EXHIBIT 10.16
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of
October 1, 2002 by and among CHART INC., a Delaware corporation (the "Company"),
CHART INDUSTRIES, INC., a Delaware corporation (the "Parent"), and XXXX X.
XXXXXX ("Executive").
WHEREAS, the Company is a wholly owned subsidiary of the Parent;
and
WHEREAS, effective as of the date of this Agreement, Executive
has been appointed Group President of the Energy and Chemicals Group of the
Parent (the "E&C Group"), a newly created operating group of business lines
carried on by Subsidiaries of the Parent, and in connection with such
appointment Executive will be relocating from his present place of employment in
Cleveland, Ohio to Houston, Texas; and
WHEREAS, Executive has valuable knowledge and experience
pertaining to the business of the E&C Group, and the parties desire to provide
for his services to the Company and the Parent on the terms set forth herein.
NOW, THEREFORE, in consideration of the respective covenants and
agreements of the parties herein contained, the parties agree as follows:
1. Term of Employment. The Company hereby agrees to employ
Executive, and Executive hereby agrees to continue to serve the Company, on the
terms and conditions set forth herein for the period commencing as of the date
hereof and expiring on September 30, 2004 (the "Employment Period"). The
Employment Period shall automatically be extended on October 1, 2004, and on
October 1 of each subsequent year, for a period of one year from such date
unless, not later than July 31, 2004, or July 31 of any such subsequent year,
the Company or Executive has given notice to the other party that it or he, as
the case may be, does not wish to have the Employment Period extended. In
addition, in the event of a Change in Control, the Employment Period shall
automatically be extended for a period of two years beginning on the date of the
Change in Control and ending on the second anniversary of the date of such
Change in Control (unless further extended under the immediately preceding
sentence). In any case, the Employment Period may be terminated earlier under
the terms and conditions set forth herein.
2. Position and Duties. During the Employment Period,
Executive shall serve as Group President of the E&C Group and report to the
Chief Executive Officer. Executive shall have responsibility for the general
management and operation of the E&C Group and the performance of such other
services and duties as shall be reasonably assigned to and requested of him by
the Chief Executive Officer; provided, however, that such services and duties
shall be reasonably consistent with his position as Group President of the E&C
Group, except that the Parent may, in its sole discretion and from time to time
or at any time, without the consent of Executive, rename the E&C Group or alter
the companies and/or business lines that make up the E&C Group at any given
time. Executive shall devote substantially all his working time and efforts to
the business and affairs of the E&C Group and serve the Company and the Parent
in their businesses and perform his duties to the best of his ability.
3. Compensation.
(a) Salary. During the Employment Period, until Executive
relocates his household to the Houston, Texas area, Executive shall continue to
receive a base salary at the rate of One Hundred Fifty Thousand Dollars
($150,000) per year (the "Base Salary Amount"). During the Employment Period,
after Executive has relocated his household to the Houston, Texas area,
Executive shall receive a base salary at the rate of One Hundred Sixty-Five
Thousand Dollars ($165,000) per year, which shall thereafter be the Base Salary
Amount. Executive's salary shall be reviewed on an annual basis by the Board of
Directors of the Parent or any duly authorized Committee thereof. Executive's
salary shall be subject to being adjusted based upon such annual review,
although any such adjustment shall be at the sole discretion of the Board of
Directors of the Parent or any duly authorized Committee thereof.
Notwithstanding the foregoing, in no event shall Executive's salary be adjusted
below the Base Salary Amount. Such salary shall be payable in bi-weekly
installments or otherwise in accordance with the normal policies of the Company
for payment of key employees.
