Document:

EXHIBIT
10.1

 

HARDINGE
INC.

EMPLOYMENT
AGREEMENT

 

 

                                EMPLOYMENT AGREEMENT dated as of March 3,
2008 (the “Agreement”), between HARDINGE INC.,
a New York corporation (the “Company”) and RICHARD L. SIMONS
(the “Executive”).

 

                                WHEREAS, the Company desires to
engage the Executive to provide services pursuant to the terms of this
Agreement and the Executive desires to accept such engagement.

 

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

 

                                1.             EFFECTIVENESS
OF AGREEMENT AND EFFECTIVE DATE

 

                                This Agreement shall become effective
as of the date hereof.  For purposes of
this Agreement, the term “Effective Date” shall mean March 3, 2008.

 

                                2.             EMPLOYMENT
AND DUTIES

 

                                2.1           General.  The Company hereby employs the Executive as,
and the Executive agrees to serve as, Senior Vice President and Chief Operating
Officer of the Company, upon the terms and conditions herein contained.  The Executive shall perform such duties and
services for the Company as may be designated from time to time by the Board of
Directors of the Company (the “Board”) or the Chief Executive Officer of
the Company.  The Executive agrees to
serve the Company faithfully and to the best of his ability under the direction
of the Board and the Chief Executive Officer of the Company.

 

                                2.2           Exclusive
Services.  Except as may otherwise be
approved in advance by the Board or the Chief Executive Officer of the Company,
the Executive shall devote his full working time throughout the Employment Term
(as defined in Section 2.3) to the services required of him
hereunder.  The Executive shall render
his services exclusively to the Company during the Employment Term, and shall
use his best efforts, judgment and energy to improve and advance the business
and interests of the Company in a manner consistent with the duties of his
position.  During the Employment Term,
the Executive will not be employed with any other person or entity, or be
self-employed, without the prior written approval of the Board or the Chief
Executive Officer of the Company.

 

                                2.3           Term
of Employment.  The Executive’s
employment under this Agreement shall commence as of the date hereof and shall
terminate on the earlier of (i) the second anniversary of the Effective Date
or (ii) termination of the Executive’s employment pursuant to this
Agreement; provided, however, that the term of the Executive’s
employment shall be automatically extended without further action of either
party for additional one year periods unless written notice of either party’s
intention not to extend (a “Non-Renewal Notice”)

 

 

 

has been given to the
other party hereto at least 60 days prior to the expiration of the then
effective term.  The period commencing as
of the Effective Date and ending on the second anniversary of the Effective
Date or such later date to which the term of the Executive’s employment shall
have been extended is hereinafter referred to as the “Employment Term”.  Notwithstanding the foregoing, in the event
of a Change in Control (as defined in Section 5.6) occurring during the
Employment Term, the Employment Term shall be extended so that it terminates on
the second anniversary of the date of the Change in Control, provided, however,
the Employment Term will not be so extended if the Executive has given a Notice
of Non-Renewal prior to the occurrence of the Change of Control.

 

                                2.4           Reimbursement
of Expenses.  Unless otherwise agreed
to by the Executive and the Company, the Company shall reimburse the Executive
for reasonable travel and other business expenses incurred by him in the
fulfillment of his duties hereunder upon presentation by the Executive of an
itemized account of such expenditures, in accordance with Company practices
consistently applied.

 

                                3.             ANNUAL
COMPENSATION

 

                                3.1           Base
Salary.  From the Effective Date, the
Executive shall be entitled to receive a base salary (“Base Salary”) at
a rate of $250,000.00 per annum, payable in accordance with the Company’s
payroll practices.  Subject to the
Executive’s rights under Section 5.2, Base Salary is subject to increase
or decrease, from time to time, in the sole and absolute discretion of the
Board.  Once changed, such amount shall
constitute the Executive’s annual Base Salary.

 

                                3.2           Annual
Review.  The Executive’s Base Salary
shall be reviewed by the Board, based upon the Executive’s performance not less
often than annually.

 

                                3.3           Discretionary
Bonus.  After the Effective Date, the
Executive shall be entitled to such bonus, if any, as may be awarded to the
Executive from time to time by the Board in the sole and absolute discretion of
the Board.

 

                                4.             EMPLOYEE
BENEFITS

 

                                4.1           Generally.  The Executive shall, during his employment
under this Agreement, be included to the extent eligible thereunder in all
employee benefit plans, programs or arrangements (including, without
limitation, any plans, programs or arrangements providing for retirement
benefits, incentive compensation, profit sharing, bonuses, disability benefits,
health and life insurance, or vacation and paid holidays) which shall be
established by the Company for, or made available to, its executives generally.

 

                                4.2           Non-Qualified
Plan.  In addition to permitting the
Executive to participate in such employee benefit pension plan or plans as are
generally made available to employees of the Employer from time to time, the
Company shall establish and maintain an unfunded nonqualified deferred
compensation plan, which shall constitute a “top-hat plan” under the Employee
Retirement Income Security Act of 1974, as amended, under which the Executive
shall be permitted to elect to defer compensation and to receive payment of
such deferred

 

 

2

 

 

compensation and notional
earnings attributable thereto at a future date selected by the Executive (the “NQDC
Plan”).  In addition to the Executive’s
elective deferrals under the NQDC Plan, the Company will make the following
annual contributions to the NQDC Plan on the Executive’s behalf: (i) 20.5%
of the amount by which the Executive’s Base Salary exceeds the then applicable
annual limit on pensionable compensation established pursuant to Section 401(a)(17)
of the Internal Revenue Code of 1986, as amended, and (ii) 20.5% of the
bonus, if any, awarded to Executive under the Company’s Cash Incentive Plan.

 

                                5.             TERMINATION
OF EMPLOYMENT

 

                                5.1           Termination
Events.

 

                                                5.1.1.       By the Company.  The Company may terminate the Executive’s
employment at any time for Cause (as hereinafter defined), without Cause, or
upon the Executive’s Permanent Disability (as hereinafter defined).

 

                                                5.1.2.       By the Executive.  The Executive may terminate his employment at
any time for Good Reason (as hereinafter defined) or without Good Reason.

