Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made and entered into as of April 17,
2013 (the “Effective Date”) by and between USA Compression Management Services,
LLC, a Delaware limited liability company (hereafter the “Company”), and Matthew
C. Liuzzi (“Employee”).

 

WHEREAS, Employee and the Company desire to enter into this Agreement as set
forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, Employee and the Company, intending to be legally bound, do
hereby agree as follows:

 

1.                                      Employment.  During the Employment
Period (as defined in Section 4 below), the Company shall employ Employee, and
Employee shall serve, as Senior Vice President—Strategic Development of the
Company.

 

2.                                      Duties and Responsibilities of Employee.

 

(a)                                 During the Employment Period, Employee
shall: (i) devote all of Employee’s business time and attention to the business
of the Company and its Affiliates (as defined below) (collectively, the “Company
Group”, which term shall include, for the avoidance of doubt, any subsidiaries
or other entities that become Affiliates of the Company from and after the date
hereof), as applicable, (ii) will act in the best interests of the Company Group
and (iii) will perform with due care Employee’s duties and responsibilities.
Employee’s duties will include those normally incidental to the position of
senior strategic development officer, as well as whatever additional duties may
be assigned to Employee by the Chief Executive Officer or the board of directors
of USA Compression GP, LLC (the “Board”), which duties may include, without
limitation, providing services to members of the Company Group in addition to
the Company. Employee agrees to cooperate fully with the Board and not to engage
in any activity that interferes with the performance of Employee’s duties
hereunder. During the Employment Period, Employee will not hold any type of
outside employment, engage in any type of consulting or otherwise render
services to or for any other person or business concern without the advance
written consent of the Board; provided, that the foregoing shall not preclude
Employee from managing private investments, participating in industry and/or
trade groups, engaging in volunteer civic, charitable or religious activities,
serving on boards of directors of charitable not-for-profit entities or, with
the consent of the Board, which consent is not to be unreasonably withheld,
serving on the board of directors of other entities, in each case as long as
such activities, individually or in the aggregate, do not materially interfere
or conflict with Employee’s responsibilities to the Company.

 

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(b)                                 Employee represents and covenants that
Employee is not the subject of or a party to any employment agreement,
non-competition covenant, nondisclosure agreement, or any other agreement,
covenant, understanding, or restriction that would prohibit Employee from
executing this Agreement or the Amended and Restated Limited Liability Company
Agreement of USA Compression Holdings, LLC, dated as of December 23, 2010 (as
amended, the “Operating Agreement”) and fully performing Employee’s duties and
responsibilities hereunder or thereunder, or would in any manner, directly or
indirectly, limit or affect the duties and responsibilities that may now or in
the future be assigned to Employee hereunder.

 

(c)                                  Employee acknowledges and agrees that
Employee owes the Company Group a duty of loyalty as a fiduciary of the Company
Group, and that the obligations described in this Agreement are in addition to,
and not in lieu of, the obligations Employee owes the Company Group under the
common law.

 

3.                                      Compensation.

 

(a)                                 During the Employment Period, the Company
shall pay to Employee an annualized base salary of $275,000 (the “Base Salary”)
in consideration for Employee’s services under this Agreement, payable on a
bi-weekly basis, in conformity with the Company’s customer payroll practices for
similarly situated employees. The Board will annually review the Base Salary,
which may be increased but not decreased during the Employment Period based on
Employee’s performance and market conditions.

 

(b)                                 During the Employment Period, Employee shall
be entitled to participate in the bonus programs established for employees of
the Company, as may be amended from time to time. The performance targets that
must be achieved in order to be eligible for certain bonus levels shall be
established by the Board each year within 90 days following the start of the
applicable fiscal year, in its sole discretion, and communicated to Employee. If
the Board determines that Employee meets the performance targets established for
a particular fiscal year, then his bonus for that year (the “Annual Bonus”) will
be in an amount up to $175,000 (the “Target Annual Bonus”), in accordance with
the terms of the bonus program in effect for the applicable year, which amount
shall be prorated for less than a full year of service for the fiscal year
ending December 31, 2013. In addition, in the event Employee outperforms and
exceeds the performance targets established for a particular fiscal year,
Employee may receive an additional outperformance bonus for the applicable year,
in an amount determined in the sole discretion of the Board (an “Outperformance
Bonus”). The Annual Bonus and any Outperformance Bonus shall be paid no later
than March 15 of the year following the year in which the Annual Bonus or
Outperformance Bonus is earned, and shall not be payable unless

 

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Employee remains employed by the Company on the date that such bonus is paid,
except in the case of a termination of Employee due to the death or Disability
of Employee, by the Company for convenience, or a resignation by Employee for
Good Reason, in which case Employee will be entitled to (i) the entire amount of
any earned Annual Bonus for the year preceding the year in which Employee dies,
becomes Disabled, is terminated by the Company for convenience or resigns for
Good Reason and (ii) a pro rata portion (based on the number of days employed
during the year) of any earned Annual Bonus for the year in which Employee dies,
becomes Disabled, is terminated by the Company for convenience or resigns for
Good Reason in each case in the year following the year to which the applicable
bonus relates.

 

4.                                      Term of Employment. The initial term of
this Agreement shall be for the period beginning on the Effective Date and
ending on the second anniversary of the Effective Date (the “Initial Term”).  On
the second anniversary of the Effective Date and on each subsequent anniversary
thereafter, this Agreement shall automatically renew and extend for a period of
12 months (each such 12-month period being a “Renewal Term”) unless written
notice of non-renewal is delivered from either party to the other not less than
90 days prior to the expiration of the then-existing Initial Term or Renewal
Term.  Notwithstanding any other provision of this Agreement, Employee’s
employment pursuant to this Agreement may be terminated at any time in
accordance with Section 6.  The period from the Effective Date through the
expiration of this Agreement or, if sooner, the termination of Employee’s
employment pursuant to this Agreement, regardless of the time or reason for such
termination, shall be referred to herein as the “Employment Period.”

