Exhibit 10.7


 


EXECUTION COPY


 


EXECUTIVE EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”),
dated as of the 4th day of February, 2008, between REMINGTON ARMS
COMPANY, INC., a Delaware corporation (“Employer”), and Theodore H. Torbeck
(“Executive”).


 


R E C I T A L S:


 


1.                                       Employer is engaged in the
business of designing, manufacturing, marketing, and selling (a) sporting
goods products, including, by way of illustration, firearms and ammunition, as
well as hunting and gun care accessories and clay targets, for the global
hunting and shooting sports marketplace, and (b) products with law
enforcement, military and government applications, including, by way of
illustration, surveillance technology products and powdered metal products (the
“Business”).


 


2.                                       Employer desires to employ
Executive as the Chief Operating Officer of Employer, and Executive desires to
be employed by Employer in that capacity.


 


NOW, THEREFORE, in
consideration of the mutual covenants and obligations herein and the compensation
and benefits Employer agrees herein to pay Executive, and of other good and
valuable consideration, the receipt of which is hereby acknowledged, Employer
and Executive agree as follows:


 


1.                                       Agreement to Employ. Upon the
terms and subject to the conditions of this Agreement, Employer hereby employs
Executive, and Executive hereby accepts employment by Employer.


 


2.                                       Term; Position and
Responsibilities; Location.


 


(a)                                  Term of Employment. Subject to
earlier termination pursuant to Section 7, the term of Executive’s
employment under this Agreement shall be for a period beginning on the date
hereof (the “Commencement Date”) and continuing until the second (2nd) anniversary of the
Commencement Date, and shall be extended automatically for twelve (12) month
periods thereafter, unless either party gives the other at least sixty (60) days
written notice in advance of the expiration of the then current term of his or
its intention not to renew (the initial term and any extensions, together, the “Employment
Period”).


 


(b)                                 Position and
Responsibilities. During the Employment Period, Executive will serve
in the executive position specified in Section 1 of Attachment A or
in such other executive position as the Board of Directors of Employer (the “Board”)
may determine from time to time. Executive shall have such duties and
responsibilities as are customarily assigned to individuals serving in the
position to which he is assigned, and such other duties consistent with
Executive’s position as the Board or Chief Executive Officer may specify from
time to time. Executive will devote all of his skill, knowledge and working
time to the conscientious performance of the duties of such position or
positions (except for (i) vacation time as set forth in Section 6(b) hereof
and absence for sickness or similar disability and (ii) to the
extent that it does


 


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not interfere with the performance of Executive’s duties hereunder, (A) such
reasonable time as may be devoted to service on outside charitable boards of
directors and the fulfillment of civic responsibilities or to service on the
boards of such corporations as Executive is serving on the date hereof or which
he may hereafter join with the consent of the Board and (B) such
reasonable time as may be necessary from time to time for personal financial
matters).


 


(c)                                  Location. Executive’s
primary work location shall be at Employer’s headquarters in Madison, North
Carolina; provided, however, that in the first twenty-four (24) months
of his employment hereunder, Executive shall not be required to relocate his
primary residence to such location; and provided, further, that
Employer may, at its option, provide Executive with the use of a corporate
apartment in Madison, North Carolina, during the first twenty-four (24) months
of his employment.


 


3.                                       Base Salary. As compensation
for the services to be performed by Executive during the Employment Period, Employer
will pay Executive the annual base salary specified in Section 2 of Attachment
A. The Board will review Executive’s base salary annually during the
Employment Period and, in the discretion of the Board, may increase (but may
not decrease) such base salary from time to time based upon the performance of
Executive, the financial condition of Employer, prevailing industry salary
levels and such other factors as the Board shall consider relevant. The annual
base salary payable to Executive under this Section 3, as the same
may be increased from time to time and without regard to any reduction therefrom
in accordance with the next sentence, shall hereinafter be referred to as the “Base
Salary”. The Base Salary payable under this Section 3 shall be
reduced to the extent that Executive elects to defer such Base Salary under the
terms of any deferred compensation, savings plan or other voluntary deferral
arrangement maintained or established by Employer. The pay period under this
Agreement shall equal one (1) month, and Employer shall pay Executive the
Base Salary for each pay period in semi-monthly installments or in such other
installments as are paid to other executives of Employer.


