UNITED
STATES
Securities
and Exchange Commission
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. __)
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Filed
by the registrant x
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Filed
by a party other than the registrant ¨
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Check
the appropriate box:
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¨
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Preliminary
proxy statement
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¨ Confidential, For
Use of the
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Commission
Only (as permitted by Rule 14a-6(e)
(2))
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x
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Definitive
proxy statement
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¨
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Definitive
additional materials
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¨
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Soliciting
material pursuant to Section 240.
14a-12
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Hudson Technologies,
Inc.
(Name of
Registrant as Specified in Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of filing fee (Check the appropriate box):
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x
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No
fee required.
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¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i) (1) and
0-11.
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(1) Title
of each class of securities to which transaction applies:
(2) Aggregate
number of securities to which transaction applies:
(3) Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined).
(4) Proposed
maximum aggregate value of transaction:
(5) Total
Fee Paid:
¨ Fee
paid previously with preliminary materials.
¨ Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)
(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
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(1)
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Amount
previously paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
party:
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(4)
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Date
filed:
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HUDSON
TECHNOLOGIES, INC.
PO Box
1541, One Blue Hill Plaza
Pearl
River, New York 10965
July 13,
2010
Dear
Fellow Shareholders:
You are
cordially invited to attend the Annual Meeting of Shareholders which will be
held on Tuesday, August 10, 2010 at 10:00 A.M., local time at the Pearl River
Hilton, 500 Veterans Memorial Highway, Pearl River, New York
10965. The Notice of Annual Meeting and Proxy Statement which follow
describe the business to be conducted at the meeting.
Whether
or not you plan to attend the Annual Meeting in person, it is important that
your shares be represented and voted. After reading the enclosed
Notice of Annual Meeting and Proxy Statement, I urge you to complete, sign, date
and return your proxy card in the envelope provided. If the address
on the accompanying material is incorrect, please inform our Transfer Agent,
Continental Stock Transfer & Trust Company, at 17 Battery Place, New York,
New York 10004, in writing, of the correct address.
Your vote
is very important, and we will appreciate a prompt return of your signed proxy
card. We hope to see you at the meeting.
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Cordially,
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Kevin
J. Zugibe, P.E.
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Chairman
of the Board and
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Chief
Executive Officer
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HUDSON
TECHNOLOGIES, INC.
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD ON AUGUST 10, 2010
To the
Shareholders of HUDSON TECHNOLOGIES, INC.:
NOTICE IS
HEREBY GIVEN that the Annual Meeting of Shareholders of Hudson Technologies,
Inc. (the “Company”) will be held on Tuesday, August 10, 2010 at 10:00 A.M.,
local time at the Pearl River Hilton, 500 Veterans Memorial Highway, Pearl
River, New York 10965 for the following purposes:
1. To
elect a class of two directors who shall serve until the Annual Meeting of
Shareholders to be held in 2012 or until their successors have been elected and
qualified;
2. To
ratify the appointment of BDO USA, LLP as the Company’s independent registered
public accountants for the fiscal year ending December 31, 2010;
and
3. To
transact such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
Only
shareholders of record at the close of business on June 15, 2010 are entitled to
notice of and to vote at the Annual Meeting or any adjournments
thereof.
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By
Order of the Board of Directors
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Stephen
P. Mandracchia
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Secretary
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July 13,
2010
IF
YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING:
PLEASE
FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED
FOR THAT PURPOSE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE, AND
IF YOU ARE PRESENT AT THE MEETING YOU MAY, IF YOU WISH, REVOKE YOUR PROXY AT
THAT TIME AND EXERCISE THE RIGHT TO VOTE YOUR SHARES PERSONALLY.
PROXY
STATEMENT
HUDSON
TECHNOLOGIES, INC.
ANNUAL
MEETING OF SHAREHOLDERS
TO
BE HELD ON AUGUST 10, 2010
This
proxy statement is furnished in connection with the solicitation of proxies by
the Board of Directors of Hudson Technologies, Inc. (the "Company", “Hudson”,
“we” or “our”) for use at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Tuesday, August 10, 2010, and including any adjournment
or adjournments thereof, for the purposes set forth in the accompanying Notice
of Meeting.
Management
intends to mail this proxy statement and the accompanying form of proxy to
shareholders on or about July 15, 2010.
Proxies
in the accompanying form, duly executed, returned to the management of the
Company and not revoked, will be voted at the Annual Meeting. Any
proxy given pursuant to such solicitation may be revoked by the shareholder at
any time prior to the voting of the proxy by a subsequently dated proxy, by
written notification to the Secretary of the Company, or by personally
withdrawing the proxy at the Annual Meeting and voting in person.
The
address and telephone number of the principal executive offices of the Company
is:
PO Box
1541, One Blue Hill Plaza
Pearl
River, New York 10965
Telephone
No.: (845) 735-6000
OUTSTANDING
STOCK AND VOTING RIGHTS
Only
shareholders of record at the close of business on June 15, 2010 (the "Record
Date") are entitled to notice of and to vote at the Annual
Meeting. As of the Record Date, there were issued and outstanding
21,043,106 shares of the Company's common stock, par value $.01 per share
("Common Stock"), the only class of voting securities of the
Company. Each share of Common Stock entitles the holder thereof to
one vote on each matter submitted to a vote at the Annual
Meeting.
VOTING
PROCEDURES
Directors
will be elected by a plurality of the votes cast by the holders of Common Stock
in person or represented by proxy at the Annual Meeting, provided a quorum is
present at the meeting. Therefore, the two nominees receiving the
greatest number of votes cast at the meeting will be elected as directors of the
Company. All other matters to be acted upon at the meeting will be decided by
the majority of the votes cast by the holders of the shares of Common Stock
present in person or represented by proxy at the Annual Meeting, provided a
quorum is present. A quorum will be present at the Annual Meeting if
the holders of a majority of the outstanding shares of Common Stock as of the
Record Date are present in person or represented by proxy. Votes will
be counted and certified by one or more Inspectors of Election who are expected
to be employees of Continental Stock Transfer & Trust Company, the Company's
transfer agent.
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In
accordance with applicable law, abstentions and "broker non-votes" (i.e.,
proxies from brokers or nominees indicating that such persons have not received
instructions from the beneficial owners or other persons entitled to vote shares
as to a matter with respect to which the brokers or nominees do not have
discretionary power to vote) will be treated as present for purposes of
determining the presence of a quorum. Based upon
the Company's understanding of the requirements of the law of the
State of New York and the Certificate of Incorporation and By-laws, as amended
(the "By-laws"), of the Company, "votes cast" at a meeting of shareholders by
the holders of shares entitled to vote are determinative of the outcome of the
matter to be voted on. Failures to vote, broker non-votes and
abstentions will not be considered "votes cast."
Proxies
will be voted in accordance with the instructions thereon. Unless
otherwise stated, all shares represented by such proxy will be voted as
instructed. Proxies may be revoked as noted above.
PROPOSAL
1
ELECTION
OF DIRECTORS
The
Company's By-laws provide that the Board of Directors (the "Board") is divided
into two classes. Each class is to have a term of two years (the term
of each class expiring in alternating years) and is to consist, as nearly as
possible, of one-half of the number of directors constituting the entire
Board. The By-laws provide that the number of directors shall be
fixed by the Board of Directors but in any event, shall be no less than five (5)
(subject to decrease by a resolution adopted by the shareholders).
At the
Annual Meeting, a class of two directors will be elected for a two-year term
expiring at the Annual Meeting of Shareholders to be held in
2012. Dominic J. Monetta and Kevin J. Zugibe are the nominees for
election to this class. Messrs. Vincent P. Abbatecola, Brian F. Coleman and Otto
C. Morch will not stand for election at the Annual Meeting because their
respective terms expire at the Annual Meeting of Shareholders to be held in
2011.
Proxies
will be voted for the nominees named below, unless authority is
withheld. Should any nominee not be available for election, proxies
will be voted for such substitute nominee as may be designated by the Board of
Directors. Each of the nominees has indicated to the Board that he
will be available and is willing to serve.
The
following is information with respect to the nominees for election as directors
at the Annual Meeting that each nominee for director has given us about his age,
all positions he holds, his principal occupation and his business experience for
at least the past five years. In addition to the information
presented below regarding each nominee’s specific experience, qualifications,
attributes and skills that led our Board of Directors to the conclusion that he
should serve as a director, we also believe that all of our directors have a
reputation for integrity, honesty and adherence to high ethical
standards. They each have demonstrated business acumen and an ability
to exercise sound judgment, as well as a commitment to service to the Company
and our Board.
