Exhibit 10.1
exhibit101imagea01.jpg [exhibit101imagea01.jpg]
ARCHROCK, INC.
AWARD NOTICE AND AGREEMENT
PERFORMANCE UNITS
Archrock, Inc. (the “Company”), has granted to you (the “Participant”) a
Performance Award (your “Award”) under the Archrock, Inc. 2013 Stock Incentive
Plan (as may be amended from time to time, the “Plan”). Each Performance Unit
(as defined below) is granted in tandem with a corresponding Dividend
Equivalent, which shall entitle you to payments in accordance with Section 2
below. All capitalized terms not explicitly defined in this Award Notice and
Agreement (the “Award Notice”) but defined in the Plan shall have the respective
meanings ascribed to them in the Plan.

The main terms of your Award are as follows:

1.Award. You have been granted a number of performance units, the payout of
which is based on the attainment of certain performance objectives (the
“Performance Units”), as described herein. Each Performance Unit is granted in
tandem with a corresponding Dividend Equivalent. The Award is stated at target;
however, the actual number of Performance Units that becomes earned and payable
hereunder may be greater or less than the target number.

2.Dividend Equivalents. Each Performance Unit granted hereunder is hereby
granted in tandem with a corresponding Dividend Equivalent, which Dividend
Equivalent shall remain outstanding from the Grant Date until the earlier of the
payment or forfeiture of the Performance Unit to which it corresponds (the
“Dividend Equivalent Period”). Each Dividend Equivalent shall entitle you to
receive payments, subject to and in accordance with this Award Notice, in an
amount equal to each dividend (including any extraordinary or other
non-recurring dividend), in each case, that (a) is made by the Company in
respect of the share of Common Stock underlying the Earned Unit (as defined
below) to which such Dividend Equivalent relates, and (b) has an applicable
Dividend Date (as defined below) occurring during the Dividend Equivalent
Period. Such amounts (if any) shall be payable no later than thirty (30) days
following the date on which such dividends are paid generally to the Company’s
stockholders; provided, that no such payments shall be made prior to the date on
which the Earned Unit becomes an Earned Unit, and any Dividend Equivalent
payments that would have been made prior to the date on which the Earned Unit
becomes an Earned Unit shall be paid in a single lump sum no later than sixty
(60) days following the date on which the Earned Unit becomes an Earned Unit.
Notwithstanding the foregoing, upon the payment of an Earned Unit or forfeiture
of a Performance Unit, the Dividend Equivalent granted in tandem with such paid
Earned Unit or forfeited Performance Unit, as applicable, and the Dividend
Equivalent Period shall terminate with respect to such Earned Unit or
Performance Unit, as applicable. For the avoidance of doubt, a Dividend
Equivalent will only entitle you to payments relating to dividends with an
applicable Dividend Date occurring between the Grant Date and the date on which
you receive payment in respect of the Earned Unit to which it corresponds in
accordance with Section 7 below (or, if earlier, the date on which you forfeit
the Performance Unit to which it corresponds), and you shall not be entitled to
any Dividend Equivalent payment with respect to any Performance Unit that does
not become an Earned Unit. The Dividend Equivalents and any amounts that may
become distributable in respect thereof shall be treated separately from the
Performance Units and the rights arising in connection therewith for purposes of
Section 409A (as defined below) (including for purposes of the designation of
the time and form of payments required by Section 409A). For purposes of this
Notice, “Dividend Date” shall mean, with respect to any dividend made in respect
of the Common Stock of the Company, the date preceding the ex-dividend date
applicable to such dividend.

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3.Grant Date. The Grant Date of this Award is the date of approval by the Board
of Directors of the Company or an appropriate committee of the Board of
Directors.

4.Vesting. Subject to Section 5 below, your Award will become payable (as
provided in Section 7 below) at [__]% to [___]% of the Performance Units based
on the achievement of the applicable pre-determined Performance Measures over
the applicable performance period (the “Performance Period”) and the
satisfaction of the time-based vesting requirements described below. The target
Performance Units equals the number of Performance Units [(or the cash
equivalent thereof)] that would be earned and paid if the Performance Measures
are met at the target level over the Performance Period.

