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Exhibit
10.3
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made effective as of the 10
th day of June, 1996, by and between Bolt
Technology Corporation, a Connecticut corporation having an office
at Four Duke Place, Norwalk, Connecticut 06854, (the
“Company”), and RAYMOND M. SOTO, (the
“Executive”).
WHEREAS, Company desires to
secure the services of Executive, as hereinafter set forth, and
Executive desires to be employed by Company, as hereinafter set
forth.
NOW, THEREFORE, IN VIEW OF
THE FOREGOING AND IN CONSIDERATION OF THE MUTUAL PROMISES
HEREINAFTER SET FORTH, THE PARTIES HERETO DO HEREBY AGREE AS
FOLLOWS:
1. EMPLOYMENT.
Company hereby employs
Executive as its Chief Executive Officer and President and
Executive hereby accepts such employment, all upon and subject to
the terms and conditions hereinafter set forth.
2. TERM.
The term of employment of
Executive under this Agreement shall commence on June 10, 1996
and shall continue for a period of three (3) years and twenty
(20) days through June 30, 1999, subject to extension as
set forth herein, (said term, as the same may be extended, being
referred to as the “Term”). The Term shall be
automatically extended for consecutive additional periods of twelve
(12) months each ending on June 30 of the applicable
year, unless, at least twenty four (24) months prior to the
expiration of the then Term, Company gives written notice to
Executive pursuant to the Notice provisions herein of its intention
not to extend the Term.
3. DUTIES AND
POSITIONS.
Executive shall be employed
as the Chief Executive Officer and President of the Company and
shall perform such services of an executive and managerial nature
as are consistent with said positions. Executive shall report only
to the Board of Directors of Company. Executive’s powers and
authority shall be superior to those of any other officer or
employee of Company. Subject to applicable law, the Company shall
nominate Executive to serve as a director during the Term.
Executive shall not be required, without his consent, to render
services during the Term in any geographic area other than
Fairfield County, Connecticut provided Executive will be expected
to travel to the extent reasonably necessary to fulfill his
responsibilities. During the Term, Executive agrees to devote his
time and energies during normal business hours to the business and
affairs of the Company.
4. COMPENSATION.
(A) BASE SALARY. Company
shall pay to Executive, on the same periodic basis as Company pays
its other employees (but in no event less frequently than monthly),
during the Term, as the same may be extended, a base salary in
substantially equal payments as follows:
(i) During the first
(1st) twelve (12) months of the Term ending June 30,
1997, a base salary of $206,000.00; and
(ii) During each subsequent
twelve (12) month period during the Term, a base salary equal
to the greater of
(a) one hundred five
(105%) of the prior twelve (12) month’s base
salary, or
(b) the product obtained by
multiplying the prior twelve (12) month’s base salary
times a fraction, the numerator of which shall be the Price Index
(hereinafter defined) for April of the immediately preceding twelve
(12) month period and the denominator of which shall be the
Price Index for April of the twelve (12) month period
immediately preceding the twelve (12) month period used in
determining the numerator. The “Price Index” shall mean
the Consumer Price Index for All Urban Consumers, New
York-No.N.J.-Long Island, NY-NJ-CT, All terms (1982-84=100) issued
and published by the Bureau of Labor Statistics of the United
States Department of Labor. If, at any time, said Consumer Price
Index is no longer issued or available, then the term “Price
Index” shall mean a successor or comparable index selected by
Company and Executive.
It is understood that Company
may, in the discretion of its Board of Directors, increase such
base salary above an amount provided for pursuant to the foregoing
without affecting any of the other terms of this Employment
Agreement.
(B) PERFORMANCE BONUS.
Company shall pay to Executive, with respect to each of
Company’s fiscal years during the Term, such performance
bonus, if any, as the Executive Compensation Committee of the Board
of Directors of Company may, in its discretion, determine.
Notwithstanding the foregoing, Company agrees that all such
performance bonuses shall be based upon the performance of Company
and Executive and shall be consistent with the past practices of
Company with respect to bonuses paid to Executive. All such bonuses
shall be paid within thirty (30) days of the end of the fiscal
year of Company to which the same relate.
5. REIMBURSEMENT
EXPENSES.
Company shall pay or
reimburse Executive for all travel, entertainment and other
expenses incurred by Executive in connection with the performance
of his duties under this Agreement. The foregoing shall include
reimbursement for country club dues and charges.
6. OFFICE, ETC.
Company shall furnish
Executive with a private office and a private secretary and such
assistance and accommodations as shall be suitable to the character
of Executive’s position with Company and adequate for the
performance of his duties hereunder. During the Term, Company
recognizes Executive’s need for an automobile for business
purposes and shall provide Executive with the use of an automobile
(comparable to Executive’s current automobile) and
reimbursement for all related expenses (e.g., gas, oil, insurance,
maintenance, repairs, etc.).
7. PARTICIPATION IN
PLANS/LIFE INSURANCE.
(A) PLANS. During the Term,
Executive (and, where applicable, his family) shall be entitled to
receive, and shall receive, any and all rights, benefits and
privileges that are provided to any one or more executives of the
Company, including, without limitation, the presently maintained
401(k) Savings Plan, stock option plan, disability plans, medical
and dental plans, and/or any other employee benefit other than the
Company’s Severance Compensation Plan adopted on
December 19, 1986, (collectively “Plans and/or
Programs”), on a basis no less favorable to Executive than
the rights, benefits and privileges that are currently in effect.
To the extent that the foregoing benefits are not provided to
Executive under the Plans and/or Programs, Executive shall be
entitled to comparable benefits and be reimbursed for the costs
thereof.
