<PAGE>
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant | |
Check the appropriate box:
| | Preliminary proxy statement
|X| Definitive proxy statement
| | Definitive additional materials
| | Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Hudson Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Board of Directors of Hudson Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(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.
(1) Amount previously paid:
________________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
(3) Filing party:
________________________________________________________________________________
(4) Date filed:
________________________________________________________________________________
<PAGE>
HUDSON TECHNOLOGIES, INC.
25 Torne Valley Road
Hillburn, New York 10931
July 14, 1998
Dear Fellow Shareholders:
You are cordially invited to attend the Annual Meeting of
Shareholders which will be held on Thursday, August 13, 1998, at 10:00 A.M. at
the Empire Ball Room, Holiday Inn and Conference Center, Three Executive
Boulevard, Suffern, New York 10901.
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 2 Broadway, 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.
Cordially,
Kevin J. Zugibe, P.E.
Chairman of the Board
<PAGE>
HUDSON TECHNOLOGIES, INC.
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 13, 1998
-------------------------
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 August 13, 1998 at
10:00 A.M., at the Empire Ball Room, Holiday Inn and Conference Center, Three
Executive Boulevard, Suffern, New York 10901, for the following purposes:
1. To elect a class of three directors;
2. To approve an amendment to the By-Laws to provide that the number of
directors comprising the Board of Directors may be fixed by resolution
adopted by the Board of Directors; 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 29, 1998
are entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
By Order of the Board of Directors
Stephen P. Mandracchia
Secretary
July 14, 1998
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
HUDSON TECHNOLOGIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 13, 1998
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Hudson Technologies, Inc.
(the "Company") for use at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Thursday, August 13, 1998, 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, 1998.
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 are:
25 Torne Valley Road
Hillburn, New York 10931
Telephone No.: (914) 368-4990
OUTSTANDING STOCK AND VOTING RIGHTS
Only shareholders of record at the close of business on June
29, 1998 (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 5,065,820
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. All other matters to be
acted upon at the meeting will be decided by the majority of the votes cast by
the holders of
<PAGE>
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.
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 Bylaws, 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 successive years) and is to consist, as
nearly as possible, of one-half of the number of directors constituting the
entire Board. Accordingly, one class consists of three directors and the second
class consists of four directors.
At the Annual Meeting, a class of three directors will be
elected for a two-year term expiring at the Annual Meeting of Shareholders to be
held in 2000. Messrs. Kevin J. Zugibe, Dominic J. Monetta and Harry C. Schell
are the nominees for election to such positions. The other class of directors,
consisting of Messrs. Thomas P. Zugibe, Vincent P. Abbatecola, Otto C. Morch and
Robert Johnson, will not stand for election at the Annual Meeting because their
respective terms expire at the Annual Meeting of Shareholders to be held in
1999.
Proxies will be voted for the nominees named below, unless
authority is withheld. Should any nominee not be
- 2 -
<PAGE>
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.
The following is information with respect to the nominees for
election as directors at the Annual Meeting:
Name Age Position
---- --- --------
Kevin J. Zugibe 35 Chairman of the Board and
Chief Executive Officer
Harry C. Schell 64 Director
Dominic J. Monetta 55 Director
Kevin J. Zugibe, P.E., a founder of the Company, has been
Chairman of the Board, President and Chief Executive Officer of the Company
since its inception in 1991. Since May 1994, Mr. Zugibe has devoted his full
business time to the Company's affairs. From May 1987 to May 1994, Mr. Zugibe
was employed as a power engineer with Orange and Rockland Utilities, Inc. Mr.
Zugibe is a licensed professional engineer, and from December 1990 to May 1994,
he was a member of Kevin J. Zugibe & Associates, a professional engineering
firm.
