AGREEMENT
THIS AGREEMENT is made as of the 10th day of October, 2006 by and
between Hudson Technologies, Inc., 275 North Middletown Road, Pearl
River, New York 10965, Hudson Technologies of Tennessee, dba Hudson
Technologies Company, 275 North Middletown Road, Pearl River, New
York 10965 (hereinafter Hudson Technologies, Inc. and Hudson
Technologies of Tennessee, dba Hudson Technologies Company are
collectively referred to herein as "Hudson") and Charles F.
Harkins, residing at 8 William Close, Warwick, New York 10990
("Executive").
WHEREAS, the Executive is an executive officer of Hudson and
currently holds the title of Vice President Sales of Hudson;
and
WHEREAS, Hudson Technologies of Tennessee, dba Hudson
Technologies Company is a separate, wholly owned subsidiary of
Hudson Technologies, Inc. and is made a party to this agreement for
the purpose of implementing the terms of this agreement; and
WHEREAS, Hudson and the Executive acknowledge that, because the
Executive's duties and responsibilities will bring the Executive
into contact with Hudson's confidential information, Hudson must
ensure that its valuable confidential information, as well as its
customer relationships, are protected and can be entrusted to the
Executive; and
WHEREAS, Hudson and the Executive acknowledge that the
Executive's talents, knowledge and services to Hudson are of a
special, unique, and extraordinary character and are of particular
and peculiar benefit and importance to Hudson; and
WHEREAS, Hudson desires to ensure that it will receive the
continued dedication, loyalty and service of, and the availability
of objective advice and counsel from, the Executive , as well as
assurances that the Executive will continue to devote his best
efforts to his employment with Hudson and that he will not solicit
other executives or employees of Hudson or the Company.
NOW, THEREFORE, in consideration of the continuation of the
employment by Hudson of the Executive, the payments, rights and
benefits granted, and the mutual covenants and conditions contained
herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, it is agreed:
1.
TERMINATION: The
following payments and benefits (hereinafter "Severance Benefits")
will be provided to the Executive by Hudson in the event of a
Termination of Employment (as hereinafter defined) of the
Executive:
A. Executive will
continue to receive his annual base salary, based upon his annual
base salary as of the date of his Termination of Employment (as
hereinafter defined), for a period of eighteen (18) months (the
"Severance Period"), with payroll to be made every two weeks, or at
such other frequency based upon Hudson's normal payroll practice.
Hudson shall deduct from Executive's continuing payroll all normal
tax withholdings and deductions which Hudson is required by law to
make.
B. On or before
the Executive's last day of employment with Hudson, Hudson will pay
to the Executive a lump sum payment in an amount equal to a pro
rata bonus through the date of Termination of Employment (the
"Pro-Rata Bonus"). For purposes of this paragraph "1.B.", the
Pro-Rata Bonus shall be an amount equal to the highest bonus earned
by the Executive in any calendar year within the three (3) calendar
years immediately preceeding the date of Termination of Employment,
pro rated for the period served during the year in which the
Termination of Employment occurs. Hudson shall deduct from this
bonus payment all normal tax withholdings and deductions which
Hudson is required by law to make.
Notwithstanding the foregoing, Hudson shall not be obligated to pay
the Pro-Rata Bonus to the Executive if as of the date of
Termination of Employment (i) Hudson is operating at a level of
performance, on a year to date basis, below Hudson's net profit
goals as established by Hudson's Budget (as hereinafter defined),
or (ii) the Executive is acting at a level of performance,
on a year to date basis, such that he has not achieved all of the
performance criteria established by the Executive's Budget (as
hereinafter defined). For purposes of this subparagraph "B", Hudson
shall prepare a profit and loss statement showing Hudson's total
year to date net profit as of the close of business the day prior
to the date of Termination of Employment, and as compared to the
net profit under Hudson's Budget (the "Interim P&L").
C. On or before the
Executive's last day of employment with Hudson, Hudson will pay to
the Executive a lump sum payment for the Executive's unused
vacation for the year in which the Termination of Employment
occurs, equal to the number of prorata unused vacation days on the
date of Termination of Employment, as determined in accordance with
Hudson's standard vacation policy, multiplied by the Executive's
daily base salary on the date of Termination of Employment. Hudson
shall deduct from this bonus payment all normal tax withholdings
and deductions which Hudson is required by law to make.