 


4.                                       Incentive Compensation.


 


(a)                                  Annual Incentive
Compensation. During the Employment Period, Executive shall be
eligible to participate in Employer’s annual incentive compensation plan for
its executive officers as in effect from time to time (the “Annual Incentive
Compensation Plan”), at a targeted level specified in Section 3
of Attachment A, and commensurate with his position and duties with
Employer based on reasonable performance targets established from time to time
by the Board or a committee thereof.


 


(b)                                 Equity. During the
Employment Period, Executive shall be eligible to participate in the 2008
American Heritage Arms, Inc. Stock Incentive Plan. Subject to the terms of
the plan and an Award Agreement entered into pursuant thereto, Executive shall
be awarded a two percent (2%) interest in American Heritage Arms on a fully
diluted basis, which shall vest in four (4) annual installments of fifteen (15%)
on the first (lst) anniversary
of the effective date hereof and twenty percent (20), twenty-five percent (25) and
forty percent (40), respectively on each anniversary thereafter.


 


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(c)                                  Other Incentive Plans. During the
Employment Period, Executive shall be eligible to participate in any other
bonus or incentive plans which Employer may hereafter establish in which other
senior executive officers of Employer are eligible to participate.


 


5.                                       Employee Benefits. During the Employment
Period (and thereafter to the extent provided under the terms of Employer’s
employee benefit plans or programs), Executive shall be eligible to participate
in any employee benefit plans and programs as in effect from time to time
generally made available to similarly situated executives of Employer, in a
manner consistent with the terms and conditions of each such plan or program
and on a basis that is commensurate with Executive’s position and duties with
Employer hereunder. In the event of a conflict between any benefit plan or
program and this Agreement, the terms of this Agreement shall govern.


 


6.                                       Expenses.


 


(a)                                  Business Travel. During the
Employment Period, Employer shall reimburse Executive for reasonable travel, lodging,
meal and other reasonable expenses incurred by him in connection with his
performance of services hereunder upon submission of evidence, satisfactory to
Employer, to support the existence and purpose of the incurred expense and
otherwise in accordance with Employer’s business travel reimbursement policy
applicable to senior executives as in effect from time to time. In the event
Executive’s employment hereunder terminates for any reason, Employer shall
reimburse Executive (or in the event of death, his personal representative) for
expenses incurred by Executive on behalf of Employer prior to the date of his
termination of employment to the extent such expenses have not been previously
reimbursed by Employer pursuant to this Section 6(a).


 


(b)                                 Vacation and Sick Leave. During the
Employment Period, Executive shall be entitled to vacation and sick leave as
determined in accordance with the prevailing policies of Employer applicable to
senior executives.


 


7.                                       Termination of Employment.


 


(a)                                  Termination Due to Death or
Disability. In the event that Executive’s employment hereunder
terminates due to death or is terminated by Employer due to Executive’s
Disability (as defined below), no termination benefits shall be payable to or
in respect of Executive except as provided in Section 7(f)(ii). If
Employer desires to terminate Executive’s employment due to Executive’s
Disability, it shall give notice to Executive as provided in Section 7(e).
For purposes of this Agreement, “Disability” shall mean a physical or
mental disability that prevents the performance by Executive of his duties
hereunder lasting for a period of one hundred eighty (180) days or longer, whether
or not consecutive, in any twelve (12) month period. The determination of
Executive’s Disability shall be made by the Board after receiving an evaluation
from an independent physician selected by Employer and reasonably acceptable to
Executive and shall be final and binding on the parties hereto.


 


(b)                                 Termination by Employer for
Cause. Employer may terminate Executive for Cause. If Employer desires to
terminate Executive’s employment for Cause, it shall give notice to Executive
as provided in Section 7(e). For purposes of this Agreement, “Cause”
shall


 


