Exhibit 10.2
PERFORMANCE AWARD AGREEMENT
HERCULES OFFSHORE, INC.
2014 LONG-TERM INCENTIVE PLAN
This Performance Award Agreement (this “Agreement”) is made and entered into by
and between Hercules Offshore, Inc., a Delaware corporation (the “Company”), and
[•] (the “Participant”) as of [•], 2015 (the “Date of Grant”).
W I T N E S S E T H
WHEREAS, the Company has adopted the Hercules Offshore, Inc. 2014 Long-Term
Incentive Plan (the “Plan”); and
WHEREAS, the Compensation Committee of the Board of Directors of the Company has
determined that it is in the best interests of the Company and its shareholders
to grant a Performance Award to the Participant pursuant to the Plan and the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereafter set forth and for other good and valuable consideration, the Company
and the Participant agree as follows:
1.Grant of Performance Award. The Company hereby grants to the Participant, as
of the Date of Grant, a Performance Award with a target value equal to $[•],
subject to the conditions and restrictions set forth herein and in the Plan (the
“Performance Award”). The Participant hereby acknowledges receipt of a copy of
the Plan, and agrees that the Performance Award granted hereunder shall be
subject to all of the terms and provisions of the Plan. In the event of any
conflict between (i) the terms of this Agreement (including Exhibit A) and the
Plan, the Plan shall control and (ii) the terms of this Agreement (including
Exhibit A) and any written employment agreement between the Participant and the
Company, such employment agreement shall control. Capitalized terms used in this
Agreement that are not defined herein (or in Exhibit A) shall have the meanings
given to them in the Plan.
2.Earning of Performance Award.
(a)Subject to the provisions of Section 4, with respect to each Performance
Period, the portion of the Performance Award that shall become earned on the
Performance Certification Date with respect to such Performance Period shall be
determined as follows:
(i)If the sum of (x) the Downtime Performance Earned Percentage for such
Performance Period and (y) the SPP Performance Earned Percentage for such
Performance Period (such sum, the “Total Earned Percentage”) is greater than or
equal to 60%, then the amount of the Performance Award that shall become earned
on the Performance Certification Date for such Performance Period shall be equal
to the product of (x) the Cash Earned Percentage for such Performance Period
(determined in accordance with the Earned Amount Chart) and (y) the target value
of the Performance Award (such product, the “Earned Cash Amount”).
(ii)If the Total Earned Percentage for such Performance Period is less than 60%,
then none of the Performance Award shall become earned on the Performance
Certification Date for such Performance Period.

