Exhibit 10.2


KEY ENERGY SERVICES, INC.


2006 PHANTOM SHARE PLAN


AWARD
AGREEMENT


This Phantom Share
Agreement (this “Award Agreement”), dated as of the          
day of                  ,
         , is entered into by and
between Key Energy Services, Inc., (the “Company”), and                  
(the “Participant” and, together with the Company, the “Parties”).


RECITALS


Pursuant to Section 3.2
of the Key Energy Services, Inc. 2006 Phantom Share Plan (the “Plan”), the
Company, has determined to grant to the Participant a number of Phantom Shares
(“Phantom Shares”) on the terms and conditions set forth below.


Any capitalized terms not
defined in this Award Agreement shall have their respective meanings set forth
in the Plan.  In the event of any
conflict between the terms of the Plan and the terms of this Agreement, the
terms of the Plan shall control.


NOW, THEREFORE, the
Parties agree as follows:


1.                                       Grant
of Phantom Shares.  The Participant
is granted        Phantom Shares.  Each Phantom Share represents an unfunded,
unsecured promise by the Company to pay the Participant a cash amount equal to
the Fair Market Value of a share of Common Stock, subject to the terms and
conditions of this Award Agreement, granted effective as of                 ,        (the
“Date of Grant”).  The Participant shall
not be required to pay any cash consideration in exchange for the Phantom Shares.


2.                                       Vesting
Period.  Subject to the terms and
conditions in this Agreement and the Plan, the Phantom Shares shall vest over a
four-year vesting period as described in Section 6.3(a) of the Plan provided
that the Participant continues to have Continuous Service with the Company on each
vesting date.  Upon (a) the occurrence of
the conditions of Section 6.3(c) of the Plan relating to cessation of
Continuous Service due to termination without Cause, death or Disability, or
the attainment of age 65 with completion of ten years of Continuous Service, or
(b) upon a Change in Control as set forth in Section 6.3(d) of the Plan, all
outstanding Phantom Shares shall immediately vest.


3.                                       Settlement
of Phantom Shares.  Within twenty
business days of the vesting date of any outstanding Phantom Shares, the
Company shall deliver to the Participant, or his or her beneficiary, without
charge, a payment in cash equal to the value of the vested Phantom Shares minus
any applicable withholding taxes.


4.                                       Rights
of a Stockholder.  The Participant
shall not have any rights as a shareholder due to the grant or vesting of any
Phantom Shares.


5.                                       Forfeiture.  If the Participant terminates Continuous
Service prior to any vesting date due to termination for Cause or a voluntary
termination of Continuous Service for any reason as set forth in Section 6.3(b)
of the Plan, all outstanding Phantom Shares shall immediately be



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forfeited and the Company
shall make no payment to the Participant with respect to the forfeited Phantom
Shares.


6.                                       Taxes.  Regardless
of any action the Company or an affiliates takes with respect to any or all
income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related
Items”), the Participant acknowledges that the ultimate liability for all
Tax-Related Items legally due by the Participant is and remains the Participant’s
responsibility and that the Company and its affiliates make no representations
or undertakings regarding the treatment of any Tax-Related Items in connection
with any aspect of the Phantom Shares, including the grant or vesting of the Phantom
Shares.


7.                                       Miscellaneous


(a)                   Restrictions on Transfer. 
Phantom Shares may not be transferred or otherwise disposed of by the Participant,
including by way of sale,
assignment, transfer, pledge, hypothecation or otherwise, except as permitted
by the Committee, or by will or the laws of descent and distribution.  No purported sale, assignment, mortgage,
hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting
or other) or other disposition of, or creation of a security interest in or
lien on, the Phantom Shares by any holder thereof in violation of the provisions
of this Agreement shall be valid.


(b)                  Compliance with Law and Regulations. 
This Award shall be subject to all applicable federal, state, foreign
and local laws, rules and regulations and to such approvals by any government
or regulatory agency as may be required.


(c)                   Incorporation of Plan. 
This Agreement is made under the provisions of the Plan and shall be
interpreted in a manner consistent with it. 
To the extent that this Agreement is silent with respect to, or in any
way inconsistent with, the terms of the Plan, the provisions of the Plan shall
govern and this Agreement shall be deemed to be modified accordingly.


(d)                  Notices. 
Any notices required or permitted hereunder shall be addressed to the
Company, at its principal offices, or to the Participant at the address then on
record with the Company, as the case may be, and deposited, postage prepaid, in
the mail.  Either party may, by notice to
the other given in the manner aforesaid, change his or its address for future
notices.


(e)                   Amendment. 
This Agreement may be amended or modified by the Company at any time;
provided that notice is provided to the Participant in accordance with Section 7(d);
and provided further that no amendment or modification that is adverse to the
rights of the Participant as provided by this Agreement shall be effective
unless set forth in a writing signed by the Parties.


(f)                     Successor. 
This Agreement shall bind and inure to the benefit of the Company, its
successors and assigns, and the Participant and his or her personal
representatives and beneficiaries.



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(g)                  Authority of the Committee. 
The Committee shall have final authority to interpret and construe the
Plan and this Agreement and to make any and all determinations under them, and
its decision shall be binding and conclusive upon the Participant and his or
her legal representative in respect of any questions arising under the Plan or
this Agreement.


(h)                  Governing Law. 
The validity, performance and construction of this Plan shall be
governed by the laws of the State of Texas. 
The parties hereto consent to the exclusive jurisdiction of the courts
of Harris County, Texas without regard to conflicts of laws principles.  Any claim arising out of or related to this
Agreement must be brought no later than six months after it has accrued.


(i)                      Electronic Delivery. 
The Company may, in its sole discretion, decide to deliver any documents
related to the Phantom Shares or future Phantom Shares that may be granted
under the Plan by electronic means or to request the Participant’s consent to
participate in the Plan by electronic means. 
The Participant hereby consents to receive such documents by electronic
delivery and, if requested, to agree to participate in the Plan through an
on-line or electronic system established and maintained by Company or another
third party designated by Company.


(j)                      Severability. 
The provisions of this Agreement are severable and if any one or more
provisions are determined to be illegal or otherwise unenforceable, in whole or
in part, the remaining provisions shall nevertheless be binding and
enforceable.


(k)                   No Compensation Deferrals. 
Neither the Plan nor this Agreement is intended to provide for deferral
of compensation that would be subject to Section 409A of the U.S. Internal
Revenue Code (“Section 409A”).  The
Company reserves the right, to the extent the Company deems necessary or
advisable in its sole discretion, to unilaterally amend or modify the Plan
and/or this Award Agreement to ensure that no Phantom Shares become subject to
the requirements of Section 409A, provided, however, that the Company makes no
representation that this Award is not subject to Section 409A nor makes any
undertaking to preclude Section 409A from applying to this Award.


-   SIGNATURE PAGE FOLLOWS –



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IN
WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first above written.


KEY ENERGY SERVICES, INC.


 


	
  By

  	
   

  	
   

  
	
  Name:  [   ]

  
	
  Authorized
  Signatory

  



 


The undersigned hereby acknowledges
receipt of the Plan, and accepts and agrees to all the terms and provisions of
this Agreement and the Plan.


 


	
  

  	
   

  
	
  [Participant]

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Address

  



 



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