Exhibit 10.4

DRESSER-RAND GROUP INC.

STANDARD TERMS AND CONDITIONS FOR

PERFORMANCE RESTRICTED STOCK UNITS

These Standard Terms and Conditions apply to any Award of performance restricted
stock units granted to an employee of the Company under the Dresser-Rand Group
Inc. 2008 Stock Incentive Plan (the “Plan”), on or after January 1, 2013, which
are evidenced by a Grant Notice or an action of the Committee that specifically
refers to these Standard Terms and Conditions.

 

1. TERMS OF PERFORMANCE RESTRICTED STOCK UNITS

 

  A. Dresser-Rand Group Inc., a Delaware corporation (the “Company”), has
granted to the Grantee named in the Grant Notice provided to said Grantee
herewith (the “Grant Notice”) an award of a number of performance restricted
stock units (the “Award” or the “Performance RSUs”) specified in the Grant
Notice. Each Performance RSU represents the right to receive one share of the
Company’s Common Shares, $0.01 par value per share (the “Common Shares”) upon
the terms and subject to the conditions set forth in the Grant Notice, these
Standard Terms and Conditions, and the Plan, each as amended from time to time.
For purposes of these Standard Terms and Conditions and the Grant Notice, any
reference to the Company shall, unless the context requires otherwise, include a
reference to any Affiliate, as such term is defined in the Plan.

 

  B. In the event there is a conflict between these Standard Terms and
Conditions or the applicable Grant Notice and applicable local law, local law
shall govern.

 

2. VESTING OF PERFORMANCE RESTRICTED STOCK UNITS

The Award shall not be vested as of the Grant Date set forth in the Grant Notice
and shall be forfeitable unless and until otherwise vested pursuant to the terms
of these Standard Terms and Conditions. After the Grant Date, subject to
termination or acceleration as provided in these Standard Terms and Conditions
and the Plan, the Award shall become vested as described in this Section 2 with
respect to that number of Performance RSUs as described in this Section 2. The
Award shall vest as follows on each of the following “Vesting Dates”:

Portion of Award Vesting February 15, 2014

 

Company’s Relative TSR for period from January 1, 2013 through December 31, 2013
   Portion of Target Award Vesting (subject to adjustment by interpolation for
performance within Threshold, Target and Maximum)* Below 25th Percentile
Relative to Peer Group    0% At least 25th Percentile But Below 50th Percentile
of Peer Group (“Threshold”)*    16.67% At least 50th Percentile But Below 75th
Percentile of Peer Group (“Target”)*    33.33% Above 75th Percentile of Peer
Group (“Maximum”)*    50%

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Portion of Award Vesting February 15, 2015

 

Company’s Relative TSR for period from January 1, 2013 through December 31, 2014
   Portion of Target Award Vesting (subject to adjustment by interpolation for
performance within Threshold, Target and Maximum)* Below 25th Percentile
Relative to Peer Group    0% At least 25th Percentile But Below 50th Percentile
of Peer Group (“Threshold”)*    16.67% At least 50th Percentile But Below 75th
Percentile of Peer Group (“Target”)*    33.33% Above 75th Percentile of Peer
Group (“Maximum”)*    50%

Portion of Award Vesting February 15, 2016

 

Company’s Relative TSR for period from January 1, 2013 through December 31, 2015
   Portion of Target Award Vesting (subject to adjustment by interpolation for
performance within Threshold, Target and Maximum)* Below 25th Percentile
Relative to Peer Group    0% At least 25th Percentile But Below 50th Percentile
of Peer Group (“Threshold”)*    16.67% At least 50th Percentile But Below 75th
Percentile of Peer Group (“Target”)*    33.33% Above 75th Percentile of Peer
Group (“Maximum”)*    50%

 

*

The portion of the Target Award that vests on a Vesting Date shall be calculated
by straight-line interpolation for results achieved between Threshold and
Target, or for results achieved between Target and Maximum. For example, if the
Company’s Relative TSR for an applicable period is at 37.5% (halfway between the
25th Percentile and the 50th Percentile), the portion of the Target Award that
would vest for that period would be 25% (halfway between 16.67% and 33.33%).

