EXHIBIT 10.7

PARKER DRILLING COMPANY
PERFORMANCE STOCK UNIT AWARD INCENTIVE AGREEMENT
THIS PERFORMANCE STOCK UNIT AWARD INCENTIVE AGREEMENT (this “Agreement”) is made
and entered into by and between Parker Drilling Company, a Delaware corporation
(the “Company”), and _______________, an individual and employee of the Company
(“Grantee”), as of the _____ day of __________, 20__ (the “Grant Date”), subject
to the terms and conditions of the Parker Drilling Company 2010 Long-Term
Incentive Plan, as Amended and Restated, as it may be further amended from time
to time thereafter (the “Plan”). The Plan is hereby incorporated herein in its
entirety by this reference. Capitalized terms not otherwise defined in this
Agreement shall have the meaning given to such terms in the Plan.
WHEREAS, Grantee is [title] of the Company, and in connection therewith, the
Company desires to grant a Performance-Based Stock-Based Award to Grantee,
subject to the terms and conditions of this Agreement and the Plan, with a view
to increasing Grantee’s interest in the Company’s success and growth; and
WHEREAS, Grantee desires to be the holder of a Performance-Based Stock-Based
Award subject to the terms and conditions of this Agreement and the Plan;
NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and such other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1.Grant of Performance Stock Units. Subject to the terms and conditions of this
Agreement and the Plan, the Company hereby grants to Grantee [number]
Performance Stock Units as described herein (the “Performance Stock Units”),
which constitutes a Performance-Based Stock-Based Award that is referred to as a
Performance-Based Award under the Plan. Each Performance Stock Unit shall
initially represent the equivalent of one Share as of the Grant Date, with the
actual number of Shares to be paid out to be determined under the terms and
conditions of this Agreement. With respect to the Performance Stock Units
granted under this Agreement, the Committee reserves the right and authority, as
exercised in its discretion, to increase or decrease the size of the Incentive
Award by a percentage not to exceed twenty percent (20%), in the form of either
positive or negative discretion, at any time before or after the Incentive Award
becomes fully vested but prior to actual payment, but subject to Section 6 for
Detrimental Conduct. As a holder of Performance Stock Units, the Grantee has the
rights of a general unsecured creditor of the Company unless and until the
Performance Stock Units are converted to Shares upon vesting and transferred to
Grantee, as set forth herein.
2.    Transfer Restrictions. Grantee shall not sell, assign, transfer, exchange,
pledge, encumber, gift, devise, hypothecate or otherwise dispose of
(collectively, “Transfer”) any Performance Stock Units granted hereunder. Any
purported Transfer of Performance Stock Units in breach of this Agreement shall
be void and ineffective, and shall not operate to Transfer any interest or title
to the purported transferee.

