Document:

Exhibit 10.1

 

ALLIANT
TECHSYSTEMS INC.

 

INCOME
SECURITY PLAN

 

 

As Amended and Restated

Effective May 3, 2010

 

 

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

  	
  9

  
	
  3.4

  	
  Severance
  Benefits for Tier 2 Participants

  	
  10

  
	
  3.5

  	
  Termination
  Due to Disability or Death

  	
  11

  
	
  3.6

  	
  Termination
  for Cause or by the Participant Without Good Reason

  	
  11

  
	
  3.7

  	
  Notice of
  Termination

  	
  11

  
	
  3.8

  	
  Payment
  of Severance Benefits

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  RELEASE AND RESTRICTIVE
  COVENANTS

  	
  12

  
	
  4.1

  	
  Release

  	
  12

  
	
  4.2

  	
  Restrictive
  Covenants

  	
  12

  
	
  4.3

  	
  Services
  of Participant

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  TRUST

  	
  12

  
	
  5.1

  	
  Establishment
  of Trust

  	
  12

  
	
  5.2

  	
  Trust
  Assets

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  EXCISE TAXES

  	
  12

  
	
  6.1

  	
  Limitation
  for Excess Parachute Payments

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  CLAIMS PROCEDURE

  	
  13

  
	
  7.1

  	
  Original
  Claim

  	
  13

  
	
  7.2

  	
  Review of
  Denied Claim

  	
  13

  
	
  7.3

  	
  General
  Rules

  	
  14

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  RIGHTS TO SEVERANCE
  BENEFITS AND LEGAL FEES

  	
  14

  
	
  8.1

  	
  Severance
  Benefits Payments

  	
  14

  
	
  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

  	
  15

  
	
  10.1

  	
  Administration
  and Committee Powers

  	
  15

  
	
  10.2

  	
  Employment
  Status

  	
  15

  
	
  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

  	
  Severability

  	
  16

  
	
  10.8

  	
  Amendment
  and Waiver

  	
  16

  
	
  10.9

  	
  Applicable
  Law

  	
  17

  
	
  10.10

  	
  Rules of Construction

  	
  17

  

 

ii

 

ALLIANT
TECHSYSTEMS INC.

INCOME SECURITY PLAN

 

As Amended
and Restated Effective May 3, 2010

 

 

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 1.3(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 with respect to any Participant who has not experienced
a Qualifying Termination prior to such third anniversary.

 

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 any 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 

 

2

 

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 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 within
90 days after such circumstances first arise;

 

(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 within 90 days
after such circumstances first arise;

 

(iii)          a material
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 within
90 days after such circumstances first arise;

 

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, where the result is a material reduction in the Participant’s total
compensation, unless such failure is remedied by the Company within 30 days
after notice thereof given by the Participant within 90 days after such
circumstances first arise; 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 such failure is remedied within 30 days after notice thereof given by
the Participant within 90 days after such circumstances first arise.

 

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.

 

5

 

(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) 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 (i) any executive officer of the Company (other
than a Tier 1 Participant) required to file reports of beneficial ownership
with the 

 

6

 

Securities and Exchange
Commission pursuant to Section 16(a) of the Exchange Act and the rules and
regulations promulgated thereunder and (ii) any employee selected by the
Committee as a covered employee eligible under this Plan (employees selected by
the Committee will be referred to as “Selected Tier 2 Participants”).  The Committee will select Selected Tier 2
Participants annually at the meeting in which it sets executive compensation
for the next fiscal year.  Selected Tier
2 Participants will remain eligible as a Participant under this Plan for the
fiscal year for which the Committee approved eligibility.  During the fiscal year, the Committee may
change the status of a Selected Tier 2 Participant if he or she has a change in
employment status (examples: removal from eligibility because of a demotion or
added as eligible because of a promotion). 
Notwithstanding the foregoing, a Selected Tier 2 Participant may not
lose covered employee status as a Selected Tier 2 Participant by the Committee
if he or she was a Participant and was eligible for benefits under Section 3.1,
Rights to Unpaid Compensation and Severance Benefits, for a Change in Control
occurrence.

 

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

 

(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, in the
latter case within two years after the circumstances comprising Good Reason
first arise.  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

 

7

 

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,
in the latter case within two years after the circumstances comprising Good
Reason first arise; 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” 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 with payment as provided in this Section 3
unless the Participant has validly and effectively elected deferral of any such
payment or award under another plan (in which case the payment or award would
be made under the terms of the other plan):

 

(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, 

 

8

 

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 and payable in full in the form of stock on the date
of a Qualifying Termination of the Participant and will be paid, distributed or
transferred to the Participant in accordance with their terms.

 

(d)              Any Performance
Vesting Stock Awards of the Participant will become immediately vested and
payable in the form of stock 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 and will be paid, distributed or
transferred to the Participant in accordance with their terms.

 

(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 (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); 

 

9

 

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, and such supplemental retirement
benefit will be paid at the time and in the form the benefit under the SERP is
paid.  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.

 

(e)           Notwithstanding
the provisions of subsections (a) - (d) of this Section 3.3, the
multiplier or period of years used to determine the benefits in each such
subsection (i.e., three) shall be reduced two tenths (0.2) effective on each of
the fifth through ninth anniversaries of the date the Tier 1 Participant was
appointed to his or her then-current position, provided that the Tier 1
Participant has not experienced a Qualifying Termination prior to any such
anniversary, so that the multiplier or period of years shall be two effective
on the ninth such anniversary.  If a Tier
1 Participant is appointed to a new position in which he or she remains or
again becomes a Tier 1 Participant, the multiplier or period of years under
subsections (a) — (d) shall be restored to three, subject to the
future application of this subsection (e) based on the anniversaries of
the Tier 1 Participant’s appointment to his or her new position.

 

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 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 

 

10

 

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, and
such supplemental retirement benefit will be paid at the time and in the form
the benefit under the SERP is paid.  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           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 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.

 

3.6           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.

 

3.7           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.

 

3.8           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 not later than the 15th day of the third calendar month following the
date of the Qualifying Termination of such Participant (or, if such Participant
dies before payment is made, to the Participant’s designated beneficiaries or
estate not later than the 15th day of the third calendar month
after the date of such Participant’s Qualifying Termination); provided,
however, that no payment shall be made, and the Participant shall not be
entitled to any Severance Benefits, unless the Participant has executed and not
revoked the Settlement Agreement and General Release of Claims described in Section 4.1,
and the period for such revocation has expired, before such payment is made or
would otherwise be required.

 

11

 

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
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           Limitation for
Excess Parachute Payments.

 

(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 

 

12

 

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 Total Payments to any Participant would be subject to
the Excise Tax, then the aggregate present value of Severance Benefits under
the Plan shall be reduced to the extent necessary so that the aggregate present
value of the Total Payments (determined in each case pursuant to Section 280G
of the Code and applicable regulations promulgated thereunder) does not exceed
the greatest amount that could be paid to the Participant such that the receipt
of payments under this Plan would not give rise to any Excise Tax.  In the event that a cutback described in this
Section 6.1(b) 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.  The Tax
Advisor shall make a final determination as to whether a reduction in the
aggregate present value of the Total Payments to the Participant is required
pursuant to this Section 6.1(b) not later than the latest date
provided in Section 3.8 of this Plan for payment of Severance Benefits.

 

(c)             A Participant
will in good faith cooperate with the Tax Advisor in making the determination
of whether a reduction to Severance Benefits is required (including, without
limitation, providing the Tax Advisor with information or documentation as
reasonably requested by the Tax Advisor).

