Document:

EX-10.123

 Exhibit 10.123 

EMPLOYEE MATTERS AGREEMENT 

by and between 

SMITH & WESSON BRANDS, INC. 

and 
 AMERICAN OUTDOOR
BRANDS, INC. 
 Dated as of August 21, 2020 
  

 TABLE OF CONTENTS 

 

							
	 	  	Page	 
		
	 Article 1 DEFINITIONS
	  	 	1	 
			
	 Section 1.1
	  	 Definitions
	  	 	1	 
	 Section 1.2
	  	 Certain Constructions
	  	 	5	 
	 Section 1.3
	  	 Sections
	  	 	6	 
	 Section 1.4
	  	 Distribution Time
	  	 	6	 
		
	 Article 2 ALLOCATION OF EMPLOYEES AND LIABILITIES; EMPLOYEE BENEFITS
	  	 	6	 
			
	 Section 2.1
	  	 Transfer of Employment of Certain AOUT Employees
	  	 	6	 
	 Section 2.2
	  	 Re-Allocation of Employees
	  	 	6	 
	 Section 2.3
	  	 Employee Liabilities Generally
	  	 	6	 
	 Section 2.4
	  	 No Termination of Employment Intended as a Result of the Allocation of Employees
	  	 	7	 
	 Section 2.5
	  	 At-Will Employment
	  	 	7	 
	 Section 2.6
	  	 Service Crediting
	  	 	7	 
	 Section 2.7
	  	 Continuity of Benefits and Coverage
	  	 	8	 
	 Section 2.8
	  	 Establishment and Spinoff of 401(k) Plan
	  	 	8	 
	 Section 2.9
	  	 Group Health and Welfare Plan Continuation Coverage
	  	 	8	 
	 Section 2.10
	  	 Disability Plans
	  	 	9	 
	 Section 2.11
	  	 Vacation and Paid Time Off
	  	 	9	 
	 Section 2.12
	  	 Insurance Contracts and Third-Party Vendor Agreements
	  	 	9	 
	 Section 2.13
	  	 Reimbursements
	  	 	10	 
	 Section 2.14
	  	 No Duplication of Benefits; Service and Other Credit
	  	 	10	 
	 Section 2.15
	  	 Workers’ Compensation
	  	 	10	 
	 Section 2.16
	  	 Annual Bonuses
	  	 	11	 
		
	 Article 3 INCENTIVE COMPENSATION PLANS AND ARRANGEMENTS
	  	 	11	 
			
	 Section 3.1
	  	 General Principles
	  	 	11	 
	 Section 3.2
	  	 SWBI Options
	  	 	12	 
	 Section 3.3
	  	 SWBI RSUs
	  	 	13	 
	 Section 3.4
	  	 SWBI PSUs
	  	 	13	 
	 Section 3.5
	  	 Tax Withholding, Reporting, and Deductions
	  	 	14	 
		
	 Article 4 LABOR AND EMPLOYMENT MATTERS
	  	 	15	 
			
	 Section 4.1
	  	 Payroll Reporting and Tax Withholding
	  	 	15	 
	 Section 4.2
	  	 Employment Policies and Practices
	  	 	15	 
	 Section 4.3
	  	 Leave of Absence Policies
	  	 	16	 
	 Section 4.4
	  	 Employee Records
	  	 	16	 
	 Section 4.5
	  	 WARN Act
	  	 	16	 
	 Section 4.6
	  	 Access to Employee Records
	  	 	16	 
	 Section 4.7
	  	 Protection of Personal Information
	  	 	16	 
		
	 Article 5 MISCELLANEOUS
	  	 	16	 
			
	 Section 5.1
	  	 Relationship of Parties
	  	 	16	 
	 Section 5.2
	  	 Access to Information; Cooperation
	  	 	16	 
	 Section 5.3
	  	 Complete Agreement
	  	 	17	 
	 Section 5.4
	  	 Counterparts
	  	 	17	 
	 Section 5.5
	  	 Survival
	  	 	17	 

