Exhibit 10.77
SEPARATION AGREEMENT
This agreement ("Agreement") is made among Xxxxxxx X. XxXxxx, an individual
residing in Spring, Texas ("XxXxxx"), Hanover Compressor Company, a Delaware
corporation ("HCC"), and Hanover Compression Limited Partnership ("Hanover
Compression," and together with HCC, "Hanover") following significant
negotiation by both parties, fully represented by counsel.
WHEREAS, XxXxxx has served as the Chief Executive Officer and President of
HCC since October 1991, and as a Director of HCC since March 1992;
WHEREAS, XxXxxx is one of the founders of Hanover, which was founded in
1990;
WHEREAS, XxXxxx has provided years of valuable service to Hanover;
WHEREAS, today, HCC is a global market leader in full service natural gas
compression and a leading provider of service, fabrication and equipment for
contract natural gas application;
WHEREAS, HCC believes it is currently the largest natural gas compressor
company in the United States on the basis aggregate market horsepower;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Hanover and XxXxxx, intending to be
legally bound, hereby agree as follows:
1. Effective Date. The Agreement will become final, binding and enforceable on
August 1, 2002 (the "Effective Date").
2. Resignations. Hanover and XxXxxx have mutually determined that it is in the
best interest of both parties to sever the current relationships with each
other, including the employment relationships of XxXxxx with Hanover and
its affiliates. Hanover agrees that XxXxxx may resign from employment, and
XxXxxx hereby resigns as of the Effective Date from all positions he holds
as an employee, agent, officer, director and/or representative of (i) HCC
and its subsidiaries and affiliates (collectively, the "Hanover Entities")
and (ii) any entity in which HCC may hold, directly or indirectly, any
interest.
3. Payments to XxXxxx. Hanover agrees as follows:
a. Within three (3) business days after the Effective Date, Hanover
will deliver to XxXxxx a final paycheck for all wages earned through
the Effective Date, plus three (3) weeks vacation, less any and all
customary and usual deductions or withholdings.
b. Within thirty (30) days after the Effective Date, Hanover will
reimburse XxXxxx for all necessary and reasonable expenses that XxXxxx
has incurred on behalf of Hanover or any of its affiliates prior to
the Effective Date, according to the standard policies and procedures
of Hanover regarding reimbursement of such expenses.
c. Hanover shall make the monthly payments specified in Paragraph 9.
d. Except as otherwise specifically provided in this Agreement, XxXxxx
will not be eligible to participate in or accumulate any credit under
the provisions of any retirement plan, the vacation policy, or any
other employee benefit plan or policy of Hanover as of the Effective
Date. No further bonus will be paid to XxXxxx under any bonus plan or
policy. It is understood that XxXxxx maintains the right to and
ownership of all vested amounts in his name as of the Effective Date
in any existing 401(k) plan, other pension or retirement plan
maintained by Hanover.
4. Stock Options. It is expressly agreed that XxXxxx may exercise any
unexercised vested outstanding options ("Stock Options") granted to XxXxxx
pursuant to any of HCC's various stock option plans and stock option
agreements between XxXxxx and HCC (such stock option plans and stock option
agreements being herein collectively referred to as the "Stock Option
Agreements"), but only in accordance with the terms and provisions of the
operative Stock Option Agreement, including those provisions relating to
termination of employment. Stock Options that have not vested before the
Separation Date shall be forfeited. No further stock option awards,
accruals, vesting, or payments of any kind will be made to XxXxxx for any
plan year. In connection with any exercise of any Stock Options, XxXxxx
shall first fully satisfy and fund HCC's tax withholding obligations, if
any, that may arise in connection with XxXxxx'x exercise of such Stock
Option. In addition, XxXxxx agrees that (i) in connection with each
exercise of any Stock Option, XxXxxx will immediately deliver the
certificates evidencing the resulting shares of stock (the "Option Shares")
