Exhibit 10.1

 

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of
the 14th  day of July, 2008, by and between BLOUNT INTERNATIONAL, INC., a
Delaware corporation (the “Company”), and RICHARD H. IRVING, III (“Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and Executive entered into an Employment Agreement, which
Agreement became effective on August 19, 1999, and which Agreement has
previously been amended by Amendment Nos. 1 and 2 (such Agreement as so amended
is hereinafter referred to as the “Prior Employment Agreement”), providing for
Executive’s employment by the Company and specifying the terms and conditions of
such employment; and

 

WHEREAS, the parties now desire to amend the Prior Employment Agreement in a
number of respects and to restate such agreement as hereinafter provided to
reflect Executive’s current employment arrangements with the Company; and

 

WHEREAS, Executive desires to continue his employment with the Company on the
terms and conditions provided herein;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the parties hereby agree as follows:

 

1.             PURPOSE AND EFFECTIVE DATE.

 

(A)           THE PURPOSE OF THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT IS
TO AMEND THE PRIOR EMPLOYMENT AGREEMENT, TO RECOGNIZE EXECUTIVE’S

 

 

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SIGNIFICANT CONTRIBUTIONS TO THE SUCCESS OF THE COMPANY, AND TO PROVIDE A
SINGLE, INTEGRATED DOCUMENT WHICH SHALL PROVIDE THE BASIS FOR EXECUTIVE’S
CONTINUED EMPLOYMENT BY THE COMPANY.

 

(B)           THIS AGREEMENT SHALL BE EFFECTIVE AS OF JULY 14, 2008 (“EFFECTIVE
DATE”) AND THIS AGREEMENT SHALL TERMINATE AS HEREINAFTER PROVIDED.

 

2.             EMPLOYMENT AND TERM.

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE COMPANY
HEREBY EMPLOYS EXECUTIVE AND EXECUTIVE HEREBY ACCEPTS EMPLOYMENT AS SENIOR VICE
PRESIDENT, GENERAL COUNSEL AND SECRETARY OF THE COMPANY AND SHALL HAVE SUCH
RESPONSIBILITIES, DUTIES AND AUTHORITY THAT ARE CONSISTENT WITH SUCH POSITION AS
MAY BE FROM TIME TO TIME ASSIGNED TO EXECUTIVE BY THE BOARD OF DIRECTORS. 
EXECUTIVE AGREES THAT DURING THE TERM OF THIS AGREEMENT HE WILL DEVOTE
SUBSTANTIALLY ALL HIS WORKING TIME, ATTENTION AND ENERGIES TO THE DILIGENT
PERFORMANCE OF HIS DUTIES AND RESPONSIBILITIES FOR THE COMPANY.  WITH THE
CONSENT OF THE BOARD OF DIRECTORS, EXECUTIVE MAY SERVE AS A DIRECTOR ON THE
BOARDS OF DIRECTORS OR TRUSTEES OF ADDITIONAL COMPANIES AND ORGANIZATIONS.

 

(B)           UNLESS EARLIER TERMINATED AS PROVIDED HEREIN, EXECUTIVE’S
EMPLOYMENT UNDER THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT SHALL COMMENCE
ON THE EFFECTIVE DATE AND SHALL END ON AUGUST 7, 2010 (THE “TERM”), UNLESS THE
PARTIES OTHERWISE AGREE TO AN EXTENSION IN WRITING (IN WHICH CASE SUCH EXTENDED
PERIOD SHALL CONSTITUTE THE TERM).  IF EXECUTIVE’S EMPLOYMENT IS TERMINATED BY
THE COMPANY OR IF EXECUTIVE TERMINATES HIS EMPLOYMENT PRIOR TO AUGUST 7, 2010,
HIS RIGHTS WILL BE DETERMINED IN ACCORDANCE WITH SECTION 5 OF THIS AGREEMENT.

 

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3.             COMPENSATION AND BENEFITS.  AS COMPENSATION FOR HIS SERVICES
DURING THE TERM OF THIS AGREEMENT, EXECUTIVE SHALL BE PAID AND RECEIVE THE
AMOUNTS AND BENEFITS SET FORTH IN SUBSECTIONS (A) THROUGH (E) BELOW:

 

(A)           AN ANNUAL BASE SALARY (“BASE SALARY”) OF THREE HUNDRED FORTY-EIGHT
THOUSAND DOLLARS ($348,000.00), PRORATED FOR ANY PARTIAL YEAR OF EMPLOYMENT. 
EXECUTIVE’S BASE SALARY SHALL BE SUBJECT TO ANNUAL REVIEW FOR INCREASE AT SUCH
TIME AS THE COMPANY CONDUCTS SALARY REVIEWS FOR ITS EXECUTIVE OFFICERS
GENERALLY.  EXECUTIVE’S SALARY SHALL BE PAYABLE IN SUBSTANTIALLY EQUAL
INSTALLMENTS ON A BI-MONTHLY BASIS, OR IN ACCORDANCE WITH THE COMPANY’S REGULAR
PAYROLL PRACTICES IN EFFECT FROM TIME TO TIME FOR EXECUTIVE OFFICERS OF THE
COMPANY.

 

(B)           EXECUTIVE SHALL BE ELIGIBLE TO PARTICIPATE IN THE EXECUTIVE
MANAGEMENT ANNUAL INCENTIVE PROGRAM (“INCENTIVE PROGRAM”) AND SUCH OTHER ANNUAL
INCENTIVE PLANS AS MAY BE ESTABLISHED BY THE COMPANY FROM TIME TO TIME FOR ITS
EXECUTIVE OFFICERS.  THE BOARD, A COMMITTEE OF THE BOARD OR THE CHIEF EXECUTIVE
OFFICER WILL ESTABLISH PERFORMANCE GOALS EACH YEAR UNDER THE INCENTIVE PROGRAM,
AND EXECUTIVE’S ANNUAL TARGET BONUS SHALL BE 50% OF BASE SALARY; THE MAXIMUM
AWARD FOR EXCEEDING THE PERFORMANCE GOALS (WHICH WILL BE DETERMINED IN
ACCORDANCE WITH THE CURRENT PLAN DESIGN) SHALL BE 100% OF BASE SALARY.  THE
ANNUAL INCENTIVE BONUS PAYABLE UNDER THIS SUBSECTION (B) SHALL BE PAYABLE AS A
LUMP SUM AT THE SAME TIME BONUSES ARE PAID TO OTHER SENIOR EXECUTIVES AFTER
CERTIFICATION BY THE COMPENSATION COMMITTEE OF THE BOARD, THAT THE APPLICABLE
PERFORMANCE OBJECTIVES HAVE BEEN MET, UNLESS EXECUTIVE ELECTS TO DEFER ALL OR A
PORTION OF SUCH AMOUNT PURSUANT TO ANY DEFERRAL PLAN ESTABLISHED BY THE COMPANY
FOR SUCH PURPOSE.

 

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(C)           EXCEPT AS PROVIDED IN SECTION 3(D), EXECUTIVE SHALL BE ENTITLED TO
PARTICIPATE IN, OR RECEIVE BENEFITS UNDER, ANY “EMPLOYEE BENEFIT PLAN” (AS
DEFINED IN SECTION 3(3) OF ERISA) OR EMPLOYEE BENEFIT ARRANGEMENT MADE GENERALLY
AVAILABLE BY THE COMPANY TO ITS EXECUTIVE OFFICERS, INCLUDING PLANS PROVIDING
RETIREMENT, 401(K) BENEFITS, DEFERRED COMPENSATION, HEALTH CARE (INCLUDING
EXEC-U-CARE), LIFE INSURANCE (INCLUDING THE EXECUTIVE LIFE INSURANCE PROGRAM),
DISABILITY (INCLUDING THE CORPORATE OFFICE LONG-TERM DISABILITY PLAN) AND
SIMILAR BENEFITS.

 

(D)           ON OR ABOUT AUGUST 15, 2002, EXECUTIVE WAS PAID IN A LUMP SUM A
100% VESTED BENEFIT UNDER THE BLOUNT, INC. AND SUBSIDIARIES SUPPLEMENTAL
RETIREMENT BENEFIT PLAN (“SERP”) AND THE BLOUNT INTERNATIONAL, INC. SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN FOR RICHARD H. IRVING, III (“INDIVIDUAL SERP”), WHICH
INCLUDED AN AMOUNT AS IF EXECUTIVE HAD EARNED TWO (2) ADDITIONAL YEARS OF
BENEFIT SERVICE, AND AS IF HE WERE TWO (2) YEARS OLDER.  FOLLOWING THE MAKING OF
SUCH PAYMENTS, THE COMPANY HAD NO FURTHER OBLIGATIONS TO EXECUTIVE IN RESPECT OF
THE SERP OR THE INDIVIDUAL SERP, EXCEPT THAT COMMENCING AUGUST 1, 2004,
EXECUTIVE WAS AGAIN ELIGIBLE TO PARTICIPATE IN THE SERP (BUT EXECUTIVE
ACKNOWLEDGES THAT SUCH SERP WAS FROZEN AS OF DECEMBER 31, 2006).  ANY BENEFIT TO
WHICH EXECUTIVE IS ENTITLED UNDER THE SERP WILL BE CALCULATED USING HIS TOTAL
YEARS OF BENEFIT SERVICE WHILE THE SERP WAS IN EFFECT AND WILL BE REDUCED IN AN
EQUITABLE MANNER BY THE SERP BENEFIT (BUT NOT THE INDIVIDUAL SERP BENEFIT)
PREVIOUSLY PAID TO EXECUTIVE IN AUGUST, 2002.

