8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 28, 2008

PIONEER DRILLING COMPANY

(Exact name of registrant as specified in its charter)

Texas	1-8182	74-2088619
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1250 N.E. Loop 410, Suite 1000, San Antonio, Texas	78209
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (210) 828-7689

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e) On August 28, 2008, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of Pioneer Drilling Company (the “Company”) approved adjustments, effective as of April 1, 2008, to the annual base salaries of certain of the Company’s executive officers and other key employees (collectively, the “Named Executive Officers”).

     The Compensation Committee also approved annual cash incentive award opportunities (the “Award Opportunities”) for the Named Executive Officers for the Company’s fiscal year ending December 31, 2008 (“FY 2008”), pursuant to the Company’s 2007 Incentive Plan. The Award Opportunities are expressed as a percentage of the Named Executive Officer’s annual base salary.

     The annual base salaries, as adjusted, and Award Opportunities for the Named Executive Officers are as follows:

		Previous		Adjusted		Target Award
Name	Position	Base Salary		Base Salary		Opportunity(1)
Wm. Stacy Locke	Director, President and Chief Executive Officer	$	450,000	$	550,000		80	%
William D. Hibbetts	Interim Chief Financial Officer	$	210,000	$	210,000		40	%
Franklin C. West	President—Drilling Services Division	$	370,000	$	395,000		50	%
Joseph B. Eustace	President—Production Services Division	$	230,000	$	280,000		50	%
Donald G. Lacombe	Senior Vice President of Drilling Services Division—Marketing	$	195,000	$	210,000		40	%

(1) For each of the Named Executive Officers, the maximum Award Opportunity is equal to approximately 200% of the target Award Opportunity.

     Pursuant to the Company’s 2007 Incentive Plan, the Compensation Committee also approved grants of long-term incentive awards in the form of restricted stock and stock options to the Named Executive Officers for FY 2008. The restricted stock awards generally vest in three equal annual installments beginning on the first anniversary of the grant date. The stock option grants have an exercise price equal to the fair market value on August 28, 2008 (the date of grant), generally vest in three equal annual installments beginning on the first anniversary of the grant date, and expire no later than the tenth anniversary of the grant date.

     The FY 2008 long-term incentive awards for the Named Executive Officers are as follows:

Name	Stock Options		Restricted Stock Awards
Wm. Stacy Locke		180,000		28,500
William D. Hibbetts		24,000		3,900
Franklin C. West		93,000		15,000
Joseph B. Eustace		54,000		8,400
Donald G. Lacombe		24,000		3,900

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Document Description
10.1	Pioneer Drilling Company 2007 Incentive Plan Form of Stock Option Agreement
10.2	Pioneer Drilling Company 2007 Incentive Plan Form of Employee Restricted Stock Award Agreement
10.3	Pioneer Drilling Company 2007 Incentive Plan Form of Non-Employee Director Restricted Stock Award Agreement

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PIONEER DRILLING COMPANY
By:	/s/ William D. Hibbetts
	William D. Hibbetts
	Interim Chief Financial Officer

Dated: September 4, 2008

Exhibit Index

Exhibit No.	Document Description
10.1	Pioneer Drilling Company 2007 Incentive Plan Form of Stock Option Agreement
10.2	Pioneer Drilling Company 2007 Incentive Plan Form of Employee Restricted Stock Award Agreement
10.3	Pioneer Drilling Company 2007 Incentive Plan Form of Non-Employee Director Restricted Stock Award Agreement

EX-10.1

Exhibit 10.1

STOCK OPTION AGREEMENT

PIONEER DRILLING COMPANY
2007 INCENTIVE PLAN

     THIS STOCK OPTION AGREEMENT (this “Agreement”) is made by and between Pioneer Drilling Company, a Texas corporation (the “Company”), and                                                              (the “Optionee”) as of the                      day of                                         , 2008, pursuant to the Pioneer Drilling Company 2007 Incentive Plan (the “Plan”), which is incorporated by reference herein in its entirety.

RECITALS

     A. The Company desires to grant to the Optionee and the Optionee desires to accept an option to purchase shares of the Company’s common stock, $0.10 par value per share (the “Common Stock”), upon the terms and conditions set forth in this Agreement and the Plan.

     B. Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Plan.

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated:

(a)	“Affiliate” means, with respect to any Person (as defined below), any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
(b)	“Associate” means, with reference to any Person, (i) any corporation, firm, partnership, association, unincorporated organization or other entity (other than the Company or any of its Affiliates) of which that Person is an officer or general partner (or officer or general partner of a general partner) or is, directly or indirectly, the beneficial owner of 10% or more of any class of its equity securities, (ii) any trust or other estate in which that Person has a substantial beneficial interest or for or of which that Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse of that Person, or any relative of that spouse, who has the same home as that Person.
(c)	“Cause” means, with reference to the Optionee, (i) the commission by the Optionee of any felony or any crime or offense involving moral turpitude or dishonesty or involving money or other property of the Company; (ii) the Optionee’s participation in a fraud or act of dishonesty against the Company or

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any Affiliate; (iii) the Optionee’s willful breach of the policies of the Company or of any Affiliate; (iv) the Optionee’s intentional damage to the property of the Company or of any Affiliate; (v) any material breach by the Optionee of any agreement between the Optionee and the Company; (vi) any unauthorized use or disclosure by the Optionee of confidential information or trade secrets of the Company or its Affiliates; (vii) the Optionee’s refusal or willful failure to substantially perform his or her employment duties; (viii) the Optionee’s receipt of any bribe or kickback in connection with the Company’s business; or (ix) the Optionee’s willfully engaging in material misconduct that results in damage to the Company or results in adverse publicity, public contempt or public ridicule of the Optionee or the Company. The determination by the Company’s Board of Directors (the “Board”) or the Compensation Committee of the Board (the “Committee”) as to whether “Cause” exists shall be final, conclusive and binding on the Optionee.

