Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the 24th day of November, 2025 by and between Hudson Technologies, Inc.,
300 Tice Boulevard, Suite 290, Woodcliff Lake, NJ 07677 (the “Company” or “Hudson”) and Kenneth Gaglione,
residing at [•] (“Executive”).
WHEREAS, Hudson desires to
retain Executive as Chairman of the Board, President and Chief Executive Officer of Hudson Technologies, Inc. and each of its subsidiaries;
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;
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 dedication, loyalty and service of, and the availability of objective advice and counsel from, the Executive,
as well as assurances that the Executive will devote his best efforts to his employment with Hudson and that he will not solicit other
executives or employees of Hudson.
NOW,
THEREFORE, in consideration 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 as follows:
1. 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 set out in more detail below), and that the additional rights and benefits contained herein constitute adequate consideration
for this Agreement. Executive, at the sole discretion of Hudson, may be given different job titles and responsibilities consistent with
the types of titles and responsibilities that Executive performs as Chairman of the Board, President and Chief Executive Officer. 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.
2. TERM:
Subject to the provisions for termination as provided herein and paragraph “15” below (providing that Executive’s employment
shall be at will), the term of this Agreement shall expire as of November 24, 2027. This Agreement shall be automatically renewed
for successive one (1) 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.
3. COMPENSATION:
As compensation for the services to be rendered by Executive, Hudson agrees to provide Executive with a base salary at the current annual
rate of Six Hundred Ninety-Five Thousand dollars ($695,000). The Compensation Committee of the Hudson Board of Directors (the “Board”)
shall meet at least annually for the purpose of determining Executive’s annual base salary based upon the apparent value of his
services provided, however, that Executive’s annual base salary may increase, but not decrease, during the term of employment hereunder.
Upon any such increase, the increased amount shall thereafter be deemed to be Executive’s annual base salary.
Commencing with the 2026 calendar
year, during the term of Executive’s employment, Executive shall be eligible to receive annual bonuses in the sole discretion of
the Compensation Committee of the Board, with an annual target bonus amount of at least seventy-five percent (75%) of then current annual
base salary (each, if so awarded, an “Annual Bonus”). Other bonus amounts may be awarded to Executive at the discretion of
the Compensation Committee of the Board.
In
addition to the foregoing, the Compensation Committee of the Board shall promptly grant to Executive, a five-year stock option,
vesting 50% on the first anniversary of the effective date of this Agreement and a further fifty percent on the second anniversary of
the date of this Agreement, having a Black-Scholes value, determined in good faith by the Compensation Committee of the Board, of at least
Six Hundred Ninety-Five Thousand dollars ($695,000).
The Executive shall also be
entitled to participate in life, health and dental insurance, disability insurance, and any other benefits provided by Hudson generally
to its senior executive group, on equivalent terms.
The
payment of the amounts in this paragraph shall constitute full satisfaction and discharge of Hudson’s obligations under this Agreement
but are without prejudice to Executive’s rights under any other Executive bonus or benefit plan hereafter provided by Hudson.
4. DUTIES:
Executive shall serve as Chairman of the Board, President and Chief Executive Officer of Hudson and shall assume such other duties as
the Board may assign as are consistent with and appropriate for Executive’s positions as Chairman of the Board, President and Chief
Executive Officer. In addition, Executive agrees to assume such other title or titles or subsidiary appointments, if any, as from time
to time may be assigned to Executive by Hudson which are consistent with the types of duties Executive performs as Chairman of the Board,
President and Chief Executive Officer. Executive shall report directly to the Board. 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 Woodcliff Lake, New Jersey for at least three days per week (and remotely for the remainder of the week)
and, except as otherwise provided herein, at such other place or places within or without the State of New Jersey 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 (a) is 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 generally 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.
5. 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 timely paid or reimbursed
to Executive, by Hudson, provided that the Executive furnishes to Hudson appropriate supporting documentation of such expenses in accordance
with Hudson policies. 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. In order
to accommodate Executive, the Company shall also, at Executive’s option, either: (i) reimburse Executive in accordance with
the Company’s reimbursement policy for the costs of a hotel near the Company’s Woodcliff Lake, New Jersey headquarters, or
(ii) reimburse Executive for the cost of an apartment in the Woodcliff Lake, New Jersey area in an amount not to exceed Five Thousand
dollars ($5,000) per month.
