Exhibit 10.15


 


ALLIANT TECHSYSTEMS INC.


 


EMPLOYMENT AGREEMENT


with


Daniel J. Murphy, Jr.


 


This
Employment Agreement (the “Agreement”), dated as of February 1, 2004, is
entered into by and between Alliant Techsystems Inc., a Delaware corporation
(the “Company”), and Daniel J. Murphy, Jr., a resident of Minnesota (“you”,
“your”, the “Executive”).


 


RECITALS:


 


WHEREAS,
the Company desires to continue to employ you, and you desire to continue in
the employment of the Company upon the terms and conditions and in the
capacities set forth herein;


 


NOW, THEREFORE,
in consideration of the premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
you hereby agree as follows:


 


1.                                      Employment
and Term of Employment.  Subject
to the terms and conditions of this Agreement, the Company hereby agrees to
employ you, and you hereby agree to serve the Company, as Chief Executive
Officer of the Company for a term beginning on February 1, 2004 (the “Effective
Date”) and ending on March 31, 2007 (the “Expiration Date”), with the term from
the Effective Date through the Expiration Date being the “Term of
Employment”.  The foregoing
notwithstanding, if either party gives a valid Notice of Termination pursuant to
Section 6 hereof, the Term of Employment shall not extend beyond the expiration
date specified in such Notice of Termination. 
If neither you nor the Company give written notice to the other prior to
the Expiration Date, this Agreement shall automatically renew for additional
one year periods.  These automatic
renewals may occur only three times after the original Expiration Date, making
the last renewal with an expiration date of March 31, 2010.  Any renewal period under this Section 1,
shall extend the Term of Employment for that additional one-year period.  If the Agreement is renewed, the “Expiration
Date” shall be March 31 of that additional one-year period.


 


2.                                      Scope
of Employment.


 


During the
Term of Employment you shall have and may exercise all the powers, duties and
functions as are normal and customary for the Chief Executive Officer and that
are consistent with the responsibilities set forth with respect to such
positions in the Company’s bylaws, and you shall also perform such other duties
not inconsistent with such positions as are assigned to you, from time to time,
by the Board of Directors of the Company (the “Board”).  During the Term of Employment, you shall
devote substantially all of your business time, attention, skill and efforts to
the faithful performance of your duties hereunder.  You may serve on up to two non-Company boards of directors,
provided these boards are not in conflict with the Company or your service as a
member of the Company’s Board, and the Board has approved them.


 


3.                                      Compensation.  During the Term of Employment, in
consideration of your services hereunder, including, without limitation,
service as an officer or director of the Company or of any subsidiary or
affiliate thereof:


 


(a)                                  Starting
on February 1, 2004, you shall receive a salary at the rate of $700,000 per
year (payable at such regular intervals as other employees of the Company are
compensated in accordance with the Company’s employment practices, but not less
than monthly), which amount shall be subject to review by the Board from time
to time but not less than once a year after January 1, 2005, and may be
adjusted at its direction, provided that such salary may not be reduced during
the Term of Employment.  Any subsequent
adjustments will take place on or after April 1, 2005, in the regular
compensation cycle of the Company.  In
addition, the Company shall reimburse you for your reasonable and documented
expenses incurred in connection with the business of the Company in accordance
with the Company’s normal procedures.


 


(b)                                 You shall be eligible to participate in certain
long-term performance incentive programs as determined by the Board from time
to time.  Including eligibility to
participate in stock and stock option incentive programs.  The Board shall review your participation in
such programs annually after January 1, 2005.


 

















 


(c)                                  All
Company shares delivered to you pursuant to this Section 3 or otherwise
pursuant to this Agreement or your employment shall be subject to such
conditions on transfer as may be required under the Securities Act of 1933, as
amended (the “Act”) and may bear a legend to such effect.


 


(d)                                 The
Company shall pay you an annual incentive bonus (“Incentive Bonus”) in each
fiscal year of the Company during which you are (1) employed by the Company for
at least three months during such fiscal year, and (2) the Company’s
performance during that fiscal year equals or exceeds the performance goals set
by the Board for such fiscal year.  The
Incentive Bonus shall be governed by and paid out in accordance with the
Alliant Techsystems Inc. Management Compensation Plan (as restated effective
April 1, 2002) and the Executive Incentive Program (EIP) (together the
“Management Compensation Plan”).  It is
understood that this plan may be changed from time to time.    The Incentive Bonus for your performance
as Chief Executive Officer for the Company’s fiscal year ending March 31, 2004
shall be as follows:


 


•                  For the period
from 10/1/03 to 1/31/04, bonus of $420,000 if the Company achieves the target performance
goals set by the Board for such fiscal year and $840,000 if and to the extent
the Company achieves a level of performance defined by the Board as
“outstanding”.  This Incentive Bonus for
FY04 shall be prorated by 4/12th.


