BLOUNT INTERNATIONAL INC, DEF 14A, 1998-03-17

BLOUNT INTERNATIONAL INC
DEF 14A, 1998-03-17
CONSTRUCTION - SPECIAL TRADE CONTRACTORS

Previous: AMERICAN ARTISTS FILM CORP/MO/, 10QSB, 1998-03-17

Next: GLOBAL PACIFIC ENTERPRISES INC, SB-2/A, 1998-03-17

<PAGE> 1

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>

Blount International, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:
<PAGE> 2

(BLOUNT LOGO)

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of
Blount International, Inc. which will be held at 10:00 AM CDT, on Monday, April
20, 1998 in the Wilson Auditorium at the Montgomery Museum of Fine Arts, One
Museum Drive, Montgomery, Alabama.

In addition to the matters set forth in the attached Proxy Statement, we
will report on the activities of Blount and give you an opportunity to ask
questions.

Your vote is important and your shares should be represented at the meeting
whether or not you are personally able to attend. You are urged to sign, date
and return the enclosed proxy card(s) promptly.

On behalf of our Board of Directors and employees, we thank you for your
continued support of Blount International, Inc.

<TABLE>
<S> <C>
Sincerely,

/s/ Winton M. Blount /s/ John M. Panettiere
Winton M. Blount John M. Panettiere
Chairman of the Board President and Chief
Executive Officer
</TABLE>
<PAGE> 3

(Blount Logo)
---------------------

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD APRIL 20, 1998
---------------------

TO THE STOCKHOLDERS OF BLOUNT INTERNATIONAL, INC.:

The Annual Meeting of Stockholders of Blount International, Inc. will be
held at 10:00 A.M., C.D.T., on Monday, April 20, 1998 in the Wilson Auditorium
at the Museum of Fine Arts, One Museum Drive, Montgomery, Alabama 36117, for the
following purposes:

1. To elect a Board of Directors to serve until the next Annual Meeting of
Stockholders or until their successors have been elected and qualified;

2. To consider and act upon a proposal to approve the 1998 Blount Long Term
Executive Stock Option Plan;

3. To consider and act upon a proposal to ratify the appointment of Coopers
& Lybrand L.L.P. as independent auditors for the Corporation for the
year ending December 31, 1998; and

4. To transact such other business as may properly come before the meeting
or any adjournment thereof.

The Board of Directors has fixed the close of business on Friday, February
20, 1998, as the record date for determining the stockholders entitled to notice
of and to vote at the Meeting or any adjournment thereof.

IF YOU OWN SHARES OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK, YOU
MUST RETURN BOTH PROXY FORMS IN ORDER TO VOTE FOR ALL DIRECTORS.

ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO ASSURE
YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO COMPLETE, DATE AND SIGN
THE ACCOMPANYING FORM OR FORMS OF PROXY AND RETURN THEM PROMPTLY IN THE ENCLOSED
ENVELOPE.

By Order of the Board of Directors,

/s/ D. Joseph McInnes
D. JOSEPH McINNES
Executive Vice President -- Administration
and Chief Administrative Officer
and Corporate Secretary

4520 Executive Park Drive
Montgomery, Alabama 36116-1602
March 9, 1998
<PAGE> 4

BLOUNT INTERNATIONAL, INC.

4520 EXECUTIVE PARK DRIVE

MONTGOMERY, ALABAMA 36116-1602

(334) 244-4000

------------------------------

PROXY STATEMENT
FOR THE
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
APRIL 20, 1998

------------------------------

This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors (the "Board") of Blount International, Inc., a
Delaware corporation, (the "Corporation") of your proxy or proxies for use at
the Annual Meeting of Stockholders to be held on April 20, 1998, or at any
adjournment thereof (the "Meeting"). It is anticipated that this Proxy Statement
and the accompanying form or forms of proxy will be mailed to stockholders on or
about March 16, 1998.

Shares represented by each properly signed proxy on the accompanying form
or forms received by the Corporation in time to permit its use at the Meeting or
any adjournment thereof will be voted at the Meeting, but such proxy may be
revoked at any time prior to the actual voting thereof by giving notice in
writing to the Secretary of the Corporation or by voting a subsequently dated
proxy. If a proxy is signed but no specification is made on the proxy, the
shares represented by the proxy will be voted as recommended by the Board. If a
specification is made, the shares will be voted in accordance with the
specification. The presence of a stockholder at the Meeting does not revoke his
or her proxy; however, a stockholder may revoke his or her proxy and vote in
person if he or she so requests.

Note that, except where expressly stated otherwise, the information
provided in this Proxy Statement constitutes the aggregation of such information
as it related to Blount, Inc. prior to November 4, 1995 and to Blount
International, Inc. after November 3, 1995.

As of the close of business on November 3, 1995, Blount, Inc. merged with a
wholly-owned subsidiary of Blount International, Inc. and became a wholly-owned
subsidiary of Blount International, Inc.

VOTING SECURITIES

RECORD DATE, CLASSES OF STOCK ENTITLED TO VOTE, AND VOTE REQUIRED

The Board has fixed the close of business on Friday, February 20, 1998, as
the record date for determining stockholders entitled to notice of and to vote
at the Meeting. Holders of shares of Class A Common Stock and Class B Common
Stock are entitled to vote at the Meeting. As of such date, the Corporation had
issued 27,281,292 shares of Class A Common Stock, of which 1,387,179 shares are
held as treasury stock and are non-voting, and 11,619,936 shares of Class B
Common Stock. There are no cumulative voting or preemptive rights.

The holders of Class A Common Stock will be entitled to elect 25% (rounded
up to the nearest whole number) of the directors and will be entitled to 1/10 of
1 vote per share with respect to other matters. The holders of Class B Common
Stock will be entitled to elect the remaining directors and will be entitled to
1 vote per share with respect to other matters.

Directors are elected by the affirmative vote of a majority of the shares
of the appropriate class of common stock, voting as a single class, cast in the
election. The affirmative vote of a majority of the voting power of the shares
of both classes of common stock, voting together, cast in the election is
required to approve any other proposal presented at the Meeting.

1
<PAGE> 5

PRINCIPAL STOCKHOLDERS

The following table sets forth as of February 20, 1998, to the best
knowledge of the Corporation, information as to (a) beneficial ownership of more
than 5% of the Class A Common Stock and Class B Common Stock of the Corporation
by certain persons (other than director nominees); and (b) beneficial ownership
of Class A Common Stock and Class B Common Stock of the Corporation by (i) each
director nominee, (ii) each executive officer named in the Summary Compensation
Table other than director nominees, and (iii) all director nominees and
executive officers of the Corporation as a group. Except as otherwise indicated,
all beneficial ownership stated in the table represents sole voting and
investment power.

<TABLE>
<CAPTION>
SHARES PERCENT PERCENT
NAME AND ADDRESS OF BENEFICIALLY OF OF TOTAL
BENEFICIAL OWNERS TITLE OF CLASS OWNED CLASS VOTES(1)
------------------------------------------ -------------------- ------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
(a) Holders of more than 5% of Class A Common
Stock and Class B Common Stock (other than
director nominees and executive officers
named in the Summary Compensation Table)
------------------------------------------
The Blount Holding Company, L.P. Class A Common Stock 2,892,144 (2) 11.17% 2.04%
4520 Executive Park Drive Class B Common Stock 8,409,696 (2) 72.37% 59.18%
Montgomery, Alabama 36116
BHP, Inc. Class A Common Stock 2,892,144 (3) 11.17% 2.04%
4520 Executive Park Drive Class B Common Stock 8,409,696 (3) 72.37% 59.18%
Montgomery, Alabama 36116
The Northern Trust Company Class A Common Stock 2,832,321 (4) 10.94% 1.99%
50 South LaSalle Street Class B Common Stock None
Chicago, Illinois 60675
Portfolio H Investors, L.P. Class A Common Stock 2,403,800 9.28% 1.69%
201 Main St., Suite 3200 Class B Common Stock None
Fort Worth, Texas 76102
The Prudential Insurance Class A Common Stock 1,423,500 5.50% 1.00%
Company of America Class B Common Stock None
751 Broad Street
Newark, New Jersey 07102-3777
(b)(i) Nominees -- Class A Common Stock
------------------------------------------
C. Todd Conover Class A Common Stock 5,000 * *
Class B Common Stock None
Emory M. Folmar Class A Common Stock 2,053 * *
Class B Common Stock None
Andrew A. Sorensen Class A Common Stock 1,280 * *
Class B Common Stock None
Nominees -- Class B Common Stock
------------------------------------------
Haley Barbour Class A Common Stock 1,059 (5) * *
Class B Common Stock None
Samuel R. Blount Class A Common Stock 691,168 (6) 2.67% *
Class B Common Stock 124,032 (6) 1.07% *
Winton M. Blount Class A Common Stock 2,974,276 (7) 11.46% 2.05%
Class B Common Stock 9,851,094 (7) 84.78% 69.33%
W. Houston Blount Class A Common Stock 4,899 * *
Class B Common Stock 2,664 * *
R. Eugene Cartledge Class A Common Stock 5,000 * *
Class B Common Stock None
H. Corbin Day Class A Common Stock 26,912 * *
Class B Common Stock None
Mary D. Nelson Class A Common Stock 8,152 * *
Class B Common Stock None
John M. Panettiere Class A Common Stock 710,836 (8) 2.68% *
Class B Common Stock None
</TABLE>

2
<PAGE> 6

- ---------------

* Less than 1.0% of class or total votes.
(1) Percent of total votes on all matters other than the election of directors.
(2) The Blount Holding Company, L.P. is a limited partnership whose sole
general partner is BHP, Inc., a Delaware corporation controlled by Winton
M. Blount.
(3) Includes 2,892,144 shares of Class A Common Stock and 8,409,696 shares of
Class B Common Stock owned by the Blount Holding Company, L.P.
(4) The Northern Trust Company serves as the Master Trustee for the
Corporation's 401(k) Retirement Savings Plan [the "401(k) Plan"]. The
shares listed are held for the benefit of the participants in the 401(k)
Plan. Under the terms of the 401(k) Plan, as amended, and the Trust, the
Trustee is to vote the allocated shares held by the 401(k) Plan in
accordance with the instructions received from 401(k) Plan participants and
to dispose of the allocated shares in connection with tender offers in
accordance with directions received from 401(k) Plan participants. If no
voting instructions or invalid voting instructions are received with
respect to allocated shares, the Trustee is to vote such shares in the same
manner and in the same proportions as the allocated shares with respect to
which the Trustee received valid voting instructions are voted. Also, with
respect to allocated shares, if no directions or invalid directions are
received in connection with tendering shares, the Trustee is to treat such
allocated shares as if 401(k) Plan participants instructed the Trustee not
to dispose of such shares. With respect to unallocated shares, the Trustee
is to vote such shares, or dispose of such shares in connection with tender
offers, in the same manner and in the same proportion as the allocated
shares with respect to which the Trustee received valid voting instructions
or directions are voted or disposed. The Northern Trust Company, as
Trustee, expressly denies beneficial ownership in the shares listed.
(5) Excludes 200 shares of Class A Common Stock (less than 1.0% of class and
total votes) owned by Haley Barbour's wife.
(6) Includes 35,496 shares of Class A Common Stock (less than 1.0% of class and
total votes) and 19,434 shares of Class B Common Stock (less than 1.0% of
class and total votes) held by Samuel R. Blount as Custodian for his
children.
(7) - Excludes 2,918 shares of Class A Common Stock (less than 1.0% of class
and total votes) and 2,718 shares of Class B Common Stock (less than 1.0%
of class and total votes) owned by Winton M. Blount's wife.
- Includes 5,898 shares of Class A Common Stock (less than 1.0% of class
and total votes) and 5,898 shares of Class B Common Stock (less than 1.0%
of class and total votes) held by Winton M. Blount as Trustee of a trust
for the benefit of his sister. Winton M. Blount disclaims any beneficial
ownership in such shares.
- Includes the 2,892,144 shares of Class A Common Stock (11.17% of class,
2.04% of total votes) and 8,409,696 shares of Class B Common Stock
(72.37% of class, 59.18% of total votes) shown in the table as owned by
the Blount Holding Company, L.P.
- Includes the 66,667 shares of Class A Common Stock (less than 1.0% of
class and total votes) which are subject to a right to acquire beneficial
ownership within 60 days under the 1995 Blount Long-Term Executive Stock
Option Plan.
(8) Includes 667,668 shares of Class A Common Stock (2.51% of class and less
than 1.0% of total votes) which are subject to a right to acquire
beneficial ownership within 60 days under the 1994 Blount Executive Stock
Option Plan and the 1995 Blount Long-Term Executive Stock Option Plan.
(9) Includes 93,531 shares of Class A Common Stock (less than 1.0% of class and
total votes) which are subject to a right to acquire beneficial ownership
within 60 days under the 1992 Blount Incentive Stock Option Plan and the
1995 Blount Long-Term Executive Stock Option Plan.

