Document:

exv10w4

 

Exhibit 10.4

First Amendment

to the

Hanover Compressor Company

2001 Equity Incentive Plan

     WHEREAS, Hanover Compressor Company (the “Company”) maintains the Hanover Compressor Company
2001 Equity Incentive Plan (the “Plan”) for the purpose of granting Awards thereunder to eligible
employees of the Company and its Affiliates; and

     WHEREAS, Section 10.2 of the Plan provides that the Compensation Committee of the Board of
Directors of the Company may amend the Plan;

     NOW, THEREFORE, the Plan is hereby amended effective as of July 8, 2005, as follows:

	 	 1.	 	Section 2.6, Change in Control, is deleted and replaced in its entirety with
the following:

“Change in Control shall mean

     (i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either
(A) the then outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this subsection (i), any acquisition by any Person pursuant to a
transaction which complies with clause (A) of subsection (iii) of this definition
shall not constitute a Change in Control; or

     (ii) Individuals, who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered for purposes of this definition
as though such individual was a member of the Incumbent Board, but excluding, for
these purposes, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

 

 

     (iii) The consummation of a reorganization, merger or consolidation of the
Company or sale, lease or other disposition of all or substantially all of the
assets of the Company and its subsidiaries, taken as a whole (other than to an
entity wholly owned, directly or indirectly, by the Company) (a “Corporate
Transaction”), in each case, unless, following such Corporate Transaction, (A) all
or substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction beneficially own,
directly or indirectly, more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities, as the case may
be, and (B) at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Corporate Transaction.

Notwithstanding the foregoing, with respect to any Award that is subject to Section
409A of the Code, for purposes of accelerating payment of such Award a “Change in
Control” shall mean a change in ownership or effective control of the corporation,
or in the ownership of a substantial portion of the assets of the corporation, as
set forth in the regulations and other guidance issued under Section 409A of the
Code.”

	 	2.	 	Article VI is amended by adding thereto a new Section 6.7 to read as follows:

     “6.7 Vesting. Notwithstanding anything herein or in a Participant’s agreement
to the contrary, if a Participant’s Termination of Employment is due to his or her
death or Disability, all shares of Restricted Stock then held by such Participant
shall immediately vest in full upon such Termination of Employment and all
restrictions applicable to such Awards shall terminate as of such date with all
performance criteria, if any, applicable to such Awards deemed met at 100% of
target.”

	 	3.	 	Section 9.1 is amended by adding thereto the following:

     “Notwithstanding anything herein or in a Participant’s agreement to the
contrary, if a Participant’s Termination of Employment is due to his or her death,
Disability or Retirement, all Options of such Participant then outstanding shall
immediately vest in full upon such Termination of Employment. As used herein,
“Retirement” means a Termination of Employment, other than due to Cause,

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death or Disability, on or after a Participant’s reaching (i) age 65 or (ii) age 55
and terminating with the written consent of the Committee.”

	 	4.	 	Section 11.1 is amended to read as follows:

     “11.1 Change in Control. Notwithstanding the provisions of Section 8 or
anything contained in a Participant’s agreement to the contrary, upon a Change in
Control (or such earlier time as the Committee may provide) all Awards shall be
subject to the following:

     (a) All unvested Options then outstanding shall immediately become exercisable
in full;

     (b) The Company shall have the right to acquire from Participants their Options
by payment of the difference between the price per share of Common Stock established
in the Change in Control and the Option Price; and

     (c) All unvested shares of Restricted Stock shall fully vest, no longer be
subject to any restrictions and become transferable.”

     All terms used herein that are defined in the Plan shall have the same meanings given to such
terms in the Plan, except as otherwise expressly provided herein.

     Except as amended and modified hereby, the Plan shall continue in full force and effect and
the Plan and this instrument shall be read, taken and construed as one and the same instrument.

