UNITED STATES

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) January 1, 2012

 

 

CHART INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-11442   34-1712937
(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification No.)

 

One Infinity Corporate Centre Drive, Suite 300,

Garfield Heights, Ohio

  44125
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (440) 753-1490

(Former name or former address, if changed since last report.)

 

 

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 (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ 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.

Amendments to Employment Agreements to Increase Base Salary Rates and Reduce Annual Incentive Bonus Targets

The Compensation Committee (the “Committee”) of the Board of Directors of Chart Industries, Inc. (the “Company”), in connection with its annual evaluation of executive compensation, and after considering the recommendations of independent compensation consultants engaged by the Committee, approved the amendment of the employment agreements of the Company’s named executive officers to adjust annual base salary rates (each, a “Base Salary”) and annual incentive bonus target amounts (each, a “Base Target”), effective as of January 1, 2012.

Under their employment agreements, each of the Company’s named executive officers is eligible to earn an annual incentive with a Base Target, at target performance levels, based upon a percentage of the named executive officer’s Base Salary, subject to the terms of the Company’s 2009 Incentive Compensation Plan (the “2009 Plan”). Any annual incentive bonus payment is determined solely based on performance against performance targets set in accordance with the 2009 Plan. Less or more than the annual cash incentive bonus amounts set forth below could be earned based on the Company’s actual performance.

The Base Salary and Base Target for each of the Company’s named executive officers have been adjusted as follows:

Chairman, Chief Executive Officer and President (“CEO”)

The Company has increased the Base Salary for its CEO from $650,000 to $700,000, and reduced the CEO’s Base Target from one hundred fifty percent (150%) of Base Salary to one hundred thirty percent (130%) of Base Salary. As such, the CEO could earn a cash incentive bonus of $910,000 for 2012 at target levels of performance. Target Total Cash Compensation (Base Salary plus target incentive bonus) that could be earned at target performance levels is $1,610,000 for 2012 compared to $1,625,000 for 2011.

Executive Vice President, Chief Financial Officer and Treasurer (“CFO”)

The Company has increased the Base Salary for its CFO from $300,000 to $365,000, and reduced the CFO’s Base Target from one hundred percent (100%) of Base Salary to ninety percent (90%) of Base Salary. As such, the CFO could earn a cash incentive bonus of $328,500 for 2012 at target levels of performance. Target Total Cash Compensation that could be earned at target performance levels is $693,500 for 2012 compared to $600,000 for 2011.

Vice President, General Counsel and Secretary (“GC”)

The Company has increased the Base Salary for its GC from $255,150 to $295,000, and reduced the GC’s Base Target from seventy five percent (75%) of Base Salary to sixty five percent (65%) of Base Salary. As such, the GC could earn a cash incentive bonus of $191,750 for 2012 at target levels of performance. Target Total Cash Compensation that could be earned at target performance levels is $486,750 for 2012 compared to $446,513 for 2011.

Vice President, Chief Accounting Officer and Controller (“CAO”)

The Company has increased the Base Salary for its CAO from $186,000 to $210,000, and reduced the CAO’s Base Target from sixty five

 

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percent (65%) of Base Salary to sixty percent (60%) of Base Salary. As such, the CAO could earn a cash incentive bonus of $126,000 for 2012 at target levels of performance. Target Total Cash Compensation that could be earned at target performance levels is $336,000 for 2012 compared to $306,900 for 2011.

The actual amount of annual incentive compensation that could possibly be earned by the named executive officers may be higher or lower than the amounts described herein depending upon the Company’s actual performance as compared to preestablished goals.

The changes in Target Total Cash Compensation for the Company’s named executive officers correspondingly impact certain other potential payments that could be due under their employment agreements upon termination of the named executive officer’s employment by the Company without cause or by the named executive officer upon resignation for good reason, including after a change in control of the Company, as these potential payments are based on multiples of Target Total Cash Compensation.

The Committee made these changes, in consultation with its independent compensation consultant, as part of a shift towards alignment with median market practices for all elements of named executive officer compensation. The compensation changes are intended to enhance the competitiveness of base salaries relative to market median, within an overall performance-based compensation philosophy. The changes do not impact 2011 annual incentive bonus determinations, and all other material terms of the employment agreements for the Company’s named executive officers remain in effect under the amended employment agreements.