 

                                5.2           Termination
Without Cause; Resignation for Good Reason.

 

                                                5.2.1  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”), at such intervals as the same would have been
paid had the Executive remained in the active service of the Company.  In addition, if the Executive elects to
continue his health insurance coverage in the applicable Company plan pursuant
to the Consolidated Omnibus Reconciliation Act of 1985, as amended, then the
Company shall pay for such coverage during the Severance Period, provided,
however, that (i) the Executive shall be responsible for paying such portion
of the applicable health insurance premium as the Company requires from
executive employees under the applicable Company plan, and (ii) the
Company’s obligation to pay for such coverage during the Severance Period will
terminate if, during the Severance Period, the Executive becomes eligible to
receive health insurance coverage from another source at a cost to the
Executive that is equal to, or less than, the Executive’s cost under the
Company Plan.  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 5.2.1
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.

 

 

3

 

 

                                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 5.2.1.

 

                                The Company’s obligation to make the
Base Salary continuation and health insurance payments described in this Section 5.2.1
shall be subject to the following conditions: (i) within twenty-one (21)
days after the effective date of termination or resignation, the Executive
shall have executed and delivered to the Company a Termination Agreement and
Release (“Release”) in the form of Exhibit A attached hereto, and (ii) the
Release shall not have been revoked by the Executive during the Executive
during the revocation period specified therein. 
If the Executive fails to deliver a fully executed Release to the
Company before expiration of such twenty-one (21) day period, or such release
is revoked as permitted therein, then the Company will have no obligation to
make any of the payments specified in this Section 5.2.1.

 

                                                5.2.2        Following a Change in Control.  If , prior to the expiration of the
Employment Term, (a) the Executive’s employment is terminated by the
Company without Cause, or the Executive terminates his employment hereunder for
Good Reason, in either case at any time following a Change in Control or (b) the
Executive resigns from his employment her for any reason at any time later than
six months following a Change in Control, the Company shall pay to the
Executive a lump sum cash payment equal to 1.5 times the sum of (i) his
Base Salary (at the rate in effect immediately prior to such termination or, if
higher, as in effect immediately prior to the Change in Control) and (ii) his
average annual bonus earned during the three fiscal years immediately preceding
the Change in Control.  In addition, the
Executive shall be entitled to continue to participate for a period of three
years following such termination in all employee 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).  The Company shall reimburse
the Executive for any premiums or other expenses incurred by the Executive with
respect to his participation and that of any of his dependents in any such
employee benefit welfare plan.

 

                                5.3           Termination
for Cause; Resignation Without Good Reason. 
If, prior to the expiration of the Employment Term, the Executive’s
employment is terminated by the Company for Cause, or the Executive resigns
from his employment hereunder other than for Good Reason, the Executive shall
(subject to Section 5.2.2) be entitled only to payment of his Base Salary
as then in effect through and including the date of termination or resignation.  Subject to Section 5.2.2, the Executive
shall have no further right to receive any other compensation or benefits after
such termination or resignation of employment, except as determined in
accordance with the terms of the employee benefit plans or programs of the
Company.

 

                                5.4           Cause.  Termination for “Cause” shall mean
termination of the Executive’s employment by the Company because of:

 

 

 

4

 

 

(i)            any act or omission that constitutes
a breach by the Executive of any of his obligations under this Agreement or any
Company policy or procedure and failure to cure such breach after notice of,
and a reasonable opportunity to cure, such breach;

 

(ii)           the continued willful failure or
refusal of the Executive to substantially perform the duties reasonably
required of him as an employee of the Company;

 

(iii)          an act of moral turpitude, dishonesty
or fraud by, or criminal conviction of, the Executive which in the
determination of the Board would render his continued employment by the Company
damaging or detrimental to the Company;

 

(iv)          any misappropriation of Company
property by the Executive; or

 

(v)           any other willful misconduct by the
Executive which is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company or any of
its subsidiaries or affiliates.

 

                                5.5           Good
Reason.  For purposes of this
Agreement, “Good Reason” shall mean any of the following (without the
Executive’s prior written consent):

 

(i)            a 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;

 

(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 breach of any term of
this Agreement and failure to cure such breach after notice of, and a
reasonable opportunity to cure, such breach.

 

                                5.6           Change
in Control.  For purposes of this
Agreement, the term “Change in Control” shall mean and shall be deemed to
occur if and when:

 

(i)            an offeror (other than the Company)
purchases securities of the Company pursuant to a tender or exchange offer for
such securities which represent 35% or more of the combined voting power of the
Company’s then outstanding securities;

 

 

5

 

 

(ii)           any person (as such term is used in
Sections 13 (d) and 14(d) (2) of the Securities Exchange Act of
1934, as amended), other than any employee benefit plan of the Company or any
person or entity appointed or established pursuant to any such plan, hereafter
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company’s
then outstanding securities, excluding any such securities held by such person
as trustee or other fiduciary of an employee benefit plan of the Company;

 

(iii)          the membership of the Board changes as
the result of a contested election or elections, so that a majority of the
individuals who are directors at any particular time were proposed by persons
other than (a) directors who were members of the Board immediately prior
to a first such contested election (“Continuing Directors”) or (b) directors
proposed by the Continuing Directors and were initially elected to the Board as
a result of such a contested election or elections occurring within the
previous two years; or

 

(iv)          the shareholders of the Company
approve a merger, consolidation, sale or disposition of all or substantially
all of the Company’s assets, or a plan of partial or complete liquidation.

 

6.             DEATH OR DISABILITY

 

In the event of
termination of employment by reason of death or Permanent Disability, the
Executive (or his estate, as applicable) shall be entitled to Base Salary and
benefits determined under Sections 3 and 4 through the date of
termination.  Other benefits shall be
determined in accordance with the benefit plans maintained by the Company, and
the Company shall have no further obligation hereunder.  For purposes of this Agreement, “Permanent
Disability” means a physical or mental disability or infirmity of the
Executive that prevents the normal performance of substantially all his duties
as an employee of the Company, which disability or infirmity shall exist for
any continuous period of 180 days.

 

7.             MITIGATION OF DAMAGES

 

The Executive shall be
required to mitigate the amount of any Base Salary continuation payment
provided for in Section 5.2.1 by seeking other employment, and any such
payment will be reduced by any amounts which the Executive receives or is
entitled to receive from another employer or from self-employment during the
Severance Period.  In fulfilling the
requirements of this section, Executive need not expend his full time and
efforts in pursuing other employment and a good faith and earnest pursuit of
such employment shall be deemed to have fulfilled such requirements.  The Executive shall promptly notify the
Company in writing in the event that other employment is obtained during the
Severance Period.

