exhibit10_1.htm


    Exhibit
10.1

     

    AMENDED
AND RESTATED

     

     EMPLOYMENT
AGREEMENT

     

    THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement”)
is made effective as of April 19, 2010 (the “Effective
Date”), between Bronco Drilling Company, Inc., a Delaware corporation
(the “Company”),
and Frank Harrison, an individual (the “Executive”).

     

    W I T N E
S S E T H:

     

    WHEREAS, the Company and the Executive
are parties to that certain Employment Agreement, dated as of August 8, 2006, as
amended on August 2, 2007 (the “Existing
Agreement”).

     

    WHEREAS,
the Company and the Executive desire to amend and restate the Existing Agreement
to set forth the terms of their agreements relating to the employment of the
Employee by the Company.

     

    NOW, THEREFORE, in consideration of the
mutual promises herein contained, and for other good and valuable consideration,
receipt of which is hereby acknowledged, the Company and the Executive agree as
follows:

     

    1. Employment.  The
Company hereby employs the Executive and the Executive hereby accepts such
employment subject to the terms and conditions contained in this
Agreement.  The Executive is engaged as an employee of the Company and
the Executive and the Company do not intend to create a joint venture,
partnership or other relationship that might impose a fiduciary obligation on
the Executive or the Company in the performance of this Agreement, other than as
an officer and director of the Company.

     

    2. Executive’s
Duties.  The Executive is employed on a full-time
basis.  Throughout the term of this Agreement, the Executive will use
the Executive’s best efforts and due diligence to assist the Company in the
objective of achieving the most profitable operation of the Company and the
Company’s affiliated entities consistent with developing and maintaining a
quality business operation.

     

    2.1 Specific
Duties.  During the term of this Agreement the
Executive:  (a) will serve as Chief Executive Officer for the
Company; (b) will be nominated for election or appointed to serve as a director
of the Company; (c) will be appointed as an officer or manager of such of the
Company’s subsidiaries as the Executive requests; and (d) will be nominated for
election or appointed to serve as a director of such of the Company’s
subsidiaries as the Executive requests.  The Executive agrees to use
the Executive’s best efforts to perform all of the services required to fully
and faithfully execute the offices and positions to which the Executive is
appointed and elected and such other services as may be reasonably directed by
the Board of Directors of the Company in accordance with this
Agreement.

     

    2.2 Modifications.  The
precise duties to be performed by the Executive may be extended or curtailed in
the discretion of the Board.  However, the occurrence of any one or
more of the following events (such events, individually and collectively, “Good
Reason”) shall constitute termination without Cause (as hereinafter
defined): (a) a reduction in the Executive’s then current Base Salary (as
hereinafter defined) or a significant reduction in the Executive’s then current
benefits as provided in Section 4 hereof; (b) a demotion by means of a
reduction in authority, responsibilities, duties or titles to a position of less
stature or importance with the Company or an assignment of duties materially
inconsistent with the Executive’s position, authority, duties or responsibility;
(c) the Company’s principal executive offices are moved to a location more than
25 miles from its current location or the Executive is required to be based
anywhere other than the Company’s principal executive offices; (d) a
failure by the Company to require any successor to the Company or to all or
substantially all of the business or assets of the Company to expressly assume
the obligations of the Company under this Agreement; or (e) a breach by the
Company of a material provision of this Agreement or any other material plan or
program covering the Executive.

     

    2.3 Rules and
Regulations.  From time to time, the Company may issue policies
and procedures applicable to employees and the Executive including an Employment
Policies Manual.  The Executive agrees to comply with such policies
and procedures, except to the extent such policies are inconsistent with this
Agreement.  Such policies and procedures may be supplemented,
modified, changed or adopted without notice in the sole discretion of the
Company at any time.  In the event of a conflict between such policies
and procedures and this Agreement, this Agreement will control unless compliance
with this Agreement will violate any law or regulation applicable to the Company
or its affiliated entities.

     

    3. Other
Activities.  During the term of this Agreement, Executive will
devote substantially all of his business time, efforts, skills and abilities and
attention to the business of the Company; provided, however, that Executive
(a) may serve on one board of directors of a publicly traded corporation,
(b) with the consent of the Board of Directors of the Company (which will
not be unreasonably withheld), may serve on other boards of directors of
business entities, (c) may engage in charitable, educational or community
affairs, including serving on the board of directors of any charitable,
educational or community organization, and (d) may manage his personal
investments, provided that such activities do not materially interfere with the
performance of his duties hereunder..

