-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H6fywDPRlt7YqhWDTX8QXR3KnumsRQIJ26NyfL2ebAkLra9KPa1HSUg6URDXZsXG pFbAeH1OCCaVscUpRGXRWA== 0000950130-01-505212.txt : 20020410 0000950130-01-505212.hdr.sgml : 20020410 ACCESSION NUMBER: 0000950130-01-505212 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011109 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12075 FILM NUMBER: 1780239 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 10-Q 1 d10q.txt FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2001 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 0-10723 BOLT TECHNOLOGY CORPORATION (Exact name of registrant as specified in its charter) Connecticut 06-0773922 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Four Duke Place, Norwalk, Connecticut 06854 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (203) 853-0700 Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] At October 16, 2001, there were 5,408,733 shares of common stock, without par value, outstanding. BOLT TECHNOLOGY CORPORATION --------------------------- INDEX -----
Page Number ----------- Part I - Financial Information: Item 1. Financial Statements. Consolidated statements of operations - three months ended September 30, 2001 and September 30, 2000 ............................... 3 Consolidated balance sheets - September 30, 2001 and June 30, 2001 .................................... 4 Consolidated statements of cash flows - three months ended September 30, 2001 and September 30, 2000 ............ 5 Notes to consolidated financial statements .............................. 6-9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ..................................... 10-12 Item 3. Quantitative and Qualitative Disclosures about Market Risk .............. 12 Part II - Other Information: Item 6. Exhibits and Reports on Form 8-K ........................................ 13 Signatures ...................................................................... 13
2 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements BOLT TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) __________________________________________________ Three Months Ended September 30, -------------------------- 2001 2000 ---- ---- Sales ............................................ $ 4,191,000 $ 3,076,000 Costs and Expenses: Cost of sales ................................ 2,505,000 1,891,000 Research and development ..................... 56,000 69,000 Selling, general and administrative .......... 1,079,000 1,114,000 Amortization of intangibles .................. - 165,000 Interest expense ............................. 71,000 108,000 Interest income .............................. (11,000) (15,000) ----------- ----------- 3,700,000 3,332,000 ----------- ----------- Income (loss) before income taxes ................ 491,000 (256,000) Provision (benefit) for income taxes ............. 189,000 (42,000) ----------- ----------- Net income (loss) ........................ $ 302,000 $ (214,000) =========== =========== Earnings (loss) per share: Basic ........................................ $ 0.06 $ (0.04) Diluted ...................................... $ 0.06 $ (0.04) Shares Outstanding: Basic ........................................ 5,408,733 5,408,733 Diluted ...................................... 5,421,669 5,408,733 See Notes to Consolidated Financial Statements. 3 BOLT TECHNOLOGY CORPORATION CONSOLIDATED BALANCE SHEETS --------------------------- ASSETS ------
September 30, June 30, 2001 2001 (unaudited) ------------ ------------ Current Assets: Cash and cash equivalents ..................................... $ 2,582,000 $ 1,329,000 Accounts receivable, net ...................................... 3,345,000 4,607,000 Inventories ................................................... 4,457,000 4,492,000 Deferred income taxes ......................................... 794,000 923,000 Other ......................................................... 152,000 126,000 ------------ ------------ Total current assets .................................... 11,330,000 11,477,000 ------------ ------------ Goodwill, net ..................................................... 11,266,000 11,276,000 Property and equipment, net ....................................... 1,263,000 1,345,000 Deferred income taxes ............................................. 572,000 603,000 Other assets ...................................................... 31,000 33,000 ------------ ------------ Total assets ............................................ $ 24,462,000 $ 24,734,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Current maturities of long-term debt .......................... $ 3,175,000 $ 3,600,000 Accounts payable .............................................. 719,000 984,000 Accrued liabilities ........................................... 1,437,000 1,321,000 ------------ ------------ Total current liabilities ............................... 5,331,000 5,905,000 ------------ ------------ Stockholders' Equity: Common stock .................................................. 26,152,000 26,152,000 Accumulated deficit ........................................... (7,021,000) (7,323,000) ------------ ------------ Total stockholders' equity .............................. 19,131,000 18,829,000 ------------ ------------ Total liabilities and stockholders' equity ......... $ 24,462,000 $ 24,734,000 ============ ============
See Notes to Consolidated Financial Statements. 4 BOLT TECHNOLOGY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ___________________________________________
