Prepared by R.R. Donnelley Financial -- Key Employees Stock Option Plan

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QvIyyukJ148CCeEWcCl9IfPxuDlsUkTizpc0hkV8QGRdtwrn9FK1ofC7Shczag4E B8jwiAtn/GGuHVwC1sIRog== 0001021408-02-004634.txt : 20020415 0001021408-02-004634.hdr.sgml : 20020415 ACCESSION NUMBER: 0001021408-02-004634 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHART INDUSTRIES INC CENTRAL INDEX KEY: 0000892553 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED PLATE WORK (BOILER SHOPS) [3443] IRS NUMBER: 341712937 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-11442 FILM NUMBER: 02596778 BUSINESS ADDRESS: STREET 1: 5885 LANDERBROOK DRIVE STREET 2: SUITE 150 CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 BUSINESS PHONE: 4407531490 10-K405 1 d10k405.txt CHART INDUSTRIES, INC. FORM 10-K Securities and Exchange Commission Washington, D.C. 20549 Form 10-K (Mark One) [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission file number 1-11442 Chart Industries, Inc. (Exact name of registrant as specified in its charter) Delaware 34-1712937 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5885 Landerbrook Drive, Suite 150, Cleveland, Ohio 44124 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (440) 753-1490 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each classon which registered Common Stock,New York Stock Exchange par value $.01 per share Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] As of February 28, 2002, the registrant had 24,875,288 shares of Common Stock outstanding. As of that date, the aggregate market value of the Common Stock of the registrant held by non-affiliates was $38,467,195 (based upon the closing price of $2.25 per share of Common Stock on the New York Stock Exchange on February 28, 2002). For purposes of this calculation, the registrant deems the 7,778,757 shares of Common Stock held by all of its Directors and executive officers as of such date to be the shares of Common Stock held by affiliates. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive Proxy Statement to be used in connection with its Annual Meeting of Stockholders to be held on June 6, 2002 are incorporated by reference into Part III of this Form 10-K. Except as otherwise stated, the information contained in this Form 10-K is as of December 31, 2001. 1 PART I ITEM 1. BUSINESS; AND ITEM 2. PROPERTIES THE COMPANY Chart Industries, Inc. (the "Company" or "Chart") was organized in June 1992 as a Delaware corporation to serve as a holding company for the operations described herein. As used herein, the terms "Company" or "Chart" mean Chart Industries, Inc., its subsidiaries and its predecessors, unless the context otherwise indicates. The Company's executive offices are located at 5885 Landerbrook Drive, Suite 150, Cleveland, Ohio 44124, and its telephone number is (440) 753-1490. The Company's sales for the year ended December 31, 2001 reached $328.0 million, a slight increase over sales of $325.7 million in 2000. The Company's net loss in 2001 was $5.2 million compared with net income of $2.2 million in 2000. Management anticipates that demand for the Company's products will increase over the next several years. The Company has initiatives to pursue multiple new products focused on the end-user equipment markets for low-temperature and cryogenic liquids. The use of liquid natural gas ("LNG") as a vehicle fuel and power generating feedstock, the migration from high pressure cylinders to micro bulk distribution and telemetry to improve distribution logistics each in their own right offer significant market potential. In addition, the Company plans to continue to focus on its worldwide presence as global industrialization and heightened environmental standards are expected to result in higher demand for high purity industrial gases, which are generally produced, stored and distributed in a cryogenic state. The recent mergers of several industrial gas producers and distributors have temporarily reduced the demand for new process and distribution equipment that the Company offers to industrial markets. The pressures for increased efficiency in the industry, however, are expected to result in renewed demand for newer equipment and increased service of existing equipment. The Company is well positioned to benefit from both of these developments. In the hydrocarbon processing market, management expects strong domestic and international growth, stemming in part from increased global natural gas and ethylene production. Oil producing countries are newly committed to capturing and marketing flared methane that previously was a waste product of the crude oil production process. This increased availability of economically priced hydrocarbons is expected to result in greater demand for equipment to liquefy, process and transport these gases. BUSINESS GENERAL The Company manufactures standard and custom-built industrial process equipment primarily used for low-temperature and cryogenic applications. The Company has developed an expertise in cryogenic systems and equipment, which operate at low temperatures sometimes approaching absolute zero (0(degrees) Kelvin; -273(degrees) Centigrade; -459(degrees) Fahrenheit). The majority of the Company's products, including vacuum-insulated containment vessels, heat exchangers, cold boxes and other cryogenic components, are used throughout the liquid-gas supply chain for the purification, liquefaction, distribution, storage and use of industrial gases and hydrocarbons. SEGMENTS AND PRODUCTS The Company's operations are organized within three segments: Applied Technologies, Distribution and Storage Equipment and Process Systems and Equipment. Further information about these segments is found at Note K to the Company's consolidated financial statements included at Item 8 of this Annual Report on Form 10-K. APPLIED TECHNOLOGIES SEGMENT The Applied Technologies segment, which accounted for 43 percent of the Company's sales in 2001, consists of various product lines built around the Company's core competencies in cryogenics but with a focus on the end users of the liquids and gases instead of the large producers and distributors. The Company's products in the Applied Technologies segment include the following: LNG Alternative Fuel Systems This product line consists of vacuum-insulated containers for LNG storage, cryogenic pumps and liquid dispensers for vehicle fueling systems and LNG and liquid/compressed natural gas ("CNG") refueling systems for centrally fueled fleets of vehicles powered by LNG and CNG, such as fleets operated by metropolitan transportation authorities, refuse haulers and heavy-duty truck fleets. Competition for LNG fueling and storage systems is based primarily on product design, customer support and service, dependability and price. Although there are alternatives to LNG as a fuel, the Company is not aware of any viable alternatives to vacuum-insulated containers for LNG fueling and storage systems. The Company pursues this opportunity through its NexGen Fueling(r) ("NexGen") business unit. 2 Telemetry Products The Company has developed this product line as a new business model which focuses primarily on providing distribution routing data to distributors of home health care oxygen and beverage carbon dioxide ("CO/2/"). The Company expects that this business will expand into other areas of liquid distribution, such as micro-bulk industrial gases, as the product gains acceptance. This routing data is expected to lower distribution costs and make the supply of liquid oxygen and liquid CO2 more competitive than the existing modes of supply to each of these markets. The Company pursues this opportunity through its CoolTel(r) ("CoolTel") business unit. CoolTel entered into agreements with its first commercial customers in the fourth quarter of 2001. Medical Products The medical oxygen product lines include a limited range of medical respiratory products, including liquid oxygen systems, ambulatory oxygen systems and oxygen concentrators, all of which are used for the in-home supplemental oxygen treatment of patients with chronic obstructive pulmonary diseases, such as bronchitis, emphysema and asthma. Individuals for whom supplemental oxygen is prescribed generally purchase or rent an oxygen system from a home healthcare provider or medical equipment dealer. The provider/dealer or physician usually selects which type of oxygen system to recommend to its customers: liquid oxygen systems, oxygen concentrators or high pressure oxygen cylinders. Liquid systems are currently believed to have more therapeutic value due to the higher quality oxygen, comfort and mobility they provide. The Company believes that competition for liquid oxygen systems is based primarily upon product performance, reliability, ease-of-service and price and focuses its marketing strategies on these considerations. Biological Storage Systems This product line consists of vacuum-insulated containment vessels used by the beef and dairy cattle breeding industry to transport frozen semen and embryos and vacuum-insulated containment vessels used by hospitals, medical laboratories and research facilities to transport and store human organs, tissue samples and other temperature-sensitive biological matter. These products are sold through laboratory product original equipment manufacturers, laboratory product distributors, industrial gas distributors and breeding service providers. Many of these distributors provide a single source for many different types of products to hospitals, medical laboratories and research facilities. The Company's competitors for biological storage systems include only a few companies inside and outside the United States, including Harsco. Competition for biological storage systems is based primarily on product design, reliability and price. Alternatives to vacuum-insulated containment vessels include mechanical, electrically powered refrigeration for storage of biological matter. Magnetic Resonance Imaging ("MRI") Cryostat Components The basis of the MRI technique is the magnetic properties of certain nuclei of the human body which can be detected, measured and converted into images for analysis. MRI equipment uses high-strength magnetic fields, applied radio waves and high-speed computers to obtain cross-sectional images of the body. The major components of the MRI assembly are a series of concentric thermal shields and a supercooled magnet immersed in a liquid helium vessel (a "cryostat") that maintains a constant, extremely low temperature (4[degree] Kelvin; -452[degree] Fahrenheit) to achieve superconductivity. The Company manufactures large cryostats, various cryogenic interfaces, electrical feed-throughs and various other MRI components that are used to transfer power and/or cryogenic fluids from the exterior of the MRI unit to the various layers of the cryostat and superconducting magnet. The Company currently sells all of its MRI cryostats to General Electric Company ("GE") and is the exclusive supplier of GE's cryostats. GE is the leading worldwide manufacturer of MRI equipment. Cryogenic Systems and Components The Company's line of cryogenic components, including vacuum-insulated pipe, high-pressure cryogenic pumps, valves and specialty components, are recognized in the market for their reliability, quality and performance. These products are sold to the Company's heat exchanger and cold box customers in the industrial gas and hydrocarbon processing industries, as well as to a diverse group of customers in those and other industries. The Company competes with a number of suppliers of cryogenic components, including Cryogenic Industries, CCI and Acme Cryogenics. Bulk Liquid CO2 Systems This product line consists primarily of vacuum-insulated, bulk liquid CO2 containers used for beverage carbonation in restaurants, convenience stores and cinemas. The Company also manufactures and markets non-insulated, bulk flavored syrup containers for side-by-side installation with its CO2 systems. The Company's beverage systems are sold to food franchisers, soft drink companies and CO2 distributors. The Company's primary competitors for its bulk liquid CO2 beverage delivery systems are producers of high pressure gaseous CO2 systems and sellers of bulk liquid CO2 beverage systems. The Company believes that competition for bulk liquid CO2 beverage systems is based primarily on service and price. 3 Stainless Steel Tubing The Company produces small diameter stainless steel tubing for sale to distributors to satisfy their customers' requirements for quick delivery. The Company's manufacturing strategy is to focus on custom sizes and smaller production runs, which management believes gives the Company a competitive advantage in providing a superior quality product while meeting customer demands for dependable, fast delivery. With its production and marketing efforts directed principally to customers relying on prompt delivery, the Company is able to compete primarily on the basis of service rather than price. Numerous manufacturers of stainless steel tubing are able to compete with the Company in this market. DISTRIBUTION AND STORAGE EQUIPMENT SEGMENT ("DISTRIBUTION AND STORAGE") Representing 40 percent of the Company's sales in 2001, the products supplied by the Distribution and Storage segment are driven primarily by the large and growing installed base of users of cryogenic liquids as well as new applications and distribution technologies for cryogenic liquids. The Company's products span the entire spectrum of the industrial gas market from small customers requiring cryogenic packaged gases to large users requiring custom engineered cryogenic storage systems and include the following: Cryogenic Bulk Storage Systems The Company is a leading supplier of cryogenic bulk storage systems of various sizes ranging up to 100,000 gallons. Using sophisticated vacuum insulation systems placed between inner and outer vessels, these bulk storage systems are able to store and transport liquefied industrial gases and hydrocarbon gases at temperatures nearing absolute zero. The Company has experienced growth in its bulk storage systems sales as the demand for liquefied industrial gases and liquefied hydrocarbon gases has increased. Customers for the Company's cryogenic storage tanks include industrial gas producers, chemical producers, manufacturers of electrical components and businesses in the oil and natural gas industries. Prices for the Company's cryogenic bulk storage systems range from $20,000 to $500,000. Principal customers for the Company's cryogenic bulk storage systems are AGA, Air Liquide, Air Products, BOC and Praxair. The Company competes chiefly with Harsco in this area. Cryogenic Packaged Gas Systems The Company is a leading supplier of cryogenic packaged gas systems of various sizes ranging from 50 gallons to 1,000 gallons. Cryogenic liquid cylinders are used extensively in the packaged gas industry to allow smaller quantities of liquid to be easily delivered to the customers of the industrial gas distributors on a full-for-empty basis. Principal customers for the Company's liquid cylinders are AGA, Air Liquide, Air Products, BOC and Praxair. The Company competes chiefly with Harsco in this area. The Company has developed two new technologies in the packaged gas product area: ORCA(r) Micro-Bulk systems and Tri-fecta(r) Laser Gas assist systems. ORCA(r) Micro-Bulk systems bring the ease of use and distribution economics of bulk gas supply to customers formerly supplied by high pressure or cryogenic liquid cylinders. The ORCA(r) Micro-Bulk system growth has exceeded Company expectations and is the substantial market leader in this growing segment. The Tri-fecta(r) Laser Gas assist system was developed to meet the performance requirements for new high powered lasers being used in the metal fabrication industry. Growth of this product has also exceeded Company expectations, and the Company has no knowledge of a similar competitive product. Cryogenic Services The Company operates four locations providing installation, service and maintenance of cryogenic products including storage tanks, liquid cylinders, cryogenic trailers, cryogenic pumps and vacuum-insulated pipe. The Company's national service network is unique in the industry, and the Company believes this network provides a significant competitive edge. The Company anticipates the demand for full service, national, qualified maintenance of cryogenic products and installations will increase. The Company's cryogenic services business results primarily from its March 1999 acquisition of a group of privately held companies, collectively known as Northcoast Cryogenics ("Northcoast"), and its December 1999 acquisition of the operational assets and personnel of Air Liquide America's cryogenic repair center located in Houston, Texas. PROCESS SYSTEMS AND EQUIPMENT SEGMENT ("PROCESS SYSTEMS") The Company's principal products within the Process Systems segment, which accounted for 17 percent of sales in 2001, are focused on the process equipment, primarily heat exchangers and coldboxes, used by the major natural gas, petrochemical processing and industrial gas companies in the production of their products. The Company is the leading designer and manufacturer of cryogenic heat exchangers. Using technology pioneered by the Company, heat exchangers are incorporated into systems such as cold boxes to facilitate the progressive cooling and liquefaction of air or hydrocarbon mixtures for the subsequent recovery or purification of component gases. In hydrocarbon processing industries, heat exchangers allow producers to obtain purified hydrocarbon by-products, such as methane, ethane, propane and ethylene, which are commercially marketable for various industrial or residential uses. In the industrial gas market, heat exchangers are used to obtain high purity atmospheric gases, such as oxygen, nitrogen and argon, which have numerous diverse industrial applications. Heat exchangers are customized to the customer's order and range in price from approximately $30,000 for a relatively simple unit to as high as $10 million for a major project. Management anticipates the return of demand for its heat exchangers in the second half of 2002, resulting substantially from increased activity in the petrochemical and natural gas segments of the hydrocarbon processing market. In particular, management believes that continuing efforts by petroleum producing countries to make better use of previously flared methane and to broaden 4 their industrial base present a promising source of demand for the Company's heat exchangers. Demand for heat exchangers in developed countries is expected to continue as firms upgrade their facilities for greater efficiency and regulatory compliance. Historic demand for heat exchangers has cycled to very low levels and typically recovered to new peak requirements. To ensure adequate capacity for anticipated growth in demand for heat exchangers, the Company operates two facilities, the larger being in the United States with a smaller capacity facility in the United Kingdom. The Company's principal competitors for heat exchangers are Linde, Sumitomo, Kobe and Nordon. Management believes that the Company is the only producer of large brazed aluminum heat exchangers in the United States and, with the second facility in the United Kingdom, is the leader in the global heat exchanger market. Major customers for the Company's heat exchangers in the industrial gas market include Air Liquide, Air Products, BOC, MG Industries and Praxair. In the hydrocarbon processing market, major customers include BP AMOCO, EXXON/MOBIL and contractors such as ABB Lummus, Bechtel and Kellogg, Brown and Root. The Company is a leading designer and fabricator of cold boxes. Cold boxes are highly engineered systems used to significantly reduce the temperature of gas mixtures to the point where component gases liquefy and can be separated and purified for further use in multiple industrial, scientific and commercial applications. In the industrial gas market, cold boxes are used to separate air into its major atmospheric components, including nitrogen, oxygen and argon, where the gases are used in a diverse range of applications such as the quick-freezing of food, wastewater treatment and industrial welding. In the hydrocarbon processing market, the Company's cold box systems are used in natural gas processing and in the petrochemical industry. The construction of a cold box generally consists of one or more heat exchangers and other equipment packaged in a "box" consisting of metal framing and a complex system of piping and valves. Cold boxes, which are designed and fabricated to order, sell in the price range of $500,000 to $10 million, with the majority of cold boxes priced between $1 million and $2 million. The Company has a number of competitors for fabrication of cold boxes, including E.S. Fox and Ivor J. Lee. Principal customers for the Company's cold boxes include Air Liquide, ABB Lummus, BP AMOCO, Bechtel, Stone & Webster, Kellogg, Brown and Root, and Lurgi. MARKET OVERVIEW The Company serves a wide variety of markets through its emphasis on providing equipment for end-users of cryogenic liquids. These markets include beverage bottling and dispensing, alternative transportation fuels, biomedical research, medical test equipment, home-healthcare and electronics testing, to name just a few. With such a wide variety of markets, the Company has reduced the effect that fluctuations in the overall industrial gas and hydrocarbon markets have on its profitability. Despite its cyclicality, management believes that the global expansion of the industrial gas and hydrocarbon processing markets presents attractive opportunities for growth. To date, the sources of the Company's international business principally have been its large domestic-based customers, who are aggressively expanding into international markets, and large foreign-based companies with significant U.S. operations. In 2001, approximately 34 percent of the Company's sales were destined for use at job sites outside the United States compared to 33 percent in 2000 and 34 percent in 1999. The industrial gas market is the largest market served by the Company. The top world producers of industrial gases have been among the Company's largest customers for each of the last three years. Producers of industrial gases separate atmospheric air into its component gases using cryogenic processes. The resultant liquid gases are then stored and transported for ultimate use by a wide variety of customers in the petrochemical, electronics, glass, paper, metals, food, fertilizer, welding, enhanced oil recovery and medical industries. Industrial gas producers use heat exchangers and cold boxes to produce liquid gases. Cryogenic tanks and components, including pumps, valves and piping, are also used to store, transport and distribute liquid gases to end users. The hydrocarbon processing market consists of petrochemical and natural gas processors. Natural gas processing involves the separation and purification of natural gas for the production of liquid gas end products such as methane, ethane, propane and butane, and by-products such as helium, which have numerous commercial and industrial applications. In the petrochemical industry, cryogenic separation and purification processes are required to produce ethylene (the basic building block of plastics), propylene and numerous other primary hydrocarbons having industrial uses. Like the industrial gas market, the hydrocarbon processing market uses all of the categories of the Company's cryogenic products in the gas separation and purification processes and the subsequent storage and distribution of liquid gases. Major customers for the Company's products in the hydrocarbon processing markets are large multinational firms in the oil and gas industry, and large engineering and construction concerns. ENGINEERING AND PRODUCT DEVELOPMENT The Company's engineering and product development activities are focused on developing new and improved solutions and equipment for the users of cryogenic liquids. The Company's engineering, technical and marketing employees actively assist customers in specifying their needs and in determining appropriate products to meet those needs. Portions of the Company's engineering expenditures typically are charged to customers, either as separate items or as components of product cost. 5 COMPETITION Management believes the Company can compete effectively around the world and that it is a leading competitor in its markets. Competition is based primarily on performance and the ability to provide the design, engineering and manufacturing capabilities required in a timely and cost-efficient manner. Contracts are usually awarded on a competitive bid basis. Quality, technical expertise and timeliness of delivery are the principal competitive factors within the industry. Price and terms of sale are also important competitive factors. Because reliable market share data is not available, it is difficult to estimate the Company's exact position in its markets, although the Company believes it ranks among the leaders in each of the markets it serves. MARKETING The Company's principal operating units currently market products and services in North America primarily through 172 direct sales personnel, and supplement these direct sales through independent sales representatives and distributors. The technical and custom design nature of the Company's products requires a professional, highly trained sales force. While each salesperson is expected to develop a highly specialized knowledge of one product or group of products within a segment of the Company, each salesperson is now able to sell many products from different segments to a single market. The Company uses independent sales representatives to conduct its sales in certain foreign countries that the Company serves. These independent sales representatives supplement the Company's direct sales force in dealing with language and cultural matters. The Company's domestic and foreign independent sales representatives earn commissions on sales, which vary by product type. ORDERS AND BACKLOG The Company considers orders to be those for which the Company has received a signed purchase order or other written contract from the customer. Such orders are included in backlog until recognized as revenue or cancelled. The table below sets forth orders and backlog by segment for the last three fiscal years. Years Ended December 31, ----------------------- 2001 2000 1999 ---- ---- ---- (Dollars in thousands) Orders Applied Technologies (A) $ 142,527 $ 142,656 $ 98,941 Distribution and Storage Equipment 122,433 154,756 96,722 Process Systems and Equipment 46,728 78,149 32,087 ---------- ---------- ---------- Total $ 311,688 $ 375,561 $ 227,750 ========== ========== ========== Backlog Applied Technologies (A) $ 13,782 $ 15,961 $ 12,456 Distribution and Storage Equipment 26,635 39,227 26,372 Process Systems and Equipment 24,395 33,686 8,165 ---------- ---------- ---------- Total $ 64,812 $ 88,874 $ 46,993 ========== ========== ========== (A) Applied Technologies backlog and orders have been restated for all periods presented to show the MRI cryostat business to have no backlog; thus, orders in all periods for this business equal sales. This is consistent with the current treatment of purchase orders by the customer for this business. During 2001, the Applied Technologies segment continued with very strong order performance in each of its product lines. This segment would have shown significant growth if it had not been for the slowdown in cryogenic systems mainly for the electronics industry. The Distribution and Storage segment experienced a reduction in orders across its product portfolio in 2001 compared with 2000 due to the worldwide slowdown experienced by the manufacturing sectors of the industrialized world. The Process Systems segment returned to a cyclical order low in 2001 after being buoyed in 2000 by several orders related to the Trinidad LNG project. The Company experienced a significant increase in orders in the Process Systems segment in 2000. This increase was primarily due to one significant LNG project in the natural gas processing market. The increase in the Applied Technologies segment orders in 2000 compared with 1999 was largely driven by the inclusion of certain MVE Holdings, Inc. ("MVE") products for the full year, while 1999 only included orders for these products subsequent to the Company's April 12, 1999 acquisition of MVE. Additionally, MRI cryostat, LNG systems and medical oxygen products all showed significant order improvements in 2000 compared with 1999. Like Applied Technologies, the Distribution and Storage segment benefited significantly in 2000 from the inclusion of MVE for the full year. In addition, the packaged gas and ORCA(R) Micro-Bulk delivery systems demonstrated significantly improved orders due to several new long term supply agreements with large industrial gas suppliers. The Company's Czech Republic operations also increased market share in Europe in 2000 as they demonstrated improved quality. 6 Almost all of the December 31, 2001 backlog is scheduled to be recognized as sales during 2002. The Company's backlog fluctuates from time to time, and the amounts set forth above are not necessarily indicative of future backlog levels or the rate at which backlog will be recognized as sales. The increased focus within the Company on the Distribution and Storage and Applied Technologies segments will generally reduce backlog, as products within these segments tend to have shorter lead times than those in the Process Systems segment. CUSTOMERS Ten customers accounted for 40 percent of consolidated sales in 2001. The Company's sales to particular customers fluctuate from period to period. In 2001, approximately 34 percent of sales were destined to be used in foreign countries. The Company's customers are spread across the industrial gas, hydrocarbon and chemical processing industries in several countries. The Company's management has established certain credit requirements that its customers must meet before sales credit is extended. The Company monitors the financial condition of its customers to help ensure collections and to minimize losses. For certain domestic and foreign customers, the Company requires customer advances, letters of credit and other such guarantees of payment. For certain foreign customers, the Company also purchases credit and political risk insurance. The Company believes its relationships with its customers are good. PATENTS AND TRADEMARKS Although the Company has a number of patents, trademarks and licenses related to its business, no one of them or related group of them is considered by the Company to be of such importance that its expiration or termination would have a material adverse effect on the Company's business. In general, the Company depends upon technological capabilities, manufacturing quality control and application of know-how, rather than patents or other proprietary rights, in the conduct of its business. RAW MATERIALS AND SUPPLIERS The Company manufactures most of the products it sells. The raw materials used in manufacturing include aluminum sheets, bars, plate and piping, stainless steel strip, heads, plate and piping, palladium oxide, carbon steel heads and plate and 9 percent nickel steel heads and plate. Most raw materials are available from multiple sources of supply. In March 2002, the United States Government instituted various levels of tariffs on certain imported steel products. These tariffs will have the impact of increasing the manufactured cost of certain of the Company's Distribution and Storage segment bulk storage tanks by between 8 percent and 18 percent. The Company has announced a surcharge related to these bulk storage tanks in order to pass the tariff costs on to its customers. Commodity metals used by the Company have experienced fluctuations in price. The Company has generally been able to recover the costs of price increases through its contracts with customers. The Company foresees no acute shortages of any raw materials which would have a material adverse effect on its operations. EMPLOYEES As of December 31, 2001, the Company had 2,137 employees, including 1,479 domestic employees and 658 international employees. These employees consisted of 665 salaried, 435 union hourly and 1,037 non-union hourly employees. The salaried employees included 112 engineers and draft-persons and 553 other professional, technical and clerical personnel. The Company is a party to three collective bargaining agreements through its operating subsidiaries. The agreement with the International Association of Machinists and Aerospace Workers covering 107 employees at the Company's La Crosse, Wisconsin heat exchanger facility expires February 3, 2004. The agreement with the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers covering 69 employees at the Company's Plaistow, New Hampshire facility expires August 30, 2002. The agreement with the United Steel Workers covering 259 employees at the Company's New Prague, Minnesota facility expired January 15, 2002, and a new agreement continues to be negotiated. No work stoppage is currently anticipated at this facility. Since the acquisition of each of its operating units, the Company has not had any work stoppages or strikes. The Company believes its employee relations are good. FACILITIES The Company occupies 22 principal locations totaling approximately 2.1 million square feet, with the majority devoted to manufacturing, assembly and storage. Of these manufacturing facilities, approximately 1.6 million square feet are owned and 0.5 million square feet are occupied under operating leases. The Company considers its manufacturing facilities sufficient to meet its current and planned operational needs. The Company leases approximately 11,400 square feet for its executive offices in Cleveland, Ohio. The Company's owned facilities in the United States are subject to mortgages securing the Company's consolidated credit and revolving loan facility. 7 The following table sets forth certain information about the Company's facilities:

*Leased by a joint venture in which the Company has a 50 percent interest. ENVIRONMENTAL MATTERS The Company's operations involve and have involved the handling and use of substances, such as various cleaning fluids used to remove grease from metal, that are subject to federal, state and local environmental laws and regulations. These regulations impose limitations on the discharge of pollutants into the soil, air and water, and establish standards for their handling, management, use, storage and disposal. The Company monitors and reviews its procedures and policies for compliance with environmental laws and regulations. The Company's management is familiar with these regulations, and supports an ongoing capital investment program to maintain the Company's adherence to required standards. The Company is involved with environmental compliance, investigation, monitoring and remediation activities at certain of its operating facilities, and, except for these continuing remediation efforts, believes it is currently in substantial compliance with all known material and applicable environmental regulations. The Company accrues for certain environmental remediation-related activities for which commitments or remediation plans have been developed and for which costs can be reasonably estimated. These estimates are determined based upon currently available facts regarding each facility. Actual costs incurred may vary from these estimates due to the inherent uncertainties involved. Future expenditures relating to these environmental remediation efforts are expected to be made over the next ten years as ongoing costs of remediation programs. Although the Company believes it has adequately provided for the cost of all known environmental conditions, the applicable regulatory agencies could insist upon different and more costly remediative measures than those the Company believes are adequate or required by existing law. The Company believes that any additional liability in excess of amounts accrued which may result from the resolution of such matters will not have a material adverse effect on the Company's financial position, liquidity, cash flows or results of operations. 8 ITEM 3. LEGAL PROCEEDINGS The Company's Applied Technologies business ("Applied Technologies") has been named as a defendant in several similar cases pending in the Court of Common Pleas, Montgomery County, Ohio, related to an accident occurring on December 7, 2000, at the IHS at Carriage by the Lake nursing home outside Dayton, Ohio. A nitrogen tank was connected to the nursing home's oxygen system resulting in the death of five elderly patients and injuries to five additional patients from inhaling nitrogen. The cases filed to date include: Tomlin, et ---------- al. v. IHS at Carriage by the Lake, et al., Waldspurger v. BOC Gases, et al., - ----------------------------------------------------------------------------- Leslie v. IHS at Carriage by the Lake, et al., Williams, et al., v. IHS at - -------------------------------------------------------------------------- Carriage by the Lake, et al., Reynolds, et. al. v. IHS at Carriage by the Lake, - ------------------------------------------------------------------------------- et. al., and Van Etten v. IHS at Carriage by the Lake, et. al. The cases were - -------- ------------------------------------------------- filed on various dates between December 13, 2000 and December 31, 2001. The claims against the Company in these cases include negligence, strict product liability, failure to warn, negligence per se, breach of warranty, punitive damages, wrongful death, loss of consortium (spousal and maternal) and negligent infliction of emotional distress. The allegations underlying the claims include defective or deficient manufacture, construction, design, labeling, formulation and warnings with regard to a cylinder. Defendants named in these cases include the nursing home and its parent company, Applied Technologies, BOC Gases of Dayton, The BOC Group, Inc., and a "John Doe" manufacturer and supplier. The plaintiffs in these cases are seeking, in total, $28.5 million in compensatory damages, $30.0 million in punitive damages, $2.0 million for loss of consortium damages, pre-judgment and post-judgment interest and costs and fees from the Company and other defendants named in the claims. The Company is vigorously defending all of these cases and has filed its answer, denied all liability and cross-claimed for contribution from certain co-defendants. Certain co-defendants have filed cross-claims against the Company claiming contribution. Certain of these cases have been settled with the other defendants, and others are scheduled to be mediated. The Company is not involved in any of the mediation or settlement negotiations, in part because the Company has not received any settlement demands. Additionally, the Company believes that the claims made against it are the most tenuous of any defendant and that the plaintiffs will be unable to articulate a plausible negligence claim based on product liability. Of further significance is the fact that some of the co-defendants have been criminally indicted in this matter. The Company, however, has not been so indicted. The court has granted stays in all of these cases pending the outcome of the criminal charges. All of these cases have been assigned to one judge and will most likely be consolidated for trial. The trial in these matters has tentatively been set for June 3, 2002. The trial in the criminal matter is scheduled for May 20, 2002. The Company is a party to other legal proceedings incidental to the normal course of its business. Management believes that the final resolution of these matters will not have a material adverse affect on the Company's financial position, liquidity, cash flows or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT Certain information as of December 31, 2001 regarding each of the Company's executive officers is set forth below: Name Age Position ---- --- -------- Arthur S. Holmes 60 Chairman, Chief Executive Officer and a Director James R. Sadowski 60 President and Chief Operating Officer Michael F. Biehl 46 Chief Financial Officer and Treasurer John T. Romain 37 Controller, Chief Accounting Officer and Assistant Treasurer Arthur S. Holmes has been Chairman and Chief Executive Officer of the Company since its formation in June 1992, and was President until December 1993. Mr. Holmes served as President of ALTEC International, Inc. from 1985 through 1989. From 1978 through 1985, he served in a variety of managerial capacities for Koch Process Systems, Inc., the predecessor of Process Systems International, Inc., an operating unit of the Company, most recently as Vice President-Manager of the Gas Processing Division. Mr. Holmes is the co-inventor of the Company's patented Ryan/Holmes technology. Mr. Holmes holds a BS and an MS in Chemical Engineering from the Pennsylvania State University and an MBA from Northeastern University. James R. Sadowski has been President and Chief Operating Officer of the Company since December 1993. Prior to joining the Company, Mr. Sadowski served as Group Vice President of Parker Hannifin Corporation's Bertea Aerospace Group ("Bertea") from 1991 to 1993. Prior to his service at Bertea he served in various managerial capacities at Parker Hannifin Corporation and TRW Inc. Mr. Sadowski holds a BS in Engineering/Science from Case Institute of Technology and an MS degree from the same institution in Mechanical Engineering. 9 Michael F. Biehl has been the Chief Financial Officer and Treasurer of the Company since July 2001. Prior to joining the Company, Mr. Biehl served as Vice President, Finance and Treasurer at Oglebay Norton Company, a publicly held Cleveland-based company that provides industrial minerals to a broad range of industries. He joined Oglebay Norton in 1992 as Corporate Controller, was promoted to Treasurer and Director of Finance in 1994 and promoted to Vice President, Finance in 1998. Prior to joining Oglebay Norton, he worked in the audit practice of Ernst & Young, LLP in Cleveland, Ohio. Mr. Biehl is a Certified Public Accountant and holds a BBA in Accounting from Ohio University and an MBA from Northwestern University's Kellogg Graduate School of Management. John T. Romain has been the Chief Accounting Officer since May 1999 and has served as the Company's Controller since July 1993. Prior to joining the Company, Mr. Romain worked in the audit practice of Ernst & Young, LLP in Cleveland, Ohio. Mr. Romain is a Certified Public Accountant and holds a BA in Accounting and Computer Systems from Grove City College, Grove City, Pennsylvania. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. QUARTERLY STOCK PRICES AND DIVIDENDS The high and low sales prices for the Company's Common Stock reported on the New York Stock Exchange for each quarterly period within the most recent two years are set forth in the table below: Quarter - ------------- 2001 High Low ---- --- 1st $ 5.88 $ 4.00 2nd 5.15 3.15 3rd 4.00 2.76 4th 3.00 1.84 Quarter - ------------- 2000 High Low ---- --- 1st $ 4.75 $ 2.94 2nd 5.12 2.62 3rd 6.38 4.25 4th 6.00 4.00 The Company did not pay any dividends in 2001 or 2000. LIMITATIONS ON THE PAYMENT OF DIVIDENDS The Company is permitted to pay cash dividends not exceeding $7.2 million in any fiscal year after January 1, 2001, but only if at both the time of payment of the dividend and immediately thereafter there is no event of default under the Credit Facility. RELATED STOCKHOLDER MATTERS Chart Industries Common Stock is traded on the New York Stock Exchange under the symbol "CTI." Shareholders of record on February 28, 2002 numbered 1,847. The Company estimates that an additional 5,000 shareholders own stock held for their accounts at brokerage firms and financial institutions. 10 ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected financial data of the Company for each of the five years during the period ended December 31, 2001. The data was derived from the annual audited consolidated financial statements of the Company for the relevant years and includes the operations of acquired businesses after their date of acquisition, including for periods after April 12, 1999, the operations of MVE. Further information about the Company's acquisitions is found at Note D to the Company's consolidated financial statements included at Item 8 of this Annual Report on Form 10-K. SELECTED FINANCIAL DATA (Dollars in thousands, except per share amounts)

(A) The Company defines EBITDA as net income (loss) before gain on sale of assets, net interest expense, derivative contracts valuation expense, income tax expense (benefit), minority interest expense, cumulative effect of change in accounting principle, extraordinary items, depreciation and amortization expense and employee separation and plant closure costs (income). The Company's definition of EBITDA may not be comparable to similarly titled measures reported by other companies. 11 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. GENERAL During 2001, the Company continued its focus on developing products that are expected to continue the growth trend Chart has demonstrated since its initial public offering in 1992. The Company is growing through organic development of new products, extension of products worldwide and acquisitions. The Company has grown from $92 million in sales in 1992 to $328 million in sales in 2001. The Company has also moved from being concentrated in the Process Systems segment to offering a wider array of products, many of which are more focused on the end usage of cryogenic liquids than on the production of these liquids. The migration of the Company's business, from products primarily employed in the production of cryogenic liquids to a broader array of products used throughout the cryogenic liquid-gas supply chain, is demonstrated by the historical growth of the Applied Technologies and Distribution and Storage segments. In 2001, the Company's Applied Technologies segment represented $142.5 million, or 43 percent, of its sales and $49.6 million, or 57 percent, of its gross profit. In 1992, the Company's equivalent segment had sales of $15.8 million, representing 15 percent of the Company's 1992 sales. Likewise, the Distribution and Storage segment generated sales of $129.5 million, or 40 percent, of consolidated sales in 2001. In 1992, this segment had $22.8 million in sales, representing 22 percent of the Company's sales for that year. In 2001, the Process Systems segment represented 17 percent of consolidated revenue. In 1992 this segment represented 63 percent of consolidated revenue. In 2001, the Company experienced the effects of the general economic slowdown affecting the United States manufacturing sector. These effects were complicated by the events of September 11th and the subsequent uncertainty in the economy. Based upon national leading economic indicators, the Company's current outlook for 2002 is positive, with an expected recovery of certain depressed markets in the second half of the year. OPERATING RESULTS The following table sets forth the percentage relationship that each line item in the Company's consolidated statements of operations represents to sales in the last three fiscal years.