6. VACATIONS:
Executive shall be entitled to 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-five (25) weekdays, no two (2) 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.
7. 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):
A. Executive
will continue to receive his annual base salary, based upon his annual base salary in effect as of the date of his Termination of Employment,
for a period of twelve (12) months (the “Severance Period”), in accordance with 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.
Subject to paragraph “7.G.” and paragraph “22” below, the initial payment shall be made within the forty-five
(45) day period following the Executive’s Termination of Employment and the Executive shall have no right to designate the taxable
year of payment.
B. Within
the forty-five (45) day period following the Executive’s Termination of Employment, 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 “7.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 preceding 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. The Executive shall have no right to designate the taxable year of
payment.
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 “7.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. Subject
to paragraph “7.G.” and paragraph “22” below, within the forty-five (45) day period following the Executive’s
Termination of Employment, 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 pro rata 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 the Termination of Employment. Hudson shall deduct from this payment all normal tax withholdings and deductions
which Hudson is required by law to make. The Executive shall have no right to designate the taxable year of payment.
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. To the extent Benefits include health and dental insurance, such Benefits
shall be provided as COBRA continuation coverage, and not in addition to COBRA. Notwithstanding the foregoing, to the extent Benefit coverages
provided to the Executive under this paragraph are taxable to the Executive, Hudson’s obligation hereunder shall not exceed the
applicable dollar amount under Section 402(g)(1)(B) of the Internal Revenue Code of 1986, as amended (the “Code”),
determined as of the year in which the Executive’s “Separation of Service” occurs, which is exempt under Treas. Reg.
Section 1.409A-1(b)(9)(v)(D)(Limited Payment).
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 exercisable on the date of Termination of Employment, and shall remain exercisable following the Termination
of Employment until (i) expiration of the Severance Period, (ii) termination of Severance Benefits pursuant to paragraph “12”
below, or (iii) expiration of the original term of the stock option, stock appreciation right or similar right, whichever first occurs.
No extension of an exercise period under this Agreement shall extend to a date that would cause a stock option, stock appreciation right
or similar right to be subject to Code Section 409A.
F. For
the 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) including for this purpose Hudson’s election not to renew this Agreement, or (b) by
the Executive following 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 effect 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 “10” or “11” of this Agreement or, (g) the resignation of Executive other than pursuant to
the occurrence of an event constituting Good Reason.
(iii) “Good
Reason” shall mean the occurrence of any of the following: (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 300 Tice Boulevard, Suite 290, Woodcliff Lake, New Jersey 07677; (c) except as provided in paragraph “1.I.”
below, the Executive’s annual base salary is reduced, except to the extent that the annual base salaries of all Executive Officers
(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 percent (90%) of the Executive’s annual base salary as of the
date herein; (d) the Executive’s benefits are reduced and such reduction results in a material reduction in the Executive’s
total compensation, except to the extent that such reductions are made by Hudson on a company-wide basis and affect all Executive Officers
that participate in such benefits; or (e) except as provided in paragraph “7.I.” 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 Executive Officers of Hudson. Good Reason
shall not be deemed to exist unless the Executive’s Termination of Employment for Good Reason occurs within ninety (90) days following
the initial existence of one of the foregoing conditions, the Executive provides Hudson with written notice of the existence of such condition(s) within
thirty (30) days after the initial existence of the condition(s) and Hudson fails to remedy the condition within thirty (30) days
after its receipt of such notice. 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) “Executive
Officer(s)” shall mean any current or future officer of Hudson Technologies, Inc. who is subject to Section 16(a) of
the Securities Exchange Act of 1934
G. Hudson’s
obligation to pay the compensation and to make the arrangements provided in this paragraph “7” 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 paragraphs 7.A.,
7.B., 7.D. and 7.E., within sixty (60) days of the Executive’s Termination of Employment, the Executive shall have (i) executed
and not revoked a general release and waiver, in form and substance reasonably satisfactory to Hudson and the Executive, of all claims
relating to the Executive’s employment by Hudson and the termination of such employment, including, without limitation, discrimination
claims (including without limitation age discrimination), 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) with such general release and waiver having become irrevocable, and (ii) executed an agreement expressly acknowledging
and reaffirming the covenants and restrictions contained in paragraphs “10” and “11” below, and the remedies available
to Hudson under paragraph “12” below. In accordance with paragraph “22” below and notwithstanding the payment
periods stated in paragraph “7” above, if the consideration period (or revocation period, if applicable) for any general release
and waiver extends across two (2) calendar years, the payments to the Executive of the Severance Benefits shall begin in the second
of the calendar years (with any payments previously due paid in a lump sum on the first payroll date, or other payment date, in the second
calendar year).
