Exhibit 10.8
ALLIANT TECHSYSTEMS
INC.
MANAGEMENT COMPENSATION
PLAN
(as restated effective
April 1, 2002)
Article I.
Establishment and Purpose of Plan
Alliant Techsystems Inc., a Delaware
corporation (the “Company”), previously established the
Alliant Techsystems Inc. Management Compensation Plan (the
“Plan”) effective October 1, 1990, for the benefit
of its management employees. The Plan has been amended from
time to time. The Company hereby amends and restates the Plan
in its entirety as set forth herein, effective April 1, 2002
(the “Restatement Effective Date”), subject to the
approval of the stockholder of the Company, to incorporate such
amendments and to clarify its terms.
The purpose of the Plan is to
provide incentive compensation to management employees in
accordance with the Company’s “pay for
performance” philosophy by directly relating individual, unit
and Company-wide performance to compensation in a manner that is
equitable internally and competitive with similarly situated
companies.
The Plan provides for annual
incentive payments to management employees based upon the
achievement of pre-established performance goals. Incentive
compensation payable under the Plan is intended to be deductible by
the Company in accordance with Section 162(m) of the Internal
Revenue Code of 1986, as amended (the
“Code”).
Article II.
Definitions
For purposes of the Plan, unless the
context otherwise requires, the following terms shall have the
meaning set forth below.
2.1
“ Award ” means
an award of incentive compensation under the Plan to a Participant
in accordance with the terms set forth herein.
2.2
“ Award Percentage
,” for an Incentive Unit for any Performance Period means the
percentage derived from dividing the dollar amount of the Incentive
Unit’s Earned Incentive Fund by the Incentive Unit’s
Target Incentive Fund for such Performance Period. In
general, an Incentive Unit’s Award Percentage may not exceed
two hundred percent (200%). However, the Committee in its
discretion may approve an Award Percentage of up to three hundred
percent (300%).
2.3
“ Base Salary ”
of a Participant for a Performance Period, means the
Participant’s basic annual salary, exclusive of any bonus,
incentive plan payment, pension or other Company-paid benefit and
all other items of extraordinary compensation, but shall include
for purposes of this Plan: (a) the amount of any reduction in
Base Salary to which a Participant has agreed as part of any plan
of the Company to use the amount of such reduction to purchase
benefits under a cafeteria plan under Code Section 125, a
transportation fringe benefit plan under Code Section 132(f),
or in connection with any qualified cash or deferred arrangement
under Code Section
401(k); (b) payments made to the Participant
under the Company’s salary continuance plan for absence due
to illness, injury, or approved medical leave of absence; and (c)
any Participant payments by salary reduction or its equivalent to a
Company-sponsored nonqualified deferred compensation
plan.
2.4
“ Board ” means
the Board of Directors of the Company as constituted at the
relevant time.
2.5
“ CEO ” means the
Company’s Chief Executive Officer at the relevant
time.
2.6
“ Change Event ”
means:
(a)
the acquisition after the
Restatement Effective Date by any “person” or group of
persons (a “Person”), as such terms are used in
Section 13(d) and 14(d) of the Exchange Act (other than the
Company or a Subsidiary or any Company employee benefit plan
(including its trustee)) of “beneficial ownership” (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company directly or indirectly
representing fifteen percent (15%) or more of the total number of
shares of the Company’s then outstanding Voting Securities
(excluding the sale or issuance of such securities directly by the
Company, or where the acquisition of such securities is made by
such Person from five (5) or fewer shareholders in a transaction or
transactions approved in advance by the Board);
(b)
the public announcement by any
Person of an intention to acquire the Company through a tender
offer, exchange offer or other unsolicited proposal; or
(c)
the individuals who, as of the
Restatement Effective Date, are members of the Board (the
“Incumbent Board”), cease for any reason to constitute
at least a majority of the Board; provided, however, that if the
nomination for election of any new director was approved by a vote
of a majority of the Incumbent Board, such new director shall, for
purposes of this definition, be considered a member of the
Incumbent Board.
2.7
“ Change of Control
” means:
(a)
the acquisition by any Person (other
than the Company or a Subsidiary, or any Company employee benefit
plan (including its trustee)) of “beneficial ownership”
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing, directly or
indirectly, more than fifty percent (50%) of the total number of
shares of the Company’s then outstanding Voting
Securities;
(b)
consummation of a reorganization,
merger or consolidation of the Company, or the sale or other
disposition of all or substantially all of the Company’s
assets (a “Business Combination”), in each case,
unless, following such Business Combination, the individuals and
entities who were the beneficial
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owners of the total number of shares
of the Company’s outstanding Voting Securities immediately
prior to both: (i) such Business Combination; and (ii) any
Change Event occurring within twelve (12) months prior to such
Business Combination, beneficially own, directly or indirectly,
more than fifty percent (50%) of the total number of shares of the
outstanding Voting Securities of the resulting corporation, or the
acquiring corporation, as the case may be, immediately following
such Business Combination (including, without limitation, the
outstanding Voting Securities of any corporation which as a result
of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more
Subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
total number of shares of the Company’s outstanding Voting
Securities; or
(c)
any other circumstances (whether or
not following a “Change Event”) which the Board
determines to be a Change of Control for purposes of this Plan
after giving due consideration to the nature of the circumstances
then represented and the purposes of this Plan. Any such
determination made by the Board shall 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 definition, a
“Change of Control” shall 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.
2.8
“ Code ” means
the Internal Revenue Code of 1986, as amended.
2.9
“ Committee ”
means the Personnel and Compensation Committee of the Board, as
constituted at the relevant time, which shall consist of two or
more “outside directors” within the meaning of
Section 162(m) of the Code.
2.10
“ Company ” means
Alliant Techsystems Inc., a Delaware corporation.