Three Months Ended September 30, --------------------- 2001 2000 ---- ---- Cash Flows From Operating Activities: Net income (loss) ................................................ $ 302,000 $ (214,000) Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization .................................... 89,000 236,000 Deferred income taxes ................................... 170,000 (34,000) ----------- ----------- 561,000 (12,000) Changes in Operating Assets and Liabilities: Accounts receivable ..................................... 1,262,000 (283,000) Inventories ............................................. 35,000 32,000 Other assets ............................................ (25,000) 37,000 Accounts payable and accrued liabilities ................ (149,000) 140,000 ----------- ----------- Net cash provided by (used in) operating activities ..... 1,684,000 (86,000) ----------- ----------- Cash Flows From Investing Activities: Purchase of property and equipment ............................... (6,000) (76,000) ----------- ----------- Net cash used in investing activities ................... (6,000) (76,000) ----------- ----------- Cash Flows From Financing Activities: Repayment of long-term debt ...................................... (425,000) (425,000) ----------- ----------- Net cash used in financing activities ................... (425,000) (425,000) ----------- ----------- Net increase (decrease) in cash and cash equivalents ...................... $ 1,253,000 $ (587,000) =========== =========== Supplemental disclosure of cash flow information: Income taxes paid ....................................... $ 8,000 $ 5,000 Interest paid ........................................... $ 71,000 $ 108,000
See Notes to Consolidated Financial Statements. 5 BOLT TECHNOLOGY CORPORATION --------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (UNAUDITED) ----------- Note 1 - Basis of Presentation - ------------------------------ The consolidated balance sheet as of September 30, 2001, the consolidated statements of operations for the three month periods ended September 30, 2001 and 2000, respectively, and the consolidated statements of cash flows for the three month periods ended September 30, 2001 and 2000, respectively, are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. Interim results are not necessarily indicative of results for a full year. It is suggested that the September 30, 2001 consolidated financial statements be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended June 30, 2001. Note 2 - Goodwill and Other Intangible Assets - Adoption of Statement 142 - ------------------------------------------------------------------------- During July 2001, SFAS No. 142, "Goodwill and Other Intangible Assets," was issued by the Financial Accounting Standards Board. Under SFAS No. 142, goodwill amortization ceases when the new standard is adopted. The new rules also require an initial goodwill impairment assessment in the year of adoption and annual impairment tests thereafter. The Company is permitted under the rules to adopt the Statement effective July 1, 2001 or defer adoption until July 1, 2002. Once adopted, annual goodwill amortization of $655,000 ceases. The Company adopted SFAS No. 142 effective as of July 1, 2001. The Company has not yet determined if any impairment charges will result from the adoption of the Statement. If the adoption of SFAS No. 142 had been in effect on July 1, 2000, net loss, basic loss per share and diluted loss per share would have been as follows: For the Three Months Ended --------------------------- September 30, September 30, 2001 2000 ---- ---- Reported net income (loss) $ 302,000 $ (214,000) Add: Goodwill amortization, net of tax effect - 144,000 --------- ---------- Adjusted net income (loss) $ 302,000 $ (70,000) ========= ========== Basic and Diluted earnings (loss) per share: Reported net income (loss) $ 0.06 $ (0.04) Goodwill amortization - 0.03 --------- ---------- Adjusted net income (loss) $ 0.06 $ (0.01) ========= ========== 6 BOLT TECHNOLOGY CORPORATION --------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (UNAUDITED) ----------- Note 3 - Debt - ------------- 8.25% Non-Negotiable Promissory Note In connection with the acquisition of A-G Geophysical Products, Inc., the Company issued a $7,000,000 note to the selling shareholder for a portion of the purchase price. The balance of the note at September 30, 2001 was $3,175,000. The Company is required to make quarterly principal payments of $425,000 on November 1, 2001 and February 1, 2002, respectively, and a final principal payment of $2,325,000 in April 2002. Note 4 - Income Taxes - --------------------- Components of income tax expense for the three months ended September 30, 2001 and September 30, 2000 follows: 2001 2000 ---- ---- Current: State $ 9,000 $ (8,000) Deferred: Federal 180,000 (34,000) --------- --------- Income tax expense (benefit) $189,000 $ (42,000) ========= ========= The Company has net operating loss carry-forwards totaling $1,995,000 which expire as follows: 2005 - $1,687,000; 2006 - $63,000 and 2007 - $245,000. Under the liability method, a valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. Based primarily upon the Company's recent earnings history and expected future levels of taxable income, management believes that it is more likely than not that it will realize the benefit of its net deferred tax asset. The amount of the net deferred tax asset recorded could be reduced if estimates of future taxable income during the carry-forward period are decreased. Note 5 - Inventories - -------------------- Inventories, net of reserves, are comprised of the following: September 30, June 30, 2001 2001 ---- ---- Raw materials and sub-assemblies ......... $3,982,000 $4,095,000 Work-in process .......................... 475,000 397,000 ---------- ---------- $4,457,000 $4,492,000 ========== ========== 7 BOLT TECHNOLOGY CORPORATION --------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (UNAUDITED) --------- Note 6 - Property and Equipment - ------------------------------- Property and equipment are comprised of the following:
