Document:

exv10w30

 

EXHIBIT 10.30

EXTERRAN EMPLOYEES’ SUPPLEMENTAL SAVINGS PLAN

(Amended and Restated Effective January 1, 2008)

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I: PURPOSE
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II: DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE III: ELIGIBILITY AND PARTICIPATION
	 	 	4	 
	 
	 	 	 	 
	ARTICLE IV: PARTICIPANT ACCOUNTS
	 	 	6	 
	 
	 	 	 	 
	ARTICLE V: DEFERRED COMPENSATION AMOUNTS
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VI: DEEMED INVESTMENT OF ACCOUNTS
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VII: VESTING
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VIII: DISTRIBUTIONS
	 	 	9	 
	 
	 	 	 	 
	ARTICLE IX: PLAN ADMINISTRATION
	 	 	11	 
	 
	 	 	 	 
	ARTICLE X: CLAIMS PROCEDURES
	 	 	12	 
	 
	 	 	 	 
	ARTICLE XI: AMENDMENT AND TERMINATION
	 	 	13	 
	 
	 	 	 	 
	ARTICLE XII: NATURE OF AGREEMENT
	 	 	13	 
	 
	 	 	 	 
	ARTICLE XIII: RESTRICTIONS ON ASSIGNMENT
	 	 	13	 
	 
	 	 	 	 
	ARTICLE XIV: MISCELLANEOUS
	 	 	13	 

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EXTERRAN EMPLOYEES’ SUPPLEMENTAL SAVINGS PLAN

(Amended and Restated Effective January 1, 2008)

* * * * * * * * * * * * * *

RECITALS:

          WHEREAS, Exterran, Inc. (the “Company”) maintains the Exterran, Inc. Exterran Employees’
Supplemental Savings Plan (the “Plan”) for the benefit of its eligible employees; and

          WHEREAS, in response to the enactment of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), effective as of January 1, 2005, the Company separated in operation all
benefits earned and vested as of December 31, 2004 (“Grandfathered Benefits”) under the Plan from
all Plan benefits earned or vested after December 31, 2004 (“409A Benefits”). At all times on and
after January 1, 2005, the Grandfathered Benefits, along with the earnings thereto, have been (and
continue to be) subject to the terms and provisions of the Plan as in effect on October 3, 2004,
and no material modifications, within the meaning of Code Section 409A and the Treasury regulations
and guidance thereunder, have been made (in form or operation) to the Plan with respect to such
benefits; and

          WHEREAS, the Company desires to bifurcate the Plan such that (1) the Grandfathered Benefits,
along with the earnings thereto, shall be maintained under and paid from a separate, frozen plan
that is intended to be a “grandfathered” plan exempt from Code Section 409A (in the form of the
Plan), and (2) the 409A Benefits, along with the earnings thereon, shall be transferred from the
Plan into, and maintained under and paid from, a newly established and separate plan that is
intended to comply with the requirements of Code Section 409A, which is the Exterran Deferred
Compensation Plan, effective as of January 1, 2008; and

          WHEREAS, the Company desires for Exterran Holdings, Inc. (“Holdings”), the parent of the
Company, to replace the Company as the sponsor of the Plan;

          NOW, THEREFORE, the Company hereby amends, restates, renames and continues the Plan with
respect to the Grandfathered Benefits in the form of the Exterran Employees’ Supplemental Savings
Plan, as set forth herein, effective as of January 1, 2008:

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ARTICLE I: PURPOSE

     1.1 The purpose of the Plan is:

          (a) to provide a mechanism for certain employees of the Company to defer the portion of their
Compensation that could not be deferred under the Savings Plan due to limitations imposed by the
Code, including Code Sections 401(a)(17), 401(k)(8), 401(m) and 402(g) thereof, during the pre-2005
Plan Years; and

          (b) to provide a mechanism for the Company to make matching contributions for the benefit of
such employees based upon the amount of their deferrals under this Plan for the pre-2005 Plan
Years; and

          (c) to provide a mechanism for such employees to defer all or a portion of any incentive bonus
to which they become entitled under the Universal Compression, Inc. Officers Bonus Plan (the “Bonus
Plan”) during the pre-2005 Plan Years.

     1.2 This Plan is a frozen plan as of January 1, 2008, and is intended to be a “grandfathered”
plan for purposes of Code Section 409A and the Treasury regulations and guidance issued thereunder.
All benefits under this Plan were fully vested as of December 31, 2004, and thus all such
benefits, along with all earnings, gains and losses attributable thereto, are exempt from Code
Section 409A. No new Participants shall be eligible to participate in the Plan after December 31,
2007; no further benefits shall be earned or vested under this Plan (other than earnings, gains and
losses on benefits earned and vested prior to January 1, 2005). Only benefits that are earned and
vested as of December 31, 2004, along with all earnings thereon, shall be maintained and paid under
this Plan. Effective as of January 1, 2008, all benefits under the Plan that were earned or vested
after December 31, 2004, along with all earnings thereon, are separated and spun-off from the Plan
into the Exterrran Deferred Compensation Plan, effective as of January 1, 2008 (the “Exterran
Plan”), with such benefits to be maintained and distributed from, and in accordance with the terms
of, the Exterran Plan.

ARTICLE II: DEFINITIONS

     The following capitalized terms shall have the following meanings. Except when otherwise
indicated by the context, any masculine terminology used in the Plan shall also include the
feminine; and the definition of any term herein in the singular shall also include the plural. All
other capitalized terms shall have the meaning ascribed to them in the Savings Plan.

     2.1 The term “Account” shall mean a Participant’s Supplemental Salary Deferral Account and
Matching Contribution Account.

     2.2 The term “Annual Bonus” means the bonus payable to the Participant pursuant to the
Company’s annual bonus plan.

     2.3 The term “Bonus Deferral” shall have the meaning ascribed to it in Section 5.3 hereof.

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     2.4 The term “Bonus Deferral Percentage” shall have the meaning ascribed to it in Section
3.3(e) hereof.

     2.5 The term “Business Day” shall mean any day during which the New York Stock Exchange is
open to engage in stock transactions.

     2.6 The term “Code” shall mean the Internal Revenue Code of 1986, as amended.

     2.7 The term “Company” shall mean Exterran, Inc., or any successor thereto.

     2.8 The term “Compensation” shall have the same meaning as it has in the Savings Plan except
that the limitations imposed by Section 401(a)(17) of the Code shall not apply.

     2.9 The term “Compensation Committee” shall mean the committee duly constituted by the Board
of Directors of Holdings having the powers described in Article IX hereof.

     2.10 The term “Death Beneficiary” shall mean the recipient of any proceeds under the Plan in
conjunction with the death of a Participant and shall be (i) the person or persons designated by
the Participant on a form provided by the Compensation Committee, or (ii) in the absence of a
beneficiary designation, the Participant’s estate.