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EXHIBIT 10.7

3.    Vesting of Performance Stock Units.
(a)    Performance Period. For purposes of this Agreement, the performance
period is the three-year period that begins on January 1, 20XX and ends on
December 31, 20ZZ (the “Performance Period”). Subject to the terms and
conditions of this Agreement, the Performance Stock Units shall vest and become
payable to Grantee at the end of the Performance Period, provided that (i)
Grantee is still an Employee at that time and has continuously been an Employee
since the Grant Date (the “Service Requirement”) and (ii) the Committee has
certified in writing that the performance criterion established for the
Performance Period as described below (the “Performance Criterion”) has been
achieved. All Performance Stock Units that do not become vested during or at the
end of the Performance Period shall be forfeited. The Committee, in its
discretion, may adjust the Performance Criterion to recognize special or
non-recurring situations or circumstances with respect to the Company or any
other company in the Peer Group for any year during the Performance Period
arising from the acquisition or disposition of assets, costs associated with
exit or disposal activities or material impairments. There is one Performance
Criterion that has been established for the Performance Stock Units awarded
under this Agreement, as described in subsection (b) below.
(b)    RTSR. The Performance Criterion is the Company’s Relative Total
Shareholder Return (“RTSR”) as defined in Exhibit A to this Agreement (the “RTSR
Criterion”). The Company’s RTSR is compared to the RTSR of each of the peer
group companies, as listed on Exhibit A to this Agreement (each a “Peer Company”
and as a group, the “Peer Group”), as of the end of each calendar year within
the Performance Period to determine where the Company ranks when compared to the
Peer Group. The RTSR Criterion is one-hundred percent (100%) of the total
weighting for each Performance Stock Unit.
(c)    Changes in Peer Group. When calculating RTSR for the Performance Period
for the Company and the Peer Group, (i) the performance of a company in the Peer
Group will not be used in calculating the RTSR of that member of the Peer Group
if the company is not publicly traded (i.e., has no ticker symbol) at the end of
the Performance Period; (ii) the performance of any company in the Peer Group
that becomes bankrupt during the Performance Period will be included in the
calculation of Peer Group performance even if it has no ticker symbol at the end
of the measurement period; (iii) the performance of the surviving entities will
be used in the event there is a combination of any of the Peer Group companies
during the measurement period; and (iv) no new companies will be added to the
Peer Group during the Performance Period (including a company that is not a Peer
Group member which acquires a member of the Peer Group). Notwithstanding the
foregoing provisions of this subsection (c), the Committee may disregard any of
these guidelines when evaluating changes in the membership of the Peer Group
during the Performance Period in any particular situation, as it deems
reasonable in the exercise of its discretion.
(d)    Ranking of Company as Compared to the Peer Group. The Committee will rank
the Company’s performance within the Peer Group as of December 31st of each
calendar

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EXHIBIT 10.7

year within the Performance Period and apply the appropriate weighting and award
multiplier from the following table:
 
Description
Weighting
 
Ranking
Award Multiplier
12/31/20XX
Single Year RTSR (20XX)
__%
 
1
2.50 MAX
12/31/20YY
Cumulative RTSR (20XX-20YY)
__%
 
2
2.05
12/31/20ZZ
Cumulative RTSR (20XX-20ZZ)
__%
 
3
1.70
 
 
 
 
4
1.42
 
 
 
 
5
1.21
 
 
 
 
6
1.07
 
 
 
 
7
1.00 TARGET
 
 
 
 
8
0.75
 
 
 
 
9
0.50
 
 
 
 
10
0.25 ENTRY
 
 
 
 
11
0.00
 
 
 
 
12
0.00
 
 
 
 
13
0.00

4.    Termination of Employment. If Grantee’s Employment is voluntarily or
involuntarily terminated during the Performance Period, then Grantee shall
immediately forfeit the outstanding Performance Stock Units, except as provided
below in this Section 4. Upon the forfeiture of any Performance Stock Units
hereunder, the Grantee shall cease to have any rights in connection with such
Performance Stock Units as of the date of forfeiture.
(a)    Termination of Employment. Except as provided in Section 4(c), if the
Grantee’s Employment is terminated for any reason, including Retirement, other
than due to death or Disability during the Performance Period, any non-vested
Performance Stock Units at the time of such termination shall automatically
expire and terminate and no further vesting shall occur after the termination of
Employment date. In such event, the Grantee will receive no payment for unvested
Performance Stock Units.
(b)    Disability or Death. Upon termination of Grantee’s Employment as the
result of Grantee’s Disability (as defined below) or death during the
Performance Period, then all of the outstanding Performance Stock Units shall
become 100% vested on such date at the 1.0 multiplier award level. For purposes
of this Agreement, “Disability” means (i) a disability that entitles the Grantee
to benefits under the Company’s long-term disability plan, as may be in effect
from time to time, as determined by the plan administrator of the long-term
disability plan or (ii) a disability whereby the Grantee is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months.
(c)    Change in Control. If there is a Change in Control of the Company (as
defined in the Plan) during the Performance Period, then in the event of the
Grantee’s Involuntary Termination Without Cause (as defined below) within two
(2) years following the effective

