BLOUNT INTERNATIONAL INC, DEF 14A, 1999-03-10

BLOUNT INTERNATIONAL INC
DEF 14A, 1999-03-10
CONSTRUCTION - SPECIAL TRADE CONTRACTORS

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<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):

[ ] 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)

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD APRIL 19, 1999
---------------------

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 19, 1999, at the Company's
principal executive offices, 4520 Executive Park Drive, Montgomery, Alabama
36116, 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 Executive Management
Target Incentive Plan;

3. To consider and act upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as independent auditors for the Corporation
for the year ending December 31, 1999; 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
19, 1999, 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 8, 1999
<PAGE> 3

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 19, 1999

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

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 19, 1999, 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 15, 1999.

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 19, 1999, 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 27,433,653 shares of Class A Common Stock, of which 1,848,635 shares are
held as treasury stock and are non-voting, and 11,475,171 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> 4

PRINCIPAL STOCKHOLDERS

The following table sets forth as of February 19, 1999, 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) 11.30% 2.06%
4520 Executive Park Drive Class B Common Stock 8,409,696 (2) 73.29% 59.93%
Montgomery, Alabama 36116
BHP, Inc. Class A Common Stock 2,892,144 (3) 11.30% 2.06%
4520 Executive Park Drive Class B Common Stock 8,409,696 (3) 73.29% 59.93%
Montgomery, Alabama 36116
The Northern Trust Company Class A Common Stock 2,860,973 (4) 11.18% 2.04%
50 South LaSalle Street Class B Common Stock None
Chicago, Illinois 60675
Portfolio H Investors, L.P. Class A Common Stock 2,761,200 10.79% 1.97%
201 Main St., Suite 3200 Class B Common Stock None
Fort Worth, Texas 76102
The Prudential Insurance Company of Class A Common Stock 1,474,515 5.76% 1.05%
America Class B Common Stock None
751 Broad Street
Newark, New Jersey 07102-3777
(b)(i) Nominees -- Class A Common Stock
------------------------------------------
Haley Barbour Class A Common Stock 1,271 (5) * *
Class B Common Stock None
C. Todd Conover Class A Common Stock 5,000 * *
Class B Common Stock None
Andrew A. Sorensen Class A Common Stock 1,294 * *
Class B Common Stock None
Nominees -- Class B Common Stock
------------------------------------------
Samuel R. Blount Class A Common Stock 819,334 (6) 3.20% *
Class B Common Stock 124,032 (6) 1.08% *
Winton M. Blount Class A Common Stock 3,124,803 (7) 12.17% 2.23%
Class B Common Stock 9,713,914 (7) 84.65% 69.22%
W. Houston Blount Class A Common Stock 4,554 * *
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 (8) * *
Class B Common Stock None
Mary D. Nelson Class A Common Stock 8,244 * *
Class B Common Stock None
John M. Panettiere Class A Common Stock 982,839 (9) 3.71% *
Class B Common Stock None
Arthur P. Ronan Class A Common Stock 2,000 * *
Class B Common Stock None
</TABLE>

2
<PAGE> 5

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

* 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) Includes 200 shares of Class A Common Stock (less than 1.0% of class and
total votes) owned by Haley Barbour's wife.
(6) - Includes 21,546 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.
- Includes 796,910 shares of Class A Common Stock (3.11% of class and less
than 1.0% of total votes) held by SRB-BLTA, L.L.C. and 104,598 shares of
Class B Common Stock (less than 1.0% of class and total votes) held by
SRB-BLTB, L.L.C. of which Samuel R. Blount is the managing member and of
which Samuel R. Blount and his wife are the sole members.
(7) - Includes 122,828 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 the 2,892,144 shares of Class A Common Stock (11.30% of class,
2.06% of total votes) and 8,409,696 shares of Class B Common Stock
(73.29% of class, 59.93% of total votes) shown in the table as owned by
the Blount Holding Company, L.P.
- Includes the 100,000 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.

3
<PAGE> 6

(8) Includes 15,000 shares of Class A Common Stock (less than 1.0% of class and
total votes) held by the Day Family Foundation of which H. Corbin Day is a
trustee and shares disposition and voting rights with his wife, the only
other trustee.
(9) Includes 907,001 shares of Class A Common Stock (3.42% 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, the 1995 Blount Long-Term Executive Stock Option Plan, and the
1998 Blount Long-Term Executive Stock Option Plan.
(10) Includes 158,834 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 1992 Blount Incentive Stock Option Plan,
the 1995 Blount Long-Term Executive Stock Option Plan, and the 1998 Blount
Long-Term Executive Stock Option Plan.
(11) Includes 367,500 shares of Class A Common Stock (1.42% 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, the 1995 Blount
Long-Term Executive Stock Option Plan, and the 1998 Blount Long-Term
Executive Stock Option Plan.
(12) Includes 277,500 shares of Class A Common Stock (1.07% 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, the 1995 Blount Long-Term Executive Stock Option Plan, and the
1998 Blount Long-Term Executive Stock Option Plan.
(13) Includes 2,080,756 shares of Class A Common Stock (7.52% of class, 1.46% 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, the 1995 Blount Long-Term Executive
Stock Option Plan, and the 1998 Blount Long-Term Executive Stock Option
Plan.