     2.11 The term “Delegate” shall have the meaning ascribed to it in Section 9.1 hereof.

     2.12 The term “Distribution Date” shall mean the date referred to in Section 8.1 hereof.

     2.13 The term “Eligible Employee” shall have the meaning ascribed to it in Section 3.1 hereof.

     2.14 The term “Entry Date” shall mean the date referred to in Section 3.2 hereof.

     2.15 The term “Holdings” shall mean Exterran Holdings, Inc. or any successor thereto.

     2.16 The term “Matching Contribution” shall have the meaning ascribed to it in Section 5.2
hereof.

     2.17 The term “Matching Contribution Account” shall mean the unfunded bookkeeping entry
established for each Participant in accordance with Section 4.1 hereof.

     2.18 The term “Matching 401(k) Contribution” refers to Matching 401(k) Contributions under the
Savings Plan.

     2.19 The term “Matching Contribution Account” shall mean the unfunded bookkeeping entry
established for each Participant in accordance with Section 4.1 hereof.

     2.20 The term “Participant” shall mean an Eligible Employee who satisfies the criteria set
forth in Section 3.2 hereof.

     2.21 The term “Plan” shall mean the Exterran Employees’ Savings Supplemental Plan.

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     2.22 The term “Plan Year” shall mean the calendar year.

     2.23 The term “Savings Plan” refers to the Universal Compression Holdings, Inc. 401(k)
Retirement and Savings Plan, which was merged with and into the Exterran 401(k) Retirement Plan,
effective January 1, 2008.

     2.24 The term “Selected Date” shall mean the date selected in a Supplemental Salary Deferral
Agreement in accordance with Section 3.3(f) hereof.

     2.25 The term “Supplemental Salary Deferral” shall have the meaning ascribed to it in Section
5.1 hereof.

     2.26 The term “Supplemental Salary Deferral Account” shall mean the unfunded bookkeeping entry
established for each Participant in accordance with Section 4.1 hereof.

     2.27 The term “Supplemental Salary Deferral Agreement” shall mean the agreement referred to in
Section 3.3 hereof.

     2.28 The term “Supplemental Salary Deferral Percentage” shall have the meaning ascribed to it
in Section 3.3(b) hereof.

     2.29 The term “Termination Date” shall mean the date the Participant terminates employment.

     2.30 The term “Valuation Date” shall mean the close of each Business Day of each month of each
Plan Year.

ARTICLE III: ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility. The Plan was frozen effective December 31, 2007; no additional individuals
shall be first eligible to commence participation in the Plan after such date. Prior thereto,
every participant (as defined in the Savings Plan) in the Savings Plan who was an officer of the
Company or who was designated by the Compensation Committee as eligible to participate in the Plan
was eligible to participate in the Plan (an “Eligible Employee”).

     3.2 Participation. Each Eligible Employee became a Participant in the Plan as of his Entry
Date. A Participant’s Entry Date was the first day of the Plan Year following the Participant’s
execution and delivery to the Compensation Committee of a Supplemental Salary Deferral Agreement.

     3.3 Execution of Supplemental Salary Deferral Agreement.

          (a) Each Eligible Employee participating in the Plan executed a Supplemental Salary Deferral
Agreement prior to the beginning of the Plan Year to which the agreement related (except that, with
respect to the first year an employee of the Company became an Eligible Employee, he may have
executed a Supplemental Salary Deferral Agreement not later than 30 days after becoming an Eligible
Employee; in such case, the Supplemental Salary Deferral Agreement only applied to Compensation for
services performed subsequent to

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execution of such agreement). Notwithstanding the foregoing provisions of this Section
3.3(a), a separate Supplemental Salary Deferral Agreement may have been executed not later than the
date specified by the Committee, which shall not be later than 6 months before the end of the
performance period with respect to performance-based compensation which is based on a performance
period of at least 12 months.

          (b) Each Eligible Employee executing a Supplemental Salary Deferral Agreement elected in such
agreement to defer a percentage of his Compensation (the “Supplemental Salary Deferral Percentage”)
in a whole percentage amount of not less than two percent (2%) and not more than twenty-five
percent (25%) of such Compensation.

          (c) Each Eligible Employee executing a Supplemental Salary Deferral Agreement may have
elected, but was not required to elect, to defer an additional amount of his Compensation equal to
the portion of such Participant’s deferral under the Savings Plan, plus any earnings on such
deferral, that was returned to the Participant pursuant to Section 401(k)(8) of the Code.

          (d) Each Eligible Employee executing a Supplemental Salary Deferral Agreement may have
elected, but was not required to elect, to defer an additional amount of his Compensation equal to
the portion of such Participant’s Matching 401(k) Contribution, plus any earnings thereon, that was
distributed to such Participant as a result of Sections 401(k)(8) or 401(m) of the Code.

          (e) Each Eligible Employee executing a Supplemental Salary Deferral Agreement may have
elected, but was not required to elect, to defer a percentage of his Annual Bonus (the “Bonus
Deferral Percentage”) in a percentage amount of twenty five percent (25%), fifty percent (50%),
seventy five percent (75%) or one hundred percent (100%) of such Annual Bonus.

          (f) Each Eligible Employee executing a Supplemental Salary Deferral Agreement may also have
elected, but was not required to elect, to specify a date (the “Selected Date”) on or beginning as
of which the Participant shall be entitled to receive or to begin receiving distributions from the
Plan of amounts credited to the Participant’s Account attributable to the amounts deferred pursuant
to such Supplemental Salary Deferral Agreement. The Selected Date shall be a Valuation Date that
is no sooner than three years from the beginning of the Plan Year to which such Supplemental Salary
Deferral Agreement relates. If a Participant did not elect to specify a Selected Date in his
Supplemental Salary Deferral Agreement, distributions from the Plan with respect to such
Participant shall be on or shall begin as of the Participant’s Termination Date, in accordance with
Article VIII hereof.

          (g) Each Eligible Employee executing a Supplemental Salary Deferral Agreement may also have
elected, but was not required to elect, to specify the manner in which such Participant shall
receive distributions of amounts credited to the Participant’s Account attributable to the amounts
deferred pursuant to such Supplemental Salary Deferral Agreement, which election was either as a
single lump-sum cash distribution or in installments; provided, however, that such Participant
shall receive a distribution in the form of Exterran Holdings, Inc.

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common stock (“Company Stock”), with respect to post-August 31, 2002 Matching Contributions
that are deemed invested in such stock as of the Distribution Date.

          (h) Once executed and delivered to the Compensation Committee, the deferrals and elections set
forth in the Supplemental Salary Deferral Agreement are irrevocable for the Plan Year to which they
relate and cannot be changed or modified.

          (i) No Supplemental Salary Deferrals shall occur after a Participant is no longer an Eligible
Employee.