 

(d)             Any
determination by the Tax Advisor regarding whether a reduction to Severance
Benefits is required will be conclusive and binding upon the Participant and
the Company for all purposes.

 

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         Review of
Denied Claim. Within 60 days after receipt of notice that the
claim has been denied in whole or in part, the claimant may file with the
Committee a written request for a review and may, in conjunction therewith,
submit written issues and comments. 
Within 60 days 

 

13

 

after the filing of such a request for review, the
Committee shall notify the claimant in writing whether, upon review, the claim
was upheld or denied in whole or in part or shall furnish the claimant a
written notice describing specific special circumstances requiring a specified
amount of additional time (but not more than 120 days from the date the request
for review was filed) to reach a decision on the request for review.

 

7.3           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 or
request for review of a denied 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 and
requests for review of denied 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 or request for review of a denied 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 or
request for review of a denied 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.

 

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 10.8.  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 

 

14

 

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
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 

 

15

 

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         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.

 

10.8         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).

 

16

 

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

 

10.9         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.

 

10.10       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
Executive Severance 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], for himself/herself and on behalf
of his agents, assigns, heirs, executors, administrators, attorneys and
representatives (“[employee name]”) , and Alliant Techsystems Inc., a Delaware
corporation, 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, [employee name]’s
employment shall end as provided in this General Release.  In consideration of [employee name]’s signing
and complying with this General Release, ATK agrees to provide [employee name]
with certain payments and other valuable consideration described below.  Further, ATK and [employee name] desire to
resolve and settle any and all potential disputes or claims related to his/her
employment or termination of employment with ATK.

 

WHEREAS, ATK has expended
significant time and resources on promotion, advertising, and the development
of goodwill and a sound business reputation through which it has developed a
list of customers and prospective customers and identified those customers’ and
prospective customers’ needs for ATK’s services and products.  This information and goodwill are valuable,
special and unique assets of ATK’s business, which [employee name] acknowledges
constitute confidential, proprietary and trade secret information belonging to
ATK.

 

WHEREAS, ATK has expended
significant time and resources 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 [employee name]
acknowledges constitute confidential, proprietary and trade secret information
belonging to ATK.

 

WHEREAS, the disclosure to
or use by third parties of any of ATK’s confidential, proprietary and/or trade
secret information, or [employee name]’s 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 [employee
name] (the “Parties”) mutually agree to the following terms and conditions:

 

A-1

 

Termination of Employment.  [Employee name]’s employment
with ATK is terminated effective [termination date] (“Date of Termination”).

 

Final
Paycheck.  ATK will pay
[employee name] for all salary earned through the Date of Termination within 30
days of Date of Termination.  ATK will
also pay for any accrued, but unused, vacation/PTO.  [Employee name]’s continuing right, if any,
under all other ATK employee benefits plans will be governed by those plans.

 

Restricted Stock. 
[Employee name] [does/does] not have any unvested and outstanding shares
of restricted stock.

 

Performance Shares and Cash Incentive Payments.  [Employee name] has xx Performance Awards as
specifically stated below.  These awards
were granted under ATK’s 2005 Stock Incentive Plan, as amended, or ATKs
Executive Officer Incentive Plan, and the awards are subject to the terms of
the applicable plan, award agreements and ATK’s compensation system.  Nothing in this Agreement creates any
additional rights with respect to these awards. 
[Employee name] understands he/she will remain eligible to receive a
prorated number of the performance shares and a prorated cash incentive payment
earned (if any) based on the amount of active service time during the Performance
period.   Specifically:

 

(i)                              For the
Performance Award for the ATK fiscal years 20xx through 20xx the proration is
[fraction] of shares and cash.

(ii)                             For the
Performance Award for the ATK fiscal years 20xx through 20ss the proration is
[fraction] of shares and cash.

(iii)                            For the
Performance Award for the ATK fiscal years 20xx through 20xx the proration is
[fraction] of shares and cash.

 

ATK expects to make payment of these awards within 2 1⁄2 months following
the completion of the respective performance periods.  The number of shares delivered and the amount
of any cash payout depends on whether and to what extent (if any) ATK meets the
objectives set forth pursuant to the respective Performance Awards and terms of
the applicable plan.  All payments will
be taxed in accordance with the federal and state tax laws that apply and ATK
practice and will be subject to the terms of the applicable Performance Award
Agreement and the related plan.

 

Stock
Options.  [employee
name] will immediately forfeit all unvested (not exercisable) stock options on
the Date of Termination.  All stock
options that are exercisable on [employee name]’s Date of Termination remain
exercisable until the earlier of (i) the option’s expiration date
under the Non-Qualified Stock Option Agreement from which it was granted, or (ii) three
years from [employee name]’s termination date. 
All terms of the Non-Qualified Stock Option Agreement(s) apply.

 

Deferred
Compensation.  Any
compensation [employee name] deferred under the Alliant Techsystems Inc.
Nonqualified Deferred Compensation Plan (or predecessor plan) shall be paid in
accordance with his/her pre-selected distribution options and the terms of that
plan.

 

A-2

 

Severance Benefits.  In exchange
for the promises of this agreement, and after the applicable revocation period
has ended, ATK will provide [employee name] with the severance benefits
contained in the Executive Severance Plan and with any additional benefits
identified in this Paragraph 2 (together referred to as “Severance Benefits”),
provided that [employee name] has not revoked this General Release during the
rescission period outlined in Paragraph 8 below.

 

Severance
Pay.  Pursuant to ATK’s Executive
Severance Plan, ATK will pay [employee name] a single lump-sum severance
payment in the amount of $xxxxx, which is equal to xx months base pay.  This severance payment will be subject to all
applicable withholdings and will be taxable as payroll wages at the
supplemental wage withholding rate.  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.  This severance payment may be subject to
additional deductions as described below in Paragraph 4.

 

Notice
or Pay in Lieu of Notice. 
Pursuant to ATK’s Executive Severance Plan, ATK will provide [employee
name] with at least two weeks’ notice of the Date of Termination, or will pay
[employee name] two weeks of base pay at his/her regular rate in lieu of notice
(“in lieu of” pay).  [employee name]’s “in
lieu of” pay will be subject to all applicable withholdings and will be taxable
as payroll wages at the supplemental wage withholding rate.  No 401(k) deductions will be taken from
[employee name]’s “in lieu of” pay 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.

 

Additional
Lump Sum.  [Employee
name] is eligible to receive a single lump-sum payment in the amount of
$8,000/$15,000 to offset the cost of continuing health care coverage.  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.

 

Annual Incentive Compensation.  [Employee name] will be eligible to receive
an annual cash incentive payment pursuant to the ATK Executive Officer
Incentive Plan (“EIP”) in respect of the fiscal year ending March 31,
20xx.  The amount paid (if any) under the
EIP will be based on the financial performance achieved as compared to the
performance goals established at the beginning of ATK’s current fiscal year,
subject to the  terms of the EIP and ATK’s
compensation system.  The EIP amount (if
any) will be paid in a single lump sum payment in cash (or deferred if the
Nonqualified Deferred Compensation Plan provides for this as a previously
elected deferral) at the time all other EIP participants receive payment of
their annual cash incentive payments for such fiscal year.  Such payment will be prorated based on
his/her xx months of employment in FY0x.

 

Outplacement Services.  [Employee name] will be entitled to
participate in executive level outplacement services through Lee Hecht
Harrison.

