Exhibit 10.78
SEPARATION AGREEMENT
This agreement ("Agreement") is made among Xxxxxxx X. Xxxxx, an individual
residing in Houston, Texas ("Xxxxx"), 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.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Hanover and Xxxxx, intending to be legally bound,
hereby agree as follows:
1. Effective Date. The Agreement will become final, binding and enforceable as
of the Effective Date (as hereafter defined).
2. Termination of Employment. Each of Hanover and Xxxxx has determined that it
is in their respective best interest to sever their relationship, including
his employment relationship with Hanover. In exchange for the waiver and
release and other substantial promises by Xxxxx contained herein, Hanover
agrees that Xxxxx may resign from employment, and Xxxxx hereby resigns from
all positions he holds as an employee, agent, representative, officer,
and/or director of HCC its subsidiaries and affiliates, and any entity in
which HCC may hold directly, or indirectly, any interest (collectively, the
"Hanover Entities") effective August 2, 2002 (the "Effective Date"). In
connection with the foregoing, Xxxxx agrees that he will execute such
resignation letters and other similar documents as Hanover may reasonably
require in connection with the foregoing.
3. Payments to Xxxxx. In further exchange for the waiver and release and other
substantial promises by Xxxxx contained herein, Hanover agrees as follows:
a. Within three (3) business days after the Effective Date, Hanover
will deliver to Xxxxx a final paycheck for all wages earned through the
Effective Date, plus any accrued but unused vacation, less any and all
customary and usual deductions or withholdings.
b. Within thirty (30) days after the Effective Date, Hanover will
reimburse Xxxxx for all necessary and reasonable expenses that Xxxxx
has incurred on behalf of the Hanover Entities prior to the Effective
Date, according to the standard policies and procedures of Hanover
regarding reimbursement of such expenses. Further, Hanover will
reimburse Xxxxx or pay directly for Xxxxx'x reasonable attorney's fees
incurred with respect to the negotiation and execution of this
Agreement.
c. Hanover's Houstonian membership which Xxxxx has been using will be
assigned from Hanover to Xxxxx, without charge, and Hanover shall pay
any remaining balance on the initiation fee. Xxxxx shall be responsible
for all dues and expenses relating thereto from and after the Effective
Date.
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d. Except as otherwise specifically provided in this Agreement, Xxxxx
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 from and after the
Effective Date. No further bonus will be paid to Xxxxx under any bonus
plan or policy.
4. Stock Options. It is expressly agreed that Xxxxx may exercise any
unexercised vested outstanding options ("Stock Options") granted pursuant
to any of HCC's various stock option plans and stock option agreements
between Xxxxx 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; provided, however, that such Stock Option Agreements shall not
be construed to forfeit any vested Stock Options upon termination of
employment but shall allow the exercise of such Stock Options in accordance
with the post-termination exercise period associated with voluntary
departure set forth in the applicable Stock Option Agreement.
Stock Options that have not vested before the Effective Date shall be
forfeited. No further awards, accruals, vesting, or payments of any kind
will be made to Xxxxx for any plan year. In connection with any exercise of
any Stock Options, Xxxxx shall first fully satisfy and fund HCC's federal
income tax withholding obligations, if any, that may arise in connection
with Xxxxx'x exercise of such Stock Option and any related requirement
under the operative Stock Option Agreement. In addition, Xxxxx agrees that
in connection with each exercise of any Stock Option, Xxxxx 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 the Effective Date, Xxxxx 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 Loan 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 only after fifteen (15) business days
after notice to Xxxxx so as to allow him time to provide additional
adequate collateral as required and the resulting proceeds shall be applied
as follows in the following order of priority:
a. First, 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 federal income 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 Xxxxx; and
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b. Second, at Xxxxx'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 Existing 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").
