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                                                                     EXHIBIT 4.6

                        2000 NON-EXECUTIVE INCENTIVE PLAN

                                       OF

                         OCEANEERING INTERNATIONAL, INC.

                  1. Plan. This 2000 Non-Executive Incentive Plan of Oceaneering
International, Inc. (the "Plan") was adopted by Oceaneering International, Inc.
(the "Company") to reward certain key employees of the Company and certain
independent consultants by enabling them to acquire shares of common stock of
the Company.

                  2. Objectives. This Plan is designed to attract and retain key
employees of the Company and its Subsidiaries, to attract and retain consultants
and other independent contractors, to encourage the sense of proprietorship of
such employees and independent contractors and to stimulate the active interest
of such persons in the development and financial success of the Company and its
Subsidiaries. These objectives are to be accomplished by making Awards under
this Plan and thereby providing Participants with a proprietary interest in the
growth and performance of the Company and its Subsidiaries.

                  3. Definitions. As used herein, the terms set forth below
shall have the following respective meanings:

                  "Authorized Officer" means the Chairman of the Board or the
Chief Executive Officer of the Company (or any other senior officer of the
Company to whom either of them shall delegate the authority to execute any Award
Agreement).

                  "Award" means the grant of any Option, SAR, Stock Award or
Cash Award, whether granted singly, in combination or in tandem, to a
Participant pursuant to such applicable terms, conditions and limitations as the
Committee may establish in order to fulfill the objectives of the Plan.

                  "Award Agreement" means a written agreement between the
Company and a Participant setting forth the terms, conditions and limitations
applicable to an Award.

                  "Board" means the Board of Directors of the Company.

                  "Cash Award" means an award denominated in cash.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

                  "Committee" means the Compensation Committee of the Board or
such other committee of the Board as is designated by the Board to administer
the Plan.

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                  "Common Stock" means the Common Stock, par value $0.25 per
share, of the Company.

                  "Company" means Oceaneering International, Inc., a Delaware
corporation.

                  "Dividend Equivalents" means, with respect to shares of
Restricted Stock that are to be issued at the end of the Restriction Period, an
amount equal to all dividends and other distributions (or the economic
equivalent thereof) that are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.

                  "Employee" means an employee of the Company or any of its
Subsidiaries and an individual who has agreed to become an employee of the
Company or any of its Subsidiaries and actually becomes such an employee within
the following six months.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.

                  "Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported on
that date, on the last preceding date on which such a sale was so reported, (ii)
if shares of Common Stock are not so listed but are quoted on the Nasdaq
National Market, the mean between the highest and lowest sales price per share
of Common Stock reported by the Nasdaq National Market on that date, or, if
there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (iii) if the Common Stock
is not so listed or quoted, the mean between the closing bid and asked price on
that date, or, if there are no quotations available for such date, on the last
preceding date on which such quotations shall be available, as reported by the
Nasdaq Stock Market, or, if not reported by the Nasdaq Stock Market, by the
National Quotation Bureau Incorporated or (iv) if shares of Common Stock are not
publicly traded, the most recent value determined by an independent appraiser
appointed by the Company for such purpose.

                  "Independent Contractor" means a person providing services to
the Company or any of its Subsidiaries except an Employee.

                  "Option" means a right to purchase a specified number of
shares of Common Stock at a specified price that is not intended to comply with
the requirements set forth in Section 422 of the Code.

                  "Participant" means an Employee or Independent Contractor to
whom an Award has been made under this Plan.

                  "Restricted Stock" means any Common Stock that is restricted
or subject to forfeiture provisions.

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                  "Restriction Period" means a period of time beginning as of
the date upon which an Award of Restricted Stock is made pursuant to this Plan
and ending as of the date upon which the Common Stock subject to such Award is
no longer restricted or subject to forfeiture provisions.

                  "SAR" means a right to receive a payment, in cash or Common
Stock, equal to the excess of the Fair Market Value or other specified valuation
of a specified number of shares of Common Stock on the date the right is
exercised over a specified strike price, in each case, as determined by the
Committee.

                  "Stock Award" means an award in the form of shares of Common
Stock or units denominated in shares of Common Stock.

                  "Subsidiary" means (i) in the case of a corporation, any
corporation of which the Company directly or indirectly owns shares representing
more than 50% of the combined voting power of the shares of all classes or
series of capital stock of such corporation which have the right to vote
generally on matters submitted to a vote of the stockholders of such corporation
and (ii) in the case of a partnership or other business entity not organized as
a corporation, any such business entity of which the Company directly or
indirectly owns more than 50% of the voting, capital or profits interests
(whether in the form of partnership interests, membership interests or
otherwise).

