SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT by and between Chart
Industries, Inc., a Delaware corporation (the "Company"), and John T. Romain
(the "Employee"), dated as of the 22nd day of May, 1996.
WITNESSETH:
WHEREAS, the Compensation Committee of the Board of Directors
of the Company (the "Committee"), has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will
have the continued dedication of the Employee, notwithstanding the possibility,
threat, or occurrence of a Change of Control (as defined below) of the Company;
and
WHEREAS, the Committee believes it is imperative to diminish
the inevitable distraction of the Employee by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control, to
encourage the Employee's full attention and dedication to the Company currently
and in the event of any threatened or pending Change of Control, and to provide
the Employee with compensation arrangements upon a Change of Control which
provide the Employee with individual financial security and which are
competitive with those of other corporations; and
WHEREAS, in order to accomplish these objectives, the
Committee has caused the Company to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. EFFECTIVE DATE OF THIS AGREEMENT.
1.1 (a) This Agreement shall become effective only upon the
Effective Date (as defined in Section 1.1(b)). Until such time, the Employee
shall have no rights against any person and no person shall have any obligations
to the Employee under or by virtue of this Agreement.
(b) The "Effective Date" shall be the first date during the
"Agreement Period" (as defined in Section 1.1(c)) on which a Change of Control
occurs. Anything in this Agreement to the contrary notwithstanding, if the
Employee's employment with the Company is terminated prior to the date on which
a Change of Control occurs, and it is reasonably demonstrated that such
termination (1) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2) otherwise arose in
connection with or anticipation of a Change of Control, then for all purposes of
this Agreement the "Effective Date" shall mean the date immediately prior to the
date of such termination.
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(c) The "Agreement Period" is the period commencing on the
date hereof and ending on the earlier to occur of (i) the first anniversary of
such date or (ii) the first day of the month next following the Employee's 65th
birthday (the "Normal Retirement Date"); PROVIDED, HOWEVER, that commencing on
the date one year after the date hereof, and on each annual anniversary of such
date (such date and each annual anniversary thereof is hereinafter referred to
as the "Renewal Date"), the Agreement Period shall be automatically extended so
as to terminate on the earlier of (x) one year from such Renewal Date or (y) the
first day of the month coinciding with or next following the Employee's Normal
Retirement Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice that the Agreement Period shall not be so extended.
1.2 For the purpose of this Agreement, a "Change of Control"
shall mean:
(i) The acquisition (other than from the Company)
by any person, entity or "group", within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act") (excluding, for this purpose, the Company or its
subsidiaries, or any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting securities
of the Company), of beneficial ownership, (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 40% or more of either the
then outstanding shares of common stock or the combined voting power
of the Company's then outstanding voting securities entitled to vote
generally in the election of directors; or
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election
or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating
to the election of the Directors of the Company, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) shall be, for purposes of this Agreement, considered as though
such person were a member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company
of a reorganization, merger, consolidation, in each case, with respect
to which persons who were the stockholders of the Company immediately
prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 60% of the combined voting power
entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company's then outstanding voting
securities, or a liquidation or dissolution of the Company or of the
sale of all or substantially all of the assets of the Company.
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Section 2. TERMINATION OF EMPLOYMENT.
2.1 TERMINATION BY THE COMPANY.
(a) COMPANY'S RIGHT TO TERMINATE. Subject to the Company's
obligations under Section 3 hereof subsequent to the Effective Date, the
Employee's employment with the Company may be terminated at any time without
cause.
(b) DEATH OR DISABILITY. This Agreement shall terminate
automatically upon the Employee's death. If the Company determines in good faith
that the Disability of the Employee has occurred (pursuant to the definition of
"Disability" set forth below), it may give to the Employee written notice of its
intention to terminate the Employee's employment. In such event, the Employee's
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Employee (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Employee shall not
have returned to full-time performance of the Employee's duties. For purposes of
this Agreement, "Disability" means disability which, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Employee or the Employee's
legal representative (such agreement as to acceptability not to be withheld
unreasonably).
(c) CAUSE. The Company may terminate the Employee's employment
for "Cause." For purposes of this Agreement, "Cause" means (i) an act or acts of
personal dishonesty taken by the Employee and intended to result in substantial
personal enrichment of the Employee at the expense of the Company or (ii) the
conviction of the Employee of a felony.
Section 2.2 TERMINATION BY THE EMPLOYEE.
The Employee's employment may be terminated by the Employee at
any time for any reason, in the Employee's sole discretion.
Section 2.3 NOTICE OF TERMINATION.
(a) NOTICE. Any termination by the Company or by the Employee
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 7(b) of this Agreement. 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) in the
case of a termination for Cause, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than fifteen (15) days after
the giving of such notice).
(b) DATE OF TERMINATION. "Date of Termination" means the date
of receipt of the Notice of Termination or any later date specified therein, as
the case may be; PROVIDED, HOWEVER, that (i) if the Employee's employment is
terminated by the Company other than for
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death or Disability, the Date of Termination shall be the date on which the
Company notifies the Employee of such termination and (ii) if the Employee's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Employee or the Disability
Effective Date, as the case may be.
Section 3. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
3.1 WITHOUT CAUSE. If, at any time prior to the earlier of (i)
the date that is 12 months subsequent to the Effective Date, or (ii) the
Employee's Normal Retirement Date (the "Salary Continuation Period"), the
Company shall terminate the Employee's employment other than for Cause,
Disability, or death or if the Employee shall terminate his employment:
(a) the Company shall continue to pay to the Employee
in accordance with its normal payroll practices the Employee's base
salary at an annual rate equal to the greater of the Employee's (i)
highest monthly base salary paid or payable by the Company during the
twelve-month period immediately preceding the Effective Date, or (ii)
the highest monthly salary paid or payable by the Company at any time
from the 90-day period preceding the Effective Date through the Date of
Termination (the "Highest Base Salary"), for the remainder of the
Salary Continuation Period.
