Appendix A Terms and Conditions of Employee Deferred Performance Unit Award

Exhibit 10.2

«FirstLast»
(address)

Dear «Fname»:

TODCO (the “Company”) hereby awards to you effective as of ___, 200___ (the “Award Date”) ___ Deferred Performance Units in accordance with the TODCO 2005 Long Term Incentive Plan (the “Plan”). Each Deferred Performance Unit represents the opportunity for you to receive one share of TODCO Class A common stock (“Common Stock”). Your award of Deferred Performance Units is more fully described in Appendix A, Terms and Conditions of Employee Deferred Performance Unit Award. This letter and the attached Appendix A shall be referred to and defined herein as the “Award Letter.”

The exact amount of the shares of Common Stock you may earn will be determined based upon the Company’s achievement of a performance standard during the Performance Cycle as described in Appendix A. Your Deferred Performance Unit Award will become Earned Shares on the Determination Date and will be issued in Common Stock thereafter in accordance with Appendix A.

Your Deferred Performance Units are subject to the terms and conditions set forth in the enclosed Plan, the Prospectus for the Plan, this Award Letter and any rules and regulations adopted by the Executive Compensation Committee of the Company’s Board of Directors in accordance with the terms of the Plan.

This Award Letter, the Plan, and any other attachments should be retained in your files for future reference.

Congratulations on your award.

Very truly yours,

Jan Rask
Enclosures

Appendix A

Terms and Conditions of
Employee Deferred Performance Unit Award
[Date]

The Deferred Performance Unit Award by TODCO (the “Company”) to you effective as of the Award Date provides for the opportunity for you to receive, if certain conditions are met, shares of TODCO Class A common stock (“Common Stock”) subject to the terms and conditions set forth in the TODCO 2005 Long Term Incentive Plan (the “Plan”), the enclosed Prospectus for the Plan, any rules and regulations adopted by the Executive Compensation Committee of the Company’s Board of Directors (the “Committee”), and this Award Letter. Any terms used and not defined in the Award Letter shall have the meanings set forth in the Plan. In the event there is an inconsistency between the terms of the Plan and the Award Letter, the terms of the Plan will prevail.

1. Determination of Earned Shares

           (a) Earned Shares. The exact number of shares of Common Stock that will actually be earned by and awarded to you (the “Earned Shares”) out of the total maximum number of the Deferred Performance Units awarded to you in this Award Letter will be based upon the level of achievement by the Company of the performance standard described below over the three-year period commencing January 1, 200___ (the “Performance Cycle”). The determination by the Committee with respect to the achievement of such performance standards will be made in the first quarter of 200___ after all necessary Company and peer information is available. The specific date on which such determination is formally made and approved by the Committee is referred to as the “Determination Date.” After the Determination Date, the Company will notify you of the number of Earned Shares, if any, to be actually awarded to you. The delivery of the Earned Shares will be made no later than 2 1/2 months after the Determination Date.

The calculation of Earned Shares shall be based on the Company’s Total Shareholder Return ranking compared to a defined peer group at the end of the Performance Cycle as determined by the Committee in its sole discretion. “Total Shareholder Return” is defined for a given company as the change in share price plus cumulative dividends paid, assuming dividend reinvestment during the Performance Cycle, over share price at the beginning of the Performance Cycle of the applicable company. Earned Shares will be calculated by multiplying the maximum number of Deferred Performance Units granted by the following percentages for the percentile rank achieved. For Total Shareholder Return performance between the percentile ranks noted below, linear interpolation will be used to calculate the exact number of Earned Shares:

The Company’s defined “Peer Group” shall consist of TODCO and the following companies: Cal Dive International, Ensco International, Global Industries, Grant Prideco, Grey Wolf, Helmerich & Payne, Key Energy Services, Maverick Tube, Newpark Resources, Parker Drilling, Patterson – UTI Energy, Pride International, Rowan Companies Inc. and Tidewater Inc.

           (b) Committee Determinations. In accordance with the provisions of the Plan, the Committee shall have the exclusive authority to make all determinations hereunder, including but not limited to the ranking of TODCO and its Peer Group. Without limiting the foregoing, the Committee shall have absolute discretion to determine the number of Earned Shares to which you are entitled, if any, including without limitation such adjustments as may be necessary in the opinion of the Committee to account for changes since the date of the Award Letter. Notwithstanding the foregoing, the Committee shall be precluded from increasing the amount that would otherwise be obtainable upon the achievement of the performance goals described in Section 1(a) above to the extent prescribed by Section 162(m) of the Internal revenue Code of 1986 as amended (the “Code”) and the applicable regulations rulings and notices thereunder. The Committee’s determination shall be final, conclusive and binding upon you. You will not have any right or claim with respect to any shares other than Earned Shares to which you become entitled in accordance herewith.

           (c) You will not be required to pay any purchase price for the Earned Shares; however tax withholding is required pursuant to Section 8.

2. Vesting

           (a) Unless vested on an earlier date as provided in this Appendix A, the Earned Shares will vest on the Determination Date. The Deferred Performance Units will only become Earned Shares, if at all, on the Determination Date.

           (b) As described in Section 7 below, in the event of a Change in Control, a portion of your Deferred Performance Units may become Earned Shares.

2

3. Restrictions

Until and unless Earned Shares become vested, you do not own any of the Common Stock potentially subject to the Deferred Performance Units awarded to you in this Award Letter and you may not attempt to sell, transfer, assign or pledge the Deferred Performance Units or the Common Stock that may be awarded hereunder. Your Earned Shares, if any, will be registered in your name as of the Determination Date. The Deferred Performance Units awarded hereunder shall be accounted for by the Company on your behalf on a ledger. Promptly after the Determination Date (but no later than 2 1/2 months after the Determination Date), the net shares (total vested Earned Shares minus any Earned Shares retained to satisfy the tax withholding obligation of the Company, as described in Section 8 if applicable), will be delivered in street name to your brokerage account (or, in the event of your death, to a brokerage account in the name of your beneficiary in accordance with the Plan) or, at the Company’s option, a certificate for such shares will be delivered to you.

4. Dividends and Voting

The Deferred Performance Units granted herein do not give you any rights as a stockholder of the Company including, but not limited to, voting and dividend rights.

5. Termination of Employment

If your employment is terminated prior to the Determination Date due to death, “Disability” (as defined below), “Retirement” (as defined below) or at the convenience of the Company (as determined by the Committee), you will be entitled to receive Earned Shares representing a “Pro Rata Share” of your Deferred Performance Units, if any become payable, on the Determination Date. The calculation of your Pro- Rata Share is determined by multiplying the number of Earned Shares calculated as of the Determination Date which would have otherwise been earned had your employment not been termi