D. The Executive's
participation in life, health and dental insurance, disability
insurance, and any other benefits (the "Benefits") provided by
Hudson to the Executive as of the date of the Termination of
Employment shall be continued, or essentially equivalent benefits
provided by Hudson, for the entire Severance Period or until
otherwise terminated by the Executive, on the same terms,
conditions and costs as if the Executive continued in the employ of
Hudson. If for any reason Hudson is unable to continue any or all
of the Benefits as required herein, Hudson shall pay to the
Executive a lump sum cash payment equal to the value of the
Benefits that cannot be provided.
E. All stock
options, stock appreciation rights, and any similar rights which
the Executive holds on the date of Termination of Employment shall
become fully vested and be exerciseable on the date of Termination
of Employment, and shall remain exerciseable following the
Termination of Employment until (i) expiration of the Severance
Period, (ii) termination of Severance Benefits pursuant to
paragraph "6" below, or (iii) expiration of the original term of
the stock option, stock appreciation right or similar right,
whichever first occurs.
F. In the event
the Executive is terminated pursuant to paragraph "3.B." below,
within ten (10) days after such termination, Hudson will pay to the
Executive a lump sum payment in an amount equal to the the amount
that Executive's base salary was reduced during the period of the
Executive's Disability (as defined below) pursuant to the
provisions of paragraph "3" below.
G. For purposes of
this agreement, the following definitions will apply:
(i) A "Termination
of Employment" shall take place in the event that the Executive's
employment is terminated (a) by Hudson without Cause (as
hereinafter defined) or (b) by the Executive within thirty (30)
days of the occurrence of an event constituting Good Reason (as
hereinafter defined).
(ii) "Cause" shall exist
if the act(s) or conduct of the Executive make it unreasonable to
require Hudson to continue to retain Executive in its employment,
such as, but not limited to, (a) the Executive's willful and
continued refusal to perform, or the Executive's willful and
continued neglect of, the substantive duties of his position, (b)
any willful act or omission by the Executive constituting
dishonesty, fraud or other malfeasance, (c) material nonconformance
with Hudson's standard business practices and policies, including
but not limited to violation of Hudson's Code of Business Conduct
and Ethics or Hudson's Substance Abuse Policy, (d) any act or
omission by the Executive which has a material adverse affect upon
the financial condition or business reputation of Hudson, (e) the
Executive's conviction of a felony, or any crime involving moral
turpitude, dishonesty or theft, under the laws of the United States
or any state thereof or any other jurisdiction in which Hudson
conducts business, (f) breach of the provisions of paragraphs "4"
or "5" of this agreement, (g) the resignation of Executive other
than pursuant to the occurrence of an event constituting Good
Reason (as hereinafter defined).
.
(iii) "Good Reason" shall mean
(a) the Executive is assigned any duties or responsibilities,
without his consent, that are materially inconsistent with his
position, duties, responsibilities or status, (b) Hudson requires
the Executive, without his consent, to be based at a location which
is more than fifty (50) miles from Hudson's corporate headquarters,
currently located at 275 North Middletown Road, Pearl River, New
York 10965, (c) except as provided in paragraph "1.J." below, the
Executive's annual base salary is reduced, except to the extent
that the annual base salaries of all Named Executives (as defined
below) are reduced due to the adverse financial condition of Hudson
and further providing that the Executive's annual base salary may
not be reduced to a level that is less than ninety (90%) percent of
the Executive's annual base salary as of the date herein, (d) the
Executive's benefits are reduced, except to the extent that such
reductions are made by Hudson on a company-wide basis and affect
all Named Executives that participate in such benefits, (e) except
as provided in paragraph "1.J." below, the Executive experiences in
any year a reduction in bonus compensation or other incentive
compensation, or a reduction in the ratio of the Executive's
incentive compensation, bonus or other such payments to his base
compensation, or a reduction in the method of calculation of the
Executive's incentive compensation, bonus or other such payments if
these benefits or payments are calculated other than as a
percentage of base salary, except to the extent such reduction
applies equally or proportionally, as the case may be, to all Named
Executives of Hudson. An isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by Hudson
within ten (10) days after Hudson's receipt of notice thereof given
by the Executive shall not constitute Good Reason.