                  4. Eligibility.

                  (a) Employees. Key Employees eligible for Awards under this
         Plan are those who hold positions of responsibility and whose
         performance, in the judgment of the Committee, can have a significant
         effect on the success of the Company and its Subsidiaries, including
         those individuals who are expected to become employees within six
         months.

                  (b) Independent Contractors. Independent Contractors eligible
         for Awards under this Plan are those Independent Contractors providing
         services to, or who will provide services to, the Company or any of its
         Subsidiaries.

                  (c) Officers and Directors. No Award shall be granted under
         this Plan to an individual who, at the time of grant, is a member of
         the Board or an "officer" within the meaning of Securities and Exchange
         Commission Rule 16a-1(f) under the Exchange Act.

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                  5. Common Stock Available for Awards. Subject to the
provisions of paragraph 14 hereof, there shall be available for Awards under
this Plan granted wholly or partly in Common Stock (including rights or options
that may be exercised for or settled in Common Stock) an aggregate of 900,000
shares of Common Stock. The number of shares of Common Stock that are the
subject of Awards under this Plan, that are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner such
that all or some of the shares covered by an Award are not issued to a
Participant or are exchanged for Awards that do not involve Common Stock, shall
again immediately become available for Awards hereunder. The Committee may from
time to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate. The Board and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that
shares of Common Stock are available for issuance pursuant to Awards.

                  6. Administration.

                  (a) This Plan shall be administered by the Committee. Subject
         to the provisions hereof, the Committee shall have full and exclusive
         power and authority to administer this Plan and to take all actions
         that are specifically contemplated hereby or are necessary or
         appropriate in connection with the administration hereof. The Committee
         shall also have full and exclusive power to interpret this Plan and to
         adopt such rules, regulations and guidelines for carrying out this Plan
         as it may deem necessary or proper, all of which powers shall be
         exercised in the best interests of the Company and in keeping with the
         objectives of this Plan. The Committee may, in its discretion, provide
         for the extension of the exercisability of an Award, accelerate the
         vesting or exercisability of an Award, eliminate or make less
         restrictive any restrictions contained in an Award, waive any
         restriction or other provision of this Plan or an Award or otherwise
         amend or modify an Award in any manner that is (i) not adverse to the
         Participant to whom such Award was granted, (ii) consented to by such
         Participant or (iii) authorized by paragraph 14(c). The Committee may
         make an Award to an individual who it expects to become an employee of
         the Company or any of its Subsidiaries within the next six months, with
         such Award being subject to the individual"s actually becoming an
         employee within such time period, and subject to such other terms and
         conditions as may be established by the Committee. The Committee may
         correct any defect or supply any omission or reconcile any
         inconsistency in this Plan or in any Award in the manner and to the
         extent the Committee deems necessary or desirable to further the Plan
         purposes. Any decision of the Committee in the interpretation and
         administration of this Plan shall lie within its sole and absolute
         discretion and shall be final, conclusive and binding on all parties
         concerned.

                  (b) No member of the Committee or officer of the Company to
         whom the Committee has delegated authority in accordance with the
         provisions of paragraph 7 of this Plan shall be liable for anything
         done or omitted to be done by him or her, by any member of the
         Committee or by any officer of the Company in connection with the
         performance of any duties under this Plan, except for his or her own
         willful misconduct or as expressly provided by statute.

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                  7. Delegation of Authority. The Committee may delegate to the
Chief Executive Officer and to other senior officers of the Company its duties
under this Plan pursuant to such conditions or limitations as the Committee may
establish.

                  8. Awards. The Committee shall determine the type or types of
Awards to be made under this Plan and shall designate from time to time the
Employees and Independent Contractors who are to be the recipients of such
Awards. Each Award may be embodied in an Award Agreement, which shall contain
such terms, conditions and limitations as shall be determined by the Committee
in its sole discretion and shall be signed by the Participant to whom the Award
is made and by an Authorized Officer for and on behalf of the Company. Awards
may consist of those listed in this paragraph 8(a) hereof and may be granted
singly, in combination or in tandem. Awards may also be made in combination or
in tandem with, in replacement of, or as alternatives to, grants or rights under
this Plan or any other plan of the Company or any of its Subsidiaries, including
the plan of any acquired entity; provided that, except as contemplated in
paragraph 14, no Option may be issued in exchange for the cancellation of an
Option with a higher exercise price nor may the exercise price of any Option be
reduced. All or part of an Award may be subject to conditions established by the
Committee, which may include, but are not limited to, continuous service with
the Company and its Subsidiaries, achievement of specific business objectives,
increases in specified indices, attainment of specified growth rates and other
comparable measurements of performance. Upon the termination of employment by a
Participant who is an Employee, any unexercised, deferred, unvested or unpaid
Awards shall be treated as set forth in the applicable Award Agreement.