September 30, June 30, 2001 2001 ---- ---- Building and leasehold improvements .................... $ 555,000 $ 555,000 Geophysical equipment .................................. 269,000 269,000 Machinery and equipment ................................ 5,974,000 5,978,000 Equipment held for rental .............................. 320,000 320,000 ------------ ----------- 7,118,000 7,122,000 Less accumulated depreciation (5,855,000) (5,777,000) ------------ ----------- $ 1,263,000 $ 1,345,000 ============ ===========
Note 7 - Earnings Per Share - --------------------------- Basic earnings per share is computed by dividing net income by the average number of common shares outstanding during the year. Diluted earnings per share is computed by dividing net income by the average number of common shares outstanding assuming dilution, the calculation of which assumes that all stock options are exercised at the beginning of the period and the proceeds used to purchase shares at the average market price for the period. The following is a reconciliation from basic earnings per share to diluted earnings per share for quarters ended September 30, 2001 and September 30, 2000:
2001 2000 ---- ---- Net income (loss) available to common stockholders $ 302,000 $ (214,000) ========== ========== Divided by weighted common shares and common share equivalents: Weighted average common shares 5,408,733 5,408,733 Weighted average common share equivalents 12,936 - ---------- ---------- Total weighted average common shares and common share equivalents 5,421,669 5,408,733 ========== ========== Basic earnings (loss) per share $ 0.06 $ (0.04) ========== ========== Diluted earnings (loss) per share $ 0.06 $ (0.04) ========== ==========
For the quarter ended September 30, 2000, the effect of any shares subject to option were not included in the calculation because to do so would be antidilutive. 8 BOLT TECHNOLOGY CORPORATION --------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (UNAUDITED) ---------- Note 8 - Segment Information - ---------------------------- The Company's reportable segments are geophysical equipment and industrial products. The following table provides selected financial information for both of the Company's segments for the quarters ended September 30, 2001 and September 30, 2000.
Quarter ended September 30, 2001 - -------------------------------- Geophysical Industrial Equipment Products Total --------- -------- ----- Sales $ 3,580,000 $ 611,000 $ 4,191,000 Interest income 11,000 - 11,000 Interest expense 71,000 - 71,000 Depreciation and amortization 81,000 8,000 89,000 Income before income taxes 424,000 67,000 491,000 Segment assets 18,359,000 6,103,000 24,462,000 Fixed asset additions 6,000 - 6,000 Quarter ended September 30, 2000 - -------------------------------- Geophysical Industrial Equipment Products Total --------- -------- ----- Sales $ 2,255,000 $ 821,000 $ 3,076,000 Interest income 15,000 - 15,000 Interest expense 108,000 - 108,000 Depreciation and amortization 172,000 64,000 236,000 Income (loss) before income taxes (430,000) 174,000 (256,000) Segment assets 18,433,000 6,106,000 24,539,000 Fixed asset additions 70,000 6,000 76,000
The Company does not allocate income taxes to its segments. 9 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Cautionary Statement for Purposes of Forward-Looking Statements Forward-looking statements in this Form 10-Q, future filings by the Company with the Securities and Exchange Commission, the Company's press releases and oral statements by authorized officers of the Company are intended to be subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation (i) the risk of technological change relating to the Company's products and the risk of the Company's inability to develop new competitive products in a timely manner, (ii) the risk of decreased demand for the Company's products due to fluctuations in energy industry activity, (iii) the Company's reliance on certain significant customers, (iv) risks associated with a significant amount of foreign sales, and (v) risk of fluctuations in future operating results. The Company believes that forward-looking statements made by it are based on reasonable expectations. However, no assurances can be given that actual results will not differ materially from those contained in such forward-looking statements. The words "estimate," "project," "anticipate," "expect," "predict," "believe," and similar expressions are intended to identify forward-looking statements. Overview Sales for the Company's geophysical products are related to the level of worldwide oil and gas exploration and development activity which is dependent, primarily, on oil and gas prices. Because of the rapid decline in oil prices in 1999, oil companies reduced exploration budgets which caused the Company's customers, primarily seismic contractors, to reduce activities. This reduction in activity resulted in underutilized and idle seismic vessels. During the last half of fiscal 2001 and into the first quarter of fiscal 2002, there has been an increase in seismic exploration activity which has benefited the Company's geophysical equipment sales and profitability. The effect, if any, that a slowing international economy and the events of September 11, 2001 may have on the Company's geophysical equipment business is uncertain. As to the industrial products segment of the Company's business, the sales outlook remains adversely affected by the slowdown in the national economy. Liquidity and Capital Resources At September 30, 2001, the Company had $2,582,000 in cash and cash equivalents. For the quarter ended September 30, 2001, cash and cash equivalents increased by $1,253,000. Cash flows from operating activities after changes in working capital items was a positive $1,684,000 for the quarter ended September 30, 2001, primarily due to the operating profit for the quarter and a decrease in the level of accounts receivable. 