 


•                  For the period
from 2/1/04 – 3/31/04, bonus of $500,000 if the Company achieves the target
performance goals set by the Board for such fiscal year and $1,000,000 if and
to the extent the Company achieves a level of performance defined by the Board
as “outstanding”.  This Incentive Bonus
for FY04 shall be prorated by 2/12th.


 


Your Incentive Bonus for the
fiscal year ending March 31, 2005 shall consist of $500,000 if the Company
achieves the target performance goals set by the Board for such fiscal year and
$1,000,000 if and to the extent the Company achieves a level of performance
defined by the Board as “outstanding” (or a prorated amount if you are employed
for less than 12 months during the fiscal year).  For years ending after April 1, 2005 the Incentive Bonus amount
shall be subject to review by the Board and may be adjusted at its discretion.


 


(e)                                  Your
incentive bonus as Group V.P. shall be prorated for FY04 by 6/12th
for your period of performance as Group Vice President – Precision Systems and
paid in accordance with the Management Compensation Plan.


 


(f)                                    You agree that the Company may, at its sole
discretion, defer any compensation including but not limited to salary,
bonuses, and stock awards, but excluding SERP payments subject to Section 4(b)
of this Agreement, that are not fully deductible for federal or state income
tax purposes.  The Company will defer
only those amounts that would exceed the deductibility levels under federal or
state income tax laws.  Such deferrals
would be into the Alliant Techsystems Inc. Nonqualified Deferred Compensation
Plan, as amended from time to time, or any subsequent Company sponsored
management compensation deferral plan.


 


4.                                      Additional
Compensation and Benefits.


 


(a)                                  As
additional compensation for your service under this Agreement during the Term
of Employment, the Company agrees to provide you with the non-cash benefits
provided by the Company to its other officers and key employees as they may
exist from time to time (other than stock options and equity compensation).  It is understood that such benefits may
change from time to time in the Company’s discretion. Such benefits shall
include leave or paid time off (“PTO”)/vacation time, medical and dental
insurance and other health care benefits, the Company’s basic term life
insurance, and retirement and disability benefits as may hereafter be provided
by the Company in accordance with its policies.  If the Company’s basic term life insurance benefit for you is not
$1,000,000, the Company shall provide you additional basic term life insurance
coverage up to a benefit of $1,000,000 payable to a beneficiary or
beneficiaries selected by you.  Except
as otherwise provided in this Agreement, payments and benefits under any
program that provides for payments and benefits after termination of employment
will be paid or provided to you under the terms of such program during periods
following the Term of Employment.


 


(b)                                 (i)                                     SERP.  If your employment hereunder automatically
terminates on the Expiration Date, you will be provided with monthly retirement
benefits under a nonqualified supplemental executive retirement plan (SERP),
subject to the following terms:


(A)                              Normal
Form of Payments to You.  The first
SERP payment will be due on the first day of the calendar month following your
termination of employment; and the last SERP payment will be due on the first
day of the calendar month in which you die (taken together, this is the Normal
Form of payment).


 


(B)                                Amount
of Payments.  The monthly amount of
each SERP payment paid in the Normal Form will be the following percentage
(your SERP Percentage) of your Final Average Earnings, reduced by the
monthly 


 

















 


amount payable to you
under the Aliant Techsystems Inc. Pension and Retirement Plan, Pension Equity
Plan formula, or any successor plan (the “ATK Pension Plan”), assuming that you
receive monthly benefits from the ATK Pension Plan in the Normal Form:


 




	
  If your termination of

  employment is:

  	
   

  	
  Your SERP
  Percentage Is:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2004

  	
   

  	
   

  	
   

  
	
  and before March 31, 2005

  	
   

  	
  5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2005

  	
   

  	
   

  	
   

  
	
  and before March 31, 2006

  	
   

  	
  15

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2006

  	
   

  	
   

  	
   

  
	
  and before March 31, 2007

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2007

  	
   

  	
   

  	
   

  
	
  and before March 31, 2008

  	
   

  	
  35

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2008

  	
   

  	
   

  	
   

  
	
  and before March 31, 2009

  	
   

  	
  45

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2009

  	
   

  	
   

  	
   

  
	
  and before March 31, 2010

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2010

  	
   

  	
   

  	
   

  
	
  and before March 31, 2011

  	
   

  	
  52.5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  On or after March 31, 2011

  	
   

  	
  55

  	
  %

  






 


Nothing in this Section 4
shall be deemed to constitute a commitment by the Company to employ you for any
particular length of time.


 


(C)                                Determination
of Final Average Earnings.  For
purposes of determining the amount of your SERP payments, your Final Average
Earnings is the monthly average of your highest 60 consecutive calendar
months of Earnings you received under this Agreement in the
120 consecutive calendar months preceding your termination of
employment.  If you have less than 120
but more than 60 consecutive calendar months of employment under this
Agreement preceding your termination of employment, then such period of
employment shall be used instead of 120 months.  If you have 60 or fewer consecutive calendar months of
employment under this Agreement preceding your termination of employment, then
such period shall be used instead of 60 months (and the 120-month rule
will be disregarded).  For this purpose,
partial calendar months of continuous employment shall be disregarded.  Earnings shall have the same meaning as
Earnings under the ATK Pension Plan, which include earnings that, at your
election, have been contributed to any Company-sponsored Section 401(k) or
Section 125 or similar plan or have been deferred under any Company-sponsored
nonqualified deferred compensation plan. Such Earnings will be included in the
month they would otherwise have been paid to you.