Leveraged Restricted Share Unit Agreements

The Committee also approved a form of Leveraged Restricted Share Unit (“LRSU”) Agreement to be used to grant leveraged restricted share units from time to time to key employees under the Company’s 2009 Omnibus Equity Plan (the “Omnibus Equity Plan”). In connection with the approval of the LRSU Agreement, the Committee approved the following grants of LRSUs to the Company’s named executive officers on January 3, 2012:

 

Name and Title

   Target Number of LRSUs  

Samuel F. Thomas, Chairman, Chief Executive Officer and President

     8,840   

Michael F. Biehl, Executive Vice President, Chief Financial Officer and Treasurer

     2,410   

Matthew J. Klaben, Vice President, General Counsel and Secretary

     1,240   

Kenneth J. Webster, Vice President, Chief Accounting Officer and Controller

     630   

Under the LRSU Agreement, the grantee will receive a target award of LRSUs set forth above, which are performance-based restricted stock units that vest based on the future price of the Company’s common stock relative to the price at the time of grant. Each LRSU represents the right to receive one share of the Company’s common stock subject to satisfaction of the vesting requirements set forth in the LRSU Agreement. In addition, the grantee is also entitled to dividend equivalents, paid out in shares of common stock, upon the vesting of the LRSUs, to the extent the Company should pay dividends on its common stock. The LRSUs generally vest on the third anniversary of the date of grant. The shares of common stock and dividend equivalents, if any, subject to the LRSUs will be paid to the grantee within 30 days of the vesting date.

 

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The number of LRSUs that vest upon such date will be based on the Company’s “absolute share price change” as of the vesting date. The “absolute share price change” will be determined by subtracting the twenty-day-average closing price of one share of the Company’s common stock as of the date of grant from the twenty-day average closing price per share as of the vesting date and then dividing that number by the twenty-day-average closing price per share as of the date of grant. The absolute share price change, therefore, generally represents the percentage increase or decrease of the price of the Company’s common stock between the date of grant and the vesting date. If the absolute share price change is 100% or greater (i.e., the stock price has doubled), then 150% of the target number of LRSUs will vest. If the absolute share price change is 0%, then the target number of LRSUs will vest. If the absolute share price change is negative 50% or less, then 50% of the LRSUs will vest. The vesting of the LRSUs will be interpolated on a straight-line basis between these points.

If the grantee dies, becomes disabled or retires with the Committee’s approval prior to the vesting date, then the grantee will vest in 50% of the target number of LRSUs upon such event. The grantee will receive payment for this portion of his or her LRSUs and their related dividend equivalents, if any, within 30 days of his or her termination of employment, subject to any delay that may be required under Section 409A of the Internal Revenue Code. In addition, a pro-rated amount of the grantee’s remaining LRSUs will vest, subject to the vesting formula using the absolute share price change (as described above), on the original vesting date. Any payment made for this remaining pro-rated portion of the grantee’s LRSUs will be paid within 30 days of the original vesting date.

If the grantee’s employment with the Company terminates for any reason other than his or her death, disability or retirement with the Committee’s approval prior to the vesting date, the grantee will forfeit his or her rights to the LRSUs and their related dividend equivalents, if any, and will not receive any payments with respect to the LRSUs.

If there is a change in control of the Company prior to the vesting date, then the grantee will become vested in the greater of the target number of LRSUs or the number of LRSUs that would vest in accordance with the absolute share price formula described above. The grantee will receive payment for the LRSUs and their related dividend equivalents, if any, within 30 days following the date of the change in control. For purposes of the LRSU Agreement, a “change in control” of the Company must be Change in Control, as defined in the Omnibus Equity Plan and a “change in control event” as defined under Section 409A of the Internal Revenue Code.

 

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit

 

10.1 Amendment No. 3, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Samuel F. Thomas.

 

10.2 Amendment No. 2, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Michael F. Biehl.

 

10.3 Amendment No. 2, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Matthew J. Klaben.

 

10.4 Amendment No. 3, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Kenneth J. Webster.

 

10.5 Form of Leveraged Restricted Share Unit Agreement.

 

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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.

 

    Chart Industries, Inc.
Date: January 5, 2012     By:   /s/ Matthew J. Klaben
      Matthew J. Klaben
      Vice President, General Counsel and Secretary

 

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EXHIBIT INDEX

 

Exhibit No.