     

    4. Executive’s
Compensation.  The Company agrees to compensate the Executive
as follows:

     

    4.1 Base Salary.  During
the term of this Agreement, a base salary (the “Base
Salary”), in an annual rate of not less than Seven Hundred Fifty Thousand
Dollars ($750,000.00), will be paid to the Executive in installments consistent
with the Company’s customary payroll practices.

     

    4.2 Bonus.  During the
term of this Agreement, the Executive will be eligible to receive an annual
bonus established by the Board of Directors of the Company (or its Compensation
Committee), in its discretion.

     

    4.3 Equity
Compensation.  In addition to the compensation set forth in
Sections 4.1 and 4.2 of this Agreement, the Executive may periodically receive
grants of stock options, restricted stock or other equity related awards from
the Company’s stock compensation plans in effect from time to time, subject to
the terms and conditions of such plans.

     

    4.4 Benefits.  The
Company agrees to extend to the Executive retirement benefits, deferred
compensation, reimbursement of reasonable expenditures for dues, travel and
entertainment and any other benefits the Company provides to other executives or
officers from time to time on the same terms as such benefits are provided to
such individuals.  Such benefits will include comprehensive
healthcare, dental care, life insurance, disability and other welfare benefits
that are not less favorable than the plans in force on the Effective
Date.  The following specific benefits will also be provided to the
Executive at the expense of the Company.

     

    (a) Vacation.  The
Executive will be entitled to take up to five (5) weeks of paid vacation each
calendar year during the term of this Agreement, subject to proration for any
portion of a calendar year under this Agreement.  No additional
compensation will be paid for failure to take vacation and no vacation may be
carried forward from one calendar year to another.

     

    (b) Membership
Dues.  The Company will reimburse the Executive for joining,
and maintaining a full membership in, any country club in the Oklahoma City
area.

     

    (c) Support Services. The
Executive shall be reasonably permitted to utilize the Company’s computer
facilities and the services of one of the company’s secretarial/administrative
employees to provide routine accounting, records maintenance and preparation for
tax returns for the Executive (and his family’s) personal business investments
and activities; provided, that, such payment and use of services be subject to
annual review by the Board of Directors of the Company (or its Compensation
Committee).

     

    (d) Reimbursement of
Expenses.  The Company will reimburse the Executive for such
reasonable and necessary out-of-pocket business expenses as may be incurred by
him or her in the performance of the Executive’s duties hereunder.

     

    (e) Supplemental Retirement
Plan.  The Executive will be eligible to participate in the
Company’s supplemental retirement plan, if any, on terms no less favorable than
those available to other senior executives.

     

    (f) Tax
Withholding.  The Company has the right to deduct from any
compensation payable to the Executive under this Agreement social security
(FICA) taxes and all Federal, state and local income taxes and charges as are
required by applicable law and regulations.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.5 Gross-Up
Payment.  In the event it is determined that any payment or
distribution by the Company or the Company’s subsidiaries or affiliates to or
for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
4.5) (a “Payment”)
is subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code (the “Code”) or
any interest or penalties related to such excise tax (collectively, the “Excise
Tax”), the Executive will be entitled to receive an additional payment (a
“Gross-Up
Payment”) from the Company.  The Gross-Up Payment will be equal
to the amount such that after payment by the Executive 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 will retain an amount of the
Gross-Up Payment equal to the Excise Tax imposed on the Payment.

     

    (a) Determination.  Subject
to the provisions of Section 4.5(b), all determinations required to be made
under this Section 4.5 (including whether and when a Gross-Up Payment is
required, the amount of such Gross-Up Payment and the assumptions to be
utilized) will be made by a nationally recognized certified public accounting
firm designated by the Executive (the “Accounting
Firm”).  The Executive will request that the Accounting Firm
provide detailed supporting calculations both to the Company and the Executive
within fifteen (15) business days of the receipt of notice from the Executive
that there has been a Payment, or such earlier time as is reasonably requested
by the parties.  In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting a Change of
Control (as hereinafter defined), the Executive will be entitled to appoint
another nationally recognized accounting firm to make the determinations
required under this paragraph (which accounting firm will then be referred to as
the Accounting Firm hereunder).  All fees and expenses of the
Accounting Firm will be paid by the Company.  Any Gross-Up Payment
required to be paid under this Section 4.5 will be paid by the Company to the
Executive within five (5) days of the receipt of the Accounting Firm’s
determination.  Any determination by the Accounting Firm will be
binding on the Company and the Executive.  As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm, the Gross-Up Payment made by the
Company may be less than actually required (an “Underpayment”)
consistent with the calculations required to be made hereunder.  In
the event that the Company exhausts its remedies pursuant to Section 4.5(b)
below and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm will determine the amount of the Underpayment that has
occurred and any such Underpayment will be promptly paid by the Company to or
for the benefit of the Executive.

