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                                                                EXHIBIT 10.31-04

EMPLOYMENT AGREEMENT DATED AS OF MAY 16, 2001 BETWEEN THE COMPANY
AND ROBERT F. MECREDY

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

                  This Confidential Separation Agreement and General Release
(this "Agreement") is entered into as of May 16, 2001 (the "Effective Date")
between FATS, Inc., a Delaware corporation (the "Company"), and Robert F.
Mecredy (the "Executive").

                  WHEREAS, the Company is the operating subsidiary of Firearms
Training Systems, Inc., a Delaware corporation (the "Parent");

                  WHEREAS, the Executive currently serves as President and Chief
Executive Officer of the Company and the Parent and as a member of the Board of
Directors of the Company and the Parent; and

                  WHEREAS, the Company and the Executive desire to set forth
herein their mutual agreement with respect to all matters relating to the
Executive's resignation and cessation of employment with the Company and its
affiliates and the Executive's release of claims upon the terms set forth
herein.

                  NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, the adequacy and sufficiency of which are hereby
acknowledged, the Company and the Executive hereby agree as follows:

Resignation; Termination of Employment. The Executive hereby resigns as
President and Chief Executive Officer and as a member of the Board of Directors
of the Company, the Parent and all subsidiaries of the Company and the Parent,
and from all other positions (if any) with the Company, the Parent and their
respective subsidiaries and affiliates as of the Effective Date. The Executive
shall continue to be employed by the Company for the period commencing on the
Effective Date and ending on the date which is 60 days thereafter (the
"Employment Termination Date"), at which time the Executive shall cease to be an
employee of, or have any other position with, the Company, its subsidiaries, the
Parent or their affiliates. During such 60-day period of continued employment,
the Executive shall assist in the transition of his duties and responsibilities
to a new management team, assist in the maintenance of the Company's customer
relationships and perform such other duties as the Chairman of the Board of
Directors of the Parent (the "Chairman") may reasonably assign to the Executive.
The Executive shall devote such time, if any, to the foregoing duties as the
Chairman shall reasonably request. In exchange for his services during this
60-day period, the Company shall pay to the Executive an aggregate amount equal
to $12,500, payable in installments in accordance with the Company's regular
payroll procedures, and the Executive shall continue to participate in those
employee benefit plans and programs of the Company in which he participated
immediately prior to the Effective Date.

Payment of Accrued Amounts. The Company shall pay to the Executive within 10
days following the Employment Termination Date all amounts due to the Executive
for salary accrued for services rendered through the Employment Termination Date
and an amount equal to $61,854.26 for accrued and unused vacation as of the
Employment Termination Date.

Bonus Payment. The Company shall on or before May 31, 2001 pay to the Executive
an incentive bonus in the amount of $50,000 for services performed during the
Company's fiscal year ended March 31, 2001.

Separation Payments. Provided that the Executive complies with the covenants
contained in Sections 9, 10, 11, 12 and 13 hereof, the Company shall pay to the
Executive an amount equal to $200,000, payable in substantially equal bi-weekly
installments during the 24-month period immediately following the Employment
Termination Date.

Additional Payment. Provided that the Executive remains employed with the
Company through the Employment Termination Date and the Executive executes a
general release in the form of Exhibit A hereto (the "Release") on or promptly
following the Employment Termination Date and has not revoked the Release, the
Company shall pay to the Executive, not less than eight and no more than 15 days
following the date of the Executive's execution of the Release, a lump sum cash
amount equal to $37,500.

Federal and State Withholding. The Company shall deduct from the amounts payable
to the Executive pursuant to Sections 2, 3, 4 and 5 hereof the amount of all
required federal and state withholding taxes in accordance with the Executive's
Form W-4 on file with the Company and all applicable social security taxes.

Stock Options. The treatment of all stock options granted to the Executive which
shall be outstanding on the Employment Termination Date, including, but not
limited to, the vesting, exercisability and termination thereof, shall be
governed by the terms of the stock option plans and stock option agreements
pursuant to which such options were granted to the Executive; provided, however,
that the Parent and the Executive shall prior to the Employment Termination Date
enter into (i) an amendment in the form of Exhibit B hereto to the Stock Option
Agreement, Series F, dated as of April 1, 2000, representing a non-qualified
option to purchase 240,000 shares of the Parent's Class A Common Stock at an
exercise price of $0.50 per share and (ii) an amendment in the form of Exhibit C
hereto to the Stock Option Agreement, Series H, dated as of April 1, 2000,
representing a non-qualified option to purchase 240,000 shares of the Parent's
Class A Common Stock at an exercise price of $0.01 per share.