Without limiting the
generality of the foregoing:
(i) with respect to the
401(k) Savings Plan currently maintained by Company, Company will,
during the Term, continue to provide a matching contribution in
accordance with the terms of said Plan and, in any event, in a
manner consistent with Company’s past practices;
and
(ii) with respect to
Executive’s participation in Company’s stock option
plan/program, Executive’s entitlement shall be consistent
with past practices of Company.
Notwithstanding any
termination of Executive’s employment under this Agreement
for any reason, and without limitation of any of Executive’s
other rights or entitlements under the terms of this Agreement,
Executive shall in all events be entitled to all accrued and vested
benefits under any and all Plans and/or Programs.
(B) EXECUTIVE LIFE INSURANCE.
Company currently maintains a whole life insurance policy covering
the life of Executive in the face amount of $620,000.00 with
respect to which Judith Soto is the beneficiary. Company agrees to
maintain, at all times during the Term, at Company’s expense,
said insurance policy or comparable insurance, with an insurer
reasonably acceptable to Executive, on the life of Executive
payable to a beneficiary or beneficiaries chosen by Executive in an
aggregate amount of at least $620,000.00, (the “Executive
Life Insurance”). The Company shall pay all premiums that
become due on the Executive Life Insurance at least 15 days before
the end of the applicable grace period and upon demand exhibit from
time to time to Executive due proof of such payment. If any premium
shall remain unpaid 15 days before the end of the grace period,
Executive may pay or cause the premium to be paid, and thereupon
Executive shall be entitled to reimbursement from the Company.
Company shall do everything necessary to maintain the Executive
Life Insurance in full force and effect and shall not borrow on the
cash surrender value of any Executive Life Insurance and/or pledge
any Executive Life Insurance as collateral for any corporate
obligation. Upon the termination of Executive’s employment
under this Agreement for any reason, Company shall, within 30 days
after such termination, transfer, free and clear of liens and
security interests, the ownership of the Executive Life Insurance
(including, without limitation, the full cash surrender value
thereof) to Executive or his designee.
(C) DISABILITY INSURANCE.
Company currently maintains a group long term disability insurance
program which provides a benefit equal to 60% of base pay up to a
maximum of $6,000.00 per month. Company agrees to maintain, at all
times during the Term, at Company’s expense, and with an
insurer reasonably acceptable to Executive, a supplemental
(individual) disability insurance policy covering Executive as may
be necessary to provide Executive with disability benefits equal to
a full 60% of Executive’s then basic salary, without
limitation on amount, (the “Executive Disability
Insurance”). The Company shall pay all premiums that become
due on the Executive Disability Insurance at least 15 days before
the end of the applicable grace period and upon demand exhibit from
time to time to Executive due proof of such payment. If any premium
shall remain unpaid 15 days before the end of the grace period,
Executive may pay or cause the premium to be paid, and thereupon
Executive shall be entitled to reimbursement from the Company.
Company shall do everything necessary to maintain the Executive
Disability Insurance in full force and effect and shall not pledge
any Executive Disability Insurance as collateral for any corporate
obligation. Upon the termination of Executive’s employment
under this Agreement for any reason, Company shall, within 30 days
after such termination, transfer, free and clear of liens and
security interests, the ownership of the Executive Disability
Insurance (including, without limitation, the right to receive any
payments thereunder) to Executive or his designee.
8. DEATH AND
DISABILITY.
(A) DISABILITY. If, during
the Term, Executive becomes physically or mentally disabled,
whether totally or partially, so that he is prevented from
performing his duties
specified herein for a period of twelve
(12) consecutive months, the Company will, nevertheless,
continue to pay Executive his full compensation hereunder when due,
through the last day of the twelfth (12th) consecutive month
of such disability, (the “Disability Period”), after
which the payment of such compensation shall be suspended. If
Executive thereafter returns to full time employment he shall, with
respect to periods thereafter commencing, receive, and the Company
shall pay, his compensation so long as Executive remains employed
hereunder on a full time basis. The Term will not be extended or be
deemed suspended by reason of any period of disability. Company
shall be entitled to a credit against its payment obligations under
this Paragraph 8(A) in the amount of any disability insurance
proceeds actually received by Executive on account of disability
insurance policies maintained and paid for by Company.
Notwithstanding anything contained herein to the contrary, Company
may terminate this Agreement after Executive shall have been absent
from employment as the result of such disability for a continuous
period of twelve (12) consecutive months. Upon any such
termination, Company shall pay to Executive, on the date of such
termination, all accrued but unpaid amounts payable hereunder with
respect to the period prior to the date of termination (including,
without limitation, accrued bonus and unused vacation pay). In
addition, after such termination, Executive shall be entitled to
receive any and all benefits payable under any disability insurance
coverage maintained by the Company with respect to Executive,
including, without limitation, the Executive Disability
Insurance.
(B) DEATH. The term of
Executive’s employment under this Agreement will terminate
automatically upon Executive’s death. In the event of
Executive’s death, his right to all further compensation
hereunder shall cease, except that his legal representative shall
be entitled to receive, on a pro rata basis for the period ending
with the last day of the month in which death shall have occurred,
compensation hereunder at his then base salary, including, without
limitation, compensation payable during any Disability Period,
accrued and unused vacation pay and any accrued bonus.
Notwithstanding the foregoing, Executive’s legal
representative and/or his designated beneficiary shall be entitled
to receive and Company shall be obligated to pay an additional
death benefit in an amount equal to one (1) year’s base
salary at the rate in effect at the time of Executive’s
death. Said death benefit shall be paid within thirty
(30) days of the Executive’s death. The foregoing shall
be in addition to the proceeds of any life insurance covering
Executive.
9. TERMINATION. Subject to the
provisions of this Paragraph 9, either Company or Executive may
terminate
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