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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrantþ
Filed by a Party other than the Registranto
Check the appropriate box:
o | Preliminary Proxy Statement | |
o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ | Definitive Proxy Statement | |
o | Definitive Additional Materials | |
o | Soliciting Material Pursuant too 240.14a-11(c) oro 240.14a-12 |
Superior Energy Services, Inc.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ | No Fee Required | |||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: | |||
2) | Aggregate number of securities to which transaction applies: | |||
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | |||
4) | Proposed maximum aggregate value of transaction: | |||
5) | Total Fee Paid: |
o | Fee paid previously with preliminary materials. | |||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: | |||
2) | Form, Schedule or Registration Statement No.: | |||
3) | Filing Party: | |||
4) | Date Filed: |
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1. elect directors; | |
2. approve the 2005 Stock Incentive Plan; | |
3. ratify the appointment of KPMG LLP as our registered public accounting firm for 2005; and | |
4. consider any other business that may properly come before the meeting. |
By Order of the Board of Directors | |
Greg Rosenstein | |
Secretary |
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Q: | Why am I receiving this proxy statement? |
A: | Our Board of Directors is soliciting your proxy to vote at the annual meeting because you owned shares of our common stock at the close of business on March 31, 2005, the record date for the meeting, and are entitled to vote at the meeting. The proxy statement, along with a proxy card or a voting instruction card, is being mailed to stockholders beginning April 18, 2005. The proxy statement summarizes the information you need to know to vote at the annual meeting. You do not need to attend the annual meeting to vote your shares. |
Q: | What is the purpose of the annual meeting? |
A: | At the annual meeting, our stockholders will be asked to elect our directors, approve our proposed 2005 Stock Incentive Plan (the “Incentive Plan”), ratify the appointment of KPMG LLP as our registered independent public accounting firm for 2005 and consider any other matter that properly comes before the meeting. |
Q: | When and where will the meeting be held? |
A: | The meeting will be held on Wednesday, May 25, 2005, 12:00 p.m., at 201 St. Charles Avenue, 52nd Floor, New Orleans, Louisiana 70170. |
Q: | Who is soliciting my proxy? |
A: | Our Board of Directors is soliciting your vote for our 2005 annual meeting of stockholders. By completing and returning the proxy card or voting instruction card, you are authorizing the proxy holder to vote your shares at our annual meeting as you have instructed him on the card. |
Q: | How many votes do I have? |
A: | You have one vote for every share of our common stock that you owned on the record date. |
Q: | How many votes can be cast by all stockholders? |
A: | As of the record date, we had 77,649,497 shares of common stock outstanding. |
Q: | How many shares must be present to hold the meeting? |
A: | Our By-laws provide that a majority of the outstanding shares of stock entitled to vote constitutes a quorum at a meeting of our stockholders. As of the record date 38,824,749 shares constitute a majority of our outstanding stock entitled to vote at the meeting. Shares that are voted, broker non-votes, and shares for which voting authority is withheld are treated as being present at the annual meeting for purposes of determining whether quorum is present. A broker non-vote occurs when a nominee holding common stock for a beneficial owner does not vote on a particular matter because the nominee does not have discretionary voting power with respect to that item and has not received voting instructions from the beneficial owner. |
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Q: | What is the difference between holding shares as a stockholder of record and as a beneficial owner? |
A: | If your shares are registered directly in your name with our transfer agent, American Stock Transfer and Trust Company, you are considered, with respect to those shares, the “stockholder of record.” The proxy statement and proxy card have been directly sent to you by us. |
If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial owner” of shares held in “street name.” The proxy statement has been forwarded to you by your broker, bank or nominee who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker, bank or nominee how to vote your shares by using the voting instruction card included in the mailing or by following their instructions for voting. |
Q: | Can my shares be voted if I don’t return the proxy card and do not attend the meeting in person? |
A: | If you hold shares in street name and you do not provide voting instructions to your broker, bank or nominee your shares will not be voted on any proposal on which your broker does not have discretionary authority to vote. In that case, your shares will be considered present at the meeting for purposes of determining a quorum, but will not be considered to be represented at the meeting for purposes of calculating the vote with respect to such proposal. Under New York Stock Exchange rules, brokers generally have discretionary authority to vote without instructions from beneficial owners on the election of directors and the ratification of the appointment of our independent public accounting firm but do not have discretionary authority to vote on any proposed equity compensation plan, such as our proposed Incentive Plan. |
If you don’t vote the shares held in your name, your shares will not be voted. |
Q: | What vote is required to approve each item? |