 


All other compensation,
including any Company stock or in-kind compensation, and related cash payments
(such as tax gross-ups), will be disregarded in determining Earnings.


 


(D)                               Forfeiture
if not Vested.  Except as otherwise
provided in this Section 4(b), if you do not have at least five (5) years
of continuous employment with the Company on your termination of employment,
you will not receive the SERP payments. 
For this purpose, employment with the Company before the Effective Date
is included.


 


(E)                                 Reduction
for Early Commencement.  If your
SERP payments are due to begin before April 1, 2008, the amount determined
in (B) above will be reduced by 1/2% for each month that your beginning due
date precedes April 1, 2008.


 

















 


(F)                                 Optional
Forms of Payments.  Notwithstanding
the foregoing, if you elect a form of payment under the ATK Pension Plan other
than the Normal Form (including any form that has survivor benefits), then the
SERP payments will also be paid in such form, with the amount of payments being
the actuarial equivalent of the Normal Form calculated by using the actuarial
assumptions then specified in the ATK Pension Plan, except:


 


(1)                                  the
discount (or interest) rate will be the greater of (i) the rate specified in
the then current Alliant Techsystems Inc. Supplemental Executive Retirement
Plan (which may be changed or amended) (“ATK SERP”), or (ii) 6%; and


 


(2)                                  any
reduction for early commencement will be determined under Section 4(b)(i)(E)
above.


 


(ii)                                  Effect
of Termination by Company Without Cause. 
If the Company terminates your employment without Cause as defined in
Section 6(c) below (which does not include a termination as a result of a
change in control which is covered by paragraph 4(b)(vi)), then you will
receive SERP payments, subject to the following terms:


 


(A)                              Normal
Form of Payments to You.  The first
SERP payment (calculated under Section 4(b)(i) as modified by the
following terms of this Section 4(b)(ii)) will be due to you on the first day
of the calendar month following your termination of employment without Cause;
the last SERP payment will be due to you on the first day of the calendar month
in which you die (taken together, this is the Normal Form of payment).


 


(B)                                No
Additional Service Credit. Your termination of employment for purposes of
calculating your SERP Percentage under Section 4(b)(i)(B) above will be
the date of your termination of employment without Cause.  Specifically, it will not be assumed that
you remained employed by the Company continuously from such date to the
Expiration Date.


 


(C)                                No
Additional Final Average Earnings. 
For purposes of determining your Final Average Earnings under Section
4(b)(i)(C) above, the calculation will be made as of the date of your
termination of employment without Cause. 
Specifically, any Earnings received by you after such date will be
disregarded and no Earnings will be attributed to the period from such date to
the Expiration Date.


 


(D)                         Full
Vesting .  Notwithstanding the
provisions of Section 4(b)(i)(D) above, you will be fully vested in your SERP
benefit.


 


(E)                                 Full
Reduction for Early Commencement. 
Any reduction for early commencement under Section 4(b)(i)(E) above will
be determined by using the actual due date for commencement of payments (that
is, the first day of the calendar month following your termination of
employment without Cause). 
Specifically, it will not be assumed that your SERP benefit begins on
the first day of the month following the Expiration Date.


 


(F)                               Optional
Form of Payment.  Notwithstanding
the foregoing, if you elect a form of payment under the ATK Pension Plan other
than the Normal Form (that is, other than a fixed life annuity beginning on the
first day of the calendar month following your termination of employment
without Cause), the SERP payments will also be paid in such form, with the
amount of payments being the actuarial equivalent of the Normal Form calculated
by using the actuarial assumptions then specified in the ATK Pension Plan, except:


 


(1)                                  the
discount (or interest) rate will be the greater of (i) the rate specified in
the ATK SERP, or (ii) 6%; and


 


(2)                                  any
reduction for early commencement will be determined under
Section 4(b)(ii)(E) above.


 


(iii)                           Effect
of Termination by You for Good Reason. 
If you terminate employment for Good Reason  as defined in Section 4(b)(xiv) below (other than a
Qualifying Termination, as then defined in the Company’s Income Security Plan),
then you will receive SERP payments, subject to the following terms:


 


(A)                              Normal
Form of Payments to You.  The first
SERP payment (calculated under Section 4(b)(i) as modified by the
following terms of this Section 4(b)(iii)) will be due to you on the first day
of the calendar month following your termination of employment for Good Reason;
and the last SERP payment will be due on the first day of the calendar month in
which you die (taken together, this is the Normal Form of payment).