  

Description

10.1    Amendment No. 3, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Samuel F. Thomas.
10.2    Amendment No. 2, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Michael F. Biehl.
10.3    Amendment No. 2, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Matthew J. Klaben.
10.4    Amendment No. 3, dated January 1, 2012, to the Employment Agreement dated February 26, 2008 by and between Chart Industries, Inc. and Kenneth J. Webster.
10.5    Form of Leveraged Restricted Share Unit Agreement.

 

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Exhibit 10.1

CHART INDUSTRIES, INC.

AMENDMENT NO. 3

TO

EMPLOYMENT AGREEMENT

This Amendment No. 3 (the “Amendment”) to the Employment Agreement, dated February 26, 2008 and subsequently amended effective January 1, 2009 and January 1, 2010 (the “Agreement”), by and between Chart Industries, Inc. (the “Company”) and Samuel F. Thomas (“Executive”), is effective January 1, 2012.

WITNESSETH:

WHEREAS, the Company and the Executive desire to amend the Agreement; and

WHEREAS, the parties reserved the right to amend the Agreement pursuant to Section 13.c thereof.

NOW, THEREFORE, pursuant to Section 13.c of the Agreement, and effective as of January 1, 2012, the parties hereby amend the Agreement as follows:

1. In Section 3 of the Agreement, delete the dollar amount “$600,000” and replace with “$700,000”.

2. In Section 4 of the Agreement delete the phrase “of one hundred fifty percent (150%) of the Executive’s Base Salary (with it being understood that one hundred fifty percent (150%) of the Executive’s Base Salary is the “Target”)” in its entirety and replace it with “of one hundred thirty percent (130%) of the Executive’s Base Salary (with it being understood that one hundred thirty percent (130%) of the Executive’s Base Salary is the “Target”)”.

3. Except as set forth herein, the Agreement is not modified or amended.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment.

 

CHART INDUSTRIES, INC.     SAMUEL F. THOMAS
(“Company”)     (“Executive”)

By:

  /s/ Mark H. Ludwig     /s/ Samuel F. Thomas

Name:

  Mark H. Ludwig    

Title:

  Vice President – Human Resources    

Exhibit 10.2

CHART INDUSTRIES, INC.

AMENDMENT NO. 2

TO

EMPLOYMENT AGREEMENT

This Amendment No. 2 (the “Amendment”) to the Employment Agreement, dated February 26, 2008 and subsequently amended effective January 1, 2009 (the “Agreement”), by and between Chart Industries, Inc. (the “Company”) and Michael F. Biehl (“Executive”), is effective January 1, 2012.

WITNESSETH:

WHEREAS, the Company and the Executive desire to amend the Agreement; and

WHEREAS, the parties reserved the right to amend the Agreement pursuant to Section 13.c thereof.

NOW, THEREFORE, pursuant to Section 13.c of the Agreement, and effective as of January 1, 2012, the parties hereby amend the Agreement as follows:

1. In Section 3 of the Agreement, delete the dollar amount “$262,150” and replace with “$365,000”.

2. In Section 4 of the Agreement delete the phrase “of one hundred percent (100%) of the Executive’s Base Salary (with it being understood that one hundred percent (100%) of the Executive’s Base Salary is the “Target”)” in its entirety and replace it with “of ninety percent (90%) of the Executive’s Base Salary (with it being understood that ninety percent (90%) of the Executive’s Base Salary is the “Target”)”.

3. Except as set forth herein, the Agreement is not modified or amended.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment.

 

CHART INDUSTRIES, INC.     MICHAEL F. BIEHL
(“Company”)     (“Executive”)

By:

  /s/ Mark H. Ludwig     /s/ Michael F. Biehl

Name:

  Mark H. Ludwig    

Title:

  Vice President – Human Resources    

Exhibit 10.3

CHART INDUSTRIES, INC.

AMENDMENT NO. 2

TO

EMPLOYMENT AGREEMENT

This Amendment No. 2 (the “Amendment”) to the Employment Agreement, dated February 26, 2008 and subsequently amended effective January 1, 2009 (the “Agreement”), by and between Chart Industries, Inc. (the “Company”) and Matthew J. Klaben (“Executive”), is effective January 1, 2012.

WITNESSETH:

WHEREAS, the Company and the Executive desire to amend the Agreement; and

WHEREAS, the parties reserved the right to amend the Agreement pursuant to Section 13.c thereof.