A: | Our By-laws provide that directors are elected by plurality vote, meaning that the nominees who receive the most votes will be elected directors. The Incentive Plan must be approved by a majority of the votes cast on the proposal. The appointment of KPMG LLP as our independent registered public accounting firm for 2005 must be ratified by the vote of a majority of the shares of common stock present in person or by proxy at the annual meeting. |
Withheld votes, abstentions and broker non-votes will have no effect on the voting calculations for the election of directors but will count as a vote against the ratification of the appointment of our independent registered public accounting firm. Withheld votes will have the effect of a vote against the adoption of the Incentive Plan, while abstentions and broker non-votes will have no effect on the voting calculations for the adoption of the Incentive Plan. |
Q: | How do I vote? |
A: | You may vote using any of the following methods: |
• | Proxy card or voting instruction card: Be sure to complete, sign and date the card and return it in the prepaid envelope. | |
• | In person at the annual meeting: All stockholders may vote in person at the annual meeting. You may also be represented by another person at the meeting by executing a proper proxy designating that person. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or nominee and present it to the inspectors of election with your ballot when you vote at the annual meeting. |
Q: | Can I change my vote? |
A: | Yes. Your proxy can be revoked or changed at any time before it is voted by notice in writing to our Secretary, by our timely receipt of another proxy with a later date or by voting in person at the meeting. |
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Q: | What if I don’t vote for a matter listed on my proxy card? |
A: | If you return the proxy card without indicating your vote for a director, your shares will be voted FOR each of the nominees listed on your card, if you return the proxy card without indicating your vote for the Incentive Plan, your shares will be voted FOR the approval of the Incentive Plan, and if you return the proxy card without indicating your vote for the ratification of the appointment of KPMG LLP as our independent registered public accounting firm, your shares will be voted FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm. |
Q: | Who pays for soliciting proxies? |
A: | We are paying for all costs of soliciting proxies. In addition to solicitations by mail, we have retained Georgeson Shareholder Communications, Inc. to aid in the solicitation of proxies at an estimated fee of $7,000. Our officers and employees may request the return of proxies by personal conversation or by telephone or telecopy. We are also requesting that banks, brokerage houses and other nominees or fiduciaries forward the soliciting material to their principals and that they obtain authorization for the execution of proxies. We will reimburse them for their expenses. |
Q: | Could other matters be decided at the meeting? |
A: | The Board does not expect to bring any other matter before the annual meeting, and it is not aware of any other matter that may be considered at the meeting. In addition, pursuant to our By-laws, the time has elapsed for any stockholder to properly bring a matter before the meeting. However, if any other matter does properly come before the meeting, the proxy holder will vote the proxies in his discretion. |
Q: | What happens if the meeting is postponed or adjourned? |
A: | Your proxy will still be good and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted. |
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Nominating and | ||||||||||
Audit | Compensation | Corporate Governance | ||||||||
E.E. Howard, III | E.L. Dawkins | E.L. Dawkins | ||||||||
R. A. Pattarozzi | R. A. Pattarozzi* | E.E. Howard, III* | ||||||||
J. L. Sullivan* | J. L. Sullivan | R. A. Pattarozzi | ||||||||
J. L. Sullivan |
* | Chairman of the committee |
Audit Committee |
Compensation Committee |
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Nominating and Corporate Governance Committee |
• | the name, age, business address and residential address of your proposed nominee; | |
• | his or her principal occupation or employment; | |
• | the number of shares of common stock beneficially owned by him or her; and | |
• | and any other information relating to your proposed nominee that would be required to be disclosed in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, had he or she been nominated by the Board of Directors. |
• | your name, age, business address and residential address; | |
• | the number of shares of our common stock that you beneficially own; | |
• | a representation that you intend to appear in person at the stockholders meeting to make the nomination; and | |
• | a description of all agreements, arrangements and understandings among you, any person acting in concert with you, your proposed nominee and any other person or persons (naming such person or persons), pursuant to which you submitted the name of your proposed nominee. |
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• | whether the potential nominee has experience and expertise that is relevant to our business, including any specialized business experience, technical expertise, or other specialized skills, and whether the potential nominee has knowledge regarding issues affecting us; | |
• | whether the potential nominee is independent, whether he or she is free of any conflict of interest or the appearance of any conflict of interest with our best interests and the best interests of our stockholders, and whether he or she is willing and able to represent the interests of all of our stockholders; and | |
• | any factor affecting the ability or willingness of the potential nominee to devote sufficient time to Board activities and to enhance his or her understanding of our business. |
