Exhibit 10.8


 


EMPLOYMENT AGREEMENT


 


This EMPLOYMENT AGREEMENT
(the “Agreement”), entered into as of August 18, 2003 (the “Effective Date”) by
and among ProDril Acquisition Company, Inc. to be renamed ProDril Services
Incorporated (collectively referred to as “PSI”) or (the “Company”) and Jon Christopher Boswell (“Executive”);


 


W I T N E S S E T H:


 


WHEREAS, the Company desires
to retain the services of the Executive, and the Executive is willing to
provide such services to the Company, all upon the terms and conditions set
forth herein;


 


NOW THEREFORE, in
consideration of the premises, the terms and provisions set forth herein, the
mutual benefits to be gained by the performance thereof and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


SECTION  1.                               Employment. 
The Company hereby employs the Executive, and the Executive hereby
accepts such employment, all upon the terms and conditions set forth herein.


 


SECTION  2.                               Term. 
Unless sooner terminated pursuant to Section 5 of this Agreement, the
Executive shall be employed for a term commencing on the Effective Date and
ending on the third anniversary of the Effective Date (the “Term”); provided,
however, that the Term shall automatically be extended on a daily basis for an
additional day such that, at all times, the remaining Term shall be three
years.  Notwithstanding any other
provision of this Agreement to the contrary, this Agreement may be terminated
by Company upon written notice, in which case the Agreement will terminate upon
the expiration of the three-year Term.


 


SECTION  3.                               Duties and
Responsibilities.


 


A.                                   Capacity. 
The Executive shall serve in the capacity of Senior Vice President,
Chief Financial Officer and Director of PSI, and in such other or additional
capacity or capacities for the Company or an affiliate of PSI as the Board of
Directors of PSI (the “Board”) may direct from time to time.  During the term of this Agreement, as Senior
Vice-President and Chief Financial Officer of the Company, Executive agrees to
be responsible for the daily execution of the Companies financial
operations.  Executive also shall perform
such duties as are normally incident to that position and shall perform such
other duties and responsibilities commensurate with his position as may be
prescribed from time to time by the board of directors of the Company.


 


B.                                     Full-Time Duties. 
The Executive shall devote his full business time, attention and
energies to the business of the Company and shall not be engaged in any other
business activity, whether or not pursued for gain, profit or other pecuniary
advantage, which would impair his ability to fulfill his duties to the Company
under this Agreement, without the prior written consent of the Board.  Nothing contained in this Section 3(B) shall
prevent the Executive from passively investing his assets in such a form or
manner as will not conflict with the terms of this Agreement and will not require
services on the part of the Executive in the operation of the business of the
companies or other enterprises in which such investments are made.


 





















 


C.                                     Standard of Performance. 
The Executive will perform his duties under this Agreement with fidelity
and loyalty, to the best of his ability, experience and talent and in a manner
consistent with his fiduciary responsibilities.


 


SECTION  4.                               Compensation.


 


A. Base Salary. 
The Company shall pay the Executive a salary (the “Base Salary”) of U.S.
$180,000 per annum.  The Base Salary
shall be payable in accordance with the general payroll practices of the
Company in effect from time to time.  The
Company shall review the Base Salary then being paid to the Executive at such
times as the Company regularly reviews the compensation paid to employees.  Upon completion of such review, the Company
in its sole discretion may increase or maintain the Executive’s then current
Base Salary, and any increased salary shall be the “Base Salary” for all
purposes under this Agreement. 
Notwithstanding the above, the Base Salary shall be increased to
$360,000 upon the third anniversary date from the effective date of this
agreement.  The Company may decrease the
Executive’s then current Base Salary after the third anniversary date only with
the prior written consent of the Executive.


 


B. Stock
Options.  The Company shall grant the Executive 500,000
options to purchase the Company’s stock at $2 per share.  Such options shall vest ratably over a three
year period and become exercisable on the third anniversary of the Effective
date and such vested options shall survive Executives termination date.


 


C. Bonus.  The Executive
shall be eligible, in the sole discretion of the Board, to be considered for a
bonus following each fiscal year
ending during the Term based upon the Executive’s performance and the operating
results of the Company and their affiliates during such year in relation to
performance targets established by the Board. Determination of the bonus amount
shall take into account such unusual or nonrecurring items as the Chief
Executive Officer of PSI and/or
the Board deem appropriate.


