AMENDMENT AND DISCHARGE OF
CHANGE OF CONTROL AGREEMENT
THIS AMENDMENT AND DISCHARGE OF CHANGE OF CONTROL AGREEMENT
(this “ Amendment ”) is made and entered
into by and between Exterran Holdings, Inc., a Delaware corporation
(the “ Company ”), and Norman A. Mckay
(“ Executive ”) (collectively referred to
as the “ Parties ” or individually as the
“ Party ”).
WHEREAS , Hanover Compressor Company (as a predecessor to
the Company) and Executive entered into a Change of Control
Agreement, dated July 29, 2005, and Amendment No. 1
thereto (as amended to date, the “ Agreement
”), regarding their respective rights and obligations in
connection with Executive’s “Qualifying Termination of
Employment” following a “Change of Control” (as
both terms are defined in the Agreement) during the term of the
Agreement; and
WHEREAS , effective as of August 20, 2007, there was a
Change of Control of Hanover Compressor Company and the Parties
agree that “Good Reason” then existed for a Qualified
Termination of Employment by Executive; and
WHEREAS , immediately following that Change of Control, the
Company assumed Hanover Compressor Company’s obligations
under the Agreement; and
WHEREAS , the Company and Executive subsequently extended
the term of the Agreement through the second anniversary of the
Change of Control pursuant to Amendment No. 2 to the
Agreement; and
WHEREAS , the Company and Executive desire to amend the
Agreement in order to discharge their respective rights and
obligations under the Agreement; and
WHEREAS , Section 4(g) of the Agreement provides that the
Agreement may be amended or discharged only if agreed to in writing
signed by Executive and by the Chairman of the Board of Directors
of the Company or an authorized officer of the Company;
NOW THEREFORE , in consideration of the premises, the terms
and provisions set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which
are hereby
acknowledged, effective as of August 5, 2009 (the “
Effective Date ”), the Parties hereby approve,
agree to and adopt this Amendment to the Agreement, as
follows:
1. Subject to
the requirements in Paragraph 2 below, the Company hereby
agrees to pay Executive a lump-sum cash payment of US$1,190,680.00
(the “ Payment ”), no later than the 30th
day after the Effective Date, in full satisfaction and discharge
of, and in exchange for Executive’s waiver of any and all of
his rights under, the Agreement; provided, however , that
Executive acknowledges and agrees that the Company shall withhold
from the Payment the international expatriate 15% flat fee amount
of US$178,602.00, in accordance with the Company’s expatriate
tax treatment policy.
2. The
foregoing notwithstanding, payment of the Payment under this
Agreement is subject to, and contingent upon, Executive’s
timely execution and return of the waiver and release (the “
Waiver and Release ”), attached hereto as
Exhibit A , to the Company, without subsequent
revocation during the seven-day period following such execution
date (the “ Waiver and Release Revocation
Period ”), as provided in this Paragraph 2, and
Executive acknowledges and agrees that the Payment serves as
adequate consideration for the Waiver and Release. Executive
acknowledges that Company provided him the Waiver and Release prior
to the Effective Date. Executive shall have until 5:00 pm (central
standard time) on August 25, 2009 (the 22nd day following the
Effective Date) to consider, execute and return the Waiver and
Release to the Company and shall then have the right to revoke the
Waiver and Release during the Waiver and Release Revocation Period.
If Executive fails to timely execute and return the Waiver and
Release to the Company by August 25, 2009 or revokes such
Waiver and Release during the Waiver and Release Revocation Period,
then Executive shall forfeit, and shall not be entitled to, any of
the benefits described in this Agreement.
3. Executive
acknowledges and agrees that (a) he is responsible for
(i) all tax obligations with respect to the Payment and
(ii) any tax liabilities (and related penalties and interest)
arising from the Amendment of the Agreement, including, but not
limited to, any such liabilities arising under Internal Revenue
Code Section 409A, and (b) the Company is not responsible
for any such tax obligations (or related penalties and
interest).
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4. Executive
hereby agrees that the Company (and any of its predecessors or
successors) shall have no further duties or obligations under the
Agreement from and after the Effective Date.
5. Executive
and the Company each hereby agree that the Agreement is of no
further force and effect from and after the Effective
Date.
6. Executive
agrees that the Payment pursuant to this Amendment is in full
satisfaction of any and all obligations of the Company (and any of
its subsidiaries and affiliates and the officers and directors of
the Company and its subsidiaries and affiliates) under the
Agreement.
7. This
Amendment shall be governed by and construed in accordance with the
laws of the State of Texas, without reference to principles of
conflict of laws. Executive agrees that venue for any dispute
related to this Amendment shall be filed and heard by the courts in
and for Harris County, Texas, or the U.S. District Courts for the
Southern District of Texas, Houston Division.
8. This
Amendment and the Waiver and Release described in Paragraph 2
hereof constitute the entire agreement of Executive and the Company
with respect to the subject matter hereof, a
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