Document:

EX-10.1

 

Exhibit 10.1

RETENTION AGREEMENT

          THIS AGREEMENT (the “Agreement”) dated as of the 12 day of June, 2007 (the “Effective Date”)
by and between Michael Baker Corporation (the “Company”), and John D. Whiteford (the “Employee”)
who is employed by the Energy Division of Michael Baker Corporation (“Energy”).

          WHEREAS, the Company has determined that it is in the best interest of the Company to assure
the continued dedication of the Employee, notwithstanding the possibility or occurrence of the
events described below.

          WHEREAS, in return for the Employee’s full attention and dedication, the Company desires to
provide the Employee with certain compensation and benefits in such defined events as an eligible
employee in the Energy Retention Plan (the “Plan”).

          NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:

          1. Term. The term of this Agreement shall commence on the Effective Date. This
Agreement may be terminated in writing at any time by the Company in its sole discretion without
liability, except as provided in this Section 1. In addition, this Agreement shall immediately
terminate and be of no further force or effect upon (a) termination of the Plan, (b) the death,
disability, resignation, retirement of the Employee, (c) termination of the Employee by the Company
for Cause, as defined in the Plan, or (d) December 31, 2008. Notwithstanding the foregoing
subclause (a), (i) termination of the Plan shall not eliminate or reduce any retention payment
benefits hereunder to which an employee would otherwise be entitled to receive and (ii) in the
event that a Triggering Event occurs within nine months of the termination of the Plan, eligible
employees meeting the Participation Criteria shall be entitled to incentive payment benefits for
which they would have otherwise been eligible hereunder on the date of such Triggering Event.

          2. No Change in Legal Employment Status. Employee shall at all times remain an
employee at will and nothing herein shall confer upon the Employee the right to continued
employment nor affect the right of the Company to terminate the Employee with or without Cause for
any reason not prohibited by law.

          3. Triggering Events. Triggering Events shall mean the closing of a sale or other
divestiture by the Company of all of the stock or substantially all of the assets of Energy, to a
nonaffiliated purchaser or purchasers. A reorganization, merger, consolidation, or other transfer
of such stock or assets to a Company affiliate is not a Triggering Event. A change in control of
the Company shall not be considered a Triggering Event for purposes of this Agreement.

 

 

          4. Payment Benefits.

     (a) Retention Payment Benefit. Upon the Employee’s (i) continuous employment with
the Company through the six month anniversary of the Effective Date or, if earlier, the employee’s
separation from service by the Company other than for Cause, and (ii) satisfaction of the
Participation Criteria and Company Criteria set forth in the Plan, the Employee shall be entitled
to a retention payment benefit as set forth on Attachment I to this Agreement, which shall be paid
in accordance with the Plan. Applicable insurance contributions, payroll withholding and taxes
shall be deducted from any payment.

     (b) Incentive Payment Benefit. Upon the occurrence of a Triggering Event and
satisfaction of the Participation Criteria and Company Criteria set forth in the Plan, the Employee
shall be entitled to an incentive payment benefit as set forth on Attachment I to this Agreement
(reduced by any taxable severance payments, not including accrued vacation, to the Employee from
the Company under any employment or severance agreement or Company severance plan covering the
Employee other than the Plan), which shall be paid in accordance with the Plan. Applicable
insurance contributions, payroll withholding and taxes shall be deducted from any payment.

          5. Release. The Employee hereby acknowledges and agrees that as a condition to
Employee’s or his dependents’ right to receive from the Company or any of its representatives or
agents any compensation or benefit to be paid or provided to him or his dependents pursuant to this
Agreement, the Employee will be required by the Company, to execute, and not revoke, a release
substantially similar to the form attached hereto as Attachment II, which releases any and all
claims (other than amounts to be paid to Employee as expressly provided for under this Agreement)
the Employee has or may have against the Company or its affiliates, agents, officers, directors,
successors or assigns including any and all claims with respect to matters relating to his
employment and termination of employment.

          6. Assignment. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. The Employee’s rights to receive payments and benefits
hereunder shall not be assignable or transferable.

          7. Entire Agreement. This Agreement contains the entire agreement of the parties
concerning the matters set forth herein and all promises, representations, understandings,
arrangements and prior agreements on such subject are merged herein and superseded hereby. To the
extent of any conflict between the provisions of this Agreement and those of the Plan (referenced
herein), the provisions of the Plan shall control. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing signed by the party against whom enforcement of any amendment,
modification, repeal, waiver, extension or discharge is sought.