 


D. Benefits. 
If and to the extent that the Company maintains employee benefit plans
(including, but not limited to, pension, profit sharing, disability, accident,
medical, life insurance and hospitalization plans), the Executive shall be
entitled to participate therein in accordance with the terms of such plans and
the Company’s regular practices with respect to its employees.  In addition, the Company promises to provide
reasonable health and dental insurance for the Executive and his family,
including $500,000 in life insurance. 
The Executive shall be entitled to reimbursement from the Company for
reasonable out-of-pocket expenses incurred by him in the course of the
performance of his duties, hereunder, including all reasonable commuting and
communication costs, upon the submission of appropriate documentation.


 


E. Vacation.
The Executive shall be entitled to four weeks
of paid vacation per calendar year, which, if not taken, may be carried forward
to any subsequent year, except in accordance with Company policy applicable to
the Company’s employees generally.  The
Executive shall also be entitled to such holidays and, subject to the provisions
of Section 5, other paid or unpaid leaves of absence as are consistent with the
Company’s normal policies.


 


SECTION  5.                               Termination of
Employment.


 


Notwithstanding the
provisions of Section 2, the Executive’s employment hereunder shall terminate
under any of the following conditions:


 


A.                                   Death. 
The Executive’s employment under this Agreement shall terminate
automatically upon his death.


 





















 


B.                                     Disability. 
The Executive’s employment under this Agreement shall terminate
automatically upon his Disability.  For
purposes of this Agreement, “Disability” means permanent and total disability
(within the meaning of section 22(e)(3) of the Internal Revenue Code of 1986,
as amended, or any successor provision) which has existed for at least 180
consecutive days.


 


C.                                     Termination by the
Company Without Cause.  The Company may terminate the
Executive’s employment hereunder without “Cause” (as hereinafter defined) on
three months written notice by the
Company.


 


D.                                    Termination by the
Company for Cause.  The Executive’s employment hereunder may be
terminated for Cause upon written notice by the Company.  For purposes of this Agreement, “Cause” shall
mean (i) the willful and continued failure by the Executive to substantially
perform his obligations under this Agreement (other than such failure resulting
from his Disability) after a demand for substantial performance has been
delivered to him by the Board which specifically identifies the manner in which
the Board believes the Executive has not substantially performed such
provisions and the Executive has failed to remedy the situation three months
after such demand; (ii) the Executive’s willfully engaging in conduct
materially and demonstrably injurious to the property or business of the
Company, including without limitation, fraud, misappropriation of funds or other
property of the Company, other willful misconduct, gross negligence or
conviction of a felony or any crime of moral turpitude; or (iii) the
Executive’s material breach of this Agreement which breach has not been
remedied by the Executive within three months after the receipt by the
Executive of written notice from the Company that the Executive is in material
breach of this Agreement, specifying the particulars of such breach.


 


For purposes of this
Agreement, no act, or failure to act, on the part of the Executive shall be
deemed “willful” or engaged in “willfully” if it was due primarily to an error
in judgment or negligence, but shall be deemed “willful” or engaged in
“willfully” only if done, or omitted to be done, by the Executive not in good
faith and without reasonable belief that his action or omission was in the best
interest of the Company.  Notwithstanding
the foregoing, the Executive shall not be deemed to have been terminated as a
result of “Cause” hereunder unless and until there shall have been delivered to
the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters of the Board then in office at a meeting of the
Board called and held for such purpose (after reasonable notice to the
Executive and an opportunity for the Executive, together with his counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive has committed an act set forth above in this Section 5(D)
and specifying the particulars thereof in detail.  Nothing herein shall limit the right of the
Executive or his legal representative to contest the validity or propriety of
any such determination.


 


E.                                      Termination by the
Executive for Good Reason.  The Executive may terminate
his employment hereunder for “Good Reason.” 
For purposes of this Agreement, “Good Reason” for termination shall mean
any of the following (which occur without the Executive’s prior written
consent):


 


(1)                                  a decrease in the Executive’s Base Salary
not in accordance with section 4 (A) above;


 


(2)                                  a materially adverse diminution of the
overall level of responsibilities of the Executive;


 


(3)                                  a material breach by the Company of any
term or provision of this Agreement;


 





















 