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Name
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Age
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Position
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Dominic
J. Monetta
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69
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Director
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Kevin
J. Zugibe
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46
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Director,
Chairman, Chief Executive
Officer
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Dominic J. Monetta, DPA, has
been a Director of the Company since 1996. Since August 1993, Dr.
Monetta has been the President of Resource Alternatives, Inc., a corporate
development firm concentrating on solving management and technological issues
facing chief executive officers and their senior executives. From
1991 to 1993, Dr. Monetta served as the Director of Defense Research and
Engineering for Research and Advanced Technology, United States Department of
Defense. From 1989 to 1991, Dr. Monetta served as the Director of the
Office of New Production Reactors, United States Department of Energy. We
believe that Mr. Monetta’s qualifications to sit on our Board include his
engineering and other experience obtained as a past director for the US
Department of Energy and Defense, his 16 years of experience in the air
conditioning and refrigeration industry by virtue of his service on our Board
including his membership on the Company’s Audit Committee for three
years.
Kevin J. Zugibe,
P.E., a founder of the
Company, has been Chairman of the Board and Chief Executive Officer of the
Company since its inception in 1991. From 1987 to 1994, Mr. Zugibe
was employed as a power engineer with Orange and Rockland Utilities, Inc., a
major public utility, where he was responsible for all HVAC
applications. Mr. Zugibe is a licensed professional engineer, and
from 1990 to 1994, he was also a member of Kevin J. Zugibe & Associates, a
professional engineering firm. We believe Mr. Zugibe’s qualifications to sit on
our Board include his 25 years of experience in the air conditioning and
refrigeration industry including as our founder, our Chairman and Chief
Executive Officer for 19 years. Mr. Zugibe is the brother-in-law of
Stephen P. Mandracchia.
The
following is information with respect to the directors whose terms of office
expire at the Annual Meeting of Shareholders to be held in the year
2011:
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Name
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Age
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Position(s) with the
Company
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Vincent
P. Abbatecola
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64
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Director
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Brian
F. Coleman
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48
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President
and Chief Operating Officer
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Otto
C. Morch
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76
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Director
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Vincent P. Abbatecola has
been a Director of the Company since 1994. Mr. Abbatecola is Vice
President of Abbey Ice & Spring Water, Spring Valley, New York, where he has
been employed since 1971. Mr. Abbatecola is a former Trustee of Nyack
Hospital. He also serves on the Rockland County Board of Governors
and St. Thomas Aquinas College President’s Council. We believe that Mr.
Abbatecola’s qualifications to sit on our Board include his business experience
obtained as Vice President of Abbey Ice and Spring Water Company, his 16 years
of experience in the air conditioning and refrigeration industry by virtue of
his service on our Board including as Chairman of the Company’s Audit Committee
for 16 years.
Brian F. Coleman, has been
President and Chief Operating Officer of the Company since August, 2001 and
served as Chief Financial Officer of the Company from 1997 until December
2002. From 1987 to 1997, Mr. Coleman was employed by, and from 1995,
was a partner with BDO USA, LLP (formerly, BDO Seidman, LLP), the Company's
independent auditors. We believe Mr. Coleman’s qualifications to sit on our
Board include his prior financial and accounting experience obtained as a
partner with BDO USA, LLP, his 15 years of experience in the air conditioning
and refrigeration industry including as our President and Chief Operating
Officer for the past 9 years.
Otto C.
Morch has been a Director
of the Company since 1996. Mr. Morch was a Senior Vice President of
Commercial Banking at Provident Savings Bank, F.A. for more than five years
until his retirement in 1997. We believe that Mr. Morch’s
qualifications to sit on our Board include his financial and other experience
obtained as a Senior Vice President at Provident Savings Bank, F.A., his 16
years of experience in the air conditioning and refrigeration industry by virtue
of his service on our Board including his membership on the Company’s Audit
Committee for 16 years.
The Board
has determined that each of Messrs. Abbatecola, Monetta and Morch is an
“independent director” within the meaning of NASDAQ Listing Rule
5605(a)(2).
Board
Meetings
A total
of twelve meetings of the Board were held during the fiscal year
ended December 31, 2009 (“Fiscal 2009”). During Fiscal 2009 no
director attended fewer than 75 percent of the aggregate of (1) the Board
meetings that were held, and (2) the meetings held by the committees of the
Board on which he served.
Committees
of the Board of Directors
The Board
has established a Compensation and Stock Option Committee, which is responsible
for recommending to the independent directors the compensation of the Company's
executive officers and for the administration of the Company's employee benefit
plans. The Compensation and Stock Option Committee is also
responsible for recommending to the directors the compensation of the Company’s
directors. Determination of the compensation of the executive
officers is made by vote of the independent directors, and the determination of
the compensation of directors is made by vote of all directors. The
executive officers do not determine executive or director compensation, but
provide information and recommendations to the Compensation and Stock Option
Committee upon its request. The members of the Compensation and Stock
Option Committee are Messrs. Abbatecola, Coleman and Morch. The
Compensation and Stock Option Committee held two meetings during Fiscal
2009. The Compensation and Stock Option Committee does not have a
charter.
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The Board
also has an Audit Committee which supervises the audit and financial procedures
of the Company and is responsible for the selection of the Company’s independent
registered public accountants. The members of the Audit Committee are
Messrs. Abbatecola, Morch and Monetta. The Board of Directors has
determined that each member of the Audit Committee is an “independent director”
within the meaning of NASDAQ Listing Rule 5605(a)(2) and applicable Securities
and Exchange Commission (“SEC”) rules under the Securities Exchange Act of 1934
(the “Exchange Act”). The Audit Committee does not have a member that
qualifies as a “financial expert” under the federal securities
laws. The members of the Audit Committee have each been active in the
business community and have broad and diverse backgrounds, and financial
experience. Two of the current members have served on the Company’s
Audit Committee and have overseen the financial review by the Company’s
independent auditors for more than ten (10) years. The Company
believes that the current members of the Audit Committee are able to fully and
faithfully perform the functions of the Audit Committee and that the Company
does not need to install a “financial expert” on the Audit
Committee. The Audit Committee held five meetings during Fiscal 2009.
The Audit Committee has adopted a written charter, a copy of which is attached
hereto as Appendix A. The charter is not available on the
Company’s website.
The Board
also has an Executive Committee which is authorized to exercise the powers of
the Board of Directors in the general supervision and control of the business
affairs of the Company during the intervals between meetings of the
Board. The members of the Executive Committee are Messrs. Abbatecola,
Morch and Zugibe.
The Board
also has an Occupational, Safety and Environmental Protection Committee, which
is responsible for satisfying the Board that the Company's Environmental, Health
and Safety policies, plans and procedures are adequate. The members
of the Occupational, Safety and Environmental Protection Committee are Messrs.
Monetta and Zugibe.
The Board has a Nominating Committee
whose members consist of Messrs. Abbatecola, Monetta and Zugibe, and which was
responsible for recommending to the independent directors the nominees for
election to the Board at the annual meeting of the shareholders to be held in
2010. In accordance with NASDAQ Listing Rule 5605(e)(1)(A), the nominees for
director at the Annual Meeting named above were selected as nominees to the
Board by vote of a majority of the independent directors. When
reviewing candidates to our Board, the Nominating Committee and the independent
members of the Board consider the evolving needs of the Board and seek
candidates that fill any current or anticipated future needs. The
Nominating Committee and the independent Board members also believe that all
directors should possess the attributes described below in the last paragraph
under the caption “Consideration of Director Nominees
Recommended by Shareholders.” While neither the Nominating
Committee nor the Board has a formal policy with respect to
diversity, the Nominating Committee and the Board believe that it is
important that the Board members represent diverse
viewpoints. In considering candidates for the Board, the Nominating
Committee and the independent members of the Board consider the entirety of each
candidate’s credentials in the context of these standards. With
respect to the nomination of continuing directors for re-election, the
individual’s contributions to the Board are also
considered.
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Shareholder
nominations for directors of the Company will be considered by the independent
directors subject to the shareholder complying with the procedures described
below. The Nominating Committee held one meeting during Fiscal 2009. The
Nominating Committee does not have a charter.
Board
Leadership Structure
The Board
believes our current leadership structure, where our Chief Executive Officer
also serves as our Chairman of the Board, provides us with the most effective
leadership model by enhancing the Chairman and Chief Executive Officer’s ability
to provide insight and direction of business strategies and plans to both the
Board and our management. The Board believes that a single person, acting in the
capacities of Chairman and Chief Executive Officer, provides us with unified
leadership and focus and that our business strategies are best served if the
Chairman is also a member of our management team. We do not have a
lead independent director; however, our Audit Committee is comprised
solely of independent directors and our Compensation and Stock Option Committee
and Nominating Committee are comprised of a majority of independent directors.