4
<PAGE> 7

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 that 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 11 effective April 19, 1999, with 3 members to be elected by the
holders of Class A Common Stock and 8 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 8 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

(BARBOUR PICTURE) HALEY BARBOUR, Age 51.
Director since September 1997; member of the Audit Committee
and the Finance Committee.
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 Skytel Communications,
Inc., Jackson, Mississippi; and Mississippi Chemical
Corporation, Yazoo City, Mississippi.

(CONOVER PICTURE) C. TODD CONOVER, Age 59.
Director since September 1992; member of the Audit Committee
and the Finance Committee.
Managing Director, Starmont Asset Management, San Francisco,
California (investment counselors) since May 1998;
President and Chief Executive Officer of The Vantage
Company, Los Altos, California (management consulting)
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.
</TABLE>

5
<PAGE> 8

<TABLE>
<S> <C>
(SORENSEN PICTURE) ANDREW A. SORENSEN, Age 60.
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, Montgomery, Alabama; and the
Bryant-Jordan Student Athlete Foundation, Birmingham, Alabama.

NOMINEES -- CLASS B COMMON STOCK

(S BLOUNT PICTURE) SAMUEL R. BLOUNT, Age 51.
Director since April 1998; member of the Executive Committee, the Acquisition Committee, and the
Compensation and Management Development Committee.
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; and Trustee of the
University of the South, Sewanee, Tennessee. He formerly served as a director of Darlington School,
Rome, Georgia, and president of the Advisory Board of Darlington School.
Mr. Blount is a son of Winton M. Blount.

(H BLOUNT PICTURE) W. HOUSTON BLOUNT, Age 77.
Director since September 1949(1); Chairman of the Acquisition Committee, member of 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.

WINTON M. BLOUNT, Age 78.
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 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; and Business
Committee for the Arts, New York, New York; 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.
Mr. Blount is the brother of W. Houston Blount and the father of Samuel R. Blount.
</TABLE>

6
<PAGE> 9
<TABLE>
<S> <C>

(CARTLEDGE PICTURE) R. EUGENE CARTLEDGE, Age 69.
Director since September 1994; Chairman of the Compensation
and Management Development Committee, member of the
Acquisition Committee, the Audit Committee, and the
Executive 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 61.
Director since June 1992; Chairman of the Finance Committee,
member of the Executive Committee, the Acquisition
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; The University of Alabama Health Ser-
vices Foundation, Birmingham, Alabama; and Vice Chairman
of the Alabama Symphony.

(NELSON PICURE) MARY D. NELSON, Age 65.
Director since June 1986; member of the Audit Committee and
the Finance Committee.
President of Nelson & Co., Cincinnati, Ohio (consulting
actuaries) throughout the past 5 years.
Mrs. Nelson is also a director of Cincinnati Bell, Inc.,
Cincinnati, Ohio and a director of Union Central Life
Insurance Co., Cincinnati, Ohio.

(PANETTIERE PICTURE) JOHN M. PANETTIERE, Age 61.
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 the Montgomery Area Chamber of
Commerce; a member of the Committee of 100; a Trustee of
Westminster College, Fulton, Missouri; and a Churchill
Fellow. He is a Life Honorary Director and Past Chairman
of the Construction Industry Manufacturers Association,
Milwaukee, Wisconsin.
</TABLE>

7
<PAGE> 10
<TABLE>
<S> <C>

(RONAN PICTURE) ARTHUR P. RONAN, Age 69.
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.
Mr. Ronan is also a director of O&S Corporation, Lancaster,
South Carolina; and Straits Corp., Bay City, Michigan.
</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, 1998, the Board held 4
regular meetings and took action 3 times by written consent in lieu of a
meeting. Average attendance by directors at Board and Committee meetings was
94.2%.

Executive Committee -- The Executive Committee consists of 5 members, 3 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 regular meeting, held 2 telephone
meetings, and took action 4 times by written consent in lieu of a meeting during
1998. The present members of the Committee are Winton M. Blount, Samuel R.
Blount, H. Corbin Day, R. Eugene Cartledge 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 1998. The
present members of the Committee are Haley Barbour, R. Eugene Cartledge, C. Todd
Conover, Mary D. Nelson, Arthur P. Ronan and Andrew A. Sorensen.

Finance Committee -- The Finance Committee consists of 5 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, 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 during 1998. The present members of
the Committee are Haley Barbour, C. Todd Conover, H. Corbin Day, 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 and
appraising the performance

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<PAGE> 11

of said officers on a timely basis, (iii) approving salaries and changes in
salaries of officers of the Corporation and presidents of its operating Groups
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, held 2 telephone meetings, and took action 5 times by
written consent in lieu of a meeting during 1998. The present members of the
Committee are Samuel R. Blount, W. Houston Blount, R. Eugene Cartledge, H.
Corbin Day and Arthur P. Ronan.