 

A-3

 

Independent Consideration.  [Employee name] understands and agrees that
he/she is only eligible for Severance Benefits because he/she has signed and
not revoked this General Release. 
[employee name] acknowledges that he/she is not otherwise entitled to
receive such additional and valuable consideration.  Except as otherwise provided in Paragraph 7,
by [employee name]’s signature on this General Release, he/she waives all
rights to any other benefits or cash payments. 
Further, [employee name] agrees that these Severance Benefits are
adequate consideration for the promises herein.

 

Delivery of Severance Pay and Additional Lump Sum.  ATK will pay [employee name] the cash amounts
under paragraph 2(a) and (c), the severance payment and additional lump
sum, not later than the 15th day of the third calendar month
after his/her Date of Termination, provided the time period for his/her right
to revoke under paragraph 8 has also elapsed. 
That delivery date may be delayed further if necessary to be compliant
with Section 409A of the Internal Revenue Code of 1986, as amended.

 

Post Employment Restrictions.

 

(a)           Confidentiality and Non-Disparagement.  [Employee name] acknowledges
that in the course of his/her employment with ATK, he/she has had access to ATK’s
confidential, proprietary and trade secret information.  [employee name] agrees to maintain the
confidentiality of ATK’s confidential, proprietary and trade secret
information, and will not disclose or otherwise make such information available
to any person, company, or other party, or use such information for [employee
name]’s own benefit.  Further, [employee
name] agrees not to make any disparaging or defamatory comments about any ATK
employee, director, or officer, the Company, or any aspect of his/her
employment or termination from employment with ATK.

 

(b)           Competition
Restrictions.  From [date
through date — 6 months - 12 months] (“Noncompetition Restricted Period”),
[employee name] agrees that he/she will not, directly or indirectly, personally
engage in, 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 the
Restricted Period [employee name] wishes to obtain other employment which
[employee name] in good faith believes would not violate this Paragraph 3(b),
he/she agrees to meet and confer in good faith with ATK regarding the
applicability of this Paragraph 3(b) to such employment, prior to
accepting such employment.

 

(c)         Nonsolicitation.  From [date through date — 6 months - 12
months] (“Nonsolicitation Restricted Period”), [employee name] 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
[employee name] own, manage, operate, join, control, consult with, participate
in the ownership, management, operation or control of, be employed by, or be
connected in any manner with any person or entity that engages in the conduct
proscribed by this paragraph during the restricted period.

 

A-4

 

(d)         Breach of Post-Employment
Restrictions.  If [employee
name] breaches any of his/her obligations under this Paragraph 3, then he/she
will not be entitled to, and shall return, 25 percent of the Severance Pay
provided in Paragraph 2(a).  ATK will be
entitled to attorneys’ fees and costs incurred in seeking injunctive relief and
damages including collecting the repayment of applicable consideration.  Such action on the part of ATK will not in
any way affect the enforceability of the 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.  Before his/her last day of
employment, [employee name] agrees to return all ATK property in his/her
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, [employee name] agrees to repay to
ATK any amounts that he/she owes for personal credit card expenses, wage
advances, employee store purchases, and used, but unaccrued, vacation/PTO
time.  These amounts, if any, may be
withheld from [employee name]’s severance payment.

 

5.             General Release of Claims.  Except as stated in Paragraph
7, [employee name] hereby releases and forever discharges ATK from all claims
and causes of action, whether or not [employee name] currently has knowledge of
such claims and causes of action, arising, or which may have arisen, prior to
[employee name]’s execution of this Agreement and out of or in connection with
his/her employment or termination of employment with ATK.  This General Release 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 Civil Rights Act of 1991, the Americans with
Disabilities Act (“ADA”), the Equal Pay Act, 42 U.S.C. §§ 1981, 1983 and 1985,
the Family Medical Leave Act (“FMLA”), the Employee Retirement Income Security
Act of 1978 (“ERISA”), the Worker Adjustment Retraining and Notification Act (“WARN”),
the National Labor Relations Act (“NLRA”), the Occupational Safety and Health
Act (“OSHA”), the Sarbanes-Oxley Act, and the Rehabilitation Act, all as
amended.  This General Release
specifically includes any rights or claims arising under the Minnesota Human
Rights Act, the Minnesota Equal Pay for Equal Work Law, Minn. Stats. §§ 181.81,
176.82, 181.931-935, and 181.940-944, and any other statutes and common law of
the State of Minnesota, all as amended.

 

This General Release
includes any rights or claims arising under any 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.

 

[Employee name] agrees that this General Release extends to all claims,
demands or causes of action which he/she may have against ATK which arose prior
to [employee name]’s execution of this Agreement based upon statutory or common
law claims for breach of contract, breach of employee handbooks or other
policies, breach of promises, fraud, wrongful discharge,

 

A-5

 

defamation, emotional
distress, whistleblower claims, negligence, assault, battery, or any other
theory, whether legal or equitable.

 

[Employee
name] agrees that this General Release includes 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 damages, statutory fines
or penalties, and/or costs or disbursements. 
Except as stated in Paragraph 7, [employee name] is 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 [employee name] breaches
any provision of the General Release of Claims provided in Paragraph 5, then
he/she will not be entitled to, and shall return, 75 percent of the Severance
Pay provided in Paragraph 2(a).  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 affect 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.  [Employee name] is not waiving
his/her rights to any vested pension and/or 401(k) benefits pursuant to
these ERISA plans.  [employee name] also
is not waiving his/her 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 his/her right to assert claims, demands or causes of
action, including but not limited to claims under the ADEA, that arise after
[employee name] executes this General Release. 
[employee name] agrees that ATK reserves any and all defenses, which it
has or might have against any claims, demands or causes of action brought by
[employee name].  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 [employee name],
reduced by the amount of money paid to him/her under to this General
Release.  Nothing in this General Release
interferes with [employee name]’s right to file a charge with the Equal
Employment Opportunity Commission (“EEOC”), or to participate in an EEOC
investigation or proceeding. 
Nevertheless, [employee name] understands that he/she has waived his/her
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  15 days after
[employee name] signs it and [employee name] has 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 15 day time period and addressed to [name and
title], Alliant Techsystems Inc., 7480 Flying Cloud Drive, Minneapolis, MN
55344.  [Employee name] understands that
if he/she decides to revoke this General Release, he/she will not be entitled
to any Severance Benefits.

 

9.             Unemployment Compensation Benefits.  If [employee name] applies for
unemployment compensation, ATK will not challenge his/her entitlement to such
benefits.  [Employee name] 

 

A-6

 

understands
that ATK does not decide whether a person is 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 [employee name]’s
employment or that he/she has any rights or claims against it.

 

11.           No Adequate Remedy at Law.  [Employee name] acknowledges
and agrees that his/her breach of the Post-Employment Restrictions provided in
Paragraph 3 would cause irreparable harm to ATK and the remedy at law would be
inadequate.  Accordingly, if [employee
name] violates 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 competent court of law in
Hennepin County, Minnesota.

 

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.  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
General Release are overbroad or otherwise invalid in any respect, [employee
name] acknowledges and agrees that the court so holding shall construe those
provision to cover only that scope, duration or extent of 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 [employee
name] and cannot be assigned to any other person or entity.

 

15.           Attorneys’ Fees.  [Employee name] understands that he/she is
responsible to pay his/her own costs and attorneys’ fees, if any, that are
incurred in consulting with an attorney about this General Release.

 

16.           Entire Agreement.  This General Release constitutes the entire
agreement between ATK and [employee name] regarding the subject matter included
in this document.  [Employee name] agrees
that there are no promises or understandings outside of this General Release,
except with respect to his/her continuing obligations not to reveal ATK’s
proprietary, confidential, and trade secret information, as well as his/her
obligations to maintain the confidentiality of secret or top 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 [employee name].