We believe the composition of these three Board committees, the fact that
our independent directors determine Board nominees and the compensation of our
executive officers, as well as the practice of our independent
directors to meet in executive session without our Chief Executive
Officer and the other members of our management present, helps ensures that our
Board maintains a level of independent oversight of management that is
appropriate for our Company.
Risk
Management
The Board has an active
role, as a whole and also at the committee level, in overseeing management of
the Company’s risks. The Board regularly reviews information regarding the
Company’s credit, liquidity and operations, as well as the risks associated with
each. The Company’s Compensation and Stock Option Committee is responsible for
overseeing the management of risks relating to the Company’s executive
compensation plans and arrangements. The Audit Committee oversees management of
financial risks and potential conflicts of interest with related parties. The
Nominating Committee manages risks associated with the independence of the Board
of Directors. While each committee is responsible for evaluating certain
risks and overseeing the management of such risks, the entire Board of Directors
is regularly informed through committee reports, or otherwise, about such
risks.
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Audit
Committee Report
The Audit
Committee held five meetings during Fiscal 2009. In December 2009,
the Audit Committee met with management to review and discuss the audit and the
procedures and timing of the audit. In March 2010, the Audit
Committee met with management to review and discuss the audited financial
statements. The Audit Committee also discussed with the Company’s
independent auditors, BDO USA, LLP (formerly, BDO Seidman, LLP) the matters
required to be discussed by the Statement on Auditing Standards No. 61, as
amended, as adopted by the Public Accounting Oversight Board. The
Audit Committee has received the written disclosures and confirming letter from
BDO USA, LLP required by the applicable requirements of the Public Accounting
Oversight Board regarding its independence and has discussed with BDO USA, LLP
its independence from the Company. Based upon the review and
discussions referred to above, the Audit Committee ratified its prior
recommendation to the Board of Directors that the audited financial statements
be included in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2009.
The Audit
Committee-
Vincent
Abbatecola, Otto Morch and Dominic Monetta.
Code
of Conduct and Ethics
The
Company has adopted a written code of conduct and ethics that applies to all
directors, and employees, including the Company's principal executive officer,
principal financial officer, principal accounting officer or controller and
any persons performing similar functions. The Company
will provide a copy of its code of conduct and ethics to any person without
charge upon written request addressed to Hudson Technologies, Inc., PO Box 1541,
One Blue Hill Plaza, Pearl River, New York 10965, Attention: Stephen P.
Mandracchia.
Executive
Officers
In
addition to Kevin J. Zugibe and Brian Coleman, Messrs. James R. Buscemi, Charles
F. Harkins, Jr. and Stephen P. Mandracchia serve as executive officers of the
Company. Executive officers are elected annually and serve at the
pleasure of the Board. The following is information with respect to
such executive officers:
James R. Buscemi, age 57, has been Chief Financial
Officer of the Company since December 2002 and prior to that time served as
Corporate Controller since joining the Company in 1998. Prior to
joining the Company, Mr. Buscemi held various financial positions within Avnet,
Inc, including Chief Financial Officer of Avnet's electric motors and component
part subsidiary, Brownell Electro, Inc.
Charles F. Harkins, Jr., age
48, has been Vice
President of Sales of the Company since December 2003. Mr. Harkins
has served in a variety of capacities since joining the Company in
1992. Prior to joining the Company, Mr. Harkins served in the U.S.
Army for 13 years attaining the rank of Staff Sergeant; he is a graduate of the
U.S. Army Engineering School and the U.S. Army Chemical School.
Stephen P. Mandracchia, age
50, a founder of the Company, has been Vice President Legal and Regulatory of
the Company since August 2003 and has been Secretary of the Company since
1995. Mr. Mandracchia has served in a variety of capacities with the
Company since 1993. Mr. Mandracchia was a member of the law firm of
Martin, Vandewalle, Donohue, Mandracchia & McGahan in Great Neck, New York
until 1995 (having been associated with such firm since 1983). Mr.
Mandracchia is the brother in-law of Mr. Zugibe.
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COMMUNICATIONS
WITH THE BOARD
The Board
of Directors has established a process for shareholders to send communications
to the Board of Directors. Shareholders may communicate with the
Board of Directors individually or as a group by writing to: The Board of
Directors of Hudson Technologies, Inc. c/o Corporate Secretary, PO Box 1541, One
Blue Hill Plaza, Pearl River, NY 10965. Shareholders
should identify their communication as being from a shareholder of the
Company. The Corporate Secretary may require reasonable evidence that
the communication or other submission is made by a shareholder of the Company
before transmitting the communication to the Board of Directors.
BOARD
ATTENDANCE AT ANNUAL SHAREHOLDER MEETINGS
We have a
policy that strongly encourages directors to attend our Annual Meeting of
Shareholders. Last year’s Annual Meeting of Shareholders was attended
by all five of our directors.
CONSIDERATION
OF DIRECTOR NOMINEES RECOMMENDED BY SHAREHOLDERS
Shareholders
of Hudson wishing to recommend director candidates to the Board must submit
their recommendations in writing to the independent directors of the Board, c/o
Corporate Secretary, Hudson Technologies, Inc., PO Box 1541, One Blue Hill
Plaza, Pearl River, NY 10965.
The
independent directors of the Board will consider nominees recommended by
Hudson’s shareholders provided that the recommendation contains sufficient
information for the independent directors to assess the suitability of the
candidate, including the candidate’s qualifications. Candidates
recommended by shareholders that comply with these procedures will be considered
either solely by Hudson’s independent directors, or by a nominating committee of
the Board that is comprised solely of the Hudson’s independent directors, if
such committee exists at the time. The recommendations must also state the name
of the shareholder who is submitting the recommendation. In addition,
it must include information regarding the recommended candidate relevant to a
determination of whether the recommended candidate would be barred from being
considered independent under NASDAQ Listing Rule 5605(a)(2), or, alternatively,
a statement that the recommended candidate would not be so
barred. Each nomination is also required to set forth: (i)
a representation that the shareholder making the nomination is a holder of
record of capital stock of Hudson entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to vote for the person or persons
nominated; (ii) a description of all arrangements and understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination was made by the shareholder; (iii)
such other information regarding each nominee proposed by such shareholder as
would be required to be included in a proxy statement filed pursuant to the
proxy rules of the SEC had the nominee been nominated by the Board of Directors;
(iv) and the consent of each nominee to serve as a director of Hudson if so
elected. A nomination which does not comply with the above
requirements or that is not received by the deadline referred to below will not
be considered.
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The qualities and skills sought in
prospective members of the Board are determined by the Board. The
Board generally requires that director candidates be qualified individuals who,
if added to the Board, would provide the mix of director characteristics,
experience, perspectives and skills appropriate for Hudson. Criteria
for selection of candidates will include, but not be limited to: (i)
business and financial acumen, as determined by the Board in its discretion,
(ii) qualities reflecting a proven record of accomplishment and ability to work
with others, (iii) knowledge of Hudson’s industry, (iv) relevant experience and
knowledge of corporate governance practices, and (v) expertise in an area
relevant to Hudson. Such persons should not have commitments that
would conflict with the time commitments of a Director of Hudson.
DEADLINE
AND PROCEDURES FOR SUBMITTING BOARD NOMINATIONS
A shareholder wishing to nominate a
candidate for election to the Board at the Annual Meeting of Shareholders to be
held in 2011, which we currently anticipate will be held in or about July 2011,
is required to give written notice containing the required information specified
above addressed to the Independent Directors of the Board, c/o Secretary of the
Company, Hudson Technologies, Inc., PO Box 1541, One Blue Hill Plaza, Pearl
River, NY 10965 of his or her intention to make such a
nomination. The notice of nomination and other required information
must be received by the Company’s Secretary no later than January 31,
2011.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires the Company's officers and directors and
persons who own more than 10% of a registered class of the Company's equity
securities (collectively, the "Reporting Persons") to file reports of ownership
and changes in ownership with the SEC. Reporting Persons are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Based
solely on the Company's review of the copies of such forms received by the
Company, the Company believes that during and for the year ended December 31,
2009 all filing requirements applicable to the Reporting Persons were complied
with except for one late filing in connection with a stock option exercise by
Mr. Morch.