Acquisition Committee -- The Acquisition Committee consists of 5 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 telephone meetings during 1998.
The present members of the Committee are Samuel R. Blount, 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 meeting. No fee is paid for execution of consent
actions. 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 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 3 participants under this plan.

9
<PAGE> 12

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The following members of the Board served as members of the Compensation
and Management Development Committee during 1998:

Samuel R. Blount, Chairman of the Board of MeadowCraft, Inc.

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.

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 1998.

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
20). 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.

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 1998 are discussed in other sections of this report. All
operating units were profitable for CY 1998.

10
<PAGE> 13

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 85th 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 1998.

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 1998, the key performance measures considered were pre-tax 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
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 1998 and, except for the Forestry and Industrial Equipment
Division and Dixon Industries, Inc., performed above budgeted targets for return
on capital employed and, except for the Forestry and Industrial Equipment
Division and Gear Products, Inc., performed above budgeted income targets. The
Forestry and Industrial Equipment Division, although profitable, failed to meet
pre-tax income and return on capital employed targets. As a result, an annual
incentive funding pool was created for the CY 1998 performance and awards were
made to certain key executives named in the compensation table exceeding target
bonus objectives.

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.

11
<PAGE> 14

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 1998 are shown in the Option Grant Table (see page
15).

CY 1998 PAY 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 1998. The President and Chief Executive
Officer, Mr. John Panettiere, received a 6.7% merit increase in March 1998
based on competitive data and performance.

Annual Bonus -- The Corporation's CY 1998 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 1998 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
1997. The Corporation's performance exceeded that objective thus bonuses equal
to 102.5% of the 45% target for Mr. Winton Blount and 102.5% of the 65% target
for Mr. John Panettiere were earned for CY 1998. In addition to bonuses earned
under this plan, the Committee approved a discretionary bonus of $54,063 for Mr.
Blount and a $67,000 discretionary bonus for Mr. Panettiere.

R. Eugene Cartledge, Chairman
Samuel R. Blount
W. Houston Blount
H. Corbin Day
Arthur P. Ronan

12
<PAGE> 15

EXECUTIVE OFFICERS

The executive officers of the Corporation, in addition to those who are
also Director nominees, as of February 19, 1999 are:

<TABLE>
<CAPTION>
YEAR FIRST
ELECTED TO FAMILY
NAME OFFICE SUCH OFFICE AGE RELATIONSHIP
- ---- ------ ----------- --- ------------
<S> <C> <C> <C> <C>
Gerald W. Bersett President -- Sporting Equipment Group 1998 58 None
Richard H. Irving, III Senior Vice President and General Counsel of the 1995 55 None
Corporation
Harold E. Layman Executive Vice President -- Finance Operations and 1997 52 None
Chief Financial Officer of the Corporation
D. Joseph McInnes Executive Vice President -- Administration and Chief 1997, 55 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 61 None
Donald B. Zorn President -- Industrial and Power Equipment Group 1997 62 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.

Gerald W. Bersett was elected President of the Sporting Equipment Group in
April 1998. Prior to that date, he served as President and Chief Operating
Officer of Sturm Ruger. Mr. Bersett was President of Winchester Ammunition
Division of Olin Corporation from 1988 to 1995. Prior to that date, he served as
Vice President and General Manager of the Winchester Division.

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> 16

EXECUTIVE COMPENSATION

The following table summarizes, for the fiscal years ended the last day of
December 1998, the last day of December 1997, and the last day of December 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 1998 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 1998 750,000 400,000 67,991(1) 0 86,030(2)
Chairman of the Board 1997 750,000 800,000 60,282 0 44,987
C1996 625,000 800,000 48,272 100,000 167,306
John M. Panettiere 1998 791,666 600,000 64,270(1) 160,000 136,833(3)
President and Chief Executive Officer 1997 741,666 1,000,000 58,685 238,000 119,805
C1996 583,333 900,000 54,605 320,000 135,585
James S. Osterman 1998 335,386 250,000 10,103(1) 45,000 35,621(4)
President -- Outdoor Products Group 1997 316,151 310,000 9,042 62,000 26,920
C1996 233,333 230,000 7,163 80,000 24,170
Harold E. Layman 1998 315,833 240,000 12,585(1) 45,000 29,080(5)
Executive Vice President -- Finance 1997 291,666 275,000 12,390 60,000 24,200
Operations and Chief Financial Officer C1996 229,166 225,000 5,620 80,000 22,291
D. Joseph McInnes 1998 308,333 230,000 16,335(1) 45,000 28,209(6)
Executive Vice President -- 1997 286,833 265,000 12,433 60,000 23,625
Administration and Chief C1996 225,833 225,000 7,747 80,000 82,199
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 $69,750 matching contribution to employee's 401(k)
and excess 401(k) accounts and $16,280 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 $80,625 matching contribution to employee's 401(k)
and excess 401(k) accounts and $56,208 premiums on a life insurance policy
under the Executive Life Insurance Plan.
(4) Amount is comprised of $29,042 matching contribution to employee's 401(k)
and excess 401(k) accounts and $6,579 accrued pursuant to the Omark Salary
Continuation Plan.
(5) Amount is comprised of $26,587 matching contribution to employee's 401(k)
and excess 401(k) accounts and $2,493 attributable to the personal portion
of the premiums on the life insurance policies under the Executive Life
Insurance Plan.
(6) Amount is comprised of $25,800 matching contribution to the employee's
401(k) and excess 401(k) accounts and $2,409 in premiums on a life insurance
policy under the Executive Benefit Life Insurance Plan and Supplemental
Retirement Plan.