Employee Benefits. As of the Employment Termination Date, the Executive shall be
entitled to those employee benefits, if any, as may be provided under the terms
and conditions of the applicable employee benefit plans and programs of the
Company. Pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), the Executive may elect to continue coverage for the Executive and
his dependents under the Company's medical and dental plans for a period of up
to 18 months following the Executive's termination of employment or as otherwise
provided by COBRA. Provided that the Executive timely elects continuation of
coverage under COBRA, the Company will pay or reimburse the Executive for the
full cost of such coverage.

Noncompetition; Nonsolicitation. (a) General. The Executive acknowledges that in
the course of the Executive's employment with the Company the Executive has
become familiar with trade secrets and other confidential information concerning
the Company, its subsidiaries and the Parent and that the Executive's services
have been of special, unique and extraordinary value to the Company, its
subsidiaries and the Parent.

                  (b)      Noncompetition. The Executive agrees that during the
period of the Executive's employment with the Company, the period during which
the Executive is receiving payments from the Company pursuant to Section 4
hereof, and for a period of one year thereafter, the Executive shall not assist,
seek to acquire or assist others in seeking to acquire an interest in, Advanced
Interactive Systems (AIS), ECC International Corp. (ECC), Israeli Electronic
Systems (IES) or Thales Training and Simulation, or their respective
subsidiaries or

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affiliates, or the successors thereof, whether as an officer, director,
employee, stockholder, partner, investor, consultant, advisor, agent or in any
other capacity, in engaging in or being engaged in, or bidding or competing for
the opportunity to bid for, the design, development, manufacture, sale or other
distribution of interactive small arms training simulation systems for military
and law enforcement training with respect to any of the following products:

                  (i) Small arms marksmanship and gunnery training products for
handguns, rifles, light and heavy machine guns, anti-armor weapons and fire
fighting simulation.

                  (ii) Tactical and judgmental training products for tactical
training for individuals, teams, crews and squads of trainees using Distributed
Interactive Simulation/High Level Architecture (DIS/HLA) compatible platforms in
connection with the training of dismounted or mounted personnel in basic through
advanced infantry and mechanized tactics.

                  (iii) Indirect fire training products, including, without
limitation, simulated mortars, binoculars and laser range finders.

                  (c)      Nonsolicitation. The Executive further agrees that
during the period of the Executive's employment with the Company, the period
during which the Executive is receiving payments from the Company pursuant to
Section 4 hereof, and for a period of one year thereafter, the Executive shall
not (i) in any manner, directly or indirectly, induce or attempt to induce any
employee of the Company, any of its subsidiaries or the Parent to terminate or
abandon his or her employment for any purpose whatsoever or (ii) in connection
with any business to which Section 9(b) applies, call on, service, solicit or
otherwise do business with any customer of the Company, any of its subsidiaries
or the Parent; provided, however, the Executive may solicit business with any
customer of the Company, any of its subsidiaries or the Parent to the extent
that such business is unrelated to the business conducted or contemplated being
conducted between the Company, its subsidiaries or the Parent and their
customers.

                  (d)      Exceptions. Nothing in this Section 9 shall prohibit
the Executive from being (i) a stockholder in a mutual fund or a diversified
investment company or (ii) an owner of not more than two percent of the
outstanding stock of any class of a corporation, any securities of which are
publicly traded, so long as the Executive has no active participation in the
business of such corporation.

                  (e)      Reformation. If, at any time of enforcement of this
Section 9, a court or an arbitrator holds that the restrictions stated herein
are unreasonable under circumstances then existing, the parties hereto agree
that the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and that
the court or arbitrator shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by law. This
Agreement shall not authorize a court or arbitrator to increase or broaden any
of the restrictions in this Section 9.

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Nondisparagement. The Executive agrees that during the Executive's employment
with the Company and thereafter, the Executive shall not directly (or through
any other person or entity) make any public or private statements (whether oral
or in writing) that are derogatory or damaging to the Company, any of its
subsidiaries or the Parent, including, but not limited to, its businesses,
activities, operations, affairs, reputation or prospects or any of their
officers, employees, or current or former directors or shareholders. The Company
also agrees that during the Executive's employment with the Company and
thereafter, the Company shall not at any time make any defamatory public or
private statements, whether oral or in writing, concerning the Executive. Except
for confirming the Executive's dates of employment and job title or as otherwise
required by any law, regulation or order of any court or regulatory commission,
department or agency, the Company shall respond to any inquiry regarding the
Executive's cessation of employment with the Company in a manner which is in
substantial conformity with the letter of resignation dated the date hereof from
the Executive to the Company. Promptly following the execution of this
Agreement, the Company and the Executive agree that the Company shall issue a
press release substantially in the form of Exhibit D hereto.

