Exhibit 10.1
BOLT TECHNOLOGY
CORPORATION
2006 STOCK OPTION
PLAN
1. Purpose . The purpose of the Bolt
Technology Corporation 2006 Stock Option Plan (the “
Plan ”) is to recognize the contributions made by
Employees and Directors of Bolt Technology Corporation (the “
Company ”) or a Subsidiary and to provide such persons
with an additional incentive to use maximum efforts for the future
success of the Company and any Subsidiary and to enhance the
ability of the Company or a Subsidiary to attract, retain and
motivate individuals upon whom the Company’s sustained growth
and financial success depend by providing such persons with an
opportunity to acquire or increase their proprietary interest in
the Company through receipt of rights to acquire Common
Stock.
2. Definitions
. As used in the Plan,
the following definitions shall apply to the capitalized terms
indicated below:
“Board”
or “Board of
Directors” means the Board of Directors of the Company
duly elected by the shareholders of the Company.
“Change of
Control” means the
earliest to occur of any of the following events: (i) the
shareholders of the Company (or the Board of Directors, if
shareholder action is not required) approve a sale or other
disposition of all or substantially all of the assets of the
Company, other than to a Subsidiary; (ii) the shareholders of
the Company (or the Board of Directors, if shareholder action is
not required) approve a merger, plan of reorganization,
consolidation or share exchange with any other entity, and
immediately following such a transaction the holders of the voting
securities of the Company or such surviving entity immediately
prior to such transaction hold securities representing fifty
percent (50%) or less of the combined voting power of the
voting securities of the Company or such surviving entity
immediately after such transaction; or (iii) the date any
entity, person or group, within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act,
as amended, other than the Company or any of its Subsidiaries or
any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its Subsidiaries shall have
become the beneficial owner of, or shall have obtained voting
control over, more than fifty percent (50%) of the outstanding
Shares of the Company’s Common Stock; provided, however, that
as to any award under the Plan that consists of deferred
compensation subject to Section 409A of the Code, the
definition of “Change of Control” shall be deemed
modified to the extent necessary to comply with Section 409A
of the Code.
“Code”
means the Internal Revenue Code of
1986, as amended.
“Committee” means the Board of Directors, or a committee of
the Board of Directors appointed in accordance with Section 3
of the Plan, when acting in connection with the administration of
the Plan.
“Common
Stock” means the
common stock, no par value, of the Company.
“Company”
means Bolt Technology Corporation, a
Connecticut corporation.
“Continuous
Service” means that
the Optionee’s service with the Company or a Subsidiary,
whether as an Employee or Director, is not interrupted or
terminated. The Optionee’s Continuous Service shall not be
deemed to have terminated merely because of a change in the
capacity in which the Optionee renders service to the Company or a
Subsidiary as an Employee or Director or a change in the entity for
which the Optionee renders such service, provided that there is no
interruption or termination of the Optionee’s Continuous
Service. For example, a change in status from an Employee of the
Company to a Director will not constitute an interruption of
Continuous Service. Notwithstanding the foregoing, an
Optionee’s Continuous Service shall be deemed to have
terminated with respect to all Incentive Stock Options granted to
such Optionee on such date as such Optionee’s Continuous
Service as an Employee terminates. To the extent permitted by law
and any leave of absence policy of the Company, the Committee or
the chief executive officer of the Company, in that party’s
sole discretion, may determine whether Continuous Service shall be
considered interrupted in the case of any leave of absence approved
by that party, including sick leave, military leave or any other
personal leave; provided, however, an Optionee’s Continuous
Service shall not be deemed to have been terminated because of an
approved leave of absence from active service with the Company or a
Subsidiary on account of temporary illness, authorized vacation, or
granted for reasons of professional advancement, education, health,
or government service, or during military leave for any period that
is required by the Uniformed Services Employment and Reemployment
Rights Act of 1994, as amended (“USERRA”) (if the
Optionee returns to active service with the Company or a Subsidiary
within the period required by USSERA after termination of military
leave), or during any period required to be treated as a leave of
absence by virtue of any applicable and binding statute (such as
the Family and Medical Leave Act of 1993, as amended), personnel
policy, or employment agreement. Whether an authorized leave of
absence constitutes termination of Continuous Service hereunder
shall be determined by the Committee.
“Director”
means each member of the Board of
Directors of the Company.