  
 -i- 

							
	 Section 5.6
	  	 Notices
	  	 	17	 
	 Section 5.7
	  	 Waivers
	  	 	18	 
	 Section 5.8
	  	 Amendment
	  	 	18	 
	 Section 5.9
	  	 Assignment
	  	 	18	 
	 Section 5.10
	  	 Successors and Assigns
	  	 	18	 
	 Section 5.11
	  	 No Circumvention
	  	 	18	 
	 Section 5.12
	  	 Third Party Beneficiaries
	  	 	18	 
	 Section 5.13
	  	 Title and Headings
	  	 	18	 
	 Section 5.14
	  	 Governing Law
	  	 	19	 
	 Section 5.15
	  	 Non-Solicitation
	  	 	19	 
	 Section 5.16
	  	 Severability
	  	 	19	 
	 Section 5.17
	  	 Interpretation
	  	 	19	 
	 Section 5.18
	  	 No Duplication; No Double Recovery
	  	 	19	 

  
 -ii- 

 EMPLOYEE MATTERS AGREEMENT 

THIS EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is made and entered into as of August 21, 2020, by and between
Smith & Wesson Brands, Inc., a Nevada corporation (“SWBI”), and American Outdoor Brands, Inc., a Delaware corporation (“AOUT” and with SWBI each, individually, a “Party,” and, collectively,
the “Parties”). Capitalized terms used in this Agreement, but not defined, shall have the meanings ascribed to them in the Separation and Distribution Agreement, dated as of August 21, 2020, by and between SWBI and AOUT (as
amended from time to time, the “Separation and Distribution Agreement”). 
 RECITALS 

WHEREAS, pursuant to the Separation and Distribution Agreement, SWBI shall be separated into two separate, publicly traded companies,
one for each of (i) the Firearm Business (as defined in the Separation and Distribution Agreement), which shall be owned and conducted, directly or indirectly, by SWBI, and (ii) the Outdoor Products and Accessories Business (as defined in
the Separation and Distribution Agreement), which shall be owned and conducted, directly or indirectly, by AOUT; and 
 WHEREAS, each
of SWBI and AOUT has determined that it is necessary and desirable to enter into this Agreement in order to allocate, assign, or transfer, as applicable, to the appropriate Party, assets, responsibilities, liabilities, and obligations with respect
to employee compensation, benefits, labor, and certain other employment matters associated with personnel of the Outdoor Products and Accessories Business and the Firearm Business, pursuant to the terms and conditions set forth herein. 

NOW, THEREFORE, in consideration of the foregoing, the mutual agreements, provisions, and covenants contained in this Agreement, and
other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, AOUT and SWBI hereby agree as follows: 

ARTICLE 1 
 DEFINITIONS

 Section 1.1 Definitions. As used in this Agreement, the following terms shall have the meanings indicated below: 

“Adjusted SWBI Option” has the meaning set forth in Section 3.2(b). 

“Adjusted SWBI PSU” has the meaning set forth in Section 3.4. 

“Adjusted SWBI RSU” has the meaning set forth in Section 3.3(a). 

“Affiliate” has the same meaning as set forth in the Separation and Distribution Agreement. For the avoidance of doubt, on
and after the Distribution Time, no member of the SWBI Group shall be deemed to be an Affiliate of any member of the AOUT Group and no member of the AOUT Group shall be deemed to be an Affiliate of any member of the SWBI Group. 

“Agreement” has the meaning set forth in the preamble to this Agreement. 

“AOUT” has the meaning set forth in the preamble to this Agreement. 

“AOUT 401(k) Plan” has the meaning set forth in Section 2.8(a). 

 

 “AOUT 401(k) Plan Effective Date” has the meaning set forth in
Section 2.8(a). 
 “AOUT Employee” means each Employee who performs services exclusively for and
is allocated to the Outdoor Products and Accessories Business and is either (a) employed by a member of the AOUT Group as of the Distribution Time, or (b) who is transferred to a member of the AOUT Group pursuant to
Section 2.1 or Section 2.2 after the Distribution Time. 
 “AOUT Equity
Awards” means those awards granted under the AOUT Equity and Incentive Plan in accordance with the provisions in Article 3 hereof. 

“AOUT Equity and Incentive Plan” means the American Outdoor Brands, Inc. 2020 Incentive Stock Plan, as amended from time to
time. 
 “AOUT Former Employee” means (i) prior to the Distribution Time, any individual who, performed services
exclusively for and was allocated to the Outdoor Products and Accessories Business but prior to the Distribution Time retired or otherwise separated from service with SWBI and its Subsidiaries and Affiliates, and (ii) on or after the
Distribution Time, any AOUT Employee that ceases performing services for the AOUT Group for any reason (other than on account of approved leaves of absences). 

“AOUT Group” means (a) prior to the Distribution Time, AOUT and each Person that will be a Subsidiary or Affiliate of
AOUT immediately after the Distribution Time; and (b) on and after the Distribution Time, AOUT and each Person that is a Subsidiary or Affiliate of AOUT. 