(4)                                  after a Change of Control (as defined in
Section 7(B)) and during the Effective Period (as defined in Section 7(C)),
(a) the failure of the Company to continue in effect any benefit or
compensation plan (including, but not limited to, any bonus, incentive,
retirement, supplemental executive retirement, savings, profit sharing,
pension, performance, stock option, stock purchase, deferred compensation, life
insurance, medical, dental, health, hospital, accident or disability plans) in
which the Executive is participating at the time of such Change of Control (or
plans providing to the Executive, in the aggregate, substantially similar
benefits as the benefits enjoyed by the Executive under the benefit and
compensation plans in which the Executive is participating at the time of such
Change of Control), or (b) the taking of any action by the Company that
would adversely affect the Executive’s participation in or materially reduce
the Executive’s benefits under any of such plans or deprive the Executive of
any material fringe benefit enjoyed by the Executive at the time of such Change
in Control;


 


(5)                                  any personal reason that the Compensation
Committee of the Board in its discretion determines shall constitute Good
Reason.


 


However, that no event or
condition described in clauses (1) – (4) of this Section 5(E) shall constitute
Good Reason unless (a) the Executive gives the Company written notice of his
objection to such event or condition within 90 days after the Executive learns
of such event, (b) such event or condition is not corrected by the Company
within 10 days of its receipt of such notice and (c) the Executive voluntarily
resigns his employment with the Company and its affiliates not more than 60
days following the expiration of the 10-day period described in the foregoing
clause (b).


 


F.                                      Voluntary Termination
by the Executive.  The Executive may terminate his employment
hereunder at any time for reason other than Good Reason on 30 days
written notice to the Company.


 


SECTION  6.                               Payments Upon Termination.


 


A.                                   Upon termination of the Executive’s
employment hereunder, the Company shall be obligated to pay and the Executive
shall be entitled to receive, on the pay date for the pay period in which the
termination occurs, all accrued and unpaid Base Salary to the date of
termination.  In addition, the Executive
shall be entitled to any benefits to which he is entitled under the terms of
any applicable employee benefit plan or program or applicable law.


 


B.                                     Except as provided in Section 7(A), upon
termination of the Executive’s employment by the Company without Cause or by
the Executive due to Good Reason, in addition to the amount set forth in
Section 6(A), the Company shall be obligated to pay, and the Executive shall be
entitled to receive, (i) Base Salary for a period of three years and (ii)
continued medical and dental benefits for a period of three years at no cost to
the Executive.  The Company may cease all
payments of Base Salary and bonus under this Section 6(B) in the event of a
willful breach by the Executive of the provisions of Sections 8, 9 or 10 of this
Agreement or any inadvertent breach that continues after notice given to the
Executive by the Company.  As a condition
precedent to the receipt of any of the severance benefits hereunder the
Executive hereby agrees to execute a release of claims against the Company and
its affiliates in form and substance reasonably satisfactory to the Company.


 


C.                                     In the event Executive elects to
terminate employment as set forth in Section 5(F) then in such event any
options not vested as set forth in Section 3(B) shall terminate.


 





















 


D.                                    Upon any termination or expiration of the
Executive’s employment hereunder pursuant to Section 5, the Executive shall
have no further liability or obligation under or in connection with this
Agreement; provided, however, that the Executive shall continue to be subject
to the provisions of Sections 8, 9, 10, 11 and 12 hereof (it being understood
and agreed that such provisions shall survive any termination or expiration of
the Executive’s employment hereunder for any reason).  Upon any Voluntary Termination by the
Executive (other than a resignation by the Executive for Good Reason), or
expiration of Executive’s employment agreement, the Company shall have no
further liability under or in connection with this Agreement, except to pay the
portion of the Executive’s Base Salary earned or accrued at the date of
termination.


 


SECTION  7.                               Change of Control.


 


A.                                   In the event that, during the Effective
Period (as hereinafter defined), the Executive’s employment is terminated by
the Company without Cause or by the Executive for Good Reason, in lieu of the
amount set forth in Section 6(B), the
Executive shall immediately become entitled to the following benefits:


 


(1)                                  the outstanding options to acquire shares
of the Company held by the Executive under any share option plan and granted on
or prior to the Change of Control shall become immediately fully exercisable
and shall remain exercisable for three years after termination of employment
or, if less, their remaining term;


 


(2)                                  a lump–payment equal to three times: (a)
the Executive’s then current Base Salary or (b) $360,000, whichever is greater;


 


(3)                                  a lump–sum payment equal to three times
the highest annual bonus allowed under the Executive Bonus Plan for the
Executive during the three-year period preceding the date of the Change of
Control; and


 


(4)                                  continued medical and dental coverage for
three years from the termination date at no cost to the Executive.