(b) Benefits. During the Employment Period Executive shall be
entitled to participate, on a basis consistent with his position and duties
hereunder, in any employee benefits plans which are maintained or established by
the Company for its key employees, subject, however, to all of the terms and
conditions thereof, including any eligibility requirements therefor, including
but not limited to: (i) the Management Incentive Compensation Plan or any other
successor plan (the "Incentive Plan"); (ii) any stock option plan of the Parent
in which the Company's key employees generally are eligible to participate (the
"Option Plan"); (iii) medical, dental and vision insurance coverage; (iv) life
insurance coverage; (v) 401(k) Retirement Plan (which includes a savings plan
component and a profit-sharing pension component); (vi) four weeks of paid
vacation to be taken at such time or times as are chosen by Executive; and (vii)
the use of a leased automobile during Executive's employment comparable to his
presently leased automobile. Notwithstanding the foregoing, during the
Employment Period Executive shall not be entitled to participate in the Parent's
Severance Benefit Plan or any such successor plan. On an annual basis, the Board
of Directors of the Parent or any duly authorized Committee thereof shall review
Executive's level of participation in the Option Plan and, based upon such
review, may in its sole discretion grant Executive additional options to
purchase common stock of the Parent.
(c) Expenses. The Company shall reimburse Executive for
reasonable expenses incurred by him on behalf of the Company in the performance
of his duties during the Employment Period. Such reimbursement shall include the
reimbursement (in accordance with the terms of the Parent's Relocation
Reimbursement Policy as currently in effect) of reasonable expenses (not to
exceed $50,000, including allowances) incurred by Executive for the relocation
of Executive's family and household goods from Cleveland, Ohio to the Houston,
Texas area in connection with the appointment of Executive as Group President of
the E&C Group. Executive shall furnish the Company with such documentation as is
requested by the Company in order for it to comply with the Code and regulations
thereunder in connection with the proper deduction of any such expenses.
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4. Termination of Employment.
(a) Events of Termination. The Employment Period shall
terminate immediately upon the occurrence of any of the following events: (i)
expiration of the Employment Period; (ii) the death of Executive; (iii) the
expiration of the 30th calendar day (the "Disability Effective Date") after the
Company gives Executive written notice of its election to terminate Executive's
employment upon the Disability of Executive, if before the expiration of such
30-day period Executive has not returned to the performance of his duties
hereunder on a full-time basis; (iv) voluntary termination by Executive of his
employment with the Company; (v) the Company's discharge of Executive for Good
Cause; (vi) voluntary termination by Executive of his employment with the
Company after a Change in Control for Good Reason; or (vii) the Company's
discharge of Executive at any time without Good Cause.
(b) Notice of Termination. Any termination by the Company for
Good Cause, or by Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 9. For
purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated and (iii) specifies the Date of Termination (as defined below). The
failure by Executive or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason or Good
Cause shall not waive any right of Executive or the Company, respectively,
hereunder or preclude Executive or the Company, respectively, from asserting
such fact or circumstance in enforcing Executive's or the Company's rights
hereunder.
(c) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by the Company for Good Cause, or by
Executive for Good Reason after a Change in Control, the date of termination of
employment that is set forth in the Notice of Termination (which shall not be
earlier than the date on which such notice is given), (ii) if Executive's
employment is terminated by the Company other than for Good Cause or Disability,
or Executive resigns (other than for Good Reason after a Change in Control), the
date on which the Company or Executive notifies Executive or the Company,
respectively, of such termination, or such later date as may be specified by the
terminating party in such notice, and (iii) if Executive's employment is
terminated by reason of death, Disability or expiration of the Employment
Period, the date of death of Executive, the Disability Effective Date or the
date of expiration of the Employment Period, as the case may be.
5. Obligations of the Company upon Termination.
(a) Discharge Without Good Cause; Resignation for Good Reason
After a Change in Control. Executive shall be entitled to the severance benefits
specified in this Section 5(a) if, during the Employment Period, (x) the Company
terminates Executive's employment under Section 4(a)(vii) without Good Cause or
(y) Executive terminates his employment under Section 4(a)(vi) after a Change in
Control for Good Reason. In either such case:
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(i) in lieu of further base salary or bonus payments,
the Company shall pay to Executive in a lump sum in cash within 30 calendar days
after the Date of Termination the amounts determined under clauses (A) and (B)
below:
(A) the sum of (1) Executive's annual base salary at the rate
then in effect through the Date of Termination to the
extent not previously paid and (2) any unpaid cash bonus
under the Incentive Plan for a prior year; and
(B) the product of (1) the number of years (including fractions
thereof) remaining from the Date of Termination until the
end of the Continuation Period and (2) Executive's annual
base salary at the rate then in effect.