Harry C. Schell has served as President and Chief Executive
Officer of BICC Cables Corporation, a company engaged in the manufacture of wire
and cable products, from 1990 to January 1994, and was President and Chief
Executive Officer of BICC's predecessor company, Cablec Corporation, from 1984
to 1990. Mr. Schell was President and Chief Executive Officer of Phelps Dodge
Corporation, a company engaged in the production of copper and copper products,
from 1974 to 1984. From 1994 to the present, Mr. Schell has been a private
investor and has served on the board of directors of the BICC Group and BICC
Cables Corporation, Phillips Cables Limited, National Electrical Manufacturers
Association, and the United Way of Rockland County.
Dominic J. Monetta has been a director of the Company since
April 1996. Since August 1993, he has been the President of Resource
Alternatives, Inc., a firm providing management and technological solutions to
executive managers. From December 1991 to May 1993, Mr. Monetta served as
Director of Defense Research and Engineering for the Research and Advanced
Technology Office of the United States Department of Defense. From June 1989 to
December 1991, he served as the Director of the Office of New Production
Reactors of the United States Department of Energy.
- 3 -
<PAGE>
The following is information with respect to the directors
whose terms of office expire at the 1999 Annual Meeting:
Name Age Position
---- --- --------
Thomas P. Zugibe 45 Executive Vice President and
Director
Vincent P. Abbatecola 50 Director
Otto C. Morch 64 Director
Robert Johnson 40 Vice President and Director
Thomas P. Zugibe has been a director since April 1995 and an
Executive Vice President of the Company since January 1997. He served as a Vice
President of the Company from its inception in 1991 until his appointment as
Executive Vice President in January 1997. Prior to May 1995, Mr. Zugibe devoted
only a portion of his business time to the affairs of the Company. Since May
1995, he has been employed by the Company on a full time basis. Mr. Zugibe has
been engaged in the practice of law in the State of New York since 1980 and is a
member of the Garnerville, New York law firm of Ferraro & Zugibe. He is also a
Justice for the Village of West Haverstraw, New York. Mr. Zugibe is the brother
of Kevin J. Zugibe, Chairman of the Board, President and Chief Executive Officer
of the Company.
Vincent P. Abbatecola has been a director of the Company since
June 1994. Mr. Abbatecola is the owner of Abbey Ice & Spring Water Company,
Spring Valley, New York, where he has been employed since 1971. Mr. Abbatecola
serves as Chairman of the Board of Mid Atlantic Ice Association, an industry
trade association.
Otto C. Morch has been a director of the Company since March
1996. Mr. Morch was Senior Vice President, Commercial Banking, at Provident
Savings Bank, F.A., for more than five years until his retirement in December
1997.
Robert Johnson has been a director of the Company and Vice
President since April 1996. Mr. Johnson founded and is President of
Environmental Support Solutions, Inc., a company which develops and provides
environmental software, training and consulting services, since March 1994. From
February 1979 to March 1994, Mr. Johnson was an Operations Manager for the
Arizona Region of Carrier Corporation's Building Systems Services.
During the fiscal year ended December 31, 1997 ("Fiscal
1997"), the Board held 11 meetings. Each of the directors attended at least 75%
of the total number of meetings of the Board held during the period he served as
a director during such
- 4 -
<PAGE>
year, except for Mr. Monetta who attended 7 of the 11 meetings. The Company has
a Stock Option Committee, which consists of Messrs. Abbatecola and Morch. The
Stock Option Committee held one meeting during Fiscal 1997 and, in addition,
took various actions by written consent. The Company also has an Audit Committee
of the Board which supervises the audit and financial procedures of the Company.
The Audit Committee is currently comprised of Messrs. Abbatecola and Morch. The
Audit Committee held one meeting during Fiscal 1997. In May 1997, the Board
established an Executive Committee consisting of Messrs. Kevin J. Zugibe, Thomas
P. Zugibe and Dominic J. Monetta, which is responsible for, among other things,
making recommendations to the Board concerning compensation of executive
officers. The Executive Committee did not meet during Fiscal 1997.
