Exhibit 10.3


 


RESTRICTED STOCK AGREEMENT


 


THIS RESTRICTED STOCK AGREEMENT (this “Agreement”)
is made as of the           
day of           ,           ,
between PARTICLE DRILLING TECHNOLOGIES, INC., a
Nevada corporation (the “Company”), and                 (“Employee”).


 


1.                                       Award.  Pursuant to the PARTICLE
DRILLING TECHNOLOGIES, INC. 2005 STOCK INCENTIVE PLAN, as amended
(the “Plan”), as of the date of this Agreement (the “Date of Grant”),           
shares (the “Restricted Shares”) of the Company’s common stock shall be issued
as hereinafter provided in Employee’s name subject to certain restrictions
thereon.  The Restricted Shares shall be
issued upon acceptance hereof by Employee and upon satisfaction of the
conditions of this Agreement.  Employee
acknowledges receipt of a copy of the Plan, and agrees that this award of
Restricted Shares shall be subject to all of the terms and provisions of the
Plan, including future amendments thereto, if any, pursuant to the terms
thereof.  In the event of any conflict between
the terms of this Agreement and the Plan, the Plan shall control.  Capitalized terms used but not defined in
this Agreement shall have the meaning attributed to such terms under the Plan,
unless the context requires otherwise.


 


2.                                       Restricted Shares.  Employee hereby accepts the Restricted Shares
when issued and agrees with respect thereto as follows:


 


(a)                                  Forfeiture Restrictions.  The Restricted Shares may not be sold,
assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered
or disposed of to the extent then subject to the Forfeiture Restrictions (as
hereinafter defined), and in the event of termination of Employee’s employment
with the Company for any reason other than death or disability (within the
meaning of section 22(e)(3) of the Code), Employee shall, for no consideration,
forfeit to the Company all Restricted Shares to the extent then subject to the
Forfeiture Restrictions, except as otherwise provided in that certain
Employment Agreement between Employee and the Company effective as of January
23, 2006, as the same may be amended from time to time.  The prohibition against transfer and the
obligation to forfeit and surrender Restricted Shares to the Company upon
termination of employment are herein referred to as the “Forfeiture
Restrictions.”  The Forfeiture
Restrictions shall be binding upon and enforceable against any transferee of
Restricted Shares.


 


(b)                                 Lapse of Forfeiture Restrictions.  The Forfeiture Restrictions shall lapse as to
the Restricted Shares in accordance with the following schedule, provided that Employee has been continuously
employed by the Company from the date of this Agreement through the lapse date:


 


	
  Lapse Date

  	
   

  	
  Percentage of Total Number

  Of Restricted Shares as to Which

  Forfeiture Restrictions Lapse

  	
   

  
	
  1st
  Anniversary of Date of Grant

  	
   

  	
  331/3

  	
  %

  
	
  2nd
  Anniversary of Date of Grant

  	
   

  	
  662/3

  	
  %

  
	
  3rd
  Anniversary of Date of Grant

  	
   

  	
  100

  	
  %

  



 


1





















 


Notwithstanding
the foregoing, the Forfeiture Restrictions shall lapse as to all of the
Restricted Shares then subject to the Forfeiture Restrictions on (i) the date
of a Corporate Change (as hereinafter defined) provided that Employee has been
continuously employed by the Company from the date of this Agreement to the
date of such Corporate Change or (ii) the date Employee’s
employment with the Company is terminated by reason of death or disability
(within the meaning of section 22(e)(3) of the Code).  For purposes of the preceding sentence, the
term “Corporate Change” shall have the same meaning as is assigned to such term
in the Plan; provided, however, that the term “Corporate Change” shall not
include any reorganization, merger, consolidation, or similar transaction or
series of transactions pursuant to which the record holders of the outstanding
shares of the Company’s stock immediately prior to such transaction or series
of transactions continue to hold immediately following such transaction or
series of transactions 50% or more of the outstanding voting securities (based upon
voting power) of (a) any entity which owns (directly or indirectly) the stock
of the Company, (b) any entity with which the Company has merged, or (c) any
entity that owns an entity with which the Company has merged.  In addition, in no event shall a recapitalization
of the Company, a reclassification of the Company’s capital stock, or other
change in the Company’s capital structure (a “recapitalization”) constitute a
Corporate Change, and the Forfeiture Restrictions shall not lapse upon the
occurrence of any such recapitalization.