12 SEGMENT INFORMATION The following table sets forth sales, gross profit and gross profit margin for the Company's three operating segments for the last three fiscal years. Years Ended December 31, ------------------------------------------ 2001 2000 1999 ------------ ------------ -------------- (Dollars in thousands) Sales Applied Technologies $142,491 $136,952 $105,323 Distribution and Storage Equipment 129,473 137,929 105,529 Process Systems and Equipment 56,026 50,819 82,085 ------------ ------------ -------------- Total $327,990 $325,700 $292,937 ============ ============ ============== Gross Profit Applied Technologies $ 49,577 $ 54,449 $ 35,521 Distribution and Storage Equipment 27,030 29,311 25,313 Process Systems and Equipment 9,754 12,269 16,547 ------------ ------------ -------------- Total $ 86,361 $ 96,029 $ 77,381 ============ ============ ============== Gross Profit Margin Applied Technologies 34.8% 39.8% 33.7% Distribution and Storage Equipment 20.9% 21.3% 24.0% Process Systems and Equipment 17.4% 24.1% 20.2% Total 26.3% 29.5% 26.4% YEARS ENDED DECEMBER 31, 2001 AND 2000 Sales for 2001 were $328.0 million versus $325.7 million for 2000, an increase of $2.3 million, or 0.7 percent. With minimal price changes in 2001, the increase in sales was primarily volume driven and resulted from sales growth in the Applied Technologies and Process Systems segments of $5.5 million and $5.2 million, respectively, offset by a $8.5 million decrease in Distribution and Storage segment sales. The Applied Technologies segment sales increase was largely driven by a $7.3 million increase in medical oxygen product shipments as well as increased shipments of $3.8 million in biological storage systems and $4.1 million in LNG alternative fuel systems. Offsetting these increases were reductions of $5.8 million in cryogenic systems and components and $3.7 million in MRI cryostat components. Sales by the Distribution and Storage segment were significantly impacted by the general economic slowdown in the second half of 2001. Declines of $4.3 million and $8.4 million in standard tanks and packaged gas liquid cylinders, respectively, more than offset the increased number of ORCA((r)) Micro-Bulk delivery systems and other mobile equipment sold. The Process Systems segment sales, while improving slightly in 2001, still reflect the significant and extended downturn in new production equipment for the industrial gas market. The Company expects to see an upturn in 2002 in the various markets this segment serves, especially natural gas processing and ethylene production equipment. Gross profit for 2001 was $86.4 million versus $96.0 million for 2000. Gross profit was negatively impacted by non-cash inventory valuation charges included in cost of sales of $1.9 million in the Applied Technologies segment and $0.7 million in the Distribution and Storage segment related to the Company's decisions to exit a product line and close certain cryogenic services business sites. Gross profit margin for 2001 was 26.3 percent versus 29.5 percent for 2000. The Applied Technologies segment 2001 gross profit margin decreased five points compared with 2000 as its sales mix was concentrated in lower margin products such as LNG alternative fuel systems rather than higher margin cryogenic systems. The Process Systems segment experienced declining margins in 2001 due to the lower prices on highly competitive projects, which were only partially offset by the $2.2 million positive impact of increased volume. Gross profit margin in the Distribution and Storage segment in 2001 declined when compared with 2000 primarily due to lower manufacturing volume in the bulk and packaged gas areas. In March 2002, the United States Government instituted various levels of tariffs on certain imported steel products. These tariffs will have the impact of increasing the manufactured cost of certain of the Company's Distribution and Storage segment bulk storage tanks by between 8 percent and 18 percent. The Company has announced a surcharge related to these bulk storage tanks in order to pass the tariff costs on to its customers. The Company does not know at this time what effect, if any, these steel tariffs will have on the future sales and gross margin of the Distribution and Storage segment. 13 Selling, general and administrative ("SG&A") expense for 2001 was $60.1 million versus $60.8 million for 2000, a decrease of $0.7 million, or 1.2 percent. As a percentage of sales, SG&A expense was 18.3 percent for 2001, down from 18.7 percent for 2000. The decreases in both total SG&A expense and SG&A expense as a percentage of sales largely reflect the headcount reduction efforts of the Company during the year. Goodwill amortization expense for 2001 was $5.0 million compared with $4.9 million for 2000. Goodwill comprised 41.1 percent and 40.3 percent of total assets at December 31, 2001 and 2000, respectively, and arose primarily from the Company's acquisition of MVE in 1999. The Company will apply the new rules on accounting for goodwill and other intangible assets under Statement of Financial Accounting Standards ("SFAS") No. 141 "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets," effective January 1, 2002. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to impairment tests in accordance with SFAS No. 142. Application of the non-amortization provisions of SFAS No. 142 is expected to result in an annual increase in net income of approximately $5.0 million, or $0.20 per share, assuming dilution. The Company does not expect to identify any indefinite lived intangible assets. The Company plans to complete step one of the transitional impairment tests of goodwill by June 30, 2002. The Company has not yet determined the effect, if any, such tests will have on the financial statements of the Company. During 2001, the Company recorded employee separation and plant closure costs of $2.4 million. The charges included $1.6 million related to the closure of the Ottawa Lake, Michigan facility and two smaller sites within the cryogenic services business of the Distribution and Storage segment, $0.4 million for terminating 25 employees at the Company's Wolverhampton, United Kingdom, heat exchangers business facility of the Process Systems segment and $0.4 million for terminating 45 other employees throughout the Company. The Ottawa Lake business was moved to New Prague, Minnesota, and the two smaller repair operations were consolidated into Holly Springs, Georgia and Chart's newest service center in Costa Mesa, California. The cryogenic services business charges of $1.6 million included $0.5 million for lease termination and facility closure-related costs, $0.6 million for writing off certain leasehold improvements and fixed assets, $0.1 million for terminating 32 employees, and $0.4 million for moving costs and other charges. At December 31, 2001, the Company had a reserve of $0.5 million remaining, primarily for lease termination costs. The Company does not expect to incur any additional costs related to the shutdown of the cryogenic services business sites. In the first quarter of 2002, the Company will record a charge related to its decision to close its Distribution and Storage segment plant in Denver, Colorado. The various mobile equipment products manufactured in this plant will be manufactured in other Company facilities. The charge related to the closure of this site is still being finalized, but is expected to approximate $2.0 million. The charge will include lease termination costs, severance for terminated employees, write-offs of inventory and fixed assets and moving costs incurred for items consolidated into other facilities. The Company expects to complete the shutdown of this plant in the second quarter of 2002. In late 2001, the Company engaged consultants to perform an operations review of all of its domestic and foreign operating facilities. Although the study is not yet finalized, preliminary discussions with the consultants indicate they will propose different rationalization scenarios. The Company is committed to reviewing these scenarios and implementing the changes, if any, that the Company believes will increase shareholder value. It is probable that the Company will incur additional charges in 2002 related to these rationalization efforts. The Company recorded $0.5 million of equity income in its Coastal Fabrication joint venture in 2001, compared with equity income of $0.04 million in 2000. The joint venture has not made any cash distributions to the Company or the other joint venture partner. In 2001, the Company recorded a $0.5 million gain on the sale of its minority investment in Restaurant Technologies, Inc. for cash proceeds of $2.4 million. Net interest expense for 2001 was $21.6 million compared with $26.7 million for 2000, reflecting lower interest rates due to decreases by the Federal Reserve in base interest rates. The Company manages its interest rate exposure through the use of interest rate collars on approximately 50 percent of the term debt and to a lesser extent by varying LIBOR maturities in the entire Credit Facility. The Company's interest rate collars do not qualify as hedges under the provisions of SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities." The Statement requires such collars to be recorded in the consolidated balance sheet at fair value. Changes in their fair value must be recorded in the consolidated statement of operations. Accordingly, the Company recorded a charge to operations as of January 1, 2001 as a cumulative effect of a change in accounting principle, net of income taxes. As a result of the significant interest rate decreases and an expectation that the forward interest rate yield curve will remain flat, the Company was required to record non-cash charges of $2.9 million in 2001 related to an estimated decline in fair value of the Company's interest rate collars. These charges should be offset in the future by lower actual interest rates on outstanding loans. There were no comparable non-cash charges in 2000. The fair value of the interest rate collars is determined by the expectation of future interest rates and is, therefore, difficult to predict. The liability relating to the collars of $2.3 million is recorded by the Company in accrued interest in the consolidated balance sheet at December 31, 2001, and represents the estimated payments to be made over the life of the collars. An interest rate collar covering $76.0 million of the Company's debt expires on June 30, 2002. The remaining interest rate collar covering $33.4 million of debt expires on March 31, 2006. 14 The effective income tax rate for 2001 reflects the interaction of a book loss and taxable income, which is primarily the result of non-deductible goodwill amortization. The Company has net deferred tax assets of $15.1 million at December 31, 2001. Management has determined, based on the Company's history of prior earnings and its expectations for the future, that taxable income of the Company will more likely than not be sufficient to fully realize the tax benefit of the net deferred tax assets. As a result of the foregoing, the Company incurred a net loss of $5.2 million in 2001, compared with net income of $2.2 million in 2000. YEARS ENDED DECEMBER 31, 2000 AND 1999 Sales for 2000 were $325.7 million versus $292.9 million for 1999, an increase of $32.8 million, or 11.2 percent. The increase in sales was primarily volume driven and was the result of growth in sales for the Applied Technologies and Distribution and Storage segments of $31.6 million and $32.4 million, respectively, offset by a $31.3 million decrease in Process Systems sales. The Applied Technologies segment increase in sales in 2000 was largely driven by the inclusion of certain product lines of MVE totaling $70.3 million for the full year, while 1999 only included sales subsequent to April 12 and totaled $53.7 million. Additionally, MRI cryostat components showed a $6.1 million improvement over 1999. Similar to Applied Technologies, sales by the Distribution and Storage segment benefited significantly in 2000 from the inclusion of MVE for the full year. MVE product lines contributed $97.8 million of sales toward the Distribution and Storage segment in 2000, compared with $62.1 million of sales in 1999. The packaged gas and ORCA((R)) Micro-Bulk delivery systems demonstrated significantly improved sales due to several new long term supply agreements with the large industrial gas suppliers. The Company's Czech Republic operations also continued to increase market share in Europe as it demonstrated improved quality. The Process Systems segment sales in 2000 reflected the significant and extended downturn in the industrial gas market for new production equipment. This market had been cyclical in the past as demonstrated by the Company's poor performance in 1993 and 1994. Gross profit for 2000 was $96.0 million versus $77.4 million for 1999. Gross profit in 1999 was reduced by $1.2 million for acquired profit in inventory related to the MVE acquisition and $0.9 million for inventory related employee separation and plant closure costs, both of which were included in cost of sales. Gross profit margin for 2000 was 29.5 percent versus 26.4 percent for 1999. The Applied Technologies segment gross profit margin improved in 2000 compared with 1999 as its sales growth was concentrated in higher margin products, driven largely by providing system solutions instead of components. The Process Systems segment also experienced improved margins in 2000 compared with 1999, largely due to the improved volumes as the result of the Trinidad LNG project as well as several other higher margin hydrocarbon processing projects. Gross profit margin in the Distribution and Storage segment declined nearly three percentage points in 2000 compared with 1999, due to poor performance in the cryogenic services business. SG&A expense for 2000 was $60.8 million versus $51.5 million for 1999, an increase of $9.3 million, or 18.2 percent. As a percentage of sales, SG&A expense was 18.7 percent for 2000, up from 17.6 percent for 1999. The increase as a percentage of sales largely reflected the higher marketing costs incurred in 2000 inherent in the pursuit of sales in the Applied Technologies segment, and increased medical and other employee benefit costs. Goodwill amortization expense for 2000 was $4.9 million compared with $3.7 million for 1999. The $1.2 million increase was entirely attributable to incremental amortization expense resulting from the MVE and Northcoast acquisitions being included for the full year. The Company recorded net employee separation and plant closure costs of $12.9 million in 1999 to reorganize its operations as a result of the MVE acquisition. The charge included a non-cash portion of $9.8 million to write-off impaired inventory, fixed assets and goodwill, and a cash portion of $3.1 million for severance and other costs related to closing a manufacturing facility. The Company terminated 188 employees in 1999 under this plan. During 2000, the Company reversed $0.7 million of the reserve due to reoccupying a leased facility previously vacated, and utilized $0.6 million of the reserve for the payment of severance benefits and lease costs for an exited facility. The Company's 1999 financial results were negatively impacted by a non-cash charge of $22.0 million for the write-off of acquired in-process research and development ("IPR&D" ) related to the MVE acquisition that had no alternative future use at the date of acquisition. This total amount was determined by independent consultants who estimated the costs to develop the technology into commercially viable products, estimated cash flows resulting from the expected revenues generated by such products, and discounted the net cash flows back to their present value using a risk-adjusted discount rate. 15 In 2000, the Company recorded a $1.0 million gain on the sale of certain fixed assets, primarily its Westborough, Massachusetts building, on proceeds of $5.0 million in cash. Net interest expense for 2000 was $26.7 million compared with $15.9 million for 1999, reflecting higher interest rates and interest for the full year on funds borrowed to finance the MVE acquisition. The change in the effective income tax rate between 2000 and 1999 was primarily due to the non-deductible IPR&D expense incurred in 1999. The Company had net deferred tax assets of $11.9 million at December 31, 2000. In 1999, the Company recorded an extraordinary charge of $12.5 million, $7.8 million net of tax, related to the early extinguishment of MVE 12.5 percent senior secured notes which had a maturity date in 2002. As a result of the foregoing, the Company earned net income of $2.2 million in 2000, compared with a net loss of $36.3 million in 1999. Excluding non-recurring items resulting from the MVE acquisition and related reorganization, the Company had net income of $4.2 million in 1999. LIQUIDITY AND CAPITAL RESOURCES Cash provided by operations in 2001 was $13.3 million compared with $14.6 million in 2000 and cash used in operations of $5.5 million in 1999. In 2001 the Company generated cash from positive cash earnings as well as reductions in both inventory and accounts receivable. In 2000, the Company increased inventory in several of its short lead time items to service increasing sales volumes and to reduce orders lost due to backorders. The significant decrease in operating cash flow in 1999 was due primarily to the large decrease in operating income from the Process Systems segment and decreases in customer advances. As orders recover in the Process Systems segment and grow in the other segments as expected by the Company, there could be large fluctuations in cash flows depending on negotiated payment terms with customers. Capital expenditures in 2001, 2000 and 1999 were $8.1 million, $5.6 million and $7.0 million, respectively. The Company's capital expenditures relate primarily to the Distribution and Storage segment, where new equipment was necessary as a result of the Company's reorganization plan initiated in 1999. The Company expects capital expenditures in 2002 to be similar in magnitude to the 2001 amount. On December 15, 1999, the Company acquired certain assets relating to the cryogenic repair business operated by Air Liquide America Corporation ("Air Liquide") for $1.0 million in cash and $2.6 million in rebate credits to be given to Air Liquide on future sales. These rebate credits have been fully utilized as of December 31, 2001. On April 12, 1999, the Company acquired the common stock of MVE for approximately $9.2 million in cash ($2.2 million net of cash acquired) and redeemed the preferred stock of MVE for approximately $74.6 million. In addition, the Company paid approximately $156.1 million to retire MVE's existing debt obligations and complete the tender offer and consent solicitation for the 12.5 percent senior secured notes due 2002 issued by MVE, Inc., a subsidiary of MVE. On March 15, 1999, the Company acquired Northcoast for approximately $2.3 million in cash ($2.2 million net of cash acquired) and $0.7 million in the Company's Common Stock. In order to finance the acquisition of MVE, in March 1999 the Company negotiated a consolidated credit and revolving loan facility (the "Credit Facility"), which originally provided for term loans of up to $250.0 million and a revolving credit line of $50.0 million, which may also be used for the issuance of letters of credit. The Company paid fees of $6.5 million in 1999 to establish the Credit Facility. The Credit Facility provides the agent bank with a secured interest in substantially all of the assets of the Company. The Company entered into the Series 1 Incremental Revolving Credit Facility in November 2000 and the Series 2 Incremental Revolving Credit Facility in April 2001 (collectively, the "Incremental Credit Facility"), providing a revolving credit line of $10.0 million in addition to the credit line available under the Credit Facility. Borrowings on the Incremental Credit Facility are secured by the same collateral as the Credit Facility. At December 31, 2001, the Company had borrowings of $218.2 million outstanding under the term loan portion of the Credit Facility, borrowings of $34.4 million outstanding under the revolving credit portion of the Credit Facility, borrowings of $9.0 million outstanding under the Incremental Credit Facility and letters of credit outstanding and bank guarantees totaling $15.0 million supported by the Credit Facility. The Credit Facility was amended in August 1999, October 2000, October 2001 and December 2001 at costs to the Company of $1.2 million, $1.0 million and $0.8 million, in 1999, 2000 and 2001, respectively. The Credit Facility and Incremental Credit Facility were subsequently amended in March 2002 (the "March 2002 Amendments") at a cost of approximately $1.9 million to modify certain covenants until March 31, 2003, to defer $25.7 million of Term A and Term B amortization payments from scheduled payment dates in 2002 to 2005 and to extend the Incremental Credit Facility to March 31, 2003. The March 2002 Amendments resulted in an increase in interest rates of 0.25 percent, the addition of one financial covenant and scheduled reductions in the commitment amounts of the revolving credit lines of the Credit Facility and the Incremental Credit Facility. The March 2002 Amendments provide for the Company to prepay borrowings under the Credit Facility and Incremental Credit Facility in an aggregate amount of at least $75.0 million ("Minimum 16 Prepayment Amount") from the net proceeds of an equity investment, sale of assets and other sources of new capital. If the Minimum Prepayment Amount is not made by September 30, 2002, the Company's interest rates will increase by another 0.25 percent, and will increase again by 0.25 percent each quarter thereafter. If the Minimum Prepayment Amount is achieved, these additional interest rate increases will be eliminated. The March 2002 Amendments also provide for the issuance of market-priced warrants to the lenders for the purchase of two percent of the Company's Common Stock at June 28, 2002. If the Minimum Prepayment Amount is not made by September 30 or December 31, 2002, the lenders will be issued market-priced warrants for the purchase of an additional five percent and three percent, respectively, of the Company's Common Stock. If at least $50.0 million of the Minimum Prepayment Amount is made from the net proceeds of an equity investment by September 30 or December 31, 2002, no warrants will be required to be issued to the lenders on those dates. Earlier in 2001, the Company was initially pursuing subordinated debt refinancing as a method of reducing the Company's leverage ratio specific to the lenders participating in the Credit Facility. Although the Company believes subordinated debt is still one option it could pursue, the Company is continuing to pursue other potential sources of capital. Discussions are ongoing between the Company and an investor group regarding a potential junior capital investment in the Company. Proceeds from either of these transactions would be used by the Company to pay down debt obligations on its Credit Facility. The Credit Facility, as modified by the March 2002 Amendments, contains certain covenants and conditions which impose limitations on the Company and its operating units, including meeting certain financial tests and the quarterly maintenance of certain financial ratios on a consolidated basis such as: minimum net worth, maximum leverage, minimum pre-tax interest coverage ratio, minimum fixed charge coverage ratio and minimum earnings before interest, taxes, depreciation, amortization and restructuring charges. The Company is permitted to pay cash dividends not exceeding $7.2 million in any fiscal year after January 1, 2001, but only if at both the time of payment of the dividend and immediately thereafter there is no event of default under the Credit Facility. As of December 31, 2001, the Company was not in default with the covenants and conditions of the Credit Facility due to amendments made in the fourth quarter of 2001 and the March 2002 Amendments. In November 1996, the Board of Directors authorized a program to repurchase 2,250,000 shares of the Company's Common Stock. The amount and timing of share purchases will depend on market conditions, share price and other factors. The Company reserves the right to discontinue the repurchase program at any time. In 2001, 2000 and 1999, 50,000, 37,200, and 104,000 shares, respectively, were acquired under the program. As of December 31, 2001, 257,467 shares remain available for repurchase under the program. As a result of the modifications made by the March 2002 Amendments, the Company currently believes that cash forecasted to be generated by operations and access to capital markets will be sufficient to satisfy its working capital, capital expenditure and debt repayment requirements for the current fiscal year. The Company did not pay any dividends in 2001 or 2000. Dividends totaling $2.4 million, or $0.10 per share, were paid by the Company in 1999. Any future declarations of dividends are at the sole discretion of the Company's Board of Directors, subject to the conditions of the Credit Facility. No assurance can be given as to whether dividends will be declared in the future, and if declared, the amount and timing of such dividends. The Company has chosen to present EBITDA, an alternative measure of performance, in "Item 6. Selected Financial Data" because the Company believes EBITDA is an indicator of the recurring amount of cash available to service principal and interest related to the Company's debt obligations. The Company defines EBITDA as net income (loss) before gain on sale of assets, net interest expense, derivative contracts valuation expense, income tax expense (benefit), minority interest expense, cumulative effect of change in accounting principle, extraordinary items, depreciation and amortization expense and employee separation and plant closure costs (income). The Company's definition of EBITDA may not be comparable to similarly titled measures reported by other companies. Many of the financial covenants related to the Credit Facility use a similar definition of EBITDA. CONTINGENCIES The Company is involved with environmental compliance, investigation, monitoring and remediation activities at certain of its operating facilities, and accrues for these activities when commitments or remediation plans have been developed and when costs can be reasonably estimated. Historical annual expenditures for these activities have been less than $0.5 million, and have been charged against the related environmental reserves. Future expenditures relating to these environmental remediation efforts are expected to be made over the next ten years as ongoing costs of remediation programs. The Company believes that any additional liability in excess of amounts accrued which may result from the resolution of such matters will not have a material adverse effect on the Company's financial position, liquidity, cash flows or results of operations. The Company has been named as a defendant in several similar cases pending related to an accident occurring on December 7, 2000 at a nursing home outside Dayton, Ohio. This litigation is more fully described in "Item 3. Legal Proceedings." The Company is a party to other legal proceedings incidental to the normal course of its business. Management believes that the final resolution of these matters will not have a material adverse affect on the Company's financial position, liquidity, cash flows or results of operations. 17 FOREIGN OPERATIONS During 2001, the Company had operations in Australia, China, the Czech Republic, Germany and the United Kingdom, which accounted for 16 percent of consolidated revenues and 17 percent of total assets at December 31, 2001. Functional currencies used by these operations include the Australian Dollar, the Chinese Renminbi Yuan, the Czech Koruna, the Euro and the British Pound. The Company's German operations changed their functional currency from the Mark to the Euro effective September 30, 2001 in anticipation of the January 1, 2002 mandatory conversion. The Company is exposed to foreign currency exchange risk as a result of transactions by these subsidiaries in currencies other than their functional currencies, and from transactions by the Company's domestic operations in currencies other than the U.S. Dollar. The majority of these functional currencies and the other currencies in which the Company records transactions are fairly stable. The use of these currencies, combined with the use of foreign currency forward purchase and sale contracts, has enabled the Company to be sheltered from significant gains or losses resulting from foreign currency transactions. This situation could change if these currencies experience significant fluctuations in their value as compared to the U.S. Dollar. CRITICAL ACCOUNTING POLICIES Allowance for Doubtful Accounts: The Company evaluates the collectibility of accounts receivable based on a combination of factors. In circumstances where the Company is aware of a specific customer's inability to meet its financial obligations (e.g., bankruptcy filings, substantial downgrading of credit scores), a specific reserve is recorded to reduce the receivable to the amount the Company believes will be collected. For all other customers, the Company records allowances for doubtful accounts based on the length of time the receivables are past due and historical experience. If circumstances change (e.g., higher-than-expected defaults or an unexpected material adverse change in a customer's ability to meet its financial obligations), the Company's estimates of the collectibility of amounts due could be reduced by a material amount. Inventory Valuation Reserves: The Company values its inventory based on a combination of factors. In circumstances where the Company is aware of a specific problem in the valuation of a certain item, a specific reserve is recorded to reduce the item to its net realizable value. For all other inventory, the Company recognizes reserves based on the actual usage in recent history and projected usage in the near-term. If circumstances change (e.g., lower-than-expected usage), estimates of the net realizable value could be reduced by a material amount. Revenue Recognition-- Long-Term Contracts: The Company recognizes revenue and profit as work on long-term contracts progresses using the percentage of completion method of accounting, which relies on estimates of total expected contract revenues and costs. The Company follows this method since reasonably dependable estimates of the revenue and costs applicable to various stages of a contract can be made. Since the financial reporting of these contracts depends on estimates, which are assessed continually during the term of the contract, recognized revenues and profit are subject to revisions as the contract progresses toward completion. Revisions in profit estimates are reflected in the period in which the facts that give rise to the revision become known. Accordingly, favorable changes in estimates result in additional profit recognition, and unfavorable changes in estimates result in the reversal of previously recognized revenue and profits. When estimates indicate a loss is expected to be incurred under a contract, cost of sales is charged with a provision for such loss. As work progresses under a loss contract, revenue and cost of sales continue to be recognized in equal amounts, and the excess of costs over revenues is charged to the contract loss reserve. Derivatives: The Company holds derivative financial instruments to manage a variety of risk exposures including interest rate risks associated with long-term debt, foreign currency fluctuations for transactions with customers, and purchase commitments for certain raw materials used in production processes. Changes in the fair value of derivatives used by the Company are reflected in earnings. To manage foreign currency and commodity risks, the Company uses exchange-traded futures contracts. The fair values of these instruments are determined from market quotes. In addition, some over-the-counter forward contracts are used to manage these risks. These forward contracts are valued in a manner similar to that used by the market to value exchange-traded contracts; that is, using standard valuation formulas with assumptions about future foreign currency exchange rates or commodity prices derived from existing exchange rates, commodity prices and interest rates observed in the market. To manage interest rate risk, two interest rate collars are used in which the Company is subject to a floor and ceiling in the calculation of its variable interest rate. The interest rate collars are valued using the market standard methodology of discounting the expected future cash payments based on an expectation of future interest rates derived from observed market interest rate curves. The Company has not changed its methods of calculating these fair values or developing the underlying assumptions. The values of these derivatives will change over time as cash receipts and payments are made and as market conditions change. The Company's derivative instruments are not subject to multiples or leverage on the underlying commodity or price index. Information about the fair values, notional amounts, and contractual terms of these instruments can be found in Note A to the consolidated financial statements and in "Item 7A. Quantitative and Qualitative Disclosures About Market Risk." The Company does not believe it is exposed to more than a nominal amount of credit risk in interest rate and foreign currency hedges as the counterparties are established, well capitalized financial institutions. 18 Debt Covenants: The Company's Credit Facility requires it to maintain certain financial ratios and a minimum level of net worth as discussed in Liquidity and Capital Resources and in Note C to the consolidated financial statements. The Company's results of operations for the year ended December 31, 2001 would not have been in compliance with certain of the financial covenants of the Credit Facility. Accordingly, the Company negotiated amendments in the fourth quarter of 2001 and the March 2002 Amendments to its Credit Facility and Incremental Credit Facility, which enabled compliance. If results of operations erode further and the Company is unable to obtain future amendments or waivers from its lenders, debt under these facilities would be in default and callable by the lenders. The Company believes its results of operations will improve for the year ending December 31, 2002 and thereafter and the likelihood of defaulting on debt covenants during 2002 is unlikely, absent any material negative event affecting the United States economy as a whole. Expectations of future operating results and continued compliance with debt covenants cannot be assured and the lenders' actions are not under the control of the Company. If projections of future operating results are not achieved and debt is placed in default, the Company would experience a material adverse impact on its reported financial position and results of operations. Pensions: The Company accounts for its defined benefit pension plans in accordance with SFAS No. 87, "Employers' Accounting for Pensions," which requires that amounts recognized in financial statements be determined on an actuarial basis. The Company's funding policy is to contribute at least the minimum funding amounts required by law. SFAS No. 87 and the policies used by the Company, notably the use of a calculated value of plan assets (which is further described below), generally reduce the volatility of pension expense from changes in pension liability discount rates and the performance of the pension plans' assets. The most significant element in determining the Company's pension expense in accordance with SFAS No. 87 is the expected return on plan assets. The Company has assumed that the expected long-term rate of return on plan assets will be 9.25 percent for the United States plans and 7.5 percent for the United Kingdom plan. Over the long term, the investment strategy employed with the Company's pension plan assets has earned in excess of such rates; therefore, the Company believes its assumptions are reasonable. The assumed long-term rate of return on assets is applied to the market value of plan assets. This produces the expected return on plan assets that is included in pension expense. The difference between this expected return and the actual return on plan assets is deferred. The net deferral of past asset gains or losses affects the calculated value of plan assets and, ultimately, future pension expense. The plan assets have earned a rate of return substantially less than the assumed rates in the last two years. Should this trend continue, future pension expense would likely increase. At the end of each year, the Company determines the rate to be used to discount plan liabilities. The discount rate reflects the current rate at which the pension liabilities could be effectively settled at the end of the year. In estimating this rate, the Company looks to rates of return on high quality, fixed-income investments that receive one of the two highest ratings given by a recognized rating agency. At December 31, 2001, the Company determined this rate to be 7.5 percent for the United States plans and 6.0 percent for the United Kingdom plan. Changes in discount rates over the past three years have not materially affected pension expense, and the net effect of changes in the discount rate, as well as the net effect of other changes in actuarial assumptions and experience, have been deferred as allowed by SFAS No. 87. At December 31, 2001, the Company's consolidated net pension liability recognized was $3.2 million, down from $4.1 million at December 31, 2000. The decrease was principally due to $1.7 million of pension contributions made by the Company in 2001. For the year ended December 31, 2001, the Company recognized consolidated pretax pension expense of $0.9 million, up from $0.7 million in 2000. The Company currently expects that consolidated pension expense for 2002 will not be materially different from 2001. Deferred Tax Assets: As of December 31, 2001, the Company has approximately $15.1 million of net deferred tax assets related principally to various accruals and reserves and loss carryforwards. The realization of these assets is based upon estimates of future taxable income. In preparing estimates of future taxable income, the Company has used the same assumptions and projections utilized in its internal five-year forecasts. Based on these projections, the Company estimates that the domestic loss carryforwards will be fully utilized prior to their expiration. The Company is uncertain whether the foreign loss carryforwards will be utilized and, accordingly, has recorded a valuation allowance of $2.8 million. Estimates of future earnings are based on management's expectations and beliefs concerning future events and are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company. Should the Company not generate taxable income in the future, increases in the valuation allowance would be required. RECENTLY ISSUED ACCOUNTING STANDARDS In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" which amends SFAS No. 19, "Financial Accounting and Reporting by Oil and Gas Producing Companies," and is effective for all companies. The Statement addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets and is effective for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years. The Company does 19 not expect these Statements to have a material impact on the Company's financial position, liquidity, cash flows or results of operations. CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS In addition to other information in this Annual Report on Form 10-K, the following factors could cause results to differ materially from those anticipated or otherwise expressed or implied by forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by the Company's management from time to time. Availability of Additional Sources of Financing and Capital: The Company must raise equity or other sources of capital in order to prevent certain events from occurring under its Credit Facility, including interest rate pricing increases and the issuance of warrants to its lenders. While the Company is currently engaged in discussions with an investor group regarding a potential junior capital investment in Chart, there can be no assurance that the Company will be able to consummate a capital investment from the investment group or obtain additional capital from other sources on reasonable terms or at all. Satisfying Debt Covenants and Paying Down Debt Under the Credit Facility: The Company's Credit Facility requires it to maintain certain financial ratios and a minimum level of net worth as discussed in Liquidity and Capital Resources and Note C to the consolidated financial statements. The Company's results of operations for the year ended December 31, 2001 would not have been in compliance with certain of the financial covenants of the Credit Facility. Accordingly, the Company negotiated amendments in the fourth quarter of 2001 and the March 2002 Amendments which enabled compliance and will be effective to March 31, 2003. While the Company believes its results of operations will improve for the year ending December 31, 2002 and thereafter, expectations of future operating results, continued compliance with debt covenants and making required payments cannot be assured and the lenders' actions are not under the control of the Company as to granting the Company further covenant and other relief in the future. Recovery of Core Businesses and Current Economic Conditions: Certain of the Company's core businesses have been underperforming over the past few years. While the Company expects to see an upturn in 2002 in the various markets its underperforming core businesses serve, there can be no assurance that such an upturn will occur or that the businesses' performance will be markedly improved in 2002. Moreover, current world economic and political conditions, including the events of September 11(th), may reduce the willingness of the Company's customers and prospective customers to commit funds to purchase its products and services. FORWARD-LOOKING STATEMENTS The Company is making this statement in order to satisfy the "safe harbor" provisions contained in the Private Securities Litigation Reform Act of 1995. This Annual Report on Form 10-K includes forward-looking statements relating to the business of the Company. In some cases, forward-looking statements may be identified by terminology such as "may," "will," "should," "expects," "anticipates," "believes," "projects," "forecasts," "continue" or the negative of such terms or comparable terminology. Forward-looking statements contained herein or in other statements made by the Company are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company, that could cause actual results of the Company to differ materially from those matters expressed or implied by forward-looking statements. The Company believes that the following factors, among others, could affect its future performance and cause actual results of the Company to differ materially from those expressed or implied by forward-looking statements made by or on behalf of the Company: (a) general economic, political, business and market conditions and foreign currency fluctuations; (b) competition; (c) decreases in spending by its industrial customers; (d) the loss of a major customer or customers; (e) the effectiveness of operational changes expected to increase efficiency and productivity; (f) the ability of the Company to manage its fixed-price contract exposure; (g) the ability of the Company to pass on increases in raw material prices, including as a result of tariffs; (h) the Company's relations with its employees; (i) the extent of product liability claims asserted against the Company; (j) variability in the Company's operating results; (k) the ability of the Company to attract and retain key personnel; (l) the costs of compliance with environmental matters; (m) the ability of the Company to protect its proprietary information; (n) the ability of the Company to access additional sources of capital; (o) the ability of the Company to satisfy debt covenants, pay down its debt and restructure its debt arrangements; and (p) the threat of terrorism and the impact of responses to that threat. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of business, the Company's operations are exposed to continuing fluctuations in foreign currency values and interest rates that can affect the cost of operating and financing. Accordingly, the Company addresses a portion of these risks through a program of risk management. The Company's primary interest rate risk exposure results from the Credit Facility's various floating rate pricing mechanisms. This interest rate exposure is managed by the use of interest rate collars on approximately 50 percent of the term debt and to a lesser extent by varying LIBOR maturities in the entire Credit Facility. The fair value of the contracts related to the 20 collars at December 31, 2001 is a liability of $2.3 million. If interest rates were to increase 200 basis points (2 percent) from December 31, 2001 rates, and assuming no changes in debt from the December 31, 2001 levels, the additional annual expense would be approximately $5.2 million on a pre-tax basis. The Company has assets, liabilities and cash flows in foreign currencies creating foreign exchange risk, the primary foreign currencies being the British Pound, the Czech Koruna and the Euro. Monthly measurement, evaluation and forward exchange contracts are employed as methods to reduce this risk. The Company enters into foreign exchange forward contracts to hedge anticipated and firmly committed foreign currency transactions. The Company does not hedge foreign currency translation or foreign currency net assets or liabilities. The terms of the derivatives are one year or less. If the value of the U.S. dollar were to strengthen 10 percent relative to the currencies in which the Company has foreign exchange forward contracts at December 31, 2001, the result would be a loss in fair value of approximately $0.2 million. 21 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. REPORT OF INDEPENDENT AUDITORS To the Shareholders and Board of Directors of Chart Industries, Inc. We have audited the accompanying consolidated balance sheets of Chart Industries, Inc. and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chart Industries, Inc. and subsidiaries at December 31, 2001 and 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. As discussed in Note A to the consolidated financial statements, on January 1, 2001 the Company changed its method of accounting for derivative financial instruments. /s/ ERNST & YOUNG LLP Cleveland, Ohio March 31, 2002 22 CHART INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these consolidated financial statements. 23 CHART INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these consolidated financial statements. 24 CHART INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

