EMPLOYMENT
AGREEMENT (the “ Agreement ”) dated
December 1, 2005 by and between Chart Industries, Inc. (the
“ Company ”) and Charles R. Lovett (the “
Executive ”).
The
Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment; and
Executive
desires to accept such employment and enter into such an
agreement.
In
consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as
follows:
1.
Term of Employment . Subject to the provisions of
Section 8 of this Agreement, Executive shall be employed by
the Company, on the terms and subject to the conditions set forth
in this Agreement, for a constantly renewing one (1) year
term, commencing on December 1, 2005, so that the remaining
term of employment under this Agreement shall always be one year
(the “ Employment Term ”), unless:
(a) either party gives written notice to the other that the
Employment Term shall no longer constantly renew (the “
Non-Renewal Notice ”) in which event the Employment
Term shall expire on the first anniversary of the delivery of such
Non-Renewal Notice or (b) Executive’s employment under
this Agreement is earlier terminated in accordance with
Section 8 of this Agreement.
a. During
the Employment Term, Executive shall serve as the Company’s
Vice President - Manufacturing. In such position, Executive shall
have such duties, authority and responsibility as shall be
determined from time to time by the Board of Directors of the
Company (the “ Board ”) or the Chief Executive
Officer of the Company, which duties, authority and responsibility
are consistent with his existing position with the Company. If
requested, Executive shall also serve as a member of the Board
without additional compensation.
b. During
the Employment Term, Executive will devote Executive’s full
business time and best efforts to the performance of
Executive’s duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise
which would conflict or interfere with the rendition of such
services either directly or indirectly, without the prior written
consent of the Board; provided that nothing herein shall
preclude Executive, subject to the prior approval of the Board,
from accepting appointment to or continue to serve on any board of
directors or trustees of any business corporation or any charitable
organization; provided in each case, and in the aggregate,
that such activities do not conflict or interfere with the
performance of Executive’s duties hereunder or conflict with
Section 9.
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3.
Base Salary . During the Employment Term, the Company shall
pay Executive a base salary at the annual rate of $173,349, payable
in regular installments in accordance with the Company’s
usual payment practices. Executive shall be entitled to such
increases in Executive’s base salary, if any, as may be
determined from time to time in the sole discretion of the Board.
Executive’s annual base salary, as in effect from time to
time, is hereinafter referred to as the “ Base Salary
.”
4.
Annual Bonus . With respect to each full fiscal year during
the Employment Term, Executive shall be eligible to earn an annual
bonus award (an “ Annual Bonus ”) of up to one
hundred and fifty percent (150%) of Executive’s Base Salary
(the “ Target ”) based upon the achievement of
EBITDA and working capital performance targets established by the
Board within the first three months of each fiscal year during the
Employment Term. The Annual Bonus, if any, shall be paid to
Executive within two and one-half (2.5) months after the end of the
applicable fiscal year.
5.
Employee Benefits . During the Employment Term, Executive
shall be entitled to participate in the Company’s employee
benefit plans (other than annual bonus and incentive plans)
providing for health, life and disability insurance, retirement,
deferred compensation and fringe benefits, as well as any stock
option plans, as in effect from time to time (collectively “
Employee Benefits ”), on the same basis as those
benefits are generally made available to other senior executives of
the Company.
6.
Vacation . During the Employment Term, Executive shall be
entitled to annual vacation as outlined under the Company’s
vacation policy where Executive is located to be taken at such
times as chosen by Executive.
7.
Business Expenses and Perquisites .
a.
Expenses . During the Employment Term, reasonable business
expenses incurred by Executive in the performance of
Executive’s duties hereunder shall be reimbursed by the
Company in accordance with Company policies.
b.
Perquisites . During the Employment Term, Executive shall be
entitled to use of one of the Company’s leased automobiles,
consistent with the Company’s current practices. Following
the termination of the applicable automobile lease in
June 2006, Executive shall be eligible for an automobile
allowance, during the Employment Term, of up to $800 per month,
consistent with the Company’s current practices.