 


(c)                                  Certificates.  A certificate evidencing the Restricted
Shares shall be issued by the Company in Employee’s
name, pursuant to which Employee
shall have all of the rights of a stockholder of the Company with respect to
the Restricted Shares, including, without limitation, voting rights and the
right to receive dividends (provided, however, that dividends paid in shares of
the Company’s stock shall be subject to the Forfeiture Restrictions and further
provided that dividends that are paid other than in shares of the Company’s
stock shall be paid no later than the end of the calendar year in which the
dividend for such class of stock is paid to stockholders of such class or, if
later, the 15th day of the third month following the date the dividend is paid
to stockholders of such class of stock). Employee may not sell, transfer,
pledge, exchange, hypothecate or otherwise dispose of the stock until the
Forfeiture Restrictions have expired and a breach of the terms of this Agreement
shall cause a forfeiture of the Restricted Shares. The certificate shall be
delivered upon issuance to the Secretary of the Company or to such other
depository as may be designated by the Committee as a depository for
safekeeping until the forfeiture of such Restricted Shares occurs or the
Forfeiture Restrictions lapse pursuant to the terms of the Plan and this award.
Employee agrees to deliver to the Company a stock power, endorsed in blank,
relating to the Restricted Shares. Upon the lapse of the Forfeiture
Restrictions without forfeiture, the Company shall cause a new certificate or
certificates to be issued without legend (except for any legend required
pursuant to applicable securities laws or any other agreement to which Employee
is a party) in the name of Employee in exchange for the certificate evidencing
the Restricted Shares.  However, the
Company, in its sole discretion, may elect to deliver the certificate either in
certificate form or electronically to a brokerage account established for Employee’s
benefit at a brokerage/financial institution selected by the Company.  Employee agrees to complete and sign any
documents and take additional action that the Company may request to enable it
to deliver the shares on Employee’s behalf.


 


2





















 


(d)                                 Corporate Acts.  The existence of the Restricted Shares shall
not affect in any way the right or power of the Board or the stockholders of
the Company to make or authorize any adjustment, recapitalization, reorganization
or other change in the Company’s capital structure or its business, any merger
or consolidation of the Company, any issue of debt or equity securities, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding. The prohibitions of Section 2(a) hereof shall not apply to
the transfer of Restricted Shares pursuant to a plan of reorganization of the
Company, but the stock, securities or other property received in exchange
therefor shall also become subject to the Forfeiture Restrictions and
provisions governing the lapsing of such Forfeiture Restrictions applicable to
the original Restricted Shares for all purposes of this Agreement and the
certificates representing such stock, securities or other property shall be
legended to show such restrictions.


 


3.                                       Withholding of Tax/Tax Election. To the extent that the receipt of
the Restricted Shares or the lapse of any Forfeiture Restrictions results in
compensation income or wages to Employee for federal, state or local tax
purposes, Employee shall deliver to the Company at the time of such receipt or
lapse such amount of money as the Company may require to meet its minimum
obligation under applicable tax laws or regulations or make such other
arrangements to satisfy such withholding obligation as the Company or the
Committee may approve.  In addition, the
Company may withhold unrestricted shares of stock of the Company (valued at
their fair market value on the date of withholding of such shares) otherwise to
be issued upon the lapse of the Forfeiture Restrictions to satisfy its
withholding obligations.  If Employee
makes the election authorized by section 83(b) of the Code in connection with
the award of the Restricted Shares, Employee shall submit to the Company a copy
of the statement filed by Employee to make such election.


