0000950130-01-504773.txt : 20011026
0000950130-01-504773.hdr.sgml : 20011026
ACCESSION NUMBER: 0000950130-01-504773
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011120
FILED AS OF DATE: 20011022
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BOLT TECHNOLOGY CORP
CENTRAL INDEX KEY: 0000354655
STANDARD INDUSTRIAL CLASSIFICATION: OIL & GAS FILED MACHINERY & EQUIPMENT [3533]
IRS NUMBER: 060773922
STATE OF INCORPORATION: CT
FISCAL YEAR END: 0630
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-12075
FILM NUMBER: 1763163
BUSINESS ADDRESS:
STREET 1: FOUR DUKE PL
CITY: NORWALK
STATE: CT
ZIP: 06854
BUSINESS PHONE: 2038530700
MAIL ADDRESS:
STREET 1: FOUR DUKE PL
CITY: NORWALK
STATE: CT
ZIP: 06854
DEF 14A
1
ddef14a.txt
DEFINITIVE PROXY STATEMENT
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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
[_] Confidential, for Use of the Commission Only (As Permitted By Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-12
BOLT TECHNOLOGY CORPORATION
--------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
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2
BOLT TECHNOLOGY CORPORATION
Four Duke Place
Norwalk, Connecticut 06854
(203) 853-0700
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held November 20, 2001
To the Stockholders of Bolt Technology Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of BOLT
TECHNOLOGY CORPORATION, a Connecticut corporation (the "Company"), will be held
at The Norwalk Inn & Conference Center, 99 East Avenue, Norwalk, Connecticut,
on Tuesday, November 20, 2001, at 10:00 A.M., Eastern Standard Time, for the
following purposes:
1. To elect three (3) directors of the Company to hold office for a term
of three years and until their successors are duly elected and shall
qualify.
2. To consider and act upon a proposal regarding amendment of the
Company's Certificate of Incorporation and related matters.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on October 10, 2001
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the meeting and any adjournment or postponement thereof.
STOCKHOLDERS ARE URGED TO DATE, SIGN AND RETURN THE ENCLOSED FORM OF PROXY
AT THEIR EARLIEST CONVENIENCE, EVEN IF THEY PLAN TO ATTEND THE MEETING. A
RETURN ENVELOPE IS ENCLOSED FOR THIS PURPOSE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
JOSEPH MAYERICK, JR.,
Secretary
Dated: October 22, 2001
BOLT TECHNOLOGY CORPORATION
Four Duke Place
Norwalk, Connecticut 06854
(203) 853-0700
PROXY STATEMENT
-----------------
ANNUAL MEETING OF STOCKHOLDERS
To Be Held November 20, 2001
-----------------
The accompanying proxy is solicited by the Board of Directors for use at the
Annual Meeting of Stockholders of Bolt Technology Corporation (the "Company")
to be held at The Norwalk Inn & Conference Center, 99 East Avenue, Norwalk,
Connecticut, on Tuesday, November 20, 2001, at 10:00 A.M., Eastern Standard
Time, and at any and all adjournments or postponements thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. The approximate date on which this Proxy Statement, Notice of
Annual Meeting and accompanying proxy card will be first given or mailed to
stockholders is October 22, 2001.
Only stockholders of record of the Company's Common Stock, without par value
(the "Common Stock"), at the close of business on October 10, 2001 are entitled
to notice of, and to vote the shares of Common Stock held by them on that date
at, the Annual Meeting or any adjournments or postponements thereof. At that
date, there were issued and outstanding 5,408,733 shares of Common Stock, the
holders of which are entitled to one vote per share on all matters.
A quorum for the Annual Meeting of Stockholders shall consist of the holders
of a majority of the outstanding shares of Common Stock entitled to vote at the
Annual Meeting, present in person or by proxy.
Any stockholder giving a proxy is empowered to revoke it at any time before
it is exercised. A proxy may be revoked by filing with the Secretary of the
Company a written revocation or a duly executed proxy bearing a later date. Any
stockholder may still attend the meeting and vote in person, regardless of
whether he has previously given a proxy, but presence at the meeting will not
revoke his proxy unless such stockholder votes in person.
If the accompanying proxy card is properly completed, signed and returned to
the Company and not revoked, it will be voted in accordance with the
instructions contained therein.
Unless contrary instructions are given, the persons designated as proxies in
the proxy card will vote (i) FOR the slate of nominees proposed by the Board of
Directors; (ii) FOR the amendment to the Company's Certificate of Incorporation
to provide for a staggered Board of Directors as set forth in the By-Laws of
the Company and the ratification of the election of directors at the 1999 and
2000 Annual Meetings of Stockholders as described below; and (iii) with regard
to all other matters which may be brought before the Annual Meeting, in
accordance with the judgment of the person or persons voting the proxies.