(d)

“Change in Control” shall mean the occurrence of any of the following after the Grant Date:

i.

any Person (other than an Exempt Person) is or becomes the beneficial owner of Voting Stock (not including any securities acquired directly from the Company after the date the Plan first became effective) representing 40% or more of the combined voting power of the Voting Stock then outstanding; provided, however, that a Change of Control will not be deemed to occur under this clause (i) if a Person becomes the beneficial owner of Voting Stock representing 40% or more of the combined voting power of the Voting Stock then outstanding solely as a result of a reduction in the number of shares of Voting Stock outstanding which results from the Company’s repurchase of Voting Stock, unless and until such time as that Person or any Affiliate or Associate of that Person purchases or otherwise becomes the beneficial owner of additional shares of Voting Stock constituting 1% or more of the combined voting power of the Voting Stock then outstanding, or any other Person (or Persons) who is (or collectively are) the beneficial owner of shares of Voting Stock constituting 1% or more of the combined voting power of the Voting Stock then outstanding becomes an Affiliate or Associate of that Person, unless, in either such case, that Person, together with all its Affiliates and Associates, is not then the beneficial owner of Voting Stock representing 40% or more of the Voting Stock then outstanding; or

ii.

the following individuals cease for any reason to constitute a majority of the number of Directors then serving on the Board: (A) individuals who on the date the Plan first became effective constitute the Board; and (B) any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a majority vote of the Directors then still in

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	office who either were Directors on the date the Plan first became effective or whose appointment, election or nomination for election was previously so approved or recommended; or
iii.	there is consummated a merger or consolidation of the Company or any parent or direct or indirect subsidiary of the Company with or into any other corporation, other than: (A) a merger or consolidation which results in the Voting Stock outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the Board or similar governing body of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Exempt Person) is or becomes the beneficial owner of Voting Stock (not including, for purposes of this determination, any Voting Stock acquired directly from the Company or its subsidiaries after the date the Plan first became effective other than in connection with the acquisition by the Company or one of its subsidiaries of a business) representing 40% or more of the combined voting power of the Voting Stock then outstanding; or
iv.	the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company, or there is consummated an agreement for the sale or disposition of all or substantially all of the Company’s assets, unless (A) the sale is to an entity of which at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the board of directors or similar governing body of such entity (“New Entity Securities”) are owned by shareholders of the Company in substantially the same proportions as their ownership of the Voting Stock immediately prior to such sale; (B) no Person other than the Company and any employee benefit plan or related trust of the Company or of such corporation then beneficially owns 40% or more of the New Entity Securities; and (C) at least a majority of the directors of such corporation were members of the incumbent Board at the time of the execution of the initial agreement or action providing for such disposition.

(e)	“Disability” means the absence of an Optionee from the Optionee’s duties with the Company or any of its Affiliates on a full-time basis for at least 180 consecutive days as a result of incapacity due to mental or physical illness or injury which is determined by the Committee in its sole discretion to be permanent.
(f)	“Exempt Person” means: (i) the Company; (ii) any Affiliate of the Company; (iii) any employee benefit plan of the Company or of any Affiliate and any Person

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	organized, appointed or established by the Company for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or any Affiliate of the Company; or (iv) any corporation or other entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of capital stock of the Company.
(g)	“Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof.
(h)	“Voting Stock” means the Common Stock and any other securities issued by the Company which entitle the holder thereof to vote generally in the election of members of the Board.

2. Award. The Company hereby grants to the Optionee an option (the “Option”) to purchase up to                                          shares of Common Stock at an exercise price per share of $                     upon the terms and conditions set forth in this Agreement and the Plan. The Option [is] [is not] intended to be treated as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code to the extent it otherwise qualifies as such.

3. Option Term. Unless terminated sooner, the Option shall expire if and to the extent it is not exercised within ten years from the date hereof (the “Expiration Date”).

4. Vesting.

(a)	General. Except as otherwise provided herein, the Option will become vested and exercisable in [three] equal annual increments beginning on the first anniversary of the date hereof, subject to the Optionee’s continuous employment or other service with the Company (“Continuous Service”) through the applicable vesting date.
(b)	Termination of Employment or Service Due to Death or Disability. If, before the Option becomes vested, the Optionee’s Continuous Service terminates due to the Optionee’s death or is terminated by the Company due to the Optionee’s Disability, then the Option will thereupon become fully vested.
(c)	Involuntary Termination of Employment. If the Optionee participates in the Company’s Key Executive Severance Plan, as amended (the “KESP”), and, before the Option becomes vested, the Optionee’s employment with the Company terminates pursuant to an Involuntary Termination (as defined in the KESP), the Option shall vest in accordance with the terms of the KESP.
(d)	Change in Control. Unless otherwise determined by the Committee in accordance with the Plan, if a Change in Control occurs and the Optionee is then still employed by or in the service of the Company, then, unless the Option is assumed, converted into an economically equivalent option for shares of the acquiring or successor company (or parent thereof) pursuant to Treasury Regulation §1.424-1, the unvested portion of the Option outstanding immediately

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prior to the Change in Control will thereupon become fully vested. To the extent the Option is not assumed, converted, exercised or cashed out, it will terminate upon a Change in Control.

5. Termination of Option in Connection with Termination of Employment or Service. Except as provided in the KESP, if the Optionee’s Continuous Service terminates for any reason other than death or Disability, then, unless sooner terminated under the terms hereof, the vested portion of the Option will terminate if and to the extent it is not exercised within 90 days after the date of the termination of the Optionee’s Continuous Service, provided, however, that, if the Optionee’s Continuous Service is terminated by the Company for Cause, then the Option (whether or not vested) will terminate upon the date of such termination of Continuous Service. If the Optionee’s Continuous Service is terminated by reason of the Optionee’s death or Disability, then, unless sooner terminated under the terms hereof, the vested portion of the Option (determined with regard to any acceleration of vesting hereunder) will terminate if and to the extent it is not exercised within one year after the date of such termination of Continuous Service. To the extent the Option is not or does not become vested at the time of the termination of the Optionee’s Continuous Service, the Option will be forfeited by the Optionee and will terminate at such time. Notwithstanding anything herein to the contrary, under no circumstances, will the Option be exercisable at any time after the Expiration Date.

