Document:

Exhibit 10.9

 

REDEMPTION
AGREEMENT

 

THIS
REDEMPTION AGREEMENT, (the “Agreement”) dated January 31,
2006, (the “Redemption Date) is made by and between Golden Grain Energy, LLC
(the “Company”), and Fagen Energy, LLC (“Fagen”) for the purpose of setting
forth the terms and conditions under which the Company shall redeem 3,000,000
of its Class A membership units (the “Units”) from Fagen.

 

WITNESSETH:

 

WHEREAS, Fagen
purchased the Units from Schwark Jensen Golden Grain, LLC (“Schwarck Jensen”),
pursuant to that certain Membership Purchase Agreement dated as of January 31,
2006(the “Schwarck Jensen Agreement”); and

 

WHEREAS, the Company desires to redeem, and Fagen
desires to have redeemed as of the Redemption Date, the Units pursuant to the
terms and conditions set forth below.

 

NOW,
THEREFORE, in consideration of the mutual promises and
covenants set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties do hereby
agree as follows:

 

SECTION
1

 

Redemption Price and Manner of Payment

 

1.1           Redemption
Price.   The redemption price (the “Redemption
Price”) for the Units shall be Two Dollars and Sixty Two and One-Half Cents ($2.625)
per Unit, or a total of Seven Million Eight Hundred Seventy Five Thousand
Dollars ($7,875,000).

 

1.2           Manner
of Payment.   Payment of the entire
Redemption Price by certified check or wire transfer of immediately available
funds delivered by the Company to Fagen within two (2) business days the
Redemption Date.

 

SECTION
2

 

REPRESENTATIONS
AND WARRANTIES OF COMPANY

 

The Company hereby makes
the following representations and warranties to Fagen, and agrees to carry out
the covenants and agreements hereinafter set forth:

 

2.1           Capitalization and Ownership of
Units.   The Company currently has 30,000,000
Class A Units authorized, of which 26,676,400 Class A units are presently
issued and outstanding, all of which outstanding Units are fully paid and
non-assessable and have been legally issued. There are no existing options,
calls or commitments of any character relating to any Units or to in any manner
issue any Units.

 

2.2           Organization.   The Company is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Iowa. The execution and delivery of this Agreement does not, and the
consummation of the transaction contemplated hereby will not, violate or breach
any provision of the Company’s Articles of Organization or Operating Agreement,
both as amended through the Redemption Date (the “Governing Documents”) or any
other agreements, whether

 

 

written or oral, to or by
which the Company is bound. Any waiver of any provision or requirement
contained in the Governing Documents relating to this Agreement and/or the
Schwarck Jensen Agreement, and the transactions contemplated hereby and
thereby, has been properly and duly made and is legally binding and enforceable
against the Company in accordance with its terms.

 

2.3           Authorization and Binding
Obligation.   This Agreement constitutes
a legal, valid, and binding obligation of Company, enforceable against Company
in accordance with its terms.

 

2.4           Securities Laws.   The Units were not offered, sold or issued in
violation of the Securities Act of 1933, as amended, and all rules and
regulations promulgated thereunder (the “Securities Act”) and were and are
registered under the Securities Exchange Act of 1934, as amended, and all rules
and regulations promulgated thereunder (the “Exchange Act”). The Units were
offered, sold, issued and are registered under all applicable state securities
laws (the “Blue Sky Laws”). The redemption of the Units does not and will not
violate the Securities Act, the Exchange Act or any applicable Blue Sky Laws.

 

SECTION 3

 

REPRESENTATIONS AND WARRANTIES OF FAGEN

 

Fagen hereby makes the
following representations and warranties to the Company, and agrees to carry
out the covenants and agreements hereinafter set forth:

 

3.1           Organization, Standing and
Authority.   Fagen is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Minnesota. Fagen has the necessary power to execute, deliver, and
perform this Agreement and the documents contemplated hereby according to their
respective terms.

 

3.2           Authorization.   This Agreement constitutes a legal, valid,
and binding obligation of Fagen, enforceable against Fagen in accordance with
its terms.

 

3.3           Marketable Title.   Based solely and exclusively upon the
representations of Schwarck Jensen to Fagen in the Schwarck Jensen Agreement:
(a) Fagen has good and marketable title to the Units;  (b) the Units delivered by Fagen to the
Company shall be free and clear of all liens, charges, security interests and
encumbrances; (c) no person or entity other than Fagen has any right, title or
interest in or to the Units. Fagen has not transferred, sold or pledged the
Units or any right, title or interest therein since the Units were acquired
from Schwarck Jensen under the Schwarck Jensen Agreement.

 

3.4           Legal and Governmental Proceedings.
  Fagen is not subject to any order of
any court or governmental authority or agency and there are no legal actions or
governmental proceedings or investigations pending or, to the best of Fagen’s
knowledge, threatened, which would have a material adverse impact on Fagen or
would adversely affect the Company or Fagen’s ability to perform according to
the terms of this Agreement.

 

SECTION
4

 

DEFAULT

 

4.1           Default.   In the event Fagen defaults or is in breach
of its obligations under this Agreement by failing to consummate the redemption
as described herein, or fails to perform or observe

 

2

 

any other term or
condition of this Agreement, then this Agreement shall be in default and the
Company shall be entitled to pursue all remedies available at law or in equity.

 

SECTION
5

 

ADDITIONAL
UNDERTAKINGS

 

5.1           Additional Instruments.   Each party to this Agreement shall execute
and deliver or use its best efforts to cause to be executed and delivered such
additional instruments and documents as any other party may reasonably request
for the purpose of carrying out this Agreement.

 

SECTION
6

 

SURVIVAL OF COVENANTS, REPRESENTATIONS AND

WARRANTIES

 

6.1           Covenants.   All covenants contained in this Agreement
shall survive Redemption Date.

 

6.2           Representations and Warranties.   All
representations and warranties contained in this Agreement shall be deemed
continuing representations and warranties and shall survive Redemption Date.

 

SECTION
7

 

INDEMNIFICATIONS

 

7.1           Indemnification by the Company.
  The Company shall indemnify and hold
Fagen harmless against and with respect to, and shall reimburse Fagen any and
all losses, liabilities or damages resulting from any untrue representation,
breach of warranty or nonfulfillment of any covenant by the Company contained
herein or in any certificate, document or instrument delivered to Fagen
hereunder as well as any losses, liabilities or damages resulting form or
related to Fagen’s acquisition of the Units pursuant to the Schwarck Jensen
Agreement and the redemption by the Company of the Units hereunder.

 

7.2           Indemnifications by Fagen.   Fagen
shall indemnify and hold the Company harmless against and with respect to, and
shall reimburse the Company for any and all losses, liabilities or damages
resulting from any untrue representation, breach of warranty or nonfulfillment
of any covenant by Fagen contained herein or in any certificate, document or
instrument delivered to the Company hereunder.

 

7.3           Attorneys’ Fees.   The
indemnity set forth in Sections 7.1 and 7.2 above shall include providing
reasonable attorneys’ fees and costs to the other party as required to enforce
the terms of said  indemnity.

 

7.4           Notices.   The Company and Fagen shall provide the other
with as much notice as possible of a potential claim pursuant to this Section.

 

3

 

SECTION 8

 

MISCELLANEOUS

 

8.1           Notices.   Any notice or communication required or
performed hereunder shall be sufficiently given if sent by registered or
certified mail, postage prepaid to the following individuals:

 

	
  To
  Company:

  	
  Golden
  Grain Energy, LLC

  
	
   

  	
  1822
  43rd St. SW

  
	
   

  	
  Mason
  City, IA 50401

  
	
   

  	
   

  
	
  To Fagen:

  	
  Ron or Diane Fagen

  
	
   

  	
  501 West Highway 212

  
	
   

  	
  P.O. Box 159

  
	
   

  	
  Granite Falls, MN 56241

  

 

Any such notice
shall become effective on the third day after the day of mailing thereof,
postage prepaid, registered or certified mail.

 

8.2           Contents of Agreement.   This Agreement sets forth the entire
understanding of the parties and supersedes any prior agreement or
understanding relating to the subject matter of this Agreement. It shall be
changed or terminated only by an instrument executed by all parties hereto in
writing.

 

8.3           No Assignments.   No 
party may assign nor delegate any of 
its rights or obligations hereunder without first obtaining the written
consents of the other parties to this Agreement.

 

8.4           Binding on Successors.   All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors, personal representatives, heirs and permitted
assigns of the parties hereto.

 

8.5           Governing Law.   This
Agreement is being delivered and is intended to be performed in the State of Iowa
and shall be construed and enforced in accordance with the laws of the State of
Iowa.

 

8.6           Interpretation.   Wherever
used herein the masculine gender shall include the feminine and neuter genders,
and vice versa, as the context shall require. The paragraph headings are
included solely for convenience and shall in no event affect, or be used in
connection with, the interpretation of this Agreement.