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EXHIBIT 10.7

date of the Change in Control and during the same Performance Period, all the
outstanding Performance Stock Units shall automatically become 100% vested on
the Grantee’s termination of Employment date at the 1.0 multiplier award level.
(d)    For purposes of this Agreement, “Involuntary Termination Without Cause”
means the Employment of Grantee is involuntarily terminated by the Company (or
by any successor to the Company) for any reason, including, without limitation,
as the result of a Change in Control, except due to death, Disability,
Retirement or Cause; provided, that in the event of a dispute regarding whether
Employment was terminated voluntarily or involuntarily, or with or without
Cause, such dispute will be resolved by the Committee, in good faith, in the
exercise of its discretion.
5.    Payment for Performance Stock Units. Payment for the vested Performance
Stock Units subject to this Agreement shall be made to the Grantee as soon as
practicable following the time such Performance Stock Units become vested in
accordance with Section 3 or Section 4 prior to their expiration, but not later
than sixty (60) days following the date of such vesting event. The number of
Performance Stock Units that vest and are payable hereunder shall be determined
by the Committee, in its discretion, in accordance with the Payout Schedule in
Section 3.
The number of Shares payable to the Grantee pursuant to this Agreement shall be
an amount equal to the number of vested Performance Stock Units multiplied by
the award multiplier for the level of achievement of the Performance Criterion
determined in Section 3(d). The maximum payout for each Performance Stock Unit
is two and one-half (2.5) Shares because the maximum award multiplier on the
Payout Schedule is 2.50.
Any amount paid in respect of the vested Performance Stock Units shall be
payable in Shares. Prior to any payments under this Agreement, the Committee
shall certify in writing, by resolution or otherwise, the amount to be paid in
respect of the Performance Stock Units as a result of the achievement of the
Performance Criterion.
Any Shares delivered to or on behalf of Grantee in respect of vested Performance
Stock Units shall be subject to any further transfer or other restrictions as
may be required by securities law or other applicable law, as determined by the
Company.
6.    Detrimental Conduct. In the event that the Committee should determine, in
its sole and absolute discretion, that, during Employment or within two (2)
years following Employment termination for any reason, the Grantee engaged in
Detrimental Conduct (as defined below), the Committee may, in its sole and
absolute discretion, if Shares have previously been transferred to the Grantee
pursuant to Section 5 upon vesting of his Performance Stock Units, direct the
Company to send a notice of recapture (a “Recapture Notice”) to such Grantee.
Within ten (10) days after receiving a Recapture Notice from the Company, the
Grantee will deliver to the Company either (i) the actual number of Shares that
were transferred to the Grantee upon vesting of Performance Stock Units or (ii)
a cash equivalent payment in an amount equal to the Fair Market Value of such
Shares at the time when transferred to the Grantee, unless the Recapture Notice
demands repayment of a lesser sum. All repayments hereunder shall be net of the
taxes that were withheld by the Company when the Shares were originally
transferred to Grantee following vesting of the