 

A-7

 

17.           Eligibility and Opportunity to Review.

 

All
employees who are eligible to participate in the Executive Severance Plan must
execute and not revoke this General Release in order to receive Severance
Benefits.

 

[Employee name] certifies that he/she is
signing this General Release voluntarily and with full knowledge of its
consequences.  [employee name]
understands that he/she has 21 days from the date he/she received this General
Release to consider it, and that he/she does not have to sign it before the end
of the 21 day period.  [Employee name] is
advised to use this time to consult with an attorney prior to executing this
General Release.  [Employee name] agrees
that if he/she signs this General Release prior to the twenty-first day, he/she
did so because he/she had sufficient time to review and consider the General
Release and to consult with an attorney if he/she wished to do so.

 

[Employee name] understands that the offer to
accept this General Release remains open for 21 days.  Changes to this General Release, whether
material or immaterial, do not restart the 21 day period.  If [employee name] has not signed this
General Release within 21 days of receiving it, then this offer expires and ATK
will be under no obligation to accept this General Release or to provide any
Severance Benefits.

 

18.          Understanding and Acknowledgement.  [employee name] understands all of the terms
of this General Release and has not relied on any oral statements or
explanation by ATK.  [Employee name] has
had adequate time to consult with legal counsel and to consider whether to sign
this General Release, and [employee name] is signing this General Release
knowingly and voluntarily.

 

[Employee
name] executes this General Release by his/her signature below.

 

	
  Date:

  	
   

  	
   

  	
  [Insert
  employee name]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee’s
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Alliant
  Techsystems Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
  Its:

  

 

A-8Exhibit
10.1

 

EMPLOYMENT
AGREEMENT

 

THIS AGREEMENT is
made and entered into as of the 14th day of December, 2009, by and between
BLOUNT INTERNATIONAL, INC., a Delaware corporation (the “Company”), and DAVID
A. WILLMOTT (“Executive”).

 

W I
T N E S S E T H:

 

WHEREAS, the
Company desires to hire Executive and Executive desires to accept such
employment; and

 

WHEREAS, the
Company and Executive desire to enter into an agreement providing for Executive’s
employment by the Company and specifying the terms and conditions of such
employment.

 

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

 

1.                                       Employment and Term.

 

(a)                                  Subject to the terms and conditions of
this Agreement, the Company hereby employs Executive and Executive hereby
accepts employment as the Senior Vice President, Corporate Development and
Strategy of the Company and shall have such responsibilities, duties and
authority that are consistent with such positions as may be from time to time
assigned to Executive by the President, Chief Operating Officer and Chief
Executive Officer-Designate prior to January 4, 2010 and by the Chief
Executive Officer from and after January 4, 2010 or the Board of
Directors.  Executive agrees that during
the Term of this Agreement he will devote substantially all his working time,
attention and energies to the diligent performance of his duties and
responsibilities for the Company; provided that, Executive may spend up to five
(5) hours per month performing services in connection with CW Gas
Partners, L.P., an investment fund for which he currently performs
services.  With the consent of the Chief
Executive Officer, Executive may serve as a director on the boards of directors
or trustees of additional companies and organizations.

 

(b)                                 Unless earlier terminated as provided
herein, Executive’s employment under this Agreement shall be for a rolling,
two-year term (the “Term”) commencing on December 14, 2009 (the “Effective
Date”) and shall be deemed to extend automatically, without further action by
either the Company or Executive, each day for an additional day, such that the
remaining term of the Agreement shall continue to be two years; provided,
however, that either party may, by written notice to the other, cause this
Agreement to cease to extend automatically and, upon such notice, the “Term” of
this Agreement shall be the two-year period following the date of such notice
and this Agreement shall terminate upon the expiration of such Term; provided,
further, that the Term of this Agreement shall cease to extend automatically on
the date Executive attains age 63 and at such time, the remaining Term of the
Agreement shall be two years.

 

2.                                       Compensation and Benefits. 
As compensation for his services during the Term of this Agreement,
Executive shall be paid and receive the amounts and benefits set forth in
subsections (a) through (f) below:

 

(a)                                  An annual base salary (“Base Salary”) at
a rate of Three Hundred Fifty Thousand Dollars ($350,000.00) per year, prorated
for any partial year of employment. 
Executive’s Base Salary shall be subject to annual review starting in
2011 for increase at such time as the Company conducts salary reviews for its
executives generally.  Executive’s salary
shall be payable in substantially equal installments on a semi-monthly basis,
or in accordance with the Company’s regular payroll practices in effect from
time to time for executives of the Company.

 

(b)                                 Executive shall be eligible to
participate in the Executive Management Annual Incentive Program (“Incentive
Program”) and such other annual incentive plans as may be established by 

 

 

the Company from time to
time for executives.  The Company will
establish performance goals for Executive each year under the Incentive
Program, and Executive’s annual Target Bonus shall be 50% of Base Salary; the
maximum award for exceeding the performance goals shall be 100% of Base
Salary.  The annual incentive bonus
payable under this subsection (b) shall be payable as a lump sum at the
same time bonuses are paid to other senior executives after certification by
the Compensation Committee that the applicable performance objectives have been
met, unless Executive elects to defer all or a portion of such amount pursuant
to any deferral plan established by the Company for such purpose.

 

(c)                                  Executive shall be entitled to
participate in, or receive benefits under, any “employee benefit plan” (as
defined in Section 3(3) of ERISA) or employee benefit arrangement
made generally available by the Company to its executives, including plans
providing 401(k) benefits, matching and Savings Plus benefits, deferred
compensation, health care (including Exec-U-Care), dental and vision care, life
insurance, disability, accidental death and similar benefits.

 

(d)                                 On the Effective Date, the Company will
grant Executive an option (the “Option”) to purchase 100,000 shares of the
Company’s Common Stock under the Company’s 2006 Equity Incentive Plan (“Equity
Plan”) that will vest in installments of 33,333 shares, 33,333 shares and
33,334 shares, respectively, on the first, second and third anniversaries of
the Effective Date.  To the extent
unvested, the Option will automatically fully vest upon the occurrence of a
Change in Control (as defined in Section 5.3 below).  The exercise price for the Option will be the
closing sales price of the Company’s Common Stock on the New York Stock
Exchange on the trading day immediately preceding the Effective Date.  The other terms and conditions of the Stock
Option Agreement granting the Option will be consistent with the agreements
under the Equity Plan for other senior executives of the Company.

 

(e)                                  The Company will reimburse Executive for
initiation fees, membership dues and any assessments at a country club of Executive’s
choice in the Portland area and will assist Executive in reducing any waiting
period in regard to membership in such club to the extent that it is able to do
so.  Executive will be provided an
automobile in accordance with the Company’s automobile policy for Executives,
and the Company will pay all insurance, maintenance, fuel, oil and related
operational expenses for such automobile. 
Executive will be entitled to four (4) weeks vacation during
calendar year 2010, which amount will be subject to increase during the Term in
accordance with Company policy. 
Executive will be provided an annual physical examination and a
financial/tax consultant for personal financial and tax planning.  Executive will be promptly reimbursed by the
Company for all reasonable business expenses he incurs in carrying out his
duties and responsibilities under this Agreement.  If any of the perquisite amounts provided to
Executive pursuant to this subsection (e) are subject to federal, state or
local income taxes, Executive will be provided an appropriate tax gross-up on
such amounts.