For purposes of this Section 5(a)(i), any amounts of compensation deferred by
Executive under a deferral plan of the Company or any of its Affiliates shall be
deemed to have been paid on the date of deferral, and all such deferred amounts
shall be payable as governed by the terms of the applicable deferral plan,
except that no such amounts shall be forfeited under the terms of the applicable
deferral plan as a result of Executive's termination of employment;
(ii) For the duration of the Continuation Period,
Executive shall be eligible to participate in the employee benefits plans
referred to in Sections 3(b)(iii) and (iv) as if he were still employed by the
Company, to the extent and at the level of Executive's participation thereunder
immediately prior to the Date of Termination, but all Company contributions or
payments under any such employee benefits plans shall be subject to Executive's
fulfillment of his contribution requirements thereunder, and Company provision
of the benefits listed in Sections 3(b)(iii) and (iv) shall cease if Executive
obtains such coverage, if any, from another employer during the Continuation
Period. Notwithstanding the foregoing, if Executive's continued participation in
any such employee benefits plan after the Date of Termination is not possible
under the terms governing such employee benefits plan, the Company may satisfy
its obligation to provide such benefits by providing to Executive during the
Continuation Period alternative coverage, comparable to the coverage in question
then maintained for key employees of the Company, on the terms set forth in the
preceding sentence; and
(iii) Executive shall be entitled to receive any other
benefits provided for in Section 3(b) which have accrued up to and including the
Date of Termination, subject to the terms and conditions of the benefit plans
referenced in Section 3(b), and reimbursement of reasonable expenses incurred up
to and including the Date of Termination under the terms of Section 3(c). If
Executive is entitled to severance benefits under this Section 5(a) and
requests, within 60 days after the Date of Termination, to be relocated back to
the Cleveland, Ohio area, then such reimbursement shall include the
reimbursement (in accordance with the terms of the Parent's Relocation
Reimbursement Policy as then in effect) of reasonable expenses (not to exceed
$50,000, including allowances) incurred by Executive for such relocation of
Executive's family and household goods back to the Cleveland, Ohio area.
(b) Death or Disability; Discharge for Good Cause; Resignation
Without Good Reason. Executive shall be entitled to the severance benefits
specified in this Section 5(b) if, during the Employment Period, Executive's
employment with the Company (i) terminates
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under Section 4(a)(ii) as a result of Executive's death or under Section
4(a)(iii) as a result of Executive's Disability, (ii) is terminated under
Section 4(a)(v) by the Company for Good Cause, or (iii) is terminated by
Executive on a voluntary basis under Section 4(a)(iv) without Good Reason. In
any such case, Executive shall be entitled to payment of base salary only for
the remainder of the month in which such termination occurs and thereafter such
salary shall end and cease to be payable. In addition, in any such case,
Executive shall be entitled to receive any benefits provided for in Section 3(b)
which have accrued up to and including the Date of Termination, subject to the
terms and conditions of the benefit plans referenced in Section 3(b), and
reimbursement of reasonable expenses incurred up to and including the Date of
Termination under the terms of Section 3(c), which in such case shall not
include additional relocation expenses.
(c) Expiration of the Employment Period. If Executive's
employment with the Company terminates under Section 4(a)(i) in connection with
the expiration of the Employment Period, Executive shall be entitled to (i)
payment of base salary only through the Date of Termination, (ii) receive,
subject to the terms and conditions of the benefit plans referenced in Section
3(b), any benefits provided for in Section 3(b) which have accrued up to and
including the Date of Termination and (iii) reimbursement of reasonable expenses
incurred up to and including the Date of Termination under the terms of Section
3(c), which in such case shall not include additional relocation expenses.