                  (a) Stock Option. An Award may be in the form of an Option.
         The price at which shares of Common Stock may be purchased upon the
         exercise of an Option shall be not less than the Fair Market Value of
         the Common Stock on the date of grant. The term of an Option shall not
         exceed 5 years from the date of grant. Subject to the foregoing
         provisions, the terms, conditions and limitations applicable to any
         Options awarded pursuant to this Plan, including the term of any
         Options and the date or dates upon which they become exercisable, shall
         be determined by the Committee.

                  (b) Stock Appreciation Right. An Award may be in the form of
         an SAR. The terms, conditions and limitations applicable to any SARs
         awarded pursuant to this Plan, including the term of any SARs and the
         date or dates upon which they become exercisable, shall be determined
         by the Committee.

                  (c) Stock Award. An Award may be in the form of a Stock Award.
         The terms, conditions and limitations applicable to any Stock Awards
         granted pursuant to this Plan shall be determined by the Committee.

                  (d) Cash Award. An Award may be in the form of a Cash Award.
         The terms, conditions and limitations applicable to any Cash Awards
         granted pursuant to this Plan shall be determined by the Committee.

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                  9. Award Payment; Dividends; Substitution.

                  (a) General. Payment of Awards may be made in the form of cash
         or Common Stock, or a combination thereof, and may include such
         restrictions as the Committee shall determine, including, in the case
         of Common Stock, restrictions on transfer and forfeiture provisions. If
         payment of an Award is made in the form of Restricted Stock, the
         applicable Award Agreement relating to such shares shall specify
         whether they are to be issued at the beginning or end of the
         Restriction Period. In the event that shares of Restricted Stock are to
         be issued at the beginning of the Restriction Period, the certificates
         evidencing such shares (to the extent that such shares are so
         evidenced) shall contain appropriate legends and restrictions that
         describe the terms and conditions of the restrictions applicable
         thereto. In the event that shares of Restricted Stock are to be issued
         at the end of the Restricted Period, the right to receive such shares
         shall be evidenced by book entry registration or in such other manner
         as the Committee may determine.

                  (b) Deferral. With the approval of the Committee, amounts
         payable in respect of Awards may be deferred and paid either in the
         form of installments or as a lump-sum payment. The Committee may permit
         selected Participants to elect to defer payments of some or all types
         of Awards in accordance with procedures established by the Committee.
         Any deferred payment of an Award, whether elected by the Participant or
         specified by the Award Agreement or by the Committee, may be forfeited
         if and to the extent that the Award Agreement so provides.

                  (c) Dividends and Interest. Rights to dividends or Dividend
         Equivalents may be extended to and made part of any Award consisting of
         shares of Common Stock or units denominated in shares of Common Stock,
         subject to such terms, conditions and restrictions as the Committee may
         establish. The Committee may also establish rules and procedures for
         the crediting of interest on deferred cash payments and Dividend
         Equivalents for Awards consisting of shares of Common Stock or units
         denominated in shares of Common Stock.

                  (d) Substitution of Awards. At the discretion of the
         Committee, a Participant may be offered an election to substitute an
         Award for another Award or Awards of the same or different type.

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                  10. Stock Option Exercise. The price at which shares of Common
Stock may be purchased under an Option shall be paid in full at the time of
exercise in cash or, if elected by the Participant, the Participant may purchase
such shares by means of tendering Common Stock or surrendering another Award,
including Restricted Stock, valued at Fair Market Value on the date of exercise,
or any combination thereof. The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards; provided that any Common
Stock that is or was the subject of an Award may be so tendered only if it has
been held by the Participant for six months. The Committee may provide for
procedures to permit the exercise or purchase of such Awards by use of the
proceeds to be received from the sale of Common Stock issuable pursuant to an
Award. Unless otherwise provided in the applicable Award Agreement, in the event
shares of Restricted Stock are tendered as consideration for the exercise of an
Option, a number of the shares issued upon the exercise of the Option, equal to
the number of shares of Restricted Stock used as consideration therefor, shall
be subject to the same restrictions as the Restricted Stock so submitted as well
as any additional restrictions that may be imposed by the Committee.

