President, Europe, Middle East and Africa Employment Agreement - Peter C. Spellar

EXHIBIT 10.28


EMPLOYMENT AGREEMENT


AGREEMENT by and between York International Corporation, a Delaware corporation (the "Company") and Peter C. Spellar (the "Executive") dated as of the 31st day of December, 2003.


The Board of Directors of the Company (the "Board") has determined that it is in the Company's best interests and that of its shareholders to employ the Executive in the capacity described below and the Executive wishes to serve in such capacity.


NOW, THEREFORE, INTENDING TO BE LEGALLY BOUND, IT IS HEREBY AGREED AS FOLLOWS:


1. Effective Date. The "Effective Date" shall mean December 31, 2003.


2. Employment Period. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue in the employment of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the first anniversary thereof (the "Initial Period"). Notwithstanding the foregoing, Executive's employment hereunder shall be deemed to be automatically extended, upon the same terms and conditions, for an additional period of one year (each, an "Additional Period"), in each such case commencing upon the expiration of the Initial Period or the then current Additional Period, as the case may be, unless, at least 30 days prior to the expiration of the Initial Period or such Additional Period, either party shall give written notice to the other (a "Non-Extension Notice") of its intention not to extend the term hereof. A Non-Extension Notice by the Company shall constitute a Notice of Termination (as defined in Section 4(e)) by the Company of the Executive's employment without "Cause" (as defined in Section 4(b)). A Non-Extension Notice by the Executive shall constitute a Notice of Termination by the Executive of the Executive's employment without "Good Reason" (as defined in Section 4(c)). The entire period during which the Executive is employed pursuant to this Agreement shall be referred to as the "Employment Period."


3. Terms of Employment.


(a) Position and Duties. (i) During the Employment Period, the Executive shall serve as President, Europe, Middle East and Africa or in such other position as the Company and Executive shall agree with authority and responsibilities for operations of EMEA; (ii) Executive shall report to the President, York International and/or such other officers as the Board may designate from time to time; and (iii) the Executive's services shall be performed in London, England or such other location as the Company and Executive shall agree, except for occasional travel which may be required for the Executive to perform his duties under this Agreement. During the Employment Period, the Executive shall devote all of his business time, attention and energies to the performance of his duties under this Agreement and shall not, without the prior written consent of the Board, be engaged in any other business activity whether or not such activity is pursued for gain, profit or other pecuniary advantage; provided, however, that the Executive shall be allowed, to the extent such activities do not substantially interfere with the performance by the Executive of his duties and responsibilities hereunder, (a) to manage


the Executive's personal, financial and legal affairs, and (b) serve on civic or charitable boards or committees.


(b) Compensation.


(i) Base Salary. During the Employment Period, the Executive shall receive an annual base salary of $464,000 ("Annual Base Salary"), which shall be paid in accordance with the Company's normal payroll practices. During the Employment Period, the Annual Base Salary shall be reviewed at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased.


(ii) Incentive Compensation. During the Employment Period, the Executive shall be eligible (1) for annual performance bonuses (the "Annual Bonus") and for mid-term performance bonuses in accordance with the provisions of the Company's 2002 Incentive Compensation Plan or its successor (the "Incentive Plan"), as the Incentive Plan may be in effect from time to time, (2) for awards under the Company's 2002 Amended and Restated Omnibus Stock Plan or its successor (the "Stock Plan"), as the Stock Plan may be in effect from time to time, and (3) to participate in the Company's Management Stock Purchase Plan or its successor (the "Purchase Plan") as the Purchase Plan may be in effect from time to time.


(iii) Employee Benefit Plans. During the Employment Period, the Executive shall be entitled to participate in the retirement, health, welfare and miscellaneous executive benefit plans and programs set forth on Schedule A, as such plans and programs may be in effect from time to time.


(iv) Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by the Executive in accordance with the Company's policies, as such policies may be in effect from time to time.