This Award is further subject to a time-based vesting schedule, as follows:
[___] (each such date, a “Vest Date”); however, except as set forth in Sections
5 and 6 below, you must remain in continuous service as an Employee of the
Company or one of its Affiliates at all times from the Grant Date up to and
including the applicable Vest Date for the applicable portion of the Award to
vest.

Exhibit A hereto provides (a) the Performance Period for your Award, (b) an
explanation of the Performance Measures and (c) the percentage of the Award that
will be earned, if any, based on the achievement of the Performance Measures
(subject to the time-based vesting requirements set forth in this Notice).

5.Termination of Service.

(a)    Subject to Sections 5(b) and 6 below, if your status as an Employee with
the Company or an Affiliate terminates for any reason, other than due to your
death or Disability or as provided in Section 6 below, the unvested portion of
your Award (after taking into account any accelerated vesting that occurs in
connection with such termination, if any) and the Dividend Equivalents
corresponding with such unvested portion of your Award will be automatically
cancelled and forfeited on the date of such termination unless the Committee
directs otherwise.

(b)    If your status as an Employee of the Company or an Affiliate terminates
as a result of your death or Disability, then your Award will immediately vest
and be payable as of such date based upon the Achievement Percentage (defined
below) or, if the Achievement Percentage has not yet been determined, based upon
the target performance level. Any such date on which such accelerated vesting
occurs pursuant to this Section 5(b) is referred to in this Award Notice as an
“Accelerated Vest Date”.

6.Corporate Change. In the event a Corporate Change occurs, notwithstanding
anything to the contrary in this Award Notice, this section will govern the
vesting of your Award on and after the date the Corporate Change is consummated.

(a)Determination of Achievement Percentage. If a Corporate Change is consummated
prior to the end of the Performance Period and you are employed by the Company
or an Affiliate as of such consummation date, then (i) the Committee, in its
discretion, shall determine in good faith the Achievement Percentage based on
performance during the portion of the Performance Period commencing on the first
day of the Performance Period and ending on the date the Corporate Change is
consummated or (ii) if the Committee determines, in its discretion, that no such
determination can reasonably be made, then the Achievement Percentage shall be
deemed to be 100% (and your Earned Units (as defined below) will be determined
based upon such Achievement Percentage).

(b)Termination of Service Following a Corporate Change. If your status as an
Employee of the Company or an Affiliate is terminated on or within 18 months
following the date a Corporate Change is consummated (i) by the Company or such
Affiliate without Cause, (ii) by you for Good Reason (as defined below) or (iii)
as a result of your death or Disability, then the unvested portion of your Award
as of the date of your Termination of Service as an Employee will immediately
vest in full as of the date of your Termination of Service as an Employee (the
“Corporate Change Vest Date”). If your status as an Employee is terminated by
the Company with Cause or by you without Good Reason on or after the date the
Corporate Change is

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consummated, then the unvested portion of your Award and the Dividend
Equivalents corresponding with such unvested portion of your Award will be
automatically forfeited on the date of your Termination of Service as an
Employee.
For purposes of this Award Notice, unless otherwise provided in a written
agreement between the Company or an Affiliate and you, “Good Reason” means the
occurrence of any of the following without your express written consent:
(i)
A reduction of 10% or more of your base salary;

(ii)
Your being required to be based at any other office or location of employment
more than 50 miles from your primary office or location of employment
immediately prior to the Corporate Change; or

(iii)
The willful failure by the Company or an Affiliate to pay you your compensation
when due;

provided, however, unless otherwise provided in a written agreement between the
Company or an Affiliate and you, that Good Reason does not exist with respect to
a matter unless you give the Company or an Affiliate, as applicable, a notice of
termination due to such matter within 20 days of the date such matter first
exists. If you fail to give a notice of termination timely, you shall be deemed
to have waived all rights you may have under this Award Notice with respect to
such matter. The Company or an Affiliate will have 30 days from the date of your
notice of termination to cure the matter. If the Company or an Affiliate cures
the matter, your notice of termination shall be deemed rescinded. If the Company
or an Affiliate (as applicable) fails to cure the matter timely, your status as
an Employee shall be deemed to have been terminated by the Company for Good
Reason at the end of the 30-day cure period.