                  11. Taxes. The Company shall have the right to deduct
applicable taxes from any Award payment and withhold, at the time of delivery or
vesting of cash or shares of Common Stock under this Plan, an appropriate amount
of cash or number of shares of Common Stock or a combination thereof for payment
of taxes required by law or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for withholding of such taxes.
The Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made. The Committee may
provide for loans, on either a short term or demand basis, from the Company to a
Participant to permit the payment of taxes required by law.

                  12. Amendment, Modification, Suspension or Termination. The
Board may amend, modify, suspend or terminate this Plan for the purpose of
meeting or addressing any changes in legal requirements or for any other purpose
permitted by law, except that (i) no amendment or alteration that would
adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Company to the extent stockholder approval
is otherwise required by applicable legal requirements.

                  13. Assignability. Unless otherwise determined by the
Committee and provided in the Award Agreement, no Award or any other benefit
under this Plan shall be assignable or otherwise transferable. Any attempted
assignment of an Award or any other benefit under this Plan in violation of this
paragraph 13 shall be null and void.

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                  14. Adjustments.

                  (a) The existence of outstanding Awards shall not affect in
         any manner the right or power of the Company or its stockholders to
         make or authorize any or all adjustments, recapitalizations,
         reorganizations or other changes in the capital stock of the Company or
         its business or any merger or consolidation of the Company, or any
         issue of bonds, debentures, preferred or prior preference stock
         (whether or not such issue is prior to, on a parity with or junior to
         the Common Stock) or the dissolution or liquidation of the Company, or
         any sale or transfer of all or any part of its assets or business, or
         any other corporate act or proceeding of any kind, whether or not of a
         character similar to that of the acts or proceedings enumerated above.

                  (b) In the event of any subdivision or consolidation of
         outstanding shares of Common Stock, declaration of a dividend payable
         in shares of Common Stock or other stock split, then (i) the number of
         shares of Common Stock reserved under this Plan, (ii) the number of
         shares of Common Stock covered by outstanding Awards in the form of
         Common Stock or units denominated in Common Stock, (iii) the exercise
         or other price in respect of such Awards, and (iv) the appropriate Fair
         Market Value and other price determinations for such Awards shall each
         be proportionately adjusted by the Board to reflect such transaction.
         In the event of any other recapitalization or capital reorganization of
         the Company, any consolidation or merger of the Company with another
         corporation or entity, the adoption by the Company of any plan of
         exchange affecting the Common Stock or any distribution to holders of
         Common Stock of securities or property (other than normal cash
         dividends or dividends payable in Common Stock), the Board shall make
         appropriate adjustments to (i) the number of shares of Common Stock
         covered by Awards in the form of Common Stock or units denominated in
         Common Stock, (ii) the exercise or other price in respect of such
         Awards, and (iii) the appropriate Fair Market Value and other price
         determinations for such Awards to give effect to such transaction shall
         each be proportionately adjusted by the Board to reflect such
         transaction; provided that such adjustments shall only be such as are
         necessary to maintain the proportionate interest of the holders of the
         Awards and preserve, without exceeding, the value of such Awards. In
         the event of a corporate merger, consolidation, acquisition of property
         or stock, separation, reorganization or liquidation, the Board shall be
         authorized to issue or assume Awards by means of substitution of new
         Awards, as appropriate, for previously issued Awards or to assume
         previously issued Awards as part of such adjustment.

                  (c) In the event of a corporate merger, consolidation,
         acquisition of property or stock, separation, reorganization or
         liquidation, the Board may make such adjustments to Awards or other
         provisions for the disposition of Awards as it deems equitable, and
         shall be authorized, in its discretion, (i) to provide for the
         substitution of a new Award or other arrangement (which, if applicable,
         may be exercisable for such property or stock as the Board determines)
         for an Award or the assumption of the Award, regardless of whether in a
         transaction to which Section 424(a) of the Code applies, (ii) to
         provide, prior to the transaction, for the acceleration of the vesting
         and exercisability of, or lapse of restrictions with respect to, the
         Award and, if the transaction is a cash

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         merger, provide for the termination of any portion of the Award that
         remains unexercised at the time of such transaction or (iii) to provide
         for the acceleration of the vesting and exercisability of an Award and
         the cancellation thereof in exchange for such payment as shall be
         mutually agreeable to the Participant and the Board.

                  15. Restrictions. No Common Stock or other form of payment
shall be issued with respect to any Award unless the Company shall be satisfied
based on the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.