The accompanying notes are an integral part of these consolidated financial statements. 25 CHART INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these consolidated financial statements. 26 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE A--NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: Chart Industries, Inc. (the "Company") manufactures standard and custom-built industrial process equipment primarily used for low-temperature and cryogenic applications. The Company has developed an expertise in cryogenic systems and equipment, which operate at low temperatures sometimes approaching absolute zero. The majority of the Company's products, including vacuum-insulated containment vessels, heat exchangers, cold boxes and other cryogenic components, are used throughout the liquid-gas supply chain for the purification, liquefaction, distribution, storage and use of industrial gases and hydrocarbons. Headquartered in Cleveland, Ohio, the Company has domestic operations located in 12 states and international operations located in Australia, China, the Czech Republic, Germany and the United Kingdom. Principles of Consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation. Investments in affiliates where the Company's ownership is between 20 percent and 50 percent, or where the Company does not have control but has the ability to exercise significant influence over operations or financial policy, are accounted for under the equity method. Reclassifications: Certain prior year amounts have been reclassified to conform to current year presentation. Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Concentrations of Credit Risks: Financial instruments that potentially subject the Company to concentrations of credit risks primarily consist of temporary cash investments and trade receivables. The Company places its temporary cash investments with high credit quality financial institutions and limits the amount of credit exposure to any one financial institution. The concentration of trade receivable credit risk is generally limited due to the Company's customers being spread across the industrial gas, hydrocarbon and chemical processing industries in several countries. The Company's management has established certain credit requirements that its customers must meet before sales credit is extended. The Company monitors the financial condition of its customers to help ensure collections and to minimize losses. For certain domestic and foreign customers, the Company requires customer advances, letters of credit and other such guarantees of payment. For certain foreign customers, the Company also purchases credit and political risk insurance. Cash and Cash Equivalents: The Company considers all investments with an initial maturity of three months or less when purchased to be cash equivalents. The December 31, 2001 and 2000 balances include money market investments and cash. Inventories: Inventories are stated at the lower of cost or market with cost being determined by both the last-in, first-out ("LIFO") method (approximately 13 percent of total inventory at December 31, 2001 and 2000, respectively), and the first-in, first-out ("FIFO") method. The components of inventory are as follows: December 31, --------------------------- 2001 2000 ---------- ---------- Raw materials and supplies $ 31,004 $ 35,931 Work in process 14,639 17,998 Finished goods 10,997 13,362 LIFO reserve ( 150) ( 304) ---------- ---------- $ 56,490 $ 66,987 ========== ========== Property, Plant and Equipment: Property, plant and equipment are stated on the basis of cost. Expenditures for maintenance, repairs and renewals are charged to expense as incurred, whereas major betterments are capitalized. The cost of applicable assets is depreciated over their estimated useful lives. Depreciation is computed using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Depreciation expense was $9,722, $9,796 and $10,781 in 2001, 2000 and 1999, respectively. The following table shows original costs and the estimated useful lives by classification of assets:

27 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE A -- NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Property, plant and equipment and intangible assets are periodically evaluated for impairment. The Company assesses impairment for each of its operating units by measuring future cash flows against the carrying value of these long-lived assets. If the future undiscounted cash flows are less than the carrying value of the assets, an impairment reserve is recorded in the period identified. Measurement of impairment is based upon discounted cash flows, asset appraisals or market values of similar assets. Goodwill and Other Intangible Assets: All intangible assets are carried at cost less applicable amortization. Goodwill represents the excess of purchase price over the fair value of net assets acquired in purchase business combinations. Goodwill is amortized using the straight-line method over the periods of expected benefit, but not in excess of 40 years. Total amortization expense of all intangibles was $8,465, $8,068, and $6,128 in 2001, 2000 and 1999, respectively. Accumulated amortization for all intangibles was $23,684 and $15,787 at December 31, 2001 and 2000, respectively. In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets," effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to impairment tests in accordance with SFAS No. 142. Other intangible assets will continue to be amortized over their useful lives. The Company will apply the new rules on accounting for goodwill and other intangible assets effective January 1, 2002. Application of the non-amortization provisions of SFAS No. 142 is expected to result in an annual increase in the Company's net income of approximately $5.0 million, or $0.20 per share, assuming dilution. The Company does not expect to identify any indefinite lived intangible assets. The Company plans to complete step one of the transitional impairment tests of goodwill by June 30, 2002. The Company has not yet determined the effect, if any, such tests will have on the financial statements of the Company. Financial Instruments: The fair values of cash equivalents, accounts receivable and short-term bank debt approximate their carrying amount because of the short maturity of these instruments. The fair value of long-term debt is estimated based on the present value of the underlying cash flows discounted at the Company's estimated borrowing rate. At December 31, 2001 and 2000, the fair value of the Company's long-term debt approximated its carrying value. Derivative Instruments: Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 138. The standard requires that all derivative instruments be recorded on the balance sheet at fair value and establishes criteria for designation and effectiveness of the hedging relationships. The Company utilizes certain derivative financial instruments to enhance its ability to manage risk, including interest rate and foreign currency exposures which exist as part of ongoing business operations. Derivative instruments are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company does not enter into contracts for speculative purposes, nor is it a party to any leveraged derivative instrument. The Company's primary interest rate risk exposure results from the Credit Facility's various floating rate pricing mechanisms. The Company has entered into two interest rate derivative contracts to manage this interest rate exposure relative to the Term A and Term B portions of the Credit Facility. These contracts had an original notional value of $125,000 and amortize following the Company's amortization schedule for its term borrowings under the Credit Facility. These agreements are generally described as collars and result in putting a cap on the base LIBOR interest rate at approximately 7.0 percent and a floor at approximately 5.0 percent for approximately half the Company's floating rate term debt. The Company's interest rate collars do not qualify as hedges under the provisions of SFAS No. 133. The Statement requires such collars to be recorded in the consolidated balance sheet at fair value. Changes in their fair value must be recorded in the consolidated statement of operations. Accordingly, the Company recorded a cumulative effect of a change in accounting principle, net of income taxes, as an adjustment to operations as of January 1, 2001. The fair value of the Company's interest rate collars at December 31, 2001 of $2,278 is recorded in accrued interest, and the change in their fair value during 2001 of $2,876 is recorded in derivative contracts valuation expense. The Company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries. The Company utilizes foreign currency forward purchase and sale contracts to manage the volatility associated with foreign currency purchases and certain intercompany transactions in the normal course of business. Contracts typically have maturities of less than one year. Principal currencies include the Euro, British Pound and Czech Koruna. The Company's foreign currency forward contracts do not qualify as hedges under the provisions of SFAS No. 133. Accordingly, the Company recorded a cumulative effect of a change in accounting principle, net of income taxes, as an adjustment to net income as of January 1, 2001. The change in fair value of the foreign currency forward contracts during 2001 was not material. 28 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE A -- NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The Company held foreign exchange forward contracts for notional amounts as follows: December 31, December 31, ----------------- ----------------------- 2001 2000 ----------------- ----------------------- Sell Buy Sell ----------------- ----------------------- French Francs $ 221 German Deutschmarks $ 2,409 United States Dollars $ 500 320 Euros 1,358 120 272 ----------------- ----------------------- $ 1,858 $ 341 $ 3,001 ----------------- ----------------------- Fair Value $ 1,865 $ 339 $ 2,956 ================= ======================= Shareholders' Equity: The Company reports comprehensive income (loss) in its consolidated statement of shareholders' equity. The components of accumulated other comprehensive loss are as follows:

Revenue Recognition: For the majority of the Company's products, revenue is recognized when products are shipped, title has transferred and collection is reasonably assured. For these products, there is also persuasive evidence of an arrangement and the selling price to the buyer is fixed or determinable. For product lines in the Process Systems and Equipment segment, engineered tanks, and liquefied natural gas fueling stations, the Company uses the percentage of completion method of accounting. Earned revenue is based on the percentage that incurred costs to date bear to total estimated costs at completion after giving effect to the most current estimates. Earned revenue on contracts in process at December 31 totaled $39,344, $33,815 and $27,157 in 2001, 2000 and 1999, respectively. Timing of amounts billed on contracts varies from contract to contract causing significant variation in working capital needs. Amounts billed on percentage of completion contracts in process at December 31 totaled $38,407, $25,045 and $23,232 in 2001, 2000 and 1999, respectively. The cumulative impact of revisions in total cost estimates during the progress of work is reflected in the period in which these changes become known. Earned revenue reflects the original contract price adjusted for agreed upon claims and change orders, if any. Losses expected to be incurred on contracts in process, after consideration of estimated minimum recoveries from claims and change orders, are charged to operations as soon as such losses are known. Advertising Costs: The Company incurred advertising costs of $2,678, $3,108 and $3,366 in 2001, 2000 and 1999, respectively. These costs are expensed as incurred. Research and Development Costs: The Company incurred research and development costs of $4,101, $3,671 and $3,469 in 2001, 2000 and 1999, respectively. These costs are expensed as incurred. Foreign Currency Translation: The functional currency for the majority of the Company's foreign operations is the applicable local currency. The translation from the applicable foreign currencies to U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using a weighted average exchange rate during the period. The resulting translation adjustments are recorded as a component of shareholders' equity. Gains or losses resulting from foreign currency transactions are charged to income as incurred. Deferred Income Taxes: The Company and its subsidiaries file a consolidated federal income tax return. Deferred income taxes are provided for temporary differences between financial reporting and the consolidated tax return in accordance with the liability method. Employee Stock Options: The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related interpretations in accounting for its employee stock options. Under APB 25, because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, compensation expense is not recognized. The Company is accounting for the 400,000 performance related options issued as part of the 2000 Executive Incentive Stock Option Plan as a variable plan. The Company has not recognized any compensation expense under this plan as the market value of the Company's stock was less than the option exercise price when the performance criteria were met. 29 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE A -- NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Earnings Per Share: The following table sets forth the computation of basic and diluted earnings per share. The assumed conversion of the Company's potentially dilutive securities (employee stock options and warrants), before giving effect to the cumulative effect of a change in accounting principle and extraordinary item, was anti-dilutive for 2001 and 1999, respectively. As a result, the calculation of diluted net loss per share for 2001 and 1999 set forth below does not reflect any assumed conversion. The amount of potentially dilutive securities is presented in the table for all years, however, to give an indication of the potential dilution that may occur in future years.

Recently Issued Accounting Standards: In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" which amends SFAS No. 19, "Financial Accounting and Reporting by Oil and Gas Producing Companies," and is effective for all companies. This statement addresses the financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company does not expect this statement to have a material impact on the Company's financial position, liquidity, cash flows or results of operations. In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" which supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets and is effective for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years. The Company does not expect this statement to have a material impact on the Company's financial position, liquidity, cash flows or results of operations. 30 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE B -- BALANCE SHEET COMPONENTS December 31, ------------------------------ 2001 2000 -------------- -------------- Other current assets: Deposits $ 511 $ 259 Investment in leases 518 391 Other investments 977 Other receivables 5,737 3,833 -------------- -------------- $ 6,766 $ 5,460 ============== ============== Other assets, net: Deferred financing costs, net $ 7,253 $ 7,991 Existing technologies, net 4,041 5,389 Patents, trademarks and intellectual property, net 5,397 5,969 Equity investment in Coastal Fabrication joint venture 1,295 770 Investment in Restaurant Technologies, Inc. 1,626 Investment in leases 883 1,181 Cash value life insurance 1,881 1,068 Prepaid pension cost 1,330 1,587 Deferred income taxes 14,624 11,324 Other 2,144 294 -------------- -------------- $ 38,848 $ 37,199 ============== ============== Other current liabilities: Accrued interest $ 5,108 $ 5,577 Accrued income taxes 2,371 4,362 Accrued other taxes 1,713 1,990 Accrued rebates 1,852 2,899 Accrued employee separation and plant closure costs 486 Deferred income taxes 3,307 2,671 Accrued other 4,935 7,339 -------------- -------------- $ 19,772 $ 24,838 ============== ============== Other long-term liabilities: Deferred income taxes $ 6,412 $ 6,823 Accrued environmental 3,189 3,298 Accrued pension cost 6,480 5,658 Minority interest 858 1,094 Other 77 130 -------------- -------------- $ 17,016 $ 17,003 ============== ============== NOTE C -- DEBT AND CREDIT ARRANGEMENTS The following table shows the components of the Company's borrowings at December 31, 2001 and 2000, respectively. December 31, ------------------------------ 2001 2000 -------------- -------------- Term loan A, due March 2005, quarterly principal payments, average interest rate of 5.49% at December 31, 2001 $ 100,000 $ 112,500 Term loan B, due March 2006, quarterly principal payments, average interest rate of 5.94% at December 31, 2001 118,191 119,095 Revolving Credit Facility, due March 2005, average interest rate of 5.11% at December 31, 2001 34,400 28,000 Series 1 and Series 2 Incremental Revolving Credit Facilities, due March 2003, average interest rate of 10.25% at December 31, 2001 9,000 Industrial Development Revenue Bonds, due June 2006, semi-annual principal payments, average interest rate of 1.95% at December 31, 2001 1,980 2,420 Revolving foreign credit facility 4,042 2,351 Several notes payable with varying principal and interest payments 4,470 5,504 -------------- -------------- Total debt 272,083 269,870 Less: current maturities 12,963 25,484 -------------- -------------- Long-term debt $ 259,120 $ 244,386 ============== ============== 31 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE C -- DEBT AND CREDIT ARRANGEMENTS - CONTINUED In order to finance the acquisition of MVE Holdings, Inc. ("MVE"), in March 1999 the Company negotiated a consolidated credit and revolving loan facility (the "Credit Facility"), which originally provided for term loans of up to $250,000 and a revolving credit line of $50,000, which may also be used for the issuance of letters of credit. The Company paid fees of $6,542 in 1999 to establish the Credit Facility. The Credit Facility provides the agent bank with a secured interest in substantially all of the assets of the Company. The Company entered into the Series 1 Incremental Revolving Credit Facility in November 2000 and the Series 2 Incremental Revolving Credit Facility in April 2001 (collectively, the "Incremental Credit Facility"), providing a revolving credit line of $10,000 in addition to the credit line available under the Credit Facility. Borrowings on the Incremental Credit Facility are secured by the same collateral as the Credit Facility and bear interest, at the Company's option, at rates equal to the prime rate (4.75 percent at December 31, 2001) plus 2.5 percent or LIBOR plus 3.5 percent. The Company is also required to pay a commitment fee of 0.75 percent per annum on the average daily unused amount. The Credit Facility was amended in August 1999, October 2000, October 2001 and December 2001 at costs to the Company of $1,156, $1,015 and $848 in 1999, 2000 and 2001, respectively. The Credit Facility and Incremental Credit Facility were subsequently amended in March 2002 (the "March 2002 Amendments") at a cost of approximately $1,900 to modify certain covenants until March 31, 2003, to defer $25,747 of Term A and Term B amortization payments from scheduled payment dates in 2002 to 2005 and to extend the Incremental Credit Facility to March 31, 2003. The March 2002 Amendments resulted in an increase in interest rates of 0.25 percent, the addition of one financial covenant and scheduled reductions in the commitment amounts of the revolving credit lines of the Credit Facility and the Incremental Credit Facility. The March 2002 Amendments call for the Company to prepay borrowings under the Credit Facility and Incremental Credit Facility in an aggregate amount of at least $75,000 ("Minimum Prepayment Amount") from the net proceeds of an equity investment, sale of assets and other sources of new capital. If the Minimum Prepayment Amount is not made by September 30, 2002, the Company's interest rates will increase by another 0.25 percent, and will increase again by 0.25 percent each quarter thereafter. If the Minimum Prepayment Amount is achieved, these additional interest rate increases will be eliminated. The March 2002 Amendments also provide for the issuance of market-priced warrants to the lenders for the purchase of two percent of the Company's Common Stock at June 28, 2002. If the Minimum Prepayment Amount is not made by September 30 or December 31, 2002, the lenders will be issued market-priced warrants for the purchase of an additional five percent and three percent, respectively, of the Company's Common Stock. If at least $50,000 of the Minimum Prepayment Amount is made from the net proceeds of an equity investment by September 30 or December 31, 2002, no warrants will be required to be issued to the lenders on those dates. Under the terms of the Credit Facility, as modified by the March 2002 Amendments, term loans and revolving credit bear interest, at the Company's option, at rates equal to the prime rate plus incremental margins or LIBOR plus incremental margins. The incremental margins vary based on the Company's financial position and currently range from 2.0 percent to 4.75 percent. The Company has entered into two interest rate derivative contracts to manage interest rate risk exposure relative to the Term A and Term B portions of the Credit Facility. The Company is also required to pay a commitment fee of 0.5 percent per annum on the unused amount of the revolving portion of the Credit Facility. The Company has letters of credit outstanding and bank guarantees totaling $14,982 supported by the Credit Facility. The Credit Facility, as modified by the March 2002 Amendments, contains certain covenants and conditions which impose limitations on the Company and its operating units, including meeting certain financial tests and the quarterly maintenance of certain financial ratios on a consolidated basis such as: minimum net worth, maximum leverage, minimum pre-tax interest coverage ratio, minimum fixed charge coverage ratio and minimum earnings before interest, taxes, depreciation, amortization and restructuring charges. The Company is permitted to pay cash dividends not exceeding $7,200 in any fiscal year after January 1, 2001, but only if at both the time of payment of the dividend and immediately thereafter there is no event of default under the Credit Facility. As of December 31, 2001, the Company was not in default with the covenants and conditions of the Credit Facility due to the amendments made in the fourth quarter of 2001 and the March 2002 Amendments. Borrowings of the Credit Facility and Incremental Credit Facility outstanding at December 31, 2001 are classified in accordance with the terms of the March 2002 Amendments. The scheduled annual maturities of debt and credit arrangements at December 31, 2001, are as follows: Year Amount - ------- ---------------- 2002 $ 12,963 2003 39,828 2004 35,436 2005 155,372 2006 28,484 ---------------- $ 272,083 ================ Interest paid was $23,996, $25,859 and $11,332 in 2001, 2000 and 1999 respectively. 32 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE D -- ACQUISITIONS The following acquisitions were accounted for using the purchase method of accounting and, accordingly, the related purchase price was allocated to assets acquired and liabilities assumed based on their estimated fair values. Results of operations for these acquisitions have been included in the consolidated results of operations since the date of acquisition. On December 15, 1999, the Company acquired certain assets relating to the cryogenic repair business previously operated by Air Liquide for $1,000 in cash and $2,600 in rebate credits to be given to Air Liquide on sales after December 15, 1999. On April 12, 1999, the Company acquired the common stock of MVE for $9,196 in cash ($2,225 net of cash acquired) and redeemed the preferred stock of MVE for $74,642. In addition, the Company paid $156,137 to retire MVE's existing debt obligations and complete the tender offer and consent solicitation for the 12.5 percent senior secured notes due 2002 issued by MVE Inc., a subsidiary of MVE. In allocating the purchase price, $172,353 was allocated to net liabilities assumed, including minority interests in certain consolidated subsidiaries of MVE, $22,010 was allocated to in-process research and development ("IPR&D") projects that had not reached technological feasibility and had no alternative future use, $7,690 was allocated to identifiable intangible assets which are being amortized over five years, and $151,849 was allocated to goodwill, which was being amortized over 40 years through December 31, 2001. The amount allocated to IPR&D was determined by independent consultants who estimated the costs to develop the technology into commercially viable products, estimated cash flows resulting from the expected revenues generated from such products and discounted the net cash flows back to their present value using a risk-adjusted discount rate. This amount was recognized as a non-cash expense without tax benefit at the date of acquisition. On March 15, 1999, the Company acquired a group of privately held companies, collectively known as Northcoast Cryogenics, for approximately $2,337 in cash ($2,185 net of cash acquired) and $723 in the Company's common stock. In allocating the purchase price, $374 was allocated to net assets acquired and $2,686 was allocated to goodwill, which was being amortized over 15 years through December 31, 2001. The Company's pro-forma unaudited results of operations for 1999, assuming consummation of the acquisition of MVE and extinguishment of the related debt as of January 1, 1999, are as follows: Net sales $ 337,754 Income (loss) before extraordinary item ( 30,412) Income (loss) before extraordinary item per share ( 1.28) Income (loss) before extraordinary item per share - assuming dilution ( 1.28) Net income (loss) ( 38,221) Net income (loss) per share ( 1.61) Net income (loss) per share - assuming dilution ( 1.61) NOTE E--EMPLOYEE SEPARATION AND PLANT CLOSURE COSTS During 2001, the Company recorded employee separation and plant closure costs of $2,375. These costs included $1,566 related to the closure of the Ottawa Lake, Michigan facility and two smaller sites within the cryogenic services business of the Distribution and Storage segment, $363 for terminating 25 employees at the Company's Wolverhampton, United Kingdom heat exchangers business facility of the Process Systems and Equipment segment and $446 for terminating 45 other employees throughout the Company. The cryogenic services business charges of $1,566 included $556 for lease termination and facility closure-related costs, $566 for writing off certain leasehold improvements and fixed assets, $62 for terminating 32 employees, and $382 for moving costs and other charges. At December 31, 2001, the Company had a reserve of $486 remaining, primarily for lease termination costs. During 1999, the Company recorded net employee separation and plant closure costs of $12,918. The charges consisted of $2,031 for the write-off of fixed assets made redundant by the acquisition of MVE, $6,823 for the write-off of impaired goodwill related to operations within the Company's Distribution and Storage segment, $1,216 for lease payments and other costs related to exiting certain facilities, $936 for the write-off of inventory to be disposed, which was classified in cost of sales, and $1,912 for severance and other costs related to the elimination of 188 positions throughout the Company. The Company utilized $11,580 of the reserve in 1999. During 2000, the Company reversed $704 of the reserve due to reoccupying a leased facility previously vacated, and utilized $346 and $288 of the reserve for the payment of severance benefits to terminated employees and the payment of lease costs for an exited facility, respectively. As of December 31, 2000, the employee separation and plant closure costs reserve was fully utilized. 33 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE F -- INCOME TAXES Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2001, the Company had deferred tax assets, associated with domestic net operating loss carryforwards, of $5,709 which expire in years 2003 through 2020 and foreign tax credits, research and developmental credits and other credits of $887 which expire in years 2004 through 2020. Additionally, the Company had deferred tax assets associated with foreign net operating loss carryforwards of $2,766 at December 31, 2001 which have an indefinite carryforward period. Significant components of the Company's deferred tax assets and liabilities are as follows: December 31, ------------------------ 2001 2000 -------- --------- Deferred tax assets: Accruals and reserves $16,175 $ 15,759 Net operating loss and credit carryforwards 9,362 6,405 Pensions 1,209 Other - net 16 387 -------- --------- 26,762 22,551 Valuation allowance ( 2,766) ( 1,692) -------- --------- Total deferred tax assets 23,996 20,859 -------- --------- Deferred tax liabilities: Property, plant and equipment 5,832 4,209 Intangibles 2,222 2,651 Inventory 835 1,298 Pensions 359 Other - net 32 428 -------- --------- Total deferred tax liabilities 8,921 8,945 -------- --------- Net deferred taxes $15,075 $ 11,914 ======== ========= The valuation allowance of $2,766 and $1,692 at December 31, 2001 and 2000, respectively, relates to foreign net operating loss carryforwards and foreign tax credit carryforwards. The Company is uncertain whether these deferred tax assets will be realized and, accordingly, has established a valuation allowance against them. Management has determined, based on the Company's history of prior earnings and its expectations for the future, that taxable income of the Company will more likely than not be sufficient to fully realize the tax benefit of the remaining net deferred tax assets. The Company has not provided for U.S. federal income taxes on approximately $7,357 of foreign subsidiaries' undistributed earnings as of December 31, 2001 because such earnings are intended to be reinvested indefinitely. The amount of U.S. federal income tax that would result had such earnings been repatriated would approximate $2,575. 34 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE F -- Income Taxes - Continued Income (loss) before income taxes, minority interest, cumulative effect of change in accounting principle and extraordinary item consists of the following: Years ended December 31, -------------------------------------------- 2001 2000 1999 ------------ --------- ----------- United States $ ( 6,618) $ 1,517 $ (24,550) Foreign 2,057 3,767 ( 535) ------------ --------- ----------- $ ( 4,561) $ 5,284 $ (25,085) ============ ========= =========== Significant components of the provision for income taxes are as follows: Years Ended December 31, --------------------------------------------- 2001 2000 1999 ------------ --------- ----------- Current: Federal $ 3,699 State $ 100 $ 40 624 Foreign 934 945 2 ------------ --------- ----------- 1,034 985 4,325 ------------ --------- ----------- Deferred: Federal ( 1,120) 1,612 (1,630) State ( 142) ( 389) Foreign 484 557 909 ------------ --------- ----------- ( 636) 2,027 (1,110) ------------ --------- ----------- $ 398 $ 3,012 $ 3,215 ============ ========= =========== The reconciliation of income taxes computed at the U.S. federal statutory tax rates to income tax expense is as follows: Years Ended December 31, --------------------------------------------- 2001 2000 1999 ------------ --------- ----------- Tax at U.S. statutory rates $ ( 1,596) $ 1,849 $ ( 8,780) State income taxes, net of federal tax benefit 65 ( 67) 153 Effective tax rate differential of earnings outside of U.S. ( 386) ( 16) 183 Federal tax benefit of Foreign Sales ( 310) ( 388) ( 291) Non-deductible goodwill 1,506 1,451 11,157 Valuation allowance 1,074 393 1,299 Other - net 45 ( 210) ( 506) ------------ --------- ----------- $ 398 $ 3,012 $ 3,215 ============ ========= =========== The Company paid income taxes of $2,272 and $2,246 in 2001 and 1999, respectively, and received a net income tax refund of $1,693 in 2000. NOTE G - EMPLOYEE BENEFIT PLANS The Company has five defined benefit pension plans covering certain hourly and salary employees. The defined benefit plans provide benefits based primarily on the participants' years of service and compensation. The Company's funding policy is to contribute at least the minimum funding amounts required by law. Plan assets consist primarily of listed common stocks and bonds. The United States plans held 250,549 shares of the Company's Common Stock with fair values of $589 and $1,081 at December 31, 2001 and 2000, respectively. The actuarially computed combined pension cost included the following components: Years Ended December 31, ------------------------------------------- 2001 2000 1999 ------------ --------- ----------- Service cost $ 1,716 $ 1,659 $ 2,194 Interest cost 2,829 2,625 2,169 Expected return on plan assets ( 3,515) (3,310) (5,666) Net amortization and deferrals ( 153) ( 241) 3,282 ------------ --------- ----------- Total pension cost $ 877 $ 733 $ 1,979 ============ ========= =========== 35 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE G -- EMPLOYEE BENEFIT PLANS - CONTINUED The following table sets forth changes in the benefit obligation, plan assets, funded status of the plans and amounts recognized in the consolidated balance sheets as of December 31:

A minimum pension liability adjustment is required when the actuarial present value of projected benefit obligations exceeds plan assets and accrued pension liabilities. The assumptions used in determining pension cost and funded status information for the years ended December 31, 2001 and 2000 are as follows: 2001 2000 ------ ------ United States Plans Discount rate 7.50% 8.00% Weighted average rate of increase in compensation 3.50% 4.00% Expected long-term weighted average rate of return on plan assets 9.25% 9.25% United Kingdom Plan Discount rate 6.00% 6.00% Weighted average rate of increase in compensation 3.90% 4.00% Expected long-term weighted average rate of return on plan assets 7.50% 7.50% 36 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE G -- EMPLOYEE BENEFIT PLANS - CONTINUED At December 31, 2001, the Company's four United States plans all had benefit obligations in excess of plan assets. At December 31, 2000, however, while on an overall basis benefit obligations exceeded plan assets for these four plans, one of these plans had plan assets in excess of its benefit obligation. This excess totaled $141 on benefit obligations of $3,785 at December 31, 2000. The Company presently makes contributions to two union supported multi-employer pension plans resulting in expense of $227, $206 and $269 in 2001, 2000 and 1999, respectively. The Company has defined contribution savings plans that cover most of its employees. Company contributions to the plans are based on employee contributions and the level of Company match and discretionary contributions. Expenses under the plans totaled $2,009, $2,184 and $1,792 for the years 2001, 2000 and 1999, respectively. NOTE H -- STOCK OPTION PLANS In July 1992, the Company adopted a Key Employee Stock Option Plan (the "Key Employee Plan"), which, as amended, allows for the issuance of 1,383,750 shares of Common Stock. In May 1997, shareholders approved the Company's 1997 Stock Option and Incentive Plan (the "1997 Plan"). In May 2001, shareholders approved an amendment to the 1997 plan to increase the number of shares available for issuance under this plan by 600,000, increasing the maximum number of shares available for award to 1,462,500 shares of Common Stock. Each of these plans provides for the granting of options to purchase shares of Common Stock to certain key employees of the Company. These nonqualified stock options vest in equal annual installments over a five year period from the date of grant and are exercisable for up to 10 years at an option price determined by the Compensation Subcommittee of the Board of Directors. In May 2000, shareholders approved an amendment to the 1996 Stock Option Plan for Outside Directors to increase the number of shares available for issuance under this plan by 210,000, supplementing the previously authorized 1995 and 1994 Stock Option Plans for Outside Directors (collectively, the "Directors Plan"). The amendment increases the maximum number of shares available for awards under the Directors Plan to a total of 446,250 shares. The option price for options granted under the Directors Plan will be equal to the fair market value of a share of Common Stock on the date of grant. These nonqualified stock options become fully vested and exercisable on the first anniversary of the date of grant and are exercisable for a period of ten years. In May 2000, shareholders approved the 2000 Executive Incentive Stock Option Plan (the "Executive Plan"), which provides for the granting of options to purchase up to 600,000 shares of Common Stock to executive employees of the Company. These nonqualified stock options are exercisable for a period of ten years and have two different vesting schedules: 200,000 options vest in equal annual installments over a five-year period and 400,000 options vest in equal annual installments over a five year period based upon the achievement of specific operating performance goals in that five year period as determined by the Compensation Subcommittee of the Board of Directors. The Company is accounting for these 400,000 performance related options as a variable plan. The operating performance goal for the year ended December 31, 2000 was met, and 80,000 options vested. The Company did not recognize any compensation expense under the Executive Plan, as the market value of the Company's stock was less than the exercise price when the performance criteria were met. The operating performance goal for the year ended December 31, 2001 was not met, and the related options were canceled in the first quarter of 2002. Certain information for 2001, 2000 and 1999 relative to the Company's stock option plans is summarized below:

37 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE H -- STOCK OPTION PLANS - CONTINUED Exercise prices for options outstanding as of December 31, 2001 ranged from $0.08 to $21.74. The weighted-average remaining contractual life of such options is 6.8 years. Certain information for ranges of exercise prices is summarized below:

Pro forma information regarding net income and earnings per share is required by SFAS No. 123, "Accounting for Stock-Based Compensation," which also requires that the information be determined as if the Company had accounted for its employee stock options granted subsequent to December 31, 1994 under the fair value method of SFAS No. 123. The fair value for these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2001, 2000 and 1999: 2001 2000 1999 -------- -------- -------- Risk free interest rate 4.2% 5.2% 6.5% Dividend yield 0.0% 0.0% 0.0% Market price volatility factor 58.3% 57.8% 54.2% Expected life of key employee options 7 years 7 years 7 years Expected life of directors options 7 years 5 years 5 years Expected life of executive options 7 years 7 years -- The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's Key Employee Plan, 1997 Plan, Directors Plan and Executive Plan stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of these stock options. The Company's pro forma disclosures showing the estimated fair value of the options, amortized to expense over the options' vesting periods, are as follows: 2001 2000 1999 ---------- -------- ---------- Pro forma net income (loss) $ ( 5,989) $ 1,073 $(37,332) Pro forma net income (loss) per share ( 0.24) 0.04 ( 1.58) Pro forma net income (loss) per share - assuming dilution ( 0.24) 0.04 ( 1.58) NOTE I - LEASE COMMITMENTS The Company incurred $5,657, $3,702 and $2,266 of rental expense under operating leases in 2001, 2000 and 1999, respectively. At December 31, 2001, future minimum lease payments for non-cancelable operating leases for the next five years total $10,415 and are payable as follows: 2002--$2,986; 2003--$2,556; 2004--$2,226; 2005--$1,756; and 2006--$891. NOTE J -- CONTINGENCIES The Company's operating units are parties, in the ordinary course of their businesses, to various legal actions related to performance under contracts, product liability and other matters, several of which actions claim substantial damages. The Company believes these legal actions will not have a material adverse effect on the Company's financial position or liquidity. The Company is subject to federal, state and local environmental laws and regulations concerning, among other matters, waste water effluents, air emissions and handling and disposal of hazardous materials such as cleaning fluids. 38 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE J -- Contingencies - Continued The Company has been named as a defendant in several similar civil cases pending related to an accident occurring on December 7, 2000 at a nursing home outside Dayton, Ohio. A nitrogen tank was connected to the nursing home's oxygen system resulting in the death of five elderly patients and injuries to five additional patients from inhaling the nitrogen. The claims against the Company in these cases include negligence, strict product liability, failure to warn, negligence per se, breach of warranty, punitive damages, loss of consortium and negligent infliction of emotional distress. The allegations underlying the claims include defective or deficient manufacture, construction, design, labeling, formulation and warnings with regard to a cylinder. The plaintiffs in these cases are seeking, in total, $28,500 in compensatory damages, $30,000 in punitive damages, $2,000 for loss of consortium damages, prejudgment and post-judgment interest and costs and fees from the Company and other defendants named in the claims. The Company is vigorously defending all of these cases and has filed its answer, denied all liability and cross-claimed for contribution from certain co-defendants. Certain co-defendants have filed cross-claims against the Company claiming contribution. Certain of these cases have been settled with the other defendants, and others are scheduled to be mediated. The Company is not involved in any of the mediation or settlement negotiations, in part because the Company has not received any settlement demands. Additionally, the Company believes that the claims made against it are the most tenuous of any defendant and that the plaintiffs will be unable to articulate a plausible negligence claim based on product liability. Of further significance is the fact that some of the co-defendants have been criminally indicted in this matter. The Company, however, has not been so indicted. The court has granted stays in all of these cases pending the outcome of the criminal charges. The Company is involved with environmental compliance, investigation, monitoring and remediation activities at certain of its operating facilities, and, except for these continuing remediation efforts, believes it is currently in substantial compliance with all known material and applicable environmental regulations. The Company accrues for certain environmental remediation-related activities for which commitments or remediation plans have been developed and for which costs can be reasonably estimated. These estimates are determined based upon currently available facts regarding each facility. Actual costs incurred may vary from these estimates due to the inherent uncertainties involved. The Company had accruals for environmental-related activities of $3,189 and $3,298 included in other long-term liabilities at December 31, 2001 and 2000, respectively. All accrued amounts are recorded on an undiscounted basis. Expected future expenditures relating to these environmental remediation accruals are expected to be made over the next ten years as ongoing costs of remediation programs. Although the Company believes it has adequately provided for the cost of all known environmental conditions, the applicable regulatory agencies could insist upon different and more costly remediative measures than those the Company believes are adequate or required by existing law. The Company believes that any additional liability in excess of amounts accrued which may result from the resolution of such matters will not have a material adverse effect on the Company's financial position, liquidity, cash flows or results of operations. NOTE K -- Operating Segments The Company has the following three reportable segments: applied technologies ("Applied Technologies"), distribution and storage equipment ("Distribution and Storage") and process systems and equipment ("Process Systems"). The Company's reportable segments are business units that offer different products. The reportable segments are each managed separately because they manufacture and distribute distinct products with different production processes and sales and marketing approaches. The Applied Technologies segment sells products including liquefied natural gas ("LNG") alternative fuel systems, telemetry products, magnetic resonance imaging ("MRI") cryostat components, bulk liquid CO2 systems, medical products, biological storage systems, cryogenic systems and components and stainless steel tubing. The Distribution and Storage segment sells cryogenic bulk storage systems, cryogenic packaged gas systems and cryogenic services to various companies for the storage and transportation of both industrial and natural gases. The Process Systems segment sells heat exchangers and coldboxes to natural gas, petrochemical processing and industrial gas companies who use them for the liquefaction and separation of natural and industrial gases. Due to the nature of the products that each operating segment sells, there are no intersegment sales. The Company evaluates performance and allocates resources based on profit or loss from operations before gain on sale of assets, net interest expense, derivative contracts valuation expense, income taxes, minority interest and cumulative effect of change in accounting principle. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. 39 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE K -- Operating Segments - Continued Information for the Company's three reportable segments and its corporate headquarters, and product and geographic information for the Company, is presented below:

(A) The Company defines operating income (loss) for segment measurement and reporting purposes to be profit or loss from operations before gain on sale of assets, net interest expense, derivative contracts valuation expense, income taxes, minority interest and cumulative effect of change in accounting principle. (B) Corporate assets consist primarily of deferred income taxes, deferred financing costs and cash and cash equivalents. (C) Corporate operating loss in 1999 includes an in-process research and development charge of $22,010 recognized by the Company upon its acquisition of MVE. 40 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE K -- OPERATING SEGMENTS - CONTINUED

NOTE L -- EXTRAORDINARY ITEM In the second quarter of 1999, the Company borrowed funds under its Credit Facility and retired prior to maturity certain debt assumed as part of the MVE acquisition with a fair value of $119.2 million. The debt extinguishment resulted in an extraordinary loss of $12,459, ($7,809 net of tax) or $0.33 per diluted share. 41 CHART INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts) NOTE M -- QUARTERLY DATA (UNAUDITED) Selected quarterly data for the years ended December 31, 2001 and 2000 are as follows:

In the second quarter of 2001, the Company recorded a non-cash inventory valuation charge included in cost of sales of $745 ($447 net of taxes) for the write-off of inventory at cryogenic services business sites closed by the Company. In the fourth quarter of 2001, the Company recorded a non-cash inventory valuation charge included in cost of sales of $1,874 ($1,153 net of taxes) for the write-down to fair value of inventory related to a product line that was sold by the Company.

In the fourth quarter of 2000, the Company recorded a non-cash inventory valuation charge included in cost of sales of $1,392 ($509 net of taxes). 42 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The information appearing under the captions "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" in the registrant's definitive Proxy Statement to be used in connection with the Annual Meeting of Stockholders to be held on June 6, 2002 (the "2002 Proxy Statement") is incorporated herein by reference. Information regarding executive officers of the registrant is set forth in Part I of this Annual Report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION. The information appearing under the captions "Election of Directors" and "Executive Compensation" (other than the Compensation Subcommittee Report on Executive Compensation) in the 2002 Proxy Statement is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information appearing under the caption "Stock Ownership of Principal Holders and Management" in the 2002 Proxy Statement is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. The information appearing under the caption "Other Matters" in the 2002 Proxy Statement is incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a)(1) Report of Independent Auditors.................................... 22 Consolidated Balance Sheets at December 31, 2001 and 2000......... 23 Consolidated Statements of Operations for the Years ended December 31, 2001, 2000 and 1999 ........................................ 24 Consolidated Statements of Shareholders' Equity for the Years ended December 31, 2001, 2000 and 1999.......................... 25 Consolidated Statements of Cash Flows for the Years ended December 31,2001, 2000 and 1999.......................................... 26 Notes to Consolidated Financial Statements........................ 27

(a)(2) Financial Statement Schedules. No financial statement schedules required. (a)(3) Exhibits See the Exhibit Index at page 45 of this Annual Report on Form 10-K. (b) Reports on Form 8-K. During the quarter ended December 31, 2001, the Company filed one Current Report on Form 8-K. A Current Report on Form 8-K, dated October 29, 2001, furnished a press release pursuant to Regulation FD. 43 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CHART INDUSTRIES, INC. By: /s/ ARTHUR S. HOLMES ---------------------------------- Arthur S. Holmes, Chairman & Chief Executive Officer Date: April 1, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date /s/ ARTHUR S. HOLMES Chairman, Chief Executive Officer and a Director April 1, 2002 ---------------- (Principal Executive Officer) Arthur S. Holmes /s/ MICHAEL F. BIEHL Chief Financial Officer and Treasurer April 1, 2002 ---------------- (Principal Financial Officer) Michael F. Biehl /s/ JOHN T. ROMAIN Controller, Chief Accounting Officer and Assistant April 1, 2002 -------------- Treasurer (Principal Accounting Officer) John T. Romain /s/ RICHARD J. CAMPBELL Director April 1, 2002 ------------------- Richard J. Campbell /s/ THOMAS F. MCKEE Director April 1, 2002 --------------- Thomas F. McKee /s/ LAZZARO G. MODIGLIANI Director April 1, 2002 --------------------- Lazzaro G. Modigliani /s/ ROBERT G. TURNER, JR. Director April 1, 2002 --------------------- Robert G. Turner, Jr.
44 EXHIBIT INDEX
Exhibit No. Description ---- ----------- 2.1 Plan and Agreement of Merger, dated April 30, 1997, by and among the Company, Greenville Tube Corporation, Chart Acquisition Company, Inc. and Cryenco Sciences, Inc.................. (E) 2.2 Agreement for the Sale and Purchase of the Industrial Heat Exchanger Group, dated March 5, 1998, by and among the Company, IMI Kynoch Limited, IMI Marston Limited, IMI plc and Chart Marston Limited........................................................................ (F) 2.3 Agreement and Plan of Merger, dated as of February 16, 1999, by and among the Company, Chart Acquisition Company and MVE Holdings, Inc.............................................. (I) 2.4 Agreement and Plan of Merger, dated as of February 25, 1999, by and among the Company, Chart Acquisition Company and MVE Investors, LLC............................................. (I) 3.1 Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of Delaware on December 3, 1992........................................... (A) 3.1.1 Certificate of Designation of Series A Junior Participating Preferred Stock of the Company..... (N) 3.1.2 Certificate of Amendment, amending the Amended and Restated Certificate of Incorporation of the Company............................................................................... (O) 3.2 Amended and Restated By-Laws of the Company, effective May 3, 2001............................. (O) 4.1 Specimen certificate of the Common Stock of the Company........................................ (N) 4.2 Form of Warrant Agreements of various dates by and between Cryenco Sciences, Inc. and various warrant holders...................................................................... (E) 4.3 Form of Amendment No. 1 to Warrant Agreement by and among the Company, Cryenco Sciences, Inc. and various warrant holders................................................... (E) 4.4 Form of Warrant Certificate.................................................................... (E) 4.5 Rights Agreement, dated as of May 1, 1998, by and between the Company and National City Bank, as Rights Agent........................................................................ (G) 4.6 Amendment No. 1 to Rights Agreement, dated as of February 8, 2001, by and between the Company and National City Bank, as Rights Agent.............................................. (N) 10.1 Form of Indemnity Agreement.................................................................... (B) *10.2 Key Employees Stock Option Plan................................................................ (B) *10.2.1 Amendment No. 1 to Key Employees Stock Option Plan ............................................ *10.2.2 Amendment No. 2 to Key Employees Stock Option Plan ............................................ *10.3 1994 Stock Option Plan for Outside Directors................................................... (C) *10.3.1 1995 Stock Option Plan for Outside Directors................................................... (N) *10.3.2 1996 Stock Option Plan for Outside Directors .................................................. *10.3.3 Amendment No. 1 to the 1996 Stock Option Plan for Outside Directors............................ (K) *10.4 Second Amended and Restated 1997 Stock Option and Incentive Plan............................... (O) *10.5 1997 Stock Bonus Plan.......................................................................... (D) *10.6 Trust Agreement by and between Chart Industries, Inc. and Fidelity Management Trust Company relating to the Deferred Compensation Plan........................................... (H) *10.7 2000 Executive Incentive Stock Option Plan..................................................... (K) *10.7.1 Form of Stock Option Agreement under the 2000 Executive Incentive Stock Option Plan (K) 10.8 License Agreement, dated August 30, 1991, by and between Koch Industries, Inc. and PSI relating to the Ryan/Holmes Technology....................................................... (B) 10.9 Permitted User Agreement, dated as of March 27, 1998, by and between Chart Marston Limited and IMI Marston Limited...................................................................... (F) 10.10 IAM Agreement 2001-2004, effective February 4, 2001, by and between Chart Heat Exchangers, L.P. and Local Lodge 2191 of District Lodge 66 of the International Association of Machinists and Aerospace Workers, AFL-CIO................................................. (O) 10.11 Agreement, effective August 30, 1999 through August 30, 2002, by and between Process Engineering and The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Help ers Local Lodge No. 752 of the AFL-CIO........................... (N) 10.12 Agreement, effective January 10, 2000 through January 15, 2002, by and between the Company and the United Steel Workers ................................................................ (N) *10.13 Employment Agreement, dated as of November 13, 2001, by and between the Company and Arthur S. Holmes ............................................................................ *10.14 Employment Agreement, dated as of January 24, 2001, by and between the Company and James R. Sadowski............................................................................ (N) *10.14.1 Amendment No. 1 to Employment Agreement, dated as of February 15, 2002, by and between the Company and James R. Sadowski ........................................................... *10.15 Letter Agreement, dated July 25, 2001, by and between the Company and Michael F. Biehl......... (Q) *10.16 Salary Continuation Agreement, dated May 12, 1996, by and between the Company and John T. Romain............................................................................... (C) *10.16.1 Amendment No. 1 to Salary Continuation Agreement, dated December 4, 1998, by and between the Company and John T. Romain....................................................... (C)
45 10.17 Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent....................................................................................... (I) 10.17.1 Amendment No. 1, dated as of August 24, 1999, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent........................ (J) 10.17.2 Amendment No. 2, dated as of October 10, 2000, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent........................ (L) 10.17.3 Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent........................................................................ (M) 10.17.4 Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent....................................................................................... (P) 10.17.5 Amendment No. 3, dated as of October 12, 2001, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), The Chase Manhattan Bank, as Administrative Agent, and National City Bank, as Documentation Agent...... ................. (Q) 10.17.6 Amendment No. 1, dated as of October 12, 2001, to the Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent ............................. 10.17.7 Amendment No. 1, dated as of October 12, 2001, to the Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and The Chase Manhattan Bank, as Administrative Agent ............................. 10.17.8 Amendment No. 2, dated as of December 18, 2001, to the Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent.................................. (R) 10.17.9 Amendment No. 2, dated as of December 18, 2001, to the Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent.................................. (R) 10.17.10 Amendment No. 4, dated as of December 31, 2001, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), JPMorgan Chase Bank, as Administrative Agent, and National City Bank, as Documentation Agent........................ (R) 10.17.11 Amendment No. 5, dated as of March 15, 2002, to the Credit Agreement, dated as of April 12, 1999, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Lenders signatory thereto (all as defined therein), JPMorgan Chase Bank, as Administrative Agent, and National City Bank, as Documentation Agent ...................................... 10.17.12 Amendment No. 3, dated as of March 15, 2002, to the Series 1 Incremental Revolving Credit Agreement, dated as of November 29, 2000, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent ................................. 10.17.13 Amendment No. 3, dated as of March 15, 2002, to the Series 2 Incremental Revolving Credit Agreement, dated as of April 17, 2001, by and among the Company, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders signatory thereto (all as defined therein), and JPMorgan Chase Bank, as Administrative Agent ................................. 10.18 Indemnification and Warrant Purchase Agreement, dated as of April 12, 1999, by and among the Company, MVE Holdings, Inc. and each of the former members of MVE Investors, LLC listed on the signature pages thereto....................................................... (I) 10.19 Form of Promissory Note....................................................................... (I) 10.20 Form of Mortgage, Assignment of Rents, Security Agreement and Fixture Filing.................. (I) 10.21 Warrant Agreement, dated as of April 12, 1999, between the Company and each of the persons listed on the signature pages thereto....................................................... (I)

46 10.22 Escrow Agreement, dated as of April 12, 1999, by and among the Company, MVE Holdings, Inc., Chart Acquisition Company, ACI Capital I, LLC, in its own capacity and, with respect to the Class B Escrow Amount (as defined therein), as agent and attorney-in-fact for each of the former members of MVE Investors, LLC listed therein, and Firstar Bank of Minnesota, N.A......................................................................................... (I) 21.1 Subsidiaries of the Registrant ............................................................... 23.1 Consent of Ernst & Young LLP .................................................................

47 * Management contract or compensatory plan or arrangement identified pursuant to Item 14(a)(3) of this Annual Report on Form 10-K. (A) Incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-3 (Reg. No. 333-35321). (B) Incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-1 (Reg. No. 33-52754). (C) Incorporated herein by reference to the appropriate exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1999. (D) Incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form S-8 (Reg. No. 333-32535). (E) Incorporated herein by reference to the appropriate exhibit to the Company's Current Report on Form 8-K, dated July 31, 1997. (F) Incorporated herein by reference to the appropriate exhibit to the Company's Current Report on Form 8-K, dated March 27, 1998. (G) Incorporated herein by reference to the appropriate exhibit to the Company's Registration Statement on Form 8-A, filed June 3, 1998. (H) Incorporated herein by reference to the appropriate exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 1998. (I) Incorporated herein by reference to the appropriate exhibit to the Company's Current Report on Form 8-K, dated April 12, 1999. (J) Incorporated herein by reference to the appropriate exhibit to the Company's Current Report on Form 8-K, dated August 24, 1999. (K) Incorporated herein by reference to the appropriate exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000. (L) Incorporated herein by reference to the appropriate exhibit to the Company's Current Report on Form 8-K, dated October 10, 2000. (M) Incorporated herein by reference to the appropriate exhibit to the Company's Current Report on Form 8-K, dated November 29, 2000. (N) Incorporated herein by reference to the appropriate exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2000. (O) Incorporated herein by reference to the appropriate exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001. (P) Incorporated herein by reference to the appropriate exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001. (Q) Incorporated herein by reference to the appropriate exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001. (R) Incorporated herein by reference to the appropriate exhibit to the Company's Current Report on Form 8-K, dated December 31, 2001. 48 EX-10.2.1 3 dex1021.htm KEY EMPLOYEES STOCK OPTION PLAN Prepared by R.R. Donnelley Financial -- Key Employees Stock Option Plan
EXHIBIT 10.2.1

CHART INDUSTRIES, INC.

AMENDMENT NO. 1 TO

KEY EMPLOYEES STOCK OPTION PLAN

Chart Industries, Inc. (“Chart”) hereby adopts Amendment No. 1 to the Chart Industries, Inc. Key Employees Stock Option Plan (the “Plan”) subject to the terms and provisions set forth below. Capitalized terms used but not defined herein shall have the meanings as set forth in the Plan.

1.  Section 6 of the Plan is deleted in its entirety and replaced as follows:

“6.  Shares Subject to the Plan.    Subject to the provisions of Section 9 concerning payment for stock appreciation rights in shares of Common Stock and subject to the provisions of the next succeeding paragraph of this Section 6, the aggregate number of shares of Common Stock for which options may be granted under the Plan shall be Five Hundred Fifteen Thousand (515,000) shares of Common Stock. Either treasury or authorized and unissued shares of Common Stock, or both, in such amounts, within the maximum limits of the Plan, as the Committee shall from time to time determine, may be so issued. All shares of Common Stock which are the subject of any lapsed, expired or terminated options may be made available for reoffering under the Plan to any Key Employee. If an option granted under this Plan is exercised pursuant to the terms and conditions determined by the Committee under Subsection 7(d), and a stock appreciation right is not granted in conjunction with the option pursuant to Section 9, any shares of Common Stock which are the subject thereof shall not thereafter be available for reoffering under the Plan to any Key Employee. If a stock appreciation right is granted in conjunction with an option pursuant to Section 9, and if the option agreement with the Optionee provides that exercise of the stock appreciation right shall be in lieu of exercise of the options, and the stock appreciation right is thereafter exercised in whole or in part, then the option or the portion thereof with respect to which the stock appreciation right was exercised shall be deemed to have been canceled and the shares of Common Stock which otherwise would have been issued upon exercise of such option, to the extent not used in payment for the stock appreciation rights, may be made available for reoffering under the Plan to any Key Employee.

In the event that subsequent to the date of adoption of the Plan by the Board, the outstanding shares of Common Stock are, as a result of a stock split, stock dividend, combination or exchange of shares, exchange for other securities, reclassification, reorganization, redesignation, merger, consolidation, recapitalization or other such change, including without limitation any transaction described in Section 424(a) of the Code, increased or decreased or changed into or exchanged for a different number or kind of shares of stock or other securities of the Company, then (i) there shall automatically be substituted for each share of Common Stock subject to an unexercised option granted under the Plan and each share of Common Stock available for additional grants of options under the Plan the number and kind of shares of stock or other

securities into which each outstanding share of Common Stock shall be exchanged, (ii) the option price per share of Common Stock or unit of securities shall be increased or decreased proportionately so that the aggregate purchase price for the securities subject to the option shall remain the same as immediately prior to such event, and (iii) the Committee shall make such other adjustments to the securities subject to options, the provisions of the Plan, and option agreements as may be appropriate, equitable and in compliance with the provisions of Section 424(a) of the Code to the extent applicable and any such adjustment shall be final, binding and conclusive as to each Optionee. Any such adjustment shall provide for the elimination of fractional shares.”

IN WITNESS WHEREOF, CHART INDUSTRIES, INC., by its appropriate officers duly authorized, has executed this instrument this 2nd day of May, 1995.

CHART INDUSTRIES, INC.

By:

Arthur S. Holmes,

Chairman and Chief

Executive Officer

And:

Don A. Baines,

Chief Financial Officer

and Treasurer

EX-10.2.2 4 dex1022.htm KEY EMPLOYEES STOCK OPTION PLAN Prepared by R.R. Donnelley Financial -- Key Employees Stock Option Plan
EXHIBIT 10.2.2

CHART INDUSTRIES, INC.

AMENDMENT NO. 2 TO

KEY EMPLOYEES STOCK OPTION PLAN

Chart Industries, Inc. (“Chart”) hereby adopts Amendment No. 2 to the Chart Industries, Inc. Key Employees Stock Option Plan (the “Plan”) subject to the terms and provisions set forth below. Capitalized terms used but not defined herein shall have the meanings as set forth in the Plan.

1.  Section 6 of the Plan is deleted in its entirety and replaced as follows:

“6.  Shares Subject to the Plan.    Subject to the provisions of Section 9 concerning payment for stock appreciation rights in shares of Common Stock and subject to the provisions of the next succeeding paragraph of this Section 6, the aggregate number of shares of Common Stock for which options may be granted under the Plan shall be Six Hundred Fifteen Thousand (615,000) shares of Common Stock. Either treasury or authorized and unissued shares of Common Stock, or both, in such amounts, within the maximum limits of the Plan, as the Committee shall from time to time determine, may be so issued. All shares of Common Stock which are the subject of any lapsed, expired or terminated options may be made available for reoffering under the plan to any Key Employee. If an option granted under this Plan is exercised pursuant to the terms and conditions determined by the Committee under Subsection 7(d), and a stock appreciation right is not granted in conjunction with the option pursuant to Section 9, any shares of Common Stock which are the subject thereof shall not thereafter be available for reoffering under the Plan to any Key Employee. If a stock appreciation right is granted in conjunction with an option pursuant to Section 9, and if the option agreement with the Optionee provides that exercise of the stock appreciation right shall be in lieu of exercise of the options, and the stock appreciation right is thereafter exercised in whole or in part, then the option or the portion thereof with respect to which the stock appreciation right was exercised shall be deemed to have been canceled and the shares of Common Stock which otherwise would have been issued upon exercise of such option, to the extent not used in payment for the stock appreciation rights, may be made available for reoffering under the Plan to any Key Employee.

In the event that subsequent to the date of adoption of the Plan by the Board, the outstanding shares of Common Stock are, as a result of a stock split, stock dividend, combination or exchange of shares, exchange for other securities, reclassification, reorganization, redesignation, merger, consolidation, recapitalization or other such change, including without limitation any transaction described in Section 424(a) of the Code, increased or decreased or changed into or exchanged for a different number or kind of shares of stock or other securities of the Company, then (i) there shall automatically be substituted for each share of Common Stock subject to an unexercised option granted under the Plan and each share of Common Stock available for additional grants of options under the Plan the number and kind of shares of stock or other

securities into which each outstanding share of Common Stock shall be exchanged, (ii) the option price per share of Common Stock or unit of securities shall be increased or decreased proportionately so that the aggregate purchase price for the securities subject to the option shall remain the same as immediately prior to such event, and (iii) the Committee shall make such other adjustments to the securities subject to options, the provisions of the Plan, and option agreements as may be appropriate, equitable and in compliance with the provisions of Section 424(a) of the Code to the extent applicable and any such adjustment shall be final, binding and conclusive as to each Optionee. Any such adjustment shall provide for the elimination of fractional shares.”

2.  A new Section 17 is added to the Plan as follows:

“17.  Grants to Any One Individual.    The maximum number of shares subject to options which may be granted to any one Key Employee during the term of the Plan is three hundred thousand (300,000) of the shares available under the Plan.”
EX-10.3.2 5 dex1032.htm 1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS Prepared by R.R. Donnelley Financial -- 1996 Stock Option Plan For Outside Directors
EXHIBIT 10.3.2

CHART INDUSTRIES, INC.

1996 STOCK OPTION PLAN FOR OUTSIDE DIRECTORS

Chart Industries, Inc., hereinafter referred to as the “Company”, hereby adopts a stock option plan for eligible Directors of the Company (hereinafter referred to sometimes as “Optionees”) pursuant to the following terms and provisions:

Section 1.    Purpose of the Plan

The purpose of this plan, hereinafter referred to as the “Plan,” is to provide additional incentive to those Directors of the Company who are not employees of the Company or any of its subsidiaries or affiliates by encouraging them to acquire a new or an additional share ownership in the Company, thus increasing their proprietary interest in the Company’s business and providing them with an increased personal interest in the Company’s continued success and progress. These objectives will be promoted through the grant of options to acquire Common Stock, par value $.01 per share (the “Common Stock”), of the Company pursuant to the terms of the Plan. Only those Directors who meet the qualifications stated above are eligible for and shall receive options under this Plan.

Section 2.    Effective Date of the Plan

The Plan shall become effective on February 8, 1996, subject to the approval of the Plan by holders of a majority of the outstanding shares of voting capital stock of the Company which is present and entitled to vote thereon at a meeting or otherwise. In the case that the Company’s stockholders have not approved the Plan on or before February 8, 1997, the Plan and any options granted hereunder shall be null and void.

Section 3.    Shares Subject to the Plan

The shares to be issued upon the exercise of the options granted under the Plan shall be shares of Common Stock of the Company. Either treasury or authorized and unissued shares of Common Stock, or both, as the Board of Directors shall from time to time determine, may be so issued. No shares of Common Stock which are subject of any lapsed, expired or terminated options may be made available for reoffering under the Plan. If an option granted under this Plan is exercised pursuant to the terms and conditions of subsection 5(b), any shares of Common Stock which are the subject thereof shall not thereafter be available for reoffering under the Plan.

Subject to the provisions of the next succeeding paragraph of this Section 3, the aggregate number of shares of Common Stock for which options may be granted under the Plan shall be One Hundred Sixty-Eight Thousand Seven Hundred Fifty (168,750) shares of Common Stock.

In the event that subsequent to the date of effectiveness of the Plan, the Common Stock should, as a result of a stock split, stock dividend, combination or exchange of shares, exchange for other securities, reclassification, reorganization, redesignation, merger, consolidation,

recapitalization or other such change, be increased or decreased or changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, then (i) there shall automatically be substituted for each share of Common Stock subject to an unexercised option (in whole or in part) granted under the Plan, each share of Common Stock available for additional grants of options under the Plan and each share of Common Stock made available for grant to each eligible Director pursuant to Section 4 hereof, the number and kind of shares of stock or other securities into which each outstanding share of Common Stock shall be changed or for which each such share of Common Stock shall be exchanged, (ii) the option price per share of Common Stock or unit of securities shall be increased or decreased proportionately so that the aggregate purchase price for the securities subject to the option shall remain the same as immediately prior to such event and (iii) the Board shall make such other adjustments as may be appropriate and equitable to prevent enlargement or dilution of option rights. Any such adjustment may provide for the elimination of fractional shares.

Section 4.    Grant of Options

(a)  Automatic Grants.    Subject to the terms of the Plan (including without limitation the receipt of stockholder approval contemplated by Section 2 hereof), each eligible Director as of February 8, 1996 shall be granted a non–qualified stock option for 11,250 shares of Common Stock effective as of February 8, 1996. Each eligible Director first appointed or elected to the Board of Directors after the effective date of the Plan shall be granted a non–qualified stock option to purchase 11,250 shares of Common Stock as of the date of such appointment or election. In addition, subject to the terms of the Plan, each eligible Director shall be granted a non–qualified stock option for 11,250 shares of Common Stock on the date of the Company’s Annual Meeting of Stockholders, beginning in 1997. Such grants shall occur automatically without any further action by the Board of Directors.

(b)  Option Price.    The price at which each share of Common Stock may be purchased pursuant to an option granted under the Plan shall be equal to the “fair market value” (as determined pursuant to Section 7) for each such share as of the date on which the option is granted (the “Date of Grant”), but in no event shall such price be less than the par value of such shares of Common Stock. Anything contained in this subsection (b) to the contrary notwithstanding, in the event that the number of shares of Common Stock subject to any option is adjusted pursuant to Section 3, a corresponding adjustment shall be made in the price at which the shares of Common Stock subject to such option may thereafter be purchased.

(c)  Duration of Options.    Each option granted under the Plan shall expire and all rights to purchase shares of Common Stock pursuant thereto shall cease on the date (the “Expiration Date”) which shall be the tenth anniversary of the Date of Grant of such option.

(d)  Vesting of Options.    Each option granted under the Plan shall become fully vested and exercisable on the first anniversary of the Date of Grant.

2

Section 5.    Option Provisions

(a)  Limitation on Exercise and Transfer of Options.    Only the Director to whom the option is granted may exercise the same except where a guardian or other legal representative has been duly appointed for such Director and except as otherwise provided in the case of such Director’s death. No option granted hereunder shall be transferable otherwise than by the Last Will and Testament of the Director to whom it is granted or, if the Director dies intestate, by the applicable laws of descent and distribution. No option granted hereunder may be pledged or hypothecated, nor shall any such option be subject to execution, attachment or similar process.

(b)  Exercise of Option.    Each option granted hereunder may be exercised in whole or in part (to the maximum extent then exercisable) from time to time during the option period, but this right of exercise shall be limited to whole shares. Options shall be exercised by the Optionee (i) giving written notice to the Treasurer of the Company at its principal business office, by certified mail, return receipt requested, of intention to exercise the same and the number of shares with respect to which the option is being exercised (the “Notice of Exercise of Option”) accompanied by full payment of the purchase price in cash or, with the consent of the Board of Directors, in whole or in part in shares of Common Stock having a fair market value on the date the option is exercised equal to that portion of the purchase price for which payment in cash is not made and (ii) making appropriate arrangements with the company with respect to income tax withholding, as required, which arrangements may include, in lieu of other withholding arrangements, (a) the Company withholding from issuance to the Optionee such number of shares of Common Stock otherwise issuable upon exercise of the option as the Company and the Optionee may agree; provided that such Optionee has had on file with the Board of Directors, for at least six (6) months prior thereto, an effective standing election to satisfy said Optionee’s tax withholding obligations in such a fashion, which election form by its terms shall not be revocable or amendable for at least six (6) months or (b) with the consent of the Board of Directors, the Optionee’s delivery to the Company of shares of Common Stock having a fair market value on the date the option is exercised equal to that portion of the withholding obligation for which payment in cash is not made. Such Notice of Exercise of Option shall be deemed delivered upon deposit into the mails.

(c)  Termination of Directorship.    If the Optionee ceases to be a Director of the Company, his or her option shall terminate three (3) months after the effective date of termination of his or her directorship and neither he or she nor any other person shall have any right after such date to exercise all or any part of such option. If the termination of the directorship is due to death, then the option may be exercised within three (3) months after the Optionee’s death by the Optionee’s estate or by the person designated in the Optionee’s Last Will and Testament or to whom transferred by the applicable laws of descent and distribution (the “Personal Representative”). Notwithstanding the foregoing, in no event shall any option be exercisable after the expiration of the option period and not to any greater extent than the Optionee would have been entitled to exercise the option at the time of death.

(d)  Acceleration of Exercise of Options in Certain Events.    Notwithstanding anything in the foregoing to the contrary, in the event of a “change in control” the eligible Director shall have the immediate right and option (notwithstanding the provisions of Section 4) to exercise the option with respect to all shares of Common Stock covered by the option, which exercise, if

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made, shall be irrevocable. The term “change in control” shall include, but not be limited to: (i) the first purchase of shares pursuant to a tender offer or exchange (other than a tender offer or exchange by the Company) for all or part of the Company’s shares of any class of common stock or any securities convertible into such common stock; (ii) the receipt by the Company of a Schedule 13D or other advice indicating that a person is the “beneficial owner” (as that term is defined in Rule 13d–3 under the Securities Exchange Act of 1934) of twenty percent (20%) or more of the Company’s shares of capital stock calculated as provided in paragraph (d) of said Rule 13d–3, other than persons who are presently “beneficial owners” of at least five percent (5%) or more of the Company’s Common Stock as of the effective date of the Plan; (iii) the date of approval by stockholders of the Company of an agreement providing for any consolidation or merger of the Company in which the Company will not be the continuing or surviving corporation or pursuant to which shares of capital stock, of any class or any securities convertible into such capital stock, of the Company would be converted into cash, securities, or other property, other than a merger of the Company in which the holders of shares of all classes of the Company’s capital stock immediately prior to the merger would have the same proportion of ownership of common stock of the surviving corporation immediately after the merger; (iv) the date of the approval by stockholders of the Company of any sale, lease, exchange, or other transfer (in one transaction or a series of related transaction) of all or substantially all the assets of the Company; or (v) the adoption of any plan or proposal for the liquidation (but not a partial liquidation) or dissolution of the Company.

(d)  Option Agreements.    Options granted under the Plan shall be subject to the further terms and provisions of an Option Agreement, a copy of which is attached hereto as Exhibit A, the execution of which by each Optionee shall be a condition to the receipt of an option.