10 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) For the three months ended September 30, 2001, the Company used $6,000 for capital expenditures. The Company does not anticipate capital expenditures for the current fiscal year to exceed $300,000 which we expect to fund through operating cash flow. The Company used $425,000 during the quarter ended September 30, 2001 for the scheduled repayment of the debt issued for the A-G Geophysical Products, Inc. acquisition. At September 30, 2000, the Company had $1,940,000 of cash and cash equivalents. For the quarter ended September 30, 2000, cash and cash equivalents decreased by $587,000. Cash flows from operating activities after changes in working capital items was a negative $86,000 for the quarter ended September 30, 2000, primarily due to the operating loss for the quarter and an increase in the level of accounts receivable. As discussed above, as part of the consideration for the acquisition of A-G Geophysical Products, Inc. ("A-G"), the Company issued a $7,000,000 note ($3,175,000 outstanding at September 30, 2001). The note bears interest at 8.25% payable monthly and requires principal payments of $425,000 on November 1, 2001 and February 1, 2002, respectively, with the remaining balance of $2,325,000 due in April 2002. The Company pledged the assets and common stock of A-G as collateral for the note. The Company expects to repay the note from operating cash flow, but if the level of business in 2002 does not produce sufficient cash, we believe that we can secure alternative financing or extend the maturity of the note; however, there can be no assurance that we will be able to do so. The Company did not maintain the minimum debt service coverage required under an unsecured credit facility and therefore, terminated it in December 2000. The Company had not used this facility since January 1998. Under the terms of the January 1, 1998 asset purchase agreement for Custom Products, the Company may be required to make additional payments to the former owners of Custom Products in the maximum amount of $4,000,000 if net sales of Custom Products increase to certain levels by December 2002. To date, no additional payments have been required because the sales of Custom Products have not met amounts specified in the asset purchase agreement. In October 1998, the Company's board of directors approved a stock repurchase program under which the Company was authorized to buy up to 500,000 shares of its common stock in open market or private transactions. Although the program remains authorized, the Company does not anticipate any repurchase of shares in the near future. Current cash and cash equivalent balances, potential borrowing capacity and projected cash flow from operations are considered adequate to meet foreseeable operating needs. Results of Operations Sales for the three months ended September 30, 2001 increased by $1,115,000 or 36% from the corresponding year-ago quarter. Sales of marine air guns and replacement parts increased by $1,056,000 or 103% from the 11 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) comparable year-ago quarter reflecting an increase in marine seismic activity. Sales for the quarter ended September 30, 2000 were especially depressed because there were no air gun system sales during that quarter. Sales of underwater electrical connectors and cables increased by $269,000 or 22% from last year's first quarter also reflecting the higher level of marine seismic activity. These increases were partially offset by a $210,000 or 26% decrease in sales of industrial clutches compared to last year, as that business was adversely affected by the general economic slowdown. Cost of sales as a percentage of sales decreased from 61% for the three months ended September 30, 2000 to 60% for the three months ended September 30, 2001. The major reason for this improvement was increased manufacturing efficiencies associated with the higher sales volumes for air guns and replacement parts, substantially offset by decreased manufacturing efficiencies for industrial clutches caused by the lower sales volume. Research and development costs decreased by $13,000 from the corresponding period of last year. Such decrease was not significant. Selling, general and administrative expenses decreased by $35,000 primarily due to lower compensation expenses. As indicated in Note 2 to the consolidated financial statements, SFAS No. 142, "Goodwill and Other Intangible Assets," was adopted by the Company in July of 2001 and goodwill amortization ceased. Accordingly, there was no amortization of intangibles for the quarter ended September 30, 2001. For the quarter ended September 30, 2000, amortization of intangibles was $165,000. The Company was amortizing goodwill prior to July 1, 2001 over 20 years. If the adoption of SFAS No. 142 had been in effect on July 1, 2000, the net loss for the quarter ended September 30, 2000 would have been $70,000. Interest expense for the first quarter of fiscal year 2002 was $71,000 which was $37,000 lower than the year-ago quarter due to the lower average balance outstanding on the note issued for the A-G acquisition. The provision for income taxes for the first quarter of fiscal year 2002 was $189,000, an effective tax rate of 38% which was 4% higher than the federal statutory rate of 34% due primarily to the effect of state income taxes. The benefit for income taxes for the first quarter of fiscal 2001 was $42,000, an effective tax rate of 16%. This benefit was lower than the federal statutory rate of 34% principally from the effect of the goodwill amortization related to the A-G acquisition which was not deductible for income taxes. Item 3 - Quantitative and Qualitative Disclosures About Market Risk Not applicable. 