6. Exercise of Option. If the Option becomes vested, it may be exercised in whole or in part by delivering to the Chief Financial Officer of the Company (or another person designated for this purpose) (a) a written notice specifying the number of whole shares of Common Stock with respect to which the Option is being exercised, and (b) payment in full of the exercise price, together with the amount, if any, deemed necessary by the Company to enable it to satisfy any tax withholding obligations attributable to the exercise. The exercise price and withholding amount shall be payable by bank or certified check or pursuant to such other methods as may be permitted by the Committee or its designee in accordance with the Plan and applicable law, including, without limitation, broker-assisted cashless exercise.

7. Rights as a Shareholder. No shares of Common Stock shall be sold or delivered hereunder until full payment for such shares has been made (including, for this purpose, satisfaction of the applicable tax withholding). The Optionee shall have no rights as a shareholder with respect to any shares covered by this Option unless and until the Option is exercised and the shares covered by the exercise of the Option are issued in the name of the Optionee. Except as otherwise specified, no adjustment shall be made for dividends or distributions of other rights for which the record date is prior to the date such shares are issued.

8. Assignment; Beneficiary. The Option and the Optionee’s rights with respect thereto may not be assigned, pledged or transferred except upon the Optionee’s death to a beneficiary designated by the Optionee (subject to the terms of this Agreement and the Plan) or if no beneficiary has been duly designated or no duly designated beneficiary shall survive the Optionee, pursuant to the Optionee’s Will or the laws of descent and distribution. Any attempted assignment, pledge or transfer in violation of this Agreement or the Plan will be void ab initio and of no force or effect. The Optionee may designate a beneficiary by filing a written (or electronic) beneficiary designation form with the Chief Financial Officer of the Company in a

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manner prescribed or deemed acceptable for this purpose by the Committee or its designee. Each such beneficiary designation will automatically revoke all prior designations by the Optionee.

9. No Right to Employment. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or any of its subsidiaries to terminate the Optionee’s employment or other service relationship at any time, nor confer upon the Optionee any right to continue in the capacity in which he or she is employed or otherwise serves the Company or any of its subsidiaries.

10. Withholding. The Company’s obligation to issue shares of Common Stock pursuant to the exercise of the Option shall be subject to and conditioned upon the satisfaction by the Optionee of applicable tax withholding obligations. The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at the time of delivery of shares of Common Stock under this Agreement, an appropriate amount of cash or number of shares of Common Stock or a combination thereof for payment of taxes required by law or to take, or cause the Optionee to take, such other action as may be necessary in the opinion of the Committee to satisfy all obligations for withholding of such taxes. The Committee may also permit withholding to be satisfied by the transfer to the Company of shares of Common Stock theretofore owned by the holder of the Option with respect to which withholding is required. If shares of Common Stock are used to satisfy tax withholding, such shares shall be valued based on the Fair Market Value when the tax withholding is required to be made.

11. Notices. Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by facsimile transmission, by electronic mail, by certified or registered mail, return receipt requested, or by courier or delivery service, to the Company at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209, Attention: Chief Financial Officer, facsimile number (210) 828-8228, and to the Optionee at the Optionee’s address and facsimile number (if applicable) indicated beneath the Optionee’s signature on the execution page of this Agreement, or at such other address and facsimile number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given (a) when received, if by personal delivery; (b) upon confirmation of receipt, if sent by facsimile transmission or electronic mail; and (c) when delivered (or upon the date of attempted delivery where delivery is refused), if sent by certified or registered mail, return receipt requested, or courier or delivery service.

12. Amendment and Waiver. Except as otherwise provided in the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Optionee. Only a written instrument executed and delivered by the party waiving compliance hereof shall make any waiver of the terms or conditions effective. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect the right to enforce the same. No waiver by any party of any term or condition, or of any breach of any term or condition, contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other term or condition, or a waiver of any breach of any other term or condition.

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13. Successors. All obligations of the Company under this Agreement with respect to the Option granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

14. Governing Law and Severability. This Agreement shall be governed by the laws of the State of Texas without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.

15. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes and all of which taken together shall constitute but one and the same instrument.

16. Grant Subject to Terms of Plan and this Agreement. The Optionee acknowledges and agrees that the grant of the Option hereunder is made pursuant to and governed by the terms of the Plan and this Agreement. The Optionee acknowledges having received a copy of the Plan. In the case of a conflict between the terms of the Plan and this Agreement, the terms of the Plan will govern.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to be duly executed by an officer thereunto duly authorized, and the Optionee has executed this Agreement, all effective as of the date first above written.

PIONEER DRILLING COMPANY:

By:

Name:

Title:

OPTIONEE:

Name:

Address:

Facsimile No.:

EX-10.2

Exhibit 10.2

EMPLOYEE
RESTRICTED STOCK AWARD AGREEMENT

PIONEER DRILLING COMPANY
2007 INCENTIVE PLAN

     THIS RESTRICTED STOCK AWARD AGREEMENT(the “Agreement”) is made by and between Pioneer Drilling Company, a Texas corporation (the “Company”), and                                          (the “Recipient”) effective as of the ___ day of                     , 20___ (the “Grant Date”), pursuant to the Pioneer Drilling Company 2007 Incentive Plan (the “Plan”), which is incorporated by reference herein in its entirety.

RECITALS

     A. The Company desires to grant to the Recipient the shares of equity securities specified herein (the “Shares”), subject to the terms and conditions of this Agreement.