3
<PAGE> 7

(10) Includes 305,834 shares of Class A Common Stock (1.17% of class and less
than 1.0% of total votes) which are subject to a right to acquire
beneficial ownership within 60 days under the 1992 Blount Incentive Stock
Option Plan, the 1994 Blount Executive Stock Option Plan, and the 1995
Blount Long-Term Executive Stock Option Plan.
(11) Includes 215,834 shares of Class A Common Stock (less than 1.0% of class
and total votes) which are subject to a right to acquire beneficial
ownership within 60 days under the 1994 Blount Executive Stock Option Plan
and the 1995 Blount Long-Term Executive Stock Option Plan.
(12) Includes 1,539,694 shares of Class A Common Stock (5.61% of class, 1.8% of
total votes) which are subject to a right to acquire beneficial ownership
within 60 days under the 1992 Blount Incentive Stock Option Plan, the 1994
Blount Executive Stock Option Plan, and the 1995 Blount Long-Term Executive
Stock Option Plan.

4
<PAGE> 8

ELECTION OF DIRECTORS

PROPOSAL 1

DIRECTORS

The By-laws of the Corporation, which may be amended by the Board,
presently provide that the number of directors which shall constitute the whole
Board shall be not less than 3 nor more than 14, with the exact number to be
determined from time to time by resolution of the Board. The Board has set the
exact number at 12 effective April 20, 1998, with 3 members to be elected by the
holders of Class A Common Stock and 9 members to be elected by the holders of
Class B Common Stock. Class A Common Stock proxies may not be voted for more
than 3 persons, and the Class B Common Stock proxies may not be voted for more
than 9 persons.

The Board intends to nominate and, unless contrary instructions are
specified, to vote, as appropriate, all proxies received by the Board FOR the
election of the persons named below as directors of the Corporation.

Each director to be elected shall hold office until the next Annual Meeting
of Stockholders of the Corporation or until his or her successor is elected and
qualified or until his or her earlier resignation or removal. Should any nominee
fail to accept election, it is expected that the Board will cast all proxies, as
appropriate, received by it in favor of the election of such other person for
the office of director as the Board may recommend. The Board has no reason to
believe that any of the persons named below will fail to accept election as a
director.

BIOGRAPHICAL INFORMATION

The following biographical information is furnished with respect to each
nominee for election as director at the Meeting:

<TABLE>
<S> <C>
NOMINEES -- CLASS A COMMON STOCK

CONOVER PICTURE C. TODD CONOVER, Age 58.
Director since September 1992; member of the Audit Committee
and the Finance Committee.
President and Chief Executive Officer of The Vantage
Company, Los Altos, California (management services) since
July 1992; formerly General Manager of the Finance
Industry Group of Tandem Computers Incorporated,
Cupertino, California from January 1994 to April 1995. He
served as Comptroller of the Currency of the United States
from December 1981 through May 1985.
Mr. Conover is also a Director of PacifiCorp and PacifiCorp
Group Holdings, Portland, Oregon.

FOLMAR PICTURE EMORY M. FOLMAR, Age 67.
Director since June 1996; member of the Audit Committee and
the Finance Committee.
Mayor, City of Montgomery, Montgomery, Alabama since 1977;
member Montgomery City Council 1975 to 1977.
Mr. Folmar is also a Director of the Montgomery Boys Club,
the Alabama Shakespeare Festival, the Montgomery YMCA and
Landmark Foundation, Inc.
</TABLE>

5
<PAGE> 9
<TABLE>
<S> <C>

SORENSEN PICTURE ANDREW A. SORENSEN, Age 59.
Director since April 1997; member of the Audit Committee and
the Finance Committee.
President of The University of Alabama since July 1996;
formerly Provost and Vice-President for Academic Affairs
at the University of Florida from July 1990 to July 1996;
Executive Director of the AIDS Institute of the Johns
Hopkins Medical Institutions from 1986 to 1990; prior to
July 1986, Director of the School of Public Health of the
University of Massachusetts at Amherst.
Dr. Sorensen is also President of the Capstone Foundation,
Tuscaloosa, Alabama; Vice-Chairman of the Board of
Directors of the Chautauqua Institution, Chautauqua, New
York; a Director of the Alabama Shakespeare Festival,
Montgomery, Alabama; The Alabama Technical Network, Mont-
gomery, Alabama; and the Bryant-Jordan Student Athlete
Foundation, Birmingham, Alabama.

NOMINEES -- CLASS B COMMON STOCK

HALEY BARBOR PICTURE HALEY BARBOUR, Age 50.
Director since September 1997.
Rejoined law firm of Barbour Griffith & Rogers with offices
in Washington, DC and Yazoo City, Mississippi in 1997;
Chairman of the Republican National Committee from 1993 to
1997.
Mr. Barbour is Chairman of Policy Impact Communications,
Washington, DC; Vice Chairman of International Equity
Partners, LP, Washington, DC; and a Managing Director of
National Environmental Strategies, Washington, DC.
Mr. Barbour is also a Director of Mobile Telecommunications
Technologies, Inc. (MTEL), parent company of Skytel;
Mississippi Chemical Corporation, Yazoo City, Mississippi;
and Deposit Guaranty National Bank, Jackson, Mississippi.

SAMUEL R. BLOUNT PICTURE SAMUEL R. BLOUNT, Age 50.
Director nominee.
Chairman of the Board of Meadowcraft, Inc., Birmingham,
Alabama (manufacturer of wrought iron furniture), since
1985. Formerly President and Chief Executive Officer of
HBC, Incorporated, Montgomery, Alabama (holding company)
from 1979 to 1985. Prior to 1979 Mr. Blount served in
various positions at Blount, Inc. and Western River
Expeditions, Inc.
Mr. Blount is also a Director of the Alabama Shakespeare
Theatre, Montgomery, Alabama; the McWane Center,
Birmingham, Alabama; and The Eye Foundation, Birmingham,
Alabama. He formerly served as a Director of Darlington
School, Rome, Georgia, and President of the Advisory Board
of Darlington School.
Mr. Blount is the son of Winton M. Blount.

W. HOUSTON BLOUNT PICTURE W. HOUSTON BLOUNT, Age 76.
Director since September 1949(1); Chairman of the
Acquisition Committee, member of the Executive Committee
and the Compensation and Management Development Committee.
Chairman of the Board Emeritus of Vulcan Materials Company,
Birmingham, Alabama (crushed stone and chemicals), since
May 1992; Chairman of the Board from May 1986 to May 1992.
Mr. Blount is also a Director Emeritus of VF Corporation,
Reading, Pennsylvania.
Mr. Blount is the brother of Winton M. Blount and the uncle
of Samuel R. Blount.
</TABLE>

6
<PAGE> 10
<TABLE>
<S> <C>

[PICK UP PHOTO FROM WINTON M. BLOUNT, Age 77.
38958] Director since September 1949(1), except from January 1969
through October 1971 during which period he served as
Postmaster General of the United States; Chairman of the
Executive Committee.
Chairman of the Board since June 1993; Chairman of the Board
and Chief Executive Officer of the Corporation throughout
the 5 years preceding June 1993 except from December 1990
to October 1991 during which period he served as Chairman
of the Board.
Mr. Blount is the brother of W. Houston Blount and the
father of Samuel R. Blount. Mr. Blount is also a Director
of the Alabama Shakespeare Festival, Montgomery, Alabama;
Montgomery Museum of Fine Arts, Montgomery, Alabama;
Americans for the Arts, New York, New York; Business
Committee for the Arts, New York, New York; and Southern
Center for International Studies, Atlanta, Georgia;
President of the National Actors Theatre, New York, New
York; Chairman of the Advisory Committee of the National
Postal Museum, Washington, DC; Trustee Emeritus of the
University of Alabama; and Life Trustee of Rhodes College,
Memphis, Tennessee.

CARTLEDGE PICTURE R. EUGENE CARTLEDGE, Age 68.
Director since September 1994; Chairman of the Compensation
and Management Development Committee, member of the
Acquisition Committee and the Audit Committee.
Past Chairman of the Board of Savannah Foods and Industries,
Inc., Savannah, Georgia (sugar processing) from 1996 to
1997. Formerly Chairman of the Board and Chief Executive
Officer of Union Camp Corporation, Wayne, New Jersey 1986
to 1994; prior to 1986, President and Chief Operating
Officer of Union Camp Corporation.
Mr. Cartledge is also a Director of Union Camp Corporation,
Delta Air Lines, Inc., Sun Company, Chase Brass
Industries, and UCAR International, Inc.

DAY PICTURE H. CORBIN DAY, Age 60.
Director since June 1992; member of the Executive Committee,
the Acquisition Committee, the Finance Committee and the
Compensation and Management Development Committee.
Chairman of Jemison Investment Co., Inc., Birmingham,
Alabama (diversified holding company) since May 1988 and
limited partner of Goldman, Sachs & Co., New York, New
York (investment bankers) since 1986.
Mr. Day is also a Director of Jemison Investment Co., Inc.
and its affiliated companies, Birmingham, Alabama;
Champion International Corporation, Stamford, Connecticut;
Altec Industries, Inc., Birmingham, Alabama; American
Heritage Life Insurance Company, Jacksonville, Florida;
Hughes Supply, Inc., Orlando, Florida; Birmingham Museum
of Art, Birmingham, Alabama; Birmingham-Southern College,
Birmingham, Alabama; a Trustee of the New Jersey
Historical Society, Newark, New Jersey; and Proctor
Academy, Andover, New Hampshire.

NELSON PICTURE MARY D. NELSON, Age 64.
Director since June 1986; member of the Audit Committee and
the Finance Committee.
President of Nelson & Co., Cincinnati, Ohio (consulting
actuaries) throughout the past 6 years.
Mrs. Nelson is also a Director of Cincinnati Bell, Inc.,
Cincinnati, Ohio and a Director of Union Central Life
Insurance Co., Cincinnati, Ohio.
</TABLE>

7
<PAGE> 11
<TABLE>
<S> <C>

PANETTIERE PICTURE JOHN M. PANETTIERE, Age 60.
Director since May 1992; member of the Executive Committee.
President and Chief Executive Officer since June 1993,
President and Chief Operating Officer from May 1992 to
June 1993 of the Corporation; formerly Chairman, President
and Chief Executive Officer from January 1990 to May 1992,
President and Chief Executive Officer from January 1988,
Senior Executive Vice President and Chief Operating
Officer from August 1986 of Grove Worldwide Company, Shady
Grove, Pennsylvania (mobile hydraulic cranes and aerial
work platforms).
Mr. Panettiere is also a Director of Altec Industries, Inc.,
Birmingham, Alabama; the Alabama Shakespeare Festival,
Montgomery, Alabama; and a Trustee of Westminster College,
Fulton, Missouri. He is a Life Honorary Director and Past
Chairman of the Construction Industry Manufacturers
Association, Milwaukee, Wisconsin.