 

(E)           EXECUTIVE WILL BE PROVIDED AN AUTOMOBILE IN ACCORDANCE WITH THE
COMPANY’S AUTOMOBILE POLICY FOR EXECUTIVES, AND THE COMPANY WILL PAY ALL
INSURANCE, MAINTENANCE, FUEL, OIL AND RELATED OPERATIONAL EXPENSES FOR SUCH
AUTOMOBILE.  EXECUTIVE

 

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WILL BE ENTITLED TO FIVE (5) WEEKS VACATION DURING 2008, WHICH AMOUNT WILL BE
SUBJECT TO INCREASE DURING THE TERM IN ACCORDANCE WITH COMPANY POLICY. 
EXECUTIVE WILL BE PROVIDED AN ANNUAL PHYSICAL EXAMINATION AND A FINANCIAL/TAX
CONSULTANT FOR PERSONAL FINANCIAL AND TAX PLANNING.  EXECUTIVE WILL BE PROMPTLY
REIMBURSED BY THE COMPANY FOR ALL REASONABLE BUSINESS EXPENSES HE INCURS IN
CARRYING OUT HIS DUTIES AND RESPONSIBILITIES UNDER THIS AGREEMENT.

 

4.             CONFIDENTIALITY AND NONCOMPETITION.

 

(A)           EXECUTIVE ACKNOWLEDGES THAT, PRIOR TO AND DURING THE TERM OF THIS
AGREEMENT, THE COMPANY HAS FURNISHED AND WILL FURNISH TO EXECUTIVE CONFIDENTIAL
INFORMATION WHICH COULD BE USED BY EXECUTIVE ON BEHALF OF A COMPETITOR OF THE
COMPANY TO THE COMPANY’S SUBSTANTIAL DETRIMENT.  MOREOVER, THE PARTIES RECOGNIZE
THAT EXECUTIVE DURING THE COURSE OF HIS EMPLOYMENT WITH THE COMPANY MAY DEVELOP
IMPORTANT RELATIONSHIPS WITH CUSTOMERS AND OTHERS HAVING VALUABLE BUSINESS
RELATIONSHIPS WITH THE COMPANY.  IN VIEW OF THE FOREGOING, EXECUTIVE
ACKNOWLEDGES AND AGREES THAT THE RESTRICTIVE COVENANTS CONTAINED IN THIS
SECTION ARE REASONABLY NECESSARY TO PROTECT THE COMPANY’S LEGITIMATE BUSINESS
INTERESTS AND GOOD WILL.

 

(B)           EXECUTIVE AGREES THAT HE SHALL PROTECT THE COMPANY’S CONFIDENTIAL
INFORMATION AND SHALL NOT DISCLOSE TO ANY PERSON, OR OTHERWISE USE, EXCEPT IN
CONNECTION WITH HIS DUTIES PERFORMED IN ACCORDANCE WITH THIS AGREEMENT, ANY
CONFIDENTIAL INFORMATION AT ANY TIME, INCLUDING FOLLOWING THE TERMINATION OF HIS
EMPLOYMENT WITH THE COMPANY FOR ANY REASON; PROVIDED, HOWEVER, THAT EXECUTIVE
MAY MAKE DISCLOSURES REQUIRED BY A VALID ORDER OR SUBPOENA ISSUED BY A COURT OR
ADMINISTRATIVE AGENCY OF COMPETENT JURISDICTION, IN WHICH EVENT EXECUTIVE WILL
PROMPTLY NOTIFY THE COMPANY OF

 

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SUCH ORDER OR SUBPOENA TO PROVIDE THE COMPANY AN OPPORTUNITY TO PROTECT ITS
INTERESTS.  EXECUTIVE’S OBLIGATIONS UNDER THIS SECTION 4(B) SHALL SURVIVE ANY
EXPIRATION OR TERMINATION OF THIS AGREEMENT FOR ANY REASON, PROVIDED THAT
EXECUTIVE MAY AFTER SUCH EXPIRATION OR TERMINATION DISCLOSE CONFIDENTIAL
INFORMATION WITH THE PRIOR WRITTEN CONSENT OF THE BOARD.

 

(C)           UPON THE TERMINATION OR EXPIRATION OF HIS EMPLOYMENT HEREUNDER,
EXECUTIVE AGREES TO DELIVER PROMPTLY TO THE COMPANY ALL COMPANY FILES, CUSTOMER
LISTS, MANAGEMENT REPORTS, MEMORANDA, RESEARCH, COMPANY FORMS, FINANCIAL DATA
AND REPORTS AND OTHER DOCUMENTS SUPPLIED TO OR CREATED BY HIM IN CONNECTION WITH
HIS EMPLOYMENT HEREUNDER (INCLUDING ALL COPIES OF THE FOREGOING) IN HIS
POSSESSION OR CONTROL, AND ALL OF THE COMPANY’S EQUIPMENT AND OTHER MATERIALS IN
HIS POSSESSION OR CONTROL.  EXECUTIVE’S OBLIGATIONS UNDER THIS
SECTION 4(C) SHALL SURVIVE ANY EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

(D)           UPON THE TERMINATION OR EXPIRATION OF HIS EMPLOYMENT UNDER THIS
AGREEMENT, EXECUTIVE AGREES THAT FOR A PERIOD OF ONE (1) YEAR FROM HIS DATE OF 
TERMINATION OR UNTIL THE END OF THE PERIOD FOR WHICH HE IS ENTITLED TO RECEIVE
COMPENSATION UNDER SECTION 5.1(A) BELOW, WHICHEVER IS LONGER, HE SHALL NOT
(I) ENTER INTO OR ENGAGE IN THE DESIGN, MANUFACTURE, MARKETING OR SALE OF ANY
PRODUCTS SIMILAR TO THOSE PRODUCED OR OFFERED BY THE COMPANY OR ITS AFFILIATES
IN THE AREA OF NORTH AMERICA, EITHER AS AN INDIVIDUAL, PARTNER OR JOINT
VENTURER, OR AS AN EMPLOYEE, AGENT OR SALESMAN, OR AS AN OFFICER, DIRECTOR, OR
SHAREHOLDER OF A CORPORATION, (II) DIVERT OR ATTEMPT TO DIVERT ANY PERSON,
CONCERN OR ENTITY WHICH IS FURNISHED PRODUCTS OR SERVICES BY THE COMPANY FROM
DOING BUSINESS WITH THE COMPANY OR OTHERWISE CHANGE ITS RELATIONSHIP WITH THE

 

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COMPANY, OR (III) SOLICIT, LURE OR ATTEMPT TO HIRE AWAY ANY OF THE EMPLOYEES OF
THE COMPANY WITH WHOM THE EXECUTIVE INTERACTED DIRECTLY OR INDIRECTLY WHILE
EMPLOYED WITH THE COMPANY.

 

(E)           EXECUTIVE ACKNOWLEDGES THAT IF HE BREACHES OR THREATENS TO BREACH
THIS SECTION 4, HIS ACTIONS MAY CAUSE IRREPARABLE HARM AND DAMAGE TO THE COMPANY
WHICH COULD NOT BE COMPENSATED IN DAMAGES.  ACCORDINGLY, IF EXECUTIVE BREACHES
OR THREATENS TO BREACH THIS SECTION 4, THE COMPANY SHALL BE ENTITLED TO SEEK
INJUNCTIVE RELIEF, IN ADDITION TO ANY OTHER RIGHTS OR REMEDIES OF THE COMPANY. 
THE EXISTENCE OF ANY CLAIM OR CAUSE OF ACTION BY EXECUTIVE AGAINST THE COMPANY,
WHETHER PREDICATED ON THIS AGREEMENT OR OTHERWISE, SHALL NOT CONSTITUTE A
DEFENSE TO THE ENFORCEMENT BY THE COMPANY OF EXECUTIVE’S AGREEMENT UNDER THIS
SECTION 4(E).