Section 6.    Investment Representation; Approvals and Listing

The options to be granted hereunder shall be further conditioned upon receipt of the following investment representation from the Optionee:

“I further agree that any shares of Common Stock of Chart Industries, Inc. which I may acquire by virtue of this option shall be acquired for investment purposes only and not with a view to distribution or resale; provided, however, that this restriction shall become inoperative in the event the said shares of Common Stock subject to this option shall be registered under the Securities Act of 1933, as amended, or in the event Chart Industries, Inc. is otherwise satisfied that the offer or sale of the shares of Common Stock subject to this option may be lawfully made without registration of the said shares of Common Stock under the Securities Act of 1933, as amended.”

The Company shall not be required to issue any certificate or certificates for shares of Common Stock upon the exercise of an option granted under the Plan prior to (i) the obtaining of any approval from any governmental agency which the Company shall, in its sole discretion, determine to be necessary or advisable, (ii) the admission of such shares of Common Stock to listing on any national securities exchange on which the Common Stock may be listed, (iii) the completion of any registration or other qualification of the shares of Common Stock under any state or federal law or ruling or regulations of any governmental body which the Company shall,

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in its sole discretion, determine to be necessary or advisable or the determination by the Company, in its sole discretion, that any registration or other qualification of the shares of Common Stock is not necessary or advisable and (iv) the obtaining of an investment representation from the Optionee in the form stated above or in such other form as the Company, in its sole discretion, shall determine to be adequate.

Section 7.    General Provisions

For all purposes of this Plan the fair market value of a share of Common Stock shall be determined as follows: so long as the Common Stock of the Company is listed upon an established stock exchange or exchanges such fair market value shall be determined to be the highest closing price of a share of such Common Stock on such stock exchange or exchanges on the date the option is granted (or the date the shares of Common Stock are tendered as payment, in the case of determining fair market value for that purpose) or if no sale of such Common Stock shall have been made on any stock exchange on that day, then on the closest preceding day on which there was a sale of such Common Stock; and during any period of time as such Common Stock is not listed upon an established stock exchange the fair market value per share shall be the mean between dealer “Bid” and “Ask” prices of such Common Stock in the over–the–counter market on the day the option is granted (or the day the shares of Common Stock are tendered as payment, in the case of determining fair market value for that purpose), as reported by the National Association of Securities Dealers, Inc.

The liability of the Company under the Plan and any distribution of Common Stock made hereunder is limited to the obligations set forth herein with respect to such distribution and no term or provision of the Plan shall be construed to impose any liability on the Company in favor of any person with respect to any loss, cost or expense which the person may incur in connection with or arising out of any transaction in connection with the Plan, including, but not limited to, any liability to any federal, state, or local authority and/or any securities regulatory authority.

Nothing in the Plan or in any option agreement shall confer upon any Optionee any right to continue as a Director of the Company, or to be entitled to any remuneration or benefits not set forth in the Plan or such option.

Nothing contained in the Plan or in any option agreement shall be construed as entitling any Optionee to any rights of a stockholder as a result of the grant of an option until such time as shares of Common Stock are actually issued to such Optionee pursuant to the exercise of an option.

The Plan may be assumed by the successors and assigns of the Company.

The Plan shall not be amended more than once every six (6) months, other than to comport with changes in the Internal Revenue Code, the Employee Retirement Income Security Act, or the rules thereunder.

The cash proceeds received by the Company from the issuance of Common Stock pursuant to the Plan will be used for general corporate purposes or in such other manner as the Board of Directors deems appropriate.

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The expense of administering the Plan shall be borne by the Company.

The captions and section numbers appearing in the Plan are inserted only as a matter of convenience. They do not define, limit, construe or describe the scope or intent of the provisions of the Plan.

Section 8.    Termination of the Plan

The Plan shall terminate ten (10) years from the date of its adoption by the Board of Directors of the Company and thereafter no options shall be granted hereunder. All options outstanding at the time of termination of the Plan shall continue in full force and effect in accordance with and subject to their terms and the terms and conditions of the Plan.

Section 9.    Taxes

Appropriate provisions shall be made for all taxes required to be withheld and/or paid in connection with the options or the exercise thereof, and the transfer of shares of Common Stock pursuant thereto, under the applicable laws or other regulations of any governmental authority, whether federal, state, or local and whether domestic or foreign.

Section 10.    Governing Law

The Plan shall be governed by and construed in accordance with the laws of the State of Delaware and any applicable federal law.

Section 11.    Venue

The venue of any claim brought hereunder by an eligible Director shall be Cleveland, Ohio.

Section 12.    Changes in Governing Rules and Regulations

All references herein to the Internal Revenue Code, or sections thereof, or to rules and regulations of the Department of Treasury or of the Securities and Exchange Commission, shall mean and include the Code sections thereof and such rules and regulations as are now in effect or as they may be subsequently amended, modified, substituted or superseded.

Section 13.    Replacement of 1995 Stock Option Plan for Outside Directors

Upon approval of the Plan by the holders of voting capital stock as set forth in Section 2, no further grants of options under the 1995 Stock Option Plan for Outside Directors shall be made.

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EX-10.13 6 dex1013.htm EMPLOYMENT AGREEMENT Prepared by R.R. Donnelley Financial -- Employment Agreement

EXHIBIT 10.13

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made as of November 13, 2001 by and between CHART INDUSTRIES, INC., a Delaware corporation (the “Company”), and ARTHUR S. HOLMES (“Executive”).

WHEREAS, Executive is currently Chairman and Chief Executive Officer of the Company and has valuable knowledge and experience pertaining to the business of the Company, and the parties desire to arrange for the continuation of his services to the Company.

NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties herein contained, the Company and Executive agree as follows:

1.  Term of Employment.    The Company hereby agrees to continue to employ Executive, and Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein for the period commencing as of the date hereof and expiring on January 30, 2006 (the “Employment Period”). The Employment Period may be extended upon mutual agreement in writing signed by Executive and an officer of the Company specifically designated by the Board of Directors of the Company to execute such writing. In any case, the Employment Period may be terminated earlier under the terms and conditions set forth herein.

2.  Position and Duties.    Executive shall serve as Chairman and Chief Executive Officer of the Company and report to the Board of Directors of the Company. Executive shall have responsibility for the general management and operation of the Company and the performance of such other executive services and duties as shall be reasonably assigned to and requested of him by, and subject to the direction and supervision of, the Board of Directors of the Company; provided, however, that such services and duties also shall be reasonably consistent with the services and duties performed by Executive for the Company immediately prior to the Employment Period. Executive shall devote substantially all his working time and efforts to the business and affairs of the Company and serve the Company in its business and perform his duties to the best of his ability.

3.  Compensation.

(a)  Salary.    During the Employment Period, Executive shall receive a base salary at the rate of Three Hundred Fifty Thousand Dollars ($350,000) per year (the “Base Salary Amount”). Executive’s salary shall be reviewed on an annual basis by the Board of Directors of the Company or any duly authorized Committee thereof. Executive’s salary shall be subject to being adjusted based upon such annual review, although any such adjustment shall be at the sole discretion of the Board of Directors or any duly authorized Committee thereof. Notwithstanding the foregoing, in no event shall Executive’s salary be adjusted below the Base Salary Amount. Such salary shall be payable in bi-weekly installments or otherwise in accordance with the normal policies of the Company for payment of corporate officers.

(b)  Benefits.    During the Employment Period Executive shall be entitled to participate in any employee benefits plans which are maintained or established by the Company for its corporate officers, subject, however, to all of the terms and conditions thereof, including

any eligibility requirements therefor, including but not limited to: (i) the Management Incentive Compensation Plan or any other successor plan (the “Incentive Plan”); (ii) any stock option plan of the Company in which the Company’s corporate officers generally are eligible to participate (the “Option Plan”); (iii) medical, dental and vision insurance coverage; (iv) life insurance coverage; (v) 401(k) Retirement Plan (which includes a savings plan component and a profit-sharing pension component); (vi) four weeks of paid vacation to be taken at such time or times as are chosen by Executive; and (vii) the use of a leased automobile during Executive’s employment comparable to his presently leased automobile. On an annual basis, the Board of Directors of the Company or any duly authorized Committee thereof shall review Executive’s level of participation in the Company’s Option Plan and, based upon such review, may in its sole discretion grant Executive additional options to purchase common stock of the Company.

(c)  Expenses.    The Company shall reimburse Executive for reasonable expenses incurred by him on behalf of the Company in the performance of his duties during the Employment Period. Executive shall furnish the Company with such documentation as is requested by the Company in order for it to comply with the Code and regulations thereunder in connection with the proper deduction of such expenses.

4.  Termination of Employment.

(a)  Events of Termination.    The Employment Period shall terminate immediately upon the occurrence of any of the following events: (i) expiration of the Employment Period; (ii) the death of Executive; (iii) the expiration of the 30th calendar day (the “Disability Effective Date”) after the Company gives Executive written notice of its election to terminate Executive’s employment upon the Disability of Executive, if before the expiration of such 30-day period Executive has not returned to the performance of his duties hereunder on a full-time basis; (iv) voluntary termination by Executive of his employment with the Company without Good Reason; (v) the Company’s discharge of Executive for Good Cause; (vi) voluntary termination by Executive of his employment with the Company for Good Reason; or (vii) the Company’s discharge of Executive at any time without Good Cause.

(b)  Notice of Termination.    Any termination by the Company for Good Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 11. 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) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) specifies the Date of Termination (as defined below). The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Good Cause shall not waive any right of Executive or the Company, respectively, hereunder or preclude Executive or the Company, respectively, from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(c)  Date of Termination.    “Date of Termination” means (i) if Executive’s employment is terminated by the Company for Good Cause, or by Executive for Good Reason, the date of termination of employment that is set forth in the Notice of Termination (which shall

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not be earlier than the date on which such notice is given), (ii) if Executive’s employment is terminated by the Company other than for Good Cause or Disability, or Executive resigns without Good Reason, the date on which the Company or Executive notifies Executive or the Company, respectively, of such termination, or such later date as may be specified by the terminating party in such notice, and (iii) if Executive’s employment is terminated by reason of death, Disability or expiration of the Employment Period, the date of death of Executive, the Disability Effective Date or the date of expiration of the Employment Period, as the case may be.

(d)  Deemed Termination After Change in Control.    Any termination of the employment of Executive by the Company under Section 4(a)(vii) without Good Cause following the commencement of any discussion with or communication from a third party that ultimately results in a Change in Control shall be deemed to be a termination of Executive after such Change in Control for purposes of this Agreement. In the event Executive is entitled to the benefits under this Agreement as contemplated by the preceding sentence, then for purposes of Section 6(c) the Date of Termination shall be deemed to be the date of the Change in Control if the employment of Executive was terminated before such date.

(e)  Notice of Change in Control.    The Company shall give Executive written notice of the occurrence of any event constituting a Change in Control as promptly as practical, and in no case later than 10 calendar days after the occurrence of such event.

5.  Obligations of the Company upon Termination.

(a)  Discharge Without Good Cause; Resignation for Good Reason or During Window Period.    Executive shall be entitled to the severance benefits specified in this Section 5(a) if, during the Employment Period, (x) the Company terminates Executive’s employment under Section 4(a)(vii) without Good Cause, (y) Executive terminates his employment under Section 4(a)(vi) for Good Reason, or (z) Executive terminates his employment on a voluntary basis under Section 4(a)(iv) during the Window Period following a Change in Control. In any such case:

(i)  subject to Section 6 and in lieu of further base salary or bonus payments, the Company shall pay to Executive in a lump sum in cash within 30 calendar days after the Date of Termination the amounts determined under clauses (A) and (B) below:

(A)  the sum of (1) Executive’s annual base salary at the rate then in effect (which shall not be a rate less than $350,000 per annum) through the Date of Termination to the extent not previously paid, (2) the product of (x) the Deemed Bonus Amount and (y) a fraction, the numerator of which is the number of days in the current calendar year through the Date of Termination, and the denominator of which is 365, and (3) any unpaid cash bonus under the Incentive Plan for a prior year (the sum of (1), (2) and (3) is referred to herein as the “Accrued Obligations”); and

(B)  the product of (1) the number of years (including fractions thereof) remaining from the Date of Termination until the end of the Continuation Period and (2) the sum of (x) Executive’s annual base salary at the rate

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then in effect (which shall not be a rate less than $350,000 per annum) and (y) the Deemed Bonus Amount (the product of (1) and (2) is referred to herein as the “Severance Payment”).

For purposes of this Section 5(a)(i), any amounts of compensation deferred by Executive under a deferral plan of the Company or any of its Affiliates shall be deemed to have been paid on the date of deferral, and all such deferred amounts shall be payable as governed by the terms of the applicable deferral plan, except that no such amounts shall be forfeited under the terms of the applicable deferral plan as a result of Executive’s termination of employment.

(ii)  for the duration of the Continuation Period, Executive shall be eligible to participate in the employee benefits plans referred to in Sections 3(b)(iii) and (iv) as if he were still employed by the Company, to the extent and at the level of Executive’s participation thereunder immediately prior to the Date of Termination, but all Company contributions or payments under any such employee benefits plans shall be subject to Executive’s fulfillment of his contribution requirements thereunder, and Company provision of the benefits listed in Sections 3(b)(iii) and (iv) shall cease if Executive obtains such coverage, if any, from another employer during the Continuation Period; and

(iii)  Executive shall be entitled to receive any other benefits provided for in Section 3(b) which have accrued up to and including the Date of Termination, subject to the terms and conditions of the benefit plans referenced in Section 3(b), and reimbursement of reasonable expenses incurred up to and including the Date of Termination under the terms of Section 3(c).

(b)  Death or Disability; Discharge for Good Cause; Resignation Without Good Reason Outside Window Period.    Executive shall be entitled to the severance benefits specified in this Section 5(b) if, during the Employment Period, Executive’s employment with the Company (i) terminates under Section 4(a)(ii) as a result of Executive’s death or under Section 4(a)(iii) as a result of Executive’s Disability, (ii) is terminated under Section 4(a)(v) by the Company for Good Cause, or (iii) is terminated by Executive on a voluntary basis under Section 4(a)(iv) without Good Reason outside of a Window Period. In any such case, Executive shall be entitled to payment of base salary only for the remainder of the month in which such termination occurs and thereafter such salary shall end and cease to be payable. In addition, in any such case, Executive shall be entitled to receive any benefits provided for in Section 3(b) which have accrued up to and including the Date of Termination, subject to the terms and conditions of the benefit plans referenced in Section 3(b), and reimbursement of reasonable expenses incurred up to and including the Date of Termination under the terms of Section 3(c).

(c)  Expiration of the Employment Period.    If Executive’s employment with the Company terminates under Section 4(a)(i) in connection with the expiration of the Employment Period, Executive shall be entitled to (i) payment of base salary only through the Date of Termination, (ii) receive, subject to the terms and conditions of the benefit plans referenced in Section 3(b), any benefits provided for in Section 3(b) which have accrued up to and including the Date of Termination (which, in such case, shall be deemed to include the right to payment at the customary time of any unpaid cash bonus to which Executive would have become entitled under all the terms and conditions of the Incentive Plan for the last calendar year

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that ended before the Date of Termination if Executive had remained employed until such bonus is determined and payable under the Incentive Plan) and (iii) reimbursement of reasonable expenses incurred up to and including the Date of Termination under the terms of Section 3(c).

6.  Limitation on Severance Payment.

(a)  Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined (as hereafter provided) that any payment or distribution by the Company or any of its Affiliates to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, restricted stock, stock appreciation right or similar right, or the lapse or termination of any restriction on, or the vesting or exercisability of, any of the foregoing (individually and collectively, a “Payment”), would be subject, but for the application of this Section 6, to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) (the “Excise Tax”) by reason of being considered “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto), then:

(i)  if the After-Tax Payment Amount would be greater by reducing the amount of the Severance Payment otherwise payable under Section 5(a)(i)(B) to Executive to the minimum extent necessary (but in no event to less than zero) so that, after such reduction, no portion of the Payment would be subject to the Excise Tax, then the Severance Payment shall be so reduced; and

(ii)  if the After-Tax Payment Amount would be greater without the reduction referred to in Section 6(a)(i), then there shall be no reduction in the Severance Payment by application of this Section 6.

As used in this Section 6, “After-Tax Payment Amount” means the difference of (x) the amount of the Payment, less (y) the amount of the Excise Tax, if any, imposed upon the Payment.

(b)  Executive shall determine, in the first instance, whether any reduction in the amount of the Severance Payment is required pursuant to this Section 6. If Executive determines that such a reduction may be required, or if reasonably requested by the Company, then an accounting firm selected by Executive and reasonably acceptable to the Company (the “Accounting Firm”) shall determine whether any such reduction is required pursuant to this Section 6 and, if required, the amount of such reduction, and Section 6(c) shall apply. In no case shall the amount of the Accrued Obligations under Section 5(a)(i)(A) be reduced and in no case shall this Section 6 permit a delay in the payment of the Accrued Obligations.

(c)  If Section 6(c) applies pursuant to Section 6(b), Executive shall direct the Accounting Firm to submit its determination and detailed supporting calculations to both the Company and Executive within 30 calendar days after the Date of Termination. The Company and Executive shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company or Executive, as the case may be, reasonably

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requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination and calculations. Any determination by the Accounting Firm as to whether any reduction in the amount of the Severance Payment is required, and the amount of the reduction if required, pursuant to this Section 6 shall be binding upon the Company and Executive. The fees and expenses of the Accounting Firm for its services in connection with the determination and calculations contemplated this Section 6 shall be borne by the Company. The federal, state and local income or other tax returns filed by Executive and the Company shall be prepared and filed on a basis consistent with such determination and calculations. The Company shall pay the Severance Payment, as reduced or not reduced pursuant to the final determination of the Accounting Firm, to Executive no later than the later of (i) the time otherwise required hereunder or (i) seven calendar days after receipt of such determination.

7.  Full Settlement; Legal Fees.    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 Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement. If Executive is required to enforce any of his rights under this Agreement after a Change in Control (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement), the Company shall reimburse Executive as incurred for all reasonable legal fees and expenses incurred by him to enforce such rights, plus interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code.

8.  Indemnification.    The Company shall indemnify Executive and his representatives, successors and estate against claims arising in connection with Executive’s status as a Director, officer, employee or agent of the Company, in accordance with the Company’s Certificate of Incorporation, By-Laws and indemnity agreements and policies for its Directors and executive officers, subject to applicable law.

9.  Restrictive Covenants.

(a)  Non-Competition.    During the Employment Period and for a period of one year after the Date of Termination, Executive shall not, directly or indirectly, own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner or director with, or have any financial interest in, any business which is in substantial competition with any business conducted by the Chart Group, in any area where such business is being conducted at the time of such termination. Ownership of 5% or less of the voting stock of any corporation which is required to file periodic reports with the Securities and Exchange Commission under the Exchange Act shall not constitute a violation hereof.

(b)  Non-Solicitation.    Executive shall not directly or indirectly, at any time during the Employment Period and for one year after the Date of Termination, solicit or induce or attempt to solicit or induce any customer, employee or sales representative of the Chart Group to terminate his, her or its customer, employment, or representation relationship with the Chart

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Group or in any way directly or indirectly interfere with such a relationship.

(c)  Confidentiality.    Executive shall keep in strict confidence, and shall not, directly or indirectly, at any time during the Employment Period and for one year after the Date of Termination, disclose, furnish, publish, disseminate, make available or, except in the course of performing his duties of employment hereunder, use any Confidential Information. Executive specifically acknowledges that all Confidential Information, in whatever media or form maintained and whether compiled by the Chart Group or Executive, derives independent economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its disclosure or use, that reasonable efforts have been made by the Chart Group to maintain the secrecy of such information, that such information is the sole property of the Chart Group and that any disclosure or use of such information by Executive during the Employment Period (except in the course of performing his duties and obligations hereunder) or within one year after the Date of Termination shall constitute a misappropriation of the Chart Group’s trade secrets. Notwithstanding the foregoing, Executive shall maintain ownership of and the right to disclose and use any patents or inventions of which Executive is the inventor, to the extent Executive has not otherwise assigned such patents or inventions to the Chart Group.

10.  Binding Agreement; Successors.    This Agreement shall inure to the benefit of and be binding upon Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the following in the order of priority specified: (a) Christine H. Holmes, if she is living at the time of Executive’s death; or (b) if Christine H. Holmes is then not living, to the Trust of Arthur S. Holmes dated December 20, 1993 as restated January 22, 1998; or (c) if such trust is then not in existence, to Executive’s devisee, legatee, or other designee; or (d) if there be no such designee, to Executive’s estate. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, including, without limitation, any person acquiring directly or indirectly all or substantially all of the assets of the Company, whether by merger, consolidation, sale or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement). The Company shall require any such successor to assume and agree to perform this Agreement.

11.  Notice.    All notices, requests and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) when hand delivered, (b) one business day after being sent by recognized overnight delivery service, or (c) three business days after being sent by registered or certified mail, return receipt requested, postage prepaid, and in each case addressed as follows (or addressed as otherwise specified by notice under this Section):

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(i)    If to the Company, to:

Chart Industries, Inc.

5885 Landerbrook Drive

Suite 150

Cleveland, Ohio 44124

Attention: General Counsel

With a copy to:

Calfee, Halter & Griswold LLP

1400 McDonald Investment Center

800 Superior Avenue

Cleveland, Ohio 44114

Attention: Thomas F. McKee

(ii)    If to Executive, to:

Arthur S. Holmes

7660 Twin Lakes Trail

Chagrin Falls, Ohio 44022

12.  Withholding.    The Company may withhold from any amounts payable under or in connection with this Agreement all federal, state, local and other taxes as may be required to be withheld by the Company under applicable law or governmental regulation or ruling.

13.  Amendments; Waivers.    No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, and is signed by Executive and an officer of the Company specifically designated by the Board of Directors of the Company to execute such writing. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

14.  Jurisdiction.    The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the conflict of law principles of such State. Executive and the Company each agree that the state and federal courts located in the State of Ohio shall have jurisdiction in any action, suit or proceeding against Executive or the Company based on or arising out of this Agreement and each of Executive and the Company hereby (a) submits to the personal jurisdiction of such courts, (b) consents to service of process in connection with any such action, suit or proceeding and (c) waives any other requirement (whether imposed by statute, rule of court or otherwise) with respect to personal jurisdiction, venue or service of process.

15.  Equitable Relief.    Executive and the Company acknowledge and agree that the covenants contained in Section 9 are of a special nature and that any breach, violation or evasion by Executive of the terms of Section 9 will result in immediate and irreparable injury and harm to the Company, for which there is no adequate remedy at law, and will cause damage

8

to the Company in amounts difficult to ascertain. Accordingly, the Company shall be entitled to the remedy of injunction, as well as to all other legal or equitable remedies to which the Company may be entitled (including, without limitation, the right to seek monetary damages), for any breach, violation or evasion by Executive of the terms of Section 9.

16.  Validity.    The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. In the event that any provision of Section 9 is found by a court of competent jurisdiction to be invalid or unenforceable as against public policy, such court shall exercise its discretion in reforming such provision to the end that Executive shall be subject to such restrictions and obligations as are reasonable under the circumstances and enforceable by the Company.

17.  Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

18.  Headings; Definitions.    The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. Certain capitalized terms used in this Agreement are defined on Schedule A attached hereto.

19.  No Assignment.    This Agreement may not be assigned by either party without the prior written consent of the other party, except as provided in Section 10.

20.  Entire Agreement.    This Agreement contains the entire agreement between the parties with respect to the employment of Executive and supersedes any and all other agreements (other than any existing agreement evidencing a stock option granted to Executive or rights of Executive to indemnity), either oral or in writing, with respect to the employment of Executive.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

CHART INDUSTRIES, INC.

By:

/s/    JAMES R. SADOWSKI

James R. Sadowski

President and Chief Operating Officer

/s/    ARTHUR S. HOLMES

Arthur S. Holmes

(“Executive”)

9

Schedule A

Certain Definitions

As used in this Agreement, the following capitalized terms shall have the following meanings:

“Affiliate” of a specified entity means an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the entity specified.

“Change in Control” shall mean the occurrence at any time of any of the following events:

(a)  The Company is merged or consolidated or reorganized into or with another corporation or other legal person or entity, other than a Related Person, and as a result of such merger, consolidation or reorganization less than 60% of the combined voting power of the then–outstanding securities of such corporation, person or entity immediately after such transaction is held in the aggregate by the holders of Voting Stock immediately prior to such transaction;

(b)  The Company sells or otherwise transfers all or substantially all of its assets to any other corporation or other legal person or entity, other than a Related Person, and less than 60% of the combined voting power of the then–outstanding securities of such corporation, person or entity immediately after such sale or transfer is held in the aggregate by the holders of Voting Stock immediately prior to such sale or transfer;

(c)  There is a report filed on Schedule 13D or Schedule TO (or any successor schedule, form or report), each as promulgated pursuant to the Exchange Act, disclosing that any person (as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) other than a Related Person has become the beneficial owner (as the term “beneficial owner” is defined under Rule l3d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 40% or more of the Voting Power;

(d)  The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction other than a contract or transaction with a Related Person; or

(e)  If during any period of two consecutive years, individuals, who at the beginning of any such period, constitute the Directors cease for any reason to constitute at least a majority thereof, unless the nomination for election by the Company’s shareholders of each new Director was approved by a vote of at least a majority of the Directors then in office who were Directors at the beginning of any such period.

Notwithstanding the foregoing provisions of paragraphs (c) and (d) of this definition, a “Change in Control” shall not be deemed to have occurred for purposes of this Agreement (i) solely because (A) the Company, (B) a Related Person, (C) a Subsidiary, or (D) any Company–sponsored employee stock ownership plan or other employee benefit plan of the Company or any Subsidiary, or any entity holding shares of Voting Stock for or pursuant to the terms of any such plan, either files or becomes obligated to file a report or proxy statement under or in response to Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock or because the Company reports that a change in control of the Company has or may have occurred or will or may occur in the future by reason of such beneficial ownership, (ii) solely because the Company or any other person, group or entity directly involved in the restructuring of the Company’s capital and debt arrangements related to the Company’s Credit Agreement, dated as of April 12, 1999, as amended, either files or becomes obligated to file a report on Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any successor schedule, form or report) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock acquired from the Company in connection with such restructuring or because the Company reports that a change in control of the Company has or may have occurred or will or may occur in the future by reason of such transaction, but only if both (A) the transaction giving rise to such filing or obligation is approved in advance of consummation thereof by the Company’s Board of Directors and (B) at least a majority of the Voting Power immediately after such transaction is held in the aggregate by the holders of Voting Stock immediately prior to such transaction, or (iii) solely because of a change in control of any Subsidiary.

“Chart Group” means, collectively, the Company and each group, division and Subsidiary of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Confidential Information” means confidential business information of the Chart Group and its customers and vendors, without limitation as to when or how Executive may have acquired such information. Such Confidential Information shall include, without limitation, the Chart Group’s manufacturing, selling and servicing methods and business techniques, customer, vendor and product information, product development plans, internal financial statements, sales and distribution information, business plans and opportunities, corporate alliances, processes and techniques, and other information concerning the Chart Group’s actual or anticipated business or products, or which is received in confidence by or for the Chart Group from any other person.

“Continuation Period” means a period of time beginning on the Date of Termination and ending on the latest of the following dates:

(a)  January 30, 2006;

(b)  The first anniversary of the Date of Termination; or

(c)  The second anniversary of a Change in Control, but this paragraph

A-2

(c) shall apply only if (i) such second anniversary is the latest of the dates specified in paragraphs (a), (b) and (c), and (ii) Executive’s employment terminates or is deemed to terminate on or after the date of such Change in Control.

“Deemed Bonus Amount” means an amount equal to 50% of Executive’s annual base salary at the rate in effect immediately prior to the Date of Termination. In no case shall the Deemed Bonus Amount be less than $175,000.

“Director” means a member of the Board of Directors of the Company.

“Disability” means the inability of Executive for a continuous period of six months to perform the essential functions of his position hereunder 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 the Company and Executive to the effect that Executive is or has been disabled and incapable of performing the essential functions of his position with or without reasonable accommodations for the Company as previously performed shall be conclusive of the fact that Executive is incapable of performing such services and is, or has been, disabled for the purposes of this Agreement. The Company and Executive acknowledge and agree that the essential functions of Executive’s position are unique and critical to the Company and that a disability condition that causes Executive to be unable to perform the essential functions of his position under the circumstances described above will constitute an undue hardship on the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.

“Good Cause” means a determination by the Board of Directors (without the participation of Executive) of the Company, pursuant to the exercise of its business judgment, that any one of the following events has occurred and not been cured by Executive within 60 calendar days after the Company first gave Executive written notice thereof:

(a)  Executive has been indicted by a state or federal grand jury of committing a felony;

(b)  the Board receives proof satisfactory to it of the commission by Executive of theft or embezzlement from the Company, or any other crime against the Company;

(c)  Executive has materially breached the provisions of Section 9 or any other material provision of this Agreement; or

(d)  Executive’s failure, refusal or inability to perform his services and duties to the Company as set forth in Section 2, any act of gross negligence, corporate waste, disloyalty, or unfaithfulness to the Company which adversely affects the business of the Company, or any other act or course of conduct which could reasonably be expected to have an adverse affect on the business of the Company such as, by way of example only, intentionally causing the Company to violate federal, state or local

A-3

environmental, labor, antitrust, or other similar laws, or sexual or other illegal harassment of employees.

“Good Reason” means a determination by Executive made in good faith that any of the following events has occurred, without Executive’s express written consent, and not been cured by the Company within 15 calendar days after Executive first gave the Company written notice thereof: (a) a significant reduction in the nature or scope of the title, authority or responsibilities of Executive from those held by Executive immediately prior to the Employment Period; (b) a reduction in Executive’s base salary below the Base Salary Amount; (c) the relocation of the Company’s principal executive office beyond 60 miles from Executive’s present residence in Chagrin Falls, Ohio; (d) with respect to the Incentive Plan for calendar year 2002 and beyond, any change in the manner in which Executive’s annual bonus under the Incentive Plan is determined such that the potential bonus payment to Executive under the Incentive Plan (subject to performance criteria established under that plan) for any year would be less than 100 percent of Executive’s base salary for that year; or (e) for any year, the amount of Executive’s annual bonus payment under the Incentive Plan is less than the annual bonus amount paid to any other executive officer under the Incentive Plan for that year.

“Related Person” means (a) Executive (b) Charles S. Holmes, (c) any person, group or entity controlled directly, or indirectly through one or more intermediaries, by Executive or Charles S. Holmes or both of them, and (d) any of the foregoing acting alone or in concert.

“Subsidiary” means a corporation, company or other entity (a) more than 50 percent of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (b) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.

“Voting Power” means, at any time, the total votes relating to the then–outstanding securities entitled to vote generally in the election of Directors.

“Voting Stock” means, at any time, the then–outstanding securities entitled to vote generally in the election of Directors.

“Window Period” means the period of time commencing on the first anniversary of a Change in Control and ending on the 60th calendar day after such first anniversary.

A-4
EX-10.14.1 7 dex10141.htm AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT Prepared by R.R. Donnelley Financial -- Amendment No. 1 to Employment Agreement
EXHIBIT 10.14.1

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

This Amendment No. 1 to Employment Agreement (“Amendment No. 1”) is made as of February 15, 2002 by and between Chart Industries, Inc., a Delaware corporation (the “Company”), and James R. Sadowski (the “Executive”).

WHEREAS, the Compensation Subcommittee of the Board of Directors has determined that a modification of the Employment Agreement dated as of January 24, 2001 by and between the Company and the Executive (the “Agreement”), which harmonizes the definition of the term “change in control” contained therein with the definitions of such term included in other executive agreements of the Company, is appropriate in order to ensure the continued dedication of the Executive to the Company, notwithstanding the possibility, threat or occurrence of a change of control of the Company; and

WHEREAS, the Compensation Subcommittee has caused the Company to prepare this Amendment No. 1 to reflect such modification.

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:

1.  Definition of Change in Control.    Section 3(e) of the Agreement is hereby amended and restated to provide in its entirety as follows:

(e) The term “change in control” shall mean the occurrence at any time of any of the following events:

i)  The Company is merged or consolidated or reorganized into or with another corporation or other legal person or entity, other than a Related Person, and as a result of such merger, consolidation or reorganization less than 60% of the combined voting power of the then–outstanding securities of such corporation, person or entity immediately after such transaction is held in the aggregate by the holders of Voting Stock immediately prior to such transaction;

ii)  The Company sells or otherwise transfers all or substantially all of its assets to any other corporation or other legal person or entity, other than a Related Person, and less than 60% of the combined voting power of the then–outstanding securities of such corporation, person or entity immediately after such sale or transfer is held in the aggregate by the holders of Voting Stock immediately prior to such sale or transfer;

iii)  There is a report filed on Schedule 13D or Schedule TO (or any successor schedule, form or report), each as promulgated pursuant to the Exchange Act, disclosing that any person (as the term “person” is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) other than a Related Person has become the beneficial owner (as the term “beneficial owner” is defined under Rule l3d-3 or any successor rule or regulation promulgated

under the Exchange Act) of securities representing 40% or more of the Voting Power;

iv)  The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change in control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction other than a contract or transaction with a Related Person; or

v)  If during any period of two consecutive years, individuals, who at the beginning of any such period, constitute the Directors cease for any reason to constitute at least a majority thereof, unless the nomination for election by the Company’s shareholders of each new Director was approved by a vote of at least a majority of the Directors then in office who were Directors at the beginning of any such period.

Notwithstanding the foregoing provisions of paragraphs (iii) and (iv) of this definition, a “change in control” shall not be deemed to have occurred for purposes of this Agreement (A) solely because (1) the Company, (2) a Related Person, (3) a Subsidiary, or (4) any Company–sponsored employee stock ownership plan or other employee benefit plan of the Company or any Subsidiary, or any entity holding shares of Voting Stock for or pursuant to the terms of any such plan, either files or becomes obligated to file a report or proxy statement under or in response to Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock or because the Company reports that a change in control of the Company has or may have occurred or will or may occur in the future by reason of such beneficial ownership, (B) solely because the Company or any other person, group or entity directly involved in the restructuring of the Company’s capital and debt arrangements related to the Company’s Credit Agreement, dated as of April 12, 1999, as amended, either files or becomes obligated to file a report on Schedule 13D, Schedule TO, Form 8-K or Schedule 14A (or any successor schedule, form or report) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock acquired from the Company in connection with such restructuring or because the Company reports that a change in control of the Company has or may have occurred or will or may occur in the future by reason of such transaction, but only if both (1) the transaction giving rise to such filing or obligation is approved in advance of consummation thereof by the Company’s Board of Directors and (2) at least a majority of the Voting Power immediately after such transaction is held in the aggregate by the holders of Voting Stock immediately prior to such transaction, or (C) solely because of a change in control of any Subsidiary.