 

8.7           Counterparts.   This Agreement may be executed in any number
of counterparts, including without limitation via facsimile or other electronic
means, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement shall become effective
at such time as counterparts thereof have been executed by each of the parties
and it shall not be a condition to its effectiveness that each of the parties
has executed the same counterpart.

 

8.8           Construction.   Each party hereto has had the opportunity to
fully negotiate the terms hereof and modify the draftsmanship of this Agreement.
Therefore, the terms of this Agreement shall not be construed and interpreted
with any presumption, inference or rule requiring construction or
interpretation of any provision of this Agreement against the interest of the
party causing this Agreement to be drafted.

 

4

 

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

 

	
  COMPANY:

  
	
   

  
	
   

  	
  Golden Grain Energy,
  LLC

  
	
   

  
	
   

  
	
  By:

  	
   /s/ Walter Wendland

  	
   

  
	
  Its:

  	
   President

  	
   

  
	
   

  
	
   

  
	
  FAGEN:

  
	
   

  
	
   

  	
  Fagen Energy, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Diane Fagen

  	
   

  
	
  Its:

  	
  CEO & President

  	
   

  
					

 

5Exhibit 10.1

 

 

 

 

ALLIANT
TECHSYSTEMS INC.

INCOME
SECURITY PLAN

 

Effective
March 13, 2006

 

 

CONTENTS

 

	
  SECTION 1.

  	
  PURPOSE AND TERM

  	
  1

  
	
   

  	
  1.1

  	
  Purpose

  	
  1

  
	
   

  	
  1.2

  	
  Type of Plan

  	
  1

  
	
   

  	
  1.3

  	
  Term; Effect of Change in Control

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  DEFINITIONS

  	
  2

  
	
   

  	
  2.1

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  UNPAID COMPENSATION AND SEVERANCE BENEFITS

  	
  7

  
	
   

  	
  3.1

  	
  Right to Unpaid Compensation and Severance Benefits

  	
  7

  
	
   

  	
  3.2

  	
  Severance Benefits for Tier 1 Participants and Tier
  2 Participants

  	
  8

  
	
   

  	
  3.3

  	
  Severance Benefits for Tier 1 Participants

  	
  8

  
	
   

  	
  3.4

  	
  Severance Benefits for Tier 2 Participants

  	
  9

  
	
   

  	
  3.5

  	
  Treatment of Stock Awards in the Event of Delisting

  	
  10

  
	
   

  	
  3.6

  	
  Termination Due to Disability or Death

  	
  10

  
	
   

  	
  3.7

  	
  Termination for Cause or by the Participant Without
  Good Reason

  	
  11

  
	
   

  	
  3.8

  	
  Notice of Termination

  	
  11

  
	
   

  	
  3.9

  	
  Payment of Severance Benefits

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  RELEASE AND RESTRICTIVE COVENANTS

  	
  11

  
	
   

  	
  4.1

  	
  Release

  	
  11

  
	
   

  	
  4.2

  	
  Restrictive Covenants

  	
  11

  
	
   

  	
  4.3

  	
  Services of Participant

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  TRUST

  	
  11

  
	
   

  	
  5.1

  	
  Establishment of Trust

  	
  11

  
	
   

  	
  5.2

  	
  Trust Assets

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  EXCISE TAXES

  	
  12

  
	
   

  	
  6.1

  	
  Gross-Up Payment

  	
  12

  
	
   

  	
  6.2

  	
  Payment Date

  	
  13

  
	
   

  	
  6.3

  	
  Controversies with Taxing Authorities

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  CLAIMS PROCEDURE

  	
  14

  
	
   

  	
  7.1

  	
  Original Claim

  	
  14

  
	
   

  	
  7.2

  	
  General Rules

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  RIGHTS TO SEVERANCE BENEFITS AND LEGAL FEES

  	
  15

  
	
   

  	
  8.1

  	
  Severance Benefits Payments

  	
  15

  
	
   

  	
  8.2

  	
  Legal Fees and Expenses

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  SUCCESSORS

  	
  15

  
	
   

  	
  9.1

  	
  Successors to the Company

  	
  15

  
	
   

  	
  9.2

  	
  Assignment by the Participant

  	
  15

  

 

i

 

	
  SECTION 10.

  	
  MISCELLANEOUS

  	
  16

  
	
   

  	
  10.1

  	
  Administration
  and Committee Powers

  	
  16

  
	
   

  	
  10.2

  	
  Employment
  Status

  	
  16

  
	
   

  	
  10.3

  	
  Entire Plan and
  Other Change in Control Plans

  	
  16

  
	
   

  	
  10.4

  	
  Notices

  	
  16

  
	
   

  	
  10.5

  	
  Includable
  Compensation

  	
  16

  
	
   

  	
  10.6

  	
  Tax Withholding

  	
  16

  
	
   

  	
  10.7

  	
  Section 409A
  of the Code

  	
  16

  
	
   

  	
  10.8

  	
  Severability

  	
  17

  
	
   

  	
  10.9

  	
  Amendment and
  Waiver

  	
  17

  
	
   

  	
  10.10

  	
  Applicable Law

  	
  17

  
	
   

  	
  10.11

  	
  Rules of
  Construction

  	
  17

  

 

ii

 

ALLIANT
TECHSYSTEMS INC.

 

INCOME
SECURITY PLAN

 

SECTION 1.                                PURPOSE AND TERM

 

1.1                                 Purpose.
The purpose of this Income Security Plan (this “Plan”) is to provide income
security protection to certain executives of Alliant Techsystems Inc. (the “Company”)
in order to (a) ensure that such executives make good corporate decisions
with respect to a possible Change in Control (as defined in Section 2.1)
of the Company, even if such a Change in Control may have adverse personal
consequences (such as the loss of the executive’s employment with the Company),
(b) maximize stockholder value by keeping such executives engaged during
periods of uncertainty relating to a possible Change in Control, and (c) provide
such executives with the ability to transition to new employment if their
employment with the Company is terminated as a result of a Change in Control.

 

1.2                                 Type
of Plan. This Plan is a severance pay plan maintained primarily for the
benefit of a select group of management or highly compensated individuals
within the meaning of ERISA (as defined in Section 2.1). This Plan will be
administered and interpreted (i) in a manner consistent with such intent
and (ii) in accordance with Section 409A of the Code (as defined in Section 2.1)
and other applicable Tax (as defined in Section 2.1) laws and regulations,
including, without limitation, any regulations promulgated pursuant to Section 409A
of the Code. Notwithstanding the foregoing, neither the Company nor any of its
officers, directors, agents or affiliates will be obligated, directly or
indirectly, to any Participant for any Taxes that may be imposed on such
Participant (a) on account of any amounts due or paid under this Plan
(except as otherwise expressly provided in Section 6) or (b) on
account of any failure to comply with any provision of the Code.

 

1.3                                 Term;
Effect of Change in Control.

 

(a)                                  This
Plan is effective on March 13, 2006 (the “Effective Date”) and will
continue in effect until this Plan is terminated by the Committee (as defined
in Section 2.1). The Committee may terminate this Plan at any time.
If a notice terminating this Plan is properly delivered by the Committee, this
Plan, along with all corresponding rights, duties and covenants, will
immediately terminate; provided, however, that in the event a
Change in Control occurs within 12 months after receipt of such notice, such termination
of the Plan will be deemed null and void, and the participation of the
Participants in this Plan will not be affected by such notice (unless such
termination of this Plan or participation by any Participant herein is required
by the terms of any final order or a federal or state court or regulatory
agency of competent jurisdiction).

 

(b)                                 Notwithstanding
Section 1.2(a), in the event that a Change in Control occurs during the
term of the Plan, the Committee may not terminate the Plan during the period
beginning on the date of such Change in Control through the third anniversary
date of the Change in Control. This Plan will thereafter automatically
terminate.

 

 

SECTION 2.                                DEFINITIONS

 

2.1                                 Definitions.
The following capitalized terms used in this Agreement will have the meanings
set forth below:

 

(a)                                  “Annual
Base Salary” means, at any time, the then regular annual rate of cash
compensation that a Participant is receiving as annual salary, excluding all
other kinds of compensation.

 

(b)                                 “Annual
Incentive Plan” means any incentive compensation plan of the Company with a
performance period of one year or less (other than an Equity Incentive Plan) in
which a Participant participates on the date of any Qualifying Termination of
such Participant, unless the Committee otherwise determines that such plan is a
Long-Term Cash Incentive Plan.

 

(c)                                  “Beneficial
Owner” or “Beneficial Ownership” will have the meaning given to such
term in Rule 13d-3 under the Exchange Act.

 

(d)                                 “Board”
or “Board of Directors” means the Board of Directors of the Company.

 

(e)                                  “Cause”
means the occurrence of either of the following:

 

(i)                                     the
Participant willfully and continually fails to substantially perform his
or her duties of employment (other than because of a mental or physical impairment)
for a period of at least 30 days after being given notice of such failure;

 

(ii)                                  the
Participant (A) engages in any act of dishonesty, wrongdoing or moral
turpitude (whether or not a felony) or (B) violates the Company’s Code of
Conduct or a Company policy, which violation has an adverse effect upon the
Company; or

 

(iii)                               the
Participant breaches his or her duty of loyalty or commits an unauthorized
disclosure of proprietary or confidential information of the Company.