NOW, THEREFORE, pursuant to Section 13.c of the Agreement, and effective as of January 1, 2012, the parties hereby amend the Agreement as follows:

1. In Section 3 of the Agreement, delete the dollar amount “$210,000” and replace with “$295,000”.

2. In Section 4 of the Agreement delete the phrase “of seventy-five percent (75%) of the Executive’s Base Salary (with it being understood that seventy-five percent (75%) of the Executive’s Base Salary is the “Target”)” in its entirety and replace it with “of sixty-five percent (65%) of the Executive’s Base Salary (with it being understood that sixty-five percent (65%) of the Executive’s Base Salary is the “Target”)”.

3. Except as set forth herein, the Agreement is not modified or amended.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment.

 

CHART INDUSTRIES, INC.     MATTHEW J. KLABEN
(“Company”)     (“Executive”)

By:

  /s/ Mark H. Ludwig     /s/ Matthew J. Klaben

Name:

  Mark H. Ludwig    

Title:

  Vice President – Human Resources    

Exhibit 10.4

CHART INDUSTRIES, INC.

AMENDMENT NO. 3

TO

EMPLOYMENT AGREEMENT

This Amendment No. 3 (the “Amendment”) to the Employment Agreement, dated February 26, 2008 and subsequently amended effective January 1, 2009 and June 1, 2010 (the “Agreement”), by and between Chart Industries, Inc. (the “Company”) and Kenneth J. Webster (“Executive”), is effective January 1, 2012.

WITNESSETH:

WHEREAS, the Company and the Executive desire to amend the Agreement; and

WHEREAS, the parties reserved the right to amend the Agreement pursuant to Section 13.c thereof.

NOW, THEREFORE, pursuant to Section 13.c of the Agreement, and effective as of January 1, 2012, the parties hereby amend the Agreement as follows:

1. In Section 3 of the Agreement, delete the dollar amount “$180,000” and replace with “$210,000”.

2. In Section 4 of the Agreement delete the phrase “of sixty-five percent (65%) of the Executive’s Base Salary (with it being understood that sixty-five percent (65%) of the Executive’s Base Salary is the “Target”)” in its entirety and replace it with “of sixty percent (60%) of the Executive’s Base Salary (with it being understood that sixty percent (60%) of the Executive’s Base Salary is the “Target”)”.

3. Except as set forth herein, the Agreement is not modified or amended.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment.

 

CHART INDUSTRIES, INC.       KENNETH J. WEBSTER
(“Company”)     (“Executive”)

By:

  /s/ Mark H. Ludwig     /s/ Kenneth J. Webster

Name:

  Mark H. Ludwig    

Title:

  Vice President – Human Resources        

Exhibit 10.5

CHART INDUSTRIES, INC.

2009 OMNIBUS EQUITY PLAN

LEVERAGED RESTRICTED SHARE UNIT AGREEMENT

THIS LEVERAGED RESTRICTED SHARE UNIT AGREEMENT (the “ Agreement ”), is entered into as of this             day of             , 20            (the “ Grant Date ”), by and between Chart Industries, Inc., a Delaware corporation (the “ Company ”), and             (the “ Grantee ”).

WITNESSETH :

WHEREAS , the Compensation Committee of the Board of Directors of the Company (the “ Committee ”) administers the Chart Industries, Inc. 2009 Omnibus Equity Plan (the “ Plan ”); and

WHEREAS , the Committee desires to provide the Grantee with Leveraged Restricted Share Units under the Plan upon the terms and conditions set forth in this Agreement.

NOW , THEREFORE , the Company and the Grantee agree as follows:

1. Definitions . Unless the context otherwise indicates, the following words used herein shall have the following meanings wherever used in this Agreement:

 

  (a) Absolute Share Price Change ” means a ratio, expressed as a percentage, determined by the following formula:

 

  Absolute Share Price Change = (X-Y) divided by (Y)

Wherein,

 

  X = the Share price on the third anniversary of the Grant Date; and

 

  Y = the Share price on the Grant Date.

The above ratio shall be subject to adjustment in accordance with Section 3.4 of the Plan. The Share price on any given day shall be the average daily closing price for the Shares over the twenty-trading-day period ending on that day, based on reported closing prices for the Shares for the twenty trading days (on which the Shares traded regular way in the market) ending on that day (or, if that day is not a trading day on which the Shares traded regular way in the market, then ending on the last trading day on which the Shares traded regular way in the market immediately preceding that day).