     B. The Recipient desires to have the opportunity to hold Shares subject to the terms and conditions of this Agreement.

     C. Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Plan.

     NOW, THEREFORE, the parties hereto agree as follows:

1. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated:

(a)

“Affiliate” means, with respect to any Person (as defined below), any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

(b)

“Associate” means, with reference to any Person, (i) any corporation, firm, partnership, association, unincorporated organization or other entity (other than the Company or any of its Affiliates) of which that Person is an officer or general partner (or officer or general partner of a general partner) or is, directly or indirectly, the beneficial owner of 10% or more of any class of its equity securities, (ii) any trust or other estate in which that Person has a substantial beneficial interest or for or of which that Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse of that Person, or any relative of that spouse, who has the same home as that Person.

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(c) “Change in Control” shall mean the occurrence of any of the following after the Grant Date:

i.	any Person (other than an Exempt Person) is or becomes the beneficial owner of Voting Stock (not including any securities acquired directly from the Company after the date the Plan first became effective) representing 40% or more of the combined voting power of the Voting Stock then outstanding; provided, however, that a Change of Control will not be deemed to occur under this clause (i) if a Person becomes the beneficial owner of Voting Stock representing 40% or more of the combined voting power of the Voting Stock then outstanding solely as a result of a reduction in the number of shares of Voting Stock outstanding which results from the Company’s repurchase of Voting Stock, unless and until such time as that Person or any Affiliate or Associate of that Person purchases or otherwise becomes the beneficial owner of additional shares of Voting Stock constituting 1% or more of the combined voting power of the Voting Stock then outstanding, or any other Person (or Persons) who is (or collectively are) the beneficial owner of shares of Voting Stock constituting 1% or more of the combined voting power of the Voting Stock then outstanding becomes an Affiliate or Associate of that Person, unless, in either such case, that Person, together with all its Affiliates and Associates, is not then the beneficial owner of Voting Stock representing 40% or more of the Voting Stock then outstanding; or
ii.	the following individuals cease for any reason to constitute a majority of the number of Directors then serving on the Company’s Board of Directors (the “Board”): (A) individuals who on the date the Plan first became effective constitute the Board; and (B) any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a majority vote of the Directors then still in office who either were Directors on the date the Plan first became effective or whose appointment, election or nomination for election was previously so approved or recommended; or
iii.	there is consummated a merger or consolidation of the Company or any parent or direct or indirect subsidiary of the Company with or into any other corporation, other than: (A) a merger or consolidation which results in the Voting Stock outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the Board or similar governing body of the Company or such surviving entity or any parent thereof outstanding immediately after such

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merger or consolidation; or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Exempt Person) is or becomes the beneficial owner of Voting Stock (not including, for purposes of this determination, any Voting Stock acquired directly from the Company or its subsidiaries after the date the Plan first became effective other than in connection with the acquisition by the Company or one of its subsidiaries of a business) representing 40% or more of the combined voting power of the Voting Stock then outstanding; or

iv. the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company, or there is consummated an agreement for the sale or disposition of all or substantially all of the Company’s assets, unless (A) the sale is to an entity of which at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the board of directors or similar governing body of such entity (“New Entity Securities”) are owned by shareholders of the Company in substantially the same proportions as their ownership of the Voting Stock immediately prior to such sale; (B) no Person other than the Company and any employee benefit plan or related trust of the Company or of such corporation then beneficially owns 40% or more of the New Entity Securities; and (C) at least a majority of the directors of such corporation were members of the incumbent Board at the time of the execution of the initial agreement or action providing for such disposition.

(d)	“Disability” means the absence of a Recipient from the Recipient’s duties with the Company or any of its Affiliates on a full-time basis for at least 180 consecutive days as a result of incapacity due to mental or physical illness or injury which is determined by the Committee in its sole discretion to be permanent.
(e)	“Exempt Person” means: (i) the Company; (ii) any Affiliate of the Company; (iii) any employee benefit plan of the Company or of any Affiliate and any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or any Affiliate of the Company; or (iv) any corporation or other entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of capital stock of the Company.
(f)	“Forfeiture Restrictions” means any prohibitions and restrictions set forth herein with respect to the sale or other disposition of Shares issued to the Recipient hereunder and the obligation to forfeit and surrender such shares to the Company.
(g)	“Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof.

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(h)	“Restricted Shares” means the Shares that are subject to the Forfeiture Restrictions under this Agreement.
(i)	“Voting Stock” means the Common Stock and any other securities issued by the Company which entitle the holder thereof to vote generally in the election of members of the Board.

2. Grant of Restricted Shares. Effective as of the Grant Date, the Company shall cause to be issued in the Recipient’s name the following Shares as Restricted Shares:                      shares of Common Stock. Subject to the Forfeiture Restrictions and other terms and conditions of this Agreement, the Recipient shall have all the rights of a shareholder with respect to such Restricted Shares, including the right to vote such Shares. Regular, ordinary dividends paid with respect to the Restricted Shares in cash shall be paid to the Recipient currently. All other dividends and distributions, whether paid in cash, equity securities of the Company, rights to acquire equity securities of the Company or any other property shall be added to and become a part of the Restricted Shares, unless the Committee, in its sole discretion, determines that such other dividends or distributions shall be paid to the Recipient currently.