H. All
amounts payable by Hudson pursuant to this paragraph “7” 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 “7”
and, except as provided in paragraph “12” 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 “7”.
I. Executive
expressly acknowledges that the following shall not constitute “Good Reason” for purposes of this paragraph “7”:
(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 Executive
Officers; except that Hudson may establish separate performance criteria and payment amounts for awards under such plan for each Executive
Officer that are reasonably achievable and reasonably related to such Executive Officer’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 the 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 limitation,
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 for the calendar year immediately prior to the Termination of Employment; or
(iv) A
reduction in the Executive’s annual base salary pursuant to the provisions of paragraph “9” below.
8. TERMINATION
FOR CAUSE: Hudson may at any time terminate the employment of the Executive for Cause (as defined in paragraph “7” 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 if he worked for the entire year. In the event
of termination under this paragraph, Hudson shall within thirty (30) days after the date of notice, pay Executive all amounts which are
then accrued but unpaid, including unpaid vacation as determined in accordance with Hudson’s’ standard vacation policy (the
“Accrued Obligations”). Hudson shall have no further or additional liability to Executive. For the avoidance of doubt, on
the resignation of Executive (including for this purpose Executive’s election not to renew this Agreement) other than pursuant to
the occurrence of an event constituting Good Reason, Executive will be entitled to only the Accrued Obligations and shall not be entitled
to Severance benefits or bonus payment that might otherwise be owed to him if he worked for the entire year.
9. SICK
LEAVE:
A. If
with or without reasonable accommodation Executive is physically or mentally unable to perform his duties, or is otherwise absent for
medical reasons, Hudson shall continue to pay base salary and provide benefits to the Executive (“Sick Leave”). However, if
a continuous period of Sick Leave exceeds eight (8) consecutive weeks, Hudson’s obligation with regard to base salary upon
the expiration of the eight (8) consecutive weeks shall be limited to paying seventy-five percent (75%) of base salary. If the Executive
returns to full service, his full base salary shall be reinstated to the pre-adjustment amount. As a condition to the receipt of the foregoing
base salary and benefits, the Executive agrees that he shall provide Hudson such information as Hudson may reasonably request from time
to time to permit Hudson to make a determination that the Executive is entitled to sick pay under this provision. Hudson shall reduce
the amount paid to the Executive during such Sick Leave 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 unless such reduction results in a violation of Code Section 409A.
B. Notwithstanding
the foregoing, Hudson may terminate the employment of Executive at any time after Executive’s continuous period of Sick Leave exceeds
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 “7” above) and shall entitle the Executive to receive the payments and benefits provided by paragraph “7”
upon Termination of Employment based upon Executive’s full base salary, and for purposes of such payments and benefits, the Severance
Period shall be deemed to commence as of the date of the Termination of Employment resulting under this paragraph “9.B.”.
C. Notwithstanding
anything to the contrary contained herein, in the event that during the period the Executive is on Sick Leave, and prior to any Termination
of Employment pursuant to paragraph “9.B.”, there is deemed a “Separation from Service” (as that term is defined
in Code Section 409A for purposes of a permissible payment event), Hudson and the Executive agree that such Separation of Service
shall be treated as a Termination of Employment. Such termination shall not be deemed a Termination for Cause (as defined in paragraph
“7” above) and shall entitle the Executive to receive the payments and benefits provided by paragraph “7” upon
Termination of Employment based upon Executive’s full base salary, provided that, for purposes of such payments and benefits, the
Severance Period shall commence as of the date of the Separation from Service as described in this paragraph “9.C.”, and shall
be based upon Executive’s full base salary.
D. Notwithstanding
anything to the contrary contained herein, in the event that during the period the Executive is on Sick Leave, and prior to any Termination
of Employment pursuant to paragraph “9.B.” or any Separation from Service pursuant to paragraph “9.C.”, the Executive
becomes “Disabled”, (as defined in Code Section 409A for purposes of a permissible payment event) Hudson and the Executive
agree that the Executive’s Disability shall entitle the Executive to receive the payments and benefits provided by paragraph “7”
upon Termination of Employment based upon Executive’s full base salary. For purposes of such payments and benefits, the Severance
Period shall commence as of the date of the Disability as described in this paragraph “9.D.”.