  (b) Change in Control ” means a change in control that is both a Change in Control as defined in Section 12.1 of the Plan and a “change in control event” (as defined in Treasury Regulation Section 1.409A-3(i)(5)(i)) for purposes of Section 409A of the Code.

 

  (c) Disability ” means, with respect to the Grantee, a medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months which: (i) renders the Grantee unable to engage in substantial gainful activity or (ii) results in the Grantee receiving income replacement benefits for at least three months under an accident and health plan sponsored by the Grantee’s employer.

 

  (d) Retirement ” or variations thereof means, with respect to the Grantee, a voluntary termination of Employment with the Company, its Subsidiaries and its Affiliates, under circumstances indicative of retirement in the sole discretion of the Committee after attaining age 60 and completing 10 years of service with such entities.

Notwithstanding this Section, and unless otherwise specified in the Agreement, capitalized terms shall have the meanings attributed to them under the Plan.

2. Grant of Restricted Share Units . As of the Grant Date, the Company grants to the Grantee, upon the terms and conditions set forth in this Agreement, a target number of (            ) (the “ Target Number ”) Restricted Share Units (the “ RSUs ”). The actual number of RSUs that Vest, if any, is subject to adjustment upward or downward from the Target Number pursuant to the vesting schedule and requirements set forth in Section 4 below. The Restricted Share Units are granted in accordance with, and subject to, all the terms, conditions and restrictions of the Plan, which is hereby incorporated by reference in its entirety. The RSUs give the Grantee the right to receive one (1) Share for each RSU subject to the satisfaction of the vesting requirements set forth in this Agreement. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern. The Grantee irrevocably agrees to, and accepts, the terms, conditions and restrictions of the Plan and this Agreement on his own behalf and on behalf of any beneficiaries, heirs, legatees, successors and assigns.

3. Restrictions on Transfer of Restricted Share Units . The Grantee and his or her beneficiaries, heirs, legatees, successors and assigns cannot sell, transfer, assign, pledge, hypothecate or otherwise directly or indirectly dispose of the Restricted Share Units (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) or any interest therein.

4. Restriction Period .

 

  (a)

General . Subject to the Grantee’s continued Employment with the Company or its Affiliates as of the third anniversary of the Grant Date (the

 

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  Vesting Date ”) (except as otherwise provided herein with respect to death, Disability, Retirement with the Committee’s approval or Change in Control), a percentage of the Target Number of RSUs, together with any dividend equivalents credited pursuant to Section 7(b) below, shall Vest based on the Absolute Share Price Change as of the Vesting Date in accordance with the following schedule:

 


Absolute Share Price Change

  

Percent of Target Number of

RSUs Vested*

Greater than or equal to 100%    150%
75%    137.5%
50%    125%
0%    100%
(-25)%,    75%
Less than or equal to (-50)%    50%

 

 

* The Vesting of the RSUs under the vesting chart above shall be interpolated on a straight-line basis upward and downward based on the data points set forth above, but in no event shall be greater than 150% or less than 50%. For example, if the Absolute Share Price Change as of the Vesting Date is 60%, then 130% of the Target Number of RSUs will vest.

 

  (b) Death or Disability or Retirement with Committee’s Approval . If, prior to the Vesting Date or a Change in Control, the Grantee dies or the Grantee’s Employment with the Company and its Affiliates terminates due to Disability or as a result of the Grantee’s Retirement with the Committee’s approval, then:

 

  (i) 50% of the Target Number of RSUs, together with any dividend equivalents credited with respect to such Target Number of RSUs pursuant to Section 7(b) below, shall immediately Vest as of the date of the Grantee’s termination of Employment; and

 

  (ii) an additional pro-rated number of RSUs will Vest as of the earlier of the Vesting Date or the date of a Change in Control in accordance with the applicable vesting provision set forth in Section 4(a) (with respect to Vesting that occurs on the Vesting Date) or Section 4(c) (with respect to Vesting that occurs on a Change in Control). The pro-rated number of RSUs shall be determined by the following formula:

(x) multiplied by (y)  minus 50% of the Target Number of RSUs, where:

 

  (x)

is the number of RSUs that would have otherwise Vested under Section 4(a) (with respect to Vesting that occurs on

 

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  the Vesting Date) or Section 4(c) (with respect to Vesting that occurs on a Change in Control) if the Grantee had remained employed with the Company until the Vesting Date; and

 

  (y) is the number of months that the Grantee was employed (rounded up to the nearest whole number) from the Grant Date until the date of his or her termination of Employment divided by 36.

