exv10w12






Exhibit 10.12




AMENDMENT AND DISCHARGE OF

CHANGE OF CONTROL AGREEMENT




          THIS AMENDMENT AND DISCHARGE OF CHANGE OF CONTROL AGREEMENT (this “Amendment”) is made and
entered into by and between Exterran Holdings, Inc., a Delaware corporation (the “Company”), and
Norman A. Mckay (“Executive”) (collectively referred to as the “Parties” or individually as the
“Party”).




W I T N E S S E T H:




          WHEREAS, Hanover Compressor Company (as a predecessor to the Company) and Executive entered
into a Change of Control Agreement, dated July 29, 2005, and Amendment No. 1 thereto (as amended to
date, the “Agreement”), regarding their respective rights and obligations in connection with
Executive’s “Qualifying Termination of Employment” following a “Change of Control” (as both terms
are defined in the Agreement) during the term of the Agreement; and




          WHEREAS, effective as of August 20, 2007, there was a Change of Control of Hanover Compressor
Company and the Parties agree that “Good Reason” then existed for a Qualified Termination of
Employment by Executive; and




          WHEREAS, immediately following that Change of Control, the Company assumed Hanover Compressor
Company’s obligations under the Agreement; and




          WHEREAS, the Company and Executive subsequently extended the term of the Agreement through the
second anniversary of the Change of Control pursuant to Amendment No. 2 to the Agreement; and




          WHEREAS, the Company and Executive desire to amend the Agreement in order to discharge their
respective rights and obligations under the Agreement; and




          WHEREAS, Section 4(g) of the Agreement provides that the Agreement may be amended or
discharged only if agreed to in writing signed by Executive and by the Chairman of the Board of
Directors of the Company or an authorized officer of the Company;




          NOW THEREFORE, in consideration of the premises, the terms and provisions set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which




 









 




are hereby
acknowledged, effective as of August 5, 2009 (the “Effective Date”), the Parties
hereby approve, agree to and adopt this Amendment to the Agreement, as follows:




     1. Subject to the requirements in Paragraph 2 below, the Company hereby agrees to pay
Executive a lump-sum cash payment of US$1,190,680.00 (the “Payment”), no later than the 30th day
after the Effective Date, in full satisfaction and discharge of, and in exchange for Executive’s
waiver of any and all of his rights under, the Agreement; provided, however, that Executive
acknowledges and agrees that the Company shall withhold from the Payment the international
expatriate 15% flat fee amount of US$178,602.00, in accordance with the Company’s expatriate tax
treatment policy.



     2. The foregoing notwithstanding, payment of the Payment under this Agreement is subject to,
and contingent upon, Executive’s timely execution and return of the waiver and release (the “Waiver
and Release”), attached hereto as Exhibit A, to the Company, without subsequent revocation during
the seven-day period following such execution date (the “Waiver and Release Revocation Period”), as
provided in this Paragraph 2, and Executive acknowledges and agrees that the Payment serves as
adequate consideration for the Waiver and Release. Executive acknowledges that Company provided
him the Waiver and Release prior to the Effective Date. Executive shall have until 5:00 pm
(central standard time) on August 25, 2009 (the 22nd day following the Effective Date) to consider,
execute and return the Waiver and Release to the Company and shall then have the right to revoke
the Waiver and Release during the Waiver and Release Revocation Period. If Executive fails to
timely execute and return the Waiver and Release to the Company by August 25, 2009 or revokes such
Waiver and Release during the Waiver and Release Revocation Period, then Executive shall forfeit,
and shall not be entitled to, any of the benefits described in this Agreement.



     3. Executive acknowledges and agrees that (a) he is responsible for (i) all tax obligations
with respect to the Payment and (ii) any tax liabilities (and related penalties and interest)
arising from the Amendment of the Agreement, including, but not limited to, any such liabilities
arising under Internal Revenue Code Section 409A, and (b) the Company is not responsible for any
such tax obligations (or related penalties and interest).