6. Full Settlement; Legal Fees. The Company's obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against Executive or others. In no event shall Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement. If Executive
is required to enforce any of his rights under this Agreement after a Change in
Control (including as a result of any contest by Executive about the amount of
any payment pursuant to this Agreement), the Company shall reimburse Executive
as incurred for all reasonable legal fees and expenses incurred by him to
enforce such rights, plus interest on any delayed payment at the applicable
federal rate provided for in Section 7872(f)(2)(A) of the Code.
7. Restrictive Covenants.
(a) Non-Competition. During the Employment Period and for a
period of one year after the Date of Termination, Executive shall not, directly
or indirectly, own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner or director with, or have any financial interest in, any business which
is in substantial competition with any business conducted by the E&C Group or
any other group, business, division or Subsidiary of the Parent for which
Executive has worked or had responsibility within two years before the Date of
Termination, in any area where such business is being conducted at the time of
such termination. Ownership of 5% or less of the voting stock of any corporation
which is required to file periodic reports with the Securities and Exchange
Commission under the Exchange Act shall not constitute a violation hereof. If it
is judicially determined that Executive has violated any of his obligations
under this Subsection 7(a), then the period applicable to the obligations that
Executive is determined to have violated shall automatically be
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extended by a period of time equal in length to the period during which such
violation(s) occurred.
(b) Non-Solicitation. Executive shall not directly or
indirectly, at any time during the Employment Period and for one year after the
Date of Termination, solicit or induce or attempt to solicit or induce any
customer, employee or sales representative of the Chart Group to terminate his,
her or its customer, employment, or representation relationship with the Chart
Group or in any way directly or indirectly interfere with such a relationship.
(c) Confidentiality.
(i) Executive shall keep in strict confidence, and shall
not, directly or indirectly, at any time during or after the Employment Period,
disclose, furnish, publish, disseminate, make available or, except in the course
of performing his duties of employment hereunder, use any Confidential
Information. Executive specifically acknowledges that all Confidential
Information, in whatever media or form maintained and whether compiled by the
Chart Group or Executive, derives independent economic value from not being
readily known to or ascertainable by proper means by others who can obtain
economic value from its disclosure or use, that reasonable efforts have been
made by the Chart Group to maintain the secrecy of such information, that such
information is the sole property of the Chart Group and that any disclosure or
use of such information by Executive during the Employment Period (except in the
course of performing his duties and obligations hereunder) or after the Date of
Termination shall constitute a misappropriation of the Chart Group's trade
secrets.
(ii) Executive agrees that upon termination of the
Employment Period, for any reason, Executive shall return to the Company, in
good condition, all property of the Chart Group, including, without limitation,
the originals and all copies of any materials, whether in paper, electronic or
other media, that contain, reflect, summarize, describe, analyze or refer or
relate to any items of Confidential Information.
8. Binding Agreement; Successors. This Agreement shall inure
to the benefit of and be binding upon Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts would still be
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to Executive's
spouse, or if is spouse does not survive him, to Executive's estate. This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company and the Parent, including, without limitation, any person
acquiring directly or indirectly all or substantially all of the assets of the
Company or the Parent, whether by merger, consolidation, sale or otherwise (and
such successor shall thereafter be deemed the "Company" or the "Parent",
respectively, for the purposes of this Agreement). The Company and the Parent
shall require any such successor to assume and agree to perform this Agreement.
9. Notice. All notices, requests and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given (a) when hand delivered, (b) one business day after being sent by
recognized overnight delivery service, or
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(c) three business days after being sent by registered or certified mail, return
receipt requested, postage prepaid, and in each case addressed as follows (or
addressed as otherwise specified by notice under this Section):
(i) If to the Company or the Parent, to:
Chart Industries, Inc.
