of restricted stock. The Committee may also determine to issue other forms
of stock-based awards to our named executive officers or other eligible
participants under our 2006 Stock Incentive Plan or other equity incentive plans
in effect at that time. Our current equity incentive plans are described under
the headings “2006 Stock Incentive Plan” and “2005 Stock Incentive
Plan” below.




If there is a
change of control of the Company, as defined in our 2006 Stock Incentive Plan,
the vesting for any restricted shares granted that have not yet vested will be
accelerated to immediately prior to the date of the change of control, provided
the eligible holder has remained a director, employee or consultant of ours or
one of our affiliates through the date of such change of control.





Perquisites
and Other Personal Benefits




Our company
provides our named executive officers with a limited number of perquisites or
other personal benefits, primarily consisting of company vehicles and club
memberships, that we believe help provide a competitive package of compensation
and benefits. The value of these benefits is disclosed under the heading
“Summary Compensation Table” below.





Broad-Based
Employee Benefits




401(k) Plan.
We have a defined contribution retirement plan in which certain of the named
executive officers currently participate. The retirement plan is a tax qualified
401(k) plan that covers all U.S. employees including the named executive
officers. Under the plan, we match 100% of employees’ contributions up to 5% of
eligible compensation, up to a maximum in 2008 of $11,500. Employee and employer
contributions vest immediately.





Our named
executive officers are eligible to participate in all of our other employee
benefit plans which include medical, dental, group life, disability and
accidental death and dismemberment insurance, in each case on the same basis as
all other employees.


-6-




Employment
Agreements




We believe
that employment agreements are critical to the attraction and retention of our
key executive officers; therefore, the Company is a party to employment
agreements with each of its executive officers. Employment agreements with D.
Frank Harrison, our Chairman of the Board and Chief Executive Officer, Mark
Dubberstein, our President, and Zachary M. Graves, our Chief Financial Officer,
were each entered into effective as of August 8, 2006, as amended effective
as of August 2, 2007.  An employment agreement was entered into
with Larry L. Bartlett, our former Senior Vice President of Rig Operations,
effective as of August 2, 2007, and with Steven Starke, our Chief
Accounting Officer, effective as of August 3, 2007. As used in this
section, all references to an individual’s employment agreement will describe
the agreement as amended, if applicable. Each employment agreement has a
three-year term, subject to automatic extensions for one additional year so that
the remaining term will be not less than two nor more than three years. Annual
base salaries are currently $450,000 per year for Mr. Harrison, $325,000
per year for Mr. Dubberstein, $325,000 per year for Mr. Graves, and
$150,000 per year for Mr. Starke. Mr. Harrison is eligible to receive
an annual bonus in an amount not less than 66.7% of his annual base salary and
Messrs. Dubberstein, Graves, and Starke are eligible to receive an annual
discretionary bonus as established by the board of directors or the
Committee.  If we terminate an employment agreement without cause, the
executive officer is entitled to severance pay in an amount equal to:
(1) the base salary earned and unpaid through the date of such termination
plus the executive officer’s base salary for the remainder of the term of his
agreement; provided, however, that such amount may not be less than twice the
base salary in effect on the date of the termination, plus (2) the greater
of any target bonus for the year of termination or the average of the two
immediately preceding years’ annual incentive bonuses; plus (3) any
vacation pay accrued through the date of the termination. In addition, for a
period of the greater of 24 months after such termination or the remainder
of the term of the executive officer’s agreement, the Company will continue to
provide the executive officer (and his family, as applicable) with medical,
dental, and life insurance and other similar benefits.


We believe
that the executive’s performance generally may be hampered by distraction,
uncertainty and other activities in the event of an actual or threatened change
of control event. To reduce such adverse effects and encourage fair treatment of
our executive officers in connection with any such change of control event, the
above-referenced employment agreements include change of control protections.
If, within two years following a change of control the Company terminates the
employment of any such executive officer with or without cause or such executive
officer resigns with or without cause or good reason, such executive officer
would be entitled to a severance payment, payable in a lump sum in cash
following such executive officer’s termination, in an amount equal to three
times the sum of (1) his highest paid annual base salary, plus (2) the bonus
calculated as discussed below, plus any applicable gross-up
payment.  We believe that the double trigger requiring both
(1) the termination with or without cause or resignation with or without
cause or good reason and (2) a change of control event is appropriate to
provide fair treatment of these named executive officers without creating a
windfall.




For
Messrs. Harrison, Dubberstein and Graves, the bonus paid upon qualifying
termination in the event of a change of control will be calculated based on the
average of the last three years’ annual bonuses or such lesser number of years
as such executive may have been employed. For Mr. Starke, the bonus payable to
him upon qualifying termination in the event of a change of control will be the
greater of any target bonus for the year of termination or the highest bonus
paid to him during his employment with the Company.


The
employment agreements also provide that in the event of a termination of the
executive officer’s employment (1) by the Company without cause,
(2) by the executive officer for good reason or (3) in connection with
a change of control, (a) all units, stock options, incentive stock options,
performance shares, stock appreciation rights and restricted stock held by such
executive officer immediately prior to such termination will immediately become
100% vested and (b) the executive officer’s right to exercise any
previously unexercised options will not terminate until the latest date on which
such option would expire but for the executive officer’s termination of
employment.
  As defined in
the employment agreements, “change of control” occurs in the event any
individual, entity or group acquires beneficial ownership of 40% or more of
either (a) the then outstanding shares of Company common stock or
(b) the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors, provided
that any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the Company will
not constitute a “change in control.” In addition, a change of control occurs
when the individuals who, as of the date of these employment agreements,
constitute the Company’s board of directors (the “incumbent board”) cease for
any reason to constitute at least a majority of the board of directors. Any
individual becoming a director subsequent to the date of these employment
agreements whose election, or nomination for election by our stockholders, is
approved by a vote of at least a majority of the directors then comprising the
incumbent board will be considered a member of the incumbent board as of the
date thereof, but 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 person other than the incumbent board
will not be deemed a member of the incumbent board as of the date of these
employment agreements. In addition, a change of control will occur upon the
consummation of certain specified business combinations and upon the approval by
our stockholders of a complete liquidation or dissolution of the
Company.