RONAN PICTURE ARTHUR P. RONAN, Age 68.
Director since June 1993; Chairman of the Audit Committee,
member of the Acquisition Committee and the Compensation
and Management Development Committee.
Retired since February 1992; formerly Corporate Vice
President from 1982 and President from June 1985 of the
Automotive Operations of Rockwell International
Corporation, Troy, Michigan (automotive components).
Mr. Ronan was Chairman and President of Western Highway
Institute, Bruno, California from 1991 to 1993; Vice
Chairman of Highway Users Federation, Washington, D.C.
from 1990 to 1992; Trustee of General Motors Institute,
Flint, Michigan from 1984 to 1992; member of the Board of
Advisors of Oakland University, Rochester, Michigan from
1984 to 1992; and Trustee of Marygrove College, Detroit,
Michigan from 1975 to 1979.
</TABLE>

- ---------------

(1) Includes the period for which the person served as a director of Blount
Brothers Corporation. The Corporation was organized in February 1971, and on
March 1, 1971, the stockholders of Blount Brothers Corporation exchanged
their stock in Blount Brothers Corporation for stock in Blount, Inc. Blount
Brothers Corporation was merged into Blount, Inc. on February 29, 1988.

THE BOARD AND ITS COMMITTEES

The property, affairs and business of the Corporation are managed under the
direction of the Board. The Board has standing Executive, Audit, Finance,
Acquisition and Compensation and Management Development Committees whose
principal functions are described below. The Corporation does not have a
Nominating Committee. During the year ended December 31, 1997, the Board held 4
regular meetings and took action 2 times by written consent in lieu of a
meeting. Average attendance by directors at Board and Committee meetings was
96.5%.

Executive Committee -- The Executive Committee consists of 4 members, 2 of
whom are non-employee directors. The Chairman of the Board of the Corporation is
Chairman of the Committee. The Committee may exercise all of the authority and
powers of the Board, to the extent permitted by law, during the intervals
between Board meetings. The Committee held 1 telephone conference and took
action 1 time by written consent in lieu of a meeting during 1997. The present
members of the Committee are Winton M. Blount, W. Houston Blount, H. Corbin Day
and John M. Panettiere.

Audit Committee -- The Audit Committee consists of 6 members, all of whom
are non-employee directors. The functions of the Committee include (i)
recommending annually to the Board the appointment of the Corporation's
independent auditors, (ii) reviewing the professional services, proposed fees
and independence of such auditors, (iii) reviewing the annual audit plans of
such auditors and the internal audit staff, (iv) monitoring the activities of
the independent auditors and internal audit staff, and (v) reporting on such
activities to the Board. The Committee held 2 regular meetings during 1997. The
members of the Committee who served during 1997 were R. Eugene Cartledge, C.
Todd Conover, Emory M. Folmar, Mary D. Nelson, Arthur P. Ronan and Andrew A.
Sorensen.

Finance Committee -- The Finance Committee consists of 6 members, all of
whom are non-employee directors. The functions of the Committee include (i)
approving the Corporation's funding policy for its retirement plans, (ii)
approving actuarial assumptions for the retirement plans, (iii) approving the
selection and termination of investment managers, trustees, independent auditors
and actuaries for the retirement plans, (iv) approving the investment policy
asset allocation guidelines, objectives,

8
<PAGE> 12

constraints, and restrictions, as appropriate, issued to investment managers and
trustees, (v) approving operating procedures and safeguards as required to
prohibit transactions not authorized under the Employee Retirement Income
Security Act, (vi) approving the consolidation, merger, or transfer of
retirement plan assets or liabilities to or from one plan to another, (vii)
approving reports with regard to retirement plans prepared by the trustees, the
independent auditors, investment managers or consultants, and the actuaries, and
(viii) reporting on such activities to the Board. The Committee held 1 regular
meeting and 1 telephone conference during 1997. The members of the Committee who
served during 1997 were C. Todd Conover, H. Corbin Day, Herbert J. Dickson,
Emory M. Folmar, Mary D. Nelson and Andrew A. Sorensen.

Compensation and Management Development Committee -- The Compensation and
Management Development Committee consists of 5 members, all of whom are
non-employee directors. The functions of the Committee include (i) approving
compensation philosophy and guidelines for the Corporation's executive and
managerial employees, (ii) establishing a total compensation range for the
Chairman of the Board and the President and Chief Executive Officer ("CEO") and
appraising the performance of said officers on a timely basis, (iii) approving
salaries and changes in salaries of officers of the Corporation and presidents
of its subsidiaries or other executives as the Committee may deem appropriate,
(iv) approving the participants, annual financial or other targets, and amounts
to be paid under the Corporation's Target Incentive Plans, (v) reviewing and
recommending to the Board any new executive incentive or stock option plans or
additions to or revisions of such existing plans and approving any awards or
options granted under such plan(s), (vi) reviewing from time to time the
Corporation's management resources and executive personnel planning, development
and selection processes, and (vii) reporting on such activities to the Board.
The Committee held 1 regular meeting and took action 4 times by written consent
in lieu of a meeting during 1997. The present members of the Committee are W.
Houston Blount, R. Eugene Cartledge, H. Corbin Day, Herbert J. Dickson and
Arthur P. Ronan.

Acquisition Committee -- The Acquisition Committee consists of 4 members,
all of whom are non-employee directors. The functions of the Committee are to
review and approve any acquisition proposed by management and report on such
activities to the Board. The Committee held 2 regular meetings during 1997. The
present members of the Committee are W. Houston Blount, R. Eugene Cartledge, H.
Corbin Day, and Arthur P. Ronan.

COMPENSATION OF DIRECTORS

Non-employee directors received a retainer fee of $6,250 per quarter plus a
fee of $1,000 for each Board Meeting attended in person or by telephone
conference, and an additional $1,000 for each Board Committee Meeting attended
in person or by telephone conference. No fee for execution of consent actions is
paid. Persons serving as Chairmen of Committees of the Board, who were not
employees of the Corporation, received an additional retainer fee of $1,000 per
quarter for their services. The directors were reimbursed for travel and other
expenses and were provided travel insurance when traveling on Corporation
business, liability insurance coverage and participation in a charitable
contributions matching gift program. Participation in the Corporation's group
medical and dental plans is available to the non-employee directors on the same
basis as offered to all employees of the Corporation. In addition, each
non-employee director was provided $50,000 of life insurance under the
Corporation's group life insurance plan. Directors who are employees of the
Corporation do not receive any additional compensation for their services as
directors.

In January 1983, the Board approved a Directors' Fee Deferral Plan under
which directors may defer receipt of directors' fees until their retirement or
other termination of status as a director. Deferred amounts bear interest,
adjusted quarterly, based on the prime rate set by a New York bank. Such
accumulated fees, together with the income accrued thereon, are payable in cash
to the director or his or her estate in accordance with the option selected by
the director at the time he or she elected to participate in this plan. The
Directors' Fee Deferral Plan is unfunded and amounts due the participants
covered thereby are general obligations of the Corporation. Two directors have
chosen to defer their director's fees.

In May 1991, the Board approved and in April 1994 amended the Advisory
Directors' Recognition Plan. Each member of the Board who has served as a
director for at least 5 consecutive years and who has not been an employee
vested in any employee benefits sponsored by the Corporation during his or her
service on the Board and (a) who is serving at the attainment of age 72, or (b)
who becomes permanently and totally disabled at any time prior to age 72, shall
become an advisory director. No advisory director and no other director, except
the co-founders of the Corporation, shall be eligible to stand for re-election
to the Board after reaching age 72. Under this plan, a director who is or
becomes eligible for advisory director status after July 1, 1991, shall, at the
end of his or her current term, be paid a quarterly benefit for life equal to
the quarterly cash retainer, exclusive of committee chairman fees, then being
paid to the director. An advisory director who attains that status due to
disability shall be paid a quarterly disability benefit equal to the quarterly
cash retainer then being paid to the director for the shorter of (a) such
advisory director's life, or (b) the number of the advisory director's full
years of service as a director. A director who has been an employee vested in
employee benefits sponsored by the Corporation is eligible to become an advisory
director, but shall not be entitled to the retainer paid to advisory directors.
When their views on a matter are sought, advisory directors are expected to
consult with management or directors of the Corporation. The status of advisory
director may be terminated upon request by the advisory

9
<PAGE> 13

director or by the Board if it determines that an advisory director becomes a
director, officer, employee or consultant of or to another company that competes
with the Corporation or any of its subsidiaries. The Advisory Directors'
Recognition Plan does not apply to Winton M. Blount, a co-founder of the
Corporation. It also does not apply to W. Houston Blount, a co-founder of the
Corporation, until he ceases to be a member of the Board of Directors regardless
of his age at the time of such cessation. The Advisory Directors' Recognition
Plan is unfunded and amounts due the participants covered thereby are general
obligations of the Corporation. There are presently 2 participants under this
plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The following members of the Board served as members of the Compensation
and Management Development Committee during 1997:

W. Houston Blount, Chairman of the Board Emeritus of Vulcan Materials
Company.

R. Eugene Cartledge, Former Chairman of Savannah Foods, Savannah,
Georgia and retired Chairman and Chief Executive Officer of Union Camp
Corporation.

H. Corbin Day, Limited Partner of Goldman, Sachs & Co., and Chairman
of Jemison Investment Co., Inc.

Herbert J. Dickson, Financial Consultant and formerly Chairman of the
Board of Fortune Financial Services.

Arthur P. Ronan, formerly President of the Automotive Operations of
Rockwell International Corporation.

There were no relationships with respect to Compensation Committee
interlocks and insider participation in compensation decisions during 1997.

COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
REPORT ON EXECUTIVE COMPENSATION

OVERALL OBJECTIVES OF THE EXECUTIVE COMPENSATION PROGRAM

The Corporation's executive compensation program is designed to help the
Corporation attract, motivate and retain the executive resources that the
Corporation needs in order to maximize its return to shareholders.

Toward that end, the Corporation's executive compensation program attempts
to provide:

- levels of compensation that are competitive with those provided in the
various markets in which the Corporation competes for its executive
resources;

- incentive compensation that varies in a manner consistent with the
financial performance of the Corporation; and

- incentive compensation that effectively rewards corporate and individual
performance.

In designing and administering its executive compensation program, the
Corporation attempts to maintain an appropriate balance among these various
objectives, each of which is discussed in greater detail below.

PROVIDING COMPETITIVE LEVELS OF COMPENSATION

The Corporation attempts to provide its executives with a total
compensation package that, at expected levels of performance, is competitive
with total compensation provided to executives who hold comparable positions or
have similar qualifications in other organizations of similar size and scope
with which the Corporation competes.

The Corporation projects an executive's competitive level of compensation
based on information drawn from a variety of sources, including proxy
statements, special surveys, and independent compensation consultants. This
information is used in creating the basic structure of the Corporation's
program. The market data used in establishing the Corporation's executive
compensation levels reflect a blending of general industry and manufacturing
industry companies comparable to the Corporation's size, including many of the
industry peer companies covered by the total shareholder return graph (see page
19). However, the Committee has not defined the Corporation's compensation
comparative group to be identical to the companies included in the graph for a
variety of reasons, including the need to adjust for differences in company size
and scope.

It should be noted that the value of an executive's compensation package
will vary significantly based on performance. So while the expected value of an
executive's compensation package may be competitive, its actual value can exceed
or fall below competitive levels depending on performance.

10
<PAGE> 14

ENSURING THAT INCENTIVE COMPENSATION VARIES WITH FINANCIAL PERFORMANCE

The Corporation's incentive plans are designed to ensure that the incentive
compensation varies in a manner consistent with the financial performance of the
Corporation and its various business units. The specific corporate performance
factors for CY 1997 are discussed in other sections of this report.

All operating units were profitable for CY 1997.

REWARDING INDIVIDUAL PERFORMANCE

The Corporation believes that effectively rewarding individual performance
will ultimately serve to enhance the financial performance of the Corporation
and its various business units. While the Corporation's incentive plans provide
compensation that varies with financial performance, they also provide for
individual awards that are based on quantitative assessments of business unit
and individual performance.

DESCRIPTION OF THE EXECUTIVE COMPENSATION PROGRAM

This section describes each of the principal elements of the Corporation's
executive compensation program.

BASE SALARY PROGRAM

The objective of the Corporation's base salary program for senior executive
management positions is to provide base salaries that are approximately between
the 70th and 80th percentile of the competitive market norms for companies in
the Corporation's business lines and similar in size to the Corporation. The
Committee believes it is crucial to provide competitive salaries in order to
attract and retain managers who are highly talented. The specific competitive
markets considered depend on the nature and level of the positions in question
and the markets from which qualified individuals are recruited.