     3.4 Frozen Plan/Spin-Off. This Article III is applicable only for pre-2008 Plan Years.
Notwithstanding any provision of this Plan to the contrary, only the deferrals, contributions and
benefits of Eligible Employees that are earned and vested as of December 31, 2004, shall be
maintained and provided under the Plan. Any and all Plan deferrals, contributions and benefits
(and the earnings thereon) that were not earned and vested as of December 31, 2004, are maintained
under, and shall be paid from, the Exterran Plan.

ARTICLE IV: PARTICIPANT ACCOUNTS

     4.1 Participant Accounts. For each Participant who has executed a Supplemental Salary
Deferral Agreement, the Compensation Committee shall establish and maintain a separate Supplemental
Salary Deferral Account and Matching Contribution Account. A Participant’s Supplemental Salary
Deferral Account shall be credited with such amounts as may be deferred pursuant to Sections 5.1
and/or 5.3 hereof, and earnings thereon. A Participant’s Matching Contribution Account shall be
credited with such amounts as may be deferred pursuant to Section 5.2 hereof and earnings thereon.

     4.2 No Interest in Specific Assets. The Accounts shall be bookkeeping entries only, and a
Participant shall have no secured or vested interest in any specified assets; provided, however,
that Holdings may establish a non-qualified trust (the “Trust”) to provide a means of funding
benefits due under this Plan. Any such Trust and any assets in such Trust shall conform to such
requirements of the Internal Revenue Service that will (i) cause amounts contributed to the Trust
not to constitute a taxable event for Participants, (ii) not cause Participants to be in
constructive receipt of income or incur an economic benefit on account of the adoption or
maintenance of such Trust, and (iii) cause amounts paid from the Trust to be deductible by Holdings
in the year in which such amounts are paid to Participants, with Holdings being regarded as the
owner of the funds held in the Trust under Section 671 of the Code.

ARTICLE V: DEFERRED COMPENSATION AMOUNTS

     5.1 Supplemental Deferrals.

          (a) For each Plan Year prior to the 2008 Plan Year with respect to which a Supplemental Salary
Deferral Agreement was in effect, the Participant’s Compensation was reduced by the amount (the
“Supplemental Salary Deferral”) by which such Participant’s

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projected Compensation for the Plan Year, when multiplied by the Supplemental Salary Deferral
Percentage, exceeded the limitation under Section 402(g) of the Code for such year.

          (b) For each Plan Year prior to the 2008 Plan Year with respect to which a Supplemental Salary
Deferral Agreement in which an election to defer additional amounts pursuant to Section 3.3(c)
hereof was in effect, the Participant’s Compensation was also reduced by the amount specified in
Section 3.3(c) hereof.

          (c) The amounts deferred in accordance with Section 5.1(a) and (b) hereof were credited to the
Participant’s Supplemental Salary Deferral Account.

     5.2 Matching Contributions.

          (a) For each dollar of Supplemental Salary Deferral contributed under the Plan pursuant to
Section 5.1(a) hereof, the Company credited to the Participant’s Matching Contribution Account a
Matching Contribution determined as follows: First, the Company calculated the amount of Matching
401(k) Contribution that would have been made under the Savings Plan if both the Salary Deferral
made under the Savings Plan and the Supplemental Salary Deferral made to this Plan had been made to
the Savings Plan (disregarding the limitations that may have prevented such amount from having been
contributed to the Savings Plan). In making that calculation, the Company disregarded the
limitation on the amount of compensation that could be taken into account under a qualified plan,
and applied the matching formula in the Savings Plan to the entire amount of deferrals under the
combined plans. Next, the Company reduced the amount calculated as provided in the foregoing
sentences by the Matching 401(k) Contribution actually made to the Savings Plan for the Plan Year,
and the remainder was the Matching Contribution made to this Plan.

          (b) If a Matching 401(k) Contribution to the Savings Plan on behalf of a Participant, and any
earnings thereon, was forfeited pursuant to Sections 401(k)(8) or 401(m) of the Code and the
Participant was otherwise participating in this Plan for the Plan Year in which the forfeiture
occurs, an amount equal to such forfeiture was credited to the Participant’s Matching Contribution
Account. To the extent necessary to prevent duplication of Matching Contributions, the Matching
Contribution otherwise to be credited pursuant to Section 5.2(a) of the Plan was reduced by the
amount credited to the Participant’s Matching Contribution Account pursuant to this Section 5.2(b).

     5.3 Bonus Deferrals.

          (a) For each Plan Year with respect to which a Supplemental Salary Deferral Agreement in which
the Participant elected to defer amounts pursuant to Section 3.3(e) hereof was in effect, the
Participant’s Annual Bonus was reduced by the amount (the “Bonus Deferral”) equal to such
Participant’s Annual Bonus multiplied by the Bonus Deferral Percentage in effect for such Plan
Year.

          (b) The amounts deferred in accordance with Section 5.3(a) hereof were credited to the
Participant’s Supplemental Salary Deferral Account.

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ARTICLE VI: DEEMED INVESTMENT OF ACCOUNTS

     6.1 Deemed Investment of Accounts.

          (a) The Compensation Committee shall provide to each Participant a list of investments from
which a Participant can choose an investment as a deemed investment for such Participant’s
Supplemental Salary Deferral Account. A Participant’s Supplemental Salary Deferral Account shall
be deemed invested in the investments selected by such Participant (provided that if no investment
is selected, the Supplemental Salary Deferral Account shall be deemed invested in the money market
option). A Participant shall have no right to compel investment of any amounts credited to a
Participant’s Supplemental Salary Deferral Account.

          (b) Amounts credited to a Participant’s Matching Contribution Account prior to September 1,
2002, were deemed invested in the same investments, and in the same proportions, as the investments
selected by the Participant under Section 6.1(a) hereof. Notwithstanding any other provisions
herein to the contrary, amounts credited to a Participant’s Matching Contribution Account, which
were based on such Participant’s Supplemental Salary Deferral amounts, (i) on or after September 1,
2002, but prior to the matching contribution on September 21, 2007, were deemed invested in Company
Stock until such time as the Participant elects to change such deemed investment as provided in
Section 6.2; and (ii) on September 21, 2007 (for the calendar quarter ended September 30, 2007) and
thereafter, shall be deemed invested in the same investments, and in the same proportions, as the
investments selected by the Participant under Section 6.1(a) hereof.

          (c) Effective as of December 31, 2010, any amounts credited to a Participant’s Matching
Contribution Account that are deemed invested in Company Stock shall be deemed invested in the
money market fund investment option effective as of such date. From and after January 1, 2011, no
amounts shall be deemed invested in Company Stock under the Plan.

