EXHIBIT 10.3

 

HARDINGE INC.
EMPLOYMENT AGREEMENT
Amendment One Effective January 1, 2009

 

AMENDMENT dated as of January 1, 2009 (the “Amendment”) of an Employment
Agreement dated as of April 1, 1995 (the “Agreement”), between HARDINGE INC., a
New York corporation (the “Company”) and DOUGLAS C. TIFFT (the “Executive”).

 

WHEREAS, the Company entered into the Agreement as of April 1, 1995 (which
Agreement has been periodically renewed according to the terms thereof) in order
to engage the Executive to provide services pursuant to the terms of the
Agreement; and

 

WHEREAS, this Amendment is intended to revise the Agreement effective January 1,
2009 to include provisions intended to comply with final regulations promulgated
under Internal Revenue Code (“Code”) Section 409A and shall be construed to the
extent practicable so as to avoid causing any amounts payable to the Executive
under the Agreement to be includable in his gross income under Code
Section 409A(a)(1).

 

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set
forth, the parties hereto agree as follows:

 

1.             Section 5.1, entitled “Termination Without Cause; Resignation for
Good Reason” is amended effective January 1, 2009 to read as follows:

 

5.1.1  Prior to a Change in Control.  If, prior to the expiration of the
Employment Term, the Executive’s employment is terminated by the Company without
Cause, or the Executive resigns from his employment hereunder for Good Reason,
in either case at any time prior to a Change in Control, the Company shall
continue to pay the Executive the Base Salary (at the rate in effect immediately
prior to such termination) for the greater of (i) 6 months or (ii) the remainder
of the Employment Term (such period being referred to hereinafter as the
“Severance Period”).  The payments shall occur in installments in the same
amount and at the same regular payment intervals as the Executive’s Base Salary
was being paid on January 1, 2009 and such installments shall be deemed a series
of separate payments within the meaning of Treas. Reg. §1.409A-2(b)(2)(iii). 
Installments which in the aggregate do not exceed Executive’s Base Salary
payable over 6 months shall be paid in a lump sum within 60 days following
Executive’s termination of employment.  The remaining installments, if any,
shall be paid in regular payment intervals with the first such installment paid
on the first payment date occurring on or after the day following the 6-month
anniversary of the Executive’s termination of employment.  In addition, the
Executive shall be entitled to

 

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continue to participate during the Severance Period in all employee welfare
benefit plans that the Company provides and continues to provide generally to
its employees, provided that the Executive is entitled to continue to
participate in such plans under the terms thereof.  The Executive shall have no
further right to receive any other compensation or benefits after such
termination or resignation of employment except as  determined in accordance
with the terms of the employee benefit plans or programs of the Company.  In the
event of the Executive’s death during the Severance Period, Base Salary
continuation payments under this Section 5.1.1 shall continue to be made during
the remainder of the Severance Period to the beneficiary designated in writing
for this purpose by the Executive or, if no such beneficiary is specifically
designated, to the Executive’s estate.

 

If, during the Severance Period, the Executive breaches his obligations under
Section 8 of this Agreement, the Company may, upon written notice to the
Executive, terminate the Severance Period and cease to make any further payments
or provide any benefits described in this Section 5.1.1.

 

5.1.2        Within 6 Months Following a Change in Control.  If , prior to the
expiration of the Employment Term, the Executive’s employment is terminated by
the Company without Cause, or the Executive terminates his employment hereunder
for Good Reason, in either case within 6 months following a Change in Control,
the Company shall pay to the Executive cash payments equal to 1.5 times the sum
of (i) his Base Salary (at the rate in effect immediately prior to such
termination or, if higher, as in effect immediately prior to the Change in
Control) and (ii) his average annual bonus earned during the three fiscal years
immediately preceding the Change in Control.  The payment based on the
Executive’s Base Salary shall occur in installments in the same amount and at
the same regular payment intervals as the Executive’s Base Salary was being paid
on January 1, 2009 and such installments shall be deemed a series of separate
payments within the meaning of Treas. Reg. §1.409A-2(b)(2)(iii).  Installments
which in the aggregate do not exceed Executive’s Base Salary payable over 6
months shall be paid in a lump sum within 60 days following Executive’s
termination of employment.  The remaining installments shall be paid in regular
payment intervals with the first such installment paid on the first payment date
occurring on or after the day following the 6-month anniversary of the
Executive’s termination of employment.  The payment based on the Executive’s
average annual bonus, which shall be deemed a separate “payment” within the
meaning of Treas. Reg. §1.409A-2(b)(2) from the payment based on Base Salary,
shall be paid in a lump sum within 60 days following the Executive’s termination
of employment.  In addition, the Executive shall be entitled to continue to
participate for a period of three years following such termination in all
employee welfare benefit plans that the Company provides and continues to
provide generally to its executive employees (or, if the Executive is not
entitled to participate in any such plan under the terms thereof, in a
comparable substitute arrangement provided by the Company) provided, however,
that for the first six months following the Executive’s termination of
employment, the Executive shall pay the premiums of any welfare benefit plans to
the extent that the payment of such premiums by the Company would have
constituted gross income to the Executive.  The Company shall reimburse

