First Amendment to Hanover Compressor Company 2003 Stock Incentive Plan
Exhibit 10.5
First Amendment
to the
Hanover Compressor Company
2003 Stock Incentive Plan
WHEREAS, Hanover Compressor Company (the “Company”) maintains the Hanover Compressor Company 2003 Stock Incentive Plan (the “Plan”) for the purpose of granting Awards thereunder to eligible employees of the Company and its Affiliates; and
WHEREAS, Section XI of the Plan provides that the Board of Directors of the Company may amend the Plan;
NOW, THEREFORE, the Plan is hereby amended effective as of July 8, 2005, as follows:
| 1. | Section II(i), Corporate Change, is deleted and replaced in its entirety by the following: |
“Corporate Change shall mean
(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of forty percent (40%) or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), any acquisition by any Person pursuant to a transaction which complies with clause (A) of subsection (iii) of this definition shall not constitute a Corporate Change; or
(ii) Individuals, who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered for purposes of this definition as though such individual was a member of the Incumbent Board, but excluding, for these purposes, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(iii) The consummation of a reorganization, merger or consolidation of the Company or sale, lease or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole (other than to an entity wholly owned, directly or indirectly, by the Company) (a “Corporate Transaction”), in each case, unless, following such Corporate Transaction, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, and (B) at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Corporate Transaction.
Notwithstanding the foregoing, with respect to any Award that is subject to Section 409A of the Code, for purposes of accelerating payment of such Award a “Corporate Change” shall mean a change in ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation, as set forth in the regulations and other guidance issued under Section 409A of the Code.”
| 2. | Section VIII(d) is amended by adding thereto the following: |
“Notwithstanding anything in this Section VIII or the Participant’s Agreement to the contrary, if a Participant’s Termination of Service is due to his or her death or Disability, all Restricted Stock Awards of such Participant then outstanding shall immediately vest in full and all restrictions applicable to such Awards shall terminate as of such date with all performance criteria, if any, applicable to such Awards deemed met at 100% of target.”
| 3. | Section IX(e) is amended by adding thereto the following: |
“Notwithstanding anything in this Section IX or the Participant’s Agreement to the contrary, if a Participant’s Termination of Service is due to his or her death or Disability, all Performance Awards of such Participant then outstanding shall immediately vest in full and all performance criteria applicable to such Awards shall be deemed met at 100% of target as of such date.”
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| 4. | Section X(c) is amended to read as follows: |
“(c) Recapitalizations and Corporate Changes. If the Company recapitalizes, reclassifies its capital stock, or otherwise changes its capital structure (a “recapitalization”), the number and class of shares of Common Stock covered by an Award theretofore granted shall be adjusted so that such Award shall thereafter cover the number and class of shares of stock and securities to which the Participant would have been entitled pursuant to the terms of the recapitalization if, immediately prior to the recapitalization, the Participant had been the holder of record of the number of shares of Common Stock then covered by such Award. Effective upon a Corporate Change (or at such earlier time as the Committee may provide) all Options then outstanding shall immediately become exercisable in full, all Restricted Stock Awards shall vest in full and cease to be subject to any Restrictions, and all Performance Awards shall vest and become immediately payable in full at 100% of their respective target levels. In addition, the Committee, acting in its sole discretion without the consent or approval of any Participant, may effect one or more of the following alternatives, which alternatives may vary among individual Participants and which may vary among Options held by any individual Participant: (1) require the mandatory surrender to the Company by selected Participants of some or all of the outstanding Options held by such Participants as of a date, before or after such Corporate Change, specified by the Committee, in which event the Committee shall thereupon cancel such Options and the Company shall pay (or cause to be paid) to each such Participant an amount of cash per share equal to the excess, if any, of the amount calculated in Subparagraph (d) below (the “Change of Control Value”) of the shares subject to such Options over the exercise price(s) under such Options for such shares, or (2) provide that the number and class of shares of Common Stock covered by such Options shall be adjusted so that such Options shall thereafter cover securities of the surviving or acquiring corporation or other property (including, without limitation, cash) as determined by the Committee in its sole discretion.”
All terms used herein that are defined in the Plan shall have the same meanings given to such terms in the Plan, except as otherwise expressly provided herein.
Except as amended and modified hereby, the Plan shall continue in full force and effect and the Plan and this instrument shall be read, taken and construed as one and the same instrument.
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