 

5.                                      Benefits.  Subject to the terms and
conditions of this Agreement, Employee shall be entitled to the following
benefits during the Employment Period:

 

(a)                                 Reimbursement of Business Expenses.  Subject
to Section 24 hereof (regarding section 409A compliance), the Company agrees to
reimburse Employee for Employee’s reasonable business-related expenses incurred
in the performance of Employee’s duties under this Agreement; provided, that
Employee timely submits all documentation for such reimbursement, as required by
Company policy in effect from time-to-time.  Employee is not permitted to
receive a payment in lieu of reimbursement under this Section 5(a).

 

(b)                                 Benefits.  During the Employment Period,
Employee and where applicable Employee’s spouse and dependents shall be eligible
to participate in the same benefit plans or fringe benefit policies, other than
severance programs, such as health, dental, life insurance, vision, and 401(k),
as are offered to members of the Company’s executive management and in each case
on no less favorable than the terms of benefits generally available to the
employees of the Company (based on seniority and salary level), subject to
applicable eligibility requirements and the terms and conditions of all plans
and policies.

 

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(c)                                  Paid Time Off.  During the Employment
Period, Employee shall accrue paid time off (“Paid Time Off”) at a rate of 20
days per calendar year during the Employment Period; provided, however, that
Employee shall cease accruing Paid Time Off once Employee has accrued 20 unused
days’ worth of Paid Time Off, and such accrual will begin again only after
Employee has used accrued Paid Time Off such that Employee’s accrued entitlement
to Paid Time Off is once again less than 20 days.  Employee shall take Paid Time
Off in accordance with all Company policies and with due regard for the needs of
the Company Group.

 

6.                                      Termination of Employment.

 

(a)                                 Company’s Right to Terminate Employee’s
Employment for Cause.  The Company shall have the right to terminate Employee’s
employment hereunder at any time for “Cause.”  For purposes of this Agreement,
“Cause” shall mean:

 

(i)                                    any material breach of this Agreement or
the Operating Agreement by Employee, including, without limitation, the material
breach of any representation, warranty or covenant made under this Agreement or
the Operating Agreement by Employee;

 

(ii)                                 Employee’s breach of any applicable duties
of loyalty to the Company or any of its Affiliates, gross negligence or material
misconduct, or a significant act or acts of personal dishonesty or deceit, taken
by Employee, in the performance of duties and services required of Employee that
is demonstrably and significantly injurious to the Company or any of its
Affiliates;

 

(iii)                             conviction of Employee of a felony or crime
involving moral turpitude;

 

(iv)                             Employee’s willful and continued failure or
refusal to perform substantially Employee’s material obligations pursuant to
this Agreement or the Operating Agreement or follow any lawful and reasonable
directive from the Chief Executive Officer or the Board, other than as a result
of Employee’s incapacity; or

 

(v)                                a violation of a federal, state or local law
or regulation applicable to the business of the Company that is demonstrably and
significantly injurious to the Company.

 

Prior to Employee’s termination for Cause, the Company must give written notice
to Employee describing the act or omission of Employee giving rise to the
determination of Cause and, in respect

 

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of circumstances capable of cure, such circumstances must remain uncured for
15 days following receipt by Employee of such written notice, provided, that
Employee shall not be entitled to cure any such acts or omissions if Employee
has previously cured any acts or omissions in the immediately preceding six
months.

 

(b)                                Company’s Right to Terminate for
Convenience.  The Company shall have the right to terminate Employee’s
employment for convenience at any time and for any reason, or no reason at all,
with written notice to Employee, subject to the provisions of
Section 6(g) regarding the severance benefits.  For purposes of this Agreement,
the Company’s failure to renew the Agreement at the end of Initial Term or a
Renewal Term shall be deemed a termination of Employee’s employment for
convenience.

 

(c)                                  Employee’s Right to Terminate for Good
Reason.  Employee shall have the right to terminate Employee’s employment with
the Company at any time for “Good Reason.”  For purposes of this Agreement,
“Good Reason” shall mean:

 

(i)                                    a material breach by the Company of any
of its covenants or obligations under this Agreement, the Operating Agreement or
any other material agreement with Employee;

 

(ii)                                 any material reduction in Employee’s Base
Salary, other than a reduction that is generally applicable to all similarly
situated employees of the Company;

 

(iii)                             a material reduction by the Company in
Employee’s duties, authority, responsibilities, job title or reporting
relationships as in effect immediately prior to such reduction, or the
assignment to Employee of such reduced duties, authority, responsibilities, job
title or reporting relationships;

 

(iv)                             a material reduction of the facilities and
perquisites available to Employee immediately prior to such reduction, other
than a reduction that is generally applicable to all similarly situated
employees of the Company; or

 

(v)                                the relocation of the geographic location of
Employee’s principal place of employment by more than 50 miles from the location
of Employee’s principal place of employment as of the Effective Date.

 

Notwithstanding the foregoing provisions of this Section 6(c) or any other
provision of this Agreement to the contrary, any

 

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assertion of Employee of a termination for Good Reason shall not be effective
unless all of the following conditions are satisfied:  (A) the condition giving
rise to Employee’s termination of employment must have arisen without Employee’s
written consent; (B) Employee must provide written notice to the Board of such
condition within 30 days of the initial existence of the condition; (C) the
condition specified in such notice must remain uncorrected for 30 days after
receipt of such notice by the Board; and (D) the date of Employee’s termination
of employment must occur within the 90-day period after the initial existence of
the condition specified in such notice, in which case, if Good Reason is found
to exist and Employee otherwise complies with Section 6(g), Employee will be
entitled to receive the severance benefits provided in Section 6(g).