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Amount and | |||||||||
Nature of | |||||||||
Beneficial | Percent | ||||||||
Name and Address of Beneficial Owner | Ownership | of Class | |||||||
Kotts Capital Holdings, Limited Partnership | 7,696,095 | 9.9 | % | ||||||
3737 Willowick Road | |||||||||
Houston, Texas 77019 |
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Amount and | ||||||||
Nature of | ||||||||
Beneficial | Percent | |||||||
Name of Beneficial Owner | Ownership(1) | of Class | ||||||
A. Patrick Bernard | 106,000 | * | ||||||
Kenneth Blanchard | 531,100 | (2) | * | |||||
Enoch Dawkins | 23,261 | (3) | * | |||||
James M. Funk | 1,000 | * | ||||||
Terence E. Hall | 1,796,437 | 2.21 | % | |||||
Ernest E. Howard | 5,485 | (3) | * | |||||
Gregory L. Miller | 125,000 | * | ||||||
Richard A. Pattarozzi | 36,411 | (3) | * | |||||
Justin L. Sullivan | 53,261 | (3) | * | |||||
Robert S. Taylor | 418,334 | * | ||||||
All directors, director nominees and executive officers as a group (10 persons) | 3,096,289 | 3.84 | % |
* | Less than 1%. |
(1) | Includes the number of shares subject to options that are exercisable by May 14, 2005, as follows: Mr. Blanchard (482,373); Mr. Dawkins (20,000); Mr. Hall (1,783,617); Mr. Pattarozzi (30,000); Mr. Sullivan (40,000); Mr. Taylor (418,334); Mr. Miller (125,000); and Mr. Bernard (105,000). |
(2) | Includes 19,593 shares held by Mr. Blanchard’s children and 15,067 shares held by Mr. Blanchard’s spouse, of which Mr. Blanchard is deemed to be the beneficial owner. |
(3) | Includes the number of shares the director has the right to receive through the grant of Restricted Stock Units, as follows: Mr. Dawkins (3,261); Mr. Pattarozzi (3,261); Mr. Sullivan (3,261); Mr. Howard (425). Each Restricted Stock Unit vests immediately upon grant, but the shares of common stock payable upon vesting will not be delivered to the director until he ceases to serve on our board of directors. |
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Long-Term | |||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||
Awards | |||||||||||||||||||||||||
Annual Compensation | Securities | ||||||||||||||||||||||||
Other Annual | Underlying | All Other | |||||||||||||||||||||||
Name and Position | Year | Salary | Bonus | Compensation(1) | Options/SARs | Compensation(2) | |||||||||||||||||||
Terence E. Hall | 2004 | $ | 450,000 | $ | 437,500 | — | (3) | 490,000 | $ | 11,261 | |||||||||||||||
Chairman, Chief | 2003 | 450,000 | 300,000 | — | (3) | — | 12,916 | ||||||||||||||||||
Executive Officer | 2002 | 451,620 | 300,000 | — | (3) | — | 11,382 | ||||||||||||||||||
Kenneth Blanchard | 2004 | $ | 248,423 | $ | 224,875 | — | 200,000 | $ | 11,386 | ||||||||||||||||
Chief Operating Officer, | 2003 | 210,000 | 125,000 | — | 70,000 | 12,547 | |||||||||||||||||||
President | 2002 | 211,113 | 105,000 | — | 65,000 | 11,022 | |||||||||||||||||||
Robert S. Taylor | 2004 | $ | 177,077 | $ | 178,500 | — | 150,000 | $ | 10,986 | ||||||||||||||||
Chief Financial Officer, | 2003 | 160,000 | 100,000 | — | 70,000 | 12,412 | |||||||||||||||||||
Executive Vice | 2002 | 160,000 | 80,000 | — | 55,000 | 10,806 | |||||||||||||||||||
President, Treasurer | |||||||||||||||||||||||||
Gregory L. Miller(4) | 2004 | $ | 200,000 | $ | 230,000 | — | 100,000 | $ | 5,474 | ||||||||||||||||
Executive Vice | 2003 | 138,940 | 50,000 | — | 25,000 | 2,878 | |||||||||||||||||||
President | |||||||||||||||||||||||||
A. Patrick Bernard(5) | 2004 | $ | 193,358 | $ | 113,750 | — | 100,000 | $ | 9,572 | ||||||||||||||||
Executive Vice | 2003 | 136,532 | 50,000 | — | 15,000 | 8,660 | |||||||||||||||||||
President | 2002 | 134,994 | 40,000 | — | — | 7,851 |
(1) | Perquisites and other personal benefits paid in any of the years presented did not exceed the lesser of $50,000 or 10% of salary and bonus for that year. |
(2) | Comprised of our matching contributions to the 401(k) plan, hospitalization and health insurance, disability and life insurance. |
(3) | Since January 1, 2002, Mr. Hall has been allowed to use the corporate airplane for personal travel. Mr. Hall reimburses us for his personal travel on the corporate airplane in an amount equal to the cost of a first class, nonrefundable ticket to his destination. Mr. Hall also reimburses us for any incidental expenses incurred during his personal travel, such as baggage handling fees at the airport and meals for the pilots. Mr. Hall reimbursed us approximately $13,546 for his personal use of the airplane during 2004. |
(4) | Mr. Miller was appointed as an executive officer in September 2004. He also serves as the President of our wholly-owned subsidiary, SPN Resources, LLC, which position he has held since April 2003. |
(5) | Mr. Bernard was appointed as an executive officer in September 2004. |
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Potential Realizable | ||||||||||||||||||||||||
Percent of | Value | |||||||||||||||||||||||
Total | at Assumed Annual Rates | |||||||||||||||||||||||
No. of Shares | Options | of Stock Appreciation | ||||||||||||||||||||||
Underlying | Granted to | Exercise | for Option Term(1) | |||||||||||||||||||||
Options | Employees | or Base | Expiration | |||||||||||||||||||||
Name | Granted | in 2004 | Price | Date | 5% | 10% | ||||||||||||||||||
Terence E. Hall | 490,000 | 32.9 | % | $ | 10.66 | 8/10/14 | 3,284,968 | 8,324,754 | ||||||||||||||||
Kenneth Blanchard | 200,000 | 13.4 | % | $ | 10.66 | 8/10/14 | 1,340,803 | 3,397,859 | ||||||||||||||||
Robert S. Taylor | 150,000 | 10.1 | % | $ | 10.66 | 8/10/14 | 1,005,603 | 2,548,394 | ||||||||||||||||
Gregory L. Miller | 100,000 | 6.7 | % | $ | 10.66 | 8/10/14 | 670,402 | 1,698,929 | ||||||||||||||||
A. Patrick Bernard | 100,000 | 6.7 | % | $ | 10.66 | 8/10/14 | 670,402 | 1,698,929 |
(1) | Appreciation has been calculated over the term of the options, beginning with the exercise price of each respective option. |