In January 1997, the Company entered into an agreement with
E.I. DuPont de Nemours & Company ("DuPont") and DuPont Chemical and Energy
Operations, Inc. ("DCEO") providing that, upon request by DuPont, the Company
will cause two persons designated by DuPont to be elected to the Company's Board
of Directors. DuPont has advised the Company that it does not intend to exercise
its right to designate such persons during 1998.
Compensation of Directors
Non-employee directors receive an annual fee of $3,000 and are
reimbursed for out-of-pocket expenses incurred in attending meetings of the
Board of Directors. Under the Company's Stock Option Plans, non-employee
directors are eligible to receive non-qualified stock options and stock
appreciation rights. No non-qualified stock options were granted to non-employee
directors in Fiscal 1997.
Executive Officers
In addition to Messrs. Kevin J. Zugibe and Thomas P.
Zugibe, Messrs. Eugene Tonkovich, Stephen P. Mandracchia, Walter
A. Phillips and Brian Coleman 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:
Name Age Position
---- --- --------
Eugene Tonkovich 57 President and Chief Operating
Officer
Stephen P. Mandracchia 38 Executive Vice President and
Secretary
Walter A. Phillips 45 Vice President of Sales and
Marketing
Brian Coleman 36 Vice President and Chief
Financial Officer
- 5 -
<PAGE>
Eugene Tonkovich has been President and Chief Operating
Officer of the Company since April 1998. Prior to joining the Company, Mr.
Tonkovich was Senior Partner and Director of the Tappan Group, a private
investment management company, from 1994 to April, 1998, and was a Director of
the Nantucket Ice Cream Company, from 1995 to May 1998. Mr. Tonkovich has served
as a Director of New Canaan Investors LLC, since 1995, and has served as a
Director of King Wire, Inc., a company engaged in the distribution of wire and
cable products since 1995.
Stephen P. Mandracchia has been an Executive Vice President of
the Company since January 1997 and Secretary of the Company since April 1995. He
served as a Vice President of the Company from January 1993 to January 1997 and
as a director of the Company from June 1994 to August 1996. Prior to September
1995, Mr. Mandracchia devoted only a portion of his business time to the
Company's affairs. Mr. Mandracchia, a member of the bar of the State of New
York, was a member of Martin, Vandewalle, Donohue, Mandracchia & McGahan, a
Great Neck, New York law firm from 1983 to December 1995.
Walter A. Phillips has been Vice President of Sales and
Marketing of the Company since October 1996. From January 1990 to October 1996,
he was employed by York International, a manufacturer of air conditioners
("York"), in various sales and marketing positions, most recently as National
Service Sales and Marketing Manager for York's United States service business.
Brian Coleman has been Vice President and Chief Financial
Officer of the Company since May 1997. Prior thereto, he was employed, for more
than 10 years, by BDO Seidman, LLP, the Company's independent auditors, in
various positions, including as a partner from 1995 to May 1997. Mr. Coleman is
a licensed certified public accountant in the State of New York.
Section 16(a) Compliance
Section 16(a) of the Securities Exchange Act of 1934, as
amended (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 to file reports of ownership and changes in ownership ("Reporting
Persons") with the Securities and Exchange Commission (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 Section 16(a) forms
received by it and written representations received from such persons, the
Company believes that during Fiscal 1997, all reporting requirements applicable
to the Company's Reporting Persons were complied with.
- 6 -
<PAGE>
EXECUTIVE COMPENSATION
The following table discloses the compensation earned for each
of the last three fiscal years by Kevin J. Zugibe, the Company's Chief Executive
Officer, and the other executive officers whose salary was in excess of $100,000
(the "Named Executives").
