Exhibit 10.2

[Hercules Letterhead]

Cash Retention Bonus Award Agreement

The undersigned (i) acknowledges receipt of an award (the “Award”) of a cash retention bonus opportunity (the “Cash Retention Bonus”) from Hercules Capital, Inc. (the “Company”), subject to the terms set forth below; and (ii) agrees with the Company as follows:

For purposes of this Agreement, “Continuous Service” means the undersigned’s uninterrupted service with the Company or an affiliate.

The amount of the Cash Retention Bonus shall be determined based on the Company’s relative total shareholder return (“TSR”) over the Performance Period compared to the

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Peer Group (as defined below) (the “Relative TSR Percentile Rank”).  TSR is calculated by dividing (i) the 20 trading-day volume weighted average share price of the Company’s (or a member of the Peer Group’s, as applicable) common stock at the end of the Performance Period (with such 20 trading-day period to end on the last day of the Performance Period or, if the last day of the Performance Period is not a trading day, on the last trading day of the Performance Period), plus cumulative dividends declared and paid during such Performance Period, if any (with any such dividends deemed to have been reinvested on a compounded basis in shares of the Company’s (or a member of the Peer Group’s, as applicable) common stock on the dividend settlement date) by (ii) the closing share price of the Company’s (or a member of the Peer Group’s, as applicable) common stock on the Grant Date.  Dividends deemed reinvested shall be deemed to constitute outstanding shares for purposes of subsequent dividends declared and paid by the Company (or a member of the Peer Group, as applicable).

No Cash Retention Bonus will vest or be payable if the Company’s Relative TSR Percentile Rank is not at or above the 25^th percentile level of the Peer Group.  A Cash Retention Bonus in the amount of $[●] will vest and be payable if the Company’s Relative TSR Percentile Rank is at the 25^th percentile level of the Peer Group.  A Cash Retention Bonus in the amount of $[●] will vest and be payable if the Company’s Relative TSR Percentile Rank is at the 50^th percentile level of the Peer Group.  A Cash Retention Bonus in the amount of $[●] will vest and be payable if the Company’s Relative TSR Percentile Rank is at the 90^th percentile level of the Peer Group.  If the Company’s Relative TSR Percentile Rank is between the 25^th percentile and the 50^th percentile, or between the 50^th percentile and the 90^th percentile, of the Peer Group, the amount of the Cash Retention Bonus that will vest and be payable will be determined by linear interpolation between the foregoing metrics.  

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Following the completion of the Performance Period, or in respect of any earlier Vesting Date (as defined below), the compensation committee of the Company’s board of directors (such committee, the “Compensation Committee” and such board, the “Board”) shall review and certify in writing the Relative TSR Percentile Rank and calculate and certify in writing the amount of the Cash Retention Bonus that shall vest and be payable to the undersigned based on the level of vesting and achievement of the Relative TSR Percentile Rank.

For purposes of this Agreement, “Peer Group” means the public business development companies listed on Schedule A.  Any such business development company that is acquired during the Performance Period shall be eliminated from the Peer Group.  Any such business development company that files for bankruptcy under federal law during the Performance Period shall be deemed to have a final TSR of -100%.  Any new business development company that emerges because of an initial public offering or spin-off shall not be added to the Peer Group.

For purposes of and subject to this Agreement, “Vesting Date” shall mean the earliest to occur of (1) the last day of the Performance Period, (2) the death or disability (as defined in Treasury Regulation Section 1.409A-3(i)(4)(i)(A)) of the undersigned or (3) the consummation of a Covered Transaction.

Notwithstanding the foregoing, the undersigned shall not vest in the right to receive payment of the Cash Retention Bonus on any Vesting Date or otherwise if the undersigned terminates Continuous Service prior to such Vesting Date or if the Company's Relative TSR Percentile Rank is below the 25^th percentile level of the Peer Group; provided, however, that (i) upon the death or disability (as defined in Treasury Regulation Section 1.409A-3(i)(4)(i)(A)) of the undersigned, the undersigned shall vest in full in the right to receive payment of the Cash Retention Bonus, and the amount payable shall be the greater of (a) the amount payable determined as of the date of such death or disability, assuming that a Relative TSR Percentile Rank of 50% was achieved during the entire Performance Period and (b) the amount payable determined as of the date of such death or disability based on the actual Relative TSR Percentile Rank as of the date of such death or disability, (ii) upon a termination of Continuous Service by the Company without Cause (as defined below) prior to a Covered Transaction, the undersigned shall vest in full in the right to receive payment of a pro-rata portion of the Cash Retention Bonus (pro-rated on a monthly basis to account for service between the Grant Date and the date of termination of Continuation Service) and the amount payable shall be determined based on the actual Relative TSR Percentile Rank during the entire Performance Period (for the avoidance of doubt, payment of the vested portion of the Cash Retention Bonus shall occur following the completion of the Performance Period, as provided below in, and in accordance with, Section 8); provided however, that notwithstanding the foregoing, no Cash Retention Bonus shall be payable to the undersigned following a termination of Continuous Service without Cause if, prior to the Payment Date (as defined in Section 8), the Board determines that grounds to terminate the undersigned’s Continuous Service for Cause existed at the time of such termination of Continuous Service, and (iii) upon the consummation of a Covered Transaction, the undersigned shall vest in full in the right to receive the Cash Retention Bonus with the amount payable to be based on the actual Relative TSR Percentile Rank as of the date of such Covered Transaction.  In respect of (iii), total shareholder return shall be calculated (x) for the Company, along with cumulative compounded reinvested dividends, by using (1), in the case of a stock sale or merger, the value per Share received or to be received in any delayed payment structure,