(iv) "Budget" shall mean (a) as
to Hudson, the projected annual and monthly revenues, expenses and
net profit goals approved and accepted by Hudson's board of
directors for the applicable fiscal year, and for each month
individually in that fiscal year, and (b) as to Executive, all
performance criteria capable of being measured on a month to month
basis, if any, that have been established for the Executive under
any bonus or other incentive compensation plan covering the
applicable fiscal year.
(v) "Named Executive(s)
shall mean Kevin Zugibe, Brian Coleman, James Buscemi, Charles
Harkins, and Stephen Mandracchia.
H. Hudson's obligation
to pay the compensation and to make the arrangements provided in
this paragraph "1" shall be absolute and unconditional and shall
not be affected by any circumstances, including, without
limitation, any offset, counterclaim, recoupment or other right
which Hudson may have against the Executive or anyone else,
provided, however, that as a condition to payment of amounts under
this paragraph "1", the Executive shall execute (i) a general
release and waiver, in form and substance reasonably satisfactory
to Hudson, of all claims relating to the Executive's employment by
Hudson and the termination of such employment, including, without
limitation, discrimination claims, employment-related tort claims,
contract claims and claims under this Agreement (other than claims
with respect to benefits under any tax-qualified retirement plans
or continuation of coverage or benefits solely as required under
ERISA), and (ii) an agreement expressly acknowledging and
reaffirming the covenants and restrictions contained in paragraphs
"4" and "5" below, and the remedies available to Hudson under
paragraph "6" below.
I. All
amounts payable by Hudson pursuant to this paragraph "1" shall be
paid without notice or demand. The Executive shall not be obligated
to seek other employment in mitigation of the amounts payable or
arrangements made pursuant to this paragraph "1" and, except as
provided in paragraph "6" below, the obtaining of any other
employment shall not result in a reduction of Hudson's obligation
to make the payments, benefits and arrangements required to be made
under this paragraph "1".
J. Executive
expressly acknowledges that the following shall not constitute
"Good Reason" for purposes of this paragraph "1":
(i)
Establishing a new or
different bonus or incentive compensation plan(s) in any subsequent
year based upon new or different criteria for calculating the
applicability of, and the amount of any bonus or incentive
compensation award due to the Executive, provided that any new or
different bonus or incentive compensation plan, and any award under
said plan, applies equally or proportionally, as the case may be,
to all Named Executives; except that Hudson may establish separate
performance criteria and payment amounts for awards under such plan
for each Named Executive that are reasonably achievable and
reasonably related to such Executive's normal duties and
responsibilities;
(ii) A reduction of the
Executive's bonus compensation or other incentive compensation that
(a) results from Hudson operating at a level of performance below
Hudson's Budget, (b) results from the Executive's failure or
inability to attain, in whole or in part, any or all of the
performance criteria established for the Executive under the said
plan, (c) results from application of the terms of such bonus or
incentive compensation plan, or (d) is based upon the Executive's
performance, or non-performance, of his normal duties and
responsibilities during the period covered by the bonus or
incentive compensation plan including, without limition, due to the
Executive's Disability (as defined herein);
(iii) A reduction of the
Executive's annual base salary based upon the Executive's
performance, or non-performance, of his normal duties and
responsibilities, provided that the Executive's annual base salary
may not be reduced to a level that is less than ninety (90%)
percent of the Executive's annual base salary as of the date
herein;
(iv) A reduction in the
Executive's annual base salary pursuant to the provisions of
paragraph "3" below.