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mean (i) the failure of Executive substantially to perform
his duties hereunder (other than any such failure due to physical or mental
illness) or other material breach by Executive of any of his obligations
hereunder, after a demand for substantial performance or demand for cure of such
breach is delivered, and a reasonable opportunity to cure is given, to
Executive by Employer, which demand identifies the manner in which Employer
believes that Executive has not substantially performed his duties or breached
his obligations, (ii) Executive’s gross negligence or serious
misconduct that has caused or would reasonably be expected to result in
material injury to Employer or any of its affiliates, (iii) Executive’s
conviction of, or entering a plea of nolo contendere to, a crime
that constitutes a felony, or (iv) Executive’s violation of any
provision of Employer’s business ethics policy that has resulted or would
reasonably be expected to result in material injury to Employer or any of its
affiliates, but only after a demand for cure of such violation is delivered, and
a reasonable opportunity to cure is given, to Executive by Employer, which
demand identifies the manner in which Employer believes that Executive has
violated a material provision of Employer’s business ethics policy.


 


(c)                                  Termination Without Cause. Employer may
terminate Executive’s employment at any time “Without Cause”. If
Employer desires to terminate Executive’s employment Without Cause, it shall
give notice to Executive as provided in Section 7(e). For purposes
of this Agreement, a termination “Without Cause” shall mean a termination of
Executive’s employment by Employer other than as described in Section 7(a) or
for Cause as defined in Section 7(b).


 


(d)                                 Termination by Executive. Executive may
terminate his employment at any time. If Executive desires to terminate for
Good Reason, he shall give notice to Employer as provided in Section 7(e).
Notwithstanding the foregoing, Executive may not terminate his employment for
Good Reason if Employer has, within fifteen (15) days of the receipt of
Executive’s written notice of his desire to terminate for Good Reason, cured
the conduct alleged to give rise to the basis for the Good Reason termination. For
purposes of this Agreement, “Good Reason” shall mean a termination of
employment by Executive within thirty (30) days following the occurrence of any
of the following events without Executive’s consent: (i) the
assignment of Executive to a position the duties of which are a material
diminution of the duties contemplated by Section 2(b) hereof, (ii) a
reduction of Executive’s Base Salary or his Incentive Compensation Target
Opportunity pursuant to Section 4 and as set forth on Attachment
A, or (iii) a material breach by Employer of any of its obligations
hereunder. In addition, Executive shall have the right to terminate his
employment for Good Reason pursuant to this Section 7(d) if
Employer requires him to relocate his primary residence at any time during the
first twenty-four (24) months of his employment.


 


(e)                                      Notice of Termination. Any
termination of Executive’s employment by Employer pursuant to Section 7(a),
7(b) or 7(c), or by Executive pursuant to Section 7(d),
shall be communicated by a written “Notice of Termination” addressed to
the other party to this Agreement. A “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive’s
employment under the provision so indicated, and (iii) subject to the
provisions of Section 7(h), specifies the effective date of
termination. The failure by Executive or Employer to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of the
reason given for the


 


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termination of Executive’s employment shall not waive any right of
Executive or Employer hereunder or preclude Executive or Employer from
asserting such fact or circumstance in enforcing Executive’s or Employer’s
rights hereunder.


 


(f)                                    Payments Upon Certain
Terminations.


 


(i)                                     If Executive’s employment is
terminated by Employer Without Cause or Executive terminates his employment for
Good Reason, Employer shall pay or provide to Executive as severance payments
and benefits the following:


 


A.                                   Executive shall
receive his Base Salary for the period from the Date of Termination (as defined
in Section 7(h) below) through the expiration of the
Severance Period as set forth on Section 4 of Attachment A, paid in
semi-monthly installments as provided in Section 3;


 


B.                                     Executive shall
receive the product of


 


(i)                                     the amount of
incentive compensation that would have been payable to Executive pursuant to Sections
4(a), 4(c) and the Annual Incentive Compensation Plan for the calendar
year in which his employment terminates with achievement of performance
objectives determined as of the Date of Termination, multiplied by


 


(ii)                                  a fraction, the
numerator of which is equal to the number of days in such calendar year that
precede the Date of Termination and the denominator of which is 365;


 


C.                                     continuation of
participation in Employer’s group medical plan pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”) at Employer’s
expense until the earlier of the conclusion of the Severance Period and the
date on which Executive first becomes eligible for substantially equivalent
insurance coverage provided by any other entity following termination; provided,
however, that in the event Employer cannot reasonably provide Executive
and his dependents with coverage under Employer’s Group Benefits Plan for the full
Severance Period, Employer may provide coverage under one or more alternative plans
or arrangements providing substantially equivalent coverage to the coverage
then being provided to active employees and their dependants under Employer’s
group benefits plan; and