 

(d)                                 Death or Disability.  Upon the death or
Disability (as defined below) of Employee, Employee’s employment with Company
shall terminate and the Company shall have no further obligation to Employee, or
Employee’s successor(s) in interest; provided, that the Company shall pay to
Employee or the estate of Employee the amounts set forth in Section 6(h), plus
any Annual Bonus or Outperformance Bonus provided for in Section 3(b).  For
purposes of this Agreement, “Disability” shall mean that Employee is unable to
perform the essential functions of Employee’s position, with reasonable
accommodation, due to an illness or physical or mental impairment or other
incapacity which continues for a period in excess of 20 consecutive weeks.  The
determination of Disability will be made by a physician selected by Employee and
acceptable to the Company or its insurers, with such agreement to the
acceptability not to be unreasonably withheld.

 

(e)                                  Employee’s Right to Terminate for
Convenience.  Employee shall have the right to terminate Employee’s employment
with the Company for convenience at any time and for any reason, or no reason at
all, upon 30 days’ advance written notice to the Company.

 

(f)                                   Termination upon Non-Renewal of the
Agreement.  Except as otherwise mutually agreed between the Company and
Employee, if the Company or Employee provides the other party with a written
notice of non-renewal of this Agreement in accordance with Section 4, Employee’s
employment with Company shall automatically terminate upon the expiration of the
then-applicable Initial Term or Renewal Term, as applicable.

 

(g)                                  Effect of Termination for Convenience or
Good Reason Resignation.  If Employee incurs a Separation from Service (as
defined below) due to Employee’s employment terminating pursuant to Sections
6(b) or 6(c) (regarding termination for convenience and resignation for Good
Reason) above and Employee:  (x) executes within 45 days following the date of

 

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Employee’s Separation from Service, and does not revoke, a release of all claims
in a form satisfactory to the Company, which such form will be promptly provided
by Company to Employee on or before his Separation from Service substantially in
the form of release contained at Exhibit A (the “Release”); and (y) abides by
Employee’s continuing obligations hereunder, including, without limitation, the
provisions of Sections 8 and 9 hereof (regarding confidentiality and
non-competition), then Employee shall be entitled to the following, in addition
to the amounts described in Section 6(h), and any Annual Bonus or Outperformance
Bonus provided for in Section 3(b):

 

(i)                                     Severance Pay.  The Company shall make
severance payments to Employee in an aggregate amount equal to one times
Employee’s Base Salary as in effect as of the date of Employee’s termination of
employment (or Base Salary for any preceding year in the Employment Period, if
greater) (the “Severance Payment”).  If payable, the Severance Payment will be
made, as applicable, in equal semi-monthly installments over the one-year period
following the date of Employee’s Separation from Service (the “Severance
Period’), in accordance with the Company’s regular payroll practices, provided,
that any such installment payments that would otherwise be paid prior to the
Company’s first regular payroll date that occurs on or after the 60th day
following the date of Employee’s Separation from Service (the “First Pay Date”)
shall be paid on the First Pay Date.  Notwithstanding the foregoing, in the
event of Employee’s death during the Severance Period, all remaining Severance
Payments due him shall be paid in a lump sum within 30 days of Employee’s
death.  Likewise, notwithstanding the other provisions of this Section 6(g)(i),
in the event of a termination for convenience by the Company or termination by
Employee for Good Reason within two years following the occurrence of a “change
in control event” within the meaning of Treasury Regulation
Section 1.409A-3(i)(5), the Severance Payment shall be paid in a lump sum within
30 days of the date of Employee’s Separation from Service.

 

(ii)                                Continued Health Insurance Benefits.  For a
period of 24 months following Employee’s Separation from Service (which period
of 24 months shall include and run concurrently with any so-called COBRA
continuation period applicable to Employee and/or his eligible dependents under
Section 4980B of the Code, and may be subject to Employee and/or his eligible
dependents electing such continuation coverage), provided, however, that

 

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(A) during the first 12 months of such coverage, the Company shall continue to
provide health insurance benefits to Employee and any eligible dependents at the
Company’s expense (other than Employee’s monthly cost-sharing contribution under
the Company’s group health plan, as in effect on the date of Employee’s
Separation from Service), and (B) during the remaining 12 months of such
coverage, the Company shall continue to provide health insurance benefits to
Employee and any eligible dependents at Employee’s expense.  Notwithstanding the
previous sentence, if the Company determines in its sole discretion that it
cannot provide the foregoing benefit without potentially violating applicable
law (including, without limitation, Section 2716 of the Public Health Service
Act and any applicable non-discrimination requirement thereunder or otherwise),
the Company shall in lieu thereof provide to Employee a taxable monthly payment
in an amount equal to the monthly COBRA premium that Employee would be required
to pay to continue his and his covered dependents’ group health coverage in
effect on the Date of Termination for the 12 month period following the date of
Employee’s Separation from Service (which amount shall be based on the premium
for the first month of COBRA coverage), less the amount of Employee’s monthly
cost-sharing contribution under the Company’s group health plan, as in effect on
the date of Employee’s Separation from Service at employee rates in effect
thereunder as of the Separation from Service.

 

(h)                                 Effect of Termination.  Subject to
Section 24 hereof (regarding section 409A compliance), upon the termination of
Employee’s employment for any reason, all earned, unpaid Base Salary and all
accrued, unused Paid Time Off shall be paid to Employee within 30 days of the
date of Employee’s termination of employment, or earlier if required by law. 
With the exception of any payments to which Employee may be entitled pursuant to
Section 5(a) (regarding business expenses) and Section 6(g) (regarding severance
benefits), the Company shall have no further obligation under this Agreement to
make any payments to Employee.

 

7.                                      Conflicts of Interest.  Employee agrees
that Employee shall promptly disclose to the Board any conflict of interest
involving Employee upon Employee becoming aware of such conflict.

 

8.                                      Confidentiality.  Employee acknowledges
and agrees that, in the course of Employee’s employment with the Company and the
performance of Employee’s duties on behalf

 

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of the Company Group hereunder, Employee will be provided with, and have access
to, valuable Confidential Information (as defined below) of the Company Group
and exchange for other valuable consideration provided hereunder, Employee
agrees to comply with this Section 8 and Section 9.