 

5.             TERMINATION.

 

5.1           BY EXECUTIVE.  EXECUTIVE SHALL HAVE THE RIGHT TO TERMINATE HIS
EMPLOYMENT HEREUNDER AT ANY TIME BY NOTICE OF TERMINATION (AS DESCRIBED IN
SECTION 7).  IF EXECUTIVE TERMINATES HIS EMPLOYMENT BECAUSE (I) THE COMPANY HAS
MATERIALLY BREACHED THIS AGREEMENT, AND SUCH BREACH HAS NOT BEEN CURED WITHIN
THIRTY (30) DAYS AFTER WRITTEN NOTICE OF SUCH BREACH IS GIVEN BY EXECUTIVE TO
THE COMPANY, PROVIDED THAT IT SHALL NOT BE A BREACH OF THIS AGREEMENT FOR THE
COMPANY TO PROMOTE OR HIRE A REPLACEMENT FOR EXECUTIVE DURING THE TERM FOR
PURPOSES OF PROVIDING A TRANSITION OF ALL OR PART OF EXECUTIVE’S DUTIES AND
RESPONSIBILITIES SO LONG AS THE COMPANY CONTINUES TO PROVIDE EXECUTIVE WITH THE
COMPENSATION AND BENEFITS SET FORTH IN SECTION 3; OR (II) EXECUTIVE HAS
DETERMINED THAT HIS TERMINATION IS FOR GOOD REASON (AS DEFINED IN SECTION 6.7),
EXECUTIVE SHALL BE ENTITLED TO RECEIVE THE COMPENSATION AND BENEFITS SET

 

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FORTH IN SUBSECTIONS (A) THROUGH (H) BELOW.  IF EXECUTIVE TERMINATES HIS
EMPLOYMENT OTHER THAN PURSUANT TO CLAUSES (I) OR (II) OF THIS SECTION 5.1, THE
COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT SHALL CEASE AS OF THE DATE OF SUCH
TERMINATION.  UNLESS SPECIFIED OTHERWISE, THE TIME PERIODS IN (A) THROUGH
(H) BELOW SHALL BE THE LESSER OF (I) THE 12-MONTH PERIOD (OR THE 24-MONTH PERIOD
IF EXECUTIVE IS TERMINATED WITHIN 12 MONTHS FOLLOWING THE DATE OF A CHANGE IN
CONTROL, AS DEFINED IN SECTION 6.3), COMMENCING ON EXECUTIVE’S DATE OF
TERMINATION, OR (II) THE TIME PERIOD REMAINING FROM THE DATE OF EXECUTIVE’S
TERMINATION UNTIL AUGUST 7, 2010, UNLESS THE PARTIES HAVE AGREED IN WRITING TO
EXTEND THE EXPIRATION DATE OF THE TERM (SUCH TIME PERIOD UNDER (I) OR (II) IS
HEREINAFTER REFERRED TO AS THE “SEVERANCE PERIOD”).  EXCEPT AS OTHERWISE
PROVIDED IN SECTION 5.3, THE COMPANY AGREES THAT IF EXECUTIVE TERMINATES
EMPLOYMENT AND IS ENTITLED TO COMPENSATION AND BENEFITS UNDER THIS SECTION 5.1,
HE SHALL NOT BE REQUIRED TO MITIGATE DAMAGES BY SEEKING OTHER EMPLOYMENT, NOR
SHALL ANY AMOUNT HE EARNS REDUCE THE AMOUNT PAYABLE BY THE COMPANY HEREUNDER.

 

(A)           BASE SALARY - EXECUTIVE WILL CONTINUE TO RECEIVE HIS BASE SALARY
AS THEN IN EFFECT (SUBJECT TO WITHHOLDING OF ALL APPLICABLE TAXES) FOR THE
SEVERANCE PERIOD IN THE SAME MANNER AS IT WAS BEING PAID AS OF THE DATE OF
TERMINATION; PROVIDED, HOWEVER, THAT THE SALARY PAYMENTS PROVIDED FOR HEREUNDER
SHALL BE PAID IN A SINGLE LUMP SUM PAYMENT, TO BE PAID NOT LATER THAN 30 DAYS
AFTER HIS TERMINATION OF EMPLOYMENT; PROVIDED, FURTHER, THAT THE AMOUNT OF SUCH
LUMP SUM PAYMENT SHALL BE DETERMINED BY TAKING THE SALARY PAYMENTS TO BE MADE
AND DISCOUNTING THEM TO THEIR PRESENT VALUE (AS DEFINED IN SECTION 6.9) ON THE
DATE EXECUTIVE’S EMPLOYMENT UNDER THIS AGREEMENT IS TERMINATED.

 

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(B)           BONUSES AND INCENTIVES - EXECUTIVE SHALL RECEIVE BONUS PAYMENTS
FROM THE COMPANY FOR EACH MONTH OF THE SEVERANCE PERIOD IN AN AMOUNT FOR EACH
SUCH MONTH EQUAL TO ONE-TWELFTH OF THE AVERAGE OF THE BONUSES EARNED BY HIM FOR
THE TWO FISCAL YEARS IN WHICH BONUSES WERE PAID TO HIM IMMEDIATELY PRECEDING THE
YEAR IN WHICH SUCH TERMINATION OCCURS.  ANY BONUS AMOUNTS THAT EXECUTIVE HAD
PREVIOUSLY EARNED FROM THE COMPANY BUT WHICH MAY NOT YET HAVE BEEN PAID AS OF
THE DATE OF TERMINATION SHALL BE PAYABLE ON THE DATE SUCH AMOUNTS ARE PAYABLE TO
OTHER EXECUTIVES AND EXECUTIVE’S TERMINATION SHALL NOT AFFECT THE PAYMENT OF
SUCH BONUS.  EXECUTIVE SHALL ALSO RECEIVE A PRORATED BONUS FOR ANY UNCOMPLETED
FISCAL YEAR AT THE DATE OF TERMINATION (CALCULATED AS IF A BONUS AT THE TARGET
AWARD LEVEL HAD BEEN ACHIEVED), BASED UPON THE NUMBER OF DAYS THAT HE WAS
EMPLOYED DURING SUCH FISCAL YEAR.  THE BONUS AMOUNTS DETERMINED HEREIN SHALL BE
PAID IN A SINGLE LUMP SUM PAYMENT, TO BE PAID NOT LATER THAN 30 DAYS AFTER
TERMINATION OF EMPLOYMENT; PROVIDED, THAT THE AMOUNT OF SUCH LUMP SUM PAYMENT
REPRESENTING THE MONTHLY BONUS PAYMENTS SHALL BE DETERMINED BY TAKING THE
MONTHLY BONUS PAYMENTS TO BE MADE AND DISCOUNTING THEM TO THEIR PRESENT VALUE ON
THE DATE EXECUTIVE’S EMPLOYMENT UNDER THIS AGREEMENT IS TERMINATED.

 

(C)           HEALTH AND LIFE INSURANCE COVERAGE - THE HEALTH CARE COVERAGE
(INCLUDING EXECUTIVE MEDICAL) AND GROUP TERM LIFE INSURANCE COVERAGE PROVIDED TO
EXECUTIVE AT HIS DATE OF TERMINATION SHALL BE CONTINUED FOR THE SEVERANCE PERIOD
AT THE SAME LEVEL AND IN THE SAME MANNER AS THEN PROVIDED TO ACTIVELY EMPLOYED
EXECUTIVE PARTICIPANTS AS IF HIS EMPLOYMENT UNDER THIS AGREEMENT HAD NOT
TERMINATED.  ANY ADDITIONAL COVERAGES EXECUTIVE HAD AT TERMINATION, INCLUDING
DEPENDENT COVERAGE, WILL ALSO BE CONTINUED FOR SUCH PERIOD ON THE SAME TERMS, TO
THE EXTENT PERMITTED BY THE

 

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APPLICABLE POLICIES OR CONTRACTS.  ANY COSTS EXECUTIVE WAS PAYING FOR SUCH
COVERAGES AT THE TIME OF TERMINATION SHALL BE PAID BY EXECUTIVE BY SEPARATE
CHECK PAYABLE TO THE COMPANY EACH MONTH IN ADVANCE.  IF THE TERMS OF THE LIFE
INSURANCE COVERAGE REFERRED TO IN THIS SUBSECTION (C), OR THE LAWS APPLICABLE TO
SUCH LIFE INSURANCE COVERAGE, DO NOT PERMIT CONTINUED PARTICIPATION BY
EXECUTIVE, THEN THE COMPANY WILL ARRANGE FOR OTHER LIFE INSURANCE COVERAGE AT
ITS EXPENSE PROVIDING SUBSTANTIALLY SIMILAR BENEFITS (EVEN IF THE COSTS OF SUCH
COVERAGE ARE HIGHER THAN IF EXECUTIVE HAD REMAINED IN THE COMPANY PLAN).

 

If the terms of the healthcare benefits program referred to in this subsection
(c) do not permit continued participation by Executive as required by this
subsection or if the healthcare benefits to be provided to Executive and his
dependents pursuant to this subsection (c) cannot be provided in a manner such
that the benefit payments will continue to be tax-free to Executive and his
dependents, then the Company  shall (i) pay to Executive within five (5) days
after Executive’s date of termination a lump sum amount equal to the monthly
rate for COBRA coverage at Executive’s termination date that is then being paid
by former active employees for the level of coverage that applies to Executive
and his dependents, minus the amount active employees are then paying for such
coverage, multiplied by the number of months in the Severance Period (plus a
gross-up on the lump sum amount determined under this subsection (c)), and
(ii) permit Executive and his dependents to elect to participate in the
healthcare plan for the length of the Severance Period upon payment of the
applicable rate for COBRA coverage during the Severance Period.