 

(f)                                    With respect to Executive’s relocation to
the Portland, Oregon area, the Company will provide Executive (i) a
furnished townhouse or apartment for three (3) months or until Executive
is permanently relocated, whichever first occurs, including reasonable and
customary living expenses for such period, (ii) one month’s Base Salary to
take care of incidental and miscellaneous moving expenses payable upon his
relocation to Portland; (iii) reimbursement for the reasonable expenses
for house hunting trips for Executive and his family, including trips taken to
Portland prior to the Effective Date in connection with contemplating
employment with the Company, (iv) transportation expenses to move Executive
and his family to Portland; (v) reimbursement for the costs of packing,
shipping and unpacking Executive’s furniture and personal effects, including
storage as appropriate; (vi) with respect to the purchase of a home in the
Portland area, house finding assistance and upon the purchase of a home,
reimbursement of Executive’s closing costs; (vii) if applicable, with
respect to the sale of Executive’s current residence in New York City, the
Company will provide marketing assistance and, if necessary, a guaranteed
buyout in accordance with the customary terms through the Company’s third-party
relocation service provider; and (viii) an appropriate tax gross-up on any
non-tax deductible relocation expenses.

 

2

 

3.                                       Confidentiality and Noncompetition.

 

(a)                                  Executive acknowledges that, prior to and
during the Term of this Agreement, the Company has furnished and will furnish
to Executive Confidential Information which could be used by Executive on
behalf of a competitor of the Company to the Company’s substantial
detriment.  Moreover, the parties
recognize that Executive during the course of his employment with the Company
will develop important relationships with customers and others having valuable
business relationships with the Company. 
In view of the foregoing, Executive acknowledges and agrees that the
restrictive covenants contained in this Section are reasonably necessary
to protect the Company’s legitimate business interests and good will.  Executive acknowledges that at least two
weeks prior to the Effective Date, he was notified in writing that his offer of
employment was conditioned upon his agreement to the noncompetition restriction
in subsection (d)(i) below.

 

(b)                                 Executive agrees that he shall protect
the Company’s Confidential Information and shall not disclose to any Person, or
otherwise use, except in connection with his duties performed in accordance
with this Agreement or otherwise for the Company, any Confidential Information
at any time, including following the termination of his employment with the
Company for any reason; provided, however, that Executive may make disclosures
required by a valid order or subpoena issued by a court or administrative
agency of competent jurisdiction, in which event Executive will promptly notify
the Company of such order or subpoena to provide the Company an opportunity to
protect its interests.  Executive’s
obligations under this Section 3(b) shall survive any expiration or
termination of this Agreement for any reason, provided that Executive may after
such expiration or termination disclose Confidential Information with the prior
written consent of the Board.

 

(c)                                  Upon the termination or expiration of his
employment hereunder, Executive agrees to deliver promptly to the Company all
Company files, customer lists, management reports, memoranda, research, Company
forms, financial data and reports and other documents supplied to or created by
him in connection with his employment hereunder (including all copies of the
foregoing) in his possession or control, and all of the Company’s equipment and
other materials in his possession or control. 
Executive’s obligations under this Section 3(c) shall survive
any expiration or termination of this Agreement.

 

(d)                                 Upon the termination or expiration of his
employment under this Agreement, Executive agrees that for a period of one (1) year
from his Date of Termination or until the end of the period for which he is
entitled to receive compensation under Section 4.1(a) below, whichever
is longer, he shall not (i) be employed by or provide services to any
company or business engaged in the design, manufacture, marketing or sale of
any products similar to those produced or offered by the Company or its
affiliates in the geographic areas of the world in which the Company conducts
its principal manufacturing and sales operations, including China, Brazil,
Germany and North America, provided that this noncompetition restriction shall
in no event extend longer than two years from Executive’s Date of Termination, (ii) divert
or attempt to divert any person, concern or entity which is furnished products
or services by the Company from doing business with the Company or otherwise
change its relationship with the Company, or (iii) solicit, lure or
attempt to hire away any of the employees of the Company with whom the
Executive interacted directly or indirectly, while employed with the Company.

 

(e)                                  Executive acknowledges that if he
breaches or threatens to breach this Section 3, his actions may cause
irreparable harm and damage to the Company that could not be compensated in
damages.  Accordingly, if Executive
breaches or threatens to breach this Section 3, the Company shall be
entitled to seek injunctive relief, in addition to any other rights or remedies
available to the Company.  The existence
of any claim or cause of action by Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to
the enforcement by the Company of Executive’s agreement under this Section 3(e).

 

4.                                       Termination.

 

4.1                                 By
Executive. 
Executive shall have the right to terminate his employment hereunder at
any time by Notice of Termination (as described in Section 6).  If Executive terminates his 

 

3

 

employment
because (i) the Company has materially breached this Agreement, and such
breach has not been cured within thirty (30) days after written notice of such
breach is given by Executive to the Company; or (ii) Executive has
determined that his termination is for Good Reason (as defined in Section 5.7),
Executive shall be entitled to receive the compensation and benefits set forth
in subsections (a) through (g) below. 
If Executive terminates his employment other than pursuant to clauses (i) or
(ii) above of this Section 4.1, the Company’s obligations under this
Agreement shall cease as of the date of such termination.  Unless specified otherwise, if Executive is
entitled to compensation and benefits under this Section 4.1, the time
period (such time period described hereinafter is referred to as the “Severance
Period”) in (a) through (g) below shall be the lesser of (A) the
24-month period commencing on Executive’s Date of Termination, or (B) the
time period remaining from Executive’s Date of Termination until the date he
attains age 65.  The Company agrees that
if Executive terminates employment and is entitled to compensation and benefits
under this Section 4.1, he shall not be required to mitigate damages by
seeking other employment, nor shall any amount he earns reduce the amount
payable by the Company hereunder.

 

(a)                                  Base Salary - Executive will continue to receive his
Base Salary as then in effect (subject to withholding of all applicable taxes)
for the Severance Period in the same manner as it was being paid as of the Date
of Termination; provided, however, that the salary payments
provided for hereunder shall be paid in a single lump sum payment, to be paid
not later than 30 days after his termination of employment; provided, further,
that the amount of such lump sum payment shall be determined by taking the
salary payments to be made and discounting them to their Present Value (as
defined in Section 5.9) on the date Executive’s employment under this
Agreement is terminated.

 

(b)                                 Bonuses and Incentives - Executive shall receive bonus payments
from the Company for each month of the Severance Period in an amount for each
such month equal to one-twelfth of the average of the bonuses (“Average Bonus”)
earned by him for the two fiscal years in which bonuses were paid to him
(including, if applicable, any completed fiscal year for which the bonus has
been earned but has not yet been paid) immediately preceding the year in which
such termination occurs.  Any bonus
amounts that Executive had previously earned from the Company but which may not
yet have been paid as of the Date of Termination shall be payable on the date
such amounts are payable to other executives and Executive’s termination shall
not affect the payment of such bonus. 
Executive shall also receive a pro rated bonus for any uncompleted
fiscal year at the Date of Termination, calculated based upon the Average Bonus
and the number of days compared to 365 that he was employed during such fiscal
year.  The bonus amounts determined
herein shall be paid in a single lump sum payment, to be paid not later than 60
days after termination of employment; provided, that
the amount of such lump sum payment representing the monthly bonus payments
shall be determined by taking the monthly bonus payments to be made and
discounting them to their Present Value on the date Executive’s employment
under this Agreement is terminated.