2

As used in this Section 3(e), the following capitalized terms shall have the following meanings:

“Director” means a member of the Board of Directors of the Company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.

“Related Person” means (i) Arthur S. Holmes (ii) Charles S. Holmes, (iii) any person, group or entity controlled directly, or indirectly through one or more intermediaries, by Arthur S. Holmes or Charles S. Holmes or both of them, and (iv) any of the foregoing acting alone or in concert.

“Subsidiary” means a corporation, company or other entity (i) more than 50 percent of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture or unincorporated association), but more than 50 percent of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.

“Voting Power” means, at any time, the total votes relating to the then–outstanding securities entitled to vote generally in the election of Directors.

“Voting Stock” means, at any time, the then–outstanding securities entitled to vote generally in the election of Directors.

2.  No Other Provision Modified.    Except as modified by Section 1 hereof, all other provisions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the day and year first above written.

CHART INDUSTRIES, INC.

By:

/s/    ARTHUR S. HOLMES

Arthur S. Holmes

Chairman and Chief Executive Officer

/s/    JAMES R. SADOWSKI

James R. Sadowski

(“Executive”)

3
EX-10.17.6 8 dex10176.htm AMENDMENT NO. 1 DATED NOVEMBER 29, 2001 Prepared by R.R. Donnelley Financial -- Amendment No. 1 dated November 29, 2001

EXHIBIT 10.17.6

AMENDMENT NO. 1

        AMENDMENT NO. 1 dated as of October 12, 2001 (this "Amendment No. 1") to the Series 1 Incremental Revolving Credit Agreement referred to below, between CHART INDUSTRIES, INC. (the "Borrower"); each of the SUBSIDIARY BORROWERS party hereto; each of the SUBSIDIARY GUARANTORS party hereto; and the SERIES 1 LENDERS party hereto.

        The Borrower, the Subsidiary Borrowers, the Subsidiary Guarantors, each of the Series 1 Lenders and the Administrative Agent are parties to (i) a Series 1 Incremental Revolving Credit Agreement dated as of November 29, 2000 (the "Series 1 Incremental Revolving Credit Agreement") and (ii) a Credit Agreement dated as of April 12, 1999 (as heretofore modified and supplemented and in effect on the date hereof, the "Credit Agreement"). The Borrower, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 1 Lenders and the Administrative Agent wish to amend the Series 1 Incremental Revolving Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows:

        Section 1. Definitions. Except as otherwise defined in this Amendment No. 1, terms defined in the Credit Agreement and the Series 1 Incremental Revolving Credit Agreement are used herein as defined therein.

        Section 2. Amendments. Subject to the satisfaction of the conditions precedent specified in Section 4, but effective as of the date hereof, the Series 1 Incremental Revolving Credit Agreement shall be amended as follows:

        2.01. References in the Series 1 Incremental Revolving Credit Agreement (including references to the Series 1 Incremental Revolving Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Series 1 Incremental Revolving Credit Agreement as amended hereby.

        2.02. The definition of "Series 1 Commitment Termination Date" in Article I of the Series 1 Incremental Revolving Credit Agreement is hereby amended to read in its entirety as follows:

        "Series 1 Commitment Termination Date" means December 30, 2001.

        Section 3. Representations and Warranties. The Borrower represents and warrants to the Series 1 Lenders that (a) the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to "this Agreement" included reference to this Amendment No. 1 and (b) no Default shall have occurred and be continuing.

        Amendment No. 1 to Series 1 Incremental Revolving Credit Agreement

-2-

        Section 4. Conditions Precedent. The amendments to the Series 1 Incremental Revolving Credit Agreement set forth in Section 2 shall become effective, as of the date hereof, upon the receipt by the Administrative Agent of counterparts of this Amendment No. 1, duly executed and delivered by each of the Obligors and the Series 1 Lenders.

        Section 5. Miscellaneous. The Borrower shall pay all reasonable expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase, in connection with the preparation, negotiation, execution and delivery of this Amendment No. 1. Except as herein provided, the Series 1 Incremental Revolving Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 1 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed by, and construed in accordance with, the law of the State of New York.

Amendment No. 1 to Series 1 Incremental Revolving Credit Agreement

-3-

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed by their respective authorized officers as of the day and year first above written.

CHART INDUSTRIES, INC.

By /s/ Michael F. Biehl

Name:

Title:

SUBSIDIARY BORROWERS

CHART HEAT EXCHANGERS LIMITED

By /s/ John T. Romain

Name:

Title:

CHART-AUSTRALIA PTY, LTD.

By /s/ John T. Romain

Name:

Title:



Amendment No. 1 to Series 1 Incremental Revolving Credit Agreement

-4-

SUBSIDIARY GUARANTORS

CHART HEAT EXCHANGERS LIMITED

  PARTNERSHIP

By:   CHART MANAGEMENT COMPANY, INC.,

as its sole general partner

By /s/ John T. Romain

Name:

Title:

CHART INDUSTRIES FOREIGN SALES

  CORPORATION

By /s/ John T. Romain

Name:

Title:

CHART INTERNATIONAL INC.

By /s/ John T. Romain

Name:

Title:

CHART MANAGEMENT COMPANY, INC.

By /s/ John T. Romain

Name:

Title:



Amendment No. 1 to Series 1 Incremental Revolving Credit Agreement

-5-

CHART LEASING, INC.

By /s/ John T. Romain

Name:

Title:

CHART, INC.

By /s/ John T. Romain

Name:

Title:

CHART INTERNATIONAL HOLDINGS, INC.

By /s/ John T. Romain

Name:

Title:

CHART ASIA, INC.

By /s/ John T. Romain

Name:

Title:

CAIRE, INC.

By /s/ John T. Romain

Name:

Title:



Amendment No. 1 to Series 1 Incremental Revolving Credit Agreement

-6-

SERIES 1 LENDERS

THE CHASE MANHATTAN BANK

By /s/ Henry W. Centa

Name: Henry W. Centa

Title: Vice President

NATIONAL CITY BANK

By /s/ Anthony J. DiMare

Name: Anthony J. DiMare

Title: Senior Vice President

BANK ONE, MICHIGAN

By /s/ Glenn A. Currin

Name: Glenn A. Currin

Title: First Vice President



Amendment No. 1 to Series 1 Incremental Revolving Credit Agreement
EX-10.17.7 9 dex10177.htm AMENDMENT NO. 1 DATES OCTOBER 12, 2001 Prepared by R.R. Donnelley Financial -- Amendment No. 1 dates October 12, 2001
EXHIBIT 10.17.7

AMENDMENT NO. 1

        AMENDMENT NO. 1 dated as of October 12, 2001 (this "Amendment No. 1") to the Series 2 Incremental Revolving Credit Agreement referred to below, between CHART INDUSTRIES, INC. (the "Borrower"); each of the SUBSIDIARY BORROWERS party hereto; each of the SUBSIDIARY GUARANTORS party hereto; and the SERIES 2 LENDERS party hereto.

        The Borrower, the Subsidiary Borrowers, the Subsidiary Guarantors, each of the Series 2 Lenders and the Administrative Agent are parties to (i) a Series 2 Incremental Revolving Credit Agreement dated as of April 17, 2001 (the "Series 2 Incremental Revolving Credit Agreement") and (ii) a Credit Agreement dated as of April 12, 1999 (as heretofore modified and supplemented and in effect on the date hereof, the "Credit Agreement"). The Borrower, the Subsidiary Borrowers, the Subsidiary Guarantors, the Series 2 Lenders and the Administrative Agent wish to amend the Series 2 Incremental Revolving Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows:

        Section 1. Definitions. Except as otherwise defined in this Amendment No. 1, terms defined in the Credit Agreement and the Series 2 Incremental Revolving Credit Agreement are used herein as defined therein.

        Section 2. Amendments. Subject to the satisfaction of the conditions precedent specified in Section 4, but effective as of the date hereof, the Series 2 Incremental Revolving Credit Agreement shall be amended as follows:

        2.01. References in the Series 2 Incremental Revolving Credit Agreement (including references to the Series 2 Incremental Revolving Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Series 2 Incremental Revolving Credit Agreement as amended hereby.

        2.02. The definition of "Series 2 Commitment Termination Date" in Article I of the Series 2 Incremental Revolving Credit Agreement is hereby amended to read in its entirety as follows:

        "Series 2 Commitment Termination Date" means December 30, 2001.

        Section 3. Representations and Warranties. The Borrower represents and warrants to the Series 2 Lenders that (a) the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to "this Agreement" included reference to this Amendment No. 1 and (b) no Default shall have occurred and be continuing.

Amendment No. 1 to Series 2 Incremental Revolving Credit Agreement

-2-

        Section 4. Conditions Precedent. The amendments to the Series 2 Incremental Revolving Credit Agreement set forth in Section 2 shall become effective, as of the date hereof, upon the receipt by the Administrative Agent of counterparts of this Amendment No. 1, duly executed and delivered by each of the Obligors and the Series 2 Lenders.

        Section 5. Miscellaneous. The Borrower shall pay all reasonable expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase, in connection with the preparation, negotiation, execution and delivery of this Amendment No. 1. Except as herein provided, the Series 2 Incremental Revolving Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 1 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 1 by signing any such counterpart. This Amendment No. 1 shall be governed by, and construed in accordance with, the law of the State of New York.

Amendment No. 1 to Series 2 Incremental Revolving Credit Agreement

-3-

       IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed by their respective authorized officers as of the day and year first above written.

CHART INDUSTRIES, INC.

By /s/ Michael F. Biehl

Name:

Title:

SUBSIDIARY BORROWERS

CHART HEAT EXCHANGERS LIMITED

By /s/ John T. Romain

Name:

Title:

CHART-AUSTRALIA PTY, LTD.

By /s/ John T. Romain

Name:

Title:

Amendment No. 1 to Series 2 Incremental Revolving Credit Agreement

-4-

SUBSIDIARY GUARANTORS

CHART HEAT EXCHANGERS LIMITED

PARTNERSHIP

By: CHART MANAGEMENT COMPANY, INC.,

as its sole general partner

By /s/ John T. Romain

Name:

Title:

CHART INDUSTRIES FOREIGN SALES

CORPORATION

By /s/ John T. Romain

Name:

Title:

CHART INTERNATIONAL INC.

By /s/ John T. Romain

Name:

Title:

CHART MANAGEMENT COMPANY, INC.

By /s/ John T. Romain

Name:

Title:

Amendment No. 1 to Series 2 Incremental Revolving Credit Agreement

-5-

CHART LEASING, INC.

By /s/ John T. Romain

Name:

Title:

CHART, INC.

By /s/ John T. Romain

Name:

Title:

CHART INTERNATIONAL HOLDINGS, INC.

By /s/ John T. Romain

Name:

Title:

CHART ASIA, INC.

By /s/ John T. Romain

Name:

CAIRE INC.

By /s/ John T. Romain

Name:

Title:

Amendment No. 1 to Series 2 Incremental Revolving Credit Agreement

-6-

SERIES 2 LENDERS

FIRST MERIT BANK N.A.