2.11
“ Corporate Management
” means the Company’s Chief Executive Officer, Chief
Financial Officer, Chief People Officer, and any other individual
to whom these officers may delegate responsibilities under the Plan
from time to time.
2.12
“ Disability or
Disabled ,” with respect to a Participant, means that the
Participant satisfies the requirements to receive disability
benefits under the Company-sponsored long-term disability plan in
which the Participant participates without regard to any waiting
periods. A Participant shall not be considered to be
“Disabled” unless the Participant furnishes proof of
the Disability to the Company in such form and manner as the
Company may require.
2.13
“ Early Retirement Date
,” of a Participant, means the date (prior to the date on
which the Participant reaches his or her Normal Retirement Date),
on which the Participant has satisfied all of the requirements to
begin receiving benefits under the Company-sponsored qualified
defined benefit plan in which he or she participates.
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2.14
“ Earned Incentive Fund
,” of an Incentive Unit for a Performance Period is the
dollar amount determined by applying the Incentive Unit’s
weighted average organizational performance percentage, using the
organizational weightings described in Section 5.1(b) and the
achievement levels for the Organizational Performance Goals
described in Section 5.1(c) and (d), to the Incentive
Unit’s Target Incentive Fund.
2.15
“ Eligible Employee
,” for any Performance Period, means an employee of the
Company who, during such period, regularly and directly makes or
influences policy and operational decisions of the Company that
significantly affect the financial results and strategic direction
of the Company, as determined by the CEO according to guidelines
established by the Committee. The designation of an employee
as an Eligible Employee for any Performance Period shall be subject
to final approval by the Committee.
2.16
“ Exchange Act ”
means the Securities Exchange Act of 1934.
2.17
“ Fair Market Value
,” of a share of Stock as of any date means the closing price
of the Stock as reported on the New York Stock Exchange Composite
Tape for such date, or if no such reported sale of the Stock shall
have occurred on such date, on the next preceding date on which
there was such a reported sale.
2.18
“ Fiscal Year ”
means the Company’s fiscal year, i.e. , April 1
through March 31.
2.19
“ Incentive Group
,” with respect to an Incentive Unit, means the business
group, if any, of which the Incentive Unit is a part, as specified
by the Committee from time to time.
2.20
“ Incentive Unit
” means the Company, or a part thereof ( e.g. ,
limited liability company, business group, or major corporate staff
department), as specified by the Committee from time to
time.
2.21
“ Individual Performance
Percentage ” means the percentage remaining when the
Organizational Performance Percentage is subtracted from
100%.
2.22
“ Normal Retirement
Date ,” of a Participant, means the date on which the
Participant has reached the age of sixty-five (65).
2.23
“ 162(m) Employee
,” for any Fiscal Year, means an employee of the Company who,
as the close of the Fiscal Year, is: (a) the CEO (or an
individual acting in such capacity); or (b) among the four highest
compensated officers of the Company (other than the CEO).
Whether an employee is the CEO or one of the four highest
compensated officers of the Company is determined pursuant to the
executive compensation rules of the Exchange Act.
2.24
“ Organizational
Performance Percentage ” is the percentage applied to the
Earned Incentive Fund for an Incentive Unit for a Performance
Period in order to determine the amount of the Earned Incentive
Fund that will be allocated to Participants for the achievement of
Organizational Performance Goals. The Committee, in its
discretion, will determine the Organizational Performance
Percentage for an Incentive Unit for a Performance Period prior to
the beginning of the Performance Period. Such percentage may
vary from Incentive Unit to Incentive Unit.
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2.25
“ Organizational
Performance Goal ” has the meaning set forth in
Section 5.1(b).
2.26
“ Outstanding Level
,” of a Performance Goal for a Performance Period, is an
achievement level above the Target Level for such goal, as
specified by the Committee at the time the Target Level is
established, which generally corresponds to 200% of a
Participant’s Target Award.
2.27
“ Participant ,”
in the Plan for any Performance Period, means an Eligible Employee
who for such Performance Period has: (a) been approved for
participation in the Plan by the Committee; (b) satisfied the
participation requirements set forth in Article IV; and (c)
commenced participation in the Plan.
2.28
“ Performance Goals
,” of a Participant for a Performance Period, are the goals
established for the Participant for the Performance Period, the
achievement of which is a condition for receiving an Award under
the Plan. A Participant’s Performance Goals consist of
the Organizational Performance Goals applicable for the Incentive
Unit to which the Participant is assigned and the Individual
Performance Goals established for the Participant for his or her
individual performance during the Performance Period.
In the case of a Participant who is
a 162(m) Employee, all Performance Goals must be pre-established by
the Committee, must be objective, and must state, in terms of an
objective formula or standard, the method for computing the amount
of compensation payable if the goal is attained. A
Performance Goal is considered “pre-established” for
purposes of this paragraph if it is established in writing by the
Committee no later than ninety (90) days after the commencement of
a Performance Period, provided that the outcome is substantially
uncertain at the time the Committee actually establishes the
goal. However, in no event will a Performance Goal be
considered to be pre-established if it is established after
twenty-five percent (25%) of a Performance Period has
elapsed. A Performance Goal is considered
“objective” if a third party having knowledge of the
relevant facts could determine whether the goal is met. A
formula or standard is considered “objective” if a
third party having knowledge of the relevant performance results
could calculate the amount to be paid to the
Participant.
Performance goals may be based on
one or more of the following factors and may be based on attainment
of a particular level of, or on a positive change in, a
factor:
(a)
revenue;
(b)
revenue per employee;
(c)
net income;
(d)
earnings per employee;
(e)
earnings per share;
(f)
operating income;
(g)
total shareholder return;
(h)
earnings before income
