Exhibit 10.63
EXTERRAN HOLDINGS, INC.
AWARD NOTICE
TIME-VESTED STOCK OPTION FOR OFFICERS
Exterran Holdings, Inc. (the “Company”) has granted to you (the “Participant”)
an Incentive Stock Option to purchase shares of Common Stock of the Company
under the Amended and Restated Exterran Holdings, Inc. 2007 Stock Incentive Plan
(as amended, the “Plan”). All capitalized terms not explicitly defined in this
Award Notice but defined in the Plan shall have the same meaning ascribed to
them in the Plan.
The material terms of your Award are as follows:
     1. Award. You have been granted an Option (the “Award” or “Option”) to
purchase shares of Common Stock of the Company in the number and at the exercise
price (the “Exercise Price”) provided above as the “Grant Price”. To the extent
allowable under the law, this Option will be treated as an Incentive Stock
Option under Section 422 of the Code. To the extent any portion of this Option
does not qualify as an Incentive Stock Option due to restrictions in the Code,
that portion of the Option will become a Non-Qualified Option.
     2. Qualification as Incentive Stock Option. Neither the Company, its
directors, officers, employees or the Committee, nor any Affiliate which is in
existence or hereafter comes into existence shall be liable to you or any other
person or entity if it is determined for any reason by the Internal Revenue
Service or any court having jurisdiction that the Option does not qualify for
tax treatment as an Incentive Stock Option under Section 422 of the Code. Please
see Section VII (c) of the Plan for specific limitations on incentive stock
options and consult your tax advisor for advice on your specific tax situation.
     3. Grant Date. The Grant Date of this Award is the “issue date” provided
above.
     4. Vesting. Your Award is subject to a vesting schedule. A portion of your
Award will automatically vest and become exercisable on each of the dates
indicated in the vesting schedule above (each a “Vesting Date”). However, except
as provided in Sections 6 and 7 below, you must be employed by the Company or
one of its Affiliates at all times from the Grant Date up to and including the
applicable Vesting Date for that portion of the Award to vest.
     5. Term. The Award will continue in effect until the date that is 7 years
from the Issue Date (the “Expiry Date”), subject to earlier termination in
accordance with Section 6 of this Award Notice or the Plan. If not exercised
prior to the Expiry Date, the Award will be forfeited.
     6. Termination of Employment. Your Award will either vest or be forfeited
upon your termination, depending on the reason for termination:
     (a) Termination as a Result of Death, Disability or Retirement.
For Incentive Stock Options — Upon a termination of employment as a result of
death or disability (as defined in Section 22(e)(3) of the Code), the unvested
portion of your Award will immediately vest in full and become exercisable, and
you (or your legal representative) will be entitled to exercise the Award at any
time prior to the Expiry Date or the expiration of one (1) year after the date
of your termination, whichever is the shorter period. Upon a termination of
employment as a result of Retirement, the unvested portion of your Award will
immediately vest in full and become exercisable, and you will be entitled to
exercise the Award at any time prior to the Expiry Date or the expiration of
three (3) months after the date of your termination, whichever is the shorter
period.

 

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For Non-Qualified Stock Options — Upon a termination of employment as a result
of death, Disability or Retirement, the unvested portion of your Award will
immediately vest in full and become exercisable, and you (or your legal
representative) will be entitled to exercise the vested portion of your Award at
any time prior to the Expiry Date or the expiration of two (2) years after the
date of your termination, whichever is the shorter period.
     (b) Termination for Cause. Following a termination of employment for Cause,
the outstanding unexercised portion of your Award (whether vested or unvested)
will be automatically forfeited on the date of your termination.
     (c) All Other Terminations. You will be entitled to exercise the vested
portion of your Award at any time prior to the Expiry Date or the expiration of
three (3) months after the date of your termination, whichever is the shorter
period. The unvested portion of your Award will be automatically forfeited on
the date of your termination.
     7. Corporate Change. In the event a Corporate Change occurs,
notwithstanding anything to the contrary in this Award Notice, this section will
govern the vesting of your Award on and after the date the Corporate Change is
consummated.
If a Corporate Change is consummated prior to the final Vesting Date of your
Award, then:
     (a) the portion of your Award that would have vested on the Vesting Date
immediately following the date the Corporate Change is consummated will
automatically vest as of the date the Corporate Change is consummated; and
     (b) the remaining unvested portion of your Award, if any, will continue to
be subject to the original vesting schedule and Vesting Dates;
provided, however, that if your employment with the Company or an Affiliate is
terminated on or after the date a Corporate Change is consummated (i) by the
Company without Cause, (ii) by you for Good Reason (as defined below) or
(iii) as a result of your death or Disability, then the unvested portion of your
Award as of such termination date will automatically vest in full and all
restrictions applicable to your Award will cease as of the date of your
termination of employment. If your employment is terminated by the Company with
Cause or by you without Good Reason on or after the date the Corporate Change is
consummated, then the unvested portion of your Award will be automatically
forfeited on the date of your termination.
For purposes of this Award Notice, unless otherwise provided in a written
agreement between the Company and you, “Good Reason” means the occurrence of any
of the following without your express written consent:
     (i) A reduction of 10% or more of your base salary;
     (ii) Your being required to be based at any other office or location of
employment more than 50 miles from your primary office or location of employment
immediately prior to the Corporate Change; or
     (iii) The willful failure by the Company to pay you your compensation when
due;
provided, however, unless otherwise provided in a written agreement between the
Company and you, that Good Reason does not exist with respect to a matter unless
you give the Company a notice of termination due to such matter within 20 days
of the date such matter first exists. If you fail to give a notice of
termination timely, you shall be deemed to have waived all rights you may have
under this Award Notice with respect to such matter. The Company will have
30 days from the date of your notice of termination to cure the matter. If the
Company cures the matter, your notice of termination shall be