 

(c)                                  Health and Life Insurance Coverage - The health care coverage (including
Exec-U-Care) and group term life insurance coverage provided to Executive at
his Date of Termination shall be continued for the Severance Period at the same
level and in the same manner as then provided to actively employed executive
participants as if his employment under this Agreement had not terminated.  Any additional coverages Executive had at
termination, including dependent coverage, will also be continued for such
period on the same terms, to the extent permitted by the applicable policies or
contracts.  Any costs Executive was paying
for such coverages at the Date of Termination shall be paid by Executive by
separate check payable to the Company each month in advance.  If the terms of the life insurance coverage
referred to in this subsection (c), or the laws applicable to such life
insurance coverage, do not permit continued participation by Executive, then
the Company will arrange for other life insurance coverage at its expense
providing substantially similar benefits (even if the costs of such coverage
are higher than if Executive had remained in the Company plan).

 

If the terms of
the healthcare benefits program referred to in this subsection (c) do not
permit continued participation by Executive as required by this subsection or
if the healthcare benefits to be provided to Executive and his dependents
pursuant to this subsection (c) cannot be provided in a 

 

4

 

manner
such that the benefit payments will continue to be tax-free to Executive and his
dependents, then the Company shall (i) pay to Executive within five (5) days
after Executive’s Date of Termination a lump sum amount equal to the monthly
rate for COBRA coverage at Executive’s termination date that is then being paid
by former active employees for the level of coverage that applies to Executive
and his dependents, minus the amount active employees are then paying for such
coverage, multiplied by the number of months in the Severance Period (plus a
gross-up on the lump sum amount determined under this subsection (c)), and (ii) permit
Executive and his dependents to elect to participate in the healthcare plan for
the length of the Severance Period upon payment of the applicable rate for
COBRA coverage during the Severance Period.

 

(d)                                 Employee Retirement Plans - To the extent permitted by the
applicable plan, Executive will be entitled to continue to participate,
consistent with past practices, in all employee retirement and deferred
compensation plans maintained by the Company in which Executive participates as
of his Date of Termination, including, to the extent such plans are still
maintained by the Company, the Blount 401(k) Plan and the Blount Excess
401(k) Plan.  Executive’s
participation in such retirement plans shall continue for the Severance Period,
the compensation payable to Executive under (a) and (b) above shall
be treated (unless otherwise excluded) as compensation under the plan as if it
were paid on a monthly basis, and he will receive credit for years of service
for the length of the Severance Period. 
For purposes of the Blount 401(k) Plan and the Blount Excess 401(k) Plan,
he will receive an amount equal to the Company’s contributions to the plans as
though Executive had contributed to such plans at the maximum permissible
contributions level and the Company had continued to make Matching
Contributions and Savings Plus Contributions to such plans for the Severance
Period.  If continued participation in
any plan is not permitted by the plan or by applicable law, the Company shall
pay to Executive or, if applicable, his beneficiary a supplemental benefit
equal to the Present Value on the Date of Termination under this Agreement of
the excess of (i) the benefit Executive would have been paid under such
plan if he had continued to be covered for the Severance Period (less any
amounts Executive would have been required to contribute), over (ii) the
benefit actually payable under such plan. 
The Company shall pay the Present Value of such additional benefits (if
any) in a lump sum within 30 days of his termination of employment.

 

(e)                                  Effect of Lump Sum Payment. 
The lump sum payment under (a) or (b) above shall not alter
the amounts Executive is entitled to receive under the benefit plans described
in this section.  Benefits under such
plans shall be determined as if Executive had remained employed and received
such payments over the Severance Period. 
The lump sum payments under subsections (a), (b) (c) and (d) above
are intended to satisfy the “short-term deferral exception” of Section 409A
of the Code; provided that, if such exception does not apply, the provisions of
Section 4.4, including the provisions relating to the delay in payments to
“key employees”, shall apply.

 

(f)                                    Stock Options And Other Equity Awards. 
As of Executive’s Date of Termination, any outstanding stock options and
other equity awards granted to Executive by the Company shall become vested and
exercisable as provided in the agreements for such stock options and equity
awards.

 

(g)                                 Office Space; Secretarial. 
Executive will be provided appropriate office space, secretarial
assistance and reasonable expenses related thereto for a period of twelve (12)
months from Executive’s Date of Termination. 
The benefits under this subsection (g) shall be provided in a
manner consistent with the requirements of Section 409A of the Code.

 

4.2                                 By
Company.  The Company shall
have the right to terminate Executive’s employment under this Agreement at any
time during the Term by Notice of Termination (as described in Section 6).  If the Company terminates Executive’s employment
under this Agreement (i) for Cause, as defined in Section 5.2, (ii) if
Executive becomes Disabled, or (iii) upon Executive’s death, the Company’s
obligations under this Agreement shall cease as of the Date of Termination;
provided, however, that Executive will be entitled to whatever benefits are
payable pursuant to the terms of any health, life insurance, disability,
welfare, retirement or other plan or program maintained by the Company.  If the Company terminates Executive during
the Term of this Agreement other than pursuant to clauses (i) 

 

5

 

through
(iii) of this Section 4.2, Executive shall be entitled to receive the
compensation and benefits provided in subsections (a) through (g) of Section 4.1
above for the Severance Period (as defined in Section 4.1), and subject to
the provisions (including the non-mitigation provision) and limitations
therein.

 

4.3                                 Limitation
on Benefits Upon Termination.

 

(a)                                  Notwithstanding anything in this
Agreement to the contrary, any benefits payable or to be provided to Executive
by the Company or its affiliates, whether pursuant to this Agreement or
otherwise, which are treated as Severance Payments shall be modified or reduced
in the manner provided in (b) below to the extent necessary so that the
benefits payable or to be provided to Executive under this Agreement that are
treated as Severance Payments, as well as any payments or benefits provided
outside of this Agreement that are so treated, shall not cause the Company to
have paid an Excess Severance Payment. 
In computing such amount, the parties shall take into account all
provisions of Code Section 280G, and the regulations thereunder, including
making appropriate adjustments to such calculation for amounts established to
be Reasonable Compensation.

 

(b)                                 In the event that the amount of any
Severance Payments which would be payable to or for the benefit of Executive
under this Agreement must be modified or reduced to comply with this Section 4.3,
Executive shall direct which Severance Payments are to be modified or reduced;
provided, however, that no increase in the amount of any payment or change in
the timing of the payment shall be made without the consent of the Company.

 

(c)                                  This Section 4.3 shall be interpreted
so as to avoid the imposition of excise taxes on Executive under Section 4999
of the Code or the disallowance of a deduction to the Company pursuant to Section 280G(a) of
the Code with respect to amounts payable under this Agreement or
otherwise.  Notwithstanding the
foregoing, in no event will any of the provisions of this Section 4.3
create, without the consent of Executive, an obligation on the part of
Executive to refund any amount to the Company following payment of such amount.

 

(d)                                 In addition to the limits otherwise
provided in this Section 4.3, to the extent permitted by law, Executive
may in his sole discretion elect to reduce any payments he may be eligible to
receive under this Agreement to prevent the imposition of excise taxes on
Executive under Section 4999 of the Code.

 

(e)                                  For purposes of this Section 4.3,
the following definitions shall apply:

 

(i)                               “Excess Severance Payment” - The term “Excess Severance Payment”
shall have the same meaning as the term “excess parachute payment” defined in Section 280G(b)(1) of
the Code.

 

(ii)                            “Severance Payment” - The term “Severance Payment” shall
have the same meaning as the term “parachute payment” defined in Section 280G(b)(2) of
the Code.