     

    (b) Contest of
Claims.  The Executive will notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment.  Such notification will
be given as soon as practicable but no later than ten (10) business days after
the Executive is informed in writing of such claim and will apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid.  The Executive will not pay such claim prior to the expiration
of the thirty (30) day period following the date on which the Executive notifies
the Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due).  If the Company notifies the
Executive in writing prior to the expiration of such thirty (30) day period that
the Company desires to contest such claim, the Executive will:  (i)
provide to the Company any information reasonably requested by the Company
relating to such claim; (ii) take such action in connection with contesting such
claim as the Company reasonably requests in writing including, without
limitation, accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company; (iii) cooperate with the Company in
good faith as necessary to effectively contest such claim; and (iv) permit the
Company to participate in any proceedings relating to such claim.  The
Company will bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with the contest of the claim and
agrees to indemnify and hold the 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 such contest (including payment of costs and
expenses as provided hereunder).  Without limitation on the foregoing
provisions, the Company will control all proceedings related to such contested
claim, may at its sole option pursue or forego any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may at its sole option either direct the Executive to
pay the tax claimed and sue for a refund, or contest the claim in any
permissible manner.  The Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company reasonably
determines.  If the Company directs the Executive to pay a claim and
sue for a refund, the Company will be required to advance the amount of such
payment to the Executive on an interest-free basis and agrees to indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance, provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.  Furthermore, the Company’s control of the contested claim
will be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive will be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority.

     

    (c) Refunds.  If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Section 4.5(b), the Executive becomes entitled to receive any refund with
respect to such claim, the Executive will (subject to the Company’s complying
with the requirements of Section 4.5(b)) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto).  If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 4.5(b), a determination is
made that the Executive will not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after
such determination, then the advance will be forgiven and will not be required
to be repaid and the amount of such advance will offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

     

    4.6 Compensation
Review.  The compensation of the Executive will be reviewed not
less frequently than annually by the Board of Directors of the Company (or a
Compensation Committee thereof) and shall be reviewed semi-annually if the
compensation of other executive officers of the Company is reviewed at such
frequency.  The compensation of the Executive prescribed in Section 4
of this Agreement (including benefits) may be increased at the discretion of the
Board of Directors of the Company or the Compensation Committee, but may not be
reduced without the prior written consent of the Executive except as expressly
provided herein.

     

    5. Term.  In the
absence of termination as set forth in Section 6 below, this Agreement will
extend for a term commencing on the Effective Date, and ending on April 18, 2013
(the “Expiration
Date”) as extended from time to time.  Unless the Company
provides thirty (30) days’ prior written notice of non-extension to the
Executive before each April 18 during the term of this Agreement, the term and
the Expiration Date will be automatically extended for one (1) additional year
so that the remaining term on this Agreement will be not less than two (2) and
not more than three (3) years.

     

    6. Termination.  The
Executive’s employment will continue in effect until the expiration of the term
set forth in Section 5 of this Agreement unless earlier terminated pursuant to
this Section 6.

     

    6.1 Termination by the
Company.  The Company will have the following rights to
terminate Executive’s employment:

     

    (a) Termination without
Cause.  The Company may terminate Executive’s employment
without Cause at any time by the service of written notice of termination to the
Executive specifying an effective date of such termination not sooner than ten
(10) days after the date of such notice (the “Termination
Date”).  In the event the Executive is terminated without Cause
(other than in connection with a Change of Control under Section 6.3 of this
Agreement), the Executive will receive as termination
compensation:  (i) an amount equal to his Base Salary (as in effect on
the Termination Date) during the remaining term of this Agreement, but in any
event through the Expiration Date; provided, however, such amount shall not be
less than two times the then current Base Salary; plus (ii) the greater of any
target bonus for the year of termination or the average of the immediately
preceding two years’ annual discretionary incentive bonuses received by
Executive; plus (iii) any vacation pay accrued through the Termination
Date.  In addition, during the greater of (i) twenty-four month
period following the date of termination and (ii) the number of months,
including fractional months, remaining in the term of this Agreement, the
Company will continue to provide Executive (and, as applicable, his family) with
the benefits, including but not limited to healthcare, dental, life insurance
and other benefits set forth in Section 4.4.  The payment of such
amounts shall be made, at Executive’s option, either in a lump sum within ten
(10) days of termination or during the remaining term of the Agreement in
installments consistent with the Company’s normal payroll practices, but, if on
the Termination Date, the Executive is a “specified employee” as defined in
regulations under Section 409A of the Code, such payments will commence on the
first payroll payment date which is more than six months following the
Termination Date, and the first payment shall include any amounts that would
have otherwise been payable during the six-month period.