12 PART II- OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits. -------- 10.1 Employment Agreement between the Company and Raymond M. Soto effective as of June 10, 1996. 10.2 Amendment to Employment Agreement between the Company and Raymond Soto effective as of September 20, 2001. (b) Reports on Form 8-K. ------------------- No reports on Form 8-K were filed during the three months ended September 30, 2001. SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BOLT TECHNOLOGY CORPORATION Date: October 30, 2001 /s/ Raymond M. Soto ----------------------- Raymond M. Soto Chairman of the Board, President and Chief Executive Officer Date: October 30, 2001 /s/ Joseph Espeso ------------------ Joseph Espeso Senior Vice President-Finance and Chief Financial Officer 13 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 10.1 Employment Agreement between the Company and Raymond M. Soto effective as of June 10, 1996. 10.2 Amendment to Employment Agreement between the Company and Raymond M. Soto effective as of September 20, 2001. 14 EX-10.1 3 dex101.txt EMPLOYMENT AGREEMENT DATED 06/10/1996 Exhibit 10.1 EMPLOYMENT AGREEMENT -------------------- THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective as of the 10th 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 PARIES HERETO DO HEREBY AGREE AS FOLLOWS: 1. EMPLOYMENT. ---------- Company hereby employs Executive as its Chief Executive Officer and President and Executive hereby accepts such employment, all upon and subject to the terms and conditions hereinafter set forth. 2. TERM. ---- The term of employment of Executive under this Agreement shall commence on June 10, 1996 and shall continue for a period of three (3) years and twenty (20) days through June 30, 1999, subject to extension as set forth herein, (said term, as the same may be extended, being referred to as the "Term"). The Term shall be automatically extended for consecutive additional periods of twelve (12) months each ending on June 30 of the applicable year, unless, at least twenty four (24) months prior to the expiration of the then Term, Company gives written notice to Executive pursuant to the Notice provisions herein of its intention not to extend the Term. 3. DUTIES AND POSITIONS. -------------------- Executive shall be employed as the Chief Executive Officer and President of the Company and shall perform such services of an executive and managerial nature as are consistent with said positions. Executive shall report only to the Board of Directors of Company. Executive's powers and authority shall be superior to those of any other officer or employee of Company. Subject to applicable law, the Company shall nominate Executive to serve as a director during the Term. Executive shall not be required, without his consent, to render services during the Term in any geographic area other than Fairfield County, Connecticut provided Executive will be expected to travel to the extent reasonably necessary to fulfill his responsibilities. During the Term, Executive agrees to devote his time and energies during normal business hours to the business and affairs of the Company. 4. COMPENSATION. ------------ (A) BASE SALARY. Company shall pay to Executive, on the same periodic ----------- basis as Company pays its other employees (but in no event less frequently than monthly), during the Term, as the same may be extended, a base salary in substantially equal payments as follows: (i) During the first (1st) twelve (12) months of the Term ending June 30, 1997, a base salary of $206,000.00; and (ii) During each subsequent twelve (12) month period during the Term, a base salary equal to the greater of (a) one hundred five (105%) of the prior twelve (12) month's base salary, or (b) the product obtained by multiplying the prior twelve (12) month's base salary times a fraction, the numerator of which shall be the Price Index (hereinafter defined) for April of the immediately preceding twelve (12) month period and the denominator of which shall be the Price Index for April of the twelve (12) month period immediately preceding the twelve (12) month period used in determining the numerator. The "Price Index" shall mean the Consumer Price Index for All Urban Consumers, New York-No.N.J.-Long Island, NY-NJ-CT, All terms (1982-84=100) issued and published by the Bureau of Labor Statistics of the United States Department of Labor. If, at any time, said Consumer Price Index is no longer issued or available, then the term "Price Index" shall mean a successor or comparable index selected by Company and Executive. It is understood that Company may, in the discretion of its Board of Directors, increase such base salary above an amount provided for pursuant to the foregoing without affecting any of the other terms of this Employment Agreement. (B) PERFORMANCE BONUS. Company shall pay to Executive, with respect to ----------------- each of Company's fiscal years during the Term, such performance bonus, if any, as the Executive Compensation Committee of the Board of Directors of Company may, in its discretion, determine. Notwithstanding the foregoing, Company agrees that all such performance bonuses shall be based upon the performance of Company and Executive and shall be consistent with the past practices of Company with respect to bonuses paid to Executive. All such bonuses shall be paid within thirty (30) days of the end of the fiscal year of Company to which the same relate. -2- 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 -3- 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 -4- 