Exhibit 10.2

LONG-TERM INCENTIVE CASH AWARD AGREEMENT

AMENDED AND RESTATED

PIONEER DRILLING COMPANY

2007 INCENTIVE PLAN

THIS LONG-TERM INCENTIVE CASH AWARD AGREEMENT (this “Agreement”) is made as of
_________, by and between Pioneer Drilling Company (the “Company”) and
____________________ (the “Employee”) pursuant to the Amended and Restated
Pioneer Drilling Company 2007 Long-Term Incentive Plan (the “Plan”), as amended.
Certain capitalized terms used in this Agreement are defined in Section 7.

 

1. Long-Term Incentive Cash Award. Subject to the vesting and other terms and
conditions set forth in this Agreement, the Company hereby grants to the
Employee a time-vested, long-term cash incentive award (the “Award”) in the
amount set forth on Exhibit A attached hereto and made a part hereof (the “Award
Amount”).

 

2. Provisions of the Plan Control. The Award is made pursuant to the Plan and is
subject to the terms and provisions of the Plan and this Agreement. The terms
and provisions of the Plan are incorporated into this Agreement and will govern
to the extent that the terms and provisions in this Agreement conflict with the
terms and provisions of the Plan. The Employee acknowledges receipt of a copy of
the Plan prior to executing this Agreement.

 

3. Special Condition to Award. The Award is subject to the condition (the
“Special Condition”) that the Company generates aggregate EBITDA of $__________
or more during the two-year period beginning January 1, _____ and ending
December 31, ______. If the Special Condition is not satisfied, the Award will
terminate and be cancelled as of January 1, ______ and no portion of the Award
Amount, whether or not it would have otherwise become vested in accordance with
the terms of this Agreement otherwise, will be paid or be payable to the
Employee.

 

4. Vesting of the Award. If the Special Condition is satisfied, the Award Amount
shall vest, without duplication, in accordance with the following provisions:

(a) Continuous Service Vesting. If the Employee provides Continuous Service
through _________ (the “Initial Vesting Date”), fifty percent (50%) of the Award
Amount (the “Initial Award Portion”) will vest on the Initial Vesting Date. If
the Employee provides Continuous Service through __________ (the “Final Vesting
Date”), the remaining fifty percent (50%) of the Award Amount (the “Final Award
Portion”) will vest on the Final Vesting Date.

(b) Vesting Upon a Change of Control. If a Change in Control occurs after the
date of this Agreement and on or before the Final Vesting Date and either
(i) the Employee provides Continuous Service through the date of such Change in
Control or (ii) the Employee’s Continuous Service is involuntarily terminated
without Cause on or after the thirtieth (30th) day prior to the date of such
Change in Control, then, in either such case, the entire Award Amount, to the
extent not previously vested, will vest immediately prior to the consummation of
such Change in Control.

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(c) Vesting Upon Certain Terminations of Continuous Service.

(i) Without Cause Before Initial Vesting Date. If the Employee’s Continuous
Service is involuntarily terminated without Cause on or before the Initial
Vesting Date, the Award will terminate and be cancelled as of the date of such
termination of service, and no portion of the Award Amount, whether or not it
would have otherwise become vested in accordance with the terms of this
Agreement otherwise, will be paid or be payable to the Employee.

(ii) Without Cause Before Final Vesting Date. If the Employee’s Continuous
Service is involuntarily terminated without Cause after the Initial Vesting Date
and on or before the Final Vesting Date, the Final Award Portion will terminate
and be cancelled as of the date of such termination of service and no portion of
the Final Award Portion, whether or not it would have otherwise become vested in
accordance with the terms of this Agreement otherwise, will be paid or be
payable to the Employee.

(iii) Death or Disability Before Final Vesting Date. If the Employee’s
Continuous Service is terminated on or before the Final Vesting Date due to the
Employee’s death or Disability, (A) the Initial Award Portion will vest on the
Initial Vesting Date or, if earlier, immediately prior to the consummation of a
Change of Control, and (B) the Final Award Portion will vest on the Final
Vesting Date or, if earlier, immediately prior to the consummation of a Change
of Control.

(d) Termination of Vesting. Except as otherwise provided in Section 4(b) and
Section 4(c), no portion of the Award Amount shall vest following the
termination of the Employee’s Continuous Service for any reason or under any
circumstances. Any portion of the Award (which may include the entire Award
Amount) that has not vested and is incapable of vesting in accordance with the
terms of this Section 4 shall thereupon terminate and be cancelled and the
Company will have no further obligation to the Employee with respect to such
terminated and cancelled portion of the Award.