Confidentiality. The Executive shall not, at any time during the Executive's
employment with the Company or thereafter, make use of or disclose, directly or
indirectly, any (i) trade secret or other confidential or secret information of
the Company, any of its subsidiaries or the Parent or (ii) other technical,
business, proprietary or financial information of the Company, any of its
subsidiaries or the Parent not available to the public generally ("Confidential
Information"), except to the extent that such Confidential Information (a)
becomes a matter of public record or is published in a newspaper, magazine or
other periodical or on electronic or other media available to the general
public, other than as a result of any act or omission of the Executive, (b) is
required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, provided that the Executive gives
prompt notice of such requirement to the Company to enable the Company to seek
an appropriate protective order, or (c) is required to be used or disclosed by
the Executive to perform properly the Executive's duties under this Agreement.
Within five days following the Employment Termination Date, the Executive shall
surrender to the Company all records, memoranda, notes, plans, reports, computer
tapes and software and other documents and data which constitute Confidential
Information which the Executive may then possess or have under the Executive's
control (together with all copies thereof).

Standstill. The Executive hereby agrees that, unless specifically requested in
writing in advance by the Chairman, the Executive will not at any time during
the period of the Executive's employment with the Company, the period during
which the Executive is receiving payments from the Company pursuant to Section 4
hereof, and for a period of three years thereafter (and the Executive will not
at any time during such period assist or encourage others to) participate,
directly or indirectly in any activity that, if consummated, would result in a
Change in Control of the Parent. For purposes of this Section 12, a Change in
Control of the Parent shall mean (a) any sale or other disposition of all or
substantially all of the assets of the Parent, (b) any acquisition of more than
40% of the then outstanding shares of common stock of the Parent, (c) any merger
in which the existing stockholders of the Parent fail to own 50% or more of the
corporation resulting from such merger or (d) any change in the membership of
the Board of Directors of the Parent (the "Board") such that the individuals
who, as of the date of this Agreement, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of such Board;
provided, however, that any individual who becomes a director of the Parent
subsequent to the date of this Agreement whose election, or nomination for
election by the Parent's stockholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed a
member of the Incumbent Board; and provided further, that no individual who was
initially elected as a director of the Parent as a result of an actual or
threatened election contest, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or any other actual or threatened solicitation of proxies or
consents by or on behalf of any individual, entity or group, including any
"person" within the meaning of Section 13(d) of the Exchange Act, other than the
Board shall be deemed a member of the Incumbent Board.

Inventions. The Executive agrees to disclose fully and promptly to the Company
in writing, upon the Company's request, all discoveries and improvements,
patentable or otherwise, trade secrets and ideas, writings and copyrightable
material which may be conceived by the Executive or developed or acquired by the
Executive during the Executive's employment with the Company or the six-month
period following the Employment Termination Date and which may pertain directly
or indirectly to the business of the Company, any of its subsidiaries or the
Parent (collectively, "Inventions"). All Inventions shall constitute works made
for hire owned by the Company and shall be the exclusive property of the
Company. To the extent any Invention does not constitute a work made for hire,
the Executive hereby assigns to the Company, without further consideration, the
Executive's entire right, title and interest in and to such Invention, under
patent, copyright, trade secret and trademark law, in perpetuity or for the
longest period otherwise permitted by law. The Executive shall, upon the
Company's request, execute, acknowledge and deliver to the Company all
instruments and do all other acts which are necessary or in the Company's
opinion desirable to evidence more fully transfer of ownership of any Invention
to the Company, or to enable the Company, any of its subsidiaries or the Parent,
to file and prosecute applications for, and to acquire, maintain and enforce,
all patents, trademarks and copyrights in all countries.

Scope of Covenants; Remedies. The following provisions shall apply to the
covenants of the Executive contained in Sections 9, 10, 11, 12 and 13 hereof:

                  (a) without limiting the right of the Company to pursue all
other legal and equitable remedies available for violation by the Executive of
the covenants contained in Sections 9, 10, 11, 12 and 13 hereof, it is expressly
agreed by the Executive and the Company that such other remedies cannot fully
compensate the Company for any such violation and that the Company shall be
entitled to a restraining order and injunctive relief to prevent any such
violation or any continuing violation thereof; and

                  (b) the Executive agrees that he will submit himself to the
personal jurisdiction of the courts of the State of Delaware in any action by
the Company to enforce an arbitration award against him or to obtain injunctive
or other relief.

