EXHIBIT 10.2

 

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Chart Industries, Inc.

Corporate Headquarters

 

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February 24, 2003

     

5885 Landerbrook Drive

Cleveland, OH 44124

Phone: 440 753 1490 Fax: 440 753 1491

Administrative Office Fax: 440 442 5253

www.chart-ind com

 

Mr. Charles R. Lovett

Chart Industries, Inc.

3505 County Road 42 West

Burnsville, MN 55306

 

Re: Chart’s Enhanced Severance Benefit Plan

 

Dear Chip:

 

On behalf of Chart, I am pleased to inform you that you are now a participant in
Chart’s Enhanced Severance Benefit Plan (the “Enhanced Severance Plan”). In
light of the turbulent markets, restructuring activities and other volatile
business conditions that continue to confront the company, Chart recognizes the
critical importance of retaining its key employees who are vital to Chart’s
future success. Thus, the Compensation Committee of Chart’s Board of Directors
has approved the Enhanced Severance Plan for certain key employees to augment
their severance benefits beyond those available under Chart’s regular severance
benefit program. This letter sets forth the terms of the Enhanced Severance Plan
and Chart’s commitment to you as a participant in the same.

 

1.   Continuation Period and Enhanced Severance Benefits.

 

Under the Enhanced Severance Plan, you are now entitled to enhanced severance
benefits for a total of 12 months after termination of your employment (the
“Continuation Period”) on the terms described in this letter (the “Enhanced
Severance Benefits”).

 

2.   Coverage Period and Participation Terms.

 

  A.   General Terms of Enhanced Severance Plan.

 

You will be entitled to receive the Enhanced Severance Benefits described in
Section 3 below for the duration of the Continuation Period if Chart terminates
your employment “Without Good Cause” (as defined below) during the period of
time commencing on February 6, 2003 and ending at midnight on June 30, 2004 (the
“Coverage Period”). If your employment is terminated following the expiration of
the Coverage Period, you will be entitled only to Chart’s then-existing regular
severance benefits. Chart’s Board of Directors may extend the Coverage Period in
its sole discretion. You should note that this Enhanced Severance Plan is not a
guarantee of employment, and Chart may terminate your employment at any time as
long as Chart provides any severance benefits to which are entitled under this
Enhanced Severance Plan or any agreement or other arrangement applicable to you.

 

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  B.   Definitions and Related Matters.

 

“Without Good Cause” means a termination of your employment by Chart for any
reason other than 1) for Good Cause (as defined below), 2) as a result of your
Disability (as defined below) or 3) as a result of your death. Any voluntary
termination of your employment by you for any reason shall not be considered a
termination of your employment Without Good Cause. This Enhanced Severance Plan
does not provide severance benefits if (a) your employment is terminated as a
result of your death, Disability or your voluntary termination or (b) your
employment is terminated for Good Cause.

 

“Good Cause” means any one of the following events has occurred and has not been
cured by you within 60 calendar days after the individual to whom you report has
given you written notice thereof: 1) You have been indicted by a state or
federal grand jury of committing a felony; 2) you have committed an act or acts
of personal dishonesty intended to result in your substantial personal
enrichment at the expense of Chart or its subsidiaries; or 3) you grossly
neglected your duties, which neglect had a significant adverse affect on Chart
or its business. Any termination by Chart of your employment for Good Cause will
be communicated by a written notice to you, which will set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
your employment for Good Cause and specify the effective date of the termination
of your employment (which will not be earlier than the date on which the notice
is given).

 

“Disability” means your inability for a continuous period of six months to
perform the essential functions of your position 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 Chart and you to the effect that
you are or have been disabled and incapable of performing the essential
functions of your position with or without reasonable accommodations for Chart
as previously performed shall be conclusive of the fact that you are incapable
of performing such services and are, or have been, disabled for the purposes of
this Enhanced Severance Plan. By participating in this plan, you acknowledge and
agree that the essential functions of your position are unique and critical to
Chart and that a disability condition that causes you to be unable to perform
the essential functions of your position under the circumstances described above
will constitute an undue hardship on Chart.

