EXHIBIT 10.1
EMPLOYMENT AGREEMENT dated as of
October 31, 2005 (the “ Agreement ”),
between HARDINGE INC. , a New York corporation (the “
Company ”) and CHARLES R. TREGO, JR. (the
“ Executive ”).
WHEREAS, the Executive is employed
by the Company effective October 31, 2005; and
WHEREAS, the Company desires to
engage the Executive to provide services pursuant to the terms of
this Agreement;
NOW, THEREFORE, in consideration of
the covenants and agreements hereinafter set forth, the parties
hereto agree as follows:
1. EFFECTIVENESS OF AGREEMENT AND EFFECTIVE
DATE
This Agreement shall become
effective as of the date hereof. For purposes of this
Agreement, the term “Effective Date” shall mean
October 31, 2005.
2. EMPLOYMENT AND DUTIES
2.1
General . The Company hereby employs the
Executive, and the Executive agrees to serve as Senior Vice
President and Chief Financial Officer, upon the terms and
conditions herein contained. The Executive shall perform such
duties and services for the Company as may be designated from time
to time by the Board of Directors of the Company (the “
Board ”) or the Chief Executive Officer of the
Company. The Executive agrees to serve the Company faithfully
and to the best of his ability under the direction of the Board and
the Chief Executive Officer of the Company.
2.2
Exclusive Services
. Except as may otherwise be
approved in advance by the Board or the Chief Executive Officer of
the Company, and except during vacation periods and reasonable
periods of absence due to sickness, personal injury or other
disability, the Executive shall devote his full working time
throughout the Employment Term (as defined in Section 2.3) to
the services required of him hereunder. The Executive shall
render his services exclusively to the Company during the
Employment Term, and shall use his best efforts, judgment and
energy to improve and advance the business and interests of the
Company in a manner consistent with the duties of his
position.
2.3
Term of Employment
. The Executive’s
employment under this Agreement shall commence as of the date
hereof and shall terminate on the earlier of (i) the second
anniversary of
the Effective Date or
(ii) termination of the Executive’s employment pursuant
to this Agreement; provided , however , that the term
of the Executive’s employment shall be automatically extended
without further action of either party for additional one year
periods unless written notice of either party’s intention not
to extend has been given to the other party hereto at least 60 days
prior to the expiration of the then effective term. The
period commencing as of the Effective Date and ending on the second
anniversary of the Effective Date or such later date to which the
term of the Executive’s employment shall have been extended
is hereinafter referred to as the “ Employment Term
”. Notwithstanding the foregoing, in the event of a
Change in Control (as defined in Section 5.5) occurring during
the Employment Term, the Employment Term shall be extended so that
it terminates on the second anniversary of the date of the Change
in Control.
2.4
Reimbursement of
Expenses . Unless
otherwise agreed to by the Executive and the Company, the Company
shall reimburse the Executive for reasonable travel and other
business expenses incurred by him in the fulfillment of his duties
hereunder upon presentation by the Executive of an itemized account
of such expenditures, in accordance with Company practices
consistently applied.
3. ANNUAL COMPENSATION
3.1
Base Salary
. From the Effective Date, the
Executive shall be entitled to receive a base salary (“
Base Salary ”) at a rate of $231,600 per annum,
payable in accordance with the Company’s payroll practices,
with such changes as may be provided in accordance with the terms
hereof. Once changed, such amount shall constitute the
Executive’s annual Base Salary.
3.2
Annual Review
. The Executive’s Base
Salary shall be reviewed by the Board, based upon the
Executive’s performance, not less often than
annually.
3.3
Bonus . After the Effective Date, the Executive
shall be entitled to such bonus, if any, as may be awarded to the
Executive from time to time by the Board, provided however that
Executive’s cash bonus for calendar year 2006 shall be not
less than $46,320.
4. EMPLOYEE BENEFITS
The Executive shall, during his
employment under this Agreement, be included to the extent eligible
thereunder in all
employee benefit plans, programs or
arrangements (including, without limitation, any plans, programs or
arrangements providing for retirement benefits, incentive
compensation, profit sharing, bonuses, disability benefits, health
and life insurance, or vacation and paid holidays) which shall be
established by the Company for, or made available to, its
executives generally.
