Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Hanover Compressor Company--Form S-1/A 96 530K
2: EX-3.4 Second Certificate of Amendment--Filed 6/24/97 1 7K
3: EX-10.23 1997 Stock Option Plan 8 38K
4: EX-10.24 1997 Stock Purchase Plan 12 63K
5: EX-11.1 Statement Re-Computation of Per Share Earnings 2± 11K
6: EX-23.1 Consent of Price Waterhouse LLP 1 6K
7: EX-23.2 Consent of Arthur Andersen LLP 1 5K
8: EX-27 Financial Data Schedule, as Amended 1 9K
EX-10.23 — 1997 Stock Option Plan
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EXHIBIT 10.23
HANOVER COMPRESSOR COMPANY
1997 STOCK OPTION PLAN
1. Preamble.
Hanover Compressor Company, a Delaware corporation (the "Company"), hereby
establishes the Hanover Compressor Company 1997 Stock Option (the "Plan") as a
means whereby the Company may, through awards of non-qualified stock options:
(a) provide Company officers, employees, directors and consultants
who have substantial responsibilities for the direction and management of
the Company and its Subsidiaries with additional incentive to promote the
success of the Company's and its subsidiaries' businesses;
(b) enable such employees to acquire proprietary interests in the
Company; and
(c) encourage such employees to remain in the employ of the Company
and its subsidiaries.
(d) provide Officers and Directors of, and consultants to, the
Company and its Subsidiaries and Affiliates (who are not otherwise
employees) with additional incentive to promote the success of the
businesses of the Company and its Subsidiaries.
Except as specifically provided herein, the provisions of this Plan do not
apply to or affect any option, stock appreciation right, or stock heretofore or
hereafter granted under any other stock plan of the Company or any subsidiary,
and all such options, stock appreciation right or stock continue to be governed
by and subject to the applicable provisions of the plan or agreement under
which they were granted.
2. Definitions.
2.01 "Board" or "Board of Directors" means the board of directors of
the Company.
2.02 "Cause" means (i) the commission by such Participant of an act
of fraud, embezzlement or willful breach of a fiduciary duty to the Company
(including the unauthorized disclosure of confidential or proprietary material
information of the Company), (ii) a conviction of such Participant (or a plea
of nolo contendere in lieu thereof) for a felony or a crime involving fraud,
dishonesty or moral turpitude, (iii) willful failure of a Participant to follow
the written directions of the chief executive officer of the Company or the
Board in the case of executive officers of the Company; (iv) willful misconduct
as an employee of the Company, (v) the willful failure of such Participant to
render services to the Company in accordance with his employment or consulting
arrangement, which failure amounts to a material neglect of his duties to the
Company or (vi) substantial dependence, as determined by the Board, on alcohol
or any drug, immediate precursor or other substance listed in Schedule I-V of
the Federal Comprehensive Drug Abuse Prevention and Control Act of 1970, as
amended, as determined in the sole discretion of the Committee.
2.03 "Change in Control" means the occurrence of any one of the
following events:
(a) any (A) consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or which
contemplates that all or substantially all of the business and/ or assets
of the Company shall be controlled by another corporation or (B) a
recapitalization (including an exchange of Company equity securities by
the holders thereof), in either case, in which any "Person" (as such term
is used in Sections 13(d) and (14(d)(2) of the Exchange Act), other than
the Controlling Shareholders, becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of securities of
the Company representing more than 50% of the combined voting power of the
Company's then outstanding securities ordinarily having the right to vote
in the election of directors;
(b) any sale, lease, exchange or transfer (in one transaction or
series of related transactions) of all or substantially all of the assets
of the Company and its Subsidiaries or Affiliates;
(c) approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company, unless such
plan or proposal is abandoned within 60 days following such approval; or
(d) any "Person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Controlling Shareholders,
shall become the beneficial owner of securities of the Company
representing more than 50% of the combined voting power of the Company's
then outstanding securities ordinarily having the right to vote in the
election of directors.
2.04 "Code" means the Internal Revenue Code of 1986, as it exists now
and as it may be amended from time to time.
2.05 "Committee" means the Compensation Committee of the Board or any
other committee comprised of two or more outside Directors appointed by the
Board to administer the Plan, as the case may be. Each member of the Committee
shall (a) be a member of the Board of Directors who has not at any time within
one year prior thereto, or at any time during such member's term of service on
the Committee, received any stock options, stock appreciation rights or
allocations of any equity securities under the Plan or any other plan
maintained by the Company or any of its affiliates, except as permitted
pursuant to the provisions of Rule 16b-3(c)(2)(i) of the Exchange Act or any
successor rule thereof; and (b) be an outside Director as determined under
Treasury Regulation 26 CFR Section 1.162-27(e)(3) or any successor regulation
thereto. Once appointed, the Committee shall continue to serve until otherwise
directed by the Board of Directors.
