Chief Financial Officer Employment Agreement

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 Executive92s 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 Executive92s 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 Company92s 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 Executive92s 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 Company92s 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 Company92s 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 Company92s normal policies.



SECTION 5. Termination of Employment .



Notwithstanding the provisions of Section 2, the Executive92s employment hereunder shall terminate under any of the following conditions:



A. Death . The Executive92s employment under this Agreement shall terminate automatically upon his death.










B. Disability . The Executive92s 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 Executive92s employment hereunder without "Cause" (as hereinafter defined) on three months written notice by the Company.



D. Termination by the Company for Cause . The Executive92s 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 Executive92s 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 Executive92 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 Executive92s prior written consent):



(1) a decrease in the Executive92s 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 Executive92s participation in or materially reduce the Executive92s 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) 96 (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 Executive92s 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 Executive92s 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.










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