 

(a)                                 Employee covenants and agrees, both during
the term of the Employment Period and thereafter that, except as expressly
permitted by this Agreement or by directive of the Board, Employee shall not
disclose any Confidential Information to any person or entity and shall not use
any Confidential, Information except for the benefit of the Company Group. 
Employee shall take all reasonable precautions to protect the physical security
of all documents and other material containing Confidential Information
(regardless of the medium on which the Confidential Information is stored). 
This covenant shall apply to all Confidential Information, whether now known or
later to become known to Employee during the Employment Period.

 

(b)                                 Notwithstanding Section 5(a), Employee may
make the following disclosures and uses of Confidential Information:

 

(i)                                    disclosures to other employees of the
Company Group in connection with the faithful performance of duties for the
Company Group;

 

(ii)                                disclosures to customers and suppliers when,
in the reasonable and good faith belief of Employee, such disclosure is in
connection with Employee’s performance of services under this Agreement and is
in the best interests of the Company Group;

 

(iii)                             disclosures and uses that are approved by the
Board;

 

(iv)                             disclosures to a person or entity that has been
retained by the Company Group to provide services to the Company Group, and has
agreed in writing to abide by the terms of a confidentiality agreement;

 

(v)                                disclosures for the purpose of complying with
any applicable laws or regulatory requirements;

 

(vi)                             disclosures to Employee’s legal, tax or
financial advisors for the purpose of assisting such advisors in providing
advice to Employee, provided, however, that such advisors agree to maintain the
confidentiality of such disclosures; or

 

(vii)                          disclosures that Employee is legally compelled to
make by deposition, interrogatory, request for documents, subpoena, civil
investigative demand, order of a court of competent

 

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jurisdiction, or similar process, or otherwise by law; provided, however, that,
prior to any such disclosure, Employee shall, to the extent legally permissible:

 

(A)                              provide the Board with prompt notice of such
requirements so that the Board may seek a protective order or other appropriate
remedy or waive compliance with the terms of this Section;

 

(B)                              consult with the Board on the advisability of
taking steps to resist or narrow such disclosure; and

 

(C)                              cooperate with the Board (at the Company’s cost
and expense) in any attempt the Board may make to obtain a protective order or
other appropriate remedy or assurance that confidential treatment will be
afforded the Confidential Information; and in the event such protective order or
other remedy is not obtained, Employee agrees (y) to furnish only that portion
of the Confidential Information that is legally required to be furnished, as
advised by counsel to Employee, and (z) to exercise (at the Company’s reasonable
cost and expense) all reasonable efforts to obtain assurance that confidential
treatment will be accorded such Confidential Information.

 

(c)                                  Upon the expiration of the Employment
Period and at any other time upon request of the Company, Employee shall
surrender and deliver to the Company all documents (including, without
limitation, electronically stored information) and other material of any nature
containing or pertaining to all Confidential Information in Employee’s
possession and shall not retain any such document or other material.  Within
10 days of any such request, Employee shall certify to the Company in writing
that all such materials have been returned to the Company.

 

(d)                                 All non-public information, designs, ideas,
concepts, improvements, product developments, discoveries and inventions,
whether patentable or not, that are conceived, made, developed or acquired by
Employee, individually or in conjunction with others, during the Employment
Period (whether during business hours or otherwise and whether on the Company’s
premises or otherwise) that relate to the Company Group’s businesses or
properties, products or services (including, without limitation, all such
information relating to corporate opportunities, business plans, strategies for
developing business and market share, research, financial and sales data,
pricing terms, evaluations, opinions, interpretations, acquisition prospects,
the identity of customers or their

 

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requirements, the identity of key contacts within customers’ organizations or
within the organization of acquisition prospects, or marketing and merchandising
techniques, prospective names and marks) is defined as “Confidential
Information.”  Moreover, all documents, videotapes, written presentations,
brochures, drawings, memoranda, notes, records, files, correspondence, manuals,
models, specifications, computer programs, e-mail, voice mail, electronic
databases, maps, drawings, architectural renditions, models and all other
writings or materials of any type including or embodying any of such
information, ideas, concepts, improvements, discoveries, inventions and other
similar forms of expression are and shall be the sole and exclusive property of
the Company Group and be subject to the same restrictions on disclosure
applicable to all Confidential Information pursuant to this Agreement.

 

9.                                      Non-Competition.

 

(a)                                 The Company shall provide Employee access to
the Confidential Information for use only during the Employment Period, and
Employee acknowledges and agrees that the Company Group will be entrusting
Employee, in Employee’s unique and special capacity, with developing the
goodwill of the Company Group, and in consideration thereof and in consideration
of the access to Confidential Information, has voluntarily agreed to the
covenants set forth in this Section.  Employee further agrees and acknowledges
that the limitations and restrictions set forth herein, including, but not
limited to, geographical and temporal restrictions on certain competitive
activities, are reasonable and not oppressive and are material and substantial
parts of this Agreement intended and necessary to prevent unfair competition and
to protect the Company Group’s Confidential Information and substantial and
legitimate business interests and goodwill.

 

(b)                                 During the Employment Period and for a
period of two years (the “Restricted Period”) following the termination of the
Employment Period for any reason, Employee shall not, for whatever reason and
with or without cause, either individually or in partnership or jointly or in
conjunction with any other Person or Persons as principal, agent, employee,
shareholder (other than holding equity interests listed on a United States stock
exchange or automated quotation system that do not exceed 5% of the outstanding
shares so listed), owner, investor, partner or in any other manner whatsoever,
directly or indirectly, engage in or compete with the Business anywhere in the
world.

 

(c)                                  During the Restricted Period, Employee
shall not (i) knowingly induce or attempt to induce any other Person known to
Employee to be a customer of the Company or its affiliates (each, a “Customer”)
to cease doing any business with the Company or its affiliates anywhere in the
world or

 

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(ii) solicit business involving the Business from, or provide services related
to the Business to, any Customer.