to HCC in freely transferable form as collateral for the repayment of the
Existing Loans (as defined below) together with such stock powers,
financing statements and security agreements as HCC shall reasonably
require to evidence and perfect a first priority security interest in the
Option Shares and (ii) within five (5) business days after Hanover presents
initial drafts to XxXxxx, XxXxxx will execute and deliver to HCC such
security agreements and financing statements as HCC shall reasonably
require to evidence and perfect a first priority security interest in any
Option Shares that have been, or may in the future be, issued pursuant to
the Stock Options (collectively the "2002 Stock Pledge Agreements"). All
Option Shares shall secure the Existing Loans pursuant to the terms of the
2002 Stock Pledge Agreements and on terms consistent with this Agreement.
The 2002 Stock Pledge Agreements shall include provisions that allow or
require, as indicated below, the sale of all or a portion of the Option
Shares covered thereby and the application of the resulting proceeds to the
following in the following order of priority:
a. First, at XxXxxx'x option, to pay or prepay any principal or
interest under the Existing Loans (as defined below);
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b. Second, at the time of the last exercise (or lapse, if earlier) of
the foregoing Stock Options, a determination shall be made of the
federal income taxes that will accrue (at the maximum marginal federal
income tax rate for the year 2002 for individuals filing jointly) as a
result of the grant and exercise of the foregoing Stock Options (less
the amount of required tax withholding by HCC) and a number of Option
Shares having a market value at such time equal to the amount of such
taxes, plus cost of sale, shall be released from the 2002 Stock Pledge
Agreements and delivered to XxXxxx; and
c. Third, at XxXxxx'x option, the remaining Option Shares may be sold
and the resulting proceeds, less actual cost of sale, shall be
delivered to HCC as substitute cash collateral for the repayment of for
the $1,700,000 Loan and the $500,000 Loan and deposited by HCC into an
interest bearing depository account under the control of HCC (such sums
being referred to herein as the "Cash Collateral"), with such interest
to accrue in such account to XxXxxx.
5. Property. Except as otherwise provided herein, no equipment or materials or
property owned by Hanover or XxXxxx shall be transferred between XxXxxx and
Hanover. XxXxxx agrees that, on or prior to the Effective Date, XxXxxx will
return or relinquish all Hanover credit cards, computers (including all
files saved thereon), office space, furniture, equipment, files, books, and
other company equipment, materials or property in his possession. XxXxxx is
entitled to all of his personal property that is currently on Hanover
premises, and Hanover agrees to return and relinquish the same.
6. Existing Loans. XxXxxx and wife, Xxxx XxXxxx (collectively, "Makers"),
agree as follows with respect to the three (3) loans evidenced by the
following described Promissory Notes (collectively the "Existing Loans"):
a. Promissory Note dated April 12, 2001 executed by Makers and payable
to the order of Hanover Compression in the original principal amount of
$1,700,000.00 as therein provided (the loan evidenced by such
Promissory Note being herein referred to as the "$1,700,000.00 Loan");
b. Promissory Note dated April 12, 2001 executed by Makers and payable
to the order of Hanover Compression in the original principal amount of
$500,000.00 as therein provided (the loan evidenced by such Promissory
Note being herein referred to as the "$500,000.00 Loan"); and
c. Unsecured Promissory Note dated January 29, 2002 executed by XxXxxx
and payable to the order of Hanover Compression in the original
principal amount of $400,000.00 as therein provided (the loan evidenced
by such Promissory Note being herein referred to as the "$400,000.00
Loan").
6.1 Status of Existing Loans. With respect to each of the Existing
Loans, Makers represent and warrant to Hanover that (i) Makers do not have
any right of offset or setoff against the payment of any such Existing Loan
or any defenses to payment of such Existing Loan, and (ii) the Promissory
Note evidencing such Existing Loan, as described above, has
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not been modified or amended, represents the entire agreement between
Makers and Hanover concerning such Existing Loan, is in full force and
effect, is a valid and subsisting obligation of Makers and is enforceable
in accordance with the its terms.
6.2. Collateral Test. In the event the sum of the total of the
following is ever less than seventy-five percent (75%) of the unpaid
principal balance of all of the Existing Loans, plus unpaid accrued
interest thereon, all of the Option Shares shall be sold and the resulting
proceeds thereof less actual cost of sale, shall be delivered to HCC as
substitute cash collateral for the repayment of the Existing Loans and
deposited into an interest bearing account under the control of HCC, with
interest to accrue in such account to XxXxxx: (i) the market value of any
unexercised, unexpired Stock Options described in Paragraph 4 above, being
an amount equal to the difference between the then market value of the
shares of stock of HCC (based on the average closing price of HCC stock
over the immediately preceding thirty (30) day period) and the purchase
price under such Stock Options, less usual and customary cost of sale; (ii)
the market value of any Option Shares (based on the average closing price
of HCC stock over the immediately preceding thirty (30) day period) pledged
as security for the Existing Loans in accordance in with the requirements
of Paragraph 4 above; plus; (iii) the amount of any Cash Collateral pledged
as security for the Existing Loans in accordance with the requirements of
Paragraph 4 above. No sale pursuant to this paragraph shall occur until ten
(10) business days after Hanover has provided XxXxxx with written notice of
the shortfall in collateral, and only, then, if within such ten (10) day
period XxXxxx fails to grant Hanover a properly perfected first security
interest in additional collateral of the type described above sufficient to
allow the above 75% test to be satisfied. The foregoing collateral test
shall not take into account any other collateral securing the Existing
Loans, including, but not limited to any real estate.