The
employment agreements also provide that in the event of termination upon the
disability of the executive officer, the Company will pay him his base salary in
effect on the date of termination through the remaining term of the employment
agreement, but in any event through the expiration date. The payment of such
amounts will be made during the remaining term of the employment agreements in
installments consistent with the Company’s normal payroll practices; provided,
however, that if the named executive officer is a “specified employee” as
defined in regulations under Section 409A of the Internal Revenue Code,
such payments will commence on the first payroll payment date that is more than
six months following the termination date and the first payment will include any
amounts that would have otherwise been payable during the six-months period.
Notwithstanding the foregoing, the amounts payable to the executive officer in
the event of termination upon disability will be reduced by any benefits payable
under any of the Company’s disability plans to such executive officer. If the
executive officer dies during the term of his employment agreement, his
employment will be terminated on such date and his estate will be entitled to
receive his base salary for a period of twelve months after the effective date
of such termination any other benefits accrued through the effective date of
such termination.
  In addition,
in the event it is determined that any payment or distribution by the Company or
its subsidiaries or affiliates to or for the benefit of the executive officer
(whether paid or payable or distributed or distributable pursuant to the terms
of his employment agreement or otherwise) is subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code or any interest or penalties
related to such excise tax, the executive officer will be entitled to receive an
additional gross-up payment from the Company. The gross-up payment will be equal
to the amount such that after payment by the executive officer of all taxes
(including the excise tax, income taxes, interest and penalties imposed with
respect to such taxes) on the gross-up payment, the executive officer will
retain an amount of the gross-up payment equal to the excise tax imposed on the
payment or distribution to or for the benefit of such executive
officer.


The
agreements also provide that each executive officer may not, during the term of
his employment with the Company and for a period extending one year from the
date of the termination of his employment with the Company, disclose any
confidential information regarding the Company or use any such confidential
information for any purpose other than the performance of his employment with
the Company. Each executive officer is also prohibited, during the term of his
employment with the Company and for a period of six months following the
termination of his employment with the Company for any reason other than without
cause or in connection with a change of control, from soliciting, inducing,
enticing or attempting to entice any employee, contractor, customer, vendor or
subcontractor to terminate or breach any relationship with the Company or any of
its subsidiaries or affiliates.


Further
details regarding potential payments to these named executive officers upon
termination or following a change of control event is set forth below under the
heading “Potential Payments upon Termination or Change of Control.”
  Other Change of Control
Arrangements


To promote
retention of executives, restricted stock grants contain “change of control”
provisions, which trigger full vesting upon a change of control. We believe that
these acceleration provisions are generally consistent with our competitors’
change of control protections offered to their similarly situated officers.
Potential payments to our Chief Executive Officer and other named executive
officers upon termination or following a change of control event are set forth
under the heading “Potential Payments upon Termination or Change of
Control.”





Separation
Agreement and Release




In connection
with the resignation of our former Senior Vice President of Rig Operations,
Larry Bartlett, on September 10, 2008, we and Mr. Bartlett entered into a
separation agreement and release, effective as of September 10,
2008.  Pursuant to the separation agreement, our employment agreement
with Mr. Bartlett, effective as of August 2, 2007, was terminated, with the
exception of the restrictive covenants concerning confidentiality and
non-disclosure by Mr. Bartlett and certain other obligations that survive the
termination of the agreement, and Mr. Bartlett released us and our affiliates
and certain others from any claims he may have relating to matters or events
arising on or before the effective date of the separation
agreement.  Under this agreement, we paid Mr. Bartlett on the
effective date the remaining amounts due to Mr. Bartlett under the terms of his
employment agreement.  This amount totaled $572,482.





Deductibility
of Executive Compensation




Section 162(m)
of the Internal Revenue Code limits the deductibility for federal income tax
purposes of executive compensation paid to the Chief Executive Officer and the
four other most highly compensated officers of a public company to $1,000,000
per year, but contains an exception for certain performance-based compensation.
Our policy is to periodically review and consider whether particular
compensation and incentive payments to our executives will be deductible for
federal income tax purposes. We intend, to the extent feasible and when we
believe it is in the best interests of our Company and our stockholders, to
attempt to qualify executive compensation as tax deductible where it does not
adversely affect the development and execution of our compensation
plans.


-7-




Compensation
Committee Report on Executive Compensation




The Committee
has reviewed and discussed the Compensation Discussion and Analysis required by
Item 402(b) of Regulation S-K with management and, based on such
review and discussions, the Committee authorized, approved and recommended the
inclusion of the Compensation Discussion and Analysis in this annual report on
Form 10-K, as amended.




The foregoing
report is provided by the following directors, who constitute the
Committee.




COMPENSATION COMMITTEE





William
R. Snipes, Chairman


Dr. Gary
C. Hill


David W.
House




Compensation
Tables





Summary
Compensation Table




The following
table sets forth certain information with respect to the total compensation
earned by our named executive officers during the years ended December 31,
2008, 2007 and 2006.