2.06 "Common Stock" means the common stock of the Company, $.001 par
value.
2.07 "Company" means Hanover Compressor Company, a Delaware
corporation, and any successor thereto.
2.08 "Controlling Shareholders" means GKH Investments, L.P., GKH
Partners, L.P., and the partners therein.
2.09 "Director" means a member of the Board.
2.10 "Disability" means being entitled to disability benefits under
the terms of the Company's long term disability plan.
2.11 "Exchange Act" means the Securities Exchange Act of 1934, as it
exists now or from time to time may hereafter be amended.
2.12 "Fair Market Value" means for the relevant day:
(a) If shares of Common Stock are listed or admitted to unlisted
trading privileges on any national or regional securities exchange, the
last reported sale price, regular way, on the composite tape of that
exchange on the day Fair Market Value is to be determined;
(b) If the Common Stock is not listed or admitted to unlisted
trading privileges as provided in paragraph (a), and if sales prices for
shares of Common Stock are reported by the National Association of
Securities Dealers, Inc. Automated Quotations, Inc. National Market System
("NASDAQ System"), then the last sale price for Common Stock reported as
of the close of business on the day Fair Market Value is to be determined,
or if no such sale takes place on that day, the average of the high bid
and low asked prices so
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reported; if Common Stock is not traded on that day, the next preceding
day on which such stock was traded; or
(c) If trading of the Common Stock is not reported by the NASDAQ
System or on a stock exchange, Fair Market Value will be determined by the
Committee in its discretion based upon the best available data.
2.13 "Officer" means a corporate or equivalent officer of the Company
or any Subsidiary or Affiliate of the Company.
2.14 "Option" means the right of a Participant to purchase a
specified number of shares of Common Stock, subject to the terms and conditions
of the Plan.
2.15 "Option Date" means the date upon which an Option is awarded to
a Participant under the Plan.
2.16 "Option Price" means the price per share at which an Option may
be exercised.
2.17 "Participant" means an individual to whom an Option has been
granted under the Plan.
2.18 "Plan" means the Hanover Compressor Company 1997 Stock Option,
as set forth herein and as from time to time amended.
2.19 "Securities Act" means the Securities Act of 1933, as it exists
now or from time to time may hereinafter be amended.
2.20 "Subsidiary" means any corporation or other entity of which the
majority voting power or equity interest is owned directly or indirectly by the
Company.
2.21 "Termination of Employment" means,
(a) with respect to an employee when the employee's employment
relationship with the Company and all of its Subsidiaries is
terminated, regardless of any severance arrangements. A transfer from
the Company to a Subsidiary or affiliate, or vice versa is not a
termination of employment for purposes of this Plan;
(b) with respect to a consultant when the consultant's consulting
relationship with the Company is terminated either due to the
termination of any consulting agreement, or otherwise, regardless of
the fact that no employment relationship exists;
(c) with respect to an Officer or Director when such individual is no
longer serving as an Officer or Director of the Company, as a
consultant to or employee of the Company and any of its Subsidiaries.
2.22 Rules of Construction.
(a) Governing Law. The construction and operation of this Plan are
governed by the laws of the State of Delaware.
(b) Undefined Terms. Unless the context requires another meaning,
any term not specifically defined in this Plan has the meaning given to it
by the Code.
(c) Headings. All headings in this Plan are for reference only and
are not to be utilized in construing the Plan.
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EXHIBIT 10.23
1997 STOCK OPTION PLAN
(d) Gender. Unless clearly appropriate, all nouns of whatever
gender refer indifferently to persons of any gender.
(e) Singular and Plural. Unless clearly inappropriate, singular
terms refer also to the plural and vice versa.
(f) Severability. If any provision of this Plan is determined to be
illegal or invalid for any reason, the remaining provisions shall continue
in full force and effect and shall be construed and enforced as if the
illegal or invalid provision did not exist, unless the continuance of the
Plan in such circumstances is not consistent with its purposes.
3. Stock Subject to the Plan.
Except as otherwise provided in Section 10, the aggregate number of shares
of Common Stock that may be issued under Options under this Plan and available
for purchase under the Hanover 1997 Stock Purchase Plan (the "Stock Purchase
Plan") may not exceed 1,365,062 shares of Common Stock. Reserved shares may be
either authorized but unissued shares or treasury shares, in the Board's
discretion. If any grants hereunder shall terminate or expire, or shares be
repurchased or redeemed by the Company under the Stock Purchase Plan, such
shares shall be eligible to be granted as new Options under this Plan or for
purchase under the Stock Purchase Plan. Except as otherwise provided in Section
12, the aggregate number of shares of Common Stock that may be issued under
Options to any one individual Participant may not exceed 60,000 shares.