6.3 Partial Release at Deed of Trust Liens. As provided in the
Promissory Notes evidencing the $1,700,000 Loan and $500,000 Loan, Makers
have agreed to secure such Existing Loans by a Deed of Trust and Security
Agreement covering, among other property, Xxx 00, Xxxxx 0, in Xxxxxx on
Lake Conroe, Section 2, a subdivision in Xxxxxxxxxx County, Texas,
according to map or plat thereof recorded in Cabinet A, Sheet 62 (formerly
Volume 10, Page 18) of the Map Records of Xxxxxxxxxx County Texas, together
with easement rights to that certain 0.083 acre tract line adjacent to such
Lot 25, as set forth in Easement Agreement filed under Clerk's File No.
8941887 of the Real Property Records of Xxxxxxxxxx County, Texas
(collectively herein referred to as the "Xxxxxxxxxx County Property" and
such Deed of Trust and Security Agreement being herein referred to as the
"XxXxxx Deed of Trust"). Hanover agrees that upon payment by Makers to
Hanover of a prepayment of principal on the $1,700,000 Loan or $500,000
Loan, or any combination thereof, in an amount equal to $500,000, Hanover
will release the Xxxxxxxxxx County Property from the liens and security
interest granted to Hanover in the XxXxxx Deed of Trust, but any such
release shall not release any other liens or security interest securing the
Existing Loans, including, but not limited to any liens or security
interests against any other property covered by the XxXxxx Deed Trust or
any replacement thereof.
6.4. Further Assurances. Makers agree that they shall promptly execute
and deliver all further agreements, and take all further action, that may
be reasonably necessary or that Hanover may reasonably request, in order to
further evidence the Existing Loans and/or the
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liens, security interests, and assignments granted or purported to be
granted as security for the Existing Loans and perfect and protect the same
or to enable Hanover to exercise and enforce Hanover's rights and remedies
thereunder. Without limiting the foregoing, Makers shall at Hanover's
reasonable request: (i) execute security agreements, deeds of trust,
financing statements, amendments and continuations of financing statements,
assignments, notices, and such other documents and agreements as Hanover
may reasonably request in order to perfect and preserve the liens and
security interests granted or purported to be granted as security for the
Existing Loans and (ii) use reasonable efforts to obtain any
acknowledgements from the obligors under any instruments securing or
purporting to secure the Existing Loans reasonably requested by Hanover to
confirm the status of such instruments and verify the rights of Hanover.
Makers also hereby authorize Hanover to execute on behalf of Makers, as
debtor, and to file financing statements necessary or desirable in
Hanover's sole discretion to perfect and to maintain the perfection and
priority of Hanover's security interest in the collateral securing or
purporting to secure the Existing Loans. Without limiting the foregoing,
Makers agree that within five (5) business days after Hanover presents
initial drafts to XxXxxx, Makers will properly execute, acknowledge and
deliver to Hanover such deeds of trust and security agreements as Hanover
shall reasonably require to grant Hanover valid and perfected deed of trust
lien and security interest in the real property purported to be covered by
the XxXxxx Deed of Trust.