 

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Executive and his dependents shall be entitled to receive coverage under the
Company’s retiree healthcare plan commencing at the end of the Severance
Period.  The level of coverage and costs under the retiree healthcare plan for
Executive and his dependents will be the same level of coverage and costs
provided under the Company’s retiree healthcare plan for executive level
employees on Executive’s Date of Termination and such retiree healthcare
coverage shall be 100% vested and shall not be terminated in the future
(regardless of any termination of such coverage that may occur that affects
other executives).  The Executive’s entitlement to retiree healthcare coverage
shall terminate upon the later of:  (i) the death of the Executive and (ii) the
death of his spouse.

 

(D)           EMPLOYEE RETIREMENT PLANS - TO THE EXTENT PERMITTED BY THE
APPLICABLE PLAN, EXECUTIVE WILL BE ENTITLED TO CONTINUE TO PARTICIPATE,
CONSISTENT WITH PAST PRACTICES, IN ALL EMPLOYEE RETIREMENT AND DEFERRED
COMPENSATION PLANS MAINTAINED BY THE COMPANY IN WHICH EXECUTIVE PARTICIPATES AS
OF HIS DATE OF TERMINATION, INCLUDING, TO THE EXTENT SUCH PLANS ARE STILL
MAINTAINED BY THE COMPANY, THE BLOUNT RETIREMENT PLAN (THIS PLAN HAS BEEN FROZEN
EFFECTIVE AS OF DECEMBER 31, 2006), THE SERP (THIS PLAN HAS BEEN FROZEN
EFFECTIVE AS OF DECEMBER 31, 2006), THE BLOUNT 401(K) PLAN, AND THE BLOUNT
EXCESS 401(K) PLAN.  EXECUTIVE’S PARTICIPATION IN SUCH RETIREMENT PLANS SHALL
CONTINUE FOR THE SEVERANCE PERIOD, THE COMPENSATION PAYABLE TO EXECUTIVE UNDER
(A) AND (B) ABOVE SHALL BE TREATED (UNLESS OTHERWISE EXCLUDED) AS COMPENSATION
UNDER THE PLAN AS IF IT WERE PAID ON A MONTHLY BASIS, AND HE WILL RECEIVE CREDIT
FOR YEARS OF SERVICE FOR THE LENGTH OF THE SEVERANCE PERIOD.  FOR PURPOSES OF
THE BLOUNT 401(K) PLAN AND THE BLOUNT EXCESS 401(K) PLAN, HE WILL RECEIVE AN
AMOUNT EQUAL TO THE COMPANY’S CONTRIBUTIONS TO

 

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THE PLANS, ASSUMING EXECUTIVE HAD PARTICIPATED IN SUCH PLANS AT THE MAXIMUM
PERMISSIBLE CONTRIBUTIONS LEVEL AND THE COMPANY HAD CONTINUED TO MAKE MATCHING
CONTRIBUTIONS AND SAVINGS PLUS CONTRIBUTIONS TO SUCH PLANS FOR THE SEVERANCE
PERIOD.  IF CONTINUED PARTICIPATION IN ANY PLAN IS NOT PERMITTED BY THE PLAN OR
BY APPLICABLE LAW, THE COMPANY SHALL PAY TO EXECUTIVE OR, IF APPLICABLE, HIS
BENEFICIARY A SUPPLEMENTAL BENEFIT EQUAL TO THE PRESENT VALUE ON THE DATE OF
TERMINATION OF EMPLOYMENT UNDER THIS AGREEMENT (CALCULATED AS PROVIDED IN THE
PLAN) OF THE EXCESS OF (I) THE BENEFIT EXECUTIVE WOULD HAVE BEEN PAID UNDER SUCH
PLAN IF HE HAD CONTINUED TO BE COVERED FOR THE SEVERANCE PERIOD (LESS ANY
AMOUNTS EXECUTIVE WOULD HAVE BEEN REQUIRED TO CONTRIBUTE), OVER (II) THE BENEFIT
ACTUALLY PAYABLE UNDER SUCH PLAN.  THE COMPANY SHALL PAY THE PRESENT VALUE OF
SUCH ADDITIONAL BENEFITS (IF ANY) IN A LUMP SUM WITHIN 30 DAYS OF HIS
TERMINATION OF EMPLOYMENT.

 

(E)           EFFECT OF LUMP SUM PAYMENT.  THE LUMP SUM PAYMENT UNDER (A) OR
(B) ABOVE SHALL NOT ALTER THE AMOUNTS EXECUTIVE IS ENTITLED TO RECEIVE UNDER THE
BENEFIT PLANS DESCRIBED IN THIS SECTION.  BENEFITS UNDER SUCH PLANS SHALL BE
DETERMINED AS IF EXECUTIVE HAD REMAINED EMPLOYED AND RECEIVED SUCH PAYMENTS OVER
THE SEVERANCE PERIOD.

 

(F)            STOCK OPTIONS.  AS OF HIS DATE OF TERMINATION, ALL OF THE TIME
OPTIONS AND THE PERFORMANCE OPTIONS, AND ANY OTHER OUTSTANDING STOCK OPTIONS
GRANTED TO EXECUTIVE BY THE COMPANY, SHALL BECOME VESTED AND EXERCISABLE AS
PROVIDED IN THE STOCK OPTION AGREEMENTS FOR SUCH STOCK OPTIONS.

 

(G)           OFFICE SPACE; SECRETARIAL.  EXECUTIVE WILL BE PROVIDED APPROPRIATE
OFFICE SPACE, HIS THEN CURRENT ADMINISTRATIVE ASSISTANT (SUCH ASSISTANT SHALL BE
PAID OR

 

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PROVIDED SIMILAR COMPENSATION AND BENEFITS TO THAT BEING PROVIDED AT THE TIME
EXECUTIVE TERMINATES EMPLOYMENT), AND REASONABLE EXPENSES RELATED THERETO FOR A
PERIOD OF TWELVE (12) MONTHS FROM EXECUTIVE’S DATE OF TERMINATION.

 

(H)           EXECUTIVE LIFE INSURANCE PROGRAM.  DURING THE SEVERANCE PERIOD,
THE COMPANY WILL CONTINUE TO PAY THE PREMIUMS ON EXECUTIVE’S POLICY UNDER THE
EXECUTIVE LIFE INSURANCE PROGRAM.

 

5.2           BY COMPANY.  THE COMPANY SHALL HAVE THE RIGHT TO TERMINATE
EXECUTIVE’S EMPLOYMENT UNDER THIS AGREEMENT AT ANY TIME DURING THE TERM BY
NOTICE OF TERMINATION (AS DESCRIBED IN SECTION 7).  IF THE COMPANY TERMINATES
EXECUTIVE’S EMPLOYMENT UNDER THIS AGREEMENT (I) FOR CAUSE, AS DEFINED IN
SECTION 6.2, (II) IF EXECUTIVE BECOMES DISABLED, OR (III) UPON EXECUTIVE’S
DEATH, THE COMPANY’S OBLIGATIONS UNDER THIS AGREEMENT SHALL CEASE AS OF THE DATE
OF TERMINATION; PROVIDED, HOWEVER, THAT EXECUTIVE WILL BE ENTITLED TO WHATEVER
BENEFITS ARE PAYABLE PURSUANT TO THE TERMS OF ANY HEALTH, LIFE INSURANCE,
DISABILITY, WELFARE, RETIREMENT OR OTHER PLAN OR PROGRAM MAINTAINED BY THE
COMPANY.  IF THE COMPANY TERMINATES EXECUTIVE DURING THE TERM OF THIS AGREEMENT
OTHER THAN PURSUANT TO CLAUSES (I) THROUGH (III) OF THIS SECTION 5.2, EXECUTIVE
SHALL BE ENTITLED TO RECEIVE THE COMPENSATION AND BENEFITS PROVIDED IN
SUBSECTIONS (A) THROUGH (H) OF SECTION 5.1 ABOVE FOR THE SEVERANCE PERIOD (AS
DEFINED IN SECTION 5.1), AND SUBJECT TO THE PROVISIONS (INCLUDING THE
NONMITIGATION PROVISION) AND LIMITATIONS THEREIN.