 

8.             CONFIDENTIALITY; NONSOLICITATION; NONCOMPETITION

 

6

 

8.1           Confidentiality.  The Executive covenants and agrees with the
Company that he will not any time during the Employment Term and thereafter,
except in performance of his obligations to the Company hereunder or with the
prior written consent of the Company, directly or indirectly, disclose any
secret or confidential information that he may learn or has learned by reason
of his association with the Company or any of its subsidiaries and affiliates.  The term “confidential information”
includes information not previously made generally available to the public or
to the trade by the Company’s management, with respect to the Company’s or any
of its subsidiaries’ or affiliates’ products, facilities, applications and
methods, trade secrets and other intellectual property, systems, procedures,
manuals, confidential reports, product price lists, customer lists, technical
information, financial information (including the revenues, costs or profits
associated with any of the Company’s products), business plans, prospects or
opportunities, but shall exclude any information which is or becomes generally
available to the public or is generally known in the industry or industries in
which the Company operates other than as a result of disclosure by the
Executive in violation of his agreements under this Section 8.1.  The Executive will be released of his
obligations under this Section 8.1 to the extent the Executive is required
to disclose under any applicable laws, regulations or directives of any
government agency, tribunal or authority having jurisdiction in the matter or
under subpoena or other process of law provided that the Executive provides the
Company with prompt written notice of such requirement.

 

8.2           Acknowledgment of Company Assets.  The Executive acknowledges that the Company,
at the Company’s expense, has acquired, created and maintains, and will
continue to acquire, create and maintain, significant goodwill with its current
and prospective customers, vendors and employees, and that such goodwill is
valuable property of the Company.  The
Executive further acknowledges that to the extent such goodwill will be
generated through the Executive’s efforts, such efforts will be funded by the
Company and the Executive will be fairly compensated for such efforts.  The Executive acknowledges that all goodwill
developed by the Executive relative to the Company’s customers, vendors and
employees shall be the sole and exclusive property of the Company and shall not
be personal to the Executive. 
Accordingly, in order to afford the Company reasonable protection of
such goodwill and of the Company’s confidential information, the Executive
agrees as follows:

 

8.2.1.       Nonsolicitation.  For so long as the Executive is employed by
the Company, and continuing for two years thereafter if termination of
employment occurs for any reason prior to a Change in Control, the Executive
shall not, without the prior written consent of the Company, directly or
indirectly, as a sole proprietor, member of a partnership, stockholder or
investor, officer or director of a corporation, or as an employee, associate,
consultant or agent of any person, partnership, corporation or other business
organization or entity other than the Company: (i) solicit or endeavor to
entice away from the Company or any of its subsidiaries any person or entity
who is, or, during the then most recent 12-month period, was employed by, or
had served as an agent or key consultant of the Company or any of its
subsidiaries; (ii) solicit or endeavor to entice away from the Company or
any of its subsidiaries any person or entity who is, or was within the then
most recent 12-month period, a customer or client (or reasonably anticipated to
the general knowledge of the Executive or the public to become a customer or
client) of the Company or any of its subsidiaries; or (iii) solicit or
endeavor to entice away from the Company or any of its subsidiaries any person
who is employed by the Company or its

 

7

 

subsidiaries or induce
such person to terminate his or her employment with the Company or its
subsidiaries.

 

8.2.2.       No Competing Employment.  For so long as the Executive is employed by
the Company, and continuing for one year thereafter if termination of
employment occurs for any reason prior to a Change in Control, the Executive
shall not, directly or indirectly, as a sole proprietor, member of a
partnership, stockholder or investor (other than a stockholder or investor
owning not more than a 1% interest), officer or director of a corporation, or
as an employee, associate, consultant or agent of any person, partnership,
corporation or other business organization or entity other than the Company,
render any service to or in any way be affiliated with a competitor (or any
person or entity that is reasonably anticipated to the general knowledge of the
Executive or the public to become a competitor) of the Company or any of its
subsidiaries.

 

8.3           Exclusive Property.  The Executive confirms that all confidential
information is and shall remain the exclusive property of the Company.  All business records, papers and documents
kept or made by Executive relating to the business of the Company shall be and
remain the property of the Company, except for such papers customarily deemed
to be the personal copies of the Executive. 
Upon termination of the Executive’s employment with the Company for any
reason, the Executive promptly deliver to the Company all of the following that
are in the Executive’s possession or under his control: (i) all computers,
telecommunication devices and other tangible property of the Company and its
affiliates, and (ii) all documents and other materials, in whatever form,
which include confidential information or which otherwise relate in whole or in
part to the present or prospective business of the Company or its affiliates,
including but not limited to, drawings, graphs, charts, specifications, notes,
reports, memoranda, and computer disks and tapes, and all copies thereof.

 

8.4           Injunctive Relief.  Without intending to limit the remedies
available to the Company, the Executive acknowledges that a breach of any of
the covenants contained in this Section 8 may result in material and
irreparable injury to the Company or its affiliates or subsidiaries for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to seek a temporary restraining
order and/or a preliminary or permanent injunction restraining the Executive
from engaging in activities prohibited by this Section 8 or such other
relief as may be required specifically to enforce any of the covenants in this Section 8.  If for any reason, it is held that the
restrictions under this Section 8 are not reasonable or that consideration
therefore is inadequate, such restrictions shall be interpreted or modified to
include as much of the duration and scope identified in this Section 8 as will
render such restrictions valid and enforceable.

 

8.5           Communication to Third Parties.  The Executive agrees that Company shall have
the right to communicate the terms of this Section 8 to any third parties,
including but not limited to, any prospective employer of the Executive.  The Company waives any right to assert any
claim for damages against Company or any officer, employee or agent of Company
arising from such disclosure of the terms of this Section 8.

 

8

 

8.6           Independent Obligations.  The provisions of this Section 8 shall
be independent of any other provision of this Agreement.  The existence of any claim or cause of action
by the Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense of the enforcement of this Section 8
by the Company.

 

8.7           Non-Exclusivity.  The Company’s rights and the Executive’s
obligations set forth in this Section 8 are in addition to, and not in
lieu of, all rights and obligations provided by applicable statutory or common
law.