 

(iii)                         “Reasonable Compensation” - The term “Reasonable Compensation”
shall have the same meaning as provided in Section 280G(b)(4) of the
Code.  The parties acknowledge and agree
that, in the absence of a change in existing legal authorities or the issuance
of contrary authorities, amounts received by Executive as damages under or as a
result of a breach of this Agreement shall be considered Reasonable
Compensation.

 

4.4                                 Section 409A
Compliance. To the extent applicable, this
Agreement shall at all times be operated in accordance with the requirements of
Section 409A of the Code, including any applicable exceptions.  The Company shall have authority to take
action, or refrain from taking any action, with respect to the payments and benefits under this Agreement that is reasonably
necessary to comply with Section 409A. 
The Company shall have the authority to delay the
commencement of all or a part of the payments to Executive under this Section 4
if Executive is a “key employee” of the Company (as 

 

6

 

determined
by the Company in accordance with procedures established by the Company that
are consistent with Section 409A) to a date which is six months after the
date of Executive’s termination of employment (and on such date the payments
that would otherwise have been made during such six-month period shall be made)
to the extent (but only to the extent) such delay is required under the
provisions of Section 409A to avoid imposition of additional income and
other taxes, provided that the Company and Executive agree to take into account
any transitional rules and exemption rules available under Section 409A.

 

4.5                                 Release
of Claims. 
To be entitled to any of the compensation and benefits described above
in this Section 4, Executive shall sign a release of claims in the form required
by the Company.  No payments shall be
made under this Section 4 until such release has been properly executed
and delivered to the Company and until the expiration of the revocation period,
if any, provided under the release.  If
the release is not properly executed by Executive and delivered to the Company
within the reasonable time periods specified in the release, the Company’s
obligations under this Section 4 will terminate.

 

5.                                       Definitions. 
For purposes of this Agreement the following terms shall have the
meanings specified below:

 

5.1                                 “Board”
or “Board of Directors”.  The
Board of Directors of the Company.

 

5.2                                 “Cause”
..  The involuntary termination of
Executive by the Company for the following reasons shall constitute a
termination for Cause:

 

(a)                                  If the termination shall have been the
result of an act or acts by Executive which have been found in an applicable
court of law to constitute a felony (other than traffic-related offenses);

 

(b)                                 If the termination shall have been the
result of a willful act or acts by Executive which are in the good faith
judgment of the Chief Executive Officer to be in material violation of law or
of policies of the Company and which result in demonstrably material injury to
the Company;

 

(c)                                  If the termination shall have been the
result of an act or acts of proven dishonesty by Executive resulting or
intended to result directly or indirectly in significant gain or personal
enrichment to the Executive at the expense of the Company; or

 

(d)                                 Upon the willful and continued failure by
the Executive substantially to perform his duties with the Company (other than
any such failure resulting from incapacity due to mental or physical illness
not constituting a Disability, as defined herein), after a demand in writing
for substantial performance is delivered by the Chief Executive Officer, which
demand specifically identifies the manner in which the Chief Executive Officer
believes that Executive has not substantially performed his duties.

 

(e)                                  With respect to clauses (b), (c) or (d) above
of this Section, Executive shall not be deemed to have been involuntarily
terminated for Cause unless and until there shall have been delivered to him a
notice by the Chief Executive Officer (or his designee) setting forth (i) the
conduct deemed to qualify as Cause, (ii) reasonable action that would
remedy such objectionable conduct, and (iii) a reasonable time (not less
than thirty days) within which Executive may take such remedial action, and
Executive shall not have taken such specified remedial action within such
specified reasonable time.  For purposes
of this Agreement, no act or failure to act by Executive shall be deemed to be “willful”
unless done or omitted to be done by Executive not in good faith and without
reasonable belief that Executive’s action or omission was in the best interests
of the Company.

 

7

 

5.3                                 “Change
in Control”.  Either

 

(a)                                  the acquisition, directly or indirectly,
by any “person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended), of securities of the Company
representing an aggregate of more than fifty percent (50%) of the combined
voting power of the Company’s then outstanding securities (excluding the
acquisition by persons who own such amount of securities on the date hereof, or
acquisitions by persons who acquire such amount through inheritance), or

 

(b)                                 during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board,
cease for any reason to constitute at least a majority thereof, unless the
election of each new director was approved in advance by a vote of at least a
majority of the directors then still in office who were directors at the
beginning of the period; or

 

(c)                                  consummation of (i) a merger,
consolidation or other business combination of the Company with any other “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) or affiliate thereof, other than a merger,
consolidation or business combination which would result in the outstanding
common stock of the Company immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into common stock of the
surviving entity or a parent or affiliate thereof) more than fifty percent
(50%) of the outstanding common stock of the Company, or such surviving entity
or parent or affiliate thereof, outstanding immediately after such merger,
consolidation or business combination, or (ii) a plan of complete
liquidation of Company or an agreement for the sale or disposition by Company
of all or substantially all of Company’s assets;

 

(d)                                 a sale of more than 50% of the assets of
the Company.

 

5.4                                 “Code”.  The Internal Revenue Code of 1986, as it may
be amended from time to time.

 

5.5                                 “Confidential
Information”. 
All technical, business, and other information relating to the business
of the Company or its subsidiaries or affiliates, including, without
limitation, technical or nontechnical data, formulae, compilations, programs,
devices, methods, techniques, processes, financial data, financial plans,
product plans, and lists of actual or potential customers or suppliers that (i) derives
economic value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other Persons, and (ii) is
the subject of efforts that are reasonable under the circumstances to maintain
its secrecy or confidentiality.  Such
information and compilations of information shall be contractually subject to
protection under this Agreement whether or not such information constitutes a
trade secret and is separately protectable at law or in equity as a trade
secret.  Confidential Information does
not include confidential business information which does not constitute a trade
secret under applicable law two years after any expiration or termination of
this Agreement.

 

5.6                                 “Disability”
or “Disabled”.  Executive’s
inability as a result of physical or mental incapacity substantially to perform
his duties for the Company on a full-time basis for a continuous period of six (6) months.

 

5.7                                 “Good
Reason”.  A “Good Reason” for
termination by Executive of Executive’s employment shall mean the occurrence
during the Term (without the Executive’s express written consent) of any one of
the acts or failures to act by the Company set forth in (a) through (d) below,
and satisfaction of the following conditions: 
(i) Executive provides notice to the Company of such Good Reason
condition within 90 days of its initial existence, (ii) the Company is
given 30 days to remedy the Good Reason condition and fails to do so, and (iii) Executive
terminates employment within one year of the initial existence of the Good
Reason condition.  For purposes of this
Agreement, the Good Reason conditions are as follows:

 

8

 

(a)                                  a material adverse change in the nature
or status of Executive’s job responsibilities from those set forth in Section 1(a) above;

 

(b)                                 the relocation of the Company’s principal
executive offices to a location more than fifty (50) miles from Portland,
Oregon or the Company’s requiring Executive to be based anywhere other than the
Company’s principal executive offices, except for reasonably required travel on
the Company’s business;

 

(c)                                  a material reduction by the Company in
Executive’s Base Salary as in effect on the date hereof or as the same my be
increased from time to time, except in connection with an across-the-board pay
reduction for executives of similar status;

 

(d)                                 a material reduction by the Company in
the compensation and benefits provided in the aggregate to Executive on the
date hereof under the Company’s 401(k), deferred compensation, incentive
compensation, life insurance, health care, AD&D, or disability plans,
except in connection with an across-the-board reduction that impacts executives
at Executive’s level generally;

 

(e)                                  the failure by the Company to obtain a
successor’s consent to be bound by the Agreement as provided in Section 8.1;
or

 

(f)                                    because a material inducement to
Executive’s acceptance of employment with the Company is the fact that he will
report directly to, and work for, Joshua L. Collins (“Collins”) for a period of
24 months from the Effective Date, the termination by the Company of Collins as
Chief Executive Officer (or Chief Executive Officer-Designate) of the Company
for any reason other than Cause or the termination by Collins for Good Reason
(as such terms are defined in the Employment Agreement dated September 29,
2009 between Collins and the Company).