     

    (b) Termination for
Cause.  The Company may terminate Executive’s employment for
Cause.  For purposes of this Agreement, “Cause”
means:  (i) the willful and continued failure of the Executive to
perform substantially the Executive’s duties with the Company or its
subsidiaries or affiliates (other than a failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board of Directors which
specifically identifies the manner in which the Board of Directors believes that
the Executive has not substantially performed the Executive’s duties; or (ii)
the willful engaging by the Executive in illegal conduct, gross misconduct or a
clearly established violation of the Company’s written policies and procedures,
in each case which is materially and demonstrably injurious to the
Company.  For purposes of this provision, an act or failure to act, on
the part of the Executive, will not be considered “willful” unless it is done,
or omitted to be done, by the Executive in bad faith or without reasonable
belief that the Executive’s action or omission was in the best interests of the
Company.  Any act, or failure to act, based on authority given
pursuant to a resolution duly adopted by the Board of Directors or based on the
advice of counsel for the Company will be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company.  In the event Executive’s employment is terminated for
Cause, the Company will not have any obligation to provide any further payments
or benefits to the Executive after the effective date of such
termination.  Executive’s employment will not be deemed to have been
terminated for Cause unless a written determination specifying the reasons for
such termination is made, approved by a majority of the independent and
disinterested members of the Board of Directors of the Company and delivered to
the Executive.  Thereafter, the Executive will have the right for a
period of thirty (30) days to request a Board of Directors meeting to be held at
a mutually agreeable time and location to be attended by the members of the
Board of Directors in person within the following thirty (30) days, at which
meeting the Executive and his designated representatives will have an
opportunity to be heard.  Failing such determination and opportunity
for hearing, any termination of Executive’s employment will be deemed to have
occurred without Cause.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.2 Termination by
Executive.  The Executive may voluntarily terminate his
employment with or without Cause by the service of written notice of such
termination to the Company specifying an effective date of such termination
ninety (90) days after the date of such notice, during which time the Executive
may use remaining accrued vacation days, or at the Company’s option, be paid for
such days.  Subject to Sections 2.2 and 6.1, in the event his
employment is terminated by the Executive, neither the Company nor the Executive
will have any further obligations hereunder, except for any obligations which
expressly survive termination of employment including, without limitation, any
obligation of the Company to provide any further payments or benefits to the
Executive after the effective date of such
termination.  Notwithstanding anything in this Agreement to the
contrary, in the event the Executive provides written notice to the Company that
he is terminating his employment with the Company for Good Reason, other than in
connection with a termination upon a Change of Control (as hereinafter defined),
the Executive shall receive the termination compensation provided in Section
6.1(a) hereof within ten (10) days of receipt by the Company of written notice
of such termination.

     

    6.3 Termination in Connection with a
Change of Control.  The Executive will be entitled to terminate
this Agreement with or without Cause or Good Reason at anytime within two (2)
years following a Change of Control by providing written notice to the Company
(or any successor to the Company or any parent corporation of the
Company).  Within ten (10) days of the Company’s (or any successor to
the Company or any parent corporation of the Company) receipt of such notice,
the Executive shall receive a severance payment (in addition to any other rights
and other amounts payable to the Executive under Section 6.7 or under Company
plans in which the Executive is a participant) payable in a lump sum in cash an
amount equal to the sum of the following: (i) three (3) times the sum of the
Executive’s highest paid annual Base Salary plus any annual discretionary bonus
paid pursuant to Section 4.2 (based on the average of the last three years’
annual discretionary bonuses or such lesser number of years as the Executive may
have been employed); plus (ii) any applicable Gross-Up Payment.  If
the foregoing amount is not paid within ten (10) days after the notice of such
termination is received by the Company, the unpaid amount will bear interest at
the per annum rate of 12% per annum.  Notwithstanding the foregoing,
if at the time of such termination the Executive is a “specified employee” as
defined in regulations under Section 409A of the Code, such payment will be made
on the first day which is more than six (6) months following the date of such
termination.  In connection with any Change of Control, the Company
shall obtain the assumption of this Agreement, without limitation or reduction,
by any successor to the Company or any parent corporation of the
Company.  In the event the Company (or any successor to the Company or
any parent corporation of the Company) terminates this Agreement, with or
without Cause, within two (2) years following a Change of Control, the Executive
shall be entitled to the severance payment set forth in this Section 6.3 on the
same terms as if the Executive elected to terminate this Agreement under this
Section 6.3.