 

5.3           LIMITATION ON BENEFITS UPON TERMINATION.

 

(A)           NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, ANY
BENEFITS PAYABLE OR TO BE PROVIDED TO EXECUTIVE BY THE COMPANY OR ITS
AFFILIATES, WHETHER

 

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PURSUANT TO THIS AGREEMENT OR OTHERWISE, WHICH ARE TREATED AS SEVERANCE PAYMENTS
SHALL BE MODIFIED OR REDUCED IN THE MANNER PROVIDED IN (B) BELOW TO THE EXTENT
NECESSARY SO THAT THE BENEFITS PAYABLE OR TO BE PROVIDED TO EXECUTIVE UNDER THIS
AGREEMENT THAT ARE TREATED AS SEVERANCE PAYMENTS, AS WELL AS ANY PAYMENTS OR
BENEFITS PROVIDED OUTSIDE OF THIS AGREEMENT THAT ARE SO TREATED, SHALL NOT CAUSE
THE COMPANY TO HAVE PAID AN EXCESS SEVERANCE PAYMENT.  IN COMPUTING SUCH AMOUNT,
THE PARTIES SHALL TAKE INTO ACCOUNT ALL PROVISIONS OF CODE SECTION 280G, AND THE
REGULATIONS THEREUNDER, INCLUDING MAKING APPROPRIATE ADJUSTMENTS TO SUCH
CALCULATION FOR AMOUNTS ESTABLISHED TO BE REASONABLE COMPENSATION.  IF EXECUTIVE
BECOMES ENTITLED TO COMPENSATION AND BENEFITS UNDER SECTION 5.1 OR SECTION 5.2
AND SUCH PAYMENTS ARE CONSIDERED TO BE SEVERANCE PAYMENTS CONTINGENT UPON A
CHANGE IN CONTROL, EXECUTIVE SHALL BE REQUIRED TO MITIGATE DAMAGES (BUT ONLY
WITH RESPECT TO AMOUNTS THAT WOULD BE TREATED AS SEVERANCE PAYMENTS) BY REDUCING
THE AMOUNT OF SEVERANCE PAYMENTS HE IS ENTITLED TO RECEIVE BY ANY COMPENSATION
AND BENEFITS HE EARNS FROM SUBSEQUENT EMPLOYMENT (BUT SHALL NOT BE REQUIRED TO
SEEK SUCH EMPLOYMENT) DURING THE 24-MONTH PERIOD AFTER TERMINATION (OR SUCH
LESSER PERIOD AS HE IS ENTITLED TO EXTENDED BENEFITS).

 

(B)           IN THE EVENT THAT THE AMOUNT OF ANY SEVERANCE PAYMENTS WHICH WOULD
BE PAYABLE TO OR FOR THE BENEFIT OF EXECUTIVE UNDER THIS AGREEMENT MUST BE
MODIFIED OR REDUCED TO COMPLY WITH THIS SECTION 5.3, EXECUTIVE SHALL DIRECT
WHICH SEVERANCE PAYMENTS ARE TO BE MODIFIED OR REDUCED; PROVIDED, HOWEVER, THAT
NO INCREASE IN THE AMOUNT OF ANY PAYMENT OR CHANGE IN THE TIMING OF THE PAYMENT
SHALL BE MADE WITHOUT THE CONSENT OF THE COMPANY.

 

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(C)           THIS SECTION 5.3 SHALL BE INTERPRETED SO AS TO AVOID THE
IMPOSITION OF EXCISE TAXES ON EXECUTIVE UNDER SECTION 4999 OF THE CODE OR THE
DISALLOWANCE OF A DEDUCTION TO THE COMPANY PURSUANT TO SECTION 280G(A) OF THE
CODE WITH RESPECT TO AMOUNTS PAYABLE UNDER THIS AGREEMENT OR OTHERWISE. 
NOTWITHSTANDING THE FOREGOING, IN NO EVENT WILL ANY OF THE PROVISIONS OF THIS
SECTION 5.3 CREATE, WITHOUT THE CONSENT OF EXECUTIVE, AN OBLIGATION ON THE PART
OF EXECUTIVE TO REFUND ANY AMOUNT TO THE COMPANY FOLLOWING PAYMENT OF SUCH
AMOUNT.

 

(D)           IN ADDITION TO THE LIMITS OTHERWISE PROVIDED IN THIS SECTION 5.3,
TO THE EXTENT PERMITTED BY LAW, EXECUTIVE MAY IN HIS SOLE DISCRETION ELECT TO
REDUCE ANY PAYMENTS HE MAY BE ELIGIBLE TO RECEIVE UNDER THIS AGREEMENT TO
PREVENT THE IMPOSITION OF EXCISE TAXES ON EXECUTIVE UNDER SECTION 4999 OF THE
CODE.

 

(E)           FOR PURPOSES OF THIS SECTION 5.3, THE FOLLOWING DEFINITIONS SHALL
APPLY:

 

(I)          “EXCESS SEVERANCE PAYMENT” - THE TERM “EXCESS SEVERANCE PAYMENT”
SHALL HAVE THE SAME MEANING AS THE TERM “EXCESS PARACHUTE PAYMENT” DEFINED IN
SECTION 280G(B)(1) OF THE CODE.

 

(II)         “SEVERANCE PAYMENT” - THE TERM “SEVERANCE PAYMENT” SHALL HAVE THE
SAME MEANING AS THE TERM “PARACHUTE PAYMENT” DEFINED IN SECTION 280G(B)(2) OF
THE CODE.

 

(III)        “REASONABLE COMPENSATION” - THE TERM “REASONABLE COMPENSATION”
SHALL HAVE THE SAME MEANING AS PROVIDED IN SECTION 280G(B)(4) OF THE CODE.  THE
PARTIES ACKNOWLEDGE AND AGREE THAT, IN THE ABSENCE OF A CHANGE IN EXISTING LEGAL
AUTHORITIES OR THE ISSUANCE OF CONTRARY AUTHORITIES,

 

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AMOUNTS RECEIVED BY EXECUTIVE AS DAMAGES UNDER OR AS A RESULT OF A BREACH OF
THIS AGREEMENT SHALL BE CONSIDERED REASONABLE COMPENSATION.

 

5.4           SECTION 409A COMPLIANCE.   THE COMPANY SHALL HAVE THE AUTHORITY TO
DELAY THE COMMENCEMENT OF ALL OR A PART OF THE PAYMENTS TO EXECUTIVE UNDER THIS
SECTION 5 IF EXECUTIVE IS A “KEY EMPLOYEE” OF THE COMPANY (AS DETERMINED BY THE
COMPANY IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE COMPANY THAT ARE
CONSISTENT WITH SECTION 409A) TO A DATE WHICH IS SIX MONTHS AFTER THE DATE OF
EXECUTIVE’S TERMINATION OF EMPLOYMENT (AND ON SUCH DATE THE PAYMENTS THAT WOULD
OTHERWISE HAVE BEEN MADE DURING SUCH SIX-MONTH PERIOD SHALL BE MADE) TO THE
EXTENT (BUT ONLY TO THE EXTENT) SUCH DELAY IS REQUIRED UNDER THE PROVISIONS OF
SECTION 409A TO AVOID IMPOSITION OF ADDITIONAL INCOME AND OTHER TAXES, PROVIDED
THAT THE COMPANY AND EXECUTIVE AGREE TO TAKE INTO ACCOUNT ANY TRANSITIONAL
RULES AND EXEMPTION RULES AVAILABLE UNDER SECTION 409A.

 

6.             DEFINITIONS.  FOR PURPOSES OF THIS AGREEMENT THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SPECIFIED BELOW:

 

6.1           “BOARD” OR “BOARD OF DIRECTORS”.  THE BOARD OF DIRECTORS OF THE
COMPANY.

 

6.2           “CAUSE” .  THE INVOLUNTARY TERMINATION OF EXECUTIVE BY THE COMPANY
FOR THE FOLLOWING REASONS SHALL CONSTITUTE A TERMINATION FOR CAUSE:

 

(A)           IF THE TERMINATION SHALL HAVE BEEN THE RESULT OF AN ACT OR ACTS BY
EXECUTIVE WHICH HAVE BEEN FOUND IN AN APPLICABLE COURT OF LAW TO CONSTITUTE A
FELONY (OTHER THAN TRAFFIC-RELATED OFFENSES);

 

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(B)           IF THE TERMINATION SHALL HAVE BEEN THE RESULT OF AN ACT OR ACTS BY
EXECUTIVE WHICH ARE IN THE GOOD FAITH JUDGMENT OF THE BOARD TO BE IN VIOLATION
OF LAW OR OF POLICIES OF THE COMPANY AND WHICH RESULT IN DEMONSTRABLY MATERIAL
INJURY TO THE COMPANY;

 

(C)           IF THE TERMINATION SHALL HAVE BEEN THE RESULT OF AN ACT OR ACTS OF
PROVEN DISHONESTY BY EXECUTIVE RESULTING OR INTENDED TO RESULT DIRECTLY OR
INDIRECTLY IN SIGNIFICANT GAIN OR PERSONAL ENRICHMENT TO THE EXECUTIVE AT THE
EXPENSE OF THE COMPANY; OR

 

(D)           UPON THE WILLFUL AND CONTINUED FAILURE BY THE EXECUTIVE
SUBSTANTIALLY TO PERFORM HIS DUTIES WITH THE COMPANY (OTHER THAN ANY SUCH
FAILURE RESULTING FROM INCAPACITY DUE TO MENTAL OR PHYSICAL ILLNESS NOT
CONSTITUTING A DISABILITY, AS DEFINED HEREIN), AFTER A DEMAND IN WRITING FOR
SUBSTANTIAL PERFORMANCE IS DELIVERED BY THE BOARD, WHICH DEMAND SPECIFICALLY
IDENTIFIES THE MANNER IN WHICH THE BOARD BELIEVES THAT EXECUTIVE HAS NOT
SUBSTANTIALLY PERFORMED HIS DUTIES.