7. Release and Waiver by XxXxxx. In partial exchange for the agreements of
Hanover contained herein, XxXxxx, on behalf of himself, his heirs,
executors, successors, administrators and assigns and subject to the
provisions set forth below in this Paragraph 7, does hereby knowingly and
voluntarily release, acquit and forever discharge Hanover, its officers,
shareholders, employees, directors, attorneys, subscribers, parent
companies, subsidiaries, affiliates, successors and assigns (collectively,
the "Hanover Parties") from any and all claims, charges, complaints,
grievances or promises of any and every kind, whether known or unknown,
that are based upon facts occurring prior to the Effective Date of this
Agreement, including but not limited to, the following: (a) any contractual
claims arising under any written or oral agreements between XxXxxx and
Hanover Entities, (b) any statutory claims under the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act of 1990, the
Family and Medical Leave Act of 1993, the Civil Rights Acts of 1964 and
1991, the Employee Retirement Income Security Act, Chapter 451 of the Texas
Labor Code, the Texas Payday Law, and/or the Texas Commission on Human
Rights Act, or arising from any federal, state, or local statute, ordinance
or regulation, (c) any tort or contract claims, (d) any claims, matters or
actions related to XxXxxx'x employment and/or affiliation with, or
separation from Hanover. It is further agreed that, in the event Hanover
initiates any claim, charge, complaint or grievance by Hanover against
XxXxxx, other than a claim, charge, complaint or grievance regarding the
obligations of XxXxxx or Makers under (a) this Agreement, (b) any of the
Existing Loans, (c) the 2002 Stock Pledge Agreements or (d) any other
instruments securing or executing in connection with the Existing Loans,
the foregoing release of claims by XxXxxx shall be extinguished and no
longer in effect to the extent necessary to defend or respond to such
claim, charge, complaint or grievance, including any counterclaims, cross
claims, demands or other actions. The above notwithstanding, it is
expressly agreed that XxXxxx is not releasing and does not release or waive
any right to (i) indemnification from any of the Hanover Entities, to the
extent he is entitled to such indemnification under Delaware or applicable
law, or the bylaws, charters or
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partnership agreements of the Hanover Entities and (ii) from the D&O
insurance carrier to the extent the XxXxxx is determined to be entitled to
the benefits offered under any directors and officers insurance policy
maintained by any of the Hanover Entities. In addition, Hanover agrees that
attorneys' fees and expenses incurred by XxXxxx in defending civil or
criminal actions as provided for under Section 7.1 of Hanover's bylaws
(including proceedings prosecuted by the United States Securities and
Exchange Commission) shall be advanced to XxXxxx; provided that XxXxxx'x
signature on this Agreement shall constitute an undertaking to reimburse
such expenses as provided for in Section 7.1 of Hanover's bylaws.
8. Confidential Information. XxXxxx acknowledges that in the course of
XxXxxx'x employment by Hanover, XxXxxx had access to information relating
to the business and affairs of the Hanover Entities, including, without
limitation, trade secrets, designs, technology, processes, data,
techniques, inventions (whether patentable or not), works of authorship,
formulas, business and development plans, customer lists, software programs
and subroutines, source and object code, algorithms, terms of compensation
and personnel assessments of the Hanover Entities' employees, information
regarding the Hanover Entities' facilities, processes, operating
procedures, financial data, purchasing practices, marketing, management
procedures, books and records, employee or personnel data, contractual
arrangements or proposals, properties and business affairs of the Hanover
Entities, as well as the Hanover Entities' business plans and budgets,
information concerning the Hanover Entities' actual or anticipated
business, research or development, and may have received information in
confidence by or for any of the Hanover Entities from any other person
(collectively "Confidential Information"). XxXxxx agrees that following the
Effective Date, XxXxxx will not, at any time, directly or indirectly, for
any reason whatsoever, with or without cause, unless pursuant to a lawful
subpoena, disclose or disseminate any Confidential Information to any
person or entity, nor will XxXxxx use any Confidential Information in
competing with any of the Hanover Entities for any purpose. It is expressly
understood that the Confidential Information covered by this paragraph
includes only information that is confidential or proprietary information
of one or more of the Hanover Entities and therefore does not include
information which is available to the public. This provision may be
specifically enforced by Hanover through an action at law or in equity at
any time Hanover deems necessary.
