Exhibit 10.32

 

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AAI Corporation

 

124 Industry Lane

 

Hunt Valley, Maryland 21030-0126

 

410-628-6600

 

Fax: 410-628-3644

 

aaicorp.com

 

March 14, 2005

 

Mr. Stuart Gray

5221 Springlake Way

Baltimore, MD 21212

 

Dear Stuart:

 

AAI is pleased to extend you an offer to join the Company as Treasurer, United
Industrial Corporation, at a bi-weekly salary of $5,769.23 (annualized
$150,000). In addition to your salary, you will be provided with a sign-on bonus
of $10,000.00 which you will receive in your first full paycheck. If you
voluntarily terminate employment within twelve months of the date of hire, you
will be required to reimburse the bonus payment, less applicable mandatory
taxes. You will accrue vacation as a rate of 13.4 hours per month for an annual
total of four weeks.

 

You will be recommended to become a participant in the UIC Management Incentive
Plan (MIP) for the year 2005 for a target incentive award of twenty percent
(20%) of base salary, with a maximum award equal to two hundred (200%) of
target. Your share of the 2005 MIP will be awarded in 2006 if you are in active
full-time status at the time of payout. Participation in the MIP program and the
amount of incentive compensation has to be approved by the UIC Compensation
Committee.

 

In addition to the foregoing, you will be awarded 5,000 options to purchase UIC
stock, with an exercise price equal to the closing price of UIC shares on the
day you commence employment with the Company. One-third (1/3) of these options
vest on the 1st three anniversaries of your start date. This grant shall be made
as of the day you commence employment and shall be subject to and governed by
the terms of the United Industrial Corporation 2004 Stock Option Plan, the stock
option agreement and all applicable Board resolutions.

 

In the event of Change of Control within the first two years of employment
and/or you are not offered a position at your equivalent level or you are asked
to move more than 50 miles from Hunt Valley, either of those conditions will
invoke severance of 26 weeks. In the event of a Change of Control after two
years of employment, you will be eligible for severance according to AAI policy.

 

This offer is contingent upon your successful completion of our post-offer
physical examination and meeting our security requirements.

 

We look forward to your positive reply and your immediate contributions to a
mutually successful future.

 

Sincerely,

 

 

/s/ Patrick H. Shockley

 

Patrick H. Shockley

ISO 9001:2000/AS9100

Director, Human Resources

SEI-CMM Level 4

 

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