UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 21, 2011
EXTERRAN PARTNERS, L.P.
Delaware | 001-33078 | 22-3935108 | ||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) |
16666 Northchase Drive, Houston, Texas |
77060 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (281) 836-7000
Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On February 21, 2011, the compensation committee of the board of directors of Exterran
Holdings, Inc. (the Exterran Holdings compensation committee) adopted a short-term incentive
program (the 2011 Incentive Program) to provide the short-term incentive compensation element of
Exterran Holdings and our total direct compensation program for this year. Under the 2011
Incentive Program, each executive officer will be eligible to receive short-term incentive
compensation in the form of a cash award based on the Exterran Holdings compensation committees
assessment of Exterran Holdings performance for 2011 relative to the key business activities and
indicators listed below, as well as such other factors or criteria that the Exterran Holdings
compensation committee in its discretion deems appropriate.
The Exterran Holdings compensation committee has determined that the key business activities
and indicators for 2011, as may be revised by the Exterran Holdings compensation committee in its
discretion, will relate to the following:
| Exterran Holdings financial performance, including EBITDA, generation of free cash flow, economic profit, earnings per share, North America operating horsepower levels and Exterran Holdings international bookings; and | ||
| Exterran Holdings safety, to be assessed by specific regional and group metrics for the incident rate for both recordable injuries (TRIR) and the number of vehicle incidents, with a corporate TRIR target of 0.75 or less. |
The Exterran Holdings compensation committee will assess 2011 performance of both Exterran
Holdings and its business groups relative to the financial and safety performance indicators
listed above. The Exterran Holdings compensation committee also will consider the following
indicators in assessing the performance of Exterran Holdings business groups:
| Customer service, to be assessed by various regional and group metrics for measuring and enhancing customer service, including equipment service availability and manufacturing quality; and | ||
| People, to be assessed by successful implementation of various regional and group initiatives intended to optimize and improve Exterran Holdings overall human capital. |
With respect to Ernie L. Danner, the President and Chief Executive Officer, the Exterran
Holdings compensation committee intends to award performance-based short-term incentive
compensation under the 2011 Incentive Program based on (1) the Exterran Holdings compensation
committees assessment of Exterran Holdings performance relative to the financial and safety
performance indicators listed above and (2) Mr. Danners individual contribution toward those
performance indicators, including his demonstrated leadership, implementation of Exterran Holdings
business strategy and success at driving employee engagement. No specific weight will be made as
between Exterran Holdings performance and individual contribution. The Exterran Holdings
compensation committee has reserved the right to modify the list of performance indicators as well
as target levels of one or more of these indicators in its discretion based on internal and
external developments during the course of 2011.
With respect to J. Michael Anderson (Senior Vice President), D. Bradley Childers (Senior Vice
President) and Joseph G. Kishkill (Senior Vice President), the Exterran Holdings compensation
committee intends to award performance-based short-term incentive compensation under the 2011
Incentive Program based on (1) the Exterran Holdings compensation committees assessment of
Exterran Holdings performance relative to the financial and safety performance factors listed
above, (2) the performance of each officers business group relative to the financial, safety,
customer service and people performance indicators listed above, (3) each officers individual
contributions, including demonstrated leadership, implementation of Exterran Holdings business
strategy and success at driving employee engagement, and (4) the recommendations
of the
Chief Executive Officer. No specific weight will be made as between Exterran Holdings
performance, business group performance
and individual contribution. The Exterran Holdings compensation committee has reserved the
right to modify the list of performance indicators as well as target levels of one or more of these
indicators in its discretion based on internal and external developments during the course of 2011.
Because Michael J. Aaronson (Chief Financial Officer) is not an executive officer of Exterran
Holdings, the analysis of his performance will be conducted, and his payout under the 2011
Incentive Program will be determined, by the Chief Executive Officer. The Chief Executive Officer
will award performance-based short-term incentive compensation to Mr. Aaronson under the 2011
Incentive Program based on an analysis similar to that described for Messrs. Anderson, Childers and
Kishkill above, except that Mr. Aaronsons payout amount may be adjusted upward by up to 20% based
on Exterran Holdings achievement of an economic profit performance measure, to be calculated as
EBITDA less the sum of maintenance capital, cash taxes and a charge for capital employed during the
period.
Each executive officers target bonus payment under the 2011 Incentive Program will be a
specified percentage of that individuals base salary, and each executive officers actual bonus
payment may be paid out at a level of 0% to approximately 175% of target bonus based on the
Exterran Holdings compensation committees review (the Chief Executive Officers review, in the
case of Mr. Aaronson) of the factors set forth in the three preceding paragraphs, as may be
adjusted by the Exterran Holdings compensation committee in its discretion. In determining the
target 2011 bonus opportunity for each of the following individuals, whom we expect to be our named
executive officers for 2011, the Exterran Holdings compensation committee (the Chief Executive
Officer, in the case of Mr. Aaronson) considered the relative responsibility of each executive
officer and his potential impact on the achievement of Exterran Holdings performance criteria.
Those target 2011 bonus opportunities (expressed as a percentage of each named executive officers
base salary for 2011), are as follows:
2011 Bonus | ||||||
Target | ||||||
Executive Officer | Title | (%) | ||||
Ernie L. Danner
|
President and Chief Executive Officer | 140 | ||||
Michael J. Aaronson
|
Vice President and Chief Financial Officer | 42 | ||||
J. Michael Anderson
|
Senior Vice President | 70 | ||||
D. Bradley Childers
|
Senior Vice President | 70 | ||||
Joseph G. Kishkill
|
Senior Vice President | 70 |
We anticipate that awards under the 2011 Incentive Program for the year ending December 31,
2011 will be determined and paid in the first quarter of 2012. Pursuant to the terms of an omnibus
agreement between us, our general partner, Exterran Holdings and others, we will reimburse Exterran
Holdings for that portion of our Named Executive Officers compensation, including any 2011 annual
incentive bonuses awarded under the 2011 Incentive Program, allocated to us.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
EXTERRAN PARTNERS, L.P. | ||||
By: | Exterran General Partner, L.P., its general partner |
|||
By: | Exterran GP LLC, its general partner |
|||
February 25, 2011 | By: | /s/ Donald C. Wayne | ||
Donald C. Wayne | ||||
Senior Vice President and General Counsel | ||||