 

5. Payment of the Award. Any portion of the Award Amount that becomes vested
shall be paid in cash (except as otherwise provided in Section 6) as soon as
practicable following the date on which it became vested (but in no event later
than (a) five (5) business days after such vesting date or (b) if earlier,
immediately prior to the consummation of a Change of Control). Such payment
shall be made to the Employee or, in the event of the Employee’s death, to the
person(s) indicated in Section 12.

 

6. Optional Payment of the Award Amount in Common Stock. Notwithstanding
anything to the contrary contained herein, in the sole and absolute discretion
of the Committee and without the consent of the Employee, up to 50% of any Award
payment made pursuant to this Agreement may be paid in whole shares of common
stock, par value $0.10 per share, of the Company (the “Common Stock”) having a
Fair Market Value (as defined in the Plan) equal to the portion of the Award
payment to be paid in Common Stock.

 

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7. Certain Definitions.

(a) The term “Affiliate” means, with respect to any Person, 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) The term “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) The term “Board” means the Company’s Board of Directors.

(d) The term “Cause” means, with reference to the Employee, (i) the commission
by the Employee of (A) any felony or (B) any other crime or offense involving
moral turpitude or dishonesty or involving money or other property of the
Company or any Affiliate of the Company; (ii) the Employee’s participation in a
fraud or act of dishonesty against the Company or any Affiliate of the Company;
(iii) the Employee’s willful breach of the policies of the Company or of any
Affiliate of the Company; (iv) the Employee’s intentional damage to the property
of the Company or of any Affiliate of the Company; (v) any material breach by
the Employee of any agreement between the Employee and the Company or any
Affiliate of the Company; (vi) any unauthorized use or disclosure by the
Employee of confidential information or trade secrets of the Company or its
Affiliates; (vii) the Employee’s refusal or willful failure to substantially
perform his or her employment duties; (viii) the Employee’s receipt of any bribe
or kickback in connection with the Company’s or its Affiliates’ business; or
(ix) the Employee’s willful engagement in material misconduct that results in
damage to the Company or to its Affiliates or results in adverse publicity,
public contempt or public ridicule of the Employee or the Company or its
Affiliates. The determination by the Board or the Committee as to whether Cause
exists shall be final, conclusive and binding on the Employee.

(e) The term “Change in Control” means the occurrence of any of the following
after the date of this Agreement:

(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;

 

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provided, however, that a Change in 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: (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 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

 

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(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.

(f) The term “Committee” means the Compensation Committee of the Board.

(g) The term “Continuous Service” means the Employee’s service with one or more
of the Pioneer Companies, whether as an employee, director or consultant,
without interruption or termination following the date of this Agreement.
Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Employee renders service to the Pioneer
Companies or a change in the Pioneer Company for which the Employee renders such
service, provided that there is no interruption or termination of the Employee’s
service. The Committee, in its sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any approved leave of
absence, including sick leave, military leave or any other personal leave.

(h) The term “Disability” means the absence of the Employee from service with
one or more of the Pioneer Companies as an employee, director or consultant 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.

(i) The term “EBITDA” means the Company’s consolidated net income (without
giving effect to any extraordinary gains or losses) for the applicable period
contemplated by this Agreement, plus the following amounts (without duplication)
to the extent that any such item was applied to reduce such consolidated net
income: (i) net interest expense for such period, (ii) federal, state and local
income taxes and credits for such period and (iii) depreciation and amortization
expense for such period, in each case determined on a consolidated basis.

(j) The term “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.

 

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(k) The term “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.

(l) The term “Pioneer Companies” means, collectively, the Company and its
subsidiaries.

(m) The term “Voting Stock” means the Common Stock and any other securities
issued by the Company that entitle the holder thereof to vote generally in the
election of members of the Board.

 

8. Termination of the Award. Unless earlier terminated pursuant to Section 3 or
Section 4, the Employee’s rights under this Agreement with respect to any
portion of the Award will terminate at the time such portion of the Award is
paid to the Employee or at such time that such portion of the Award is no longer
eligible to become paid, as determined by the Committee.