“Disability” means (i) in the case of an Optionee who
receives a Nonqualified Stock Option and whose employment
arrangement with the Company or a Subsidiary is subject to the
terms of an employment agreement between such Optionee and the
Company or Subsidiary, which employment agreement includes a
definition of “Disability,” the meaning set forth in
such agreement for “Disability” during the period that
agreement remains in effect; and (ii) in all other cases, the
term “Disability” as used in this Plan or any Option
Document shall have the meaning set forth in Section 22(e)(3)
of the Code.
“Employee”
means any person, including
officers, employed by the Company or a Subsidiary. However, service
solely as a Director, or payment of a fee for such service, shall
not cause a Director to be considered an “Employee” for
purposes of the Plan.
“Exchange
Act” means the
Securities Exchange Act of 1934, as amended.
“Fair Market
Value” means, as of
a particular date, the value of the Common Stock determined as
follows: (i) if the Common Stock is traded in a public market,
then the Fair Market Value per share shall be, (A) if the
Common Stock is listed on a national securities exchange or
included in the NASDAQ Stock Market, the last reported sale price
thereof on the relevant date (or if no Shares of Common Stock were
traded on such date, the next preceding date on which the Common
Stock was traded), or (B) if the Common Stock is not so listed
or included, the average of the last reported “bid” and
“asked” prices thereof on the relevant date (or if no
Shares of Common Stock were traded on such date, the next preceding
date on which the Common Stock was traded) as reported on the OTC
Bulletin Board, or the Fair Market Value per share as determined by
any other method adopted by the Committee from time to time as the
Committee may deem appropriate or as may be required in order to
comply with applicable laws and regulations; and (ii) at any
time at which the Common Stock is not traded in a public market,
then the Fair Market Value per share shall be determined by the
Board, acting in good faith, and such determination shall be final
and binding for all purposes of the Plan.
“Incentive Stock
Option” or
“ISO” means an Option that is intended to
qualify as an “incentive stock option” within the
meaning of Section 422 of the Code.
“Non-Employee
Director” means a
Director who either (i) is not a current Employee or officer
of the Company or a Subsidiary and does not receive compensation
directly or indirectly from the Company or a Subsidiary for
services rendered as a consultant or in any capacity other than as
a Director, or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3
promulgated under the Exchange Act.
“Nonqualified Stock
Option” means an
Option that is not intended to qualify, or otherwise does not
qualify, as an “incentive stock option” within the
meaning of Section 422 of the Code.
“Option”
means either an ISO or a
Nonqualified Stock Option granted under the Plan.
“Option
Document” means the
document described in Section 7 of the Plan that sets forth
the terms and conditions of an Option grant. Each Option Document
shall be subject to the terms and conditions of the
Plan.
“Optionee”
means a person to whom an Option has
been granted under the Plan, which Option has not been exercised
and has not expired or terminated, or if applicable, such other
person who holds an outstanding Option.
“Option
Price” means the
price at which Shares may be purchased upon exercise of an Option
determined in accordance with Section 7(b) of the
Plan.
“Securities
Act” means the
Securities Act of 1933, as amended.
“Shares”
means the shares of Common Stock of
the Company that are the subject of Options.
“Subsidiary” means a corporation that is a subsidiary
corporation with respect to the Company within the meaning of
Section 424(f) of the Code.
“Ten Percent
Shareholder” means
an Employee who owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all
classes of stock of the Company or of a Subsidiary.
3. Administration of the
Plan . The Plan shall
be administered by the Board; however, the Board may designate a
committee composed of two or more Non-Employee Directors to
administer the Plan in its stead. Any such committee so designated
by the Board to administer the Plan shall be constituted as
necessary to comply with the legal requirements, if any, relating
to the administration of the types of options granted under the
Plan imposed by applicable corporate and securities laws, the Code
and any stock exchange or national market system upon which the
Common Stock is then listed or traded. Notwithstanding anything to
the contrary contained in this Section 3, the Board shall
constitute the Committee and administer the Plan with respect to
Options granted to Non-Employee Directors.
(a) Meetings
. The Committee may hold meetings at
such times and places as it may determine. Acts approved at a
meeting by a majority of the members of the Committee or acts
approved in writing by the unanimous consent of the members of the
Committee shall be the valid acts of the Committee.
