WILL BE TAXABLE AS PAYROLL WAGES. NO 401K PLAN DEDUCTIONS WILL BE TAKEN FROM
THE TRANSITION PAYMENT NOR IS IT PENSIONABLE EARNINGS (FOR EXAMPLE, IT IS NOT
"EARNINGS" OR "RECOGNIZED COMPENSATION") FOR PURPOSES OF ANY ATK QUALIFIED OR
NON-QUALIFIED EMPLOYEE BENEFITS PLANS.
(C)
EXECUTIVE INCENTIVE PAY. MR. DITTEMORE IS
ELIGIBLE FOR THE EXECUTIVE INCENTIVE PLAN (EIP) PROGRAM FOR FISCAL YEAR 2009
("FY09"). PAYMENT UNDER THE EIP PROGRAM WILL BE BASED SOLELY ON THE ACTUAL
BUSINESS PERFORMANCE AS ESTABLISHED IN THE BEGINNING OF FY09, AND MR. DITTEMORE
WILL RECEIVE THE FULL DISCRETIONARY AWARD WITH NO DOWNWARD ADJUSTMENT MADE TO
IT. THE AMOUNTS PAID WILL BE MADE IN A SINGLE LUMP SUM PAYMENT IN CASH AT THE
TIME ALL OTHER EIP PARTICIPANTS RECEIVE PAYMENT. MR. DITTEMORE'S PAYMENT WILL BE
BASED 100% ON THE ACHIEVEMENT OF CORPORATE GOALS.
(D)
RESTRICTED STOCK. MR. DITTEMORE HAS ONE
UNVESTED RESTRICTED STOCK AWARD WHICH WAS GRANTED ON OCTOBER 31, 2005, FOR 5000
SHARES WHICH ACCORDING TO THE TERMS OF HIS RESTRICTED STOCK AWARD AGREEMENT WILL
VEST UPON HIS TERMINATION DATE.
(E)
PERFORMANCE SHARES AND CASH INCENTIVE
PAYMENTS. MR. DITTEMORE HAS THREE PERFORMANCE AWARD AGREEMENTS. IN ACCORDANCE
WITH THESE PERFORMANCE AWARD AGREEMENTS, MR. DITTEMORE WILL RECEIVE A PRORATED
NUMBER OF PERFORMANCE SHARES AND A PRORATED CASH INCENTIVE PAYMENT, AS
APPLICABLE, BASED ON THE AMOUNT OF ACTIVE SERVICE TIME DURING THE APPLICABLE
FISCAL YEAR. SPECIFICALLY, ASSUMING THE LAST DAY OF EMPLOYMENT OF MARCH 31,
2009:
(I)
FOR THE PERFORMANCE AWARD AGREEMENT DATED APRIL 1, 2006, FOR THE FISCAL YEAR
2007-2009 PERFORMANCE PERIOD, THE AWARD WILL BE THE TOTAL EARNED AMOUNT.
(II)
FOR THE PERFORMANCE AWARD AGREEMENT DATED MARCH 12, 2007 FOR THE FISCAL YEAR
2008 - 2010 PERFORMANCE PERIOD, THE AWARD WILL BE PRORATED 24/36 OF TOTAL EARNED
AMOUNT.
(III)
FOR THE PERFORMANCE AWARD AGREEMENT DATED MARCH 10, 2008 FOR THE FISCAL YEAR
2009 - 2011 PERFORMANCE PERIOD, THE AWARD WILL BE PRORATED 12/36 OF TOTAL EARNED
AMOUNT.
ATK EXPECTS TO MAKE PAYMENT OF EACH AWARD FOLLOWING THE COMPLETION OF THE
APPLICABLE PERFORMANCE PERIOD WHICH ATK CURRENTLY EXPECTS TO BE IN MAY AFTER
EACH OF THOSE PERIODS; BUT IN NO EVENT WILL THE PAYMENT BE LATER THAN THE LAST
DAY IN THE CALENDAR YEAR IN WHICH THE PERFORMANCE PERIOD ENDS. THE NUMBER OF
SHARES DELIVERED AND THE AMOUNT OF ANY CASH PAYMENT DEPEND ON WHETHER AND TO
WHAT EXTENT ATK MEETS THE OBJECTIVES THAT WERE ESTABLISHED WHEN THE
2
PERFORMANCE AWARDS WERE GRANTED. ALL PAYMENTS WILL BE TAXED IN ACCORDANCE WITH
THE FEDERAL AND STATE TAX LAWS THAT APPLY AND ATK PRACTICE AND WILL BE SUBJECT
TO THE TERMS OF THE APPLICABLE PERFORMANCE AWARD AGREEMENTS.
(F)
STOCK OPTIONS. ALL OF MR. DITTEMORE'S
STOCK OPTIONS HAVE VESTED. ALL STOCK OPTIONS THAT ARE EXERCISABLE ON
MR. DITTEMORE'S TERMINATION DATE REMAIN EXERCISABLE UNTIL THE EARLIER OF (I) THE
OPTION'S EXPIRATION DATE UNDER THE NON-QUALIFIED STOCK OPTION AGREEMENT FROM
WHICH IT WAS GRANTED, OR (II) THREE YEARS FROM HIS TERMINATION DATE. ALL TERMS
OF THE NON-QUALIFIED STOCK OPTION AGREEMENT(S) APPLY.
(G)
DEFERRED