4. Administration.
The Plan shall be administered by the Committee. In addition to any other
powers set forth in this Plan, the Committee has the exclusive authority:
(a) to construe and interpret the Plan, and to remedy any
ambiguities or inconsistencies therein;
(b) to establish, amend and rescind appropriate rules and
regulations relating to the Plan;
(c) subject to the express provisions of the Plan, to determine the
individuals who will receive grants of Options, the times when they will
receive them, the number of shares to be subject to each award and the
Option Price, payment terms, payment method, and expiration date
applicable to each award;
(d) to contest on behalf of the Company or Participants, at the
expense of the Company, any ruling or decision on any matter relating to
the Plan or to any grants of Options;
(e) generally, to administer the Plan, and to take all such steps
and make all such determinations in connection with the Plan and the
grants of Options as it may deem necessary or advisable;
(f) to determine the form in which tax withholding under Section 13
of this Plan will be made; and
(g) to amend the Plan or any Option granted hereunder as may be
necessary in order for any business combination involving the Company to
qualify for pooling-of-interest treatment under APB No. 16.
5. Eligible Participants
Subject to the provisions of the Plan, the Committee shall determine from
time to time those individuals who shall be designated as Participants and the
number, if any, of Options to be granted to each such Participant;
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6. Terms and Conditions of Options.
All Options granted under this Plan shall be nonstatutory options, which
are not intended to be classified as "incentive stock options" under Section
422 of the Code. The Committee may, in its discretion, grant Options to any
Participant under the Plan. Each Option shall be evidenced by an agreement
between the Company and the Participant. Each Option agreement, in such form
as is approved by the Committee, shall be subject to the following express
terms and conditions and to such other terms and conditions, not inconsistent
with the Plan as the Committee may deem appropriate:
(a) Option Period. Each Option will expire as of the earliest of:
(i) ten years from the Grant Date;
(ii) the date on which it is forfeited under the
provisions of Section 18;
(iii) the date three months after the Participant's
Termination of Employment for any reason other than death or
Disability; or
(iv) the date twelve months after the Participant's death
or Disability.
(b) Option Price. At the time when the Option is granted, the
Committee will fix the Option Price. The Option Price may be greater than,
less than, or equal to Fair Market Value on the Option Date, as determined
in the sole discretion of the Committee.
(c) Other Option Provisions. The form of Option authorized by the
Plan may contain such other provisions as the Committee may from time to
time determine.
7. Manner of Exercise of Options.
To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) must give written notice to the
Committee, stating the number of shares to which he intends to exercise the
Option. The Company will issue the shares with respect to which the Option is
exercised upon payment in full of the Option Price. The Option Price may be
paid (i) in cash, (ii) in shares of Common Stock having an aggregate Fair
Market Value, as determined on the date of delivery, equal to the Option Price,
(iii) if permitted by the Committee, by cash or certified or cashier's check
for the par value of the Plan Shares plus a promissory note for the balance of
the purchase price, which note shall provide for full personal liability of the
maker and shall contain such other terms and provisions as the Committee may
determine, including without limitation the right to repay the note partially
or wholly with Common Stock, or (iv) by delivery of irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
necessary to pay for all Common Stock acquired through such exercise and any
tax withholding obligations resulting from such exercise. The Option Price may
be paid in shares of Common Stock which were received by the Participant upon
the exercise of one or more Options.
8. Vesting.
A Participant may not exercise an Option until it has become vested. The
portion of an Option award that is vested depends upon the period that has
elapsed since the Option Date. Unless the Committee establishes a different
vesting schedule at the time when an Option is granted, all Options granted
under this Plan shall vest according to the following schedule:
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[Download Table]
Period Elapsed Vested Percentage
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First Anniversary of Option Date 10%
Second Anniversary of Option Date 30%
Third Anniversary of Option Date 60%
Fourth Anniversary of Option Date 100%
Except as provided below, upon a Termination of Employment, a Participant
forfeits any Options that are not yet vested. Unless the Committee in its sole
discretion specifically waives the application of this sentence, then
notwithstanding the vesting schedule contained herein or in the Participant's
agreement, if the Participant's Termination of Employment is terminated for
Cause all Options granted to the Participant will be immediately cancelled and
forfeited by the Participant upon delivery to him of notice of such termination
for Cause.
