EXHIBIT 10.2
FORM OF RESTRICTED STOCK AGREEMENT
UNDER THE
2005 STOCK INCENTIVE STOCK PLAN
     This RESTRICTED STOCK AGREEMENT (this “Agreement”) is made as of
_______________, 2005, by and between Horizon Offshore, Inc. (“Horizon”) and
________________________ (the “Award Recipient”).
     WHEREAS, Horizon maintains the 2005 Stock Incentive Stock Plan (the
“Plan”), under which the Compensation Committee of the Board of Directors of
Horizon (the “Committee”), may, among other things, grant restricted shares of
Horizon’s common stock, $.001 par value per share (the “Common Stock”), to key
employees of Horizon or its subsidiaries (collectively, the “Company”) as the
Committee may determine, subject to terms, conditions, or restrictions as it may
deem appropriate; and
     WHEREAS, pursuant to the Plan the Committee has awarded to the Award
Recipient restricted shares of Common Stock on the terms and conditions
specified below;
     NOW, THEREFORE, the parties agree as follows:
1.
AWARD OF SHARES
     Upon the terms and conditions of the Plan and this Agreement, the Committee
as of the date of this Agreement hereby awards to the Award Recipient __________
restricted shares of Common Stock (the “Restricted Stock”), that vest, subject
to Sections 2, 3 and 4 hereof, in installments as follows:

              Number of Shares of   Scheduled Vesting Date   Restricted Stock  
September 30, 2005
    25 %
First Anniversary Date
    25 %
Second Anniversary Date
    25 %
Third Anniversary Date
    25 %

2.
AWARD RESTRICTIONS ON
RESTRICTED STOCK
     2.1 In addition to the conditions and restrictions provided in the Plan,
neither the shares of Restricted Stock nor the right to vote the Restricted
Stock, to receive dividends thereon or to enjoy any other rights or interests
thereunder or hereunder may be sold, assigned, donated, transferred, exchanged,
pledged, hypothecated or otherwise encumbered prior to vesting. Subject to the
restrictions on transfer provided in this Section 2.1, the Award Recipient shall
be entitled to all rights of a stockholder of Horizon with respect to the
Restricted Stock, including the right to vote the shares and receive all
dividends and other distributions declared thereon.

 

--------------------------------------------------------------------------------

 

     2.2 If the shares of Restricted Stock have not already vested in accordance
with Section 1 above, the shares of Restricted Stock shall vest and all
restrictions set forth in Section 2.1 shall lapse on the earlier of: (a) the
date on which the employment of the Award Recipient terminates as a result of
the events specified in Sections 3(i), (ii) or (iii); (b) if permitted by the
Committee in accordance with Section 3 below, retirement or termination by the
Award Recipient; or (c) the occurrence of a Change of Control of Horizon, as
described in Section 11.12 of the Plan.
3.
TERMINATION OF EMPLOYMENT
     If the Award Recipient’s employment terminates as the result of (i) death,
(ii) Disability (as defined in the Employment Agreement referred to below) or
(iii) Award Recipient’s termination by the Company pursuant to Section 4(c)(iv)
of that certain Employment Agreement dated as of July ___, 2005 (the “Employment
Agreement”) between Horizon and Award Recipient, all unvested shares of
Restricted Stock granted hereunder shall immediately vest. Termination of the
Award Recipient’s employment pursuant to Section 4(c)(iii) of the Employment
Agreement shall automatically result in the termination and forfeiture of all
unvested Restricted Stock. Unless the Committee determines otherwise in its sole
discretion in the case of retirement of the Award Recipient or termination by
the Award Recipient of the Award Recipient’s employment, termination of
employment for any other reason, shall automatically result in the termination
and forfeiture of all unvested Restricted Stock.
4.
FORFEITURE OF AWARD
     4.1 If, at any time during the Award Recipient’s employment by the Company
or within 12 months after termination of employment, the Award Recipient
breaches the terms of Sections 6(c) (if binding on the Executive pursuant to
Section 6(c) of the Employment Agreement) or Section 6(d)(i) or (ii) of the
Employment Agreement, then the award of Restricted Stock granted hereunder shall
automatically terminate and be forfeited effective on the date on which the
Award Recipient breached the Employment Agreement and (i) all shares of Common
Stock acquired by the Award Recipient pursuant to this Agreement (or other
securities into which such shares have been converted or exchanged) shall be
returned to the Company or, if no longer held by the Award Recipient, the Award
Recipient shall pay to the Company, without interest, all cash, securities or
other assets received by the Award Recipient upon the sale or transfer of such
stock or securities, and (ii) all unvested shares of Restricted Stock shall be
forfeited.
     4.2 If the Award Recipient owes any amount to the Company under Section 4.1
above, the Award Recipient acknowledges that the Company may, to the fullest
extent permitted by applicable law, deduct such amount from any amounts the
Company owes the Award Recipient from time to time for any reason (including
without limitation amounts owed to the Award Recipient as salary, wages,
reimbursements or other compensation, fringe benefits, retirement benefits or
vacation pay or otherwise under the Employment Agreement). Whether or not the
Company elects to make any such set-off in whole or in part, if the Company does
not recover by means of set-off the full amount the Award Recipient owes it, the
Award Recipient