In addition, the 2002 Stock Pledge Agreements shall provide that (i) for
purposes of the ratio test contained in Paragraph 4 of the 2000 Pledge
Agreement (as hereafter defined), the Option Shares covered by the 2002
Stock Pledge Agreements shall be considered Pledged Securities (as defined
in such Paragraph 4) covered by the 2000 Pledge Agreement (ii) in the event
Xxxxx is ever required pursuant to such Paragraph 4 to deliver additional
Pledged Securities, Xxxxx shall have twenty (20) days after delivery of
notice thereof from Hanover in which to satisfy such requirement, and,
(iii) Xxxxx shall be entitled to a release from the 2002 Stock Pledge
Agreements of any Option Shares covered by the 2002 Stock Pledge Agreements
in excess of the number of Option Shares necessary to satisfy the ratio
test contained in Paragraph 4 of the 2000 Pledge Agreement, after taking
into account the number of shares of HCC then covered by the 2000 Pledge
Agreement. The "2000 Pledge Agreement" will mean that certain Pledge
Agreement dated June 29, 2000 executed by Xxxxx in favor of Hanover
Compression.
5. Return of Company Materials. Except as otherwise provided herein, no
equipment or materials shall be transferred to Xxxxx from Hanover. Xxxxx
must, on or prior to the Effective Date, return or relinquish all Hanover
credit cards, computers (including all files saved thereon), office space,
equipment, files, books, and other company equipment, materials, or
property in his possession, except all furniture and accessories in his
office may be taken by Xxxxx at no charge within thirty (30) days after the
Effective Date.
6. Payments to Hanover. In partial exchange for the substantial promises by
Hanover contained herein, Xxxxx agrees as follows with respect to the loan
evidenced by the following described Promissory Note (the "Existing Loan"):
Four Year Secured Promissory Note dated June 29, 2000 executed by Xxxxx and
payable to the order of HCC in the original principal amount of $824,087.08
as therein provided.
6.1 Status of Existing Loan. With respect to the Existing Loan, the
parties agree that the unpaid principal amount of the Existing Loan, as of
the Effective Date, is equal to $583,692. Xxxxx represents and warrants to
Hanover that (i) Xxxxx does not have any right of offset or setoff against
the payment of the Existing Loan or any defenses to payment of the Existing
Loan and (ii) the Promissory Note evidencing such Existing Loan, as
described above, has not been modified or amended, represents the entire
agreement between Xxxxx and Hanover Compression concerning such Existing
Loan, is in full force and effect, is a valid and subsisting obligation of
Xxxxx and is enforceable in accordance with its terms.
6.2. Further Assurances. Xxxxx agrees that Xxxxx 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 Loan and/or the liens, security
interests, and assignments granted or purported to be granted as security
for
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the Existing Loan and perfect and protect the same or to enable Hanover to
exercise and enforce Hanover's rights and remedies thereunder. Without
limiting the foregoing, Xxxxx shall at Hanover's reasonable request: (i)
execute security agreements, 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 Loan and (ii) use reasonable
efforts to obtain any acknowledgements from the obligors under any
instruments securing or purporting to secure the Existing Loan reasonably
requested by Hanover to confirm the status of such instruments and verify
the rights of Hanover. Xxxxx also hereby authorizes Hanover to execute on
behalf of Xxxxx, 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 Loan.
7. Release and Waiver by Xxxxx. In partial exchange for the consideration
referred to herein, Xxxxx, on behalf of himself, his heirs, executors,
successors, administrators and assigns (collectively, "Xxxxx Parties"),
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 and any other entity in which HCC owns, directly or indirectly, an
interest (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 Xxxxx 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 other federal,
state, or local statute, ordinance or regulation, (c) any tort or contract
claims, (d) any claims, matters or actions related to Xxxxx'x employment
and/or affiliation with or separation from Hanover. It is further agreed
that, in the event that Hanover initiates any claim, charge, complaint or
grievance against Xxxxx other than a complaint arising from an alleged
violation of Paragraph 6 or 9 hereof then the foregoing release of claims
by Xxxxx shall be extinguished and no longer be in effect to the extent
necessary to defend or respond to such claim, charge, complaint or
grievance, including any counter claims, cross claims, demands or other
actions in any way relating to such claim, charge, complaint or grievance.