 

(f)                                    “Change
in Control” means the occurrence of any of the following:

 

(i)                                     The
acquisition by any Person of Beneficial Ownership of 40% or more of the
outstanding shares of the Company’s Voting Securities;

 

(ii)                                  The
consummation of a reorganization, merger or consolidation of the Company or
sale or other disposition of all or substantially all of the assets of the
Company (a “Corporate Transaction”), unless such Corporate Transaction is a
transaction pursuant to which all or substantially all of the Persons who are
the Beneficial Owners of the Company immediately prior to the Corporate

 

2

 

Transaction will
beneficially own, directly or indirectly, 60% or more of the outstanding shares
of Voting Securities of the resulting or combined entity;

 

(iii)                               Individuals
who, as of the Effective Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided,
however, that (A) any individual who becomes a member of the Board
subsequent to the Effective Date, whose election (or nomination for election by
the Company’s stockholders) was approved by the vote of at least a majority of
the Directors then comprising the Incumbent Board will be deemed a member of
the Incumbent Board and (B) any individual who is initially elected as a
member of the Board as a result of any actual or threatened solicitation of
proxies or consents by or on behalf of any Person other than the Board will not
be deemed a member of the Incumbent Board;

 

(iv)                              Approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company; or

 

(v)                                 Any
other circumstances (whether or not following a Change Event) which the Board
determines to be a Change in Control for purposes of this Plan after giving due
consideration to the nature of the circumstances then presented and the
purposes of this Plan. Any such determination made by the Board will be
irrevocable except by vote of a majority of the members of the Board who voted
in favor of making such determination.

 

For purposes of this Section 2.1(f), a “Change in
Control” will not result from any transaction precipitated by the Company’s
insolvency, appointment of a conservator or determination by a regulatory
agency that the Company is insolvent.

 

(g)                                 “Change
Event” means either of the following:

 

(i)                                     The
acquisition by any Person (other than the Company or a subsidiary or an
employee benefit plan (including its trustee) of the Company) of Beneficial
Ownership, directly or indirectly, of shares of Voting Securities of the
Company directly or indirectly representing 15% or more of the total number of
the then outstanding shares of the Company’s Voting Securities (excluding the
sale or issuance of any Voting Securities directly by the Company, or any transaction
in which the acquisition of such Voting Securities is made by such Person from
five or fewer stockholders in a transaction or transactions approved in advance
by the Board); or

 

(ii)                                  The
public announcement by any Person of an intention to acquire the Company
through a tender offer, exchange offer or other unsolicited proposal.

 

(h)                                 “Code”
means the U.S. Internal Revenue Code of 1986, as amended from time to time.

 

3

 

(i)                                     “Committee”
means the Personnel and Compensation Committee of the Board, or, if no
Personnel and Compensation Committee exists, then a committee of independent
Board members appointed by the Board to administer this Plan.

 

(j)                                     “Common
Stock” means the common stock, par value $.01 per share, of the Company.

 

(k)                                  “Disability”
or “Disabled” will have the meaning given to such term in the Company’s
governing long-term disability plan or, if no such plan exists, such term will
mean total and permanent disability as determined under the rules of the
Social Security Administration.

 

(l)                                     “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

 

(m)                               “Equity
Incentive Plan” means any incentive compensation plan of the Company
providing for the grant of Stock Awards in which a Participant participates on
the date of any Qualifying Termination of such Participant.

 

(n)                                 “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time.

 

(o)                                 “Group
Health Plan” means any group health plan generally available to all
employees of the Company in which a Participant participates on the date of any
Qualifying Termination of such Participant.

 

(p)                                 “Good
Reason” means, without a Participant’s express written consent, the
occurrence after a Change Event or a Change in Control, as the case may be,
of any one or more of the following:

 

(i)                                     A
material reduction of such Participant’s authorities, duties or
responsibilities as an executive and/or officer of the Company from those in
effect immediately prior to such Change Event or Change in Control, other than (A) an
insubstantial reduction or (B) a substantial reduction that is remedied by
the Company within 30 days after receipt of notice thereof given by the
Participant;

 

(ii)                                  The
Company’s requiring the Participant to be based at a location in excess of 50
miles from the Participant’s principal job location immediately prior to such
Change Event or Change in Control, unless such requirement is withdrawn by the
Company within 30 days after notice thereof given by the Participant;

 

(iii)                               A
reduction by the Company of the Participant’s Annual Base Salary in effect
immediately prior to such Change Event or Change in Control, or as such Annual
Base Salary has been increased thereafter, unless such reduction is remedied by
the Company within 30 days after notice thereof given by the Participant;

 

4

 

(iv)                              The
failure of the Company to continue in effect, or the failure to continue the
Participant’s participation on substantially the same basis in, any Annual
Incentive Plan, Long-Term Cash Incentive Plan or Equity Compensation Plan in
which the Participant participates immediately prior to such Change Event or
Change in Control, unless such failure is remedied by the Company within 30
days after notice thereof given by the Participant; and

 

(v)                                 If
such Change in Control results in a successor to the Company, the failure of
the Company to obtain a satisfactory agreement from such successor to assume
and agree to perform the Company’s obligations under this Plan, as
contemplated by Section 9.1.

 

Unless the Participant becomes Disabled, the
Participant’s right to terminate employment for Good Reason will not be
affected by the Participant’s incapacity due to physical or mental illness. The
Participant’s continued employment will not constitute consent to, or a waiver
of rights with respect to, any action or circumstance constituting Good Reason.

 

(q)                                 “Long-Term
Cash Incentive Plan” means (i) any cash incentive compensation plan of
the Company with a performance period of more than one year (other than an
Equity Incentive Plan) or (ii) or any other cash incentive compensation
plan the Committee determines is a Long-Term Cash Incentive Plan (other than an
Equity Incentive Plan), in each case in which a Participant participates on the
date of any Qualifying Termination of such Participant.

 

(r)                                    “Notice
of Termination” means a written notice indicating the specific provision in
this Plan relied upon for the termination of employment of any Participant.
Such notice will set forth in reasonable detail the facts and circumstances
claimed to provide the basis for such termination pursuant to such provision.

 

(s)                                  “Participant”
means any of the Tier 1 Participants or Tier 2 Participants.

 

(t)                                    “Performance
Vesting Stock Award” means any Stock Award the vesting and payment of which
is based on achievement of performance goals rather than solely on the
continued employment of a Participant.

 

(u)                                 “Perquisites”
means any automobile allowance, financial planning services, employment
outplacement services or other perquisites provided to a Participant under any
benefit plan or program of the Company that provides special benefits to a
select group of management or highly compensated employees in which such
Participant participates on the date of any Qualifying Termination of such
Participant.

 

(v)                                 “Person”
will have the meaning given to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof
(including a “group” as defined in Section 13(d)).

 

(w)                               “Qualified
401(k) Plan” means any Retirement Plan of the Company with a voluntary
elective deferral arrangement intended to be qualified under Sections 401(a)

 

5

 

and 401(k) of the Code in
which a Participant participates on the date of any Qualifying Termination of
such Participant.

 

(x)                                   “Qualifying
Termination” means a Post-Change in Control Qualifying Termination (as
defined in Section 3.1(a)) or a Pre-Change in Control Qualifying
Termination (as defined in Section 3.1(b)), as the case may be; provided,
however that a Qualifying Termination will not occur unless the
Participant’s termination of employment qualifies as a “separation from service”
(within the meaning of Section 409A of the Code).

 

(y)                                 “Retirement
Plan” means any “employee pension benefit plan” (within the meaning of Section 3(2) of
ERISA) of the Company, including, without limitation, any Qualified 401(k) Plan
and any SERP.

 

(z)                                   “SERP”
means (i) the Company’s Supplemental Executive Retirement Plan, or (ii) any
other non-qualified supplemental retirement plan or agreement pursuant to which
any Participant is entitled to receive supplemental retirement benefits on the
date of any Qualifying Termination of such Participant.

 

(aa)                            “Severance
Benefits” mean the severance benefits provided for in Section 3.2, 3.3
and 3.4.

 

(bb)                          “Stock
Award” means any equity-based incentive award (including any award, without
limitation, of stock options, stock appreciation rights, restricted stock or
restricted stock units, or any Performance Vesting Stock Awards).

 

(cc)                            “Target
Level” means the “target” performance level (or other reasonably expected
median performance goal) established for purposes of any Annual Incentive Plan,
Long-Term Cash Incentive Plan or Performance Vesting Stock Award.

 

(dd)                          “Tax”
or “Taxes” means all taxes, charges, fees, levies or other assessments
and impositions of any kind, payable to any governmental entity, including,
without limitation, all net income, profits, gross income, alternative minimum,
payroll, employment, social security, Medicare, unemployment, withholding,
disability, workers’ compensation, excise, or other taxes or fees, assessments
or charges of any kind whatsoever, including, without limitation, all interest
and penalties thereon, and additions to tax or additional amounts imposed by
any taxing authority.