(b) Powers of
Committee. The Committee
shall have the power, subject to the express provisions of the
Plan:
(i) To determine from time to time
which of the eligible persons under the Plan shall be granted
Options; when and how each Option shall be granted; what type or
combinations of types of Options shall be granted; the provisions
of each Option granted, which need not be identical, including any
terms of vesting of the Option and the price at which the Option
shall be granted; and, the number of Shares subject to the
Option.
(ii) To construe and interpret the
Plan and Options granted under it, and to establish, amend and
revoke rules and regulations for its administration. The Committee
in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Option Document in a manner and
to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(iii) Generally, to exercise such
other powers and perform such acts as the Committee deems necessary
or expedient to promote the best interests of the Company and that
are not in conflict with the provisions of the Plan or any
Options.
(iv) The Committee may delegate to
officers or employees of the Company or a Subsidiary the authority,
subject to such terms as the Committee may determine, to perform
administrative functions with respect to the Plan and Option
Documents.
(c) Exculpation
. No member of the Committee shall
be personally liable for monetary damages for any action taken or
any failure to take any action in connection with the
administration of the Plan or the granting of Options under the
Plan, provided that this Subsection 3(c) shall not apply to:
(i) any breach of such member’s duty of loyalty to the
Company or its shareholders; (ii) acts or omissions not in
good faith or involving intentional misconduct or a knowing
violation of law; (iii) acts or omissions that would result in
liability under the circumstances described in the exclusions
contained in Section 33-636(b)(4) of the Connecticut Stock
Corporation Act, as amended; and (iv) any transaction from
which the member derived an improper personal benefit.
(d) Indemnification
. Service on the
Committee shall constitute service as a member of the Board of the
Company. Each member of the Committee shall be entitled without
further action on such person’s part to indemnity from the
Company to the fullest extent provided by applicable law and the
Company’s Certificate of Incorporation and/or Bylaws in
connection with or arising out of any action, suit or proceeding
with respect to the administration of the Plan or the granting of
Options thereunder in which such person may be involved by reason
of such person’s being or having been a member of the
Committee, whether or not such person continues to be a member of
the Committee at the time of the action, suit or
proceeding.
(e) Effect of Committee
Action. The
Committee’s determinations under the Plan (including, without
limitation, determinations of the persons to receive Options, the
form, amount and timing of such Options, the terms and provisions
of such Options and the Option Documents evidencing same) shall be
made in its discretion and need not be uniform and may be made by
it selectively among persons who receive, or are eligible to
receive, Options under the Plan, whether or not such persons are
similarly situated. All determinations and interpretations made by
the Committee shall be final, binding and conclusive on all
persons, including without limitation, all Optionees and persons
claiming rights from or through an Optionee.
4. Shares Subject to Plan
. Subject to adjustment
as provided in Section 9, the number of Shares that may be
issued pursuant to Options shall not exceed, in the aggregate,
500,000 Shares. The Shares shall be issued from authorized and
unissued or reacquired Common Stock, including Shares repurchased
by the Company. If an Option shall for any reason expire or
otherwise terminate without having been exercised in full for any
reason, the Shares for which the Option was not exercised shall
revert to, and may again become available for the grant of one or
more Options under the Plan. No Options shall be granted under the
Plan after June 30, 2016; provided, however, that all Options
granted under the Plan prior to such date shall remain in effect
until such Options have been exercised or terminated in accordance
with the Plan and the terms of such Options.
5. Eligibility
.
(a) Eligibility for Grant of
Options. Nonqualified
Stock Options shall be granted to Non-Employee Directors as set
forth in Section 6, and may otherwise be granted to
Non-Employee Directors at the discretion of the Committee.
Nonqualified Stock Options and/or ISOs (or a combination thereof)
may be granted to Employees of the Company or its Subsidiaries, at
the discretion of the Committee.
(b) Ten Percent
Shareholders. A Ten
Percent Shareholder shall not be granted an ISO unless the exercise
price of such Option is at least 110% of the Fair Market Value of
the Common Stock on the date of grant, and the Option is not
exercisable after the expiration of five (5) years from the
date of grant.
(c) Committee To
Determine. The Committee,
in its sole discretion, shall determine all questions of
eligibility to receive Options under the Plan.