“AOUT Group Welfare Plans” has the meaning set forth in Section 2.9(a). 

“AOUT Option” has the meaning set forth in Section 3.2(b). 

“AOUT Participant” means an AOUT Employee, an AOUT Former Employee, and any eligible dependent or beneficiary thereof who
participates or is eligible to participate in any AOUT Plan. 
 “AOUT Plan” means each Plan that is sponsored, maintained,
or contributed to or required to be contributed to by any member of the AOUT Group that does not also cover any SWBI Employee, including, without limitation, the AOUT Equity and Incentive Plan, the AOUT 401(k) Plan and the AOUT Group Welfare Plans.

 “AOUT Post-Distribution Share Value” means the average of the closing share price of the common stock of AOUT on Nasdaq
for the five (5) trading days immediately following the Distribution Time. 
 “AOUT PSU” has the meaning set forth in
Section 3.4. 
 “AOUT Ratio” means the quotient obtained by dividing the AOUT Post-Distribution
Share Value by the SWBI Pre-Distribution Share Value. 
 “AOUT RSU” has the meaning
set forth in Section 3.3(a). 
 “Applicable Law” has the meaning set forth in the Separation and
Distribution Agreement. 
 “COBRA” means the U.S. Consolidated Omnibus Budget Reconciliation Act of 1985, as codified at
Section 601 et seq. of ERISA and at Section 4980B of the Code. 

  
 2 

 “Code” means the Internal Revenue Code of 1986, as amended from time to
time. 
 “Code Section 409A” means Section 409A of the Code and the regulations and guidance
promulgated thereunder. 
 “Deferred RSU” means each outstanding SWBI RSU that is subject to an election by the holder to
defer receipt of the shares of common stock of SWBI upon settlement of such SWBI RSU until separation from service with the SWBI Group, determined immediately prior to the Distribution Date. 

“Designated Executive” has the meaning set forth in Section 3.3(a). 

“Distribution” has the meaning set forth in the Separation and Distribution Agreement. 

“Distribution Date” has the meaning set forth in the Separation and Distribution Agreement. 

“Distribution Ratio” means one share of AOUT common stock for every four shares of SWBI common stock. 

“Distribution Time” has the meaning set forth in the Separation and Distribution Agreement. 

“Employee” means any individual who is an employee of SWBI or any of its Subsidiaries and Affiliates (including, for the
avoidance of doubt, AOUT and its Subsidiaries) immediately before the Distribution Time, including active employees and employees on vacation and approved leave of absence (including maternity, paternity, family, sick, short-term or long-term
disability leave, qualified military service under the Uniformed Services Employment and Reemployment Rights Act of 1994, leave under the Family Medical Leave Act, and other approved leaves). 

“Employee Record” has the meaning set forth in Section 4.4. 

“Employment Claim” means any actual or threatened action, lawsuit, charge, complaint, audit, inquiry, investigation,
grievance, arbitration, claim (including ERISA claims), or federal, state, or local judicial or administrative proceeding of whatever kind involving a demand by, on behalf of, or relating to an Employee, Former Employee, or current or former
independent contractor, or by or relating to any federal, state, or local Governmental Authority alleging Liability against a Party or against a Party’s pension, welfare, or other benefit plan, or such plan’s administrator, trustee, or
fiduciary. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor legislation.

 “Firearm Business” has the meaning set forth in the Separation and Distribution Agreement. 

“Former Employee” means any individual who was employed by SWBI or any of its Subsidiaries (including, for the avoidance of
doubt, AOUT and its Subsidiaries) at any time prior to the Distribution Time but who is not an Employee on or after such Distribution Time. 

“IRS” means the Internal Revenue Service. 

“Liabilities” has the meaning set forth in the Separation and Distribution Agreement. 

“Monheit RSU” has the meaning set forth in Section 3.3(c). 

“New Employer RSU” has the meaning set forth in Section 3.3(b). 

