EXHIBIT 10.4

 

Description of the Chart Industries, Inc. 2005 Incentive Plan for Executive
Officers

 

Chart Industries, Inc. (the “Company”) historically has maintained a cash bonus
plan administered by the Compensation Committee of its Board of Directors (the
“Committee”). The purpose of the bonus plan is to provide an incentive to
employees to enhance stockholder value. The Committee historically determines
which employees of the Company are eligible to participate in the bonus plan for
a fiscal period, establishes specific performance targets to be achieved during
that fiscal period and approves specific bonus amounts under the plan, which are
tied to the targets. Executive officers of the Company historically have
participated under specific terms of the broader cash bonus plan approved by the
Committee. The actual bonuses payable under the cash bonus plan for a fiscal
period, if any, will vary depending on the extent to which actual performance
meets, exceeds or falls short of the target approved by the Committee, as
determined by the Committee.

 

On January 26, 2005, the Committee adopted the Chart Industries, Inc. 2005
Employee Incentive Compensation Plan (the “2005 Incentive Plan”) for the
Company’s 2005 fiscal year. In connection with its adoption of the 2005
Incentive Plan, the Committee determined that that the following executive
officers are eligible to participate in the 2005 Incentive Plan: Samuel F.
Thomas, President and Chief Executive Officer; Michael F. Biehl, Chief Financial
Officer and Treasurer; and Charles R. Lovett, Vice President—Manufacturing. The
Committee also approved the financial targets for fiscal 2005 under the 2005
Incentive Plan. The financial target approved by the Committee as it relates to
these executive officers is the Company’s achievement of a specified amount (the
“Year-End Target”) of consolidated earnings before interest, taxes,
depreciation, amortization and restructuring costs, subject to certain
adjustments (“EBITDAR”), for fiscal 2005. The potential 2005 cash bonus amounts
payable under the 2005 Incentive Plan approved by the Committee are based on
percentages of the 2005 base salaries of Messrs. Thomas, Biehl and Lovett, which
are $400,000, $213,200 and $173,349, respectively.

 

Under the 2005 Incentive Plan, Messrs. Thomas, Biehl and Lovett could receive
2005 cash bonuses equal to 100% of their respective 2005 base salaries, if the
Company achieves the Year-End Target EBITDAR for fiscal 2005. Messrs. Thomas,
Biehl and Lovett could receive 2005 cash bonuses equal to 150% of their
respective 2005 base salaries, if the Company exceeds the Year-End Target
EBITDAR for fiscal 2005 by approximately 11% or more. Messrs. Thomas, Biehl and
Lovett will not receive any 2005 bonuses if the Company falls short of the
Year-End Target EBITDAR by approximately 19% or more, unless a minimum cash
bonus is earned under the terms disclosed below. Subject to any such minimum
bonus, each executive officer will receive a graduated 2005 cash bonus payout
based on his 2005 base salary for the Company’s achievement of between
approximately 81% and 111% of the Year-End Target EBITDAR. Each executive
officer must be employed by the Company at the end of 2005 to be eligible for a
bonus payment under the 2005 Incentive Plan, except in the case of an earned
minimum cash bonus where the executive officer has been involuntarily terminated
from employ with the Company.

 

In addition to approving the Year-End Target, on January 26, 2005 the Committee
approved a mid-year target related to the 2005 Incentive Plan for Messrs.
Thomas, Biehl and Lovett, which is the Company’s achievement of a specified
amount (the “Mid-Year Target”) of consolidated

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EBITDAR for the first half of fiscal 2005. If the Company achieves or exceeds
the Mid-Year Target EBITDAR for the first half of fiscal 2005, Messrs. Thomas,
Biehl and Lovett will earn a minimum cash bonus under the 2005 Incentive Plan
equal to 50% of their respective 2005 base salaries, which cannot be reduced
based on subsequent Company financial performance in 2005 and will be paid as
part of and at the same time as payments of cash bonuses under the 2005
Incentive Plan generally. If the Mid-Year Target EBITDAR is not achieved, no
minimum cash bonus payment would be earned for 2005.

 

The Committee has the authority to determine the Company’s actual performance
against the Year-End Target and Mid-Year Target. It also has the discretion to
adjust the bonuses that otherwise might be payable to Messrs. Thomas, Biehl and
Lovett based on unforeseen events or other circumstances as it deems appropriate
in good faith. Any 2005 cash bonuses payable under the 2005 Incentive Plan will
be paid no later than March 15, 2006.

 

Forms of the conditions pursuant to which bonuses may be earned by executive
officers under the annual 2005 Incentive Plan or the minimum cash bonus
component are filed with this description as Exhibits 10.5 and 10.6,
respectively.