Exhibit 10.1
EMPLOYMENT AGREEMENT
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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 Xxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000,
(the "Company"), and XXXXXXX X. XXXX, (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.
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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.
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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.
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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.
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(A) BASE SALARY. Company shall pay to Executive, on the same periodic
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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
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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.
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5. REIMBURSEMENT EXPENSES.
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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.
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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.
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(A) PLANS. During the Term, Executive (and, where applicable, his family)
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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
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insurance policy covering the life of Executive in the face amount of
$620,000.00 with respect to which Xxxxxx Xxxx 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
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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
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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.
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(A) DISABILITY. If, during the Term, Executive becomes physically or
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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
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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
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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
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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
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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
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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 Xxxxx & 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.
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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.
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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.
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(A) NON-ASSIGNABILITY. Neither this Employment Agreement nor any right or
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interest hereunder shall be assignable by Executive, his beneficiaries, or legal
representatives,
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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
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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
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amended except by an instrument in writing signed by the parties hereto.
(D) NON-WAIVER. No term or condition of this Employment Agreement shall
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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
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Title: Chairman
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EXECUTIVE:
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
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SCHEDULE A
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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.