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earnout or similar arrangement by the Company’s stockholders in such Covered Transaction, (2) in the case of an asset sale, the value per Share received or to be received in any delayed payment structure, earnout or similar arrangement by the Company’s stockholders in such Covered Transaction adjusted upward to reflect a sale of 100% of the Company’s assets (as determined by the Compensation Committee in its sole discretion), (3) in the case of a majority board shift, the closing per share price on the date of such Covered Transaction and (4) in the case of a Covered Transaction pursuant to prong (v) of the definition below or any other Covered Transaction not described in (1) – (3), the closing price or other value per Share on the date of such Covered Transaction and all other value received or to be received in any delayed payment structure, earnout or similar arrangement by the Company’s stockholders in such Covered Transaction, in each case as determined by the Compensation Committee in its discretion and (y) for each member of the Peer Group, by calculating such Peer Group member’s actual TSR during the period between the Grant Date and the date of such Covered Transaction. The provisions of any employment, retention or separation agreement between the undersigned and the Company shall not apply to this Award, notwithstanding anything to the contrary in any other agreement between the undersigned and the Company.

For purposes of the Award, “Cause” means (i) engaging in (A) willful or gross misconduct or (B) willful or gross neglect; (ii) failing to adhere to the lawful written directions of superiors or the Board or to the materially significant written policies and practices of the Company or its affiliates (in each case, with circumstances giving rise to “Cause” to exist only following (x) a written warning from the Board or the undersigned’s direct supervisor, delivered to the undersigned following the Board or the undersigned’s direct supervisor becoming aware of such conduct and (ii) the undersigned failing to cure such conduct within forty-five (45) days following the delivery of such written warning); (iii) the commission and conviction of a felony or a crime involving any of the following: material moral turpitude, material dishonesty, material breach of trust or unethical business conduct; or the commission and conviction of a material crime involving the Company or its affiliates; (iv) conviction of material fraud, misappropriation or embezzlement; (v) a material breach of the undersigned’s employment agreement (if any) with the Company or its affiliates; (vi) acts or omissions constituting a material failure to perform substantially and adequately the duties assigned to the undersigned; (vii) any illegal act detrimental to the Company or its affiliates; or (viii) repeated failure to devote substantially all of the undersigned’s business time and efforts to the Company.

For purposes of the Award, “Covered Transaction” means any of (i) a consolidation, merger, stock sale, reverse merger or similar transaction or series of related transactions which results in the acquisition of all or substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company’s assets, (iii) a dissolution or liquidation of the Company, (iv) following such time as the Company has a class of equity securities listed on a national securities exchange or quoted on an inter-dealer quotation system, a change in the membership of the Board for any reason such that the individuals who, as of the Grant Date, constitute the Board (the “Continuing Directors”) cease for any reason to constitute at least a majority of the Board (a “Board Change”); provided, however, that any individual becoming a director after the Grant Date whose election or nomination for election by the Company’s shareholders was approved by a vote of at least a majority of the Continuing Directors will be considered as though such individual were a Continuing Director, but excluding for this purpose any such individual whose initial assumption of office occurs as a result of either an actual or

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threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended) or other actual or threatened solicitation of proxies or consents by or on behalf of any person or entity other than the Board or (v) a change in the management structure of the Company from an internally managed business development company to an externally managed business development company pursuant to which the Company enters into an investment advisory agreement with a third-party advisor. Where a Covered Transaction involves a tender offer that is reasonably expected to be followed by a merger described in clause (i) (as determined by the Board), the Covered Transaction shall be deemed to have occurred upon consummation of the tender offer.

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[SIGNATURE PAGE FOLLOWS]

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Very truly yours,

HERCULES CAPITAL, INC.

By_______________________________

Manuel Henriquez

Chief Executive Officer

Dated:  __________________

The foregoing Cash Retention Bonus
Award Agreement is hereby agreed to and accepted:

By_______________________________

      [Signature of Grantee]

_______________________________

Print Name

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Schedule A

Peer Group Members

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