 

















 


(B)                                No
Additional Service Credit. Your termination of employment for purposes of
calculating your SERP Percentage under Section 4(b)(i)(B) above will be the
date of your termination of employment for Good Reason. Specifically,  it will not be assumed that you remained
employed by the Company continuously from such date to the Expiration Date.


 


(C)                                  No Additional Final Average Earnings.  For purposes of determining your Final
Average Earnings under Section 4(b)(i)(C) above, the calculation will be made
as of the date of your termination of employment for Good Reason.  Specifically, any Earnings received by you
after such date will be disregarded and no Earnings will be attributed to the
period from such date to the Expiration Date.


 


(D)                         Full
Vesting.  Notwithstanding the
provisions of Section 4(b)(i)(D) above, you will be fully vested in your SERP
benefit.


 


(E)                                 Full
Reduction for Early Commencement. 
Any reduction for early commencement under Section 4(b)(i)(E) above will
be determined by using the actual due date for commencement of payments (that
is, the first day of the calendar month following your termination of
employment for Good Reason). 
Specifically, it will not be assumed that your SERP benefit begins on
the first day of the month following the Expiration Date.


 


(F)                                 Optional
Forms of Payment.  Notwithstanding
the foregoing, if you elect a form of payment under the ATK Pension Plan other
than the Normal Form (that is, other than a fixed life annuity beginning on the
first day of the calendar month following your termination of employment
without Cause), the SERP payments will also be paid in such form, with the
amount being calculated by using the actuarial assumptions then specified in
the ATK Pension Plan, except:


 


(1)                                  the
discount (or interest) rate will be the greater of (i) the rate specified in
the ATK SERP, or (ii) 6%; and


 


(2)                                  any
reduction for early commencement will be determined under
Section 4(b)(iii)(E) above.


 


(iv)                              Effect
of Termination by You for Other Than Good Reason.  Notwithstanding any other provision of this Section 4(b), if
you terminate employment with the Company before March 31, 2007, for other
than Good Reason during the Term of Employment, your SERP will be forfeited and
you will receive no SERP payments. If you terminate employment with the Company
on or after March 31, 2007, for other than Good Reason during the Term of
Employment, you will receive SERP payments under Section 4(b)(i) above
determined as of the date of your termination of employment; provided, however,
that if you do not then have at least five (5) years of continuous employment as
required by Section 4(b)(i)(D) above, your SERP will be forfeited and you
will receive no SERP payments.


 


(v)                                 Forfeiture
for Cause.  Notwithstanding any
other provision of this Section 4(b), if the Company terminates your
employment for Cause as defined in Section 6(c) below during the Term of
Employment, you will not be entitled to receive the SERP payments and all such
amounts shall be forfeited.


 


(vi)                              Effect
of Qualifying Termination.  In the
event of a Qualifying Termination, as 
defined in the Company’s Income Security Plan then in place (“Income
Security Plan”), you will receive SERP payments under Section 4(b)(i)
above determined as of your Qualifying Termination but incorporating any
provisions of the Income Security Plan that may affect the determination of the
amount of such payments, and such amounts will become payable to you in a
single lump sum, utilizing the same assumptions necessary for making such
determinations as set forth in the ATK Pension Plan  as in effect immediately prior to the Change of Control , as then
defined in the Company’s Income Security Plan, except that:


 


(1)                                  the
discount (or interest) rate will be the greater of (i) the rate specified in
the ATK SERP, or (ii) 6%; and


 


(2)                                  any
reduction for early commencement will be determined under Section 4(b)(i)(E)
above.


 


(vii)                           Effect
of Death.   If you die before the
Expiration Date while employed by the Company and you are then married, then
your surviving spouse will receive a SERP spouse benefit, subject to the
following terms:


 

















 


(A)                              Lump
Sum Payment to Spouse.  The present
value of the SERP benefit that would have been payable to you if you had
survived and terminated employment on the Expiration Date (calculated under
Section 4(b)(i) above as modified by the following terms of this Section 4(b)(vii))
will be paid by the Company to your spouse in a cash lump sum as soon as
administratively feasible following your death.  Such present value will be calculated by using the actuarial
assumptions then specified in the ATK Pension Plan, except:


 


(1)                                  the
discount (or interest) rate will be the greater of (i) the rate specified in
the ATK SERP, or (ii) 6%; and


 


(2)                                  any
reduction for early commencement will be determined under
Section 4(b)(vii)(E) below.


 


(B)                                Additional
Service Credit.  For purposes of
determining your SERP Percentage under Section 4(b)(i)(B) above, it will be
assumed that you remained employed by the Company continuously from the date of
your death up to and including the Expiration Date.


 


(C)                                No
Additional Final Average Earnings. 
For purposes of determining your Final Average Earnings under Section
4(b)(i)(C) above, the calculation will be made as of your date of death.  Specifically, no Earnings will be attributed
to the period from your date of death to the Expiration Date.


 


(D)                               Full
Vesting.  Notwithstanding the
provisions of Section 4(b)(i)(D) above, your surviving spouse will be
fully vested in her SERP spouse benefit.