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deemed rescinded. If the Company fails to cure the matter timely, your
employment shall be deemed to have been terminated by the Company for Good
Reason at the end of the 30-day cure period.
     8. Exercise of Award. The exercise of your Option must be accompanied by
full payment of the Exercise Price for the shares of Common Stock being acquired
by: (i) cash, (ii) a check acceptable to the Company, (iii) the delivery of a
number of already-owned shares of Common Stock having a Fair Market Value equal
to such Exercise Price (provided you have owned such shares of Common Stock for
more than six months), (iv) a “cashless broker exercise” of the Option through
any procedures established or approved by the Compensation Committee with
respect thereto, or (v) any combination of the foregoing approved by the
Compensation Committee. No shares of Common Stock will be issued until the
Exercise Price has been paid. An Incentive Stock Option shall be exercisable
only by you except in the case of your death or Disability, in which event it
can be exercised only by your legal representatives, executors, successors or
beneficiaries.
     9. Stockholder Rights. You will have no rights as a stockholder with
respect to any shares of Common Stock issuable upon exercise of the Option until
you become the holder of record of such shares of Common Stock.
     10. Non—Transferability. You cannot sell, transfer, pledge, exchange or
otherwise dispose of your Option except in accordance with the Plan.
     11. No Right to Continued Employment. Nothing in this Award Notice
guarantees your continued employment with the Company or any of its Affiliates
or interferes in any way with the right of the Company or its Affiliates to
terminate your employment at any time.
     12. Data Privacy. You consent to the collection, use, processing and
transfer of your personal data as described in this paragraph. You understand
that the Company and/or its Affiliates hold certain personal information about
you (including your name, address and telephone number, date of birth, social
security number, social insurance number, etc.) for the purpose of administering
the Plan (“Data”). You also understand that the Company and/or its Affiliates
will transfer this Data amongst themselves as necessary for the purpose of
implementing, administering and managing your participation in the Plan, and
that the Company and/or its Affiliates may also transfer this Data to any third
parties assisting the Company in the implementation, administration and
management of the Plan. You authorize them to receive, possess, use, retain and
transfer the Data, in electronic or other form, for these purposes. You also
understand that you may, at any time, review the Data, require any necessary
changes to the Data or withdraw your consent in writing by contacting the
Company. You further understand that withdrawing your consent may affect your
ability to participate in the Plan.
     13. Withholding. Your Award is subject to applicable income, employment
and/or social insurance or social security withholding obligations, and the
Company and its Affiliates may, in their sole discretion, withhold a sufficient
number of shares of Common Stock that are otherwise issuable to you under this
Award in order to satisfy any such withholding obligations. If necessary, the
Company also reserves the right to withhold from your regular earnings an amount
sufficient to meet the withholding obligations.
     14. Plan Governs. This Award Notice is subject to the terms of the Plan, a
copy of which is available at no charge through your Solium account or which
will be provided to you upon request as indicated in Section 17. All the terms
and conditions of the Plan, as may be amended from time to time, and any rules,
guidelines and procedures which may from time to time be established pursuant to
the Plan, are hereby incorporated into this Award Notice. In the event of a
discrepancy between this Award Notice and the Plan, the Plan shall govern.
     15. Modifications. The Company may make any change to this Award Notice
that is not adverse to your rights under this Award Notice or the Plan.

