CHART INDUSTRIES, INC. 8-K
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) February 26, 2008
CHART INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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001-11442
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34-1712937 |
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(State or other jurisdiction
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(Commission
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(IRS Employer |
of incorporation)
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File Number)
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Identification No.) |
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One Infinity Corporate Centre Drive, Suite 300, Garfield Heights, Ohio
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44125 |
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(Address of principal executive offices)
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(Zip Code) |
Registrants 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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 |
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Entry into a Material Definitive Agreement. |
On March 1, 2008, Chart Industries, Inc. (the Company) entered into an indemnification agreement
with Kenneth J. Webster in connection with the appointment of Mr. Webster as the Companys Chief
Accounting Officer and Controller. The indemnification agreement is in the same form as the
existing indemnification agreements the Company has entered into previously with each of its
directors and executive officers. In the indemnification agreement, the Company has agreed,
subject to certain exceptions, to indemnify and hold harmless Mr. Webster to the maximum extent
then authorized or permitted by the provisions of the Companys amended and restated certificate of
incorporation, the General Corporation Law of the State of Delaware, or by any amendment(s)
thereto.
The description of the indemnification agreement set forth in this Item 1.01 is not complete and is
qualified in its entirety by reference to the full text of the form of indemnification agreement.
The form of indemnification agreement between the Company and each of its directors or executive
officers was filed as Exhibit 10.20 to the Companys Registration Statement on Form S-1, filed with
the Securities and Exchange Commission (the SEC) on April 13, 2006, and is incorporated herein by
reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Appointments of James H. Hoppel, Jr. as Vice President Corporate Development and Kenneth J.
Webster as Chief Accounting Officer and Controller.
(c) Effective March 1, 2008, the Board of Directors of the Company appointed James H. Hoppel,
Jr., who previously served as the Companys Chief Accounting Officer, Controller and Assistant
Treasurer, as the Companys Vice President Corporate Development. Effective the same date, the
Companys Board of Directors appointed Kenneth J. Webster, who previously served as the Companys
Director Internal Audit, as the Companys Chief Accounting Officer and Controller, filling the
vacancies resulting from the appointment of Mr. Hoppel as Vice President Corporate Development.
On March 3, 2008, the Company issued a news release announcing these appointments. A copy of the
news release is attached hereto as Exhibit 99.1 and furnished herewith.
Mr. Hoppel, 44, has served as the Companys Chief Accounting Officer and Assistant Treasurer since
April 2006 and has served as the Companys Controller since joining the Company in November 2004.
Prior to joining the Company, Mr. Hoppel served as Vice President Finance for W.W. Holdings, LLC,
a manufacturer and distributor of doors and hardware.
In connection with the Board of Directors approval of employment agreements for executive
officers, as described below, Mr. Hoppel entered into a new employment agreement, the terms of
which are further described in Section 5.02(e) of this Current Report on Form 8-K and incorporated
herein by reference.
Mr. Webster, 45, has served as the Companys Director Internal Audit since joining the Company in
July 2006. Prior to joining the Company, Mr. Webster served as Assistant Corporate
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Controller for International Steel Group, an integrated steel manufacturer, from March 2004 to
April 2005, at which time International Steel Group was acquired by Mittal Steel. Following the
acquisition, Mr. Webster continued to serve in his capacity as Assistant Corporate Controller for
Mittal Steel USA, Inc. until July 2006. Before that, Mr. Webster served in various accounting and
finance positions with Bethlehem Steel.
In connection with the Board of Directors approval of employment agreements for executive
officers, as described below, Mr. Webster entered into an employment agreement with the Company,
the terms of which are further described in Section 5.02(e) of this Current Report on Form 8-K and
are incorporated herein by reference.
There is no arrangement or understanding between Messrs. Hoppel and/or Webster and any other person
pursuant to which either of Messrs. Hoppel or Webster was appointed to his new position with the
Company.