Votes withheld, abstentions and broker non-votes (shares held by brokers or
nominees which are present in person or represented by proxy but which are not
voted on a particular matter because instructions have not been received from
the beneficial owner) will be counted for purposes of determining the presence
of a quorum at the Annual Meeting. Directors will be elected by a plurality of
votes present, in person or by proxy, at the Annual Meeting. The proposed
amendment to the Company's Certificate of Incorporation and all other matters
which properly come before the Annual Meeting will be approved if the votes
cast in favor of the matter exceed the votes cast in opposition to the matter.
Votes withheld, abstentions and broker non-votes are not counted as a vote "in
favor" or a vote "against" the election of any director or any other such
matters.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
A beneficial owner of a security includes any person who directly or
indirectly has or shares voting power and/or investment power with respect to
such security. Voting power is the power to vote or direct the voting of
securities and investment power is the power to dispose of or direct the
disposition of securities. The following is the only person known to the
Company or its management who beneficially owned as of October 10, 2001 more
than five percent of any class of the Company's voting securities. The
information set forth in the following table is based on information contained
in Schedule 13G, as amended, filed by Kennedy Capital Management, Inc. on
February 14, 2001. Beneficial ownership reflected in the table represents sole
voting power for 295,850 shares and sole dispositive power for 310,950 shares.
Name and Address of Shares of Common Stock
Beneficial Owner Beneficially Owned Percent Of Class
------------------- ---------------------- ----------------
Kennedy Capital Management, Inc.
10829 Olive Blvd.
St. Louis, MO 63141 310,950 5.7
2
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth all equity securities of the Company
beneficially owned as of October 10, 2001 by (i) each director and nominee,
(ii) each executive officer named in the Summary Compensation Table below, and
(iii) all directors and executive officers as a group. Except as otherwise
indicated, all beneficial ownership reflected in the table represents sole
voting and investment power as to the shares of Common Stock listed.
Shares of
Common Stock Options Percent of
Name Owned(1) Exercisable(2) Total Class(3)
---- ------------ -------------- ------- ----------
Stephen Chelminski............................. 27,805 -- 27,805 *
Kevin M. Conlisk............................... 9,500(4) 6,000 15,500 *
Joseph Espeso.................................. 31,400 3,000 34,400 *
John H. Larson................................. 21,200(5) 3,000 24,200 *
Alan Levy...................................... 73,302(4) 30,000 103,302 1.9
Joseph Mayerick, Jr............................ 56,830(4) 30,000 86,830 1.6
Gerald H. Shaff................................ 139,000 -- 139,000 2.6
Gerald A. Smith................................ 39,250 6,000 45,250 *
Raymond M. Soto................................ 186,710 64,000 250,710 4.6
All Executive Officers and Directors As a Group 584,997 142,000 726,997 13.1
--------
* Less than 1% of the Company's outstanding Common Stock.
(1)Includes 3,000 shares, 700 shares, 7,500 shares, 2,000 shares, 25,000 shares
and 1,875 shares held by the wives of Messrs. Conlisk, Espeso, Larson,
Shaff, Smith and Soto, respectively, or an aggregate of 40,075 shares owned
by the wives of all directors and officers as a group, as to which such
directors and officers disclaim beneficial ownership.
(2)Represents shares subject to stock options granted under the Company's stock
option plan which officers and directors may acquire within 60 days upon
exercise of stock options.
(3)The percentages represent the total of shares listed in columns (1) and (2)
divided by the issued and outstanding shares of Common Stock as of October
10, 2001 plus where applicable all stock options granted to the individual
or group, as appropriate, under the Company's stock option plans, which
officers and directors may acquire within 60 days.
(4)Represents shared voting power with a family member.
(5)Includes 7,500 shares, the voting power of which is shared with a family
member.
3
ELECTION OF DIRECTORS
In accordance with the Company's By-Laws, the Board of Directors is divided
into three classes, with the directors in each class elected at successive
annual meetings for three-year terms. Subject to stockholder approval at the
2001 Annual Meeting of Stockholders, the Company's Certificate of Incorporation
will also be amended to reflect such staggered board of directors. The
Company's Board of Directors currently consists of eight members, all of whom
are elected by the holders of the Common Stock. The two directors whose terms
will expire at the 2001 Annual Meeting of Stockholders are John H. Larson and
Gerald H. Shaff. Both of these directors have been nominated by the Board of
Directors to stand for election at the 2001 Annual Meeting of Stockholders.
Messrs. Larson and Shaff were elected by the stockholders at the annual meeting
held on November 24, 1998. Mr. Larson has served as a director of the Company
for twelve years and has agreed to be nominated again and to serve as a member
of the Board; however, Mr. Larson has indicated to the Board that he may decide
to retire for personal reasons as a director at some point prior to expiration
of his three-year term in 2004.
In addition, the Board has determined it appropriate to modify the term of
one of the four directors whose term would otherwise expire in 2002 to instead
expire in 2001 in order to cause the number of directors in each class to be as
equal as possible. Accordingly, Mr. Espeso's term has been modified to expire
as of the 2001 Annual Meeting of Stockholders, and the Board of Directors has
nominated Mr. Espeso to stand for election at the 2001 Annual Meeting of
Stockholders. Mr. Espeso was elected by the stockholders at the annual meeting
held on November 23, 1999.