 

  (c) Change in Control . In the event of a Change in Control of the Company prior to the Vesting Date, subject to the Grantee’s continuous Employment from the Grant Date through the date of the consummation of the Change in Control (other than with respect to a termination of Employment described in Section 4(b) above), a number of RSUs (calculated in accordance with the following sentence), together with any dividend equivalents credited pursuant to Section 7(b) below, shall immediately become fully Vested as of the date of the Change in Control. The number of RSUs that become fully Vested pursuant to this Section 4(c) shall equal the greater of either: (i) the Target Number or (ii) the number of RSUs that would Vest pursuant to Section 4(a) above if the “Vesting Date” for purposes thereof were the date immediately preceding date of the consummation of the Change in Control.

5. Forfeiture . If the Committee determines in its sole and exclusive discretion that the Grantee’s Employment with the Company, its Subsidiaries and Affiliates has terminated prior to the Vesting Date for reasons other than those described in Section 4(b) above or prior to the occurrence of a Change in Control in Section 4(c) above, the Grantee will forfeit all of the RSUs, together with any dividend equivalents credited pursuant to Section 7(b) below, and any right to receive Shares under this Agreement with respect to such unvested RSUs and the Grantee will have no further interests under this Agreement. In addition, to the extent that the number of RSUs that Vest is reduced below the Target Number pursuant to Section 4(a) above or pro-rated pursuant to Section 4(b) above, the Grantee will forfeit any RSUs that are not Vested due to such reduction or pro-ration and any right to receive Shares under this Agreement with respect to such unvested RSUs together with any dividend equivalents credited with respect to such forfeited RSUs pursuant to Section 7(b) below.

6. Payment and Issuance of Common Shares . Subject to Section 26 below and the following sentence, the Company will deliver to the Grantee (or his or her beneficiary or beneficiaries) the Shares to which the Grantee is then entitled under this Agreement (including any Shares to which the Grantee is entitled as a result of dividend equivalents credited pursuant to Section 7(b) below) free and clear of any restrictions (except any applicable securities law restrictions) in a lump sum no later than 30 days following the first to occur of: (a) the Vesting Date under Section 4(a) above or (b) the date of the consummation of a Change in Control of the Company (each, a “ Payment Date ”). Notwithstanding the foregoing, if 50% of the Target Number of RSUs vest in accordance with Section 4(b)(i) above due to the Grantee’s death,

 

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Disability or Retirement with the Committee’s approval, then the Payment Date with respect to such RSUs, and any related dividend equivalents, shall be the date of the Grantee’s termination of Employment and the Company shall deliver to the Grantee (or his or her beneficiary or beneficiaries) the Shares with respect to such RSUs no later than 30 days following the date of the Grantee’s termination of Employment. Any otherwise Vested fractional Shares remaining as of a Payment Date shall be eliminated and cancelled.

7. Stockholder Rights .

 

  (a) Voting Rights . The Grantee will not have any Stockholder rights, including voting rights, with respect to the RSUs unless and until the RSUs are Vested and Shares have actually been issued to the Grantee.

 

  (b) Dividend Equivalents . If on any date prior to a Payment Date the Company shall pay any cash dividend on the Shares (with a record date after the Grant Date), then the Company shall credit on the books and records of the Company and the Grantee shall be entitled to receive, on the Payment Date, a number of Shares equal to: (a) the Target Number of RSUs multiplied by (b) the per Share amount of such cash dividend and divided by (c) the Fair Market Value of a Share on the dividend record date. In the case of any dividend declared on Shares (with a record date after the Grant Date) that is payable in the form of Shares, the Company shall credit to the Grantee’s bookkeeping account and the Grantee shall be granted, as of the Payment Date, a number of additional Shares (rounded down to the next whole Share) equal to: (x) the Target Number of RSUs, multiplied by (y) the number of Shares (including any fraction thereof) payable as a dividend on a Share. Notwithstanding the foregoing, if, pursuant to Section 4(a) above, the number of RSUs that Vest as of the Vesting Date is less than or greater than the Target Number, then the number of Shares the Grantee becomes entitled to receive with respect to dividend equivalents provided under this Section 7(b) shall be adjusted downward or upward, respectively, in accordance with the calculations provided in the vesting schedule in Section 4(a) above.