     

    For the
purpose of this Agreement, a “Change of
Control” means the occurrence of any of the following
events:

     

    (a) The
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”)) (a “Person”),
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 40% or more of either (i) the then outstanding shares of
common stock of the Company (the “Outstanding
Company Common Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding
Company Voting Securities”).  For purposes of this Section
6.3(a), 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.

     

    (b) The
individuals who, as of the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
Board.  Any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company’s 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 hereof, 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
hereof.

     

    (c) The
consummation of a reorganization, merger, consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Business
Combination”), unless following such Business Combination: (i) the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which, as a result of such transaction, owns
the Company or all or substantially all of the Company’s assets either directly
or through one ore more subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be; (ii) no Person (excluding any corporation resulting from such
Business Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 40% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination; and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination.

     

    The
approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

     

    6.4 Disability of
Executive.  (a) The employment of Executive will terminate
upon the Disability of Executive.  For purposes of this Agreement,
“Disability” means Executive’s inability to perform his duties and
responsibilities as contemplated under this Agreement for a period of more than
120 consecutive days due to physical, mental or emotional incapacity or
impairment.  A determination of Disability will be made by a physician
acceptable to both Executive and the Company; provided that if Executive and the
Company cannot agree as to a physician, each will select a physician and the two
physicians will select a third physician, whose determination as to Disability
will be binding on Executive and the Company.  Executive, his legal
representative or any adult member of his immediate family will have the right
to present to the Company and such physician such information and arguments on
his behalf as Executive or they deem appropriate, including the opinion of his
personal physician.  Executive’s employment will not be terminated due
to Disability until the physician has delivered a written opinion certifying
such disability and a written notice of termination for Disability has been
delivered by the Company or Executive, as the case may be, to the other
party.

     

    (b)           In
the event Executive’s employment is terminated for Disability, the Company will
pay Executive his Base Salary in effect on the date of termination through the
remaining term of this Agreement, but in any event through the Expiration
Date.  The payment of such amounts shall be made during the remaining
term of the Agreement in installments consistent with the Company’s normal
payroll practices, but, if on the termination date, the Executive is a
“specified employee” as defined in regulations under Section 409A of the Code,
such payments will commence on the first payroll payment date which is more than
six months following the termination date and the first payment shall include
any amounts that would have otherwise been payable during the six-month
period.  Notwithstanding the foregoing, the amount payable hereunder
will be reduced by any benefits payable under any disability plans provided by
the Company under Section 4.4 of this Agreement.

     

    6.5 Death of
Executive.  If Executive dies during the term of this
Agreement, Executive’s employment will terminate without compensation to the
Executive’s estate, except:  (a) the obligation to continue the Base
Salary payments under Section 4.1 of this Agreement for twelve (12) months after
the effective date of such termination, and (b) the benefits described in
Section 4.4 of this Agreement accrued through the effective date of such
termination.

     