 

(ee)                            “Tier 1
Participant” means each of the Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer and General Counsel of the Company.

 

(ff)                                “Tier 2
Participant” means any executive officer of the Company (other than a
Tier 1 Participant) required to file reports of beneficial ownership with
the Securities and Exchange Commission pursuant to Section 16(a) of
the Exchange Act and the rules and regulations promulgated thereunder.

 

(gg)                          “Unpaid
Compensation” means any of the following:

 

6

 

(i)                                     Any
unpaid Annual Base Salary, accrued vacation pay and unreimbursed business expenses
owed to any Participant through the date of the Qualifying Termination of such
Participant;

 

(ii)                                  Any
amount payable to such Participant as of the date of such Participant’s
Qualifying Termination under any Annual Incentive Plan in effect for the most
recently completed fiscal year, to the extent not previously paid; and

 

(iii)                               Any
amount payable to such Participant as of the date of such Participant’s
Qualifying Termination under any Long-Term Cash Incentive Plan in effect for
any completed performance period, to the extent not previously paid.

 

(hh)                          “Voting
Securities” means any shares of capital stock of any entity that are
generally entitled to vote in elections for members of the board of directors.

 

SECTION 3.                                UNPAID COMPENSATION AND SEVERANCE BENEFITS

 

3.1                                 Right
to Unpaid Compensation and Severance Benefits.

 

(a)                                  Subject
to the terms and conditions of this Plan, a Participant will be entitled to
receive from the Company any Unpaid Compensation and the Severance Benefits
described in Sections 3.2, 3.3 and 3.4 (as applicable) if (i) during
the term of this Plan, a Change in Control occurs and (ii) within 36
months thereafter, the Participant’s employment with the Company is terminated
by the Company without Cause or voluntarily by the Participant for Good Reason.
The termination of a Participant’s employment that entitles the Participant to
Severance Benefits pursuant to this Section 3.1(a) is referred to in
this Plan as a “Post-Change in Control Qualifying Termination.”  A “Post-Change in Control Qualifying
Termination” will not include a termination of a Participant’s employment by
reason of death or Disability, the Company’s termination of a Participant’s
employment for Cause or a Participant’s voluntary termination without Good
Reason.

 

(b)                                 Subject
to the terms and conditions of this Plan, a Participant will also be entitled
to receive from the Company any Unpaid Compensation and the Severance Benefits
described in Sections 3.2, 3.3 and 3.4 (as applicable) if (i) during the
term of this Plan, a Change Event and a Change in Control occur and (ii) within
12 months after such Change Event and no more than 12 months prior to such
Change in Control, such Participant’s employment with the Company is terminated
by the Company without Cause or voluntarily by the Participant for Good Reason;
provided, however, that the Participant will only be entitled to
receive such Severance Benefits if the Participant can demonstrate that such
termination by the Company or event constituting Good Reason (A) occurred
at the specific request of a third party with which the Company had entered
into negotiations or an agreement regarding a subsequent Change in Control or (B) otherwise
occurred in connection with (or in anticipation of) such Change in Control. The
termination of a Participant’s employment that entitles the Participant to
Severance Benefits pursuant to this Section 3.1(b) is referred to in
this Plan as a “Pre-Change in Control Qualifying Termination.”  A “Pre-Change in Control Qualifying
Termination”

 

7

 

will not include a
termination of a Participant’s employment by reason of death or Disability, the
Company’s termination of a Participant’s employment for Cause or a Participant’s
voluntary termination without Good Reason.

 

(c)                                  Any
Unpaid Compensation will be paid in cash to a Participant in a single lump sum
within 30 days after the date of the Qualifying Termination of such
Participant.

 

3.2                                 Severance
Benefits for Tier 1 Participants and Tier 2 Participants. In the event the
Company is obligated to provide Severance Benefits to any Participant pursuant
to Section 3.1, such Participant will receive the following:

 

(a)                                  The
cash amount such Participant would receive under the Annual Incentive Plan in
effect for the fiscal year in which such Participant’s Qualifying Termination
occurs. If such Qualifying Termination occurs within the first three quarters
of any fiscal year, such cash amount will be determined based on the assumption
that the Target Level of performance under such Annual Incentive Plan had been
achieved. If the Qualifying Termination occurs in the fourth quarter of any
fiscal year, such cash amount will be determined based on projected actual
performance (unless Target Level performance would result in a larger cash
payment, in which event the amount of the cash payment will be determined based
on the assumption that Target Level performance had been achieved). In each
case, the cash amount will be adjusted on a pro rata basis to reflect the
number of days the Participant was actually employed during such fiscal year.

 

(b)                                 The
cash amount such Participant would receive under any Long-Term Cash Incentive
Plan in effect at the time such Participant’s Qualifying Termination occurs,
assuming the Target Level of performance under such Long-Term Cash Incentive
Plan had been achieved.

 

(c)                                  Any
Stock Awards of the Participant (other than Performance Vesting Stock Awards)
will become immediately vested in full on the date of a Qualifying Termination
of the Participant.

 

(d)                                 Any
Performance Vesting Stock Awards of the Participant will become immediately
vested and payable on the date of a Qualifying Termination of such Participant,
assuming the Target Level of performance under such Performance Vesting Stock
Award had been achieved.

 

(e)                                  A
cash amount, determined in the sole discretion of the Committee, with a value
equal to any Perquisites that would have been provided to the Participant for a
period of one year following the Qualifying Termination of such Participant.

 

3.3                                 Severance
Benefits for Tier 1 Participants. In the event the Company is
obligated to provide Severance Benefits to any Tier 1 Participant pursuant
to Section 3.1, such Tier 1 Participant will receive (in addition to
the Severance Benefits described in Section 3.2) the following:

 

(a)                                  A
cash amount equal to the sum of:  (i) three
times the Tier 1 Participant’s Annual Base Salary in effect on the date of
his or her Qualifying Termination, plus 

 

8

 

(ii) three times the
Tier 1 Participant’s then current bonus opportunity established under any
Annual Incentive Plan, assuming the Target Level of performance under such
Annual Incentive Plan had been achieved.

 

(b)                                 A
cash amount equal to three times the maximum match (determined on an annual
basis) the Tier 1 Participant would have received under any Qualified
401(k) Plan for the calendar year in which such Tier 1 Participant’s
Qualifying Termination occurs, assuming such Tier 1 Participant had (i) earned
“recognized compensation” during such calendar year equal to or greater than
the maximum dollar amount permitted under the Code and (ii) deferred into
the Qualified 401(k) Plan such maximum dollar amount for the calendar year.

 

(c)                                  A
cash amount, determined in the sole discretion of the Committee, with a value
equal to the benefits that would have been provided to the Participant for a
period of three years after the date of such Participant’s Qualifying
Termination under the Group Health Plan.

 

(d)                                 An
additional supplemental retirement benefit equal to the increase to the
Tier 1 Participant’s benefit under any SERP that would have occurred if
the amount of such Tier 1 Participant’s benefit payable under the SERP was
determined based on the assumption that the Tier 1 Participant had been
continuously employed by the Company for the three-year period following the
date of such Tier 1 Participant’s Qualifying Termination (with respect to
both the Tier 1 Participant’s age and years of service); provided, however,
that neither the time nor the form of payment of such Tier 1
Participant’s benefit under the SERP will be affected by such additional age
and service credit. In determining the amount of such additional supplemental
retirement benefit, a Tier 1 Participant’s “recognized compensation” will
be deemed to include his or her Annual Base Salary and any payments received by
the Tier 1 Participant pursuant to any Annual Incentive Plan during the
year preceding his or her Qualifying Termination.

 

3.4                                 Severance
Benefits for Tier 2 Participants. In the event the Company is
obligated to provide Severance Benefits to any Tier 2 Participant pursuant
to Section 3.1, such Tier 2 Participant will receive (in addition to
the Severance Benefits described in Section 3.2) the following:

 

(a)                                  A
cash amount equal to the sum of:  (i) two
times the Tier 2 Participant’s Annual Base Salary in effect on the date of
his or her Qualifying Termination, plus (ii) two times the Tier 2
Participant’s then current bonus opportunity established under any Annual
Incentive Plan, assuming the Target Level of performance under such Annual
Incentive Plan had been achieved.

 

(b)                                 A
cash amount equal to two times the maximum match (determined on an annual
basis) the Tier 2 Participant could have received under any Qualified
401(k) Plan for the calendar year in which such Tier 2 Participant’s
Qualifying Termination occurs, assuming such Tier 2 Participant had (i) earned
“recognized compensation” during such calendar year equal to or greater than
the maximum dollar amount permitted under the

 

9

 

Code and (ii) deferred
into the Qualified 401(k) Plan such maximum dollar amount for the calendar
year.