9. Non-Competition. As partial exchange for the consideration referred to
herein and in further consideration of the payment by Hanover to XxXxxx of
$33,333.33 per month for a period of eighteen (18) months and pursuant to
XxXxxx'x recognition that a material part of Hanover's willingness to enter
into this Agreement centers upon its concern that a breach of this
Paragraph 9 by XxXxxx would materially damage the Hanover Entities, XxXxxx
further agrees that from the Effective Date up to and including a two (2)
year period following the Effective Date of this Agreement, XxXxxx will
not, either directly or indirectly, for himself or on behalf of any other
person, persons, company, partnership, corporation or business of whatever
nature:
a. except for the Permitted Activities (as defined below), engage in,
carry on, or have a financial interest in (in any capacity whatsoever,
including, without limitation, as an officer, director, shareholder,
owner, partner, joint venturer,
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manager, advisor, employee, independent contractor or consultant) the
Applicable Businesses (as defined below) anywhere except Asia, due to
the broad geographic nature of the Hanover Entities' business or
otherwise compete with the Hanover Entities in the Applicable
Businesses;
b. employ any employee, consultant or independent contractor of any of
Hanover, or solicit or call upon any person or entity who is, at that
time, an employee, consultant or independent contractor of any of the
Hanover Entities, for the purpose of or with the intent or effect of
employing, contracting for services, or enticing such employee,
independent contractor or consultant away from or out of the employ or
contract with any of the Hanover Entities, whether through a Qualified
Investment or otherwise, or
c. call upon any person or entity which is, at that time, or which has
been within one (1) year prior to that time, a customer of any of the
Hanover entities for the purpose of proposing a Qualified Investment or
soliciting, selling, leasing or outsourcing management of services or
products relating to the Applicable Businesses anywhere except Asia.
As referenced above, the "Applicable Businesses" will mean the hydrocarbon
compression and hydrocarbon processing, treating, parts and services and
production equipment businesses conducted by any of the Hanover Entities.
Notwithstanding anything in subparagraph (a) of this Paragraph 9 to the
contrary, XxXxxx may (i) acquire, for investment purposes only, not more
than two percent (2%) of the capital stock of a business competing with
Hanover, provided that such stock is traded on a national securities
exchange, an automated quotation system, or over-the-counter, or (ii) after
offering a Qualified Investment (as defined below) to HCC pursuant to the
procedures set forth in this Paragraph 9, make a Qualified Investment (the
activities described in clauses (i) and (ii) being collectively referred to
as the "Permitted Activities").
If, from the Effective Date up to and including the last day of the
twenty-four (24) month period following the Effective Date of this
Agreement, XxXxxx desires to make a Qualified Investment, XxXxxx shall give
written notice to HCC at least thirty (30) days prior to the proposed date
such Qualified Investment is to be consummated by XxXxxx (the "First
Notice"). The First Notice shall contain a detailed description of the
terms and timing of such Qualified Investment, the dollar amount of such
Qualified Investment, and contact information for representatives of the
entity or business in which such Qualified Investment is to be made, and
shall be accompanied by written authorization from the Qualified Entity (as
defined below) offering the Qualified Investment to Hanover in lieu of
XxXxxx. XxXxxx hereby consents to HCC's contact with such representatives
to the extent deemed necessary by HCC for its evaluation of the Qualified
Investment. HCC shall have ten (10) days from the date of its receipt of
the First Notice to notify XxXxxx in writing of Hanover's intention to make
the Qualified Investment in lieu of XxXxxx making such investment (the
"First Acceptance Notice"). If HCC shall deliver a First Acceptance
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Notice to XxXxxx, the Qualified Investment shall not be considered a
Permitted Activity, and XxXxxx hereby consents to Hanover's negotiation and
consummation of such Qualified Investment on behalf of itself. If, however,
HCC does not deliver an First Acceptance Notice within such ten (10)-day
period, XxXxxx may continue to negotiate the terms of such Qualified
Investment and shall give a second written notice to HCC (directed to the
attention of the CEO office at least ten (10) days prior to the proposed
date such Qualified Investment is to be consummated by XxXxxx (the "Second
Notice"). The Second Notice shall contain updated versions of the
information contained in the First Notice. HCC shall have five (5) days
from the date of its receipt of the Second Notice to notify XxXxxx in
writing of Hanover's intention to make the Qualified Investment in lieu of
XxXxxx making such investment (the "Second Acceptance Notice"). If HCC
shall deliver a Second Acceptance Notice to XxXxxx, the Qualified
Investment shall not be considered a Permitted Activity, and XxXxxx hereby
consents to Hanover's negotiation and consummation of such Qualified
Investment behalf of itself. If, however, HCC shall not have delivered
either a First Acceptance Notice within the ten (10)-day period described
herein or a Second Acceptance Notice with the five (5)-day period described
herein, the Qualified Investment shall be considered a Permitted Activity
so long as it shall be consummated by XxXxxx under substantially the same
terms as such Qualified Investment was presented to HCC on the proposed
consummation date as stated in the Second Notice or within five (5) days
thereafter (the "Deadline"). Any Qualified Investment not consummated by
the XxXxxx on or prior to the Deadline shall not be considered a Permitted
Investment unless re-offered to Hanover in accordance with the procedures
specified in this Paragraph 9.