 


D.                                    a pro-rated
acceleration of the next installment in the equity vesting schedule set forth
in Section 4(b) following termination based on the number of days
Executive worked in the applicable twelve (12) month vesting period in which
termination occurs. By way of example, if Executive is terminated by Employer
without Cause or Executive terminates his employment for Good Reason and the
Date of Termination is half way through the second twelve (12) month vesting
period,


 


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Executive will previously have vested in 15% on
the first anniversary and will be vested in 50% (representing the half-year
worked) of the 20% vesting amount for the second year.


 


(ii)                                  Upon his death or Disability
or if Employer terminates Executive’s employment for Cause, Employer shall pay
Executive his Base Salary through the Date of Termination, plus, in the case of
termination upon Executive’s death or Disability, a pro-rata amount of
incentive compensation pursuant to the Annual Incentive Compensation Plan
calculated in the same manner as Section 7(f)(i)(B) above (but
excluding any time between the onset of a physical or mental disability that
prevents the performance by Executive of his duties hereunder and the resulting
Date of Termination). Executive shall not be entitled to severance compensation
under any severance compensation plan of Employer; provided, however,
that other than severance compensation, any benefits payable to or in respect
of Executive under any otherwise applicable plans, policies and practices of
Employer shall not be limited by this provision. Any payments required to be
made on account of Executive’s death or Disability shall be made to Executive
or his designated beneficiary in the case of death no later than two and
one-half (21/2) months following the end
of the calendar year in which Executive’s employment terminates on account of
death or Disability. Finally, Executive or his designated beneficiary in the
case of death shall be entitled to the equity vested pursuant to Section 4(b).


 


(iii)                               Notwithstanding anything to
the contrary in this Agreement, in the event of Employee’s voluntary
termination without Good Reason or his termination for Cause, Employer shall
have the right to continue to pay Employee’s Base Salary for a period of up to
twelve (12) months following the Date of Termination (which period shall also
be referred to as the Severance Period), paid in semi-monthly installments as
provided in Section 3, in exchange for Employee’s compliance with
the covenants contained in Sections 9, 10 and 1l. Finally,
Executive shall be entitled to the equity vested pursuant to Section 4(b).


 


(g)                                 Conditions to Receipt of
Payments Upon Certain Terminations


 


(i)                                     In consideration of the
severance payments and benefits provided in Section 7(f), Employee
agrees to (A) waive all rights to post termination benefits, other than
vested equity awards and vested benefits under Employer’s tax-qualified and
non-qualified deferred compensation plans, if any, after the Date of
Termination, (B) waive any claims to other severance or termination
payments or benefits, and (C) execute a general release releasing Employer
from all claims, including but not limited to claims under the Age
Discrimination in Employment Act or for wrongful discrimination and wrongful
discharge from Employer, which release shall be in substantially the form attached
hereto as Attachment B. Prior to Executive’s termination of employment, the
release of claims may be revised by Employer. Employer may in any event modify
the release of claims to conform it to the laws of the local jurisdiction
applicable to Executive.


 


(ii)                                  Executive shall not have a
duty to mitigate the costs to Employer under Section 7(f).


 


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(h)                                 Date of Termination. As used in
this Agreement, the term “Date of Termination” shall mean (A) if
Executive’s employment is terminated by his death, the date of his death, (B) if
Executive’s employment is terminated by Employer for Cause, the date on which
Notice of Termination is given or, if later, the date of termination specified
in such Notice, as contemplated by Section 7(e), and (C) if
Executive’s employment is terminated by Employer Without Cause, due to
Executive’s Disability or by Executive for Good Reason, thirty (30) days after
the date on which Notice of Termination is given as contemplated by Section 7(e) or,
if no such Notice is given, the actual date of termination of Executive’s
employment; provided, however, that Employer may discontinue
Executive’s services hereunder during any notice period as long as Executive
continues to receive his Base Salary and benefits as if he were continuing to
provide such services.