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EXHIBIT 10.7

Performance Stock Units pursuant to Section 5. For purposes of this Agreement, a
Grantee has committed “Detrimental Conduct” if the Grantee (a) violated a
confidentiality, non-solicitation, non-competition or similar restrictive
covenant between the Company or one of its Affiliates and such Grantee,
including violation of a Company policy relating to such matters, or (b) engaged
in willful fraud that causes harm to the Company or one of its Affiliates or
that is intended to manipulate the performance results of any Incentive Award,
including, without limitation, any material breach of fiduciary duty,
embezzlement or similar conduct that results in a restatement of the Company’s
financial statements.
7.    Grantee’s Representations. Notwithstanding any provision hereof to the
contrary, the Grantee hereby agrees and represents that Grantee will not acquire
any Shares, and that the Company will not be obligated to issue any Shares to
the Grantee hereunder, if the issuance of such Shares constitutes a violation by
the Grantee or the Company of any law or regulation of any governmental
authority. Any determination in this regard that is made by the Committee, in
good faith, shall be final and binding. The rights and obligations of the
Company and the Grantee are subject to all applicable laws and regulations.
8.    Tax Withholding. To the extent that the receipt of the payment of Shares
hereunder results in compensation income to Grantee for federal, state or local
income tax purposes, Grantee shall deliver to Company at such time the sum that
the Company requires to meet its tax withholding obligations under applicable
law or regulation, and, if Grantee fails to do so, Company is authorized to (a)
withhold from any cash or other remuneration (including any Shares), then or
thereafter payable to Grantee, any tax required to be withheld; or (b) sell such
number of Shares as is appropriate to satisfy such tax withholding requirements
before transferring the resulting net number of Shares to Grantee in
satisfaction of its obligations under this Agreement.
9.    Independent Legal and Tax Advice. The Grantee acknowledges that (a) the
Company is not providing any legal or tax advice to Grantee and (b) the Company
has advised the Grantee to obtain independent legal and tax advice regarding
this Agreement and any payment hereunder.
10.    No Rights in Shares. The Grantee shall have no rights as a stockholder in
respect of any Shares, unless and until the Grantee becomes the record holder of
such Shares on the Company’s records.
11.    Conflicts with Plan, Correction of Errors, and Grantee’s Consent. In the
event that any provision of this Agreement conflicts in any way with a provision
of the Plan, such provisions shall be reconciled, or such discrepancy shall be
resolved, by the Committee in the exercise of its discretion. In the event that,
due to administrative error, this Agreement does not accurately reflect the
Performance Stock Units properly granted to the Grantee, the Committee reserves
the right to cancel any erroneous document and, if appropriate, to replace the
cancelled document with a corrected document. All determinations and
computations under this Agreement shall be made by the Committee (or its
authorized delegate) in its discretion as exercised in good faith.
This Agreement and any award of Performance Stock Units or payment hereunder are
intended to comply with or be exempt from Section 409A of the Internal Revenue
Code and shall be interpreted accordingly. Accordingly, Grantee consents to such
amendment of this Agreement

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EXHIBIT 10.7

as the Committee may reasonably make in furtherance of such intention, and the
Company shall promptly provide, or make available, to Grantee a copy of any such
amendment.
12.    Miscellaneous.
(a)    No Fractional Shares. All provisions of this Agreement concern whole
Shares. If the application of any provision hereunder would yield a fractional
Share, such fractional Share shall be rounded down to the next whole Share if it
is less than 0.5 and rounded up to the next whole Share if it is 0.5 or more.
(b)    Transferability of Performance Stock Units. The Performance Stock Units
are transferable only to the extent permitted under the Plan at the time of
transfer (i) by will or by the laws of descent and distribution, or (ii) by a
domestic relations order in such form as is acceptable to the Company. No right
or benefit hereunder shall in any manner be liable for or subject to any debts,
contracts, liabilities, obligations or torts of the Grantee or any permitted
transferee thereof.
(c)    Not an Employment Agreement. This Agreement is not an employment
agreement, and no provision of this Agreement shall be construed or interpreted
to create any Employment relationship between Grantee and the Company for any
time period. The Employment of Grantee with the Company shall be subject to
termination to the same extent as if this Agreement did not exist.
(d)    Notices. Any notice, instruction, authorization, request or demand
required hereunder shall be in writing, and shall be delivered either by
personal in-hand delivery, by telecopy or similar facsimile means, by certified
or registered mail, return receipt requested, or by courier or delivery service,
addressed to the Company at its then current main corporate address, and to
Grantee at the address indicated on the Company’s records, or at such other
address and number as a party has last previously designated by written notice
given to the other party in the manner hereinabove set forth. Notices shall be
deemed given when received, if sent by facsimile means (confirmation of such
receipt by confirmed facsimile transmission being deemed receipt of
communications sent by facsimile means); and when delivered and receipted for
(or upon the date of attempted delivery where delivery is refused), if
hand-delivered, sent by courier or delivery service, or sent by certified or
registered mail, return receipt requested.
(e)    Amendment, Termination and Waiver. This Agreement may be amended,
modified, terminated or superseded only by written instrument executed by or on
behalf of the Grantee and the Company (by action of the Committee or its
delegate). Any waiver of the terms or conditions hereof shall be made only by a
written instrument executed and delivered by the party waiving compliance. Any
waiver granted by the Company shall be effective only if executed and delivered
by a duly authorized executive officer of the Company other than Grantee. 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 herein, or the breach thereof, in
one or more instances shall be deemed