3. Evidence of Ownership.

(a)	Evidence of the issuance of the Restricted Shares pursuant to this Agreement may be accomplished in such manner as the Company or its authorized representatives shall deem appropriate including, without limitation, electronic registration, book-entry registration or issuance of a stock certificate or certificates in the name of the Recipient. Any stock certificate issued for the Restricted Shares shall bear an appropriate legend with respect to the Forfeiture Restrictions applicable to such Restricted Shares. The Company may retain, at its option, the physical custody of any stock certificate representing any Restricted Shares during the Restriction Period or require that the certificates evidencing Restricted Shares be placed in escrow or trust, along with a stock power endorsed in blank, until all Forfeiture Restrictions are removed or lapse. In the event the issuance of the Restricted Shares is documented or recorded electronically, the Company and its authorized representatives shall ensure that the Recipient is prohibited from selling, assigning, pledging, exchanging, hypothecating or otherwise transferring the Restricted Shares while such shares are still subject to the Forfeiture Restrictions.
(b)	Upon the lapse of the Forfeiture Restrictions, the Company or, at the Company’s instruction, its authorized representative shall release those Restricted Shares with respect to which the Forfeiture Restrictions have lapsed. The lapse of the Forfeiture Restrictions and the release of the Restricted Shares shall be evidenced in such a manner as the Company and its authorized representatives deem appropriate under the circumstances.
(c)	At the Company’s request, the Recipient shall execute and deliver, as necessary, a blank stock power with respect to the Restricted Shares, and the Company may,

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as necessary, exercise such stock power in the event of forfeiture of the Restricted Shares pursuant to this Agreement, or as may otherwise be required in order for the Company to withhold the Restricted Shares necessary to satisfy any applicable federal, state and local income and employment tax withholding obligations pursuant to Section 6 of this Agreement.

4.

Transfer Restrictions. Except as otherwise set forth in this Agreement or the Plan, the Restricted Shares granted hereby may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, disposed of or encumbered. Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, disposition or encumbrance in violation of this Agreement shall be void and the Company shall not be bound thereby. Further, the Shares granted hereby that are no longer subject to Forfeiture Restrictions may not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws, and the Recipient agrees (a) that the Company may refuse to cause the transfer of the Shares to be registered on the applicable stock transfer records if such proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of any applicable securities law and (b) that the Company may give related instructions to the transfer agent, if any, to stop registration of the transfer of the Shares.

5.

Vesting.

(a) Restricted Shares that are granted hereby shall be subject to the Forfeiture Restrictions. All of the Forfeiture Restrictions shall lapse and the Restricted Shares shall vest as follows (it being understood that the number of Restricted Shares as to which all restrictions have lapsed and which have vested in the Recipient at any time shall be the greatest of the number of vested Shares specified in subparagraph (i), (ii), (iii) or (iv) below):

i.	Except as otherwise provided herein, one-third of the Restricted Shares shall vest on the first anniversary of the Grant Date, an additional one-third of the Restricted Shares shall vest on the second anniversary of the Grant Date, and the remaining Restricted Shares shall vest on the third anniversary of the Grant Date.
ii.	In the event the Recipient’s employment is terminated due to death or Disability of the Recipient while employed by the Company and before all of the Restricted Shares have vested, 100% of the Restricted Shares shall vest and the Forfeiture Restrictions shall lapse with respect to such shares.
iii.	In the event of an Involuntary Termination (as defined in the Company’s Key Executive Severance Plan, as amended (the “KESP”)), the Restricted Shares shall vest in accordance with the terms of the KESP.
iv.	If a Change in Control occurs and the Recipient is employed by the Company immediately prior to such Change in Control, 100% of the Restricted Shares shall vest and the Forfeiture Restrictions shall lapse with

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respect to such Restricted Shares immediately prior to such Change in Control.

(b) Restricted Shares that do not become vested pursuant to Paragraph (a) above shall be forfeited and the Recipient shall cease to have any rights of a shareholder with respect to such forfeited Shares upon termination of the Recipient’s employment by the Company.

6.	Tax Matters. The lapsing of the Forfeiture Restrictions with respect to the Restricted Shares pursuant to Section 5 of this Agreement shall be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements (the “Required Withholding”), if any. By execution of this Agreement, the Recipient shall be deemed to have authorized the Company, to the extent permissible, to withhold Restricted Shares with respect to which the Forfeiture Restrictions have lapsed necessary to satisfy the Recipient’s Required Withholding, if any. The amount of the Required Withholding and the number of Restricted Shares required to satisfy the Recipient’s Required Withholding, if any, as well as the amount reflected on tax reports filed by the Company, shall be based upon the Fair Market Value of the Common Stock on the day the Forfeiture Restrictions lapse pursuant to Section 5 of this Agreement. Notwithstanding the foregoing, the Company may require that the Recipient satisfy the Recipient’s Required Withholding, if any, by any other means the Company, in its sole discretion, considers reasonable. The obligations of the Company under this Agreement shall be conditioned on such satisfaction of the Required Withholding, if any.
7.	No Fractional Shares. All provisions of this Agreement concern whole Shares. Notwithstanding anything contained in this Agreement to the contrary, if the application of any provision of this Agreement would yield a fractional share, such fractional share shall be rounded down to the next whole Share.
8.	No Obligation to Retain Services. This Agreement is not a services or employment agreement, and no provision of this Agreement shall be construed or interpreted to create a services or employment relationship between the Recipient, the Company or any of its Subsidiaries or guarantee the Recipient the right to continued employment by the Company for any specified term.
9.	Notices. Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by facsimile transmission, by electronic mail, by certified or registered mail, return receipt requested, or by courier or delivery service, to the Company at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209, Attention: Chief Financial Officer, facsimile number (210) 828-8228, and to the Recipient at the Recipient’s address and facsimile number (if applicable) indicated beneath the Recipient’s signature on the execution page of this Agreement, or at such other address and facsimile number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given (a) when received, if by personal delivery; (b) upon confirmation of receipt, if sent by facsimile transmission or electronic mail; and (c) when delivered (or

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upon the date of attempted delivery where delivery is refused), if sent by certified or registered mail, return receipt requested, or courier or delivery service.