 

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For purposes hereof:

 

  • “Company’s Relative TSR” means the ranking of the TSR of the Company’s
Common Shares for the applicable performance period, on a percentile basis,
compared to the TSRs of the common shares of the Peer Group for such performance
period.

 

  • “TSR” for each performance period means the percentage change in the Average
Stock Price of a Common Share (or for each member of the Peer Group, a share of
the class of common stock most widely traded) from January 1, 2013 through the
last day of the applicable year (or, in the event of Retirement in 2013, death
or Disability, the date of such Retirement, death or Disability). For this
purpose, any dividends paid between January 1, 2013 and the last day of the
applicable year (or, in the event of Retirement in 2013, death or Disability,
the date of such Retirement, death or Disability) with respect to a Common Share
(or for each member of the Peer Group, a share of the class of common stock most
widely traded) shall be included so as to reflect the cumulative rate of return
utilizing price appreciation plus reinvestment of dividends so that they are
reflected as an increase in such Average Stock Price. In addition, TSR shall be
appropriately adjusted by the Compensation Committee to reflect stock splits,
stock dividends, and similar events with respect to the Common Shares (or, as
applicable, the class of common stock taken into account in determining the TSR
of a member of the Peer Group).

 

  • “Peer Group” means the companies listed on Exhibit A. If a member of the
Peer Group is acquired or is otherwise a party to a corporate transaction and no
longer exists as a separate entity, or if its common stock is delisted, the TSR
of the Peer Group will be determined for remaining performance periods
retroactively to January 1, 2013, without such former Peer Group member.

 

  • “Average Stock Price” means the average closing price of the Common Shares
(or for each member of the Peer Group, the class of common stock most widely
traded) for the 30 calendar days immediately preceding January 1, 2013 or, as
applicable, the last day of the applicable calendar year (or, in the event of
Retirement in 2013, death or Disability or Retirement, the date of such
Retirement, death or Disability).

 

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Notwithstanding anything contained in these Standard Terms and Conditions to the
contrary:

 

  (i) if the Grantee’s separation from service is due to death or Disability
before December 31, 2015, the Award shall vest with respect to any uncompleted
calendar years in the same manner as specified above, but using the Company’s
Relative TSR through the date of death of Disability rather than through the end
of the applicable calendar year(s);

 

  (ii) subject to Section 9, if the Grantee’s employment or other service
terminates due to the Grantee’s Retirement (as defined in Section 17.H below),
the Award shall continue to vest under the schedule described in the Grant
Notice and Section 2; provided, however, that if the Grantee’s Retirement is
less than twelve (12) months after the Grant Date, only the following portion of
the Award shall continue to vest: (x) the Award that continues to vest under the
schedule described in the Grant Notice and Section 2, (y) multiplied by a
fraction, (I) the numerator of which is the number of full days from the Grant
Date through the date of Retirement, and (II) the denominator of which is 365.
The remaining portion of the Award shall be forfeited and canceled as of the
date of such Retirement; and

 

  (iii) if the Grantee’s separation from service is for any reason other than
Retirement, death or Disability, any then-unvested portion of the Award held by
the Grantee shall be forfeited and canceled as of the date of such separation
from service.

 

3. SETTLEMENT OF PERFORMANCE RESTRICTED STOCK UNITS

Vested Performance RSUs shall be settled by the delivery to the Grantee or a
designated brokerage firm of one Share per vested Performance RSU following each
performance period or as soon as reasonably practicable thereafter (but in no
event later than the March 15th following the performance period); provided that
in the event the Grantee’s separation from service (i) is due to death or
Disability, such settlement shall occur as soon as reasonably practicable
following the date of death or Disability (and in no event later than two and
one-half months following the date of death or Disability), or (ii) is due to
Retirement in 2013, such settlement shall occur as soon as reasonably
practicable following such Retirement (and in no event later than two and
one-half months following such Retirement).

 

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4. RIGHTS AS STOCKHOLDER

The Grantee shall have no voting rights or the right to receive any dividends
with respect to Common Shares underlying Performance RSUs unless and until such
Common Shares are reflected as issued and outstanding shares on the Company’s
stock ledger.