At the Annual Meeting, the accompanying proxy, if properly completed,
executed and returned, will be voted (absent contrary instructions) in favor of
electing these three nominees as directors. Should any one or all of these
nominees become unable to accept nomination or election, which the Board of
Directors has no reason to believe will be the case, the persons named in the
enclosed form of proxy will vote for the election of such person or persons as
the Board of Directors may nominate. The other persons listed below will
continue in office as directors until the expiration of their terms and until
their successors are duly elected and shall qualify.
The Board of Directors recommends a vote "FOR" the slate of nominees
described below.
The following table sets forth the name, age, principal occupation for the
past five years and directorships of each of the nominees for election as a
director and each of the incumbent directors of the Company.
Name, Age and Positions, Business Experience Director
if any, with the Company During Past 5 Years Since
------------------------ ------------------- --------
Nominees for Term Expiring in 2004:
Joseph Espeso, 59, Director Senior Vice President of The French American 1999
Banking Corporation and Vice President of the U.S.
Group of BNP Paribas, a bank chartered under the
laws of France, for more than five years. Became
Senior Vice President--Finance and Chief
Financial Officer of the Company as of October 8,
2001.
4
Name, Age and Positions, Business Experience Director
if any, with the Company During Past 5 Years Since
------------------------ ------------------- ----
John H. Larson, 71, Director Retired in April 1989 as President and Chief 1989
Executive Officer and Director of Connecticut
Energy Corporation and its principal subsidiary,
The Southern Connecticut Gas Company.
Gerald H. Shaff, 68, Director President and Chief Executive Officer of Custom 1998
Products Corporation for more than five years.
Custom Products, a manufacturer of miniature
clutches, brakes and electric motors, became a
wholly-owned subsidiary of the Company in
January 1998.
Directors Elected for Term Expiring in 2002:
Kevin M. Conlisk, 56, Director A Principal and Chief Financial Officer of Alinabal 1996
Holdings Corporation, a diversified manufacturer
of industrial products, for more than five years.
Joseph Mayerick, Jr., 59, Senior Vice Senior Vice President-Marketing of the Company 1993
President--Marketing, Secretary for more than five years.
and Director
Gerald A. Smith, 55, Director President of Integrated Loan Services, Inc., a 1993
provider of valuation reports to the banking and
mortgage lending industries, for more than five
years.
Directors Elected for Term Expiring in 2003:
Stephen Chelminski, 69, Director of A founder of the Company. Part-time Director of 1962
Special Research and Development Special Research and Development Projects of the
Projects on a part-time basis and Company for more than five years.
Director
Raymond M. Soto, 62, Chairman, Chairman of the Board of the Company since 1979
President, Chief Executive Officer November 1997. President and Chief Executive
and Director Officer for more than five years.
PROPOSAL TO APPROVE THE AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION
Pursuant to an amendment to the Company's By-Laws approved by the Board of
Directors and stockholders in 1983, the Company's Board of Directors was
divided into three classes, each class having a three-year term. The Board of
Directors now proposes to amend the Certificate of Incorporation to provide for
a staggered Board of Directors in accordance with the Connecticut Business
Corporation Act and the provisions of the Company's By-Laws and, in conjunction
therewith, to ratify the prior election to three-year terms of those members of
the Board of Directors who were elected at the Company's 1999 and 2000 Annual
Meeting of Stockholders.
5
The Company's stockholders approved Section 3.03 of the Company's By-Laws,
which instituted the staggered Board of Directors, at the 1983 Annual Meeting
of Stockholders. The proxy statement for the 1983 Annual Meeting provided the
following reasons for adoption of the amendment:
The proposed amendment will result in the stockholders having the right
annually to elect approximately one-third of the directors. As a result, a
change in the majority of the Board could in general occur only upon the
election of directors at two successive annual meetings. In the event of a
change in control of the Company by reason of the accumulation of a large
block of stock, a classified Board is believed desirable to assure
continuity and stability in leadership and policy. Such effect is achieved,
upon establishment of the classified Board, because approximately two-thirds
of the directors in office at any time will have had prior experience.
However, adoption of this change will make it applicable to every election
of directors, rather than only an election occurring after a change in
control of the Company. The proposed change will make it more difficult to
effect a change in the majority of the incumbent Board of Directors even
when the only reason for the change may be the performance of the present
directors and may also discourage tender offers and other types of takeover
proposals.
The proposed amendment to the Certificate of Incorporation provides for a
staggered Board in accordance with Section 3.03 of the Company's By-Laws. In
addition, the proposed amendment provides that the Board of Directors will
designate the directors that will be included in each class and, in the event
of any change in the authorized number of directors, will apportion any newly
created directorships among, or reduce the number of directorships in, such
class or classes as shall, so far as possible, equalize the number of directors
in each class. Each class will have a three-year term; however, in the event of
a vacancy on the Board of Directors, the term of any director elected by the
Board of Directors to fill such vacancy will expire at the next stockholders'
meeting at which directors are elected.