 


B.                                    For purposes of this Agreement, a “Change of Control”
shall be deemed to have taken place upon the earliest occurrence of any of the
following: (i) a tender offer is made and consummated for the beneficial
ownership of 25% or more of the outstanding voting securities of PSI; (ii) PSI
is merged or consolidated with another corporation, and as a result of such
merger or consolidation, less than 75% of the outstanding voting securities of
the surviving or resulting corporation are beneficially owned in the aggregate
by the persons or entities who were shareholders of PSI immediately prior to such
merger or consolidation; (iii) PSI sells all or substantially all of its assets
to another entity or person that is not a wholly owned subsidiary; (iv) during
any 15-month period, individuals who at the beginning of such period
constituted the Board (including for this purpose any new member whose election
or nomination for election by the shareholders of PSI was approved by a vote of
at least 2/3 of the members then still in office and who were members at the
beginning of such period) cease for any reason to constitute at least a
majority of the Board; (v) the Compensation Committee of the Board determines,
in its sole discretion, that a Change of Control has occurred for purposes of
this Agreement; (vi) the Company sells all or substantially all of its assets
to another entity or person that is not a subsidiary or affiliate of the
Company or (vii) 80% or more of the outstanding voting securities of the
Company are acquired by any person or entity other than PSI, its subsidiaries
or affiliates.


 





















 


C.                                     For purposes of this Agreement,
“Effective Period” shall mean the period beginning on the date of a Change of
Control and ending on the earlier of the third anniversary of the Change of
Control or the expiration of the Term.


 


D.                                    To the extent that the acceleration of
vesting or any payment, distribution or issuance made to the Executive in the
event of a Change of Control is subject to federal income, excise or other tax
at a rate above the rate ordinarily applicable to compensation paid in the
ordinary course of business (collectively, a “Parachute Tax”), whether as a
result of the provisions of Section 280G and 4999 of the Internal Revenue Code
of 1986, as amended, or any similar or analogous provisions of any statute
adopted subsequent to the date hereof, or otherwise, then the Company shall pay
to the Executive an additional sum (the “Additional Amount”) such that the net
amount received by the Executive, after paying any applicable Parachute Tax and
any federal or state income tax on such Additional Amount, shall be equal to
the amount that the Executive would have received if such Parachute Tax were
not applicable.


 


SECTION  8.                              
Confidential Information and Inventions.


 


A.                                    Nondisclosure. 
The Executive hereby acknowledges that the Executive has knowledge of
certain confidential and proprietary information relating to Company, PSI or
their affiliates and that it will be necessary, in connection with the
performance of services hereunder, to provide or make available to the
Executive certain confidential and proprietary information, including, but not
limited to, business and financial information, technological information,
strategies, the status and content of contracts with suppliers or clients,
customer lists and financial information on customers, intellectual property,
trade secrets and other information relating to the businesses, products,
technology, services, customers, methods or tactics of the Company, PSI or its
affiliates (any such confidential or proprietary information being hereinafter
referred to as “Confidential Information”). 
The Executive further acknowledges that the Confidential Information
constitutes valuable trade secrets of Company, PSI and its affiliates and
agrees that any such Confidential Information shall remain the property of the
Company, PSI and their affiliates at all times during the term of this
Agreement and following the expiration or termination hereof.  The Executive shall not publish, disseminate,
distribute, disclose, sell, assign, transfer, copy, remove from the premises of
the Company, PSI or their affiliates, commercially exploit, make available to
others, or otherwise make use of any Confidential Information to or for the use
or benefit of the Executive or any other person, firm, corporation or entity,
except as specifically and previously authorized in writing by the Board or as
required for the due and proper performance of his duties and obligations under
this Agreement.  In addition, the
Executive shall employ all necessary safeguards and precautions in order to ensure
that unauthorized access to the Confidential Information is not afforded to any
person, firm, corporation or entity. 
Upon any expiration or termination of this Agreement, or if the Board or
the Company so requests at any time, the Executive shall promptly return to the
Company, PSI and their affiliates all Confidential Information in the
Executive’s possession, whether in writing, on computer disks or other media,
without retaining any copies, extracts or other reproductions thereof.  Notwithstanding the foregoing, nothing
contained in this Section 8(A) shall prevent the publishing, dissemination,
distribution, disclosure, sale, assignment, transfer, copying, removal,
commercial exploitation or other use by the Executive of any information that
(i) is generally available to the public (other than through a breach of an
obligation of confidentiality, or (ii) is lawfully obtained by the Executive
without obligation of confidentiality from a source other than the Company, PSI
or its affiliates, directors, officers, employees, agents or other
representatives (provided, however, that such source is not bound by a
confidentiality agreement with the Company, PSI or any of its affiliates and is
not otherwise under an obligation of secrecy or confidentiality to either of
them).