9. Change of Control.
Notwithstanding the provisions of Section 8 or anything contained in a
Participant's agreement to the contrary, upon a Change in Control all Options
shall be subject to the following:
(a) The Company shall have the right to acquire from Participants
their vested Options by payment of the difference between the price per
share of Common Stock established in the Change of Control and the Option
Price; and
(b) All unvested Options shall either (i) convert into options to
purchase securities of the acquirer in the Change of Control on the same
terms and conditions as apply to the Options under the Plan, (ii) convert
into such consideration as the Participant would have received had the
Options been fully vested, or (iii) be treated as otherwise determined by
the Committee.
10. Adjustments to Reflect Changes in Capital Structure.
If there is any change in the corporate structure or shares of the
Company, the Committee may, in its discretion, make any adjustments necessary
to prevent accretion, or to protect against dilution, in the number and kind of
shares authorized by the Plan and, with respect to outstanding Options, in the
number and kind of shares covered thereby and in the applicable Option Price.
For the purpose of this Section 10, a change in the corporate structure or
shares of the Company includes, without limitation, any change resulting from a
recapitalization, stock split, stock dividend, consolidation, rights offering,
spin-off, reorganization, or liquidation and any transaction in which shares of
Common Stock are changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or another entity.
11. Non-Transferability of Options.
The Options granted under the Plan are not transferable, voluntarily or
involuntarily, other than by will or the laws of descent and distribution, or
to the extent permissible under Section 422 of the Code pursuant to a qualified
domestic relations order as defined in Section 414(p) of the Code. During a
Participant's lifetime his Options may be exercised only by him.
12. Rights as Stockholder.
No Common Stock may be delivered upon the exercise of any Option until
full payment has been made and all income tax withholding requirements thereon
have been satisfied. A Participant has no rights whatsoever as a stockholder
with respect to any shares covered by an Option until the date of the issuance
of a stock certificate for the shares.
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13. Withholding Tax.
The Company shall have the right to withhold in cash or shares of Common
Stock with respect to any payments made to Participants under the Plan any
taxes required by law to be withheld because of such payments.
14. Non-Competition and Confidential Information.
Each Participant receiving Options shall be subject to the restriction
that, during the term of his Option Agreement and for a period of two years
thereafter, he or she (i) will not compete with any business of the Company or
its Subsidiaries and (ii) will not disclose to persons outside the Company
confidential information concerning the Company or its Subsidiaries without the
Company's express written consent.
15. No Right To Employment.
Participation in the Plan will not give any Participant a right to be
retained as an employee of the Company or any Subsidiary, or any right or claim
to any benefit under the Plan, unless the right or claim has specifically
accrued under the Plan.
16. Amendment of the Plan.
The Committee may from time to time amend or revise the terms of this
Plan in whole or in part and may, without limitation, adopt any amendment
deemed necessary; provided, however, that, except as provided in Section 4(g),
no change in any Options previously granted to a Participant may be made that
would impair the rights of the Participant without the Participant's consent.
17. Stockholder Approval.
Continuance of the Plan shall be subject to approval by the shareholders
of the Company within 12 months before or after the date the Plan is adopted by
the Committee.
18. Conditions Upon Issuance of Shares.
An Option shall not be exercisable and a share of Common Stock shall not
be issued pursuant to the exercise of an Option until such time as the Plan has
been approved by the Stockholders of the Company and unless the exercise of
such Option and the issuance and delivery of such share pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares of
Common Stock may then be listed, and shall be further subject to the approval
of counsel for the Company with respect to such compliance. As a condition to
the exercise of an Option, the Company may require the person exercising such
Option to represent and warrant at the time of any such exercise that the
Common Stock is being purchased only for investment and without any present
intention to sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
19. Effective Date and Termination of Plan.
19.1 Effective Date. This Plan is effective as of the later of the
date of its adoption by the Committee, or the date it is approved by the
stockholders of the Company pursuant to Section 17.
19.2 Termination of the Plan. The Board may terminate the Plan at
any time with respect to any shares that are not then subject to Options.
Termination of the Plan will not affect the rights and obligations of any
Participant with respect to Options granted before termination.
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* * * * *
I hereby certify that the foregoing Plan was adopted by the Board of
Directors of Hanover Compressor Company on April 8, 1997.
Executed as of April 8, 1997
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Michael A. O'Conner
Chairman - Director
I hereby certify that the foregoing Plan was approved by the
shareholders of Hanover Compressor Company on ________________, 1997.
Executed
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-----------------------------------
Alvin V. Shoemaker - Director
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Dates Referenced Herein
| Referenced-On Page |
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| This ‘S-1/A’ Filing | | Date | | First | | Last | | | Other Filings |
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| |  |
| Filed on: | | 6/26/97 | | | | | | | None on these Dates |
| | 4/8/97 | | 8 |
| List all Filings |
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