 

5. CHANGE IN CONTROL

If there is a Change in Control, unless otherwise provided in an employment,
severance or other agreement between the Company and the Grantee that
specifically addresses the treatment of performance-based equity awards (and not
just the treatment of restricted stock units or other equity awards generally),
a number of such Performance RSUs shall be calculated based on actual
performance goal attainment through the date of the Change in Control, as
determined by the Committee in its discretion (the “Earned PSUs”), and any such
Performance RSUs that are not determined as having been achieved based on actual
performance pursuant to this Section 5 shall be forfeited. The Earned PSUs shall
be treated as follows:

 

  A. If the Earned PSUs are not continued, assumed or substituted by the
Grantee’s employer (or an Affiliate of such employer) that engages the Grantee
immediately following the Change in Control, the Earned PSUs shall fully vest
upon the occurrence of the Change in Control. For each Earned PSU, the Grantee
shall receive (i) the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Common Stock for each
share held on the effective date of the Change in Control, (ii) common stock of
the successor to the Company with a value equal to the Change in Control Price,
or (iii) cash equal to the Change in Control Price, as determined by the
Committee in its discretion.

 

  B. If the Earned PSUs are continued, assumed or substituted by the Grantee’s
employer (or an Affiliate of such employer) that engages the Grantee immediately
following the Change in Control, the Earned PSUs shall continue to vest as
provided in the Grant Notice; provided, however, that if the Grantee’s
employment is terminated other than for Serious Misconduct, or the Grantee
resigns for Good Reason, in either case within twelve months following the
Change in Control, the Earned PSUs shall fully vest upon such termination or
resignation.

For purposes hereof, the Earned PSUs shall be considered “assumed” if, following
the Change in Control, the Earned PSUs confer the right to receive, for each
share of Common Stock subject to the Earned PSU immediately prior to the Change
in Control, (i) the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Common Stock for each
share held on the effective date of the Change in Control, or (ii) common stock
of the successor to the Company of substantially equivalent economic value to
the consideration received in the Change in Control by holders of Common Stock
for each share held on the effective date of the Change in Control (as
determined by the Committee in its discretion). The Earned PSUs will be
considered “substituted for” if the successor or acquiror replaces the Earned
PSUs with equity awards of substantially equivalent economic value measured as
of the date the Change in Control occurs (as determined by the Committee in its
discretion).

 

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In all events, any action under this Section 5 shall comply with the applicable
requirements of Section 409A of the Code (such that, for the avoidance of doubt,
no action shall be taken by the Committee pursuant to this Section 5 that would
violate the requirements of Section 409A of the Code).

 

6. RESTRICTIONS ON RESALES OF SHARES

The Company may impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resales by the Grantee
or other subsequent transfers by the Grantee of any Common Shares issued in
respect of vested Performance RSUs, including without limitation
(a) restrictions under an insider trading policy, (b) restrictions designed to
delay and/or coordinate the timing and manner of sales by Grantee and other
holders and (c) restrictions as to the use of a specified brokerage firm for
such resales or other transfers.

 

7. INCOME TAXES

The Company shall not deliver shares in respect of any Performance RSUs unless
and until the Grantee has made arrangements satisfactory to the Committee to
satisfy applicable withholding tax obligations. Unless otherwise permitted by
the Committee, withholding shall be effected by withholding Common Shares
issuable in connection with the delivery of the Performance RSUs. The Grantee
acknowledges that the Company shall have the right to deduct any taxes required
to be withheld by law in connection with the delivery of the Performance RSUs
from any amounts payable by it to the Grantee (including, without limitation,
future cash wages).

