EMPLOYMENT AGREEMENT
DATED AS OF
February 20, 1998
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") dated as of February 20, 1998
between Universal Compression, Inc., a Texas corporation (the "Company"),
Universal Compression Holdings, Inc., a Delaware corporation ("Holdings") and
Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, Tidewater, Inc. ("Tidewater") has agreed to sell
Tidewater Compression Service, Inc. ("TCS") to TW Acquisition Corporation ("TW")
pursuant to the Stock Purchase Agreement, dated as of December 18, 1997, between
TW and Tidewater (the "Stock Purchase Agreement");
WHEREAS, TW is a direct wholly-owned subsidiary of Holdings;
WHEREAS, immediately after the consummation of such sale (the
"Closing"), TW will be merged into TCS and TCS will change its name to Universal
Compression, Inc.;
WHEREAS, the parties wish to terminate all prior employment
agreements upon the effective date of this Agreement; and
WHEREAS, the parties wish to establish the terms of Executive's
future employment with the Company.
Accordingly, the parties agree as follows:
1. Employment, Duties and Acceptance.
1.1 Employment by the Company. The Company shall employ
the Executive effective upon the date of the Closing (the "Closing Date"), for
itself and its affiliates, to render exclusive and full-time services to the
Company. The Executive will serve in the
capacity of President - Chief Executive Officer of the Company. The Executive
will perform such duties as are imposed on the holder of that office by the
By-laws of the Company and such other duties as are customarily performed by one
holding such positions in the same or similar businesses or enterprises as those
of the Company. The Executive will perform such other duties as may be assigned
to him from time to time by the Company's Board of Directors. The Executive will
devote all his full working-time and attention to the performance of such duties
and to the promotion of the business and interests of the Company. This
provision, however, will not prevent the Executive from investing his funds or
assets in any form or manner, or from acting as a member of the board of
directors of any companies, businesses, or charitable organizations, so long as
such investments or companies do not compete with the Company and Holdings.
1.2 Acceptance of Employment by the Executive. The
Executive accepts such employment and shall render the services described above.
If requested, the Executive agrees, in addition, to render, without additional
compensation, the services described above in the capacity of President - Chief
Executive Officer of Holdings.
2. Duration of Employment.
This Agreement and the employment relationship hereunder
will continue in effect for three (3) years from the Closing Date through the
third anniversary date thereof. It may be extended by mutual, written agreement
at any time. Notwithstanding the foregoing, in the event that a "Change in
Control" (as herein defined) occurs during the original or any extended term of
this Agreement, this Agreement shall automatically be extended to a date which
is the second anniversary of such Change in Control. In addition, the provisions
of Section 7 relating to a Change in Control will, notwithstanding the
expiration of this Agreement, continue
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until the Board of Directors terminates said provision. In the event of the
Executive's termination of employment during the term of this Agreement, the
Company's obligation to continue to pay all base salary, bonus and other
benefits then accrued shall terminate except as may be provided for in Sections
6.1, 6.2, 6.3, 6.4, and 7 of this Agreement.
3. Compensation by the Company.
3.1 Base Salary. As compensation for all services rendered
pursuant to this Agreement, the Company will pay to the Executive an annual base
salary ("Base Salary") of ONE HUNDRED SEVENTY THOUSAND DOLLARS ($170,000),
payable in equal semi-monthly installments of $7083.33. The Board of Directors
in its sole discretion may increase but not reduce the Base Salary. The Board of
Directors of the Company will review Executive's Base Salary within six months
after the effective date hereof.
3.2. Bonuses. The Executive shall be entitled to receive
from the Company an annual cash bonus on or before 60 days after the end of each
of the Company's fiscal years (including partial years on a pro-rata basis) in a
target amount equal to 70% of Base Salary based upon awards or formulas
determined by the Compensation Committee of the Board of Directors of the
Company (the "Compensation Committee") (in the case of 1998, within 90 days of
the Closing Date). Such award or formula shall be based upon the Company's
results in relation to budget.