 

With respect to clauses (b), (c) or (d) above of this Section, Executive shall
not be deemed to have been involuntarily terminated for Cause unless and until
there shall have been delivered to him a copy of a resolution duly adopted by
the affirmative vote of not less than three-quarters of the entire membership of
the Board at a meeting of the Board (after reasonable notice to Executive and an
opportunity for him, together with his counsel, to be heard before the Board),
finding that, in the good faith opinion of the Board, Executive was guilty of
conduct set forth above in clauses (b), (c) or (d)  and specifying the
particulars thereof in detail.  For purposes of this Agreement, no act or
failure to act by Executive shall be deemed to be “willful” unless done or
omitted to be

 

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done by Executive not in good faith and without reasonable belief that
Executive’s action or omission was in the best interests of the Company.

 

6.3           “CHANGE IN CONTROL”.  EITHER

 

(A)           THE ACQUISITION, DIRECTLY OR INDIRECTLY, BY ANY “PERSON” (AS SUCH
TERM IS USED IN SECTIONS 13(D) AND 14(D) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED), OF SECURITIES OF THE COMPANY REPRESENTING AN AGGREGATE OF MORE THAN
FIFTY  PERCENT (50%) OF THE COMBINED VOTING POWER OF THE COMPANY’S THEN
OUTSTANDING SECURITIES (EXCLUDING THE ACQUISITION BY PERSONS WHO OWN SUCH AMOUNT
OF SECURITIES ON THE DATE HEREOF, OR ACQUISITIONS BY PERSONS WHO ACQUIRE SUCH
AMOUNT THROUGH INHERITANCE), OR

 

(B)           DURING ANY PERIOD OF TWO CONSECUTIVE YEARS, INDIVIDUALS WHO AT THE
BEGINNING OF SUCH PERIOD CONSTITUTE THE BOARD, CEASE FOR ANY REASON TO
CONSTITUTE AT LEAST A MAJORITY THEREOF, UNLESS THE ELECTION OF EACH NEW DIRECTOR
WAS APPROVED IN ADVANCE BY A VOTE OF AT LEAST A MAJORITY OF THE DIRECTORS THEN
STILL IN OFFICE WHO WERE DIRECTORS AT THE BEGINNING OF THE PERIOD; OR

 

(C)           CONSUMMATION OF (I) A MERGER, CONSOLIDATION OR OTHER BUSINESS
COMBINATION OF THE COMPANY WITH ANY OTHER “PERSON” (AS SUCH TERM IS USED IN
SECTIONS 13(D) AND 14(D) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED) OR
AFFILIATE THEREOF, OTHER THAN A MERGER, CONSOLIDATION OR BUSINESS COMBINATION
WHICH WOULD RESULT IN THE OUTSTANDING COMMON STOCK OF THE COMPANY IMMEDIATELY
PRIOR THERETO CONTINUING TO REPRESENT (EITHER BY REMAINING OUTSTANDING OR BY
BEING CONVERTED INTO COMMON STOCK OF THE SURVIVING ENTITY OR A PARENT OR
AFFILIATE THEREOF) MORE THAN FIFTY PERCENT (50%) OF THE OUTSTANDING COMMON STOCK
OF THE COMPANY, OR SUCH SURVIVING ENTITY OR PARENT OR AFFILIATE

 

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THEREOF, OUTSTANDING IMMEDIATELY AFTER SUCH MERGER, CONSOLIDATION OR BUSINESS
COMBINATION, OR (II) A PLAN OF COMPLETE LIQUIDATION OF COMPANY OR AN AGREEMENT
FOR THE SALE OR DISPOSITION BY COMPANY OF ALL OR SUBSTANTIALLY ALL OF COMPANY’S
ASSETS;

 

(D)           A SALE OF MORE THAN 50% OF THE ASSETS OF THE COMPANY.

 

6.4           “CODE” .  THE INTERNAL REVENUE CODE OF 1986, AS IT MAY BE AMENDED
FROM TIME TO TIME.

 

6.5           “CONFIDENTIAL INFORMATION” .  ALL TECHNICAL, BUSINESS, AND OTHER
INFORMATION RELATING TO THE BUSINESS OF THE COMPANY OR ITS SUBSIDIARIES OR
AFFILIATES, INCLUDING, WITHOUT LIMITATION, TECHNICAL OR NONTECHNICAL DATA,
FORMULAE, COMPILATIONS, PROGRAMS, DEVICES, METHODS, TECHNIQUES, PROCESSES,
FINANCIAL DATA, FINANCIAL PLANS, PRODUCT PLANS, AND LISTS OF ACTUAL OR POTENTIAL
CUSTOMERS OR SUPPLIERS, WHICH (I) DERIVES ECONOMIC VALUE, ACTUAL OR POTENTIAL,
FROM NOT BEING GENERALLY KNOWN TO, AND NOT BEING READILY ASCERTAINABLE BY PROPER
MEANS BY, OTHER PERSONS, AND (II) IS THE SUBJECT OF EFFORTS THAT ARE REASONABLE
UNDER THE CIRCUMSTANCES TO MAINTAIN ITS SECRECY OR CONFIDENTIALITY.  SUCH
INFORMATION AND COMPILATIONS OF INFORMATION SHALL BE CONTRACTUALLY SUBJECT TO
PROTECTION UNDER THIS AGREEMENT WHETHER OR NOT SUCH INFORMATION CONSTITUTES A
TRADE SECRET AND IS SEPARATELY PROTECTABLE AT LAW OR IN EQUITY AS A TRADE
SECRET.  CONFIDENTIAL INFORMATION DOES NOT INCLUDE CONFIDENTIAL BUSINESS
INFORMATION WHICH DOES NOT CONSTITUTE A TRADE SECRET UNDER APPLICABLE LAW TWO
YEARS AFTER ANY EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

6.6           “DISABILITY” OR “DISABLED”.  EXECUTIVE’S INABILITY AS A RESULT OF
PHYSICAL OR MENTAL INCAPACITY TO SUBSTANTIALLY PERFORM HIS DUTIES FOR THE
COMPANY ON A FULL-TIME BASIS FOR A PERIOD OF SIX (6) MONTHS.

 

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6.7           “GOOD REASON”.  A “GOOD REASON” FOR TERMINATION BY EXECUTIVE OF
EXECUTIVE’S EMPLOYMENT SHALL MEAN THE OCCURRENCE DURING THE TERM  (WITHOUT THE
EXECUTIVE’S EXPRESS WRITTEN CONSENT) OF ANY ONE OF THE FOLLOWING ACTS BY THE
COMPANY, OR FAILURES BY THE COMPANY TO ACT, AND SUCH ACT OR FAILURE TO ACT HAS
NOT BEEN CORRECTED WITHIN THIRTY (30) DAYS AFTER WRITTEN NOTICE OF SUCH ACT OR
FAILURE TO ACT IS GIVEN BY EXECUTIVE TO THE COMPANY:

 

(I)          A MATERIAL ADVERSE CHANGE IN THE NATURE OR STATUS OF EXECUTIVE’S
JOB RESPONSIBILITIES FROM THOSE SET FORTH IN SECTION 2(A) ABOVE, EXCEPT IN
CONNECTION WITH (A) A JOB CHANGE OF EXECUTIVE THAT IS NECESSITATED BY CHANGES IN
THE OPERATION OF THE BUSINESS; OR (B) A PERFORMANCE-RELATED JOB CHANGE OF
EXECUTIVE THAT THE COMPANY DEEMS NECESSARY TO THE OPERATION OF THE BUSINESS;
PROVIDED, HOWEVER, THAT IT SHALL NOT CONSTITUTE A GOOD REASON FOR TERMINATION BY
EXECUTIVE NOR A BREACH OF THIS AGREEMENT FOR THE COMPANY TO PROMOTE OR HIRE A
REPLACEMENT FOR EXECUTIVE DURING THE TERM FOR PURPOSES  OF PROVIDING A
TRANSITION OF ALL OR PART OF EXECUTIVE’S DUTIES AND RESPONSIBILITIES SO LONG AS
THE COMPANY CONTINUES TO PROVIDE EXECUTIVE WITH THE COMPENSATION AND BENEFITS
SET FORTH IN SECTION 3;

 