 





















 


B.                                     Requests for Disclosure. 
It shall not be a breach of the obligations of Section 8(A) if Executive
discloses Confidential Information as required by judicial or administrative
process or, in the written opinion of Executive’s counsel, by the requirements
of applicable law, but only upon satisfaction of the following conditions:  (i) the Executive gives prompt written notice
to the Chairman of the Board of the existence of, and the circumstances
attendant to, such request, sufficient to permit the Company, PSI or an
affiliate to contest or seek to restrict the required disclosure (ii) the
Executive consults with the Chairman of the Board as to the advisability of
taking legally available steps to resist or narrow any such request or otherwise
to eliminate the need for such disclosure, (iii) if disclosure is required, the
Executive cooperates with the Chairman of the Board in obtaining a protective
order or other reliable assurance in form and substance satisfactory to the
Chairman of the Board that confidential treatment will be accorded to such
portion of the Confidential Information as is required to be disclosed, and
(iv) that Executive disclosed only such Confidential Information as is legally
required (or, where applicable, only such information as the written opinion of
Executive’s counsel deems required).


 


C.                                     Confidential
Information of Others.  The Executive shall not
disclose to the Company, PSI or their affiliates, or induce them to use, the
proprietary information, trade secrets, or confidential information of others.


 


D.                                    Disclosure. 
Upon each occurrence of conception, creation, and/or reduction to
practice, the Executive will promptly provide a written description of each
Invention (as hereinafter defined) to the Board or its designee.


 


E.                                      Assignment and
Ownership of Rights.  The Executive agrees that all Inventions
shall and, to the extent necessary, shall become and remain the property of PSI
or the Company, and their successors and assigns, unless expressly released by
PSI and the Company in writing.  The
Executive assigns, and to the extent such assignment is not effective, the
Executive agrees to assign all such Inventions to PSI or the Company.  The Executive agrees that all copyrightable
works created for PSI or the Company during the Executive’s employment are
owned by PSI or the Company and, if necessary or appropriate, are works made
for hire.


 


F.                                      Obtaining Patents. 
PSI or the Company shall have sole discretion to decide whether to
obtain any patent or other protection on any Invention.  If PSI or the Company seeks any such
protection, the Executive shall have no obligation to pay any expenses of the
filing or maintenance of any such patent or other protection.


 


G.                                     Inventions.  “Inventions” means (i) any invention, development,
improvement, or copyrightable work, (ii) created, conceived, or reduced to
practice by the Executive individually or jointly with others while the
Executive is employed by the Company, PSI or their affiliates or within a
six-month period following termination of the Executive’s employment, (iii)
whether patentable or not, (iv) whether or not conceived or reduced to practice
during regular working hours, (v) that relates to any methods, apparatus,
products, or components thereof which, before termination of the Executive’s
employment, are manufactured, sold, leased, or used by the Company, PSI or
their affiliates or which are under development by, or which otherwise pertain
to the business of, the Company, PSI or their affiliates.  However, “Inventions” shall not include any
inventions, developments, improvements, or copyrightable work (i) for which no
equipment, supplies, facility, or trade secret information of the Company, PSI
or their affiliates were used, (ii) which the Executive developed entirely on
the Executive’s own time (iii) which does not relate directly to the business
of the Company, PSI or their affiliates or to their actual or demonstrably
anticipated research or development, or (iv) which does not result from any
work performed by the Executive for the Company, PSI or their affiliates.  The Executive represents that he has provided
PSI, on or prior to the date hereof, a complete written description of all
unpatented


 





















 


inventions and improvements in which the Executive has
any rights that are not included in the term “Inventions”, in a form
acknowledged in writing by the Chief Executive Officer of PSI.