- 9
-
EXECUTIVE
COMPENSATION
The
following table discloses, for the years indicated, the compensation for our
Chief Executive Officer and for our two most highly compensated executive
officers, other than the Chief Executive Officer, who were serving as executive
officers at the end of the year ended December 31, 2009 and whose total
compensation during the year ended December 31, 2009 exceeded $100,000 (the
“Named Executives”).
SUMMARY
COMPENSATION TABLE
|
Name and
Principal
Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option Awards
(1)
|
Non-Equity
Incentive Plan
Compensation
|
Non-qualified
Deferred
Compen-sation
Earnings
|
All Other
Compen-sation
|
Total
|
||||||||||||||||||||||||||
|
Kevin
J. Zugibe, Chairman, Chief Executive Officer (3)
|
2009
2008
|
$
$
|
189,131
198,021
|
$
$
|
—
—
|
$
$
|
—
—
|
$
$
|
44,437
—
|
$
$
|
—
170,000
|
(2)
|
$
$
|
—
—
|
$
$
|
—
—
|
$
$
|
233,568
368,021
|
|||||||||||||||||
|
Brian
F. Coleman, President, Chief Operating Officer, Director
(3)
|
2009
2008
|
$
$
|
167,440
175,377
|
$
$
|
—
—
|
$
$
|
—
—
|
$
$
|
42,728
—
|
$
$
|
—
160,000
|
(2)
|
$
$
|
—
—
|
$
$
|
—
—
|
$
$
|
210,168
335,377
|
|||||||||||||||||
|
Charles
F. Harkins, Jr., Vice President Sales
|
2009
2008
|
$
$
|
156,629
164,019
|
$
$
|
—
—
|
$
$
|
—
—
|
$
$
|
41,018
—
|
$
$
|
—
150,000
|
(2)
|
$
$
|
—
—
|
$
$
|
—
—
|
$
$
|
197,647
314,019
|
|||||||||||||||||
(1) We
utilize the grant date estimated fair value for valuing stock option awards (see
Note 10 to the Notes to the Consolidated Financial Statements included in our
Form 10-K for the year ended December 31, 2009).
(2)
Non-Equity Incentive Plan Compensation was earned in 2008 and paid in
2009.
(3)
Messrs. Coleman and Zugibe did not receive any compensation for
services as a director during the years ended December 31, 2009 and December 31,
2008.
- 10
-
Narrative
Disclosure to Summary Compensation Table
On December 17, 2009, each of the Named
Executives received employee stock options to purchase shares of the Company’s
common stock, which options were issued under one of the Company’s existing
stock incentive plans. The amount of the options, awarded to each
Named Executive was approved by our Board of Directors. See “Stock
Option Grants or Stock Awards”.
For the fiscal year 2008, each of the
Named Executives received Non-Equity Incentive Plan Compensation that was paid
out of a bonus pool established by our Board of Directors on January 8,
2008. The amount of the bonus pool was not initially established, but
was based upon our achieving earnings for the fiscal year 2008 in excess of a
pre-determined level for fiscal year 2008, with a maximum bonus pool of
$400,000. On February 26, 2009 our Board of Directors increased the
fiscal year 2008 cash bonus pool and approved the payment of Non-Equity
Incentive Plan Compensation to the Named Executives. The amount of
the Non-Equity Incentive Plan Compensation awarded to each Named Executive was
determined in the discretion of our Board of Directors based upon our overall
2008 financial results as well as on the personal performance of the Named
Executive during 2008.
Employment,
Termination, Change of Control and other Agreements
Kevin J.
Zugibe. On October 10, 2006, we entered into an Amended and
Restated Employment Agreement with Kevin J. Zugibe, which currently expires in
October 2010 and is automatically renewable for successive two year terms unless
either party gives notice of termination at least ninety days prior to the
expiration date of the then current term. Pursuant to the agreement,
as amended by the First Amendment to Restated Employment Agreement dated
December 29, 2008, Mr. Zugibe is receiving an annual base salary of $192,800
with such increases and bonuses as our board of directors may
determine. The agreement provides, in the event of Mr. Zugibe's
disability, for the continuation of at least 75% of Mr. Zugibe's salary for up
to one hundred twenty days after the commencement of his
disability. Mr. Zugibe is also entitled to take up to four
weeks of vacation, excluding paid holidays.
As part of the agreement, Mr. Zugibe
has agreed to certain covenants and restrictions, which include an agreement
that Mr. Zugibe will not compete with us in specified geographic areas for a
period of twenty-four months after his termination for any
reason. The agreement also provides that, in the event of
his involuntary separation from Hudson without cause, or in the event of his
voluntary separation for a good reason as enumerated in the agreement, Mr.
Zugibe will receive severance payments, in the form of the continuation of his
annual base salary and benefits for a period of twenty-four months, and a lump
sum payment equivalent to the highest bonus paid to Mr. Zugibe in the three
years prior to his termination, pro-rated to the date of his
termination. We are the beneficiary of a “key-man” insurance policy
on the life of Mr. Zugibe in the amount of $1,000,000.
- 11
-
Brian F.
Coleman. On October 10, 2006, we entered into an agreement
with Brian F. Coleman, pursuant to which, as amended, Mr. Coleman has agreed to
certain covenants and restrictions, which include an agreement that Mr. Coleman
will not compete with us in specified geographic areas for a period of eighteen
months after his termination for any reason. The agreement provides, in the
event of his disability, for the continuation of at least 75% of his salary for
up to one hundred twenty days after the commencement of his
disability. The agreement also provides that, in the event of
his involuntary separation without cause, or in the event of his voluntary
separation for a good reason as enumerated in the agreement, Mr. Coleman will
receive severance payments, in the form of the continuation of his annual base
salary and benefits for a period of eighteen months, and a lump sum payment
equivalent to the highest bonus paid to him in the three years prior to his
termination, pro-rated to the date of his termination.
Charles F.
Harkins. On October 10, 2006, we entered into an agreement
with Charles F. Harkins, pursuant to which, as amended, Mr. Harkins has agreed
to certain covenants and restrictions, which include an agreement that Mr.
Harkins will not compete with us in specified geographic areas for a period of
eighteen months after his termination for any reason. The agreement
provides, in the event of his disability, for the continuation of at least 75%
of his salary for up to one hundred twenty days after the commencement of his
disability. The agreement also provides that in the event of his
involuntary separation without cause, or in the event of his voluntary
separation for a good reason as enumerated in the agreement, Mr. Harkins will
receive severance payments, in the form of the continuation of his annual base
salary and benefits for a period of eighteen months, and a lump sum payment
equivalent to the highest bonus paid to him in the three years prior to his
termination, pro-rated to the date of his termination.
Stock
Options Grants or Stock Awards to the Named Executives
Kevin J.
Zugibe. On December 17, 2009, pursuant to our 2008 Stock
Incentive Plan, Mr. Zugibe was granted options to purchase 78,000 shares of
common stock at an exercise price of $1.26 per share. These options
expire on December 17, 2019 and became exercisable and vested immediately upon
issuance.
Brian F.
Coleman. On December 17, 2009, pursuant to our 2008
Stock Incentive Plan, Mr. Coleman was granted options to purchase 75,000 shares
of common stock at an exercise price of $1.26 per share. These
options expire on December 17, 2019 and became exercisable and vested
immediately upon issuance.
Charles F.
Harkins. On December 17, 2009, pursuant to our 2004 Stock
Incentive Plan, Mr. Harkins was granted options to purchase 72,000 shares of
common stock at an exercise price of $1.26 per share. These options
expire on December 17, 2019 and became exercisable and vested immediately upon
issuance.