  
 3 

 “Other Employee” has the meaning set forth in
Section 3.3(b). 
 “Outdoor Products and Accessories Business” has the meaning set forth in the
Separation and Distribution Agreement. 
 “Party” and “Parties” have the meanings set forth in the
preamble to this Agreement. 
 “Plan” means, with respect to any entity, each plan, program, policy, arrangement, contract
or agreement that is maintained primarily for the benefit of employees (and their dependents and beneficiaries) providing employee benefits, including, without limitation, employee benefit plans as defined in Section 3(3) of ERISA, executive
compensation, bonuses, equity and/or equity based compensation, profit sharing, savings, retirement, severance pay, salary continuation, medical, dental, vision, life, disability, sick leave, vacation pay, and other fringe benefits, whether formal
or informal or written or unwritten, which is sponsored, maintained, or contributed by such entity or to which such entity is a party or under which such entity has any obligation. Notwithstanding the foregoing, the term “Plan” as
used in this Agreement does not include (i) the SWBI Equity and Incentive Plan; (ii) any SWBI Equity Award; (iii) the AOUT Equity and Incentive Plan; (iv) any AOUT Equity Award; (v) any employment agreements; and
(vi) any contract, agreement, or understanding relating to settlement of actual or potential employment claims. 

“PTO” has the meaning set forth in Section 2.11. 

“Record Date” has the meaning set forth in the Separation and Distribution Agreement. 

“Scott RSU” has the meaning set forth in Section 3.3(c). 

“SWBI” has the meaning set forth in the preamble to this Agreement. 

“SWBI 401(k) Plan” has the meaning set forth in Section 2.8(a). 

“SWBI Board” means the Board of Directors of SWBI or a duly authorized committee thereof. 

“SWBI Employee” means each Employee who performs services exclusively for and is allocated to the Firearm Business and who is
either (a) employed by a member of the SWBI Group as of the Distribution Time or (b) who is transferred to a member of the SWBI Group after the Distribution Time pursuant to Section 2.2 after the Distribution
Time. 
 “SWBI Equity and Incentive Plan” means the Smith & Wesson Brands, Inc. 2013 Incentive Stock Plan, as
amended from time to time. 
 “SWBI Equity Awards” means the SWBI Restricted Stock, the SWBI RUSs and the SWBI Options.

 “SWBI Former Employee” means (i) prior to the Distribution Time, any individual who, performed services exclusively
for and was allocated to the Firearm Business but prior to the Distribution Time retired or otherwise separated from service with SWBI and its Subsidiaries and Affiliates, and (ii) on or after the Distribution Time, any SWBI Employee that
ceases performing services for the SWBI Group for any reason (other than on account of approved leaves of absences). 
 “SWBI
Group” means SWBI and each Person that is a direct or indirect Subsidiary or Affiliate of SWBI (other than any member of the AOUT Group). 

  
 4 

 “SWBI Group Welfare Plans” means the SWBI Plans providing medical, dental,
vision, health care spending accounts, disability, life, and similar welfare benefits and is an “employee welfare benefit plan” as described in Section 3(1) of ERISA. 

“SWBI Option” means each outstanding option to purchase shares of the common stock of SWBI, whether vested or unvested,
granted under the SWBI Equity and Incentive Plan, determined immediately prior to the Distribution Time. 
 “SWBI
Participant” means a SWBI Employee, a SWBI Former Employee, and any eligible dependent or beneficiary thereof who participates or is eligible to participate in a SWBI Plan. 

“SWBI Plan” means each Plan that is sponsored, maintained, contributed to, or required to be contributed to by any member of
the SWBI Group, including, without limitation, the SWBI Equity and Incentive Plan, the SWBI 401(k) Plan, and the SWBI Group Welfare Plans, but not including any AOUT Plan. 

“SWBI Post-Distribution Share Value” means the average of the closing share price of the common stock of SWBI on Nasdaq for
the five (5) trading days immediately following the Distribution Time. 
 “SWBI
Pre-Distribution Share Value” means the average of the closing share price of the common stock of SWBI on Nasdaq on the last five (5) trading days immediately preceding the Distribution Time.

 “SWBI PSUs” means each outstanding performance-based restricted stock unit award with respect to the shares of the
common stock of SWBI, whether vested or unvested, granted under the SWBI Equity and Incentive Plan, determined immediately prior to the Distribution Time. 

“SWBI Ratio” means the quotient obtained by dividing the SWBI Post-Distribution Share Value by the SWBI Pre-Distribution Share Value. 
 “SWBI RSU” means each outstanding restricted stock unit
award with respect to the shares of the common stock of SWBI, whether vested or unvested, granted under the SWBI Equity and Incentive Plan, determined immediately prior to the Distribution Time. 

“Separation and Distribution Agreement” has the meaning set forth in the preamble to this Agreement. 

“Tax” or “Taxes” has the meaning set forth in the Tax Matters Agreement. 