 


(E)                                 Partial
Reduction for Early Commencement Reduction.  For purposes of determining any reduction for early commencement
under Section 4(b)(i)(E) above, it will be assumed that the SERP benefit is due
to begin on the first day of the month following the Expiration Date.


 


(F)                                 No
Benefit if Not Married.  If you die
and are not survived by your spouse, no SERP benefit will be payable to any
survivor or beneficiary under this Section 4(b)(vii).


 


(viii)                        Effect
of Disability.  If either the
Company or you terminate your employment on account of Disability (as defined
in Section 6(e)) before the Expiration Date, then you will receive a SERP
disability benefit, subject to the following terms:


 


(A)                              Normal
Form of Payments to You.  The first
SERP disability payment (calculated under Section 4(b)(i) above as
modified by the following terms of this Section 4(b)(viii)) will be due to
you on the first day of the calendar month following your termination of
employment on account of Disability; and the last SERP disability payment will
be due on the first day of the calendar month in which you die (taken together,
this is the Normal Form of payment of the SERP disability payments).


 


(B)                                Additional
Service Credit.  For purposes of
determining the SERP Percentage under Section 4(b)(i)(B) above, it will be
assumed that you remained employed by the Company continuously from the date of
your termination of employment on account of Disability up to and including the
Expiration Date.


 


(C)                                No
Additional Final Average Earnings. 
For purposes of determining your Final Average Earnings under Section
4(b)(i)(C) above, the calculation will be made as of your termination of
employment on account of Disability. 
Specifically, any Earnings received by you after such date will be
disregarded and no Earnings will be attributed to the period from your date of
your termination of employment on account of Disability to the Expiration Date.


 


(D)                               Full
Vesting.  Notwithstanding the
provisions of Section 4(b)(i)(D) above, you will be fully vested in your
SERP disability benefit.


 


(E)                                 Partial
Reduction for Early Commencement. 
For purposes of determining any reduction for early commencement under
Section 4(b)(i)(E) above, it will be assumed that your SERP benefit is due to
begin on the first day of the month following the Expiration Date.


 


(F)                                 Optional
Forms of Payment.  Notwithstanding
the foregoing, if you elect a form of payment under the ATK Pension Plan other
than the Normal Form (that is, other than a fixed life annuity beginning on the
first day of the calendar month following your termination of employment on
account of Disability), the SERP disability 


 

















 


payments will also be
paid in such form, with the amount being calculated by using the actuarial
assumptions then specified in the ATK Pension Plan, except:


 


(1)                                  the
discount (or interest) rate will be the greater of (i) the rate specified in the
ATK SERP, or (ii) 6%; and


 


(2)                                  any
reduction for early commencement will be determined under
Section 4(b)(viii)(E) above.


 


(ix)                                Benefit
Not Funded.  Benefits due under this
Section 4(b) shall be paid out of the general funds of the Company, and
you and your spouse shall not have any preferred interest by way of trust,
escrow, lien or otherwise in any specific assets of the Company or any
affiliate of the Company.  The rights
accruing to you and your spouse hereunder shall be solely those of unsecured
creditors of the Company.


 


(x)                                   Benefit
Not Transferable.  You and your
spouse shall not have the right to assign, encumber or otherwise anticipate the
SERP payments to be made under this Section 4(b). The benefits provided
under this Section 4(b) shall not be subject to seizure for payment of any
debts or judgments against you or your spouse.


 


(xi)                                Tax
Withholding.  The Company may deduct
from any SERP payment (and transmit to the proper taxing authority) such amount
as it may be required to withhold under any applicable federal, state or other
law.


 


(xii)                             ERISA
Compliance.  Your SERP shall be
included in the ATK SERP.  As provided
in § 10.2 of the ATK SERP, however, your SERP is included in the ATK SERP
only to the extent that such inclusion is necessary to comply with the Employee
Retirement Income Security Act of 1974 (ERISA).  All benefit determinations for your SERP shall be made according
to the terms of this Section 4(b).


 


(xiii)                          Delayed
Payments.  Notwithstanding any other
provision of this Section 4(b), the Company may, at its sole discretion, delay
(but not reduce) receipt of the initial SERP payment up to three (3) months for
administrative reasons.  In addition, if
the Company determines that delaying the time any SERP payment is made would
increase the probability that such payment would be fully deductible for
federal or state income tax purposes, the Company may unilaterally delay the
time of the making of such payment or any portion of such payment for up to 24
months after the date such payment would be otherwise payable. Any such delay
will not affect the amount of any SERP payments.


 


(xiv)                       Good
Reason. For purposes of this Agreement, “Good Reason” shall mean the
occurrence of any of the following, unless you have agreed in writing that such
occurrence shall not constitute “Good Reason”:


 


(A)                            Change
of Compensation.  A reduction by the
Company in your annual base salary or target annual incentive bonus (as in
effect on the Effective Date of this Agreement or as such amounts which may
have been increased from time to time).


