Exhibit 10.21
PERFORMANCE SHARE UNIT AWARD AGREEMENT
     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:

 

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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, 601 Poydras Street,
Suite 2400, New Orleans, LA 70130, 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 & Payne Inc.
Oceaneering International, Inc.
Oil States International, Inc.
Pride International, Inc.
RPC, Inc.
Seacor Holdings, Inc.
Smith International Inc.
Tetra Technologies, Inc.
Weatherford 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.

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