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 -5- 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 (3) highest such bonuses during the five (5) fiscal years preceding the date of such termination. Notwithstanding the foregoing, Executive shall have the continuing right, at any time following the date of termination, to elect to have the Severance Period Payments paid in a lump sum. Said right shall be exercised by Executive giving written notice to Company, whereupon the Company shall, within thirty (30) days after such a notice from Executive, pay to Executive a lump sum amount equal to the total of all then outstanding and unpaid Severance Payments. Said lump sum amount shall be computed without any discount for present value; and (iii) during the Severance Period, continue to provide Executive with the Executive Life Insurance and the Executive Disability Insurance and with participation in (or, if such participation is not permitted under the terms of the applicable Plan or Program, the economic equivalent to Executive of participation in) all Plans and/or Programs in accordance with Paragraph 7 above. (C) If Company terminates this Agreement for Cause, or if Executive terminates this Agreement for other than Good Reason, then Company shall 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 ending on the date of termination (including, without limitation, accrued bonus and unused vacation pay). (D) For purposes of this Agreement, "Cause" shall mean: (i) Executive's conviction of a felony other than arising out of a motor vehicle incident; or (ii) an intentional and material breach by Executive of his duties and responsibilities hereunder which is not remedied within thirty (30) days after receipt by Executive of written notice from the Chairman of the Board of Directors of Company (or, if the nature of such breach is such that it cannot reasonably be completely cured within 30 days, if Executive shall not have commenced to cure said breach within said 30 day period and thereafter diligently pursued said cure to completion). (E) For purposes of this Agreement, "Good Reason" shall mean: (i) the Company shall materially breach this Agreement, and fail to cure such breach within thirty (30) days after the first notice by Executive to the Company of the breach (or, if the nature of such breach is such that it cannot reasonably be completely cured within 30 days, if Company shall not have commenced to cure said breach within said 30 day period and thereafter diligently pursued said cure to completion); or (ii) the occurrence of a "Defined Corporate Change" as defined in Schedule A - ---------- -6- attached. Any election by Executive to terminate for "Good Reason" shall be made within twenty four (24) months after the occurrence of the event or events constituting "Good Reason". (F) In the event that any payment to Executive hereunder shall remain unpaid for a period of ten (10) days after its due date, interest shall, at Executive's option, accrue on the unpaid portion thereof at the Prime Rate, but not exceeding the maximum rate allowed by law and shall be payable on demand. The "Prime Rate" is the Prime Rate as published in the "Money Rates" table of the Wall Street Journal by Dow Jones & Company, Inc. If more than one Prime Rate is published in the "Money Rates" table the highest of those Prime Rates will apply. If the Wall Street Journal ceases publication, or ceases to publish a Money Rates table or if a Prime Rate is no longer included among the rates published therein, Executive will designate a comparable index. (G) Notwithstanding anything to the contrary herein, in the event Executive terminates this Agreement for Good Reason as defined in Paragraph 9(E)(ii) above, then the amount of the benefits payable pursuant to Paragraph 9(B) above shall be limited to the maximum amount which can be paid without having any amount paid hereunder being treated as a "parachute payment" within the meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as the same may be amended, after giving effect to all other payments of compensation described in Section 280G(b)(2)(A)(i) and (ii). 10. RESTRICTIVE COVENANT. -------------------- Executive agrees that if Executive's employment hereunder is terminated by Company for Cause (as defined above) or Executive resigns for other than Good Reason as defined in Paragraph 9(E)(i) above, he will not, for a period of one (1) year after said termination of his employment by Company hereunder, without the prior written approval of the Board of Directors of Company, as an individual, stockholder, partner, officer, employee, agent or director, engage, within the United States of America, in a business activity which is in competition with the business of Company, as the business of Company may be constituted at the termination hereof. Ownership of less than 1% of any class of outstanding securities of a public company shall not be considered to be in competition with the Company or any affiliate. 11. VACATION TIME. ------------- During the Term, as the same may be extended, Executive shall be entitled to at least four (4) weeks vacation during every twelve (12) month period, to be taken at such reasonable time or times as Executive may determine. Unused vacation time may be carried over to succeeding periods. 