Name
      and Principal
              Position
            
            Year
            
            Salary
            
            Bonus (1)
            
            Stock
      Awards (2)
            
            Option
      Awards
            
            All
      Other Compensation(3)
            
            TotalD.
      Frank Harrison
            
            2008
            
            $450,000
            
            $300,000
            
            $1,514,737
            
            -
            
            $15,577
            
            $2,280,314Chairman
      and Chief Executive Officer
            
            2007
              2006
            
            $450,000
              $353,846
            
            $300,000
              $387,500
            
            $891,698
              $187,501
            
            $242,778
              $582,667
            
            $15,577
              $7,942
            
            $1,900,053
              $1,519,456Mark
      Dubberstein (4)
            
            2008
            
            $325,000
            
            $100,000
            
            $716,630
            
            -
            
            $25,371
            
            $1,167,001President
            
            2007
              2006
            
            $291,346
              $201,648
            
            $100,000
              $50,000
            
            $331,688
              -
            
            $164,653
              $345,299
            
            $13,942
              $7,692
            
            $901,629
              $604,639Zachary
      M. Graves
            
            2008
            
            $325,000
            
            $100,000
            
            $1,036,051
            
            -
            
            $12,208
            
            $1,473,259Chief
      Financial Officer, Secretary and Treasurer
            
            2007
              2006
            
            $272,115
              $194,231
            
            $100,000
              $210,000
            
            $464,197
              -
            
            $239,083
              $474,050
            
            $17,395
              $14,729
            
            $1,092,790
              $893,010Steven
      R. Starke (5)
            
            2008
            
            $134,615
            
            $20,000
            
            $220,451
            
            -
            
            $6,731
            
            $381,797Chief
      Accounting Officer
            
            2007
              2006
            
            $122,692
              $104,038
            
            $20,000
              $27,500
            
            $96,152
              -
            
            $55,640
              $103,111
            
            $8,488
              $9,214
            
            $302,972
              $243,863Larry
      Bartlett (6)
            
            2008
            
            $167,019
            
            -
            
            $959,495
            
            -
            
            $598,261
            
            $1,724,775Former
      Senior Vice President of Rig Operations
            
            2007
              2006
            
            $225,000
              $194,077
            
            $25,000
              $167,565
            
            $287,518
              -
            
            $151,167
              $322,900
            
            $15,731
              $10,863
            
            $704,416
              $695,405




(1)
            Reflects
      cash award paid in 2008, 2007 and 2006,
  respectively.


(2)
            Reflects
      the amount of expense recognized by the Company for the fiscal years
      ended December 31, 2008, 2007 and 2006, respectively, related to all
      outstanding equity awards for each named executive officer in accordance
      with Statement of Financial Accounting Standard No. 123 (revised
      2004), “Share-Based Payment” (SFAS No. 123 (R)), disregarding any
      adjustments for potential
forfeitures.


(3)
            Reflects
      (a) the amount of our matching contributions to our 401(k) plan for
      the benefit for the named executive officer: (1) $15,577 for 2008, $15,577
      for 2007, and $7,942 for Mr. Harrison, (2) $13,125 for 2008,
      $13,942 for 2007 and $7,692 for 2006 for Mr. Dubberstein,
      (3) $11,250 for 2008, $11,106 for 2007 and $8,460 for 2006 for
      Mr. Graves, (4) $20,500 for 2008, $11,250 for 2007 and $7,702
      for 2006 for Mr. Bartlett and (5) $6,731 for 2008, $6,135 for
      2007 and $4,554 for 2006 for Mr. Starke; (b) the amount of club
      membership dues: (1) $1,292 for 2007 and $6,269 for 2006 for
      Mr. Graves, (2) $1,576 for 2008, $3,720 for 2007 and $3,161 for
      2006 for Mr. Bartlett, (3) $12,246 for 2008 for Mr. Dubberstein and
      (4) $2,353 for 2007 and $4,660 for 2006 for Mr. Starke;
      (c) the amount of personal use of company vehicles: (1) $958 for
      2008, $4,997 for 2007 and $3,398 for 2006 for Mr. Graves, and
      (2) $3,704 for 2008, $761 for 2007 and $1,099 for 2006 for
      Mr. Bartlett; and (d) the amount of severance expense paid by the
      Company upon termination of employment of our former Senior Vice President
      of Rig Operations ($572,481 for Mr.
Bartlett).


(4)
            Mr. Dubberstein
      has served as our President since June 2007. Mr. Dubberstein
      previously served as our General Counsel from January 2006 to June
      2007.


(5)
            Mr. Starke
      has served as our Chief Accounting Officer since June 2007.
      Mr. Starke previously served as our Controller from May 2005 to June
      2007.


(6)
            Mr. Bartlett’s
      employment with Company was terminated on September 10,
      2008.


Grants
of Plan-Based Awards




The following
table contains information with respect to the named executive officers
concerning grants of plan-based awards during 2008.




All
      Other Stock Awards:
            
            All
      Other Option Awards:Name
            
            Grant
      Date
            
            Number
      of Shares of Stock or Units (1)
            
            Number
      of Securities Underlying Options
            
            Exercise
      or Base Price of Option Awards
            
            Grant
      Date Fair Value of Stock and Option Awards (2)D.
      Frank Harrison
            
            01/18/2008
            
            50,000
            
            -
            
            -
            
            $671,000Mark
      Dubberstein
            
            01/18/2008
            
            33,333
            
            -
            
            -
            
            $447,329Zachary
      M. Graves
            
            01/18/2008
            
            48,333
            
            -
            
            -
            
            $648,629Steven
      R. Starke
            
            01/18/2008
            
            10,042
            
            -
            
            -
            
            $134,764Larry
      Bartlett
            
            01/18/2008
            
            28,333
            
            -
            
            -
            
            $380,229


(1)
            Reflects
      shares of restricted stock awarded in January 2008 under our 2006 Stock
      Incentive Plan.