Number of Securities | Value of Unexercised | |||||||||||||||
Shares | Underlying Unexercised | In-the-Money Options | ||||||||||||||
Acquired on | Value | Options at Year End (#) | at Year End ($) | |||||||||||||
Exercise (#) | Realized ($) | Exercisable/Unexercisable | Exercisable/Unexercisable | |||||||||||||
Terence E. Hall | 45,000 | 96,288 | 1,827,617/0 | $13,360,510/$ 0 | ||||||||||||
Kenneth Blanchard | 107,000 | 491,087 | 724,040/68,333 | $ 5,086,065/$438,781 | ||||||||||||
Robert S. Taylor | — | — | 575,001/64,999 | $ 4,229,256/$418,944 | ||||||||||||
Gregory L. Miller | — | — | 112,500/12,500 | $ 533,875/$ 78,875 | ||||||||||||
A. Patrick Bernard | — | — | 105,000/10,000 | $ 502,800/$ 55,600 |
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THE AUDIT COMMITTEE | |
Justin L. Sullivan | |
Ernest E. Howard, III | |
Richard A. Pattarozzi |
Fiscal Year Ended | ||||||||
December 31, | ||||||||
2004 | 2003 | |||||||
Audit Fees(1) | $ | 815,135 | $ | 274,017 | ||||
Audit-Related Fees(2) | 55,050 | — | ||||||
Tax Fees(3) | 278,487 | 74,635 | ||||||
All Other Fees(4) | — | 14,100 |
(1) | Reflects fees for services rendered for the audits of our annual financial statements for the fiscal year indicated and reviews of the financial statements contained in our quarterly reports on Form 10-Q for that fiscal year. |
(2) | Reflects fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.” |
(3) | Reflects fees for professional services rendered for tax compliance, tax advice, and tax planning. |
(4) | Reflects fees for all other services not included in the figures above. KMPG did not perform any financial information systems design and implementation services for us in 2004. |
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• | rewards are linked to Company-wide individual performance; | |
• | the interest of the Company’s employees are aligned with those of its stockholders through potential stock ownership; and | |
• | compensation and benefits are set at market-competitive levels that enable the Company to attract, retain and motivate a talented work force which helps us maintain a critical advantage in our competitive market place. |
Base Salary |
Cash Incentive Bonuses |
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Long-Term Incentive Compensation |
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Compensation of the Chief Executive Officer |
Policy Regarding Section 162(m) of the Internal Revenue Code |
Compensation Committee Interlocks and Insider Participation |
THE COMPENSATION COMMITTEE | |
Enoch L. Dawkins | |
Richard A. Pattarozzi | |
Justin L. Sullivan |
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PERIOD ENDING | |||||||||||||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||
1999 | 2000 | 2001 | 2002 | 2003 | 2004 | ||||||||||||||||||||||||||
Superior | $ | 100 | $ | 170.40 | $ | 128.10 | $ | 121.50 | $ | 139.30 | $ | 228.30 | |||||||||||||||||||
S&P 500 | $ | 100 | $ | 91.20 | $ | 80.40 | $ | 62.60 | $ | 80.60 | $ | 89.50 | |||||||||||||||||||
Self-Determined Peer Group | $ | 100 | $ | 173.30 | $ | 140.00 | $ | 146.10 | $ | 165.80 | $ | 220.80 | |||||||||||||||||||
A. | The lines represent monthly index levels derived from compounded daily returns that include all dividends. |
B. | The indexes are reweighted daily, using the market capitalization on the previous trading day. |
C. | If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used. |
D. | The index level for all series was set to $100.0 on December 31, 1999. |
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• | incentive stock options under Section 422 of the Internal Revenue Code (the “Code”); | |
• | non-qualified stock options; | |
• | restricted stock; | |
• | restricted stock units; | |
• | stock appreciation rights; and | |
• | other stock-based awards. |
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• | materially increase the benefits accruing to participants under the Incentive Plan; | |
• | materially increase the number of shares of common stock that may be issued under the Incentive Plan; | |
• | materially expand the classes of persons eligible to participate in the Incentive Plan; | |
• | expand the types of awards available for grant under the Incentive Plan; | |
• | materially extend the term of the Incentive Plan; | |
• | materially change the method of determining the exercise price of stock options or the “base price” of stock appreciation rights; or | |
• | amend the Incentive Plan to permit repricing of options without the approval of stockholders. |
Stock Options. The Compensation Committee may grant non-qualified stock options or incentive stock options to purchase shares of common stock. The Compensation Committee will determine the number and exercise price of the options, and the time or times that the options become exercisable, provided that the option exercise price may not be less than the fair market value of a share of common stock on the date of grant, except for an option granted in substitution of an outstanding award in an acquisition transaction. The term of an option will also be determined by the Compensation Committee; provided that the term of an option may not exceed 10 years. The Compensation Committee may accelerate the exercisability of any stock option at any time. The Compensation Committee may also |
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approve the purchase by us of an unexercised stock option from the optionee by mutual agreement for the difference between the exercise price and the fair market value of the shares covered by the option. | |
The option exercise price may be paid in cash; by check; in shares of common stock, subject to certain limitations; through a “cashless” exercise arrangement with a broker approved in advance by us; or in any other manner authorized by the Compensation Committee. Incentive stock options will be subject to certain additional requirements necessary in order to qualify as incentive stock options under Section 422 of the Code. | |