5. TERMINATION OF EMPLOYMENT
5.1
Termination Without Cause;
Resignation for Good Reason .
5.1.1 Prior to a Change in Control
. If, prior to the expiration
of the Employment Term, the Executive’s employment is
terminated by the Company without Cause (as defined in
Section 5.3), or the Executive resigns from his employment
hereunder for Good Reason (as defined in Section 5.4.1), at
any time prior to a Change in Control, the Company shall continue
to pay the Executive the Base Salary (at the rate in effect
immediately prior to such termination) for the greater of
(i) 6 months or (ii) the remainder of the Employment Term
(such period being referred to hereinafter as the “
Severance Period ”), at such intervals as the same
would have been paid had the Executive remained in the active
service of the Company. In addition, the Executive shall be
entitled to continue to participate during the Severance Period in
all employee welfare benefit plans that the Company provides and
continues to provide generally to its employees, provided
that the Executive is entitled to continue to participate in such
plans under the terms thereof. The Executive shall have no
further right to receive any other compensation or benefits after
such termination or resignation of employment except as determined
in accordance with the terms of the employee benefit plans or
programs of the Company. In the event of the
Executive’s death during the Severance Period, Base Salary
continuation payments under this Section 5.1.1 shall continue
to be made during the remainder of the Severance Period to the
beneficiary designated in writing for this purpose by the Executive
or, if no such beneficiary is specifically designated, to the
Executive’s estate.
If, during the Severance Period, the
Executive materially breaches his obligations under Section 8
of this Agreement, the Company may, upon written notice to the
Executive, terminate the Severance Period and cease to make any
further payments or provide any benefits described in this
Section 5.1.1.
5.1.2 Following a Change in Control
. If, prior to the expiration
of the Employment Term, (a) the Executive’s
employment is terminated by the
Company without Cause (as defined in Section 5.3), or the
Executive terminates his employment hereunder for Good Reason (as
defined in Section 5.4.2), at any time following a Change in
Control or (b) the Executive resigns from his employment
hereunder for any reason at any time later than six months
following a Change in Control, the Company shall pay to the
Executive a lump sum cash payment equal to 1.5 times the sum of
(i) his Base Salary (at the rate in effect immediately prior
to such termination or, if higher, as in effect immediately prior
to the Change in Control) and (ii) his average annual bonus
earned during the three fiscal years immediately preceding the
Change in Control. In addition, the Executive shall be
entitled to continue to participate for a period of three years
following such termination in all employee benefit welfare plans
that the Company provides and continues to provide generally to its
executive employees (or, if the Executive is not entitled to
participate in any such plan under the terms thereof, in a
comparable substitute arrangement provided by the Company).
The Company shall reimburse the Executive for any premiums or other
expenses incurred by the Executive with respect to his
participation and that of any of his dependents in any such
employee benefit welfare plan.
5.2
Termination for Cause;
Resignation Without Good Reason . If, prior to the expiration of the
Employment Term, the Executive’s employment is terminated by
the Company for Cause, or the Executive resigns from his employment
hereunder other than for Good Reason, the Executive shall (subject
to Section 5.1.2) be entitled only to payment of his Base
Salary as then in effect through and including the date of
termination or resignation. Subject to Section 5.1.2,
the Executive shall have no further right to receive any other
compensation or benefits after such termination or resignation of
employment, except as determined in accordance with the terms of
the employee benefit plans or programs of the Company.
5.3
Cause . Termination for “ Cause
” shall mean termination of the Executive’s employment
because of:
(i)
any act or omission that constitutes
a material breach by the Executive of any of his obligations under
this Agreement;
(ii)
the continued failure or refusal of
the Executive to substantially perform the duties reasonably
required of him as an employee of the Company;
(iii)
any willful and material violation
by the Executive of any Federal or state law or
regulation
