EXHIBIT 10.90
HANOVER COMPRESSOR COMPANY
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Agreement") is entered into between HANOVER
COMPRESSOR COMPANY, a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxxxxx ("Optionee"), as of March 19, 2002 (all capitalized terms used herein
but not otherwise defined shall have the meaning assigned to them in Section
18). In consideration of the mutual promises and covenants made herein, the
parties hereby agree as follows:
1. Grant of Option. Under the Company's 2001 Equity Incentive Plan (the
"Plan") and subject to the terms and conditions set forth herein, the Company
grants to Optionee an option (the "Option") to purchase the Shares at a purchase
price of $17.25 per share (the "Option Price"). The "Shares" shall consist of
75,000 shares of the Company's common stock, par value $.001 per share (the
"Common Stock").
The Option is a non-statutory option and is not intended to qualify as an
incentive stock option described in Section 422 of the Internal Revenue Code of
1986, as amended. All provisions of this Agreement are to be construed in
conformity with this intention. Defined terms not defined herein shall have the
meaning set forth in the Plan.
2. Term. Except as provided below, the Option shall be valid for a term
commencing on the date hereof (the "Date of Grant") and ending ten (10) years
from the Date of Grant (the "Termination Date").
(a) Option Rights Upon Termination as a Director. If Optionee ceases
to be a director of the Company or any subsidiary or affiliate thereof for
any reason other than Cause or Optionee's Disability or death, the Option
shall be exercisable (to the extent exercisable on the date of such
termination) at any time prior to the earlier of (i) the Termination Date,
or (ii) within ninety (90) days after the Optionee's Termination of
Employment.
(b) Termination for Cause. If Optionee ceases to be a director of the
Company or any subsidiary or affiliate thereof because Optionee is
terminated for Cause, the Option shall automatically expire and Optionee
shall have no right to exercise any portion of the Option, whether or not
vested, thereafter.
(c) Option Rights Upon Disability or Death of Optionee. If Optionee
ceases to be a director of the Company as a result of his Disability or
death the Option shall be exercisable at any time prior to the earlier of
(i) the Termination Date, or (ii) twelve (12) months after the date of
Termination of Employment. Following the death of Optionee, the Option may
be exercised by Optionee's personal representative or by the distributee to
whom Optionee's rights under the Option shall pass by will or by the laws
of descent and distribution.
3. Vesting. The Option may only be exercised to the extent vested.
(a) The Option will vest according to the following schedule:
Number of Years Since
Date of Grant Vested Percentage
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Fewer than one 0.0%
One but fewer than two 33.3%
Two but fewer than three 66.7%
Three or more 100.0%
Upon Optionee's Termination of Employment, he will forfeit the
non-vested portion of the Option.
(b) Notwithstanding the vesting schedule in Section 3(a) hereof, if
Optionee's Termination of Employment is for Cause, Optionee's vested
percentage shall be 0% and Optionee shall forfeit any and all rights in and
to the Option.
(c) Notwithstanding the vesting schedule in Section 3(a) hereof,
immediately prior to a Change in Control the Option shall be fully vested
and non-forfeitable. In addition, the Company hereby agrees to exercise its
right under Section 11.1(a) of the Plan to acquire from Optionee his vested
Options by payment of the difference between the price per share of Common
Stock established in the Change in Control and the Option Price.
4. Restriction on Exercise. The Option may not be exercised during any
period in which Optionee is in default under the terms of any loan or other
obligation that Optionee may have with the Company. Upon cure of such default,
the restrictions of this Section 4 will lapse and the Option shall be
exercisable to the extent vested and otherwise exercisable under the terms of
this Agreement.
5. Procedure for Exercise. Exercise of the Option or a portion thereof
shall be effected by the giving of written notice by Optionee to the Company in
accordance with Section 7 of the Plan and the payment of the pro rata portion of
the Option Price for the number of Shares to be acquired pursuant to the
exercise.
6. Payment for Shares. Payment of the Option Price for any Shares purchased
pursuant to the exercise of the Option shall be made in cash or by such other
method as may be permitted by the Committee administering the Plan in accordance
with the provisions of Section 7 of the Plan. No shares shall be delivered upon
the exercise of the Option until full payment has been made and all applicable
withholding requirements satisfied.
7. Option Not Transferable and Subject to Certain Restrictions. The Option
may not be sold, pledged, assigned or transferred in any manner other than by
will or the laws of descent and distribution and may be exercised during the
lifetime of Optionee only by Optionee or by his legally authorized
representative. Following the death of Optionee, the Option may be exercised by
Optionee's personal representative or by the distributee to whom Optionee's
rights under the Option shall pass by will or by the laws of descent and
distribution.