 

(d)                                 During the Restricted Period, Employee shall
not solicit the employment of any individual who is an employee of the Company
or its affiliates, except that Employee shall not be precluded from soliciting
the employment of, or hiring, any such individual (i) whose employment with the
Company or one of its affiliates has been terminated before entering into
employment discussions with such Seller, (ii) who initiates discussions with
Employee regarding employment opportunities with Employee or (iii) responds to a
general advertisement or other similarly broad form of solicitation for
employees.

 

(e)                                  For purposes of this Section 9, the
following terms shall have the following meanings:

 

(i)                                     “Business” shall mean the business of
providing natural gas compression services through the deployment and
maintenance of on-site compressor packages and any other line of business in
which the Company Group is engaged at the time of termination or has taken
substantial steps to enter during the Employment Period and is actively pursuing
at the time of termination.

 

(ii)                                  “Person” means any individual,
corporation, partnership, limited liability company, association, trust,
incorporated organization, other entity or group (as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended).

 

(f)                                   Because of the difficulty of measuring
economic losses to the Company Group as a result of a breach of the foregoing
covenants, and because of the immediate and irreparable damage that could be
caused to the Company Group for which it would have no other adequate remedy,
Employee agrees that the foregoing covenant may be enforced by the Company, in
the event of breach by Employee, by injunctions and restraining orders and that
such enforcement shall not be the Company’s exclusive remedy for a breach but
instead shall be in addition to all other rights and remedies available to the
Company.

 

(g)                                  The covenants in this Section 9 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant.  Moreover, in the event any
arbitrator or court of competent jurisdiction shall determine that the scope,
time or territorial . restrictions set forth are unreasonable, then it is the
intention of the parties that such restrictions be enforced to the fullest
extent which the panel or court deems reasonable, and this Agreement shall
thereby be reformed.

 

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(h)                                 All of the covenants in this Section 9 shall
be construed as an agreement independent of any other provision in this
Agreement; and the existence of any claim or cause of action of Employee against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of such covenants.

 

10.                               Ownership of Intellectual Property.  Employee
agrees that the Company shall own, and Employee agrees to assign and does hereby
assign, all right, title and interest (including, but not limited, to patent
rights, copyrights, trade secret rights, mask work rights, trademark rights, and
all other intellectual and industrial property rights of any sort throughout the
world) relating to any and all inventions (whether or not patentable), works of
authorship, mask works, designs, ideas and information authored, created,
contributed to, made or conceived or reduced to practice, in whole or in part,
by Employee during the Employment Period which either (a) relate, at the time of
conception, reduction to practice, creation, derivation or development, to the
Company Group’s businesses or actual or anticipated research or development, or
(b) were developed on any amount of the Company’s time or with the use of any of
the Company Group’s equipment, supplies, facilities or trade secret information
(all of the foregoing collectively referred to herein as “Company Intellectual
Property”); and Employee will promptly disclose all Company Intellectual
Property to the Company.  All of Employee’s works of authorship and associated
copyrights created during the Employment Period and in the scope of Employee’s
employment shall be deemed to be “works made for hire” within the meaning of the
Copyright Act.  Employee agrees to perform, during and after the Employment
Period, all reasonable acts deemed necessary by the Company Group to assist the
Company, at the Company’s expense, in obtaining and enforcing its rights
throughout the world in the Company Intellectual Property.  Such acts may
include, but are not limited to, execution of documents and assistance or
cooperation (a) in the filing, prosecution, registration, and memorialization of
assignment of any applicable patents, copyrights, mask work, or other
applications, (b) in the enforcement of any applicable patents, copyrights, mask
work, moral rights, trade secrets, or other proprietary rights, and (c) in other
legal proceedings related to the Company Intellectual Property.

 

11.                               Arbitration.

 

(a)                                 Subject to Section 11(b), any dispute,
controversy or claim between Employee and the Company arising out of or relating
to this Agreement or Employee’s employment with the Company will be finally
settled by arbitration in Austin, Texas before, and in accordance with the
rules for the resolution of employment disputes then in effect of, the American
Arbitration Association (“AAA”).  The arbitration award shall be final and
binding on both parties.

 

(b)                                 Any arbitration conducted under this
Section 11 shall be heard by a single arbitrator (the “Arbitrator”) selected in
accordance with the then applicable rules of the AAA.  The Arbitrator shall
expeditiously (and, if possible, within 90 days after the selection of the
Arbitrator) hear and decide all matters concerning the dispute.  Except as
expressly provided to the contrary in this Agreement, the Arbitrator shall have
the power to

 

13

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(i) gather such materials, information, testimony and evidence as he or she
deems relevant to the dispute before him or her (and each party will provide
such materials, information, testimony and evidence requested by the Arbitrator,
except to the extent any information so requested is subject to an
attorney-client or other privilege and, if the information so requested is
proprietary or subject to a third party confidentiality restriction, the
arbitrator shall enter an order providing that such material will be subject to
a confidentiality agreement), and (ii) grant injunctive relief and enforce
specific performance.  The decision of the Arbitrator shall be rendered in
writing, be final, non-appealable and binding upon the disputing parties and the
parties agree that judgment upon the award may be entered by any court of
competent jurisdiction; provided, that the parties agree that the Arbitrator and
any court enforcing the award of the Arbitrator shall not have the right or
authority to award punitive or exemplary damages to any disputing party.

 

(c)                                  Each side shall share equally the cost of
the arbitration and bear its own costs and attorneys’ fees incurred in
connection with any arbitration, unless the Arbitrator determines that
compelling reasons exist for allocating all or a portion of such costs and fees
to the other side.

 

(d)                                 Notwithstanding Section 11(a), an
application for emergency or temporary injunctive relief by either party shall
not be subject to arbitration under this Section; provided, however, that the
remainder of any such dispute (beyond the application for emergency or temporary
injunctive relief) shall be subject to arbitration under this Section.