 

(c)                                  A
cash amount, determined in the sole discretion of the Committee, with a value
equal to the benefits that would have been provided to the Participant for a
period of two years after the date of such Participant’s Qualifying Termination
under the Group Health Plan.

 

(d)                                 An
additional supplemental retirement benefit equal to the increase to the
Tier 2 Participant’s benefit under any SERP that would have occurred if
the amount of such Tier 2 Participant’s benefit payable under the SERP was
determined based on the assumption that the Tier 2 Participant had been
continuously employed by the Company for the two-year period following the date
of such Tier 2 Participant’s Qualifying Termination (with respect to both
the Tier 2 Participant’s age and years of service); provided, however,
that neither the time nor the form of payment of such Tier 2
Participant’s benefit under the SERP will be affected by such additional age
and service credit. In determining the amount of such additional supplemental
retirement benefit, a Tier 2 Participant’s “recognized compensation” will
be deemed to include his or her Annual Base Salary and any payments received by
the Tier 2 Participant pursuant to any Annual Incentive Plan during the
year preceding his or her Qualifying Termination.

 

3.5                                 Treatment
of Stock Awards in the Event of Delisting.

 

(a)                                  If,
as a result of a Change in Control, the Common Stock ceases to be listed for
trading on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National Market System (a “Trading System”), and any Voting Securities
of the resulting or surviving entity (as the case may be) are traded on a
Trading System, any Stock Award held by a Participant will be replaced with a
Stock Award of, exercisable into or related to such Voting Securities of such
entity (the “Replacement Equity Awards”). All Replacement Equity Awards will
have terms and conditions substantially the same as the Stock Awards replaced,
and a value equal to such replaced Stock Awards.

 

(b)                                 If,
as a result of a Change in Control, the Common Stock ceases to be listed on a
Trading System, and no Voting Securities of the resulting or surviving entity
(as the case may be) are traded on a Trading System, any Stock Award held
by a Participant will be replaced with a right to receive a cash payment in
lieu of any Common Stock issuable or deliverable to such Participant pursuant
to such Stock Award (a “Replacement Cash Award”). All Replacement Cash Awards
will have terms and conditions substantially the same as the Stock Awards
replaced (except that the Replacement Cash Awards will be payable in cash), and
a value equal to such replaced Stock Award.

 

3.6                                 Termination
Due to Disability or Death. Following a Change in Control, if a Participant’s
employment with the Company is terminated due to Disability or death, the
Company will pay any Unpaid Compensation through the date of such termination
to the Participant or his or her designated beneficiaries (or, if there are no
such designated beneficiaries, to the Participant’s estate), respectively. The
payment of any other amounts or

 

10

 

benefits to the Participant or his or her
beneficiaries or estate will be determined in accordance with any Annual
Incentive Plan, Long-Term Cash Incentive Plan, Equity Incentive Plan, the
Company’s retirement, disability, insurance and survivors’ benefits plans and
programs and other applicable plans and programs of the Company then in effect.

 

3.7                                 Termination
for Cause or by the Participant Without Good Reason. Following a Change in
Control, if a Participant’s employment with the Company is terminated either by
the Company for Cause or voluntarily by such Participant without Good Reason,
the Company will pay the Participant (a) any Unpaid Compensation through
the date of such termination, plus (b) all other amounts to which the
Participant is entitled under any compensation plans of the Company, at the
time such payments are due. The Company will have no further obligations to
such Participant under this Plan.

 

3.8                                 Notice
of Termination. Any termination of a Participant’s employment by the
Company for Cause or by the Participant for Good Reason will be communicated by
Notice of Termination to such Participant or the Committee, as the case may be.

 

3.9                                 Payment
of Severance Benefits. The Severance Benefits described in Sections 3.2(a),
(b) and (e), Sections 3.3(a), (b) and (c) and Sections 3.4(a), (b) and
(c) will be paid in cash to a Participant in a single lump sum within 30
days after the end of the six-month period following the date of the Qualifying
Termination of such Participant (or, if such Participant dies prior to the end
of such six-month period, to the Participant’s designated beneficiaries or
estate within 30 days after the date of such Participant’s death).

 

SECTION 4.                                RELEASE AND RESTRICTIVE COVENANTS

 

4.1                                 Release.
The Severance Benefits are in consideration of a Participant’s release of all
claims against the Company pursuant to an agreement with terms substantially
similar to the terms of the Separation Agreement and General Release of Claims
set forth as Exhibit A to this Plan (the “Release”). If a Participant does
not execute the Release or if he or she effectively revokes it, the Participant
will not be entitled to any Severance Benefits.

 

4.2                                 Restrictive
Covenants. The Company’s obligation to provide the Severance Benefits to a
Participant will be conditioned on the Participant’s continuing compliance with
the confidentiality and non-disparagement, non-competition and non-solicitation
covenants set forth in the Release.

 

4.3                                 Services
of Participant. The Company’s obligation to provide the Severance Benefits
to a Participant will be conditioned upon the Participant’s continuing
compliance with the covenants to provide services to the Company set forth in
the Release.

 

SECTION 5.                                TRUST

 

5.1                                 Establishment
of Trust. At any time but in no event later than the date of a Change in
Control, the Company will establish a trust fund (the “Trust”) for the benefit
of the Participants to secure the Severance Benefits to be provided under this
Plan. The Company will fund the Trust with cash or with a letter of credit not
later than such date of the Change in Control, or such earlier date if
authorized by the Committee. Notwithstanding the foregoing, any

 

11

 

obligations owed by the Company under this Plan are
unfunded and unsecured liabilities of the Company. In the event of the Company’s
insolvency or bankruptcy, the assets of the Trust will be treated like other
corporate assets of the Company and will be subject to the claims of the
Company’s creditors. Claims for benefits under this Plan will be treated like
any other claim by the Company’s unsecured creditors, with no special
preference for Participants.

 

5.2                                 Trust
Assets. Interest earned on amounts deposited by the Company into the Trust
will be for the account of the Company, and, after payment of all cash
Severance Benefits to the Participants under this Plan, any surplus amount held
in the Trust will be retained by the Company. In the event any Participant who
is eligible for Severance Benefits becomes subject to Taxes on the full amount
held in the Trust for such Participant’s benefit, the Company will directly pay
any such taxes due from the Trust.

 

SECTION 6.                                EXCISE TAXES

 

6.1                                 Gross-Up
Payment.

 

(a)                                  In
the event a Participant becomes entitled to receive payments of Severance
Benefits under the Plan, the Company will cause an independent accounting or
other qualified firm (the “Tax Advisor”) promptly to review, at the Company’s
sole expense, the applicability of Section 4999 of the Code to those
payments. The Tax Advisor will determine whether the payment of Severance
Benefits or any other amounts by the Company to a Participant or for a
Participant’s benefit (whether paid or payable pursuant to the terms of this
Plan or otherwise) (the “Total Payments”), would be subject to the excise Tax
imposed by Section 4999 of the Code, and any interest or penalties with
respect to such excise Tax (the excise Tax, together with any such interest and
penalties, are collectively referred to herein as the “Excise Tax”).

 

(b)                                 If
the Tax Advisor determines that the Total Payments would be subject to any
Excise Tax, then the Participant will be entitled to receive an additional cash
payment (a “Gross-Up Payment”) equal to an amount such that after payment by
the Participant of all Excise Taxes and other taxes (including any interest or
penalties imposed with respect to such taxes) imposed upon the Gross-Up
Payment, the Participant would retain an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Total Payments. For purposes of determining
the amount of any Tax pursuant to this Section 6.1, the Participant’s Tax
rate will be deemed to be the highest statutory marginal federal and state Tax
rate (on a combined basis and including the Participant’s share of FICA and
Medicare Taxes) then in effect.

 

(c)                                  Notwithstanding
Section 6.1(b), if the Tax Advisor determines that any Tier 2
Participant is entitled to a Gross-Up Payment, but that the aggregate present
value of the Total Payments (determined pursuant to Section 280G of the
Code and applicable regulations promulgated thereunder) does not exceed 110% of
the greatest amount (the “Safe Harbor Amount”) that could be paid to any
Tier 2 Participant such that the receipt of payments under this Plan would
not give rise to any Excise Tax, then no Gross-Up Payment will be made to such
Tier 2 Participant. In this case, the amounts payable under this Plan will
be reduced so that the aggregate present value of the Total Payments made

 

12

 

to the Tier 2
Participant is reduced to the Safe Harbor Amount. In the event that a cut-back
described in this Section 6.1(c) is required, amounts payable to the
Participant in cash shall be reduced first, followed by a reduction of other
benefits, as determined by the Tax Advisor. In the event that the Tax Advisor
has not made a final determination as to whether a reduction in the aggregate
present value of the Total Payments to the Tier 2 Participant is required
pursuant to this Section 6.1(c) as of the date provided in Section 3.9
of this Plan, the Company shall initially make the payment provided by this
Agreement to the Tier 2 Participant and he or she will be required to
refund to the Company any amounts ultimately determined not to have been
payable under the terms of this Plan.