(2)
            Reflects
      the grant date fair value of each equity award computed in accordance with
      SFAS No. 123 (R).




Outstanding
Equity Awards at Fiscal Year-End




The following
table contains information with respect to the named executive officers
concerning outstanding equity awards at December 31, 2008.





Option
      Awards
            
            Stock
      AwardsName
            
            Number
      of Securities 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
  (1)D.
      Frank Harrison
            
            -
            
            -
            
            -
            
            -
            
            122,224
            
            $789,567Mark
      Dubberstein
            
            -
            
            -
            
            -
            
            -
            
            75,000
            
            $484,500Zachary
      M.  Graves
            
            -
            
            -
            
            -
            
            -
            
            105,000
            
            $678,300Steven
      R. Starke
            
            -
            
            -
            
            -
            
            -
            
            21,750
            
            $140,505Larry
      Bartlett
            
            -
            
            -
            
            -
            
            -
            
            -
            
            -


(1)
            Calculated
      by multiplying the number of unvested shares of restricted stock by the
      closing price of our common stock on The NASDAQ Global Market on December
      31, 2008, or $6.46.




-8-




Option
Exercises and Stock Vested




The following
table contains information with respect to the named executive officers
concerning option exercises and stock vested in fiscal 2008.





Option
      Awards
            
            Stock
      AwardsName
            
            Number
      of Shares Acquired on Exercise
            
            Value
      Realized on Exercise
            
            Number
      of Shares Acquired on Vesting
            
            Value Realized on Vesting(1)D.
      Frank Harrison
            
            -
            
            -
            
            72,220
            
            $1,089,923Mark
      Dubberstein
            
            -
            
            -
            
            33,333
            
            $494,995Zachary
      M. Graves
            
            -
            
            -
            
            48,333
            
            $717,745Steven
      R. Starke
            
            -
            
            -
            
            10,042
            
            $149,124Larry
      Bartlett
            
            -
            
            -
            
            93,333
            
            $1,278,095




(1)
            Calculated
      by multiplying the number of shares of restricted stock by the closing
      price of our common stock on The NASDAQ Global Market on the date of
      vesting.





Nonqualified
Deferred Compensation




We do not
currently have in place any nonqualified deferred compensation
arrangements.





Pension
Benefits




We do not
currently offer any pension benefits.





Potential
Payments upon Termination or Change of Control




The following
table sets forth the potential payments due to our named executive officers
assuming the executive’s employment was terminated by us without cause or by the
executive for good reason or in the event of a change of control at
December 31, 2008. The termination events, including those upon change of
control, triggering payments or other benefits to our named executive officers
are described under the headings “Employment Agreements” above.





Termination
Following a Change of Control





Name
            
            Salary
      (1)
            
            Bonus
            
            Vesting
      of Restricted Stock (4)
            
            Excise
      Tax Gross-Up
            
            TotalD.
      Frank Harrison
            
            $1,350,000
            
            $987,500
      (2)
            
            $789,561
            
            -
            
            $3,127,061Mark
      Dubberstein
            
            $975,000
            
            $250,000
      (2)
            
            $484,500
            
            -
            
            $1,709,500Zachary
      M. Graves
            
            $975,000
            
            $410,000
      (2)
            
            $678,300
            
            -
            
            $2,063,300Steven
      R. Starke
            
            $450,000
            
            $82,500
      (3)
            
            $140,505
            
            $197,496
            
            $870,501




(1)
            Calculated
      as an amount equal to three times the named executive officers’ highest
      paid annual base salary.


(2)
            Calculated
      as an amount equal to three times the named executive officers’ average
      bonus for the last three years or such lesser number of years as the named
      executive officers may have been
employed.


(3)
            Calculated
      as an amount equal to three times the named executive officer’s highest
      paid annual bonus during his employment with the
  Company.


(4)
            Calculated
      by multiplying the number of unvested shares of restricted stock by the
      closing price of our common stock on The NASDAQ Global Market on
      December 31, 2008, or $6.46.




Termination
Without Cause or For Good Reason





Name
            
            Salary
      (1)
            
            Bonus (2)
            
            Vesting
      of Restricted Stock (3)
            
            Continued
      Benefit Plan Coverage (4)
            
            TotalD.
      Frank Harrison
            
            $1,162,500
            
            $300,000
            
            $789,561
            
            $15,694
            
            $2,267,755Mark
      Dubberstein
            
            $839,583
            
            $100,000
            
            $484,500
            
            $23,167
            
            $1,447,250Zachary
      M. Graves
            
            $839,583
            
            $100,000
            
            $678,300
            
            $23,167
            
            $1,641,050Steven
      R. Starke
            
            $387,500
            
            $20,000
            
            $140,505
            
            $23,167
            
            $571,172




(1)
            Calculated
      as an amount equal to the named executive officers’ base salary as in
      effect on the termination date continuing through the remaining term of
      each named executive officer’s
agreement.


(2)
            Calculated
      as the greater of any target bonus for the year of termination or the
      average of the immediately preceding two years’ annual incentive bonuses
      received by the named executive officer or such lesser number of years as
      the named executive officer may have been
  employed.


(3)
            Calculated
      by multiplying the number of unvested shares of restricted stock by the
      closing price of our common stock on The NASDAQ Global Market on
      December 31, 2008, or $6.46.


(4)
            Reflects
      the estimated cost to us to provide existing medical and dental benefits
      to each named executive officer for the time period remaining in each
      named executive officer’s
agreement.