3.3 Grant of Stock Option. (a) The Executive is hereby
granted an option that will expire on the tenth anniversary date of the date
hereof pursuant to the Stock Option Agreement attached as Exhibit A hereto to
purchase from Holdings 6,619 shares of Holdings Common Stock at an exercise
price of $50 per share.
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(b) The Company and Holdings have adopted an Incentive
Stock Option Plan which provides for the grant of stock options which are
"qualified" or "Incentive Stock Options" under Section 422 of the Code as well
as options that are not so qualified. The Option as is granted to the Executive
under Section 3.3(a) shall become exercisable to the maximum extent permissible
under such Plan, such option shall be deemed an Incentive Stock Option and the
balance, if any, of such option shall be deemed a Non-Qualified Stock Option, in
each case, under such Plan.
3.4 Participation in Employee Benefit Plans. The Executive
shall be permitted, during the term of this Agreement, if and to the extent
eligible, to participate in any group life, hospitalization or disability
insurance plan, health program, pension plan or similar benefit plan of the
Company, which may be available to other executives of the Company generally, on
the same terms as such other executives. Such plan shall be put into place by
the Compensation Committee no later than 90 days after the Closing Date.
Executive shall be entitled to paid vacation and all customary holidays each
year during the term of this Agreement in accordance with the Company's policies
as the same may be established from time to time. Promptly following the
execution of this Agreement, the Company shall establish a nonqualified
Supplemental Savings Plan which provides benefits that the Executive would have
otherwise accrued under Tidewater's Supplemental Savings Plan but for the
limitations imposed under Section 415 of the Internal Revenue Code of 1986, as
amended (the "Code").
3.5 Profit Sharing Plan. During the term of this
Agreement, Executive shall not participate in the Company's nonqualified cash
profit sharing plan applicable to employees generally.
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3.6 Club Membership. During the term of this Agreement,
the Company shall pay or reimburse the Executive for the initiation fee and
membership dues of a private club selected by the Executive upon presentation of
statements or vouchers or such other supporting information as may be required.
4. [INTENTIONALLY OMITTED]
5. Registration Rights.
In consideration, in part, for Executive's agreement
hereunder to be employed by the Company and Holdings, Holdings is granting
Executive certain rights to register his shares of Common Stock pursuant to a
Registration Rights Agreement with the Executive being entered into concurrently
herewith.
6. Termination.
6.1 Termination Upon Death. If the Executive dies during
the term hereof, the Executive's legal representatives shall be entitled to
receive the Executive's base salary and accrued bonus for the period ending on
the last day of the month in which the death of the Executive occurs. In the
event of the Executive's death during the term of this Agreement, the Company
shall purchase from the Executive's estate or legal representatives any and all
shares of Holdings stock which the Executive owned and for each share of
Holdings stock subject to an unexercised option shall pay an amount equal to the
excess of the per share amount determined pursuant to the next sentence over the
exercise price for such option. The Company shall purchase said stock within 60
days after the death of the Executive at a price based upon a formula to be
agreed upon within 90 days of the Closing Date. Notwithstanding the foregoing,
the Company's obligation to purchase and/or pay shall be suspended for any
period that the Company or Holdings is precluded by any credit agreement or
similar facility to which either of
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them is a party from making such purchase or payment. Such amount shall accrue
interest until paid at the rate of 6% per annum. The Company agrees that it will
maintain insurance on the life of the Executive in an amount reasonably
determined by the Company to be sufficient to avoid the suspension described in
the preceding sentence.
6.2 Termination Upon Disability. If during the term of
this Agreement the Executive meets the requirements for physical or mental
disability under the Company's long-term disability plan and is eligible to
receive benefits thereunder, the Company may at any time prior to the
Executive's recovery but after the last day of the sixth consecutive month of
such disability, by written notice to the Executive, terminate the Executive's
employment hereunder. In the event that the Executive's employment is terminated
due to disability, the Company will offer to loan to the Executive an amount
equal to the amount necessary to exercise all unexercised options held by the
Executive, with interest accruing monthly at a rate equal to the prime rate, as
published in the Wall Street Journal on the date the loan is made, plus 1%, and
providing for a single payment of principal and interest at a date three years
from the date of the loan.