General Release. The Executive, on behalf of himself and anyone claiming through
him, hereby agrees not to sue the Company or the Parent or any of their
divisions, subsidiaries, affiliates or other related entities of the above
specified entities (whether or not such entities are wholly owned) or any of the
past, present or future directors, officers, administrators, trustees,
fiduciaries, employees, agents, attorneys or shareholders of the Company, the
Parent or any of such other entities, or the predecessors, successors or assigns
of any of them (hereinafter referred to as the "Released Parties"), and agrees
to release and discharge, fully, finally and forever, the Released Parties from
any and all claims, causes of action, lawsuits, liabilities, debts, accounts,
covenants, contracts, controversies, agreements, promises, sums of money,
damages, judgments and demands of any nature whatsoever, in law or in equity,
both known and unknown, asserted or not asserted, foreseen or unforeseen, which
the Executive ever had or may presently have against any of the Released Parties
arising from the beginning of time up to and including the effective date of
this Agreement, including, without limitation, all matters in any way related to
the Executive's employment by the Company, the terms and conditions thereof, any
failure to promote the Executive and the termination or cessation of the
Executive's employment with the Company, and including, without limitation, any
and all claims arising under the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in
Employment Act, the Older Workers' Benefit Protection Act, the Family and
Medical Leave Act, the Americans With Disabilities Act, the Employee Retirement
Income Security Act of 1974, the Georgia Minimum Wage Law, the Georgia Common
Day of Rest Act, the Georgia Equal Employment for Persons with Disabilities
Code, the Georgia Equal Pay for Equal Work Act, the Georgia law governing wage
payment (O.C.G.A. 34-7-1, et seq.), the Georgia law prohibiting discrimination
based on age (O.C.G.A. 34-1-2), the

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Georgia law governing safety in the workplace (O.C.G.A. 34-2-10) or any other
federal, state, local or foreign statute, regulation, ordinance or order, or
pursuant to any common law doctrine; provided, however, that nothing contained
in this Section 15 (i) shall apply to, or release the Company from, any
obligation of the Company contained in this Agreement or any vested or accrued
benefit pursuant to any employee benefit plan of the Company, or (ii) shall
apply to, or release the Parent from, any obligation of the Parent contained in
the stock option agreements between the Parent and the Executive. The
consideration offered herein is accepted by the Executive as being in full
accord, satisfaction, compromise and settlement of any and all claims or
potential claims, and the Executive expressly agrees that he is not entitled to,
and shall not receive, any further recovery of any kind from the Company or any
of the other Released Parties, and that in the event of any further proceedings
whatsoever based upon any matter released herein, neither the Company nor any of
the other Released Parties shall have any further monetary or other obligation
of any kind to the Executive, including any obligation for any costs, expenses
or attorneys' fees incurred by or on behalf of the Executive. The Executive
agrees that he has no present or future right to employment with the Company or
any of the other Released Parties and that he will not apply for or otherwise
seek employment with any of them.

                  16.      Authority. The Executive expressly represents and
warrants that he is the sole owner of the actual and alleged claims, demands,
rights, causes of action and other matters that are released herein; that the
same have not been transferred or assigned or caused to be transferred or
assigned to any other person, firm, corporation or other legal entity; and that
he has the full right and power to grant, execute and deliver the general
release, undertakings and agreements contained herein.

                  17.      Indemnification of Executive. (a) The Company agrees
that the limitation of liability now existing in favor of the Executive
contained in Article Eleventh of the Parent's Restated Certificate of
Incorporation and all rights to indemnification now existing in favor of the
Executive contained in Article Eleventh of the Parent's Restated Certificate of
Incorporation and in Article VI of the Parent's By-laws, in each case as in
effect on the date hereof, shall not be amended in any manner that would
adversely affect the rights of the Executive, unless such amendment is required
by law.

                  (b) Pursuant to the rights to indemnification referred to in
Section 17(a) hereof, the Company agrees to indemnify and hold harmless the
Executive and his legal representatives and successors to the fullest extent
permitted by the laws of the State of Delaware with respect to any claim arising
at any time out of any event, action or omission related to or in connection
with the Executive having been a director, officer or employee of the Company or
having served as a director or officer of another corporation or other
organization at the request of the Company. This indemnification shall continue
in full force and effect for a period of not less than the duration of all
statutes of limitations applicable to such matters (or in the case of events,
actions or omissions giving rise to matters which have not been resolved prior
to the expiration of such period, until such matters are finally resolved).
Without limiting the foregoing, the Company shall periodically advance all
reasonable expenses (including reasonable attorneys' and paralegals' fees and
other costs and expenses) as incurred with respect to the foregoing to the
fullest extent permitted by the laws of the State of Delaware. The Executive
shall not unreasonably withhold his consent to the settlement of any claim for
which he is entitled to be fully indemnified hereunder. To the extent that the
Company shall maintain in effect a policy of directors' and officers' liability
insurance, the Executive shall be covered by such policy for his actions or
omissions as a director or officer in accordance with the terms of such policy
to the maximum extent of coverage provided for any other director or officer of
the Company, subject to policy exceptions applicable to directors and officers
generally.

                  18.      Reimbursement of Legal Expenses. The Company shall
reimburse the Executive, up to a maximum of $5,000, for legal fees and expenses
incurred by the Executive in connection with the negotiation and preparation of
this Agreement.