0000 Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Chief Executive Officer
With a copy to:
Xxxxxx, Halter & Xxxxxxxx LLP
1400 XxXxxxxx Investment Center
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. XxXxx
(ii) If to Executive, to:
Xxxx X. Xxxxxx
__________________________
__________________________
10. Withholding. The Company may withhold from any amounts
payable under or in connection with this Agreement all federal, state, local and
other taxes as may be required to be withheld by the Company under applicable
law or governmental regulation or ruling.
11. Amendments; Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing, and is signed by Executive and an officer of the Company
and of the Parent. No waiver by a party hereto at any time of any breach by
another party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
12. Jurisdiction. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the conflict of law principles of such State.
Executive, the Company and the Parent each agree that the state and federal
courts located in the State of Ohio shall have jurisdiction in any action, suit
or proceeding against Executive, the Company or the Parent based on or arising
out of this Agreement and each of Executive, the Company and the Parent hereby
(a) submits to the personal jurisdiction of such courts, (b) consents to service
of process in connection with any such action, suit or proceeding and (c) waives
any other requirement (whether imposed by statute, rule of court or otherwise)
with respect to personal jurisdiction, venue or service of process.
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13. Equitable Relief. Executive, the Company and the Parent
acknowledge and agree that the covenants contained in Section 7 are of a special
nature and that any breach, violation or evasion by Executive of the terms of
Section 7 will result in immediate and irreparable injury and harm to the
Company and the Parent, for which there is no adequate remedy at law, and will
cause damage to the Company and the Parent in amounts difficult to ascertain.
Accordingly, the Company and the Parent each shall be entitled, collectively or
separately, to the remedy of injunction, as well as to all other legal or
equitable remedies to which the Company or the Parent may be entitled
(including, without limitation, the right to seek monetary damages), for any
breach, violation or evasion by Executive of the terms of Section 7.
14. Validity. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect. In the event that any provision of Section 7 is found by
a court of competent jurisdiction to be invalid or unenforceable as against
public policy, such court shall exercise its discretion in reforming such
provision to the end that Executive shall be subject to such restrictions and
obligations as are reasonable under the circumstances and enforceable by the
Company and/or the Parent.
15. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
16. Headings; Definitions. The headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Certain capitalized terms used in this
Agreement are defined on Schedule A attached hereto.
17. No Assignment. This Agreement may not be assigned by either
party without the prior written consent of the other party, except as provided
in Section 8.
18. Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the employment of Executive and
supersedes any and all other agreements (including the Salary Continuation
Agreement, dated as of May 22, 1996, as amended, by and between the Parent and
Executive, which is hereby terminated, but excluding any existing agreement
evidencing a stock option granted to Executive or rights of Executive to
indemnity), either oral or in writing, with respect to the employment of
Executive.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
CHART INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
----------------------------
Title: Chairman
---------------------------
CHART INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
/s/ Xxxx X. Xxxxxx
-----------------------------------------
XXXX X. XXXXXX
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Schedule A
Certain Definitions
As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Affiliate" of a specified entity means an entity that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the entity specified.