 


SECTION  9.                              
Covenant Not to Compete.


 


A.                                   Noncompetition. 
The Executive hereby agrees that during the “Noncompetition Period” (as
hereinafter defined), he will not, except as otherwise permitted under this
Agreement, directly or indirectly (whether as an employee, consultant,
shareholder or director, or whether acting alone or through any of his
affiliates, as a member of a partnership or a joint venture or an investor in,
or a holder of securities of, any corporation or other entity, or otherwise),
engage in any business conducted by the Company, PSI or its affiliates in the
area of particle impact drilling (the “Noncompetition Area”).  Notwithstanding anything to the contrary in
this Section 9, the Executive may passively invest his assets in such a form or
manner as will not conflict with the terms of this Agreement and will not
require services on the part of the Executive in the operation of the business
of the companies or other enterprises in which such investments are made.  The Executive acknowledges that (i) the
provisions set forth in this Section 9 are for the benefit of the Company, PSI
and its affiliates, (ii) his agreement to such provisions is an express
condition to his employment by the Company and (iii) such provisions are
reasonably necessary to protect the goodwill and other business interests of
the Company, PSI and its affiliates.  The
“Noncompetition Period” shall be the period commencing on the Effective Date
and ending on the second anniversary of the date of termination of the
Executive’s employment.


 


B.                                     Reformation of Scope. 
If any of the provisions of this Section 9 is found to be unreasonably
broad, oppressive or unenforceable in an action, suit or proceeding before any
federal or state court, such court (i) shall narrow the Noncompetition Period
or the Noncompetition Area or shall otherwise endeavor to reform the scope of
such agreements in order to ensure that the application thereof is not
unreasonably broad, oppressive or unenforceable and (ii) to the fullest extent
permitted by law, shall enforce such agreements as so reformed.


 


SECTION  10.                         Nonsolicitation. 
The Executive shall not, directly or indirectly, during the
Noncompetition Period, (A) take any action to solicit or divert any business
(or potential business) or customers (or potential customers) away from the
Company, PSI or its affiliates, (B) induce customers, potential customers,
suppliers, agents or other persons under contract or otherwise associated or
doing business with the Company, PSI or its affiliates to terminate, reduce or
alter any such association or business with or from the Company, PSI or its
affiliates and/or (C) induce any person in the employment of the Company, PSI
or its affiliates or any consultant to the Company, PSI or its affiliates to
(i) terminate such employment or consulting arrangement, (ii) accept
employment, or enter into any consulting arrangement, with anyone other than
the Company, PSI or its affiliates (except to the extent the consultant makes
its services available to third parties on a regular basis) and/or (iii)
interfere with the customers, suppliers or clients of the Company, PSI or its
affiliates in any manner or the business of the Company, PSI or its affiliates
in any manner.  For purposes of this
Section 10, a “potential customer” shall mean a person or entity that the
Company, PSI or its affiliates, as of the date the Executive’s employment
terminates, is soliciting or is considering soliciting (or has targeted for
solicitation).


 


SECTION  11.                         Remedies.  The Executive
hereby agrees that a violation of the provisions of Section 8, 9 or 10 hereof
may cause irreparable injury to the Company, PSI and its affiliates for which
they would have no adequate remedy at law. 
Accordingly, in the event of any such violation, the Company, PSI and/or
its affiliates shall be entitled to preliminary and other injunctive relief.  Any such injunctive relief shall be in addition
to any other remedies to which the Company, PSI and/or its affiliates may be
entitled at law or in equity or otherwise.


 





















 


SECTION  12.                         Arbitration. 
Any dispute or controversy arising under or in connection with this
Agreement (other than any dispute or controversy arising from a violation or
alleged violation by the Executive of the provisions of Section 8, 9 or 10
hereof) shall be settled exclusively by final and binding arbitration in
Houston, Texas, in accordance with the Rules for the Resolution of Employment
Disputes of the American Arbitration Association (“AAA”).  The arbitrator shall be selected by mutual
agreement of the parties, if possible. 
If the parties fail to reach agreement upon appointment of an arbitrator
within 30 days following receipt by one party of the other party’s notice of
desire to arbitrate, the arbitrator shall be selected from a panel or panels of
persons submitted by the AAA.  The
selection process shall be that which is set forth in the AAA Rules for the
Resolution of Employment Disputes then prevailing, except that, if the parties
fail to select an arbitrator from one or more panels, AAA shall not have the
power to make an appointment but shall continue to submit additional panels
until an arbitrator has been selected. 
This agreement to arbitrate shall not preclude the parties from engaging
in voluntary, nonbinding settlement efforts, including, but not limited to,
mediation.  In the event the arbitration
is decided in whole or in part in favor of the Executive, the Company will
reimburse the Executive for his reasonable costs and expenses of the
arbitration (including reasonable attorneys’ fees).