Base salary levels are also dependent on the performance of each individual
employee. Thus, employees with higher levels of sustained performance will be
paid correspondingly higher salaries.

Annual salary reviews are based on three factors: general levels of market
salary increases, individual performance, and the Corporation's overall
financial results. All base salary increases are based on a philosophy of
pay-for-performance and perceptions of an individual's long-term value to the
Corporation.

THE MANAGEMENT INCENTIVE PLAN

The objectives of the Annual Target Incentive Plan are to motivate and
reward the accomplishment of annual corporate objectives; reinforce a strong
performance orientation with differentiation and variability in individual
awards based on contributions to business results; and provide a fully
competitive compensation package which will attract, reward and retain
individuals of the highest quality. As a pay-for-performance plan, cash bonus
awards are paid upon the achievement of specific business segment and individual
performance objectives established for CY 1997.

Targeted bonus award levels are determined for eligible positions each year
using data obtained from independent consultants and surveys. The target bonus
levels reflect competitive market norms for companies similar in size to the
Corporation and the Corporation's philosophy of providing competitive total
annual compensation opportunities.

A target incentive bonus program is established each year based on the
Corporation's budgeted performance against measures approved by the Committee.
For CY 1997, the key performance measures considered were pre-tax or operating
income and return on capital employed for operating units, net income for the
Corporate staff and for all plan participants other than the Chairman of the
Board and the President and Chief Executive Officer, individual key base
objectives were established and measured. The weighting of target objectives
among each of the Corporation's operating units range from a 50% weighting
factor for pre-tax or operating income, a 20% weighting for return on capital
employed and a 30% weighting for attainment of individual performance
objectives.

For the corporate staff and senior corporate officers, 60% of bonus
attainment is based on the Corporation's net income target and 40% of the bonus
is determined by attainment of individual key base objectives. The bonus
attainment for the Chairman of the Board and for the President and Chief
Executive Officer is based 100% on the Corporation's net income target.

Target bonuses for Incentive Plan participants range from 5% to 65% of the
participants' base pay. Participants can earn from 80% (minimum threshold) to
200% (maximum) of the target bonus. The actual bonus is determined by the extent
to which performance objectives have been accomplished. All units were
profitable for CY 1997. As a result, an annual incentive funding pool was
created for CY 1997 performance and awards were made to certain key executives
named in the compensation table exceeding target bonus objectives.

11
<PAGE> 15

LONG-TERM INCENTIVES

The Corporation's approach to long-term incentives for employees is focused
on the Corporation's stock option plans. The Corporation uses stock options to
align the interests of employees and shareholders by providing value to the
employee when the stock price increases. Options are granted at 100% of the
market value of the stock on the date of grant.

All options granted have terms of 10 years and are generally fully
exercisable within 3 years of the date of the grant. The exercise price is
payable in cash. No option holder has any rights as a shareholder for any shares
subject to an option until the exercise price has been paid and the shares have
been issued to the employee.

The Corporation's stock option grant levels are established by considering
competitive market data on grant levels and the level of shares reserved for
such plans. Individual option grants are based on the responsibility level of
each participant in the Corporation, attainment of individual performance
measured against key base objectives, and the amounts of previous grants.

The Executive Compensation Program is reviewed annually by the Compensation
and Management Development Committee to provide an appropriate mix of base
salary, annual bonus, and long-term awards within the philosophy of providing
competitive total direct compensation opportunities. Stock options granted to
the named executives in CY 1997 are shown in the Option Grant Table (see page
15).

CY 1997 COMPENSATION FOR THE CHAIRMAN OF THE BOARD AND THE PRESIDENT AND CHIEF
EXECUTIVE OFFICER

As described above, the Corporation determines its pay for all Executive
Officers of the Corporation, including the Chairman of the Board and the
President and Chief Executive Officer, considering both a pay-for-performance
philosophy and market rates of compensation for the job. Specific actions taken
by the Committee regarding the Chairman of the Board and the President and Chief
Executive Officer's compensation are summarized below:

Base Salary -- The Chairman of the Board, Mr. Winton Blount, received
no increase in base salary in CY 1997. The President and Chief Executive
Officer, Mr. John Panettiere, received a 7.14% merit increase in March 1997
based on competitive data and performance.

Annual Bonus -- The Corporation's CY 1997 performance exceeded the
targeted net income objective established in the Executive Management
Incentive Plan which covers the Chairman of the Board and the President and
Chief Executive Officer. The Plan was approved by the shareholders in June
of 1994.

The bonus for CY 1997 generated by the Executive Management Incentive Plan
formula for Mr. Winton Blount, Chairman of the Board, and for Mr. John
Panettiere, President and Chief Executive Officer, was based on the
Corporation's attainment of the net income objective established in December
1996. The Corporation's performance significantly exceeded that objective thus
bonuses equal to 150% of the 45% target for Mr. Winton Blount and 150% of the
65% target for Mr. John Panettiere were earned for CY 1997. As a result of this
performance, the Committee also approved a discretionary bonus of $293,750 for
Mr. Blount and a $268,750 discretionary bonus for Mr. Panettiere.

R. Eugene Cartledge, Chairman
W. Houston Blount
H. Corbin Day
Herbert J. Dickson
Arthur P. Ronan

12
<PAGE> 16

EXECUTIVE OFFICERS

The executive officers of the Corporation, in addition to those who are
also Director nominees, as of February 20, 1998 are:

<TABLE>
<CAPTION>
YEAR FIRST
ELECTED TO FAMILY
NAME OFFICE SUCH OFFICE AGE RELATIONSHIP
- ---- ------ ----------- --- ------------
<S> <C> <C> <C> <C>
Leonard C. Hale President -- Sporting Equipment Group 1996 54 None
Richard H. Irving, III Senior Vice President and General Counsel of the 1995 54 None
Corporation
Harold E. Layman Executive Vice President -- Finance Operations and 1997 51 None
Chief Financial Officer of the Corporation
D. Joseph McInnes Executive Vice President -- Administration and Chief 1997, 54 None
Administrative Officer of the Corporation, Corporate 1994 and
Secretary and President of The Blount Foundation, 1982
Inc.
James S. Osterman President -- Outdoor Products Group 1997 60 None
Donald B. Zorn President -- Industrial and Power Equipment Group 1997 61 None
</TABLE>

Each of these executive officers serves at the pleasure of the Board. There
were no arrangements or understandings with any other person pursuant to which
any officer was elected. The executive officers of the Corporation may also be
directors or officers of subsidiaries of the Corporation.

Leonard C. Hale was elected President of the Sporting Equipment Group May
21, 1996. Prior to that date, Mr. Hale served for more than 5 years as Executive
Vice President of Ellett Brothers, a supplier of outdoor sporting goods in
Chapin, South Carolina.

Richard H. Irving, III was elected Senior Vice President and General
Counsel in April 1995. Prior to that date, he served since 1986 as Vice
President, General Counsel and Secretary of Duchossois Industries, Inc., a
diversified privately held company headquartered in Elmhurst, Illinois. Mr.
Irving also served as Associate General Counsel of Union Camp Corporation from
1979 to 1986, and Assistant General Counsel of Rockwell International from 1974
to 1979.

Harold E. Layman was elected Executive Vice President -- Finance Operations
and Chief Financial Officer of the Corporation in February 1997. Prior to that
date, he served as Senior Vice President and Chief Financial Officer of the
Corporation from January 1993. Prior to January 1993, he served as Senior Vice
President Finance and Administration and was a member of the Executive Committee
of VME Group, N.V., The Netherlands, a manufacturer of automotive components and
industrial equipment, from September 1988.

D. Joseph McInnes was elected Executive Vice President -- Administration
and Chief Administrative Officer of the Corporation in February 1997. Prior to
that date, he served as Senior Vice President -- Administration and Secretary of
the Corporation from May 1994. Prior to May 1994, he served as Senior Vice
President -- Administration of the Corporation from October 1991, and Vice
President -- Human Resources of the Corporation from March 1983. In addition, he
was elected President of The Blount Foundation, Inc., a charitable foundation
funded by the Corporation, in April 1982. He also continues to serve as
Corporate Secretary.

James S. Osterman was elected President, Outdoor Products Group in January
1997. Prior to that date, he served as President of the Oregon Cutting Systems
Division of the Corporation from January 1987.

Donald B. Zorn was elected President, Industrial and Power Equipment Group
in January 1997. Prior to that date, he served as President of the Forestry and
Industrial Equipment Division of the Corporation since January 1994. Prior to
January 1994, he served as President and Chief Operating Officer of Grove
Cranes, a division of Grove Worldwide Company, Shady Grove, Pennsylvania
(manufacturer of mobile hydraulic cranes and aerial work platforms) from March
1988.

13
<PAGE> 17

EXECUTIVE COMPENSATION

The following table summarizes, for the fiscal years ended the last day of
December 1997, the last day of December 1996, and the last day of February 1996,
all plan and non-plan compensation awarded to, earned by, or paid to (i) the
Chief Executive Officer and (ii) the four most highly compensated executive
officers other than the CEO of the Corporation (the "Named Executive Officers")
at the end of December 1997 in all capacities in which they served:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
NAME AND ---------------------------------------------- UNDERLYING
PRINCIPAL SALARY BONUS OTHER ANNUAL OPTIONS ALL OTHER
POSITION YEAR* ($) ($) COMPENSATION ($) (#) COMPENSATION ($)
--------- ----- ------- --------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Winton M. Blount 1997 750,000 800,000 60,282(1) 0 44,987(2)
Chairman of the Board C1996 625,000 800,000 48,272 100,000 167,306
1996 750,000 975,000 60,937 0 47,057
John M. Panettiere 1997 741,666 1,000,000 58,685(1) 238,000 119,805(3)
President and Chief Executive Officer C1996 583,333 900,000 54,605 320,000 135,585
1996 632,500 823,000 91,436 0 94,817
James S. Osterman 1997 316,151 310,000 9,042(1) 62,000 26,920(4)
President -- Outdoor Products Group C1996 233,333 230,000 7,163 80,000 24,170
1996 255,000 235,000 8,538 0 20,402
Harold E. Layman 1997 291,666 275,000 12,390(1) 60,000 24,200(5)
Executive Vice President -- Finance C1996 229,166 225,000 5,620 80,000 22,291
Operations and Chief Financial Officer 1996 257,000 232,000 13,401 0 19,554
D. Joseph McInnes 1997 286,833 265,000 12,433(1) 60,000 23,625(6)
Executive Vice President -- C1996 225,833 225,000 7,747 80,000 82,199
Administration and Chief 1996 254,000 232,000 11,727 0 31,468
Administrative Officer and
Corporate Secretary
</TABLE>

* C1996 represents the ten-month period March 1, 1996 through December 31, 1996.
The Corporation changed its Fiscal Year from a March 1-February 28 period to a
January 1-December 31 period, thus the ten-month period ended December 31,
1996 is reported.
- ---------------

(1) Tax gross-up on club dues, personal use of the Corporation's property and
premiums on life insurance policies.
(2) Amount is comprised of $31,000 matching contribution to employee's 401(k)
and excess 401(k) accounts and $13,987 attributable to the personal portion
of the premiums on life insurance policies under the Executive Benefit Life
Insurance and Supplemental Retirement Plan.
(3) Amount is comprised of $68,791 matching contribution to employee's 401(k)
and excess 401(k) accounts and $51,014 premiums on a life insurance policy
under the Executive Life Insurance Plan.
(4) Amount is comprised of $23,157 matching contribution to employee's 401(k)
and excess 401(k) accounts and $3,763 accrued pursuant to the Omark Salary
Continuation Plan.
(5) Amount is comprised of $21,895 matching contribution to employee's 401(k)
and excess 401(k) accounts and $2,305 attributable to the personal portion
of the premiums on the life insurance policies under the Executive Life
Insurance Plan.
(6) Amount is comprised of $21,861 matching contribution to the employee's
401(k) and excess 401(k) accounts and $1,764 in premiums on a life insurance
policy under the Executive Benefit Life Insurance Plan and Supplemental
Retirement Plan.