4. Termination of Employment.


(a) Death or Disability. The Executive's employment shall terminate automatically upon the Executive's death during the Employment Period. If the Board determines in good faith that the "Disability" of the Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to the Executive written notice in accordance with Section 10(b) of this Agreement of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, the Executive shall not have returned to full-time performance of the Executive's duties. For purposes of this Agreement, "Disability" shall mean the Executive's inability to perform his full duties with the Company for 180 calendar days in any twelve month period as a result of incapacity due to mental or physical illness. In the event of a dispute under this Section 4(a), the


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Executive shall submit to an examination by a physician selected by the Company or its insurers and reasonably acceptable to the Executive or the Executive's legal representative, and the determination of such physician shall be determinative.


(b) Cause. The Company may terminate the Executive's employment at any time during the Employment Period for "Cause." For purposes of this Agreement, "Cause" shall mean:


(i) knowingly providing the Company or its affiliates with materially false representations relied upon by the Company or its affiliates including, but not limited to furnishing information to stockholders, a stock exchange or the Securities and Exchange Commission, or


(ii) maintaining an undisclosed, unauthorized and material conflict of interest in the discharge of duties owed to the Company or its affiliates, or


(iii) willful misconduct or gross negligence which is or may be demonstrably and materially injurious to the Company or its affiliates, or


(iv) theft or misappropriation of the funds or assets of the Company or its affiliates, or


(v) conviction of or pleading nolo contendere to a crime involving moral turpitude or any felony, or


(vi) a willful and material breach by the Executive of this Agreement.


For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interest of the Company. As used in this Agreement, the term "affiliates" shall mean any company controlled by, controlling or under common control with the Company.


(c) Good Reason. The Executive may terminate his employment with the Company at any time during the Employment Period for "Good Reason." For purposes of this Agreement, "Good Reason" shall mean, in the absence of a written consent of the Executive, any of the following which occurs before the expiration of the Employment Period:


(i) a substantial and adverse change in the Executive's authority or responsibilities as specified in Section 3(a) of this Agreement, excluding for this purpose an isolated, insubstantial or inadvertent action not taken in bad faith, and which is remedied by the Company promptly after receipt of written notice thereof given by the Executive;


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(ii) any material failure by the Company to comply with any of the provisions of Section 3(b) of this Agreement, unless initiated by the Executive, other than a failure not occurring in bad faith and which is remedied by the Company promptly after receipt of written notice thereof given by the Executive;


(iii) the requiring that the Executive travel on the Company's business to an extent materially greater than the Executive's normal business travel, or the Company requiring the Executive to be based at any office or location more than 35 miles from that provided in Section 3(a)(iii) hereof, unless these requirements are remedied by the Company promptly after receipt of written notice thereof given by the Executive;


(iv) a material breach by the Company of this Agreement; or


(v) any failure by the Company to obtain the assumption of this Agreement by any successor or assign of the Company.


For purposes of this Agreement, any action or inaction shall constitute Good Reason only for the 90 day period from the date on which such action or inaction first occurs.


(d) Termination Without Cause or Good Reason. The Company may terminate the Executive's employment without Cause, and the Executive may terminate his employment without Good Reason, at any time during the Employment Period.


(e) Notice of Termination. Any termination of the Executive's employment during the Employment Period by the Company or by the Executive, shall be communicated by "Notice of Termination" to the other party hereto given in accordance with Section 10(b) of this Agreement. 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) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date, which date shall, (A) in all cases other than a voluntary termination by the Executive for other than Good Reason, be not more than thirty days after the giving of such notice, and (B) in the case of a voluntary termination by the Executive for other than Good Reason, thirty days after the Company receives such notice; provided that in a termination described in either (A) or (B), during the notice period, the Board, in its absolute discretion, may relieve the Executive of all his duties, responsibilities and authority with respect to the Company and restrict the Executive's access to Company property. The failure by the 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 Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive's or the Company's rights hereunder.


(f) Date of Termination. "Date of Termination" means (i) if the Executive's employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein within


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30 days of such notice, as the case may be, (ii) if the Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Executive of such termination, or any later date specified therein within 30 days of such notice, as the case may be, (iii) if the Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Executive or the Disability Effective Date, as the case may be, and (iv) if the Executive's employment is voluntarily terminated by the Executive for other than Good Reason, 30 days following the date of receipt of the Notice of Termination.


5. Obligations of the Company upon Termination.


(a) Good Reason or Other Than for Cause, Death or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause, Death or Disability or the Executive shall terminate employment for Good Reason, then


(i) the ...