- 12
-
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following table discloses the outstanding option awards held by the Named
Executives as of December 31, 2009. No options were exercised by the
Named Executives during the fiscal year ended December 31, 2009. No
stock awards have been issued to the Named Executives.
|
Name
|
Number of Securities
Underlying Unexercised
Options (#) Exercisable
|
Option Exercise
Price ($)
|
Option Expiration Date
|
||||||
|
Kevin
J. Zugibe, Chairman,
Chief
Executive Officer
|
|||||||||
| 87,500 | $ | 1.13 |
3/5/2014
|
||||||
| 193,750 | $ | 1.15 |
3/31/2014
|
||||||
| 18,750 | $ | 0.83 |
9/17/2014
|
||||||
| 18,750 | $ | 0.95 |
10/1/2014
|
||||||
| 93,750 | $ | 1.02 |
1/3/2015
|
||||||
| 18,750 | $ | 0.87 |
4/1/2015
|
||||||
| 18,750 | $ | 0.83 |
7/8/2015
|
||||||
| 18,750 | $ | 2.15 |
9/30/2015
|
||||||
| 123,750 | $ | 1.76 |
12/29/2015
|
||||||
| 35,000 | $ | 1.40 |
3/31/2016
|
||||||
| 9,300 | $ | 1.02 |
10/10/2016
|
||||||
| 195,000 | $ | 0.85 |
11/20/2017
|
||||||
| 78,000 | $ | 1.26 |
12/17/2019
|
||||||
|
Brian
F. Coleman, President,
Chief
Operating Officer
|
|||||||||
| 75,000 | $ | 1.13 |
3/5/2014
|
||||||
| 18,750 | $ | 1.15 |
3/31/2014
|
||||||
| 12,500 | $ | 0.83 |
9/17/2014
|
||||||
| 12,500 | $ | 0.95 |
10/1/2014
|
||||||
| 62,500 | $ | 1.02 |
1/3/2015
|
||||||
| 12,500 | $ | 0.87 |
4/1/2015
|
||||||
| 12,500 | $ | 0.83 |
7/8/2015
|
||||||
| 12,500 | $ | 2.15 |
9/30/2015
|
||||||
| 82,500 | $ | 1.76 |
12/29/2015
|
||||||
| 32,500 | $ | 1.40 |
3/31/2016
|
||||||
| 8,100 | $ | 1.02 |
10/10/2016
|
||||||
| 180,000 | $ | 0.85 |
11/20/2017
|
||||||
| 75,000 | $ | 1.26 |
12/17/2019
|
||||||
- 13
-
|
Name
|
Number of Securities
Underlying Unexercised
Options (#) Exercisable
|
Option Exercise
Price ($)
|
Option Expiration Date
|
||||||
|
Charles
F. Harkins, Jr.,
Vice
President Sales
|
|||||||||
| 13,114 | $ | 1.13 |
3/5/2014
|
||||||
| 14,063 | $ | 1.15 |
3/31/2014
|
||||||
| 9,375 | $ | 2.15 |
9/30/2015
|
||||||
| 61,875 | $ | 1.76 |
12/29/2015
|
||||||
| 23,125 | $ | 1.40 |
3/31/2016
|
||||||
| 7,900 | $ | 1.02 |
10/10/2016
|
||||||
| 150,000 | $ | 0.85 |
11/20/2017
|
||||||
| 72,000 | $ | 1.26 |
12/17/2019
|
||||||
Stock
Option Plans
1994
Stock Option Plan
We
adopted an Employee Stock Option Plan (the “1994 Plan”) effective October 31,
1994 pursuant to which 725,000 shares of our common stock were reserved for
issuance upon the exercise of options designated as either (i) options intended
to constitute incentive stock options (“ISOs”) under the Internal Revenue Code
of 1986, as amended (the “Code”), or (ii) nonqualified options. ISOs
could be granted under the 1994 Plan to our employees and
officers. Non-qualified options could be granted to consultants,
directors (whether or not they are employees), our employees or
officers. Effective November 1, 2004, our ability to grant options
under the 1994 Plan expired.
All
options granted under the 1994 Plan are not transferable during an optionee's
lifetime but are transferable at death by will or by the laws of descent and
distribution. In general, upon termination of employment of an
optionee, all options granted to such person that are not exercisable on the
date of such termination immediately terminate, and any options that are
exercisable terminate 90 days following termination of employment.
As of
December 31, 2009, we had options outstanding to purchase 59,364 shares of our
common stock under the 1994 Plan.
1997
Stock Option Plan
We
adopted the 1997 Stock Option Plan (the “1997 Plan”) effective June 11, 1997
pursuant to which 2,000,000 shares of our common stock were reserved for
issuance upon the exercise of options designated as either (i) ISOs under the
Code, or (ii) nonqualified options. ISOs could be granted under the
1997 Plan to our employees and officers. Non-qualified options could
be granted to consultants, directors (whether or not they are employees), our
employees or officers. Stock appreciation rights could also be issued
in tandem with stock options. Effective June 11, 2007 our ability to
grant options under the 1997 Plan expired.
- 14
-
All
options granted under the 1997 Plan are not transferable during an optionee's
lifetime but are transferable at death by will or by the laws of descent and
distribution. In general, upon termination of employment of an
optionee, all options granted to such person that are not exercisable on the
date of such termination immediately terminate, and any options that are
exercisable terminate 90 days following termination of employment.
As of December 31, 2009, we had options
outstanding to purchase 817,678 shares of our common stock under the 1997
Plan.
2004
Stock Incentive Plan
We have
adopted the 2004 Stock Incentive Plan (the “2004 Plan”), pursuant to which
2,500,000 shares of our common stock are currently reserved for issuance upon
the exercise of options, designated as either (i) ISOs, under the Code or (ii)
non-qualified options, or for issuance upon the granting of restricted stock,
deferred stock or other stock-based awards. ISOs may be granted under
the 2004 Plan to employees and officers of Hudson. Non-qualified
options, restricted stock, deferred stock or other stock-based awards may be
granted to consultants, directors (whether or not they are employees), employees
or officers of Hudson. Stock appreciation rights may also be issued
in tandem with stock options.
The 2004
Plan is intended to qualify under Rule 16b-3 under the Exchange Act and is
administered by our Compensation/Stock Option Committee of the Board of
Directors. The Committee, within the limitations of the 2004 Plan,
determines the persons to whom options will be granted, the number of shares to
be covered by each option, whether the options granted are intended to be ISOs,
the duration and rate of exercise of each option, the exercise price per share
and the manner of exercise and the time, manner and form of payment upon
exercise of an option. In the case of restricted stock, deferred
stock or other stock-based awards, the Committee, within the limitations of the
2004 Plan, determines the persons to whom awards will be granted, the number of
shares of stock subject to the award, and the restrictions on issuance and
transfer of such shares. Unless the 2004 Plan is sooner terminated,
the ability to grant options or other awards under the 2004 Plan will expire on
September 10, 2014.
ISOs
granted under the 2004 Plan may not be granted at a price less than the fair
market value of our common stock on the date of grant (or 110% of fair market
value in the case of ISO’s granted to a 10% shareholder). In the case
of ISOs, the aggregate fair market value of shares for which ISOs granted to any
employee are exercisable for the first time by such employee during any calendar
year (under all of our stock option plans) may not exceed
$100,000. Non-qualified options granted under the 2004 Plan may not
be granted at a price less than the fair market value of our common
stock. Options granted under the 2004 Plan will expire not more than
ten years from the date of grant (five years in the case of ISOs granted to a
10% shareholder). Except as otherwise provided by the Committee with
respect to non-qualified options, all options, restricted stock, deferred stock
or other stock-based awards granted under the 2004 Plan are not transferable
during an grantee’s lifetime but are transferable at death by will or by the
laws of descent and distribution. In general, upon termination of
employment of a grantee, all options, restricted stock, deferred stock or other
stock-based awards granted to such person which are not exercisable on the date
of such termination immediately terminate, and any options that are exercisable
terminate 90 days following termination of employment.
- 15
-
As of
December 31, 2009, we had options outstanding to purchase 2,306,301 shares of
common stock and 20,000 shares reserved for future issuances under the 2004
Plan.
2008
Stock Incentive Plan
We have
adopted the 2008 Stock Incentive Plan (the “2008 Plan”), pursuant to which
3,000,000 shares of our common stock are currently reserved for issuance upon
the exercise of options, designated as either (i) ISOs, under the Code or (ii)
non-qualified options, or for issuance upon the granting of restricted stock,
deferred stock or other stock-based awards. ISOs may be granted under
the 2008 Plan to employees and officers of Hudson. Non-qualified
options, restricted stock, deferred stock or other stock-based awards may be
granted to consultants, directors (whether or not they are employees), employees
or officers of Hudson. Stock appreciation rights may also be issued
in tandem with stock options.
The 2008
Plan is intended to qualify under Rule 16b-3 under the Exchange Act and is
administered by our Compensation/Stock Option Committee of the Board of
Directors. The Committee, within the limitations of the 2008 Plan,
determines the persons to whom options will be granted, the number of shares to
be covered by each option, whether the options granted are intended to be ISOs,
the duration and rate of exercise of each option, the exercise price per share
and the manner of exercise and the time, manner and form of payment upon
exercise of an option. In the case of restricted stock, deferred
stock or other stock-based awards, the Committee, within the limitations of the
2008 Plan, determines the persons to whom awards will be granted, the number of
shares of stock subject to the award, and the restrictions on issuance and
transfer of such shares. Unless the 2008 Plan is sooner terminated,
the ability to grant options or other awards under the 2008 Plan will expire on
June 19, 2018.