14
<PAGE> 18

OPTION GRANTS

The following table summarizes pertinent information concerning individual
grants of stock options, including the potential realizable dollar value of
grants of options made during 1997 to each Named Executive Officer, assuming
that the market value of the underlying security appreciates in value, from the
date of grant to the end of the option term, at the rates indicated in the
following table:

OPTION GRANTS IN CALENDAR YEAR 1997

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE EXPIRATION FOR OPTION TERM(1)
OPTIONS EMPLOYEES PRICE DATE --------------------------
NAME GRANTED(#) IN 1997 ($/SHARE) (MMDDYY) 5%($) 10%($)
---- ---------- ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Winton M. Blount 0 0 0 0 0 0
John M. Panettiere 238,000 22.99% 19.6563 02-11-07 2,942,000 7,456,000
James S. Osterman 62,000 5.99% 19.6563 02-11-07 766,000 1,942,000
Harold E. Layman 60,000 5.79% 19.6563 02-11-07 742,000 1,880,000
D. Joseph McInnes 60,000 5.79% 19.6563 02-11-07 742,000 1,880,000
</TABLE>

- ---------------

(1) The amounts under these columns are the result of calculations at 5% and 10%
rates which were established by rules adopted by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, in the price of the Corporation's Class A Common
Stock.

OPTION EXERCISES AND YEAR-END OPTION VALUES

The following table summarizes pertinent information concerning the
exercise of stock options during 1997 by each of the Named Executive Officers
and the year-end value of unexercised options:

AGGREGATE OPTION EXERCISES IN 1997
AND YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES YEAR END(#) YEAR END($)
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Winton M. Blount 0 0 33,334 66,666 375,008 749,993
John M. Panettiere 36,640 644,252 481,668 568,136 7,206,263 6,871,836
James S. Osterman 65,000 821,565 39,688 124,812 447,575 1,143,359
Harold E. Layman 0 0 247,168 125,332 4,199,138 1,288,357
D. Joseph McInnes 12,000 211,000 169,168 113,332 2,617,514 1,021,857
</TABLE>

15
<PAGE> 19

PENSION PLANS

Assuming continuance of the Blount Retirement Plan in its present form,
estimated annual benefits payable to eligible employees (including executive
officers) in specific classifications following retirement at age 65 (normal
retirement age), after continuous years of credited service, are shown below:

PENSION PLAN TABLE

<TABLE>
<CAPTION>
FIVE-YEAR AVERAGE ESTIMATED ANNUAL BENEFITS FOR SPECIFIED YEARS OF CREDITED SERVICE(1), (2)
EARNINGS AT ----------------------------------------------------------------------------
RETIREMENT(3) 10 15 20 25 30 35 40 OR MORE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 52,500 $ 55,000 $ 57,500
200,000 40,000 60,000 80,000 100,000 105,000 110,000 115,000
300,000 60,000 90,000 120,000 150,000 157,500 165,000 172,500
400,000 80,000 120,000 160,000 200,000 210,000 220,000 230,000
500,000 100,000 150,000 200,000 250,000 262,500 275,000 287,500
600,000 120,000 180,000 240,000 300,000 315,000 330,000 345,000
700,000 140,000 210,000 280,000 350,000 367,500 385,000 402,500
800,000 160,000 240,000 320,000 400,000 420,000 440,000 460,000
</TABLE>

- ---------------

(1) The amounts set out above are based on the benefits under a straight life
annuity to a participant retiring at age 65 on January 1, 1998. The amounts
shown are to be reduced for offsetting amounts to be paid as social security
benefits and benefits payable under Master Annuity Contracts (purchased upon
termination of prior Retirement Plans).
(2) Under Section 415(b) of the Internal Revenue Code, as amended, the maximum
benefit payable under the Master Annuity Contracts (purchased upon
termination of prior Retirement Plans) and the Blount Retirement Plan to an
employee retiring at age 65 in 1997 is $125,000, an amount which may change
each year in accordance with a determination made by the Commissioner of the
Internal Revenue Service. In addition, Section 401(a)(17) of the Internal
Revenue Code, as amended, limits the amount of an employee's compensation
which may be taken into account under the Blount Retirement Plan to $160,000
for 1997, an amount which also may change each year in accordance with a
similar determination. These limitations have been disregarded for the
purposes of this table since the amount of the benefit payable in excess of
the limitation is covered by the Blount International, Inc. and Subsidiaries
Supplemental Retirement Benefit Plan (the "Excess Benefit Plan").
(3) Earnings covered by the Blount Retirement Plan are based on the
participant's base salary or wages.

The years of benefit service used to determine benefits under the Blount
Retirement Plan and the Master Annuity Contracts (purchased upon termination of
prior Retirement Plans) as of December 31, 1997, for the persons named in the
Summary Compensation Table are: Mr. Panettiere -- 6 years; Mr. Blount -- 52
years; Mr. Osterman -- 28 years; Mr. Layman -- 5 years; and Mr. McInnes -- 24
years.

EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS

EXECUTIVE BENEFIT LIFE INSURANCE AND SUPPLEMENTAL RETIREMENT PLAN

On September 22, 1980, the Board adopted, effective August 1, 1980, an
Executive Benefit Life Insurance and Supplemental Retirement Plan (the "Keyman
Insurance Plan") for key executive officers of the Corporation and its
subsidiaries. Eligibility is determined by the Compensation and Management
Development Committee of the Board. Each participating executive officer has the
opportunity to obtain life insurance that will pay to the named beneficiary in
the event of the executive officer's death while employed by the Corporation or
one of its subsidiaries as a full-time permanent employee, an amount equal to
2 1/2 times the executive officer's annual compensation (base salary as of
August 1 of each year plus the amount of the most recent bonus paid under the
Corporation's Annual Target Incentive Plan) at the time of the executive
officer's death (the "Death Benefit"). The excess of the face amount of the
policy over the Death Benefit is paid to the Corporation. The Corporation has
ownership rights in the policy, except that the executive officer has the right
to change the beneficiary designation for the amount of the Death Benefit. All
dividends declared on the policy shall be applied at the option of the
Corporation to purchase additional paid-up insurance on the life of the
executive officer or to reduce the premiums on the policy. The Corporation pays
all premiums due on the policies.

If the executive officer retires directly from permanent full-time
employment with the Corporation or one of its subsidiaries, under certain
circumstances and subject to the election by the executive officer, the
Corporation, after withdrawing the cash value, will assign its rights in the
policy to the executive officer. In lieu of the Corporation's assignment of its
rights in the policy, the executive officer may elect to receive an optional
supplemental retirement benefit payable by the Corporation instead of all or a
16
<PAGE> 20

portion of any interest the executive officer or his beneficiary or
beneficiaries may otherwise be entitled to under the policy, and the Death
Benefit will terminate. If the executive officer retires prior to age 65, he or
she may elect a supplemental retirement benefit commencing upon such retirement
date, but the benefit will be reduced based on a formula.

Should the executive officer upon retirement at age 65 or later elect to
receive a supplemental retirement benefit under the Keyman Insurance Plan and
based on the amount of life insurance in force at the end of 1997, the persons
named in the Summary Compensation Table would receive the following annual
payments from the Corporation for 15 years in addition to the benefits payable
under the Master Annuity Contract, the Excess Benefit Plan and any Supplemental
Executive Retirement Plan: Mr. Blount -- $280,000 and Mr. McInnes -- $144,200.
Messrs. Panettiere, Osterman and Layman do not participate in the Keyman
Insurance Plan.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLANS

The Corporation maintains a Supplemental Executive Retirement Plan for John
M. Panettiere. The Supplemental Executive Retirement Plan will provide Mr.
Panettiere with a benefit upon his normal retirement date or earlier termination
of employment equal to a benefit calculated under the benefit formula of the
Blount Retirement Plan, but based on a schedule of years of service granted to
him under the Supplemental Executive Retirement Plan rather than his actual
service, reduced by any retirement benefits payable under the Blount Retirement
Plan, the Supplemental Retirement Benefit Plan, and any retirement income
actually paid to Mr. Panettiere under any pension plan maintained by a former
employer. This Plan is administered by the Board or, at its discretion, the
Compensation and Management Development Committee of the Board. This Plan may be
amended from time to time in any respect with the consent of the other party,
but it cannot be terminated without the consent of the Board or its designated
committee and Mr. Panettiere. At the discretion of the Board and after timely
notice to Mr. Panettiere, rights to receive any benefits under this Plan may be
forfeited, suspended, reduced or terminated by the Board if it determines in
good faith that good cause as defined in this Plan has been shown. The projected
annual benefit payable to Mr. Panettiere under this Plan, in addition to the
benefits payable under the Blount Retirement Plan, the Excess Benefit Plan and
the retirement income payable under any pension plan maintained by a former
employer of Mr. Panettiere, is $288,042.

OMARK SUPPLEMENTAL RETIREMENT PLAN

The Corporation sponsors a Supplemental Retirement Plan for the certain
management employees of Blount, Inc.'s Outdoor Products Group, Sporting
Equipment Group, and Industrial and Power Equipment Group (the "Omark
Supplemental Retirement Plan"), which was originally adopted by a predecessor
corporation, effective July 1, 1979. The Omark Supplemental Retirement Plan
provides a supplemental retirement benefit to participants equal to the excess,
if any, of (i) 50% of the participant's highest 5-year average base salary
during the last 10 years of employment before age 65, over (ii) the aggregate
amount available to the participant under the other benefit plans of the
subsidiaries and one-half the primary social security benefit. The Omark
Supplemental Retirement Plan provides for retirement at an earlier age at
reduced benefits. The Omark Supplemental Retirement Plan may be revised or
terminated by the Board. Mr. Osterman participates in the Omark Supplemental
Retirement Plan. No benefits are projected to be payable under this Plan.

OMARK RETIREMENT PROTECTION PLAN

The Corporation sponsors a Retirement Protection Plan (the "Omark
Protection Plan") for certain employees of Blount, Inc.'s Outdoor Products
Group, Sporting Equipment Group, and Industrial and Power Equipment Group, which
was originally adopted by a predecessor corporation, effective November 1, 1983.
Participation in the Omark Protection Plan is automatic if the amount of an
individual's benefit under the Omark Retirement Plan, which was funded by the
Corporation prior to its termination on July 27, 1985, is reduced as a result of
any deferral of compensation pursuant to the Omark Deferred Plan, which was
terminated effective December 31, 1986. Benefits under the Omark Protection Plan
are limited to the amount of any reduction of benefits under the Master Annuity
Contracts (purchased upon termination of the Omark Retirement Plan) or the
Pre-1992 Omark Retirement Plan as a result of any deferral of compensation
pursuant to the Omark Deferred Plan prior to its termination. If the benefits
that are actually due under the Master Annuity Contracts or the Blount
Retirement Plan are not reduced, then no benefits are due under the Omark
Protection Plan. The Board may terminate or amend the Omark Protection Plan on
the first day of any month by giving notice to the participants. Such
termination shall not affect the rights of participants under the Omark
Protection Plan as of such date of termination. The Omark Protection Plan is
unfunded and amounts due the participants covered thereby are general
obligations of the Corporation. Mr. Osterman participates in the Omark
Protection Plan. No benefits are projected to be payable under this Plan.

OMARK SALARY CONTINUATION PLAN

The Corporation sponsors a Salary Continuation Plan for certain employees
of Blount, Inc.'s Outdoor Products Group, Sporting Equipment Group, and
Industrial and Power Equipment Group, who participated in the former Management
Award Plan

17
<PAGE> 21

of those divisions, which was originally adopted by a predecessor corporation,
effective January 1, 1985. The Salary Continuation Plan provides the
beneficiaries of the participants with a continuation of 2 years of annual
salary when death occurs. The Board may at any time terminate or amend the
Salary Continuation Plan. Participation in the Salary Continuation Plan was
frozen effective February 28, 1990. The Salary Continuation Plan is unfunded and
amounts due the beneficiaries of the participants covered thereby are general
obligations of the Corporation. Mr. Osterman participates in the Salary
Continuation Plan.

EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS

The Corporation has entered into Employment Agreements (the "Agreements")
with all of the executive officers named in the Summary Compensation Table
except for Winton M. Blount. The terms of the Agreements provide that each
executive will be paid a base salary no less than the most recent base salary,
be eligible to participate in the Corporation's Incentive Plans with target
bonuses ranging from 45% to 65% of base salary, participate in the Corporation's
stock option programs and all other benefit plans, arrangements and perquisites
generally available to executive officers. Two executives are covered by the
Corporation's Executive Life Insurance Program and two are covered under the
Corporation's Keyman Life Insurance and Supplemental Retirement Plan. The
Agreement with Mr. Panettiere provides for certain supplemental retirement
benefits, less any benefits from the Blount Retirement Plan, the Blount and
Subsidiaries Supplemental Retirement Plan and any pension plan of a former
employer.

The duration of each Agreement is automatically extended one day for each
day employed until such time as the executive attains his 65th birthday. Each
Agreement has a clause which prohibits the executive, for up to three years
following the termination of employment, from competing directly or indirectly
with the Corporation or disclosing proprietary or confidential information.

The Agreements contain a Change-In-Control provision under which the
executive is paid a multiple (2 to 3 times, depending on the executive) of his
then current base salary and an average of bonus payments recently received.
Full funding of certain benefits and immediate vesting in unvested stock options
also occur upon a Change-In-Control, as defined in the Agreements.

The Agreements also contain provisions for severance payments and benefits
(for 24 to 36 months, depending on the executive) if the Corporation terminates
the executive's employment for reasons other than death, disability or cause (as
defined in the Agreements).

In the event of death, disability or termination for cause (as defined in
the Agreements) or in the event the employee terminates his employment (except
for Change-In-Control), the Corporation's obligations under the Employment
Agreements cease and no special benefits will be paid.

A Rabbi Trust has been established by the Corporation for the purpose of
funding certain non-qualified benefits and Change-In-Control liabilities
identified in this section.

18
<PAGE> 22

PERFORMANCE GRAPH

Rules adopted by the Securities and Exchange Commission require that the
Corporation include in the proxy statement a line-graph presentation comparing
cumulative, five-year shareholder returns on an indexed basis with the
cumulative return of a broad equity market index that includes companies whose
equity securities are traded on the same exchange and either a published
industry index or an index of peer companies selected by the Corporation. Since
the Corporation is not included in the Standard and Poor's 500 Stock Index and
its equity securities are traded on the New York Stock Exchange, the New York
Stock Exchange Market Value Index was selected as the broad equity market index.
The Corporation chose a group of 11 manufacturing companies that have operations
in those industries in which the Corporation competes as its peer group for
purposes of this performance comparison. A list of these companies ("Peer
Group") follows the graph below.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
BLOUNT INTERNATIONAL, INC., A PEER GROUP, AND
NEW YORK STOCK EXCHANGE MARKET VALUE INDEX

<TABLE>
<CAPTION>
MEASUREMENT PERIOD NYSE MKT. VAL.
(FISCAL YEAR COVERED) BLOUNT PEER GROUP INDEX
<S> <C> <C> <C>
FEB. 1993 100.00 100.00 100.00
FEB. 1994 219.37 154.63 112.96
FEB. 1995 346.21 145.40 114.69
FEB. 1996 345.05 199.11 151.75
DEC. 1996 440.12 221.16 174.92
DEC. 1997 619.26 302.63 230.13
</TABLE>

- ---------------

(1) The companies in the Peer Group are as follows: Brunswick Corp.,
Caterpillar, Inc., Deere & Co., Figgie International A, Ingersoll-Rand Co.,
Johnson Worldwide Assoc., Kaydon Corp., Kennametal Inc., Regal-Beloit Corp.,
Terex Corp., and the Toro Co.
(2) The comparison of total return on investment (change in year-end stock price
plus reinvested dividends) for each of the periods assumes that $100 was
invested on February 26, 1993 in each of Blount International, Inc., the
Peer Group, and the NYSE Market Value Index, with investment weighted on the
basis of market capitalization as appropriate.

INDEBTEDNESS OF MANAGEMENT

In connection with the employment of Richard H. Irving, III as Senior Vice
President and General Counsel of the Corporation in April 1995, the Corporation
made an interest-free loan to him in August 1995 for the purchase of a home in
Montgomery, Alabama pending sale of his home in another city. The largest
aggregate amount of such indebtedness outstanding at any time during the year
was $318,719, and the entire indebtedness was paid by February 28, 1997.

In connection with the employment of Leonard C. Hale as President of
Blount's Sporting Equipment Group in May 1996, the Corporation made an
interest-free loan to him in December 1996 for the purchase of a home in
Montgomery, Alabama. The largest aggregate amount of such indebtedness
outstanding at any time was $78,000, and that was repaid in full on May 27,
1997.

19
<PAGE> 23

FILING DISCLOSURE

Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Corporation's directors, executive officers and persons
who beneficially own more than 10% of any class of equity securities of the
Corporation to file reports of ownership and changes in ownership with the
Securities and Exchange Commission and the New York Stock Exchange and to
furnish the Corporation with copies.

Based on the review of copies of such forms received by it, or written
representations from certain reporting persons, the Corporation believes that,
during 1997 all filing requirements were complied with which were applicable to
its directors, officers and greater than 10% beneficial owners.

CERTAIN TRANSACTIONS AND OTHER MATTERS

During 1997, the Corporation made cash contributions of $2,150,634 to The
Blount Foundation, Inc., a charitable foundation. D. Joseph McInnes is President
and a director; Katherine Blount Miles is Vice President, Secretary, Treasurer
and a director; and Winton M. Blount is a director of The Blount Foundation,
Inc.

APPROVAL OF THE 1998 BLOUNT LONG TERM EXECUTIVE STOCK OPTION PLAN

PROPOSAL 2

The Board adopted, subject to approval by the stockholders of the
Corporation, a new stock option plan entitled the 1998 Blount Long Term
Executive Stock Option Plan (the "1998 LTESO Plan"). The 1998 LTESO Plan became
effective upon its adoption by the Compensation and Management Development
Committee of the Board (the "Committee") on February 1, 1998. It was ratified by
the Board on February 2, 1998 and is subject to approval by the stockholders.
The following summary of the principal features of the 1998 LTESO Plan is
qualified in all respects by the specific provisions of the 1998 LTESO Plan, the
full text of which is set forth as Exhibit A hereto.

The 1998 LTESO Plan contemplates the grant of the right to purchase shares
of Class A Common Stock of the Corporation under Stock Option Agreements
("Options"). Subject to the usual antidilution provisions of stock splits, stock
dividends, etc., the number of shares of Class A Common Stock which may be
issued under the 1998 LTESO Plan may not exceed 1,200,000 shares. The 1998 LTESO
Plan will be administered by the Committee. Those employees eligible to
participate are any officer or other key management employee (approximately 60
persons) of the Corporation and its subsidiaries. The Committee will have sole
discretion to determine from among eligible employees those to whom and the time
or times at which or the criteria under which Options may be granted, the number
of shares of Class A Common Stock to be subject to each Option and the period
for the exercise of such Options. As of the date hereof, options to acquire
562,550 shares of Class A Common Stock at $24.84375 per share have been granted,
subject to approval of the 1998 LTESO Plan by the stockholders under the 1998
LTESO Plan. Included were options for the following number of shares for the
following persons and groups. Mr. Blount, Chairman of the Board, 0 shares; Mr.
Panettiere, President and Chief Executive Officer, 160,000 shares; Mr. Osterman,
President, Outdoor Products Group, 45,000 shares; Mr. Layman, Executive Vice
President -- Finance Operations and Chief Financial Officer, 45,000 shares; and
Mr. McInnes, Executive Vice President and Chief Administrative Officer and
Corporate Secretary, 45,000 shares; all Executive Officers, as a group, 390,000
shares; all other employees, including all current officers who are not
executive officers, as a group, 172,550 shares.

The Board may from time to time suspend or discontinue the 1998 LTESO Plan
or revise or amend it without further stockholder approval. New York Stock
Exchange rules, however, presently would require stockholder approval to
increase the number of shares which may be issued under the 1998 LTESO Plan, but
if such rules were to be amended so as not to require such approval, the Board
would be able to increase the number of shares issuable under the 1998 LTESO
Plan without further stockholder action.

The per share exercise price of the Class A Common Stock subject to each
Option may not be less than the fair market value of such stock on the date the
Option is granted. The life of the 1998 LTESO Plan is indefinite but the period
for the exercise of each Option cannot exceed 10 years from the date of grant.
As of February 27, 1998, the closing price of Class A Common Stock was $27.8125.

Options may be exercised upon such schedule as the Committee determines at
the date of grant and as may otherwise be set out in the 1998 LTESO Plan. No
Option will be transferable by an optionee other than by will or the laws of
descent and distribution. During the lifetime of an optionee, the Option will be
exercisable only by the optionee.

In the event an optionee's employment is terminated with or without cause,
or by the act of the optionee including death, before his or her Option is
exercisable, the optionee's right to exercise such Option shall terminate and
all rights thereunder shall cease. In the event an optionee's employment is
terminated with or without cause, or by the act of the optionee including death,
20
<PAGE> 24

after his or her Option is exercisable, the optionee will have 3 months, except
in the case of death as described below, after such termination within which to
exercise such Option to the extent it was exercisable at the date of such
termination provided, however, that if an Optionee is 60 years old or more and
retires under a tax qualified pension plan of the Corporation directly from
service with the Corporation or a subsidiary, such Optionee shall have the right
for three months after the effective date of retirement (but not to exceed the
original expiration date of the Option) to exercise such Option to the extent
not previously exercised whether or not he/she would otherwise have a fully
vested right to exercise the Option.

In the event of the death of an optionee, the executor or administrator of
the estate of the optionee or the person or persons to whom the Option shall
have been validly transferred by the executor or the administrator pursuant to a
will or the laws of descent and distribution shall have the right for 1 year
following the date of death to exercise the optionee's Option to the extent it
was exercisable at the date of death, but not to exceed the original expiration
date of the Option.

The 1998 LTESO Plan provides that in the event of a change in control of
the Corporation (as defined in the 1998 LTESO Plan), all options will be fully
exercisable as of the date of the change in control and shall remain exercisable
through their full term.

SECTION 162(M) OF THE CODE

Section 162(m) of the U.S. Internal Revenue Code, as amended, (the "Code"),
generally disallows a tax deduction to public companies for compensation of more
than $1 million paid in any year (not including amounts deferred) to a
corporation's chief executive officer and to the four other most highly
compensated executive officers. "Qualified performance-based compensation" is
not subject to the deduction limit if certain requirements are met. Because
stock options granted under the 1998 LTESO Plan must have an exercise price
equal at least to fair market value at the date of grant and because the 1998
LTESO Plan states the maximum number of shares (500,000) with respect to which
options may be granted during a specified period to any employee who is a
Covered Employee as defined in the 1998 LTESO Plan, compensation from the
exercise of stock options should be treated as "qualified performance-based
compensation" for Section 162(m) purposes.

FEDERAL INCOME TAX CONSEQUENCES

Options which may be granted under the 1998 LTESO Plan are not intended to
qualify as "incentive stock options" within the meaning of Section 422A of the
Code.

Under current federal tax law, there are no tax consequences to either the
Corporation or the optionee upon grant of the Option. Upon exercise of the
Option, the excess of the fair market value of the Class A Common Stock acquired
over the option price is taxable to the optionee as compensation income and
deductible by the Corporation. The tax basis for the stock acquired by the
optionee is the option price plus such taxable excess. When an optionee disposes
of shares acquired upon exercise of the option, any amount received in excess of
the tax basis of the shares will be treated as capital gain and will either be
long-term or short-term, depending on the holding period of the shares. The
holding period commences on the date of exercise of the option. If the amount
received on sale is less than the tax basis of the shares, the loss will be
treated as long-term or short-term capital loss, depending upon the holding
period of the shares.

MANAGEMENT RECOMMENDATION

By affording key management employees of the Corporation and its
subsidiaries an opportunity to acquire or increase their equity interest in the
Corporation and by thus encouraging such employees to become owners of the
Corporation's Class A Common Stock, the Corporation seeks to motivate, retain
and attract those highly competent individuals upon whose judgment, initiative,
leadership and continued efforts the success of the Corporation in large measure
depends. For this reason, the management of the Corporation recommends to the
stockholders of the Corporation that they vote FOR approval of the 1998 LTESO
Plan.