 

9.             CERTAIN PAYMENTS

 

Notwithstanding anything
in this Agreement to the contrary, if any amounts due to the Executive under
this Agreement and any other plan or program of the Company constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the “Code”)), then the aggregate of the
amounts constituting the parachute payment shall be reduced to an amount that
will equal three times his “base amount” (as defined in Section 280G(b)(3) of
the Code) less $1.00.  The determination
to be made with respect to this Section 9 shall be made by an accounting
firm jointly selected by the Company and the Executive and paid by the Company,
and which may be the Company’s independent auditors.

 

10.           MISCELLANEOUS.

 

10.1         Notices.  All notices or communications hereunder shall
be in writing, addressed as follows:

 

	
   

  	
  To the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hardinge Inc.

  
	
   

  	
   

  	
  One Hardinge Drive

  
	
   

  	
   

  	
  Elmira, New York
  14902-1507

  
	
   

  	
   

  	
  Telecopier
  No. (607) 734-2353

  
	
   

  	
   

  	
  Attention: Mr. J.
  Patrick Ervin

  
	
   

  	
   

  	
   

  
	
   

  	
  To the Executive:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Richard L. Simons

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

All such notices shall be
conclusively deemed to be received and shall be effective, (i) if sent by
hand delivery, upon receipt, (ii) if sent by telecopy or facsimile
transmission, upon confirmation of receipt by the sender of such transmission,
or (iii) if sent by registered or certified mail, on the fifth day after
the day on which such notice is mailed.

 

9

 

10.2         Severability.  Each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

10.3         Assignment.  The rights and obligations of this Agreement
shall bind and inure to the benefit of any successor of the Company by
reorganization, merger or consolidation, or any assignee of all or
substantially all of the Company’s business and properties.  Neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by the
Executive.

10.4         Entire Agreement.  This Agreement represents the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the Company and the Executive relating
to the subject matter hereof.  This
Agreement may be amended at any time by mutual written agreement of the parties
hereto.

 

10.5         Withholding.  The payment of any amount pursuant to this
Agreement shall be subject to applicable withholding and payroll taxes, and
such other deductions as may be required under the Company’s employee benefits
plans, if any.

 

10.6         Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed entirely within that state.

 

IN WITNESS WHEREOF, the
Company has caused this 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

  	
   

  
	
   

  	
  Name:

  	
  J. Patrick Ervin

  
	
   

  	
  Title:

  	
  Chairman of the Board,
  President

  
	
   

  	
   

  	
  and Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Richard L.
  Simons

  

 

10

 

 

	
  State of New York

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
  : ss.

  	
   

  	
   

  	
   

  
	
  County of Chemung

  	
  )

  	
   

  	
   

  	
   

  

 

 

On the
         day of
                              ,
in the year 2008, before me, the undersigned, a Notary Public in and for said
state, personally appeared J. PATRICK ERVIN, residing at
                                                                                        ,
the Chairman of the Board, President and Chief Executive Officer of HARDINGE
INC., personally known to me, or proved to me on the basis of satisfactory
evidence, to be the individual whose name is subscribed to the within
instrument, and he acknowledged to me that he executed the same in his capacity
and that, by his signature on the instrument, the individual, or the person
upon behalf of which the individual acted, executed the instrument on behalf of
said corporation.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

	
  State of

  	
  )

  	
   

  	
   

  	
   

  
	
   

  	
  : ss.

  	
   

  	
   

  	
   

  
	
  County of

  	
  )

  	
   

  	
   

  	
   

  

 

On the
         day of
                              ,
2008, before me, the undersigned, personally appeared RICHARD L. SIMONS,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and he
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

11

 

 

 

EXHIBIT A

 

HARDINGE
INC.

TERMINATION
AGREEMENT AND RELEASE

 

                In consideration of the payments and benefits to be
provided to me by Hardinge Inc. (the “Company”) pursuant to Section 5.2.1
of the Employment Agreement between the Company and me dated as of March 3,
2008 (the “Employment Agreement”), I agree as follows:

 

1.             Termination.  My employment with the Company is terminated
effective
                        
and I will not thereafter apply for employment with the Company.

 

2.             Release.  On behalf of myself and my heirs, successors
executors, administrators, trustees, legal representatives, agents and assigns,
I fully and forever release and discharge the Company, its subsidiaries,
divisions and affiliates and its and all of their predecessors, successors,
assigns, directors and officers (collectively “Released Parties”) from any and
all claims, demands, suits, causes of action, obligations, promises, damages,
fees, covenants, agreements, attorneys’ fees, debts, contracts and torts of
every kind whatsoever, known or unknown, at law or in equity, foreseen or
unforeseen, which against the Released Parties I ever had, now have or which I
may have for, upon or by reason of any matter, cause or thing whatsoever
relating to or arising from my employment with the Company or the termination
thereof, specifically including, but not limited to, all claims under the
following:  the Civil Rights Acts of
1866, 1871, 1964 and 1991; the Age Discrimination in Employment Act of 1967; the
Older Workers’ Benefit Protection Act of 1990; the Americans with Disabilities
Act; the Equal Pay Act; the Employee Retirement Income Security Act; the Worker
Adjustment Retraining Notification Act; the Family and Medical Leave Act; the
National Labor Relations Act; the Occupational Safety and Health Act; the New
York State Human Rights Law; the New York City Human Rights Law; the New York
State Labor Law; §§ 120 and 241 of the New York State Workers’ Compensation
Law; any contract of employment, express or implied; and any and all other federal,
state or local laws, rules or regulations.

 

                I hereby waive the right to receive any personal
relief (i.e. monetary or equitable relief) as a result of any lawsuit or other
proceeding brought by the EEOC or any other governmental agency, based on or related
to any of the matters from which I have released the Released Parties. I also
will take all actions necessary, if any, now or in the future, to make this
Release effective, including seeking and obtaining any necessary governmental
or court approval.

 

                The foregoing release shall not operate to release
the Company from its obligations to make payments and provide benefits as
provided under Section 5.2.1 of the Employment Agreement.

 

                In connection with the foregoing release (i) I
acknowledge that the payments and benefits under Section 5.2.1 of the
Employment Agreement are good and sufficient consideration to which I would not
otherwise be entitled but for my execution and delivery to the Company of this
instrument, (ii) I acknowledge that I have been advised by the Company to
consult with an attorney before signing this instrument, (iii) the Company
has allowed me at least twenty-one (21) days from the date I first receive this
instrument to consider it before being required to sign

 

 

it and return it to the
Company, and (iv) I may revoke this instrument, in its entirety, within
seven (7) days after signing it by delivering written notice of such
revocation to the Company on or before 5:00 p.m. on the seventh day of
such revocation period.