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Compensation
Annual Compensation(1) Awards
-------------------------------------------- -------------
Name Position Year Salary Bonus
---- -------- ---- ------ -----
<S> <C> <C> <C> <C>
Kevin J. Zugibe Chairman of the 1997 $158,631 -- 58,000 shares
Board, President & 1996 $145,462 -- --
Chief Operating 1995 $113,076 -- --
Officer
Stephen P. Executive Vice 1997 $120,554 -- 40,000 shares
Mandracchia President and 1996 $104,885 -- --
Secretary 1995 $ 47,574 -- --
Thomas Zugibe Executive Vice 1997 $120,169 -- 40,000 shares
President 1996 $ 98,461 -- --
1995 $ 65,439 -- --
Stephen Spain(2) Vice President 1997 $ 83,649 -- --
1996 $133,960 -- 60,000 shares
Robert Johnson Vice President 1997 $ 81,956 -- --
1996 $133,289 -- 60,000 shares
Walter A. Phillips Vice President 1997 $213,145 -- 22,000 shares
Sales & Mkt. 1996 $ 30,046 -- 25,000 shares
</TABLE>
__________________
(1) The value of personal benefits furnished to the Named Executives during
1995, 1996 and 1997 did not exceed 10% of their respective annual
compensation.
(2) Mr. Spain resigned in December 1997.
The Company granted options to the Named Executives during the fiscal year ended
December 31, 1997, as shown in the following table:
- 7 -
<PAGE>
<TABLE>
<CAPTION>
Summary of Stock Options Granted to Executive Officers
Number of % of Total
Securities Options
Underlying Granted to
Options Employees
Granted in Fiscal Year
------- --------------
Exercise or
Base price Expiration
Name Position Shares Percent ($/sh) Date
- ---- -------- ------ ------- ------ ----
<S> <C> <C> <C> <C> <C>
Kevin J. President and 40,000 15.4% $4.47 11/2002
Zugibe Chief 18,000 7.0% $3.85 12/2002
Executive
Officer
Thomas P. Executive Vice 25,000 9.6% $4.47 11/2002
Zugibe President 15,000 5.8% $3.85 12/2002
Stephen P. Executive Vice 25,000 9.6% $4.47 11/2002
Mandracchia President 15,000 5.8% $3.85 12/2002
Walter A. Vice President 10,000 3.8% $3.87 10/2002
Phillips of Sales and 12,000 4.6% $3.50 12/2002
Marketing
</TABLE>
The following table sets forth information concerning the
value of unexercised stock options held by Named Executives at December 31,
1997.
<TABLE>
<CAPTION>
Aggregated Fiscal Year End Option Values
Number of Securities
Underlying (1)Value of
Unexercised Options In-the-money Options
At December 31, 1997 At December 31, 1997
--------------------------------- ------------------------------
Shares
Acquire Value
Name on Exercise Received Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------- ---------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kevin J. Zugibe(2) 7,728 42,126 64,272 61,000 0 0
Chairman of the
Board, President &
Chief Operating
Officer
Thomas P. 7,728 42,126 64,272 43,000 0 0
Zugibe(2)
Executive Vice
President
Stephen P. 7,728 42,126 64,272 43,000 0 0
Mandracchia(2)
Executive Vice
President and
Secretary
Walter A. Phillips 10,000 48,075 29,700 7,300 $705 $1,095
Vice President of
Sales & Marketing
</TABLE>
- ----------
(1) Year-end values of unexercised in-the-money options represent the
positive spread between the exercise price of such options and the
year-end market value of the Common Stock of $3.625.
(2) Includes value as of date of exercise of 3,628 shares purchased at
$5.50 per share, which shares are still held by the named individuals.
- 8 -
<PAGE>
Employment Agreements
The Company has entered into a five-year employment agreement
with Kevin J. Zugibe, which expires in May 1999 and is automatically renewable
for successive terms. Pursuant to the agreement, effective January 1, 1998 Mr.
Zugibe is receiving an annual base salary of $130,000 with such increases and
bonuses as the Board may determine. The Company is the beneficiary of a
"key-man" insurance policy on the life of Mr. Zugibe in the amount of
$1,000,000.