12. GENERAL PROVISIONS. ------------------ (A) NON-ASSIGNABILITY. Neither this Employment Agreement nor any right or ----------------- interest hereunder shall be assignable by Executive, his beneficiaries, or legal representatives, -7- without Company's prior written consent; provided, however, that nothing in this Paragraph shall preclude (i) Executive from designating a beneficiary to receive any benefit payable hereunder upon his death, or (ii) the executors, administrators, or other legal representatives of Executive or his estate from receiving any payment or benefit hereunder or from assigning any rights hereunder to the person or persons entitled thereunto. (B) BENEFIT/BINDING EFFECT. This Employment Agreement shall be binding ---------------------- upon, and inure to the benefit of, Executive and Company and their respective heirs, administrators, successors and assigns. (C) MODIFICATION. This Employment Agreement may not be modified or ------------ amended except by an instrument in writing signed by the parties hereto. (D) NON-WAIVER. No term or condition of this Employment Agreement shall ---------- be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Employment Agreement, except by written instrument of the party charged with such waiver or estoppel. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. (E) GOVERNING LAW. This Employment Agreement has been executed and ------------- delivered in the State of Connecticut, and its validity, interpretation, performance, and enforcement shall be governed by the laws of said State. (F) CAPTIONS. The headings and captions of paragraphs herein are included -------- solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Employment Agreement. (G) NOTICES. All notices and other communications hereunder shall be in ------- writing and shall be given by personal delivery, telecopier, recognized overnight courier service or Certified Mail, Return Receipt Requested, to the parties at their addresses set forth above, or to such other address as either party hereto may pursuant to the provisions of this Paragraph provide to the other party hereto. (H) ARBITRATION. Any controversy, question, claim or alleged breach ----------- arising out of, or relating to, this Agreement shall be resolved by arbitration as set forth hereinbelow. Any such controversy, question, claim or alleged dispute shall be submitted to arbitration upon written notice of either party to the other, which notice shall, in reasonable detail, set forth the controversy, question, claim or alleged breach to be arbitrated. Within fifteen (15) days after such notice is given, each party shall appoint one lawyer actively engaged in the full time practice of employment and/or corporate law for a continuous period immediately preceding the date of delivery of the notice of dispute of not less than ten (10) years. -8- Within fifteen (15) days after such appointment and notice, such lawyers shall appoint a third person (together with the first two lawyers, collectively, "Arbitration Panel") who is a lawyer of such qualification and background as the first two lawyers. In the event that either party fails to appoint an arbitrator within the time set forth hereinabove, such dispute or disagreement shall automatically be deemed to be resolved against such party. The Arbitration Panel, when duly selected, shall investigate the facts, hold hearings in Stamford Connecticut, and permit the parties to present evidence and arguments, and shall require both parties, at the end of such evidence, to simultaneously deliver to such Arbitration Panel a written statement of the exact award that such party requests that the Arbitration Panel render. The members of the Arbitration Panel shall utilize their utmost skill and shall apply themselves diligently so as to hear and decide, by majority vote, the outcome and resolution of any dispute submitted to the Arbitration Panel as promptly as possible, but in any event on or before the expiration of sixty (60) days after the date upon which the statements of the requested award are submitted by each party. The decision(s) of the Arbitration Panel shall be final and binding and may not be appealed to any court of competent jurisdiction, or otherwise, except upon claim of fraud or corruption as by law provided, provided, however, that implementation of such decision(s) shall in no way be delayed or otherwise impaired pending the outcome of any such appeal. Judgment upon the award rendered in such arbitration may be entered by any court having jurisdiction thereof. The nonprevailing party does hereby covenant and agree to promptly pay, and the Arbitration Panel shall be obliged to award to the prevailing party, one hundred (100%) percent of all reasonable legal fees and reasonable costs incurred by the prevailing party. In addition, the nonprevailing party shall be required to pay one hundred (100%) percent of the pre-agreed fees and costs of each of the arbitrators. Legal counsel for the prevailing party shall certify in writing to the Arbitration Panel (i) the total dollar amount of legal fees and costs, (ii) that such legal fees and costs were incurred in good faith and in keeping with the fee arrangements between the prevailing party and such counsel and (iii) that the payment of such legal fees and costs in full by the prevailing party was and is in no way contingent upon the outcome of the arbitration proceedings hereunder. Such certification shall be accompanied by a reasonably detailed itemization of the services rendered, the identity of the lawyer or lawyers who renders such services and the hourly rate or rates charged for such services (and/or any other basis employed to arrive at such legal fees and costs). The Arbitration Panel shall decide the amount of fees and costs to be awarded to the prevailing party. Neither the nonprevailing party nor its counsel shall be permitted to argue or comment upon the amount of fees or costs to be awarded. (I) INDEMNIFICATION. During the Term, the Company shall provide to --------------- -9- Executive, with respect to any capacity in which Executive shall serve, indemnification and expense advancement to the fullest extent to which the Company is permitted by law and to the fullest extent to which the Company is obligated otherwise to