Termination
Upon Death




In the event
of the death of our Chief Executive Officer, President, Chief Financial Officer,
Senior Vice President of Rig Operations, or Chief Accounting Officer, the
executive’s beneficiary will receive the named executives’ base salary for a
period of 12 months and any benefits accrued through the date of death. At
December 31, 2008, the base salary of our (1) Chief Executive Officer was
$450,000, (2) President was $325,000, (3) Chief Financial Officer
was $325,000, and (4) Chief Accounting Officer was $150,000.





Termination
Upon Disability




In the event
of the disability of our Chief Executive Officer, President, Chief Financial
Officer, or Chief Accounting Officer, the executive will continue to receive his
base salary through the remaining term of the contract. Had the event occurred
at December 31, 2008, our Chief Executive Officer would be entitled to
$1,162,500, our President would be entitled to $839,583, our Chief Financial
Officer would be entitled to $839,583, and our Chief Accounting Officer would be
entitled to $387,500 over the remaining term of the contracts.





Director
Compensation




The following
table contains information with respect to 2008 compensation of our directors
who served in such capacity during that year, except directors who are also our
named executive officers who do not receive compensation for services as
directors.





Director’s
Compensation Table for the Fiscal Year Ended December 31, 2008





Name
            
            Fees
      Earned or Paid in Cash
            
            Stock
      Awards (1)
            
            Option
      Awards
            
            All
      Other Compensation
            
            TotalGary
      C. Hill
            
            $47,500
            
            $150,074
            
            -
            
            -
            
            $197,574David
      W. House
            
            $6,170
            
            -
            
            -
            
            -
            
            $6,170David
      L. Houston
            
            $25,000
            
            $106,474
            
            -
            
            -
            
            $131,474Mike
      Liddell (2)
            
            -
            
            -
            
            -
            
            -
            
            -William
      R. Snipes
            
            $50,000
            
            $150,074
            
            -
            
            -
            
            $200,074




(1)
            Reflects
      the amount of expense recognized by the Company for the fiscal year
      related to all outstanding equity awards for each named director in
      accordance with SFAS No. 123 (R), disregarding any adjustments for
      potential forfeitures.


(2)
            Mr.
      Liddell resigned as a member of our board of directors on August 5,
      2008.


-9-





Historically,
our non-employee directors were paid a monthly retainer of $1,000 and a per
meeting attendance fee of $500 and were reimbursed for all ordinary and
necessary expenses incurred in the conduct of our business.  To ensure
the compensation of our directors is competitive with other similarly situated
directors, the Committee, with the assistance of an external compensation
consultant, Equilar, Inc., reviewed the director compensation practices at the
peer companies described above under the heading “Compensation
Benchmarking.”   After completing its review in the fourth
quarter of 2008, the Committee determined that the Company’s historical
compensation for directors was not competitive with similarly situated
companies.  The Committee, therefore, recommended to our board of
directors that the cash component of director compensation be increased to a
monthly retainer of $3,000, without per meeting attendance
fees.   The Committee believed that per meeting attendance fees
were unnecessary, as the incentive to attend board meetings should be to comply
with director fiduciary duties as opposed to cash
compensation.  Furthermore, despite many peer companies compensating
board members for committee membership, the Committee concluded that each
non-employee director should serve on board committees without additional
compensation.  Our board of directors approved such recommendations,
which were implemented after our 2008 annual meeting of stockholders held on
November 17, 2008.




In January
2008, the Committee approved restricted stock awards of 5,000 shares to each of
Messrs. Hill, Snipes and Houston under our 2006 Stock Incentive
Plan.  One half of these shares of restricted stock vested on February
25, 2009.  The remaining one half vest on February 25, 2010, subject
to earlier vesting or forfeiture in certain circumstances.  These
awards were made in the discretion of the Committee to help incentivize these
directors by maintaining a comparable amount of unvested shares of restricted
stock they had prior to recent vestings.  In January 2009, the
Committee approved restricted stock awards of 11,240 shares to each of Messrs.
Hill, House, Houston and Snipes under our 2006 Stock Incentive
Plan.  These shares of restricted stock vest on February 25, 2010,
subject to earlier vesting or forfeiture in certain
circumstances.  These awards were made in the discretion of the
Committee to help incentivize these directors by maintaining a comparable value
of unvested shares of restricted stock they had prior to recent
vestings.  We anticipate that in the future our non-employee directors
will receive restricted stock awards, rather than options, in such amounts that
will be determined by the Committee in its discretion. Members of our board of
directors who are also officers or employees of our company, including our named
executive officers, do not receive any additional compensation for their
services as directors.





2006
Stock Incentive Plan




Our board of
directors and a majority of our stockholders approved our 2006 Stock Incentive
Plan, which we refer to as the 2006 Plan, effective April 20, 2006. No
further awards will be made under our 2005 Stock Incentive Plan discussed below.
The purpose of the 2006 Plan is to provide a means by which eligible recipients
of awards may be given an opportunity to benefit from increases in value of our
common stock through the granting of one or more of the following awards:
(1) incentive stock options, (2) nonstatutory stock options,
(3) restricted awards, (4) performance awards and (5) stock
appreciation rights.




The purpose
of the plan is to enable our company, and any of its affiliates, to attract and
retain the services of the types of employees, consultants and directors who
will contribute to our long range success and to provide incentives that are
linked directly to increases in share value that will inure to the benefit of
our stockholders.




Eligible
award recipients are employees, consultants and directors of our company and its
affiliates. Incentive stock options may be granted only to our employees. Awards
other than incentive stock options may be granted to employees, consultants and
directors. The shares that may be issued pursuant to awards consist of our
authorized but unissued common stock, and the maximum aggregate amount of such
common stock that may be issued upon exercise of all awards under the plan,
including incentive stock options, may not exceed 2,500,000 shares, subject to
adjustment to reflect certain corporate transactions or changes in our capital
structure.