                  19.      Arbitration. Except as provided in Section 14(a)
hereof, any dispute or controversy between the Company and the Executive,
whether arising out of or relating to this Agreement, the breach of this
Agreement, or otherwise, shall be settled by arbitration in the State of
Delaware, administered by the American Arbitration Association, with any such
dispute or controversy arising under this Agreement being so administered in
accordance with its Commercial Rules then in effect, and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall have the authority to award any remedy or relief
that a court of competent jurisdiction could order or grant, including, without
limitation, the issuance of an injunction. However, either party may, without
inconsistency with this arbitration provision, apply to any court having
jurisdiction over such dispute or controversy and seek interim provisional,
injunctive or other equitable relief until the arbitration award is rendered or
the controversy is otherwise resolved. Except as necessary in court proceedings
to enforce this arbitration provision or an award rendered hereunder, or to
obtain interim relief, neither a party nor an arbitrator may disclose the
existence, content or results of any arbitration hereunder without the prior
written consent of the Company and the Executive. The Company and the Executive
acknowledge that this Agreement evidences a transaction involving interstate
commerce. Notwithstanding any choice of law provision included in this
Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.

                  20.      Successors; Binding Agreement. This Agreement shall
inure to the benefit of and be enforceable by the Executive and by his personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. In the event of the death of the Executive
while any amounts are payable to the Executive hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to such person or persons designated in writing by the Executive
to receive such amounts or, if no person is so designated, to the Executive's
estate.

                  21.      Notices. All notices and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given by a party hereto when delivered personally or by
overnight courier or five days after deposit in the United States mail, postage
prepaid to the following address of the other party hereto (or to such other
address of such other party as shall be furnished in accordance herewith):

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                  If to the Company, to:

                           FATS, Inc.
                           7340 McGinnis Ferry Road
                           Suwanee, Georgia 30174
                           Attention: Chairman of the Board of Directors of
                                      Firearms Training Systems, Inc

                  With a copy to:

                           Michael S. Sigal, Esq.
                           Sidley Austin Brown & Wood
                           Bank One Plaza
                           10 South Dearborn Street
                           Chicago, Illinois 60603

                  If to the Executive, to:

                           Robert F. Mecredy
                           1545 Lockridge Drive
                           Cumming, GA  30141

                  With a copy to:

                           Harry J. Winograd, Esq.
                           Bodker, Ramsey & Andrews
                           1800 Peachtree Street, N.W.
                           Suite 615
                           Atlanta, Georgia 30309

                  22.      Governing Law; Validity. The interpretation,
construction and performance of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware without regard to the principle of conflicts of laws.


                  23.      Entire Agreement. This Agreement, and the agreements
referenced herein, constitute the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes and preempts
any prior understandings, agreements or representations by or between the
parties, written or oral, which may have related in any manner to the subject
matter hereof, including, but not limited to, the Employment Agreement, dated
November 1, 2000, entered into by and between the Company and the Executive.

                  24.      Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.

                  25.      Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and executed by the Executive and by a duly authorized officer of the Company.
No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. Failure by the Executive or the Company to insist upon strict compliance
with any provision of this Agreement or to assert any right which the Executive
or the Company may have hereunder shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.

                  26.      No Admission. Nothing in this Agreement or the
Release is intended to, or shall be construed as, an admission by the Company or
any of the other Released Parties that it violated any law, interfered with any
right, breached any obligation or otherwise engaged in any improper or illegal
conduct with respect to the Executive or otherwise. The Company, for itself and
the other Released Parties, hereby expressly denies any such illegal or wrongful
conduct

                  27.      ACKNOWLEDGMENT BY EXECUTIVE. BY EXECUTING THIS
AGREEMENT, THE EXECUTIVE EXPRESSLY ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT
CAREFULLY, THAT HE FULLY UNDERSTANDS ITS TERMS AND CONDITIONS, THAT HE HAS BEEN
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT, THAT HE
HAS BEEN ADVISED THAT HE HAS 21 DAYS WITHIN WHICH TO DECIDE WHETHER OR NOT TO
EXECUTE THIS AGREEMENT AND THAT HE INTENDS TO BE LEGALLY BOUND BY IT. DURING A
PERIOD OF SEVEN DAYS FOLLOWING THE DATE OF HIS EXECUTION OF THIS AGREEMENT, THE
EXECUTIVE SHALL HAVE THE RIGHT TO REVOKE THE RELEASE CONTAINED IN SECTION 15 OF
THIS AGREEMENT OF CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT BY
SERVING WITHIN SUCH PERIOD WRITTEN NOTICE OF REVOCATION. IF THE EXECUTIVE
EXERCISES HIS RIGHTS UNDER THE PRECEDING SENTENCE, HE SHALL FORFEIT THE AMOUNT
PAYABLE TO HIM PURSUANT TO SECTION 5 OF THIS AGREEMENT.