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     4. Executive hereby agrees that the Company (and any of its predecessors or successors) shall
have no further duties or obligations under the Agreement from and after the Effective Date.



     5. Executive and the Company each hereby agree that the Agreement is of no further force and
effect from and after the Effective Date.



     6. Executive agrees that the Payment pursuant to this Amendment is in full satisfaction of any
and all obligations of the Company (and any of its subsidiaries and affiliates and the officers and
directors of the Company and its subsidiaries and affiliates) under the Agreement.



     7. This Amendment shall be governed by and construed in accordance with the laws of the State
of Texas, without reference to principles of conflict of laws. Executive agrees that venue for any
dispute related to this Amendment shall be filed and heard by the courts in and for Harris County,
Texas, or the U.S. District Courts for the Southern District of Texas, Houston Division.



     8. This Amendment and the Waiver and Release described in Paragraph 2 hereof constitute the
entire agreement of Executive and the Company with respect to the subject matter hereof, and hereby
expressly terminates, rescinds and replaces in full any prior and contemporaneous promises,
representations, understandings, arrangements and agreements between the Parties relating to the
subject matter hereof, whether written or oral.



          IN WITNESS WHEREOF, the Company and Executive have executed this Amendment in multiple
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument, effective for all purposes as of the Effective Date.




	 	 	 	 	 	 	 
	EXECUTIVE

	 	 	 	EXTERRAN HOLDINGS, INC.	 	 
	 
	 
	 	 	 	 	 	 
	 

Norman A. Mckay

	 	 
	 	 

Ernie L. Danner
	 	 
	 

	 	 	 	President and Chief Executive Officer	 	 






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Exhibit A




Waiver And Release




          In exchange for the payment (the “Payment”) to me of the amount under the Amendment and
Discharge of Change of Control Agreement, effective August 5, 2009 (the “Amendment”), which I
understand is incorporated herein by reference, except as provided below, I agree to waive all of
my claims against and release (i) Exterran Holdings, Inc. and its predecessors, successors and
assigns (collectively referred to as the “Company”), (ii) all of its affiliates, and (iii) their
respective directors and officers, employees and agents, insurers, employee benefit plans and the
fiduciaries and agents of the foregoing (collectively, with the Company and its affiliates,
referred to as the “Corporate Group”) from any and all claims, demands, actions, liabilities and
damages arising out of or relating in any way to (i) my employment with the Company or any of its
affiliates, (ii) the Amendment, or (iii) the Agreement (as defined in the Amendment) (collectively,
the “Covered Matters”). All payments under the Amendment are voluntary and are not required by
any legal obligation other than the Amendment itself.




          I understand that signing this Waiver and Release is an important legal act. I acknowledge
that I have been advised in writing to consult an attorney before signing this Waiver and Release.
I understand that, in order to be eligible for the Payment under the Amendment, I must sign and
return (to the Company’s Senior Vice President of Human Resources at Exterran Holdings, Inc., 16666
Northchase Drive, Houston, Texas 77060) this Waiver and Release not later than 5:00 pm (central
standard time) on August 25, 2009 (the 22nd day following the Execution Date of the Amendment
(August 3, 2009)). I acknowledge that I have been given at least 21 days to consider whether to
execute this Waiver and Release.