10. 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 result
in irreparable harm to Hudson.
(ii) Hudson’s
Confidential Information (as hereinafter defined) constitutes valuable commercial assets of Hudson and is not readily available to the
general public or any persons not employed by or otherwise not 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, among other things, restricting access to only
those who need the information to perform their Hudson job function and prohibiting the use or disclosure of Confidential Information
to anyone not authorized to receive or use the Confidential Information.
(iii) Executive’s
position with Hudson will continue to provide Executive with access to or knowledge of Hudson’s Confidential Information.
(iv) Hudson’s
Confidential Information 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 acknowledges and agrees as follows:
(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 for the purposes authorized by Hudson, or 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, or upon termination of 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 “10” and “11”) 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; equipment utilization information; and 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,
and 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.
“Confidential
Information” does not include general skills, experience or information that is generally available to the public, other than information
which has become generally available as a result of Executive’s direct or indirect act or omission. “Confidential Information”
also does not include information regarding Executive’s own pay and benefits, information as to the terms and conditions of employment,
or information that is deemed not confidential under Section 7 of the National Labor Relations Act. Executive understands
that nothing contained in this Agreement limits Executive’s ability to file a charge or complaint with the Equal Employment Opportunity
Commission, the National Labor Relations Board, the Occupation Safety and Health Administration, the Securities and Exchange Commission
or any other federal, state or local governmental agency or commission (“Government Agencies”). Executive further understands
that this Agreement does not limit Executive’s ability to communicate with any Government Agencies, including providing documents
or other information, without notice to Hudson. This Agreement does not limit Executive’s right to receive an award for information
provided to any Government Agencies.
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
pending; trademarks, copyrights, and any and all applications for same issued to and/or applied for by Hudson; any and all technological
(including software), educational, operational, and financial innovations, discoveries, inventions, designs, and formulae; tests; performance
data; process 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 regardless of the medium in which the information is stored
or recorded; without regard to whether such property is patentable, copyrightable, or subject to trade/service mark protection, and without
regard to whether a patent, copyright, or trademark or service mark has been sought or obtained.
E. Notwithstanding
anything in this Agreement, Executive is hereby advised that pursuant to the federal Defend Trade Secrets Act: (i) an individual
shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (a) is
made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely
for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed
in a lawsuit or other proceeding, if such filing is made under seal; and (ii) an individual who files a lawsuit for retaliation by
an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade
secret information in the court proceeding, if the individual (a) files any document containing the trade secret under seal; and
(b) does not disclose the trade secret, except pursuant to court order.
11. NON-COMPETITION
/ NON-SOLICITATION:
A. Executive
expressly acknowledges and agrees as follows:
(i) Hudson
compensates its employees, 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;
(ii) Executive
will be exposed to, acquire and develop knowledge of Confidential Information including, without limitation, Confidential Information
related to Hudson’s customers, operations, and its suppliers;
(iii) Executive
is able to be gainfully employed by other employers in a variety of other industries and businesses that are engaged in businesses that
do not involve and are not competitive with any part of Hudson’s business.
B. In
light of the foregoing, Executive agrees, that while Executive is employed by Hudson, and continuing until the expiration of the Covenant
Period (as hereinafter defined):
(i) Executive
shall not, within the Restricted Territory (as hereinafter defined), compete with Hudson, directly or indirectly, whether for Executive’s
own behalf or on behalf of or in conjunction with any other person, persons, company, partnership, corporation or business entity, whether
for profit or not-for-profit, by being employed by, participating in, or otherwise being materially connected in the conduct of any business
activity that involves providing products or services that are like or similar to, or competitive with, or would replace or be a substitute
for, any one or more of the products and services provided by Hudson (hereinafter “Competitive Products”) if such employment,
participation, or connection involves: (a) responsibilities similar to responsibilities Executive had or performed for Hudson at
any time during the last eighteen (18) months of Executive’s employment with Hudson; (b) supervision of employees or other
personnel in the provision of Competitive Products; (c) development or implementation of strategies or methodologies related to the
provision of Competitive Products; (d) marketing or sale of Competitive Products; or (e) responsibilities in which Executive
would utilize or disclose Confidential Information.