     6.2 Changing Deemed Investments. A Participant shall have the right to change the deemed
investment of his entire Account (including his Matching Contribution Account) among investments by
notice to the Compensation Committee in such form as required by the Compensation Committee. Such
changes in deemed investments and allocation shall be made as of the Valuation Date next following
the date upon which said change is made, or as soon thereafter as may be administratively
practicable. If a Participant elects to change the deemed investment on all or a portion of the
balance of his Matching Contribution Account from Company Stock to some other deemed investment,
the Participant may not subsequently elect to have such amount deemed invested in Company Stock,
but he can change the deemed investment direction to any other deemed investment option available
under the Plan as he deems appropriate from time to time.

     6.3 Adjustment of Account Balances. The amounts credited to a Participant’s Supplemental
Salary Deferral Account and Matching Contribution Account shall be adjusted as of each Valuation
Date to reflect increases or decreases in the value of the deemed investments corresponding to such
Accounts. To the greatest extent practicable, the same valuation and

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accounting methods shall be used as are used to recalculate the Participant’s account balances
under the Savings Plan.

ARTICLE VII: VESTING

     7.1 Vesting of Amounts Held in Supplemental Salary Deferral Account. A Participant’s interest
in his Supplemental Salary Deferral Account is one hundred percent (100%) vested at all times.

     7.2 Vesting of Amounts Held in Matching Contribution Account. A Participant’s interest in his
Matching Contribution Account is one hundred percent (100%) vested at all times.

ARTICLE VIII: DISTRIBUTIONS

     8.1 Distributions to Participants.

          (a) A Participant shall be entitled to a distribution from his Supplemental Salary Deferral
Account and Matching Contribution Account on a Distribution Date. The term “Distribution Date”
shall mean the earlier of: (i) the Termination Date or as soon thereafter as administratively
possible (but in no case more than 60 days following the Termination Date), or (ii) the Selected
Date or as soon thereafter as administratively possible (but in no case more than 60 days following
the Selected Date).

          (b) On a Distribution Date that is determined with respect to the Participant’s Termination
Date, the Participant shall be entitled to payment of an amount equal to his entire vested interest
in his Accounts. On a Distribution Date that is the Participant’s Selected Date, the Participant
shall be entitled to payment of an amount equal to the portion of his vested interest in his
Account that relates to Supplemental Salary Deferrals made with respect to the Supplemental Salary
Deferral Agreement in which the Selected Date was selected, and earnings thereon.

          (c) For the purpose of determining the amount to be distributed to a Participant under this
Section 8.1, a Participant’s Account balance shall be that as determined on the Distribution Date.

          (d) Distributions made under this Section 8.1 shall be in cash and in a single lump sum,
except that a Participant may have elected (i) pursuant to Section 3.3(g) hereof in his
Supplemental Salary Deferral Agreement to receive installment payments in the case of distributions
on a Termination Date resulting from retirement from the Company and (ii) to receive a distribution
in the form of Company Stock of Matching Contributions deemed invested in such stock as of the
Distribution Date. From and after January 1, 2011, no distributions shall be available in the form
of Company Stock under the Plan.

     8.2 Distributions to Death Beneficiaries.

          (a) If the Participant’s employment terminates by reason of death, or if the Participant dies
prior to receipt of all the benefits provided under Section 8.1 hereof, a

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 Participant’s Death Beneficiary shall be entitled to a distribution of an amount equal to the
remaining vested interest of the Participant in such Participant’s Accounts as of the date of
death.

          (b) For the purpose of determining the amount to be distributed to a Death Beneficiary under
this Section 8.2, a Participant’s Account balance shall be that as determined on the Distribution
Date.

          (c) Distributions made under this Section 8.2 shall be in cash and in a single lump sum paid
within 60 days after the Participant’s death; provided, however, that such Participant’s Death
Beneficiary shall receive a distribution in the form of Company Stock with respect to post-August
31, 2002 Matching Contributions that are deemed invested in such stock as of the Distribution Date.
From and after January 1, 2011, no distributions shall be available in the form of Company Stock
under the Plan.

     8.3 Hardship Distributions. A benefit is payable under this Plan to a Participant prior to a
Distribution Date only if the Participant establishes to the satisfaction of the Compensation
Committee that the Participant has an unforeseeable emergency. An unforeseeable emergency is a
severe financial hardship of the Participant resulting from a sudden and unexpected illness or
accident of the Participant or a dependent of the Participant, loss of the Participant’s property
due to uninsured casualty, or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant and which will constitute an
unforeseeable emergency under Code Section 409A and the Treasury regulations issued thereunder.
The amount distributed in the case of an unforeseeable emergency shall be limited to what is needed
reasonably to satisfy the emergency and is not available from other sources. The amount of the
hardship distribution cannot exceed the balance credited to the Participant’s Supplemental Salary
Deferral Account and is charged against such Account.

     8.4 Involuntary Distributions.

          (a) Notwithstanding any provision of this Plan to the contrary, the Compensation Committee may
direct the trustee of any trust established with respect to this Plan to distribute to any
Participant (or Death Beneficiary), in the form of an immediate single-sum payment, all or any
portion of the amount then credited to a Participant’s Accounts to the extent that an adverse
determination is made with respect to such Participant. For purposes of this Section 8.4, the term
“adverse determination” shall mean a determination based upon federal tax or revenue law, a
published or private ruling or similar announcement issued by the Internal Revenue Service, a
regulation issued by the Secretary of the Treasury, a decision by a court of competent
jurisdiction, a closing agreement made under Section 7121 of the Code that is approved by the
Internal Revenue Service and that involves the Participant, or by counsel, that such Participant
(or Death Beneficiary) has or will recognize income for federal income tax purposes with respect to
any amount that is or will be payable under this Plan before it is otherwise to be paid hereunder.

          (b) Further, notwithstanding any provision of this Plan to the contrary, the Compensation
Committee may direct the trustee of any trust established with respect to this Plan to distribute
to any Participant (or Death Beneficiary), in the form of an immediate single-sum payment, all or
any portion of the amount then credited to a Participant’s Account to the extent

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necessary based upon a change in ERISA, a published advisory opinion or similar announcement
issued by the Department of Labor, a regulation issued by the Secretary of Labor, a decision by a
court of competent jurisdiction, an agreement between such Participant and the Department of Labor
or similar agency or an opinion of counsel, that such Participant is not a “management” or a
“highly compensated” employee or that the Plan is not an “unfunded” plan within the meaning of
ERISA.

     8.5 Withholding. All distributions shall be subject to applicable state and federal
withholding of taxes.

ARTICLE IX: PLAN ADMINISTRATION

     9.1 Administration by Committee. The Plan shall be administered by the Compensation
Committee. The Compensation Committee’s powers and obligations shall be the same as those set
forth in the plan document for the Savings Plan, but modified to take into account that this Plan
is an unfunded plan for highly compensated employees. The Compensation Committee shall have full
power and authority to interpret, construe and administer this Plan, and its interpretations and
constructions hereof and actions hereunder, including the timing, form, amount or recipient of any
payment to be made hereunder, within the scope of its authority, shall be binding and conclusive on
all persons for all purposes. The Compensation Committee shall also have the power to delegate to
a person or persons (the “Delegate”) the power to review and rule upon initial claims for benefits,
as described in Section 10.2 hereof.

