AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made as of the 10
th 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 Kevin J. Zugibe,
residing at PO Box 754, Pearl River, New York 10965
("Executive").
WHEREAS, the Executive is a named executive officer of Hudson and
currently holds the title of Chief Executive Officer and Chairman
of Hudson; and
WHEREAS, the 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, the Executive and Hudson previously entered into an
Employment Agreement, made as of May 23, 1994 (the "May 1994
Agreement"), as amended by Addendum to Employment Agreement, made
as of January 1, 1995 (the "Addendum") and further supplemented by
letter dated January 20, 1998 (the "Letter") (hereinafter the May
1994 Agreement, the Addendum and the Letter are collectively
referred to as the "Employment Agreement"); and
WHEREAS, Hudson and the Executive acknowledge that the Executive is
one of the founders of Hudson and is a key Executive of Hudson, and
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 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 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; and
WHEREAS, Hudson and the Executive desire to amend and restate the
Employment Agreement on the terms contained herein.
NOW, THEREFORE, in consideration of the continuation of the
employment by Hudson of the Executive and the mutual covenants and
conditions contained herein, and for other good and valuable
consideration, receipt of which is hereby acknowledged, it is
agreed that the Employment Agreement is hereby amended and
supplemented as follows:
1. AMENDMENT AND
RESTATEMENT: This
agreement hereby amends, restates and supercedes in its entirety
the Employment Agreement and each and every provision contained
therein.
2.
EMPLOYMENT:
Hudson agrees to employ Executive in an executive capacity, and
Executive accepts employment upon the terms and conditions set
forth herein. Executive expressly acknowledges that he was advised
that a condition to Executive's entering into this agreement was
the Executive's agreement to restrictions regarding Confidential
Information, Intellectual Property, Non-Solicitation of Executives,
and Covenants Not To Compete (all as set out in more detail below),
and that the additional rights and benefits contained herein
constitute new and adequate consideration for this Agreement.
Executive understands that, subject to the provisions contained
herein, from time to time he may be promoted, reassigned, or given
different job titles and responsibilities at the sole discretion of
Hudson, and that unless and until such time as a new agreement or
amendment to this agreement is executed in writing by Hudson and
Executive, this Agreement shall remain binding upon Executive
regardless of the job title or position held by Executive.
3. TERM:
Subject to the provisions for termination as provided herein, the
term of this agreement shall be two (2) years. This agreement shall
be automatically renewed for successive two (2) year terms unless
either party gives notice of its intention not to renew no less
than ninety (90) days prior to the expiration of the existing
term.
4.
COMPENSATION: As compensation for the
services to be rendered by Executive, Hudson agrees to provide
Executive with a base salary at the annual rate of One Hundred
Seventy Nine Thousand, Nine Hundred and 00/100 ($179,900.00)
dollars. The Board of Directors shall meet at least annually for
the purpose of determining Executive's annual base salary based
upon the apparent value of his services. The payment of the above
amounts shall constitute full satisfaction and discharge of
Hudson's obligations under this agreement, but are without
prejudice to Executive's rights under any Executive benefit plan
heretofore or hereafter provided by Hudson.
Hudson may, but shall not be obligated to, pay to the Executive, in
addition to his base salary, a cash bonus. Payment of any such
bonus, and the amount of any such bonus shall be at the sole
discretion of the Board of Directors.
5. DUTIES:
Executive
shall serve as Chief Executive Officer of Hudson, and shall assume
such other duties as the Board of Directors may assign. The
services to be performed by the Executive may be extended or
curtailed from time to time at the direction of the board of
directors.
Executive agrees that he will at all times faithfully,
industriously and to the best of his ability, experience and
talents, perform all of the duties that may be required of and from
him pursuant to the express and implicit terms of this agreement,
to the reasonable satisfaction of Hudson. Such duties shall be
rendered at Hudson's headquarters currently located at Pearl River,
New York and, except as otherwise provided herein, at such other
place or places within or without the State of New York as Hudson
shall in good faith require or as the interest, needs, business, or
opportunities of Hudson shall require.
Executive shall devote full, normal and regular business time,
attention, knowledge and skill to the business and interest of
Hudson, and Hudson shall be entitled to all of the benefits,
profits or other issue arising from or incident to all work,
services and advice of Executive performed for Hudson. Executive
agrees that while Executive is employed by Hudson, Executive shall
not directly or indirectly in any capacity engage in any business
other than Hudson's Business without Hudson's prior written
consent, which consent will not be unreasonably withheld provided
that such other business is (a) unrelated to the Business of
Hudson, (b) will in no way interfere with the performance of
Executive's duties to Hudson, (c) will not utilize Confidential
Information or Intellectual Property of Hudson or of any Client of
Hudson, (d) will be conducted at times other than when Executive is
required to work for Hudson, and at places other than Hudson's
business locations or those of Hudson's customers, and (e) will not
involve Hudson, other Executives of Hudson, any Client of Hudson,
or any supplier of Hudson, in the conduct or the financing of
Executive's business, or as customers, suppliers, investors,
partners, joint venturers, or otherwise. Under no circumstances
shall Executive render any services that are competitive with any
of Hudson's business, or that are for any other person, corporation
or other entity that is engaged in any business competitive with or
in the same business as any of Hudson's business. Notwithstanding
the foregoing, Executive shall have the right to make investments
in businesses which in engage in activities other than those
engaged in by Hudson or its subsidiaries.
6. EXPENSES:
Executive is authorized to incur reasonable
expenses on behalf of Hudson in performing his duties, including
expenses for general administration of Hudson's office, travel,
transportation, entertainment, gifts and similar items, which
expenses shall be paid, or reimbursed to Executive, by Hudson,
provided that the Executive furnishes to Hudson appropriate
supporting documentation of such expenses. In addition Hudson will
reimburse the Executive for all professional fees and expenses for
professional organizations and continued education reasonably
incurred by the Executive and reasonably related to the continued
performance of his duties.
7.
VACATIONS: Executive shall be entitled the number of paid
vacation, sick days, personal days and holidays as are specified,
established and set forth in Hudson's standard policies, provided,
however, that Executive shall be entitled each calendar year to a
vacation of no less than twenty (20) weekdays, no two of which need
be consecutive. Hudson shall not be required to compensate
Executive for vacation days, sick days or personal days not taken
by the Executive in any given year, and the Executive cannot accrue
and accumulate unused vacation days, sick days or personal days in
subsequent years.
8.
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 twenty-four (24) 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 "8.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 paragraph "8.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 "13" 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 "10.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 hereinafter defined) pursuant to the
provisions of paragraph "10" 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 "11"
or "12" 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 "8.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 "8.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 "8" 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 "8", 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
"11" and "12" below, and the remedies available to Hudson under
paragraph "13" below.
I. All
amounts payable by Hudson pursuant to this paragraph "8" 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 "8" and, except as
provided in paragraph "13" 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 "8".
J. Executive
expressly acknowledges that the following shall not constitute
"Good Reason" for purposes of this paragraph "8":
(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 "10" below.
9. TERMINATION
FOR CAUSE:
Hudson may
at any time terminate the employment of the Executive for Cause (as
defined in paragraph "8" 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.
10. 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
"10" 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 "8" above") and shall entitle the
Executive to receive the payments and benefits provided by
Paragraph "8" 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.
11. 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 a