8.
Termination . The Employment Term and Executive’s
employment hereunder may be terminated by either party at any time
and for any reason; provided that Executive will be required to
give the Company at least 60 days advance written notice of
any resignation of Executive’s employment. Notwithstanding
any other provision of this Agreement, the provisions of this
Section 8 shall exclusively govern Executive’s rights upon
termination of employment with the Company and its
affiliates.
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a.
By the Company For Cause or By Executive Resignation Without
Good Reason .
(i) The
Employment Term and Executive’s employment hereunder may be
terminated by the Company for Cause (as defined below) and shall
terminate automatically upon Executive’s resignation without
Good Reason (as defined in Section 8(c)); provided that
Executive will be required to give the Company at least
60 days advance written notice of a resignation without Good
Reason.
(ii) For
purposes of this Agreement, “ Cause ” shall mean
the Executive’s (A) willful failure to perform duties
which, if curable, is not cured promptly, or in any event within
ten (10) days, following the first written notice of such
failure from the Company, (B) commission of, or plea of guilty
or no contest to a (x) felony or (y) crime involving
moral turpitude, (C) willful malfeasance or misconduct which is
demonstrably injurious to the Company or its subsidiaries or
affiliates, (D) material breach of the material terms of this
Agreement, including, without limitation, any non-competition,
non-solicitation or confidentiality provisions, (E) commission
of any act of gross negligence, corporate waste, disloyalty or
unfaithfulness to the Company which adversely affects the business
of the Company or its subsidiaries or affiliates, or (F) any
other act or course of conduct which will demonstrably have a
material adverse effect on the Company, a subsidiary or
affiliate’s business.
(iii) If
Executive’s employment is terminated by the Company for
Cause, or if Executive resigns without Good Reason, Executive shall
be entitled to receive:
(A) the
Base Salary through the date of termination;
(B) any
Annual Bonus earned, but unpaid, as of the date of termination for
the immediately preceding fiscal year, paid in accordance with
Section 4 (except to the extent payment is otherwise deferred
pursuant to any applicable deferred compensation arrangement with
the Company);
(C) reimbursement,
within 60 days following submission by Executive to the
Company of appropriate supporting documentation, for any
unreimbursed business expenses properly incurred by Executive in
accordance with Company policy prior to the date of
Executive’s termination; provided claims for such
reimbursement (accompanied by appropriate supporting documentation)
are submitted to the Company within 90 days following the date
of Executive’s termination of employment; and
(D) such
Employee Benefits, if any, as to which Executive may be entitled
under the employee benefit plans of the Company, including payment
for any accrued but unused vacation within 30 days following
the date of Executive’s termination of employment (the
amounts described in clauses (A) through (D) hereof being
referred to as the “ Accrued Rights ”).
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Following
such termination of Executive’s employment by the Company for
Cause or resignation by Executive without Good Reason, except as
set forth in this Section 8(a)(iii), Executive shall have no
further rights to any compensation or any other benefits under this
Agreement.
(i) The
Employment Term and Executive’s employment hereunder shall
terminate upon Executive’s death and may be terminated by the
Company if Executive becomes physically or mentally incapacitated
and is therefore unable for a period of six (6) consecutive
months or for an aggregate of nine (9) months in any
twenty-four (24) consecutive month period to perform
Executive’s duties (such incapacity is hereinafter referred
to as “ Disability ”). Any question as to the
existence of the Disability of Executive as to which Executive and
the Company cannot agree shall be determined in writing by a
qualified independent physician mutually acceptable to Executive
and the Company. If Executive and the Company cannot agree as to a
qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall
make such determination in writing. The determination of Disability
made in writing to the Company and Executive shall be final and
conclusive for all purposes of the Agreement.
