PERFORMANCE SHARE UNIT AWARD AGREEMENT
Exhibit 10.21
This PERFORMANCE SHARE UNIT AWARD AGREEMENT (this “Agreement”), executed by the parties on the
dates indicated on the signature page, is by and between Superior Energy Services, Inc.
(“Superior”) and (the “Participant”).
WHEREAS, Superior has adopted its 2005 Stock Incentive Plan (the “Plan”), to attract, retain
and motivate officers and key employees; and
WHEREAS, the Compensation Committee (the “Committee”) believes that entering into this
Agreement with the Participant is consistent with the purpose for which the Plan was adopted.
NOW, THEREFORE, in consideration of the services rendered by the Participant, the mutual
covenants hereinafter set forth and other good and valuable consideration, Superior and the
Participant hereby agree as follows:
Section 1. The Plan. The Plan, a copy of which has been made available to the
Participant, is incorporated by reference and made a part of this Agreement as if fully set forth
herein. This Agreement uses a number of defined terms that are defined in the Plan or in the body
of this Agreement. These defined terms are capitalized wherever they are used.
Section 2. Award.
(a) On , 20___, Superior granted to the Participant an Other Stock Based Award
consisting of___Performance Share Units (the “Units”), subject to the terms and conditions of this
Agreement.
(b) Depending on the Company’s achievement of the performance goals specified in Section 2(c)
during the period beginning January 1, 20___and ending December 31, 20___(the “Performance
Period”), the Participant shall be entitled to a payment equal to the value of the Units determined
pursuant to Section 2(d) if, except as otherwise provided in Section 3, he remains actively
employed with the Company on January 2, 20___.
(c) The amount paid with respect to the Units shall be based upon the Company’s achievement of
the following performance criteria as determined by the Committee: (i) return on invested capital
relative to the return on invested capital of the Company’s “Peer Group” listed on Schedule A
attached hereto (“Relative ROIC”); and (ii) the Company’s total shareholder return relative to the
total shareholder return of the Company’s “Peer Group” listed on Schedule A attached hereto
(“Relative TSR”) in accordance with the following matrix:
Relative ROIC
| Performance | ||||
| Performance Level Compared to Peer Group | Percentage(%) | |||
Threshold Target Maximum |
Below 40th Percentile 40th Percentile 60th Percentile 80th Percentile or above |
0 % 25 % 50 % 100 % |
||
Relative TSR
| Performance Level Compared to Peer Group | Performance Percentage(%) |
|||
Threshold Target Maximum |
Below 40th Percentile 40th Percentile 60th Percentile 80th Percentile or above |
0 % 25 % 50 % 100 % |
||
The Committee shall adjust the performance criteria to recognize special or non-recurring
situations or circumstances with respect to the Company or any other company in the peer group for
any year during the Performance Period arising from the acquisition or disposition of assets, costs
associated with exit or disposal activities or material impairments that are reported on a Form 8-K
filed with the Securities and Exchange Commission.
(d) The amount payable to the Participant pursuant to this Agreement shall be an amount equal
to the number of Units awarded to the Participant multiplied by the product of (i) $100 and (ii)
the sum of the Performance Percentages set forth above for the level of achievement of each of the
performance criteria set forth in Section 2(c). By way of example, if the Company reached the
40th percentile in Relative ROIC and the 60th percentile in Relative TSR, the
sum of the Performance Percentages would be 75% and the amount payable with respect to each Unit
would be $75. If Relative ROIC reached the 80th percentile but Relative TSR was below
the 40th percentile, the sum of the Performance Percentages would be 100% and the amount
payable with respect to each Unit would be $100. Performance results between the threshold, target
and maximum levels will be calculated on a pro rata basis. The maximum payout for each Unit is
$200.
(e) Except as provided in Section 3(b), payment of amounts due under the Units shall be made
on March 30, 20___. Any amount paid in respect of the Units shall be payable in such combination of
cash and Common Stock (with the Common Stock valued at its Fair Market Value) as determined by the
Committee in its sole discretion; provided, however, that no more than fifty percent (50%) of the
payment may be made in Common Stock. Prior to any payments under this Agreement, the Committee
shall certify in writing, by resolution or otherwise, the amount to be paid in respect of the Units
as a result of the achievement of Relative ROIC and Relative TSR. The Committee shall not increase
the amount payable to the Participant to an amount that is higher than the amount payable under the
formula described herein.