ISOs
granted under the 2008 Plan may not be granted at a price less than the fair
market value of our common stock on the date of grant (or 110% of fair market
value in the case of ISO’s granted to a 10% shareholder). In the case
of ISOs, the aggregate fair market value of shares for which ISOs granted to any
employee are exercisable for the first time by such employee during any calendar
year (under all of our stock option plans) may not exceed
$100,000. Non-qualified options granted under the 2008 Plan may not
be granted at a price less than the fair market value of our common
stock. Options granted under the 2008 Plan will expire not more than
ten years from the date of grant (five years in the case of ISOs granted to a
10% shareholder). Except as otherwise provided by the Committee with
respect to non-qualified options, all options, restricted stock, deferred stock
or other stock-based awards granted under the 2008 Plan are not transferable
during an grantee’s lifetime but are transferable at death by will or by the
laws of descent and distribution. In general, upon termination of
employment of a grantee, all options, restricted stock, deferred stock or other
stock-based awards granted to such person which are not exercisable on the date
of such termination immediately terminate, and any options that are exercisable
terminate 90 days following termination of employment.
- 16
-
As of
December 31, 2009, we had options outstanding to purchase 211,000 shares of
common stock and 2,789,000 shares reserved for issuance of future awards under
the 2008 Plan.
Compensation
of Directors
Commencing
January 1, 2010, non-employee directors receive an annual fee of $10,000 and
receive reimbursement for out-of-pocket expenses incurred for attendance at
meetings of the Board of Directors and Board Committee meetings. In
2009, non-employee directors each received an annual fee of $7,000 and
reimbursement for out-of-pocket expenses incurred for attendance at meetings of
the Board of Directors and Board committee meetings. The Chairman of
the Audit Committee of our Board received additional compensation in 2009 of
$2,000, and each independent member of our Audit Committee (excluding the
Chairman) received additional compensation in 2009 of $1,000. The
following table discloses the compensation of the non-employee directors who
served as our directors during the year ended December 31, 2009. We
reimburse each of our non-employee directors for their reasonable expenses
incurred in connection with attending meetings of our board of directors and
related committees.
DIRECTOR
COMPENSATION
|
Name
|
Fees earned or
paid in cash($)(1)
|
Stock
Awards
|
Option
Awards(2)
|
Non-Equity
Incentive Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
|
Total
|
|||||||||||||||||||||
|
Vincent
P. Abbatecola (3)
|
$ | 9,000 | — | $ | 22,000 | — | — | — | $ | 31,000 | ||||||||||||||||||
|
Dominic
J. Monetta (3)
|
$ | 8,000 | — | $ | 22,000 | — | — | — | $ | 30,000 | ||||||||||||||||||
|
Otto
C. Morch (3)
|
$ | 8,000 | — | $ | 22,000 | — | — | — | $ | 30,000 | ||||||||||||||||||
|
(1)
|
Excludes
compensation for Board and committees participation earned in 2009 and
paid in 2010.
|
(2) We utilize the grant date estimated
fair value for valuing stock option awards (see Note 10 to the Notes to the
Consolidated Financial Statements included in our Form 10-K for the year ended
December 31, 2009).
(3) As
of December 31, 2009, Mr. Abbatecola has options to purchase 80,000 shares of
Common Stock outstanding, Mr. Morch has options to purchase 72,500 shares of
Common Stock outstanding, and Mr. Monetta has options to purchase 40,000 shares
of Common Stock outstanding..
- 17
-
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth
information as of the Record Date based on information obtained from the persons
named below, with respect to the beneficial ownership of our Common Stock by (i)
each person known by us to be the beneficial owner of more than 5% of our
outstanding Common Stock, (ii) the Named Executives, (iii) each or our
directors, and (iv) all of our directors and executive officers as a
group:
BENEFICIAL
OWNERSHIP TABLE
|
Title of Class
|
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership (1)
|
Percent of Class
|
||||||||
|
Common
Stock
|
Kevin
J. Zugibe
|
5,636,705 | (2 | ) | 25.80 | % | |||||
|
Common
Stock
|
Brian
F. Coleman
|
947,176 | (3 | ) | 4.40 | % | |||||
|
Common
Stock
|
Charles
F. Harkins
|
280,052 | (4 | ) | 1.65 | % | |||||
|
Common
Stock
|
Stephen
P. Mandracchia
|
2,365,695 | (5 | ) | 11.26 | % | |||||
|
Common
Stock
|
Vincent
P. Abbatecola
|
114,500 | (6 | ) | * | ||||||
|
Common
Stock
|
Dominic
J. Monetta
|
160,100 | (7 | ) | * | ||||||
|
Common
Stock
|
Otto
C. Morch
|
92,509 | (8 | ) | * | ||||||
|
Common
Stock
|
Marathon
Capital Management LLC
|
1,599,500 | (9 | ) | 7.6 | % | |||||
|
Common
Stock
|
All
directors and executive officers as a group (Eight
Persons)
|
10,175,507 | (7 | ) | 43.47 | % | |||||
* Less
than 1%
(1) A
person is deemed to be the beneficial owner of securities that can be acquired
by such person within 60 days from the Record Date. Each beneficial
owner's percentage ownership is determined by assuming that options and warrants
that are held by such person (but not held by any other person) and which are
exercisable within 60 days from the Record Date have been
exercised. Unless otherwise noted, Hudson believes that all persons
named in the table have sole voting and investment power with respect to all
shares of our Common Stock beneficially owned by them. The address for each
beneficial owner, unless otherwise noted, is c/o Hudson Technologies, Inc. at PO
Box 1541, One Blue Hill Plaza, Pearl River, New York 10965.
(2)
Includes (i) 87,500 shares which may be purchased at $1.13 per share; (ii)
193,750 shares which may be purchased at $1.15 per share; (iii) 37,500 shares
which may be purchased at $.83 per share; (iv) 18,750 shares which may be
purchased at $.95 per share; (v) 93,750 shares which may be purchased at $1.02
per share; (vi) 18,750 shares which may be purchased at $.87 per share; (vii)
18,750 shares which may be purchased at $2.15 per share; (viii) 123,750 shares
which may be purchased at $1.76 per share; (ix) 35,000 shares which may be
purchased at $1.40 per share; (x) 9,300 shares which may be purchased at $1.02
per share, (xi) 195,000 shares that may be purchased at $0.85 per share; and
(xii) 78,000 shares which may be purchased at $1.26 per share, under immediately
exercisable options.
- 18
-
(3)
Includes (i) 75,000 shares which may be purchased at $1.13 per share;
(ii) 18,750 shares which may be purchased at $1.15 per share; (iii) 25,000
shares which may be purchased at $.83 per share; (iv) 12,500 shares which may be
purchased at $.95 per share; (v) 62,500 shares which may be purchased at $1.02
per share; (vi) 12,500 shares which may be purchased at $.87 per share; (vii)
12,500 shares which may be purchased at $2.15 per share; (viii) 82,500 shares
which may be purchased at $1.76 per share; (ix) 32,500 shares which may be
purchased at $1.40 per share; (x) 8,100 shares which may be purchased at $1.02
per share, (xi) 180,000 shares which may be purchased at $0.85 per share; and
(xii) 75,000 shares which may be purchased at $1.26 per share, under immediately
exercisable options.
(4)
Includes (i) 13,114 shares which may be purchased at $1.13 per share; (ii)
14,063 shares which may be purchased at $1.15 per share; (iii) 9,375 shares
which may be purchased at $2.15 per share; (iv) 61,875 shares which may be
purchased at $1.76 per share; (v) 23,125 shares which may be purchased at $1.40
per share; (vi) 7,900 shares which may be purchased at $1.02, (vii) 78,600 which
may be purchased at $0.85 per share; and (viii)72,000 shares which may be
purchased at $1.26 per share, under immediately exercisable
options.
(5) Includes
(i) 1,548,420 shares held of record in the name of Mr. Mandracchia’s wife,
Theresa Mandracchia, over which Mr. Mandracchia has sole voting power and shared
dispositive power, and (ii) the following shares which may be purchased by Mr.