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(b)Subject to Section 4, any portion of the Performance Award that becomes
earned in accordance with Section 2(a) or Section 4 shall be settled in
accordance with Section 3. Any portion of any Performance Award that does not
become earned in accordance with Section 2(a) or Section 4 during a Performance
Period shall be forfeited on the Performance Certification Date for such
Performance Period.
(c)Without limiting the foregoing and unless the Performance Award has been
forfeited earlier, the Committee shall certify in writing as promptly as
practicable after the close of each Performance Period, whether, and the extent
to which, the applicable requirements of Section 2(a) have been satisfied and
the amount of the Performance Award, if any, that becomes earned with respect to
such Performance Period.
3.Payment. Within 30 days following the Performance Certification Date for the
final Performance Period, so long as the Participant remains continuously
employed by the Company or one of its Subsidiaries through the applicable
payment date, the Company shall, with respect to any portion of the Performance
Award that has become earned hereunder, pay to the Participant an amount of cash
equal to the Earned Cash Amount, as applicable, less applicable tax withholding
pursuant to Section 7.
4.Effect of Termination of Employment. Except as otherwise provided in any
written employment agreement between the Participant and the Company in effect
from time to time:
(a)If the Participant incurs a Termination of Employment prior to the payment of
the Performance Award, then the Performance Award shall be immediately forfeited
by the Participant as of the date of such Termination of Employment and the
Company shall have no further obligations hereunder.
(b)Notwithstanding any provision of Section 3 or any of the preceding provisions
of this Section 4 to the contrary, the Performance Award shall be treated as
follows upon the occurrence of a Change in Control, provided that the
Participant is employed by the Company or one of its Subsidiaries upon the
consummation of such Change in Control:
(i)If such Change in Control occurs on or after the last day of a Performance
Period (determined without regard to Section 4(b)(ii)) and before the
Performance Certification Date for such Performance Period, all future
Performance Certification Dates shall be deemed to be changed to the date of
such Change in Control.
(ii)If such Change in Control occurs before the last day of a Performance Period
(determined without regard to this Section 4(b)(ii)):
(A)All Performance Periods that have not ended as of the date of such Change in
Control shall be deemed to end on the date of such Change in Control; and
(B)All future Performance Certification Dates shall be deemed to be changed to
the date of such Change in Control.
5.Limitation of Rights. Nothing in this Agreement or the Plan shall be construed
to (a) give the Participant any right to be awarded any further cash award or
any other Award in the future, even if cash awards or other Awards are granted
on a regular or repeated basis, as grants of cash awards and other Awards are
completely voluntary and made solely in the discretion of the Committee; (b)
give the Participant or any other Person any interest in any fund or in any
specified asset or assets of the Company or any Subsidiary; or (c) confer upon
the Participant the right to continue in the employment of the Company or any
Subsidiary, or affect the right of the Company or any Subsidiary to terminate
the employment of the Participant at any time or for any reason. Neither the
Participant, nor any Person claiming through the Participant, shall have

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any right or interest in the Performance Award granted hereunder, unless and
until all the terms, conditions and provisions of this Agreement and the Plan
that affect the Participant or such other Person shall have been complied with
as specified herein.
6.Successors and Assigns. This Agreement shall bind and inure to the benefit of
and be enforceable by the Participant, the Company and their respective
permitted successors and assigns (including personal representatives, heirs and
legatees), except that the Participant may not assign any rights or obligations
under this Agreement except to the extent and in the manner expressly permitted
herein.
7.Tax Withholding. All amounts payable to the Participant hereunder shall be
reduced by the amount the Company is required to withhold under the applicable
provisions of the Internal Revenue Code of 1986, as amended (the “Code”), or its
successors, or any other federal, state, local or other tax withholding
requirement. When the Company is required to withhold any amount or amounts
under the applicable provisions of the Code, the Company shall withhold from
each payment of the Performance Award to be paid to the Participant an amount of
cash necessary to satisfy the Company’s minimum withholding obligations. The
Participant acknowledges and agrees that none of the Board, the Committee, the
Company or any of its Affiliates have made any representation or warranty as to
the tax consequences to the Participant as a result of the receipt of the
Performance Award. The Participant represents that he is in no manner relying on
the Board, the Committee, the Company or any of its Affiliates or any of their
respective managers, directors, officers, employees or authorized
representatives (including, without limitation, attorneys, accountants,
consultants, bankers, lenders, prospective lenders and financial
representatives) for tax advice or an assessment of such tax consequences. The
Participant represents that he has consulted with any tax consultants that the
Participant deems advisable in connection with the grant of the Performance
Award.
8.Entire Agreement; Amendment. This Agreement and any written employment
agreement between the Participant and the Company in effect from time to time
constitute the entire agreement of the parties with regard to the subject matter
hereof, and contain all the covenants, promises, representations, warranties and
agreements between the parties with respect to the Performance Award granted
hereunder. Without limiting the scope of the preceding sentence, except as
provided in this Agreement and any written employment agreement between the
Participant and the Company in effect from time to time, all prior
understandings and agreements, if any, among the parties hereto relating to the
subject matter hereof are hereby null and void and of no further force and
effect. The Committee may, in its sole discretion, amend this Agreement from
time to time in any manner that is not inconsistent with the Plan; provided,
however, that except as otherwise provided in the Plan or this Agreement, any
such amendment that materially reduces the rights of the Participant shall be
effective only if it is in writing and signed by both the Participant and an
authorized officer of the Company.
9.Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Delaware, without regard to conflicts
of law principles thereof.
10.Headings; References; Interpretation. All Section headings in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any of the provisions hereof. The words “hereof,”
“herein” and “hereunder” and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole, including all Exhibits
attached hereto, and not to any particular provision of this Agreement. All
references herein to Sections and Exhibits shall, unless the context requires a
different construction, be deemed to be references to the Sections of this
Agreement and the Exhibits attached hereto, and all such Exhibits attached
hereto are hereby incorporated herein and made a part hereof for all purposes.
The use herein of the word “including” following any general statement, term or
matter shall not be construed to limit such statement, term or matter to the
specific items or matters