 


8.                                       Unauthorized Disclosure.


 


(a)                                  Without the prior written
consent of the Board or its authorized representative, except to the extent
required by an order of a court having competent jurisdiction or under subpoena
from an appropriate government agency, in which event, Executive will use his
best efforts to consult with Employer’s Chief Executive Officer prior to
responding to any such order or subpoena, and except as required in the performance
of his duties hereunder, Executive shall not disclose any confidential or
proprietary trade secrets, customer lists, drawings, designs, information
regarding product development, marketing plans, sales plans, manufacturing
plans, any information covered by the Uniform Trade Secrets Act of Delaware or
any other similar legal protections that may be applicable (or any successor
thereto), management organization information (including data and other
information relating to members of the Board, the Board of Directors of RACI
Holding, Inc. (“Holding”) and management of Employer or Holding), operating
policies or manuals, business plans, financial records, packaging design or
other financial, commercial, business or technical information relating to
Holding, Employer or any of their respective subsidiaries or affiliates or that
Holding, Employer or any of their respective subsidiaries or affiliates may
receive belonging to suppliers, customers or others who do business with
Holding, Employer or any of their respective subsidiaries or affiliates (collectively,
“Confidential Information”) to any third person unless such Confidential
Information has been previously disclosed to the public or is in the public
domain (other than by reason of Executive’s breach of this Section 8).
The parties expressly agree that Confidential Information does not exist in
written form only.


 


(b)                                 Executive acknowledges and
agrees that he will have broad access to Confidential Information, that
Confidential Information will in fact be developed by him in the course of his
employment with Employer, and that Confidential Information furnishes a
competitive advantage in many situations and constitutes, separately and in the
aggregate, a valuable, special and unique asset of Employer. Executive shall
use his best efforts to prevent the disclosure of or removal of any
Confidential Information from the premises of Employer, except as required in
connection with the performance of his duties as an executive of Employer. Executive
agrees that all Confidential Information (whether now or hereafter existing) conceived,
discovered or developed by him during the Employment Period belongs exclusively
to Employer and not to him.


 


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9.             Non-Competition.


 


(a)           During the Employment Period and thereafter during
the Restriction Period (as defined in this Section 9), Executive shall
not, directly or indirectly, engage in, become employed by, serve as an agent
or consultant to, or become a partner, principal or stockholder (other than a
holder of less than one percent (1%) of the outstanding voting shares of any
publicly held company) of, or otherwise support, any business within the
Restricted Area (as defined in this Section 9) which engages in the
Business or which is competitive with the Business. For purposes of this
Agreement, the “Restriction Period” shall be equal to any Severance
Period, and “Restricted Area” means any geographical area in which
Employer and its affiliates are engaged in the Business.


 


(b)           Executive agrees and acknowledges that Employer and
its affiliates are engaged in the Business and sell and distribute their
products throughout the United States and other jurisdictions throughout the
world, and that it would not be reasonable to limit the geographic scope of
this covenant to any particular geographic location.


 


10.           Non-Solicitation of Employees. During the
Employment Period and thereafter during the Restriction Period, Executive shall
not, directly or indirectly, for his own account or for the account of any
other person or entity with which he is or shall become associated in any
capacity, (a) solicit for employment, employ or otherwise interfere with the
relationship of Employer with any person who at any time during the six (6) months
preceding such solicitation, employment or interference is or was employed by
or otherwise engaged to perform services for Employer other than any such
solicitation or employment during Executive’s employment with Employer on
behalf of Employer, or (b) induce or attempt to induce any employee of Employer
who is a member of management to engage in any activity which Executive is
prohibited from engaging in under any of Sections 8, 9, 10,
11, 12  or 13
hereof or to terminate his or her employment with Employer.


 


11.           Non-Solicitation of Customers. During the
Employment Period and thereafter during the Restriction Period, Executive shall
not, directly or indirectly, solicit, divert or otherwise attempt to establish
for himself or any other person, firm or entity (other than Employer or its
subsidiaries or affiliates) any business relationship of a nature that is
competitive with the Business or any relationship of Employer with any person, firm
or corporation which during the twelve (12) month period preceding the
prohibited conduct was a customer, client or distributor of Employer or any of
its subsidiaries or affiliates.