 

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the Executive for any premiums or other expenses incurred by the Executive with
respect to his participation and that of any of his dependents in any such
employee benefit welfare plan.

 

5.1.3        After 6 Months Following a Change in Control.  If, prior to the
expiration of the Employment Term, the Executive resigns from his employment for
any reason at any time later than six months following a Change in Control, the
Company shall pay to the Executive a lump sum cash payment equal to 1.5 times
the sum of (i) his Base Salary (at the rate in effect immediately prior to such
termination or, if higher, as in effect immediately prior to the Change in
Control) and (ii) his average annual bonus earned during the three fiscal years
immediately preceding the Change in Control.  The payment based on the
Executive’s Base Salary shall occur in installments in the same amount and at
the same payment intervals as the Executive’s Base Salary was being paid on
January 1, 2009 provided, however, that no such installment shall be paid before
the day following the 6-month anniversary of the Executive’s termination of
employment.  The payment based on the Executive’s average annual bonus, which
shall be deemed a separate “payment” within the meaning of Treas. Reg.
§1.409A-2(b)(2) from the payment based on Base Salary, shall be paid in a lump
sum on the day following the 6-month anniversary of the Executive’s termination
of employment.  In addition, the Executive shall be entitled to continue to
participate for a period of three years following such termination in all
employee welfare benefit plans that the Company provides and continues to
provide generally to its executive employees (or, if the Executive is not
entitled to participate in any such plan under the terms thereof, in a
comparable substitute arrangement provided by the Company) provided, however,
that for the first six months following the Executive’s termination of
employment, the Executive shall pay the premiums of any welfare benefit plans to
the extent that the payment of such premiums by the Company would have
constituted gross income to the Executive.  The Company shall reimburse the
Executive for any premiums or other expenses incurred by the Executive with
respect to his participation and that of any of his dependents in any such
employee benefit welfare plan.

 

2.             Section 5.4, entitled “Good Reason” is amended effective
January 1, 2009 to read as follows:

 

5.4           Good Reason.  For purposes of this Agreement, “Good Reason” shall
mean the occurrence of one or more of the following events provided that, the
Executive shall give the Company a written notice, within 90 days following the
initial occurrence of the event, describing the event that the Executive claims
to be Good Reason and stating the Executive’s intention to terminate employment
unless the Company takes appropriate corrective action:

 

(i)            a material decrease in the Executive’s Base Salary or a failure
by the Company to pay material compensation due and payable to the Executive in
connection with his employment;

 

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(ii)           the Company’s failure to assign to the Executive duties that are
generally consistent with the Executive’s position and title;

 

(iii)          a material diminution in benefits provided by the Company to the
Executive except for a diminution applicable to substantially all of the
Company’s senior executives;

 

(iv)          the Company’s requiring the Executive to relocate to an office or
location more than 50 miles from the Company’s facilities in Elmira, New York;

 

(v)           a failure or refusal of any successor company to assume the
Company’s obligations under this Agreement; or

 

(vi)          the Company’s material breach of any material term of this
Agreement.

 

The Company shall have 30 days from the date of receipt of the written notice
from the Executive stating his claim of Good Reason in which to take appropriate
corrective action.  If the Company does not cure the Good Reason, the Good
Reason will be deemed to have occurred at the end of the 30-day period.  This
section shall apply with respect to any successor of the Company following a
Change in Control as if such successor were the Company.

 

IN WITNESS WHEREOF, the Company has caused this Amendment of the Agreement to be
duly executed and the Executive has hereunto set his hand, as of the day and
year first above written.

 

 

HARDINGE INC.

 

 

 

 

 

By

  /S/  RICHARD L. SIMONS

 

Name:  Richard L. Simons

 

Title:  President and CEO

 

 

 

 

 

  /S/  DOUGLAS C. TIFFT

 

Douglas C. Tifft

 

 

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