8. Designation of Beneficiary . By properly executing and delivering a Designation of Beneficiary Form to the Company, the Grantee may designate an individual or individuals as his or her beneficiary or beneficiaries with respect to his or her interest under this Agreement. If the Grantee fails to properly designate a beneficiary, his or her interests under this Agreement will pass to the person or persons in the first of the following classes (who shall be deemed a beneficiary or beneficiaries) in which there are any survivors: (i) spouse at the time of death; (ii) issue, per stirpes ; (iii) parents; and (iv) the estate. Except as the Company may determine in its sole and exclusive discretion, a properly completed Designation of Beneficiary Form shall be deemed to revoke all prior designations with respect to this Agreement (or, if the form so provides, the Plan) upon its receipt and approval by the designated representative of the Company.

9. Non-Transferability of Shares; Legends . Upon the acquisition of any Shares

 

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pursuant to this Agreement, if the Shares have not been registered under the Securities Act of 1933, as amended (the “Act”), they may not be sold, transferred or otherwise disposed of unless a registration statement under the Act with respect to the Shares has become effective or unless the Grantee establishes to the satisfaction of the Company that an exemption from such registration is available. The Shares will bear a legend stating the substance of such restrictions, as well as any other restrictions the Committee deems necessary or appropriate. In addition, the Grantee will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws or this Agreement.

10. Effect of Corporate Reorganization or Other Changes Affecting Number or Kind of Shares . The provisions of this Agreement will be applicable to the RSUs, Shares or other securities, if any, which may be acquired by the Grantee related to the RSUs as a result of any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, redesignation, reclassification, merger, consolidation, liquidation, split-up, reverse split, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or other similar corporate transaction or event. Subject to Section 3.4 of the Plan, the Committee may appropriately adjust the number and kind of RSUs or Shares described in this Agreement to reflect such a change.

11. Plan Administration . The Plan is administered by the Committee, which has sole and exclusive power and discretion to interpret, administer, implement and construe the Plan and this Agreement. All elections, notices and correspondence relating to the Plan should be directed to the Secretary at:

Chart Industries, Inc.

One Infinity Corporate Centre, Suite 300

Garfield Heights, OH 44125

Attn.: Secretary

12. Notices . Any notice relating to this Agreement intended for the Grantee will be sent to the address appearing in the personnel records of the Company, its Affiliate or its Subsidiary. Either party may designate a different address in writing to the other. Any notice shall be deemed effective upon receipt by the addressee.

13. Termination of Agreement . This Agreement will terminate on the earliest of: (a) the date of termination of the Grantee’s Employment for reasons other than those provided in Section 4(b) above; (b) the date that Shares, if any, are delivered to the Grantee (or his or her beneficiary or beneficiaries); or (c) the date any termination of this agreement made pursuant to Section 23 below becomes effective. Any terms or conditions of this Agreement that the Company determines are reasonably necessary to effectuate its purposes will survive the termination of this Agreement. Without limiting the generality of the foregoing, the termination of this Agreement will not affect any obligation the Grantee may have, as determined by the

 

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Committee in its sole discretion, under any recoupment or “clawback” policy adopted by the Company.

14. Successors and Legal Representatives . This Agreement will bind and inure to the benefit of the Company and the Grantee and their respective heirs, beneficiaries, executors, administrators, estates, successors, assigns and legal representatives.

15. Integration . This Agreement, together with the Plan, constitutes the entire agreement between the Grantee and the Company with respect to the subject matter hereof and may not be modified, amended, renewed or terminated, nor may any term, condition or breach of any term or condition be waived, except pursuant to the terms of the Plan or Section 23 below or by a writing signed by the person or persons sought to be bound by such modification, amendment, renewal, termination or waiver. Any waiver of any term, condition or breach thereof will not be a waiver of any other term or condition or of the same term or condition for the future, or of any subsequent breach.

16. Separability . In the event of the invalidity of any part or provision of this Agreement, such invalidity will not affect the enforceability of any other part or provision of this Agreement.

