This Employment Agreement involves
Title: Exhibit 10.3 EMPLOYMENT AGREEMENT
Industry: Oil Well Services and Equipment Sector: Energy
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:
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.
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.
(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 this Agreement prior to the expiration of the Term, as provided for hereinbelow.
(A) Company shall have the right to terminate this Agreement for Cause (as hereinafter defined), whereupon the Term shall be at an end. Executive shall have the right to terminate this Agreement for Good Reason (as hereinafter defined), whereupon the Term shall be at an end, subject to the obligations of the Company to pay and provide the payments and benefits set forth in this Employment Agreement.
(B) If Company terminates this Agreement for other than Cause or Executive terminates this Agreement for Good Reason, then Company shall be obligated to:
(i) pay to Executive, within thirty (30) days after 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); and
(ii) pay to Executive any and all sums which would have become payable to Executive under this Agreement during the three (3) year period following the date of such termination (the “Severance Period”). Said sums are sometimes hereinafter referred to as the “Severance Period Payments”. Subject to acceleration as hereinafter provided, the Severance Period Payments shall be paid as and when the same would otherwise have been required to be paid, assuming that Executive had remained employed under this Agreement during the Severance Period. The Severance Period Payments shall be computed based upon (a) base salary increasing at 105% per year, and (b) annual performance bonuses based upon the average of the three (