Except for certain permitted adjustments or upon a change in control, unless approved by our stockholders, (a) the exercise price for any outstanding option granted under the Incentive Plan may not be decreased after the date of grant and (b) an outstanding option that has been granted under the Incentive Plan may not, as of any date that such option has a per share exercise price that is greater than the then current fair market value of our common stock, be surrendered as consideration for the grant of a new option with a lower exercise price, shares of common stock, shares of restricted stock, restricted stock units, another “stock-based” award or a cash payment. | |
Restricted Stock. Shares of common stock may be granted by the Compensation Committee to an eligible employee and made subject to restrictions on sale, pledge or other transfer by the employee for a certain period (the restricted period). Except for shares of restricted stock that vest based on the attainment of performance goals and except for grants of a small number of shares described above under “Limitations and Adjustments to Shares Issuable through the Incentive Plan,” the restricted period must be a minimum of three years, with incremental vesting of portions of the award over the three-year period permitted. If vesting of the shares is subject to the attainment of specified performance goals, the restricted period must be at least one year, with incremental vesting of portions of the award allowed. All shares of restricted stock will be subject to such restrictions as the Compensation Committee may provide in an agreement with the participant, including provisions obligating the participant to forfeit or resell the shares to us in the event of termination of employment or if specified performance goals or targets are not met. Subject to the restrictions provided in the agreement and the Incentive Plan, a participant receiving restricted stock shall have all of the rights of a stockholder as to such shares. Restricted stock units are subject to the same minimum voting periods described above for grants of restricted stock. | |
Restricted Stock Units. A restricted stock unit represents the right to receive from us, on the respective scheduled vesting or payment date for such restricted stock unit, one share of common stock. An award of restricted stock units may be subject to the attainment of specified performance goals or targets, forfeitability provisions and such other terms and conditions as the Compensation Committee may determine, subject to the provisions of the Incentive Plan. To the extent an award of restricted stock units is intended to qualify as performance based compensation under Section 162(m), it must be granted subject to the attainment of performance goals and meet the additional requirements imposed by Section 162(m). | |
Stock Appreciation Rights. A stock appreciation right is a right to receive, without payment to us, a number of shares of common stock, the number of which is determined pursuant to a formula set forth in the Incentive Plan. Under that formula, the number of shares of common stock issuable upon the exercise of a stock appreciation right is determined by dividing: (1) the number of shares of common stock as to which the stock appreciation right is exercised, multiplied by the amount of the appreciation in a share (for this purpose, the “appreciation” is the amount by which the fair market value (as defined in the Incentive Plan) of a share of common stock subject to the stock appreciation right on the exercise date exceeds the “Base Price” by (2) the fair market value of a share of common stock on the exercise date. The “Base Price” is an amount, not less than the fair market value of a share of common stock on the date of grant, which shall be determined by the Compensation Committee at the time of grant, subject to certain adjustments. The term of a stock appreciation right will be determined by the Compensation Committee, but may not exceed ten years. | |
Other Stock-Based Awards. The Incentive Plan also authorizes the Compensation Committee to grant participants awards of common stock and other awards that are denominated in, payable in, valued |
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in whole or in part by reference to, or are otherwise based on the value of, or the appreciation in value of, shares of common stock (other stock-based awards). The Compensation Committee has discretion to determine the participants to whom other stock-based awards are to be made, the times at which such awards are to be made, the size of such awards, the form of payment, and all other conditions of such awards, including any restrictions, deferral periods or performance requirements. Other stock-based awards are subject to the same minimum vesting periods described above for grants of restricted stock. |
• | by will; | |
• | by the laws of descent and distribution; | |
• | pursuant to a domestic relations order; or |
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• | in the case of stock options only, to immediate family members or to a partnership, limited liability company or trust for which the sole owners, members or beneficiaries are the participant and/or immediate family members, if permitted by the Compensation Committee and if so provided in the stock option agreement. |
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Vote Required |
Number of | |||||||||||||
Securities | |||||||||||||
Number of | Remaining Available | ||||||||||||
Securities to be | Weighted-Average | for Future Issuance | |||||||||||
Issued upon | Exercise Price of | Under Equity | |||||||||||
Exercise of | Outstanding | Compensation Plans | |||||||||||
Outstanding | Options, | (Excluding | |||||||||||