 

(e)                                  By entering into this Agreement and
entering into the arbitration provisions of this Section 11, THE PARTIES
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THEY ARE KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVING THEIR RIGHTS TO A JURY TRIAL.

 

(f)                                   Nothing in this Section 11 shall prohibit
a party to this Agreement from (i) instituting litigation to enforce any
arbitration award, or (ii) joining another party to this Agreement in a
litigation initiated by a person or entity which is not a party to this
Agreement.

 

12.                               Defense of Claims.  Employee agrees that,
during the Employment Period and thereafter, upon request from the Company,
Employee will reasonably cooperate with the Company Group in the defense of any
claims or actions that may be made by or against the Company Group that relate
to Employee’s actual or prior areas of responsibility, except if Employee’s
reasonable interests are adverse to the Company or its Affiliate(s), as
applicable, in such claim or action.  The Company agrees to pay or reimburse
Employee for all of Employee’s reasonable travel and other direct expenses
incurred, or to be reasonably incurred, to comply with Employee’s obligations
under this Section, provided, Employee provides reasonable documentation of same
and obtains the Company’s prior approval for incurring such expenses.

 

14

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After the expiration of one year following the date of Employee’s Separation
from Service, the Company will compensate Employee for the time Employee spends
on reasonable cooperation and assistance at the Company’s request at a rate per
hour calculated, by dividing his annualized Base Salary at the end of the
Employment Period by 2,080.

 

13.                               Withholdings; Deductions.  The Company may
withhold and deduct from any payments made or to be made pursuant to this
Agreement (a) all federal, state, local and other taxes or other amounts as may
be required pursuant to any law or governmental regulation or ruling and (b) any
deductions consented to in writing by Employee.

 

14.                               Title and Headings; Construction.  Titles and
headings to Sections hereof are for the purpose of reference only and shall in
no way limit, define or otherwise affect the provisions hereof.  Any and all
Exhibits or Attachments referred to in this Agreement are, by such reference,
incorporated herein and made a part hereof for all purposes.  The words
“herein”, “hereof, “hereunder” and other compounds of the word “here” shall
refer to the entire Agreement and not to any particular provision hereof.

 

15.                               Applicable Law; Submission to Jurisdiction. 
This Agreement shall in all respects be construed according to the laws of the
State of Texas.  With respect to any claim or dispute related to or arising
under this Agreement, the parties hereby consent to the arbitration provisions
of Section 11 above and recognize and agree that should any resort to a court be
necessary and permitted under this Agreement, then they consent to the exclusive
jurisdiction, forum and venue of the state and federal courts located in Austin,
Texas.

 

16.                               Entire Agreement and Amendment.  This
Agreement,-including the Operating Agreement, the terms of which are
incorporated herein by reference, contains the entire agreement of the parties
with respect to the matters covered herein; moreover, this Agreement supersedes
all prior and contemporaneous agreements and understandings, oral or written,
between the parties hereto concerning the subject matter hereof; provided,
however, that, notwithstanding anything to the contrary in the Operating
Agreement, the definitions of “Cause” and “Good Reason” in this Agreement shall
apply in lieu of those same defined terms in the Operating Agreement when and to
the extent those defined terms are applicable to Employee under the Operating
Agreement.  This Agreement may be amended only by a written instrument executed
by both parties hereto.

 

17.                               Waiver of Breach.  Any waiver of this
Agreement must be executed by the party to be bound by such waiver.  No waiver
by either party hereto of a breach of any provision of this Agreement by the
other party, or of compliance with any condition or provision of this Agreement
to be performed by such other party, will operate or be construed as a waiver of
any subsequent breach by such other party or any similar or dissimilar provision
or condition at the same or any subsequent time.  The failure of either party
hereto to take any action by reason of any breach will not deprive such party of
the right to take action at any time while such breach continues.

 

18.                               Assignment.  This Agreement is personal to
Employee, and neither this Agreement nor any rights or obligations hereunder
shall be assignable or otherwise transferred by Employee.  The Company may
assign this Agreement to any member of the Company Group

 

15

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and to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the equity, assets or businesses of the Company, if such
successor expressly agrees to assume the obligations of the Company hereunder.

 

19.                               Affiliates.  For purposes of this Agreement,
the term “Affiliates” means any person or entity Controlling, Controlled by or
Under Common Control with such person or entity, but with respect to the
Company, specifically does not mean Riverstone, the entities Controlling it, and
its investment funds, partners of its investment funds, and its portfolio
companies other than the Company and its subsidiaries.  The term “Control,”
including the correlative terms “Controlling,” “Controlled by,” and “Under
Common Control with” means possession, directly or indirectly, of the power to
direct or cause the direction of management or policies (whether through
ownership of securities or any Company or other ownership interest, by contract
or otherwise) of a person or entity.  For the purposes of the preceding
sentence, Control shall be deemed to exist when a person or entity possesses,
directly or indirectly, through one or more intermediaries (a) in the case of a
corporation more than 50% of the outstanding voting securities thereof; (b) in
the case of a limited liability company, partnership or joint venture, the right
to more than 50% of the distributions therefrom (including liquidating
distributions); or (c) in the case of any other person or entity, more than 50%
of the economic or beneficial interest therein.

 

20.                               Notices.  Notices provided for in this
Agreement shall be in writing and shall be deemed to have been duly received (a)
when delivered in person or sent by facsimile transmission, (b) on the first
business day after such notice is sent by air express overnight courier service,
or (c) on the third business day following deposit in the United States mail,
registered or certified mail, return receipt requested, postage prepaid and
addressed, to the following address, as applicable:

 

If to the Company, addressed to:

 

USA Compression Management Services, LLC

100 Congress Avenue, Suite 1550

Austin, TX 78701

Attn:  Joseph C. Tusa, Jr.