"Change in Control" shall mean the occurrence at any time of any of the
following events:
(a) The Parent is merged or consolidated or
reorganized into or with another corporation or other legal person or
entity, other than a Related Person, and as a result of such merger,
consolidation or reorganization less than 60% of the combined voting
power of the then-outstanding securities of such corporation, person or
entity immediately after such transaction is held in the aggregate by
the holders of Voting Stock immediately prior to such transaction;
(b) The Parent sells or otherwise transfers all or
substantially all of its assets to any other corporation or other legal
person or entity, other than a Related Person, and less than 60% of the
combined voting power of the then-outstanding securities of such
corporation, person or entity immediately after such sale or transfer
is held in the aggregate by the holders of Voting Stock immediately
prior to such sale or transfer;
(c) There is a report filed on Schedule 13D or
Schedule TO (or any successor schedule, form or report), each as
promulgated pursuant to the Exchange Act, disclosing that any person
(as the term "person" is used in Section 13(d)(3) or Section 14(d)(2)
of the Exchange Act) other than a Related Person has become the
beneficial owner (as the term "beneficial owner" is defined under Rule
l3d-3 or any successor rule or regulation promulgated under the
Exchange Act) of securities representing 40% or more of the Voting
Power;
(d) The Parent files a report or proxy statement
with the Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form or report or item therein) that a change in
control of the Parent has or may have occurred or will or may occur in
the future pursuant to any then-existing contract or transaction other
than a contract or transaction with a Related Person; or
(e) If during any period of two consecutive years,
individuals, who at the beginning of any such period, constitute the
Directors cease for any reason to constitute at least a majority
thereof, unless the nomination for election by the Parent's
shareholders of each new Director was approved by a vote of at least a
majority of the Directors then in office who were Directors at the
beginning of any such period.
Notwithstanding the foregoing provisions of this
definition, a "Change in
Control" shall not be deemed to have occurred for purposes of this
Agreement (i) solely because (A) the Parent, (B) a Related Person, (C)
a Subsidiary, or (D) any Parent-sponsored employee stock ownership plan
or other employee benefit plan of the Parent or any Subsidiary, or any
entity holding shares of Voting Stock for or pursuant to the terms of
any such plan, either files or becomes obligated to file a report or
proxy statement under or in response to Schedule 13D, Schedule TO, Form
8-K or Schedule 14A (or any successor schedule, form or report or item
therein) under the Exchange Act, disclosing beneficial ownership by it
of shares of Voting Stock or because the Parent reports that a change
in control of the Parent has or may have occurred or will or may occur
in the future by reason of such beneficial ownership, (ii) solely
because the Parent or any other person, group or entity directly
involved in the restructuring of the Parent's capital and debt
arrangements related to the Parent's Credit Agreement, dated as of
April 12, 1999, as amended, either files or becomes obligated to file a
report on Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any
successor schedule, form or report) under the Exchange Act, disclosing
beneficial ownership by it of shares of Voting Stock acquired from the
Parent in connection with such restructuring or because the Parent
reports that a change in control of the Parent has or may have occurred
or will or may occur in the future by reason of such transaction, but
only if both (A) the transaction giving rise to such filing or
obligation is approved in advance of consummation thereof by the
Parent's Board of Directors and (B) at least a majority of the Voting
Power immediately after such transaction is held in the aggregate by
the holders of Voting Stock immediately prior to such transaction, or
(iii) solely because of a change in control of any Subsidiary or a sale
of the E&C Group, which does not otherwise constitute a "Change in
Control".
"Chart Group" means, collectively, the Parent and each group, division
and Subsidiary of the Parent.
"Chief Executive Officer" means the chief executive officer of the
Parent, or if there is no such chief executive officer, then the
president of the Parent.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Confidential Information" means confidential business information of
the Chart Group and its customers and vendors, without limitation as to
when or how Executive may have acquired such information. Such
Confidential Information shall include, without limitation, the Chart
Group's manufacturing, selling and servicing methods and business
techniques, customer, vendor and product information, product
development plans, internal financial statements, sales and
distribution information, business plans and opportunities, corporate
alliances, processes and techniques, and other information concerning
the Chart Group's actual or anticipated business or products, or which
is received in confidence by or for the Chart Group from any other
person.
"Continuation Period" means a period of time (not to exceed 24 months
nor be less than 12 months) beginning on the Date of Termination and
ending on the earlier of the following dates:
A-2
(a) The date that is 24 months after the Date of
Termination; or
(b) The date that is the Applicable Number of
months after the Date of Termination.
As used in this definition, the term "Applicable Number" shall equal
the difference of (i) 24 minus (ii) a number equal to the number of
full months elapsing from October 1, 2002 until the Date of
Termination. In no case, however, shall the "Applicable Number" be less
than 12.