    6.6 Effect of
Termination.  The termination of Executive’s employment will
terminate all obligations of the Executive to render services on behalf of the
Company.  Executive will maintain the confidentiality of all
information acquired by the Executive during the term of his employment in
accordance with Section 7 of this Agreement.  In the event of
Executive’s termination of employment, and in addition to any other payments or
benefits owed to Executive under this Section 6, the Company will pay
Executive, his estate or his representative, as the case may be, any accrued but
unpaid salary, bonuses, expenses or benefits as of the date of
termination.  Except as provided in the previous sentence, no accrued
bonus, severance pay or other form of compensation will be payable by the
Company to the Executive by reason of the termination of his
employment.  In the event that payments are required to be made by the
Company under this Section 6, the Executive will not be required to seek other
employment as a means of mitigating the Company’s obligations hereunder
resulting from termination of the Executive’s employment and the Company’s
obligations hereunder (including payment of severance benefits) will not be
terminated, reduced or modified as a result of the Executive’s earnings from
other employment or self-employment.  All keys, entry cards, credit
cards, files, records, financial information, furniture, furnishings, equipment,
supplies and other items relating to the Company will remain the property of the
Company.  All such personal items will be removed from such offices no
later than ten (10) days after the effective date of termination, and the
Company is hereby authorized to discard any items remaining and to reassign the
Executive’s office space after such date.  Prior to the effective date
of termination, the Executive will cooperate with the Company to provide for the
orderly termination of the Executive’s employment.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.7 Equity Compensation
Provisions.  Notwithstanding any provision to the contrary in
any option agreement, restricted stock agreement, plan or other agreement
relating to equity based compensation, in the event of a termination by the
Executive for Good Reason under Section 6.2, termination by the Company under
Section 6.1(a) (which includes any constructive termination by the Company for
Good Reason), or upon a Change of Control under Section 6.3 of this
Agreement:  (a) all units, stock options, incentive stock options,
performance shares, stock appreciation rights and restricted stock held by the
Executive immediately prior to such termination will immediately become 100%
vested; and (b) the Executive’s right to exercise any previously unexercised
options will not terminate until the latest date on which such option would
expire but for Executive’s termination of employment.  To the extent
the Company is unable to provide for one or both of the foregoing rights, the
Company will provide, in lieu thereof, a lump-sum cash payment equal to the
difference between the total value of such units, stock options, incentive stock
options, performance shares, stock appreciation rights and shares of restricted
stock (the “Equity
Compensation Rights”) with the foregoing rights as of the date of
Executive’s termination of employment and the total value of the Equity
Compensation Rights without the foregoing rights as of the date of the
Executive’s termination of employment.  The foregoing amounts will be
determined by the Board of Directors in good faith based on a valuation
performed by an independent consultant selected by the Board of Directors and
the cash payment, if any, will be paid in a lump sum in the case of a
termination under Section 6.1(a), at the same time as the first severance
payment is otherwise due under such Section, and in the case of a termination by
the Executive for Good Reason under Section 6.2, at the same time as the first
severance payment is otherwise due under such Section, and in the case of a
termination as a result of a Change of Control under Section 6.3, within ten
(10) days of such Change of Control.

     

    6.8 Payment in Lieu of
Benefits.  In the event that Executive and/or his family is
entitled to benefits, such as healthcare, under this Section 6, to the extent
that the Company’s plans, programs and arrangements do not permit a continuation
of Executive’s and/or his family’s participation in a benefit plan, program or
arrangement following his termination of employment, the Company will pay
Executive (and/or his family), no less frequently than quarterly in advance an
amount which, after all taxes on such amount, is sufficient for him and/or his
family to purchase equivalent benefits.

     

    6.9 Release.  As a
condition of receiving any amounts pursuant to Section 6, or of accelerated
vesting of any equity-based or cash-based award in connection with the
termination of Executive’s employment, Executive agrees to execute a release of
claims that he has or may have against the Company relating to, or arising out
of his employment (including the termination of such employment) with the
Company; provided, however, Executive will not release:

     

    (i) claims
that Executive may have against the Company for reimbursement of ordinary and
necessary business expenses incurred by him during the course of his
employment;

     

    (ii) claims
that arise after the effective date of the release;

     

    (iii) any
rights Executive may have to enforce this Agreement;

     

    (iv) any
rights or entitlements that Executive has under any applicable plan, policy,
program, or arrangement of, or other agreement with, the Company;
and

     

    (v) claims
for which Executive is entitled to be indemnified under the Company’s
Certificate of Incorporation or By-laws or under applicable law or pursuant to
the Company’s directors’ and officer’s liability insurance
policies.

     