Additionally, in such event, Executive (or his legal
representatives) shall be entitled to receive the Executive's Base Salary and
accrued bonus for the period ending on the date such termination occurred.
Nothing in this Section 6.2 shall be deemed to in any way affect the Executive's
right to participate in any disability plan maintained by the Company and for
which the Executive is otherwise eligible.
6.3 Termination for Cause. The Executive's employment
hereunder may be terminated by the Company for "Cause" (as herein defined) upon
at least thirty (30) days' prior written notice to the Executive. Termination
for Cause shall mean termination by reason of
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(a) the willful and continued failure by Executive to substantially perform his
duties with the Company (other than any such failure resulting from his
incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board of Directors,
which demand specifically identifies the manner in which the Executive is
believed not to have substantially performed his duties, (b) the Executive's
willful engagement in conduct which is or is likely to become demonstrably and
materially injurious to the Company, monetarily or otherwise, or (c) the
Executive's breach of Section 10.12 hereof. For purposes of this Section, no
act, or failure to act, on the part of the Executive shall be deemed "willful"
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that his action or omission was in the best interests
of the Company. Notwithstanding the foregoing, the Executive shall not be deemed
to have been terminated for Cause unless and until there has been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
a majority of the entire membership of the Board of Directors at a meeting of
the Board of Directors called and held for such purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with his
counsel, to be heard before the Board of Directors), finding that in the good
faith opinion of the Board of Directors the Executive was guilty of conduct of
the type set forth above in this Section and specifying the particulars thereof
in detail.
Upon termination for Cause hereunder the Executive shall
be entitled to receive the Executive's Base Salary through the date of
termination.
6.4 Voluntary Termination. The Executive may upon at least
sixty (60) days' prior written notice to the Company terminate employment
hereunder. Upon a
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voluntary termination the Executive shall be entitled to receive the Executive's
Base Salary through the date of termination.
7. Severance.
(a) If, prior to the expiration of this Agreement, the
Company breaches this Agreement by terminating the Executive's employment for
any reason other than Cause (a "Breach"), or during the two year period next
following a "Change in Control" (as herein defined) the Executive's employment
with the Company is terminated for reasons other than death, disability or Cause
("Termination Upon Change in Control"), in lieu of additional salary payments to
the Executive for periods subsequent to the date of such termination, the
Company shall pay a lump sum severance payment (together with the payments
provided in paragraph (c) below, the "Severance Payments") to the Executive at
the time of termination. Such payment shall be an amount equal to the number of
years, including fractional years, remaining until this Agreement would expire
but for such termination (in any event however, the period shall be not less
than two years nor more than the number of years, including the fractional
years, from the date of such termination until the Executive's attainment of age
65) multiplied by the sum of (A) the Executive's Base Salary rate as in effect
as of the date of termination and (B) the average of the bonus amounts awarded
or due to the Executive pursuant to Section 3.2 of this Agreement. Payment of
Severance Payments provided under this Section 7 in the event of a termination
which constitutes a Breach by the Company will not prohibit Executive from
seeking enforcement of the remaining provisions of this Agreement or other
remedies for breach of this Agreement.
(b) In determining the amount of payments due under any
incentive plan or other bonus plan in effect for the year in which the Executive
is terminated as a result of a
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Breach or Termination Upon Change in Control, the Company shall pay the
Executive at the time of termination a pro-rata portion of all contingent awards
granted under such plans for all uncompleted periods, assuming for this purpose
that the amount of each award that would have been paid upon the completion of
such period would at least equal the pro rata amount of the greater of the
target or maximum bonus, if any, provided for in such plan.
(c) The Company shall pay the Executive all reasonable
legal fees and expenses incurred by the Executive as a result of such
termination (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to obtain or enforce
any right or benefit provided by this Agreement), unless the decision-maker in
any proceeding, contest or dispute arising hereunder makes a formal finding that
the Executive did not have a reasonable basis for instituting such proceeding,
contest or dispute, in which event the Executive shall pay to the Company its
reasonable legal fees and expenses incurred in the defense of such proceeding,
contest or dispute.
