EXHIBIT 10.3


 





 


July 27, 2016


Shawn C. Leska


One Lacey Place


Southport, CT 06890


 


Dear Shawn:


 


As you are aware, it is the practice of
Sturm, Ruger & Co., Inc. (the "Company") to provide severance benefits, subject to certain conditions, to certain
officers whose employment is terminated by the Company.


The purpose of this letter is to set forth
the terms of the severance benefits that you would be entitled to receive under the circumstances outlined below.


1.           (a)
           Termination Without Cause: Subject to the limitations set forth
in Section 4, if, during the Term (as defined below) the Company terminates your employment without Cause (as defined below) then
the Company shall pay to you, within 30 days after the date that you execute and deliver a Release (as defined below) to the Company
(the "Release Delivery Date") or, to the extent required by Section 409A of the Internal Revenue Code of 1986 (the "Code"),
on the first day of the seventh month following the Release Delivery Date, as a severance payment for services previously rendered
to the Company, a lump sum equal to: (i) 12 months of Base Annual Salary (as defined below) if you have been employed by the Company
for less than 5 years by the Company as of the date of your termination or (ii) 18 months of Base Annual Salary if you have been
employed by the Company for 5 years or more as of the date of your termination. Your Base Annual Salary shall be the rate in effect
immediately prior to the date your employment terminates.


 


(b)           Change
of Control Termination: Subject to the limitations set forth in Section 4, if (i) a Change in Control (as defined below) occurs
during the Term, (ii) within 24 months after the effective date of such Change in Control the Company reduces your annual salary
or makes a material change in the nature and scope of your duties to a level below that in effect immediately prior to the effective
date of the Change in Control and (iii) thereafter you or the Company terminates your employment during the Term, then the Company
shall pay to you, within 30 days after the Release Delivery Date or, to the extent required by Section 409A of the Code, on the
first day of the seventh month following the Release Delivery Date, a lump sum equal to 18 months of your Annual Compensation in
effect immediately prior to the date your employment terminates (without regard to any decrease in the rate of your Annual Compensation
made after the Change in Control).


 


(c)           Section
409A of the Code: Notwithstanding the foregoing or anything to the contrary contained in any Company policy providing for severance
payments and benefits to which you 



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may become eligible pursuant to this Section 1, to the extent required by Section 409A of the
Code, no payments shall be made to you pursuant to any such Company policy during the first six months following your termination
of employment with the Company; you shall instead receive a lump sum payment on the first day of the seventh month following the
date your employment terminates in an amount equal to the total amount of payments that you otherwise would have received during
the first six months following your termination of employment. Any remaining payments shall be made to you in accordance with the
terms of the applicable Company policy.


 


(d)           The
severance benefits specified in this Section 1 shall be in lieu of any severance pay or other severance benefit that the Company
may provide to terminated employees pursuant to policies of the Company that may at that time be in effect.


(e)           The
severance benefits specified in this Section 1 shall not in any way affect your entitlement to the receipt of a pro-rated
cash bonus or other cash incentive that you are otherwise eligible to earn in the ordinary course, during the partial year prior
to date of termination, pursuant to each plan or program (whether or not such plan or program has been formalized or is in written
form) of the Company in effect for such year that provides for cash bonuses or other cash incentives (provided that the Company
goals that trigger the obligation of the Company to pay the cash bonus or other cash incentives are satisfied).


 


2.           Definitions:
As used herein:


(a)            "Annual
Compensation" shall mean, at any time, an amount equal to your Base Annual Salary, plus 100% of the target cash bonus or other
cash incentive that you are eligible to earn in such year pursuant to each plan or program (whether or not such plan or program
has been formalized or is in written form) of the Company in effect for such year that provides for cash bonuses or other cash
incentives, or if no such plan or program has been adopted with respect to such year, 100% of the target cash bonus or other cash
incentive that you were eligible to earn in the most recent year in which such a plan or program was in effect;


(b)            "Base
Annual Salary" shall mean, at any time, an amount equal to your annual rate of salary at such time;


(c)           "Cause"
shall mean: (i) a breach of your fiduciary duty to the Company including, but not limited to, your failure to obey any lawful directive
of the Board of Directors of the Company, (ii) your personal dishonesty or willful misconduct or (iii) your willful violation of
any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order;


