Document:

exv10w3

Exhibit 10.3

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 <<Participant Name>> (the “Participant”).

     WHEREAS, Superior has adopted its 2009 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 <<Grant Date>>, Superior granted to the Participant an Other Stock Based
Award consisting of <<Awards Granted>> 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, 2010 and ending December 31, 2012 (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, 2013.

     (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(%)
	 
	 	Below 40th Percentile	 	 	0	%
	Threshold
	 	40th Percentile	 	 	25	%
	Target
	 	60th Percentile	 	 	50	%
	Maximum
	 	80th Percentile or above	 	 	100	%

Relative TSR

	 	 	 	 	 	 	 
	 	 	 	 	Performance
	Performance Level Compared to Peer Group	 	Percentage(%)
	 
	 	Below 40th Percentile	 	 	0	%
	Threshold
	 	40th Percentile	 	 	25	%
	Target
	 	60th Percentile	 	 	50	%
	Maximum
	 	80th Percentile or above	 	 	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 29, 2013. 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.

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     Section 3. Early Termination; Change of Control.

     (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 29, 2013, 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) and Section 4(m).

     (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, including by electronic means as provided in Section 4(m). 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.

     (m) Superior may, in its sole discretion, deliver any documents related to the Participant’s
current or future participation in the Plan by electronic means or request your consent to
participate in the Plan by electronic means. By accepting the terms of this Agreement, the
Participant hereby consents to receive such documents by electronic delivery and agrees to
participate in the Plan through an on-line or electronic system established and maintained by
Superior or a third party designated by Superior.

     (n) The Participant must expressly accept the terms and conditions of this Agreement by
electronically accepting this Agreement in a timely manner. If the Participant does not accept the
terms of this Agreement, this award of Units is subject to cancellation.

* * * * * * * * * * * * *

     By clicking the “Accept” button, the Participant represents that he or she is familiar with
the terms and provisions of the Plan, and hereby accepts this Agreement subject to all of the terms
and provisions thereof. The Participant has reviewed the Plan and this Agreement in their entirety
and fully understands all provisions of this Agreement. The Participant agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee upon any questions
arising under the Plan or this Agreement.

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Schedule A

PEER GROUP COMPANIES

Baker Hughes Incorporated

Basic Energy Services Inc.

Cameron International Corporation

Complete Production Services, Inc.

Global Industries, Ltd.

Helix Energy Solutions Group Inc.

Hercules Offshore, Inc.

Key Energy Services, Inc.

National Oilwell Varco, Inc.

Oceaneering International, Inc.

Oil States International, Inc.

RPC, Inc.

Smith International Inc

Superior Well Services, 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.

PLEASE PRINT AND KEEP A COPY FOR YOUR RECORDS

A-1Exhibit 10.1

Exhibit 10.1

LENNOX INTERNATIONAL INC.

DIRECTORS’ RETIREMENT PLAN

(As Amended and Restated as of January 1, 2010)

THIS DIRECTORS’ RETIREMENT PLAN, made and executed in Richardson, Texas, by Lennox
International Inc., a Delaware corporation (the “Company”),

WITNESSETH THAT:

WHEREAS, effective as of January 1, 1988, Lennox International Inc., an Iowa corporation,
established an unfunded retirement plan known as the Lennox International Inc. Directors’
Retirement Plan (the “Plan”) to provide retirement benefits to certain directors of said Lennox
International Inc.; and

WHEREAS, the Company now desires to amend and restate the Plan to update it for tax law
compliance and to make certain other changes;

NOW, THEREFORE, pursuant to Section 3.1 thereof, the Plan is hereby amended and restated in
its entirety to read as follows:

Article 1. Definitions

	1.1	 	Definitions

	 	 	 
	 

	 	a. “Board of Directors” means the Board of Directors of the Company.
	 
	 	 
	 

	 	b. “Company” means (i) Lennox International Inc., an Iowa corporation, for periods
of time prior to its merger into Lennox International Inc., a Delaware corporation, and
(ii) thereafter Lennox International Inc., a Delaware corporation.
	 
	 	 
	 

	 	c. “Compensation” means one-twelfth of the sum of (i) the annual amount of the
retainer fee being paid in cash by the Company to a Director for services rendered
immediately prior to his/her Severance Date minus (ii) $25,000, where such cash amount
shall be determined prior to any reduction resulting from an election by the Director to be
paid some portion of the retainer fee in a form other than cash.
	 
	 	 
	 

	 	d. “Director” means an individual who is a member of the Board of Directors on or
after January 1, 1988, and prior to January 1, 1998.
	 
	 	 
	 

	 	e. “Retirement Benefit” means the retirement income provided to Directors in
accordance with the provisions of Article 2 of this Plan.

 

 

 

	 	 	 
	 

	 	f. “Retirement Date” means the later of a Director’s Separation from Service or the
Director’s attainment of age 60.
	 
	 	 
	 

	 	g. “Separation from Service” means with respect to a Director, the Director’s
separation from service (within the meaning of Section 409A of the Internal Revenue Code
and the regulations and other guidance issued thereunder) with the group of service
recipients that includes the Company and each Affiliated Company (as hereinafter defined).
A Director’s Separation from Service does not occur so long as the Director continues to
provide services to the Company or any Affiliated Company as a director, an employee or an
independent contractor. For purposes of this definition, “Affiliated Company” shall mean
any incorporated or unincorporated trade or business or other entity or person, other than
the Company, that along with the Company is considered a single employer under Section
414(b) or Section 414(c) of the Internal Revenue Code.
	 
	 	 
	 

	 	h. “Severance Date” means the date a Director’s service on the Board of Directors
terminates for any reason.
	 
	 	 
	 

	 	i. “Specified Employee” means a specified employee within the meaning of Section
409A(a)(2) of the Internal Revenue Code and the regulations and other guidance issued
thereunder. Specified Employees shall be identified by the Compensation and Human
Resources Committee of the Board of Directors.
	 
	 	 
	 

	 	j. “Year of Service” means a period of 12 consecutive months of service as a
Director measured from the anniversary of election as a Director. In the event a Director
shall resign from the Board of Directors for the purpose of assuming a full-time management
position with the Company, any service with the Company subsequent to such resignation
shall be counted as service as a Director for purposes of “Vesting”, as defined in Section
2.1 under the Plan; provided, however, that said Director shall not be entitled to receive
any retirement benefit under the terms of the Plan until the active employment of said
Director with the Company has terminated.

Article 2. Retirement Benefits

	2.1	 	Vesting. A Director shall be entitled to a Retirement Benefit upon completing five
Years of Service and attainment of age 60 while still a Director or upon termination of
service as a Director after December 31, 1997, for any reason other than cause or voluntary
resignation. For purposes of this Article 2, a Director’s failure to seek reelection while
eligible for reelection shall be treated as a voluntary resignation.
	 
	2.2	 	Retirement Benefit. The Company shall pay to a Director who is entitled to a
Retirement Benefit under Section 2.1, a monthly Retirement Benefit determined as follows:

 

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	 	a.	 	In the case of any such Director whose service as a Director terminates after
December 31, 1997, for any reason other than cause or voluntary resignation, a monthly
Retirement Benefit equal to 100% of the Director’s Compensation.
	 
	 	b.	 	In the case of any other such Director, a monthly Retirement Benefit equal to
100% of the Director’s Compensation but reduced by 20% for each year (if any) by which
his/her total Years of Service on his/her Severance Date is less than ten.

	 	 	A Director’s monthly Retirement Benefit shall commence in payment on the first day of the
first month immediately following the month in which the Director’s Retirement Date occurs
and continue thereafter during the lifetime of such Director; provided, however, that if
the Director is a Specified Employee as of the date of his/her Separation from Service,
then any payments that would be made to the Director during the first six months following
his/her Separation from Service shall be accumulated and paid on the first day of the
seventh month after the date of his/her Separation from Service (or if earlier, the first
day of the month after his/her death). If the Director dies while payments are being
accumulated pursuant to the preceding sentence, the accumulated payments shall be paid to
his/her surviving spouse, if any, or if none, to his/her estate.

Article 3. Miscellaneous Provisions

	3.1	 	Amendment and Termination. The Board of Directors shall have the authority to amend
or terminate this Plan in whole or in part at any time and from time to time; provided,
however, that the Retirement Benefit of any Director entitled thereto under Section 2.1 on or
before the date of such Board action shall not be adversely affected by any such amendment or
termination.
	 
	3.2	 	Plan Administration. The general administration of this Plan shall be the
responsibility of the Company. The Board of Directors shall be authorized to construe and
interpret all of the provisions of this Plan, to adopt rules and practices concerning the
administration of the same and to make any determinations necessary hereunder, which shall be
binding and conclusive on all parties. The Plan is intended to provide compensation and
benefits that are not subject to the tax imposed under Section 409A of the Internal Revenue
Code and shall be interpreted and administered to the extent possible in accordance with such
intent.
	 
	3.3	 	Continued Retention. This Plan shall not be construed as a promise to retain any
Director on the Board of Directors.
	 
	3.4	 	Non-Alienation of Benefits. No benefit provided under this Plan may be assigned,
pledged, mortgaged, or hypothecated, and no such benefit shall be subject to legal process or
attachment for the payment of claims of any creditor of the Director.

 

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	3.5	 	No Funding Obligation. This Plan is unfunded and the Retirement Benefits payable
hereunder shall be paid by the Company out of its general assets. The Company may make such
arrangements for its own benefit as it desires to provide for the payment of any benefits
hereunder, and no person shall have any claim against a particular fund or asset owned by the
Company or in which it has an interest to secure the payment of the Company’s obligations
hereunder. A Director entitled to a Retirement Benefit under this Plan shall have no greater
rights than those of an unsecured general creditor of the Company.
	 
	3.6	 	Governing Law. The provisions of this Plan shall be construed according to the laws
of the State of Texas.

IN WITNESS WHEREOF, this amended and restated Plan has been executed this 11th day
of December, 2009, to be effective as of January 1, 2010.

	 	 	 	 	 
	 	LENNOX INTERNATIONAL INC.

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 

 

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