14
<PAGE> 17

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 1998 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 1998

<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 1998 ($/SHARE) (MMDDYY) 5%($) 10%($)
- ---- ---------- ---------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Winton M. Blount 0 0 0 0 0 0
John M. Panettiere 160,000 26.75% 24.84375 01-31-08 2,500,000 6,335,000
James S. Osterman 45,000 7.52% 24.84375 01-31-08 703,000 1,782,000
Harold E. Layman 45,000 7.52% 24.84375 01-31-08 703,000 1,782,000
D. Joseph McInnes 45,000 7.52% 24.84375 01-31-08 703,000 1,782,000
</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 1998 by each of the Named Executive Officers
and the year-end value of unexercised options:

AGGREGATE OPTION EXERCISES IN 1998
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 66,667 33,333 633,337 316,664
John M. Panettiere 36,640 1,066,759 667,668 505,496 7,795,649 3,646,580
James S. Osterman 0 0 93,531 115,969 802,981 504,296
Harold E. Layman 0 0 305,834 111,666 4,371,044 468,794
D. Joseph McInnes 0 0 215,834 111,666 2,680,421 468,794
</TABLE>

15
<PAGE> 18

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, 1999. 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 1998 is $130,000, 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 1998, 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, 1998, for the persons named in the
Summary Compensation Table are: Mr. Panettiere -- 7 years; Mr. Blount -- 53
years; Mr. Osterman -- 29 years; Mr. Layman -- 6 years; and Mr. McInnes -- 25
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> 19

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 1998, 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 -- $161,560.
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 $313,049.

THE BLOUNT DEFERRED COMPENSATION PLAN

On October 9, 1998, the Corporation adopted The Blount Deferred
Compensation Plan for a select group of highly compensated or management
employees of Blount, Inc. and Blount International, Inc. (the "Deferred
Compensation Plan"). The Deferred Compensation Plan provides supplemental
retirement benefits to participants at age 65 in the form of a life annuity with
monthly payments equal to the excess of (i) the product of .2083% of the
participant's highest 3-year average earnings (base salary plus bonuses earned
under the Executive Management Target Incentive Plan) during the last 10 years
of employment multiplied by his years of benefit service (as provided under the
Deferred Compensation Plan which, for some participants, may be greater than
actual service) up to, but not in excess of, 20, over (ii) the amount of
retirement benefits payable to the participant under all other defined benefit
plans of the Corporation, any pension plan maintained by a former employer of
the participant, and his primary social security benefit. Upon the participant's
death, a survivor annuity is payable under the Deferred Compensation Plan to the
participant's surviving spouse in a monthly amount equal to 66 2/3% of the
monthly benefit payable to the participant. The Deferred Compensation Plan
provides for retirement before age 65 with reduced benefits and also provides
special rules regarding benefits payable if the participant becomes disabled or
dies before commencing a benefit. If certain events occur, the Deferred
Compensation Plan allows participants to elect to receive their benefit in a
single lump sum payment.

The Deferred Compensation Plan may be amended or terminated with the
consent of all participants and employers. The Corporation, in its discretion
and without consent of the participants, may also make certain amendments that
do not adversely affect the rights of participants. All persons named in the
Summary Compensation Table participate in the Deferred Compensation Plan. The
projected annual benefit payable under the Deferred Compensation Plan, in
addition to the benefits payable under other defined benefits plans, pension
plans of prior employers, and social security, to the persons named in the
Summary Compensation Table is as follows: Mr. Blount -- $239,453; Mr.
Panettiere -- $437,321; Mr. Osterman -- $26, 819; Mr. Layman -- $130,286; and
Mr. McInnes -- $21,129.

OMARK SUPPLEMENTAL RETIREMENT PLAN

The Corporation sponsors a Supplemental Retirement Plan for the key
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

17
<PAGE> 20

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 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.