Mandracchia upon the exercise of options previously granted to
him: (a) 40,000 shares which may be purchased at $1.13 per share; (b)
9,375 shares which may be purchased at $1.15 per share; (c) 12,500 shares which
may be purchased at $.83 per share; (d) 6,250 shares which may be purchased at
$.95 per share; (e) 31,250 shares which may be purchased at $1.02 per share; (f)
6,250 shares which may be purchased at $.87 per share; (g) 6,250 shares which
may be purchased at $2.15 per share; (h) 51,250 shares which may be purchased at
$1.76 per share; (i) 20,750 shares which may be purchased at $1.40 per share;
(j) 7,400 shares which may be purchased at $1.02 per share, (k) 125,000 shares
that may be purchased at $0.85 per share; and (l) 58,000 shares which may be
purchased at $1.26 per share, under immediately exercisable
options.
(6) Includes
(i) 40,000 shares which may be purchased at $0.85 per share, and (ii) 40,000
shares which may be purchased at $1.21 per share, under immediately exercisable
options.
(7) Includes
40,000 shares which may be purchased at $1.21 per share under immediately
exercisable options.
(8)
Includes (i) 2,500 shares, which may be purchased at $1.12 per share; (ii)
20,000 shares which may be purchased at $0.85 per share, and (iii) 40,000 shares
which may be purchased at $1.21 per share, under immediately exercisable
options.
(9)
Represents aggregate amount of beneficially owned common stock as reported in
Schedule 13G filed by Marathon Capital Management, LLC on January 19,
2010. The address of Marathon Capital Management, LLC is 4 North Park
Drive, Suite 106, Hunt Valley, MD 21030.
(10)
Includes exercisable options to purchase 2,629,947 shares of common stock which
may be purchased under immediately exercisable options.
- 19
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
On March 26, 2009, we borrowed
$1,000,000 from Catherine F. Zugibe, the mother of Kevin J. Zugibe, which loan
was evidenced by a Secured Subordinated Promissory Note in the same amount,
which note provided for monthly payments of interest only at the rate of ten
(10%) percent per annum and matured and was payable on September 30,
2009. On September 30, 2009, we made final payment of all amounts
due, inclusive of all principal and interest, under the note issued to Catherine
F. Zugibe.
PROPOSAL
2
RATIFICATION
OF THE APPOINTMENT OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS
BDO USA,
LLP (formerly, BDO Seidman, LLP) has audited and reported upon our financial
statements for our fiscal year ended December 31, 2009. The Audit Committee of
the Board of Directors has re-appointed BDO USA, LLP as our independent
registered public accountants for the fiscal year ending December 31, 2010.
Although shareholder approval of the appointment of BDO USA, LLP is not required
by law, the Audit Committee and the Board of Directors believe that it is
advisable to give shareholders an opportunity to ratify this appointment. In
view of the difficulty and expense involved in changing auditors on short
notice, however, should the shareholders not ratify the selection of BDO USA,
LLP, it is contemplated that the appointment of BDO USA, LLP for the fiscal year
ending December 31, 2010 will be permitted to stand unless the Audit
Committee finds other compelling reasons for making a change. Disapproval by the
shareholders will be considered a recommendation that the Audit Committee select
other auditors for the following year. Furthermore, although the
appointment of BDO USA, LLP is being submitted for shareholder ratification, the
Audit Committee reserves the right, even after ratification by shareholders, to
change the appointment of BDO USA, LLP as our independent registered public
accountants, at any time during the 2010 fiscal year, if it deems such change to
be in our best interest. A representative of BDO USA, LLP is expected to be
present at the Annual Meeting with the opportunity to make a statement if he or
she desires to do so and is expected to be available to respond to appropriate
questions.
In
addition to retaining BDO USA, LLP to audit the Company’s financial statements,
we have engaged BDO USA, LLP from time to time to perform other
services. The following sets forth the aggregate fees billed by BDO
USA, LLP to the Company in connection with services rendered during the years
ended December 31, 2009 and December 31, 2008.
Audit Fees. The
aggregate fees billed by BDO USA, LLP for professional services rendered for the
audit of the Company's annual financial statements for the years ended December
31, 2009 and 2008, the review of the financial statements included in the
Company's Forms 10-K for 2009 and Form 10-KSB for 2008 totaled $221,000 and
$209,000, respectively.
- 20
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Audit-Related
Fees. In 2009, the aggregate fees billed by BDO USA, LLP for
assurance and related services that are reasonably related to the performance of
the audit or review of the Company's financial statements was
none. In 2008, the aggregate fees billed by BDO USA, LLP for
professional services rendered for assurance and related services that are
reasonable related to the performance of the audit or review of the Company’s
financial statements totaled $1,000.
Tax Fees. In 2009
and 2008 the aggregate fees billed by BDO USA, LLP for professional services
rendered for tax advice totaled $34,000 and $30,000, respectively.
All Other Fees: In
2008 all other fees billed by BDO USA LLP for professional services rendered
other than the services described in the paragraphs caption “Audit Fees”, “Audit
Related Fees” and “Tax Fees” were $20,000. In 2009, the Company did
not utilize BDO USA, LLP for products and services, other than the services
described in the paragraphs caption “Audit Fees”, “Audit Related Fees” and “Tax
Fees.”
The Audit
Committee has established its pre-approval policies and procedures, pursuant to
which the Audit Committee approved the foregoing audit services provided by BDO
USA, LLP in 2009. Consistent with the Audit Committee's
responsibility for engaging the Company’s independent auditors, all audit and
permitted non-audit services require pre-approval by the Audit
Committee. The full Audit Committee approves proposed services and
fee estimates for these services. The Audit Committee chairperson or
their designee has been designated by the Audit Committee to approve any
services arising during the year that were not pre-approved by the Audit
Committee. Services approved by the Audit Committee chairperson are
communicated to the full Audit Committee at its next regular meeting and the
Audit Committee reviews services and fees for the fiscal year at each such
meeting. Pursuant to these procedures, the Audit Committee approved
the foregoing audit services provided by BDO USA, LLP.
Recommendation
The
Board of Directors recommends that you vote FOR approval of Proposal 2 and the
ratification of the appointment of BDO USA, LLP as our independent registered
public accountants for the fiscal year ending December 31,
2010.
SHAREHOLDER
PROPOSALS
Shareholders
who wish to present proposals appropriate for consideration at the 2010 Annual
Meeting of Shareholders, which the Company currently anticipates will be held in
or about July 2011, must submit the proposal in proper form, and in satisfaction
of the conditions established by the Securities and Exchange Commission, to the
Company at its address set forth on the first page of this proxy statement not
later than January 31, 2011 to be considered for inclusion in the Company's
proxy statement and form of proxy relating to such annual
meeting. Any such proposals, as well as any questions related
thereto, should be directed to the Secretary of the Company.
- 21
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After the
January 31, 2011 deadline, a shareholder may present a proposal at the Company’s
2010 Annual Meeting if it is submitted to the Company’s Secretary at the address
set forth above no later than March 16, 2011. If timely submitted,
the shareholder may present the proposal at the next Annual Meeting, but the
Company is not obligated to include the proposal in its proxy
statement.
OTHER
INFORMATION
Proxies
for the Annual Meeting will be solicited by mail and through brokerage
institutions and all expenses involved, including printing and postage, will be
paid by the Company.
A COPY OF
THE COMPANY'S ANNUAL REPORT ON FORM 10-K, AS AMENDED, FOR THE YEAR ENDED
DECEMBER 31, 2009 IS BEING FURNISHED HEREWITH AS PART OF THE ANNUAL REPORT TO
SHAREHOLDERS TO EACH SHAREHOLDER OF RECORD AS OF THE CLOSE OF BUSINESS ON THE
RECORD DATE.
COPIES OF
EXHIBITS TO SUCH ANNUAL REPORT ON FORM 10-K WILL BE PROVIDED FOR A
NOMINAL CHARGE TO SHAREHOLDERS WHO MAKE A WRITTEN REQUEST TO THE COMPANYAT THE
FOLLOWING ADDRESS:
HUDSON
TECHNOLOGIES, INC.
PO Box
1541, One Blue Hill Plaza
PEARL
RIVER, NEW YORK 10965
ATTENTION:
Stephen P. Mandracchia, Secretary
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING
TO BE HELD ON AUGUST 10, 2010
The Company’s proxy statement, and
Annual Report to Shareholders are available on line at http://hudsontech.investorroom.com.
The Company’s Annual Meeting of
Shareholders will be held on Tuesday, August 10, 2010 at 10:00 A.M., local time
at the Pearl River Hilton, 500 Veterans Memorial Highway, Pearl River, New York
10965. You may obtain directions to the Pearl River Hilton by
contacting the Pearl River Hilton at (845) 735-9005, or by accessing their
website at http://www1.hilton.com/en_US/hi/hotel/PRLBHHF-Hilton-Pearl-River-New-York/directions.do.