     9.2 Limitation on Liability. No member of the Compensation Committee nor any Delegate shall
be liable to any person for any action taken or omitted to be taken in connection with the
interpretation and administration of this Plan, unless attributable to his own willful misconduct
or lack of good faith.

     9.3 Indemnification. Holdings shall indemnify and hold harmless each member of the
Compensation Committee and any Delegate as provided in the Savings Plan.

     9.4 Limitation on Action. No member of the Compensation Committee nor any Delegate shall
participate in any action or determination regarding his own benefits hereunder.

     9.5 Interpretation. Since the Plan (other than the Bonus Deferral) is intended to supplement
the Savings Plan, any ambiguities or gaps in this Plan shall be resolved by reference to the
Savings Plan document, as amended, but only if consistent with the purposes set forth in Article I
hereof.

ARTICLE X: CLAIMS PROCEDURES

     10.1 Payment Without the Need for Demand. Benefits upon termination of employment shall
ordinarily be paid to a Participant without the need for demand, and to a Death Beneficiary upon
receipt of the Death Beneficiary’s address and Social Security number, along with evidence of death
acceptable to the Compensation Committee.

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     10.2 Filing a Claim for Benefits. Notwithstanding the provisions of Section 10.1 hereof, a
Participant, or any person claiming to be a Death Beneficiary, who claims entitlement to a benefit
under the terms of this Plan may file a claim for benefits with the Compensation Committee or its
Delegate. If the claim is for a benefit resulting from a termination, of employment or death, the
Compensation Committee or its Delegate shall accept or reject the claim within 30 days of its
receipt.

     10.3 Form of Denial of a Claim for Benefits. If a claim is denied, the Compensation Committee
or its Delegate shall give the reason for denial in a written notice calculated to be understood by
the claimant, referring to the Plan provisions that form the basis of the denial. If any
additional information or material is necessary to perfect the claim, the Compensation Committee or
its Delegate will identify these items and explain why such additional material is necessary. If a
claim is denied, all subsequent reasonable attorney’s fees and costs of a successful claimant,
including the filing of the appeal with the Compensation Committee as described in Section 10.4
hereof, and any subsequent litigation, shall be paid by Holdings unless the failure of Holdings to
pay is caused by reasons beyond its control, such as insolvency or bankruptcy.

     10.4 Appealing an Adverse Benefits Claim Decision. Upon the denial of claim, the claimant may
file a written appeal of the denied claim to the Compensation Committee within 60 days of the
denial. The claimant shall have the opportunity to be represented by counsel and to be heard at a
hearing. The Compensation Committee must set a date for such a hearing within 30 days after
receipt of the appeal. In no event shall the date of the hearing be set later than 60 days after
receipt of the notice. The claimant shall have the opportunity to review pertinent documents and
the opportunity to submit issues and argue against the denial in writing.

     10.5 Form of Denial of a Claim for Benefits on Appeal. The decision upon the appeal must be
made no later than the later of: (a) 60 days after receipt of the request for review, or (b) 30
days after the hearing. If the appeal is denied after the appeal provided for in Section 10.4
hereof, the denial shall be in writing. The Compensation Committee shall give the reason for such
denial in a written notice calculated to be understood by the claimant, referring to the Plan
provisions that form the basis of the denial.

ARTICLE XI: AMENDMENT AND TERMINATION

     11.1 Amendment. The provisions of this Plan may be amended by the Board of Directors of
Holdings from time to time and at any time in whole or in part, provided that no amendment shall
operate to deprive any Participant or Death Beneficiary of any vested rights in such Participant’s
Accounts accrued to them under the Plan and Trust prior to such amendment.

     11.2 Termination. While it is Holdings’ intention to continue the Plan in operation
indefinitely, Holdings nevertheless expressly reserves the right to terminate the Plan in whole or
in part. Upon a termination of the Plan, amounts equal to the full balance in each Participant’s
Supplemental Salary Deferral Account and Matching Contribution Account shall be distributed (and
taxable) to the Participant (or his Death Beneficiary) and Holdings shall have no further
obligations under the Plan.

12

 

ARTICLE XII: NATURE OF AGREEMENT

     12.1 Mere Promise to Pay. This Plan constitutes a mere promise to make payments in the
future. By participating in this Plan, Participants and their Death Beneficiaries have only an
unsecured right to receive benefits from Holdings as a general creditor of Holdings. The adoption
of this Plan and any setting aside of amounts by Holdings with which to discharge its obligations
hereunder shall not be deemed to create a trust for the benefit of Participants or their Death
Beneficiaries; legal and equitable title to any funds so set aside shall remain in Holdings, and
any recipient of benefits hereunder shall have no security or other interest in such funds. Any
and all funds so set aside shall remain subject to the claims of the general creditors of Holdings,
present and future, and no payment shall be made under this Plan unless Holdings is then solvent.
This provision shall not require Holdings to set aside any funds, but Holdings may set aside such
funds if it chooses to do so.

     12.2 No Right to Continued Employment. Nothing contained herein shall be construed as
conferring upon any Participant the right to continue in the employ of Holdings or any subsidiary
of Holdings in any capacity.

ARTICLE XIII: RESTRICTIONS ON ASSIGNMENT

     13.1 Spendthrift Provisions. The interest of a Participant or his Death Beneficiary may not
be sold, transferred, assigned, pledged, encumbered or made subject to any charge in any manner,
either voluntarily or involuntarily, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge the same shall be null and void; neither shall the benefits
hereunder be liable for or subject to the debts, contracts, liabilities, engagement or torts of any
person to whom such benefits or funds are payable, nor shall they be subject to garnishment,
attachment or other legal or equitable process nor shall they be an asset in bankruptcy, except
that no amount shall be payable hereunder until and unless any and all amounts representing debts
or other obligations owed to Holdings or any affiliate of Holdings by the Participant or Death
Beneficiary with respect to whom such amount would otherwise be payable shall have been fully paid
and satisfied. The interest of any Participant or Death Beneficiary shall be held subject to the
maximum restraint on alienation permitted or required by applicable laws of the State of Texas.

ARTICLE XIV: MISCELLANEOUS

     14.1 Recovery of Payments Made By Mistake. Notwithstanding anything to the contrary, a
Participant or other person receiving amounts from the Plan is entitled only to those benefits
provided by the Plan and promptly shall return any payment, or portion thereof, made by mistake of
fact or law. The Compensation Committee may offset the future benefits of any recipient who
refuses to return an erroneous payment, in addition to pursuing any other remedies provided by law.