(II)         THE RELOCATION OF THE COMPANY’S PRINCIPAL EXECUTIVE OFFICES TO A
LOCATION MORE THAN FIFTY (50) MILES FROM PORTLAND, OREGON OR THE COMPANY’S
REQUIRING EXECUTIVE TO BE BASED ANYWHERE OTHER THAN THE COMPANY’S PRINCIPAL
EXECUTIVE OFFICES, EXCEPT FOR REASONABLY REQUIRED TRAVEL ON THE COMPANY’S
BUSINESS;

 

20

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(III)        A REDUCTION BY THE COMPANY IN EXECUTIVE’S BASE SALARY AS IN EFFECT
ON THE DATE HEREOF OR AS THE SAME MY BE INCREASED FROM TIME TO TIME, EXCEPT IN
CONNECTION WITH (A) AN ACROSS-THE-BOARD PAY REDUCTION FOR EXECUTIVES OF SIMILAR
STATUS, OR (B) A CHANGE DESCRIBED IN (I)(A) OR (I)(B) ABOVE;

 

(IV)        THE FAILURE BY THE COMPANY TO CONTINUE TO PROVIDE EXECUTIVE WITH
COMPENSATION AND BENEFITS SUBSTANTIALLY SIMILAR IN THE AGGREGATE TO THOSE
ENJOYED BY EXECUTIVE ON THE DATE HEREOF UNDER THE COMPANY’S RETIREMENT, 401(K),
DEFERRED COMPENSATION, INCENTIVE COMPENSATION, LIFE INSURANCE, HEALTH CARE,
AD&D, OR DISABILITY PLANS, OR THE TAKING OF ANY ACTION BY THE COMPANY WHICH
WOULD DIRECTLY OR INDIRECTLY MATERIALLY REDUCE ANY OF SUCH COMPENSATION OR
BENEFITS, EXCEPT IN CONNECTION WITH (A) AN ACROSS-THE-BOARD REDUCTION THAT
IMPACTS EXECUTIVES AT EXECUTIVE’S LEVEL GENERALLY, OR (B) A CHANGE DESCRIBED IN
(I)(A) OR (I)(B) ABOVE; OR

 

(V)         ANY PURPORTED TERMINATION OF EXECUTIVE’S EMPLOYMENT WHICH IS NOT
EFFECTED PURSUANT TO A NOTICE OF TERMINATION SATISFYING THE REQUIREMENTS OF
SECTION 7.1 (FOR PURPOSES OF THIS AGREEMENT, NO SUCH PURPORTED TERMINATION SHALL
BE EFFECTIVE).

 

The Executive’s right to terminate the Executive’s employment for Good Reason
shall not be affected by the Executive’s incapacity due to physical or mental
illness.  The Executive’s continued employment shall not constitute consent to,
or a waiver of rights with respect to, any act or failure to act constituting
Good Reason hereunder.

 

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6.8           “PERSON” .  ANY INDIVIDUAL, CORPORATION, BANK, PARTNERSHIP, JOINT
VENTURE, ASSOCIATION, JOINT-STOCK COMPANY, TRUST, UNINCORPORATED ORGANIZATION OR
OTHER ENTITY.

 

6.9           “PRESENT VALUE”.  THE TERM “PRESENT VALUE” ON ANY PARTICULAR DATE
SHALL HAVE THE SAME MEANING AS PROVIDED IN SECTION 280G(D)(4) OF THE CODE.

 

7.             TERMINATION PROCEDURES.

 

7.1           NOTICE OF TERMINATION.  DURING THE TERM OF THIS AGREEMENT, ANY
PURPORTED TERMINATION OF EXECUTIVE’S EMPLOYMENT (OTHER THAN BY REASON OF DEATH)
SHALL BE COMMUNICATED BY WRITTEN NOTICE OF TERMINATION FROM ONE PARTY HERETO TO
THE OTHER PARTY HERETO IN ACCORDANCE WITH SECTION 11.  FOR PURPOSES OF THIS
AGREEMENT, A “NOTICE OF TERMINATION” SHALL MEAN A NOTICE WHICH SHALL INDICATE
THE SPECIFIC TERMINATION PROVISION IN THIS AGREEMENT RELIED UPON AND SHALL SET
FORTH IN REASONABLE DETAIL THE FACTS AND CIRCUMSTANCES CLAIMED TO PROVIDE A
BASIS FOR TERMINATION OF EXECUTIVE’S EMPLOYMENT UNDER THE PROVISION SO
INDICATED.  FURTHER, A NOTICE OF TERMINATION FOR CAUSE IS REQUIRED TO INCLUDE
THE INFORMATION SET FORTH IN SECTION 6.2.

 

7.2           DATE OF TERMINATION.  “DATE OF TERMINATION,” WITH RESPECT TO ANY
PURPORTED TERMINATION OF EXECUTIVE’S EMPLOYMENT DURING THE TERM OF THIS
AGREEMENT, SHALL MEAN (I) IF EXECUTIVE’S EMPLOYMENT IS TERMINATED BY HIS DEATH,
THE DATE OF HIS DEATH, (II) IF EXECUTIVE’S EMPLOYMENT IS TERMINATED FOR
DISABILITY, THIRTY (30) DAYS AFTER NOTICE OF TERMINATION IS GIVEN (PROVIDED THAT
EXECUTIVE SHALL NOT HAVE RETURNED TO THE FULL-TIME PERFORMANCE OF EXECUTIVE’S
DUTIES DURING SUCH THIRTY (30) DAY PERIOD), AND (III) IF EXECUTIVE’S EMPLOYMENT
IS TERMINATED FOR ANY OTHER REASON, THE DATE SPECIFIED IN THE NOTICE OF
TERMINATION (WHICH, IN THE CASE OF A TERMINATION BY THE COMPANY, SHALL NOT BE

 

22

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LESS THAN THIRTY (30) DAYS (EXCEPT IN THE CASE OF A TERMINATION FOR CAUSE) AND,
IN THE CASE OF A TERMINATION BY THE EXECUTIVE, SHALL NOT BE LESS THAN THIRTY
(30) DAYS NOR MORE THAN SIXTY (60) DAYS, RESPECTIVELY, FROM THE DATE SUCH NOTICE
OF TERMINATION IS GIVEN); PROVIDED, HOWEVER, THAT THE “DATE OF TERMINATION” FOR
PURPOSES OF THIS AGREEMENT SHALL NOT BE THE LAST DAY OF THE COMPANY’S FISCAL
YEAR AND, IN THE EVENT THE LAST DAY OF THE FISCAL YEAR IS DESIGNATED AS THE
“DATE OF TERMINATION”, THE “DATE OF TERMINATION” FOR PURPOSES HEREOF SHALL
AUTOMATICALLY BE THE FIRST DAY OF THE NEXT FOLLOWING FISCAL YEAR.

 

8.             CONTRACT NON-ASSIGNABLE.  THE PARTIES ACKNOWLEDGE THAT THIS
AGREEMENT HAS BEEN ENTERED INTO DUE TO, AMONG OTHER THINGS, THE SPECIAL SKILLS
OF EXECUTIVE, AND AGREE THAT THIS AGREEMENT MAY NOT BE ASSIGNED OR TRANSFERRED
BY EXECUTIVE, IN WHOLE OR IN PART, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY.

 

9.             SUCCESSORS; BINDING AGREEMENT.

 

9.1           IN ADDITION TO ANY OBLIGATIONS IMPOSED BY LAW UPON ANY SUCCESSOR
TO, OR TRANSFEROR OF,  THE COMPANY, THE COMPANY WILL REQUIRE ANY SUCCESSOR TO,
OR TRANSFEROR OF, ALL OR SUBSTANTIALLY ALL OF THE BUSINESS AND/OR ASSETS OF THE
COMPANY OR STOCK OF THE COMPANY (WHETHER DIRECT OR INDIRECT, BY PURCHASE,
MERGER, REORGANIZATION, LIQUIDATION, CONSOLIDATION OR OTHERWISE) TO EXPRESSLY
ASSUME AND AGREE TO PERFORM THIS AGREEMENT, IN THE SAME MANNER AND TO THE SAME
EXTENT THAT THE COMPANY WOULD BE REQUIRED TO PERFORM IT IF NO SUCH SUCCESSION
HAD TAKEN PLACE.  FAILURE OF THE COMPANY TO OBTAIN SUCH ASSUMPTION AND AGREEMENT
PRIOR TO THE EFFECTIVENESS OF ANY SUCH SUCCESSION SHALL BE A BREACH OF THIS
AGREEMENT AND SHALL ENTITLE THE EXECUTIVE TO COMPENSATION FROM THE COMPANY IN
THE SAME AMOUNT AND ON THE SAME TERMS AS THE EXECUTIVE WOULD BE ENTITLED TO
HEREUNDER IF THE EXECUTIVE WERE TO TERMINATE THE

 

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EXECUTIVE’S EMPLOYMENT FOR GOOD REASON, EXCEPT THAT, FOR PURPOSES OF
IMPLEMENTING THE FOREGOING, THE DATE ON WHICH ANY SUCH SUCCESSION BECOMES
EFFECTIVE SHALL BE DEEMED THE DATE OF TERMINATION.