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EXHIBIT 10.7

to be, or construed as, a further or continuing waiver of any such condition or
breach or a waiver of any other condition or the breach of any other term or
condition.
(f)    No Guarantee of Tax or Other Consequences. The Company makes no
commitment or guarantee that any tax treatment will apply or be available to the
Grantee or any other person. The Grantee has been advised, and provided with
ample opportunity, to obtain independent legal and tax advice regarding this
Agreement.
(g)    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,
except as preempted by controlling federal law. The invalidity of any provision
of this Agreement shall not affect any other provision hereof or of the Plan,
which shall remain in full force and effect.
(h)    Successors and Assigns. This Agreement shall bind, be enforceable by, and
inure to the benefit of, the Company and Grantee and any permitted successors
and assigns under the Plan.
[Signature page follows.]

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EXHIBIT 10.7

IN WITNESS WHEREOF, this Agreement is hereby approved and executed as of the
date first written above.
Parker Drilling Company
By:                            
Name:                            
Title:                            
Grantee
                            
Signature

                            
Print Name

Grantee’s Address for Notices:
                            
                            
                            
                            

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EXHIBIT 10.7

EXHIBIT A
Performance Criterion
1.     RTSR. RTSR is the Performance Criterion applicable to the Performance
Stock Units and is determined by dividing (1) the sum of (a) the cumulative
amount of the dividends of the Company or the Peer Company, as applicable, for
the applicable period assuming same-day reinvestment into the corporation’s
common stock on the ex-dividend date and (b) the share price of such corporation
at the end of the applicable period minus the share price at the beginning of
the applicable period, by (2) the share price at the beginning of the applicable
period. The RTSR for each Peer Company in the Peer Group will be calculated over
the applicable period, annualized, and then compared with the identical
calculation for the Company. The Company’s RTSR is a Performance Criterion that
is compared to each Peer Company’s RTSR for the applicable period.
2.     Peer Companies and Peer Group. The following Peer Companies comprise the
Peer Group to which the Company’s RTSR performance will be compared for the
Performance Period:
1.    BAS    Basic Energy Services, Inc.
2.    DWSN    Dawson Geophysical Co.
3.    HP    Helmerich & Payne, Inc.
4.    HERO    Hercules Offshore, Inc.
5.    KEG    Key Energy Services, Inc.
6.    NBR    Nabors Industries Ltd.
7.    NGS    Natural Gas Services Group, Inc.
8.    PDC    Pioneer Energy Services Corp.
9.    PDS    Precision Drilling Corporation
10.    SPN    Superior Energy Services Inc.
11.    TTI     Tetra Technologies, Inc.
12.    VTG    Vantage Drilling Company

3.     Alternate Payout Scales. Should the number of Peer Companies decrease
during the Performance Period as described in Section 3(c) of the Agreement,
then the Company’s performance within the Peer Group may be measured according
to one of the following alternate tables, subject to the Committee’s discretion:

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EXHIBIT 10.7

Company + 11 Peers
Ranking
Award Multiplier
1
2.50 MAX
2
2.00
3
1.60
4
1.30
5
1.10
6
1.00 TARGET
7
0.75
8
0.50
9
0.25 ENTRY
10
0.00
11
0.00
12
0.00
Company + 10 Peers
Ranking
Award Multiplier
1
2.50 MAX
2
2.00
3
1.60
4
1.30
5
1.10
6
1.00 TARGET
7
0 .75
8
0.50
9
0.25 ENTRY
10
0.00
11
0.00

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