 


12.           Return of Property. In the event of the
termination of Executive’s employment for any reason, or such earlier time as
Employer may request, Executive will deliver to Employer all of Employer’s
property and documents and data of any nature and in whatever medium pertaining
to Executive’s employment with Employer (except for that which is personal to
Executive), and he will not take with him any such property, documents or data
of any description or any reproduction thereof, or any documents containing or
pertaining to any Confidential Information.


 


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13.           Non-Disparagement. During the Employment
Period and thereafter during the Restriction Period, Executive will not make
any statement, written or oral, whether expressed as a fact, opinion or
otherwise, to any person (or induce any third party to make any such statement)
which disparages, impugns, maligns, defames, libels, slanders or otherwise
casts in an unfavorable light Employer or any officer, director, shareholder or
employee of Employer.


 


14.           Failure to Comply with Covenants.


 


(a)           Without limiting the damages available to Employer, in
the event that Executive fails to comply with any of the covenants in Sections
8, 9, 10, 11, 12 or 13, to the extent
applicable, following his termination of employment, and such failure continues
following delivery of notice thereof by Employer to Executive, all rights of
Executive and any person claiming under or through him to the payments and
benefits described in Sections 7(f) shall thereupon terminate and no
person shall be entitled thereafter to receive any payments or benefits hereunder;
provided,  however, that
Executive shall not have the option of foregoing such payments and benefits in
order to be relieved of compliance with such covenants.


 


(b)           Executive acknowledges and agrees that the covenants
and obligations of Executive described in Sections 8, 9, 10,
11, 12 and 13 relate to special, unique and extraordinary
matters and that a violation of any of the terms of such covenants and
obligations will cause Employer irreparable injury for which adequate remedies
are not available at law. Therefore, Executive agrees that Employer shall be
entitled to an injunction, restraining order or such other equitable relief (without
the requirement to post bond) as a court of competent jurisdiction may deem
necessary or appropriate to restrain Executive from committing any violation of
the covenants and obligations referred to in this Section 14. These
injunctive remedies are cumulative and in addition to any other rights and
remedies Employer may have at law or in equity. If Employer does not prevail in
obtaining any such injunctive relief, Employer shall reimburse Executive for
any legal expenses incurred by him in defending against the imposition of such
injunctive relief.


 


15.           Intellectual Property. During the Employment
Period, Executive will disclose to Employer all ideas, inventions and business
plans developed by him during such period which relate directly or indirectly
to the Business of Employer or any of its subsidiaries or affiliates, including
without limitation, any process, operation, product or improvement which may be
proprietary, patentable or copyrightable. Executive agrees that all of the
foregoing will be the property of Employer and that he will at Employer’s
request and cost do whatever is necessary to secure the rights thereto by
patent, copyright or otherwise for Employer.


 


16.           Assignability; Merger or Consolidation; Assumption
of Agreement.


 


(a)           The obligations of Executive hereunder may not be
delegated, and Executive may not, without Employer’s written consent, assign, transfer,
convey, pledge, encumber, hypothecate or otherwise dispose of this Agreement or
any interest herein. Any such attempted delegation or disposition shall be null
and void and without effect.


 


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(b)           Employer and Executive agree that this Agreement and
all of Employer’s rights and obligations hereunder may be assigned or
transferred by Employer. Employer will require any successor (by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of Employer, by agreement in form and substance reasonably satisfactory
to Executive, to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that Employer would be required to perform
it if no such succession had taken place. Failure of Employer to obtain such
agreement prior to the effectiveness of any such succession shall entitle
Executive to compensation from Employer in the same amount and on the same
terms as Executive would be entitled hereunder if Employer terminated his
employment Without Cause as contemplated by Section 7 (c), except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed both the date of the Notice of
Termination and the Date of Termination.


 


17.           Entire Agreement. Except as otherwise
expressly provided herein, this Agreement (including the Attachments hereto) constitutes
the entire agreement among the parties hereto with respect to the subject
matter hereof, and all promises, representations, understandings, arrangements
and prior agreements relating to such subject matter (including, without
limitation, those between Executive and any other person or entity) are merged
into and superseded by this Agreement, and the terms of any prior employment
agreement or arrangement shall, from and after the date of this Agreement, be
of no further force or effect.