To effect such amendment to the Company's Certificate of Incorporation, the
Board proposes to add a new Article 10 thereto to read in its entirety as
follows:
10. The Board of Directors, as constituted from time to time in accordance
with the By-Laws of the Corporation, shall be and is divided into three
groups with each group containing approximately the same percentage of the
total and with the term of office of one group expiring each year at the
annual meeting of shareholders. At each annual meeting of shareholders,
directors shall be elected for a term of office to expire at the third
succeeding annual meeting of shareholders after their election. Each
director shall hold office until the expiration of the term for which
elected and until such director's respective successor is elected and
qualified, subject to such director's earlier death, resignation,
disqualification or removal. The Board of Directors shall designate the
directors that will be included in each group from time to time, and in
furtherance thereof, in the event of any change in the authorized number of
directors, the Board of Directors shall apportion any newly created
directorships among, or reduce the number of directorships in, such group or
groups as shall, so far as possible, equalize the number of directors in
each group.
The Board of Directors recommends that the stockholders vote "FOR" approval
of the proposal to amend the Company's Certificate of Incorporation to add a
provision providing for a staggered Board of Directors and to ratify the prior
election to three-year staggered terms of those members of the Board of
Directors who were elected at the Company's 1999 and 2000 Annual Meeting of
Stockholders.
If the amendment is not approved, the Board will no longer be staggered, and
all members of the Board of Directors will stand for election at the Company's
2002 Annual Meeting of Stockholders.
6
GENERAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
Information on Committees of the Board of Directors
During the fiscal year ended June 30, 2001, the Board of Directors held
seven Board meetings and three Committee meetings. With the exception of Mr.
Mayerick, who missed two Board meetings because of Company-related travel, no
director attended fewer than 75% of the total number of meetings of the Board
and of the Committees of which he is a member.
The standing committees of the Board of Directors are the Executive
Compensation Committee and the Audit Committee. In lieu of a Nominating
Committee, the Board of Directors selects the nominees for election as
directors.
The Executive Compensation Committee oversees the Company's executive
compensation programs and establishes its executive compensation policies. For
fiscal 2001 its members are Gerald A. Smith (Chairman), Kevin M. Conlisk,
Joseph Espeso and John H. Larson. Mr. Soto, the Company's Chairman, President
and Chief Executive Officer, participates in deliberations of the Executive
Compensation Committee concerning executive officer compensation. The Executive
Compensation Committee held one meeting during fiscal 2001.
The Audit Committee is a committee of the Board of Directors which reviews
and discusses the plan for and the results of the annual audit with the
Company's independent auditors and approves non-audit services provided by
them. The Audit Committee also reviews the Company's internal controls and
accounting system. In addition, the Audit Committee makes recommendations to
the Board concerning the selection of the independent auditors. For fiscal
2001, its members are Joseph Espeso (Chairman), Kevin M. Conlisk, John H.
Larson and Gerald A. Smith, each of whom is "independent" as defined in the
American Stock Exchange Listing Standards, Policies and Requirements. The Audit
Committee met two times during fiscal 2001. The Audit Committee operates under
a written charter adopted by the Board of Directors, a copy of which is annexed
as Appendix A to this Proxy Statement.
As of October 8, 2001, Mr. Espeso became Senior Vice President-Finance and
Chief Financial Officer of the Company and will no longer be a member of the
Executive Compensation Committee or Audit Committee.
7
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed the Company's consolidated
financial statements for the fiscal year ended June 30, 2001 with management
and Deloitte & Touche LLP, the Company's independent accountants. The Company
discussed with the independent accountants the matters required to be discussed
by Statement on Auditing Standards No. 61, "Communication with Audit
Committees."
The Company's independent accountants also provided to the Audit Committee
the written disclosures and the letter required by the Independence Standards
Board Standard No. 1, "Independence Discussions with Audit Committees," and the
Audit Committee has discussed the independent accountants' independence with
the independent accountants.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Company's Board of Directors that the Company's audited
consolidated financial statements be included in the Company's Annual Report on
Form 10-K for the year ended June 30, 2001 filed with the Securities and
Exchange Commission.
The Audit Committee also reviewed the fees paid to Deloitte & Touche LLP
during fiscal year 2001 as well as fees payable in connection with the
Company's confidential independent internal investigation subsequent to June
30, 2001 and determined that the services provided by Deloitte & Touche LLP are
compatible with maintaining its independence.
Audit Committee
Kevin M. Conlisk
Joseph Espeso
John H. Larson
Gerald A. Smith
8
MANAGEMENT
Directors and Executive Officers
The directors and executive officers of the Company are as follows:
Name Position
---- --------
Raymond M. Soto..... Chairman of the Board, President, Chief Executive Officer and Director
Joseph Espeso....... Senior Vice President--Finance, Chief Financial Officer and Director(3)
Joseph Mayerick, Jr. Senior Vice President--Marketing, Secretary and Director
Stephen Chelminski.. Director
Kevin M. Conlisk.... Director(1)(2)
John H. Larson...... Director(1)(2)
Gerald H. Shaff..... Director
Gerald A. Smith..... Director(1)(2)
--------
(1)Member of the Audit Committee.