 

8. NON-TRANSFERABILITY OF AWARD

The Grantee represents and warrants that the Performance RSUs are being acquired
by the Grantee solely for the Grantee’s own account for investment and not with
a view to or for sale in connection with any distribution thereof. The Grantee
further understands, acknowledges and agrees that, except as otherwise provided
in the Plan, the Performance RSUs may not be sold, assigned, transferred,
pledged or otherwise directly or indirectly encumbered or disposed of except to
the extent expressly permitted hereby and at all times in compliance with the
U.S. Securities Act of 1933, as amended, and the rules and regulations of the
Securities Exchange Commission thereunder, and in compliance with applicable
state securities or “blue sky” laws and non-U.S. securities laws. Unless
permitted by the Committee, the Performance RSUs may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated by the Grantee other
than by will or the laws of descent and distribution.

 

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9. RESTRICTED ACTIVITIES

This Section 9 applies if the Grantee’s separation from service is due to the
Grantee’s Retirement and, as a result, all or a portion of the Performance RSUs
vest pursuant to Section 2(ii).

 

  A. By accepting the Performance RSU, the Grantee acknowledges and agrees that
(i) the Company is engaged in a highly competitive business; (ii) the Company
has expended considerable time and resources to develop goodwill with its
customers, vendors, and others, and to create, protect, and exploit its
Confidential Information (as defined in Section 18.B below); (iii) the Company
must continue to prevent the dilution of its goodwill and unauthorized use or
disclosure of its Confidential Information to avoid irreparable harm to its
legitimate business interests; (iv) the Grantee’s participation in or direction
of the Company’s day-to-day operations and strategic planning are an integral
part of the Company’s continued success and goodwill; (v) in the period between
the Grantee’s notice to the Committee of the Grantee’s Retirement and the date
of the Grantee’s Retirement (the “Transition Period”), the Grantee will
participate in identifying a successor, transitioning his or her
responsibilities to and training a successor, and engaging in other transition
activities (the “Transition Process”); (vi) given the Grantee’s position and
responsibilities, including during the Transition Period, he or she necessarily
will be relying on and/or creating Confidential Information that belongs to the
Company and enhances the Company’s goodwill; during the Transition Process will
be transmitting Confidential Information to his or her successor; and in
carrying out his or her responsibilities, including during the Transition
Process, the Grantee in turn will be relying on the Company’s goodwill and the
disclosure by the Company to him or her of Confidential Information; (vii) the
Grantee will have access to Confidential Information, including concerning the
Transition Process, that could be used by any competitor of the Company in a
manner that would irreparably harm the Company’s competitive position in the
marketplace and dilute its goodwill; (viii) the Grantee’s engaging in any of the
Restricted Activities during the Restriction Period would result in the
inevitable disclosure or use of Confidential Information for the Competitor’s
benefit or to the detriment of the Company; (ix) the Grantee will return to the
Company upon Retirement all the Confidential Information, in whatever form or
media and all copies thereof, in his or her possession, custody, or control;
(x) by giving advance notice of his or her Retirement, the Grantee represents
that he or she will not engage in the Restricted Activities; (xi) the Company is
relying on such representation in providing the Grantee continuing access to
Confidential Information and authorizing him or her to engage in the Transition
Process and other activities that will create new and additional Confidential
Information during the Transition Period; and (xi) absent the Grantee’s
agreement to this Section 8, the Company would not authorize the Grantee to
participate in the Transition Process and engage in other activities that
provide access to or create new and additional Confidential Information in an
unfettered fashion; and would not provide for the continued vesting of the
Performance RSU upon Retirement as provided for in Section 2.

 

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  B. The Company, by granting the Performance RSU, and the Grantee, by accepting
the Performance RSU, thus acknowledge and agree that during the remaining term
of the Grantee’s employment with the Company, including the Transition Period,
the Grantee (i) will receive Confidential Information that is unique,
proprietary, and valuable to the Company; (ii) will rely on and/or create
Confidential Information that is unique, proprietary, and valuable to the
Company; and (iii) will benefit, including without limitation by way of
increased earnings and earning capacity, from the goodwill the Company has
generated and from the Confidential Information.