(d) For the length of the period for which severance
benefits are provided after any termination pursuant to this Section 7, the
Company shall arrange to provide the Executive with life, disability, accident
and group health insurance benefits substantially similar to those which the
Executive was receiving immediately prior to the notice of termination. Benefits
otherwise receivable by the Executive pursuant to this paragraph (d) shall be
reduced to the extent comparable benefits are actually received by the Executive
during the period following the Executive's termination, and any such benefits
actually received by the Executive shall be reported to the Company.
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(e) Nothing contained in this Section 7 shall prevent the
Executive from receiving any and all benefits payable under any severance
benefit plan or program maintained by the Company to which the Executive is
entitled.
8. Definition of Change in Control.
For purposes of this Agreement a "Change in Control" shall
be deemed to have occurred upon the first to occur of the following events:
(a) any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than (i) the Company, or (ii) any corporation owned, directly or
indirectly, by the stockholders of the Company or Holdings in substantially the
same proportions as their ownership of stock of the Company or Holdings, or
(iii) Xxxxxx Xxxxxx, Inc. or its affiliates), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company or Holdings representing more than 50%
of the combined voting power of the Company's or Holdings' then outstanding
securities; or
(b) during any period of two consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Company's or Holdings' Board of
Directors, and any new director (other than a director designated by a person
who has entered into an agreement with the Company or Holdings to effect the
transaction described in clause (a) of this Section) whose election by the
Company's or Holdings' Board of Directors or nomination for election by the
Company's or Holdings' stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
at the beginning of the period or whose election or
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nomination for election was previously so approved, cease for any reason to
constitute at least a majority thereof.
9. Restrictions and Obligations of the Executive.
(a) Consideration for Restrictions and Covenants. The
parties hereto acknowledge and agree that the principal consideration for the
agreement to make the payments provided in this Agreement by the Company to
Executive and the grant to the Executive options to purchase common stock of the
Company ("Common Stock") is the Executive's compliance with the undertakings set
forth in this Section 9. Specifically, the Executive agrees to comply with the
provisions of this Section 9 irrespective of whether the Executive is entitled
to receive any such payments.
(b) Confidentiality. The confidential and proprietary
information and, in any material respect, trade secrets of the Company are among
its most valuable assets, including but not limited to, its customer and vendor
lists, database, engineering, computer programs, frameworks, models, its
marketing programs, its sales, financial, marketing, training and technical
information, and any other information, whether communicated orally,
electronically, in writing or in other tangible forms concerning how the Company
creates, develops, acquires or maintains its products and marketing plans,
targets its potential customers and operates its retail and other businesses.
The Company invested, and continues to invest, considerable amounts of time and
money in its process, technology, know-how, obtaining and developing the
goodwill of its customers, its other external relationships, its data systems
and data bases, and all the information described above (hereinafter
collectively referred to as "Confidential Information"), and any
misappropriation or unauthorized disclosure of Confidential Information in any
form would irreparably harm the Company. The Executive shall
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hold in a fiduciary capacity for the benefit of the Company all Confidential
Information relating to the Company and its business, which shall have been
obtained by the Executive during the Executive's employment by the Company and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company, the Executive
shall not, without the prior written consent of the Company or as may otherwise
be required by law or legal process, communicate, divulge or use any such
information, knowledge or data to anyone other than the Company and those
designated by it.
(c) Non-Solicitation or Hire. During the stated term of
this Agreement (as set forth in Section 2) (the "Employment Period") and for a
two-year period following the termination of the Executive's employment for any
reason, the Executive shall not, directly or indirectly (i) employ or seek to
employ any person who is at the date of termination, or was at any time within
the six-month period preceding the date of termination, an officer, general
manager or director or equivalent or more senior level employee of the Company
or any of its subsidiaries or otherwise solicit, encourage, cause or induce any
such employee of the Company or any of its subsidiaries to terminate such
employee's employment with the Company or such subsidiary for the employment of
another company (including for this purpose the contracting with any person who
was an independent contractor (excluding consultant) of the Company during such
period) or (ii) take any action that would interfere with the relationship of
the Company or its subsidiaries with their suppliers or customers without, in
either case, the prior written consent of the Company's Board of Directors, or
engage in any other action or business that would have a material adverse effect
on the Company.