 


SECTION  13.                         Notices.  All notices
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
registered or certified mail (return receipt requested and with postage prepaid
thereon) or by facsimile transmission to the respective parties at the
following addresses (or at such other address as either party shall have
previously furnished to the other in accordance with the terms of this Section
13):


 


If to the Company:


 


Prodril Acquisition Company Inc.


808 Travis Street, Suite 850


Houston, Texas 77002


Attn:   Prentis Tomlinson


 


if to the Executive:


 


Jon Christopher Boswell


22307 Bute Drive,


Spicewood, Texas  78669


 


SECTION  14.                         No Mitigation.  In the event of any termination of employment
by the Company without Cause, by the Executive for Good Reason, the Executive shall be under no
obligation to seek other employment, or otherwise engage in mitigating
activity, following the date of termination, and there shall be no offset
against amounts due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain.


 


SECTION  15.                         Indemnification.  PSI and the Company agree that, in the event
the Executive’s employment is terminated during the Term by the Company without
Cause or by the Executive for Good Reason, the Company shall continue to
indemnify the Executive following termination to the fullest extent permitted
by applicable law consistent with the Certificate of Incorporation and By-Laws
and the Company in effect as of the date of termination with respect to Executives
sole, joint or concurrent negligence and any acts or omissions he may have
committed during the period during which he was an officer, director and/or
employee of the Company or any of their affiliates for which he served as an
officer, director or employee at the request of the Company.


 





















 


SECTION  16.                         Amendment; Waiver.  The terms and provisions of this Agreement
may be modified or amended only by a written instrument executed by each of the
parties hereto, and compliance with the terms and provisions hereof may be
waived only by a written instrument executed by each party entitled to the
benefits thereof.  No failure or delay on
the part of any party in exercising any right, power or privilege granted hereunder
shall constitute a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege granted
hereunder.


 


SECTION  17.                         Entire Agreement.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior written or oral agreements or understandings between the
Executive and the Company or its affiliates relating thereto, including,
without limitation.


 


SECTION  18.                         Severability.  In the event that any term or provision of
this Agreement is found to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining terms and provisions hereof shall
not be in any way affected or impaired thereby, and this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained therein.


 


SECTION  19.                         Binding Effect; Assignment.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns
(it being understood and agreed that, except as expressly provided herein,
nothing contained in this Agreement is intended to confer upon any other person
or entity any rights, benefits or remedies of any kind or character
whatsoever).  The Executive may not
assign this Agreement without the prior written consent of the Company.  Except as otherwise provided in this
Agreement, the Company may assign this Agreement to any of their affiliates or
to any successor (whether by operation of law or otherwise) to all or
substantially all of their business and assets without the consent of the
Executive, and any transfer of employment from the Company to such affiliate or
successor shall be deemed to constitute an assignment and not a termination of
employment hereunder.  In the event of an
assignment of this Agreement by the Company, all references herein to PSI or
the Company shall be deemed to be references to the assignee.  Similarly, in the event PSI is no longer an
affiliate of the Company (or any assignee), all references to PSI shall be
deemed to be references to the Company (or the assignee).


 


SECTION  20.                         Withholding of Taxes.  The Executive agrees that the Company shall
deduct, or shall cause to be deducted, from the amount of any benefits to be
paid hereunder any taxes required to be withheld by the federal or any state or
local government.


 


SECTION  21.                         Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas (except that no
effect shall be given to any conflicts of law principles thereof that would
require the application of the laws of another jurisdiction).


 


SECTION  22.                         Headings. 
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.


 


SECTION  23.                         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


SECTION  24.                         Subsidiaries and Affiliates.  As used herein, the term “subsidiary” shall
mean any corporation or other business entity controlled by the corporation in
question, and the term


 





















 


“affiliate” shall mean and include any corporation or
other business entity controlling, controlled by or under common control with
the corporation in question.  The terms
“controlled,” “controlling,” “controlled by” and “under common control with,”
as used with respect to any person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise.