(2)Member of the Executive Compensation Committee.
(3)Mr. Espeso became Senior Vice President-Finance and Chief Financial Officer
of the Company effective October 8, 2001.
Alan Levy, age 52, served as Vice President-Finance since 1991, Secretary
since 1988 and Treasurer since 1997. Effective August 31, 2001, Mr. Levy
resigned these positions.
See "Election of Directors" for biographies relating to Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the acquisition of Custom Products Corporation in January
1998, the Company paid $4,971,000 in cash and 135,000 shares of the Company's
Common Stock to Mr. Shaff. In addition, the Company may pay additional
consideration to Mr. Shaff based upon the future sales growth of Custom
Products Corporation. To induce Mr. Shaff to enter into an employment agreement
with the Company, the Company agreed to nominate Mr. Shaff as a Director of the
Company during the term of the employment agreement. The employment agreement
terminates on December 31, 2002 or on such earlier date as Mr. Shaff dies,
becomes permanently disabled or is terminated for cause. The employment
agreement provides for a salary of not less than $150,000 per year. For the
fiscal year ended June 30, 2001, Mr. Shaff was paid a salary of $150,000 under
his employment agreement and received a $4,800 matching contribution paid to
his account under the Company's 401(k) Savings Plan.
Mr. Chelminski, a director of the Company, was paid $45,000 for his services
as Director of Special Research and Development Projects for the year ended
June 30, 2001.
The Audit Committee recently had a confidential internal independent
investigation conducted by its outside counsel, with assistance from its
independent accountants, of certain transactions by the Company's Chief
Executive Officer and certain established accounting practices of the Company
relating to the payment and
9
reimbursement of certain expenses incurred by its Chief Executive Officer and
not included in his compensation. As an outcome of the investigation, the
Company discontinued such accounting practices and the Chief Executive Officer
of the Company reimbursed the Company for $26,549 of personal expenses
improperly accounted for in prior years as business expenses, repaid a $62,270
liquidated balance of an account receivable previously maintained by the
Company on its books and records for advances made by the Company over a period
of years on behalf of the Chief Executive Officer, and agreed to reimburse the
Company for the costs of the investigation. The Company also determined not to
award the Chief Executive Officer a bonus for fiscal 2001, amended his
Employment Agreement to include in the definition of termination "for cause" a
breach or default of the agreements reached as an outcome of the investigation
and has obtained written assurances from the Chief Executive Officer regarding
the investigated amounts and future compliance with the Company's accounting
policies and procedures. The Company has hired Joseph Espeso, formerly Senior
Vice President of The French American Banking Corporation and Vice President of
the U.S. Group of BNP Paribas, and a Director of the Company and previously
Chairman of the Company's Audit Committee, to become Senior Vice
President-Finance and Chief Financial Officer of the Company, effective October
8, 2001. The Company, at the direction of Mr. Espeso and of the Audit Committee
and its independent accountants, is in the process of instituting such
additional accounting controls, practices and procedures as are appropriate,
and is reviewing its outside audit process and procedures.
EXECUTIVE COMPENSATION
The following table sets forth, for the Company's last three fiscal years,
the cash compensation paid by the Company, as well as certain other
compensation paid or accrued for those years, to the Company's Chief Executive
Officer and each of the Company's other executive officers who had earned
qualifying compensation in excess of $100,000:
Summary Compensation Table
Annual Compensation Long Term Compensation
------------------------------- ----------------------------------
Other Stock
Fiscal Annual Options All Other
Name and Principal Position Year Salary($) Bonus($) Compensation($) Awards(#) Compensation($)(1)(2)(3)
--------------------------- ------ --------- -------- --------------- --------- ------------------------
Raymond M. Soto 2001 $250,044 $ -- $36,062(4) -- $42,498
Chairman, President and Chief 2000 238,140 -- 35,103(4) -- 36,545
Executive Officer 1999 234,647 310,000 (5) -- 35,469
Joseph Mayerick, Jr. (6) 2001 165,846 10,000 (5) -- 20,573
Senior Vice President-- 2000 162,000 -- (5) -- 17,573
Marketing 1999 155,769 95,000 (5) -- 17,573
Alan Levy (6) 2001 161,807 -- (5) -- 18,774
Vice President--Finance, 2000 157,000 -- (5) -- 17,403
Secretary and Treasurer 1999 150,769 95,000 (5) -- 17,263
--------
(1)Includes matching contribution paid by the Company to the respective
accounts of each named executive under the Company's 401(k) Savings Plan.
The matching contribution made to the executive officer's accounts for
fiscal year 2001 was as follows: Mr. Soto, $5,428 and Mr. Levy, $4,606. Mr.
Mayerick did not participate in the savings plan.