"Director" means a member of the Board of Directors of the Parent.
"Disability" means the inability of Executive for a continuous period
of six months to perform the essential functions of his position
hereunder on an active full-time basis with or without reasonable
accommodations by reason of a disability condition. A certificate from
a physician acceptable to both the Company and Executive to the effect
that Executive is or has been disabled and incapable of performing the
essential functions of his position with or without reasonable
accommodations for the Company as previously performed shall be
conclusive of the fact that Executive is incapable of performing such
services and is, or has been, disabled for the purposes of this
Agreement. The Company and Executive acknowledge and agree that the
essential functions of Executive's position are unique and critical to
the Company and that a disability condition that causes Executive to be
unable to perform the essential functions of his position under the
circumstances described above will constitute an undue hardship on the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.
"Good Cause" means a determination by the Chief Executive Officer, in
good faith, that any one of the following events has occurred and not
been cured by Executive within 60 calendar days after the Chief
Executive Officer first gave Executive written notice thereof:
(a) Executive has been indicted by a state or
federal grand jury of committing a felony;
(b) the Chief Executive Officer receives proof
satisfactory to him of the commission by Executive of theft or
embezzlement from the Parent or its Subsidiaries, or any other crime
against the Parent or its Subsidiaries;
(c) Executive has materially breached the
provisions of Section 7 or any other material provision of this
Agreement; or
(d) Executive's failure, refusal or inability to
perform his services and duties as set forth in Section 2, any act of
gross negligence, corporate waste, disloyalty, or unfaithfulness to the
Parent or its Subsidiaries which adversely affects the business of the
Parent or its Subsidiaries, or any other act or course of conduct which
could reasonably be expected to have an adverse affect on the business
of the Parent or its Subsidiaries such as, by way of example only,
intentionally causing the Parent or its
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Subsidiaries to violate federal, state or local environmental, labor,
antitrust, or other similar laws, or sexual or other illegal harassment
of employees.
"Good Reason" means a determination by Executive, made in good faith,
that either of the following events has occurred upon or after a Change
in Control, without Executive's express written consent, and not been
cured by the Company within 20 calendar days after Executive first gave
the Company written notice thereof: (a) a significant reduction in the
nature or scope of the title, authority or responsibilities of
Executive from those held by Executive immediately prior to the Change
in Control; or (b) a reduction in Executive's base salary rate below
his base salary rate in effect immediately prior to the Change in
Control.
"Related Person" means (a) Xxxxxx X. Xxxxxx (b) Xxxxxxx X. Xxxxxx, (c)
any person, group or entity controlled directly, or indirectly through
one or more intermediaries, by Xxxxxx X. Xxxxxx or Xxxxxxx X. Xxxxxx or
both of them, and (d) any of the foregoing acting alone or in concert.
"Subsidiary" means a corporation, company or other entity (a) more than
50 percent of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing
authority) are, or (b) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or
unincorporated association), but more than 50 percent of whose
ownership interest representing the right generally to make decisions
for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Parent.
"Voting Power" means, at any time, the total votes relating to the
then-outstanding securities entitled to vote generally in the election
of Directors.
"Voting Stock" means, at any time, the then-outstanding securities
entitled to vote generally in the election of Directors.
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ADDENDUM TO
EMPLOYMENT AGREEMENT
This Addendum to Employment Agreement (this "Addendum") is made as of
October 1, 2002 by and among CHART INC., a Delaware corporation (the "Company"),
CHART INDUSTRIES, INC., a Delaware corporation (the "Parent"), and XXXX X.
XXXXXX ("Executive").