 

  C. Accordingly, in consideration of the promises of the Company set out in
Section 9.B, the Performance RSU, and the continued vesting of all or a portion
of the Performance RSU upon Retirement as provided for in Section 2, the Grantee
agrees that:

 

  1. He or she will not engage in any of the Restricted Activities (as defined
in Section 18.F below) during the Restriction Period (as defined in Section 18.G
below);

 

  2. If he or she engages in, or threatens to engage in, any of the Restricted
Activities during the Restriction Period or otherwise violates his or her
obligations under this Section 8, then (x) the Performance RSUs held by the
Grantee that have not been settled shall immediately be forfeited and canceled
(regardless of whether then vested or unvested) and (y) with respect to any
Performance RSUs that have been settled, the Grantee shall immediately pay to
the Company the fair market value of the Shares associated with the settlement
of the Performance RSUs at the time of vesting;

 

  3. If he or she engages in, or threatens to engage in, any of the Restricted
Activities during the Restriction Period or otherwise violates his or her
obligations under this Section 8, the Company would not have an adequate remedy
at law and would be irreparably harmed and, accordingly, that the Company shall
be entitled to equitable relief, including preliminary and permanent injunctions
and specific performance, in the event the Grantee engages or threatens to
engage in any of the Restricted Activities during the Restriction Period or
otherwise violates his or her obligations under this Section 8, without the
necessity of posting any bond or proving special damages or irreparable injury;
and

 

  4. Neither Section 9.C.2 nor Section 9.C.3 constitute the Company’s exclusive
remedy for a breach or threatened breach of the Grantee’s obligations under this
Section 9, but shall be in addition to all other remedies available to the
Company at law or equity.

 

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  D. By accepting the Performance RSU, the Grantee acknowledges and agrees that
(i) the restrictions contained in this Section 9 are ancillary to an otherwise
enforceable agreement, including without limitation the mutual promises and
undertakings set out in Section 9.A and B, the Performance RSU, and the
continued vesting of all or a portion of the Performance RSU upon Retirement as
provided for in Section 2; (ii) the Company’s promises and undertakings set out
in these Standard Terms and Conditions, and in particular Section 9.B, the Grant
Notice, and the Plan, and the Grantee’s position and responsibilities with the
Company and his or her promises and undertakings set out in Section 9.A, give
rise to the Company’s interest in restricting the Grantee’s post-Retirement
activities; (iii) such restrictions are designed to enforce the Grantee’s
promises and undertakings set out in Section 9.A and his or her common-law
obligations and duties owed to the Company; (iv) the restrictions are reasonable
and necessary, are valid and enforceable, and do not impose a greater restraint
than necessary to protect the Company’s goodwill, Confidential Information, and
other legitimate business interests; (v) he or she will immediately notify the
Company in writing should he or she believe or be advised that the provisions of
this Section 8 are not, or likely are not, valid and enforceable; (vi) he or she
will not challenge the enforceability of this Section 8; (vii) absent the
Grantee’s agreement to this Section 8, the Company would not authorize the
Grantee to participate in the Transition Process and engage in other activities
that provide access to or create new and additional Confidential Information in
an unfettered fashion and would not provide for the continued vesting of the
Performance RSU upon Retirement as provided for in Section 2.

 

  E. The provisions of Section 2 providing for the continued vesting of all or a
portion of the Performance RSU upon Retirement and this Section 8 are mutually
dependent and not severable, and the Grantee acknowledges and agrees that the
Company would not provide for the continued vesting of the Performance RSU upon
Retirement as provided for in Section 2 but for the Grantee’s promises set out
in and the enforceability of this Section 9. Accordingly, if Section 8 or any
part of it is ever declared to be illegal, invalid, or otherwise unenforceable
in any respect by a court of competent jurisdiction, then the Grantee agrees
that (x) the Performance RSUs held by the Grantee that have not been settled
shall immediately be forfeited and canceled (regardless of whether then vested
or unvested) and (y) with respect to any Performance RSUs that have been
settled, the Grantee shall immediately pay to the Company the fair market value
of the Shares associated with the settlement of the Performance RSUs at the time
of vesting; provided that if the scope of the restrictions in this Section 8 as
to time, geography, or scope of activities are deemed by court of competent
jurisdiction to exceed the limitations permitted by applicable law, the Grantee
and the Company agree that the restrictions so deemed shall be, and are,
automatically reformed to the maximum limitation permitted by such law.