SUPPLEMENTAL RETIREMENT AND DISABILITY PLAN

The Corporation has a Supplemental Retirement and Disability Plan (the
"Retirement and Disability Plan") for the employees of the Corporation's
corporate office effective as of January 1, 1992 (adopted by the Board on
November 25, 1991). Each person who was an eligible employee of the corporate
office on December 31, 1991 and whose annual earnings were at least $90,000,
became a participant in the Retirement and Disability Plan on January 1, 1992 or
will become a participant on the first day thereafter on which he or she becomes
an eligible employee of the corporate office. The Retirement and Disability Plan
provides that, at the time a participant ceases to be an eligible employee, if
his or her retirement benefit under the Blount Retirement Plan is less than the
retirement benefit to which such participant would have been entitled at the
time he or she ceased to be an eligible employee if the Pre-1992 Blount
Retirement Plan had continued in effect without amendment, then such participant
shall be entitled to a supplemental retirement benefit under the Retirement and
Disability Plan which has an actuarial value equal to the excess, if any, of (i)
the actuarial value of the retirement benefit to which the participant would
have been entitled had the Pre-1992 Blount Retirement Plan continued in effect
over (ii) the actuarial value of his or her retirement benefit under the Blount
Retirement Plan, as amended and in effect at the time he or she ceases to be an
eligible employee. If such participant dies under circumstances entitling his or
her spouse to a benefit under the Blount Retirement Plan, as in effect at the
date of his or her death, such spouse shall be entitled to receive a benefit
having the actuarial value equal to the excess, if any, of (i) the actuarial
value of the benefit to which such spouse would have been entitled had the
Pre-1992 Blount Retirement Plan continued in effect over (ii) the actuarial
value of the benefit to which such spouse is entitled under the Blount
Retirement Plan, as in effect at the date of the participant's death. Payment of
any supplemental retirement benefit hereunder shall be made in the same form as
is payment of the corresponding benefit under the Blount Retirement Plan.

The Retirement and Disability Plan also provides that a participant who
ceases active work as a result of his or her inability to perform the duties of
his or her occupation because of disease or accidental bodily injury while an
eligible employee shall be entitled to receive a monthly disability benefit on
the 1st day of the 7th month following the month during which the participant
ceased to be an active eligible employee and terminating on the earlier of the
1st day of the calendar month in which the participant dies or the 1st day of
the 29th calendar month following the calendar month in which the participant
ceases to be an active eligible employee. The amount of each such monthly
payment during this period shall be equal to (i) 40% of the sum of the
participant's earnings less 50% of the participant's monthly social security
disability benefit, less (ii) the monthly benefit payable to the participant
under the long-term disability component of the Blount, Inc. Welfare Benefit
Plan. If a participant becomes disabled while an active eligible employee, he or
she shall be entitled to receive a long-term disability supplement commencing on
18
<PAGE> 21

the 1st day of the 30th month following the month in which the participant
ceases to be an active eligible employee and terminating on the 1st day of the
calendar month in which the participant dies. No such supplement shall be
payable during any month ending prior to the participant's normal retirement
date during which the participant does not receive a social security disability
benefit. The payment is based on a formula set forth in this plan. The
Retirement and Disability Plan may be amended, suspended, or terminated in whole
or in part at any time by action of the Board without affecting prior rights
accrued under this Plan. Messrs. Blount, Layman, McInnes and Panettiere named in
the Summary Compensation Table participate in the Retirement and Disability
Plan. No benefits are projected to be payable under this 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 term of the Agreement extends to the
executive's 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.

19
<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.
(FISCAL YEAR COVERED) BLOUNT PEER GROUP VAL. INDEX
<S> <C> <C> <C>
FEB. 1994 100.00 100.00 100.00
FEB. 1995 157.82 94.39 101.54
FEB. 1996 157.29 129.19 134.34
DEC. 1996 200.63 143.35 154.86
DEC. 1997 282.29 196.48 203.73
DEC. 1998 266.94 167.27 242.42
</TABLE>

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

(1) The companies in the Peer Group are as follows: Brunswick Corp.,
Caterpillar, Inc., Deere & Co., Ingersoll-Rand Co., Johnson Worldwide
Assoc., Kaydon Corp., Kennametal Inc., Regal-Beloit Corp., Scott
Technologies, Inc., 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 28, 1994 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.

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 1998 all filing requirements were complied with which were applicable to
its directors, officers and greater than 10% beneficial owners.

20
<PAGE> 23

CERTAIN TRANSACTIONS AND OTHER MATTERS

During 1998, the Corporation made cash contributions of $1,733,096 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 EXECUTIVE MANAGEMENT TARGET INCENTIVE PLAN

PROPOSAL 2

The Board adopted on April 13, 1994 and the stockholders of the Corporation
on June 27, 1994 approved, a new performance based incentive plan for senior
executive officers entitled the Executive Management Target Incentive Plan (the
"Executive Incentive Plan"), the full text of which is set forth in Exhibit A
hereto. The Board at its February 8, 1999 meeting approved, subject to approval
by the stockholders of the Corporation, the continuation of the Executive
Incentive Plan for five years from January 1, 1999.

The Executive Incentive Plan provides for the payment of a monetary award
("Target Award") to participants based upon the achievement of a targeted
performance goal set by the Compensation and Management Development Committee of
the Board (the "Committee") and communicated annually to participants not later
than the first meeting of the Committee for that fiscal year. The Executive
Incentive Plan will be administered by the Committee, no member of which is
eligible to participate in the Executive Incentive Plan. Participation in the
Executive Incentive Plan is limited to the Chairman of the Board and the
President and Chief Executive Officer of the Corporation (2 persons).

