ALLIANT TECHSYSTEMS INC. COMPENSATION ARRANGEMENT WITH PAUL DAVID MILLER o Base salary o $600,000/year ($50,000/month) o Salary may adjust from time to time, but not annually o Annual incentive o $400,000/year at target; up to 200% of target for achieving outstanding results o Above target incentive, after tax, will be paid in stock until you meet an ownership target of 4x base (starts FY00) o Ownership target = 4 x $600,000/$75 = 32,000 shares at today's stock price o FY99 MIP incentive will be prorated and paid at 'on-plan', in advance at time of hire o We will 'true-up' this incentive at the end of FY99 o $400,000 x 3/12 = $100,000 (less taxes) o Long term business performance incentive A. Performance shares payable 3/31/00 for FY00 EPS o Threshold: 1,000 shares for EPS = 85% of plan as of 4/1/99 o Target: 2,000 shares for EPS = plan as of 4/1/99 o Outstanding: 4,000 shares for EPS = 125% of plan as of 4/1/99 B. Performance shares payable 3/31/01 for average FY00 and FY01 EPS o Threshold: 1,000 shares for average EPS = 85% of plan as of 4/1/99 o Target: 2,000 shares for average EPS = plan as of 4/1/99 o Outstanding: 4,000 shares for average EPS = 125% of plan as of 4/1/99 C. Future annual performance share grants o Stock options o 150,000 non-qualified stock options o Priced as of the grant date o Vesting 1/3 per year over 3 years o No additional stock option grants for 3 years o Flexible perquisites o Up to $15,000 per year in quarterly reimbursements of qualifying expenses o No tax gross-up o Gross expenses are reimbursed at net amount o For qualifying items such as o First class upgrade o Airline 'club' membership o Spouse travel o Car purchase/lease o Staff entertainment o Home security o Home computer o Financial counseling o $15,000 first year; $10,000 subsequent years o Direct payment to vendor(s) o Plus tax gross-up o Life Insurance o Company provided 'basic' life insurance at 1.5 (base + incentive) o $1,500,000 death benefit o Or any lesser amount, at your election o Income Security Plan o Provides 3 years of income protection subsequent to a change of control o Full relocation, including Home Purchase Option Program to cover your move to Minnesota. o Full relocation, including Home Purchase Option Program to cover your move from Minnesota at the end of your service to Alliant, including loss on sale up to 5% of the purchase price of the Minnesota home. o All Alliant Techsystems Inc. employee benefits o Cash balance defined benefit plan - vests in 5 years o 401k with 50% match on first 4% contribution - immediately vests o Supplemental insurances at group rates o Long term disability insurance at group rates o HealthPartners Minneapolis health care plan at group rates o Vacation: Starting balance = 10 days; Accruing at 15 days per year; subject to plan limits
Employment Agreement - Alliant Techsystems Inc. and Paul David Miller
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