(ii) Upon
termination of Executive’s employment hereunder for either
Disability or death, Executive or Executive’s estate (as the
case may be) shall be entitled to receive:
(A) the
Accrued Rights; and
(B) a
pro rata portion of any Annual Bonus, if any, that Executive would
have been entitled to receive pursuant to Section 4 hereof for
such year based upon the Company’s actual results for the
year of termination and the percentage of the fiscal year that
shall have elapsed through the date of Executive’s
termination of employment, payable to Executive pursuant to
Section 4 had Executive’s employment not terminated.
Following
Executive’s termination of employment due to death or
Disability, except as set forth in this Section 8(b)(ii),
Executive shall have no further rights to any compensation or any
other benefits under this Agreement.
c. By
the Company Without Cause or Resignation by Executive for Good
Reason.
(i) The
Employment Term and Executive’s employment hereunder may be
terminated by the Company without Cause or by Executive’s
resignation for Good Reason.
(ii) For
purposes of this Agreement, “ Good Reason ”
shall mean, without Executive’s consent, (i) a
substantial diminution in Executive’s position or duties,
material adverse change in reporting lines, or assignment of duties
materially inconsistent with his
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position or
(ii) any reduction in Executive’s base salary and/or
material reduction in employee benefits in the aggregate provided
to Executive (excluding any general salary reduction or reduction
in employee benefits similarly affecting substantially all other
senior executives of the Company as a result of a material adverse
change in the Company’s prospects or business), in each case
which is not cured within 30 days following the
Company’s receipt of written notice from the Executive
describing the event constituting Good Reason.
(iii) If
Executive’s employment is terminated by the Company without
Cause (other than by reason of death or Disability) or if Executive
resigns for Good Reason, Executive shall be entitled to
receive:
(A) the
Accrued Rights;
(B) subject
to Executive’s (x) continued compliance with the
provisions of Sections 9 and 10 and (y) execution and delivery
of a general release of claims against the Company and its
affiliates in a form reasonably acceptable to the Company,
continued payment of the greater of the current Base Salary or
Executive’s highest Base Salary paid within the Employment
Term in accordance with the Company’s usual payment
practices, as in effect on the date of termination of
Executive’s employment, until the expiration of the otherwise
remaining portion of the Employment Term determined, for this
purpose only, as if such termination of employment and the
Employment Term had not occurred (the “ Severance
Period ”); and
(C) continued
coverage under the Company’s group health plans during the
Severance Period on the same basis as active employees of the
Company.
Following
Executive’s termination of employment by the Company without
Cause (other than by reason of Executive’s death or
Disability) or by Executive’s resignation for Good Reason,
except as set forth in this Section 8(c)(iii), Executive shall
have no further rights to any compensation or any other benefits
under this Agreement.
d.
Expiration of Employment Term .
(i)
Election Not to Renew the Employment Term . In the event
either party provides the other with the Non-Renewal Notice
pursuant to Section 1, unless Executive’s employment is
earlier terminated pursuant to paragraphs (a), (b) or
(c) of this Section 8, the expiration of the Employment
Term and the Executive’s termination of employment hereunder
(whether or not Executive continues as an employee of the Company
thereafter) shall be deemed to occur on the close of business on
the first anniversary of the delivery of such Non-Renewal Notice
and Executive shall be entitled to receive the Accrued
Rights.
Following
such termination of Executive’s employment hereunder, except
as set forth in this Section 8(d)(i), Executive shall have no
further rights to any compensation or any other benefits under this
Agreement.
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(ii)
Continued Employment Beyond the Expiration of the Employment
Term . Unless the parties otherwise agree in writing,
continuation of Executive’s employment with the Company
beyond the expiration of the Employment Term shall be deemed an
employment at-will and shall not be deemed to extend any of the
provisions of this Agreement and Executive’s employment may
thereafter be terminated at will by either Executive or the
Company; provided that the provisions of Sections 9, 10
and
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