7.Determination of Earned Units, Settlement and Payment. As soon as
administratively practicable following the conclusion of the Performance Period
(or, if earlier, the date on which a Corporate Change is consummated), the
Committee shall certify in writing the level of performance achieved with
respect to the Performance Measures (the “Achievement Percentage”). The actual
number of Performance Units payable under your Award shall be equal to the
product of the target number of Performance Units multiplied by the Achievement
Percentage or, in the event of your termination due to your death or Disability
during the Performance Period or a Corporate Change during the Performance
Period in connection with which the Committee determines, in its discretion, it
cannot reasonably determine the Achievement Percentage, 100% of the Performance
Units (in any case, such number of Performance Units payable under your Award,
the “Earned Units”).

As soon as administratively practicable after your Earned Units vest, but in no
event later than the sixtieth (60th) day following the applicable Vest Date,
Accelerated Vest Date, or Corporate Change Vest Date of such Earned Units, you
will receive payment in respect of such vested Earned Units in the form of [an
equivalent number of shares of Common Stock of the Company] [cash equal to the
Fair Market Value of an equivalent number of shares of Common Stock of the
Company] as of the applicable Vest Date, Accelerated Vest Date, or Corporate
Change Vest Date of such vested Earned Units. Payments in respect of any
corresponding Dividend Equivalents shall be paid in the form of cash.

Except as provided below, this Award and the Dividend Equivalents are intended
to be exempt under Section 409A of the Code (“Section 409A”) under the
short-term deferral exclusion and will be interpreted and operated consistent
with such intent. If, for any reason, the Company determines that this Award
and/or the Dividend Equivalents are subject to Section 409A, the Company shall
have the right in its sole discretion (without any obligation to do so or to
indemnify you or any other person for failure to do so) to adopt such amendments
to the Plan or this Award Notice, or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, as the Company determines are necessary or appropriate to
provide for either the Performance Units and/or Dividend Equivalents to be
exempt from the application of Section 409A or to comply with the requirements
of Section 409A.

8.Stockholder Rights. The Performance Units represent an unfunded, unsecured and
contingent right to receive payment. Except as otherwise provided in Section 2
above, you have no rights as a stockholder with respect to any Performance Units
[unless and until you receive shares of Common

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Stock of the Company in respect of your vested Earned Units]. The grant of the
Performance Units under your Award shall be implemented by a credit to a
bookkeeping account maintained by the Company.

9.Non-Transferability. You cannot sell, transfer, pledge, exchange, hypothecate
or otherwise dispose of your Award or the Dividend Equivalents except as
otherwise set forth in Paragraph XV(i) of the Plan.

10.No Right to Continued Service. Nothing in this Award Notice guarantees your
continued service as an Employee or other service provider of the Company or any
of its Affiliates or interferes in any way with the right of the Company or its
Affiliates to terminate your status as an Employee or other service provider at
any time.

11.Data Privacy. You consent to the collection, use, processing and transfer of
your personal data as described in this paragraph. You understand that the
Company and/or its Affiliates hold certain personal information about you
(including your name, address and telephone number, date of birth, social
security number, social insurance number, etc.) for the purpose of administering
the Plan (“Data”). You also understand that the Company and/or its Affiliates
will transfer this Data amongst themselves as necessary for the purpose of
implementing, administering and managing your participation in the Plan, and
that the Company and/or its Affiliates may also transfer this Data to any third
parties assisting the Company in the implementation, administration and
management of the Plan. You authorize them to receive, possess, use, retain and
transfer the Data, in electronic or other form, for these purposes. You also
understand that you may, at any time, review the Data, require any necessary
changes to the Data or withdraw your consent in writing by contacting the
Company. You further understand that withdrawing your consent may affect your
ability to participate in the Plan.