(d)           "Change
in Control" shall be deemed to have the same meaning as defined in the Sturm, Ruger & Company, Inc. 2007 Stock Incentive
Plan;


(e)           "Release"
shall mean a release in made by you in favor of the Company and its affiliates, in form and content acceptable to the Company,
which shall include, but not be limited to, appropriate non-solicitation and non-disparagement provisions and that shall last for
a period of time equal to the number of months of severance being received by you; and


(f)           "Term"
shall mean the period commencing on the date hereof and ending on the first anniversary of the date hereof, subject to automatic
extension on each anniversary of the date hereof, unless (i) you give notice of your intent to terminate your employment, or otherwise
terminate your employment, before such date or (ii) the Company gives written notice to you of the termination of such automatic
extensions at least 360 days prior to such date.



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3.           Benefits:
Upon the occurrence of a termination of your employment under circumstances entitling you to receive the severance payment provided
in Section 1 above, the Company shall also cause to be continued, for a period of time equal to the number of months of severance
pay, such life, medical and dental insurance coverage as is otherwise maintained by the Company for full-time employees (based
on your Base Annual Salary in effect immediately prior to the date your employment terminates), subject to the limitations set
forth in such plans, programs or policies, provided that you shall continue to pay all amounts in respect of such coverage that
an employee receiving the same level of coverage is or would be required to pay (the employee contribution).


 


4.           Parachute
Payment: In the event that any amount otherwise payable hereunder would be deemed to constitute a parachute payment (a "Parachute
Payment") within the meaning of Section 280G of the Code, and if any such Parachute Payment, when added to any other payments
which are deemed to constitute Parachute Payments, would otherwise result in the imposition of an excise tax under Section 4999
of the Code, the amounts payable hereunder shall be reduced by the smallest amount necessary to avoid the imposition of such excise
tax. Any such limitation shall be applied to such compensation and benefit amounts, and in such order, as the Company shall determine
in its sole discretion. 


 


5.           Termination
for Cause and Voluntary Termination: You shall have no right to receive any severance pay or severance benefit for any period after
the date of the termination by the Company of your employment for Cause or, except as otherwise provided in Section 1, following
the voluntary termination by you of your employment. Notwithstanding the foregoing, nothing herein shall affect any equity awards
you are entitled to receive under Restricted Stock Unit (“RSU”) awards in place at the time of termination, if any,
such RSU awards subject to, and governed by, their own terms.


 


6.           Nothing
in this letter (a) confers upon you the right to continue in the employment of the Company or the right to hold any particular
office or position with the Company, (b) requires the Company to pay you, or entitles you to receive, any specified annual salary
or interferes with or restricts in any way the right of the Company to decrease your annual salary at any time or (c) interferes
with or restricts in any way the right of the Company to terminate your employment at any time, with or without Cause.


 


7.           Any
payments due you hereunder shall be reduced by all applicable withholding and other taxes.


 


8.           The
provisions set forth in this letter shall continue in effect throughout its Term. 


 


9.           This
letter is intended to be binding upon the Company, its successors in interest and assigns. On and after the date of this letter,
the terms regarding severance benefits described herein shall supersede and replace all severance and other benefits provided under,
and any other provisions set forth or described in any prior letters to, or agreements with, you relating to provisions of benefits
upon a termination of your employment, and are contingent upon your acceptance by signing below.


 



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10.           This
letter shall be governed by, construed and enforced in accordance with the laws of the State of New York, without giving effect
to the principles of conflicts of law thereof.


 


11.           You
and the Company intend that this letter complies with the provisions of Section 409A of the Code and the regulations and other
guidance of general applicability that are issued thereunder. You and the Company agree to negotiate in good faith regarding amendments
to this letter that may be necessary or desirable to comply with Section 409A.


 


This
letter may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which will collectively
constitute a single original.


 


 


 


	 	Very truly yours,
	 	STURM, RUGER & CO., INC.
	 	/S/  Michael O Fifer
	 	Michael O. Fifer
	 	Chief Executive Officer   


 


 


	Agreed and Accepted:
	By:   	/S/  Shawn C. Leska    
	 	 Shawn C. Leska


 


 


Date:   July 27, 2016








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