VOTE REQUIRED

The affirmative vote of the majority of the stock having voting power
present in person or represented by proxy at the Annual Meeting of Stockholders
is required for approval of the 1998 LTESO Plan. Proxies solicited hereby will
be voted FOR the proposal unless a vote against the proposal or abstention is
specifically indicated.

RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS

PROPOSAL 3

Upon recommendation of the Audit Committee, the Board has appointed the
firm of Coopers & Lybrand L.L.P. as its independent auditors for the calendar
year ending December 31, 1998. Although stockholder ratification is not
required, the Board
21
<PAGE> 25

has determined that it would be desirable to request an expression from the
stockholders as to whether or not they concur in the foregoing appointment.

Coopers & Lybrand L.L.P. has served as auditors of the consolidated
financial statements of the Corporation and its subsidiaries from year to year
since 1972. The Corporation has been advised by Coopers & Lybrand L.L.P. that
they do not have any direct financial interest or any material indirect
financial interest in the Corporation or any of its subsidiaries, and that
during the above time, Coopers & Lybrand L.L.P. has not had any connection with
the Corporation or its subsidiaries in the capacity of promoter, underwriter,
voting trustee, director, officer or employee.

Representatives of Coopers & Lybrand L.L.P. and of the Audit Committee of
the Board will be present at the Meeting and will have the opportunity to make a
statement if they desire to do so. Those representatives will also be available
to respond to appropriate questions.

The Audit Committee of the Board approved all non-audit services rendered
by Coopers & Lybrand L.L.P. during 1997 and concluded that such services did not
affect the independence of the auditors. The audit services provided by Coopers
& Lybrand L.L.P. included the audit of the consolidated financial statements of
the Corporation for 1997, audit of certain subsidiary financial statements for
1997, review of various filings with the Securities and Exchange Commission, and
performance of such other appropriate auditing services as were required by
management or the Board. The non-audit services include, among other things, tax
services and special services regarding accounting issues.

Coopers & Lybrand L.L.P. has advised that all professional services were
provided at customary rates and terms.

The Board recommends a vote FOR ratification of the appointment of Coopers
& Lybrand L.L.P. as independent auditors for the Corporation for the calendar
year ending December 31, 1998. If the stockholders should not ratify the
appointment of Coopers & Lybrand L.L.P., the Board will reconsider the
appointment.

STOCKHOLDERS' PROPOSALS FOR 1999 ANNUAL MEETING

Stockholders may present proposals which may be proper subjects for
inclusion in the Proxy Statement and for consideration at the Annual Meeting of
Stockholders. In order to be considered, proposals must be submitted on a timely
basis. Proposals for the 1999 Annual Meeting of Stockholders must be received by
the Corporation no later than November 1, 1998. Any such proposals, as well as
any questions related thereto, should be directed to the Secretary of the
Corporation.

GENERAL INFORMATION

The Board does not presently know of any other business to be presented at
the Meeting. However, if any other matters properly come before the Meeting, the
persons whose names appear on the enclosed form or forms of proxy will vote
thereon in accordance with their best judgment.

The expenses of soliciting proxies will be paid by the Corporation. In
addition to the use of the mails, proxies may be solicited personally, or by
telephone or facsimile, by directors, officers and regular employees of the
Corporation and its subsidiaries, who, except for normal overtime pay in certain
instances, will not receive additional compensation therefor. Arrangements will
also be made with brokerage firms and other custodians, nominees and fiduciaries
for the forwarding of proxy soliciting materials to beneficial owners of the
Corporation's Class A Common Stock and Class B Common Stock, and the Corporation
will reimburse such brokerage firms, custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred by them in connection therewith.

By Order of the Board of Directors,

/s/ D. JOSEPH MCINNES
D. Joseph McInnes
Executive Vice President -- Administration
and Chief Administrative Officer
and Corporate Secretary

Montgomery, Alabama
March 9, 1998

22
<PAGE> 26

EXHIBIT A

BLOUNT INTERNATIONAL, INC.

1998 BLOUNT LONG TERM EXECUTIVE STOCK OPTION PLAN

ARTICLE I

DEFINITIONS

SECTION 1.1 Definitions.

As used herein, the following terms shall have the meanings hereinafter set
forth unless the context clearly indicates to the contrary:

(a) "Company" shall mean Blount International, Inc., a Delaware
corporation.

(b) "Board" shall mean the Board of Directors of the Company.

(d) "Covered Employee" shall mean any individual who, as of the last
day of the Company's taxable year, is either the Chief Executive Officer of
the Company or is acting in such capacity, or is among the four highest
compensated officers of the Company and subsidiaries other than the Chief
Executive Officer.

(e) "Committee" shall mean the Compensation and Management Development
Committee of the Board consisting of two (2) or more persons.

(f) "Stock," with respect to each share to which that term refers,
shall mean one (1) share of Class A Common Stock of the Company, par value
$0.01 per share.

(g) "Fair Market Value" shall mean the average of the highest price
and the lowest price per share at which the Stock is sold in the regular
way on the New York Stock Exchange, Inc. on the day an Option is granted
hereunder or, in the absence of any reported sales on such day, the first
preceding day on which there were such sales.

(h) "Fundamental Change" shall mean any of the following events:

(i) the sale by the Company of substantially all of its assets to a
single purchaser or a group of associated or affiliated purchasers;

(ii) the sale, exchange, or other disposition, in one transaction
to an entity or entities not affiliated with the Company, of more than
fifty percent (50%) of the outstanding common stock of the Company other
than a sale, exchange, or disposition of the common stock of the Company
resulting from a public or private offering of common stock or other
security convertible into common stock of the Company which offering is
sponsored or initiated by the Company and approved by the Board;

(iii) the merger or consolidation of the Company in a transaction
in which the stockholders of the Company receive less than fifty percent
(50%) of the outstanding voting stock of the new or continuing entity;
or

(iv) individuals who, as of February 2, 1998, constitute the Board
(the "Continuing Directors") cease for any reason to constitute at least
a majority of the Board, provided that any person becoming a director of
the Company subsequent to February 2, 1998, whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the Continuing Directors (other than an
election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened solicitation with
respect to the election or removal of directors of the Company, as such
terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act)
shall be for purposes of the Plan, considered as though such person were
a Continuing Director.

(i) "Option" shall mean an option to purchase Stock granted pursuant
to the provisions of Article VI hereof.

(j) "Optionee" shall mean an employee to whom an Option has been
granted hereunder.

(k) "Plan" shall mean the 1998 Blount Long Term Executive Stock Option
Plan, the terms of which are set forth herein.

(l) "Stock Option Agreement" shall mean the agreement between the
Company and the Optionee under which the Optionee may purchase Stock
hereunder.

A-1
<PAGE> 27

(m) "Subsidiary" shall mean any corporation, the majority of the
outstanding capital stock of which is owned, directly or indirectly, by the
Company.

ARTICLE II

THE PLAN

SECTION 2.1 Name.

This plan shall be known as the "1998 Blount Long Term Executive Stock
Option Plan".

SECTION 2.2 Purpose.

The purpose of the Plan is to advance the interests of the Company and its
stockholders by affording to key management employees of the Company and its
subsidiaries an opportunity to acquire or increase their proprietary interest in
the Company and to allow such employees to benefit directly from improved
performance of the Company by the grant to such employees of Options under the
terms set forth herein. By thus encouraging such employees to become owners of
the Company stock and allowing them to benefit directly from improved
performance of the Company, the Company seeks to motivate, retain and attract
those highly competent individuals upon whose judgment, initiative, leadership
and continued efforts the success of the Company in large measure depends. The
Options granted under this Plan are not intended to qualify as incentive stock
options under Section 422 of the Code.

SECTION 2.3 Effective Date.

The Plan shall be deemed adopted and shall become effective upon its
approval by the Board subject to its subsequent approval within 12 months of
adoption by the Board by the stockholders of the Company at an annual or special
meeting of the stockholders of the Company. No option granted hereunder may
become exercisable unless and until such approval is obtained.

ARTICLE III

PARTICIPANTS

SECTION 3.1 Eligibility.

Any officer or other key management employee of the Company or its
subsidiaries shall be eligible to participate in the Plan; provided, however,
that each member of the Committee shall be a "non-employee director" within the
meaning of Rule 16b-3 under the Securities Exchange Act of 1934 and an "outside
director" within the meaning of the Treasury regulations under Section 162(m) of
the Code. The Committee may grant Options to any eligible employee in accordance
with such determinations as the Committee from time to time in its sole
discretion shall make.

ARTICLE IV

ADMINISTRATION

SECTION 4.1 Duties and Powers of Committee.

The Plan shall be administered by the Committee. Subject to the express
provisions of the Plan, the Committee shall have sole discretion and authority
to determine from among eligible employees those to whom and the time or times
at which Options may be granted, the number of shares of Stock to be subject to
each Option, and the period for the exercise of such Option which need not be
the same for each grant hereunder. Subject to the express provisions of the
Plan, the Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine
the details and provisions of each Stock Option Agreement, and to make all other
determinations necessary or advisable in the administration of the Plan.

SECTION 4.2 Majority Rule.

A majority of the members of the Committee shall constitute a quorum, and
any action taken by a majority present at a meeting at which a quorum is present
or any action taken without a meeting evidenced by a writing executed by a
majority of the whole Committee shall constitute the action of the Committee.

A-2
<PAGE> 28

SECTION 4.3 Company Assistance.

The Company shall supply full and timely information to the Committee on
all matters relating to eligible employees, their employment, death, or other
termination of employment, and such other pertinent facts as the Committee may
require. The Company shall furnish the Committee with such clerical and other
assistance as is necessary in the performance of its duties.

ARTICLE V

SHARES OF STOCK SUBJECT TO PLAN

SECTION 5.1 Limitations.

Subject to adjustment pursuant to the provisions of Section 5.3 hereof, the
number of shares of Stock which may be issued and sold hereunder shall not
exceed 1,200,000 shares of Stock. Such shares may be either authorized and
unissued shares or shares issued and thereafter acquired by the Company. The
maximum number of shares with respect to which Options may be granted to any
individual who has been a Covered Employee at any time during the term of the
Plan is 500,000 in any calendar year.

SECTION 5.2 Options Granted Under Plan.

Shares of Stock with respect to which an Option granted hereunder shall
have been exercised shall not again be available for grant hereunder. If Options
granted hereunder shall expire, terminate or be canceled for any reason without
being wholly exercised, new Options may be granted hereunder covering the number
of shares to which such Option expiration, termination or cancellation relates.

SECTION 5.3 Antidilution and Fundamental Change.

In the event that the outstanding shares of Stock hereafter are changed
into or exchanged for a different number or kind of shares or other securities
of the Company or of another corporation by reason of merger, consolidation,
other reorganization, recapitalization, reclassification, combination of shares,
stock split-up or stock dividend:

(a) the aggregate number and kind of shares subject to Options which
may be granted hereunder shall be adjusted appropriately;

(b) rights under outstanding Options granted hereunder, both as to the
number of subject shares and the Option price, shall be adjusted
appropriately;

(c) where dissolution or liquidation of the Company is involved, each
outstanding Option granted hereunder shall terminate, but the Optionee
shall have the right, subject to the other provisions of the Plan, for
thirty (30) days prior to such dissolution or liquidation, to exercise his
Option in full, without regard to any installment exercise provisions, to
the extent that it shall not have been exercised;

The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined solely by the Committee, and any such adjustment
shall provide for the elimination of fractional share interests.

In the event of a Fundamental Change, subject to the other provisions of
the Plan, Optionee shall have the right to exercise his Option in full, without
regard to any installment exercise or vesting provisions, to the extent that it
shall not have been exercised.

ARTICLE VI

OPTIONS

SECTION 6.1 Option Grant and Agreement.

Each Option granted hereunder shall be evidenced by minutes of a meeting or
the written consent of the Committee and by a Stock Option Agreement dated as of
the date of grant and executed by the Company and the Optionee, which Agreement
shall set forth such terms and conditions as may be determined by the Committee
consistent with the Plan. Such Agreement shall bind the Optionee to provide
written notice to the Company in the event that the Optionee shall make an
election under Section 83(b) of the Code with respect to any Stock purchased
through exercise of an Option under this Plan; such written notice shall be
presented to the Company no later than ten (10) days following the filing of
such election.