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(d) Non-Competition. (i) During the Employment Period and
for a four-year period (the "Restriction Period") following the termination of
the Executive's employment for any reason other than a termination by the
Company without Cause, the Executive shall not, directly or indirectly:
(x) engage in any managerial, administrative,
advisory, consulting, operational or sales activities in a Restricted Business
anywhere in the Restricted Area, including, without limitation, as a director or
partner of such Restricted Business, or
(y) organize, establish, operate, own, manage,
control or have a direct or indirect investment or ownership interest in a
Restricted Business or in any corporation, partnership (limited or general),
limited liability company enterprise or other business entity that engages in a
Restricted Business anywhere in the Restricted Area; and
(ii) Nothing contained in this Section 9 shall
prohibit or otherwise restrict the Executive from acquiring or owning, directly
or indirectly, for passive investment purposes not intended to circumvent this
Agreement, securities of any entity engaged, directly or indirectly, in a
Restricted Business if either (i) such entity is a public entity and the
Executive (A) is not a controlling Person of, or a member of a group that
controls, such entity and (B) owns, directly or indirectly, no more than 3% of
any class of equity securities of such entity or (ii) such entity is not a
public entity and the Executive (A) is not a controlling Person of, or a member
of a group that controls, such entity and (B) does not own, directly or
indirectly, more than 1% of any class of equity securities of such entity.
(e) Definitions. For purposes of this Section 9:
(i) "Restricted Business" means the business of
designing, manufacturing, servicing, operating, marketing, assembling, renting
or leasing of air or gas
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compressors or devices using comparable technologies or other business in which
Holdings or its subsidiaries may be engaged during the term of Executive's
employment with the Company. To the extent that any entity is primarily engaged
in a business other than a Restricted Business, the term "Restricted Business"
shall mean the operations, division, segment or subsidiary of such entity that
is engaged in any Restricted Business.
(ii) "Restricted Area" means any country in which
Holdings or its subsidiaries engages in any Restricted Business at any time
during the term of Executive's employment with the Company.
10. Other Provisions.
10.1. Mitigation. Except as provided in Section 7(d)
hereof, the Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in Section 7 be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Company, or otherwise.
10.2. Notices. Any notice or other communication required
or which may be given hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed, sent by facsimile transmission or sent by
certified, registered or express mail, postage prepaid, and shall be deemed
given when so delivered personally, telegraphed, telexed, or sent by
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facsimile transmission or, if mailed, four days after the date of mailing, as
follows:
(a) If the Company, to:
4430 Brittmoore
Xxxxxxx, Xxxxx 00000
Attention: Board of Directors
With copies to:
Xxxxxx Xxxxxx, Inc.
000 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
(b) If the Executive, to his home address set forth in the
records of the Company.
10.3 Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto.
10.4 Waiver and Amendments. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
right, power or privilege hereunder, nor any single or partial exercise of any
right, power or
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privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
10.5 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of Delaware.
10.6 Assignability. This Agreement, and the Executive's
rights and obligations hereunder, may not be assigned by the Executive. The
Company may assign this Agreement and its rights, together with its obligations,
to any other entity which will substantially carry on the business of the
Company.
10.7 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement to produce or account for more than one such
counterpart.
10.8 Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein.