          8. Governing Law. This Agreement shall be governed by and construed under the laws of
the Commonwealth of Pennsylvania without regard to its conflict of law provisions.

- 2 -

 

          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers
thereunto duly authorized, and the Employee has hereunto set his hand, all as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 
	EMPLOYEE:	 	 	 	MICHAEL BAKER CORPORATION
	 
	 	 	 	 	 	 	 	 
	/S/ John D. Whiteford	 	 	 	By:	 	/S/ Richard L. Shaw
	 	 	 	 	 	 	 
	John D. Whiteford

	 	 	 	 
	 
	 	 
	 	 	 	Title:
	 	Chairman and CEO
	 
	 	 	 	 	 	 	 	 

- 3 -

 

Attachment I

Retention
Payment
Benefit:              $111,375

Incentive
Payment
Benefit:               $334,125

 

 

Attachment II

FORM OF GENERAL RELEASE

     WHEREAS, Employee is a participant in the Michael Baker Corporation Energy Division Retention
Plan (“Plan”); and

     WHEREAS, pursuant to the Plan and in accordance with the Retention Agreement entered into
between Employee and Michael Baker Corporation in connection with that Plan, Employee is eligible
to receive certain compensation and benefits under specified circumstances in exchange for, among
other things, the execution of a General Release;

     NOW, THEREFORE, the undersigned Employee, intending to be legally bound, provides the
following General Release:

     In acknowledgement of the receipt of [$111,375], [$334,125] less applicable insurance
contributions, payroll withholding and taxes, I, John D. Whiteford, on behalf of myself, my heirs,
representatives, estates, successors and assigns, do hereby irrevocably and unconditionally release
and forever discharge Michael Baker Corporation and its predecessors, parents, subsidiaries,
affiliates, successors and assigns and their past, present and future directors, officers,
employees, representatives, agents, and insurers and the heirs, successors or assigns of any such
persons or such entities (hereinafter severally and collectively called “Releasees”) from any and
all manner of suits, actions, causes of action, damages and claims, known and unknown, that I have
or may have against any of the Releasees for any acts, practices or events (collectively, “Claims”)
up to and including the effective date of this General Release and the continuing effects thereof,
it being my intention to effect a general release of all such Claims; provided, however, that the
foregoing shall not release Claims against Michael Baker Corporation for Claims occurring or
arising after a Triggering Event if such entity is not controlled by Michael Baker Corporation and
Claims with respect to amounts that may become due and owing under the Plan in the future. This
release includes any and all Claims under any possible legal, equitable, contract, tort, common law
or statutory theory, including, but not limited to, any Claims under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
Act, the Americans With Disabilities Act, the Family And Medical Leave Act, the Massachusetts Fair
Employment Practices Act, and other federal, state, and local statutes, ordinances, executive
orders and regulations prohibiting discrimination in employment, the federal Employee Retirement
Income Security Act of 1974, and state or local law Claims of any other kind whatsoever (including
common law tort and contract Claims) arising out of or in any way related to my employment with
Releasees and/or my separation from employment with Releasees. I also specifically release all
Releasees from any and all Claims or causes of action for the fees, costs, expenses and interest of
any and all attorneys who have at any time or are now representing me in connection with this
Release and/or in connection with any matters released in this Release. Nothing herein releases
Michael Baker Corporation from any obligations with respect to indemnification of Employee as may
be provided in its Articles of Incorporation or By-Laws.

 

 

     I acknowledge that I have been given the opportunity to consider this Release for at least 21
calendar days, which is a reasonable period of time, and that I have been advised hereby to consult
with an attorney about this Release prior to executing it. I further acknowledge that I have had a
full and fair opportunity to consult with an attorney if I desired to do so, that I have carefully
read and fully understand all of the provisions of this Release and that I am voluntarily executing
this Release, intending to be legally bound by it. For a period of seven calendar days following
my execution of this Release, I may revoke it by delivery of a written notice of revocation to the
offices of H. James Mcknight, General Counsel & Secretary, Michael Baker Corporation, 100 Airside
Drive Moon Township, PA 15108.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

[Signature of Employee]
	 	 

- 2 -EX-10.1

 

 Exhibit 10.1

AMENDED AND RESTATED

CHART INDUSTRIES, INC.