The Company has also entered into one-year employment
agreements with Messrs. Thomas Zugibe and Mr. Stephen Mandracchia. Pursuant to
these agreements these officers are receiving annual base salaries of $100,000.
The agreements are automatically renewable for successive one-year terms.
The Company has entered into a three-year employment contract
with Mr. Phillips which provides for an annual base salary of $150,000 and is
automatically renewable for successive one-year terms. Mr. Phillip's contract
also provides for annual bonuses not to exceed $25,000, based on the Company's
achievement of certain levels of profitability. The Company has entered into
three-year employment contracts with Messrs. Johnson and Coleman which are
automatically renewable for successive one-year terms. Pursuant to these
agreements, Messrs. Johnson and Coleman are receiving annual base salaries of
$100,000 and $110,500, respectively.
- 9 -
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of June 29, 1998
based on the information obtained from the persons named below, with respect to
the beneficial ownership of Common Stock by (i) each person known by the Company
to be the beneficial owner of more than 5% of the Company's outstanding Common
Stock, (ii) the Named Executives, except for Mr. Spain, (iii) each director of
the Company, and (iv) all directors and executive officers of the Company as a
group:
Amount and
Name and Nature of Percentage of
Address of Beneficial Outstanding
Beneficial Owner(1) Ownership(2) Shares Owned
------------------- ------------ ------------
Kevin J. Zugibe 301,900 (3) 6.0%
Thomas P. Zugibe 306,900 (3) 6.1
Stephen P. Mandracchia 295,300 (3) 5.8
Stephen J. Cole-Hatchard 270,000 (3) 5.3
Walters A. Phillips 29,700 (6) *
Robert Johnson 28,500 (4) *
Vincent P. Abbatecola 2,600 *
Otto C. Morch 600 *
Dominic J. Monetta 6,000 *
Fredrick T. Zugibe 282,400 (3) *
DuPont Chemical and Energy
Operations, Inc. 500,000 (5) 10.0
All directors and executive
officers as a group (13 persons) 1,010,300 20.1%
- --------------------
* Less than one percent
(1) Unless otherwise indicated, the address of each of the persons listed is the
address of the Company, 25 Torne Valley Road, Hillburn, New York 10931.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of this report. 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 date hereof have been exercised.
Unless otherwise noted, the Company believes that all persons named in the table
have sole voting and investment power with respect to all shares of Common Stock
beneficially owned by them.
(3) Includes 64,272 shares which may be purchased by the named person at $5.50
per share under an immediately exercisable option expiring in October 1999.
(4) Represents immediately exercisable options. Does not include Options to
purchase 31,500 shares.
- 10 -
<PAGE>
(5) According to a Schedule 13D filed with the Securities and Exchange
Commission, DuPont Chemical and Energy Options, Inc. ("DCEO") and E.I. DuPont de
Nemours and Company claim shared voting and dispositive power over the shares.
DCEO's address is DuPont Building, Room 8045, 1007 Market Street, Wilmington, DE
19898.
(6) Includes 15,000 immediately exercisable shares, which may be purchased by
the named person at $5.625 per share under an immediately exercisable option
expiring in October 2001. Also includes 10,000 shares which may be purchased by
the named person at $4.06 per share under an immediately exercisable option
expiring in October 2002. Also includes 4,700 shares which may be purchased by
the named person at $3.50 per share under an immediately exercisable option
expiring in December 2002.
Kevin J. Zugibe, Thomas P. Zugibe, Frederick T. Zugibe, Stephen Mandracchia
and Stephen J. Cole-Hatchard may be deemed to be "parents" of the Company as
such term is used under the Securities Act of 1933.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1996, the Company acquired the outstanding capital
stock of Environmental Support Solutions from Robert Johnson and Stephen Spain
for an aggregate of $2,375,000, of which $700,000 consisted of cash paid to
Messrs. Johnson and Spain and $1,675,000 consisted of notes issued to such
persons maturing in October 1996 bearing interest at the annual rate of 7%. The
indebtedness evidenced by such notes was fully paid by the Company in October
1996.