Section 3. Early Termination; Change of Control.
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(a) In the event of the Participant’s termination of employment prior to the end of the
Performance Period due to (i) any reason other than voluntary termination by the Participant (other
than as permitted under Section 3(a)(iv)) or cause as determined by the Committee in its sole
discretion, (ii) death, (iii) disability (within the meaning of Section 22(e)(3) of the Internal
Revenue Code of 1986, as amended (the “Code”)), or (iv) Retirement (as hereinafter defined), the
Participant shall forfeit as of the date of termination a number of Units determined by multiplying
the number of Units by a fraction, the numerator of which is the number of full months following
the date of termination, death, disability or retirement to the end of the Performance Period and
the denominator of which is thirty six (36). The Committee shall determine the number of Units
forfeited and the amount to be paid to the Participant or his beneficiary in accordance with
Section 2(e) based on the performance criteria for the entire Performance Period. As used herein,
“Retirement” is defined as the voluntary termination of employment at or after age 55 with at least
five years of service and the Participant not, at any time on or before March 30, 20___, accepting
employment with, acquiring a 5% or more equity or participation interest in, serving as a
consultant, advisor, director or agent of, directly or indirectly soliciting or recruiting any
employee of the Company who was employed at any time during Participant’s service with the Company,
or otherwise assisting in any other capacity or manner any company or enterprise that is directly
or indirectly in competition with or acting against the interests of the Company or any of its
lines of business, except for any service or assistance that is provided at the request or with the
written permission of Superior.
(b) In the event of a Change of Control, the Participant shall be deemed to have achieved the
maximum level for Relative ROIC and Relative TSR in accordance with the terms of the Plan. Payment
shall be made to the Participant as soon as administratively practical following the Change of
Control, but in no event later than 2.5 months following the end of the year in the such Change of
Control occurs. Notwithstanding the foregoing, if the Change of Control does not qualify as a
“change in control event” under Section 409A of the Code, and any regulations or guidance
promulgated thereunder, then payment shall be made at the time specified in Section 2(e).
Section 4. Miscellaneous.
(a) Participant understands and acknowledges that he is one of a limited number of employees
of the Company who have been selected to receive grants of Units and that the grant is considered
confidential information. Participant hereby covenants and agrees not to disclose the award of
Units pursuant to this Agreement to any other person except (i) Participant’s immediate family and
legal or financial advisors who agree to maintain the confidentiality of this Agreement, (ii) as
required in connection with the administration of this Agreement and the Plan as it relates to this
award or under applicable law, and (iii) to the extent the terms of this Agreement have been
publicly disclosed by the Company.
(b) The Company shall be entitled to require a cash payment by or on behalf of the Participant
and/or to deduct from other compensation payable to the Participant any sums required by federal,
state or local tax law to be withheld with respect to the award or payments in respect of any Units
or the issuance of Common Stock. Alternatively, the Participant may irrevocably elect, in such
manner and at such time or times prior to any applicable tax date, as may be permitted by the
Committee, to have the Company withhold and reacquire Units or Common Stock to satisfy any
withholding obligations of the Company. Any election to have
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Units or Common Stock so held back and reacquired shall be subject to the Committee’s
approval.
(c) The authority to manage and control the operation and administration of this Agreement
shall be vested in the Committee, and the Committee shall have all powers with respect to this
Agreement as it has with respect to the Plan. Any interpretation of this Agreement by the Committee
and any decision made by it with respect to this Agreement shall be final and binding on all
persons.
(d) Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement
shall be subject to the terms of the Plan, and this Agreement is subject to all interpretations,
amendments, rules and regulations promulgated by the Committee from time to time pursuant to the
Plan.