17. Incapacity . If the Committee determines that the Grantee is incompetent by reason of physical or mental disability or a person incapable of handling his or her property, the Committee may deal directly with or direct any payment to the guardian, legal representative or person having the care and custody of the incompetent or incapable person. The Committee may require proof of incompetence, incapacity or guardianship, as it may deem appropriate before making any payment. In the event of a payment, the Committee will have no obligation thereafter to monitor or follow the application of the amounts so paid. Payments pursuant to this paragraph shall completely discharge the Company with respect to such payments.

18. No Further Liability . The liability of the Company, its Affiliates, and its Subsidiaries under this Agreement is limited to the obligations set forth herein and no terms or provisions of this Agreement shall be construed to impose any liability on the Company, its Affiliates, its Subsidiaries or the Committee in favor of any person or entity with respect to any loss, cost, tax or expense which the person or entity may incur in connection with or arising from any transaction related to this Agreement.

19. Section Headings . The section headings of this Agreement are for convenience and reference only and are not intended to define, extend or limit the contents of the sections.

20. No Right to Continued Employment . Nothing in this Agreement will be construed to confer upon the Grantee the right to continue in the employment or service of the Company, its Subsidiaries or Affiliates, or to be employed or serve in any particular position therewith, or affect any right which the Company, its Subsidiaries or an Affiliate may have to terminate the Grantee’s employment or service with or without cause.

 

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21. Governing Law . Except as may otherwise be provided in the Plan, this Agreement will be governed by, construed and enforced in accordance with the internal laws of the State of Delaware, without giving effect to its principles of conflict of laws.

22. Signature in Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures were upon the same instrument.

23. Amendment . The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate this Agreement, but no such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination shall materially adversely affect the rights of the Grantee hereunder without the consent of the Grantee; provided, however , that the Grantee’s consent shall not be required to an amendment that is deemed necessary or appropriate by the Company to ensure (a) compliance with (or exemption from) Section 409A of the Code; (b) compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any regulations promulgated thereunder (the “ Dodd-Frank Act ”); or (c) compliance with the terms of any recoupment or “clawback” policy the Company adopts to comply with the requirements of the Dodd-Frank Act or any regulations promulgated thereunder (even if the terms of that policy are broader than the requirements of the Dodd-Frank Act).

24. Withholding . The Grantee may be required to pay to the Company or any Affiliate and the Company or any Affiliate shall have the right and is hereby authorized to withhold, any applicable withholding taxes in respect of the RSUs or payment of Shares thereunder, or any payment or transfer under or with respect to the RSUs or Shares and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes. The Grantee may elect, pursuant to a separate election form, to cover withholding taxes under this Award by (a) delivering Shares, provided that such Shares have been held by the Grantee for more than six (6) months or (b) having the Company withhold Shares from this Award, in each case with a Fair Market Value equal to the amount required to satisfy the minimum tax withholding obligations applicable to Grantee relating to this Award.

25. Section 409A of the Code . This Agreement, together with the Plan, constitutes the entire agreement between the parties with respect to the subject matter hereof. The parties intend that this Agreement be, at all relevant times, compliant with (or exempt from) Section 409A of the Code and all other applicable laws, and, if the Grantee’s interests hereunder are subject to Section 409A of the Code, this Agreement shall be so interpreted and administered. In addition to the general amendment rights of the Company with respect to the Plan, the Company specifically retains the unilateral right (but not the obligation) to make, prospectively or retroactively, any amendment to this Agreement or any related document as it deems necessary or desirable to more fully address issues in connection with compliance with (or exemption from) Section 409A of the Code and other laws. In no event, however, shall this section or any other provisions of this Agreement be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or payments under, this Agreement. Except as may be provided in another agreement to which the Company is bound, the Company and its

 

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Affiliates shall have no responsibility for tax or legal consequences to the Grantee (or the Grantee’s beneficiaries) resulting from the terms or operation of this Agreement or the Plan.

26. Six-Month Delay in Payment . Notwithstanding anything in this Agreement to the contrary, if at the time of the Grantee’s termination of Employment with the Company, the Grantee’s interests hereunder are subject to Section 409A of the Code and the Grantee is a “specified employee” as defined in Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of Employment is necessary in order to prevent the imposition of any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Grantee) until the date that is six (6) months following the Grantee’s termination of Employment with the Company (or the earliest date as is permitted under Section 409A of the Code).

 

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IN WITNESS WHEREOF , the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and the Grantee has hereunto set his hand.

Grantee     Chart Industries, Inc.
       

By:

     

Print Name:

       

Its:

   

Date:

       

Date:

   

 

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