2

--------------------------------------------------------------------------------

 

hereby agrees to pay immediately the unpaid balance to the Company. Award
Recipient and Horizon agree that the liquidated damages set forth herein are
reasonable, and not a penalty, based upon the facts and circumstances of and
known to them at the time of execution of this Agreement. The liquidated damages
set forth herein are an addition to any other legal or equity remedies to which
Horizon may be entitled for any violation of any part of Section 4 hereof or
Section 6 of the Employment Agreement, including all remedies provided in the
Employment Agreement and this Agreement, and any related plans, agreements or
other documents, the right to obtain specific performance or injunctive or
declaratory relief and all other legal and equitable remedies to which Horizon
may be entitled.
     4.3 The Award Recipient may be released from the Award Recipient’s
obligations under Sections 4.1 and 4.2 above only if the Committee determines in
its sole discretion that such action is in the best interests of the Company.
5.
STOCK CERTIFICATES
     5.1 The stock certificates evidencing the Restricted Stock shall be
retained by Horizon until the lapse of restrictions under the terms hereof.
Horizon shall place a legend, in the form specified in the Plan, on the stock
certificates restricting the transferability of the shares of Restricted Stock.
     5.2 Upon the lapse of restrictions on shares of Restricted Stock, Horizon
shall cause a stock certificate without a restrictive legend to be issued with
respect to the vested Restricted Stock in the name of the Award Recipient or his
nominee within 5 business days. Upon receipt of such stock certificate, the
Award Recipient is free to hold or dispose of the shares represented by such
certificate, subject to applicable securities laws.
6.
DIVIDENDS
     Any dividends paid on shares of Restricted Stock shall be paid to the Award
Recipient currently.
7.
WITHHOLDING TAXES
     At the time that all or any portion of the Restricted Stock vests, the
Award Recipient must deliver to Horizon the amount of income tax withholding
required by law. In accordance with the terms of the Plan, the Award Recipient
may satisfy the tax withholding obligation by delivering currently owned shares
of Common Stock or by electing to have Horizon withhold from the shares the
Award Recipient otherwise would receive hereunder shares of Common Stock having
a value equal to the minimum amount required to be withheld (as determined under
the Plan).

3

--------------------------------------------------------------------------------

 

8.
ADDITIONAL CONDITIONS
     Anything in this Agreement to the contrary notwithstanding, if at any time
Horizon further determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any such document) of the
shares of Common Stock issuable pursuant hereto is necessary on any securities
exchange or under any federal or state securities or blue sky law, or that the
consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with the issuance of shares of
Common Stock pursuant thereto, or the removal of any restrictions imposed on
such shares, such shares of Common Stock shall not be issued, in whole or in
part, or the restrictions thereon removed, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to Horizon. Horizon agrees to use commercially
reasonable efforts to issue all shares of Common Stock issuable hereunder on the
terms provided herein.
9.
NO CONTRACT OF EMPLOYMENT INTENDED
     Nothing in this Agreement shall confer upon the Award Recipient any right
to continue in the employment of the Company, or to interfere in any way with
the right of the Company to terminate the Award Recipient’s employment
relationship with the Company at any time.
10.
BINDING EFFECT
     This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, legal
representatives and successors. Without limiting the generality of the
foregoing, whenever the term “Award Recipient” is used in any provision of this
Agreement under circumstances where the provision appropriately applies to the
heirs, executors, administrators or legal representatives to whom this award may
be transferred by will or by the laws of descent and distribution, the term
“Award Recipient” shall be deemed to include such person or persons.
11.
INCONSISTENT PROVISIONS
     The shares of Restricted Stock granted hereby are subject to the terms,
conditions, restrictions and other provisions of the Plan as fully as if all
such provisions were set forth in their entirety in this Agreement. If any
provision of this Agreement conflicts with a provision of the Plan, the Plan
provision shall control. The Award Recipient acknowledges that a copy of the
Plan was distributed or made available to the Award Recipient and that the Award
Recipient was advised to review such Plan prior to entering into this Agreement.
The Award Recipient waives the right to claim that the provisions of the Plan
are not binding upon the Award Recipient and the Award Recipient’s heirs,
executors, administrators, legal representatives and successors.

4

--------------------------------------------------------------------------------

 

12.
GOVERNING LAW
     This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas.
13.
SEVERABILITY
     If any term or provision of this Agreement, or the application thereof to
any person or circumstance, shall at any time or to any extent be invalid,
illegal or unenforceable in any respect as written, the Award Recipient and
Horizon intend for any court construing this Agreement to modify or limit such
provision so as to render it valid and enforceable to the fullest extent allowed
by law. Any such provision that is not susceptible of such reformation shall be
ignored so as to not affect any other term or provision hereof, and the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid,
illegal or unenforceable, shall not be affected thereby and each term and
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
14.
ENTIRE AGREEMENT; MODIFICATION
     The Plan, this Agreement and the Employment Agreement contain the entire
agreement between the parties with respect to the subject matter contained
herein and may not be modified, except as provided in the Plan, as it may be
amended from time to time in the manner provided therein, or in this Agreement,
as it may be amended from time to time by a written document signed by each of
the parties hereto. Any oral or written agreements, representations, warranties,
written inducements, or other communications with respect to the subject matter
contained herein made prior to the execution of the Agreement shall be void and
ineffective for all purposes.
     By Award Recipient’s signature below, Award Recipient represents that he or
she is familiar with the terms and provisions of the Plan, and hereby accepts
this Agreement subject to all of the terms and provisions thereof. Award
Recipient has reviewed the Plan and this Agreement in their entirety and fully
understands all provisions of this Agreement. Award Recipient agrees to accept
as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan or this Agreement.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the day and year first above written.

            Horizon Offshore, Inc.
      By:           Name:           Title:        

                        {Insert name}      Award Recipient     

5