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Separation Agreement

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Sectors: Aerospace and Defense
Governing Law: Virginia , View Virginia State Laws
Effective Date: December 17, 2008
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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.
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