12.Withholding. Your Award is subject to applicable income and/or social
insurance tax withholding obligations (including, without limitation, any
applicable FICA, employment tax or other social security contribution
obligations), and the Company and its Affiliates may, in their sole discretion,
withhold an amount of cash otherwise payable to you under this Award and/or with
respect to the Dividend Equivalents in order to satisfy any such withholding
obligations. If necessary, the Company reserves the right to withhold from your
regular earnings an amount sufficient to meet the withholding obligations.

13.Plan Governs. This Award Notice is subject to the terms of the Plan, a copy
of which is available at no charge through your UBS account or which will be
provided to you upon request as indicated in Section 17. All the terms and
conditions of the Plan, as may be amended from time to time, and any rules,
guidelines and procedures which may from time to time be established pursuant to
the Plan, are hereby incorporated into this Award Notice, including, but not
limited to, Sections XV(l) (“Section 409A of the Code”) and XV(j) (“Clawback”)
thereof. In the event of a discrepancy between this Award Notice and the Plan,
the Plan shall govern.

14.Adjustment. This Award shall be subject to adjustment as provided in
Paragraph XIII of the Plan.

15.Modifications. The Company may, without your consent, make any change to this
Award Notice that is not adverse to your rights under this Award Notice or the
Plan.

16.Non-Solicitation/Confidentiality Agreement. The greatest assets of the
Company and its Affiliates (“Archrock” in this Section 16) are its employees,
directors, customers, and confidential information. In recognition of the
increased risk of unfairly losing any of these assets, Archrock has adopted this
Non-Solicitation/Confidentiality Agreement as set forth in this Section 16, the
terms of which you accept and agree to by accepting the Award.

a.In order to assist you with your employment-related duties, Archrock has
provided and shall continue to provide you with access to confidential and
proprietary operational information and other confidential information which is
either information not known by actual or potential

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competitors and third parties or is proprietary information of Archrock
(“Confidential Information”). Such Confidential Information shall include,
without limitation, information regarding Archrock’s customers and suppliers,
employees, business operations, product lines, services, pricing and pricing
formulae, machines and inventions, research, knowhow, manufacturing and
fabrication techniques, engineering and product design specifications, financial
information, business plans and strategies, information derived from reports and
computer systems, work in progress, marketing and sales programs and strategies,
cost data, methods of doing business, ideas, materials or information prepared
or performed for, by or on behalf of Archrock. You agree, during your service as
an Employee and at all times thereafter, not to use, divulge, or furnish or to
make accessible to any third party, company, or other entity or individual,
without Archrock’s written consent, any Confidential Information of Archrock,
except as required by your job-related duties to Archrock. Notwithstanding the
foregoing or anything herein to the contrary, you understand that (a) nothing
contained herein will prohibit you from filing a charge with, reporting possible
violations of federal law or regulation to, participating in any investigation
by, or cooperating with any governmental agency or entity or making other
disclosures that are protected under the whistleblower provisions of applicable
law or regulation; (b) nothing herein is intended to or will prevent you from
communicating directly with, cooperating with, or providing information
(including trade secrets) in confidence to, any federal, state or local
government regulator (including, but not limited to, the U.S. Securities and
Exchange Commission, the U.S. Commodity Futures Trading Commission, or the U.S.
Department of Justice) for the purpose of reporting or investigating a suspected
violation of law, or from providing such information to your attorney or in a
sealed complaint or other document filed in a lawsuit or other governmental
proceeding; and (c) pursuant to 18 USC Section 1833(b), you will not be held
criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that is made: (i) in confidence to a federal,
state, or local government official, either directly or indirectly, or to an
attorney, and solely for the purpose of reporting or investigating a suspected
violation of law; or (ii) in a complaint or other document filed in a lawsuit or
other proceeding, if such filing is made under seal.
b.You agree that whenever your service as an Employee of Archrock ends for any
reason, (i) you shall return to Archrock all documents containing or referring
to Archrock’s Confidential Information as may be in your possession and/or
control, with no request being required; and (ii) you shall return all Archrock
computer and computer-related equipment and software, and all Archrock property,
files, records, documents, drawings, specifications, lists, equipment and other
similar items relating to Archrock’s business coming into your possession and/or
control during your employment, with no request being required.
c.In connection with your acceptance of the Award under the Plan, and in
exchange for the consideration provided hereunder, and in consideration of
Archrock disclosing and providing access to Confidential Information, you agree
that you will not, during your service as an Employee or other service provider
of Archrock, and for one year thereafter, directly or indirectly, for any
reason, for your own account or on behalf of or together with any other person,
entity or organization (i) call on or otherwise solicit any natural person who
is employed by Archrock in any capacity with the purpose or intent of attracting
that person from the employ of Archrock, or (ii) divert or attempt to divert
from Archrock any business relating to the provision of natural gas compression
equipment and related services, oil and natural gas production and processing
equipment and related services or water treatment equipment and related services
without, in each case, the prior written consent of Archrock.
d.You agree that (i) the terms of this Section 16 are reasonable and constitute
an otherwise enforceable agreement to which the terms and provisions of this
Section 16 are ancillary or a part of; (ii) the consideration provided by
Archrock under this Section 16 is not illusory; (iii) the restrictions of this
Section 16 are necessary and reasonable for the protection of the legitimate
business interests and goodwill of Archrock; and (iv) the consideration given by
Archrock under this