 


4.                                       Status of Stock. 
Employee agrees that the Restricted Shares issued under this Agreement
will not be sold or otherwise disposed of in any manner which would constitute
a violation of any applicable securities laws, whether federal or state.
Employee also agrees that (a) the certificates representing the Restricted
Shares may bear such legend or legends as the Committee deems appropriate in
order to reflect the Forfeiture Restrictions and to assure compliance with
applicable securities laws, (b) the Company may refuse to register the transfer
of the Restricted Shares on the stock transfer records of the Company if such proposed
transfer would constitute a violation of the Forfeiture Restrictions or, in the
opinion of counsel satisfactory to the Company, of any applicable securities
law, and (c) the Company may give related instructions to its transfer agent,
if any, to stop registration of the transfer of the Restricted Shares.


 


5.                                       Employment Relationship. 
For purposes of this Agreement, Employee shall be considered to be in
the employment of the Company as long as Employee remains an employee of either
the Company, an Affiliate, or any successor corporation.  Without
limiting the scope of the preceding sentence, it is expressly provided that
Employee shall be considered to have terminated employment with the Company at
the time of the termination of the “Affiliate” status under the Plan of the
entity or other organization that employs Employee.  Any question as to whether and when
there has been a termination of such employment, and the cause of such
termination, shall be determined by the Committee and its determination shall
be final.


 


3





















 


6.                                       Notices. Any notices or other
communications provided for in this Agreement shall be sufficient if in
writing.  In the case of Employee, such
notices or communications shall be effectively delivered if hand delivered to
Employee at his principal place of employment or if sent by registered or
certified mail to Employee at the last address Employee has filed with the
Company. In the case of the Company, such notices or communications shall be
effectively delivered if sent by registered or certified mail to the Company at
its principal executive offices.


 


7.                                       Entire Agreement; Amendment. This
Agreement replaces and merges all previous agreements and discussions relating
to the same or similar subject matters between Employee and the Company and
constitutes the entire agreement between Employee and the Company with respect
to the subject matter of this Agreement. 
Without limiting the scope of the preceding sentence, all prior
understandings and agreements, if any, among the parties hereto relating to the
subject matter hereof are hereby null and void and of no further force and
effect.  Any modification of this
Agreement shall be effective only if it is in writing and signed by both
Employee and an authorized officer of the Company.


 


8.                                             Binding Effect. This Agreement
shall be binding upon and inure to the benefit of any successors to the Company
and all persons lawfully claiming under Employee.


 


9.                                             Governing Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Nevada, without regard to conflicts of laws principles
thereof.


 


10.                                       Jurisdiction.                          Each of the Company and
Employee hereby irrevocably (i) submits and consents to the personal
jurisdiction of the state and federal courts sitting in Harris County, Texas
with respect to any suit, action, or proceeding arising out of or based upon
this Agreement or the transactions contemplated hereby and (ii) waives the
right to contend in any such action that venue is improperly laid in any such
court or that it is an improper or inconvenient forum or lacks personal
jurisdiction.  If Employee now or
hereafter resides outside the State of Texas, Employee hereby irrevocably appoints
the General Counsel of the Company as Employee’s authorized agent upon whom
process may be served at such General Counsel’s Company office for notices
under this Agreement in any suit, action, or proceeding arising out of or based
upon this Agreement or the transactions contemplated hereby that may be
instituted in any state or federal court in the State of Texas by the Company,
and Employee hereby agrees to so act. 
Employee agrees to take any and all action, including the filing of any
and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid.  Service of process upon the authorized agent
of Employee and written notice of such service to Employee shall be deemed, in
every respect, effective service of process as to Employee for purposes of any
such suit, action, or proceeding instituted in any state or federal court in
the State of Texas.


 


4





















 


IN WITNESS
WHEREOF, the Company has caused this Agreement to be
duly executed by its officer thereunto duly authorized, and Employee has
executed this Agreement, all effective as of the day and year first above
written.


 


	
   

  	
  PARTICLE DRILLING TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Position:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  



 


5