(ii) Executive
shall not compete with Hudson, directly or indirectly, whether for Executive’s own behalf or on behalf of or in conjunction with
any other person, persons, company, partnership, corporation or business entity, whether for profit or not-for-profit, by calling upon,
contacting, diverting, soliciting, or doing business for or with any “Client” of Hudson (as hereinafter defined) for the purpose
of offering or providing any Competitive Products.
(iii) Executive
shall not directly or indirectly, without the prior written consent of Hudson, (a) induce, solicit, entice, or encourage any officer,
director, employee or other individual to leave his or her employment with Hudson, (b) induce, solicit, entice, or encourage any
officer, director, employee or other individual to compete in any way with the products and services of Hudson, or to violate the terms
of any employment, non-competition, confidentiality or similar agreement with Hudson; or (c) employ, offer to employ, contract with,
offer to contract with, or do business with any officer, director, employee or other individual who is employed by Hudson.
C. For
purposes of this paragraph “11”, the Covenant Period shall be twelve (12) months after the Executive’s last day of employment
with Hudson, regardless of the reason underlying the termination of Executive’s employment.
D. Executive
acknowledges that many of Hudson’s services are remedial in nature and, as such, its customers may utilize Hudson’s services
on an infrequent basis over an extended period of time, or following a protracted sales effort over an extended period of time. Executive
also acknowledges that because of his position, he will likely have knowledge of Hudson’s customers through access to Confidential
Information, whether or not located within the Restricted Territory (hereinafter defined). Accordingly, for purposes of this paragraph
“11”, the term “Client” shall mean (a) any customer or potential customer of Hudson upon whom Executive,
during the last eighteen (18) months of Executive’s employment with Hudson, called upon or with whom Executive had any contact,
or as to whom Executive was involved in regard to planning, marketing, conducting, or overseeing an offer to sell products or perform
services; (b) any customer as to whom Executive assisted in selling products or providing services, or as to whom Executive was involved
in regard to planning, marketing, conducting, or overseeing the offer to sell products or perform services if the customer received any
products or services from Hudson during the last eighteen (18) months of Executive’s employment with Hudson; (c) any potential
customer of Hudson whose identity Executive learned during the eighteen (18) months of Executive’s employment with Hudson or learned
from Confidential Information at any time; or (d) any customer for whom Hudson has provided products or services to at any time during
the thirty-six (36) months preceding the last day of the Executive’s employment with Hudson and whose identity as a Hudson customer
Executive learned from Confidential Information at any time.
E. Executive
acknowledges that the nature of Hudson’s business is such that provides its products and services to customers throughout the United
States of America and Puerto Rico. Accordingly, the “Restricted Territory” includes each and every state of the United States
of America (including the District of Columbia) and Puerto Rico.
F. In
order to assure Hudson of the full twelve (12) months of the Covenant Period within which to protect its goodwill and to prevent Executive
from unfairly benefiting by violations of this paragraph “11”, the provisions and requirements of this paragraph “11”
shall be extended for a period of time beyond the Covenant Period equal in length to the total length of time during which Executive is
in violation of any one or more provisions of this paragraph.
G. In
the event it is determined by a court of competent jurisdiction that any provision or portion of a provision of this paragraph “11”
is not enforceable under the law governing this Agreement, the unenforceable provision or portion thereof may be stricken, and the remainder
of the provision and of this paragraph “11” shall be valid and fully enforceable, in all respects, as if the provision or
portion of a provision deemed unenforceable had never been part of the Agreement. Further, if any provision of this Agreement is found
to be overbroad or unenforceable, the court or any other authority with competent jurisdiction is expressly authorized to conform the
provision to the extent necessary to remedy any deficiency and render it valid and enforceable.
12. REMEDIES:
A. In
the event that the Executive breaches any term or provision of paragraphs “10” or “11” of this Agreement, Hudson
shall be immediately, permanently and irreparably damaged and shall be entitled, in addition to and without limiting Hudson’s rights
to, any and all other legal and equitable remedies and damages, (i) to a temporary restraining order ex parte, to a preliminary injunction,
and to a permanent injunction, to restrain Executive’s actions or the actions of others acting in conjunction with Executive or
on Executive’s behalf, (ii) to terminate all future Severance Benefits through the remainder of the Severance Period, and (iii) to
recover from Executive all Severance Benefits actually paid to the Executive, including any costs or expenses actually incurred by Hudson
in providing such Severance Benefits. Executive agrees that Executive will not be damaged by enforcement of this covenant as Executive
can obtain many other types of gainful employment without violating the provisions of paragraphs “10” or “11”,
so that no bond shall be required, and if the court requires a bond to be posted, it shall not exceed $500.00.