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Exhibit 10.5

First Amendment

to the

Hanover Compressor Company

2003 Stock Incentive Plan

     WHEREAS, Hanover Compressor Company (the “Company”) maintains the Hanover Compressor Company
2003 Stock Incentive Plan (the “Plan”) for the purpose of granting Awards thereunder to eligible
employees of the Company and its Affiliates; and

     WHEREAS, Section XI of the Plan provides that the Board of Directors of the Company may amend
the Plan;

     NOW, THEREFORE, the Plan is hereby amended effective as of July 8, 2005, as follows:

	 	 1.	 	Section II(i), Corporate Change, is deleted and replaced in its entirety by the
following:

“Corporate Change shall mean

     (i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either
(A) the then outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this subsection (i), any acquisition by any Person pursuant to a
transaction which complies with clause (A) of subsection (iii) of this definition
shall not constitute a Corporate Change; or

     (ii) Individuals, who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered for purposes of this definition
as though such individual was a member of the Incumbent Board, but excluding, for
these purposes, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

 

 

     (iii) The consummation of a reorganization, merger or consolidation of the
Company or sale, lease or other disposition of all or substantially all of the
assets of the Company and its subsidiaries, taken as a whole (other than to an
entity wholly owned, directly or indirectly, by the Company) (a “Corporate
Transaction”), in each case, unless, following such Corporate Transaction, (A) all
or substantially all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Corporate Transaction beneficially own,
directly or indirectly, more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Corporate
Transaction (including a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities, as the case may
be, and (B) at least a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Corporate Transaction.

Notwithstanding the foregoing, with respect to any Award that is subject to Section
409A of the Code, for purposes of accelerating payment of such Award a “Corporate
Change” shall mean a change in ownership or effective control of the corporation, or
in the ownership of a substantial portion of the assets of the corporation, as set
forth in the regulations and other guidance issued under Section 409A of the Code.”

	 	2.	 	Section VIII(d) is amended by adding thereto the following:

     “Notwithstanding anything in this Section VIII or the Participant’s Agreement
to the contrary, if a Participant’s Termination of Service is due to his or her
death or Disability, all Restricted Stock Awards of such Participant then
outstanding shall immediately vest in full and all restrictions applicable to such
Awards shall terminate as of such date with all performance criteria, if any,
applicable to such Awards deemed met at 100% of target.”

	 	3.	 	Section IX(e) is amended by adding thereto the following:

“Notwithstanding anything in this Section IX or the Participant’s Agreement to the
contrary, if a Participant’s Termination of Service is due to his or her death or
Disability, all Performance Awards of such Participant then outstanding shall
immediately vest in full and all performance criteria applicable to such Awards
shall be deemed met at 100% of target as of such date.”

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	 	4.	 	Section X(c) is amended to read as follows:

     “(c) Recapitalizations and Corporate Changes. If the Company
recapitalizes, reclassifies its capital stock, or otherwise changes its capital
structure (a “recapitalization”), the number and class of shares of Common Stock
covered by an Award theretofore granted shall be adjusted so that such Award shall
thereafter cover the number and class of shares of stock and securities to which the
Participant would have been entitled pursuant to the terms of the recapitalization
if, immediately prior to the recapitalization, the Participant had been the holder
of record of the number of shares of Common Stock then covered by such Award.
Effective upon a Corporate Change (or at such earlier time as the Committee may
provide) all Options then outstanding shall immediately become exercisable in full,
all Restricted Stock Awards shall vest in full and cease to be subject to any
Restrictions, and all Performance Awards shall vest and become immediately payable
in full at 100% of their respective target levels. In addition, the Committee,
acting in its sole discretion without the consent or approval of any Participant,
may effect one or more of the following alternatives, which alternatives may vary
among individual Participants and which may vary among Options held by any
individual Participant: (1) require the mandatory surrender to the Company by
selected Participants of some or all of the outstanding Options held by such
Participants as of a date, before or after such Corporate Change, specified by the
Committee, in which event the Committee shall thereupon cancel such Options and the
Company shall pay (or cause to be paid) to each such Participant an amount of cash
per share equal to the excess, if any, of the amount calculated in Subparagraph (d)
below (the “Change of Control Value”) of the shares subject to such Options over the
exercise price(s) under such Options for such shares, or (2) provide that the number
and class of shares of Common Stock covered by such Options shall be adjusted so
that such Options shall thereafter cover securities of the surviving or acquiring
corporation or other property (including, without limitation, cash) as determined by
the Committee in its sole discretion.”

     All terms used herein that are defined in the Plan shall have the same meanings given to such
terms in the Plan, except as otherwise expressly provided herein.

     Except as amended and modified hereby, the Plan shall continue in full force and effect and
the Plan and this instrument shall be read, taken and construed as one and the same instrument.

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