Options, Warrants | Warrants and | Securities Reflected | |||||||||||
Plan Category | and Rights | Rights | in Column (a)) | ||||||||||
(a) | (b) | (c) | |||||||||||
Equity compensation plans approved by security holders | 5,797,295 | $ | 8.43 | 35,746 | (1) | ||||||||
Equity compensation plans not approved by security holders | — | — | — | ||||||||||
Total | 5,797,295 | 35,746 | |||||||||||
(1) | Under the terms of our 1999 Stock Incentive Plan and 2002 Stock Incentive Plan, no more than 250,000 shares may be issued as restricted stock or “other stock-based awards” (which awards are valued in whole or in part on the value of the shares of Common Stock) under each plan. Under the terms of our 1995 Stock Incentive Plan, there is no limit to how many of the shares may be issued as restricted stock or “other stock-based awards.” |
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By Order of the Board of Directors | |
Greg Rosenstein | |
Secretary |
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A. The maximum number of shares of Common Stock that may be issued upon exercise of stock options intended to qualify as incentive stock options under Section 422 of the Code shall be 1,000,000 shares. | |
B. The maximum number of shares of Common Stock that may be covered by Incentives granted under the Plan to any one individual during any one calendar-year period shall be 1,000,000. | |
C. The maximum number of shares of Common Stock that may be issued as restricted stock, restricted stock units, stock appreciation rights and Other Stock-Based Awards (as defined in Section 10) shall be 1,750,000 shares. Such Incentives shall be subject to the minimum vesting periods provided herein, with respect to restricted stock, restricted stock units and Other Stock-Based Awards, except that restricted stock, restricted stock units and Other Stock-Based Awards with respect to an aggregate of 200,000 shares of Common Stock may be granted without compliance with the minimum vesting periods provided in Sections 7.2, 8.2 and 10.2. |
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A. Any incentive stock option agreement authorized under the Plan shall contain such other provisions as the Committee shall deem advisable, but shall in all events be consistent with and contain or be deemed to contain all provisions required in order to qualify the options as incentive stock options. | |
B. All incentive stock options must be granted within ten years from the date on which this Plan is adopted by the Board of Directors. | |
C. No incentive stock options shall be granted to any participant who, at the time such option is granted, would own (within the meaning of Section 422 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the employer corporation or of its parent or subsidiary corporation. | |
D. The aggregate Fair Market Value (determined with respect to each incentive stock option as of the time such incentive stock option is granted) of the Common Stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year (under the Plan or any other plan of Superior or any of its subsidiaries) shall not exceed $100,000. To the extent that such limitation is exceeded, the excess options shall be treated as non-qualified stock options for federal income tax purposes. |
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The transferability of this certificate and the shares of Common Stock represented by it are subject to the terms and conditions (including conditions of forfeiture) contained in the Superior Energy Services, Inc. 2005 Stock Incentive Plan (the “Plan”), and an agreement entered into between the registered owner and Superior Energy Services, Inc. thereunder. Copies of the Plan and the agreement are on file at the principal office of the Company. |
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A. the number of shares of Common Stock as to which the SAR is exercised, multiplied by the amount of the appreciation in such shares (for this purpose, the “appreciation” shall be the amount by which the Fair Market Value of the shares of Common Stock subject to the SAR on the Exercise Date exceeds the “Base Price,” which is an amount, not less than the Fair Market Value of a share of Common Stock on the date of grant, which shall be determined by the Committee at the time of grant, subject to adjustment under Section 12.5); by | |
B. the Fair Market Value of a share of Common Stock on the Exercise Date. No fractional shares of Common Stock shall be issued upon the exercise of a SAR; instead, the holder of a SAR shall be entitled to purchase the portion necessary to make a whole share at its Fair Market Value on the Exercise Date. |
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A. The Company shall have the right to withhold from any payments made or stock issued under the Plan or to collect as a condition of payment, issuance or vesting, any taxes required by law to be withheld. At any time that a participant is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with an Incentive, the participant may, subject to disapproval by the Committee, satisfy this obligation in whole or in part by electing (the “Election”) to deliver currently owned shares of Common Stock or to have the Company withhold shares of Common Stock, in each case having a value equal to the minimum statutory amount required to be withheld under federal, state and local law. The value of the shares to be delivered or withheld shall be based on the Fair Market Value of the Common Stock on the date that the amount of tax to be withheld shall be determined (“Tax Date”). | |
B. Each Election must be made prior to the Tax Date. The Committee may disapprove of any Election, may suspend or terminate the right to make Elections, or may provide with respect to any Incentive that the right to make Elections shall not apply to such Incentive. If a participant makes an election under Section 83(b) of the Code with respect to shares of restricted stock, an Election to have shares withheld to satisfy withholding taxes is not permitted to be made. |