                  16. Unfunded Plan. Insofar as it provides for Awards of cash,
Common Stock or rights thereto, this Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants who are
entitled to cash, Common Stock or rights thereto under this Plan, any such
accounts shall be used merely as a bookkeeping convenience. The Company shall
not be required to segregate any assets that may at any time be represented by
cash, Common Stock or rights thereto, nor shall this Plan be construed as
providing for such segregation, nor shall the Company, the Board or the
Committee be deemed to be a trustee of any cash, Common Stock or rights thereto
to be granted under this Plan. Any liability or obligation of the Company to any
Participant with respect to an Award of cash, Common Stock or rights thereto
under this Plan shall be based solely upon any contractual obligations that may
be created by this Plan and any Award Agreement, and no such liability or
obligation of the Company shall be deemed to be secured by any pledge or other
encumbrance on any property of the Company. Neither the Company nor the Board
nor the Committee shall be required to give any security or bond for the
performance of any obligation that may be created by this Plan.

                  17. Governing Law. This Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.

                  18. Effectiveness. This Plan shall be effective as of August
18, 2000 (the "Effective Date"), the date on which it was approved by the Board
of Directors of the Company.

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                                                                EXHIBIT 10.29-02

AMENDED EMPLOYMENT AGREEMENT DATED AS OF NOVEMBER 1, 2000
BETWEEN THE COMPANY AND JOHN A. MORELLI

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is entered into as of
November 1, 2000 between FATS, Inc., a Delaware corporation (the "Company"), and
John A. Morelli (the "Executive").

         WHEREAS, the Company is the operating subsidiary of Firearms Training
Systems, Inc. (the "Parent"), a leading worldwide provider of small and
supporting arms training simulators; and

         WHEREAS, the Company desires to employ the Executive to serve as Vice
President of Finance and Administration and Chief Financial Officer of the
Company, and the Executive desires to be employed by the Company, upon the terms
and subject to the conditions set forth herein.

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

1.       Employment. The Company hereby agrees to employ the Executive and the
Executive hereby agrees to be employed by the Company upon the terms and subject
to the conditions contained in this Agreement. The term of employment of the
Executive by the Company pursuant to this Agreement (the "Employment Period")
shall commence on October 1, 2000 (the "Effective Date") and shall end on the
third annual anniversary of the Effective Date, unless earlier terminated
pursuant to Section 4 hereof.

2.       Position and Duties; Responsibilities. (a) Position and Duties. The
Company shall employ the Executive during the Employment Period as its chief
financial officer, with the titles of Vice President of Finance and
Administration and Chief Financial Officer. The Executive shall report directly
to the Chief Executive Officer of the Parent and shall follow direction, when
given from time to time, from the Board of Directors of the Parent. During the
Employment Period, the Executive shall perform faithfully and loyally and to the
best of the Executive's abilities the duties assigned to the Executive hereunder
and shall devote the Executive's full business time, attention and effort to the
affairs of the Company, and its subsidiaries and shall use the Executive's best
efforts to promote the interests of the Company, its subsidiaries and the
Parent. The Executive may engage in charitable, civic or community activities
and, with the prior approval of the Chief Executive Officer, may serve as a
director of any other business corporation, provided that such activities or
service do not interfere with the Executive's duties hereunder or violate the
terms of any of the covenants contained in Sections 6, 7, 8, 9 or 10 hereof.

(b)      Responsibilities. Subject to the powers, authority and responsibilities
vested in the Board and in duly constituted committees of the Board, the
Executive shall have the authority and responsibility for the Company's
financial management. The Executive shall also perform such other duties (not
inconsistent with the position of Chief Financial Officer) on behalf of the
Company and its subsidiaries as may from time to time be authorized or directed
by the Chief Executive Officer.

3.       Compensation. (a) Base Salary. During the Employment Period, the
Company shall pay to the Executive a base salary at the rate of $125,000 per
annum (" Base Salary"), payable in accordance with the Company's executive
payroll policy. Such Base Salary shall be reviewed annually and shall be subject
to such changes as determined by the Compensation Committee of the Board (the
"Compensation Committee").

(b)      Annual Bonus. During the Employment Period, the Company shall provide
the Executive the opportunity to earn an annual incentive bonus, based upon the
Company's performance, the Executive's individual performance and the Company's
liquidity position (the "Annual Bonus"). The actual amount of such Annual Bonus
shall be determined by the Board, in its sole discretion; provided, however,
that in no event may the Executive receive an Annual Bonus in excess of 60% of
the Executive's Base Salary.

(c)      Stock Options. As of the date of this Agreement, the Executive shall be
entitled to receive a grant of nonqualified stock options under the Firearms
Training Systems, Inc. Stock Option Plan as follows:

(i)      The Executive shall be granted an option to purchase from the Parent
150,000 shares of its Class A common stock, 0.000006 par value ("Common Stock"),
at the price of $0.50 per share, under the terms and conditions described in the
Stock Option Agreement Series F, to be entered into between the Executive and
the Parent.