The above notwithstanding, it is expressly agreed that Xxxxx is not
releasing and does not release any right to indemnification from HCC (i) to
the extent he is determined to be entitled to such indemnification by HCC
under Delaware or applicable law, or the bylaws or charter of HCC, and (ii)
to the extent Xxxxx is determined to be entitled to the benefits offered
under any directors and officers insurance policy maintained by HCC. In
addition, Hanover agrees that expenses incurred by Xxxxx in defending civil
or criminal actions as provided for under Section 7.1 of HCC's bylaws
(including proceedings prosecuted by the United States Securities and
Exchange Commission) shall be advanced to Xxxxx; provided, that Xxxxx'x
signature on this Agreement shall constitute an undertaking to reimburse
such expenses as provided for in Section 7.1 of HCC's bylaws.
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8. Confidential Information. Xxxxx acknowledges that in the course of Xxxxx'x
employment by Hanover, Erwin had access to information relating to the
business and affairs of the Hanover Entities, including, without
limitation, trade secrets, designs, technology, know-how, processes, data,
ideas, 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 performance levels 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 affairs of the
Hanover Entities, as well as their 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
the Hanover Entities' from any other person (collectively "Confidential
Information"). Xxxxx agrees that following the Effective Date, Xxxxx will
not, at any time, directly or indirectly, for any reason whatsoever, with
or without cause, unless pursuant to a lawful subpoena or other legal
process, breach the confidentiality of the information by using,
disseminating, or disclosing any of the Hanover Entities' Confidential
Information to any person or entity, nor will Xxxxx 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 generally available now or
hereafter 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 to Xxxxx of $20,611.11
per month for a period of eighteen (18) consecutive months beginning on the
first day of each month beginning August 1, 2002 (provided, however, that
the payment due August 1, 2002 shall be paid on August 5, 2002) and
pursuant to Xxxxx'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 Xxxxx would materially damage the Hanover
Entities, Xxxxx further agrees that from the Effective Date up to and
including a twenty-four (24) month period following the Effective Date of
this Agreement, Xxxxx 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 any capacity whatsoever,
including, without limitation, as an officer, director, shareholder,
owner, partner, joint venturer, manager, advisor, employee,
independent contractor or consultant) in 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 Business;
b. in any capacity whatsoever, employ any employee or consultant of
any of the Hanover Entities, or solicit or call upon any person or
entity, who is in either
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instance, at that time, an employee or consultant 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 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. in any capacity whatsoever, call upon any person or entity which is,
at that time, or which has been within twenty-four (24) months prior to
that time, a customer of any of the Hanover Entities for the purpose of
soliciting, selling, leasing or management of services or products
relating to the Applicable Businesses anywhere.
As referenced above, the "Applicable Businesses" will mean the compression
processing, treating, parts and services, and production equipment
businesses conducted by Hanover as its primary businesses prior to the
Effective Date.
Notwithstanding anything in subparagraph (a) of this Paragraph 9 to the
contrary: (i) Xxxxx may 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, (ii) Xxxxx
may secure employment in the energy industry with a company that does not
compete as a third party service provider, lessor, or vendor in the
Applicable Businesses or (iii) 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) (ii) and (iii) 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, Xxxxx desires to make a Qualified Investment, Xxxxx shall give
written notice to HCC at least thirty (30) days prior to the proposed date
such Qualified Investment is to be consummated by Xxxxx (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
Xxxxx. Xxxxx 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 Xxxxx in writing of Hanover's intention to make
the Qualified Investment in lieu of Xxxxx making such investment (the
"First Acceptance Notice"). If HCC shall deliver a First Acceptance Notice
to Xxxxx, the Qualified Investment shall not be considered a Permitted
Activity, and Xxxxx 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, Xxxxx may continue to negotiate the terms of such Qualified
Investment and shall give a second written notice to HCC at least ten (10)
days prior to the proposed date such Qualified Investment is to be
consummated by Xxxxx (the "Second Notice"). The Second Notice shall contain
updated versions of the information contained in the First Notice. HCC
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shall have five (5) days from the date of its receipt of the Second Notice
to notify Xxxxx in writing of Hanover's intention to make the Qualified
Investment in lieu of Xxxxx making such investment (the "Second Acceptance
Notice"). If HCC shall deliver a Second Acceptance Notice to Xxxxx, the
Qualified Investment shall not be considered a Permitted Activity, and
Xxxxx 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 Xxxxx 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 Xxxxx 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 an 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 Hanover anywhere and (b) with
respect to which (or with respect to its subsidiaries or affiliates), Xxxxx
has no employment, consulting, contractor or management relationship.