Description of the new form of Employment Agreement for the Companys executive officers.
(e) In connection with its review of executive officer compensation arrangements of
similarly-situated companies, and after considering the recommendations of independent compensation
consultants engaged by the Companys Compensation Committee of the Board of Directors regarding
appropriate compensation arrangements for public company executive officers, the Compensation
Committee approved, and the Board of Directors ratified, new
Employment Agreements (the Employment Agreements) entered into effective February 26, 2008 by
each of the Companys executive officers. The Employment Agreements for Messrs. Thomas, Biehl,
Hoppel and Klaben replace existing employment agreements with these executive officers, which were
initially put into place prior to the Companys initial public offering and were in a form more
customary for private equity portfolio companies.
The Employment Agreements provide for an initial two year employment term which automatically
renews for additional one year periods. The Employment Agreements further provide for an automatic
three year extension in the event of a change in control of the Company (as such term is defined
in the Employment Agreements).
During the employment term, the executive is entitled to receive at least the base salary in effect
as of the effective date of the Employment Agreement, together with the right to participate in the
Companys employee benefit plans, including health, life and disability insurance, retirement,
deferred compensation and fringe benefits, as well as any incentive and equity compensation plans,
as in effect form time to time, on the same basis as such plans are made available to other senior
executives, and to receive a car allowance. Annual base salaries of the Companys executive
officers under their respective employment agreements are as follows: (i) Samuel F. Thomas,
Chairman, Chief Executive Officer and President, $500,000; (ii) Michael F. Biehl, Executive Vice
President, Chief Financial Officer and Treasurer, $262,150; (iii) James H. Hoppel, Jr., Vice
President Corporate Development, $192,000; (iv) Matthew J. Klaben, Vice President, General
Counsel and Secretary, $210,000; and (v) Kenneth J. Webster, Chief Accounting Officer and
Controller, $156,000.
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During the employment term, the executive is eligible to receive an annual bonus (an Annual
Bonus) of up to one hundred fifty percent (150%) of a target amount designated for each executive,
based upon a percentage of such executives annual base salary (the Base Target). Annual Bonuses
are based upon the achievement of performance targets established by the Board of Directors, or a
duly authorized committee thereof, within the first three months of each fiscal year during the
employment period. Annual Bonuses, if any, are payable within two and one-half months after the
end of the applicable fiscal year. Annual Bonuses are determined in accordance with the terms of
the Companys Incentive Compensation Plan, as currently in effect and as it may be amended from
time to time, including any successor plan. In the event of a change in control, the Annual Bonus
may be pro-rated in accordance with the terms of the Incentive Compensation Plan. Base Targets of
the Companys executive officers under their respective employment agreements are as follows: (i)
Samuel F. Thomas, Chairman, Chief Executive Officer and President, 110% of base salary; (ii)
Michael F. Biehl, Executive Vice President, Chief Financial Officer and Treasurer, 100% of base
salary; (iii) James H. Hoppel, Jr., Vice President Corporate Development, 65% of base salary;
(iv) Matthew J. Klaben, Vice President, General Counsel and Secretary, 75% of base salary; and (v)
Kenneth J. Webster, Chief Accounting Officer and Controller, 45% of base salary.
If the executive is terminated for cause or resigns without good reason (as those terms are
defined in the Employment Agreements), the executive will be entitled to receive only the following
benefits: (i) base salary through the date of termination; (ii) any annual bonus earned but not
yet paid for the fiscal year before the year of termination; (iii) reimbursement for any
unreimbursed business expenses properly incurred by the executive prior to the date of termination;
and (iv) such employee benefits, if any, as to which the executive may be entitled under the
Companys employee benefit plans (collectively, the Accrued Rights).