10.	Amendment and Waiver. Except as otherwise provided in the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Recipient. Only a written instrument executed and delivered by the party waiving compliance hereof shall make any waiver of the terms or conditions effective. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect the right to enforce the same. No waiver by any party of any term or condition, or of any breach of any term or condition, contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other term or condition, or a waiver of any breach of any other term or condition.
11.	Governing Law and Severability. This Agreement shall be governed by the laws of the State of Texas without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.
12.	Successors and Assigns. Subject to the limitations which this Agreement imposes upon the transferability of the Shares granted hereby, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and to the Recipient and the Recipient’s executors, administrators, agents, and legal and personal representatives.
13.	Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument.
14.	Grant Subject to Terms of Plan and this Agreement. The Recipient acknowledges and agrees that the grant of the Restricted Shares hereunder is made pursuant to and governed by the terms of the Plan and this Agreement. In the case of a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the Company has caused this Restricted Stock Award Agreement to be duly executed by an officer thereunto duly authorized, and the Recipient has executed this Agreement, all effective as of the date first above written.

PIONEER DRILLING COMPANY:

By:

Name:

Title:

RECIPIENT:

Name:

Address:

Facsimile No.:

Signature Page to Restricted Stock Award Agreement

IRREVOCABLE STOCK POWER

     KNOW ALL MEN BY THESE PRESENTS, THAT the undersigned, FOR VALUE RECEIVED, has bargained, sold, assigned and transferred and by these presents does bargain, sell, assign and transfer unto Pioneer Drilling Company, a Texas corporation (the “Company”), the Shares transferred pursuant to the Restricted Stock Award Agreement, dated effective as of                     , 20___, between the Company and the undersigned; AND subject to and in accordance with such Restricted Stock Award Agreement, the undersigned does hereby constitute and appoint the Secretary of the Company the undersigned’s true and lawful attorney, IRREVOCABLY, to sell, assign, transfer, hypothecate, pledge and make over all or any part of such Shares and for that purpose to make and execute all necessary acts of assignment and transfer thereof, and to substitute one or more persons with like full power, hereby ratifying and confirming all that said attorney or his or her substitutes shall lawfully do by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Stock Power effective the                      day of                                         , 20___.

Name:

EX-10.3

Exhibit 10.3

NON-EMPLOYEE DIRECTOR
RESTRICTED STOCK AWARD AGREEMENT

PIONEER DRILLING COMPANY
2007 INCENTIVE PLAN

     THIS RESTRICTED STOCK AWARD AGREEMENT(the “Agreement”) is made by and between Pioneer Drilling Company, a Texas corporation (the “Company”), and                      (the “Recipient”) effective as of the ___ day of                     , 20___ (the “Grant Date”), pursuant to the Pioneer Drilling Company 2007 Incentive Plan (the “Plan”), which is incorporated by reference herein in its entirety.

RECITALS

     A. The Company desires to grant to the Recipient the shares of equity securities specified herein (the “Shares”), subject to the terms and conditions of this Agreement.

     B. The Recipient desires to have the opportunity to hold Shares subject to the terms and conditions of this Agreement.

     C. Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the meaning assigned to such terms in the Plan.

     NOW, THEREFORE, the parties hereto agree as follows:

1. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated:

(a)

“Affiliate” means, with respect to any Person (as defined below), any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

(b)

“Associate” means, with reference to any Person, (i) any corporation, firm, partnership, association, unincorporated organization or other entity (other than the Company or any of its Affiliates) of which that Person is an officer or general partner (or officer or general partner of a general partner) or is, directly or indirectly, the beneficial owner of 10% or more of any class of its equity securities, (ii) any trust or other estate in which that Person has a substantial beneficial interest or for or of which that Person serves as trustee or in a similar fiduciary capacity and (iii) any relative or spouse of that Person, or any relative of that spouse, who has the same home as that Person.

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(c) “Change in Control” shall mean the occurrence of any of the following after the Grant Date:

i.	any Person (other than an Exempt Person) is or becomes the beneficial owner of Voting Stock (not including any securities acquired directly from the Company after the date the Plan first became effective) representing 40% or more of the combined voting power of the Voting Stock then outstanding; provided, however, that a Change of Control will not be deemed to occur under this clause (i) if a Person becomes the beneficial owner of Voting Stock representing 40% or more of the combined voting power of the Voting Stock then outstanding solely as a result of a reduction in the number of shares of Voting Stock outstanding which results from the Company’s repurchase of Voting Stock, unless and until such time as that Person or any Affiliate or Associate of that Person purchases or otherwise becomes the beneficial owner of additional shares of Voting Stock constituting 1% or more of the combined voting power of the Voting Stock then outstanding, or any other Person (or Persons) who is (or collectively are) the beneficial owner of shares of Voting Stock constituting 1% or more of the combined voting power of the Voting Stock then outstanding becomes an Affiliate or Associate of that Person, unless, in either such case, that Person, together with all its Affiliates and Associates, is not then the beneficial owner of Voting Stock representing 40% or more of the Voting Stock then outstanding; or
ii.	the following individuals cease for any reason to constitute a majority of the number of Directors then serving on the Company’s Board of Directors (the “Board”): (A) individuals who on the date the Plan first became effective constitute the Board; and (B) any new Director (other than a Director whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of Directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a majority vote of the Directors then still in office who either were Directors on the date the Plan first became effective or whose appointment, election or nomination for election was previously so approved or recommended; or
iii.	there is consummated a merger or consolidation of the Company or any parent or direct or indirect subsidiary of the Company with or into any other corporation, other than: (A) a merger or consolidation which results in the Voting Stock outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the Board or similar governing body of the Company or such surviving entity or any parent thereof outstanding immediately after such

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merger or consolidation; or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Exempt Person) is or becomes the beneficial owner of Voting Stock (not including, for purposes of this determination, any Voting Stock acquired directly from the Company or its subsidiaries after the date the Plan first became effective other than in connection with the acquisition by the Company or one of its subsidiaries of a business) representing 40% or more of the combined voting power of the Voting Stock then outstanding; or

iv. the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company, or there is consummated an agreement for the sale or disposition of all or substantially all of the Company’s assets, unless (A) the sale is to an entity of which at least 50% of the combined voting power of the securities which entitle the holder thereof to vote generally in the election of members of the board of directors or similar governing body of such entity (“New Entity Securities”) are owned by shareholders of the Company in substantially the same proportions as their ownership of the Voting Stock immediately prior to such sale; (B) no Person other than the Company and any employee benefit plan or related trust of the Company or of such corporation then beneficially owns 40% or more of the New Entity Securities; and (C) at least a majority of the directors of such corporation were members of the incumbent Board at the time of the execution of the initial agreement or action providing for such disposition.