 


18.           Indemnification. Employer agrees that it
shall indemnify, defend and hold harmless Executive to the fullest extent
permitted by law from and against any and all liabilities, costs, claims and
expenses, including without limitation all costs and expenses incurred in
defense of litigation, including attorneys’ fees, arising out of the employment
of Executive hereunder, except to the extent arising out of or based upon the
gross negligence or willful misconduct of Executive. Costs and expenses
incurred by Executive in defense of litigation, including attorneys’ fees, shall
be paid by Employer in advance of the final disposition of such litigation upon
receipt of an undertaking by or on behalf of Executive to repay such amount if
it shall ultimately be determined that Executive is not entitled to be
indemnified by Employer under this Agreement.


 


19.           Compliance with Code Section 409A. To the extent
applicable, the parties hereto intend that this Agreement comply with Section 409A
of the Internal Revenue Code of 1986, as amended, and all rules, regulations
and other similar guidance issued thereunder (“Code Section 409A”). The parties
agree that this Agreement shall at all times be interpreted and construed in a
manner to comply with Code Section 409A and that should any provision be found
not in compliance with Code Section 409A, the parties are contractually
obligated to execute any and all amendments to this Agreement deemed necessary
and required by Employer’s legal counsel to achieve compliance with Code Section
409A unless such action results in substantial additional costs to Employer. By
execution and delivery of this Agreement, Executive irrevocably waives any
objections he may have to the amendments required by Code Section 409A. The
parties also agree that in no event shall any payment required to be made
pursuant to this Agreement be made to Employee unless compliant with Code Section
409A. In the event amendments are required to make this Agreement compliant
with Code Section 409A, Employer shall use its best efforts to provide
Executive with substantially the same benefits and


 


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payments he would have been entitled to pursuant to this Agreement had
Code Section 409A not applied, but in a manner that is compliant with Code
Section 409 A and does not result in substantial additional costs to Employer. The
manner in which the immediately preceding sentence shall be implemented shall
be the subject of good faith negotiations between the parties.


 


20.           Miscellaneous.


 


(a)           Arbitration. Any dispute or controversy
arising under or in connection with this Agreement shall be resolved by binding
arbitration. The arbitration shall be held within the State of Delaware, and
except to the extent inconsistent with this Agreement, shall be conducted in
accordance with the Employment Arbitration Rules of the American Arbitration
Association then in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court of law or equity. The
arbitrator shall be acceptable to both Employer and Executive. If the parties
cannot agree on an acceptable arbitrator, the dispute shall be heard by a panel
of three arbitrators, one appointed by each of the parties and the third
appointed by the other two arbitrators. All expenses of arbitration shall be
borne by the party who incurs the expense or, in the case of joint expenses, by
both parties in equal portions, except that, in the event Executive
substantially prevails on the principal issues of such dispute or controversy, all
such expenses shall be borne by Employer. Notwithstanding the above, however, because
time is of the essence, whenever a violation or threatened violation of the
covenants contained in Sections 8, 9, 10, 11, 12
or 13 is alleged, then the parties agree that the enforcement of such
covenants and any request for injunctive relief pursuant to Section 14
shall be excepted from the provisions of this Section 20(a).


 


(b)           Governing Law; Consent to Jurisdiction.


 


(i)            This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (without regard to conflict
of law principles thereof) applicable to contracts made and to be performed
therein, and in any action or other proceeding that may be brought arising out
of, in connection with or by reason of this Agreement, the laws of the State of
Delaware shall be applicable and shall govern to the exclusion of the laws of
any other forum.


 


(ii)           Any action to enforce any of the provisions of this
Agreement, except as provided in Section 20(a), shall be brought
exclusively in a court of the State of Delaware or in a Federal court located
within the State of Delaware, and by execution and delivery of this Agreement, Executive
and Employer irrevocably consent to the exclusive jurisdiction of those courts
and Executive hereby submits to personal jurisdiction in the State of Delaware.
Executive and Employer irrevocably waive any objection, including any objection
based on lack of jurisdiction, improper venue or forum non conveniens, which
either may now or hereafter have to the bringing of any action or proceeding in
such jurisdiction in respect to this Agreement or any transaction related
hereto. Executive and Employer acknowledge and agree that any service of legal
process by mail in the manner provided for notices under this Agreement
constitutes proper legal service of process under applicable law in any action
or proceeding under or in respect to this Agreement.