 

3.   Enhanced Severance Benefits.

 

The Enhanced Severance Benefits provided for under this Enhanced Severance Plan
are intended to augment (but not duplicate) Chart’s regular severance benefit
plan. The Enhanced Severance Benefits entitle you to the following:

 

  A)   Continued payment during the Continuation Period of your base salary at
the higher of

1) the rate in effect immediately before the date of termination of your
employment or

2) the rate in effect on February 6, 2003;

 

  B)   Continued participation during the Continuation Period in Chart’s
medical, dental and vision insurance coverage available to its employees
generally as if you were still employed

 

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by Chart, to the extent and at the level of your participation in that coverage
immediately prior to the date of termination of your employment (which shall
offer an aggregate level of benefits not less than the level of comparable
benefits you received on February 6, 2003), subject to your fulfillment of your
contribution requirements under that coverage. If, however, your continued
participation in any such insurance coverage after the date of termination of
your employment is not possible under the terms governing such coverage, Chart
may satisfy its obligation to provide such coverage by providing to you during
the Continuation Period alternative coverage on the terms set forth in the
preceding sentence; and

 

  C)   Payment of any unpaid cash bonus previously determined and declared under
the terms of a Chart incentive plan for a period ending before the date of
termination of your employment. For this purpose, any amounts of compensation
deferred by you under a Chart deferral plan shall be deemed to have been paid on
the date of deferral.

 

All such Enhanced Severance Benefits will continue to be paid and administered
in accordance with Chart’s normal payroll practices and cycles. If you should
die while receiving Enhanced Severance Benefits during the Continuation Period,
your Enhanced Severance Benefits nevertheless shall continue until the
expiration of the Continuation Period and your Enhanced Severance Benefits shall
be paid and provided to your listed beneficiaries as of the date of your death.

 

4.   No Duplication of Other Benefits.

 

If A) you are a party to either or both of an employment agreement (which
includes any letter agreement regarding your employment with Chart) or severance
agreement with Chart (singularly or collectively, the “Prior Agreement”), and B)
your employment with Chart is terminated under circumstances giving rise to a
right on your part to receive continuing compensation, separation pay, or other
severance benefits under the Prior Agreement and under this Enhanced Severance
Plan, you shall have the right to elect to have either the Prior Agreement (if
and only to the extent the Prior Agreement is applicable) or this Enhanced
Severance Plan (if and only to the extent it is applicable), but not both, apply
to the termination. If this Section 4 applies, then: 1) Chart shall not make any
payments arising out of the termination of your employment, either under the
Prior Agreement or under this Enhanced Severance Plan, until after you have
delivered to Chart a signed notice of election to receive payments under the
Prior Agreement or under this Enhanced Severance Plan, and 2) if you elect to
receive payments under the Prior Agreement, the provisions of this Enhanced
Severance Plan shall not be applicable.

 

If you receive any payments under this Enhanced Severance Plan as a result of
the termination of your employment during the Coverage Period, those payments
shall be in lieu of any and all other claims or rights that you may have for
severance, separation, and/or salary continuation pay (including claims or
rights under any other severance plan maintained by Chart or its affiliates)
upon termination of your employment. In no case will you be entitled to any
benefits under this Enhanced Severance Plan in duplication of benefits under any
such other severance, separation, and/or salary continuation

 

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arrangement. Chart may require you to acknowledge and agree to the conditions of
this Section 4 as a condition to your receipt of any payments or benefits under
the Enhanced Severance Plan.

 

In closing, I wish to remind you that the Enhanced Severance Plan is being
offered to a select number of key employees. As such, you are requested to keep
the terms and conditions of the plan confidential and not to discuss the
Enhanced Severance Plan with anyone other than those that have legitimate reason
to know. Of course if you have any questions, please contact Mark Ludwig,
Chart’s Director of Human Resources.

 

Sincerely,

/s/    ARTHUR S. HOLMES

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Arthur S. Holmes

Chairman and CEO

 

cc: M. Ludwig

 

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