By /s/ John F. Neumann

Name: John F. Neumann

Title: Senior Vice President

Amendment No. 1 to Series 2 Incremental Revolving Credit Agreement
EX-10.17.11 10 dex101711.txt AMENDMENT NO. 5 EXHIBIT 10.17.11 AMENDMENT NO. 5 AMENDMENT NO. 5 dated as of March 15, 2002 to the Credit Agreement referred to below, between CHART INDUSTRIES, INC., a Delaware corporation duly organized and validly existing under the laws of the State of Delaware (the "Borrower"); the Subsidiary of the Borrower identified under the -------- caption "SUBSIDIARY BORROWER" on the signature pages hereto (the "Subsidiary ---------- Borrower"); each of the Subsidiaries of the Borrower identified under the - -------- caption "SUBSIDIARY GUARANTORS" on the signature pages hereto (individually, a "Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors" and, --------------------- together with the Borrower and the Subsidiary Borrower, the "Obligors"); each -------- of the lenders that is a signatory hereto (individually, a "Lender" and, ------ collectively, the "Lenders"); and JPMORGAN CHASE BANK (as successor to The Chase Manhattan Bank), as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the "Administrative -------------- Agent"). The Borrower, the Subsidiary Borrower, the Subsidiary Guarantors, each of the lenders that is a signatory thereto and the Administrative Agent are parties to a Credit Agreement dated as of April 12, 1999 (as heretofore modified and supplemented and in effect on the date hereof, the "Credit Agreement"), providing, subject to the terms and conditions ---------------- thereof, for loans and other extensions of credit to be made by said lenders to the Borrower in an aggregate principal or face amount as specified therein. The Borrower, the Subsidiary Borrower, the Subsidiary Guarantors, the Lenders and the Administrative Agent wish to amend the Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows: Section 1. Definitions. Except as otherwise defined in this ----------- Amendment No. 5, terms defined in the Credit Agreement are used herein as defined therein. Section 2. Amendments. Subject to the satisfaction of the ---------- conditions precedent specified in Section 5, but effective as of the date hereof, the Credit Agreement shall be amended as follows: 2.01. References in the Credit Agreement (including references to the Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Credit Agreement as amended hereby. 2.02. Section 1.01 of the Credit Agreement is hereby amended by adding the following new definitions (to the extent not already included in said Section 1.01) and inserting the same in the appropriate alphabetical locations and by amending in their entirety the following definitions (to the extent already included in said Section 1.01), as follows: "Amendment No. 5" means Amendment No. 5 dated as of March 15, --------------- 2002 to this Agreement. Amendment No. 5 --------------- -2- "Amendment No. 5 Effective Date" means the date as of which ------------------------------ Amendment No. 5 shall become effective. "Applicable Margin" means, for any day, with respect to any ----------------- ABR Loan (including any Swingline Loan) or Eurodollar Loan, as the case may be, of any Class the applicable rate per annum set forth below under the caption "ABR Spread" or "Eurodollar Spread" with respect to such Class, respectively, based upon the Leverage Ratio as of the most recent determination date:
========================= =================== ================= =================== =================== Eurodollar ABR Spread for Spread for Leverage Ratio: Revolving Credit Revolving Loans and Term Credit Loans ABR Spread for Eurodollar Spread Loan A and Term Loan A Term Loan B for Term Loan B - ------------------------- ------------------- ----------------- ------------------- ------------------- Category 1 ---------- 3.25% 4.25% 3.75% 4.75% Greater than 6.00 to 1 - ------------------------- ------------------- ----------------- ------------------- ------------------- Category 2 ---------- 3.00% 4.00% 3.50% 4.50% Less than or equal to 6.00 to 1 and greater than 5.50 to 1 - ------------------------- ------------------- ----------------- ------------------- ------------------- Category 3 ---------- 2.75% 3.75% 3.25% 4.25% Less than or equal to 5.50 to 1 and greater than 4.00 to 1 - ------------------------- ------------------- ----------------- ------------------- ------------------- Category 4 ---------- 2.50% 3.50% 3.25% 4.25% Less than or equal to 4.00 to 1 and greater than 3.50 to 1 - ------------------------- ------------------- ----------------- ------------------- ------------------- Category 5 ---------- 2.25% 3.25% 3.25% 4.25% Less than or equal to 3.50 to 1 and greater than 3.00 to 1 - ------------------------- ------------------- ----------------- ------------------- ------------------- Category 6 ---------- 2.00% 3.00% 3.25% 4.25% Less than or equal to 3.00 ========================= =================== ================= =================== ===================
For purposes of the foregoing, (a) the Leverage Ratio shall be determined as of the end of each fiscal quarter of the Borrower's fiscal year based upon the Borrower's consolidated financial statements delivered pursuant to Section 6.01(a) or (b) and (b) each change in the Applicable Margin resulting from a change in the Leverage Ratio shall be effective during the period commencing on and including the date three Business Days after delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change; provided that the Leverage Ratio shall be deemed to be in -------- Category 1 above (i) at any time that an Event of Default has occurred and is continuing (and has not been waived in accordance with the terms of this Agreement) and (ii) if the Borrower fails to deliver the consolidated financial statements required to be delivered by it pursuant to Amendment No. 5 --------------- -3- Section 6.01(a) or (b) and/or the related compliance certificate, during the period from the expiration of the time for delivery thereof until such consolidated financial statements and compliance certificate are so delivered. Notwithstanding the foregoing, the Applicable Margin with respect to Incremental Revolving Credit Loans of any Series, shall be 3.50% for ABR Loans and 4.50% for Eurodollar Loans. "Available Cash" means, on any day, the balance of the funds -------------- and Permitted Investments held, and deposited pursuant to Section 2.09(b), in the Collateral Account (as defined in the Security Agreement) on such day. "Debt Incurrence" means the incurrence of any Indebtedness by --------------- the Borrower or any Subsidiary Guarantor after the Effective Date, provided that Debt Incurrence shall not include Indebtedness permitted -------- under clauses (a), (b) and (c) of Section 7.01. "Deferred Term Loan Amortization Amount" means, with respect -------------------------------------- to Term Loan A, $26,682,875, representing that portion of the aggregate principal installments of such Term Loan due at any time during the period commencing on March 15, 2002 and ending on March 31, 2003 in accordance with the scheduled amortization of such Term Loan in effect immediately prior to Amendment No. 5, as to which, as a result of the amendments in Section 2.05 of Amendment No. 5, payment shall have been deferred to the Term Loan A Maturity Date pursuant to Amendment No. 5. "EBITDAR" means, for any period, the sum, for the Borrower and ------- its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP), of the following for such period: (a) net income for such period plus (b) to the extent deducted in ---- computing such net income, the sum of (i) income tax expense, plus (ii) ---- depreciation and amortization for such period (including amortization of any goodwill or other intangibles), plus (iii) Interest Expense for ---- such period plus (iv) all other non-cash, extraordinary charges plus ---- ---- (v) Restructuring Charges for such period minus (c) to the extent added ----- in computing such net income, the sum of (i) any gains and losses attributable to any fixed asset sales and (ii) any non-cash, extraordinary gains; provided that, without duplication, if during any -------- period for which EBITDAR is being determined, the Borrower or any of its Subsidiaries shall have made any Disposition, EBITDAR shall be determined for purposes of this Agreement by excluding the EBITDAR of any business, assets or Person subject to such Disposition (to the extent not already reflected in the relevant financial statements of the Borrower) for such period as if such Disposition had been made or consummated on the first day of such period. "Excess Cash Flow" means, for any period, (a) EBITDAR for such ---------------- period minus (b) the sum of (i) Capital Expenditures made during such ----- period (except for any such Capital Expenditures to the extent financed with the proceeds of purchase money Indebtedness or Capital Lease Obligations incurred during such period) plus (ii) the aggregate amount ---- of Debt Service for such period (excluding any prepayment made during such period pursuant to Section 2.10(b)(iv)) plus (iii) the aggregate ---- amount of Amendment No. 5 --------------- -4- income taxes paid in cash by the Borrower and its Subsidiaries during such fiscal year plus (iv) the aggregate amount of cash dividends paid ---- by the Borrower on its common stock during such period under Section 7.05(d) plus (v) the aggregate amount paid by the Borrower during such ---- period in respect of the repurchase of its common stock under Section 7.05(c) plus (or minus) (c) an amount equal to the decrease (or ---- ----- increase, as the case may be) in Net Working Capital during such period (to the extent not taken into account in any of the foregoing clauses) minus (d), for purposes of calculating Excess Cash Flow under ----- the first sentence of Section 2.10(b)(iv), an amount equal to 20% of the excess (if any) of Excess Cash Flow over Forecasted Excess Cash Flow for such period. "EYCF Report" has the meaning assigned to such term in Section ----------- 6.13. "Fixed Charge Coverage Ratio" means, as at any date, the ratio --------------------------- of (a) (i) EBITDAR for the period of four consecutive fiscal quarters ending on or most recently ended prior to such date minus (ii) Capital ----- Expenditures for such period to (b) Fixed Charges for such period. "Forecasted Excess Cash Flow" means, for the period of two --------------------------- fiscal quarters ending on each June 30, 2002 and December 31, 2002, the amount of Excess Cash Flow projected by the Borrower for such period as set forth in Schedule X. "Interest Coverage Ratio" means, as at any date of ----------------------- determination thereof, the ratio of (a) EBITDAR for the period of four fiscal quarters ending on or most recently ended prior to such date (after deducting therefrom any income on Available Cash for such period) to (b) Interest Expense for such period. "Interest Expense" means, for any period, the sum, for the ---------------- Borrower and its Subsidiaries (determined on a consolidated basis without duplication in accordance with GAAP), of the following: (a) all interest in respect of Indebtedness (including the interest component of any payments in respect of Capital Lease Obligations) accrued or capitalized during such period (whether or not actually paid during such period) plus (b) the net amount payable (or minus the net amount ---- ----- receivable) under Hedging Agreements relating to interest during such period (whether or not actually paid or received during such period); provided that, for any day on which the amount of Available Cash shall -------- be positive, interest for such day on a portion of the Revolving Credit Loans equal to the amount of such Available Cash shall be excluded from interest for purposes of this definition. "Leverage Ratio" means, as at any date of determination -------------- thereof, the ratio of (a) the difference between (i) all Funded Indebtedness of the Borrower and its Subsidiaries (determined on a consolidated basis, without duplication, in accordance with GAAP) as at such date minus (ii) Available Cash as at such date to (b) EBITDAR for ----- the period of four fiscal quarters ending on or most recently ended prior to such date. "Minimum Prepayment Amount" means (a) for all purposes hereof ------------------------- other than Section 6.15, mandatory prepayments made by the Borrower pursuant to Section 2.10(b) Amendment No. 5 --------------- -5- after the Amendment No. 5 Effective Date in an aggregate minimum amount equal to $75,000,000, provided that (i) not more than $37,500,000 of -------- such amount may result from Casualty Events and/or Dispositions pursuant to Section 2.10(b)(i) and 2.10(b)(v), respectively, and (ii) the sale of the Cryogenic pump business shall count toward the Minimum Prepayment Amount regardless of whether such sale or the mandatory prepayment of the Net Cash Proceeds thereof shall be consummated on or prior to the Amendment No. 5 Effective Date) and (b) for purposes of Section 6.15, mandatory prepayments made by the Borrower pursuant to Section 2.10(b) after the Amendment No. 5 Effective Date in an aggregate minimum amount equal to $50,000,000. "Permitted Investments" means (a) direct obligations of, or --------------------- obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard & Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc., or from Moody's Investors Services, Inc; (c) investments in certificates of deposit, banker's acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) of this definition and entered into with a financial institution satisfying the criteria described in clause (c) of this definition; and (e) money market mutual funds whose investment guidelines restrict such funds' investments primarily to those satisfying the provisions of clauses (a) through (d) above, and to other investments constituting cash or cash equivalents under GAAP. "Permitted Junior Capital Investment" means (a) an Equity ------------------------------------ Issuance consisting of common stock (or warrants to purchase common stock) of the Borrower, (b) an Equity Issuance consisting of preferred stock, provided that such preferred stock shall contain terms -------- reasonably acceptable to the Administrative Agent, but in no event (unless the Required Lenders shall otherwise agree) shall contain any provision providing for mandatory redemption thereof prior to a date earlier than one year after the Term Loan B Maturity Date) or (c) any unsecured, subordinated Indebtedness permitted under Section 7.01(d). "Restructuring Charges" means (a) any and all charges or --------------------- expenses directly related to the closure or partial closure of a facility or sale of any business unit or product line, including, but not limited to, employee severance, expenses related to moving of assets to another facility, inventory and fixed asset write-downs, lease buyouts, and accelerated warranty liabilities, (b) any and all fees and expenses incurred by the Borrower in connection with Amendment No. 5 and in connection with any Debt Incurrences, Equity Issuances or Dispositions, the Net Available Proceeds of which are Amendment No. 5 --------------- -6- used to satisfy the Minimum Prepayment Amount, and (c) any and all costs and expenses incurred in connection with the implementation of the actions suggested by and taken pursuant to the EYCF Report; provided that (a) Restructuring Charges incurred on or after January -------- 1, 2002 shall not exceed $10,000,000 in the aggregate and (b) Restructuring Charges in respect of obtaining Permitted Junior Capital Investments shall not exceed $2,000,000 in the aggregate. "Supplemental Margin" means (a) for each day during the fiscal ------------------- quarter commencing on October 1, 2002 that all or any portion of the Minimum Prepayment Amount shall not have been paid, 0.25%, and (b) thereafter, for each day during each subsequent fiscal quarter that all or any portion of the Minimum Prepayment Amount shall not have been paid, the sum of (i) the Supplemental Margin in effect prior to the commencement of such fiscal quarter plus (ii) 0.25%; provided that from ---- -------- and after payment in full of the Minimum Prepayment Amount, the Supplemental Margin shall be zero. 2.03. Section 1.01 of the Credit Agreement is hereby amended by deleting each of the following definitions in its entirety: "EBIT" and "EBITDA". 2.04. Section 2.08 of the Credit Agreement is hereby amended by inserting new clauses (e), (f) and (g) at the end thereof as follows: "(e) Certain Automatic Reductions of Revolving Credit ------------------------------------------------ Commitments and Incremental Revolving Credit Commitments. The aggregate -------------------------------------------------------- amount of the Revolving Credit Commitments and the Incremental Revolving Credit Commitments, as the case may be, shall be automatically reduced upon any prepayment of Revolving Credit Loans and Incremental Revolving Credit Loans, as the case may be, pursuant to Section 2.10(a), and upon any reduction in Revolving Credit Exposure pursuant to the second sentence of Section 2.10(a) that occurs on the sixth Business Day following any expiration or termination of a Letter of Credit, in an amount equal to the amount of such prepayment of Revolving Credit Loans or such reduction in Revolving Credit Exposure, as the case may be. Amendment No. 5 --------------- -7- (f) Scheduled Reductions of Revolving Credit Commitments. The ---------------------------------------------------- aggregate amount of the Revolving Credit Commitments shall be automatically reduced on each of the reduction dates set forth in column (A) below to the amount set forth in column (B) below opposite such reduction date: (A) (B) Revolving Credit Commitment Reduced to the Following Reduction Date: Amount ($): -------------- ---------- June 30, 2002 49,901,165 September 30, 2002 49,703,495 December 31, 2002 48,966,725 (g) Scheduled Reductions of Incremental Revolving Credit ---------------------------------------------------- Commitments. The aggregate amount of the Incremental Revolving Credit ----------- Commitments shall be automatically reduced on each of the reduction dates set forth in column (A) below to the amount set forth in column (B) below opposite such reduction date: (A) (B) Incremental Revolving Credit Commitment Reduced to the Following Reduction Date: Amount ($): -------------- ---------- June 30, 2002 9,980,255 September 30, 2002 9,940,765 December 31, 2002 9,793,575 March 31, 2003 0" Amendment No. 5 --------------- -8- 2.05. Clauses (a)(ii), (a)(iii) and (b) of Section 2.09 of the Credit Agreement are hereby amended in their entirety to read as follows: "(ii) to the Administrative Agent for account of the Term A Lenders the outstanding principal amount of the Term Loan A on each Principal Payment Date set forth below in the aggregate principal amount set forth opposite such Principal Payment Date (subject to adjustment pursuant to paragraph (b) of this Section): Principal Payment Date Amount ($) - ---------------------- ---------- December 31, 1999 2,500,000 March 31, 2000 2,500,000 June 30, 2000 2,500,000 September 30, 2000 2,500,000 December 31, 2000 2,500,000 March 31, 2001 2,500,000 June 30, 2001 5,000,000 September 30, 2001 5,000,000 December 31, 2001 0 March 31, 2002 0 June 30, 2002 197,725 September 30, 2002 395,450 December 31, 2002 1,473,950 March 31, 2003 6,250,000 June 30, 2003 7,500,000 September 30, 2003 7,500,000 December 31, 2003 7,500,000 March 31, 2004 7,500,000 June 30, 2004 8,750,000 September 30, 2004 8,750,000 December 31, 2004 8,750,000 Term Loan A Maturity Date 35,432,875; Amendment No. 5 --------------- -9- (iii) to the Administrative Agent for account of the Term Loan B Lenders the outstanding principal amount of the Term Loan B on each Principal Payment Date set forth below in the aggregate principal amount set forth opposite such Principal Payment Date (subject to adjustment pursuant to paragraph (b) of this Section): Principal Payment Date Amount ($) - ---------------------- ---------- December 31, 1999 312,500 March 31, 2000 312,500 June 30, 2000 301,507 September 30, 2000 301,507 December 31, 2000 301,507 March 31, 2001 301,507 June 30, 2001 301,507 September 30, 2001 301,507 December 31, 2001 0 March 31, 2002 0 June 30, 2002 233,695 September 30, 2002 467,390 December 31, 2002 1,742,090 March 31, 2003 299,090 June 30, 2003 299,090 September 30, 2003 299,090 December 31, 2003 299,090 March 31, 2004 299,090 June 30, 2004 299,090 September 30, 2004 299,090 December 31, 2004 299,090 March 31, 2005 299,090 June 30, 2005 28,263,993 September 30, 2005 28,263,993 December 31, 2005 28,263,993 Term Loan B Maturity Date 28,263,993 Amendment No. 5 --------------- -10- (b) Adjustment of Amortization Schedule, Etc. Any prepayment ---------------------------------------- of a Term Loan of either Class shall be applied to reduce ratably the remaining scheduled installments of such Term Loan. To the extent not previously paid, all Term Loans of each Class shall be due and payable on the Term Loan Maturity Date for such Class. In addition, anything in this Agreement to the contrary notwithstanding, concurrently with any payment of Term Loans on March 31, 2003, or any payment of Revolving Credit Loans or Incremental Revolving Credit Loans as a result of a reduction of Revolving Credit Commitments or Incremental Revolving Credit Commitments on March 31, 2003, the Borrower shall deliver a certificate signed by the President, a Vice President or a Financial Officer to the effect that on the date of such payments, and after giving effect thereto, no Default has occurred and is continuing (it being understood that the determination of whether or not a breach has occurred in respect of the financial covenants set forth in Section 7.09 shall be based upon the Borrower's good faith estimate of the financial results for the relevant fiscal periods ending on said March 31, 2003, which good faith estimate together with related computations of such covenants shall be set forth in such certificate), provided that in the event the Borrower is unable -------- (or fails) to deliver such certificate concurrently with such payments, then, in lieu of the Administrative Agent's remitting to each Lender the appropriate share of such payments, the Administrative Agent shall deposit the aggregate amount so received from the Borrower on such date into the Collateral Account (which amount shall be subject to application as provided in the Security Agreement)." 2.06. Sections 2.10(a) and 2.10(b) of the Credit Agreement are hereby amended in their entirety to read as follows: "(a) Optional Prepayments. The Borrower shall have the right -------------------- at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section, provided that (i) -------- the Borrower shall not prepay any Loans of any Class (other than a prepayment of Revolving Credit Loans concurrently with the issuance of a Letter of Credit in a face amount equal to such prepayment) unless it shall concurrently therewith prepay Loans of all Classes in such amount as shall be necessary so that the Lenders of each Class receive a prepayment in an amount equal to its Ratable Percentage of the aggregate prepayment of all Classes and (ii) each prepayment of Term Loans shall be applied ratably to the remaining scheduled installments thereof. In addition, on the sixth Business Day following any expiration or termination of a Letter of Credit (including pursuant to a drawing thereunder), unless and to the extent that within five Business Days following such expiration or termination the unused Revolving Credit Commitment that arises as a consequence thereof shall have been reutilized (whether through one or more Borrowings or the issuance of one or more Letters of Credit), the Borrower shall borrow Revolving Credit Loans and apply the proceeds thereof to the prepayment of Term Loans, and (whether or not the conditions precedent thereto set forth in Section 5.02 shall have been satisfied) the Revolving Credit Lenders shall make Revolving Credit Loans, in such amounts as shall be necessary so that the Lenders of each Class of Loans receive a reduction in Revolving Credit Exposure, or prepayment of Term Loans, in an amount equal to its Ratable Percentage of the aggregate reduction in Amendment No. 5 --------------- -11- LC Exposure as a result of such expiration or termination (it being understood that, during any time when an event referred to in clauses (h) or (i) of Article VIII shall have occurred and be continuing, the Revolving Credit Lenders may, in lieu of such Borrowing and prepayment purchase participations or other interests in the Loans of other Classes hereunder in a manner that achieves the same economic effect of such Borrowing and prepayment). For purposes hereof, "Ratable Percentage" means, with respect to any Class ------------------ of Lenders, the percentage equivalent of a fraction, the numerator of which is the aggregate outstanding principal amount of the Loans held by the Lenders of such Class (or, in the case of Revolving Credit Lenders or Incremental Revolving Credit Lenders, the greater of the aggregate Revolving Credit Exposure or the aggregate Incremental Revolving Credit Exposure, as the case may be, and the aggregate amount of the Revolving Credit Commitments or the Incremental Revolving Credit Commitments, as the case may be), and the denominator of which is the sum of (i) the aggregate outstanding principal amount of the Term Loans held by the Term Loan Lenders plus (ii) the greater of the aggregate Revolving ---- Credit Exposure or the aggregate Incremental Revolving Credit Exposure, as the case may be, and the aggregate amount of the Revolving Credit Commitments or the Incremental Revolving Credit Commitments, as the case may be. (b) Mandatory Prepayments --------------------- (i) Casualty Events. Following the receipt by the Borrower of the --------------- proceeds of insurance, condemnation award or other compensation in respect of any Casualty Event affecting any property of the Borrower or any of its Subsidiaries, the Borrower shall prepay the Loans (and/or provide cover for LC Exposure as specified in Section 2.05(k)), and/or the Commitments shall be subject to automatic reduction, in an aggregate amount, if any, equal to 100% of the Net Available Proceeds of such Casualty Event to the extent required by the next sentence of this clause (i), such prepayment and/or reduction to be effected in each case in the manner and to the extent specified in clause (vi) of this paragraph. Notwithstanding anything herein or in any Security Document to the contrary, the Borrower shall be required to make a prepayment in respect of any Casualty Event pursuant to this clause (i) as follows: (x) The first $25,000,000 in the aggregate of Net Available Proceeds of Casualty Events may be used by the Borrower or any of its Subsidiaries to repair or replace the property affected by the relevant Casualty Event, provided that all such amounts in excess of $10,000,000 in the aggregate -------- shall be deposited by the Borrower or the relevant Subsidiary into the relevant cash collateral account (in the case of property covered by the Security Agreement) or the Restoration Account (as defined in the relevant Mortgage) or similar account (in the case of property covered by a Mortgage) and shall be disbursed by the Administrative Agent (or mortgagee, as the case may be) upon request and certification by the Borrower that such amounts are to be used to repair or replace the property Amendment No. 5 --------------- -12- affected by the relevant Casualty Event, and provided further, if at any -------- ------- time the Borrower determines that it shall not repair or replace such property, the Borrower shall promptly notify the Administrative Agent thereof and, within 30 days thereof, prepay the Loans (and/or provide cover for LC Exposure) and/or the Commitments shall be reduced as provided in the first paragraph of this clause (i) in an amount equal to that portion of the Net Available Proceeds so determined not to be used for such repair or replacement (but in amounts not less than $1,000,000 and in $1,000,000 increments); and (y) All Net Available Proceeds of Casualty Events in excess of $25,000,000 in the aggregate shall, unless the Required Lenders shall approve the use thereof for the purpose of repairing or replacing the property affected by the relevant Casualty Event, within 30 days after the Borrower's receipt of such Net Available Proceeds, prepay the Loans (and/or provide cover for LC Exposure) and/or the Commitments shall be reduced as provided in the first paragraph of this clause (i) in an amount equal to such excess (but in amounts not less than $1,000,000 and in $1,000,000 increments). Nothing in this paragraph shall be deemed to limit any obligation of the Borrower or any of its Subsidiaries pursuant to any of the Security Documents to remit to a collateral or similar account maintained by the Administrative Agent pursuant to any of the Security Documents the proceeds of insurance, condemnation award or other compensation received in respect of any Casualty Event. (ii) Debt Incurrence. Upon any Debt Incurrence after the Effective Date, --------------- the Borrower shall prepay the Loans (and/or provide cover for LC Exposure as specified in Section 2.05(k)), and/or the Revolving Credit Commitments and/or the Incremental Revolving Credit Commitments shall be subject to automatic reduction, in an aggregate amount equal to 100% of the Net Available Proceeds thereof, such prepayment and/or reduction to be effected in each case in the manner and to the extent specified in clause (vi) of this paragraph. (iii) Equity Issuance. Upon any Equity Issuance after the Effective Date, --------------- the Borrower shall prepay the Loans (and/or provide cover for LC Exposure as specified in Section 2.05(k)), and/or the Revolving Credit Commitments and/or the Incremental Revolving Credit Commitments shall be subject to automatic reduction, in an aggregate amount equal to 100% of the Net Available Proceeds thereof, such prepayment and/or reduction to be effected in each case in the manner and to the extent specified in clause (vi) of this paragraph. (iv) Excess Cash Flow. Not later than the date 45 days after June 30, ---------------- 2002 and December 31, 2002, the Borrower shall prepay the Loans (and/or provide cover for LC Exposure as specified in Section 2.05(k)), and/or the Revolving Credit Commitments and/or the Incremental Revolving Credit Commitments shall be subject to automatic reduction, in an aggregate amount equal to 100% of Excess Cash Flow for the two fiscal quarter period ending on such date, such prepayment and/or reduction to be effected in Amendment No. 5 --------------- -13- each case in the manner and to the extent specified in clause (vi) of this paragraph. Not later than the date 90 days after the end of each fiscal year of the Borrower commencing with the fiscal ending December 31, 2003, the Borrower shall prepay the Loans (and/or provide cover for LC Exposure as specified in Section 2.05(k)), and/or the Revolving Credit Commitments and/or the Incremental Revolving Credit Commitments shall be subject to automatic reduction, in an aggregate amount equal to (A) 75% of Excess Cash Flow for such fiscal year minus ----- (B) the aggregate amount of optional prepayments of Term Loans (if any) made during such fiscal year pursuant to paragraph (a) of this Section and, after the payment in full of the Term Loans, the aggregate amount of voluntary reductions of the Revolving Credit Commitments and the Incremental Revolving Credit Commitments made during such fiscal year pursuant to Section 2.08(b), such prepayment and/or reduction to be effected in each case in the manner and to the extent specified in clause (vi) of this paragraph; provided that no such -------- prepayment under this clause (iv) shall be required with respect to any such fiscal year if the Leverage Ratio determined as of the last day of such fiscal year is less than 3.0:1.0 (as set forth in the certificate with respect to such fiscal year delivered pursuant to Section 6.01(c)). (v) Sale of Assets. Without limiting the obligation of the Borrower to -------------- obtain the consent of the Required Lenders pursuant to Section 7.03(b) to any Disposition not otherwise permitted hereunder, (A) in connection with any Disposition (herein, the "Current Disposition") prior to the payment in full of ------------------- the Minimum Prepayment Amount, or (B) at any time after payment in full of the Minimum Prepayment Amount, in the event that the Net Available Proceeds of any Current Disposition, and of all prior Dispositions as to which a prepayment has not yet been made under this paragraph, shall exceed $5,000,000 in the aggregate (and thereafter in increments of $1,000,000)) then, in each case, no later than five Business Days prior to the occurrence of the Current Disposition, the Borrower will deliver to the Lenders a statement, certified by a Financial Officer of the Borrower, in form and detail satisfactory to the Administrative Agent, of the amount of the Net Available Proceeds of the Current Disposition and (in the case of clause (B) above) of all such prior Dispositions and will prepay the Loans (and/or provide cover for LC Exposure as specified in Section 2.05(k)), and/or the Revolving Credit Commitments and/or the Incremental Revolving Credit Commitments shall be subject to automatic reduction, in an aggregate amount equal to 100% of the Net Available Proceeds of the Current Disposition and (in the case of clause (B) above) such prior Dispositions, such prepayment and/or reduction to be effected in each case in the manner and to the extent specified in clause (vi) of this paragraph. (vi) Application. Prepayments and/or reductions of Commitments pursuant ----------- to this paragraph shall be applied as follows: (A) prior to the payment in full of the Minimum Prepayment Amount, the aggregate amount to be applied to a prepayment and/or commitment reduction under this Section shall be applied on a pro rata basis (determined on the basis of, in the case of any Term Loan, the aggregate outstanding principal thereof and, in the case of the Revolving Credit Commitments and the Incremental Revolving Credit Commitments, the aggregate amount of such commitments) among each of Amendment No. 5 --------------- -14- the Revolving Credit Commitments, the Incremental Revolving Credit Commitments, the Term Loan A and the Term Loan B, subject to the following: (i) that portion of such amount to be so applied to the Revolving Credit Commitments shall reduce the aggregate amount of the Revolving Credit Commitments and shall be applied to reduce the total Revolving Credit Exposures (if any) in the same amount by, first, prepaying ratably Swingline Loans and Foreign Currency Credits, second, prepaying Revolving Credit Loans and third, providing cover for LC Exposure as specified in Section 2.05(k); (ii) that portion of such amount to be so applied to the Incremental Revolving Credit Commitments shall reduce the aggregate amount of the Incremental Revolving Credit Commitments and shall be applied to prepay the Incremental Revolving Credit Loans (if any) in the same amount; (iii) that portion of such amount to be so applied to Term Loan A shall be applied to prepay the Term Loan A, first, to the Deferred Term Loan Amortization Amount and, then, ratably over the remaining scheduled installments of Term Loan A; and (iv) that portion of such amount to be so applied to Term Loan B shall be applied to prepay the Term Loan B, ratably over the remaining scheduled installments of Term Loan B. (B) from and after the payment in full of the Minimum Prepayment Amount: first, ratably among the Classes of Term Loans in accordance with ----- the respective sums at such time of the aggregate outstanding principal amount of Term Loans of such Class (if any), to prepay the Term Loans of such Class (and, with respect to each Class of Term Loans, ratably over the remaining scheduled installments thereof), and second, after the payment in full of the Term Loans and the ------ termination of the Term Loan Commitments, to reduce the aggregate amount of the Revolving Credit Commitments (and to the extent that, after giving effect to such reduction, the total Revolving Credit Exposures would exceed the Revolving Credit Commitments, the Borrower shall, first, prepay ratably Swingline Loans and Foreign Currency Credits, second, prepay Revolving Credit Loans and third, provide cover for LC Exposure as specified in Section 2.05(k) in an aggregate amount equal to such excess)." Amendment No. 5 --------------- -15- 2.07. Sections 2.12(a) and 2.12(b) of the Credit Agreement are hereby amended in their entirety to read as follows: "(a) ABR Loans. The Loans constituting each ABR Borrowing (including --------- each Swingline Loan) shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin plus the Supplemental ---- Margin. (b) Eurodollar Loans. The Loans constituting each Eurodollar ---------------- Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest Period for such Borrowing plus the Applicable ---- Margin plus the Supplemental Margin." ---- 2.08. Section 6.01 of the Credit Agreement shall be amended by (a) deleting the word "and" at the end of clause (i) thereof, (b) relettering clause (j) as clause "(n)" and (c) inserting new clauses (j), (k), (l) and (m) to read as follows: "(j) from and after September 30, 2002, on a bi-weekly basis, a 13-week forecast of the cash flows of the Borrower and its Subsidiaries; (k) without duplication of any information theretofore delivered under clause (c) of this Section, promptly following the delivery thereof to the Borrower's senior management, the monthly package of financial and other information prepared for such senior management; (l) concurrently with any delivery of financial statements under clause (c) of this Section, a report of the chief financial officer of the Borrower describing in reasonable detail the efforts undertaken by the Borrower and its Subsidiaries during the month to which such financial statements relates with respect to any Dispositions, Debt Incurrence or Equity Issuance in connection with raising funding to make the Minimum Prepayment Amount; (m) concurrently with any delivery of financial statements under clause (b) of this Section with respect to each fiscal quarter ending on June 30th or December 31st of each year, a certificate of a Financial Officer of the Borrower setting forth reasonably detailed calculations for purposes of determining the amount (if any) required to be prepaid pursuant to Section 2.10(b)(iv) with respect to the period of two consecutive fiscal periods ending on such date; and". 2.09. Section 6.06 of the Credit Agreement shall be amended in its entirety to read as follows: "SECTION 6.06. Books and Records; Inspection. The Borrower will, and ----------------------------- will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit (i) any representatives designated by the Administrative Agent (including without limitation any advisor engaged by the Administrative Agent or its counsel) or any Lender, upon Amendment No. 5 --------------- -16- reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers, employees and independent accountants, all at such reasonable times and as often as reasonably requested (which visits and inspections shall be at the Borrower's sole expense after the occurrence and during the continuance of any Default or in the case of any visit or inspection by the Administrative Agent and at the Lenders' sole expense at any other time) and (ii) upon the request of the Administrative Agent at any time and at the Borrower's sole expense, the Administrative Agent or any of its agents or representatives to engage an auditor to conduct a comprehensive field audit of its books, records, properties and assets; provided, however, that the Administrative Agent --------- ------- shall provide prior notice to the Borrower of the terms of such engagement." 2.10. Article VI of the Credit Agreement is hereby amended by inserting new Sections 6.12, 6.13, 6.14 and 6.15 immediately after Section 6.11 thereof as follows: "SECTION 6.12. Warrants. (a) The Borrower will issue, dated as of -------- the respective dates set forth below and actually to be issued not later than 30 days after each such date, to the Lenders warrants ("Warrants") to -------- purchase such percentage of common stock of the Borrower (determined on a fully-diluted basis on such respective dates) as is set forth below: (i) 2% (after giving effect to the Warrants then to be issued), on June 28, 2002 (the "First Issuance"); -------------- (ii) in the event that the Minimum Prepayment Amount shall not have been paid in full on or prior to September 30, 2002, Warrants to purchase such number of shares of common stock of the Borrower such that after giving effect to the Warrants issued under the First Issuance and the Warrants to be issued under the Second Issuance, the Lenders will have been issued Warrants (including the Warrants issued under the First Issuance) to purchase 7% in the aggregate of the common stock of the Borrower (such number of Warrants to be issued being subject to adjustment in accordance with paragraph (b)(I) of this Section), on September 30, 2002 (the Warrants to be issued on such date being hereinafter referred to as the "Second ------ Issuance"); and -------- (iii) in the event that the Minimum Prepayment Amount shall not have been paid in full on or prior to December 31, 2002, Warrants to purchase such number of shares of common stock of the Borrower such that after giving effect to the Warrants issued under the First Issuance and the Second Issuance and the Warrants to be issued under the Third Issuance, the Lenders will have been issued Warrants (including the Warrants issued under the First Issuance and the Second Issuance) to purchase 10% in the aggregate of the common stock of the Borrower minus a number of such shares ----- equal to the reduction in the number of shares under the Second Issuance pursuant to paragraph (b)(I) below (such number of Warrants to be issued being subject to adjustment in accordance with paragraph (b)(II) of this Section), on December 31, 2002 (the Warrants to be issued on such date being hereinafter referred to as the "Third Issuance"). -------------- Amendment No. 5 --------------- -17- All Warrants shall be issued to the Lenders hereunder for no additional consideration and shall contain such terms as are set forth in Schedule XI and shall be issued pursuant to documentation (which shall contain such terms) satisfactory to the Administrative Agent. The Warrants issued hereunder will be allocated among the Lenders on a ratable basis based upon the aggregate principal amount of the Term Loans held by the Lenders and the aggregate amount of the Commitments of the Lenders, in each case determined on the respective dates set forth above. (b) Notwithstanding the requirements of paragraph (a): (I) with respect to the Second Issuance, (i) if after March 15, 2002 and prior to September 30, 2002, the Borrower shall have made prepayments in accordance with Section 2.10(b)(ii) or (iii) from the Net Available Proceeds of Permitted Junior Capital Investments in an aggregate amount of $50,000,000 or more, no Warrants will be issued to the Lenders with respect to the Second Issuance; (ii) if after March 15, 2002 and prior to September 30, 2002, the Borrower shall have made prepayments in accordance with Section 2.10(b)(ii) or (iii) from the Net Available Proceeds of Permitted Junior Capital Investments in an aggregate amount of greater than zero but less than $50,000,000, the Second Issuance shall be reduced by a percentage the numerator of which is the aggregate amount of such Permitted Junior Capital Investments and the denominator of which is $50,000,000; and (iii) if after March 15, 2002 and prior to September 30, 2002, the Borrower shall have made prepayments from the Net Available Proceeds of Casualty Events and/or Dispositions after the Amendment No. 5 Effective Date pursuant to Section 2.10(b)(i) and 2.10(b)(v), respectively, the Second Issuance shall be reduced by a percentage the numerator of which is the product of 50% multiplied by the aggregate amount of such Net Available Proceeds of such Casualty Events and Dispositions and the denominator of which is $75,000,000; provided that in no event shall the sum of the percentages in clauses (ii) -------- and (iii) above exceed 100%; and (II) with respect to the Third Issuance, (i) if after March 15, 2002 and prior to December 31, 2002, the Borrower shall have made prepayments in accordance with Section 2.10(b)(ii) or (iii) from the Net Available Proceeds of Permitted Junior Capital Investments in an aggregate amount of $50,000,000 or more, no Warrants will be issued to the Lenders with respect to the Third Issuance; Amendment No. 5 --------------- -18- (ii) if after March 15, 2002 and prior to December 31, 2002, the Borrower shall have made prepayments in accordance with Section 2.10(b)(ii) or (iii) from the Net Available Proceeds of Permitted Junior Capital Investments in an aggregate amount of greater than zero but less than $50,000,000, the Third Issuance shall be reduced by a percentage the numerator of which is the aggregate amount of such Permitted Junior Capital Investments and the denominator of which is $50,000,000; and (iii) if after March 15, 2002 and prior to December 31, 2002, the Borrower shall have made prepayments from the Net Available Proceeds of Casualty Events and/or Dispositions after the Amendment No. 5 Effective Date pursuant to Section 2.10(b)(i) and 2.10(b)(v), respectively, the Third Issuance shall be reduced by a percentage the numerator of which is the product of 50% multiplied by the aggregate amount of such Net Available Proceeds of such Casualty Events and Dispositions and the denominator of which is $75,000,000; provided that in no event shall the sum of the percentages in clauses (ii) -------- and (iii) above exceed 100%. SECTION 6.13. Ernst & Young Corporate Finance LLC Review. Prior to ------------------------------------------ the Amendment No. 5 Effective Date, the Borrower will engage Ernst & Young Corporate Finance LLC ("EYCF") to conduct an operational review of the ---- Borrower's businesses and provide its written report (the "EYCF Report") to ----------- the Borrower upon its timely completion of such review. The Borrower shall provide the EYCF Report to the Lenders within ten Business Days of the Borrower's receipt thereof. Prior to delivery of the EYCF Report, the Borrower will permit, and cause EYCF to permit, any representatives designated by the Administrative Agent (including any of its advisors) or any Lender, upon reasonable prior notice, to meet from time to time with the appropriate personnel of EYCF to discuss the status of such review by EYCF and to obtain updates of such review and EYCF's findings to date. Promptly upon issuance of the EYCF Report, the Borrower will cause the recommendations of the EYCF Report to be considered by the Borrower's board of directors in light of the Borrower's then existing circumstances, and the Borrower will take all necessary steps or actions to implement such recommendations, to the extent authorized by the Borrower's board of directors. Following delivery of the EYCF Report to the Lenders, the Borrower shall provide the Administrative Agent and the Lenders with monthly status reports in writing with respect to the steps undertaken by the Borrower resulting from the EYCF Report. SECTION 6.14. Engagement of Investment Advisor. No later than June -------------------------------- 28, 2002, unless the Administrative Agent shall otherwise agree, the Borrower will engage an investment advisor reasonably satisfactory to the Administrative Agent to assist it with Dispositions in connection with making the Minimum Prepayment Amount. SECTION 6.15. Engagement of Management Consultant. In the event that ----------------------------------- the Borrower has failed to make the Minimum Prepayment Amount by December 31, 2002, the Borrower will retain a management consultant (the "Management Consultant") by no Amendment No. 5 --------------- -19- later than January 31, 2003. Both the Management Consultant and the scope of its engagement will be subject to the approval and satisfaction, which shall not be unreasonably withheld, of the Administrative Agent and the Required Lenders, which approval or non-approval shall be provided by no later than January 31, 2003. The Borrower agrees to fully cooperate with the Management Consultant and shall authorize the Management Consultant to provide such information and reports with respect to the financial condition, business, assets, liabilities and prospects of the Borrower and its Subsidiaries as reasonably requested by the Administrative Agent or any Lender from time to time. All fees and expenses of the Management Consultant shall be the sole responsibility of the Borrower and in no event shall the Administrative Agent or any Lender have any liability or responsibility for the payment of any such fees or expenses, nor shall the Administrative Agent or any Lender have any obligation or liability to the Borrower or any other Person by reason of any acts or omissions of the Management Consultant." 2.11. Section 7.01 of the Credit Agreement is hereby amended by (a) deleting the word "and" at the end of clause (b) thereof, (b) deleting the period at the end of clause (c) thereof and replacing it with a semi-colon followed by the word "and" and (c) inserting immediately following said clause (c), a new clause (d) to read as follows: "(d) unsecured Indebtedness that is subordinated in right of payment to the payment of the obligations of the Obligors hereunder (and any other obligations constituting "Secured Obligations" under the Security Documents) on terms acceptable to the Required Lenders and having such other terms and conditions as the Required Lenders shall have approved in writing." 2.12. Section 7.03(b) of the Credit Agreement is hereby amended in its entirety to read as follows: "(b) Dispositions. The Borrower will not, nor will it permit any of ------------ its Subsidiaries to, convey, sell, lease, transfer or otherwise dispose of any part of its business or property, whether now owned or hereafter acquired including receivables and leasehold interests, except: (i) the disposition of any inventory or other property in the ordinary course of business and on ordinary business terms; (ii) the disposition of obsolete or worn-out property, tools or equipment no longer used or useful in its business so long as the amount thereof sold in any fiscal year by the Borrower and its Subsidiaries shall not have an aggregate fair market value in excess of $1,000,000; (iii) any Subsidiary of the Borrower may sell, transfer, lease or otherwise dispose of its assets to the Borrower or to another Subsidiary, provided that the aggregate fair market value of assets -------- that may be so sold, transferred, leased or Amendment No. 5 --------------- -20- disposed of to Subsidiaries that are not Subsidiary Guarantors shall not exceed $5,000,000; (iv) the Disposition of assets associated with the cryogenic pump business of the Borrower and its Subsidiaries at fair market value; provided that the proceeds from such Disposition are used to -------- prepay the Loans to the extent required by Section 2.10(b)(v); and (v) the conveyance, sale, lease, transfer or other disposition of assets by the Borrower or any of its Subsidiaries with the prior approval of the Required Lenders (such approval not to be unreasonably withheld); provided that the proceeds from any such conveyance, sale, -------- lease, transfer or other disposition are used to prepay the Loans to the extent required by Section 2.10(b)(v)." 2.13. Section 7.09 of the Credit Agreement is hereby amended in its entirety to read as follows: "SECTION 7.09. Certain Financial Covenants. --------------------------- (a) Leverage Ratio. The Borrower will not permit the Leverage Ratio -------------- to exceed the following respective ratios at any time during the following respective periods: Period Ratio ------ ----- From January 1, 2002 through March 31, 2002 9.00:1.00 From April 1, 2002 through June 30, 2002 9.00:1.00 From July 1, 2002 through September 30, 2002 8.75:1.00 From October 1, 2002 through December 31, 2002 7.25:1.00 From January 1, 2003 through March 30, 2003 7.25:1.00 From March 31, 2003 and 2.50:1.00 thereafter Amendment No. 5 --------------- -21- (b) Interest Coverage Ratio. The Borrower will not permit the ----------------------- Interest Coverage Ratio to be less than the following respective ratios as at the last day of any fiscal quarter ending during the following respective periods: Period Ratio ------ ----- From January 1, 2002 through March 31, 2002 1.50:1.00 From April 1, 2002 through June 30, 2002 1.50:1.00 From July 1, 2002 through September 30, 2002 1.75:1.00 From October 1, 2002 through December 31, 2002 2.00:1.00 From January 1, 2003 through 3.50:1.00 December 31, 2003 From January 1, 2004 through 3.75:1.00 December 31, 2005 From January 1, 2006 and 4.00:1.00 thereafter (c) Fixed Charge Coverage Ratio. The Borrower will not permit --------------------------- the Fixed Charge Coverage Ratio to be less than the following respective ratios as of the last day of any fiscal quarter ending during the following respective periods: Period Ratio ------ ----- From January 1, 2002 through March 31, 2002 0.75:1.00 From April 1, 2002 through June 30, 2002 0.75:1.00 From July 1, 2002 through December 31, 2002 1.00:1.00 From January 1, 2003 through March 30, 2003 1.00:1.00 Amendment No. 5 --------------- -22- From March 31, 2003 and 1.25:1.00 thereafter (d) Net Worth. The Borrower will not permit its Net Worth to --------- be less than the sum of (a) $57,500,000 plus (b) 50% of net income (if positive) of the Borrower and its Subsidiaries (determined on a consolidated basis in accordance with GAAP) for each fiscal quarter commencing with the fiscal quarter ending June 30, 2000 minus (c) the ----- aggregate amount of any write-downs of goodwill taken subsequent to August 24, 1999 but not exceeding $10,000,000 minus (d) the aggregate ----- amount of foreign currency translation losses, offset by any translation gains, subsequent to March 31, 2000, but not exceeding $10,000,000 minus (e) any reduction of Net Worth as a result of the ----- Restructuring Charges minus (f) $3,500,000. ----- (e) Minimum EBITDAR. The Borrower will not permit its EBITDAR --------------- for any fiscal quarter ending on the dates set forth below to be less than the respective amounts set forth opposite such fiscal quarter: Fiscal Quarter ending Amount - --------------------- ------ March 31, 2002 $4,500,000 June 30, 2002 $6,600,000 September 30, 2002 $9,600,000 December 31, 2002 $10,000,000 Upon the consummation of any Disposition by the Borrower or any of its Subsidiaries, the ratios and levels required to be complied with under the covenants contained in this Section 7.09 will be amended to reflect the pro forma effect of such Disposition in a manner reasonably acceptable to the Borrower, the Administrative Agent and the financial advisor engaged by counsel to the Administrative Agent." 2.14. Section 8(d) of the Credit Agreement is hereby amended in its entirety to read as follows: "(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Sections 2.09(b), 6.02(a), 6.03 (with respect to the Borrower's existence), 6.08, 6.10, 6.12, 6.13 or 6.14 or in Article VII or any Obligor shall default in the performance of any of its obligations contained in Section 4.02 or 5.02 of the Security Agreement or any provisions of the Mortgages;" 2.15. Section 10.02(b)(viii) of the Credit Agreement is hereby amended to read in its entirety as follows: Amendment No. 5 --------------- -23- "(viii) waive any prepayment or any Commitment reduction required by, or amend any provisions of, Section 2.10(a) or (b), or waive or amend any of the provisions of Section 6.12 or 7.09(a) (or any defined terms as used in any of the foregoing Sections), without the written consent of each Lender." 2.16. Section 10.03(a) of the Credit Agreement is hereby amended in its entirety to read as follows: "(a) Costs and Expenses. The Borrower shall pay (i) all ------------------ reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Credit Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket expenses incurred by each Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii) all out-of-pocket expenses incurred by any financial advisor engaged by the Administrative Agent or its counsel in connection with this Agreement, provided that the -------- Administrative Agent shall provide prior notice to the Borrower of the terms of any engagement of a financial advisor, (iv) all out-of-pocket expenses incurred by the Administrative Agent, any Issuing Lender or any Lender, including the fees, charges and disbursements of (x) any counsel for the Administrative Agent, any Issuing Lender or any Lender and (y) any such financial advisor, in connection with the enforcement or protection of its rights in connection with this Agreement and the other Credit Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including in connection with any workout, restructuring or negotiations in respect thereof or in connection with the bankruptcy, insolvency or reorganization with respect to any Obligor, and (v) and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Security Document or any other document referred to therein." 2.17. A new Schedule X (Forecasted Excess Cash Flow) will be added to the Credit Agreement in the form of the Schedule X attached to this Amendment No. 5. 2.18. A new Schedule XI (Warrants) will be added to the Credit Agreement in the form of the Schedule XI attached to this Amendment No. 5. Section 3. Extensions and Waivers. Subject to the limitations ---------------------- set forth in Section 6 of this Amendment No. 5, with effect on and after the date hereof upon satisfaction of the conditions set forth in Section 5.01, 5.02 and 5.06 of this Amendment No. 5, each Lender hereby (a) agrees to extend (x) the date for payment of principal in respect of the Term Loans due on March 15, 2002 and (y) the Incremental Revolving Credit Commitment Termination Date to the earlier of (i) the date on which all of the conditions precedent in Section 5 of this Amendment No. 5 are satisfied or (ii) March 29, 2002 and (b) waives any Default that has occurred and is Amendment No. 5 --------------- -24- continuing on the date hereof or may hereafter arise as a result of the expiration of the waivers and the amendments contained in Amendment No. 4 dated as of December 31, 2001 to the Credit Agreement and in each of the Amendment Nos. 3 to the Incremental Revolving Credit Agreements dated as of December 31, 2001, provided that this Section 3 shall terminate and be of no further -------- force or effect on or after 5:00 p.m., New York City time, on March 29, 2002 if all of the conditions precedents contained in Section 5 of this Amendment No. 5 are not satisfied by such date. Section 4. Representations and Warranties. The Borrower ------------------------------ represents and warrants to the Lenders that (a) the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to "this Agreement" included reference to this Amendment No. 5 and (b) immediately after giving effect to the waivers set forth in Section 3 of this Amendment No. 5, no Default shall have occurred and be continuing. Section 5. Conditions Precedent. The amendments to the -------------------- Credit Agreement set forth in Section 2 of this Amendment No. 5, and (subject to the terms of Section 3 of this Amendment No. 5) the waivers set forth in said Section 3, shall become effective, as of the date hereof, upon the satisfaction of the following conditions precedent: 5.01. Execution by All Parties. This Amendment No. 5 shall ------------------------ have been executed and delivered by each of the Obligors and each of the Lenders. 5.02. Amendments No. 3 to the Incremental Revolving Credit ---------------------------------------------------- Agreements. Amendment No. 3 to each of the Incremental Revolving Credit - ---------- Agreements, in substantially the form of Exhibit A to this Amendment No. 5 shall have been executed and delivered by each of the Obligors and each of the Incremental Revolving Credit Lenders. 5.03. Corporate Documents. Delivery to the Administrative ------------------- Agent of certified copies of the charter and by-laws (or equivalent documents) of each Obligor and of all corporate authority for each Obligor (including board of director resolutions and evidence of the incumbency of officers for each Obligor) with respect to the execution, delivery and performance of this Amendment No. 5 and the Credit Agreement as amended hereby and extensions of credit under the Credit Agreement as amended hereby and each other document to be delivered by each Obligor from time to time in connection with the Credit Agreement as amended hereby (and the Administrative Agent and each Lender may conclusively rely on such certificate until it receives notice in writing from each Obligor to the contrary). 5.04. Opinion of Counsel to the Obligors. A favorable written ---------------------------------- opinion (addressed to the Administrative Agent and the Lenders and dated as of a date acceptable to the Administrative Agent) of (i) Calfee, Halter & Griswold LLP, counsel for the Obligors, and (ii) such other counsel to one or more of the Obligors, in each case in form and substance satisfactory to the Administrative Agent covering such matters relating to the Obligors, this Amendment No. 5 and the Credit Agreement as the Administrative Amendment No. 5 --------------- -25- Agent shall reasonably request (and each Obligor hereby instructs such counsel to deliver such opinion to the Lenders and the Administrative Agent). 5.05. Collateral. Delivery to the Administrative Agent of a ---------- fully completed perfection certificate in form and substance satisfactory to the Administrative Agent, and the taking of all action in connection with the creation of first perfected security interests in the Collateral as reasonably requested by the Administrative Agent. 5.06. Amendment Fee. The Administrative Agent shall have ------------- received for the account of each Lender an amendment fee in an amount equal to 0.50% of the sum of Revolving Credit Exposures and unused Revolving Credit Commitments, outstanding A Term Loans, outstanding B Term Loans and Incremental Revolving Credit Exposures and unused Incremental Revolving Credit Commitments, if any, of each Lender. 5.07. Fees and Expenses. Evidence satisfactory to the ----------------- Administrative Agent that the Borrower shall have paid all fees and expenses of the Administrative Agent incurred in connection this Amendment No. 5 and the Credit Agreement, including without limitation fees and expenses of Milbank, Tweed, Hadley & McCloy LLP and FTI Policano & Manzo, for which written statements have been delivered to the Borrower. 5.08. Other Documents. Such other documents as the --------------- Administrative Agent or Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to JPMorgan Chase, may reasonably request prior to the satisfaction of the conditions precedent specified in the foregoing provisions of this Section 5. Section 6. Limited Waiver; Reservation of Rights. Except as ------------------------------------- herein provided, the Credit Agreement shall remain unchanged and in full force and effect; provided that except as expressly provided in Section 3 of this -------- Amendment No. 5, nothing herein shall constitute a waiver of, or any agreement to provide a waiver of, any existing or future Default. Notwithstanding anything contained herein to the contrary (except as provided in the immediately preceding sentence), the Administrative Agent and the Lenders reserve all of its or their rights, powers, privileges and remedies under or in respect of the Credit Agreement and the other Credit Documents, at law, in equity or otherwise in connection with the obligations owing by the Obligors thereunder, and all collateral security and/or guarantees therefor, all of which are expressly reserved. This Amendment No. 5 shall not be deemed or otherwise construed: to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Borrower or any other person, firm or corporation with respect to any waiver, amendment, modification or any other change to the Credit Agreement or the other Credit Documents or any rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them, under or with respect to any such documents; or to be a waiver of, or consent to or a modification or amendment of, any other term or condition of any other agreement by and among the Borrower, on the one hand, and the Administrative Agent or any other Lender, on the other hand. Neither the requirements of good faith and fair dealing nor any other theory, concept or argument shall require any Lender to impart upon the Borrower any further or greater benefits; to suffer any prejudice or impairment of any kind whatsoever; or to tolerate any noncompliance with this Amendment No. 5 and the other Credit Documents, because each Amendment No. 5 --------------- -26- Lender has bargained for and given valuable consideration for this Amendment No. 5 and the other Credit Documents and its creation of express, explicit and objective limits of what benefits each Lender is willing to provide to the Borrower, and what, in return, the Borrower is required to provide to each Lender. This Amendment No. 5 and the other Credit Documents provide a clear statement of each Lender's requirements and obligations and creates an agreed upon standard of performance upon which each Lender is entitled to rely in exercising and enforcing its respective remedies under the Credit Agreement and the other Credit Documents. Section 7. Ratification of Obligations, Etc. By its execution -------------------------------- of this Amendment No. 5, each of the Obligors (a) ratifies and reaffirms its obligations under the Credit Agreement (as modified by this Amendment No. 5) and the other Credit Documents to which it is a party in all respects, and confirms that each such agreement to which it is a party is valid and enforceable against such Obligor and (b) agrees that there are no oral agreements or understandings among such Obligor and the Administrative Agent or any Lender relating to this Amendment No. 5, the Credit Agreement or any other Credit Document. Section 8. Acknowledgment and Release. (a) Each of the -------------------------- Obligors acknowledges that neither the Administrative Agent nor any Lender has at any time directed or participated in any aspect of the management of the Obligors or any of their respective Affiliates or the conduct of the businesses of the Obligors, or any of their respective Affiliates, and the Obligors, and any of their respective Affiliates, have made all of their respective business decisions independently of the Administrative Agent or any Lender. Notwithstanding any other provision of this Amendment No. 5 or the Credit Agreement, or any other contract or instrument between the Obligors, or any of their respective Affiliates, on the one hand, and the Administrative Agent and the Lenders, or any of them, on the other hand: (i) the relationship between the Administrative Agent or any Lender, on the one hand, and each of the Obligors, or any of their respective Affiliates, on the other hand, shall be limited to the relationship of a lender to a borrower in a commercial loan transaction; (ii) neither the Administrative Agent nor any Lender is or shall be construed as a partner, joint venturer, alter-ego, manager, controlling person or other business associate or participant of any kind of the Obligors, or any of their respective Affiliates (or any other Person), and neither the Administrative Agent nor any Lender intends to assume any such status at any time; and (iii) neither the Administrative Agent nor any Lender shall be deemed responsible for (or a participant in) any acts, omissions or decisions of the Obligors, or any of their respective Affiliates, or any other Lender or, in the case of Lenders, the Administrative Agent. (b) Each of the Obligors further acknowledge and agree that they have no claims, demands, damages, suits, cross complaints, counterclaims, conditions, causes of action, debts, offsets, disgorgements or assertions of any kind or nature whatsoever, whether known or unknown, and whenever or however arising that can be asserted to reduce or eliminate all or any part of their respective liability to repay all amounts owed under the Credit Documents, or to seek any affirmative relief or damages of any kind or nature from the Administrative Agent or Lenders, or any of them, that arises out of or relates to any Prior Event (the "Claims"), and to the extent any such Claims exist, they ------ are fully and forever released as provided in clause (c) below. As used herein the term "Prior Event" means any transaction, event, circumstances, action, ----------- failure to act or occurrence of any sort or type, whether known or unknown, which occurred, Amendment No. 5 --------------- -27- existed, was taken, permitted or begun prior to the execution of this Amendment No. 5 or occurred, existed, was taken, permitted or begun in accordance with, pursuant to or by virtue of any terms of this Amendment No. 5, the Credit Agreement, the other Credit Documents, the transactions referred to herein and/or therein, or oral or written agreement relating to any of the foregoing, including without limitation any approval or acceptance given or denied. (c) Each of the Obligors on behalf of itself, and any Person claiming by, through, or under any of the Obligors, (each a "Releasing Party" --------------- and collectively the "Releasing Parties") hereby releases, remises, waives and ----------------- forever discharges the Administrative Agent, the Lenders, and any or all of the Administrative Agents' or Lenders' subsidiaries, Affiliates, directors, officers, employees, agents, attorneys, financial advisors, representatives, successors and assigns, from any and all Claims. This section shall survive the termination of this Amendment No. 5 or any other Loan Document. Each Releasing Party has been advised by counsel with respect to the release contained in this Section 8. Each Releasing Party hereby affirms its intent to waive unknown claims and to waive any statutory protection available in any applicable jurisdiction with respect thereto. Section 9. Miscellaneous. The Borrower shall pay all ------------- reasonable expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of (x) Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase, in connection with the preparation, negotiation, execution and delivery of this Amendment No. 5 and (y) FTI Policano & Manzo, the financial advisor engaged by such counsel in connection with this Amendment No. 5 and the Credit Agreement. Except as herein provided, the Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 5 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 5 by signing any such counterpart. This Amendment No. 5 shall be governed by, and construed in accordance with, the law of the State of New York. Amendment No. 5 --------------- -28- IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 5 to be duly executed by their respective authorized officers as of the day and year first above written. CHART INDUSTRIES, INC. By /s/ Michael F. Biehl --------------------- Name: Michael F. Biehl Title: Chief Financial Officer and Treasurer SUBSIDIARY BORROWER ------------------- CHART HEAT EXCHANGERS LIMITED By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer Amendment No. 5 --------------- -29- SUBSIDIARY GUARANTORS --------------------- CHART HEAT EXCHANGERS LIMITED PARTNERSHIP By: CHART MANAGEMENT COMPANY, INC., as its sole general partner By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer CHART INDUSTRIES FOREIGN SALES CORPORATION By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer CHART INTERNATIONAL INC. By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer CHART MANAGEMENT COMPANY, INC. By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer Amendment No. 5 --------------- -30- CHART LEASING, INC. By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer CHART, INC. By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer CHART INTERNATIONAL HOLDINGS, INC. By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer CHART ASIA, INC. By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer CAIRE INC. By /s/ John T. Romain ------------------- Name: John T. Romain Title: Assistant Treasurer Amendment No. 5 --------------- - 31 - COOLTEL, INC. By /s/ John T. Romain ------------------------------------ Name: John T. Romain Title: Assistant Treasurer NEXGEN FUELING, INC. By /s/ John T. Romain ------------------------------------ Name: John T. Romain Title: Assistant Treasurer GREENVILLE TUBE, LLC By /s/ John T. Romain ------------------------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 5 --------------- - 32 - LENDERS ------- JPMORGAN CHASE BANK, individually and as Administrative Agent By /s/ Henry W. Centa -------------------------------- Name: Henry W. Centa Title: Vice President NATIONAL CITY BANK By /s/ Anthony J. DiMare -------------------------------- Name: Anthony J. DiMare Title: Senior Vice President BANK ONE, MICHIGAN By /s/ Gaye C. Plunkett -------------------------------- Name: Gaye C. Plunkett Title: Vice President VAN KAMPEN PRIME RATE INCOME TRUST By: Van Kampen Advisory Investment Corp. By /s/ Christina Jamieson -------------------------------- Name: Christina Jamieson Title: Vice President SENIOR DEBT PORTFOLIO By: Boston Management and Research, as Investment Advisor By /s/ Payson F. Swaffield -------------------------------- Name: Payson F. Swaffield Title: Vice President Amendment No. 5 --------------- - 33 - U.S. BANK NATIONAL ASSOCIATION By /s/ Greg Wilson ------------------------------------ Name: Greg Wilson Title: AVP UNION BANK OF CALIFORNIA, N.A. By /s/ Hagop V. Jazmadarian ------------------------------------ Name: Hagop V. Jazmadarian Title: Vice President FLEET NATIONAL BANK By /s/ Peter M. Anzivino ------------------------------------ Name: Peter M. Anzivino Title: Vice President GENERAL ELECTRIC CAPITAL CORPORATION By /s/ Gregory L. Hong ------------------------------------ Name: Gregory L. Hong Title: Duly Authorized Signatory HARRIS TRUST AND SAVINGS BANK By /s/ Sarah U. Johnston ----------------------------------- Name: Sarah U. Johnston Title: Vice President Amendment No. 5 --------------- - 34 - THE HUNTINGTON NATIONAL BANK By /s/ John R. Bruch ------------------------------------- Name: John R. Bruch Title: Vice President ENDEAVOUR, LLC By: PPM America, Inc. attorney in fact By /s/ Stuart J. Lissner ------------------------------------- Name: Stuart J. Lissner Title: Managing Director CITIZENS BANK OF MASSACHUSETTS By /s/ Christopher G. Daniel ------------------------------------- Name: Christopher G. Daniel Title: Vice President BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC. By /s/ Warren Seidel ------------------------------------- Name: Warren Seidel Title: Senior Vice President By /s/ Kenny Tang ------------------------------------- Name: Kenny Tang Title: Associate FIRST MERIT BANK N.A. By /s/ John F. Neumann ------------------------------------- Name: John F. Neumann Title: Senior Vice President Amendment No. 5 --------------- - 35 - KEYBANK NATIONAL ASSOCIATION By /s/ Nadine M. Eames ------------------------------------- Name: Nadine M. Eames Title: Vice President KZH RIVERSIDE LLC By /s/ Susan Lee ------------------------------------- Name: Susan Lee Title: Authorized Agent KZH STERLING LLC By /s/ Susan Lee ------------------------------------- Name: Susan Lee Title: Authorized Agent KZH CYPRESSTREE - 1 LLC By /s/ Susan Lee ------------------------------------- Name: Susan Lee Title: Authorized Agent Amendment No. 5 --------------- SCHEDULE X Forecasted Excess Cash Flow --------------------------- January 1 - June 30, 2002 $ 5,792,000 July 1, 2002 - December 31, 2002 $ 6,385,000 Amendment No. 5 --------------- SCHEDULE XI Warrants -------- Issuer: Chart Industries, Inc. (the "Issuer"). Warrants: Warrants to purchase the percentage specified in Section 6.12 of (the Credit Agreement of the fully diluted common stock of the Issuer (the "Warrant Stock"). Exercise Period: At any time prior to the third anniversary of the date of issuance of the Warrants (the "Issuance Date"), in whole or in part. Purchase Price: The Warrants will be issued to the Lenders (or their respective designees), including the Incremental Revolving Credit Lenders, for no additional consideration, to be allocated among the Lenders on a ratable basis based upon the aggregate principal amount of the Term Loans held by the Lenders and the aggregate amount of the Commitments of the Lenders on the relevant Issuance Date. Exercise Price: A price equal to the average closing price of the Issuer's common stock on the New York Stock Exchange over the 10 consecutive trading days prior to the respective Issuance Date. Payment of Exercise Price: Cash equal to the Exercise Price or surrender of Warrants for an amount of common stock having a market price equal to the Exercise Price or tender of Loans having a principal amount equal to the Exercise Price. Anti-Dilution Provisions: Customary anti-dilution protections with respect to stock splits and combinations, stock dividends, distributions, merger, consolidations or reorganization. In addition, customary anti-dilution protection for below market sales of securities (determined on a weighted-average basis), subject to customary exceptions to be agreed including securities issued upon exercise or conversion of outstanding derivative or convertible securities, future issuances under employee benefit plans at or above then current market price and the issuance of common stock by the Issuer as consideration for any acquisition. Registration Rights:Prior to the date two years after the expiration of the Warrants, the holders of Warrants and/or Warrant Stock will have the following registration rights with respect to the Warrant Stock on customary terms: (i) the holders shall be entitled to three demand registrations (on form S-3 or other appropriate available forms), each such demand to be initiated upon Amendment No. 5 --------------- - 2 - request of holders of at least 25% of the common stock issuable upon exercise of the Warrants, and (ii) unlimited piggyback rights in all primary offerings and all other secondary offerings (subject to customary underwriter cutbacks). The Issuer will pay all reasonable expenses (including the fees and expenses of one counsel for such holders (selected by holders of a majority of Warrant Stock being registered in the relevant registration), but excluding underwriting discounts and selling commissions) of the holders of Warrant Stock in all demand and piggyback registrations. The Issuer will not grant other registration rights, other than rights which are pari passu or subordinated to the rights of the holders of Warrant Stock. Tag-Along Rights: If any stockholder holding at least 20% of the aggregate issued and outstanding common stock of the Issuer proposes to sell beneficial ownership of any such stock to an unaffiliated third party, the holders of Warrants and Warrant Stock will have the right to participate, pro rata, in that sale at the same price and upon the same terms (except that such holders will not be required to make any representations or warranties other than as to their ownership of the Warrants or Warrant Stock and authorization and ability to sell). Tag-along rights will expire on the third anniversary of the respective Issuance Date of the Warrants and will be subject to certain customary exclusions, including (i) sales in connection with any tender offer or other disposition of stock of the Issuer in connection with any business combination involving the Issuer in which stockholders generally have the right to participate, (ii) the sale of not more than 10% of the issued and outstanding common stock of the Issuer (in one transaction or a series of related transactions) and (iii) transfers by gift, to related trusts and family partnerships for estate planning purposes, by will or as a result of inheritance laws. Documentation: The terms with respect to the Warrants will be set forth in mutually acceptable definitive documentation containing other terms and provisions customary for a transaction of this type. Transferability: The Warrants and Warrant Stock shall be freely transferable in whole or in part, subject only to compliance with applicable securities laws, provided that the registration -------- rights and tag-along rights described above can be transferred only in connection with a transfer of rights under the warrant agreement. Governing Law and Forum: State of New York. Amendment No. 5 --------------- EXHIBIT A [Forms of Amendment Nos. 3 to Incremental Revolving Credit Agreements] AMENDMENT NO. 3 AMENDMENT NO. 3 dated as of March 15, 2002 (this "Amendment No. 3") --------------- to the Series 1 Incremental Revolving Credit Agreement referred to below, between CHART INDUSTRIES, INC. (the "Borrower"); the SUBSIDIARY BORROWER party -------- hereto; each of the SUBSIDIARY GUARANTORS party hereto; and the SERIES 1 LENDERS party hereto. The Borrower, the Subsidiary Borrower, the Subsidiary Guarantors, each of the Series 1 Lenders and the Administrative Agent are parties to (i) a Series 1 Incremental Revolving Credit Agreement dated as of November 29, 2000 (the "Series 1 Incremental Revolving Credit Agreement") and (ii) a Credit ----------------------------------------------- Agreement dated as of April 12, 1999 (as heretofore modified and supplemented and in effect on the date hereof, the "Credit Agreement"). The Borrower, the ---------------- Subsidiary Borrower, the Subsidiary Guarantors, the Series 1 Lenders and the Administrative Agent wish to amend the Series 1 Incremental Revolving Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows: Section 1. Definitions. Except as otherwise defined in this ----------- Amendment No. 3, terms defined in the Credit Agreement and the Series 1 Incremental Revolving Credit Agreement are used herein as defined therein. Section 2. Amendments. Subject to the satisfaction of the conditions ---------- precedent specified in Section 4, but effective as of the date hereof, the Series 1 Incremental Revolving Credit Agreement shall be amended as follows: 2.01. References in the Series 1 Incremental Revolving Credit Agreement (including references to the Series 1 Incremental Revolving Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Series 1 Incremental Revolving Credit Agreement as amended hereby. 2.02. The definition of "Series 1 Commitment Termination Date" in Article I of the Series 1 Incremental Revolving Credit Agreement is hereby amended to read in its entirety as follows: "Series 1 Commitment Termination Date" means March 31, 2003. ------------------------------------ Section 3. Representations and Warranties. The Borrower represents ------------------------------ and warrants to the Series 1 Lenders that (a) the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to "this Agreement" included reference to this Amendment No. 3 and (b) no Default shall have occurred and be continuing. Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 2 - Section 4. Conditions Precedent. The amendments to the Series 1 -------------------- Incremental Revolving Credit Agreement set forth in Section 2 shall become effective, as of the date hereof, upon the receipt by the Administrative Agent (x) of counterparts of this Amendment No. 3, duly executed and delivered by each of the Obligors and the Series 1 Lenders and (y) for the account of each Lender that consents to this Amendment No. 3 of an amendment fee in an amount equal to 0.50% of the sum of the Incremental Revolving Credit Exposures and unused Incremental Revolving Credit Commitments, if any, of each Lender. Section 5. Miscellaneous. The Borrower shall pay all reasonable ------------- expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase, in connection with the preparation, negotiation, execution and delivery of this Amendment No. 3. Except as herein provided, the Series 1 Incremental Revolving Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 3 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 3 by signing any such counterpart. This Amendment No. 3 shall be governed by, and construed in accordance with, the law of the State of New York. Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 3 - IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed by their respective authorized officers as of the day and year first above written. CHART INDUSTRIES, INC. By_________________________ Name: Title: SUBSIDIARY BORROWER ------------------- CHART HEAT EXCHANGERS LIMITED By_________________________ Name: Title: Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 4 - SUBSIDIARY GUARANTORS --------------------- CHART HEAT EXCHANGERS LIMITED PARTNERSHIP By: CHART MANAGEMENT COMPANY, INC., as its sole general partner By_________________________ Name: Title: CHART INDUSTRIES FOREIGN SALES CORPORATION By_________________________ Name: Title: CHART INTERNATIONAL INC. By_________________________ Name: Title: CHART MANAGEMENT COMPANY, INC. By_________________________ Name: Title: Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 5 - CHART LEASING, INC. By ________________________ Name: Title: CHART, INC. By ________________________ Name: Title: CHART INTERNATIONAL HOLDINGS, INC. By ________________________ Name: Title: CHART ASIA, INC. By ________________________ Name: Title: CAIRE INC. By ________________________ Name: Title: Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 6 - COOLTEL, INC. By ________________________ Name: Title: NEXGEN FUELING, INC. By ________________________ Name: Title: GREENVILLE TUBE, LLC By ________________________ Name: Title: Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 7 - SERIES 1 LENDERS ---------------- JPMORGAN CHASE BANK By ________________________ Name: Title: NATIONAL CITY BANK By ________________________ Name: Title: BANK ONE, MICHIGAN By ________________________ Name: Title: Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ AMENDMENT NO. 3 AMENDMENT NO. 3 dated as of March 15, 2002 (this "Amendment No. 3") --------------- to the Series 2 Incremental Revolving Credit Agreement referred to below, between CHART INDUSTRIES, INC. (the "Borrower"); the SUBSIDIARY BORROWER party -------- hereto; each of the SUBSIDIARY GUARANTORS party hereto; and the SERIES 2 LENDERS party hereto. The Borrower, the Subsidiary Borrower, the Subsidiary Guarantors, each of the Series 2 Lenders and the Administrative Agent are parties to (i) a Series 2 Incremental Revolving Credit Agreement dated as of April 17, 2001 (the "Series 2 Incremental Revolving Credit Agreement") and (ii) a Credit Agreement ----------------------------------------------- dated as of April 12, 1999 (as heretofore modified and supplemented and in effect on the date hereof, the "Credit Agreement"). The Borrower, the ---------------- Subsidiary Borrower, the Subsidiary Guarantors, the Series 2 Lenders and the Administrative Agent wish to amend the Series 2 Incremental Revolving Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows: Section 1. Definitions. Except as otherwise defined in this ----------- Amendment No. 3, terms defined in the Credit Agreement and the Series 2 Incremental Revolving Credit Agreement are used herein as defined therein. Section 2. Amendments. Subject to the satisfaction of the conditions ---------- precedent specified in Section 4, but effective as of the date hereof, the Series 2 Incremental Revolving Credit Agreement shall be amended as follows: 2.01. References in the Series 2 Incremental Revolving Credit Agreement (including references to the Series 2 Incremental Revolving Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Series 2 Incremental Revolving Credit Agreement as amended hereby. 2.02. The definition of "Series 2 Commitment Termination Date" in Article I of the Series 2 Incremental Revolving Credit Agreement is hereby amended to read in its entirety as follows: "Series 2 Commitment Termination Date" means March 31, 2003. ------------------------------------ Section 3. Representations and Warranties. The Borrower represents ------------------------------ and warrants to the Series 2 Lenders that (a) the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to "this Agreement" included reference to this Amendment No. 3 and (b) no Default shall have occurred and be continuing. Section 4. Conditions Precedent. The amendments to the Series 2 -------------------- Incremental Revolving Credit Agreement set forth in Section 2 shall become effective, as of the date hereof, upon the receipt by the Administrative Agent (x) of counterparts of this Amendment No. 3, duly Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 2 - executed and delivered by each of the Obligors and the Series 2 Lenders and (y) for the account of each Lender that consents to this Amendment No. 3 of an amendment fee in an amount equal to 0.50% of the sum of the Incremental Revolving Credit Exposures and unused Incremental Revolving Credit Commitments, if any, of each Lender. Section 5. Miscellaneous. The Borrower shall pay all reasonable ------------- expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase, in connection with the preparation, negotiation, execution and delivery of this Amendment No. 3. Except as herein provided, the Series 2 Incremental Revolving Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 3 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 3 by signing any such counterpart. This Amendment No. 3 shall be governed by, and construed in accordance with, the law of the State of New York. Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 3 - IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed by their respective authorized officers as of the day and year first above written. CHART INDUSTRIES, INC. By ________________________ Name: Title: SUBSIDIARY BORROWER ------------------- CHART HEAT EXCHANGERS LIMITED By ________________________ Name: Title: Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 4 - SUBSIDIARY GUARANTORS --------------------- CHART HEAT EXCHANGERS LIMITED PARTNERSHIP By: CHART MANAGEMENT COMPANY, INC., as its sole general partner By ________________________ Name: Title: CHART INDUSTRIES FOREIGN SALES CORPORATION By ________________________ Name: Title: CHART INTERNATIONAL INC. By ________________________ Name: Title: CHART MANAGEMENT COMPANY, INC. By ________________________ Name: Title: Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 5 - CHART LEASING, INC. By ________________________ Name: Title: CHART, INC. By ________________________ Name: Title: CHART INTERNATIONAL HOLDINGS, INC. By ________________________ Name: Title: CHART ASIA, INC. By ________________________ Name: Title: CAIRE INC. By ________________________ Name: Title: Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 6 - COOLTEL, INC. By ________________________ Name: Title: NEXGEN FUELING, INC. By ________________________ Name: Title: GREENVILLE TUBE, LLC By ________________________ Name: Title: Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ - 7 - SERIES 2 LENDERS ---------------- FIRST MERIT BANK N.A. By ________________________ Name: Title: Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ EX-10.17.12 11 dex101712.txt AMENDMENT NO. 3 EXHIBIT 10.17.12 AMENDMENT NO. 3 AMENDMENT NO. 3 dated as of March 15, 2002 (this "Amendment No. 3") to the Series 1 Incremental Revolving Credit Agreement - -------------- referred to below, between CHART INDUSTRIES, INC. (the "Borrower"); the -------- SUBSIDIARY BORROWER party hereto; each of the SUBSIDIARY GUARANTORS party hereto; and the SERIES 1 LENDERS party hereto. The Borrower, the Subsidiary Borrower, the Subsidiary Guarantors, each of the Series 1 Lenders and the Administrative Agent are parties to (i) a Series 1 Incremental Revolving Credit Agreement dated as of November 29, 2000 (the "Series 1 Incremental Revolving Credit Agreement") and ----------------------------------------------- (ii) a Credit Agreement dated as of April 12, 1999 (as heretofore modified and supplemented and in effect on the date hereof, the "Credit Agreement"). The ---------------- Borrower, the Subsidiary Borrower, the Subsidiary Guarantors, the Series 1 Lenders and the Administrative Agent wish to amend the Series 1 Incremental Revolving Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows: Section 1. Definitions. Except as otherwise defined in this ----------- Amendment No. 3, terms defined in the Credit Agreement and the Series 1 Incremental Revolving Credit Agreement are used herein as defined therein. Section 2. Amendments. Subject to the satisfaction of the ---------- conditions precedent specified in Section 4, but effective as of the date hereof, the Series 1 Incremental Revolving Credit Agreement shall be amended as follows: 2.01. References in the Series 1 Incremental Revolving Credit Agreement (including references to the Series 1 Incremental Revolving Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Series 1 Incremental Revolving Credit Agreement as amended hereby. 2.02. The definition of "Series 1 Commitment Termination Date" in Article I of the Series 1 Incremental Revolving Credit Agreement is hereby amended to read in its entirety as follows: "Series 1 Commitment Termination Date" means March 31, 2003. ------------------------------------ Section 3. Representations and Warranties. The Borrower ------------------------------ represents and warrants to the Series 1 Lenders that (a) the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to "this Agreement" included reference to this Amendment No. 3 and (b) no Default shall have occurred and be continuing. Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -2- Section 4. Conditions Precedent. The amendments to the Series -------------------- 1 Incremental Revolving Credit Agreement set forth in Section 2 shall become effective, as of the date hereof, upon the receipt by the Administrative Agent (x) of counterparts of this Amendment No. 3, duly executed and delivered by each of the Obligors and the Series 1 Lenders and (y) for the account of each Lender that consents to this Amendment No. 3 of an amendment fee in an amount equal to 0.50% of the sum of the Incremental Revolving Credit Exposures and unused Incremental Revolving Credit Commitments, if any, of each Lender. Section 5. Miscellaneous. The Borrower shall pay all ------------- reasonable expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase, in connection with the preparation, negotiation, execution and delivery of this Amendment No. 3. Except as herein provided, the Series 1 Incremental Revolving Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 3 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 3 by signing any such counterpart. This Amendment No. 3 shall be governed by, and construed in accordance with, the law of the State of New York. Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -3- IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed by their respective authorized officers as of the day and year first above written. CHART INDUSTRIES, INC. By /s/ Michael F. Biehl -------------------- Name: Michael F. Biehl Title: Chief Financial Officer and Treasurer SUBSIDIARY BORROWER ------------------- CHART HEAT EXCHANGERS LIMITED By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -4- SUBSIDIARY GUARANTORS --------------------- CHART HEAT EXCHANGERS LIMITED PARTNERSHIP By: CHART MANAGEMENT COMPANY, INC., as its sole general partner By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART INDUSTRIES FOREIGN SALES CORPORATION By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART INTERNATIONAL INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART MANAGEMENT COMPANY, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -5- CHART LEASING, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART INTERNATIONAL HOLDINGS, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART ASIA, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CAIRE INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -6- COOLTEL, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer NEXGEN FUELING, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer GREENVILLE TUBE, LLC By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -7- SERIES 1 LENDERS ---------------- JPMORGAN CHASE BANK By /s/ Henry W. Centa ------------------ Name: Henry W. Centa Title: Vice President NATIONAL CITY BANK By /s/ Anthony J. DiMare --------------------- Name: Anthony J. DiMare Title: Senior Vice President BANK ONE, MICHIGAN By /s/ Gaye C. Plunkett -------------------- Name: Gaye C. Plunkett Title: Vice President Amendment No. 3 to Series 1 Incremental Revolving Credit Agreement ------------------------------------------------------------------ EX-10.17.13 12 dex101713.txt AMENDMENT NO. 3 EXHIBIT 10.17.13 AMENDMENT NO. 3 AMENDMENT NO. 3 dated as of March 15, 2002 (this "Amendment No. 3") --------------- to the Series 2 Incremental Revolving Credit Agreement referred to below, between CHART INDUSTRIES, INC. (the "Borrower"); the SUBSIDIARY BORROWER party -------- hereto; each of the SUBSIDIARY GUARANTORS party hereto; and the SERIES 2 LENDERS party hereto. The Borrower, the Subsidiary Borrower, the Subsidiary Guarantors, each of the Series 2 Lenders and the Administrative Agent are parties to (i) a Series 2 Incremental Revolving Credit Agreement dated as of April 17, 2001 (the "Series 2 Incremental Revolving Credit Agreement") and (ii) a Credit Agreement - ------------------------------------------------ dated as of April 12, 1999 (as heretofore modified and supplemented and in effect on the date hereof, the "Credit Agreement"). The Borrower, the ---------------- Subsidiary Borrower, the Subsidiary Guarantors, the Series 2 Lenders and the Administrative Agent wish to amend the Series 2 Incremental Revolving Credit Agreement in certain respects, and accordingly, the parties hereto hereby agree as follows: Section 1. Definitions. Except as otherwise defined in this ----------- Amendment No. 3, terms defined in the Credit Agreement and the Series 2 Incremental Revolving Credit Agreement are used herein as defined therein. Section 2. Amendments. Subject to the satisfaction of the ---------- conditions precedent specified in Section 4, but effective as of the date hereof, the Series 2 Incremental Revolving Credit Agreement shall be amended as follows: 2.01. References in the Series 2 Incremental Revolving Credit Agreement (including references to the Series 2 Incremental Revolving Credit Agreement as amended hereby) to "this Agreement" (and indirect references such as "hereunder", "hereby", "herein" and "hereof") shall be deemed to be references to the Series 2 Incremental Revolving Credit Agreement as amended hereby. 2.02. The definition of "Series 2 Commitment Termination Date" in Article I of the Series 2 Incremental Revolving Credit Agreement is hereby amended to read in its entirety as follows: "Series 2 Commitment Termination Date" means March 31, 2003. ------------------------------------ Section 3. Representations and Warranties. The Borrower ------------------------------ represents and warrants to the Series 2 Lenders that (a) the representations and warranties set forth in Article IV of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article IV to "this Agreement" included reference to this Amendment No. 3 and (b) no Default shall have occurred and be continuing. Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -2- Section 4. Conditions Precedent. The amendments to the Series -------------------- 2 Incremental Revolving Credit Agreement set forth in Section 2 shall become effective, as of the date hereof, upon the receipt by the Administrative Agent (x) of counterparts of this Amendment No. 3, duly executed and delivered by each of the Obligors and the Series 2 Lenders and (y) for the account of each Lender that consents to this Amendment No. 3 of an amendment fee in an amount equal to 0.50% of the sum of the Incremental Revolving Credit Exposures and unused Incremental Revolving Credit Commitments, if any, of each Lender. Section 5. Miscellaneous. The Borrower shall pay all reasonable ------------- expenses incurred by the Administrative Agent, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase, in connection with the preparation, negotiation, execution and delivery of this Amendment No. 3. Except as herein provided, the Series 2 Incremental Revolving Credit Agreement shall remain unchanged and in full force and effect. This Amendment No. 3 may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Amendment No. 3 by signing any such counterpart. This Amendment No. 3 shall be governed by, and construed in accordance with, the law of the State of New York. Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -3- IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed by their respective authorized officers as of the day and year first above written. CHART INDUSTRIES, INC. By /s/ Michael F. Biehl -------------------- Name: Michael F. Biehl Title: Chief Financial Officer and Treasurer SUBSIDIARY BORROWER ------------------- CHART HEAT EXCHANGERS LIMITED By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -4- SUBSIDIARY GUARANTORS --------------------- CHART HEAT EXCHANGERS LIMITED PARTNERSHIP By: CHART MANAGEMENT COMPANY, INC., as its sole general partner By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART INDUSTRIES FOREIGN SALES CORPORATION By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART INTERNATIONAL INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART MANAGEMENT COMPANY, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -5- CHART LEASING, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART INTERNATIONAL HOLDINGS, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CHART ASIA, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer CAIRE INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -6- COOLTEL, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer NEXGEN FUELING, INC. By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer GREENVILLE TUBE, LLC By /s/ John T. Romain ------------------ Name: John T. Romain Title: Assistant Treasurer Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ -7- SERIES 2 LENDERS ---------------- FIRST MERIT BANK N.A. By /s/ John F. Neumann ------------------- Name: John F. Neumann Title: Senior Vice President Amendment No. 3 to Series 2 Incremental Revolving Credit Agreement ------------------------------------------------------------------ EX-21.1 13 dex211.htm SUBSIDIARIES OF THE REGISTRANT Prepared by R.R. Donnelley Financial -- Subsidiaries of the Registrant
EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT AND JURISDICTION