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A. materially revise the Plan without the approval of the stockholders. A material revision of the Plan includes (i) except for adjustments permitted herein, a material increase to the maximum number of shares of Common Stock that may be issued through the Plan, (ii) a material increase to the benefits accruing to participants under the Plan, (iii) a material expansion of the classes of persons eligible to participate in the Plan, (iv) an expansion of the types of awards available for grant under the Plan, (v) a material extension of the term of the Plan and (vi) a material change to the method of determining the exercise price of options or the Base Price of SARs; | |
B. amend Section 6.6 to permit repricing of options without the approval of stockholders; or | |
C. materially impair, without the consent of the recipient, an Incentive previously granted, except that the Company retains all of its rights under Section 12.10. |
A. Unless a different definition is provided in the Incentive Agreement, a Change of Control shall mean: |
(i) the acquisition by any person of beneficial ownership of 50% or more of the outstanding shares of the Common Stock or 50% or more of the combined voting power of Superior’s then outstanding securities entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: |
(a) any acquisition (other than a Business Combination (as defined below) which constitutes a Change of Control under Section 12.10A.(iii) hereof) of Common Stock directly from the Company, | |
(b) any acquisition of Common Stock by the Company, | |
(c) any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or | |
(d) any acquisition of Common Stock by any corporation or other entity pursuant to a Business Combination that does not constitute a Change of Control under Section 12.10A.(iii) hereof; or |
(ii) individuals who, as of January 1, 2005, constituted the Board of Directors of Superior (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to such date whose election, or nomination for election by Superior’s stockholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual’s initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Incumbent Board; or | |
(iii) consummation of a reorganization, share exchange, merger or consolidation (including any such transaction involving any direct or indirect subsidiary of Superior) or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”); |
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provided, however, that in no such case shall any such transaction constitute a Change of Control if immediately following such Business Combination: |
(a) the individuals and entities who were the beneficial owners of Superior’s outstanding Common Stock and Superior’s voting securities entitled to vote generally in the election of directors immediately prior to such Business Combination have direct or indirect beneficial ownership, respectively, of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the surviving or successor corporation, or, if applicable, the ultimate parent company thereof (the “Post-Transaction Corporation”), and | |
(b) except to the extent that such ownership existed prior to the Business Combination, no person (excluding the Post-Transaction Corporation and any employee benefit plan or related trust of either Superior, the Post-Transaction Corporation or any subsidiary of either corporation) beneficially owns, directly or indirectly, 25% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 25% or more of the combined voting power of the then outstanding voting securities of such corporation, and | |
(c) at least a majority of the members of the board of directors of the Post-Transaction Corporation were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board of Directors, providing for such Business Combination; or |
(iv) approval by the stockholders of Superior of a complete liquidation or dissolution of Superior. |
B. Upon a Change of Control of the type described in clause A.(i) or A.(ii) of this Section 12.10 or immediately prior to any Change of Control of the type described in clause A.(iii) or A.(iv) of this Section 12.10, all outstanding Incentives granted pursuant to this Plan shall automatically become fully vested and exercisable, all restrictions or limitations on any Incentives shall automatically lapse and, unless otherwise provided in the applicable Incentive Agreement, all performance criteria and other conditions relating to the payment of Incentives shall be deemed to be achieved at the target level without the necessity of action by any person. As used in the immediately preceding sentence, “immediately prior” to the Change of Control shall mean sufficiently in advance of the Change of Control to permit the grantee to take all steps reasonably necessary (i) if an optionee, to exercise any such option fully and (ii) to deal with the shares purchased or acquired under any such option or other Incentive and any formerly restricted shares on which restrictions have lapsed so that all types of shares may be treated in the same manner in connection with the Change of Control as the shares of Common Stock of other stockholders. | |
C. No later than 30 days after a Change of Control of the type described in subsections A.(i) or A.(ii) of this Section 12.10 and no later than 30 days after the approval by the Board of a Change of Control of the type described in subsections A.(iii) or A.(iv) of this Section 12.10, the Committee, acting in its sole discretion without the consent or approval of any participant (and notwithstanding any removal or attempted removal of some or all of the members thereof as directors or Committee members), may act to effect one or more of the alternatives listed below, which may vary among individual participants and which may vary among Incentives held by any individual participant; |
