The 2-pound fragment traveled more than a mile from Picatinny Arsenal and punched a hole in the roof of Frederick Angle's Jefferson Township home.
The hot piece of metal landed on the bed of Angle's then-10-year-old stepdaughter, who wasn't home. But the family's cat was on the bed and had to be euthanized.
Angle tells The Daily Record of Parsippany the offer is a "kick in the teeth" and he plans to reject it.
Picatinny spokesman Tim Rider says major steps were taken after the 2008 incident to ensure it could not happen again.
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Information from: Daily Record, http://www.dailyrecord.com