(d)	“Disability” means the absence of the Recipient from the Recipient’s duties as a Director of the Company for at least 180 consecutive days as a result of incapacity due to mental or physical illness or injury which is determined by the Committee in its sole discretion to be permanent.
(e)	“Exempt Person” means: (i) the Company; (ii) any Affiliate of the Company; (iii) any employee benefit plan of the Company or of any Affiliate and any Person organized, appointed or established by the Company for or pursuant to the terms of any such plan or for the purpose of funding any such plan or funding other employee benefits for employees of the Company or any Affiliate of the Company; or (iv) any corporation or other entity owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of capital stock of the Company.
(f)	“Forfeiture Restrictions” means any prohibitions and restrictions set forth herein with respect to the sale or other disposition of Shares issued to the Recipient hereunder and the obligation to forfeit and surrender such shares to the Company.
(g)	“Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof.

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(h)	“Restricted Shares” means the Shares that are subject to the Forfeiture Restrictions under this Agreement.
(i)	“Voting Stock” means the Common Stock and any other securities issued by the Company which entitle the holder thereof to vote generally in the election of members of the Board.

2.

Grant of Restricted Shares. Effective as of the Grant Date, the Company shall cause to be issued in the Recipient’s name the following Shares as Restricted Shares:                      shares of Common Stock. Subject to the Forfeiture Restrictions and other terms and conditions of this Agreement, the Recipient shall have all the rights of a shareholder with respect to such Restricted Shares, including the right to vote such Shares. Regular, ordinary dividends paid with respect to the Restricted Shares in cash shall be paid to the Recipient currently. All other dividends and distributions, whether paid in cash, equity securities of the Company, rights to acquire equity securities of the Company or any other property shall be added to and become a part of the Restricted Shares, unless the Committee, in its sole discretion, determines that such other dividends or distributions shall be paid to the Recipient currently.

3.

Evidence of Ownership.

(a)	Evidence of the issuance of the Restricted Shares pursuant to this Agreement may be accomplished in such manner as the Company or its authorized representatives shall deem appropriate including, without limitation, electronic registration, book-entry registration or issuance of a stock certificate or certificates in the name of the Recipient. Any stock certificate issued for the Restricted Shares shall bear an appropriate legend with respect to the Forfeiture Restrictions applicable to such Restricted Shares. The Company may retain, at its option, the physical custody of any stock certificate representing any Restricted Shares during the Restriction Period or require that the certificates evidencing Restricted Shares be placed in escrow or trust, along with a stock power endorsed in blank, until all Forfeiture Restrictions are removed or lapse. In the event the issuance of the Restricted Shares is documented or recorded electronically, the Company and its authorized representatives shall ensure that the Recipient is prohibited from selling, assigning, pledging, exchanging, hypothecating or otherwise transferring the Restricted Shares while such shares are still subject to the Forfeiture Restrictions.
(b)	Upon the lapse of the Forfeiture Restrictions, the Company or, at the Company’s instruction, its authorized representative shall release those Restricted Shares with respect to which the Forfeiture Restrictions have lapsed. The lapse of the Forfeiture Restrictions and the release of the Restricted Shares shall be evidenced in such a manner as the Company and its authorized representatives deem appropriate under the circumstances.
(c)	At the Company’s request, the Recipient shall execute and deliver, as necessary, a blank stock power with respect to the Restricted Shares, and the Company may,

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as necessary, exercise such stock power in the event of forfeiture of the Restricted Shares pursuant to this Agreement, or as may otherwise be required in order for the Company to withhold the Restricted Shares necessary to satisfy any applicable federal, state and local income and employment tax withholding obligations pursuant to Section 6 of this Agreement.

4.

Transfer Restrictions. Except as otherwise set forth in this Agreement or the Plan, the Restricted Shares granted hereby may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, disposed of or encumbered. Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, disposition or encumbrance in violation of this Agreement shall be void and the Company shall not be bound thereby. Further, the Shares granted hereby that are no longer subject to Forfeiture Restrictions may not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws, and the Recipient agrees (a) that the Company may refuse to cause the transfer of the Shares to be registered on the applicable stock transfer records if such proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of any applicable securities law and (b) that the Company may give related instructions to the transfer agent, if any, to stop registration of the transfer of the Shares.

5.

Vesting.

(a) Restricted Shares that are granted hereby shall be subject to the Forfeiture Restrictions. All of the Forfeiture Restrictions shall lapse and the Restricted Shares shall vest as follows (it being understood that the number of Restricted Shares as to which all restrictions have lapsed and which have vested in the Recipient at any time shall be the greatest of the number of vested Shares specified in subparagraph (i), (ii) or (iii) below):

i.	Except as otherwise provided herein, one-third of the Restricted Shares shall vest on the first anniversary of the Grant Date, an additional one-third of the Restricted Shares shall vest on the second anniversary of the Grant Date, and the remaining Restricted Shares shall vest on the third anniversary of the Grant Date.
ii.	In the event of death or Disability of the Recipient while serving as a Director and before all of the Restricted Shares have vested, 100% of the Restricted Shares shall vest and the Forfeiture Restrictions shall lapse with respect to such shares.
iii.	If a Change in Control occurs and the Recipient is serving as a Director immediately prior to such Change in Control, 100% of the Restricted Shares shall vest and the Forfeiture Restrictions shall lapse with respect to such Restricted Shares immediately prior such Change in Control.