2005 STOCK INCENTIVE PLAN

PERFORMANCE UNIT AGREEMENT

     THIS PERFORMANCE 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 Amended and Restated Chart Industries, Inc. 2005 Stock
Incentive Plan (the “Plan”); and

     WHEREAS, the Committee desires to provide the Grantee with Performance 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.	 	“Performance Period” means the period set forth in
Exhibit A.
	 
	 	b.	 	“Performance Requirements” means the performance
measures set forth in Exhibit A.
	 
	 	c.	 	“Performance Unit” means a unit representing the right
to receive a Share after completion of the Performance Period provided that the
Performance Requirements have been satisfied.
	 
	 	d.	 	“Retirement” (or variations thereof) means a voluntary
separation from service with the Company, its Subsidiaries and its Affiliates,
under circumstances indicative of retirement, 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 Performance Units. As of the Grant Date, the Company grants to the
Grantee, upon the terms and conditions set forth in this Agreement,
                     (     )
Performance Units. The Performance 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. 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 Performance 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 Performance Units (whether with or
without consideration and whether voluntarily or involuntarily or by operation of law) or any
interest therein.

     4. Termination of Employment.

	 	a.	 	Retirement, Death or Disability. If the Grantee
terminates Employment as a result of Retirement, death or Disability prior to
the last day of the Performance Period, the Grantee (or his or her beneficiary
or beneficiaries) shall be entitled to a pro-rated number of Shares or, if the
Committee so elects, the cash equivalent, calculated by multiplying (x) by (y)
where:

	 	(x)	 	is the number of Shares, if any, that would
have been earned by the Grantee as the result of the satisfaction of
the Performance Requirements; and
	 
	 	(y)	 	is the number of months that the Grantee was
employed (rounded up to the nearest whole number) during the
Performance Period divided by the number of months in the Performance
Period.

The Committee shall determine in its sole and exclusive discretion whether
the Grantee’s Employment has terminated because of his or her Disability.
The distribution or payment of the pro-rated award shall occur (if at all)
at the same time as the distribution or payment specified in Section 6.

	 	b.	 	Reasons Other Than Retirement, Death or Disability.
Except as otherwise provided in Section 5, if the Committee determines in its
sole and exclusive discretion that the Grantee’s Employment has terminated
prior to the end of the Performance Period for reasons other than those
described in Section 4(a) above, the Grantee will forfeit his or her
Performance Units. If the Performance Units are forfeited, the Grantee

2

 

	 	 	 	and all persons who might claim through him or her will have no further
interests under this Agreement.

     5. Change in Control. Upon a Change in Control prior to the end of the Performance
Period:

	 	a.	 	the Performance Requirements shall be deemed to have been
satisfied at the greater of either: (i) the target level of the Performance
Requirements as set forth on Exhibit A as if the entire Performance Period had
elapsed; or (ii) the level of actual achievement of the Performance
Requirements as of the date of the Change in Control; and
	 
	 	b.	 	the appropriate number of Shares, or, if the Committee so
elects, cash, determined in accordance with subsection (a) above shall be
issued or paid to the Grantee not later than 30 days after the date of the
Change in Control.

     6. Distributions. Within 60 days after satisfaction or deemed satisfaction of the
Performance Requirements:

	 	a.	 	with respect to Shares earned under Sections 4 or 5, the
Company will deliver to Grantee (or his or her beneficiary or beneficiaries)
certificates for the Shares to which Grantee is entitled, subject to any
applicable securities law restrictions or, if the Committee so elects, the cash
equivalent; and
	 
	 	b.	 	with respect to Shares otherwise earned under this Agreement,
the Company will issue to the Grantee the Shares to which Grantee is entitled,
subject to any applicable securities law restrictions or, if so elected, the
cash equivalent, and provided that the Grantee is in active Employment on the
last day of the Performance Period.

For purposes of this Section 6, “earned” Shares are those Shares to which the Grantee is entitled
based upon the Earned Performance Units (as described in Exhibit A) and the terms of Section 4 or
5, if applicable. For purposes of this Agreement, the cash equivalent of Shares is their Fair
Market Value on the date of payment. Upon payment of the cash equivalent of Shares, the recipient
and all persons who might claim through him or her shall have no remaining interest under this
Agreement.