     14.2 Governing Law. The Plan and Trust shall be construed, administrated and applied under
the laws of the State of Texas. It is Holdings’ intent that the Plan shall be exempt from ERISA’s
provisions, to the maximum extent permitted by law. The Plan is intended to be unfunded for
federal income tax purposes and for purposes of Title I of ERISA and intended to

13

 

provide deferred compensation only for a select group of management or highly compensated
employees and shall be exempt from Parts 2, 3 and 4 of ERISA, pursuant to Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA.

     14.3 Effective Date. The Plan was originally effective as of July 1, 1998. The effective
date of this amendment and restatement of the Plan is January 1, 2008.

14exv10w31

 

Exhibit
10.31

EXTERRAN ANNUAL PERFORMANCE PAY PLAN

(Effective as of January 1, 2008)

ARTICLE I

PURPOSE

     The purpose of the Exterran Annual Performance Pay Plan (the “Plan”) is to reward eligible
employees of the Company and its Affiliates for financial results that drive the creation of value
for stockholders of the Company and, thereby, to attract, motivate, reward and retain high-caliber
employees required for the success of the Company. The Plan provides a means to link total and
individual cash compensation to Company performance, as measured by approved performance measures.

ARTICLE II

DEFINITIONS

     2.1 Definitions. Where the following words and phrases appear in the Plan, they shall
have the respective meanings set forth below, unless their context clearly indicates to the
contrary.

     “Affiliate” shall mean any corporation, partnership, limited liability company or
partnership, association, trust or other organization which, directly or indirectly,
controls, is controlled by, or is under common control with, the Company. For purposes of
the preceding sentence, “control,” “controlled by” and “under common control with,” as used
with respect to any entity or organization, shall mean the possession, directly or
indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting
power for the election of directors of the controlled entity or organization, or (ii) to
direct or cause the direction of the management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by contract or
otherwise.

     “Base Salary” shall mean the annualized pay rate of a Participant as in effect on
December 31 of a Plan Year, including (a) base pay a Participant could have received in cash
in lieu of (i) contributions made by, or on behalf of, such Participant to a tax-qualified
Plan under Section 401(a) of the Code or to a cafeteria plan under Section 125 of the Code
maintained by the Company and (ii) deferrals of compensation made at the Participant’s
election to the Deferred Compensation Plan or other plan or arrangement of the Company or an
Affiliate, but (b) excluding any Rewards under this Plan and any other bonuses, incentive
pay or special awards paid to the Participant by the Company or an Affiliate.

1

 

     “Board” shall mean the Board of Directors of the Company.

     “CEO” shall mean the Chief Executive Officer of the Company.

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

     “Committee” shall mean the Compensation Committee of the Board or other committee
appointed by the Board from among its members; provided, however, that no member of the
Committee shall be an Employee.

     “Company” shall mean Exterran Holdings, Inc., and its successors.

     “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 Exchange Act) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 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 involving the
Company or any of its subsidiaries, or the 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) (each, 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 of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Corporate Transaction beneficially own, directly or indirectly, more than 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 Resulting Corporation in

2

 

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 Resulting Corporation 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. The term “Resulting Corporation” means (1) the Company or its
successor, or (2) if as a result of a Corporate Transaction the Company or its successor
becomes a subsidiary of another entity, then such entity or the parent of such entity, as
applicable, or (3) in the event of a Corporate Transaction involving the sale, lease or
other disposition of all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole, then the transferee of such assets in such Corporate
Transaction. Notwithstanding the foregoing, neither the sale, lease or other disposition of
assets by the Company or its subsidiaries to Exterran Partners, L.P. or its subsidiaries or
their successor nor the sale, lease or other disposition of any interest in Exterran
Partners, L.P., its general partner or its subsidiaries or their successors shall, in and of
itself, constitute a Corporate Change for purposes of this Plan.

     “Deferred Compensation Plan” shall mean the Exterran Deferred Compensation Plan,
effective as of January 1, 2008, and as the same may thereafter be amended from time to
time, or any successor plan thereto.

     “Employee” shall mean any person who is a regular full-time employee or a part-time
employee and who is scheduled work at least 20 hours per week on a regular basis of the
Company or any Affiliate. For purposes of the Plan, the term “Employee” shall exclude an
individual hired as an independent contractor, leased employee, consultant, or a person
otherwise designated as ineligible to participate in the Plan by the Committee. With
respect to a person residing outside of the United States, the Committee may revise the
definition of “Employee” as appropriate to conform to the laws of the applicable non-U.S.
jurisdiction.

     “Employment” shall mean active employment with the Company or an Affiliate.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Executive” shall mean any “officer” as defined in Rule 16a-1(f) under the Exchange Act
and includes the president, the principal financial officer, the principal accounting
officer, any vice president in charge of a principal business unit, division, or function
(such as sales, administration, or finance), any other officer who performs a policymaking
function, or any other person who performs similar policymaking functions for the Company.

     “Individual Performance” shall mean each Participant’s individual performance
assessment, as further described in Section 5.1.

     “Participant” shall mean an Employee who participates in the Plan pursuant to the
provisions of Article III hereof.

3

 

     “Participant Category” shall mean a grouping of Participants as described in Article
III hereof.

     “Payment Date” shall mean, with respect to a particular Plan Year, a date that is on or
after January 1st, but not later than March 15th, of the calendar year immediately following
the end of such particular Plan Year, as determined by the Committee.

     “Performance Goals” shall mean, for a particular Plan Year, established levels of
applicable Performance Measures, as set forth on Exhibit A hereto.

     “Performance Measures” shall mean the criteria used in determining Performance Goals
for particular Participant Categories, as set forth on Exhibit A hereto.

     “Plan” shall mean this Exterran Annual Performance Pay Plan, effective as of January 1,
2008, and as the same may thereafter be amended from time to time.

     “Plan Year” shall mean a calendar year ending on December 31st.

     “Retirement” shall mean termination of Employment, other than due to death, on or after
the date a Participant attains age 65.

     “Reward” shall mean the discretionary dollar amount of incentive compensation payable
to a Participant under the Plan for a Plan Year that combines the actual results from the
Reward Schedule and a Participant’s Individual Performance, as determined in accordance with
Section 5.2.

     “Reward Opportunity” shall mean, with respect to each Participant Category, Reward
amounts, expressed as a percentage of Base Salary.

     “Reward Schedule” shall mean the schedule which sets forth the level of achievement of
applicable Performance Goals for a particular Plan Year.

     2.2 Number. Wherever appropriate herein, words used in the singular shall be
considered to include the plural and words used in the plural shall be considered to include the
singular.

     2.3 Headings. The headings of Articles and Sections herein are included solely for
convenience, and if there is any conflict between headings and the text of the Plan, the text shall
control.

