EXHIBIT 10.12
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 Carl A. Marchetto for
himself and on behalf of his agents, assigns, heirs, executors,
administrators, attorneys and representatives (“Mr.
Marchetto”), 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, Mr. Marchetto’s employment
shall end as provided in this General Release. In
consideration of Mr. Marchetto signing and complying with
this General Release, ATK agrees to provide him with certain
payments and other valuable consideration described below.
Further, ATK and Mr. Marchetto desire to resolve and settle
any and all potential disputes or claims related to his employment
or termination of employment.
WHEREAS, ATK has expended significant time and
money on promotion, advertising, and the development of goodwill
and a sound business reputation through which ATK has developed a
list of customers and spent time and resources to learn the
customers’ needs for ATK’s services and products.
This information is a valuable, special and unique asset of
ATK’s business, which Mr. Marchetto acknowledges
constitutes confidential and proprietary information.
WHEREAS, ATK has expended significant time and
money on technology, research, and development through which it has
developed products, processes, technologies and services that are
valuable, special and unique assets of ATK’s business, which
Mr. Marchetto acknowledges constitute confidential and
proprietary information.
WHEREAS, the disclosure to or use by third
parties of any of ATK’s confidential or proprietary
information, or trade secrets, or Mr. Marchetto unauthorized
use of such information or trade secrets would seriously harm
ATK’s business and cause monetary loss that would be
difficult, if not impossible, to measure.
THEREFORE, ATK and Mr. Marchetto (the
“Parties”) mutually agree to the following terms and
conditions:
1.
Last Day of Employment
. Mr. Marchetto’s
employment with ATK is terminated effective January 2,
2009.
(a)
Final Paycheck
. ATK will pay
Mr. Marchetto for all salary earned through the effective date
of the termination of his employment with ATK. ATK will also
pay
for any accrued, but unused vacation/PTO.
Mr. Marchetto’s continuing right, if any, under all
other ATK employee benefits plans will be governed by those
plans.
(b)
Restricted Stock
. Mr. Marchetto has one
unvested restricted stock award which was granted on
December 31, 2007, for 7300 shares. Pursuant to the
Restricted Stock Award Agreement, 3650 shares (which is 1/2 of the
original grant) will vest on December 31, 2008. Also
pursuant to that agreement, the other 3650 shares will vest upon
his termination date of January 2, 2009.
(c)
Performance Share and Cash
Incentive Payment .
Mr. Marchetto has a Performance Share Award Agreement for the
Measuring Period of ATK fiscal year 2009 through 2011. In
accordance with that Performance Award Agreement,
Mr. Marchetto will receive a prorated number of performance
shares and a prorated cash incentive payment; this proration is
9/36. The number of shares delivered and the amount of any
cash payment depend on the plan terms and whether and to what
extent ATK meets the objectives that were established when the
performance award was granted.
ATK expects to make payment of this award
following the completion of the performance period which ATK
currently expects to be in May 2011; but in no event will the
payment be later than the last day in the calendar year in which
the performance period ends. 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 Agreements.
(d)
Executive Incentive
Plan .
Mr. Marchetto will be eligible to receive an Executive
Incentive Plan (EIP) payment for ATK Fiscal Year 2009. Such
payment will be prorated based on his 9/12 months of employment in
ATK FY09 and based on the performance and terms as established in
the beginning of the fiscal year. This amount will be paid in
a single lump sum payment in cash at the time all other EIP
participants receive payment
(e)
Deferred Compensation
. Any compensation Mr.
Marchetto deferred under the Alliant Techsystems Inc. Nonqualified
Deferred Compensation Plan shall be paid in accordance with his
pre-selected distribution options and the terms of that plan.
All existing deferral elections will be governed by the Alliant
Techsystems Inc. Nonqualified Deferred Compensation Plan
terms.
2.
Severance Benefits
. In exchange for the promises
of this Agreement, and after the applicable revocation period has
ended, ATK will provide Mr. Marchetto 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”):
(a)
Severance Pay
. ATK will pay
Mr. Marchetto a single lump-sum severance payment in the
amount of $420,000, which is equal to twelve months base pay.
This severance payment will be subject to all applicable
withholdings and will be taxable as payroll wages and provided the
seven day revocation period has expired (in accordance with
paragraph 9) will be paid no later than January 23,
2009. No 401(k) deductions will be taken from
the
2
payment nor is it pensionable earnings (for
example, it is not “Earnings” or “Recognized
Compensation”) for purposes of any ATK qualified or
non-qualified employee benefits plans.
(b)
Additional Lump Sum
. Mr. Marchetto is
eligible to receive a single lump-sum payment in the amount of
$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 401k
deductions will be taken from the payment nor is it pensionable
earnings (for example, it is not “Earnings” or
“Recognized Compensation”) for purposes of any ATK
qualified or non- qualified employee benefits plans.
(c)
Outplacement Services
. Mr. Marchetto will be
entitled to participate in executive level outplacement services
through Lee Hecht Harrison.
(d)
Independent
Consideration .
Mr. Marchetto understands and agrees that he is only eligible
for Severance Benefits because he has signed and not revoked this
General Release. Mr. Marchetto acknowledges that he is
not otherwise entitled to receive such additional and valuable
consideration. Except as otherwise provided in Paragraph 7,
by Mr. Marchetto’s signature on this General Release, he
waives all rights to any other benefits or cash payment.
Further, Mr. Marchetto agrees that these Severance Benefits
are adequate consideration for the promises herein.
3.
Post Employment
Restrictions .
(a)
Confidentiality and
Non-Disparagement .
Mr. Marchetto acknowledges that in the course of his
employment with ATK, he has had access to confidential and
propriety information and trade secrets. Mr. Marchetto
agrees to maintain the confidentiality of ATK’s confidential
and proprietary information and trade secrets.
Mr. Marchetto will not disclose or otherwise make available to
any person, company, or other party confidential and proprietary
information or trade secrets. Further, Mr. Marchetto
agrees not to make any disparaging or defamatory comments about any
ATK employee, director, or officer, the Company, or any aspect of
his employment or his separation from employment with ATK.
ATK agrees that its senior management, officers and directors will
not make any disparaging or defamatory comments about
Mr. Marchetto, or any aspect of his employment or separation
from employment with ATK.
(b)
Competition
Restrictions . From
January 3, 2009 through January 2, 2010,
Mr. Marchetto agrees that he will not directly or indirectly,
personally engage in, nor own, manage, operate, join, control,
consult with, participate in the ownership, operation or control
of, be employed by any person or entity that distributes, markets
or sells services or products competitive with ATK’s space
craft business, which ATK manufactures, markets or sells to any
customer anywhere