6. Non-Employee Director
Grants under the Plan . Notwithstanding any provision of the Plan to the
contrary, each Non-Employee Director of the Company who was elected
at the Company’s Annual Meeting of Shareholders held in 2003,
2004 or 2005, shall be granted a Nonqualified Stock Option to
purchase 3,000 Shares of Common Stock upon approval of the Plan by
the shareholders of the Company. Each Non-Employee Director of the
Company who is elected by the shareholders of the Company at the
Company’s Annual Meeting of Shareholders held in 2006 and in
each year of election thereafter ending with the year 2015, shall
be granted a Nonqualified Stock Option to purchase 5,000 Shares of
Common Stock on the date so elected to the Board. Each Option
granted pursuant to this Section 6 shall have an Option Term
of five (5) years from the date it is granted and shall be
first exercisable as to twenty-five percent (25%) of the
Shares covered under the Option in each of years two through five
of its term (each year commencing on the anniversary date of the
grant).
7. Option Documents and
Terms . Each Option
granted under the Plan shall be a Nonqualified Stock Option, unless
the Option specifically shall be designated at the time of grant to
be an ISO. If any Option designated as an ISO is determined for any
reason not to qualify as an incentive stock option within the
meaning of Section 422 of the Code, such Option shall be
treated as a Nonqualified Stock Option for all purposes under the
provisions of the Plan. Each Option granted pursuant to the Plan
shall be evidenced by an Option Document in such form as the
Committee shall from time to time approve, which Option Document
shall comply with and be subject to the following terms and
conditions and such other terms and conditions as the Committee
shall from time to time require that are not inconsistent with the
terms of the Plan.
(a) Number of Option
Shares .
Each Option Document shall state the
number of Shares to which it pertains. An Optionee may receive more
than one Option and the Options received may include Options that
are intended to be ISOs and Options that are not intended to be
ISOs, but only on the terms, and subject to the conditions and
restrictions, of the Plan.
(b) Option Price
. Each Option Document shall state the Option
Price applicable to the Option granted therein. Subject to the
provisions of Section 5(b) with respect to a Ten Percent
Shareholder granted an ISO, the exercise price of any Option,
whether a Nonqualified Stock Option or an ISO, shall in no event
ever be less than 100% of the Fair Market Value of the Shares
subject to the Option on the date the Option is granted as
determined by the Committee in accordance with this
Section 7(b). Notwithstanding the foregoing, an Option may be
granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an
assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the
Code.
(c) Exercise.
No Option shall be exercisable
during the year ending on the first anniversary date of the
granting of the Option. No Option shall be deemed to have been
exercised prior to the receipt by the Company of written notice of
such exercise and of payment in full of the Option price for the
Shares to be purchased. Each such notice shall specify the number
of Shares to be purchased and (unless the Shares are covered by a
then current registration statement or a notification under
Regulation A under the Securities Act) shall contain the
Optionee’s acknowledgment in form and substance satisfactory
to the Company that: (i) such Shares are being purchased for
investment and not for distribution or resale (other than a
distribution or resale which, in the opinion of counsel
satisfactory to the Company, may be made without violating the
registration provisions of the Securities Act); (ii) the
Optionee has been advised and understands that (A) the Shares
have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144
under the Securities Act and are subject to restrictions on
transfer, and (B) the Company is under no obligation to
register the Shares under the Securities Act or to take any action
which would make available to the Optionee any exemption from such
registration; (iii) such Shares may not be transferred without
compliance with all applicable federal and state securities laws
and any other restrictions contained in the Plan and the applicable
Option Document; and (iv) an appropriate legend referring to
the foregoing restrictions on transfer and any other restrictions
imposed under the Option Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if the Company
determines that issuance of Shares should be delayed pending
(1) registration under federal or state securities laws,
(2) the receipt of an opinion of counsel satisfactory to the
Company that an appropriate exemption from such registration is
available, (3) the listing or inclusion of the Shares on any
securities exchange or an automated quotation system, or
(4) the consent or approval of any governmental regulatory
body whose consent or approval is necessary in connection with the
issuance of such Shares, the Company may defer exercise of any
Option granted hereunder until any of the events described in this
sentence has occurred.