For purposes of this Agreement, the term (i) "Qualified Investment" shall
mean a passive investment, whether as a shareholder, limited partner,
member, or other owner, in a Qualified Entity, and (ii) "Qualified Entity"
shall mean any entity or business that (a) competes with any Hanover Entity
anywhere, and (b) with respect to which (or its subsidiaries or
affiliates), XxXxxx has no employment, consulting, contractor or management
relationship.
Should XxXxxx fail to perform any provision of this Agreement, including
this Paragraph 9, then the payments provided for under this Paragraph 9
shall cease immediately. Notwithstanding the foregoing, Hanover agrees that
prior to exercising the foregoing right to cease such payments on the basis
of XxXxxx'x perceived failure to perform any provision of this Agreement or
instituting any proceedings for injunctive relief for such failure by
XxXxxx, Hanover will first deliver written notice of such failure to XxXxxx
and make reasonable efforts to have a senior officer of HCC meet with
XxXxxx to discuss any alleged violation during the seven (7) day period
immediately following the delivery of such notice. In the event at the
expiration of such seven (7) day period Hanover still believes that XxXxxx
has failed to perform any provisions of this Agreement, Hanover shall not
be limited in exercising any rights available to Hanover for such failure,
whether arising under this Agreement, at law or in equity.
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10. Injunctive Relief. It is agreed by the parties that the foregoing covenants
in Paragraph 9 impose a reasonable restraint on the XxXxxx in light of the
activities and business of Hanover on the date of the execution of this
Agreement. All of the covenants in Paragraph 9 shall be construed as an
agreement independent of any other provision in this Agreement or any other
relationship or dealings between the parties. Because of the difficulty of
measuring economic losses to Hanover as a result of a breach of any
covenant in Paragraph 9 above, and because of the immediate and irreparable
damage that could be caused to Hanover for which they would have no other
adequate remedy, XxXxxx agrees that in the event of an alleged breach by
XxXxxx, the foregoing covenants may be enforced by Hanover by injunctions,
restraining orders and other equitable actions.
11. Cooperation. XxXxxx agrees that he will act at all times hereafter in a
manner consistent with the interests of Hanover with respect to their
shareholders, customers, employees, agents, and lenders. Neither XxXxxx nor
Hanover will defame or disparage each other. XxXxxx further agrees that he
will provide reasonable cooperation to Hanover in response to reasonable
requests made by Hanover in matters relating to internal investigations,
external investigations, and/or judicial or administrative proceedings,
including but not limited to, participating upon reasonable notice in
conferences and meetings, making himself available upon reasonable notice
of reasonable times for interviews, providing non-privileged documents or
information, aiding in the analysis of documents, or complying with any
other reasonable requests by Hanover including execution of such agreements
as are reasonably necessary. Nothing in this paragraph is intended to
constitute or be construed as a waiver of the attorney-client privilege or
any other privileges that XxXxxx may be entitled to assert. This
cooperation is an integral part of this Agreement. Hanover agrees that it
will provide reasonable cooperation to XxXxxx in response to reasonable
requests by XxXxxx in matters relating to internal investigations, external
investigations, and/or judicial or administrative proceedings arising out
of or relating in any way to any fact related to XxXxxx as an officer or
director of Hanover which occurred prior to the Effective Date of this
Agreement, including but not limited to providing non-privileged documents
or information, aiding in the analysis of documents or complying with any
other reasonable requests by XxXxxx.
12. Indemnification of Hanover. XxXxxx agrees to pay federal and state taxes,
if any, that he is required by law to pay with respect to this Agreement.
If XxXxxx fails to pay any required taxes with respect to this Agreement,
XxXxxx agrees to indemnify and hold Hanover harmless from any claims,
demands, deficiencies, levies, assessments, penalties or recoveries by any
government or entity against XxXxxx for any amounts claimed due on account
of XxXxxx'x failure to pay any required taxes with respect to the amounts
designated in this Agreement, including Hanover's reasonable attorneys'
fees in any disputes related to those payments.
13. Consulting Services. For a period thirty-six (36) months from the Effective
Date, the XxXxxx agrees to provide reasonable consulting services to
Hanover that do not materially interfere with XxXxxx'x business activities
(the "Consulting Services"). XxXxxx shall provide the consulting services
at the direction of the Chairman of the Board of Directors of Hanover.