4

 

ARTICLE III

PARTICIPATION

     3.1 Participants. Employees who are actively employed as of January 1st of each Plan
Year shall be eligible to become Participants for such Plan Year. The CEO shall select the
eligible Employees who will be Participants with respect to each Plan Year and each such
Participant shall be assigned to a Participant Category, based on his or her position with the
Company or an Affiliate at the time he or she is selected to be a Participant for such Plan Year.
No Employee shall at any time have the right (a) to be selected as a Participant in the Plan for
any Plan Year or (b) if so selected, to receive a Reward. The terms and conditions under which a
Participant may participate in the Plan shall be determined by the CEO, subject, with respect to
Executives, to the approval of the Committee in accordance with Article IV.

     3.2 Partial Plan Year Participation. If, after January 1st of a Plan Year, (i) a
person is newly appointed or elected as an Executive or is initially hired as an Employee, or (ii)
an Employee who was not previously a Participant for such Plan Year because he or she was on a
Company-approved leave of absence as of January 1st of the Plan Year returns to Employment
immediately following the end of such leave of absence, then the CEO, in his or her sole
discretion, may provide that such Employee shall become a Participant effective as of the date of
such appointment, election, Employment or return to Employment, as the case may be, for the balance
of the Plan Year, subject to the approval of the Committee with respect to Executives. Such
Employee shall be eligible for a prorated Reward based on that portion of the Plan Year during
which he or she is a Participant. If an Employee who has previously been designated as a
Participant for a Plan Year takes a leave of absence during such Plan Year, all of such
Participant’s rights to a Reward for such Plan Year shall be forfeited, unless the CEO, in his or
her sole discretion, shall determine that such Participant shall be eligible for a prorated Reward
for such Plan Year based upon that portion of the Plan Year during which he or she was a
Participant.

     If during a Plan Year a Participant incurs a change in his or her Employment status due to
promotion, demotion, reassignment or transfer to a position that is under a different Participant
Category, the Participant’s Reward Opportunity will be determined based on the Reward Opportunity
for the Participant Category in which the Participant is assigned as of December

5

 

31st of such Plan Year (or, if earlier, as of the date the Participant’s Employment is terminated due to
death or Retirement), unless otherwise provided by the CEO.

     3.3 No Right to Participate. Except as provided in Sections 3.1 and 3.2, no
Participant or other Employee of the Company or an Affiliate or any other person shall, at any
time, have a right to participate in the Plan for any Plan Year, notwithstanding having previously
participated in the Plan in a prior Plan Year or during a portion of a Plan Year.

     3.4 Plan Exclusive. No Employee shall simultaneously participate in this Plan and in
any other short-term incentive plan of the Company or an Affiliate unless such Employee’s
participation in such other plan is approved by the CEO and, with respect to Executives, the
Committee.

ARTICLE IV

ADMINISTRATION

     During the first calendar quarter of a Plan Year, the Committee shall establish the basis for
payments under the Plan in relation to given Performance Goals, as more fully described in Article
V hereof. As soon as administratively practicable following the end of each Plan Year, but in no
event later than March 15th of the calendar year immediately following the end of such Plan Year,
(i) the Committee shall determine the actual Reward payable for each Executive and (ii) the CEO
shall determine the actual Reward payable for each other Participant who is not an Executive. The
CEO is authorized to construe and interpret the Plan, to prescribe, amend and rescind rules,
regulations, procedures and forms relating to its administration and to make all other
determinations necessary or advisable for administration of the Plan, subject to (i) with respect
to Executives, the approval of the Committee in accordance with Article IV and (ii) the provisions
of Article X. The Committee and the CEO, as applicable, shall have such authority as is expressly
provided in the Plan. In addition, as permitted by law, the Committee and the CEO may delegate
such of its and his or her authority, respectively, granted under the Plan as deemed appropriate.
Decisions of the Committee and the CEO, or its or his or her delegates, in accordance with the
authority granted hereby or delegated pursuant hereto, shall be conclusive and binding on all
parties. Subject only to compliance with the express provisions hereof, the Committee and the CEO,
and its and his or her respective delegates, may act in their sole and absolute discretion with
respect to matters within their authority under the Plan. Neither a

6

 

member of the Committee, the CEO, an officer or Employee of the Company or an Affiliate, nor any
other person to whom authority has been delegated in accordance with the provisions of this Plan
shall be liable for anything done or omitted to be done by any member of the Committee, the CEO,
any officer or Employee of the Company or an Affiliate or any other person in connection with the
performance of any duties under this Plan, except for his or her own willful misconduct or as
expressly provided by law.

ARTICLE V

REWARD DETERMINATIONS

     5.1 Performance Measures and Reward Opportunities. During the first calendar quarter
of a Plan Year, (i) the Committee shall select the Performance Measures that will be used to
measure the Performance Goals for such Plan Year and (ii) the CEO shall establish the Reward
Opportunities for Participants who are not Executives and the Committee shall establish the Reward
Opportunities for Participants who are Executives for such Plan Year.

     The Reward Opportunities corresponding to Performance Measures will have a payout ranging from
0% to 200%, with such measures to determine the budget pool for the incentive payout for such Plan
Year, and may vary in relation to, and within, the Participant Categories. In the event a
Participant changes Participant Categories during a Plan Year, the Participant’s Reward
Opportunities shall be adjusted in accordance with the applicable provisions of Section 3.2.

     A Participant’s Individual Performance multiplier will range from 0% to 125%. The Individual
Performance multiplier shall be primarily based on the performance assessment determined in
connection with the Participant’s performance evaluation conducted with respect to the applicable
Plan Year; provided, however, other factors pertaining to Individual Performance may also be
considered in determining the appropriate percentage. This Individual Performance multiplier will
be applied to the appropriate Performance Measures evaluated in the Reward determination process
according to the provisions outlined in Section 5.2.

     5.2 Reward Determinations. As soon as administratively practicable after a Plan Year,
but in no event later than March 15th of the calendar year immediately following such Plan Year,
the CEO shall provide the Reward Schedule to the Committee, which will show the extent to which the
Performance Goals have been achieved. The amount of the Reward shall be

7

 

determined for each Participant in accordance with the Reward Schedule and each Participant’s
Individual Performance. Executive Rewards, including any CEO Reward, shall be subject to approval
by the Committee.

     5.3 Discretionary Adjustments. Once established, Performance Goals will not be
changed during the Plan Year. However, if the CEO determines, subject to the review and approval
of the Committee, that there has been (i) a change in the business, operations, corporate or
capital structure, (ii) a change in the manner in which business is conducted or (iii) any other
material change or event which will impact one or more Performance Goals in a manner that was not
intended, then the CEO may, reasonably contemporaneously with such change or event, make such
adjustments as the CEO shall deem appropriate and equitable in the manner of computing the relevant
Performance Measures applicable to such Performance Goal or Goals for the Plan Year.

     5.4 Discretionary Bonuses. Notwithstanding any other provision contained herein to
the contrary, the CEO may, in his or her sole discretion, make such other or additional bonus
payments to a Participant as he shall deem appropriate; provided, however, that any discretionary
Executive Rewards, including any discretionary Reward to the CEO, shall be subject to approval by
the Committee.