 

10. THE PLAN AND OTHER AGREEMENTS

In addition to these Terms and Conditions, the Award shall be subject to the
terms of the Plan, which are incorporated into these Standard Terms and
Conditions by this reference. Certain capitalized terms not otherwise defined
herein are defined in the Plan. In the event of a conflict between the terms and
conditions of these Standard Terms and Condition and the Plan, the Plan
controls.

 

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Subject to the next paragraph, the Grant Notice, these Standard Terms and
Conditions and the Plan constitute the entire understanding between the Grantee
and the Company regarding the Award, and any prior agreements, commitments or
negotiations concerning the Award are superseded.

The Award (including the terms described herein) are subject to the provisions
of the Plan and, if the Grantee is outside the U.S., there may be an addendum
containing special terms and conditions applicable to grants in the Grantee’s
country. The grant of the Performance RSUs to any such Grantee is contingent
upon the Grantee executing and returning any such addendum in the manner
directed by the Company.

 

11. NOT A CONTRACT FOR EMPLOYMENT.

Nothing in the Plan, in the Grant Notice, these Standard Terms and Conditions or
any other instrument executed pursuant to the Plan shall confer upon the Grantee
any right to continue in the Company’s employ or service nor limit in any way
the Company’s right to terminate the Grantee’s employment or other service at
any time for any reason.

 

12. SEVERABILITY.

In the event that any provision of these Standard Terms and Conditions is
declared to be illegal, invalid or otherwise unenforceable by a court of
competent jurisdiction, such provision shall be reformed, if possible, to the
extent necessary to render it legal, valid and enforceable, or otherwise
deleted, and the remainder of these Standard Terms and Conditions shall not be
affected except to the extent necessary to reform or delete such illegal,
invalid or unenforceable provision.

 

13. HEADINGS.

The headings preceding the text of the sections hereof are inserted solely for
convenience of reference, and shall not constitute a part of these Standard
Terms and Conditions, nor shall they affect its meaning, construction or effect.

 

14. FURTHER ASSURANCES.

Each party shall cooperate and take such action as may be reasonably requested
by another party in order to carry out the provisions and purposes of these
Standard Terms and Conditions.

 

15. BINDING EFFECT.

These Standard Terms and Conditions shall inure to the benefit of and be binding
upon the parties hereto and their respective permitted heirs, beneficiaries,
successors and assigns.

 

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16. ELECTRONIC DELIVERY

By executing the Grant Notice, the Grantee hereby consents to the delivery of
information (including, without limitation, information required to be delivered
to the Grantee pursuant to applicable securities laws) regarding the Company and
the Subsidiaries, the Plan, and the Performance RSUs via Company web site or
other electronic delivery.

 

17. SECTION 409A

The Award shall be administered pursuant to the requirements of Section 409A of
the Code. For purposes hereof, “separation from service” shall have the meaning
specified in Section 409A of the Code and the regulations thereunder. To the
extent required by Section 409A of the Code, any payment hereunder to a Grantee
is a “specified employee” shall be delayed until six months following such
Grantee’s separation from service.

 

18. DEFINITIONS

For purposes hereof, the following terms shall have the following meanings:

 

