Dresser-Rand Retirement and Equity Acceleration Agreement with Lonnie Arnett (2008)

Summary

This agreement between Dresser-Rand Group Inc. and Lonnie Arnett outlines the terms of Arnett's retirement as Vice President and Chief Accounting Officer, effective November 3, 2008, with continued employment through November 30, 2008. In recognition of his service, Arnett will receive a 2008 incentive payment, accelerated vesting of restricted shares and stock options, and an extended period to exercise his options. These benefits are contingent upon Arnett signing a release and non-solicitation agreement.

EX-10.1 2 v133377_ex10-1.htm

West8 Tower

10205 Westheimer, Suite 1000

Houston, TX 77042

Phone:

Fax:

October 31, 2008

Lonnie Arnett

Vice President, Controller and Chief Accounting Officer

Dresser-Rand

10205 Westheimer, Suite 1000

Houston, Texas 77042

Dear Lonnie;

As we have previously discussed, you are retiring as Vice President and Chief Accounting Officer for Dresser-Rand Group Inc. on November 3, 2008. You will remain employed by the Company through November 30, 2008.

In recognition of your significant accomplishments during your tenure with the Company, I am pleased to inform you that the Dresser-Rand Compensation Committee of the Board of Directors has approved (a) a 2008 AIM incentive payment, the calculation of which will be based on the actual 2008 performance of the AIM Shared Services plan in which you currently participate, timed to coincide with the Company’s normal AIM payment process and based on your actual months of service in 2008, (b) the acceleration of the vesting of all of your outstanding equity grants to coincide with your last day of employment with the Company and (c) the extension of the period during which you may exercise all of your options to November 30, 2009, including but not limited to those shown below. The awards subject to vesting acceleration are as follows:

23,664 restricted shares

19,269 stock options

All of these benefits are conditioned upon you signing the Company’s release and non-solicitation agreement and the agreement being effective and not subject to revocation.

Lonnie, I would like to take this opportunity, on behalf of our Board of Directors and the Executive Leadership Team, to thank you for your many contributions and your service to Dresser-Rand. We wish you the very best in your future endeavors.

Very Truly Yours,

/s/ Mark E. Baldwin

Mark E. Baldwin

Executive Vice President and Chief Financial Officer

Acknowledged and Agreed this 19^thday of November, 2008.

/s/ Lonnie Arnett

Lonnie Arnett