Exhibit 10.3


FIRST AMENDMENT TO


EMPLOYMENT
AGREEMENT


THIS FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT (“First Amendment”) is entered into by
and between Particle Drilling Technologies, Inc., a Nevada corporation (“Company”),
and Jim B. Terry (“Executive”) as of August 7, 2007.


WHEREAS,
Company and Executive have heretofore entered into that certain Employment
Agreement effective as of January 23, 2006 (the “Employment Agreement”); and


WHEREAS,
Company and Executive desire to amend the Employment Agreement in certain
respects;


NOW, THEREFORE,
in consideration of the premises set forth above and the mutual agreements set
forth herein, Company and Executive hereby agree, effective as of the date
first set forth above, that the Employment Agreement shall be amended as
hereafter provided:


1.             Section 5.4 of the Employment Agreement shall be deleted
and the following shall be substituted therefor:


“5.4        Parachute Payments.  Notwithstanding anything to the contrary in
this Agreement, in the event that any payment or distribution by Company to or
for the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties with respect to such excise tax (such excise tax,
together with any such interest or penalties, are hereinafter collectively
referred to as the “Excise Tax”), Company shall pay to Executive an additional
payment (a “Gross-up Payment”) in an amount such that after payment by
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed on any Gross-up
Payment, Executive retains an amount of the Gross-up Payment equal to the
Excise Tax imposed upon the Payments. 
The Gross-up Payment attributable to a particular Payment shall be made
at the time such Payment is made; provided, however, that in no event shall the
Gross-up Payment be made later than the end of Executive’s taxable year next
following Executive’s taxable year in which Executive remits the related
taxes.  Company and Executive shall make
an initial determination as to whether a Gross-up Payment is required and the
amount of any such Gross-up Payment. 
Executive shall notify Company in writing of any claim by the Internal
Revenue Service which, if successful, would require Company to make a Gross-up
Payment (or a Gross-up Payment in excess of that, if any, initially determined
by Company and Executive) within ten days of the receipt of such claim.  Company shall notify Executive in writing at
least ten days prior to the due date of any response required with respect to
such claim if it plans to contest the claim. 
If Company decides to contest such claim, Executive shall cooperate
fully with Company in such action; provided, however, Company shall bear and
pay directly or indirectly 



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all costs and expenses (including additional interest
and penalties) incurred in connection with such action and shall indemnify and
hold Executive harmless, on an after-tax basis, for any Excise Tax or income
tax, including interest and penalties with respect thereto, imposed as a result
of Company’s action.  If, as a result of
Company’s action with respect to a claim, Executive receives a refund of any
amount paid by Company with respect to such claim, Executive shall promptly pay
such refund to Company.  If Company fails
to timely notify Executive whether it will contest such claim or Company determines
not to contest such claim, then Company shall immediately pay to Executive the
portion of such claim, if any, which it has not previously paid to Executive.”


2.             Except as expressly modified by this First Amendment,
the terms of the Employment Agreement shall remain in full force and effect and
are hereby confirmed and ratified.


IN WITNESS WHEREOF,
the parties hereto have executed and delivered this First Amendment as of the
date first set forth above.


	
  “EXECUTIVE”

  	
   

  	
  “COMPANY”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PARTICLE DRILLING TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
  /s/ Jim
  B. Terry

  	
   

  	
  By:

  	
  /s/ Ken
  R. LeSuer

  
	
  Jim B. Terry

  	
   

  	
   

  	
  Name: Ken R. LeSuer

  
	
   

  	
   

  	
   

  	
  Title: Chairman, Board of Directors

  	 




 



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