  A. “Competitor” shall mean any person or entity that carries on business
activities in competition with the activities of the Company, including but not
limited to (i) suppliers of rotating equipment, services and solutions for
applications in the oil, gas, petrochemical and process industries including for
oil and gas production; high-pressure gas injection, gas lift and other
applications for enhanced oil recovery; natural gas production and processing;
gas liquefaction; gas gathering, transmission and storage; hydrogen, wet and
coker gas, synthesis gas, carbon dioxide and other applications for the
refining, fertilizer and petrochemical markets; (ii) several applications for
the armed forces; (iii) applications for general industrial markets such as
paper, steel, sugar, and distributed and independent power generation;
(iv) competing environmental solutions such as compressed air energy storage,
combined heat and power, air separation, bio fuels, and wave or wind energy; or
(v) servicing the Company’s installed base of equipment, and the installed base
of the Company’s class of equipment of other suppliers through the provision of
parts, repairs, overhauls, operation and maintenance, upgrades, revamps, applied
technology solutions, coatings, field services, technical support and other
extended services. The term “Competitor” specifically includes but is not
limited to the centrifugal turbo and reciprocating compressor, steam and gas
turbine, rotating machinery, related aftermarket parts and services (including
repairs, revamps, re-rates, upgrades, applied technology, overhauls,
remanufacturing, installation and start-up) and other competing businesses of
(x) GE Oil & Gas/Nuovo Pignone, Siemens (including TurboCare), Solar Turbines,
Inc., Rolls-Royce Group plc, Elliott Company, General Electric, Alstom,
Mitsubishi Heavy Industries, Hitachi, MAN Turbo, Hickham USA, Sulzer Turbo
Services, Wood Group, Burckhardt Compression, Neuman & Esser Group, Ariel Corp.,
Thomassen Mitsui & Co., Ltd., Ebara, Shin Nippon Machinery Co. Ltd., Caterpillar
Inc., Solar, Hoerbiger, or, if those corporate names are not formally correct,
the businesses commonly referred to by those names; and (y) the successors to,
assigns of, and affiliates of the persons or entities described in clause (x).

 

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  B. “Confidential Information” shall mean, without limitation, all documents or
information, in whatever form or medium, or consisting of knowledge or
“know-how” whether or not recorded in any medium, concerning or evidencing
sales; costs; pricing; strategies; forecasts and long range plans; financial and
tax information; personnel information (including without limitation
compensation, other terms of employment, or performance other than as concerns
solely the Grantee); business, marketing and operational projections, plans, and
opportunities; and customer, vendor, and supplier information; but excluding any
such information that is or becomes generally available to the public other than
as a result of any unauthorized disclosure or breach of duty by the Grantee.

 

  C. “Disability” shall have the meaning specified in Section 409A(a)(2)(C) of
the Code and the related Treasury Regulations.

 

  D. “Good Reason” shall mean the Grantee’s resignation from employment from the
Company or its successor within sixty (60) days following the occurrence of
(i) a material reduction in the Grantee’s base salary; (ii) a material adverse
change in the Grantee’s responsibilities; or (iii) a required relocation of the
Grantee’s principal place of employment by more than fifty (50) miles from its
location as in effect immediately prior to the Change in Control; provided, that
the Grantee shall have provided written notice to the Company or its successor
of his or her intention to resign for Good Reason and the grounds therefore
within thirty (30) days following the occurrence of the event constituting Good
Reason, and the Company shall have failed to cure such event within thirty
(30) days of receiving such notice.

 

  E. “Noncompetition Area” shall mean the following geographic areas to the
extent the Grantee’s duties and responsibilities for the Company take or took
place anywhere in or are or were directed at any part of: (i) any foreign
country in which the Company has provided, sold, or installed its services,
products, or systems or has definitive plans to provide, sell, or install its
services, products, or systems during the Grantee’s employment by the Company;
and (ii) any state or territory of the United States of America.

 

  F. “Restricted Activities” means:

 

  1. The Grantee, whether on his or her own behalf or on behalf of any other
individual, partnership, firm, corporation, or business organization, either
directly or indirectly soliciting, inducing, persuading, or enticing, or
assisting another to solicit, induce, persuade, or entice, any person who is
then employed by or otherwise engaged to perform services for the Company, or
any person who at the time of the Grantee’s conduct had been employed by the
Company within the previous 12 months, to leave that employment or cease
performing those services;

 

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  2. The Grantee, whether on his or her own behalf or on behalf of any other
individual, partnership, firm, corporation, or business organization, either
directly or indirectly soliciting, inducing, persuading, or enticing, or
assisting another to solicit, induce, persuade, or entice, any person or entity
who is then a customer, supplier, or vendor of the Company to cease being a
customer, supplier, or vendor of the Company or to divert all or any part of
such person’s or entity’s business from the Company; and

 

  3. The Grantee, whether on his or her own behalf or on behalf of any other
individual, partnership, firm, corporation, or business organization, either
directly or indirectly soliciting, inducing, persuading, or enticing, or
assisting another to solicit, induce, persuade, or entice, any person or entity
who is a potential customer, supplier, or vendor of the Company, or at the time
of the Grantee’s conduct was a potential customer, supplier, or vendor of the
Company within the previous 12 months, not to become a customer, supplier, or
vendor of the Company or to divert all or any part of such person’s or entity’s
business from the Company; and

 

  4. The Grantee’s association directly or indirectly, as an employee, officer,
director, agent, partner, stockholder, owner, member, representative, financial
contributor, or consultant, with any Competitor.