“Tax Matters Agreement” means the Tax Matters Agreement, dated as of the date hereof between SWBI and AOUT, as such agreement
may be amended, amended and restated, supplemented, or modified from time to time. “WARN Act” has the meaning set forth in Section 4.5. 

“Wadecki RSU” has the meaning set forth in Section 3.3(c). 

“Workers Compensation Event” means the event, injury, illness, or condition giving rise to a workers’ compensation
claim. 
 Section 1.2 Certain Constructions. References to the singular in this Agreement shall refer to the plural and
vice-versa, and references to the masculine shall refer to the feminine and vice-versa. 

  
 5 

 Section 1.3 Sections. References to a “Section” are, unless otherwise
specified, to one of the Sections of this Agreement. 
 Section 1.4 Distribution Time. This Agreement shall be effective as of
the Distribution Time. 
 ARTICLE 2 

ALLOCATION OF EMPLOYEES AND LIABILITIES; EMPLOYEE BENEFITS 

Section 2.1 Transfer of Employment of Certain AOUT Employees. SWBI and AOUT will cause the employment of each AOUT Employee who is
not employed by a AOUT Group member as of the date hereof to be transferred to an AOUT Group member prior to the Distribution Time. 

Section 2.2 Re-Allocation of Employees. If the Parties mutually agree after the
Distribution Time that an Employee or individual independent contractor was incorrectly allocated to the SWBI Group or the AOUT Group (or was incorrectly employed or engaged by a member of the SWBI Group or the AOUT Group as of the Distribution
Time), the Parties shall use their reasonable best efforts to correct such misallocation as appropriate (including by transferring the employment or engagement opportunity of such AOUT Employee or SWBI Employee (as applicable) or individual
independent contractor to the applicable member of the applicable group or by offering employment or an engagement opportunity to such AOUT Employee, SWBI Employee, or individual independent contractor), and, to the extent possible, such correction
shall be effective as of the Distribution Time. 
 Section 2.3 Employee Liabilities Generally. 

(a) From and after the Distribution Time, SWBI or a member of the SWBI Group hereby assumes or retains, and shall be responsible for paying,
performing, fulfilling, and discharging in accordance with their respective terms, (i) all Liabilities or obligations expressly assigned to or assumed by a member of the SWBI Group under this Agreement; and (ii) except as otherwise
expressly provided for herein or in the Separation and Distribution Agreement, all Liabilities with respect to the employment (including the termination thereof), compensation, and employee benefits of all (x) SWBI Employees, (y) SWBI
Former Employees, and (z) all independent contractors, temporary employees, consultants, freelancers, agency employees, leased employees, or other non-payroll workers allocated to the Firearm Business, in
each case, and their respective dependents and beneficiaries (and any alternate payees in respect thereof), whenever incurred. Such Liabilities are assumed or retained regardless of when such Liabilities arose or arise, or whether the facts on which
they are based occurred prior to or subsequent to the Distribution Time, regardless of where or against whom such Liabilities are asserted or determined and include, without limitation, (1) wages, salaries, incentive compensation, commissions,
and bonuses, (2) any and all Liabilities with respect to Employment Claims made by or with respect to SWBI Employees or SWBI Former Employees or in connection with any SWBI Plan, and (3) all service-related Liabilities to any individual
who is or was an independent contractor, temporary employee, consultant, freelancer, agency employee, leased employee, or other non-payroll worker connected to the Firearm Business. All Liabilities assumed or
retained by a member of the SWBI Group under this Section 2.3(a) shall be “SWBI Liabilities” for purposes of the Separation and Distribution Agreement. 

(b) From and after the Distribution Time, AOUT or a member of the AOUT Group hereby assumes or retains, and shall be responsible for paying,
performing, fulfilling, and discharging in accordance with their respective terms, (i) all Liabilities or obligations expressly assigned to or assumed by a member of the AOUT Group under this Agreement; and (ii) except as otherwise
expressly provided for herein or in the Separation and Distribution Agreement, all Liabilities with respect to the employment (including the termination thereof), compensation, and employee benefits of all (x) AOUT Employees, (y) AOUT
Former Employees, and (z) all independent contractors, temporary employees, consultants, 