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     16. Non-Solicitation/Confidentiality Agreement. The greatest assets of the
Company and its Affiliates (“Exterran” in this Section 16) are its employees,
directors, customers, and confidential information. In recognition of the
increased risk of unfairly losing any of these assets, Exterran has adopted this
Non-Solicitation/Confidentiality Agreement as set forth in this Section 16, the
terms of which you accept and agree to by accepting the Award.
     a. In order to assist you with your employment-related duties, Exterran has
provided and shall continue to provide you with access to confidential and
proprietary operational information and other confidential information which is
either information not known by actual or potential competitors and third
parties or is proprietary information of Exterran (“Confidential Information”).
Such Confidential Information shall include, without limitation, information
regarding Exterran’s customers and suppliers, employees, business operations,
product lines, services, pricing and pricing formulae, machines and inventions,
research, knowhow, manufacturing and fabrication techniques, engineering and
product design specifications, financial information, business plans and
strategies, information derived from reports and computer systems, work in
progress, marketing and sales programs and strategies, cost data, methods of
doing business, ideas, materials or information prepared or performed for, by or
on behalf of Exterran. You agree, during your employment and at all times
thereafter, not to use, divulge, or furnish or to make accessible to any third
party, company, or other entity or individual, without Exterran’s written
consent, any Confidential Information of Exterran, except as required by your
job-related duties to Exterran.
     b. You agree that whenever your employment with Exterran ends for any
reason, (i) you shall return to Exterran all documents containing or referring
to Exterran’s Confidential Information as may be in your possession and/or
control, with no request being required; and (ii) you shall return all Exterran
computer and computer-related equipment and software, and all Exterran property,
files, records, documents, drawings, specifications, lists, equipments and other
similar items relating to Exterran’s business coming into your possession and/or
control during your employment, with no request being required.
     c. In connection with your acceptance of the Award under the Plan, and in
exchange for the consideration provided hereunder, and in consideration of
Exterran disclosing and providing access to Confidential Information, you agree
that you will not, during your employment with, or service to Exterran, and for
one year thereafter, directly or indirectly, for any reason, for your own
account or on behalf of or together with any other person, entity or
organization (i) call on or otherwise solicit any natural person who is employed
by Exterran in any capacity with the purpose or intent of attracting that person
from the employ of Exterran, or (ii) divert or attempt to divert from Exterran
any business relating to the provision of natural gas compression equipment and
related services or oil and natural gas production and processing equipment and
related services without, in either case, the prior written consent of Exterran.
     d. You agree that (i) the terms of this Section 16 are reasonable and
constitute an otherwise enforceable agreement to which the terms and provisions
of this Section 16 are ancillary or a part of; (ii) the consideration provided
by Exterran under this Section 16 is not illusory; (iii) the restrictions of
this Section 16 are necessary and reasonable for the protection of the
legitimate business interests and goodwill of Exterran; and (iv) the
consideration given by Exterran under this Section 16, including without
limitation, the provision by Exterran of Confidential Information to you, gives
rise to Exterran’s interests in the covenants set forth in this Section 16.
     e. You and Exterran agree that it was both parties’ intention to enter into
a valid and enforceable agreement. You agree that if any covenant contained in
this Section 16 is found by a court of competent jurisdiction to contain
limitations as to time, geographic area, or scope of activity that are not
reasonable and impose a greater restraint than is necessary to protect the
goodwill or other business interests of Exterran, then the court shall reform
the covenant to the

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extent necessary to cause the limitations contained in the covenant as to time,
geographic area, and scope of activity to be restrained to be reasonable and to
impose a restraint that is not greater than necessary to protect the goodwill
and other business interests of Exterran.
     f. In the event that Exterran determines that you have breached or
attempted or threatened to breach any term of this Section 16, in addition to
any other remedies at law or in equity Exterran may have available to it, it is
agreed that Exterran shall be entitled, upon application to any court of proper
jurisdiction, to a temporary restraining order or preliminary injunction
(without necessity of (i) proving irreparable harm, (ii) establishing that
monetary damages are inadequate, or (iii) posting any bond with respect thereto)
against you prohibiting such breach or attempted or threatened breach by proving
only the existence of such breach or attempted or threatened breach. You agree
that the period during which the covenants contained in this Section 16 are in
effect shall be computed by excluding from such computation any time during
which you are in violation of any provision of this Section 16.
     g. You hereby acknowledge that the Award being granted to you under the
Plan is an extraordinary item of compensation and is not part of, nor in lieu
of, your ordinary wages for services you may render to Exterran.
     h. You understand that this agreement is independent of and does not affect
the enforceability of any other restrictive covenants by which you have agreed
to be bound in any other agreement with Exterran.
     i. Notwithstanding any other provision of this Award, the provisions of
this Section 16 shall be governed, construed and enforced in accordance with the
laws of the State of Texas, without giving effect to the conflict of law
principles thereof. Any action or proceeding seeking to enforce any provision of
this Section 16 shall be brought only in the courts of the State of Texas or, if
it has or can acquire jurisdiction, in the United States District Court for the
Southern District of Texas, and the parties consent to the jurisdiction of such
courts in any such action or proceeding and waives any objection to venue laid
therein.
     17. Additional Information. If you require additional information
concerning your Award, contact the Company’s Stock Plan Administrator at
281.836.7000 or at mystock@exterran.com. You may also contact the Company’s
third party recordkeeper, Solium, at 877.380.7793 (U.S. and Canada) or
403.515.3909.
     18. Participant Acceptance. If you agree with the terms and conditions of
this Award, please indicate your acceptance in the Solium website
(www.solium.com) by selecting “Accept.” To decline the Award, select “Disagree.”
If within 90 days of the Grant Date you do not accept the Award, indicate in
Solium that you disagree with the terms and conditions of this Award or provide
written notice to the Company’s Stock Plan Administrator, as provided in
Section 17, that you have chosen not to accept the Award, the Award will be
deemed to be accepted.

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