Facsimile:  (512) 473-2616

 

and a copy to:

 

R/C IV USACP Holdings, L.P.

c/o Riverstone Holdings, LLC

712 Fifth Avenue, 51st Floor

New York, NY 10019

Attn:  Andrew W. Ward

Facsimile:  (212) 993-0077

 

16

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and a copy to:

 

Vinson & Elkins

1001 Fannin Street

Suite 2500

Houston, Texas 77002-6760

Attn:  E. Ramey Layne

Facsimile:  (713) 751-5396

 

If to Employee, addressed to:

 

Matthew C. Liuzzi

6154 Briar Rose Drive

Houston, Texas 77057

Facsimile:  (   )    -

 

21.                               Counterparts.  This Agreement may be executed
in any number of counterparts, including by electronic mail or facsimile, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument. Each
counterpart may consist of a copy hereof containing multiple signature pages,
each signed by one party, but together signed by both parties hereto.

 

22.                               Deemed Resignations.  Unless otherwise agreed
to in writing by the Company and Employee prior to the termination of Employee’s
employment, any termination of Employee’s employment shall constitute:  (a) an
automatic resignation of Employee as an officer of the Company and each member
of the Company Group, as applicable, and (b) an automatic resignation of
Employee from the Board (if applicable), from the board of directors or managers
of any member of the Company Group (if applicable) and from the board of
directors or managers or any similar governing body of any corporation, limited
liability entity or other entity in which the Company or any Affiliate holds an
equity interest and with respect to which board or similar governing body
Employee serves as the Company’s or such Affiliate’s designee or other
representative (if applicable).

 

23.                               Key Person Insurance.  At any time during the
Employment Period, the Company shall have the right to insure the life of
Employee for the Company’s sole benefit.  The Company shall have the right to
determine the amount of insurance and the type of policy.  Employee shall
cooperate with the Company in obtaining such insurance by submitting to physical
examinations, by supplying all information reasonably required by any insurance
carrier and by executing all necessary documents reasonably required by any
insurance carrier. Employee shall incur no financial obligation by executing any
required document, and shall have no interest in any such policy.

 

24.                               Compliance with Section 409A.

 

(a)                                 The severance pay and benefits provided
under this Agreement are intended to be exempt from or comply with Section 409A
of the Internal Revenue Code (the “Code”), and any ambiguous provision shall be

 

17

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construed in a manner consistent with such intent.  For purposes of this
Agreement, a “Separation from Service” shall mean Employee’s “separation from
service” as such term is defined in Treasury Regulation Section 1.409A-1(h) or
any successor regulation.  Each separate severance payment and each severance
installment payment shall be treated as a separate payment under this Agreement
for all purposes.  To the extent that Employee is a “specified employee” within
the meaning of Section 1.409A-l(i)(l) of the Department of Treasury Regulations,
any amounts that would otherwise be payable by reason of such separation from
service and are not otherwise exempt from the provisions of Section 409A of the
Code will delayed for a period of six months from the date of such Separation
from Service, in which case the payments that would otherwise have been paid
during such six month period shall be paid in a lump sum on the first day of the
seventh month after the date of the Separation from Service and the remainder of
such payments, if any, will be made pursuant to their terms.

 

(b)                                 Notwithstanding anything to the contrary in
this Agreement, in-kind benefits and reimbursements provided under this
Agreement during any calendar year shall not affect in-kind benefits or
reimbursements to be provided in any other calendar year, other than an
arrangement providing for the reimbursement of medical expenses referred to in
Section 105(b) of the Code, and are not subject to liquidation or exchange for
another benefit.  Notwithstanding anything to the contrary in this Agreement,
reimbursement requests must be timely submitted by Employee and, if timely
submitted, reimbursement payments shall be promptly made to Employee following
such submission, but in no event later than December 31st of the calendar year
following the calendar year in which the expense was incurred.  In no event
shall Employee be entitled to any reimbursement payments after December 31st of
the calendar year following the calendar year in which the expense was
incurred.  This paragraph shall only apply to in-kind benefits and
reimbursements that would result in taxable compensation income to Employee.

 

(c)                                  If any amount payable hereunder would be
subject to additional taxes and interest under Section 409A of the Code because
the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)
of the Code, then the payment of such amount shall be delayed and paid, without
interest, in a lump sum on the earliest of:  (i) Employee’s death, (ii) the date
that is six months after the date of Employee’s Separation from Service with the
Company (or if such payment date does not fall on a business day of Company, the
next following business day of the Company), or (iii) such earlier date upon
which such payment can be paid under Section 409A of the Code without being
subject to such additional taxes and interest.

 

[Signature Page Follows]

 

18

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IN WITNESS WHEREOF, Employee and the Company each have caused this Agreement to
be executed in its name and on its behalf, as of the Effective Date.

 

 

EMPLOYEE:

 

 

 

 

 

 

 

/s/ Matthew C. Liuzzi

 

Matthew C. Liuzzi

 

 

 

 

 

COMPANY:

 

 

 

USA COMPRESSION MANAGEMENT SERVICES, LLC

 

 

 

 

 

 

By:

/s/ Joseph C. Tusa, Jr.

 

 

Joseph C. Tusa, Jr.

 

 

President

 

SIGNATURE PAGE TO
EMPLOYMENT AGREEMENT

 

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EXHIBIT A

 

FORM OF RELEASE AGREEMENT

 

This Release Agreement (this “Agreement”) constitutes the release referred to in
that certain Employment Agreement (the “Employment Agreement”) dated as of
April 17, 2013 by and among Matthew C. Liuzzi (“Employee”) and USA Compression
Management Services, LLC (the “Company”).