 

                IN WITNESS WHEREOF, the undersigned has executed this
instrument as of the          day of
                      .

 

 

 

	
   

  	
   

  
	
   

  	
  Richard L.
  Simons

  

 

2EXHIBIT
10.2

 

HARDINGE
INC.

EMPLOYMENT
AGREEMENT

 

                                EMPLOYMENT AGREEMENT dated as of March 3,
2008 (the “Agreement”), between HARDINGE INC.,
a New York corporation (the “Company”) and EDWARD J. GAIO
(the “Executive”).

 

                                WHEREAS, the Company desires to engage
the Executive to provide services pursuant to the terms of this Agreement and
the Executive desires to accept such engagement.

 

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

 

                                1.             EFFECTIVENESS
OF AGREEMENT AND EFFECTIVE DATE

 

                                This Agreement shall become effective
as of the date hereof.  For purposes of
this Agreement, the term “Effective Date” shall mean March 3, 2008.

 

                                2.             EMPLOYMENT
AND DUTIES

 

                                2.1           General.  The Company hereby employs the Executive as,
and the Executive agrees to serve as, Vice President and Chief Financial
Officer, upon the terms and conditions herein contained.  The Executive shall perform such duties and services
for the Company as may be designated from time to time by the Board of
Directors of the Company (the “Board”) or the Chief Executive Officer of
the Company.  The Executive agrees to
serve the Company faithfully and to the best of his ability under the direction
of the Board and the Chief Executive Officer of the Company.

 

                                2.2           Exclusive
Services.  Except as may otherwise be
approved in advance by the Board or the Chief Executive Officer of the Company,
the Executive shall devote his full working time throughout the Employment Term
(as defined in Section 2.3) to the services required of him
hereunder.  The Executive shall render
his services exclusively to the Company during the Employment Term, and shall
use his best efforts, judgment and energy to improve and advance the business
and interests of the Company in a manner consistent with the duties of his
position.  During the Employment Term,
the Executive will not be employed with any other person or entity, or be
self-employed, without the prior written approval of the Board or the Chief
Executive Officer of the Company.

 

                                2.3           Term
of Employment.  The Executive’s
employment under this Agreement shall commence as of the date hereof and shall
terminate on the earlier of (i) the second anniversary of the Effective
Date or (ii) termination of the Executive’s employment pursuant to this
Agreement; provided, however, that the term of the Executive’s
employment shall be automatically extended without further action of either
party for additional one year periods unless written notice of either party’s
intention not to extend (a “Non-Renewal Notice”)

 

 

 

 

 

has been given to the
other party hereto at least 60 days prior to the expiration of the then
effective term.  The period commencing as
of the Effective Date and ending on the second anniversary of the Effective
Date or such later date to which the term of the Executive’s employment shall
have been extended is hereinafter referred to as the “Employment Term”.  Notwithstanding the foregoing, in the event
of a Change in Control (as defined in Section 5.6) occurring during the
Employment Term, the Employment Term shall be extended so that it terminates on
the second anniversary of the date of the Change in Control, provided, however,
the Employment Term will not be so extended if the Executive has given a Notice
of Non-Renewal prior to the occurrence of the Change of Control.

 

                                2.4           Reimbursement
of Expenses.  Unless otherwise agreed
to by the Executive and the Company, the Company shall reimburse the Executive
for reasonable travel and other business expenses incurred by him in the
fulfillment of his duties hereunder upon presentation by the Executive of an
itemized account of such expenditures, in accordance with Company practices
consistently applied.

 

                                3.             ANNUAL
COMPENSATION

 

                                3.1           Base
Salary.  From the Effective Date, the
Executive shall be entitled to receive a base salary (“Base Salary”) at
a rate of $205,000.00 per annum, payable in accordance with the Company’s
payroll practices.  Subject to the
Executive’s rights under Section 5.2, Base Salary is subject to increase
or decrease, from time to time, in the sole and absolute discretion of the
Board.  Once changed, such amount shall
constitute the Executive’s annual Base Salary.

 

                                3.2           Annual
Review.  The Executive’s Base Salary
shall be reviewed by the Board, based upon the Executive’s performance not less
often than annually.

 

                                3.3           Discretionary
Bonus.  After the Effective Date, the
Executive shall be entitled to such bonus, if any, as may be awarded to the
Executive from time to time by the Board in the sole and absolute discretion of
the Board.

 

                                4.             EMPLOYEE
BENEFITS

 

                                The Executive shall, during his
employment under this Agreement, be included to the extent eligible thereunder
in all employee benefit plans, programs or arrangements (including, without
limitation, any plans, programs or arrangements providing for retirement
benefits, incentive compensation, profit sharing, bonuses, disability benefits,
health and life insurance, or vacation and paid holidays) which shall be
established by the Company for, or made available to, its executives generally.

 

                                5.             TERMINATION
OF EMPLOYMENT

 

                                5.1           Termination
Events.

 

 

 

2

 

 

                                                5.1.1.       By the Company.  The Company may terminate the Executive’s
employment at any time for Cause (as hereinafter defined), without Cause, or
upon the Executive’s Permanent Disability (as hereinafter defined).

 

                                                5.1.2.       By the Executive.  The Executive may terminate his employment at
any time for Good Reason (as hereinafter defined) or without Good Reason.

 

                                5.2           Termination
Without Cause; Resignation for Good Reason.

 

                                                5.2.1  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”), at such intervals as the same would have been
paid had the Executive remained in the active service of the Company.  In addition, if the Executive elects to
continue his health insurance coverage in the applicable Company plan pursuant
to the Consolidated Omnibus Reconciliation Act of 1985, as amended, then the
Company shall pay for such coverage during the Severance Period, provided,
however, that (i) the Executive shall be responsible for paying such
portion of the applicable health insurance premium as the Company requires from
executive employees under the applicable Company plan, and (ii) the
Company’s obligation to pay for such coverage during the Severance Period will
terminate if, during the Severance Period, the Executive becomes eligible to
receive health insurance coverage from another source at a cost to the
Executive that is equal to, or less than, the Executive’s cost under the
Company Plan.  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 5.2.1
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 5.2.1.

