<PAGE>
 
Compensation of Directors

     Each non-employee director is paid an annual retainer of $20,000 plus $700
for each meeting of the Board or its committees they attend. Each director who
is not an employee of the Company and who also serves as the chairman of a
committee of the Board of Directors is paid an additional annual retainer of
$3,000. Pursuant to the Company's Amended and Restated Special Incentive Plan,
each non-employee director of the Company automatically receives, following
initial appointment or election to the Board of Directors, a grant of options to
purchase 100,000 shares of the Company's Common Stock at the fair market value
on the date of the grant. Each such option is exercisable in three equal annual
installments after the date of the grant. Those directors who are also Company
employees do not receive any additional compensation for their services as
directors.

     On August 27, 1981, the Company and B. John Mackin entered into a
Consulting and Retirement Agreement pursuant to which Mr. Mackin, who was then
serving as chairman of the board and chief executive officer of the Company,
agreed to continue serving as chairman of the board and chief executive officer
of the Company until his normal retirement date, and to serve as a consultant to
the Company following his retirement. The agreement provides for annual
retirement income of $225,000 for the remainder of Mr. Mackin's life and
thereafter $112,500 annually to his wife should she survive him. Mr. Mackin
retired as an employee of the Company on December 31, 1985, and as a result he
receives amounts provided for under the agreement. The agreement was deemed
appropriate by the Board of Directors since by serving the Company in the stated
capacities, Mr. Mackin forfeited retirement benefits comparable to those
provided for under such agreement and which otherwise would have accrued to him
in respect of his previous employment. Mr. Mackin was also not eligible to
participate in the Company's pension plan. Mr. Mackin resigned from the Board of
Directors on February 21, 1994.

     In November 1993, Peter M. Holt and the Company entered into a three-year
Consulting Agreement pursuant to which the Company will pay Mr. Holt an annual
consulting fee of $200,000 for the first year, $150,000 for the second year and
$130,000 for the third year. During the first eighteen months of the term of the
Consulting Agreement, Mr. Holt will serve in the capacity of chairman and chief
executive officer of the divisions or subsidiaries of the Company engaged in the
natural gas compression business, without additional compensation from the
division or subsidiaries. Mr. Holt has agreed that, upon receipt of the written
request of the Chief Executive Officer of the Company during such eighteen month
period, he will relinquish the title of chief executive officer of such
divisions or subsidiaries, but will continue to have the title of chairman of
such divisions or subsidiaries. During the second eighteen months of the term of
the Consulting Agreement, Mr. Holt will serve in the capacity of chairman of
such divisions or subsidiaries. Under the Consulting Agreement, Mr. Holt has
agreed to assign to the Company or its nominee without further consideration his
entire right, title and interest in any inventions, improvements or discoveries
conceived, developed or reduced to practice by Mr. Holt in connection with or as
a result of his services for the Company under the Consulting Agreement.

                                       7