In January
2008, we granted restricted stock awards of (i) 50,000 shares to Mr.
Harrison, (ii) 33,333 shares to Mr. Dubberstein, (iii) 48,333 shares to Mr.
Graves, (iv) 28,333 shares to Mr. Bartlett, and (v) 10,042 shares to Mr.
Starke.  In January 2009, we granted restricted stock awards of (i)
112,395 shares to Mr. Harrison, (ii) 71,429 shares to Mr. Dubberstein, (iii)
81,148 shares to Mr. Graves, (iii) and 22,573 shares to Mr. Starke, under our
2006 Stock Incentive Plan described in more detail below.  These
shares of restricted stock vest in two equal annual installments beginning on
February 25, 2010, subject to earlier vesting or forfeiture in certain
circumstances.  As of April 28, 2009, no options to purchase shares of
our common stock were outstanding and ­­560,670 shares of
restricted common stock were outstanding under our 2006 Plan. There were
1,290,871 shares available for future grants under our 2006 Plan as of April 28,
2009.




2005 Stock Incentive
Plan




Our
2005 Stock Incentive Plan, which we refer to as the 2005 Plan, was adopted on
July 20, 2005 and amended on November 16, 2005. The purpose of the
2005 Plan was to enable us, and any of our affiliates, to attract and retain the
services of the types of employees, consultants and directors who would
contribute to our long-range success and to provide incentives which were linked
directly to increases in share value which will inure to the benefit of our
stockholders. The 2005 Plan provided a means by which eligible recipients of
awards may be given an opportunity to benefit from increases in value of our
common stock through the granting of incentive stock options and nonstatutory
stock options. Eligible award recipients under the 2005 Plan were our and our
affiliates’ employees, consultants and directors. Incentive stock options under
the 2005 plan could be granted only to employees. Awards other than incentive
stock options under the 2005 Plan could be granted to employees, consultants and
directors. The shares that may be issued upon exercise of the options are from
authorized but unissued common stock, and the maximum aggregate amount of such
common stock which may be issued upon exercise of all awards under the plan,
including incentive stock options, could not exceed 1,000,000 shares, subject to
adjustment to reflect certain corporate transactions or changes in our capital
structure. Under the 2005 Plan, employee stock options generally became
exercisable in equal monthly installments over a three-year period, and all
options generally expire ten years after the date of grant.  As a
result of the Exchange Offer and the forfeiture of certain options, all options
granted pursuant to the 2005 Plan have been cancelled.  No further
awards will be made under this plan.




Liability
Insurance and Indemnification Agreements




We have
obtained liability insurance for our current directors and officers. We have
also entered into contractual indemnification arrangements with our directors
and executive officers under which we have agreed, in certain circumstances, to
compensate them for costs and liabilities incurred in actions brought against
them while acting as directors or executive officers of our
company.





Compensation
Committee Interlocks and Insider Participation




We currently
maintain a compensation committee.  The Committee was established by
our board of directors effective as of March 25, 2007. The Committee
is composed of Messrs. Snipes (chair), House and Hill.




No Committee
member is or was during the fiscal year ended December 31, 2008 an officer
or employee of us or any of our subsidiaries or had any relationship requiring
disclosure pursuant to Item 404 of Regulation S-K. None of our
executive officers served as a director or member of the Committee (or other
board committee performing similar functions or, in the absence of any such
committee, the entire board of directors) of another entity, one of whose
executive officers served on the Committee or as one of our
directors.


Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.






Equity
Compensation Plan Information




The following
table provides information as of December 31, 2008 with respect to shares
of our common stock that may be issued under our equity compensation plans as of
December 31, 2008.





Plan
      Category
            
            Number
      of Securities to be Issued Upon Exercise of Outstanding Options, Warrants
      and Rights
            
            Weighted
      Average Exercise Price Per Share 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
            
            -
            
            -
            
            1,698,578Equity
      Compensation plans not approved by security holders
            
            -
            
            -
            
            -Total
            
            -
            
            -
            
            1,698,578




(1)
            As
      of April 28, 2009, we had no options to purchase shares of our common
      stock outstanding.  As of April 28, 2009, we had issued 560,670
      shares of our restricted stock under the 2006 Plan.  The
      securities remaining available for future issuance reflect securities that
      may be issued under the 2006 Plan, as no more shares remain available for
      the grant of awards under the 2005
Plan.




-10-




Security
Ownership of Certain Beneficial Owners and Management




The following
tables set forth as of April 28, 2009 (unless otherwise specified) the number
and percentage of shares of our common stock beneficially owned by (1) each
person known by us to beneficially own more than 5% of the outstanding shares of
our common stock, and (2) each of our directors, each of our named executive
officers, and all of our directors and named executive officers as a
group.




Beneficial
ownership is determined in accordance with the rules of the
SEC.  Beneficial ownership is based upon the most recent Forms 3, 4
and 5 and Schedules 13D and 13G filings with the SEC and reports made directly
to us.  In computing the number of shares of our common stock
beneficially owned by a person and the beneficial ownership percentage of that
person, shares of our common stock subject to options held by that person that
are currently exercisable or exercisable within 60 days of April 28, 2009 are
deemed outstanding, but are not deemed outstanding for computing the percentage
ownership of any other person.  Percentage of beneficial ownership of
our common stock is based upon 27,217,459 shares of our common stock outstanding
as of April 28, 2009.  To our knowledge, except as set forth in the
footnotes to this table, the beneficial owners named in the table below have
sole voting and investment power with respect to all shares of capital stock
held by them.