(b) Restricted Shares that do not become vested pursuant to Paragraph (a) above shall be forfeited and the Recipient shall cease to have any rights of a shareholder with

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respect to such forfeited Shares upon termination of the Recipient’s service as a Director.

6.	Tax Matters. The lapsing of the Forfeiture Restrictions with respect to the Restricted Shares pursuant to Section 5 of this Agreement shall be subject to the satisfaction of all applicable federal, state and local income and employment tax withholding requirements (the “Required Withholding”), if any. By execution of this Agreement, the Recipient shall be deemed to have authorized the Company, to the extent permissible, to withhold Restricted Shares with respect to which the Forfeiture Restrictions have lapsed necessary to satisfy the Recipient’s Required Withholding, if any. The amount of the Required Withholding and the number of Restricted Shares required to satisfy the Recipient’s Required Withholding, if any, as well as the amount reflected on tax reports filed by the Company, shall be based upon the Fair Market Value of the Common Stock on the day the Forfeiture Restrictions lapse pursuant to Section 5 of this Agreement. Notwithstanding the foregoing, the Company may require that the Recipient satisfy the Recipient’s Required Withholding, if any, by any other means the Company, in its sole discretion, considers reasonable. The obligations of the Company under this Agreement shall be conditioned on such satisfaction of the Required Withholding, if any.
7.	No Fractional Shares. All provisions of this Agreement concern whole Shares. Notwithstanding anything contained in this Agreement to the contrary, if the application of any provision of this Agreement would yield a fractional share, such fractional share shall be rounded down to the next whole Share.
8.	No Obligation to Retain Services. This Agreement is not a services or employment agreement, and no provision of this Agreement shall be construed or interpreted to create a services or employment relationship between the Recipient, the Company or any of its Subsidiaries or guarantee the Recipient the right to continued service as a Director for any specified term.
9.	Notices. Any notice, instruction, authorization, request or demand required hereunder shall be in writing, and shall be delivered either by personal delivery, by facsimile transmission, by electronic mail, by certified or registered mail, return receipt requested, or by courier or delivery service, to the Company at 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209, Attention: Chief Financial Officer, facsimile number (210) 828-8228, and to the Recipient at the Recipient’s address and facsimile number (if applicable) indicated beneath the Recipient’s signature on the execution page of this Agreement, or at such other address and facsimile number as a party shall have previously designated by written notice given to the other party in the manner hereinabove set forth. Notices shall be deemed given (a) when received, if by personal delivery; (b) upon confirmation of receipt, if sent by facsimile transmission or electronic mail; and (c) when delivered (or upon the date of attempted delivery where delivery is refused), if sent by certified or registered mail, return receipt requested, or courier or delivery service.
10.	Amendment and Waiver. Except as otherwise provided in the Plan, this Agreement may be amended, modified or superseded only by written instrument executed by the Company and the Recipient. Only a written instrument executed and delivered by the

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party waiving compliance hereof shall make any waiver of the terms or conditions effective. Any waiver granted by the Company shall be effective only if executed and delivered by a duly authorized executive officer of the Company. The failure of any party at any time or times to require performance of any provisions hereof shall in no manner affect the right to enforce the same. No waiver by any party of any term or condition, or of any breach of any term or condition, contained in this Agreement, in one or more instances, shall be construed as a continuing waiver of any such condition or breach, a waiver of any other term or condition, or a waiver of any breach of any other term or condition.

11.	Governing Law and Severability. This Agreement shall be governed by the laws of the State of Texas without regard to its conflicts of law provisions. The invalidity of any provision of this Agreement shall not affect any other provision of this Agreement, which shall remain in full force and effect.
12.	Successors and Assigns. Subject to the limitations which this Agreement imposes upon the transferability of the Shares granted hereby, this Agreement shall bind, be enforceable by and inure to the benefit of the Company and its successors and assigns, and to the Recipient and the Recipient’s executors, administrators, agents, and legal and personal representatives.
13.	Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original for all purposes but all of which taken together shall constitute but one and the same instrument.
14.	Grant Subject to Terms of Plan and this Agreement. The Recipient acknowledges and agrees that the grant of the Restricted Shares hereunder is made pursuant to and governed by the terms of the Plan and this Agreement. In the case of a conflict between the terms of the Plan and this Agreement, the terms of the Plan shall govern.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the Company has caused this Restricted Stock Award Agreement to be duly executed by an officer thereunto duly authorized, and the Recipient has executed this Agreement, all effective as of the date first above written.

PIONEER DRILLING COMPANY:

By:

Name:

Title:

RECIPIENT:

Name:

Address:

Facsimile No.:

Signature Page to Restricted Stock Award Agreement

IRREVOCABLE STOCK POWER

     KNOW ALL MEN BY THESE PRESENTS, THAT the undersigned, FOR VALUE RECEIVED, has bargained, sold, assigned and transferred and by these presents does bargain, sell, assign and transfer unto Pioneer Drilling Company, a Texas corporation (the “Company”), the Shares transferred pursuant to the Restricted Stock Award Agreement, dated effective as of                     , 20___, between the Company and the undersigned; AND subject to and in accordance with such Restricted Stock Award Agreement, the undersigned does hereby constitute and appoint the Secretary of the Company the undersigned’s true and lawful attorney, IRREVOCABLY, to sell, assign, transfer, hypothecate, pledge and make over all or any part of such Shares and for that purpose to make and execute all necessary acts of assignment and transfer thereof, and to substitute one or more persons with like full power, hereby ratifying and confirming all that said attorney or his or her substitutes shall lawfully do by virtue hereof.

     IN WITNESS WHEREOF, the undersigned has executed this Irrevocable Stock Power effective the                      day of                     , 20___.

Name: