Document:

exv10w1

 

Exhibit 10.1

PERFORMANCE SHARE UNIT AWARD AGREEMENT

     This PERFORMANCE SHARE UNIT AWARD AGREEMENT (this “Agreement”) is dated and effective as of
                    , 2006, 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) Superior hereby grants 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, 2006 and ending December 31, 2008 (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, 2009.

     (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	%

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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 31, 2009. 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.

     (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) permanent and total disability as determined by the Committee in its
sole discretion, 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

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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 31, 2009, 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.

     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 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

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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, 1105 Peters Road, Harvey, LA 70058, 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
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

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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 day and year first above written.

	 	 	 	 	 	 	 
	 	 	Superior Energy Services, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	[Insert Name]	 	 
	 

	 	 	 	Participant	 	 
	 
	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

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Schedule A

PEER GROUP COMPANIES

	 	 	 	 	 
	 

	 	BJ Services Co.
	 	 
	 

	 	Cal Dive International, Inc.	 	 
	 

	 	Helmerich & Payne	 	 
	 

	 	Oceaneering International	 	 
	 

	 	Oil States International, Inc.	 	 
	 

	 	Pride International, Inc.	 	 
	 

	 	RPC, Inc.	 	 
	 

	 	Seacor Holdings, Inc.	 	 
	 

	 	Smith International Inc.	 	 
	 

	 	Tetra Technologies, Inc.	 	 
	 

	 	Weatherford International Inc.	 	 
	 

	 	W-H Energy Services, 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-1exv10w2

 

Exhibit 10.2

STOCK OPTION AGREEMENT

     THIS AGREEMENT is dated as of                                         , 2006, by and between Superior Energy Services, Inc.
(“Superior”), and                     (“Optionee”).

     WHEREAS Optionee is a key employee of Superior or one of its subsidiaries (collectively, the
“Company”) and Superior considers it desirable and in its best interest that Optionee be given an
inducement to acquire a proprietary interest in the Company and an added incentive to advance the
interests of the Company by possessing an option to purchase shares of the common stock of
Superior, $.001 par value per share (the “Common Stock”), in accordance with the Superior Energy
Services, Inc. 2005 Stock Incentive Plan (the “Plan”).

     NOW, THEREFORE, in consideration of the premises, it is agreed by and between the parties as
follows:

1.

GRANT OF OPTION

     Superior hereby grants to Optionee effective February 23, 2006 (the “Date of Grant”), the
right, privilege and option to purchase ___shares of Common Stock (the “Option”) at an exercise
price of $      per share (the “Exercise Price”). The Option shall be exercisable at the time
specified in Article II below. The Option is a non-qualified stock option and shall not be treated
as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).

2.

TIME OF EXERCISE

     2.1 Subject to the provisions of the Plan and the other provisions of this Agreement, the
Option shall vest in equal annual installments on the anniversary date of the Date of Grant for
three consecutive years. The Option shall expire and may not be exercised later than the tenth
anniversary of the Date of Grant.

     2.2 Upon the termination of Optionee’s employment with the Company, any portion of the Option
that has not yet become exercisable shall terminate immediately.

     2.3 (a) Except as provided in Section 2.3(b), if Optionee’s employment with the Company is
terminated, other than as a result of death, disability, Cause or retirement on or after reaching
age 55 with five years of service, the Option must be exercised, to the extent exercisable at the
time of termination of employment, within 30 days of the date on which Optionee ceases to be an
employee, but in no event later than the tenth anniversary of the Date of Grant.

          (b) If there has been a Change of Control (as defined in the Plan) of Superior, (i) if the
Option remains outstanding after the Change of Control, either as a right to purchase Common Stock
or as a right to purchase that number and class of shares of stock or other securities or property
(including without limitation, cash) to which the Optionee would have

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been entitled if, immediately prior to the Change of Control, the Optionee had been the record
owner of the number of shares of Common Stock then covered by the Option and (ii) if the Optionee’s
employment is terminated by the Company other than for Cause within a one-year period following the
Change of Control, then the Option must be exercised within three years following the date of
termination of employment, but in no event later than the tenth anniversary of the Date of Grant.

          (c) “Cause” for termination of employment shall be deemed to exist upon either (i) a final
determination is made in accordance with the terms of Optionee’s employment agreement, if any, with
the Company that the Optionee’s employment has been terminated for “cause” within the meaning of
the employment agreement or (ii), if the Optionee is not subject to an employment agreement: (A)
failure to abide by the Company’s rules and regulations governing the transaction of its business,
including without limitation, its Code of Business Ethics and Conduct; (B) inattention to duties,
or the commission of acts within employment with the Company amounting to negligence or misconduct;
(C) misappropriation of funds or property of the Company or committing any fraud against the
Company or against any other person or entity in the course of employment with the Company; (D)
misappropriation of any corporate opportunity, or otherwise obtaining personal profit from any
transaction which is adverse to the interests of the Company or to the benefits of which the
Company is entitled; or (E) the commission of a felony or other crime involving moral turpitude.

     2.4 If Optionee’s employment by the Company is terminated for Cause, the Option shall
terminate in full immediately, whether or not exercisable at the time of termination of employment.

     2.5 If Optionee ceases to be an employee of the Company because of disability within the
meaning of Section 22(e)(3) of the Code or retirement, as described in Section 2.3(a), the Option
must be exercised, to the extent exercisable at the time of termination of employment, within one
year from the date on which Optionee ceases to be an employee, but in no event later than the tenth
anniversary of the Date of Grant.

     2.6 In the event of Optionee’s death, the Option must be exercised by his estate, or by the
person to whom such right devolves from him by reason of his death, to the extent exercisable at
the time of death, within one year from the date of death, but in no event later than the tenth
anniversary of the Date of Grant.

3.

FORFEITURE OF OPTION AND OPTION GAIN

     If at any time during Optionee’s employment by the Company or within 36 months after
termination of employment, Optionee engages in any activity in competition with any activity of the
Company, or inimical, contrary or harmful to the interests of the Company, including but not
limited to:

     (a) conduct relating to Optionee’s employment for which either criminal or civil penalties
against Optionee may be sought;

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     (b) conduct or activity that results in termination of Optionee’s employment for Cause;

     (c) violation of Company policies, including, without limitation, the Company’s Code of
Business Ethics and Conduct;

     (d) 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 Optionee’s tenure 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 (a “competitor”), except for (i) any isolated, sporadic accommodation or
assistance provided to a competitor, at its request, by Optionee during Optionee’s tenure with the
Company, but only if provided in the good faith and reasonable belief that such action would
benefit the Company by promoting good business relations with the competitor and would not harm the
Company’s interests in any substantial manner or (ii) any other service or assistance that is
provided at the request or with the written permission of the Company;

     (e) disclosing or misusing any confidential information or material concerning the Company; or

     (f) making any statement or disclosing any information to any customers, suppliers, lessors,
lessees, licensors, licensees, regulators, employees or others with whom the Company engages in
business that is defamatory or derogatory with respect to the business, operations, technology,
management, or other employees of the Company, or taking any other action that could reasonably be
expected to injure the Company in its business relationships with any of the foregoing parties or
result in any other detrimental effect on the Company; then the Option shall terminate without any
payment to Optionee effective the date on which Optionee engages in such activity, unless
terminated sooner by operation of another term or condition of this Agreement or the Plan, and
Optionee shall pay in cash to the Company, without interest, any option gain realized by Optionee
from exercising all or a portion of the Option during the period beginning one year prior to
termination of employment (or one year prior to the date Optionee first engages in such activity if
no termination occurs) and ending on the date on which the Option terminates. For purposes hereof,
“option gain” shall mean the difference between the closing market price of the Common Stock on the
date of exercise minus the exercise price, multiplied by the number of shares purchased.

4.

METHOD OF EXERCISE OF OPTION

     Optionee may exercise all or a portion of the Option by delivering to the Company a signed
written notice of his intention to exercise the Option, specifying therein the number of shares to
be purchased. Upon receiving such notice, and after the Company has received payment of the
exercise price as provided in the Plan, the appropriate officer of the Company shall cause the
transfer of title of the shares purchased to Optionee on the Company’s stock records and cause to
be issued to Optionee a stock certificate for the number of shares being

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acquired. Optionee shall not have any rights as a stockholder until the stock certificate is
issued to him.

5.

NO CONTRACT OF EMPLOYMENT INTENDED

     Nothing in this Agreement shall confer upon Optionee any right to continue in the employ of
the Company or any of its subsidiaries, or to interfere in any way with the right of the Company or
any of its subsidiaries to terminate Optionee’s employment relationship with the Company at any
time.

6.

BINDING EFFECT AND SUCCESSORS

     6.1 This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, executors, administrators and successors.

     6.2 If in connection with a Change of Control, the Option is assumed by a successor to the
Company, then, as used herein, “Company” shall include any successor to the Company’s business and
assets that assumes and agrees to perform this Agreement.

7.

NON-TRANSFERABILITY

     The Option may not be transferred, assigned, pledged or hypothecated in any manner, by
operation of law or otherwise, other than by will or by the laws of descent and distribution and
shall not be subject to execution, attachment or similar process.

8.

INCONSISTENT PROVISIONS

     The Option is subject to the provisions of the Plan as in effect on the date hereof and as it
may be amended. In the event any provision of this Agreement conflicts with such a provision of the
Plan, the Plan provision shall control.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first above written.

	 	 	 	 	 	 	 
	 	 	SUPERIOR ENERGY SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Optionee	 	 

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