(d) Medium of Payment
. The purchase price of Common Stock acquired
pursuant to the exercise of an Option shall be paid, to the extent
permitted by applicable law and as determined by the Committee in
its sole discretion, by one or more of the following methods. The
Committee shall have authority to grant Options that do not entitle
the Optionee to use all methods or that require prior written
consent of the Company to use certain of the methods. The methods
of payment of the Option price are:
(i) cash or check payable in
clearinghouse funds to the order of the Company;
(ii) by delivery to the Company of
other Shares of Common Stock which, unless otherwise determined by
the Committee, have been held for more than six
(6) months;
(iii) by a “net
exercise” arrangement pursuant to which the Company will
reduce the number of Shares issued upon exercise by the largest
whole number of the Shares
with a Fair Market Value that does not exceed
the Option price; provided , however , that the
Company shall accept cash or other payment from the Optionee to the
extent of any remaining balance of the aggregate Option price not
so satisfied, provided further that the Shares will
no longer be outstanding under an Option and will not be
exercisable thereafter to the extent so applied or withheld to
satisfy tax withholding obligations pursuant to Section 11
below; or
(iv) any other form of legal
consideration that may be acceptable to the Committee.
(e) Vesting.
The total number of Shares subject
to an Option may vest and therefore become exercisable in periodic
installments that may or may not be equal. An Option may be subject
to such other terms and conditions on the time or times when it may
be exercised (which may be based on the satisfaction of certain
performance criteria) as the Committee may deem appropriate. The
vesting provisions of individual Options may vary.
(f) Termination of
Options.
(i) No Option shall be exercisable
after the first to occur of the following:
(A) Expiration of the Option term
specified in the Option Document, which expiration shall occur no
later than (1) ten (10) years from the date of grant, or
(2) five (5) years from the date of grant of an ISO if
the Optionee on the date of grant is a Ten Percent
Shareholder;
(B) Unless otherwise set forth in
the Option Document, expiration of three (3) months from the
date the Optionee’s Continuous Service terminates by reason
of the Optionee’s retirement or Disability; provided however,
that if the Optionee dies within such three-month period, any
unexercised Option, to the extent to which it was exercisable at
the time of his death, shall thereafter be exercisable for a period
not exceeding fifteen (15) months from the date of his
death;
(C) Unless otherwise set forth in
the Option Document, expiration of fifteen (15) months from
the date Optionee’s Continuous Service terminates due to the
Optionee’s death;
(D) Unless otherwise set forth in
the Option Document or in (E) below with respect to
Non-Employee Director Options, upon the termination date of the
Optionee’s Continuous Service in the event that the
Optionee’s Continuous Service is terminated for any reason
other than death, Disability or retirement; or
(E) Notwithstanding (B) and
(D) above, in the case of Options granted to Non-Employee
Directors pursuant to Section 6 above, expiration of a period
of thirty (30) days from the date the Optionee’s
Continuous Service terminates; provided however, that if the
Non-Employee Director dies within such thirty (30) days, any
unexercised Option, to the extent to which it was exercisable at
the time of his death, shall thereafter be exercisable for a period
not exceeding fifteen (15) months from the date of his death;
or
(F) The date, if any, set by the
Board of Directors or the Committee as an accelerated expiration
date in the event of the liquidation or dissolution of the Company
or a Change of Control.
(ii) Notwithstanding the foregoing,
if an Optionee’s employment terminates by death, Disability
or retirement after the first anniversary date of the granting of
the Option and prior to an installment of his Option (other than
the first installment) becoming exercisable and if there are no
conditions to the next succeeding installment becoming exercisable
other than the passage of time, his Option thereupon shall become
exercisable with respect to a number of Shares (in addition to
Shares covered by installments theretofore matured) equal to a pro
rata portion of the Shares for which it would become exercisable
upon the maturity of the next succeeding installment, such pro rata
portion to be based upon the proportion which the number of full
months in the period beginning with the maturity date of the next
preceding installment and ending with such termination of his
employment bears to the total number of full months in the period
beginning with the maturity date of the next preceding installment
and ending with the maturity date of the next succeeding
installment.
(iii) Notwithstanding the foregoing,
the Committee may extend the period during which all or any portion
of an Option may be exercised to a date no later than the Option
term specified in the Option Document pursuant to
Subsection 7(f)(i)(A), provided that any change pursuant to
this Subsection 7(f)(iii) which would cause an ISO to become a
Nonqualified Stock Option may be made only with the consent of the
Optionee.
(g) Transferability of
Options .
Unless otherwise determined by the
Committee with respect to a Nonqualified Stock Option, no Option
granted under the Plan may be transferred, except by will or by the
laws of