In the event that the executives employment is terminated as a result of death or disability (as
such term is defined in the Employment Agreements), the executive or the executives estate (as the
case may be) will be entitled to receive any Accrued Rights together with a pro rata portion of any
Annual Bonus the executive would have been entitled to receive for such year, based on the
Companys actual results for the year of termination and the percentage of the fiscal year that has
elapsed through the date of termination.
If the executives employment is terminated without cause or the executive resigns with good
reason, the Employment Agreements provide for the following benefits: (i) a lump sum payment equal
to the following percentage of the executives base salary and target annual bonus, depending upon
the executives position: Chief Executive Officer, 200%; Chief Financial Officer, 150%; and all
other officers, 100%; and (ii) continued coverage under the Companys group health plans for the
following period, depending upon the executives position: Chief Executive Officer, 24 months;
Chief Financial Officer, 18 months; and all other executives, 12 months.
In the event that the Chief Executive Officer or Chief Financial Officer is terminated without
cause or resigns with good reason within two years following a change in control, (i) the
percentage of base salary and target annual bonus to be paid to these executives increases to 300%
and 200%, respectively, and (ii) continued coverage under the Companys group health
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plans for these executives increases to 36 and 24 months, respectively. There is no increase in
these severance measures for other executive officers if their employment is terminated without
cause or they resign for good reason following a change in control. The severance payments to be
paid to the executive officers upon a termination of employment without cause or for good reason
within two years following a change in control may be reduced under the Employment Agreements if
(x) the payments would result in the imposition of a golden parachute excise tax under the
Internal Revenue Code Section 280G and (y) the reduced payments would result in the executive
officer receiving a greater net after-tax payment.
The Employment Agreements also require the executive to comply with certain restrictive covenants
during the employment term and for the following period following the date of termination,
depending upon the executives position with the Company: Chief Executive Officer, 24 months
(extended to 36 months if change in control severance is received); Chief Financial Officer, 18
months (extended to 24 months if change in control severance is received); and all other
executives, 12 months (the Restricted Period). During the Restricted Period, the executive shall
not, whether on the executives own behalf or on behalf of or in conjunction with any person,
directly or indirectly compete with the Company or solicit customers or employees of the Company.
In addition, the executive may not disclose any confidential information about the Company during
or at any time following the employment period.
The foregoing description of the Employment Agreements does not purport to be complete and is a
summary of the material terms of the Employment Agreements.
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Item 7.01 |
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Regulation FD Disclosure. |
On February 28, 2008, the Company hosted a conference call to discuss the Companys results for its
fourth quarter and full year ended December 31, 2007. A transcript of the conference call is
furnished with this Current Report on Form 8-K as Exhibit 99.2. All information in the transcript
is furnished and shall not be deemed filed with the Securities and Exchange Commission for
purposes of Section 18 of the Exchange Act, or otherwise be subject to the liability of that
Section, and shall not be deemed to be incorporated by reference into any filing under the
Securities Act or the Exchange Act, except to the extent the Company specifically incorporated it
by reference.
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Item 9.01 |
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Financial Statements and Exhibits. |
(d) Exhibits.
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Exhibit No. |
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Description |
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99.1 |
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News release of the Company, dated March 3, 2008, announcing
the appointments of James H. Hoppel, Jr. as Vice President
Corporate Development and Kenneth J. Webster as Chief
Accounting Officer and Controller. |
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99.2 |
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Transcript of Chart Industries fourth quarter and full year 2007 earnings conference call held on February 28, 2008. |
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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.
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Chart Industries, Inc.
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Date: March 3, 2008 |
By: |
/s/ Michael F. Biehl
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Michael F. Biehl |
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Executive Vice President, Chief Financial Officer and
Treasurer |
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EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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News release of the Company, dated March 3, 2008, announcing
the appointments of James H. Hoppel, Jr. as Vice President
Corporate Development and Kenneth J. Webster as Chief
Accounting Officer and Controller. |
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99.2 |
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Transcript of Chart Industries fourth quarter and full year 2007 earnings conference call held on February 28, 2008. |
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