B. All
of Executive’s covenants and obligations under paragraphs “10” and “11” of this Agreement shall survive,
and shall remain enforceable, for so long as Executive is employed and after termination of employment for any reason, and shall survive
despite future promotions, raises, changes in position or compensation, demotions and the execution of new agreements with Hudson, and
shall inure to the benefit of Hudson’s successors and assigns, unless Hudson executes in writing an agreement expressly terminating
the covenants of paragraphs “10” and “11” of this Agreement.
C. Hudson
and Executive shall each bear and be responsible for their own attorneys’ fees, expenses and disbursements incurred in any litigation
brought by either party to enforce or interpret any provision contained in paragraphs “10” or “11” of this Agreement.
13. NOTICES:
All notices required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by certified mail, return
receipt requested, to the Executive at his residence, and to Hudson at its principal office located at 300 Tice Boulevard, Suite 290,
Woodcliff Lake, New Jersey 07677, attention Chief Financial Officer, or at such other address as any party specifies by giving proper
notice.
14. SUCCESSORS
AND ASSIGNS: This Agreement shall be binding upon and shall inure to the benefit of the Executive and his estate. Neither this Agreement
nor any rights hereunder shall be assignable by the Executive.
This
Agreement shall be freely assignable by Hudson to, and shall inure to the benefit of, and be binding upon, any successor corporation or
affiliate of a successor corporation, and all references in this Agreement to Hudson shall include its subsidiaries and affiliates
and any successors, affiliates of successors or assigns of Hudson. As used herein, the term “successor” shall mean any person,
firm, corporation or business entity or affiliate thereof which at any time, whether by merger, purchase, or otherwise, directly or indirectly
acquires all or substantially all of the assets or the business of Hudson, including any entity that shall be the surviving corporation
in a merger with Hudson.
15. EMPLOYMENT
AT WILL; CONSEQUENCES OF TERMINATION: Notwithstanding paragraph “2” above, Hudson expressly agrees that at all times Executive’s
employment shall be at will and at any time the Executive may resign or otherwise terminate his or her employment with Hudson, for any
reason or for no reason, subject to the provisions contained herein. Likewise, the Executive expressly agrees that at any time Hudson
may terminate the employment of the Executive for any reason or for no reason, subject to the provisions contained herein.
16. INDEMNIFICATION:
In the event that any litigation shall be brought to enforce or interpret any provision contained in paragraphs “7”, “8”,
or “9” of this Agreement, then, provided that the Executive prevails to any extent, Hudson or any successor corporation shall
reimburse or indemnify the Executive for the Executive’s reasonable attorneys’ fees, expenses and disbursements incurred in
such litigation, including the costs of enforcement.
17. CONTROLLING
LAW: This Agreement and all other issues regarding the employment of the Executive shall be governed by the laws of the State of New
Jersey, without reference to its conflicts of law principles.
18. ENTIRE
AGREEMENT: This Agreement represents the entire agreement and understanding of the parties regarding the employment of the Executive,
and all prior or contemporaneous agreements, representations, or understandings. Executive has not relied upon any inducement, promise,
representation, or assurance, other than those expressly set out herein. Except as expressly permitted herein, this Agreement may not
be modified or amended except in writing signed by all parties hereto.
19. WAIVER:
The waiver of any breach of any provision of this Agreement by either party shall not operate or be construed as a subsequent waiver by
either party of any term or condition of this Agreement.
20. HEADINGS;
COUNTERPARTS: The headings in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation
of this Agreement. This Agreement may be executed in counterparts, each of which shall constitute an original and all of which shall constitute
one and the same instrument. Signature pages hereto may be delivered via facsimile or other electronic image transmission and such
signature pages shall be valid and binding for all purposes.
21. SEVERABILITY:
The parties intend and agree that each covenant and condition contained in this Agreement shall be a separate and distinct covenant. If
any provision of this Agreement is found to be invalid, illegal, or unenforceable, the remaining provisions shall not be affected.