10.9 Remedies; Specific Performance. The parties hereto
hereby acknowledge that the provisions of Section 9 are reasonable and necessary
for the protection of the Company. In addition, the Executive further
acknowledges that the Company will be irrevocably damaged if such covenants are
not specifically enforced. Accordingly, the Executive agrees that, in addition
to any other relief to which the Company may be entitled, the Company will be
entitled to seek and obtain injunctive relief (without the requirement of any
bond) from a court of competent jurisdiction for the purposes of restraining the
Executive from any actual or threatened breach of such covenants. In addition,
without limiting the Company's remedies for any breach of any restriction on the
Executive set forth in Section 9, except as required by law, the
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Executive shall not be entitled to any payments set forth in Section 6 hereof if
the Executive breaches any of the covenants applicable to the Executive
contained in Section 9, the Executive will immediately return to the Company any
such payments previously received under Section 7 upon such a breach, and, in
the event of such breach, the Company will have no obligation to pay any of the
amounts that remain payable by the Company under Section 6.
10.10 Severability. If any term, provision, covenant or
restriction of this Agreement, or any part thereof, is held by a court of
competent jurisdiction of any foreign, federal, state, county or local
government or any other governmental, regulatory or administrative agency or
authority to be invalid, void, unenforceable or against public policy for any
reason, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected or impaired or invalidated. The Executive acknowledges that the
restrictive covenants contained in Section 9 are a condition of this Agreement
and are reasonable and valid in geographical and temporal scope and in all other
respects.
10.11 Judicial Modification. If any court or arbitrator
determines that any of the covenants in Section 9, or any part of any of them,
is invalid or unenforceable, the remainder of such covenants and parts thereof
shall not thereby be affected and shall be given full effect, without regard to
the invalid portion. If any court or arbitrator determines that any of such
covenants, or any part thereof, is invalid or unenforceable because of the
geographic or temporal scope of such provision, such court or arbitrator shall
reduce such scope to the minimum extent necessary to make such covenants valid
and enforceable.
10.12 Management Subscription Agreement. The Executive
hereby agrees that, as further consideration for receipt of the opportunity
offered by this Agreement, he will
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purchase the number of shares of Series A Preferred Stock and Common Stock of
Holdings as set forth in the Management Subscription Agreement dated as of the
date hereof.
11. Arbitration.
Any controversy or claim arising out of or in connection
with this Agreement (other than pursuant to Section 9) shall be settled by
arbitration in accordance with the rules then obtaining of the American
Arbitration Association. Such controversies shall be submitted to three
arbitrators, one arbitrator being selected by the Company, one arbitrator being
selected by the Executive, and the third being selected by the two so selected
by the Company and the Executive or, if they cannot agree upon a third, by the
American Arbitration Association. In the event that either the Company or the
Executive, within one month after any notification of any demand for arbitration
hereunder, shall not have selected its arbitrator and given notice thereof by
registered or certified mail to the other, such arbitrator shall be selected by
the American Arbitration Association. Confirmation of any award in any such
arbitration may be held in any court having jurisdiction of the person against
whom such award is rendered. Regardless of the circumstances giving rise to the
need for arbitration, until such arbitration shall be finally determined and
ended, the Base Salary of the Executive pursuant to Section 3.1, subject to the
provisions of Sections 6 and 7, shall be paid monthly until the expiration of
the term of this Agreement. If the results of such arbitration are more
favorable to the position taken by the Executive than that taken by the Company,
in the opinion of the arbitrators, then all costs and expenses incurred by the
Executive in connection with such arbitration shall be paid by the Company. In
the event that the arbitrators make a formal finding that the Executive did not
have a reasonable basis for instituting the proceeding, contest or dispute
giving rise to such arbitration,
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the Executive shall pay to the Company its reasonable legal fees and expenses
incurred in the defense of the proceeding, contest or dispute giving rise to
such arbitration.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound hereby, have executed this Agreement as of the day and year first above
mentioned.
EXECUTIVE
/s/ XXXXXXX X XXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxx
UNIVERSAL COMPRESSION, INC.
By: /s/ XXXXX XXXXXX
-------------------------------
Title: CHIEF FINANCIAL OFFICER
----------------------------
UNIVERSAL COMPRESSION
HOLDINGS, INC.
By: /s/ XXXXX XXXXXX
-------------------------------
Title: Chief Financial Officer
----------------------------
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