    7. Confidentiality.  The
Executive recognizes that the nature of the Executive’s services are such that
the Executive will have access to information that constitutes trade secrets, is
of a confidential nature, is of great value to the Company or is the foundation
on which the business of the Company is predicated (“Confidential
Information”).  The Executive agrees not to disclose to any
person other than the Company’s employees or the Company’s legal counsel or
other parties authorized by the Company to receive confidential information nor
use for any purpose, other than the performance of this Agreement, any
Confidential Information.  Confidential Information includes data or
material (regardless of form) which is:  (a) a trade secret; (b)
provided, disclosed or delivered to Executive by the Company, any officer,
director, employee, agent, attorney, accountant, consultant or other person or
entity employee by the Company in any capacity, any customer, borrower or
business associate of the Company or any public authority having jurisdiction
over the Company of any business activity conducted by the Company; or (c)
produced, developed, obtained or prepared by or on behalf of the Executive or
the Company (whether or not such information was developed in the performance of
this Agreement) with respect to the Company or any assets, business activities,
officers, directors, employees, borrowers or customers of the
foregoing.  However, Confidential Information will not include any
information, data or material which at the time of disclosure or use was
generally available to the public other than by a breach of this Agreement, was
available to the party to whom disclosed on a non-confidential basis by
disclosure or access provided by the Company or a third party, or was otherwise
developed or obtained independently by the person to whom disclosed without a
breach of this Agreement.  On request by the Company, the Company will
be entitled to a copy of any Confidential Information in the possession of the
Executive.  The provisions of this Section 7 will survive the
termination, expiration or cancellation of Executive’s employment for a period
of one (1) year after the date of termination.  The Executive will
deliver to the Company all originals and copies of the documents or materials
containing Confidential Information.  For purposes of Sections 7, 8
and 9 of this Agreement, the Company expressly includes any of the Company’s
subsidiaries or affiliates.

     

    8. Non-competition.  During
the period of Executive’s employment and for a period ending six (6) months
after the Executive’s termination of employment for any reason other than
pursuant to Section 6.1(a) or 6.3, (a) the Executive will not solicit, induce,
entice or attempt to entice any employee, contractor, customer, vendor or
subcontractor to terminate or breach any relationship with the Company or the
Company’s subsidiaries or affiliates for the Executive’s own account or for the
benefit of another party; and (b) the Executive will not circumvent or attempt
to circumvent the foregoing agreements in clause (a) by any future arrangement
or through the actions of a third party.  The foregoing will not
prohibit the activities which are expressly permitted by Section 3 of this
Agreement.

     

    9. Proprietary
Matters.  The Executive expressly understands and agrees that
any and all improvements, inventions, discoveries, processes or know-how that
are generated or conceived by the Executive during the term of this Agreement,
whether generated or conceived during the Executive’s regular working hours or
otherwise, will be the sole and exclusive property of the
Company.  Whenever requested by the Company (either during the term of
this Agreement or thereafter), the Executive will assign or execute any and all
applications, assignments and/or other instruments and do all things which the
Company deems necessary or appropriate in order to permit the Company
to:  (a) assign and convey or otherwise make available to the Company
the sole and exclusive right, title and interest in and to said improvements,
inventions, discoveries, processes, know-how, applications, patents, copyrights,
trade names or trademarks; or (b) apply for, obtain, maintain, enforce and
defend patents, copyrights, trade names or trademarks of the United States or of
foreign countries for said improvements, inventions, discoveries, processes or
know-how.  However, the improvements, inventions, discoveries,
processes or know-how generated or conceived by the Executive and referred to
above (except as they may be included in the patents, copyrights or registered
trade names or trademarks of the Company, or corporations, partnerships or other
entities which may be affiliated with the Company) will not be exclusive
property of the Company at any time after having been disclosed or revealed or
have otherwise become available to the public or to a third party on a
non-confidential basis other than by a breach of this Agreement, or after they
have been independently developed or discussed without a breach of this
Agreement by a third party who has no obligation to the Company or the Company
Entities.

     

    10. Arbitration.  The
parties will attempt to promptly resolve any dispute or controversy arising out
of our relating to this Agreement or termination of the Executive by the
Company.  Any negotiations pursuant to this Section 10 are
confidential and will be treated as compromise and settlement negotiations for
all purposes.  If the parties are unable to reach a settlement
amicably, the dispute will be submitted to binding arbitration before a single
arbitrator in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association.  The arbitrator will be instructed
and empowered to take reasonable steps to expedite the arbitration and the
arbitrator’s judgment will be final and binding upon the parties subject solely
to challenge on the grounds of fraud or gross misconduct.  Except for
damages arising out of a breach of Sections 6, 7, 8 or 9 of this Agreement, the
arbitrator is not empowered to award total damages (including compensatory
damages) that exceed 300% of compensatory damages and each party hereby
irrevocably waives any damages in excess of that amount.  The
arbitration will be held in Oklahoma County, Oklahoma.  Judgment upon
any verdict in arbitration may be entered in any court of competent jurisdiction
and the parties hereby consent to the jurisdiction of, and proper venue in, the
federal and state courts located in Oklahoma County, Oklahoma.  The
Company will pay the costs and expenses of the arbitration including, without
implied limitation, the fees for the arbitrators.  Unless otherwise
expressly set forth in this Agreement, the procedures specified in this Section
10 will be the sole and exclusive procedures for the resolution of disputes and
controversies between the parties arising out of or relating to this
Agreement.  Notwithstanding the foregoing, a party may seek a
preliminary injunction or other provisional judicial relief if in such party’s
judgment such action is necessary to avoid irreparable damage or to preserve the
status quo.