 


(B)                                Change
of Location.  The Company requiring
you to be based anywhere other than your work location on the Effective Date,
or such other location to it may be changed thereafter with your consent, or a
location within fifty (50) miles from such location; unless such relocation is
agreed to in writing by both the Company and you, or is otherwise permitted by
the terms of this Agreement; or


 


(C)                                Change
of Position.  The assignment to you
of any duties inconsistent in any respect with your position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding for
this purpose (i) the change in position explicitly provided for in Section 1
(which likewise shall not constitute reason for a “Qualifying Termination”
under the Income Security Plan) and (ii) an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by you.


 


A termination
pursuant to this Section 4(b)(xiv) shall not be deemed a termination for Good
Reason unless the Company receives written notice of such termination from you
within sixty (60) days after the occurrence of the events constituting your
reason for such termination and the Company does not within thirty (30) days
after receipt of such notice cure the stated reason therefor.


 

















 


(c)                                  You are eligible
to participate in the Company’s executive perquisite programs which may change
from time to time.


 


(d)                                 During
the Term of Employment and for a period of three years after termination of
employment hereunder, the Company will pay up to $15,000 during any calendar
year (such amount to be prorated in the case of a partial calendar year) for
financial counseling services for you, and the Company will also pay to you an
amount (if any) which is necessary to put you in the same position with respect
to your total federal, state and local income liability as you would have been
in had the payments under this paragraph (d) not been made.


 


5.                                      Relocation
Expenses.  Unless (i) you
terminate for other than Good Reason or (ii) the Company terminates you for
Cause:


 


(a)                                  The
Company shall pay 100% of your reasonable costs in moving you, your family and
possessions, from your home in the Minneapolis, Minnesota area, to a home
selected by you anywhere in the continental United States. All payments
pursuant to this paragraph (a) shall be increased to the extent necessary so
that the amount received by you net of all applicable federal, state and local
taxes is equal to the cost or expense being reimbursed.


 


(b)                                 The
Company shall reimburse you for real estate commissions and other reasonable
closing costs and reasonable attorney’s fees customarily borne by sellers in
connection with the sale of your home in the Minneapolis, MN area and pay you
the difference between the sale price of such home and your original purchase
price, if former is lower than latter.


 


(c)                                  Alternatively
to (b) above, at the option of you, the Company will purchase your existing
home in the Minneapolis, Minnesota area. 
Under this paragraph (c), the purchase price of your home shall be the
greater of an amount determined according to the Company’s Home Purchase Option
Program, or your original purchase price.


 


(d)                                 You
will not have any rights to these relocation expenses under this Section 5,
unless you commence the relocation process within one year following your
termination from the Company, and have completed such relocation within two
years following the termination from the Company.


 


6.                                      Termination.


 


(a)                                  General.  Your employment hereunder shall
automatically terminate on the earlier of your death or the Expiration
Date.  You may, at any time prior to the
Expiration Date, terminate employment hereunder for any reason by delivering a
Notice of Termination (defined below) to the Board.  The Company may, at any time prior to the Expiration Date,
terminate your employment hereunder for any reason by delivering a Notice of
Termination to you, provided that in no event shall the Company be
entitled to terminate your employment prior to the Expiration Date unless the
Board shall duly adopt by the affirmative vote of at least a majority of the
entire membership of the Board, a resolution authorizing such termination and
stating whether such termination is for Cause (defined below).  As used in this Agreement, “Notice of
Termination” means a notice in writing purporting to terminate your employment
in accordance with this Section 6, which notice shall (i) specify the effective
date of such termination (not prior to the date of such notice) and (ii) in the
case of a termination by the Company for Cause or Disability or a termination
by you for Good Reason or Disability, set forth in reasonable detail the reason
for such termination and the facts and circumstances claimed to provide a basis
for such termination.


 


(b)                                 Termination
on Death.  In the event your employment
hereunder shall terminate as a result of your death, you shall only be entitled
to receive, to the extent applicable, (i) all unpaid compensation accrued as of
the termination date pursuant to Section 3 hereof, (ii) all unused PTO/vacation
time accrued by you as of the termination date, (iii) all amounts owing to you
under Section 4(b), and (iv) those benefits under Section 4 which are required
under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), or other laws.  The amounts described
in clauses (i) and (ii) of the foregoing sentence shall be paid to you in a
lump sum payment promptly after the Expiration Date or such termination date.