     7. Dividend and Voting Rights. The Grantee will not have any voting rights or be
entitled to any dividends with respect to Performance Units unless and until the Performance
Requirements are timely satisfied, the Committee elects not to make payments in cash and Shares
have actually been issued to the Grantee. No dividends or dividend equivalents will be paid to the
Grantee based upon interests in the Performance Units during the Performance Period.

3

 

     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
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 performance units, Shares
or other securities, if any, which may be acquired by the Grantee related to the Performance Units
as a result of a liquidation, recapitalization, reorganization, redesignation or reclassification,
split-up, reverse split, merger, consolidation, dividend, combination or exchange of Performance
Units or Shares, exchange for other securities, a sale of all or substantially all assets or the
like. The Committee may appropriately adjust the number and kind of performance units or Shares
described in this Agreement to reflect such a change. Section 9 of the Plan shall control in the
event of any inconsistency between that section and this Section 10.

     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

4

 

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 last day of the Performance Period if the Performance Requirements are not satisfied; (b) the
date of termination of the Grantee’s Employment for reasons referenced in Section 4(b) prior to the
last day of the Performance Period; or (c) the date that Shares are delivered to the Grantee (or
his or her beneficiary or beneficiaries) or the date of payment of the cash equivalent thereof to
the Grantee (or his or her beneficiary or beneficiaries). 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.

     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 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, its
Subsidiaries and the Committee 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

5

 

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.

     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.

     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 Performance Units or Shares, or any payment or
transfer under or with respect to the Performance Units 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 Participant may elect to pay any or all such withholding taxes as provided
for in Section 4 of the Plan.

     25. Code Section 409A. It is intended that this Agreement and the compensation and
benefits hereunder either be exempt from, or comply with, Internal Revenue Code Section 409A, and
this Agreement shall be so construed and administered. If the Company reasonably determines that
any compensation or benefits awarded or payable under this Agreement may be subject to taxation
under Section 409A, the Company, after consultation with the Grantee, shall have the authority to
adopt, prospectively or retroactively, such amendments to this Agreement or to take any other
actions it determines necessary or appropriate to: (a) exempt the compensation and benefits
payable under this Agreement from Section 409A; or (b) comply with the requirements of Section
409A. In no event, however, shall this Section or any other provisions of the Plan or this
Agreement be construed to require the Company to provide any gross-up for the tax consequences of
any provisions of, or awards or payments under, this Agreement and the Company shall have no
responsibility for tax consequences of any kind, whether or not such consequences are contemplated
at the time of entry into this Agreement, to Grantee (or his beneficiary) resulting from the terms
or operation of this Agreement.

6

 

     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:	 	 
	 

	 
	 	 	 	 	 	 

7

 

EXHIBIT A

PERFORMANCE REQUIREMENTS

Performance Period

The Performance Period begins on July 1, 2007 and ends on December 31, 2009.

Performance Measures

The Performance Measures are:

	 	1.	 	Relative Total Shareholder Return (“RTSR”) - RTSR is determined by comparing
the total shareholder return of the Company with the total shareholder return of the
peer group of companies designated on Exhibit B. Total shareholder return is the
result of (a) minus (b), plus (c), divided by (d), where:

	 	a.	 	is the Share price on December 31, 2009;
	 
	 	b.	 	is the Share price on July 1, 2007;
	 
	 	c.	 	is the Dividends over the Performance Period; and
	 
	 	d.	 	is the Share price on July 1, 2007.

For purposes of this formula, “Dividends” includes regular dividends,
special or one-time dividends, Share buybacks and other payments or distributions
from the Company to holders of Shares and, in the case of peer group companies, from
each of those companies to the holders of their common stock of any class.

The Committee may, in the exercise of its discretion in good faith and in a manner
consistent with the purposes of this Agreement, make such adjustments in calculating
the RTSR as it deems necessary or appropriate to account for extraordinary or
non-recurrent events affecting the Company or the peer group companies. Without
limiting the foregoing, the Committee may make appropriate adjustments to the RTSR
to reflect a merger, asset sale, spin-off, stock split, stock dividend, public
offering, bankruptcy or liquidation affecting the Company or any peer group company.