<PAGE>   6

                  IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of the Company and the Executive has
executed this Agreement as of the day and year first above written.



                                       FATS, INC.



                                       By:
                                          --------------------------------------

                                       Title:
                                             -----------------------------------



                                       ROBERT F. MECREDY



                                       -----------------------------------------

<PAGE>   7

EXHIBIT A

GENERAL RELEASE

                  This General Release (this "Release") is executed by Robert F.
Mecredy (the "Executive") pursuant to Section 5 of the Confidential Separation
Agreement and General Release dated as of May 16, 2001 (the "Separation
Agreement") between FATS, Inc., a Delaware corporation (the "Company"), and the
Executive.

                  WHEREAS, the Executive's employment with the Company is
terminating;

                  WHEREAS, the Company and the Executive intend that the terms
and conditions of the Separation Agreement and this Release shall govern all
issues related to the Executive's employment and termination of employment with
the Company;

                  WHEREAS, the Executive has had 21 days to consider the form of
this Release;

                  WHEREAS, the Company advised the Executive in writing to
consult with an attorney before signing this Release;

                  WHEREAS, the Executive acknowledges that the consideration to
be provided to the Executive under the Separation Agreement is sufficient to
support this Release; and

                  WHEREAS, the Executive understands that the Company regards
the representations by the Executive in the Separation Agreement and this
Release as material and that the Company is relying on such representations in
paying amounts to the Executive pursuant to the Separation Agreement.

                  THE EXECUTIVE THEREFORE AGREES AS FOLLOWS:

                  1.       The Executive's employment with the Company shall
terminate on July 15, 2001, and the Executive shall receive the termination
payments set forth in Sections 4 and 5 of the Separation Agreement and the
benefits set forth in Section 8 of the Separation Agreement in accordance with
the terms and subject to the conditions thereof.

                  2.       The Executive, on behalf of himself and anyone
claiming through him, hereby agrees not to sue the Company or Firearms Training
Systems, Inc. or any of their divisions, subsidiaries, affiliates or other
related entities of the above specified entities (whether or not such entities
are wholly owned) or any of the past, present or future directors, officers,
administrators, trustees, fiduciaries, employees, agents, attorneys or
shareholders of the Company or Firearms Training Systems, Inc. or any of such
other entities, or the predecessors, successors or assigns of any of them
(hereinafter referred to as the "Released Parties"), and agrees to release and
discharge, fully, finally and forever, the Released Parties from any and all
claims, causes of action, lawsuits, liabilities, debts, accounts, covenants,
contracts, controversies, agreements, promises, sums of money, damages,
judgments and demands of any nature whatsoever, in law or in equity, both known
and unknown, asserted or not asserted, foreseen or unforeseen, which the
Executive ever had or may presently have against any of the Released Parties
arising from the beginning of time up to and including the effective date of
this Release, including, without limitation, all matters in any way related to
the Executive's employment by the Company, the terms and conditions thereof, any
failure to promote the Executive and the termination or cessation of the
Executive's employment with the Company, and including, without limitation, any
and all claims arising under the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in
Employment Act, the Older Workers' Benefit Protection Act, the Family and
Medical Leave Act, the Americans With Disabilities Act, the Employee Retirement
Income Security Act of 1974, the Georgia Minimum Wage Law, the Georgia Common
Day of Rest Act, the Georgia Equal Employment for Persons with Disabilities
Code, the Georgia Equal Pay for Equal Work Act, the Georgia law governing wage
payment (O.C.G.A. 34-7-1, et seq.), the Georgia law prohibiting discrimination
based on age (O.C.G.A. 34-1-2), the Georgia law governing safety in the
workplace (O.C.G.A. 34-2-10) or any other federal, state, local or foreign
statute, regulation, ordinance or order, or pursuant to any common law doctrine;
provided, however, that nothing contained in this Release (i) shall apply to, or
release the Company from, any obligation of the Company contained in the
Separation Agreement or any vested or accrued benefit pursuant to any employee
benefit plan of the Company, or (ii) shall apply to, or release the Parent from,
any obligation of the Parent contained in the stock option agreements between
the Parent and the Executive. The consideration offered in the Separation
Agreement is accepted by the Executive as being in full accord, satisfaction,
compromise and settlement of any and all claims or potential claims, and the
Executive expressly agrees that he is not entitled to, and shall not receive,
any further recovery of any kind from the Company or any of the other Released
Parties, and that in the event of any further proceedings whatsoever based upon
any matter released herein, neither the Company nor any of the other Released
Parties shall have any further monetary or other obligation of any kind to the
Executive, including any obligation for any costs, expenses or attorneys' fees
incurred by or on behalf of the Executive. The Executive agrees that he has no
present or future right to employment with the Company or any of the other
Released Parties and that he will not apply for or otherwise seek employment
with any of them.