The Executive Incentive Plan provides that the Corporation's income after
income taxes but before extraordinary items, discontinued operations and the
cumulative effect of accounting changes as reported each year in the Annual
Report to Shareholders shall be the performance goal used to determine if a
Target Award is earned under the Executive Incentive Plan. The performance goal
established by the Committee will be expressed in terms of a minimum performance
goal, targeted performance goal and maximum performance goal.

Target Awards are stated in terms of a percent ("Target Bonus Percent")
times a participant's annual base salary paid during a fiscal year of the
Corporation. The Target Bonus Percent for the Chairman of the Board is 45% of
base salary and the Target Bonus Percent for the President and Chief Executive
Officer is 65% of base salary. Participants can earn from 80% (minimum
threshold) to 200% (maximum award) of a Target Award based on the percent of the
targeted performance goal achieved for the fiscal year. No Target Award is
payable under the Executive Incentive Plan if actual income as defined above for
a given fiscal year is less than 80% of the targeted performance goal
established by the Committee. The maximum payment to all participants in any
fiscal year of the Corporation cannot exceed $2.5 million with a maximum payment
to the Chairman of the Board of $1 million and a maximum payment to the
President and Chief Executive Officer of $1.5 million. The Committee shall
determine that the performance goal that warrants payment under the Executive
Incentive Plan has been met and approve any payment due.

Assuming all other Award requirements are met and subject to approval by
the Committee, pro rata Target Awards for any fiscal year will be made to
participants who are (i) appointed to participate after the beginning of a
fiscal year; (ii) placed on unpaid leave of absence because of disability or for
personal reasons after the beginning of a fiscal year; (iii) demoted or removed
as a participant after the beginning of a fiscal year; (iv) transferred to a
position which does not qualify as a participant after the beginning of a fiscal
year; or (v) retired after the beginning of a fiscal year.

In the event of death of a participant during a fiscal year, a pro rata
award will be paid to the participant's beneficiary if all other Target Award
requirements are met. No Target Award, pro rata or complete, will be paid to a
participant who is discharged for cause or voluntarily leaves the Corporation
prior to the end of a fiscal year. The Executive Incentive Plan shall remain in
effect for a period of 5 years from January 1, 1999 unless terminated earlier by
the Committee.

The potential Target Awards for the 2 participants in the Executive
Incentive Plan for the fiscal year beginning January 1, 1999 based on the annual
salary then in effect and assuming the targeted performance goal for the year is
met are as follows:

EXECUTIVE MANAGEMENT TARGET INCENTIVE PLAN

<TABLE>
<CAPTION>
NAME AND POSITION TARGET AWARD($)
- ----------------- ---------------
<S> <C>
PERSONS NAMED IN THE SUMMARY COMPENSATION TABLE
Winton M. Blount, Chairman of the Board 337,500
John M. Panettiere, President and CEO 520,000
</TABLE>

21
<PAGE> 24

MANAGEMENT RECOMMENDATION

By affording the Chairman of the Board and the President and CEO who, by
the nature of their duties, are in a position to contribute to the successful
annual performance of the Corporation an opportunity to receive monetary awards
for the achievement of annual performance goals, the Corporation seeks to
enhance the interest of its executive management, provide competitive incentive
compensation consistent with targeted performance goals, and to grow and build
shareholder value as a result of achieving desired financial and other strategic
goals and growth rates above the average of the Corporation's peer group. For
these reason, the management of the Corporation recommends to the stockholders
of the Corporation that they vote FOR approval of the Executive Incentive 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 Executive Incentive 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 PricewaterhouseCoopers LLP as its independent auditors for the calendar
year ending December 31, 1999. Although stockholder ratification is not
required, the Board 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.

PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP 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, PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP during 1998 and concluded that such services did
not affect the independence of the auditors. The audit services provided by
PricewaterhouseCoopers LLP included the audit of the consolidated financial
statements of the Corporation for 1998, audit of certain subsidiary financial
statements for 1998, 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.

PricewaterhouseCoopers LLP has advised that all professional services were
provided at customary rates and terms.

The Board recommends a vote FOR ratification of the appointment of
PricewaterhouseCoopers LLP as independent auditors for the Corporation for the
calendar year ending December 31, 1999. If the stockholders should not ratify
the appointment of PricewaterhouseCoopers LLP by a majority vote, the Board will
reconsider the appointment.

STOCKHOLDERS' PROPOSALS FOR 2000 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 2000 Annual Meeting of Stockholders must be received by
the Corporation no later than November 1, 1999. Any such proposals, as well as
any questions related thereto, should be directed to the Secretary of the
Corporation.

22
<PAGE> 25

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 8, 1999

23
<PAGE> 26

EXHIBIT A

BLOUNT INTERNATIONAL, INC.

EXECUTIVE MANAGEMENT TARGET INCENTIVE PLAN

I. DEFINITIONS

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

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

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

(c) "Committee" shall mean the Compensation Management Development
Committee of the Board. This Committee is appointed by the Blount
International, Inc. Board from those of its members not eligible for awards
under the provisions of this Plan. It is comprised of not less than 3
outside Directors of the Board (a simple majority of whom will constitute a
quorum) and has primary responsibility for interpretation of the terms and
provision of the Plan.