 

(d)                                 A
Participant will in good faith cooperate with the Tax Advisor in making the
determination of whether a Gross-Up Payment is required (including, without
limitation, providing the Tax Advisor with information or documentation as
reasonably requested by the Tax Advisor).

 

(e)                                  Any
determination by the Tax Advisor regarding whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment will be conclusive and binding
upon the Participant and the Company for all purposes.

 

6.2                                 Payment
Date. Any Gross-Up Payment required to be made by Section 6.1 will be
paid to Participant within 30 days of a final determination by the Tax Advisor
that the Gross-Up Payment is required; provided, however, that
the Gross-Up Payment will not be paid earlier than the Participant’s “earliest
payment date,” which date will be the last day of the six-month period
following the date of the Participant’s Qualifying Termination (or, if such Participant
dies prior to the end of such six-month period, the date of such Participant’s
death). In any event, payment of any required Gross-Up Payment will be made by
the later of (a) the last day of the taxable year in which the Participant’s
earliest payment date occurs or (b) the date that is two and one-half
months after such earliest payment date.

 

6.3                                 Controversies
with Taxing Authorities.

 

(a)                                  The
Company and a Participant will promptly deliver to each other copies of any
written communications (and written summaries of any oral communications) with
any taxing authority regarding the applicability of Section 280G or 4999
of the Code to any portion of the Total Payments. In the event of any
controversy with the Internal Revenue Service or other taxing authority with
regard to the applicability of Section 280G or 4999 of the Code to any
portion of the Total Payments, the Company will have the right (exercisable in
its sole discretion) to control the resolution of such controversy at its own
expense. The Participant and the Company will cooperate in good faith in the
resolution of such controversy.

 

(b)                                 If
the Internal Revenue Service or any other taxing authority makes a final
determination that a greater Excise Tax should be imposed upon the Total Payments
than is determined by the Tax Advisor or reflected in the Participant’s Tax
return pursuant to Section 6.2, the Participant will be entitled to
receive from the Company the full Gross-Up Payment calculated on the basis of
the amount of Excise Tax determined to be

 

13

 

payable by the Internal
Revenue Service or such other taxing authority. Such amount will be paid to
such Participant within 30 days of the date of such final determination by the
Internal Revenue Service or such other taxing authority.

 

SECTION 7.                                CLAIMS PROCEDURE

 

7.1                                 Original
Claim. Any Participant, former Participant, or beneficiary of such
Participant or former Participant, if he or she so desires, may file with
the Committee a written claim for Severance Benefits under this Plan. Within 90
days after the filing of such a claim, the Committee will notify the claimant
in writing whether the claim is upheld or denied (in whole or in part), or will
furnish the claimant a written notice describing specific special circumstances
requiring a specified amount of additional time (but not more than 180 days
from the date the claim was filed) to reach a decision on the claim. If the
claim is denied in whole or in part, the Committee will state in writing:

 

(a)                                  the
specific reasons for the denial;

 

(b)                                 the
pertinent provisions of this Plan on which the denial is based; and

 

(c)                                  any
additional material or information necessary for the claimant to perfect the
claim, and an explanation of why such material or information is necessary.

 

7.2                                 General
Rules. The following general rules will apply to all claims for
Severance Benefits:

 

(a)                                  No
inquiry or question from a Participant regarding Severance Benefits will be
deemed to be a claim, unless made in accordance with the procedures described
in Section 7.1. The Committee may require that any claim for benefits
be filed on forms to be furnished to the claimant upon request.

 

(b)                                 All
decisions on claims will be made by the Committee;

 

(c)                                  The
Committee may, in its discretion, hold one or more hearings on a claim or a
request for a review of a denied claim;

 

(d)                                 A
claimant may be represented by a lawyer or other representative (at the
claimant’s own expense), but the Committee reserves the right to require the
claimant to furnish written notice that such lawyer or other representative is
authorized to represent the claimant;

 

(e)                                  The
decision of the Committee on a claim will be provided to the claimant in
writing. If a decision or notice is not received by a claimant within the time
specified, the claim or request for a review of a denied claim will be deemed
to have been denied; and

 

(f)                                    Prior
to filing a claim, the claimant or his or her lawyer or other representative
will have a reasonable opportunity to review a copy of this Plan and all other
pertinent documents in the possession of the Company.

 

14

 

SECTION 8.                                RIGHTS TO SEVERANCE BENEFITS AND LEGAL FEES

 

8.1                                 Severance
Benefits Payments.

 

(a)                                  This
Plan establishes in a Participant a right to the Severance Benefits to which
such Participant is entitled hereunder, subject to the conditions of Section 4
and to the Committee’s right to terminate or amend this Plan in accordance with
Section 1.3 and 10.9. The Company’s obligation to make the payments or
distributions with respect to Severance Benefits will not be affected by any
circumstances (including, without limitation, any offset, counterclaim,
recoupment, defense or other right which the Company may have against the
Participant). Notwithstanding the foregoing sentence, the Company will have no
obligation to make any payment to any Participant under this Plan to the extent
(but only to the extent) that such payment is prohibited by the terms of any
final order of a federal or state court or regulatory agency of competent
jurisdiction. Such final order will not affect, impair or invalidate any
provision of this Plan not expressly subject to such order.

 

(b)                                 A
Participant will not be obligated to seek other employment in mitigation of the
Severance Benefits the Company is required to provide under this Plan, and the
obtaining of any such other employment will in no event effect any reduction of
the Company’s obligations to provide Severance Benefits under this Plan.

 

8.2                                 Legal
Fees and Expenses. The Company will pay all reasonable legal fees, costs of
litigation, prejudgment interest and other expenses that are incurred in good
faith by a Participant as a result of (a) the Company’s refusal to provide
the Severance Benefits to which the Participant becomes entitled under this
Plan, (b) the Company (or any third party) contesting the validity,
enforceability or interpretation of this Plan or (c) any conflict between
the Participant and the Company pertaining to this Plan; provided, however,
that if a court determines that the Participant’s claims were brought without a
reasonable belief in the merits of such claims, the Company will have no
obligations under this Section 8.2.

 

SECTION 9.                                SUCCESSORS

 

9.1                                 Successors
to the Company. The Company will require any successor to the Company
(whether direct or indirect, by purchase, merger, reorganization,
consolidation, acquisition of property or stock, liquidation or otherwise) to
expressly assume and agree to perform this Plan in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place. Regardless of whether such an agreement to such
express assumption is obtained, this Plan will be binding upon any successor in
accordance with the operation of law, and such successor will be deemed to be
the “Company” for purposes of this Plan.

 

9.2                                 Assignment
by the Participant. This Plan will inure to the benefit of and be
enforceable by the Participant’s personal or legal representatives or
designated beneficiaries. If the Participant dies while any amount would still
be payable to such Participant had he or she continued to live, all such
amounts will be paid in accordance with the terms of this Plan to such

 

15

 

Participant’s designated (or, if there are no such
designated beneficiaries, to the Participant’s estate).

 

SECTION 10.                          MISCELLANEOUS

 

10.1                           Administration
and Committee Powers. This Plan will be administered by the Committee. The
Committee will have full power, discretion and authority to interpret and
construe this Plan, and the Committee’s interpretation and construction of this
Plan will be conclusive and binding on the Participants, the Company and all
other Persons.

 

10.2                           Employment
Status. This Plan is not, and nothing herein will be deemed to create, an
employment contract between the Participant and the Company. The Company may at
any time change any Participant’s compensation, title, employment
responsibilities, job location and any other aspect of the Company’s employment
relationship with such Participant, or terminate such Participant’s employment
prior to a Change in Control (subject to such termination being determined to
be a Pre-Change in Control Qualifying Termination pursuant to Section 3.1(b)).

 

10.3                           Entire
Plan and Other Change in Control Plans.

 

(a)                                  This
Plan contains the entire understanding of the Company and the Participant with
respect to the subject matter hereof. In addition, the payment of any Severance
Benefits in the event of a Participant’s termination of employment will be in
lieu of any severance benefits payable under any other severance plan, program
or policy of the Company to which the Participant might otherwise be entitled.

 

(b)                                 This
Plan completely supersedes any and all prior change in control severance
agreements, understandings or plans (including, without limitation, the Income
Security Plan, as in effect immediately prior to the Effective Date), oral or
written, entered into between the Company and a Participant.

 

10.4                           Notices.
All notices, requests, demands, and other communications hereunder will be
sufficient if in writing and will be deemed to have been duly given if
delivered by hand or if sent by registered or certified mail to the Participant
at the last address he or she has filed in writing with the Company, or, in the
case of the Company, at its principal executive offices.

 

10.5                           Includable
Compensation. Severance Benefits provided hereunder will not be considered “includable
compensation,” “recognized compensation,” “recognized earnings” or “final
average earnings” for purposes of determining the Participant’s benefits under
any other plan or program of the Company, unless otherwise expressly provided
in such other plan or program.