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set forth immediately following such word or to similar items or matters,
whether or not non-limiting language (such as “without limitation”, “but not
limited to”, or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that could
reasonably fall within the broadest possible scope of such general statement,
term or matter. The word “or” as used herein is not exclusive and shall be
deemed to have the meaning “and/or”. Unless the context requires otherwise, all
references herein to an agreement, instrument or other document shall be deemed
to refer to such agreement, instrument or other document as amended,
supplemented, modified and restated from time to time to the extent permitted by
the provisions thereof. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed or resolved against any party hereto, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by each of the parties hereto and shall be construed and interpreted
according to the ordinary meaning of the words used so as to fairly accomplish
the purposes and intentions of the parties hereto.
11.Section 409A. Notwithstanding any provision of this Agreement to the
contrary, all payments under this Agreement are intended to be exempt from
Section 409A of the Internal Revenue Code of 1986, as amended, and the
applicable Treasury regulations and administrative guidance issued thereunder
and this Agreement shall be construed and administered in accordance with such
intent.
[Remainder of Page Intentionally Blank;
Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
one of its officers thereunto duly authorized and the Participant, effective for
all purposes as provided above.
    
HERCULES OFFSHORE, INC.
    
    
By: _________________________________
John T. Rynd
Chief Executive Officer and President

    
PARTICIPANT

____________________________________
[Name of Participant]
    
    

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EXHIBIT A

As used in this Agreement, the following terms shall have the meanings set forth
below:
(a)
“Cash Earned Percentage” means, with respect to a Performance Period, the
percentage under the heading “Cash Earned Percentage” that corresponds to the
Total Earned Percentage for such Performance Period in the Earned Amount Chart.

(b)
“Company SPP Rank” means the Company SPP Rank on the Peer Group SPP Chart.

(c)
“Downtime Performance Earned Percentage” means the percentage in the column
entitled “Downtime Performance Percentage” that corresponds to the Downtime
Performance Percentage Rank on the Downtime Performance Percentage Chart.

(d)
“Downtime Performance Percentage” or “DPP” means, with respect to a Performance
Period, the average of the annual downtimes of the Company’s rigs and liftboats
expressed as a percentage and determined in accordance with the Company’s
prescribed practices and policies as interpreted and applied by the Committee,
for each calendar year during such Performance Period.

(e)
“Downtime Performance Percentage Chart” means the following chart:

Downtime Performance Percentage
Downtime Performance Earned Percentage
DPP ≤ 1.35%
100%
1.35% < DPP ≤ 1.37%
100%
1.37% < DPP ≤ 1.39%
100%
1.39% < DPP ≤ 1.41%
90%
1.41% < DPP ≤ 1.43%
80%
1.43% < DPP ≤ 1.45%
70%
1.45% < DPP ≤ 1.47%
60%
1.47% < DPP ≤ 1.50%
50%
1.50% < DPP ≤ 1.53%
40%
1.53% < DPP ≤ 1.57%
30%
1.57% < DPP ≤ 1.61%
20%
1.61% < DPP ≤ 1.65%
10%

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(f)
“Earned Amount Chart” means the following chart:

Total Earned Percentage
Cash Earned Percentage
1/1/2015-12/31/2015
1/1/2015-12/31/2016
1/1/2015-12/31/2017
200%
40%
60%
100%
190%
38%
57%
95%
180%
36%
54%
90%
170%
34%
51%
85%
160%
32%
48%
80%
150%
30%
45%
75%
140%
28%
42%
70%
130%
26%
39%
65%
120%
24%
36%
60%
110%
22%
33%
55%
100%
20%
30%
50%
90%
18%
27%
45%
80%
16%
24%
40%
70%
14%
21%
35%
60%
12%
18%
30%
Less than 60%
0%
0%
0%

(g)
“Ending Share Price” means, with respect to a Performance Period, the average
closing price of one share of common stock of the relevant Peer Group member
over the 90-day period ending on the last day of such Performance Period.

(h)
“Peer Group” means the Company, Atwood Oceanics, Inc., Basic Energy Services,
Inc., Dresser-Rand Group, Inc., Gulfmark Offshore, Inc., Helmerich & Payne Inc.,
Hornbeck Offshore Services, Inc., Paragon Offshore plc, Parker Drilling Company,
Patterson-UTI Energy, Inc., Rowan Companies plc, Seacor Holdings Inc., TETRA
Technologies, Inc., Tidewater Inc., Unit Corporation and Vantage Corporation, to
the extent such entities or their successors are in existence and have publicly
traded common stock as of the last day of the applicable Performance Period, as
may be adjusted by the Committee to account for extraordinary events, such as
mergers, acquisitions, divestitures or bankruptcies, affecting the Company or
such other entities.

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(i)
“Peer Group SPP Chart” means the following chart:

Company SPP Rank
SPP Performance Earned Percentage
1st
100%
2nd
100%
3rd
100%
4th
90%
5th
80%
6th
70%
7th
60%
8th
50%
9th
40%
10th
30%
11th
20%
12th
10%
13th
0%
14th
0%
15th
0%
16th
0%

If the number of members of the Peer Group decreases prior to the end of a
Performance Period, the Company SPP Rank shall be determined as follows: (i) the
Company’s SPP shall be ranked among the SPPs of the remaining members of the
Peer Group on of the last day of such Performance Period, with the highest SPP
being ranked first, (ii) the rank of the Company’s SPP among the remaining
members of the Peer Group on the last day of such Performance Period shall then
be multiplied by a fraction, the numerator of which is 16 and the denominator of
which is the number of members of the Peer Group on the last day of such
Performance Period, and (iii) the number obtained in subclause (ii) shall be the
Company SPP Rank on the Peer Group SPP Chart.
(j)
“Performance Certification Date” means, with respect to each Performance Period,
the date(s) as of which the Committee makes its written certifications of the
Company SPP Rank and the Downtime Performance Percentage for such Performance
Period, as applicable, and its determination of whether and the extent to which
the applicable Performance Requirements have been satisfied in accordance with
Section 2(c).

(k)
“Performance Period” means each of the following three periods: (i) the period
beginning on January 1, 2015 and ending on December 31, 2015, (ii) the period
beginning on January 1, 2015 and ending on December 31, 2016 and (ii) the period
beginning on January 1, 2015 and ending on December 31, 2017.

(l)
“Performance Requirement” means the condition that must necessarily be attained
to earn the Performance Award pursuant to Section 2(a).

(m)
“SPP” means the common stock price growth (or loss) for each entity in the Peer
Group over the Performance Period, as measured for each entity by dividing (i)
the difference

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between the entity’s Ending Share Price and Starting Share Price, by (ii) the
entity’s Starting Share Price.
(n)
“SPP Performance Earned Percentage” means the percentage in the column entitled
“SPP Performance Earned Percentage” that corresponds to the Company SPP Rank on
the Peer Group SPP Chart.

(o)
“Starting Share Price” means, with respect to a Performance Period, the average
closing price of one share of common stock of the relevant Peer Group member
over the 90-day period ending on the last day before the beginning of such
Performance Period.

(p)
“Termination of Employment” means the act, event or condition by or upon which
the Participant ceases to be an Employee.