If, during the twenty-four (24) month period following the Effective Date,
HCC consummates a Qualified Investment or purchases or sells any assets or
businesses as a result of a Proposal presented by Xxxxx and accepted in
writing by HCC, then HCC agrees to pay Xxxxx the Finder's Fee agreed to by
HCC and Xxxxx for such Qualified Investment, purchase or sale. As
referenced herein, (a) a "Proposal" means a detailed written proposal
presented by Xxxxx to the Chief Executive Officer of HCC for a Qualified
Investment, purchase or sale; and (b) a "Finder's Fee" means a reasonable
and customary fee paid to third party agents in the industry for an
opportunity similar to the applicable Qualified Investment, purchase or
sale, which fee must be specified in a written agreement executed by Xxxxx
and HCC. At such time that Xxxxx presents a Proposal to HCC, and HCC
chooses to pursue such Proposal by executing it in writing, Xxxxx and HCC
will negotiate in good faith to arrive at the applicable Finder's Fee.
In the event Hanover believes that Xxxxx has violated or is in the process
of violating any provision of Paragraph 9, Hanover shall, before initiating
any action for temporary or permanent injunctive relief or damages, notify
Xxxxx in writing of such alleged violation. Such notification shall specify
with reasonable particularity the alleged violation. Further, before
initiating any action for temporary or permanent injunctive relief or
damages, Hanover and Xxxxx agree to meet within seven (7) days of the
notification to Xxxxx to discuss the alleged violation and the parties
shall, in good faith, attempt to resolve the alleged violation. If, after
such meeting, Hanover continues to believe that Xxxxx is in violation of
Paragraph 9 and initiates action for injunctive relief or damages, Hanover
may cease to make further payments under Paragraph 9, provided however,
that if Hanover does not subsequently obtain a court order or judgment
finding that Xxxxx has in fact violated the provisions of Paragraph 9, then
Hanover shall be obligated to pay Xxxxx promptly all amounts due under
Paragraph 9 that were withheld and to resume any remaining payments.
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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 Xxxxx 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, and the
existence of any claim or cause of action of any of the Xxxxx Parties
against any of the Hanover Parties, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Hanover of
such covenants. 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, Xxxxx agrees
that in the event of a breach by the Xxxxx Parties, the foregoing covenants
may be enforced by Hanover by injunctions, restraining orders and other
equitable actions, without the posting of any bond.
11. Confidentiality of Agreement. Xxxxx agrees that the Xxxxx Parties will not
disclose, or cause to be disclosed, the terms of this Agreement, except to
Xxxxx'x attorneys, accountants, and/or tax advisors, or as otherwise
required by law.
12. Cooperation. Xxxxx agrees that he will act at all times hereafter in a
manner not inconsistent with the interests of Hanover with respect to their
shareholders, customers, employees, agents, and third parties; and will not
defame or disparage Hanover nor their employees. Xxxxx further agrees that
he will provide reasonable cooperation to Hanover at reasonable and
mutually agreeable times in response to requests made by Hanover in matters
relating to internal investigations, external investigations, and/or
judicial or administrative proceedings arising out of or relating in any
way to any facts occurring prior to Effective Date of this Agreement,
including but not limited to, participating in conferences and meetings,
advising counsel, making himself available for interviews, providing
documents or information, aiding in the analysis of documents, testifying,
or complying with any other reasonable requests by Hanover; provided, that
such cooperation will not require Xxxxx to waive any privilege or to forgo
his constituted right to decline to testify against himself in any
investigation, Congressional hearing, grand jury, or any other judicial or
administrative proceeding. Xxxxx agrees to maintain in confidence (except
pursuant to regulatory request, subpoena, court order, or any other legal
process) any information regarding past, current or potential claims,
governmental proceedings, investigations or administrative or judicial
litigation relating to Hanover, and agrees not to communicate with any
party(ies) who he knows or should have known is adverse or potentially
adverse to the Company, including attorneys (other than his own counsel),
investigators or others, except pursuant to valid regulatory request,
subpoena, court order, or other legal process. Xxxxx agrees to provide
notice of any motion, subpoena, order, regulatory request or other
correspondence relating to Hanover as soon as practicable and in any event
no later than three (3) days of his receipt of same, by forwarding such
document or providing notice of any oral request to the General Counsel,
Hanover Compressor Company, 00000 X. Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000,
(000) 000-0000. This cooperation is an integral part of this Agreement, and
Xxxxx will not be compensated for such cooperation, other than
reimbursement for any reasonable expenses Xxxxx may incur in connection
with such cooperation.