                  3.       The Executive expressly represents and warrants that
he is the sole owner of the actual and alleged claims, demands, rights, causes
of action and other matters that are released herein; that the same have not
been transferred or assigned or caused to be transferred or assigned to any
other person, firm, corporation or other legal entity; and that he has the full
right and power to grant, execute and deliver the general release, undertakings
and agreements contained herein.

<PAGE>   8

                  4.       ACKNOWLEDGMENT BY EXECUTIVE. BY EXECUTING THIS
RELEASE, THE EXECUTIVE EXPRESSLY ACKNOWLEDGES THAT HE HAS READ THIS RELEASE
CAREFULLY, THAT HE FULLY UNDERSTANDS ITS TERMS AND CONDITIONS, THAT HE HAS BEEN
ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE, THAT HE HAS
BEEN ADVISED THAT HE HAS 21 DAYS WITHIN WHICH TO DECIDE WHETHER OR NOT TO
EXECUTE THIS RELEASE AND THAT HE INTENDS TO BE LEGALLY BOUND BY IT. DURING A
PERIOD OF SEVEN DAYS FOLLOWING THE DATE OF HIS EXECUTION OF THIS RELEASE, THE
EXECUTIVE SHALL HAVE THE RIGHT TO REVOKE THE RELEASE OF CLAIMS UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT BY SERVING WITHIN SUCH PERIOD WRITTEN NOTICE OF
REVOCATION. IF THE EXECUTIVE EXERCISES HIS RIGHTS UNDER THE PRECEDING SENTENCE,
HE SHALL FORFEIT THE AMOUNT PAYABLE TO HIM PURSUANT TO SECTION 5 OF THE
SEPARATION AGREEMENT.

                  5.       The Separation Agreement and this Release constitute
the entire understanding between the parties. The Executive has not relied on
any oral statements that are not included in the Separation Agreement or this
Release.

                  6.       This Release shall be construed, interpreted and
applied in accordance with the internal laws of the State of Delaware without
regard to the principle of conflicts of laws.



                                       EXECUTIVE



                                       -----------------------------------------
                                       Robert F. Mecredy



                                       Date:
                                            ------------------------------------

<PAGE>   9

EXHIBIT B

FIRST AMENDMENT TO THE
FIREARMS TRAINING SYSTEMS, INC. STOCK OPTION AGREEMENT
SERIES F

         WHEREAS, Firearms Training Systems, Inc., a Delaware corporation (the
"Company"), previously granted to Robert Mecredy (the "Optionee"), as of April
1, 2000, an option to purchase 240,000 shares of its Class A Common Stock,
$0.000006 per share par value, pursuant to the provisions of the Firearms
Training Systems, Inc. Stock Option Plan (the "Plan") and upon and subject to
the terms and conditions set forth in the Series F Stock Option Agreement (the
"Option Agreement");

         WHEREAS, pursuant to Section 1.2 of the Plan, the Stock Option
Sub-Committee of the Compensation Committee of the Board of Directors of the
Company (the "Committee") has been appointed by the Board of Directors of the
Company to administer the Plan;

         WHEREAS, pursuant to Section 1.2 of the Plan, the Committee has the
power and authority to determine terms and conditions of the options granted
under the Plan, including the number of shares subject to each option, the time
and conditions of exercise of such option and the form of the option agreement;

         WHEREAS, the Committee has determined that it is advisable to amend the
Option Agreement in certain respects; and

         WHEREAS, the Optionee has agreed that it is advisable to amend the
Option Agreement in certain respects.

         NOW, THEREFORE, the Option Agreement hereby is amended in the following
respects:

         1. Subsection (a) of Section 2.2 is amended by deleting "subsections
(b) - (d)" and substituting therefor "subsection (b)".

         2. Subsections (b) and (c) of Section 2.2 are deleted in their
entirety.

         3. Subsection (d) of Section 2.2 is amended by deleting such subsection
in its entirety and substituting the following in lieu thereof:

                  "(b) If the Optionee's employment with the Company
                  terminates for any reason, the Option shall continue
                  to become exercisable in accordance with Section
                  2.2(a) above and may thereafter be exercised by the
                  Optionee or the Optionee's Legal Representative
                  until the earlier to occur of (i) the date which is
                  the second anniversary of the Optionee's termination
                  of employment and (ii) the Expiration Date; provided
                  that if the Optionee's employment is terminated by
                  the Company for Cause prior to the "Employment
                  Termination Date," as such term is defined in
                  Section 1 of the Confidential Separation Agreement
                  and General Release dated as of May 16, 2001 between
                  FATS, Inc. and the Optionee (the "Separation
                  Agreement"), the Option shall terminate
                  automatically on the date the Board authorizes the
                  Optionee's termination for Cause, and the Optionee
                  shall be subject to the provisions of Section 2.5."