2. TERMINATION
FOR CAUSE:
Hudson may
at any time terminate the employment of the Executive for Cause (as
defined in paragraph "1" above) upon five (5) days prior written
notice to Executive. If Executive is terminated for cause, he shall
be entitled to no Severance Benefits and shall be entitled to no
bonus payment that might otherwise be owed to him even if he worked
for the entire year. In the event of termination under this
section, Hudson shall pay Executive all amounts which are then
accrued but unpaid, including unpaid vacation as determined in
accordance with Hudson's standard vacation policy, within thirty
(30) days after the date of notice. Hudson shall have no further or
additional liability to Executive.
3.
DISABILITY :
A. If Executive is unable
to perform his services by reason of illness, injury or incapacity
(hereinafter "Disabled" or "Disability"), he will continue to
receive his base salary and all benefits for a period of eight (8)
weeks after the commencement of the Disability. If Executive is
unable to perform his services by reason of his Disability for a
period of more than eight (8) consecutive weeks, the Executive's
annual base salary during the continued period of Disability shall
be reduced by twenty-five (25%) percent. Executive's full
compensation shall be reinstated upon his return to employment and
the discharge of his full duties. Hudson shall have the right to
reduce the amount paid to the Executive pursuant to this paragraph
"3" by an amount equal to any disability payments or benefits
actually received by Executive under or pursuant to any disability
program or supplemental disability insurance plan(s) provided by
Hudson at Hudson's expense.
B.
Notwithstanding the foregoing, Hudson may terminate the employment
of Executive at any time after Executive has been Disabled for a
continuous period of more than 120 calendar days. Termination of
the Executive after the said 120 calendar period shall not be
deemed a Termination for Cause (as defined in paragraph "1" above")
and shall entitle the Executive to receive the payments and
benefits provided by Paragraph "1" upon Termination of Employment,
except that, for purposes of such payments and benefits, the
Severance Period shall be deemed to commence the date of the
commencement of the Executive's Disability.
4.
CONFIDENTIALITY:
A.
Executive expressly
acknowledges and agrees as follows:
(i) Hudson expends
a significant amount of funds annually on researching and
developing solutions and proprietary techniques related to the
products and services it offers or is seeking to offer, and has
developed substantial confidential, proprietary, and trade secret
information, and this confidential, proprietary, and trade secret
information, if misused, disclosed, misappropriated or used by
others, would be very injurious and result in irreparable harm to
Hudson.
(ii) Hudson's
Confidential Information (as hereinafter defined) constitute
valuable commercial assets of Hudson and are not readily available
to the general public or by any persons not employed by or
otherwise associated in a position of trust with Hudson. Hudson
keeps its Confidential Information confidential (other than to the
extent filings are required for patents) by means of restrictions
upon those to whom the information will become known prohibiting
use or disclosure.
(iii) Executive's position with
Hudson will provide the Executive with access to or knowledge of
Hudson's Confidential Information.
(iv) Hudson's Confidential
Information has or will become known to Executive only as a result
of his employment with Hudson. To the extent that Executive was
previously engaged, on his own or with others, in a business that
provided the same or similar services as those provided by Hudson,
Executive further acknowledges that such prior business knowledge
and experience, and any familiarity with entities that are actual
or potential customers for the business, shall not permit or allow
Executive to contend that Hudson's Confidential Information is not
confidential or should not be protected from use or
misappropriation.
B. In light of
the foregoing, Executive understands, acknowledges, and agrees to
the following terms and conditions regarding Confidential
Information.
(i) All
Confidential Information is the property of Hudson, and Executive
shall not, without the express written consent of Hudson, directly
or indirectly use, disseminate, disclose, or in any way reveal,
either during Executive's employment or at any time thereafter, all
or any part of the Confidential Information, other than to use such
Confidential Information for the purposes authorized by Hudson and
only for the benefit of Hudson.
(ii) Hudson shall be the
sole owner of, and Executive hereby assigns to Hudson, any and all
property rights to all Intellectual Property (as hereinafter
defined) made, conceived, originated, devised, discovered,
invented, or developed before, during, or after the term of
Executive's employment with Hudson, whether or not Executive was
involved either alone or with others, if it was in whole or in part
developed during the course of Executive's employment or by
Executive's use of any property of Hudson. This ownership provision
does not apply to creations of the Executive which are made in the
Executive's own time, without the use of any Hudson resources, and
which do not relate in any way to Hudson's business. Executive
agrees to cooperate fully and assist Hudson or its designee in the
performance of any lawful acts that Hudson at its discretion deems
necessary, and to execute and deliver without charge any documents
reasonably required by Hudson to secure any patent, copyright,
trademark and other protection for Intellectual Property and
improvements thereon, and to assign to and vest in Hudson the
entire interest therein in the United States and all foreign
countries.