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Section 16, including without limitation, the provision by Archrock of
Confidential Information to you, gives rise to Archrock’s interests in the
covenants set forth in this Section 16.
e.You and Archrock agree that it was both parties’ intention to enter into a
valid and enforceable agreement. You agree that if any covenant contained in
this Section 16 is found by a court of competent jurisdiction to contain
limitations as to time, geographic area, or scope of activity that are not
reasonable and impose a greater restraint than is necessary to protect the
goodwill or other business interests of Archrock, then the court shall reform
the covenant to the extent necessary to cause the limitations contained in the
covenant as to time, geographic area, and scope of activity to be restrained to
be reasonable and to impose a restraint that is not greater than necessary to
protect the goodwill and other business interests of Archrock.
f.In the event that Archrock determines that you have breached or attempted or
threatened to breach any term of this Section 16, in addition to any other
remedies at law or in equity Archrock may have available to it, it is agreed
that Archrock shall be entitled, upon application to any court of proper
jurisdiction, to a temporary restraining order or preliminary injunction
(without necessity of (i) proving irreparable harm, (ii) establishing that
monetary damages are inadequate, or (iii) posting any bond with respect thereto)
against you prohibiting such breach or attempted or threatened breach by proving
only the existence of such breach or attempted or threatened breach. You agree
that the period during which the covenants contained in this Section 16 are in
effect shall be computed by excluding from such computation any time during
which you are in violation of any provision of this Section 16.
g.You hereby acknowledge that the Award being granted to you under the Plan is
an extraordinary item of compensation and is not part of, nor in lieu of, your
ordinary wages for services you may render to Archrock.
h.You understand that this agreement is independent of and does not affect the
enforceability of any other restrictive covenants by which you have agreed to be
bound in any other agreement with Archrock.
i.Notwithstanding any other provision of this Award, the provisions of this
Section 16 shall be governed, construed and enforced in accordance with the laws
of the State of Texas, without giving effect to the conflict of law principles
thereof. Any action or proceeding seeking to enforce any provision of this
Section 16 shall be brought only in the courts of the State of Texas or, if it
has or can acquire jurisdiction, in the United States District Court for the
Southern District of Texas, and the parties consent to the jurisdiction of such
courts in any such action or proceeding and waive any objection to venue laid
therein.
18.    Additional Information. If you require additional information concerning
your Award, contact the Company’s Stock Plan Administrator at 281.836.8055 or at
mystock@archrock.com. You may also contact UBS at 713.654.4713.
19.    Participant Acceptance. If you agree with the terms and conditions of
this Award, please indicate your acceptance in UBS One Source by selecting
“Accept.” To reject the Award, select “Reject.” Please note that if you reject
the Award or do not accept the Award within 60 days of the Grant Date, the Award
will be forfeited.

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