 

Executive’s right
to terminate Executive’s employment for Good Reason shall not be affected by
the Executive’s incapacity due to physical or mental illness.  Executive’s continued employment shall not
constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason hereunder.

 

5.8                                 “Person”
..  Any individual, corporation, bank,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or other entity.

 

5.9                                 “Present
Value”.  The term “Present Value” on
any particular date shall have the same meaning as provided in Section 280G(d)(4) of
the Code.

 

6.                                       Termination Procedures.

 

6.1                                 Notice
of Termination. 
During the Term of this Agreement, any purported termination of
Executive’s employment (other than by reason of death) shall be communicated by
written Notice of Termination from one party hereto to the other party hereto
in accordance with Section 10.  For
purposes of this Agreement, a “Notice of Termination” shall mean a notice
which, if applicable, shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated. 
Further, a Notice of Termination for Cause is required to include the
information set forth in Section 6.2.

 

6.2                                 Date
of Termination. 
“Date of Termination,” with respect to any purported termination of
Executive’s employment during the Term of this Agreement, shall mean (i) if
Executive’s employment is terminated by his death, the date of his death, (ii) if
Executive’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that Executive shall not have returned
to the full-time performance of Executive’s duties during such thirty (30) day
period), and (iii) if 

 

9

 

Executive’s
employment is terminated for any other reason, the date specified in the Notice
of Termination (which, in the case of a termination by the Company, shall not
be less than thirty (30) days (except in the case of a termination for Cause)
and, in the case of a termination by the Executive, shall not be less than
thirty (30) days nor more than sixty (60) days, respectively, from the date
such Notice of Termination is given); provided, however, that the “Date of
Termination” for purposes of this Agreement shall not be the last day of the
Company’s fiscal year and, in the event the last day of the fiscal year is
designated as the “Date of Termination”, the “Date of Termination” for purposes
hereof shall automatically be the first day of the next following fiscal year.

 

7.                                       Contract Non-Assignable. 
The parties acknowledge that this Agreement has been entered into due
to, among other things, the special skills of Executive, and agree that this
Agreement may not be assigned or transferred by Executive, in whole or in part,
without the prior written consent of the Company.

 

8.                                       Successors; Binding Agreement.

 

8.1                                 In
addition to any obligations imposed by law upon any successor to, or transferor
of, the Company, the Company will require any successor to, or transferor of,
all or substantially all of the business and/or assets of the Company or stock
of the Company (whether direct or indirect, by purchase, merger,
reorganization, liquidation, consolidation or otherwise) to expressly assume
and agree to perform this Agreement, in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place.  Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall constitute the basis
for Executive to terminate his employment for Good Reason during the 90-day
period after succession and to receive the compensation and benefits provided
in Section 4.1 above.

 

8.2                                 This
Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees and by the Company’s successors and
assigns.  If Executive shall die while
any amount would still be payable to Executive hereunder (other than amounts
which, by their terms, terminate upon the death of Executive) if Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of Executive’s estate.

 

9.                                       Other Agents. 
Nothing in this Agreement is to be interpreted as limiting the Company
from employing other personnel on such terms and conditions as may be
satisfactory to the Company.

 

10.                                 Notices.  All notices,
requests, demands and other communications required or permitted hereunder
shall be in writing and shall be deemed to have been duly given if delivered or
seven days after mailing if mailed, first class, certified mail, postage
prepaid:

 

	
  To the Company

  	
   

  	
  Blount
  International, Inc.

  4909 SE
  International Way

  Portland, OR 97222

   

  ATTN: General Counsel

  
	
   

  	
   

  	
   

  
	
  To the Executive:

  	
   

  	
  David A. Willmott

  

 

Any
party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.

 

10

 

11.                                 Provisions Severable. 
If any provision or covenant, or any part thereof, of this Agreement
should be held by any court to be invalid, illegal or unenforceable, either in
whole or in part, such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of the remaining provisions or
covenants, or any part thereof, of this Agreement, all of which shall remain in
full force and effect.

 

12.                                 Waiver.  Failure of
either party to insist, in one or more instances, on performance by the other
in strict accordance with the terms and conditions of this Agreement shall not
be deemed a waiver or relinquishment of any right granted in this Agreement or
the future performance of any such term or condition or of any other term or
condition of this Agreement, unless such waiver is contained in a writing
signed by the party making the waiver.

 

13.                                 Indemnification. 
During the term of this Agreement and after Executive’s termination, the
Company shall indemnify Executive and hold Executive harmless from and against
any claim, loss or cause of action arising from or out of Executive’s
performance as an officer, director or employee of the Company or any of its
subsidiaries or other affiliates or in any other capacity, including any
fiduciary capacity, in which Executive serves at the Company’s request, in each
case to the maximum extent permitted by law and under the Company’s Articles of
Incorporation and By-Laws (the “Governing Documents”), provided that in no
event shall the protection afforded to Executive hereunder be less than that
afforded under the Governing Documents as in effect on the date of this
Agreement except from changes mandated by law. 
During the Term and after Executive’s termination, Executive shall be
covered by any policy of directors’ and officers’ liability insurance
maintained by the Company for the benefit of its officers and directors.

 

14.                                 Amendments and Modifications. 
This Agreement may be amended or modified only by a writing signed by
both parties hereto.

 

15.                                 Governing Law. 
The validity and effect of this Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.

 

16.                                 Arbitration of Disputes; Expenses. 
All claims by Executive for compensation and benefits under this
Agreement shall be directed to and determined by the Board and shall be in
writing.  Any denial by the Board of a
claim for benefits under this Agreement shall be delivered to Executive in
writing and shall set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon.  The Board shall afford a reasonable
opportunity to Executive for a review of a decision denying a claim and shall
further allow Executive to appeal to the Board a decision of the Board within
sixty (60) days after notification by the Board that Executive’s claim has been
denied.  Unless prohibited by applicable
law, any further dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Portland, Oregon,
in accordance with the employment arbitration rules of the American
Arbitration Association then in effect. 
To the extent administratively practicable, the Company and the
Executive agree to select an arbitrator who is an attorney with experience in
employment law disputes.  Judgment may be
entered on the arbitrator’s award in any court having jurisdiction.  In the event the Executive incurs legal fees
and other expenses in seeking to obtain or to enforce any rights or benefits
provided by this Agreement and is successful, in whole or in part, in obtaining
or enforcing any material rights or benefits through settlement, arbitration or
otherwise, the Company shall pay Executive’s reasonable legal fees and expenses
incurred in enforcing this Agreement and the fees of the arbitrator.  If applicable, the Executive’s reasonable
legal fees and expenses shall be paid within thirty (30) days of Executive’s
submission of the invoices for such amounts. 
Except to the extent provided in the preceding sentence, each party
shall pay its own legal fees and other expenses associated with any dispute.

 

11

 

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

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  s/ David A. Willmott

  
	
   

  	
  DAVID A. WILLMOTT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  BLOUNT INTERNATIONAL,
  INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  s/ Richard H.
  Irving, III

  
	
   

  	
   

  	
  Senior Vice President

  

 

12

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