 

10.6                           Tax
Withholding. The Company will withhold from any amounts payable under this
Plan all federal, state or other Taxes legally required to be withheld.

 

10.7                           Section 409A
of the Code. The Company will, to the extent necessary and only to the
extent necessary, modify the timing of delivery of Severance Benefits if the
Company determines that the timing would subject the Severance Benefits to any
additional Tax or interest

 

16

 

assessed under Section 409A of the Code. In such
event, the payments will occur as soon as practicable without causing the
Severance Benefits to trigger such additional Tax or interest under Section 409A
of the Code.

 

10.8                           Severability.
In the event any provision of this Plan is held illegal or invalid for any
reason, the illegality or invalidity will not affect the remaining parts of
this Plan, and this Plan will be construed and enforced as if the illegal or
invalid provision had not been included.

 

10.9                           Amendment
and Waiver.

 

(a)                                  Any
provision of this Plan may be amended or modified (which modification may include
the termination of any Participant’s participation in this Plan) by the
Committee at any time; provided, however, that (i) during
the period beginning on the date of a Change in Control and ending on the third
anniversary date of such Change in Control, no provision of this Plan may be
amended or modified (unless such modification or waiver is agreed to in writing
by any affected Participant) and (ii) if a Change Event occurs during the
12-month period immediately prior to the date of a Change in Control, any
amendment or modification to this Plan during such 12-month period will be
deemed null and void (unless such modification or amendment is agreed to in
writing by any affected Participant).

 

(b)                                 Any
provisions of this Agreement may be waived in writing by the Company or
the Participant, as the case may be.

 

10.10                     Applicable Law. The laws of
the State of Delaware will be the controlling law in all matters relating to
this Plan without giving effect to principles of conflicts of laws.

 

10.11                     Rules of Construction.
Captions are provided in this Plan for convenience only, and such captions will
not serve as a basis for interpretation or construction hereof. Unless
otherwise expressly provided or unless the context otherwise requires, the
terms defined in this Plan include the plural and the singular.

 

17

 

 

EXHIBIT A

 

[FORM AGREEMENT for INCOME SECURITY
PLAN]

 

SEPARATION AGREEMENT

 

AND

 

GENERAL RELEASE OF CLAIMS

 

This Separation Agreement
and General Release of Claims (“Agreement” or “General Release”) is made and entered
into by and between [employee name], on behalf of his/her agents, assigns,
heirs, executors, administrators, attorneys and representatives (“I,” “me,” “Employee”),
and Alliant Techsystems Inc., a Delaware corporation, [include new company name
if applicable] any related corporations or affiliates, subsidiaries,
predecessors, successors and assigns, present or former officers, directors,
stockholders, board members, agents, employees, and attorneys, whether in their
individual or official capacities, delegates, benefit plans and plan
administrators, and insurers (“Company” or “ATK”).

 

WHEREAS, ATK and I have mutually agreed that my employment shall
terminate as provided in this General Release. In consideration of my signing
and complying with this General Release, ATK agrees to provide me with certain
payments and other valuable consideration described below. Further, ATK and I
desire to resolve and settle any and all potential disputes or claims related
to my employment or termination of employment.

 

WHEREAS, this Separation Agreement and General Release is given in
consideration of benefits received pursuant to the Alliant Techsystems Inc.
Income Security Plan.

 

WHEREAS, ATK has expended significant time and money on promotion,
advertising, and the development of goodwill and a sound business reputation
through which it has developed a list of customers and spent time and resources
to learn the customers’ needs for ATK’s services and products. This information
is valuable, special and unique assets of ATK’s business, which I acknowledge
constitutes confidential information.

 

WHEREAS, ATK has expended significant time and money on technology,
research, and development through which it has developed products, processes,
technologies and services, that are valuable, special and unique assets of ATK’s
business, which I acknowledge constitute confidential information.

 

WHEREAS, the disclosure to or use by third parties of any of ATK’s
confidential or proprietary information, trade secrets, or my unauthorized use
of such information would seriously harm ATK’s business and cause monetary loss
that would be difficult, if not impossible, to measure.

 

THEREFORE, ATK and I mutually agree to the following terms and
conditions:

 

A-1

 

1.                                       Termination of Employment. I understand my employment with ATK is terminated
effective [date].

 

(a)                                  Final
Paycheck. My final paycheck will include (a) all salary earned through
the effective date of the termination of my employment with ATK, (b) any
accrued, but unused vacation/PTO, and (c) any cash amounts completely
earned and owing under any bonus plan, but not yet paid.

 

(b)                                 Deferred
Compensation. Any compensation I deferred under the Alliant Techsystems
Inc. Nonqualified Deferred Compensation Plan (or predecessor or successor plan)
shall be paid in accordance with my pre-selected distribution options, if applicable, and
the terms of that plan.

 

2.                                       Severance
Benefits. In exchange for the promises contained herein, ATK will provide
me with the severance benefits contained in the ATK Income Security Plan and
with any additional benefits identified in this Paragraph 2 (together referred
to as “Severance Benefits”):

 

(a)                                  Severance
Pay. I am eligible to receive a single lump-sum severance payment in the
amount of [$          ], which is made up
of [list the amount and category of compensation, ex:  base salary, annual incentive bonus, etc...].
This severance payment will be subject to all applicable withholdings and will
be taxable as payroll wages. No 401(k) deductions will be taken from the
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.

 

(b)                                 Additional
Lump Sum. I am eligible to receive a single lump-sum payment in the amount
of [$          ] in consideration of
certain perquisites and benefits. This amount will be subject to all applicable
withholdings and will be taxable as payroll wages. No 401(k) deductions will be
taken from the 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)                                  Equity
Awards

 

(i)                                     Restricted
Stock. [I have xx shares of restricted stock which will become
nonforfeitable and free and clear of the restrictions of the plan from which
they were issued.]

 

(ii)                                  Performance
Shares. [Identify outstanding performance shares. Provide details on grant,
vesting and delivery. Include the number of shares, proration, if any, and
delivery.]

 

(iii)                               Stock Options. [Identify
status of stock options. Provide details on the number of shares, the grant,
vesting, and exercisability.]

 

A-2

 

(d)                                 Independent
Consideration. I am only eligible for Severance Benefits because I have
signed and not revoked this General Release. I acknowledge that I am not
otherwise entitled to receive such additional and valuable consideration. By my
signature on this General Release, I waive all rights to any other benefits or
cash payment. Further, I agree that these Severance Benefits are adequate
consideration for my promises herein.

 

(e)                                  Delivery
of Severance Pay and Additional Lump Sum. ATK will deliver to me the cash
amounts under paragraph 2(a) and (b), the Severance pay and additional
lump sum, within 30 days of six months after my termination date, provided that
the applicable rescission period has also elapsed. This delivery date may be
delayed further if necessary to be compliant with Section 409A of the U.S.
Internal Revenue Code of 1986, as amended from time to time.

 

3.                                       Post
Employment Restrictions.

 

(a)                                  Confidentiality
and Non-Disparagement. I acknowledge that in the course of my employment
with ATK, I have had access to confidential information and trade secrets. If I
hold a U.S. Government issued security clearance, I acknowledge my personal
obligations to maintain the confidentiality of information gained under that
clearance. I agree to maintain the confidentiality of ATK’s confidential
information and trade secrets. I will not disclose or otherwise make available
to any person, company, or other party confidential information or trade
secrets. Further, I agree not to make any disparaging or defamatory comments
about any ATK employee, director, or officer, the Company, or any aspect of my
employment or termination from employment with ATK.

 

(b)                                 Competition
Restrictions. From [date] through [date – Tier 1 – 3 years, Tier 2 – 2
years], I agree I will not
directly or indirectly, engage in, nor own, manage, operate, join, control,
consult with, participate in the ownership, operation or control of, or be employed by any
person or entity that develops, manufactures, distributes, markets or sells
services or products competitive with those that ATK manufactures, markets or
sells to any customer anywhere in the world. If during this restricted period I
wish to obtain other non-competitive employment, I agree to meet and confer in
good faith with ATK, prior to accepting such employment. I will provide ATK
with the name of any potential future employer and give ATK the right to provide
a copy of this provision to said potential employer.

 

(c)                            Non-solicitation. From
[date] through [date – Tier 1 – 3 years, Tier 2 – 2 years], I will not,
directly or indirectly solicit any of ATK’s employees for the purpose of hiring
them or inducing them to leave their employment with ATK, nor will I own
manage, operate, join, control, consult with, participate in the ownership,
management, operation or control of, or be employed by any person or entity that engages
in the conduct proscribed by this paragraph during the restricted period.

 

(d)                           Access. I agree to be
available to ATK for up to thirty hours per month [if Tier 1 – for one year, if
Tier 2 – for 6 months], from my termination date to aid in transitioning
information, supporting customer’s needs or other requests of ATK.