13. Indemnification of Hanover. Xxxxx agrees to pay federal and state taxes, if
any, that he is required by law to pay with respect to this Agreement. If
Xxxxx fails to pay any required
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taxes with respect to this Agreement, Xxxxx agrees to indemnify and hold
harmless Hanover from any claims, demands, deficiencies, levies,
assessments, penalties or recoveries by any government or entity against
Xxxxx for any amounts claimed due on account of Xxxxx'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.
14. Consulting Services. Xxxxx agrees to provide, until December 31, 2003,
reasonable consulting services to Hanover (the "Consulting Services").
Xxxxx shall provide the consulting services at the direction of the
Chairman of the Board of Directors of Hanover. Xxxxx will be an independent
contractor and is not authorized to represent any of the Hanover Entities.
Xxxxx shall be entitled to cease providing Consulting Services to Hanover
by giving Hanover thirty (30) days prior written notice. In consideration
for Xxxxx'x agreement to provide Consulting Services, Hanover shall
provide, until December 31, 2003, health and medical benefits to Xxxxx and
his family on a basis (and at a cost) substantially similar to those
benefits provided to Hanover's employees. At such time as Xxxxx elects to
terminate its obligations to provide Consulting Services, Hanover shall
cease providing such health and medical benefits.
15. Acknowledgement. Xxxxx acknowledges, represents and agrees that Xxxxx has
been fully informed and is fully aware of Xxxxx'x right to discuss any and
all aspects of this matter with an attorney of Xxxxx'x choice, that Xxxxx
has carefully read and fully understands all of the provisions of this
Agreement, and that Xxxxx accepts the terms of this Agreement as fair and
equitable under all the circumstances and voluntarily executes this
Agreement.
16. Non-Admission. This Agreement is not an admission by Xxxxx or Hanover of
any wrongdoing or liability.
17. No Future Employment. Xxxxx agrees that Xxxxx waives any right to
reinstatement or future employment with Hanover or any of its affiliates
following Xxxxx'x Effective Date.
18. 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:
If to Hanover:
Hanover Compressor Company
00000 X. Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Chief Executive Officer
With copy to the General Counsel
If to Xxxxx:
Xxxxxxx X. Xxxxx
0000 Xxxxxxx
Xxxxxxx, Xxxxx 00000
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or such other address as either party shall provide to the other by notice
sent as provided in this section.
All notices and other communication given to a party hereto in accordance
with the provision of this Agreement shall be deemed to have been given on
the date of receipt.
19. Entire Agreement. This Agreement sets forth the entire Agreement between
Xxxxx and Hanover. Further, it supercedes and extinguishes any prior
understandings or written or oral agreements between the parties. No one
has promised Xxxxx anything that is different from what is set forth in
this Agreement. No other promises or agreements shall be binding upon Xxxxx
or Hanover with respect to the subject matter of this Agreement unless
separately agreed to in writing.
20. 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.
21. Controlling Law. (a) 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; (b) Xxxxx 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.
22. Miscellaneous. This Agreement is intended to settle and release any and all
claims for damages, benefits, and attorneys' fees and/or costs. Xxxxx
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. The parties agree that this Agreement may be used as evidence in a
subsequent proceeding in which any of the parties allege a breach of this
Agreement or as a defense to any lawsuit brought by either party. Other
than these two exceptions, the parties agree that this Agreement will not
be introduced as evidence in any proceeding or in any lawsuit.
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HANOVER COMPRESSOR COMPANY
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------- --------------------------------
Xxxxxxx X. Xxxxx [name] Xxxxxx X. Xxxxxxxx
[title] Chief Executive Officer
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
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