 

                                The Company’s obligation to make the
Base Salary continuation and health insurance payments described in this Section 5.2.1
shall be subject to the following conditions: (i) within twenty-one (21)
days after the effective date of termination or resignation, the Executive
shall have executed and delivered to the Company a Termination Agreement and
Release (“Release”) in the form of Exhibit A attached hereto, and (ii) the
Release shall not have been revoked by the Executive during the Executive
during the revocation period specified therein. 
If the Executive fails to deliver a fully executed Release to the
Company before expiration of such twenty-one (21) day period, or such release
is revoked as permitted therein, 

 

 

3

 

 

then the Company will
have no obligation to make any of the payments specified in this Section 5.2.1.

 

                                                5.2.2        Following a Change in Control.  If , prior to the expiration of the
Employment Term, (a) the Executive’s employment is terminated by the
Company without Cause, or the Executive terminates his employment hereunder for
Good Reason, in either case at any time following a Change in Control or (b) the
Executive resigns from his employment her for any reason at any time later than
six months following a Change in Control, the Company shall pay to the
Executive a lump sum cash payment equal to 1.5 times the sum of (i) his
Base Salary (at the rate in effect immediately prior to such termination or, if
higher, as in effect immediately prior to the Change in Control) and (ii) his
average annual bonus earned during the three fiscal years immediately preceding
the Change in Control.  In addition, the
Executive shall be entitled to continue to participate for a period of three
years following such termination in all employee 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).  The Company shall reimburse
the Executive for any premiums or other expenses incurred by the Executive with
respect to his participation and that of any of his dependents in any such
employee benefit welfare plan.

 

                                5.3           Termination
for Cause; Resignation Without Good Reason. 
If, prior to the expiration of the Employment Term, the Executive’s
employment is terminated by the Company for Cause, or the Executive resigns
from his employment hereunder other than for Good Reason, the Executive shall
(subject to Section 5.2.2) be entitled only to payment of his Base Salary
as then in effect through and including the date of termination or
resignation.  Subject to Section 5.2.2,
the Executive shall have no further right to receive any other compensation or
benefits after such termination or resignation of employment, except as
determined in accordance with the terms of the employee benefit plans or
programs of the Company.

 

                                5.4           Cause.  Termination for “Cause” shall mean
termination of the Executive’s employment by the Company because of:

 

(i)            any act or omission that constitutes
a breach by the Executive of any of his obligations under this Agreement or any
Company policy or procedure and failure to cure such breach after notice of,
and a reasonable opportunity to cure, such breach;

 

(ii)           the continued willful failure or
refusal of the Executive to substantially perform the duties reasonably
required of him as an employee of the Company;

 

(iii)          an act of moral turpitude, dishonesty
or fraud by, or criminal conviction of, the Executive which in the determination
of the Board would render his continued employment by the Company damaging or
detrimental to the Company;

 

(iv)          any misappropriation of Company
property by the Executive; or

 

 

4

 

 

(v)           any other willful misconduct by the
Executive which is materially injurious to the financial condition or business
reputation of, or is otherwise materially injurious to, the Company or any of
its subsidiaries or affiliates.

 

                                5.5           Good
Reason.  For purposes of this Agreement,
“Good Reason” shall mean any of the following (without the Executive’s
prior written consent):

 

(i)            a 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;

 

(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 breach of any term of
this Agreement and failure to cure such breach after notice of, and a
reasonable opportunity to cure, such breach.

 

                                5.6           Change
in Control.  For purposes of this
Agreement, the term “Change in Control” shall mean and shall be deemed
to occur if and when:

 

(i)            an offeror (other than the Company)
purchases securities of the Company pursuant to a tender or exchange offer for
such securities which represent 35% or more of the combined voting power of the
Company’s then outstanding securities;

 

(ii)           any person (as such term is used in
Sections 13 (d) and 14(d) (2) of the Securities Exchange Act of
1934, as amended), other than any employee benefit plan of the Company or any
person or entity appointed or established pursuant to any such plan, hereafter
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of the Company’s
then outstanding securities, excluding any such securities held by such person
as trustee or other fiduciary of an employee benefit plan of the Company;

 

(iii)          the membership of the Board changes as
the result of a contested election or elections, so that a majority of the
individuals who are directors at any particular time were proposed by persons
other than (a) directors who were members of the Board immediately prior
to a first such contested election (“Continuing Directors”) or (b)

 

 

 

5

directors proposed by the
Continuing Directors and were initially elected to the Board as a result of
such a contested election or elections occurring within the previous two years;
or

(iv)          the shareholders of the Company
approve a merger, consolidation, sale or disposition of all or substantially
all of the Company’s assets, or a plan of partial or complete liquidation.

 

6.             DEATH OR DISABILITY

 

In the event of termination of
employment by reason of death or Permanent Disability, the Executive (or his
estate, as applicable) shall be entitled to Base Salary and benefits determined
under Sections 3 and 4 through the date of termination.  Other benefits shall be determined in
accordance with the benefit plans maintained by the Company, and the Company
shall have no further obligation hereunder. 
For purposes of this Agreement, “Permanent Disability” means a
physical or mental disability or infirmity of the Executive that prevents the
normal performance of substantially all his duties as an employee of the Company,
which disability or infirmity shall exist for any continuous period of 180
days.

 

7.             MITIGATION OF DAMAGES

 

The Executive shall be required
to mitigate the amount of any Base Salary continuation payment provided for in Section 5.2.1
by seeking other employment, and any such payment will be reduced by any
amounts which the Executive receives or is entitled to receive from another
employer or from self-employment during the Severance Period.  In fulfilling the requirements of this
section, Executive need not expend his full time and efforts in pursuing other
employment and a good faith and earnest pursuit of such employment shall be
deemed to have fulfilled such requirements. 
The Executive shall promptly notify the Company in writing in the event
that other employment is obtained during the Severance Period.