(iii) Upon request by Hudson at
any time, and upon termination from employment with Hudson,
whichever is sooner, Executive shall immediately deliver to Hudson
any and all information and property of Hudson in whatever form it
exists, including but not limited to all Confidential Information,
and all copies thereof or materials containing or derived from
Confidential Information.
C. As used in this
agreement: "Confidential Information" means all information not
publicly-available (but including information that is publicly
available as a result of a breach by Executive of paragraphs "4"
and "5") and not generally known or used by Hudson's competitors or
in the industry, and which could be harmful to Hudson if disclosed
to persons outside of Hudson and which includes, but is not limited
to:
(i) Intellectual
Property (as hereinafter defined;
(ii) Technical
information, such as, but not limited to: Hudson's plant
organization and designs; product formulation, manufacturing,
performance and processing data; and research and development
results and plans;
(iii) Product information, such
as, but not limited to: non-public details of Hudson's products and
services, including (but not limited to) its existing refrigerant,
decontamination, reclamation and recovery products and services, as
well as those being developed; specialized equipment and training;
product plans, drawings and specifications; and performance
capabilities, strengths and weaknesses;
(iv) Strategic information,
such as, but not limited to: Hudson's material costs; supplier and
vendor information; overhead costs; pricing; profit margins;
banking and financing information; and market penetration
initiatives and strategies;
(v) Organizational
information, such as, but not limited to: Hudson's personnel and
salary data; information concerning the utilization of facilities;
merger, acquisition and expansion information; and equipment
utilization information; Hudson manuals, policies and
procedures;
(vi) Marketing and sales
information, such as, but not limited to: Hudson's licensing,
marketing and sales techniques and data; customer lists; customer
data, such as, but not limited to, their personnel, project,
financial and account status, individual needs, historical
purchases, contact information; product development and delivery
schedules; market research and forecasts; and marketing and
advertising plans, techniques and budgets; and
(vii)
Advertising information, such as, but not limited to: Hudson's
overall marketing policies; the specific advertising programs and
strategies utilized by Hudson; and the success or lack of success
of those programs and strategies.
D. As used in this
agreement, "Intellectual Property" means all information concerning
the evaluation, design, engineering, construction, marketing, and
sales of the products and services provided by Hudson and which
includes, but is not limited to: any and all patents, patents
pendings, trademarks, copyrights, and any and all applications for
same issued to and/or applied for by Hudson; any and technological
(including software), educational, operational, and financial
innovations, discoveries, inventions, designs, and formulae; tests;
performance data; processes or production methods; improvements to
all such property; and all recorded material defining, describing,
illustrating, or documenting in any fashion, all such property,
whether written or not and whether stored in plain, code or other
form; without regard to whether such property is patentable,
copyrightable, or subject to trade/service mark protection, and if
patentable, copyrightable, or subject to trade/service mark
protection, without regard to whether a patent, copyright, or
trademark or service mark has been sought or obtained.
5.
NON-COMPETITION / NON-SOLICITATION:
A. Executive expressly acknowledges and agrees as follows:
Hudson compensates its Executives, among other things, to develop
and to pursue, on Hudson's behalf, good relationships and goodwill
with all customers and potential customers, whether developed by
Executive or others within the Hudson organization; Hudson's
Confidential Information, if used in competition with Hudson, or
disclosed to a competitor of Hudson, would be very injurious to
Hudson, resulting in irreparable harm to Hudson; by virtue of his
position with Hudson, Executive will be exposed to, acquire and
develop knowledge of Confidential Information that Hudson uses
throughout the country and elsewhere in the world, not just in the
area of Executive's employment, in particular Confidential
Information related to Hudson's customers, operations, and its
suppliers; Executive is able to be gainfully employed b