In November 1996, certain officers and shareholders of the
Company loaned an aggregate of $678,000 to the Company. To evidence the
resulting indebtedness, the Company issued (a) $100,000 principal amount notes,
bearing interest at the annual rate of 8.75%, to each of Messrs. Kevin J.
Zugibe, Thomas P. Zugibe, Stephen P. Mandracchia and Stephen Cole-Hatchard,
executive officers of the Company; (b) a note in the principal amount of
$50,000, bearing interest at the annual rate of 6%, to Mr. William A. Barron, a
former executive officer of the Company; and (c) notes in the aggregate
principal amount of $228,000 to Deerfield Partnership, a New York general
partnership consisting of Messrs. Thomas Zugibe and Cole-Hatchard and Mr.
Cole-Hatchard's mother, and Mrs. Cole-Hatchard, individually. The notes were
payable upon the Company's receipt of the proceeds of a mortgage loan by a
specified date or on demand if not paid by such date. The Company repaid such
indebtedness in January 1997.
In January 1997, the Company entered into certain agreements
with DuPont and DCEO pursuant to which (a) the Company issued and sold 500,000
shares of Common Stock to DCEO in consideration for a $3.5 million cash payment,
(b) subject to certain exceptions, DuPont and DCEO agreed that neither DuPont
nor any of its affiliates will, directly or indirectly, acquire voting
securities of the Company representing more than 20% of the total voting power
for the election of directors; (c) the Company granted certain demand and
"piggy-bank" registration
- 11 -
<PAGE>
rights to DCEO with respect to such 500,000 shares; and (e) the Company agreed
to cause two persons designated by DuPont to be elected to the Board. The
Company's principal shareholders (other than DCEO and DuPont) granted to DuPont,
subject to certain exceptions, rights of first refusal to purchase shares of
Common Stock proposed to be sold by such shareholders. In addition, the Company
has entered into certain agreements with DuPont pursuant to which the Company
agreed (a) to provide certain services to DuPont to be marketed through DuPont's
authorized distributor network and (b) to market DuPont refrigerant products to
selected market segments together with the Company's refrigerant reclamation and
management services.
In May 1997, the Company borrowed an aggregate of $385,000
from Kevin J. Zugibe and $200,000 from Stephen P. Mandracchia, executive
officers of the Company, and issued demand notes to such persons in the
respective principal amounts borrowed from such persons. The notes issued to Mr.
Zugibe bear interest at 8% per annum and the note issued to Mr. Mandracchia
requires the Company to pay the interest (at 8.25% per annum) and fees incurred
by Mr. Mandracchia in connection with money he borrowed to fund his $200,00 loan
to the Company. The Company repaid such indebtedness in August 1997.
In May 1998, the Company borrowed $100,000 and $200,000,
respectively, from Thomas P. Zugibe and Frederick T. Zugibe, evidenced by demand
promissory notes bearing interest at the rate of 10% per annum. The Company
repaid such indebtedness in June 1998.
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<PAGE>
PROPOSAL 2
AMENDMENT TO THE COMPANY'S BY-LAWS
The Board has adopted a resolution unanimously approving and
recommending to the Company's shareholders for their approval, an amendment to
Article III, Section 3 of the Company's By-laws. The amendment provides that the
number of directors comprising the Board may be fixed (increased or decreased)
by resolution adopted by the Board. The By-laws currently provide that the
number of directors shall not be less than seven and that the number of
directors may be increased or decreased (but in no event less than five) by
resolution adopted by the shareholders. The proposed amendment to the By-laws
would permit the Board to increase or decrease the number of directors from time
to time without shareholder approval. The text of the proposed amendment to the
Company's By-Laws is attached hereto as Exhibit A.