 

8.             CONFIDENTIALITY; NONSOLICITATION; NONCOMPETITION

 

8.1           Confidentiality. 
The Executive covenants and agrees with the Company that he will not any
time during the Employment Term and thereafter, except in performance of his
obligations to the Company hereunder or with the prior written consent of the
Company, directly or indirectly, disclose any secret or confidential
information that he may learn or has learned by reason of his association with
the Company or any of its subsidiaries and affiliates.  The term “confidential information”
includes information not previously made generally available to the public or
to the trade by the Company’s management, with respect to the Company’s or any
of its subsidiaries’ or affiliates’ products, facilities, applications and
methods, trade secrets and other intellectual property, systems, procedures,
manuals, confidential reports, product price lists, customer lists, technical
information, financial information (including the revenues, costs or profits
associated with any of the Company’s products), business plans, prospects or
opportunities, but shall exclude any information which is or becomes generally
available to the public or is generally known in the industry or industries in
which the Company operates other than as a result of disclosure by the
Executive in violation of his agreements under 

 

 

 

6

 

this Section 8.1.  The Executive will be released of his obligations
under this Section 8.1 to the extent the Executive is required to disclose
under any applicable laws, regulations or directives of any government agency,
tribunal or authority having jurisdiction in the matter or under subpoena or
other process of law provided that the Executive provides the Company with
prompt written notice of such requirement.

 

8.2           Acknowledgment of Company Assets.  The Executive acknowledges that the Company,
at the Company’s expense, has acquired, created and maintains, and will continue
to acquire, create and maintain, significant goodwill with its current and
prospective customers, vendors and employees, and that such goodwill is
valuable property of the Company.  The
Executive further acknowledges that to the extent such goodwill will be
generated through the Executive’s efforts, such efforts will be funded by the
Company and the Executive will be fairly compensated for such efforts.  The Executive acknowledges that all goodwill
developed by the Executive relative to the Company’s customers, vendors and
employees shall be the sole and exclusive property of the Company and shall not
be personal to the Executive. 
Accordingly, in order to afford the Company reasonable protection of
such goodwill and of the Company’s confidential information, the Executive
agrees as follows:

 

8.2.1.       Nonsolicitation. 
For so long as the Executive is employed by the Company, and continuing
for two years thereafter if termination of employment occurs for any reason
prior to a Change in Control, the Executive shall not, without the prior
written consent of the Company, directly or indirectly, as a sole proprietor,
member of a partnership, stockholder or investor, officer or director of a
corporation, or as an employee, associate, consultant or agent of any person,
partnership, corporation or other business organization or entity other than
the Company: (i) solicit or endeavor to entice away from the Company or
any of its subsidiaries any person or entity who is, or, during the then most
recent 12-month period, was employed by, or had served as an agent or key
consultant of the Company or any of its subsidiaries; (ii) solicit or
endeavor to entice away from the Company or any of its subsidiaries any person
or entity who is, or was within the then most recent 12-month period, a
customer or client (or reasonably anticipated to the general knowledge of the
Executive or the public to become a customer or client) of the Company or any
of its subsidiaries; or (iii) solicit or endeavor to entice away from the
Company or any of its subsidiaries any person who is employed by the Company or
its subsidiaries or induce such person to terminate his or her employment with
the Company or its subsidiaries.

 

8.2.2.       No Competing Employment.  For so long as the Executive is employed by
the Company, and continuing for one year thereafter if termination of
employment occurs for any reason prior to a Change in Control, the Executive
shall not, directly or indirectly, as a sole proprietor, member of a
partnership, stockholder or investor (other than a stockholder or investor
owning not more than a 1% interest), officer or director of a corporation, or
as an employee, associate, consultant or agent of any person, partnership,
corporation or other business organization or entity other than the Company,
render any service to or in any way be affiliated with a competitor (or any
person or entity that is reasonably anticipated to the general knowledge of the
Executive or the public to become a competitor) of the Company or any of its
subsidiaries.

 

 

7

 

8.3           Exclusive Property. 
The Executive confirms that all confidential information is and shall
remain the exclusive property of the Company. 
All business records, papers and documents kept or made by Executive
relating to the business of the Company shall be and remain the property of the
Company, except for such papers customarily deemed to be the personal copies of
the Executive.  Upon termination of the Executive’s
employment with the Company for any reason, the Executive promptly deliver to
the Company all of the following that are in the Executive’s possession or
under his control: (i) all computers, telecommunication devices and other
tangible property of the Company and its affiliates, and (ii) all
documents and other materials, in whatever form, which include confidential
information or which otherwise relate in whole or in part to the present or
prospective business of the Company or its affiliates, including but not
limited to, drawings, graphs, charts, specifications, notes, reports,
memoranda, and computer disks and tapes, and all copies thereof.

 

8.4           Injunctive Relief. 
Without intending to limit the remedies available to the Company, the
Executive acknowledges that a breach of any of the covenants contained in this Section 8
may result in material and irreparable injury to the Company or its affiliates
or subsidiaries for which there is no adequate remedy at law, that it will not
be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat thereof, the Company shall be entitled to seek
a temporary restraining order and/or a preliminary or permanent injunction
restraining the Executive from engaging in activities prohibited by this Section 8
or such other relief as may be required specifically to enforce any of the
covenants in this Section 8.  If for
any reason, it is held that the restrictions under this Section 8 are not
reasonable or that consideration therefore is inadequate, such restrictions
shall be interpreted or modified to include as much of the duration and scope
identified in this Section 8 as will render such restrictions valid and
enforceable.

 

8.5           Communication to Third Parties.  The Executive agrees that Company shall have
the right to communicate the terms of this Section 8 to any third parties,
including but not limited to, any prospective employer of the Executive.  The Company waives any right to assert any
claim for damages against Company or any officer, employee or agent of Company
arising from such disclosure of the terms of this Section 8.

 

8.6           Independent Obligations.  The provisions of this Section 8 shall
be independent of any other provision of this Agreement.  The existence of any claim or cause of action
by the Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense of the enforcement of this Section 8
by the Company.

 

8.7           Non-Exclusivity. 
The Company’s rights and the Executive’s obligations set forth in this Section 8
are in addition to, and not in lieu of, all rights and obligations provided by
applicable statutory or common law.

 

9.             CERTAIN PAYMENTS

 

Notwithstanding anything in
this Agreement to the contrary, if any amounts due to the Executive under this Agreement
and any other plan or program of the Company constitute a “parachute payment”
(as defined in Section 280G(b)(2) of the Internal Revenue Code of
1986, 

 

8

 

as amended (the “Code”)),
then the aggregate of the amounts constituting the parachute payment shall be
reduced to an amount that will equal three times his “base amount” (as defined
in Section 280G(b)(3) of the Code) less $1.00.  The determination to be made with respect to
this Section 9 shall be made by an accounting firm jointly selected by the
Company and the Executive and paid by the Company, and which may be the
Company’s independent auditors.