Principal
Stockholders





Name
      and Address of Beneficial Owner
            
            Shares
      Beneficially Owned
            
            Percent
      Beneficially Owned (6)5%
      StockholdersThird
      Avenue Management LLC
              622
      Third Avenue
              32
      Floor
              New
      York, NY 10017
            
            6,184,304
      (1)
            
            22.72%Inmobiliaria
      Carso S.A. de C.V
              Insurgentes
      Sur #3500
              PB
      Col. Pena Pobre
              Delegacion
      Tlalpan, CP
            
            4,200,000
      (2)
            
            15.43%Met
      Investors Advisory, LLC
              5
      Park Plaza, Suite 1900
              Irvine,
      CA 92614
            
            4,134,324
      (3)
            
            15.19%Wexford
      Capital LP
              401
      West Putnam Avenue
              Greenwich,
      CT 06830
            
            3,532,998
      (4)
            
            12.98%Dimensional
      Fund Advisors LP
              1299
      Ocean Avenue
              Santa
      Monica, CA 90401
            
            1,683,644
      (5)
            
            6.19%





(1)
            Based
      solely upon information obtained from Schedule 13G filed with the SEC
      on February 13, 2009 on behalf of Third Avenue Management LLC, or Third
      Avenue. Third Avenue, in its capacity as investment advisor, has shared
      power to vote or to direct the vote with respect to 6,184,304 shares of
      our common stock and has shared power to dispose or to direct the
      disposition of 6,184,304 shares of our common stock. These shares are
      owned of record by clients of Third Avenue which have the right to
      receive, or the power to direct the receipt of, dividends from, or the
      proceeds from the sale of, these shares. Of these shares, 4,134,324 are
      also beneficially owned by Met Investors Advisory,
  LLC.




(2)
            Based
      solely upon information obtained from Form 4 filed with the SEC on March
      9, 2009 by Inmobiliaria Carso S.A. de C.V., or
      Inmobiliaria.  Pursuant to the Form 4, Inmobiliaria beneficially
      owns directly 4,200,000 shares of our common stock as of March 5,
      2009.  Company shares reported as beneficially owned by
      Inmobiliaria include shares owned directly by Control Empresarial de
      Capitales, S.A. de C.V., a subsidiary of Inmobiliaria.  Mr.
      Carlos Slim Helú, Mr. Carlos Slim Domit, Mr. Marco Antonio Slim Domit, Mr.
      Patrick Slim Domit, Ms. María Soumaya Slim Domit, Ms. Vanessa Paola
      Slim Domit and Ms. Johanna Monique Slim Domit are beneficiaries of a
      Mexican trust which in turn owns substantially all of the issued and
      outstanding voting securities of Inmobiliaria.  As a result,
      each individual listed above may be deemed to have indirect beneficial
      ownership of the company shares owned directly by
      Inmobiliaria.




(3)
            Based
      solely upon information obtained from Schedule 13G filed with the SEC on
      April 15, 2009 by Met Investors Advisory, LLC, or Met.  Met, in
      its capacity as an investment advisor, serves as investment manager of
      each series of Met Investors Series Trust, or the Trust.  In its
      role as investment manager of the Trust, Met has contracted with certain
      sub-advisers to make the day-to-day investment decisions for the certain
      series of the Trust.  Pursuant to the 13G, Met has shared power
      to vote or to direct the vote with respect to 4,134,324 shares of our
      common stock and has shared power to dispose or direct the disposition of
      4,134,324 shares of our common
stock.




(4)
            Based
      solely upon information obtained from Form 4 filed with the SEC on
      April 21, 2009 filed by Wexford Capital LP. Pursuant to the Form 4,
      Wexford Capital, LP, as manager or investment sub advisor of Wexford
      Spectrum Trading Limited and Wexford Catalyst Investors LLC, reported
      beneficial ownership of 3,532,998 shares of our common stock.





(5)
            Based
      solely upon information obtained from Schedule 13G filed with the SEC
      on February 9, 2009 on behalf of Dimensional Fund Advisors LP, or
      Dimensional. Dimensional, in its capacity as investment advisor, has
      shared power to vote or to direct the vote with respect to 1,636,298
      shares of our common stock and has shared power to dispose or to direct
      the disposition of 1,683,644 shares of our common stock. These shares are
      owned of record by clients of Dimensional which have the right to receive,
      or the power to direct the receipt of, dividends from, or the proceeds
      from the sale of, these shares.





(6)
            Determined
      by dividing the number of shares reported as beneficially owned by
      27,217,459 shares of common stock
outstanding.





Directors
and Named Executive Officers





Name
            
            Shares
      Beneficially Owned
            
            Percent
      Beneficially OwnedD.
      Frank Harrison (1)
            
            118,661
            
            *Gary
      C. Hill (2)
            
            12,500
            
            *David
      L. Houston (3)
            
            12,500
            
            *David
      W. House (4)
            
            -
            
            -William
      R. Snipes (5)
            
            -
            
            *Mark
      Dubberstein (6)
            
            -
            
            -Zachary M. Graves
      (7)
            
            56,083
            
            *Steven
      R. Starke (8)
            
            10,044
            
            *Directors
      and executive officers as a group (9 persons) (9)
            
            209,788
            
            *




(1)
            Does
      not include 148,506 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the date hereof except pursuant to a
      change of control.





(2)
            Does
      not include 13,740 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the date hereof except pursuant to a
      change of control.





(3)
            Does
      not include 13,740 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the date hereof except pursuant to a
      change of control.





(4)
            Does
      not include 11,240 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the date hereof except pursuant to a
      change of control.