 


(c)           Taxes. Employer may withhold from
any payments made under this Agreement all federal, state, city or other
applicable taxes as shall be required by law.


 


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(d)           Amendments. Except as otherwise
provided in Section 19, no provision of this Agreement may be modified, waived
or discharged unless such modification, waiver or discharge is approved by the
Board or a duly authorized committee thereof. No waiver by any party hereto at
any time of any breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No waiver of any provision of this
Agreement shall be implied from any course of dealing between the parties
hereto or from any failure by any party hereto to assert his or its rights
hereunder on any occasion or series of occasions.


 


(e)           Severability. In the event that any one
or more of the provisions of this Agreement shall be or become invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not be affected thereby. Specifically,
in the event any part of the covenants set forth in Sections 8, 9,
10, 11, 12  or
13 is held to be invalid or unenforceable, the remaining parts thereof
shall nevertheless continue to be valid and enforceable as though the invalid
or unenforceable parts had not been included therein. In the event that any
provision of Sections 8, 9, 10 or 11 is declared by
a court of competent jurisdiction to be overbroad as written, Executive
specifically agrees that the court should modify such provision in order to
make it enforceable, and that a court should view each such provision as
severable and enforce those severable provisions deemed reasonable by such
court.


 


(f)            Notices. Any notice or other
communication required or permitted to be delivered under this Agreement shall
be (i) in writing, (ii) delivered personally, by courier service
or by certified or registered mail, first-class postage prepaid and return
receipt requested, (iii) deemed to have been received on the date of
delivery or on the third business day after the mailing thereof, and (iv)
addressed as follows (or to such other address as the party entitled to notice
shall hereafter designate in accordance with the terms hereof);


 


(i)            If to Employer, to it at:


 


Remington Arms Company, Inc.


Post Office Box 700


Madison, North Carolina 27025


Attention: Secretary


 


(ii)           If to Executive, to him at the address listed in Section
5 of Attachment A.


 


(g)           Survival. Sections 8, 9, 10,
11, 12, 13, 14,
15, 17, 18, 19, 20(a),
(b), (c) and (f) and, if Executive’s employment terminates
in a manner giving rise to a payment under Section 7(f), Section 7(f)
shall survive the termination of Executive’s employment hereunder.


 


(h)           No Conflicts. Executive and Employer
each represent that they are entering into this Agreement voluntarily and that
Executive’s employment hereunder and each party’s compliance with the terms and
conditions of this Agreement will not conflict with or result in the breach by
such party of any agreement to which he or it is a party or by which he or it
may be bound.


 


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(i)            Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed an original and both of
which together shall constitute one and the same instrument.


 


(j)            Headings. The sections and other
headings contained in this Agreement are for the convenience of the parties
only and are not intended to be a part hereof or to affect the meaning or
interpretation hereof.


 


(k)           Recitals. The Recitals to this
Agreement are incorporated herein and shall constitute an integral part of this
Agreement.


 


21.           Legal Fees. Employer will pay for or
reimburse Executive for his costs reasonably incurred in retaining legal
counsel to review this Agreement and advise him in connection therewith prior
to execution to a maximum amount of fifteen thousand dollars ($15,000), subject
to the Executive’s submission of appropriate documentation of such expenses.


 


22.           Acknowledgement. Executive (a) has had a
reasonable amount of time in which to review and consider this Agreement prior
to signature, (b) has in fact read the terms of this Agreement, (c) has the
full legal capacity to enter into this Agreement and has had the opportunity to
consult with legal counsel before signing this Agreement, (d) fully and
completely understands the meaning, intent and legal effect of this Agreement, and
(e) has knowingly and voluntarily executed this Agreement.


 


[Signatures on following
page.]


 


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IN WITNESS WHEREOF, Employer has duly
executed this Agreement by its authorized representative and Executive has
hereunto set his hand, in each case effective as of the date first above
written.


 


	
   

  	
  REMINGTON ARMS COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul A. Miller

  
	
   

  	
  Name: 

  	
  Paul A. Miller

  
	
   

  	
  Title:

  	
  Chairman
  of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Theodore H. Torbeck

  
	
   

  	
  Theodore
  H. Torbeck

  



 


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