10
(2)Includes the value of Company-paid whole life insurance policies on Messrs.
Soto, Mayerick and Levy. The named executive has the right to designate the
beneficiary and in the event of termination of employment, for any reason,
ownership of the policy transfers to the named executive. The value of this
benefit in fiscal year 2001 was $29,383 for Mr. Soto, $17,573 for Mr.
Mayerick and $12,347 for Mr. Levy.
(3)Includes reimbursement for medical expenses in fiscal year 2001 in the
amount of $7,687 for Mr. Soto, $3,000 for Mr. Mayerick and $1,821 for Mr.
Levy.
(4)Includes for fiscal years 2001 and 2000, respectively, country club
membership fees of $13,130 and $15,219, and payments related to
Company-provided automobiles of $22,932 and $19,884.
(5)Perquisites that do not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus for a named executive officer have been omitted.
(6)Mr. Levy resigned as the Company's Vice President-Finance, Secretary and
Treasurer effective August 31, 2001. Mr. Mayerick was elected by the Board
of Directors to fill the vacant corporate office of Secretary created by Mr.
Levy's resignation.
Employment Agreement
The Company has an employment agreement, through June 30, 2003, subject to
extension, with Mr. Soto. The agreement provides for, among other things, a
current base annual salary of $262,800 for fiscal year 2002, subject to
adjustment and a discretionary bonus to be determined from time-to-time by the
Board of Directors. Pursuant to the employment agreement, the Company must also
maintain a life insurance policy for the benefit of Mr. Soto. The employment
agreement will terminate in the event of Mr. Soto's death and may be terminated
by the Company in the event of Mr. Soto's disability or for cause (as defined
therein). Mr. Soto may terminate his employment for Good Reason, which includes
(i) certain changes in Mr. Soto's duties and responsibilities; (ii) the
relocation of Mr. Soto's principal place of employment; or (iii) the occurrence
of a "defined corporate change," as defined in the employment agreement. If Mr.
Soto terminates his employment for Good Reason, he will be entitled to receive
all sums which would have become payable to him under the employment agreement
during the three-year period following the date of such termination. This sum
includes base salary and a performance bonus based on the average of the three
highest such bonuses paid during the five fiscal years preceding the date of
termination.
Severance Compensation Plan
The Company has a Severance Compensation Plan which provides for special
severance benefits to employees designated by the Board in the event of their
termination, for whatever reason, during the 24-month period following (i) a
change of control of the Company, including the acquisition by any person or
group of beneficial ownership of 30% of the Company's outstanding shares, or a
change in the composition of the Board during any two-year period resulting in
a majority turnover where election or nomination of the new directors was not
approved by at least two-thirds of the directors then in office who were
directors at the beginning of such period, or (ii) approval by the Company's
stockholders of (A) the Company's merger or consolidation where the Company is
not the surviving corporation or (B) the Company's sale or disposal of all or
substantially all of the Company's assets (including a plan of liquidation).
The benefit, which is payable within ten days of termination of employment,
shall (as pre-designated by the Board) equal two or three times (i) current
base salary, (ii) the average of such employee's bonuses in the three highest
years during the five-year period prior to termination, and (iii) certain
annual medical insurance premiums; provided, however, such total amount may not
exceed the
11
maximum amount that may be paid without incurring the adverse tax consequences
imposed upon such benefits by the Internal Revenue Code. In certain
circumstances, the Severance Compensation Plan may be amended or terminated by
the Board. In fiscal 2001, four key employees, including Messrs. Levy and
Mayerick, participated in this plan.
Directors' Compensation
In fiscal year 2001, non-employee directors received a fee of $1,000 for
attendance at each meeting of the Board of Directors. Each non-employee
director also received an annual director's fee of $5,000 and $500 for each
committee meeting attended. Directors who are also employees of the Company
receive no additional compensation for their service as a director.
Under the Bolt Technology Corporation 1993 Stock Option Plan, each
non-employee director receives, when elected a director, an option to purchase
3,000 shares of the Common Stock of the Company subject to the terms and
conditions of the Plan.
Option Grants in the Last Fiscal Year
The Company did not grant options to the Chief Executive Officer or the
other named executive officers in the 2001 fiscal year.
Stock Option Exercises and Holdings
The following table sets forth information related to stock options
exercised by the Chief Executive Officer and the other executive officers named
in the Summary Compensation Table above during fiscal 2001, and the number and
value of unexercised options held by such individuals at June 30, 2001.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
Shares at Fiscal Year-End(#) at Fiscal Year-End($)(1)
Acquired Value ------------------------- -------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- -------------- ----------- ----------- ------------- ----------- -------------
Raymond M. Soto..... -- -- 64,000 -- $24,600 --
Joseph Mayerick, Jr. -- -- 30,000 -- -- --
Alan Levy........... -- -- 30,000 -- 10,250 --
--------
(1)Based upon $5.15 per share, the market price of a share of Common Stock as
of June 30, 2001, net of exercise prices that range from $4.125 to $6.9375
per share. In all cases the exercise price equaled the market price of a
share at the date of grant.