 

(a)                                 For good and valuable consideration,
including the Company’s provision of a severance payment to Employee in
accordance with Section 6(f) of the Employment Agreement, Employee hereby
releases, discharges and forever acquits each member of the Company Group and
their respective Affiliates (each as defined in the Employment Agreement,
provided, however, that for purposes of this Agreement, “Affiliates” shall
expressly include Riverstone, the entities Controlling it, and its investment
funds, partners of its investment funds, and its and their portfolio companies
other than the Company) and subsidiaries and the past, present and future
stockholders, members, partners, directors, managers, employees, agents,
attorneys, heirs, representatives, successors and assigns of the foregoing, in
their personal and representative capacities (collectively, the “Company
Parties”), from liability for, and hereby waives, any and all claims, damages,
or causes of action of any kind related to Employee’s employment with any
Company Party, the termination of such employment, and any other acts or
omissions related to any matter on or prior to the date of the execution of this
Agreement including, without limitation, any alleged violation through the date
of this Agreement of:  (i) the Age Discrimination in Employment Act of 1967, as
amended; (ii) Title VII of the Civil Rights Act of 1964, as amended; (iii) the
Civil Rights Act of 1991; (iv) Section 1981 through 1988 of Title 42 of the
United States Code, as amended; (v) Employee Retirement Income Security Act of
1974, as amended; (vi) the Immigration Reform Control Act, as amended; (vii) the
Americans with Disabilities Act of 1990, as amended; (viii) the National Labor
Relations Act, as amended; (ix) the Occupational Safety and Health Act, as
amended; (x) the Family and Medical Leave Act of 1993; (xi) any state
anti-discrimination law; (xii) any state wage and hour law; (xiii) any other
local, state or federal law, regulation or ordinance; (xiv) any public policy,
contract, tort, or common law claim; (xv) any allegation for costs, fees, or
other expenses including attorneys’ fees incurred in these matters; (xvi) any
and all rights, benefits or claims Employee may have under any employment
contract, incentive compensation plan or stock option plan with any Company
Party or to any ownership interest in any Company Party except as expressly
provided in the Employment Agreement and any stock option or other equity
compensation agreement between Employee and the Company and (xvii) any claim for
compensation or benefits of any kind not expressly set forth in the Employment
Agreement or any such stock option or other equity compensation agreement
(collectively, the “Released Claims”).  In no event shall the Released Claims
include (i) any claim which arises after the date of this Agreement, (ii) any
claim to vested benefits under an employee benefit plan, (iii) any claims for
contractual payments under the Employment Agreement, or (iv) any claims under
the Operating Agreement of the Company.  This Agreement is not intended to
indicate that any such claims exist or

 

Exhibit A-1

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that, if they do exist, they are meritorious.  Rather, Employee is simply
agreeing that, in exchange for the consideration recited in the first sentence
of this paragraph, any and all potential claims of this nature that Employee may
have against the Company Parties, regardless of whether they actually exist, are
expressly settled, compromised and waived.  By signing this Agreement, Employee
is bound by it.  Anyone who succeeds to Employee’s rights and responsibilities,
such as heirs or the executor of Employee’s estate, is also bound by this
Agreement.  This release also applies to any claims brought by any person or
agency or class action under which Employee may have a right or benefit. 
Notwithstanding the release of liability contained herein, nothing in this
Agreement prevents Employee from filing any non-legally waivable claim
(including a challenge to the validity of this Agreement) with the Equal
Employment Opportunity Commission (“EEOC”) or comparable state or local agency
or participating in any investigation or proceeding conducted by the .EEOC or
comparable state or local agency; however, Employee understands and agrees that
Employee is waiving any and all rights to recover any monetary or personal
relief or recovery as a result of such EEOC or comparable state or local agency
proceeding or subsequent legal actions.  THIS RELEASE INCLUDES MATTERS
ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR
OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE COMPANY PARTIES.

 

(b)                                 Employee agrees not to bring or join any
lawsuit against any of the Company Parties in any court relating to any of the
Released Claims.  Employee represents that Employee has not brought or joined
any lawsuit or filed any charge or claim against any of the Company Parties in
any court or before any government agency and has made no assignment of any
rights Employee has asserted or may have against any of the Company Parties to
any person or entity, in each case, with respect to any Released Claims.

 

(c)                                  By executing and delivering this Agreement,
Employee acknowledges that:

 

(i)                          He has carefully read this Agreement;

 

(ii)                       He has had at least [21] [45] days to consider this
Agreement before the execution and delivery hereof to the Company.  [Add if
45 days applies:    , and he acknowledges that attached to this Agreement are
(A) a list of the positions and ages of those employees selected for termination
(or participation in the exit incentive or other employment termination
program); (B) a list of the ages of those employees not selected for termination
(or participation in such program); and (C) information about the unit affected
by the employment termination program of which his termination was a part,
including any eligibility factors for such program and any time limits
applicable to such program];

 

Exhibit A-2

--------------------------------------------------------------------------------

 

(iii)                   He has been and hereby is advised in writing that he
may, at his option, discuss this Agreement with an attorney of his choice and
that he has had adequate opportunity to do so;

 

(iv)                   He fully understands the final and binding effect of this
Agreement; the only promises made to him to sign this Agreement are those stated
in the Employment Agreement and herein; and he is signing this Agreement
voluntarily and of his own free will, and that he understands and agrees to each
of the terms of this Agreement; and

 

(v)                      With the exception of any sums that he may be owed
pursuant to Section 6(f) of the Employment Agreement, he has been paid all wages
and other compensation to which he is entitled under the Agreement and received
all leaves (paid and unpaid) to which he was entitled during the Employment
Period (as defined in the Employment Agreement).

 

Notwithstanding the initial effectiveness of this Agreement, Employee may revoke
the delivery (and therefore the effectiveness) of this Agreement within the
seven-day period beginning on the date Employee delivers this Agreement to the
Company (such seven day period being referenced to herein as the “Release
Revocation Period”).  To be effective, such revocation must be in writing signed
by Employee and must be delivered to [name, address] before 11:59 p.m., Austin,
Texas time, on the last day of the Release Revocation Period.  If an effective
revocation is delivered in the foregoing manner and timeframe, this Agreement
shall be of no force or effect and shall be null and void ab initio.  No
consideration shall be paid if this Agreement is revoked by Employee in the
foregoing manner.

 

Executed on this       day of                          , 201  .

 

 

 

 

 

Matthew C. Liuzzi

 

Exhibit A-3

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