XxXxxx will be an independent contractor and is not authorized to represent
any of the Hanover Parties. The XxXxxx shall be entitled to cease providing
Consulting Services to Hanover by giving Hanover thirty (30) days prior
written notice. In consideration for the
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XxXxxx'x agreement to provide Consulting Services, Hanover shall provide
health and medical benefits to the XxXxxx and his family on a basis (and at
a cost) substantially similar to those benefits provided to Hanover's
employees. At such time as XxXxxx elects to terminate XxXxxx'x obligations
to provide Consulting Services, Hanover shall cease providing such health
and medical benefits.
14. Acknowledgement. XxXxxx and Hanover acknowledge, represent and agree that
they have been fully informed and are fully aware of their rights to
discuss any and all aspects of this matter with an attorney of choice, that
they have carefully read and fully understands all of the provisions of
this Agreement, and that they accept the terms of this Agreement as fair
and equitable under all the circumstances and voluntarily execute this
Agreement.
15. Non-Admission. This Agreement is not an admission by XxXxxx or Hanover of
any wrongdoing or liability.
16. No Future Employment. XxXxxx agrees to waive any right to reinstatement or
future employment with any of the Hanover Entities following the Effective
Date.
17. Entire Agreement. This Agreement sets forth the entire Agreement between
XxXxxx and Hanover. Further, it supercedes and extinguishes any prior
understandings or written or oral agreements between the parties. No one
has promised XxXxxx or Hanover anything that is different from what is set
forth in this Agreement. No other promises or agreements shall be binding
upon XxXxxx or Hanover with respect to the subject matter of this Agreement
unless separately agreed to in writing.
18. Assignment. This Agreement and all the provisions hereof shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, legal representatives and assigns, but neither this
Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by either of the parties hereto without the prior written
consent of the other party.
19. Controlling Law. This Agreement has been made in the State of Texas and
Texas law applies to it. If any part is found to be invalid, the remaining
parts of the Agreement will remain in effect as if there were no invalid
part. Any suit, action or proceeding against any party to this Agreement
shall be brought in any federal or state court located in the City of
Houston, Texas, and each party hereby submits to the nonexclusive
jurisdiction of such courts for the purpose of any such suit, action or
proceeding. XxXxxx and Hanover agree that this Agreement is intended to,
and in all respects should be interpreted and enforced in a manner that
renders it consistent with, and in no manner in violation of, the
Xxxxxxxx-Xxxxx Act of 2002.
20. Miscellaneous. XxXxxx agrees that, except as provided by this Agreement, he
is not entitled to any income, payments, salaries, or other financial
benefits from any of Hanover.
21. Notices. Except as otherwise specifically provided herein, notices and
other communications provided for herein shall be in writing and shall be
hand delivered or mailed;
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If to Hanover: With a Copy to:
Hanover Compressor Company Hanover Compressor Company
00000 X. Xxxxxxx Rosslyn 00000 X. Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer Attention: General Counsel
If to XxXxxx: With a Copy to:
Xxxxxxx X. XxXxxx Xxxx X.X. Xxxxxxx
Xxxx, Xxxxxx & Xxxxxxx, L.L.P.
--------------------------
Houston, Texas 1221 McKinney, Suite 4500
-----------
Xxxxxxx, Xxxxx 00000
22. Xxxx XxXxxx has joined in the execution of this Agreement for purposes of
evidencing her agreement to the terms of Paragraphs 6, 17, 18, 19 and 20.
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HANOVER COMPRESSOR COMPANY
/s/ Xxxxxxx X. XxXxxx
----------------------------------- By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxxx X. XxXxxx --------------------------------
[name] Xxxxxx X. Xxxxxxxx
/s/ Xxxx Xxxx XxXxxx [title] President & Chief
----------------------------------- Executive Officer
Xxxx XxXxxx
Date: 8/2/02 Date: 8/5/02
----------------- -------------
HANOVER COMPRESSION LIMITED
PARTNERSHIP
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
[name] Xxxx X. Xxxxxxx
[title] Chief Financial Officer
Date: 8/5/02
-------------
It is represented that the
individual(s) signing above on
behalf of Hanover Compressor Company
and Hanover Compression Limited
Partnership have full authorization
to do so.
12