12
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP, independent accountants, were selected by the Board
of Directors in March 2001 to serve as the Company's independent accountants
for the fiscal year ended June 30, 2001. The Board selects the Company's
independent accountants upon recommendation of the Audit Committee. The Audit
Committee is expected to make its recommendation for the year ending June 30,
2002 no later than March 2002.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting of Stockholders, with the opportunity to make a statement, if they
desire to do so, and to respond to appropriate questions from stockholders.
Audit Fees
The aggregate fees billed by Deloitte & Touche LLP for professional services
rendered for the audit of the Company's annual consolidated financial
statements for the fiscal year ended June 30, 2001 and for the review of the
financial statements included in the Company's Forms 10-Q for the fiscal year
ended June 30, 2001 were approximately $75,200.
Financial Information Systems Design and Implementation Fees
Deloitte & Touche LLP did not provide the Company with any professional
services for financial information systems design and implementation.
All Other Fees
There were no other fees billed by Deloitte & Touche LLP for any other
professional service for the fiscal year ended June 30, 2001. Subsequent to
June 30, 2001, Deloitte & Touche provided certain services in connection with
the Audit Committee's confidential independent internal investigation. The
aggregate fees for these services are estimated to be approximately $37,500.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Act"), requires the Company's executive officers and directors, and persons
owning more than 10% of the Company's Common Stock ("Reporting Persons"), to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Reporting Persons are required to furnish the Company with
copies of all Section 16(a) reports that they file. Based solely on a review of
copies of these filings received by the Company and written representations,
the Company believes that all Section 16(a) filing requirements applicable to
Reporting Persons during the fiscal year ended June 30, 2001 were complied
with.
STOCKHOLDERS' PROPOSALS
In order to be considered for inclusion in the Company's proxy statement and
form of proxy for next year's Annual Meeting of Stockholders, any proposals by
stockholders intended to be presented at the 2002 Annual Meeting of
Stockholders must be received at the Company's offices at Four Duke Place,
Norwalk, Connecticut 06854 on or before June 24, 2002.
13
In addition, if a stockholder intends to present a proposal at the Company's
2002 Annual Meeting of Stockholders without inclusion of that proposal in the
Company's proxy materials and written notice of the proposal is not received by
the Company on or before September 7, 2002, proxies solicited by the Board of
Directors for the 2002 Annual Meeting of Stockholders will confer discretionary
authority to vote on the proposal at the meeting.
OTHER MATTERS
The Board of Directors does not know of any matters that may come before the
Annual Meeting other than those set forth in the Notice of Annual Meeting of
Stockholders and in this proxy statement. However, if any other matters
properly come before the Annual Meeting of Stockholders, it is the intention of
the persons named in the accompanying form of proxy to vote the proxy in
accordance with their judgment on such matters.
The cost of the solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone, telex or facsimile, by regular employees of the Company or others
affiliated with the Company. The Company will not pay compensation for the
solicitation of proxies but will reimburse brokers and other persons holding
stock in their names or in the names of nominees for their expenses in sending
or forwarding proxy material to principals in obtaining their proxies.
All stockholders are urged to execute, date and return promptly the enclosed
form of proxy in the enclosed return envelope, regardless of whether they
intend to be present in person at the Annual Meeting.
By Order of the Board of Directors
JOSEPH MAYERICK, JR.,
Secretary
Norwalk, Connecticut
Dated: October 22, 2001
14
APPENDIX A
BOLT TECHNOLOGY CORPORATION
AUDIT COMMITTEE
CHARTER
RESOLVED, that the Audit Committee (the "Committee") is hereby empowered to:
1. Provide an open avenue of communication between the independent auditor
and the Board of Directors.
2. Meet at least two times per year or more frequently as circumstances
require. The Committee may ask members of management or others to attend
meetings and provide pertinent information as necessary.
3. Confirm and assure the independence of the independent auditor.
4. Review with the independent auditor the coordination of audit efforts to
assure completeness of coverage, reduction of redundant efforts, and the
effective use of audit resources.
5. Inquire of management and the independent auditor about significant risks
or exposures and assess the steps management has taken to minimize such risk to
the Company.
6. Consider and review with the independent auditor:
(a) The adequacy of the Company's and related entities' internal controls
including computerized information system controls and security.
(b) Related findings and recommendations of the independent auditor
together with any actions taken by management.
7. Consider and review with management and the independent auditor:
(a) Significant findings during the year, including the status of
previous audit recommendations.
(b) Any difficulties encountered in the course of audit work including
any restrictions on the scope or activities or access to required
information.
8. Meet periodically with the independent auditor and management in separate
executive sessions to discuss any matters that the Committee or these groups
believe should be discussed privately with the Audit Committee.
9. Report periodically to the Board of Directors on significant results of
the foregoing activities.
10. Instruct the independent auditor that the Board of Directors and the
Audit Committee, as the stockholders' representative, is the auditor's client.