 


(c)                                  Termination
by Company for Cause.  If the
Company terminates your employment for Cause, you shall only be entitled to
receive the compensation and other payments described in paragraph (b) above,
however, Section 4(b)(v) governs with respect to payments under any SERP, such
compensation and other payments to be paid as if your employment had automatically
terminated without the giving of any Notice of Termination.  As used in this Agreement “Cause” shall mean
(i) any material failure of you to perform your duties specified in Section 2
of this Agreement or material breach of this Agreement (other than such failure
resulting from your incapacity due to Disability), (ii) gross negligence or
willful or intentional wrongdoing or misconduct, (iii) a material breach by you
of any confidentiality or non-competition agreement between you and the Company,
(iv) a commission of an act of personal dishonesty which involved material
personal profit in connection with the Company, or (v) a conviction or guilty
plea by you of a felony offense or a crime involving moral turpitude.  Before you are terminated for Cause, the
Company shall give the reason for 


 

















 


the termination in the Notice
of Termination.  You shall have fourteen
(14) calendar days to cure the reason. 
Also, you shall be entitled to speak to the Board prior to any Board
resolution authorizing your termination. 
Notwithstanding the forgoing, the Company may suspend you without pay
during the cure period and pending resolution of the termination.  If you cure the issue, the Company shall
reinstate you and give back pay for the suspension period.


 


(d)                                 Termination
by Company Without Cause.  If the
Company terminates your employment without Cause during the initial Term of
Employment, you shall be entitled to receive a payment equal to (i) the base
salary and the “target” Incentive Bonus (established at the beginning of that
fiscal year) that would have been payable to you through the Term of
Employment, or, (ii) a payment equal to twelve months base salary and “target”
Incentive Bonus, whichever is greater. 
Applicable withholding and deductions shall be taken from this
payment.  As a condition of receiving
that payment, you will be required to execute and not rescind a general release
of claims against the Company, in a form to be provided to you by the Company
(“General Release of Claims”).  If the Company
terminates your employment without Cause at any time on or after March 31,
2007, you shall be entitled to receive a payment equal to twelve months base
salary and “target” Incentive Bonus provided you execute and not rescind a
General Release of Claims. Section 4(b)(ii) governs with respect to payments
under any SERP.  This paragraph 6(d)
does not apply in the event of a termination upon a Change of Control.  In that event, paragraph 6(f) shall
apply.  You agree that this payment
shall be in lieu of any severance payment for which you are otherwise eligible
for from the Company.


 


(e)                                  Termination
for Disability.  If either the
Company or you terminate your employment on account of Disability (defined
below), you shall only be entitled to receive the compensation and other
payments described in paragraph (b) above, such compensation and other payments
to be paid as if your employment had automatically terminated without the
giving of any Notice of Termination.  In
addition, the Company shall provide you such other disability benefits as may
hereafter be provided by the Company in accordance with its policies, as they
may exist from time to time.  As used
herein, “Disability” means any physical or mental condition of yours that (i)
prevents you from being able to perform the services required under this
Agreement (ii) has continued for at least 180 consecutive days during any
12-month period and (iii) is reasonably expected to continue.


 


(f)                                    Termination
Upon Change of Control.  If your
employment terminates either by the Company or by you subsequent to a Change of
Control, as defined in the Company’s Income Security Plan, the Company shall
pay you the compensation and other payments, including vesting of restricted
shares and stock options, described in the Income Security Plan.


 


(g)                                 Termination
for Good Reason.  If you terminate
your employment with the Company for Good Reason, you shall be entitled to a
payment equal to twelve months base salary and “target” Incentive Bonus less
applicable withholdings and deductions, provided you execute and not rescind a
General Release of Claims.  Section
4(b)(iii) governs with respect to payments under any SERP.


 


(h)                                 Termination
at end of Expiration Date.  If this
Agreement terminates automatically at the end of the initial Expiration Date or
any renewal period Expiration Date because the Company has chosen not to renew
your employment, you shall be entitled to a payment equal to twelve months base
salary and “target” Incentive Bonus less applicable withholdings and deductions,
provided you execute and not rescind a General Release of Claims.  Section 4(b) governs with respect to
payments under any SERP.


 


7.                                      Restrictions
on Competition.


 


Without prior
written consent of the Board, you agree that you will not, directly or indirectly,
own, manage, operate, control, be employed by, provide consulting or other
services of any kind to, participate in or be connected in any manner with the
ownership, management, operation or control of any business which may be in
direct competition with the Company for:


 


(i)                                     two years from your date of
termination from the Company if you terminate from the Company without Good
Reason, or you choose not to renew your employment with the Company on the
Expiration Date; or


 


(ii)                                  one year from your date of termination
from the Company if the Company terminates you without Cause, or the Company
chooses not to renew your employment with the Company on the Expiration Date.


 


This Section 7 does not apply to immaterial ownership
interests such as ownership in a mutual fund that has within its portfolio
stock of a competitor of the Company or ownership of less than 5% of the stock
of a publicly traded corporation.


 


8.                                      Non-Solicitation.


 


Without prior
written consent of the Board, you agree that you will not, for two years from
your date of termination from the Company, induce or attempt to induce any
employee of the Company or a subsidiary or affiliate of the Company to leave
his or 


 

















 


her employment with the Company or a subsidiary or affiliate
of the Company or to become employed by any business enterprise with which you
may then be employed, associated or connected, or induce or attempt to induce
any customer or supplier of the Company or a subsidiary to cease doing business
with or reduce the level of its business with the Company or any subsidiary.