(ii)     The Executive shall be granted an option to purchase from the Parent
150,000 shares of Common Stock, at the price of $0.50 per share, under the terms
and conditions described in the Stock Option Agreement Series G, to be entered
into between the Executive and the Parent.

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(iii)    The Executive shall be granted an option to purchase from the Parent
150,000 shares of Common Stock, at the price of $0.01 per share, under the terms
and conditions described in the Stock Option Agreement Series H, to be entered
into between the Executive and the Parent.

(d)      Other Benefits. During the Employment Period, the Executive shall be
entitled to participate in the Company's employee benefit plans that are
generally available from time to time to executives of the Company, including
group medical, dental, life, accidental death and dismemberment, short-term
disability, long-term disability, business travel accident plans, sick leave,
vacation, and the profit sharing retirement plan (all such benefits being
hereinafter referred to as the "Employee Benefits").

(e)      Expense Reimbursement. During the Employment Period, the Company shall
reimburse the Executive, in accordance with the Company's policies and
procedures, for all proper documented expenses incurred by the Executive in the
performance of the Executive's duties hereunder.

4.       Termination. (a) Death. Upon the death of the Executive, this Agreement
shall automatically terminate and all rights of the Executive and the
Executive's heirs, executors and administrators to compensation and other
benefits under this Agreement shall cease immediately, except that the
Executive's heirs, executors or administrators, as the case may be, shall be
entitled to:

(i)      accrued Base Salary through and including the Executive's date of
death;

(ii)     the Annual Bonus, if any, that the Executive would have received for
the fiscal year in which his death occurs had he remained employed through the
end of such year, reduced pro rata for that portion of such fiscal year not
completed by the Executive and payable at such time as the Executive would have
received such Annual Bonus had he remained employed through the end of such
fiscal year; and

(iii)    other Employee Benefits to which the Executive was entitled on the date
of death in accordance with the terms of the plans and programs of the Company.

(b)      Disability. The Company may, at its option, terminate this Agreement
upon written notice to the Executive if the Executive, because of physical or
mental incapacity or disability, fails to perform the essential functions of the
Executive's position, with or without reasonable accommodation, required of the
Executive hereunder for a continuous period of 120 days or any 180 days within
any 12-month period. In the event of any dispute regarding the existence of the
Executive' s incapacity or disability hereunder, the matter shall be resolved by
the determination of a physician, qualified to practice medicine in the state of
the Executive's Residence, to be selected by the Board. The Executive shall have
the right to require a second opinion from a physician qualified to practice
medicine in the state of the Executive's residence, as selected by the
Executive. If the initial and second opinions are inconsistent, the matter shall
be resolved by a third opinion from a physician licensed to practice medicine as
selected by the agreement between the Company and the Executive. Upon such
termination, all obligations of the Company hereunder shall cease immediately,
except that the Executive shall be entitled to:

(i)      accrued Base Salary through and including the effective date of the
Executive's termination of employment;

(ii)     the Annual Bonus, if any, that the Executive would have received for
the fiscal year in which the Executive's termination of employment occurs had he
remained employed through the end of such year, reduced pro rata for that
portion of such fiscal year not completed by the Executive and payable at such
time as the Executive would have received such Annual Bonus had he remained
employed through the end of such fiscal year; and

(iii)    other Employee Benefits to which the Executive is entitled upon
termination of employment in accordance with the terms of the plans and programs
of the Company.

(c)      Cause. (i) The Company may, at its option, terminate the Executive's
employment under this Agreement for Cause (as hereinafter defined) upon written
notice to the Executive (the "Cause Notice"). Any such termination for Cause
shall be authorized by the Board. The Cause Notice shall state the particular
action(s) or inaction(s) giving rise to termination for Cause.

(ii)     As used in this Agreement, the term "Cause" shall mean any one or more
of the following:

(A)      The Executive's commission of a felony or any other crime involving
moral turpitude, fraud, misrepresentation, embezzlement, or theft,

(B)      The Executive's engaging in any other activity that is harmful
(including alcoholic or other self-induced affliction), in a material respect,
to the Company, any of its subsidiaries or the Parent monetarily or otherwise,
as determined by a majority of the Board;

                                    Page 17
<PAGE>   3

(C)      The Executive's material malfeasance (including, without limitation,
any intentional act of fraud or theft), misconduct, or gross negligence in
connection with the performance of his duties hereunder;

(D)      The Executive's significant violation of any statutory or common law
duty of loyalty to the Company, any of its subsidiaries or the Parent;

(E)      The Executive's material breach of this Agreement or of a material
policy of the Company or the Parent (including, without limitation, disclosure
or misuse of any confidential or competitively sensitive information or trade
secrets of the Company, any of its subsidiaries or the Parent);

(F)      The Executive's refusal or failure to carry out directives or
instructions of the majority of the Board that are consistent with the scope and
nature of the Executive's duties and responsibilities set forth herein; or

(G)      Any breach by the Executive of any one or more of the covenants
contained in Section 6, 7, 8, 9 or 10 hereof.