(5)
            Does
      not include 13,740 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the date hereof except pursuant to a
      change of control.





(6)
            Does
      not include 96,429 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control.





(7)
            Does
      not include 113,648 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control.


-11-




(8)
            Does
      not include 29,261 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control.





(9)
            Does
      not include 440,304 shares of restricted stock, none of which restrictions
      will lapse within 60 days of the record date except pursuant to a
      change of control.





*  Less
than 1%.




Item
13. Certain Relationships and Related Transactions, and Director
Independence.





Review and Approval of Related Party
Transactions




It is our
policy that all employees and directors, as well as their family members, must
avoid any activity that is or has the appearance of conflicting with our
business interest. This policy is included in our Code of Business Conduct and
Ethics posted on our website. Each director and executive officer is instructed
to always inform the designated compliance officer when confronted with any
situation that may be perceived as a conflict of interest. Only our board of
directors or a committee consisting solely of independent directors may grant
waivers of the provisions of our Code of Business Conduct and Ethics for our
executive officers and directors. In addition, at least annually, each director
and executive officer completes a detailed questionnaire specifying any business
relationship that may give rise to a conflict of interest.





Under the
audit committee charter, the audit committee of our board of directors is
responsible for reviewing and monitoring compliance with our Code of Business
Conduct and Ethics and recommending any warranted changes to the board of
directors. In addition, our board of directors, and pursuant to its charter, our
audit committee, reviews and approves all relationships and transactions in
which we and our directors, director nominees and executive officers and their
immediate family members, as well as holders of more than 5% of any class of our
voting securities and their family members, have a direct or indirect material
interest. Our board of directors and our audit committee will approve only those
transactions that, in light of known circumstances, are consistent, or are not
inconsistent with, our best interests, as they determine in the good faith
exercise of their discretion.





Administrative
Services Agreement and Lease of Space




The Company
has entered into six noncancelable operating leases with Grace Properties, LLC,
which we refer to as Grace Properties, that have expirations of
July 31, 2011. Grace Properties is owned by Kim Snell, President of Eagle
Well Service, Inc. (d/b/a Bronco Energy Services), a wholly owned subsidiary of
the Company. Related rent expense was approximately $572,000 for the year ended
December 31, 2008.




Drilling
Services




During 2008
we received $5.3 million for services rendered to Windsor Energy Group, LLC and
Gulfport Energy Corporation, affiliates of Wexford. On April 17, 2008, we
entered into a long term contract with Gulfport, in which we agree to provide
Gulfport a drilling rig in order to drill four wells.  Under the terms
of this contract, Gulfport agreed to pay us a day work rate of
$17,500.  On June 2, 2008, we entered into a term contract with
Windsor, in which we agreed to provide Windsor a drilling rig for a period of
one year.  Under the terms of this contract, Windsor agreed to pay us
a day rate of $22,800.  On December 11, 2008, the contract was
terminated and Windsor paid us $3,000,000. Related disclosures are included in
Note 8, Transactions with Affiliates, of
the Notes to Consolidated Financial Statements, as part of our Annual Report on
Form 10-K filed with the SEC on March 16, 2009.




Item 14. Principal Accounting Fees and
Services




Grant
Thornton LLP served as our independent auditor for fiscal 2008 and 2007.
Aggregate fees billed to us by Grant Thornton LLP for 2008 and 2007 were as
follows:


Fees
            
            2008
            
            
            2007Audit
      Fees (1)
            
            
            $461,631
            
            
            $
            343,979Audit
      Related Fees (2)
            
            
            $23,854
            
            
            
            $50,678Tax
      Fees (3)
            
            
            $26,735
            
            
            
            $59,750All
      Other Fees
            
            
            —
            
            
            
            —Total
            
            
            $512,220
            
            
            $
            454,407




(1)
            
            Fees
      for audit service included billings for our annual audit, reviews of our
      quarterly reports, regulatory filings to the SEC, issuance of comfort
      letters and consents, Section 404 services, and out-of-pocket
      expenses associated with the services.(2)
            
            Audit
      related fees include fees for due diligence associated with acquisitions
      and benefit plan audits, including out-of-pocket
  expenses.(3)
            
            Tax
      fees include fees for preparation of corporate returns, tax consultation
      and advice.




It is our
audit committee’s policy to pre-approve all audit, audit related and permissible
non-audit services rendered to us by our independent auditor. Consistent with
such policy, all of the fees listed above that we incurred for services rendered
by Grant Thornton LLP in fiscal 2008 and 2007 were pre-approved by our audit
committee. Non-audit services that received pre-approval in 2008 and 2007
include tax preparation, tax consultation and advice. The audit committee has
considered whether the provisions of the non-audit services in 2008 is
compatible with maintaining the independent auditors’ independence and concluded
that the payment of such fees would not prohibit Grant Thornton LLP from
maintaining its independence.




Grant
Thornton LLP has been selected by the audit committee as our independent
auditors for the fiscal year ending December 31, 2009.




PART
IV




Item 15.
Exhibits, Financial Statement Schedules.




(a)(3).
            Exhibits







Exhibit
No.                                                                Description








31.1
            Certification
      of Chief Executive Officer of Bronco Drilling Company, Inc. pursuant to
      Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as
      amended.





31.2
            Certification
      of Chief Financial Officer of Bronco Drilling Company, Inc. pursuant to
      Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as
      amended  -12-




SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, Bronco Drilling Company, Inc. has duly caused this Amendment No. 1 to
its Annual Report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.




BRONCO DRILLING COMPANY, INC.Date:
      April 29, 2009
            By:
            /S/    D.
      FRANK
      HARRISOND. Frank Harrison
              Chairman
      and Chief Executive Officer








-13-