WHEREAS, the Company is a wholly owned subsidiary of the Parent; and
WHEREAS, Executive is entering into an Employment Agreement with the
Company and the Parent, dated as October 1, 2002 (the "Employment Agreement");
and
WHEREAS, upon Executive's assuming the position and duties described
in the Employment Agreement on the date hereof, Executive ceases to be an
officer of, and ceases to perform any policy-making function for, the Parent;
accordingly, Executive acknowledges that it is no longer appropriate for
Executive to participate in the Parent's 2000 Executive Incentive Stock Option
Plan (the "2000 Plan") with respect to that portion of the stock option granted
to Executive under the 2000 Plan that is not currently exercisable and does not
become exercisable for the Company's 2002 fiscal year; and
WHEREAS, the Company desires to provide Executive the opportunity for
additional portions of such option to become exercisable, in accordance with and
subject to the existing terms of such option, based on the Company's financial
performance for its 2002 fiscal year, which is expected to be determined by May
1, 2003 (the "Effective Date"), and to provide that any portion of such option
which is not exercisable on the Effective Date will be canceled and terminated
on the Effective Date.
NOW, THEREFORE, in consideration of the respective covenants and
agreements of the parties contained in the Employment Agreement of which this
Addendum is part, the parties agree as follows:
1. Modification of Stock Option. (a) The parties acknowledge that
Executive and the Parent are parties to that certain Stock Option Agreement,
dated as of May 4, 2000 (the "2000 Option Agreement"), issued under the 2000
Plan, subject to the terms of which Executive has the option to purchase up to
100,000 shares of the Parent's common stock (the "2000 Option"). Executive, the
Parent and the Company acknowledge that Executive currently has the right to
exercise the 2000 Option with respect to 26,666 of such shares (the "Vested
Shares") and that Executive has not, as of the date hereof, exercised the 2000
Option with respect to those shares. Executive, the Parent and the Company
further acknowledge that the 2000 Option may become exercisable with respect to
additional shares of the Parent's common stock, subject to the terms of the 2000
Option Agreement, on or before the Effective Date, and that such additional
shares, if any, shall be deemed to be Vested Shares from and after the time at
which the 2000 Option becomes exercisable to purchase such additional shares in
accordance with its terms.
(b) Executive, the Parent and the Company agree that the 2000
Option Agreement is hereby amended and modified to provide that Executive may
exercise the 2000
Option, subject to the terms of the 2000 Option Agreement, to purchase up to the
full number of the Vested Shares, but that the 2000 Option shall be deemed
canceled and terminated on the Effective Date with respect to the remaining
shares of the Parent's common stock subject thereto that are not Vested Shares
on the Effective Date (the "Relinquished Shares"). Executive relinquishes all
his rights to purchase the Relinquished Shares under the 2000 Option and the
related 2000 Option Agreement. Accordingly, on and after the Effective Date,
Executive may exercise the 2000 Option, subject to the terms of the 2000 Option
Agreement, to purchase the Vested Shares, and the 2000 Option shall for all
purposes be deemed canceled and terminated with respect to the Relinquished
Shares and Executive shall have no right or option to purchase any of the
Relinquished Shares. Except with respect to such reduction in the number of
shares that Executive may purchase thereunder, the 2000 Option Agreement shall
remain in effect and be unaffected by this Addendum. Executive agrees that the
Parent has the right, in its discretion, to make new grants of stock options to
one or more of its executive employees to purchase the Relinquished Shares under
the 2000 Plan.
(c) In no case shall the exercisability of the 2000 Option be
accelerated in the event of a Change in Control (as defined in the 2000 Option
Agreement) that occurs after October 1, 2002.
(d) Executive's existing stock options, other than the 2000
Option, shall be unaffected by the terms of this Addendum.
2. Miscellaneous. This Addendum shall be considered a part of the
Employment Agreement. In the event of conflict between the terms of the
Employment Agreement and the express terms of this Addendum, the express terms
of this Addendum shall prevail. This Addendum may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties have executed this Addendum as of the
date first above written.
CHART INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------
Title: Chairman
------------------------------
CHART INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
/s/ Xxxx X. Xxxxxx
-----------------------------------------
XXXX X. XXXXXX
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