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8. Non-Competition and Confidential Information. In consideration hereof,
Optionee agrees that during the term of this Agreement and for a period of one
(1) year thereafter, Optionee (i) will not compete with any business of the
Company or any of its subsidiaries or affiliates, and (ii) will not disclose to
persons outside the Company confidential information concerning the Company or
any of its subsidiaries or affiliates without the Company's express written
consent.
9. Acceptance of Agreement and Plan. Optionee hereby accepts and agrees to
be bound by all the terms and conditions of this Agreement and the Plan.
10. Tax Withholding.
(a) Option Conditioned upon Satisfaction of Withholding Obligation.
The issuance, delivery, exercise or vesting of the Option is subject to the
condition that if at any time the Committee shall determine, in its
discretion, that the satisfaction of withholding tax or other withholding
liabilities under any state or federal law is necessary or desirable as a
condition of, or in connection with, the issuance, delivery, exercise or
vesting of the Option, then the issuance, delivery, exercise or vesting of
the Option shall not be effective unless the withholding shall have been
effected or obtained in a manner acceptable to the Company.
(b) Manner of Satisfying Withholding Obligation. If Optionee is
required to pay to the Company an amount required to be withheld under
applicable income tax laws in connection with the exercise of the Option,
subject to Section 10(c), Optionee may satisfy the obligation, in whole or
in part, by electing to (i) have the Company withhold a portion of the
Shares acquired upon the exercise of the Option having a Fair Market Value
on the date the amount of tax to be withheld is to be determined (the "Tax
Date") equal to the amount required to be withheld, or (ii) deliver to the
Company shares of Common Stock already owned for at least six months and
having a Fair Market Value on the Tax Date equal to the amount required to
be withheld. The amount to be withheld shall be the minimum amount that is
required to be withheld under applicable federal and state income tax laws;
provided, however, if a request is made by Optionee, the amount to be
withheld shall be the approximate amount of federal and state income taxes
that will be incurred by Optionee with respect to such issuance, delivery,
exercise or vesting of Options under this Agreement.
(c) Special Rules for Use of Stock. An election to have Shares or
other shares of Common Stock withheld or delivered out of already-owned
Common Stock for the purposes of Section 10(b) (i) must be made prior to
the Tax Date and (ii) must be irrevocable.
11. Compliance with Securities Laws. The Option shall not be exercisable
and Shares shall not be issued pursuant to the exercise of the Option unless the
exercise of such Option and the issuance and delivery of such Shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares
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may then be listed, and shall be further subject to the approval of counsel for
the Company with respect to such compliance. If, in the opinion of counsel for
the Company, a representation is required to be made by Optionee in order to
satisfy any of the foregoing relevant provisions of law, the Company may, as a
condition to the exercise of the Option, require Optionee to represent and
warrant at the time of exercise that the Shares to be delivered as a result of
such exercise are being acquired solely for investment and without any present
intention to sell or distribute such Shares.
12. Employment of Optionee. Optionee serves solely as a Director of the
Company in the capacity of Chairman of the Board. Optionee is not an Employee of
the Company and nothing contained in this Agreement should be construed to
create any employment relationship between the Company and Optionee. Nothing in
this Agreement shall confer upon Optionee any right to employment by the Company
or any of its subsidiaries or affiliates.
13. Adjustments. The Committee may in its discretion make any adjustments
necessary to prevent accretion, or to protect against dilution, in the number
and kind of Shares with respect to any unexercised portion of the Option, and in
the Option Price in the event of a recapitalization, stock split, stock
dividend, consolidation, rights offering, spin-off, reorganization, or
liquidation and any transaction in which Shares are changed into or exchanged
for a different number or kind of shares of stock or other securities of the
Company or another entity.
14. Shares Not Outstanding. Prior to issuance, the Shares are not deemed to
be outstanding for any purpose and Optionee shall have no voting, preemptive or
other shareholder rights with respect to such Shares.
15. Number. Whenever used herein, nouns in the singular shall include the
plural where appropriate.
16. Headings. Headings of articles and sections hereof are inserted for
convenience of reference only and constitute no part of this Agreement.
17. Binding on Successors. This Agreement shall be binding upon the
successors and assigns of the Company and on the heirs, personal
representatives, successors, assigns and distributees of Optionee.
18. Definitions. Unless otherwise defined herein, terms used herein with
initial capital letters shall have the meanings set forth in the Plan.
19. Governing Law. The construction and operation of this Agreement are
governed by the laws of the State of Delaware.
20. Amendment. This Agreement may be amended only by an instrument in
writing signed by both the Company and Optionee.
21. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto concerning the subject matter hereof and supersedes
all prior and
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contemporaneous agreements between the Company and Optionee relating to the
subject matter hereof.
22. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each party hereto has executed this Agreement on the
date first written above.
COMPANY:
HANOVER COMPRESSOR COMPANY, a Delaware corporation
By: /s/ Xxxx Xxxx
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Xxxx Xxxx
Senior Vice President
OPTIONEE:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
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