22. COMPLIANCE
WITH CODE SECTION 409A:
A. It
is the intention of Hudson and the Executive that the payments, benefits and rights to which the Executive could be entitled pursuant
to this Agreement comply with Code Section 409A, the Treasury regulations and other guidance promulgated or issued thereunder (collectively
for purposes of this paragraph 22, “Section 409A”), to the extent that the requirements of Section 409A are applicable
thereto, and after application of all available exemptions, including but not limited to, the “short-term deferral rule” and
“involuntary separation pay plan exception” and the provisions of this Agreement shall be construed in a manner consistent
with that intention. If any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would
cause the Executive to incur any additional tax or interest under Section 409A, Hudson shall, upon the specific request of the Executive,
use its reasonable business efforts to in good faith reform such provision to comply with Section 409A; provided, that to the maximum
extent practicable, the original intent and economic benefit to the Executive and Hudson of the applicable provision shall be maintained,
but Hudson shall have no obligation to make any changes that could create any additional economic cost or loss of benefit to Hudson. Hudson
shall not have any liability to the Executive with respect to tax obligations that result from the application of Section 409A and
makes no representation with respect to the tax treatment of the payments and/or benefits provided under this Agreement. Any provision
required for compliance with Section 409A that is omitted from this Agreement shall be incorporated herein by reference and shall
apply retroactively, if necessary, and be deemed a part of this Agreement to the same extent as though expressly set forth herein.
B. With
regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A,
(i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, (ii) the amount
of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expense eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be
violated with regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses
are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the
last day of the Executive's taxable year following the taxable year in which the expense was incurred.
C. For
purposes of applying the provisions of Section 409A to this Agreement, each separately identified amount to which the Executive is
entitled under this Agreement shall be treated as a separate payment within the meaning of Section 409A. In addition, to the extent
permissible under Section 409A, any series of installment payments under this Agreement shall be treated as a right to a series of
separate payments.
D. Neither
Hudson nor the Executive, individually or in combination, may accelerate any payment or benefit that is subject to Section 409A,
except in compliance with Section 409A and the provisions of this Agreement, and no amount that is subject to Section 409A shall
be paid prior to the earliest date on which it may be paid without violating Section 409A. Notwithstanding anything in paragraph
“7” above, if the consideration period (or revocation period, if applicable) for any general release and waiver extends across
two (2) calendar years, the payments to the Executive shall begin in the second of the calendar years.
E. If
and to the extent required to comply with Section 409A, a Termination of Employment, as defined above, shall not be deemed to have
occurred for purposes of this Agreement providing for the payment of any amounts or benefits upon or following a Termination of Employment
unless such termination is also a “Separation from Service” within the meaning of Section 409A and, for purposes of any
provision of this Agreement, references to Termination of Employment, “termination”, “termination of employment”
or like terms shall mean “Separation from Service”.
F. If
the Executive is deemed on the date of termination of his employment to be a “specified employee”, within the meaning of that
term under Section 409A(a)(2)(B) and using the identification methodology selected by Hudson from time to time, or if none,
the default methodology under Section 409A, then with regard to any payment or the providing of any benefit subject to this Agreement
and to the extent required to be delayed in compliance with Section 409A(a)(2)(B), and any other payment or the provision of any
other benefit that is required to be delayed in compliance with Section 409A(a)(2)(B), such payment or benefit shall not be made
or provided prior to the earlier of (i) the expiration of the six (6) month period measured from the date of the Executive’s
Separation from Service or (ii) the date of the Executive’s death. In this regard, it is the intention and understanding of
Hudson and the Executive that payments made following a Termination of Employment under paragraph “7” shall be exempt under
the “short-term deferral rule” and “involuntary separation pay plan exception”, and other applicable exceptions,
from the requirements of Section 409A(a)(2)(B) and are not required and shall not be delayed. Absent such exception, on the
first day of the seventh month following the date of Executive’s Separation from Service or, if earlier, on the date of his death,
all payments delayed pursuant to this paragraph “22.F.” (whether they would have otherwise been payable in a single sum or
in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and
benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. The
determination of whether the Executive is a “specified employee” shall be made by Hudson in good faith applying Section 409A.
IN
WITNESS THEREOF, the parties have executed this Agreement as of the date first written above.
| Hudson Technologies, Inc. |
|
| |
|
| By: |
/s/ Brian Bertaux |
|
| Name: |
Brian Bertaux |
|
| Title: |
CFO & Corporate Secretary |
|
| |
|
| /s/ Kenneth Gaglione |
|
| Kenneth Gaglione |
|
| |
|