(iii)    With respect to E and F above, the Executive shall have ten days after
the Cause Notice is given to cure the particular action(s) or inaction(s), to
the extent a cure is possible. If the Executive so effects a cure to the
satisfaction of the Board, the Cause Notice shall be deemed rescinded and of no
force or effect.

(iv)     The exercise of the right of the Company to terminate this Agreement
pursuant to this Section 4(c) shall not abrogate the rights or remedies of the
Company in respect of the breach giving rise to such termination.

(v)      If the Company terminates the Executive's employment for Cause, all
obligations of the Company hereunder shall cease, except that the Executive
shall be entitled to the payments and benefits specified in Sections 4(b)(i) and
4(b)(iii) hereof.

(d)      Termination Without Cause. The Company may, at its option, terminate
the Executive's employment under this Agreement upon written notice to the
Executive for a reason other than a reason set forth in Section 4(a), 4(b) or
4(c). Any such termination shall be authorized by the Board. If the Company
terminates the Executive's employment for any such reason, all obligations of
the Company hereunder shall cease immediately, except that the Executive shall
be entitled to:

(i)      accrued Base Salary through and including the date of the Executive's
termination of employment;

(ii)     other Employee Benefits to which the Executive is entitled upon
termination of employment in accordance with the terms of the plans and programs
of the Company; and

(iii)    an amount equal to the Executive's Base Salary as in effect immediately
prior to the Executive's termination of employment, payable in substantially
equal monthly installments during the 18-month period following the Executive's
termination of employment with the Company.

Notwithstanding Section 4(d)(iii), the amount payable to the Executive under
such Section 4(d)(iii) during the last 9 months for which such amount is payable
shall be reduced by the amount of salary, bonus or other compensation which the
Executive receives from any company other than the Company in exchange for the
Executive's services as an employee or director of or consultant to such company
during such 9-month period. The Executive shall use his best efforts to seek
other employment or a consulting engagement for this purpose and to otherwise
mitigate the amount payable pursuant to Section 4(d)(iii) hereof.

(e)      Voluntary Termination for Good Reason. If the Executive reasonably
believes he has Good Reason (as defined below) to terminate employment he must
give the Board 60 days prior written notice (or such shorter period as may be
permitted by the Board) and a reasonable opportunity to cure, which shall be a
minimum of 30 days. If the Board fails to cure the Good Reason within such
reasonable time, the Executive may voluntarily terminate his employment with the
Company prior to the end of the Employment Period. If the Executive voluntarily
terminates his employment pursuant to this Section 4(e), the Executive shall be
entitled to receive the payments and benefits specified by Section 4(d), payable
in accordance with and subject to the conditions of such Section. For purposes
of this Agreement, "Good Reason" shall mean (i) the assignment to the Executive
of duties inconsistent with the position of President and Chief Executive
Officer of the Company or (ii) the assignment of the Executive to a position of
lesser dignity. Any dispute which may arise concerning whether a voluntary
termination of employment by the Executive is for Good Reason shall be resolved
by an arbitrator appointed pursuant to Section 15.

                                    Page 18
<PAGE>   4

(f)      Other Voluntary Termination. Upon 60 days prior written notice to the
Company (or such shorter period as may be permitted by the Board), the Executive
may voluntarily terminate the Executive's employment with the Company for any
reason. If the Executive voluntarily terminates the Executive's employment
pursuant to this Section 4(f), all obligations of the Company hereunder shall
cease immediately, except that the Executive shall be entitled to the payments
and benefits specified in Sections 4(d)(i) and 4(d)(ii) hereof.

5.       Federal and State Withholding. The Company shall deduct from the
amounts payable to the Executive pursuant to this Agreement the amount of all
required federal, state and local withholding taxes in accordance with all
applicable federal employment taxes.