A-3
<PAGE> 29

SECTION 6.2 Option Price.

The per share price of the Stock subject to each Option shall be determined
by the Committee, but said per share price shall not be less than the Fair
Market Value of the Stock on the date the Option is granted.

SECTION 6.3 Option Period.

The period for the exercise of each Option shall be determined by the
Committee, but in no instance shall such period exceed ten years from the date
of grant of the Option.

SECTION 6.4 Option Exercise.

(a) Options may be exercised with respect to whole shares only, for such
shares of Stock and within the period permitted by the exercise thereof as
determined by the Committee, and shall be exercised by written notice of intent
to exercise the Option with respect to a specified number of shares delivered to
the Company at its principal office in the State of Alabama, and payment in full
in cash to the Company at said office of the amount of the Option price for the
number of shares of Stock with respect to which the Option is then being
exercised. If and to the extent that the Company is required to withhold on
account of any present or future tax imposed by any taxing authority with
respect to such exercise, the notice of exercise shall be accompanied by a check
to the order of the Company in payment of the amount of such withholding, as
determined by the Company in its sole discretion.

(b) No Option granted hereunder shall be exercisable unless at all times
during the period beginning on the date of the granting of such Option and
ending on the day which is three months before the date of exercise (or ending
on the day which is twelve months before the date of exercise in case of the
death of the Optionee) the Optionee was an employee of either the Company or a
parent or Subsidiary of the Company, or a corporation (or parent or subsidiary
of such corporation) issuing or assuming such Option.

SECTION 6.5 Nontransferability of Option.

No Option shall be transferred by an Optionee otherwise than by will or the
laws of descent and distribution. During the lifetime of an Optionee the Option
shall be exercisable only by the Optionee.

SECTION 6.6 Effect of Death or Other Termination of Employment.

(a) If on or subsequent to the date an Option shall have been granted, the
Optionee's employment with the Company or its subsidiaries shall be terminated
by the Company or subsidiaries with or without cause, or by the act of the
Optionee including death, the Optionee's right to exercise such Option shall
extend only to the number of shares under the Option which such Optionee has on
such date a fully vested right to exercise the Option with respect thereto. The
Option with respect to all remaining shares shall terminate, and except as set
forth in this Plan all rights under the Option shall cease. Notwithstanding the
foregoing provisions of this Section 6.6(a), if an Optionee is 60 years old or
more and retires under a tax qualified pension plan of the Company directly from
service with the Company or a subsidiary, such Optionee shall have the right for
three months after the effective date of retirement (but not to exceed the
original expiration date of the Option) to exercise such Option to the extent
not previously exercised whether or not he/she would otherwise have a fully
vested right to exercise the Option.

(b) In the event of the death of an Optionee, the executor or administrator
of the estate of the Optionee or the person or persons to whom an Option granted
hereunder shall have been validly transferred by the executor or the
administrator pursuant to will or the laws of descent and distribution shall
have the right to exercise the Optionee's Option to the extent exercisable by
such Optionee on the date of death for one year following the date of death (but
not to exceed the original expiration date of the Option).

(c) No transfer of an Option by the Optionee by will or by the laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and an
authenticated copy of the will and/or such other evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions of such Option.

SECTION 6.7 Rights as Stockholder.

An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares subject to such Option prior to the
purchase of such shares by exercise of such Option as provided herein.

A-4
<PAGE> 30

ARTICLE VII

STOCK CERTIFICATES

SECTION 7.1 Stock Certificates.

The Company shall not be required to issue or deliver any certificate for
shares of Stock purchased upon the exercise of any Option granted hereunder or
any portion thereof, prior to fulfillment of all of the following conditions:

(a) the admission of such shares to listing on all stock exchanges on
which the Stock is then listed;

(b) the completion of any registration or other qualification of such
shares under any federal or state law or under the rulings or regulations
of the U.S. Securities and Exchange Commission or any other governmental
regulatory body, which the Committee shall in its sole discretion deem
necessary or advisable;

(c) the obtaining of any approval or other clearance from any federal
or state governmental agency which the Committee shall in its sole
discretion determine to be necessary or advisable; and

(d) the lapse of such reasonable period of time following the exercise
of the Option as the Committee from time to time may establish for reasons
of administrative convenience.

ARTICLE VIII

TERMINATION, AMENDMENT AND MODIFICATION OF THE PLAN

SECTION 8.1 Termination, Amendment and Modification of the Plan.

The Board may at any time terminate, and may at any time and from time to
time and in any respect amend or modify, the Plan; provided, however, that no
such action of the Board may in any manner affect any Stock Option Agreement
theretofore granted pursuant to the Plan without the consent of the Optionee or
transferee of the Option.

ARTICLE IX

MISCELLANEOUS

SECTION 9.1 Employment.

Nothing in the Plan or in any Option granted hereunder or in any Stock
Option Agreement relating thereto shall confer upon any employee the right to
continue in the employ of the Company or any Subsidiary.

SECTION 9.2 Other Compensation Plans.

The adoption of the Plan shall not affect any other stock option or
incentive or other compensation plans in effect for the Company or any
Subsidiary, nor shall the Plan preclude the Company from establishing any other
forms of incentive or other compensation for employees of the Company or any
Subsidiary.

SECTION 9.3 Plan Binding on Successors.

The Plan shall be binding upon the successors and assigns of the Company.

SECTION 9.4 Singular, Plural; Gender.

Whenever used herein, nouns in the singular shall include the plural, and
the masculine pronoun shall include the feminine gender.

SECTION 9.5 Headings, Etc., No Part of Plan.

Headings of Articles and Sections hereof are inserted for convenience and
reference; they constitute no part of the Plan.

A-5
<PAGE> 31
APPENDIX A

DETACH HERE

PROXY

BLOUNT INTERNATIONAL, INC.

4520 EXECUTIVE PARK DRIVE
MONTGOMERY, ALABAMA 36116-1602

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON APRIL 20, 1998

CLASS A COMMON STOCK

The undersigned, revoking previous proxies, if any, relating to these
shares, hereby acknowledges receipt of the Notice and Proxy Statement dated
March 9, 1998 in connection with the Annual Meeting of Stockholders to be held
at 10:00 A.M., C.D.T., on Monday, April 20, 1998, in the Wilson Auditorium of
the Montgomery Museum of Fine Arts, One Museum Drive, Montgomery, Alabama
36117, and hereby appoints RICHARD H. IRVING, III and L. DANIEL MORRIS, JR., or
either one of them acting in the absence of the other, the proxies of the
undersigned, with power of substitution to each, to represent and vote, as
designated on the reverse side, all shares of Class A Common Stock of Blount
International, Inc. registered in the name provided herein as of February 20,
1998 which the undersigned is entitled to vote at the 1998 Annual Meeting of
Stockholders, and at any adjournment thereof, with all the powers the
undersigned would have if personally present.

CONTINUED AND TO BE SIGNED ON REVERSE SIDE

[SEE REVERSE
SIDE]
<PAGE> 32

[BLOUNT LOGO] THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.

Regardless of whether you plan to attend the Annual Meeting of Stockholders,
you can be sure your shares are represented at the meeting by promptly
returning your proxy in the enclosed envelope.

BLOUNT HIGHLIGHTS DURING 1997

. Achieved record sales and profits for the sixth consecutive year.

. Attained a return on shareholders equity in excess of 20 percent.

. Stock split 2 for 1 in December.

. Increased the dividend for the fifth time in five years and paid the
Company's 100th consecutive dividend.

. Added to Standard & Poor's SmallCap 600 Index.

. Completed the acquisition of Federal Cartridge Company.

DETACH HERE

[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS NUMBERED 1, 2 AND 3.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS NUMBERED 1, 2 AND 3.

<TABLE>
<CAPTION>
<S> <C> <C>
FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS.
NOMINEES: C. Todd Conover, Emory M. Folmar and 2. APPROVE THE 1998 BLOUNT LONG [ ] [ ] [ ]
Andrew A. Sorensen TERM EXECUTIVE STOCK OPTION
PLAN.
[ ] FOR ALL NOMINEES [ ] WITHHELD FROM
ALL NOMINEES 3. RATIFY THE APPOINTMENT OF [ ] [ ] [ ]
COOPERS & LYBRAND LLP as the
independent auditors for the
Corporation for the year
ending December 31, 1998.

4. In their discretion on such other business as may properly come
before the meeting.
[ ]
---------------------------------------------------
For all nominees except as noted above

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]

Please mark, sign exactly as your name is printed hereon and return in
the enclosed envelope. If the stock is held jointly, each joint owner
must sign. When signing as Attorney, Executor, Administrator, Trustee,
Guardian or in any other representative capacity, please give full
title.

Signature: Date: Signature: Date:
------------------------ -------------- ------------------------ --------------

</TABLE>

<PAGE> 33
DETACH HERE

APPENDIX B

PROXY

BLOUNT INTERNATIONAL, INC.

4520 EXECUTIVE PARK DRIVE
MONTGOMERY, ALABAMA 36116-1602

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS ON APRIL 20, 1998

CLASS B COMMON STOCK

The undersigned, revoking previous proxies, if any, relating to these shares,
hereby acknowledges receipt of the Notice and Proxy Statement dated March 9,
1998 in connection with the Annual Meeting of Stockholders to be held at 10:00
A.M., C.D.T., on Monday, April 20, 1998, in the Wilson Auditorium of the
Montgomery Museum of Fine Arts, One Museum Drive, Montgomery, Alabama 36117,
and hereby appoints RICHARD H. IRVING, III and L. DANIEL MORRIS, JR., or
either one of them acting in the absence of the other, the proxies of the
undersigned, with power of substitution to each, to represent and vote, as
designated on the reverse side, all shares of Class B Common Stock of Blount
International, Inc. registered in the name provided herein as of February 20,
1998 which the undersigned is entitled to vote at the 1998 Annual Meeting of
Stockholders, and at any adjournment thereof, with all powers the undersigned
would have if personally present

-----------
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE SEE REVERSE
SIDE
-----------

<PAGE> 34
[BLOUNT LOGO] THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.

Regardless of whether you plan to attend the Annual Meeting of Stockholders,
you can be sure your shares are represented at the meeting by promptly
returning your proxy in the enclosed envelope.

BLOUNT HIGHLIGHTS DURING 1997

- - Achieved record sales and profits for the sixth consecutive year.

- - Attained a return on shareholders equity in excess of 20 percent.

- - Stock split 2 for 1 in December.

- - Increased the dividend for the fifth time in five years and paid the Company's
100th consecutive dividend.

- - Added to Standard & Poor's SmallCap 600 Index.

- - Completed the acquisition of Federal Cartridge Company.

BL272F DETACH HERE
- ------------------------------------------------------------------------------
X PLEASE MARK VOTES
AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS NUMBERED 1,2 AND 3.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS NUMBERED 1,2 AND 3.

<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS. FOR AGAINST ABSTAIN
NOMINEES: Haley Barbour, Samuel R. Blount, W. Houston Blount 2. APPROVE THE 1998 BLOUNT LONG
Winton M. Blount, R. Eugene Cartledge, H. Corbin Day, TERM EXECUTIVE STOCK OPTION [ ] [ ] [ ]
Mary D. Nelson, John M. Panettiere and Arthur P. Ronan PLAN.

[ ] FOR [ ] WITHHELD 3. RATIFY THE APPOINTMENT OF [ ] [ ] [ ]
ALL FROM ALL COOPERS & LYBRAND LLP as the
NOMINEES NOMINEES independent auditors for the
Corporation for the year
ending December 31, 1998.
[ ]
--------------------------------------- 4. In their discretion on such other business as may
For all nominees except as noted above properly come before the meeting.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]

Please mark, sign exactly as your name is printed
hereon and return in the enclosed envelope. If the
stock is held jointly, each joint owner must sign.
When signing as Attorney, Executor, Administrator,
Trustee, Guardian or in any other representative
capacity, please give full title.

Signature: Date: Signature: Date:
----------------------- -------------- --------------------------- ---------------

</TABLE>