         4. Subsection (e) of Section 2.2 is relettered as subsection (c).

         5. Subsection (a) of Section 2.5 is amended by deleting the words
"Sections 6, 7, 8, 9, or 10 of the Employment Agreement or the Optionee is
terminated for Cause," and substituting therefor the words "Sections 9, 10, 11,
12 or 13 of the Separation Agreement or the Optionee is terminated for Cause
prior to the "Employment Termination Date," as such term is defined in the
Separation Agreement,".

                  IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by a duly authorized officer of the Company and the Optionee has
executed this Amendment as of May 16, 2001.



                                       FIREARMS TRAINING SYSTEMS, INC.



                                       By:
                                          --------------------------------------

                                       Title:
                                             -----------------------------------



                                       ROBERT F. MECREDY



                                       -----------------------------------------

<PAGE>   10

EXHIBIT C

FIRST AMENDMENT TO THE
FIREARMS TRAINING SYSTEMS, INC. STOCK OPTION AGREEMENT
SERIES H

         WHEREAS, Firearms Training Systems, Inc., a Delaware corporation (the
"Company"), previously granted to Robert Mecredy (the "Optionee"), as of April
1, 2000, an option to purchase 240,000 shares of its Class A Common Stock,
$0.000006 per share par value, pursuant to the provisions of the Firearms
Training Systems, Inc. Stock Option Plan (the "Plan") and upon and subject to
the terms and conditions set forth in the Series H Stock Option Agreement (the
"Option Agreement");

         WHEREAS, pursuant to Section 1.2 of the Plan, the Stock Option
Sub-Committee of the Compensation Committee of the Board of Directors of the
Company (the "Committee") has been appointed by the Board of Directors of the
Company to administer the Plan;

         WHEREAS, pursuant to Section 1.2 of the Plan, the Committee has the
power and authority to determine terms and conditions of the options granted
under the Plan, including the number of shares subject to each option, the time
and conditions of exercise of such option and the form of the option agreement;

         WHEREAS, the Committee has determined that it is advisable to amend the
Option Agreement in certain respects; and

         WHEREAS, the Optionee has agreed that it is advisable to amend the
Option Agreement in certain respects.

         NOW, THEREFORE, the Option Agreement hereby is amended in the following
respects:

         1. Section 2.1 is amended by deleting the word "seventh" and replacing
it with the word "third".

         2. The first sentence of clause (i) of subsection (a) of Section 2.2 is
amended by deleting the phrase "(i) Except as provided in Section 2.2(a)(ii)
below,".

         3. Clauses (ii) and (iii) of subsection (a) of Section 2.2 and
subsections (b) and (c) of Section 2.2 are deleted in their entirety.

         4. Subsection (d) of Section 2.2 is amended by deleting such subsection
in its entirety and substituting the following in lieu thereof:

                  "(b) If the Optionee's employment with the Company
                  terminates for any reason, the Option shall continue
                  to become exercisable in accordance with Section
                  2.2(a) above and may thereafter be exercised by the
                  Optionee or the Optionee's Legal Representative
                  until the Expiration Date; provided that if the
                  Optionee's employment is terminated by the Company
                  for Cause prior to the "Employment Termination
                  Date," as such term is defined in Section 1 of the
                  Confidential Separation Agreement and General
                  Release dated as of May 16, 2001 between FATS, Inc.
                  and the Optionee (the "Separation Agreement"), the
                  Option shall terminate automatically on the date the
                  Board authorizes the Optionee's termination for
                  Cause, and the Optionee shall be subject to the
                  provisions of Section 2.5."

         5. Subsection (e) of Section 2.2 is amended by deleting such subsection
in its entirety and substituting the following in lieu thereof:

                  "(c) For purposes of this Agreement, "Cause" shall
                  have the meaning contained in Section 4(c) of the
                  Employment Agreement between the Optionee and FATS,
                  Inc. dated November 1, 2000 (the "Employment
                  Agreement")."

         6. Subsection (a) of Section 2.5 is amended by deleting the words
"Sections 6, 7, 8, 9, or 10 of the Employment Agreement or the Optionee is
terminated for Cause," and substituting therefor the words "Sections 9, 10, 11,
12 or 13 of the Separation Agreement or the Optionee is terminated for Cause
prior to the "Employment Termination Date," as such term is defined in the
Separation Agreement,".

                  IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by a duly authorized officer of the Company and the Optionee has
executed this Amendment as of May 16, 2001.



                                       FIREARMS TRAINING SYSTEMS, INC.



                                       By:
                                          --------------------------------------

                                       Title:
                                             -----------------------------------



                                       ROBERT F. MECREDY



                                       -----------------------------------------