The Board believes that its ability to increase the number of
directors is in the best interests of the Company, and believes it may be
advisable in the future to appoint additional directors to strengthen management
and bring certain expertise to the Board. The Company's By-laws currently
provide that a majority of the members of the Board may fill vacancies on the
Board created by the death, resignation or removal of directors or newly created
directorships resulting from an increase in the number of directors. The ability
to increase the number of directors, coupled with the requirement to maintain a
classified Board (i.e., two or more classes of directors serving staggered
terms), may enable management to make it more difficult or discourage an attempt
to obtain control of the Company by means of a merger, tender offer, proxy
contest or otherwise. In addition, pursuant to the Company's agreement with
DuPont, DuPont has the right to designate two persons to act as directors of the
Company. Although DuPont has not yet exercised this right, it may do so in the
future. The Board does not currently intend to increase the size of the Board or
appoint any additional directors, but may do so in the future.
Recommendation
THE BOARD RECOMMENDS A VOTE "FOR" PROPOSAL 2.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BDO Seidman, LLP has audited and reported upon the
consolidated financial statements of the Company for Fiscal 1997 and has been
selected by the Board of Directors to examine and report upon the financial
statements of the Company for the fiscal year ending December 31, 1998. A
representative of BDO Seidman, LLP is expected to be present at the Annual
Meeting with
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<PAGE>
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.
SHAREHOLDER PROPOSALS
Shareholders who wish to present proposals appropriate for
consideration at the next Annual Meeting of Shareholders must submit the
proposal in proper form to the Company at its address set forth on the first
page of this proxy statement not later than February 25, 1999 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.
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-KSB FOR THE
YEAR ENDED DECEMBER 31, 1997 IS BEING FURNISHED HEREWITH 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-KSB WILL
BE PROVIDED FOR A NOMINAL CHARGE TO SHAREHOLDERS WHO MAKE A WRITTEN REQUEST TO
THE COMPANY AT THE FOLLOWING ADDRESS:
HUDSON TECHNOLOGIES, INC.
25 TORNE VALLEY ROAD
HILLBURN, NEW YORK 10931
ATTENTION: Stephen P. Mandracchia, Secretary
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.
By order of the Board
of Directors
Kevin J. Zugibe, P.E.
Chairman of the Board
July 14, 1998
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<PAGE>
EXHIBIT A
AMENDMENT TO THE COMPANY'S BY-LAWS
Article III, Section 3 of the Company's By-Laws are hereby
deleted and a new Section 3 is substituted in lieu thereof, to read as follows:
"3. NUMBER OF DIRECTORS: The number of directors
comprising the Board of Directors shall be such number
as may be from time to time fixed by resolution of the
Board of Directors."
<PAGE>
HUDSON TECHNOLOGIES, INC.
25 Torne Valley Road
Hillburn, New York 10931
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD AUGUST 13, 1998
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 Stockholders of Hudson Technologies, Inc. (the "Company") on
Thursday, August 13, 1998, at the Empire Ball Room, Holiday Inn and Conference
Center, Three Executive Boulevard, Suffern, New York 10901 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:
1. ELECTION OF DIRECTORS:
| | FOR all nominees listed below | | WITHHOLD AUTHORITY
(except as marked to the to vote for all nominees listed
contrary below). below.
Kevin J. Zugibe, Dominic J. Monetta and Harry C. Schell
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space below.)
________________________________________________________________________________
(Continued and to be signed on reverse side)
<PAGE>
2. Approval of an amendment to the Company's By-Laws.
| | FOR | | AGAINST | | ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE.
IF NO INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THOSE NOMINEES
AND THE PROPOSALS LISTED ABOVE.
DATED: _____________________, 1998
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.
________________________________________
Signature
________________________________________
Signature if held jointly
Please mark, sign, date and return this proxy card promptly using
the enclosed envelope.