 

9.2           THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY
EXECUTIVE’S PERSONAL OR LEGAL REPRESENTATIVES, EXECUTORS, ADMINISTRATORS,
SUCCESSORS, HEIRS, DISTRIBUTEES, DEVISEES AND LEGATEES AND BY THE COMPANY’S
SUCCESSORS AND ASSIGNS.  IF EXECUTIVE SHALL DIE WHILE ANY AMOUNT WOULD STILL BE
PAYABLE TO EXECUTIVE HEREUNDER (OTHER THAN AMOUNTS WHICH, BY THEIR TERMS,
TERMINATE UPON THE DEATH OF EXECUTIVE) IF EXECUTIVE HAD CONTINUED TO LIVE, ALL
SUCH AMOUNTS, UNLESS OTHERWISE PROVIDED HEREIN, SHALL BE PAID IN ACCORDANCE WITH
THE TERMS OF THIS AGREEMENT TO THE EXECUTORS, PERSONAL REPRESENTATIVES OR
ADMINISTRATORS OF EXECUTIVE’S ESTATE.

 

10.           OTHER AGENTS.  NOTHING IN THIS AGREEMENT IS TO BE INTERPRETED AS
LIMITING THE COMPANY FROM EMPLOYING OTHER PERSONNEL ON SUCH TERMS AND CONDITIONS
AS MAY BE SATISFACTORY TO THE COMPANY.

 

11.           NOTICES.  ALL NOTICES, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS
REQUIRED OR PERMITTED HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE
BEEN DULY GIVEN IF DELIVERED OR SEVEN DAYS AFTER MAILING IF MAILED, FIRST CLASS,
CERTIFIED MAIL, POSTAGE PREPAID:

 

To the Company

Blount International, Inc.
4909 SE International Way
Portland, OR 97222

ATTN: Chief Executive Officer

 

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To the Executive:

Richard H. Irving, III
3600 Piper Court
Lake Oswego, Oregon 97034

With a copy to: Kilpatrick Stockton LLP
ATTN: William J. Vesely, Jr.
Suite 2800
1100 Peachtree Street
Atlanta, GA 30309-4530

 

Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.

 

12.           PROVISIONS SEVERABLE.  IF ANY PROVISION OR COVENANT, OR ANY PART
THEREOF, OF THIS AGREEMENT SHOULD BE HELD BY ANY COURT TO BE INVALID, ILLEGAL OR
UNENFORCEABLE, EITHER IN WHOLE OR IN PART, SUCH INVALIDITY, ILLEGALITY OR
UNENFORCEABILITY SHALL NOT AFFECT THE VALIDITY, LEGALITY OR ENFORCEABILITY OF
THE REMAINING PROVISIONS OR COVENANTS, OR ANY PART THEREOF, OF THIS AGREEMENT,
ALL OF WHICH SHALL REMAIN IN FULL FORCE AND EFFECT.

 

13.           WAIVER.  FAILURE OF EITHER PARTY TO INSIST, IN ONE OR MORE
INSTANCES, ON PERFORMANCE BY THE OTHER IN STRICT ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT SHALL NOT BE DEEMED A WAIVER OR RELINQUISHMENT OF
ANY RIGHT GRANTED IN THIS AGREEMENT OR THE FUTURE PERFORMANCE OF ANY SUCH TERM
OR CONDITION OR OF ANY OTHER TERM OR CONDITION OF THIS AGREEMENT, UNLESS SUCH
WAIVER IS CONTAINED IN A WRITING SIGNED BY THE PARTY MAKING THE WAIVER.

 

14.           INDEMNIFICATION.  DURING THE TERM OF THIS AGREEMENT AND AFTER
EXECUTIVE’S TERMINATION FOR A PERIOD OF THREE (3) YEARS, THE COMPANY SHALL
INDEMNIFY EXECUTIVE AND HOLD EXECUTIVE HARMLESS FROM AND AGAINST ANY CLAIM, LOSS
OR CAUSE OF ACTION ARISING

 

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FROM OR OUT OF EXECUTIVE’S PERFORMANCE AS AN OFFICER, DIRECTOR OR EMPLOYEE OF
THE COMPANY OR ANY OF ITS SUBSIDIARIES OR OTHER AFFILIATES OR IN ANY OTHER
CAPACITY, INCLUDING ANY FIDUCIARY CAPACITY, IN WHICH EXECUTIVE SERVES AT THE
COMPANY’S REQUEST, IN EACH CASE TO THE MAXIMUM EXTENT PERMITTED BY LAW AND UNDER
THE COMPANY’S ARTICLES OF INCORPORATION AND BY-LAWS (THE “GOVERNING DOCUMENTS”),
PROVIDED THAT IN NO EVENT SHALL THE PROTECTION AFFORDED TO EXECUTIVE HEREUNDER
BE LESS THAN THAT AFFORDED UNDER THE GOVERNING DOCUMENTS AS IN EFFECT ON THE
DATE OF THIS AGREEMENT EXCEPT FROM CHANGES MANDATED BY LAW.  DURING THE TERM AND
FOR A PERIOD OF THREE (3) YEARS, EXECUTIVE SHALL BE COVERED BY ANY POLICY OF
DIRECTORS AND OFFICERS LIABILITY INSURANCE MAINTAINED BY THE COMPANY FOR THE
BENEFIT OF ITS OFFICERS AND DIRECTORS.

 

15.           AMENDMENTS AND MODIFICATIONS.  THIS AGREEMENT MAY BE AMENDED OR
MODIFIED ONLY BY A WRITING SIGNED BY BOTH PARTIES HERETO.

 

16.           GOVERNING LAW.  THE VALIDITY AND EFFECT OF THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE.

 

17.           ARBITRATION OF DISPUTES; EXPENSES.  ALL CLAIMS BY EXECUTIVE FOR
COMPENSATION AND BENEFITS UNDER THIS AGREEMENT SHALL BE DIRECTED TO AND
DETERMINED BY THE BOARD AND SHALL BE IN WRITING.  ANY DENIAL BY THE BOARD OF A
CLAIM FOR BENEFITS UNDER THIS AGREEMENT SHALL BE DELIVERED TO EXECUTIVE IN
WRITING AND SHALL SET FORTH THE SPECIFIC REASONS FOR THE DENIAL AND THE SPECIFIC
PROVISIONS OF THIS AGREEMENT RELIED UPON.  THE BOARD SHALL AFFORD A REASONABLE
OPPORTUNITY TO EXECUTIVE FOR A REVIEW OF A DECISION DENYING A CLAIM AND SHALL
FURTHER ALLOW EXECUTIVE TO APPEAL TO THE BOARD A DECISION OF THE BOARD WITHIN
SIXTY (60) DAYS AFTER NOTIFICATION BY THE BOARD THAT EXECUTIVE’S CLAIM HAS

 

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BEEN DENIED.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY FURTHER DISPUTE OR
CONTROVERSY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT SHALL BE SETTLED
EXCLUSIVELY BY ARBITRATION IN PORTLAND, OREGON, IN ACCORDANCE WITH THE RULES OF
THE AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT.  JUDGMENT MAY BE ENTERED ON
THE ARBITRATOR’S AWARD IN ANY COURT HAVING JURISDICTION.  IN THE EVENT THE
EXECUTIVE INCURS LEGAL FEES AND OTHER EXPENSES IN SEEKING TO OBTAIN OR TO
ENFORCE ANY RIGHTS OR BENEFITS PROVIDED BY THIS AGREEMENT AND IS SUCCESSFUL, IN
WHOLE OR IN PART, IN OBTAINING OR ENFORCING ANY MATERIAL RIGHTS OR BENEFITS
THROUGH SETTLEMENT, ARBITRATION OR OTHERWISE, THE COMPANY SHALL PROMPTLY PAY
EXECUTIVE’S REASONABLE LEGAL FEES AND EXPENSES INCURRED IN ENFORCING THIS
AGREEMENT AND THE FEES OF THE ARBITRATOR.  EXCEPT TO THE EXTENT PROVIDED IN THE
PRECEDING SENTENCE, EACH PARTY SHALL PAY ITS OWN LEGAL FEES AND OTHER EXPENSES
ASSOCIATED WITH ANY DISPUTE.

 

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IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Employment Agreement as of the day and year first above written.

 

 

 

EXECUTIVE:

 

 

 

/s/ Richard H. Irving, III

 

RICHARD H. IRVING, III

 

 

 

 

 

COMPANY:

 

 

 

BLOUNT INTERNATIONAL, INC.

 

 

 

 

 

By:

/s/ James S. Osterman

 

 

JAMES S. OSTERMAN

 

 

Chairman and Chief Executive Officer

 

28

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