(b) for the remainder of the Salary Continuation
Period, or such longer period as any plan, program, practice or policy
may provide, the Company shall continue to provide health insurance,
life insurance and retirement benefits to the Employee and/or the
Employee's family at least equal to those which would have been
provided to them if the Employee's employment had not been terminated,
in accordance with the most favorable plans, practices, programs or
policies of the Company and its subsidiaries during the 90-day period
immediately preceding the Effective Date or, if more favorable to the
Employee, as in effect at any time thereafter with respect to other key
employees and their families and for purposes of eligibility for
retirement benefits pursuant to such plans, practices, programs and
policies, the Employee shall be considered to have remained employed
until the end of the Salary Continuation Period and to have retired on
the last day of such period. Notwithstanding the foregoing, the
Employee shall have no right to participate in any bonus plan of the
Company subsequent to the Date of Termination.
3.2 DEATH. If the Employee's employment is terminated by
reason of the Employee's death, this Agreement shall terminate without further
obligations to the Employee's legal representatives under this Agreement, other
than those obligations accrued or earned and vested (if applicable) by the
Employee as of the Date of Termination, including, for this purpose (i) the
Employee's base salary at the Highest Base Salary rate through the Date of
Termination, and (ii) any accrued vacation pay not yet paid by the Company (such
amounts specified in clauses (i) and (ii) are hereinafter referred to as
"Accrued Obligations"). All such Accrued Obligations shall be paid to the
Employee's estate or beneficiary, as applicable, in a lump sum in cash within 30
days of the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, the Employee's family shall be entitled to receive benefits at
least equal to the most favorable benefits provided by the Company and any of
its subsidiaries to surviving
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families of employees of the Company and such subsidiaries under such plans,
programs, practices and policies relating to family death benefits, if any, in
accordance with the most favorable plans, programs, practices and policies of
the Company and its subsidiaries in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Employee
and/or the Employee's family, as in effect on the date of the Employee's death
with respect to other key employees of the Company and its subsidiaries and
their families.
3.3 DISABILITY. If the Employee's employment is terminated by
reason of the Employee's Disability, this Agreement shall terminate without
further obligations to the Employee, other than those obligations accrued or
earned and vested (if applicable) by the Employee as of the Date of Termination,
including for this purpose, all Accrued Obligations. All such Accrued
Obligations shall be paid to the Employee in a lump sum in cash within 30 days
of the Date of Termination. Anything in this Agreement to the contrary
notwithstanding, the Employee shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to the most
favorable of those provided by the Company and its subsidiaries to disabled
employees and/or their families in accordance with such plans, programs,
practices and policies relating to disability, if any, in accordance with the
most favorable plans, programs, practices and policies of the Company and its
subsidiaries in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Employee and/or the
Employee's family, as in effect at any time thereafter with respect to other key
employees of the Company and its subsidiaries and their families.
3.4 CAUSE. If the Employee's employment shall be terminated
for Cause, this Agreement shall terminate without further obligations to the
Employee.
Section 4. NON-EXCLUSIVITY OF RIGHTS.
Nothing in this Agreement shall prevent or limit the
Employee's continuing or future participation in any benefit, bonus, incentive
or other plans, programs, policies or practices, provided by the Company or any
of its subsidiaries and for which the Employee may qualify, nor shall anything
herein limit or otherwise affect such rights as the Employee may have under any
stock option or other agreements with the Company or any of its subsidiaries.
Amounts which are vested benefits or which the Employee is otherwise entitled to
receive under any plan, policy, practice or program of the Company or any of its
subsidiaries at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program.
Section 5. FULL SETTLEMENT.
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 the Employee or others. In no event
shall the Employee be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the
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Employee under any of the provisions of this Agreement, nor shall any amounts
actually paid to the Employee by any person for services rendered during the
Salary Continuation Period reduce the Company's payment obligations under
Section 3.1(a) hereof. The Company agrees to pay, to the full extent permitted
by law, all legal fees and expenses which the Employee may reasonably incur as a
result of any contest (regardless of the outcome thereof) by the Company or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof, plus in each case
interest at the applicable Federal rate provided for in Section 7872(f)(2) of
the Code.
Section 6. SUCCESSORS.
(a) This Agreement is personal to the Employee and without the
prior written consent of the Company shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee's legal
representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
Section 7. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EMPLOYEE:
John T. Romain
2700 Coventry Road
Shaker Heights, OH 44120
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IF TO THE COMPANY:
Chart Industries, Inc.
35555 Curtis Boulevard
Eastlake, Ohio 44095
Attention: Chairman and
Chief Executive Officer
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Employee's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such provision
or any other provision thereof.
(f) This Agreement contains the entire understanding of the
Company and the Employee with respect to the subject matter hereof.
(g) The Employee and the Company acknowledge that the
employment of the Employee by the Company is "at will", and, prior to the
Effective Date, may be terminated by either the Employee or the Company at any
time without any obligation under or by virtue of this Agreement. Upon a
termination of the Employee's employment or upon the Employee's ceasing to be an
officer of the Company, in each case, prior to the Effective Date, there shall
be no further rights under this Agreement.
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IN WITNESS WHEREOF, the parties have hereunto set their hands
as of the day and year first above written.
/s/ John T. Romain
-------------------------------
John T. Romain
Chart Industries, Inc.
By: /s/ Arthur S. Holmes
----------------------------
Arthur S. Holmes,
Chairman and Chief
Executive Officer
Attest: /s/ Thomas F. Mckee
-----------------------------
Thomas F. McKee,
Secretary
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