11. Work closely with any outside accounting firms, and/or operations review
specialists that the corporation may retain.
A-1
12. Perform such duties required to be performed by independent directors of
the corporation pursuant to law or the bylaws or regulations of the American
Stock Exchange.
13. Perform other duties as the Board of Directors may from time to time
assign to it.
CONTINUOUS ACTIVITIES--RE: REPORTING SPECIFIC POLICIES
1. Advise financial management and the independent auditor that they are
expected to provide a timely analysis of significant current financial
reporting issues and practices.
2. Provide that financial management and the independent auditor discuss
with the audit committee their qualitative judgements about the
appropriateness, not just the acceptability, of accounting principles and
financial disclosure practices used or proposed to be adopted by the Company
and, particularly, about the degree of aggressiveness or conservatism of its
accounting principles and underlying estimates.
3. Inquire as to the auditor's independent qualitative judgements about the
appropriateness, not just the acceptability, of the accounting principles and
the clarity of the financial disclosure practices used or proposed to be
adopted by the Company.
4. Inquire as to the auditor's views about whether management choices of
accounting principles are conservative, moderate, or aggressive from the
perspective of income, asset, and liability recognition, and whether those
principles are common practices or are minority practices.
5. Determine, in regard to new transactions or events, the auditor's
reasoning for the appropriateness of the accounting principles and disclosure
practices adopted by management.
6. Assure that the auditor's reasoning is described in determining the
appropriateness of changes in accounting principles and disclosure practices.
7. Inquire as to the auditor's views about how the Company's choices of
accounting principles and disclosure practices may affect public views and
attitudes about the Company.
SCHEDULED ACTIVITIES
1. Recommend the selection of the independent auditor for approval by the
Board of Directors and approve the compensation of the independent auditor, and
review and approve the discharge of the independent auditor.
2. Consider, in consultation with the independent auditor, the audit scope
and plan of the independent auditor.
3. Review with management and the independent auditor, the results of annual
audits and related comments including:
(a) The independent auditor's audit of the Company's annual financial
statements, accompanying footnotes and its report thereon.
A-2
(b) Any significant changes required in the independent auditor's audit
plans.
(c) Any difficulties or disputes with management encountered during the
course of the audit.
(d) Other matters related to the conduct of the audit which are to be
communicated to the Audit Committee under Generally Accepted Auditing
Standards.
4. Review and update the Committee's Charter annually.
OVERSIGHT ACTIVITIES
1. Review and approve requests for any management consulting engagement to
be performed by the Company's independent auditor and be advised of any other
study undertaken at the request of management that is beyond the scope of the
audit engagement letter.
2. Review, if required, with General Counsel legal and regulatory matters
that may have a material impact on the Company's and related entities financial
statements, compliance policies and programs.
3. Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committees shall be empowered to
retain independent counsel and other professionals to assist it in the conduct
of any investigation.
4. The Committee shall consist of at least three members who at all times
shall be members of the Board of Directors, all of whom are independent
directors, and that such members shall be designated by resolution of the Board
of Directors, each such member to serve until he is no longer a director or
until removed and a successor is elected by the Board of Directors, whichever
shall first occur.
A-3
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
BOLT TECHNOLOGY CORPORATION
The undersigned hereby appoints Raymond M. Soto and Joseph Mayerick, Jr.
proxies, each with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote, as designated on
the other side, all the shares of stock of Bolt Technology Corporation standing
in the name of the undersigned with all powers which the undersigned would
possess if present at the Annual Meeting of Stockholders of the Company to be
held November 20, 2001 or any adjournment or postponement thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS AND "FOR" THE PROPOSAL SET
FORTH ON THE REVERSE SIDE.
(Continued, and to be marked, dated and signed, on the other side)
------------------------------------------------------------------------
FOLD AND DETACH HERE
Annual
BOLT TECHNOLOGY CORPORATION Meeting of
Stockholders
November 20, 2001, 10:00 a.m.
The Norwalk Inn & Conference Center
99 East Avenue
Norwalk, Connecticut
Please mark [X]
your votes as
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2. indicated in
this example
FOR AGAINST ABSTAIN
WITHHELD Item 2- Proposal to approve [_] [_] [_]
Item 1- ELECTION OF DIRECTORS FOR FOR ALL Amendment to Certificate
Nominees: [_] [_] of Incorporation and ratify
election of directors.
01 Joseph Espeso
02 John H. Larson
03 Gerald H. Shaff
Item 3- To transact in their
discretion such other business
as may properly come before the
meeting, or any adjournment
or postponement thereof.
WITHHELD FOR: (Write that nominee's name in the space
provided below).
___________________________________________
Signature(s)_______________________________________________________Date_______
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
-----------------------------------------------------------------
FOLD AND DETACH HERE
------------------------------
Admission Ticket
------------------------------
Annual Meeting
of
BOLT TECHNOLOGY CORPORATION
Tuesday, November 20, 2001
10:00 a.m.
The Norwalk Inn & Conference Center
99 East Avenue
Norwalk, Connecticut