(e) This Agreement shall be construed and interpreted to comply with Section 409A of the
Internal Revenue Code of 1986, as amended. Superior reserves the right to amend this Agreement to
the extent it reasonably determines is necessary in order to preserve the intended tax consequences
of the Units in light of Section 409A and any regulations or other guidance promulgated thereunder.
Neither the Company nor the members of the Committee shall be liable for any determination or
action taken or made with respect to this Agreement or the Units granted thereunder.
(f) Each notice relating to this Agreement shall be in writing and delivered in person or by
mail to Superior at its office, 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000, to the
attention of the Secretary or at such other address as Superior may specify in writing to the
Participant by a notice delivered in accordance with this Section 4(f). All notices to the
Participant shall be delivered to the Participant’s address specified below or at such other
address as the Participant may specify in writing to the Secretary by a notice delivered in
accordance with this Section 4(f).
(g) Neither this Agreement nor the rights of Participant hereunder shall be transferable by
the Participant during his life other than by will or pursuant to applicable laws of descent and
distribution. No rights or privileges of the Participant in connection herewith shall be
transferred, assigned, pledged or hypothecated by Participant or by any other person in any way,
whether by operation of law, or otherwise, and shall not be subject to execution, attachment,
garnishment or similar process. In the event of any such occurrence, this Agreement shall
automatically be terminated and shall thereafter be null and void.
(h) Nothing in this Agreement shall confer upon the Participant any right to continue in the
employment of the Company, or to interfere in any way with the right of the Company to terminate
the Participant’s employment relationship with the Company at any time.
(i) This Agreement shall be governed by and construed in accordance with the laws of the State
of Louisiana.
(j) If any term or provision of this Agreement, shall at any time or to any extent be invalid,
illegal or unenforceable in any respect as written, the Participant and Superior intend for any
court construing this Agreement to modify or limit such provision so as to render it valid and
enforceable to the fullest extent allowed by law. Any such provision that is not susceptible of
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such reformation shall be ignored so as to not affect any other term or provision hereof, and
the remainder of this Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid, illegal or unenforceable, shall not
be affected thereby and each term and provision of this Agreement shall be valid and enforced to
the fullest extent permitted by law.
(k) The Plan and this Agreement contain the entire agreement between the parties with respect
to the subject matter contained herein and may not be modified, except as provided herein or in the
Plan or as it may be amended from time to time by a written document signed by each of the parties
hereto. Any oral or written agreements, representations, warranties, written inducements, or other
communications with respect to the subject matter contained herein made prior to the execution of
the Agreement shall be void and ineffective for all purposes.
(l) Superior’s obligation under the Plan and this Agreement is an unsecured and unfunded
promise to pay benefits that may be earned in the future. Superior shall have no obligation to set
aside, earmark or invest any fund or money with which to pay its obligations under this Agreement.
The Participant or any successor in interest shall be and remain a general creditor of Superior in
the same manner as any other creditor having a general claim for matured and unpaid compensation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered on the dates indicated below.
| SUPERIOR ENERGY SERVICES, INC. |
||||
| _______________, 20__ | By: | |||
| Name: | ||||
| Title: | ||||
| _______________, 20__ | ||||
| Participant | ||||
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Schedule A
PEER GROUP COMPANIES
BJ Services Co.
Helix Energy Solutions Group Inc.
Helmerich & Xxxxx Inc.
Oceaneering International, Inc.
Oil States International, Inc.
Pride International, Inc.
RPC, Inc.
Seacor Holdings, Inc.
Xxxxx International Inc.
Tetra Technologies, Inc.
Xxxxxxxxxxx International Inc.
Helix Energy Solutions Group Inc.
Helmerich & Xxxxx Inc.
Oceaneering International, Inc.
Oil States International, Inc.
Pride International, Inc.
RPC, Inc.
Seacor Holdings, Inc.
Xxxxx International Inc.
Tetra Technologies, Inc.
Xxxxxxxxxxx International Inc.
If any peer group company’s Relative ROIC or Relative TSR shall cease to be publicly available
(due to a business combination, receivership, bankruptcy or other event) or if any such company is
no longer publicly held, the Committee shall exclude that company from the peer group and, in its
sole discretion, substitute another comparable company.
A-1