 

9. Compliance with Section 409A. Notwithstanding anything to the contrary
herein, the making of any payment pursuant to this Agreement on account of the
Employee’s separation from service, to the extent the Employee’s right to
receive such payment is properly treated as deferred compensation subject to
Section 409A of the Code and the regulations and other applicable guidance
issued by the Internal Revenue Service thereunder, shall be delayed until the
first business day after the expiration of six (6) months from the date of the
Employee’s separation from service (within the meaning of said regulations under
Section 409A of the Code) or, if earlier, the date of the Employee’s death. The
Employee shall be solely responsible, and the Company shall have no liability,
for any taxes, acceleration of taxes, interest or penalties arising under
Section 409A of the Code as a result of this Award and the payment of the Award
Amount (or any portion thereof) hereunder.

 

10. Tax Matters. Each payment of any portion of the Award Amount pursuant to
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. Except as otherwise required by applicable law,
the amount of the Required Withholding, and the amount reflected on tax reports
filed by the Company, in respect of any shares of Common Stock issued pursuant
to Section 6 shall be based upon the Fair Market Value (as defined in the Plan)
of such shares on the date of issuance (the “Valuation Date”). In the
Committee’s sole discretion, the Company shall be entitled to satisfy the
Employee’s Required Withholding by withholding shares of Common Stock issued
pursuant to Section 6 having a Fair Market Value on the Valuation Date equal to
the amount of the Required Withholding, or by deducting the amount of such
Required Withholding amount from any cash payment made pursuant to this
Agreement or from cash compensation otherwise payable to the Employee, or any
combination of the foregoing. By execution of this Agreement, the Employee shall
be deemed to have authorized the satisfaction of the Employee’s Required
Withholding by the Company through any one or more of the foregoing means.

 

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11. No Service Rights. This Agreement is not a services or employment agreement
and nothing contained in the Plan or this Agreement shall be interpreted or
construed to confer upon the Employee any right with respect to the continuation
of the Employee’s employment or other service with the Company or any subsidiary
of the Company or interfere in any way with the right of the Company or any
subsidiary of the Company at any time to terminate such relationship.

 

12. Non-transferability. The Employee’s rights under this Agreement may not be
sold, assigned, pledged, exchanged, hypothecated or otherwise disposed of,
encumbered or transferred, except (a) to the Company or (b) upon the Employee’s
death to a beneficiary designated by the Employee (subject to the terms of this
Agreement and the Plan) or if no beneficiary has been duly designated or no duly
designated beneficiary survives the Employee, pursuant to the Employee’s will or
the laws of descent and distribution. Any attempted sale, assignment, pledge,
exchange, hypothecation, disposition, encumbrance or transfer in violation of
this Agreement shall be void and the Company and its Affiliates will not be
bound thereby.

 

13. Severability. If any portion of this Agreement is determined to be in
violation of any statute or public policy, then only the portion(s) of this
Agreement that have been found to violate such statute or public policy shall be
deleted and all portions of this Agreement that have not been found to violate
any statute or public policy will continue in full force and effect.
Furthermore, it is the parties’ intent that any order that requires deletion of
any portion of this Agreement should modify the deleted portion of the Agreement
as narrowly as possible to give as much effect as possible to the intentions of
the parties hereto.

 

14. Limitation of Liability. Under no circumstances will the Company or any
Affiliate be liable for any indirect, incidental, consequential or special
damages (including lost profits) of any form incurred by any Person, whether or
not foreseeable and regardless of the form of the act in which such a claim may
be brought, with respect to this Agreement, the Award or the Plan.

 

15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to its conflicts
of law provisions.

 

16. Amendment and Waiver. Except as otherwise provided in this Agreement or the
Plan, this Agreement may be amended, modified or superseded only by written
instrument executed by the Company and the Employee. 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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17. Miscellaneous. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, including any successor to the Company as the result of a direct or
indirect purchase, merger, consolidation or similar transaction involving all or
substantially all of the Company’s business or assets. This Agreement
constitutes the entire agreement between the parties with respect to the subject
matter hereof.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the Company has caused this Long-Term Incentive Cash Award
Agreement to be duly executed by an officer thereunto duly authorized, and the
Employee has executed this Agreement, all effective as of the date first above
written.

 

PIONEER DRILLING COMPANY: By:      Name:   Title:   EMPLOYEE:   Name:

Address:             

Facsimile No.:    

 

Signature Page to Long-Term Incentive Cash Award Agreement