 


IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first
above written.


 


	
   

  	
  Prodril
  Acquisition Company, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Prentis B. Tomlinson, Jr.

  	
   

  
	
   

  	
  Prentis B. Tomlinson, Jr.

  
	
   

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Jon Christopher Boswell

  
	
   

  	
   

  
	
   

  	
  /s/ Jon Christopher
  Boswell

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 





















 


AMENDMENT TO EMPLOYMENT AGREEMENT


 


WHEREAS, Particle Drilling Inc, formerly ProDril
Acquisition Company, Inc. (“Company”) entered into that certain Employment
Agreement dated August 18, 2003 (the “Agreement”) with Jon Christopher Boswell (“Executive”); and


 


WHEREAS, Company and
Executive amended the Agreement pursuant to that certain Term Sheet for
Modification of Employment Agreement dated September 1, 2003; and


 


WHEREAS, it is the desire of
Company and Executive to properly reflect the role of Executive as a partner in
the Company and to further amend and correct the Agreement with respect to
certain terms and provisions;


 


NOW, THEREFORE, in
consideration of the premises, Company and Executive hereby agree as follows:


 


1.                                       Executive hereby waives any right to receive
Base Salary compensation as set forth in Section 4.A of the Agreement for the
period beginning August 18, 2003 through March 31, 2004, and it is understood
and agreed that Executive has not and shall not accrue any Base Salary during
such period.  Beginning on April 1, 2004
and thereafter, Executive shall accrue Base Salary in accordance with the
Agreement.


 


2.                                       Executive shall receive a Net Profits
Interest (“NPI”) in ProDril Partners, LLC that shall result in the Executive
becoming the beneficial owner of 865,000 shares of common stock in the
Company.  The NPI shall be established
effective as of the date of this Amendment. 
ProDril Partners, LLC shall execute this Amendment to more fully
effectuate the NPI granted as set forth herein.


 


3.                                       Section 4.B. of the Agreement shall be
deleted in its entirety and the following provision shall be substituted
therefor:  The Company shall grant the
following stock options to Executive a.) Non-statutory (fully vested as of this
date) Stock Options to purchase 480,000 shares of the Company’s common stock at
$0.12 per share; and b.) Statutory Incentive Stock Options to purchase another
480,000 shares of the Company’s common stock at $0.12 per share vesting over a
four (4) year period and in accordance with the Incentive Stock Plan as
approved by the Company’s Board of Directors.


 


4.                                       Neither the proposed merger between Company
and Particle Drilling Technologies, Inc. (the “PDI/PDT Merger”), nor the
proposed merger between the surviving company resulting from the PDI/PDT Merger
and the public company that has yet to be identified and as being coordinated


 





















 


by
Cagen McAfee Capital Partners shall be considered a “Change of Control” for
purposes of Section 7 of the Agreement. 
This provision shall not constitute a waiver of the provisions of
Section 7 of the Agreement with respect to any other transaction or event.


 


It is further understood and
agreed between Company and Executive that the terms of that certain amendment
referenced above entitled Term Sheet for Modification of Employment Agreement
dated September 1, 2003 shall be null and void and shall be replaced and
superceded in its entirety by this Amendment.


 


The terms, provisions and
conditions of the Agreement are hereby modified and amended to the extent
necessary to conform with the terms and provisions of this Amendment; and all
other terms, provisions and conditions of the Agreement are hereby ratified and
confirmed and Company and Executive hereby recognize the Agreement is a valid
and subsisting Agreement as hereby amended.


 


Agreed to and accepted this
8th day of April 2004, by:


 


	
   

  	
  “Company”

  
	
   

  	
   

  
	
   

  	
  Particle
  Drilling Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Prentis B. Tomlinson,
  Jr.

  	
   

  
	
   

  	
  Prentis B. Tomlinson, Jr.

  
	
   

  	
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ProDril
  Partners, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Prentis B. Tomlinson,
  Jr.

  	
   

  
	
   

  	
  Prentis B. Tomlinson, Jr.

  
	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “Executive”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jon Christopher
  Boswell

  	
   

  
	
   

  	
  Jon Christopher Boswell

  
	
   

  	
  Senior Vice President and
  CFO

  
	
   

  	
  Particle Drilling, Inc.