With respect to the post-Retirement Restriction Period, the Restricted
Activities in F.2 and F.3 extend only to a customer, supplier, or vendor or
prospective customer, supplier, or vendor with respect to whom or whose business
the Grantee has or had Confidential Information (including without limitation
knowledge of or participation in a bid, proposal, or offer); and the Restricted
Activities in F.4 extend only to a (x) the performance by the Grantee, directly
or indirectly, of the same or similar activities the Grantee performed for the
Company prior to Retirement or such other activities that by their nature are
likely to lead to the disclosure of Confidential Information; and (y) that take
place anywhere in, or are directed at any part of, the Noncompetition Area. The
“Restricted Activities” do not extend to the Grantee’s investment in stock or
other securities of a Competitor listed on a national securities exchange or
actively traded in the over-the-counter market if he or she and the members of
his or her immediate family do not, directly or indirectly, hold more than a
total of 5% of all such shares of stock or other securities issued and
outstanding.

 

  G. “Restriction Period” shall mean the period of the Grantee’s employment by
the Company and continuing through the date that is three years after the
Grantee’s Retirement.

 

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  H. “Retirement” shall mean the Grantee’s voluntary separation from service
after the Grantee (i) has attained age sixty-two and completed at least ten
years of continuous service with the Company as of the date of separation or
(ii) has attained age sixty-five and completed at least five years of continuous
service with the Company as of the date of separation, and in either event with
the express intent not to engage in any of the Restricted Activities after
separation, provided that the Grantee has provided the Committee at least one
year’s advance notice of such retirement.

 

  I. “Serious Misconduct” shall mean the occurrence of any of the following:
(i) the material failure or refusal by the Grantee to perform his or her duties
to the Company or its successor (including, without limitation, the Grantee’s
inability to perform such duties as a result of alcohol or drug abuse, chronic
alcoholism or drug addiction) or to devote substantially all of his or her
business time, attention and energies to the performance of his or her duties to
the Company or its successor; (ii) any willful, intentional or grossly negligent
act by the Grantee having the effect of materially injuring the interest,
business or prospects of the Company or its successor or any of their
Affiliates; (iii) the material violation or material failure by the Grantee to
comply with the Company’s or its successor’s material published rules,
regulations or policies, as in effect from time to time; (iv) the Grantee’s
conviction of a felony offense or conviction of a misdemeanor offense involving
moral turpitude, fraud, theft or dishonesty; (v) any willful or intentional,
misappropriation or embezzlement of the property of the Company or its successor
or any of their Affiliates (whether or not a misdemeanor or felony); or (vi) a
material breach of Section 9 above by the Grantee; provided, however, that in
the event that the Company or its successor determines to terminate the
Grantee’s employment pursuant to clauses (i), (iii) or (vi) of this definition
of Serious Misconduct, such termination shall only become effective if the
Company or its successor shall first give the Grantee written notice of such
Serious Misconduct, which notice shall identify in reasonable detail the manner
in which the Company or its successor believes Serious Misconduct to exist and
indicates the steps required to cure such Serious Misconduct, if curable, and
the Grantee shall fail within thirty (30) days of such notice to substantially
remedy or correct the same.

 

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EXHIBIT A

MEMBERS OF PEER GROUP

Baker Hughes Incorporated (BHI)

Cameron International (CAM)

Exterran Holdings (EXH)

Flowserve (FLS)

FMC Technologies (FTI)

Gardner Denver (GDI)

Halliburton (HAL)

Idex (IDEX)

National Oilwell (NOV)

Oceaneering International (OLL)

Schlumberger (SLB)

Weatherford International (WFT)

 

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