The Board
is not aware of any other matters, except for those incident to the conduct of
the Annual Meeting, that are to be presented to shareholders for formal action
at the Annual Meeting. If, however, any other matters properly come
before the Annual Meeting or any adjournments thereof, it is the intention of
the persons named in the proxy included herewith to vote such proxy in
accordance with their judgment.
- 22
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By
order of the Board
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|
|
of
Directors
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|
|
|
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Kevin
J. Zugibe, P.E.
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|
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Chairman
of the Board
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July 13,
2010
- 23
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Appendix
A
HUDSON
TECHNOLOGIES, INC.
AUDIT
COMMITTEE CHARTER
(adopted
September 10, 2004)
Purpose
There
shall be a committee of the board of directors (the "Board") of Hudson
Technologies, Inc. (the “Company”) to be known as the audit
committee. The audit committee’s purpose is to:
(A)
oversee the accounting and financial reporting processes of the Company and the
audits of the financial statements of the Company; and
(B)
prepare an audit committee report as required by the SEC’s rules to be included
in the Company’s annual proxy statements, or, if the Company does not file a
proxy statement, in the Company’s annual report filed on Form 10-KSB with the
SEC.
Composition
The audit
committee shall have at least three (3) members, each of whom must meet the
following conditions: (i) be independent as defined under Rule 4200(a)(15) of
The Nasdaq Stock Market (except as set forth in Rule 4350 (d)(2)(B)); (ii) meet
the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities
Exchange Act of 1934 (subject to the exemptions provided in Rule 10A-3(c));
(iii) not have participated in the preparation of the financial statements of
the Company or any current subsidiary of the Company at any time during the past
three years; and (iv) be able to read and understand fundamental financial
statements, including a Company’s balance sheet, income statement, and cash flow
statement. Additionally, at least one member of the audit committee
must have past employment experience in finance or accounting, requisite
professional certification in accounting, or any other comparable experience or
background which results in the individual’s financial sophistication, including
being or having been a chief executive officer, chief financial officer or other
senior officer with financial oversight responsibilities.
The Board
shall elect or appoint a chairperson of the audit committee (or, if it does not
do so, the audit committee members shall elect a chairperson by vote of a
majority of the full committee); the chairperson will have authority to act on
behalf of the audit committee between meetings.
Page 1 of
3
Specific Responsibilities
and Authority
The
specific responsibilities and authority of the audit committee shall be as
follows:
(A) be
directly responsible for the appointment, compensation, retention and oversight
of the work of any registered public accounting firm engaged (including
resolution of disagreements between management and the auditor regarding
financial reporting) for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Company, and each such
registered public accounting firm must report directly to the audit
committee.
(B)
establish procedures for (i) the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls or
auditing matters, and (ii) the confidential, anonymous submissions by Company
employees of concerns regarding questionable accounting or auditing
matters;
(C) have
the authority to engage independent counsel and other advisers, as it determines
necessary to carry out its duties;
(D)
receive appropriate funding from the Company, as determined by the audit
committee in its capacity as a committee of the Board, for payment of: (i)
compensation to any registered public accounting firm engaged for the purpose of
preparing or issuing an audit report or performing other audit, review or attest
services for the Company; (ii) compensation to any advisers employed by the
audit committee; and (iii) ordinary administrative expenses of the
audit committee that are necessary or appropriate in carrying out its
duties;
(E)
ensure its receipt from the outside auditors of a formal written statement
delineating all relationships between the auditor and the Company, consistent
with Independence Standards Board Standard 1, and actively engaging in a
dialogue with the auditor with respect to any disclosed relationships or
services that may impact the objectivity and independence of the auditor and for
taking, or recommending that the full Board take, appropriate action to oversee
the independence of the outside auditor;
(F)
report regularly to the Board;
(G) make
an annual performance evaluation of the audit committee;
(H)
review and reassess the adequacy of the audit committee’s charter
annually;
(I)
comply with all preapproval requirements of Section 10A(i) of the Securities
Exchange Act of 1934 and all SEC rules relating to the administration by the
audit committee of the auditor engagement to the extent necessary to maintain
the independence of the auditor as set forth in 17 CFR Part 210.2-01(c)(7);
and
(J) make
such other recommendations to the Board on such matters, within the scope of its
function, as may come to its attention and which in its discretion warrant
consideration by the Board.
Page 2 of
3
Meetings
The audit
committee shall meet at least four times per year on a quarterly basis, or more
frequently as circumstances require. One or more meetings may be
conducted in whole or in part by telephone conference call or similar means if
it is impracticable to obtain the personal presence of each audit committee
member. The Company shall make available to the audit committee, at
its meetings and otherwise, such individuals and entities as may be designated
from time to time by the audit committee, such as members of management
including (but not limited to) the internal audit and accounting staff, the
independent auditors, inside and outside counsel, and other individuals or
entities (whether or not employed by the Company and including any corporate
governance employees and individuals or entities performing internal audit
services as independent contractors).
Delegation
Any
duties and responsibilities of the audit committee, including, but not limited
to, the authority to preapprove all audit and permitted non-audit services, may
be delegated to one or more members of the audit committee or a subcommittee of
the audit committee.
Limitations
The audit
committee is responsible for the duties and responsibilities set forth in this
charter, but its role is oversight and therefore it is not responsible for
either the preparation of the Company’s financial statements or the auditing of
the Company’s financial statements. The members of the audit
committee are not employees of the Company and may not be accountants or
auditors by profession or experts in accounting or
auditing. Management has the responsibility for preparing the
financial statements and implementing internal controls and the independent
auditors have the responsibility for auditing the financial statements and
monitoring the effectiveness of the internal controls, subject, in each case, to
the oversight of the audit committee described in this charter. The
review of the financial statements by the audit committee is not of the same
character or quality as the audit performed by the independent
auditors. The oversight exercised by the audit committee is not a
guarantee that the financial statements will be free from mistake or
fraud. In carrying out its responsibilities, the audit committee
believes its policies and procedures should remain flexible in order to best
react to a changing environment.
Page 3 of
3
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF
PROXY
MATERIALS FOR THE SHAREHOLDER MEETING TO
BE
HELD ON AUGUST 10, 2010
The
Company's proxy statement and Annual Report to Shareholders,
including
the Annual Report on Form 10-K, as amended, for the year
ended
December 31, 2009, are available on line at
http://hudsontech.investorroom.com
HUDSON
TECHNOLOGIES, INC.
PO
Box 1541, One Blue Hill Plaza
Pearl
River, New York 10965
PROXY
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 10, 2010
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints KEVIN
J. ZUGIBE and STEPHEN P. MANDRACCHIA, and each of them, Proxies, with full power
of substitution in each of them, in the name, place and stead of the
undersigned, to vote at the Annual Meeting of Shareholders of Hudson
Technologies, Inc. (the "Company") on Tuesday, August 10, 2010, at 10:00 AM, at
the Pearl River Hilton, 500 Veterans Memorial Highway, Pearl River, New York
10965 or at any adjournment or adjournments thereof, according to the number of
votes that the undersigned would be entitled to vote if personally present, upon
the following matters:
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PROXY
THIS
PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN
BELOW. IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED
FOR THOSE NOMINEES IN PROPOSAL 1 AND THE OTHER PROPOSAL LISTED
BELOW.
|
Please
mark
your
votes
like
this
|
T
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||||
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1. Election
of Directors
Dominic
J. Monetta,
Kevin
J. Zugibe
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FOR
all nominees, listed to
the
left (except as marked to
the
contrary below)
£
|
WITHHOLD
AUTHORITY
to
vote for all nominees
listed
to the left
£
|
2. Ratification of the
appointment of BDO
USA, LLP as the
Company’s independent
registered public
accountants for the fiscal
year ending December 31,
2010
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FOR AGAINST ABSTAIN
£
£ £
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(INSTRUCTION: To
withhold authority to vote for any individual nominee,
write
that nominee’s name in the space below.)
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3. In
their discretion, the Proxies are authorized to vote
upon
such other business as may properly come before
the
meeting.
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Please
mark, sign, date and return this proxy card promptly using the enclosed
envelope.
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COMPANY
ID:
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||||||
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PROXY
NUMBER:
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||||||
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ACCOUNT
NUMBER:
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Signature
____________________________________
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Signature
if held jointly ________________________________
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Date , 2010.
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Please
sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as
such.
If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in
partnership name by authorized
person.
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