 

A-3

 

(e)                            Breach of
Post-Employment Restrictions. If I breach any of my obligations under this
Paragraph 3, then I will not be entitled to, and shall return, 75 percent of
the Severance Benefit provided in Paragraph 2. ATK will be entitled to attorney’s
fees and costs incurred in seeking injunctive relief and damages including
collecting the repayment of applicable consideration as specified above.
Such action on the part of ATK will not in any way affect the
enforceability of my General Release of Claims provided in Paragraph 5, which
is adequately supported by the remaining Severance Benefits provided in
Paragraph 2.

 

4.                                       Return
of ATK Property. Prior to my last day of employment, I agree to return all
ATK property in my possession or control including, but not limited to,
confidential or proprietary information, credit card, computer, documents,
records, correspondence, identification badge, files, keys, software, and
equipment. Further, I agree to repay to ATK any amounts that I owe for personal
credit card expenses, wage advances, employee store purchases, and used, but
unaccrued, vacation/PTO time. These debts may be withheld from my
severance payment, if any.

 

5.                                       General
Release of Claims. Except as stated in Paragraph 7, I hereby release and
forever discharge ATK from all claims and causes of action, whether I currently
have knowledge of such claims and causes of action, arising, or which may have
arisen, out of or in connection with my employment or termination of employment
with ATK. This includes, but is not limited to claims, demands or actions
arising under any federal or state law such as the Age Discrimination in
Employment Act (“ADEA”), the Older Workers Benefit Protection Act (“OWBPA”),
Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with
Disabilities Act (“ADA”), the Family Medical Leave Act (“FMLA”), the Employee
Retirement Income Security Act of 1978 (“ERISA”), the Worker Adjustment
Retraining and Notification Act (“WARN”), the Fair Labor Standards Act (“FLSA”),
the National Labor Relations Act (“NLRA”), the Occupational Safety and Health
Act (“OSHA”), the Rehabilitation Act, the Minnesota Human Rights Act, and Minn.
Stat. Chap. 181, all as amended.

 

This General Release
includes any claims arising
under state human rights or fair employment practices act, or any
other federal, state or local statute, ordinance, regulation or order regarding
conditions of employment, compensation for employment, termination of
employment, or discrimination or harassment in employment on the basis of age,
gender, race, religion, disability, national origin, sexual orientation, or any
other protected characteristic, and the common law of any state.

 

I further understand that
this General Release extends to all claims which I may have as of this
date against ATK based upon statutory or common law claims for breach of
contract, breach of employee handbooks or other policies, breach of promises,
fraud, wrongful discharge, defamation, emotional distress, whistleblower
claims, negligence, assault, battery, or any other theory, whether legal or
equitable.

 

I agree that this General
Release includes claims for all
damages available under any theory of recovery, including, without limitation,
any compensatory damages (including all forms of back-pay or front-pay),
attorneys’ fees, liquidated damages, punitive damages, treble damages,
emotional distress damages, pain and suffering damages, consequential damages,
incidental

 

A-4

 

damages, statutory fines
or penalties, and/or costs or disbursements. Except as stated in Paragraph 7, I
am completely and fully waiving any rights under the above stated statutes,
regulations, laws, or legal or equitable theories.

 

6.                                       Breach
of General Release of Claims. If I breach any provision of the General
Release of Claims provided in Paragraph 5, then I will not be entitled to, and
shall return, 25 percent of the Severance Benefit provided in Paragraph 2. ATK
will be entitled to attorney’s fees and costs incurred in its defense including
collecting the repayment of applicable consideration. Such action on the part of
ATK will not in any way effect the enforceability of the Post-Employment
Restrictions provided in Paragraph 3, which are adequately supported by the
remaining Severance Benefits provided in Paragraph 2.

 

7.                                       Exclusions
from General Release. I am not waiving my right to enforce the terms of
this General Release or to challenge the knowing and voluntary nature of this
General Release under the ADEA as amended; or my right to assert claims that
are based on events that happen after this General Release becomes effective. I
agree that ATK reserves any and all defenses, which it has or might have
against any claims brought by me. This includes, but is not limited to, ATK’s
right to seek available costs and attorneys’ fees, and to have any money or
other damages that might be awarded to me, reduced by the amount of money paid
to me pursuant to this General Release. Nothing in this General Release
interferes with my right to file a charge with the Equal Employment Opportunity
Commission (“EEOC”), or to participate in an EEOC investigation or proceeding.
Nevertheless, I understand that I have waived my right to recover any
individual relief or money damages, which may be awarded on such a charge.

 

8.                                       Right
to Revoke.
This General Release does not become effective for a period of fifteen (15)
days after I sign it and I have the right to cancel it during that time. Any
decision to revoke this General Release must be made in writing and
hand-delivered to ATK or, if sent by mail, postmarked within the fifteen (15)
day time period and addressed to [insert name] Alliant Techsystems Inc., 5050
Lincoln Drive, Edina, MN 55436. I understand that if I decide to revoke this
General Release, I will not be entitled to any Severance Benefits.

 

9.                                       Unemployment
Compensation Benefits. If I apply for unemployment compensation, ATK will
not challenge my entitlement to such benefits. I understand that ATK does not
decide whether I am eligible for unemployment compensation benefits, or the
amount of the benefit.

 

10.                                 No
Wrongdoing. By entering into this General Release, ATK does not admit that
it has acted wrongfully with respect to my employment or that I have any rights
or claims against it.

 

11.                                 No
Adequate Remedy at Law. I acknowledge and agree that my breach of the
Post-Employment Restrictions provided in Paragraph 3 would cause irreparable
harm to the Company and the remedy at law would be inadequate. Accordingly, if
I violate such Paragraph, ATK is entitled to injunctive relief in addition to
any other legal or equitable remedies.

 

12.                                 Choice
of Law and Venue. The terms of this General Release will be governed by the
laws of Minnesota (without regard to conflict of laws principles). Any legal
action to enforce this General Release shall be brought in a court of law in
Hennepin County, Minnesota.

 

A-5

 

13.                                 Severability.
If any of the terms of this General Release are deemed to be invalid or
unenforceable by a court of law, the validity and enforceability of the
remaining provisions of this General Release will not in any way be affected or
impaired thereby. In the event
that any court having jurisdiction of the parties should determine that any of
the post-employment restrictions set forth in Paragraph 3 of this Agreement are
overbroad or otherwise invalid in any respect, I acknowledge and agree that the
court so holding shall construe those provisions to cover only that scope,
duration or extent or those activities which may validly and enforceably
be restricted, and shall enforce the restrictions as so construed. The parties
acknowledge the uncertainty of the law in this respect and expressly stipulate
that this Agreement shall be construed in a manner which renders its provisions
valid and enforceable to the maximum extent (not exceeding its express terms)
possible under applicable law.

 

14.                                 No
Assignment. This General Release is personal to me and I cannot assign it
to any other person or entity. In the event of my death before all payments due to me under the
terms of this Agreement have been made, then all such payments shall continue
to be made to my estate.

 

15.                                 Attorneys’
Fees. I understand that I am responsible to pay my own costs and attorneys’
fees, if any, that I incurred in consulting with an attorney about this General
Release.

 

16.                                 Entire
Agreement. This General Release constitutes the entire agreement between
ATK and me regarding the subject matter included in this document. I agree that
there are no promises or understandings outside of this General Release, except
with respect to my continuing obligations not to reveal ATK’s proprietary,
confidential, and trade secret information. This General Release supercedes and
replaces all prior or contemporaneous discussions, negotiations or General
Releases, whether written or oral, except as set forth herein. Any modification
or addition to this General Release must be in writing, signed by an officer of
ATK and me.

 

17.                                 Eligibility
and Opportunity to Review.

 

(a)                                  All
employees who are eligible to participate in the Alliant Techsystems Inc.
Income Security Plan must execute a release of claims in order to receive
Severance Benefits.

 

(b)                                 I
certify that I am signing this General Release voluntarily and with full
knowledge of its consequences. I understand that I have at least [use either: “twenty-one
(21) days” if individual termination or “forty-five (45) days” if more than one
person being terminated]  from the date I
received this General Release to consider it, and that I do not have to sign it
before the end of the twenty-one (21) day period. I have been advised to use
this time to consult with an attorney prior to executing this General Release.

 

(c)                                  I
understand that the offer to accept this General Release remains open for [use “twenty-one
(21)” or use “forty-five (45)” – see comment in (b) above] days. If I have
not signed this General Release within [“twenty-one (21)” or “forty-five (45)”
– see comment in (b) above] days of receiving it, then this offer expires
and ATK will be under no obligation to accept this General Release or to
provide me any Severance Benefits.

 

A-6

 

18.                               Understanding and Acknowledgement. I
understand all of the terms in this General Release and I have not relied on
any oral statements or explanations by ATK. I have had adequate time to consult with legal counsel and to consider
whether to sign this General Release, and I am signing it knowingly and voluntarily.

 

IN WITNESS WHEREOF,
Employee has executed this General Release by his signature below.

 

	
  Date:

  	
   

  	
   

  	
  [Insert
  employee name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Employee’s
  Signature

  

 

A-7

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