 

10.           MISCELLANEOUS.

 

10.1         Notices.  All
notices or communications hereunder shall be in writing, addressed as follows:

 

To the Company:

 

                                                Hardinge Inc.

                                                One Hardinge Drive

                                                Elmira, New York  14902-1507

                                                Telecopier No. (607) 734-2353

                                                Attention: 
Mr. J. Patrick Ervin

 

                                To
the Executive:

 

	
  Edward J. Gaio

  
	
   

  
	
   

  
	
   

  

 

All such notices shall be
conclusively deemed to be received and shall be effective, (i) if sent by
hand delivery, upon receipt, (ii) if sent by telecopy or facsimile
transmission, upon confirmation of receipt by the sender of such transmission,
or (iii) if sent by registered or certified mail, on the fifth day after
the day on which such notice is mailed.

 

10.2         Severability. 
Each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

 

10.3         Assignment. 
The rights and obligations of this Agreement shall bind and inure to the
benefit of any successor of the Company by reorganization, merger or
consolidation, or any assignee of all or substantially all of the Company’s
business and properties.  Neither this
Agreement nor any rights hereunder shall be assignable or otherwise subject to
hypothecation by the Executive.

 

10.4         Entire Agreement. 
This Agreement represents the entire agreement of the parties and shall
supersede any and all previous contracts, arrangements or understandings 

 

9

 

between the Company and the
Executive relating to the subject matter hereof.  This Agreement may be amended at any time by
mutual written agreement of the parties hereto.

 

10.5         Withholding. 
The payment of any amount pursuant to this Agreement shall be subject to
applicable withholding and payroll taxes, and such other deductions as may be
required under the Company’s employee benefits plans, if any.

 

10.6         Governing Law. 
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts executed in and to be
performed entirely within that state.

 

IN WITNESS WHEREOF, the Company
has caused this 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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   J. Patrick Ervin 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Chairman of the Board, President 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Edward J. Gaio

  
										

 

10

 

	
  State of New York

  	
  )

  	
   

  
	
   

  	
  : ss

  	
  .

  
	
  County of Chemung

  	
  )

  	
   

  

 

On the
         day of
                              ,
in the year 2008, before me, the undersigned, a Notary Public in and for said state,
personally appeared J. PATRICK ERVIN, residing at
                                                                                        ,
the Chairman of the Board, President and Chief Executive Officer of HARDINGE
INC., personally known to me, or proved to me on the basis of satisfactory
evidence, to be the individual whose name is subscribed to the within
instrument, and he acknowledged to me that he executed the same in his capacity
and that, by his signature on the instrument, the individual, or the person
upon behalf of which the individual acted, executed the
instrument on behalf of said corporation.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

 

	
  State of 

  	
  )

  	
   

  
	
   

  	
  : ss

  	
  .

  
	
  County of 

  	
  )

  	
   

  

 

 

                                On
the          day of
                              ,
2008, before me, the undersigned, personally appeared EDWARD J. GAIO,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and he
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

 

	
   

  	
   

  
	
   

  	
  Notary Public

  

 

 

 

11

 

 

EXHIBIT A

 

HARDINGE INC.

TERMINATION AGREEMENT AND RELEASE

 

In consideration of the
payments and benefits to be provided to me by Hardinge Inc. (the “Company”)
pursuant to Section 5.2.1 of the Employment Agreement between the Company
and me dated March 3, 2008 (the “Employment Agreement”), I agree as
follows:

 

1.             Termination. 
My employment with the Company is terminated effective
                        
and I will not thereafter apply for employment with the Company.

 

2.             Release. 
On behalf of myself and my heirs, successors executors, administrators,
trustees, legal representatives, agents and assigns, I fully and forever
release and discharge the Company, its subsidiaries, divisions and affiliates
and its and all of their predecessors, successors, assigns, directors and
officers (collectively “Released Parties”) from any and all claims, demands,
suits, causes of action, obligations, promises, damages, fees, covenants,
agreements, attorneys’ fees, debts, contracts and torts of every kind
whatsoever, known or unknown, at law or in equity, foreseen or unforeseen,
which against the Released Parties I ever had, now have or which I may have
for, upon or by reason of any matter, cause or thing whatsoever relating to or
arising from my employment with the Company or the termination thereof,
specifically including, but not limited to, all claims under the
following:  the Civil Rights Acts of
1866, 1871, 1964 and 1991; the Age Discrimination in Employment Act of 1967;
the Older Workers’ Benefit Protection Act of 1990; the Americans with
Disabilities Act; the Equal Pay Act; the Employee Retirement Income Security
Act; the Worker Adjustment Retraining Notification Act; the Family and Medical
Leave Act; the National Labor Relations Act; the Occupational Safety and Health
Act; the New York State Human Rights Law; the New York City Human Rights Law;
the New York State Labor Law; §§ 120 and 241 of the New York State Workers’
Compensation Law; any contract of employment, express or implied; and any and
all other federal, state or local laws, rules or regulations.

 

I hereby waive the right to
receive any personal relief (i.e. monetary or equitable relief) as a result of
any lawsuit or other proceeding brought by the EEOC or any other governmental
agency, based on or related to any of the matters from which I have released
the Released Parties. I also will take all actions necessary, if any, now or in
the future, to make this Release effective, including seeking and obtaining any
necessary governmental or court approval.

 

The foregoing release shall not
operate to release the Company from its obligations to make payments and
provide benefits as provided under Section 5.2.1 of the Employment
Agreement.

 

In connection with the
foregoing release (i) I acknowledge that the payments and benefits under Section 5.2.1
of the Employment Agreement are good and sufficient consideration to which I
would not otherwise be entitled but for my execution and delivery to the
Company of this instrument, (ii) I acknowledge that I have been advised by
the Company to consult with an attorney before signing this instrument, (iii) the
Company has allowed me at least twenty-one (21) days from the date I first
receive this instrument to consider it before being required to sign

 

 

 

 

 

it and return it to the
Company, and (iv) I may revoke this instrument, in its entirety, within
seven (7) days after signing it by delivering written notice of such
revocation to the Company on or before 5:00 p.m. on the seventh day of
such revocation period.

 

IN WITNESS WHEREOF, the
undersigned has executed this instrument as of the
         day of
                      .

 

	
   

  	
   

  
	
   

  	
  Edward J. Gaio

  

 

 

 

2

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