6.       Noncompetition; Nonsolicitation. (a) General. The Executive
acknowledges that in the course of the Executive's employment with the Company
the Executive has and will become familiar with trade secrets and other
confidential information concerning the Company, its subsidiaries and the Parent
and that the Executive' s services will be 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, if any, during which the
Executive is receiving payments from the Company pursuant to Section 4, and for
a period of two years thereafter the Executive shall not in any manner, directly
or indirectly, through any person, firm or corporation, alone or as a member of
a partnership or as an officer, director, stockholder, investor or employee of
or consultant or other agent to any other corporation or enterprise or
otherwise, engage or be engaged, or assist any other person, firm, corporation
or enterprise in engaging or being engaged, in any business, in which the
Executive was involved or had knowledge, being conducted by, or contemplated by,
the Company or any of its subsidiaries as of the termination of the Executive's
employment in any geographic area in which the Company, any of its subsidiaries
or the Parent is then conducting or is contemplating conducting such business.

(c)      Nonsolicitation. The Executive further agrees that during the period of
the Executive's employment with the Company, the period if any during which the
Executive is receiving payments from the Company pursuant to Section 4, and for
a period of three years 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 6(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 6 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 6, 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 6.

7.       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 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.

8.       Confidentiality. The Executive shall not, at any time during the
Employment Period 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

                                    Page 19
<PAGE>   5

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. Promptly following the termination of the Employment Period, 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).

9.       Standstill. The Executive hereby agrees that, unless specifically
requested in writing in advance by the Board, the Executive will not at any time
during the period of the Executive's employment with the Company, the period, if
any, during which the Executive is receiving payments from the Company pursuant
to Section 4, 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 9, 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 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.

10.      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 Employment Period or the six-month period
thereafter 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.

11.      Key Man Insurance. The Executive agrees to cooperate fully with the
Company, including but not limited to submitting to a medical examination, in
securing key man insurance (the entire cost of which shall be borne by the
Company) on the life of the Executive.

12.      Enforcement. The parties hereto agree that the Company, its
subsidiaries and the Parent would be damaged irreparably in the event that any
provision of Section 6, 7, 8, 9 or 10 of this Agreement were not performed in
accordance with its terms or were otherwise breached and that money damages
would be an inadequate remedy for any such nonperformance or breach.
Accordingly, the Company and the Parent and their successors and permitted
assigns shall be entitled, in addition to other rights and remedies existing in
their favor, to an injunction or injunctions to prevent any breach or threatened
breach of any of such provisions and to enforce such provisions specifically
(without posting a bond or other security). The Executive agrees that the
Executive will submit to the personal jurisdiction of the courts of the State of
Delaware in any action by the Company or the Parent enforce an arbitration award
against the Executive or to obtain interim injunctive or other relief pending an
arbitration decision.

13.      Representations. The Executive represents and warrants to the Company
that (a) the execution, delivery and performance of this Agreement by the
Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which the Executive is a party or by which the Executive is bound, (b) the
Executive is not a party to or bound by any employment agreement, noncompetition
agreement or confidentiality agreement with any other person or entity and (c)
upon the execution and delivery of this Agreement by the Company, this Agreement
shall be the valid and binding obligation of the Executive, enforceable in
accordance with its terms.

                                    Page 20
<PAGE>   6

14.      Survival. Sections 6, 7, 8, 9 and 10 of this Agreement shall survive
and continue in full force and effect in accordance with their respective terms,
notwithstanding any termination of the Employment Period.

15.      Arbitration. Except as otherwise set forth in Section 12 hereof, any
dispute or controversy between the Company or the Parent 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.

16.      Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (a) delivered
personally or by overnight courier to the following address of the other party
hereto (or such other address for such party as shall be specified by notice
given pursuant to this Section) or (b) sent by facsimile to the following
facsimile number of the other party hereto (or such other facsimile number for
such party as shall be specified by notice given pursuant to this Section), with
the confirmatory copy delivered by overnight courier to the address of such
party pursuant to this Section 16:

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 copies to:
Scott Perekslis
Centre Partners Management LLC
30 Rockefeller Plaza
New York, New York 10020

James G. Archer
Sidley & Austin
875 Third Avenue
New York, New York 10022

If to the Executive, to:
John A. Morelli
2327 Ceiba Court
Lawrenceville, GA  30043

17.      Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Agreement or the
validity, legality or enforceability of such provision in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

18.      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.

19.      Successors and Assigns. This Agreement shall be enforceable by the
Executive and the Executive's heirs, executors, administrators and legal
representatives, and by the Company and its successors and assigns.

20.      Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware without
regard to principles of conflict of laws.

                                    Page 21
<PAGE>   7

21.      Amendment and Waiver. The provisions of this Agreement may be amended
or waived only by the written agreement of the Company and the Executive, and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.

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

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.

FATS, INC.

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

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

JOHN A. MORELLI

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

                                    Page 22

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