(d) "Plan" shall mean the Executive Management Target Incentive Plan,
effective as of March 1, 1994.

(e) "Net Income" shall mean income after taxes but before
extraordinary items, discontinued operations and the cumulative effect of
accounting changes as reported each year in the Company's Annual Report to
shareholders.

II. PLAN OBJECTIVES

The Plan is designed to address the following corporate-wide objectives:

(a) To enhance the interests of Blount executive management by
providing monetary awards for achievement of annual performance goals and
as an incentive to retain outstanding executive employees.

(b) To provide competitive incentive compensation consistent with
targeted performance goals.

(c) To grow and build shareholder value as a result of achieving
desired financial and other strategic goals at growth rates above the
average of the Company's peer group.

III. PLAN ADMINISTRATION

The Committee has primary responsibility for interpretation and
administration of the terms and provisions of the Plan. Such responsibility
includes, but is not limited to setting performance targets, conducting
consultations with officers and other executives of the Company as needed to
perform the Committee's duties, promulgating necessary rules, guidelines, and
procedures for administration of the Plan, and engaging or employing counsel,
advisors, or consultants, and any other persons as it may deem necessary or
expedient for the performance of its responsibilities under the Plan.

The Executive Vice President, Administration of the Company will serve the
Committee as the chief personnel resource for matters relating to the Plan.
While the Committee is free to delegate any duties and responsibilities it deems
appropriate, all decisions regarding participation, performance and payments
under the Plan will be made solely by the Committee. All decisions,
determinations and interpretations of the Committee with respect to the Plan
will be binding upon all persons.

No member of the Committee shall be liable by reason of contract or other
instrument executed by him or on his behalf in his capacity as a member of such
committee nor for any mistake of judgment made in good faith.

IV. PLAN PARTICIPATION

Participation in the Plan is limited to the Chairman of the Board of the
Company and the President and Chief Executive Officer of the Company who, by the
nature of their duties, are in a position to contribute to the successful annual
performance of the Company.

V. CALCULATION OF AWARDS

Target Awards -- Each potential Target Award is stated in terms of a Target
Bonus Percent times a participant's Annual Base Salary paid during a fiscal
year. This is the amount that will be earned and paid if the performance measure
is met during the fiscal year. The participant's Target Award is based on the
Net Income (as defined in Section I) of the Company. The Target Bonus Percent
for the Chairman of the Board is 45% of base salary and the Target Bonus Percent
for the President and Chief Executive Officer is 65% of base salary.
Participants can earn from 80% (minimum threshold) to 200% (maximum bonus) of a

A-1
<PAGE> 27

Target Award. No Target Award is payable if the Net Income is less than 80% of
the Net Income goal established by the Committee. The maximum payment to all
participants covered by the Plan in any fiscal year cannot exceed $2.5 million
(with a maximum payment to the Chairman of the Board of $1 million and a maximum
payment to the President and Chief Executive Officer of $1.5 million).

Plan Funding -- Payment under the Plan is determined by the cumulative
profitability of the Company's divisions and subsidiaries. As a result, for any
awards to be paid, the appropriate Net Income goal must be equaled or exceeded.

Performance Measures -- During the annual planning and budgeting process by
the Corporation the Committee will develop the Net Income goal for each upcoming
fiscal year. The measure will be expressed in terms of a minimum performance
goal, targeted performance goal, and maximum performance goal. For each fiscal
year beginning on or after January 1, 1999, the approved performance goal will
be communicated annually (and not later than the first Committee meeting of the
subject fiscal year) to the Plan participants as a means of motivating such
participants to achieve common corporate goals.

VI. PAYMENT OF AWARDS

Earned awards will be paid as soon as practical after final determination
that the performance goals that warrant payment have been met. Final
determinations will be reviewed and approved by the Committee prior to payment.
No payment can be made under this Plan until it is approved by the shareholders
of the Company.

VII. SPECIAL SITUATIONS AFFECTING AWARDS

Assuming all other award requirements are met, pro rata awards for any
fiscal year, subject to the Committee's approval, will be made to participants
who are:

(a) appointed to participation in the Plan after the beginning of a
Plan fiscal year;

(b) placed on unpaid leave of absence because of disability or for
personal reasons after the beginning of a Plan fiscal year;

(d) transferred to a position which does not qualify for membership in
the Plan after the beginning of a Plan fiscal year; or

(e) retired after the beginning of a Plan fiscal year.

Assuming all other award requirements are met, in the event of the death of
a participant during a Plan fiscal year, a pro rata award will be paid to the
participant's beneficiary.

No awards, pro rata or complete, will be paid to participants who:

(a) are discharged for cause; or

(b) voluntarily leave the Company prior to the end of a Plan fiscal
year.