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provided, however, that no such action may be taken if it would result in the imposition of a penalty on the participant under Section 409A of the Code as a result thereof, or: |
(i) require that all outstanding options, SARs or Other Stock-Based Awards be exercised on or before a specified date (before or after such Change of Control) fixed by the Committee, after which specified date all unexercised options and Other Stock-Based Awards and all rights of participants thereunder shall terminate, | |
(ii) make such equitable adjustments to Incentives then outstanding as the Committee deems appropriate to reflect such Change of Control (provided, however, that the Committee may determine in its sole discretion that no adjustment is necessary), | |
(iii) provide for mandatory conversion of some or all of the outstanding options, SARs, restricted stock units, or Other Stock-Based Awards held by some or all participants as of a date, before or after such Change of Control, specified by the Committee, in which event such options and Other Stock-Based Awards shall be deemed automatically cancelled and the Company shall pay, or cause to be paid, to each such participant an amount of cash per share equal to the excess, if any, of the Change of Control Value of the shares subject to such option, SAR, restricted stock unit or Other Stock-Based Award, as defined and calculated below, over the exercise price of such options or the exercise or base price of such SARs, restricted stock units or Other Stock-Based Awards or, in lieu of such cash payment, the issuance of Common Stock or securities of an acquiring entity having a Fair Market Value equal to such excess; | |
(iv) provide that thereafter, upon any exercise or payment of an Incentive that entitles the holder to receive Common Stock, the holder shall be entitled to purchase or receive under such Incentive in lieu of the number of shares of Common Stock then covered by Incentive, the number and class of shares of stock or other securities or property (including, without limitation, cash) to which the holder would have been entitled pursuant to the terms of the agreement providing for the reorganization, share exchange, merger, consolidation or asset sale, if, immediately prior to such Change of Control, the holder had been the record owner of the number of shares of Common Stock then covered by such Incentive. |
D. For the purposes of paragraph (iii) of Section 12.10C., the “Change of Control Value” shall equal the amount determined by whichever of the following items is applicable: |
(i) the per share price to be paid to stockholders of Superior in any such merger, consolidation or other reorganization, | |
(ii) the price per share offered to stockholders of Superior in any tender offer or exchange offer whereby a Change of Control takes place, | |
(iii) in all other events, the fair market value per share of Common Stock into which such options being converted are exercisable, as determined by the Committee as of the date determined by the Committee to be the date of conversion of such options, or | |
(iv) in the event that the consideration offered to stockholders of Superior in any transaction described in this Section 12.10 consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered that is other than cash. |
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SUPERIOR ENERGY SERVICES, INC.
1105 PETERS ROAD
HARVEY, LOUISIANA 70058
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR USE AT THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 25, 2005
By signing this proxy, you revoke all prior proxies and appoint Greg A. Rosenstein, with full power of substitution, to represent you and to vote your shares on the matters shown on the reverse side at Superior’s annual meeting of stockholders to be held on May 25, 2005, and any adjournments thereof.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
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ANNUAL MEETING OF STOCKHOLDERS OF
SUPERIOR ENERGY SERVICES, INC.
May 25, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
ê Please detach along perforated line and mail in the envelope provided.ê
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES LISTED BELOW AND FOR PROPOSALS 2 AND 3. | ||
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HEREx |
1. Election of directors | |||||||||
NOMINEES: | |||||||||
o | FOR ALL NOMINEES | O Enoch L. Dawkins O James M. Funk | |||||||
o | WITHHOLD AUTHORITY FOR ALL NOMINEES | O Terence E. Hall O Ernest E. Howard, III O Richard A. Pattarozzi | |||||||
o | FOR ALL EXCEPT (See instructions below) | O Justin L. Sullivan | |||||||
INSTRUCTION: | To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT”and fill in the circle next to each nominee you wish to withhold, as shown here:l | ||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | o | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
2. | 2005 Stock Incentive Plan | o | o | o | ||||
3. | Appointment of KPMG LLP as independent registered public accounting firm for 2005 | o | o | o | ||||
4. | To vote in his discretion upon such other business as may properly come before the annual meeting and any adjournments thereof. | |||||||
WHEN THIS PROXY IS PROPERLY EXECUTED, YOUR SHARES WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE NOMINEES LISTED ON THIS PROXY CARD AND FOR PROPOSALS 2 AND 3. THE INDIVIDUAL DESIGNATED ON THE REVERSE SIDE WILL VOTE IN HIS DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING. | ||||||||
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. |
Signature of Stockholder | Date: | Signature of Stockholder | Date: |
Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. |