OF INCORPORATION OR ORGANIZATION

CHD, Inc. (Non–Operating)

Delaware

Caire Inc.

Delaware

Chart Asia, Inc.

Delaware

Chart Australia Pty. Ltd.

Australia

Chart Cryogenic Equipment (Changzhou) Co. Ltd.

China

Chart Cryogenic Equipment (Zhangjiagang) Co. Ltd.

China

Chart Europe GmbH

Germany

Chart Heat Exchangers Limited

U.K.

Chart Heat Exchangers Limited Partnership

Delaware

Chart Inc.

Delaware

Chart Industries Foreign Sales Corporation

U.S. Virgin Islands

Chart International, Inc.

Delaware

Chart International Holdings, Inc.

Delaware

Chart Leasing, Inc.

Ohio

Chart Management Company, Inc.

Ohio*

Chart UK Investments Limited Partnership

U.K.

Coastal Fabrication, LLC

Delaware

CoolTel, Inc.

Delaware

Ferox a.s.

Czech Republic

Greenville Tube, LLC

Delaware

NexGen Fueling, Inc.

Delaware

*

General partner for Chart Heat Exchangers Limited Partnership, a Delaware limited partnership, and Chart UK Investments Limited Partnership, a U.K. limited partnership.

EX-23.1 14 dex231.txt CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statements (Forms S-8 No. 33-58446 and No. 333-08665) pertaining to the Chart Industries, Inc. Key Employees Stock Option Plan, (Form S-8 No. 33-92340) pertaining to the Chart Industries, Inc. 1994 Stock Option Plan for Outside Directors and 1995 Stock Option Plan for Outside Directors, (Forms S-8 No. 333-08667 and No. 333-57306) pertaining to the Chart Industries, Inc. 1996 Stock Option Plan for Outside Directors, (Form S-8 No. 333-32535) pertaining to the Chart Industries, Inc. 1997 Stock Option and Incentive Plan and the Chart Industries, Inc. 1997 Stock Bonus Plan, (Form S-3 No. 333-35321) pertaining to the Chart Industries, Inc. registration for sale of 2,800,000 shares of Common Stock, (Form S-3/A No. 333-44621) pertaining to the Chart Industries, Inc. registration for resale of 89,715 shares of Common Stock, (Form S-8 No 333-57300) pertaining to the Chart Industries, Inc. 2000 Executive Incentive Stock Option Plan, (Form S-8 No. 333-57308) pertaining to the Amended and Restated Chart Industries, Inc. 1997 Stock Option and Incentive Plan, and (Form S-8 No. 333-67194) pertaining to the Second Amended and Restated Chart Industries, Inc. 1997 Stock Option and Incentive Plan of our report dated March 31, 2002, with respect to the consolidated financial statements of Chart Industries, Inc. and subsidiaries included in the Annual Report (Form 10-K) for the year ended December 31, 2001. /s/ ERNST & YOUNG LLP Cleveland, Ohio March 31, 2002 50 ~~-----END PRIVACY-ENHANCED MESSAGE-----~~

CHART INDUSTRIES, INC.

By:
		Arthur S. Holmes, Chairman and Chief Executive Officer


And:
		Don A. Baines, Chief Financial Officer and Treasurer

CHART INDUSTRIES, INC.

By:		/s/ JAMES R. SADOWSKI James R. Sadowski President and Chief Operating Officer

		/s/ ARTHUR S. HOLMES Arthur S. Holmes (“Executive”)

CHART INDUSTRIES, INC.

By:		/s/ ARTHUR S. HOLMES
		Arthur S. Holmes Chairman and Chief Executive Officer


		/s/ JAMES R. SADOWSKI
		James R. Sadowski (“Executive”)

	CHART INDUSTRIES, INC.



	By	/s/ Michael F. Biehl

		Name:
		Title:


SUBSIDIARY BORROWERS


	CHART HEAT EXCHANGERS LIMITED



	By	/s/ John T. Romain

		Name:
		Title:


	CHART-AUSTRALIA PTY, LTD.



	By	/s/ John T. Romain

		Name:
		Title:

SUBSIDIARY GUARANTORS


	CHART HEAT EXCHANGERS LIMITED
	PARTNERSHIP


	By:	CHART MANAGEMENT COMPANY, INC.,
		as its sole general partner



	By	/s/ John T. Romain

		Name:
		Title:





	CHART INDUSTRIES FOREIGN SALES
	CORPORATION




	By	/s/ John T. Romain

		Name:
		Title:




	CHART INTERNATIONAL INC.




	By	/s/ John T. Romain

		Name:
		Title:




	CHART MANAGEMENT COMPANY, INC.




	By	/s/ John T. Romain

		Name:
		Title:






	CHART LEASING, INC.




	By	/s/ John T. Romain

		Name:
		Title:




	CHART, INC.




	By	/s/ John T. Romain

		Name:
		Title:




	CHART INTERNATIONAL HOLDINGS, INC.




	By	/s/ John T. Romain

		Name:
		Title:


	CHART ASIA, INC.


	By	/s/ John T. Romain

		Name:
		Title:


	CAIRE, INC.


	By	/s/ John T. Romain

		Name:
		Title:











SERIES 1 LENDERS


	THE CHASE MANHATTAN BANK




	By	/s/ Henry W. Centa

		Name: Henry W. Centa
		Title: Vice President




	NATIONAL CITY BANK




	By	/s/ Anthony J. DiMare

		Name: Anthony J. DiMare
		Title: Senior Vice President




	BANK ONE, MICHIGAN




	By	/s/ Glenn A. Currin

		Name: Glenn A. Currin
		Title: First Vice President

SERIES 2 LENDERS




	FIRST MERIT BANK N.A.


	By	/s/ John F. Neumann


		Name: John F. Neumann
		Title: Senior Vice President

CHD, Inc. (Non–Operating)		Delaware
Caire Inc.		Delaware
Chart Asia, Inc.		Delaware
Chart Australia Pty. Ltd.		Australia
Chart Cryogenic Equipment (Changzhou) Co. Ltd.		China
Chart Cryogenic Equipment (Zhangjiagang) Co. Ltd.		China
Chart Europe GmbH		Germany
Chart Heat Exchangers Limited		U.K.
Chart Heat Exchangers Limited Partnership		Delaware
Chart Inc.		Delaware
Chart Industries Foreign Sales Corporation		U.S. Virgin Islands
Chart International, Inc.		Delaware
Chart International Holdings, Inc.		Delaware
Chart Leasing, Inc.		Ohio
Chart Management Company, Inc.		Ohio*
Chart UK Investments Limited Partnership		U.K.
Coastal Fabrication, LLC		Delaware
CoolTel, Inc.		Delaware
Ferox a.s.		Czech Republic
Greenville Tube, LLC		Delaware
NexGen Fueling, Inc.		Delaware