	 	2.	 	EBITDA Growth - EBITDA Growth is determined by reference to the adjusted
compounded annual growth rate of adjusted earnings of the Company before interest,
taxes, depreciation and amortization (“EBITDA”) over the Performance Period. For this
purpose, adjustments shall include stock-based compensation expenses, expenses related
to stock offerings, acquisitions, dispositions, restructuring charges, gain or loss on
sale of non-operating assets, income or expenses related to the adoption of accounting
principles, income or loss from

 

 

	 	 	 	discontinued operations and any other extraordinary items (e.g., hurricane losses,
etc.) deemed to be adjustments by the Committee.

Earned Performance Units

The Performance Units subject to, respectively, the RTSR and EBITDA Growth Performance Measures
shall become, respectively, RTSR Earned Performance Units and EBITDA Earned Performance Units
(collectively, the “Earned Performance Units”), as determined pursuant to the methodologies set
forth below:

	 	1.	 	RTSR Earned Performance Units

RTSR Earned Performance Units are determined as follows:

	 	a.	 	Measure total shareholder return for the Performance Period for
the Company and for each entity that makes up the peer group (the companies
listed on Exhibit B are the “Peer Group”).
	 
	 	b.	 	Determine the percentile ranking of the Company compared to the
Peer Group based upon the cumulative total shareholder return over the
Performance Period.
	 
	 	c.	 	Determine the percentage of earned Performance Units (the “RTSR
Earned Percentage”) as follows:

	 	 	 	 	 	 	 	 	 
	Levels	 	Percentage Ranking	 	RTSR Earned Percentage
	Threshold
	 	50th	 	 	35	%
	   Target
	 	75th	 	 	100	%
	Maximum
	 	90th	 	 	150	%

With respect to performance levels that fall between these percentiles, the
RTSR Earned Percentage will be interpolated on a straight-line basis. In no
event will the RTSR Earned Percentage exceed 150%.

	 	d.	 	Determine the number of earned Performance Units (“RTSR Earned
Performance Units”) as follows:

50%           X           RTSR Earned Percentage           X           Number of Performance Units

	 	2.	 	EBITDA Earned Performance Units 

EBITDA Earned Performance Units are determined as follows:

	 	a.	 	Measure the Company’s adjusted EBITDA (i) for the final year of
the Performance Period (the “Final LTM EBITDA”) and (ii) for the twelve months
ended June 30, 2007 (the “Base LTM EBITDA”).

2

 

	 	b.	 	Calculate the compound annual percentage growth rate (the
“EBITDA Growth”) for the Performance Period based on the relationship of Final
LTM EBITDA to Base LTM EBITDA, and giving effect to a 2.5-year period.
	 
	 	c.	 	Based on such EBITDA Growth, determine the percentage of earned
Performance Units (the “EBITDA Earned Percentage”) as provided on Exhibit C.
	 
	 	d.	 	Determine the number of earned Performance Units (“EBITDA
Earned Performance Units”) as follows:

50%            X           EBITDA Earned Percentage            X           Number of Performance Units

3

 

EXHIBIT B

PEER GROUP

	 	 	 
	 

	 	Air Products & Chemicals Inc.
	 

	 	Airgas Inc.
	 

	 	Altra Holdings Inc.
	 

	 	Ampco-Pittsburgh Corp.
	 

	 	Barnes Group Inc.
	 

	 	Cameron International Corp.
	 

	 	Circor Intl. Inc.
	 

	 	Columbus McKinnon Corp.
	 

	 	Dresser-Rand Group Inc.
	 

	 	Enpro Industries Inc.
	 

	 	Gorman-Rupp Co.
	 

	 	Grant Prideco Inc.
	 

	 	Hanover Compressor Co.
	 

	 	Kaydon Corp.
	 

	 	Lufkin Industries, Inc.
	 

	 	National Oilwell Varco Inc.
	 

	 	Powell Industries Inc.
	 

	 	Praxair Inc.
	 

	 	Robbins & Myers Inc.
	 

	 	Universal Compression Holdings

 

 

EXHIBIT C

EBITDA GROWTH

PERFORMANCE MEASURES

The EBITDA Growth Performance Measures for the Performance Period:

	 	 	 	 	 	 	 	 	 
	 Levels	 	Attained EBITDA Growth%	 	EBITDA Earned Percentage
	Threshold
	 	 	—	%	 	 	35	%
	Target
	 	 	—	%	 	 	100	%
	Maximum
	 	 	—	%	 	 	150	%

With respect to performance levels that fall between these attained percentages, the EBITDA Earned
Percentage will be interpolated on a straight-line basis. In no event will the EBITDA Earned
Percentage exceed 150%.

2

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