Exhibit 10.4

APPENDIX A
Employer shall annually provide Employee with aggregate cash incentive
compensation potential comprised of the following two components (collectively,
the “Aggregate Cash Incentive Compensation Potential”) and weighted as a
percentage of Employee’s Basic Salary as indicated below. For 2018, the
Aggregate Cash Incentive Compensation Potential for Component 1¹ shall be based
upon the achievement of threshold, target and maximum metrics, if applicable,
for the objective Component times the applicable Weighted Percentage of Basic
Salary as set forth below:
•
Achievement of a component “threshold” metric earns cash incentive compensation
of fifty percent (50%) of the applicable Weighted Percentage of Basic Salary;

•
Achievement of a component “target” metric earns cash incentive compensation of
one hundred percent (100%) of the applicable Weighted Percentage of Basic
Salary; and

•
Achievement of a component “maximum” metric earns cash incentive compensation of
one hundred and fifty percent (150%) of the applicable Weighted Percentage of
Basic Salary.¹

With respect to Component 1, the cash incentive compensation for achievement
(i) greater than the threshold metric and less than the target metric and
(ii) greater than the target metric, but less than the maximum metric, shall be
interpolated on a straight-line basis for actual results between the threshold
metric and the target metric, or the target metric and the maximum metric, as
applicable.
1.Component 1 - Weighted Percentage 25%¹ - Safety. Component 1 shall represent
25% of the Aggregate Cash Incentive Compensation Potential. Component 1 shall be
based on a comparison of the Parent’s Total Recordable Incident Rate (“TRIR”) on
a consolidated basis for the applicable calendar year compared to the Component
1 vesting metric set forth in the table below. The threshold and target metrics
utilize the annual TRIR industry benchmarks for the International Association of
Drilling Contractors (“IADC”) (for U.S. Waters), the Offshore Marine Service
Association (“OMSA”), the International Support Vessel Owners’ Association
(“ISOA”) and the International Marine Contractors Association (“IMCA”) based
upon the latest available data as of the applicable time of determination of the
cash incentive compensation; provided, however, that such TRIRs for the Parent,
IADC, OMSA, ISOA and IMCA shall be calculated on a comparable basis using the
same criteria and definitional formula. Recognizing that the Parent has
historically outperformed these industry safety benchmarks, the maximum metric
utilizes the Parent’s own average of its three best annual TRIRs achieved within
the last ten years on a consolidated basis as a benchmark (which for periods
prior to the sale of its Downstream segment, shall only include the Parent’s
Upstream segment). The threshold, target and maximum metrics, if applicable, for
this component are set forth in the table below.

2.Component 2 - Weighted Percentage 75%¹ - Discretionary. Component 2 shall
represent 75% of the Aggregate Cash Incentive Compensation Potential.
Component 2 shall be determined at the sole discretion of the Compensation
Committee of the Parent’s Board of Directors, and may range from 50% to 150% of
such discretionary Component 2, based on the performance of the Parent, on a
consolidated basis, and Employee.

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The following table sets forth the "threshold", "target" and "maximum" metrics
for the two components for 2018.
Component
Threshold Metric (50%)
Target Metric (100%)
Maximum Metric (150%)
Safety
TRIR less than the lowest average of all four annual safety benchmarks for any
year falling within the most recent three years compiled by IADC, OMSA, ISOA and
IMCA
TRIR less than the lowest of any one of the four annual safety benchmarks for
any year falling within the most recent three years compiled by IADC, OMSA, ISOA
or IMCA
 
TRIR at least 10% less than the average of the Parent's three best annual TRIRs
achieved in the last ten years
Discretionary
As determined in the sole discretion of the Compensation Committee
As determined in the sole discretion of the Compensation Committee
 
As determined in the sole discretion of the Compensation Committee

Notwithstanding the above, the Compensation Committee, in its sole discretion,
(x) may award cash incentive compensation to Employee for achievement that is
less than the threshold metric and (y) may award additional cash incentive
compensation to Employee for achievement in excess of the maximum metric. Any
vesting metrics that vary from year to year will be set forth each year as an
Appendix B.
 

1 Effective January 1, 2017, Employee voluntarily agreed (as subsequently
confirmed by the Compensation Committee) to the following modifications to
certain elements of his Aggregate Cash Incentive Compensation Potential for the
calendar year 2017:
1.
The number of objective components was reduced from three to one;

2.
The weighting of the objective and discretionary components was inverted from
the previous levels of 75% and 25% to 25% and 75%, respectively; and

3.
The upside of the potential cash incentive compensation earned upon achievement
of the maximum metric was capped at 150% (rather than at 200% as in prior
years).

The understanding between the Compensation Committee and the Employee was that
they would revisit these three modifications each year for the remaining period
of the industry downturn. Effective January 1, 2018, Employee voluntarily agreed
(as subsequently confirmed by the Compensation Committee) to extend the above
referenced modifications to certain elements of his Aggregate Cash Incentive
Compensation Potential (with the more stringent Maximum Safety Metric reflected
above) for the calendar year 2018.

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ACKNOWLEDGED AND AGREED TO:
 
 
EMPLOYEE
 
 
By:
 
 
 
Name:
 

HORNBECK OFFSHORE OPERATORS, LLC
 
 
By:
 
 
 
Name:
 
 
 
Title:
 

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