VIII. GENERAL RESTRICTIONS, OBLIGATIONS AND RIGHTS

No Employment Rights or Participation Guarantees -- Participation in the
Plan during a Plan fiscal year does not ensure an award payment, participation
in future Plan years, or the right to continue employment with the Company.
Nothing in the Plan shall interfere with the right of the Company to terminate a
participant's employment at any time.

Plan Document -- Each participant in the Plan will be provided with a copy
of the Plan. All Plan awards are subject to all the terms and provisions of the
Plan. No officer or other individual is entitled to make any representation or
commitment contrary or in addition to those appearing in the Plan.

Binding Upon Successors -- The obligations of the Company under the Plan
shall be binding upon any successor or organization which shall succeed to
substantially all of the assets and business of the Company and the term
"Company," whenever used in the Plan, shall mean and include any such
corporation or organization after such succession. If the business conducted by
the Company shall be discontinued, any unpaid installments under the Plan shall
become payable in a lump sum to the person or persons then entitled to such
payments.

IX. PLAN REVISIONS OR TERMINATION

The Committee reserves the right to revise or terminate the Plan in the
event of a major reorganization of all or a portion of the Company. If the Plan
is terminated during a Plan fiscal year, any incentive payments will be
determined by using the

A-2
<PAGE> 28

appropriate fiscal year-end figures and prorating those figures for that portion
of the year the Plan was in effect. For the purpose of determining individual
awards in the event of Plan termination or revision, base salary paid during the
period the Plan was in effect will be used.

X. TERMS

The Plan shall remain in effect for a period of five years from January 1,
1999 unless terminated under Section IX.

A-3
<PAGE> 29

(RECYCLED PAPER LOGO)

1180-PS-99
<PAGE> 30
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.

COMPANY HIGHLIGHTS DURING 1998

- - All time record net sales and operating income. Sales reached $832 million
and operating income was $113.66 million.

- - Earnings were $63.276 million ($1.65 per share).

- - ROCE for the Corporation was 18.9%

- - Purchased operating assets of Redfield Rifle Scopes, Inc.

- - Completed a $150 million senior note offering.

[1180 - BLOUNT INTERNATIONAL] [ FILE NAME:BLN79A.ELX] [VERSION -3] [3/06/99]

DETACH HERE

Please mark
[X] 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.

<S> <C> <C> <C> <C>
FOR AGAINST ABSTAIN
1. Election of Directors. 2. Approve the Executive Management [ ] [ ] [ ]
Nominees: Haley Barbour, C. Todd Conover and Target Incentive Plan.
Andrew A. Sorensen

FOR WITHHELD 3. Ratify the appointment of [ ] [ ] [ ]
[ ] ALL [ ] FROM ALL PricewaterhouseCoopers LLP as the
NOMINEES NOMINEES independent auditors for the
Corporation for the year ending
December 31, 1999.

[ ]
-------------------------------------- 4. In their discretion, the Proxies are authorized to vote upon
For all nominees except as noted above such other business as may 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>
<PAGE> 31
[1180 - BLOUNT INTERNATIONAL] [ FILE NAME:BLN79AB.ELX] [VERSION-2] [2/19/99]

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 19, 1999

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 8, 1999 in connection with the Annual Meeting of Stockholders to be held
at 10:00 A.M., C.D.T., on Monday April 19, 1999, at the Company's principal
executive offices, 4520 Executive Park Drive, Montgomery, Alabama 36116, 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 19, 1999 which the
undersigned is entitled to vote at the 1999 Annual Meeting of Stockholders, and
at any adjournment thereof, with all powers the undersigned would have if
personally present.

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

COMPANY HIGHLIGHTS DURING 1998

- - All time record net sales and operating income. Sales reached $832 million
and operating income was $113.66 million.

- - Earnings were $63.276 million ($1.65 per share).

- - ROCE for the Corporation was 18.9%.

- - Purchased operating assets of Redfield Rifle Scopes, Inc.

- - Completed a $150 million senior note offering.

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>
FOR AGAINST ABSTAIN
1. Election of Directors 2. Approve the Executive Management [ ] [ ] [ ]
Nominees: Samuel R. Blount, W. Houston Blount, Target Incentive Plan
Winton M. Blount, R. Eugene Cartledge,
H. Corbin Day, Mary D. Nelson, John M. 3. Ratify the appointment of [ ] [ ] [ ]
Panettiere and Arthur P. Ronan PricewaterhouseCoopers LLP as the
independent auditors for the
[ ] FOR [ ] WITHHELD Corporation for the year ending
ALL FROM ALL December 31, 1999.
NOMINEES NOMINEES
4. In their discretion, the Proxies are authorized to vote upon
[ ] 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 envelop. 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

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 19, 1999

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 8, 1999 in connection with the Annual Meeting of Stockholders to be held
at 10:00 A.M., C.D.T., on Monday April 19, 1999, at the Company's principal
executive offices, 4520 Executive Park Drive, Montgomery, Alabama 36116, 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 19, 1999 which the
undersigned is entitled to vote at the 1999 Annual Meeting of Stockholders, and
at any adjournment thereof, with all powers the undersigned would have if
personally present.

[SEE REVERSE] CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE]
[SIDE] [SIDE]