provide such to any of its directors or officers. (J) UNCONDITIONAL OBLIGATION. The Company's obligation to pay to or ------------------------ provide Executive with the payments, rights, benefits and privileges set forth in this Employment Agreement shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against him or anyone else. Executive shall not be obligated to seek or accept other employment in mitigation of the amount payable and the obtaining of any such other employment shall in no event effect any reduction of the Company's obligations to make the payments or to provide the benefits required hereunder. (K) ENTIRE AGREEMENT. This Agreement contains the entire agreement ---------------- between the parties with respect to the subject matter hereof and supersedes all prior agreements, written or oral, with respect thereto. (L) SEVERABILITY. Any provision of this Employment Agreement which is ------------ prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions, and any such prohibition or unenforceability in any such jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. (M) COUNTERPARTS. This Agreement may be executed in two or more ------------ counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, Company and Executive have made and delivered this Employment Agreement as of the day and year first above written. COMPANY: BOLT TECHNOLOGY CORPORATION By: /s/ Bernard Luskin ---------------------------------- Name: Bernard Luskin ---------------------------------- Title: Chairman ---------------------------------- EXECUTIVE: /s/ Raymond M. Soto ----------------------------------------- RAYMOND M. SOTO -10- SCHEDULE A ---------- For purposes hereof, a "Defined Corporate Change" shall mean the occurrence of any of the following: (1) the acquisition of beneficial ownership of 30% or more of the shares of the common stock of the Company by or for any person (as such term is defined in Section 14(d)(2) of the Securities Exchange Act of 1934), including for purposes of calculating such person's ownership all shares beneficially owned by the affiliates and associates (as such terms are defined in Rule 12b-2 of said Act) of such person, or (2) during any period of 24 consecutive months, individuals who at the beginning of such period constitute the Board of Directors of the Company cease for any reason to constitute a majority thereof, unless the election, or nomination for election by the Company's stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period; or (3) the Company's stockholders shall approve (a) the merger or consolidation of the Company with or into another corporation and the Company shall not be the surviving corporation or (b) an agreement to sell or otherwise dispose of all or substantially all of the Company's assets (including a plan of liquidation), or (4) any other event of a nature that would be required to be reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the aforesaid Act as in effect on December 19, 1985. EX-10.2 4 dex102.txt AMENDMENT TO EMPLOYMENT AGREEMENT DATED 09/20/2001 Exhibit 10.2 AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment (the "Amendment") to Employment Agreement, effective as of September 20, 2001, is entered into by and between BOLT TECHNOLGY CORPORATION, a Connecticut corporation (the "Company"), and Raymond M. Soto (the "Executive"). WITNESSETH: WHEREAS, the Company and the Executive entered into an Employment Agreement effective as of June 10, 1996 (the "Employment Agreement") in connection with the employment by the Company of the Executive; and WHEREAS, the Company and the Executive desire to amend the Employment Agreement as set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Executive agree as follows: 1. Paragraph 9(D) is hereby amended by deleting the existing Paragraph 9(D) in its entirety and substituting the following: "(D) For purposes of this Agreement, "Cause" shall mean: (i) Executive's conviction of a felony other than arising out of a motor vehicle incident; (ii) A determination by the Board of Directors of the Company that the Executive has engaged in conduct that constitutes fraud, theft, embezzlement, misappropriation of corporate assets, self-dealing or otherwise resulting in inappropriate personal gain, which conduct either is undisclosed as of the date of this Amendment or occurs at any time after the date of this Amendment, or that the Executive has breached his obligations to make the restitution and take the actions approved at the meeting of the Board of Directors of the Company on the effective date of this Amendment; or (iii) An intentional and material breach by Executive of his duties and responsibilities hereunder which is not remedied within thirty (30) days after receipt by Executive of written notice from the Board of Directors of Company (or, if the nature of such breach is such that it cannot reasonably be completely cured within 30 days, if Executive shall not have commenced to cure said breach within said 30 day period and thereafter diligently pursued said cure to completion)." 2. Executive hereby waives, releases and relinquishes any and all claims for (i) any unreimbursed business expenses accruing on or before September 20, 2001, and (ii) unused vacation for fiscal year 2001 or any prior fiscal year. 3. Except as amended by this Amendment, the Employment Agreement shall remain unaffected and in full force and effect. 4. This Amendment may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first above written. BOLT TECHNOLOGY CORPORATION By: /s/ Joseph Espeso ------------------------------------------ Name: Joseph Espeso Title: Senior Vice President-Finance and Chief Financial Officer /s/ Raymond M. Soto ----------------------------------------------- Raymond M. Soto 2 -----END PRIVACY-ENHANCED MESSAGE-----