     

    11. Miscellaneous.  The
parties further agree as follows:

     

    11.1 Time.  Time is of
the essence of each provision of this Agreement.

     

    11.2 Notices.  Any
notice, payments, demand or communication required or permitted to be given by
any provision of this Agreement will be in writing and will be deemed to have
been given when received by personal delivery, by facsimile, by overnight
courier, or be certified mail, postage and charges prepaid, directed to the
following address or to such other additional addresses as any party might
designate by written notice to the other party:

     

    To the
Company:                                Bronco
Drilling Company, Inc.

                                                                                            
16217 N. May Avenue

                                                          
Edmond, OK 73013

                                                                 
        Attn:
General Counsel

     

    To the Executive:  The
Executive’s most recent home address on file with the Company.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    11.3 Assignment.  Neither
this Agreement nor any of the parties’ rights or obligations hereunder can be
transferred or assigned without the prior written consent of the other parties
to this Agreement.

     

    11.4 Construction.  If
any provision of this Agreement or the application thereof to any person or
circumstances is determined, to any extent, to be invalid or unenforceable, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those as to which the same is held invalid or
unenforceable, will not be affected thereby, and each term and provision of this
Agreement will be valid and enforceable to the fullest extent permitted by
law.  This Agreement is intended to be interpreted, construed and
enforced in accordance with the laws of the State of Oklahoma.

     

    11.5 Entire
Agreement.  Except as provided in Section 2.3 of this
Agreement, this Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter herein contained, and no modification
hereof will be effective unless made by a supplemental written agreement
executed by all of the parties hereto.

     

    11.6 Binding
Effect.  This Agreement will be binding on the parties and
their respective successors, legal representatives and permitted
assigns.  In the event of a merger, consolidation, combination,
dissolution or liquidation of the Company, the performance of this Agreement
will be assumed by any entity which succeeds to or is transferred the business
of the Company as a result thereof.

     

    11.7 Attorneys’ Fees.  If
any party institutes an action, proceeding or arbitration against any other
party relating to the provisions of this Agreement or any default hereunder, the
Company will be responsible for paying the Company’s legal fees and expenses and
the Company will be required to reimburse the Executive for reasonable expenses
and legal fees incurred by the Executive in connection with the resolution of
such action or proceeding, including any costs of appeal.

     

    11.8 Superseding
Agreement.  This Agreement is the final, complete and exclusive
expression of the agreement between the Company and the Executive and supersedes
and replaces in all respects any prior oral or written employment agreements,
including, but not limited to, the Existing Agreement.  On execution
of this Agreement by the Company and the Executive, the relationship between the
Company and the Executive after the effective date of this Agreement will be
governed by the terms of this Agreement and not by any other agreements, oral or
otherwise.

     

    11.9 Non-Contravention.  Executive
represents and warrants to the Company that the execution and performance of
this Agreement will not violate, constitute a default under, or otherwise give
rights to any third party, pursuant to the terms of any Agreement to which
Executive is a party.

     

    11.10 Compliance with Section 409A of the
Code.  This Agreement is intended to comply with Section 409A
of the Code and shall be construed and interpreted in accordance with such
intent.  To the extent any benefit paid under this Agreement shall be
subject to Section 409A of the Code, such benefit shall be paid in a manner that
will comply with Section 409A, including any IRS 409A Guidance.  Any
provision of this Agreement that would cause the payment of any benefit to fail
to satisfy Section 409A of the Code shall have no force and effect until amended
to comply with Section 409A (which amendment may be retroactive to the extent
permitted by the IRS 409A Guidance.

     

    


     

    [SIGNATURES
ON FOLLOWING PAGE]

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


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

     

    COMPANY:

     

    


     

    By:/s/MARK
DUBBERSTEIN                                                                

     

          Mark
Dubberstein, President

     

    EXECUTIVE:

     

    


     

    By:/s/ D. FRANK
HARRISON                                                                

     

          D.
Frank Harrison