          In exchange for the Payment, which is in addition to any remuneration or benefits to which I
am already entitled, except as provided below, (1) I agree not to sue in any local, state and/or
federal court or to file a grievance regarding or relating in any way to the Covered Matters, and
(2) I knowingly and voluntarily waive all claims and release the Corporate Group from any and all
claims, demands, actions, liabilities, and damages, whether known or unknown, arising out of or
relating in any way to the Covered Matters except to the extent that my rights are vested under the
terms of employee benefit plans sponsored by the Company or any of its affiliates and except with
respect to such rights or claims as may arise after the date this Waiver and Release is executed.
This Waiver and Release includes, but is not limited to, claims and causes of action under: Title
VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act of 1967,
as amended, including the Older Workers Benefit Protection Act of 1990; the Civil Rights Act of
1866, as amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of 1990; the
Energy Reorganization Act, as amended, 42 U.S.C. § 5851; the Workers Adjustment and Retraining
Notification Act of 1988; the Pregnancy Discrimination Act of 1978; the Employee Retirement Income
Security Act of 1974, as amended; the Family and Medical Leave Act of 1993; the Fair Labor
Standards Act; the Occupational Safety and Health Act; claims in connection with workers’
compensation or “whistle blower” statutes; and/or contract, tort, defamation, slander, wrongful
termination or any other state or federal regulatory, statutory or common law. Further, I
expressly represent that no promise or agreement which is not expressed in the Amendment or this
Waiver and Release has been made to me in executing this Waiver and Release, and that I am relying
on my own judgment in executing this Waiver and Release, and that I am not relying on any statement
or representation of any member of the Corporate Group or any of their agents. I agree that this




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Waiver and Release is valid, fair, adequate and reasonable, is with my full knowledge and
consent, was not procured through fraud, duress or mistake and has not had the effect of
misleading, misinforming or failing to inform me. I acknowledge and agree that the Company (or an
affiliate) will withhold any taxes required by federal or state law from the amount payable to me
under the Amendment and that such amount shall be reduced by any monies owed by me to the Company
(or an affiliate). I further understand, and the Corporate Group agrees, that I am not waiving,
and will continue to have, any indemnification rights and coverages, provided to me by the Company
or an affiliate, including, but not limited to, such rights and coverages under any written
indemnification agreement between me and the Company or an affiliate, or under the Company’s or an
affiliate’s charter or by-laws or directors and officers insurance policy.




          I acknowledge that payment of the amount under the Amendment is not an admission by any member
of the Corporate Group that they engaged in any wrongful or unlawful act or that any member of the
Corporate Group violated any federal or state law or regulation. I understand that nothing in this
Waiver and Release is intended to prohibit, restrict or otherwise discourage any individual from
engaging in activity protected under 42 U.S.C. § 5851, 10 C.F.R. § 50.7 or the Sarbanes-Oxley Act
of 2002. I acknowledge that no member of the Corporate Group has promised me continued employment.




          Should any of the provisions set forth in this Waiver and Release be determined to be invalid
by a court, agency or other tribunal of competent jurisdiction, it is agreed that, except as
otherwise provided herein, such determination shall not affect the enforceability of other
provisions of this Waiver and Release. I acknowledge that this Waiver and Release and the
Amendment set forth the entire understanding and agreement between me and the Company or any other
member of the Corporate Group concerning the subject matter of this Waiver and Release and
supersede any prior or contemporaneous oral and/or written agreements or representations, if any,
between me and the Company or any other member of the Corporate Group. I understand that for a
period of 7 calendar days following the date I sign this Waiver and Release, I may revoke my
acceptance of the offer by delivering a written statement to the Senior Vice President of Human
Resources of the Company by hand or by registered-mail, in which case the Waiver and Release will
not become effective. In the event I revoke my acceptance of this offer, I shall not be entitled
to any amount under the Amendment. I understand that failure to revoke my acceptance of the offer
within 7 calendar days following the date I sign this Waiver and Release will result in this Waiver
and Release being permanent and irrevocable.




          I acknowledge that I have read this Waiver and Release, have had an opportunity to ask
questions and have it explained to me and that I understand that this Waiver and Release will,
except as otherwise provided herein, have the effect of knowingly and voluntarily waiving any
action I might pursue, including breach of contract, personal injury, retaliation, discrimination
on the basis of race, age, sex, national origin, religion, veterans status, or disability and any
other claims arising prior to the date of this Waiver and Release.




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          By execution of this document, I do not waive or release or otherwise relinquish any legal
rights I may have which are attributable to or arise out of acts, omissions, or events of any
member of the Corporate Group which occur after the date of the execution of this Waiver and
Release.




	 	 	 
	 

Norman A. Mckay

	 	 
	 
	 	 
	Dated:                                         , 2009
	 	 







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