ARTICLE VI

DISTRIBUTION OF REWARDS

     6.1 Form and Timing of Payment. Except as provided below and in Article VII, a
Participant must be an active Employee as of the last business day of the Plan Year and as of the
Payment Date for such Plan Year to receive the Reward. A Participant’s Reward, if any, as
determined pursuant to Article V for a particular Plan Year, shall be paid in a lump sum cash
payment on the Payment Date if the Participant is an Employee as of the Payment Date. In the event
of termination of a Participant’s Employment prior to the Payment Date, to the extent the amount of
any Reward (or prorated portion thereof) is payable pursuant to the provisions of Section 7.1 or
7.2, such amount shall be paid in a lump sum cash payment on the Payment Date.

     6.2 Elective Deferral. Nothing herein shall be deemed to preclude a Participant’s
timely election to defer receipt of a percentage of his or her Reward pursuant to the Deferred
Compensation Plan, in accordance with the terms and conditions of such plan.

8

 

     6.3 Tax Withholding. The Company or employing Affiliate through which payment of a
Reward is to be made shall have the right to deduct from any payment hereunder any amounts that
Federal, state, local or foreign tax laws require with respect to such payments.

ARTICLE VII

TERMINATION OF EMPLOYMENT

     7.1 Termination of Service During Plan Year. In the event a Participant’s Employment
terminates prior to the last day of a Plan Year for any reason other than death or Retirement, all
of such Participant’s rights to a Reward for such Plan Year shall be forfeited as of such
termination date, unless the CEO (subject to the review and approval of the Committee, with respect
to Executives) shall determine that such Participant’s Reward for such Plan Year shall be prorated
based upon that portion of the Plan Year during which he or she was a Participant, in which case
the prorated portion of the Reward shall be paid in accordance with the provisions of Section 6.1.

     In the event that a Participant’s Employment terminates prior to the last day of a Plan Year
due to death or Retirement, such Participant’s Reward for such Plan Year shall be prorated based
upon that portion of the Plan Year during which he or she was a Participant, in which case the
prorated portion of the Reward shall be paid to the Participant or, in the event of his or her
death, the executor or legal representative of the Participant’s estate, in accordance with the
provisions of Section 6.1.

     7.2 Termination of Service After End of Plan Year But Prior to the Payment Date. If a
Participant’s Employment terminates after the end of the applicable Plan Year, but prior to the
Payment Date, then the amount of any Reward applicable to such Plan Year shall be (a) forfeited by
the Participant as of his or her termination date if such termination is for any reason other than
due to death or Retirement, unless the CEO (subject to the review and approval of the Committee,
with respect to Executives) shall determine that the Reward shall be paid in a lump sum cash
payment on the Payment Date; or (b) paid in a lump sum cash payment on the Payment Date to the
Participant or the executor or legal representative of the Participant’s estate if such termination
is due to Retirement or death.

9

 

ARTICLE VIII

RIGHTS OF PARTICIPANTS AND BENEFICIARIES

     8.1 Status as a Participant. Status as a Participant shall not be construed as a
commitment that any Reward will be paid or payable under the Plan.

     8.2 Employment. Nothing contained in the Plan or in any document related to the Plan
or to any Reward shall confer upon any Participant any right to continue as an Employee or in the
employ of the Company or an Affiliate or constitute any contract or agreement of employment for a
specific term or interfere in any way with the right of the Company or an Affiliate to reduce such
person’s compensation, to change the position held by such person or to terminate the Employment of
such person, with or without cause.

     8.3 Nontransferability. No benefit payable under, or interest in, this Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance
or charge and any such attempted action shall be void and no such benefit or interest shall be, in
any manner, liable for, or subject to, debts, contracts, liabilities or torts of any Participant or
beneficiary; provided, however, that, nothing in this Section 8.3 shall prevent transfer (i) by
will or (ii) by applicable laws of descent and distribution. Any attempt at transfer, assignment
or other alienation prohibited by the preceding sentence shall be disregarded and all amounts
payable hereunder shall be paid only in accordance with the provisions of the Plan.

     8.4 Nature of Plan. No Participant or other person shall have any right, title or
interest in any fund or in any specific asset of the Company or any Affiliate by reason of any
Reward hereunder. There shall be no funding of any benefits which may become payable hereunder.
Nothing contained in the Plan (or in any document related thereto), nor the creation or adoption of
the Plan, nor any action taken pursuant to the provisions of the Plan shall create, or be construed
to create, a trust of any kind or a fiduciary relationship between the Company or an Affiliate and
any Participant or other person. To the extent that a Participant or other person acquires a right
to receive payment with respect to a Reward hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Company or other employing Affiliate, as applicable.
All amounts payable under the Plan shall be paid from the general assets of the Company or
employing Affiliate, as applicable, and no special or separate fund or deposit shall be established
and no segregation of assets shall be made to assure payment of such

10

 

amounts. Nothing in the Plan shall be deemed to give any Employee any right to participate in the
Plan except in accordance herewith.

ARTICLE IX

CORPORATE CHANGE

     In the event of a Corporate Change, (i) with respect to a Participant’s Reward Opportunity for
the Plan Year during which the Corporate Change occurred, provided the Participant is an Employee
as of the date the Corporate Change is consummated (“Closing Date”), such Participant shall be paid
within 15 days after the Closing Date a lump sum cash payment equal to the target amount of his or
her Reward for such Plan Year, prorated to the Closing Date; and (ii) with respect to a Corporate
Change that occurs after the end of the Plan Year but prior to the Payment Date, a Participant
shall be paid his or her Reward earned for such Plan Date as of the Payment Date or, if earlier,
within 15 days after the Closing Date.

ARTICLE X

AMENDMENT AND TERMINATION

     Notwithstanding anything herein to the contrary, the Committee may, at any time, terminate or,
from time to time amend, modify or suspend the Plan; provided, however, that, without the prior
consent of the Participants affected, no such action may adversely affect any rights or obligations
with respect to any Rewards theretofore earned for a particular Plan Year, whether or not the
amounts of such Rewards have been computed and whether or not such Rewards are then payable.

ARTICLE XI

MISCELLANEOUS

     11.1 Governing Law. The Plan and all related documents shall be governed by, and
construed in accordance with, the laws of the State of Texas, without giving effect to the
principles of conflicts of law thereof, except to the extent preempted by federal law.

     11.2 Severability. If any provision of the Plan shall be held illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining provisions hereof;
instead, each

11

 

provision shall be fully severable and the Plan shall be construed and enforced as if said illegal
or invalid provision had never been included herein.

     11.3 Successor. All obligations of the Company under the Plan shall be binding upon
and inure to the benefit of any successor to the Company, whether the existence of such successor
is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company.

     11.4 Effective Date. This Plan shall be effective from and after January 1, 2008, and
shall remain in effect until such time as it may be terminated or amended pursuant to Article X.

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]