 


9.                                      Confidential
Information.


 


You acknowledge
that, in the course of your employment with the Company, you have had access to
confidential information and trade secrets relating to business affairs of the
Company or related companies and entities, and you likewise may have access to
further such confidential information in providing the services contemplated by
this Agreement.  You agree that you are
obligated to not, at any time, disclose or otherwise make available to any
person, company or other party confidential information or trade secrets, or to
use such information except in the good faith belief that such use is for the
benefit of the Company and its subsidiaries. 
This Agreement shall not limit any obligations you have under any
employee confidentiality agreement, Company employment policy, or applicable
federal or state law.


 


10.                               Arbitration/
Injunctive Relief.


 


(a)  Any dispute
regarding any claims by either party for breach of this Employment Agreement,
and/or other claims relating to your employment with the Company or the
termination of your employment, shall be resolved by binding arbitration before
the American Arbitration Association in Minneapolis, Minnesota, pursuant to the
then-applicable rules of the American Arbitration Association .


 


(b) As the sole
exception to the arbitration provision of this Section 10, the Company will be
entitled to seek injunctive relief before any court of competent jurisdiction
with respect to any claims that you have breached Section 7, 8, and/or 9 of
this Employment Agreement.  In that
event,  you agree
that it is impossible to measure in monetary terms all of the damages that will
accrue to the Company by reason of your breach of those obligations under this
Agreement.  Therefore, if the Company
finds it necessary, in its sole discretion, to institute any action or
proceeding to enforce those provisions of this Agreement, you hereby waive the
defense that the Company has an adequate remedy at law, and you shall not raise
in any such action or proceeding the defense that the Company has an adequate
remedy at law.


 


11.                               Non-exclusivity
of Rights.


 


Except as
otherwise provided in this Agreement, you have the right to participate in any
benefit, bonus, incentive or other plan or program provided by the Company for
which you are eligible and qualify under the plan or program provision.  Additionally, nothing in this Agreement
shall prevent or limit your continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Company or any of its
affiliated companies and for which you may qualify, nor shall anything herein
limit or otherwise affect such rights as you may have under any stock option or
other agreements with the Company or any of its affiliated companies.  Amounts which are vested benefits or which
you are otherwise entitled to receive under any plan or program of the Company
or any of its affiliated companies at or subsequent to the date of termination
of your employment under this Agreement shall be payable in accordance with
such plan or program.


 


12.                               Governing
Law.  This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Minnesota.


 


13.                               Notice.  Any notice, payment, demand or
communication required or permitted to be given by this Agreement shall be
deemed to have been sufficiently given or served for all purposes if delivered
personally or if sent by registered or certified mail, return receipt
requested, postage prepaid, addressed to such party at its address set forth
below such party’s signature to this Agreement or to such other address as has
been furnished in writing by such party for whom the communication is
intended.  Any such notice is deemed to
be given on the date so delivered.


 


14.                               Severability.  In the event any provisions hereof
shall be modified or held ineffective by any court, such adjudication shall not
invalidate or render ineffective the balance of the provisions hereof. To the
extent that any court shall conclude that Sections 7, 8, and/or 9 are not
enforceable according to their terms, it is agreed that the court should
enforce those provisions to the maximum extent possible under applicable law.


 


15.                               Entire
Agreement.  Except as
expressly provided herein, this Agreement constitutes the sole agreement
between the parties with respect to the employment of you by the Company and
supersedes any and all other agreements, oral or written, between the parties.


 

















 


16.                               Amendment
and Waiver.  This
Agreement may not be modified or amended except by a writing signed by the
parties hereto.  Any waiver or breach of
any of the terms of this Agreement shall not operate as a waiver of any other
breach of such terms or conditions, or any other terms or conditions, nor shall
any failure to enforce any provisions hereof operate as a waiver of such
provision or any other provision hereof.


 


17.                               Assignment.  This Agreement is a personal
employment contract and the rights and interests of you hereunder may not be
sold, transferred, assigned or pledged. 
The Company may assign its rights under this Agreement to (i) any entity
into or with which the Company is merged or consolidated or to which the
Company transfers all or substantially all of its assets or (ii) any entity,
which at the time of such assignment, controls, is under common control with,
or is controlled by the Company, provided that the Company will require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance reasonably acceptable to you, 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 such
succession had not taken place.


 


18.                               Successors.  This Agreement shall be binding upon
and inure to the benefit of you and your heirs, executors, administrators and
legal representatives.  This Agreement
shall be binding upon and inure to the benefit of the Company and its
successors and assigns.


 


IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first written
above and intend that this Employment Agreement have the effect of a sealed
instrument.


 


 


	
  Date:

  	
  January 21,
  2004

  	
   

  	
   

  	
  /S/ DANIEL J. MURPHY, JR.

  	
   

  
	
   

  	
   

  	
  Daniel J.
  Murphy, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  January 21,
  2004

  	
   

  	
  ALLIANT TECHSYSTEMS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ ANN D.
  DAVIDSON

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Ann D.
  Davidson

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: Vice
  President and General Counsel