  
 6 

 
freelancers, agency employees, leased employees, or other non-payroll workers allocated to the Outdoor Products and Accessories Business, in each case, and
their respective dependents and beneficiaries (and any alternate payees in respect thereof), whenever incurred. Such Liabilities are assumed or retained regardless of when such Liabilities arose or arise, or whether the facts on which they are based
occurred prior to or subsequent to the Distribution Time, regardless of where or against whom such Liabilities are asserted or determined and include, without limitation, (1) wages, salaries, incentive compensation, commissions, and bonuses,
(2) any and all Liabilities with respect to Employment Claims made by or with respect to AOUT Employees or AOUT Former Employees or in connection with any AOUT Plan, and (3) all service-related Liabilities to any individual who is or was
an independent contractor, temporary employee, consultant, freelancer, agency employee, leased employee, or other non-payroll worker connected to the Outdoor Products and Accessories Business. All Liabilities
assumed or retained by a member of the AOUT Group under this Section 2.3(b) shall be “AOUT Liabilities” for purposes of the Separation and Distribution Agreement. 

Section 2.4 No Termination of Employment Intended as a Result of the Allocation of Employees. It is intended that no SWBI Employee
and no AOUT Employee will experience a termination of employment for severance purposes or otherwise solely as a result of the transactions contemplated by the Separation and Distribution Agreement (including any transfer of employment effectuated
in connection with those transactions). To the extent permitted by Applicable Law, no SWBI Employees and no AOUT Employees shall be entitled to any termination or severance payments or benefits as a result of such transactions or transfer, as
applicable. SWBI shall, and shall cause other members of the SWBI Group (as applicable), and AOUT shall, and shall cause other members of the AOUT Group (as applicable), to cause any applicable Plan to be interpreted and administered consistent with
such intent, to the greatest extent possible without breaching the applicable Plan. 
 Section 2.5
At-Will Employment. Nothing in this Agreement shall (a) create any obligation on the part of any member of the SWBI Group or the AOUT Group to continue the employment of any SWBI Employee or AOUT
Employee following the date of this Agreement or the Distribution Time (except as required by Applicable Law) or (b) change the employment status of any SWBI Employee or AOUT Employee from
“at-will,” to the extent such SWBI Employee or AOUT Employee was an “at-will” employee under Applicable Law. 

Section 2.6 Service Crediting. 

(a) From and after the Distribution Time, AOUT shall, and shall cause other members of the AOUT Group (as applicable) to, recognize each AOUT
Employee’s service prior to the Distribution Time (including service with any member of the SWBI Group prior to the Distribution Time) for all purposes, including purposes of eligibility, vesting, and level of paid time off or severance
benefits under any AOUT Plan, to the same extent and for the same purpose such service was recognized as of the Distribution Time under the corresponding SWBI Plan. Notwithstanding the foregoing, nothing herein shall require the AOUT Group or any
equity compensation plan or arrangement maintained by the AOUT Group after the Distribution Time to credit service prior to the Distribution Time for purposes of any equity award or other equity-based benefit or equity-based compensation that may be
established by the AOUT Group at any time at or after the Distribution Time. 
 (b) Notwithstanding anything to the contrary in this
Agreement, or the Separation and Distribution Agreement, no Employee shall receive service credit or benefits to the extent that receipt of such service credit or benefits would result in duplication of benefits provided by another SWBI Plan or AOUT
Plan. 

  
 7 

 Section 2.7 Continuity of Benefits and Coverage. It is the intention of SWBI and
AOUT that there be uninterrupted employee benefit plan participation and coverage for SWBI Employees and AOUT Employees, notwithstanding the transactions contemplated by the Separation and Distribution Agreement, this Agreement, or any other
Ancillary Agreement. Therefore, SWBI and AOUT shall use their reasonable best efforts to cause there to be no interruption of coverage with respect to the type of employee benefits or coverage being provided to such Employees immediately prior to
the Distribution Time. 
 Section 2.8 Establishment and Spinoff of 401(k) Plan. 

(a) Effective as of the Distribution Time (the “AOUT 401(k) Plan Effective Date”), (i) AOUT (or a designated member of the
AOUT Group) shall have adopted a defined contribution plan that contains a cash or deferred arrangement within the meaning of Section 401(k) of the Code and is intended to be qualified under Section 401(a) of the Code (the “AOUT
401(k) Plan”), and (b) each member of the AOUT Group shall no longer be a participating employer in the SWBI 401(k) Plan (the “SWBI 401(k) Plan”). The AOUT 401(k) Plan is intended to have terms and features (including
employer contribution provisions) substantially similar to the SWBI 401(k) Plan for the applicable AOUT Employees. 
 (b) Upon the 401(k)
Plan Effective Date, all AOUT Employees who, immediately prior to such time, were participants in or otherwise eligible to participate in a SWBI 401(k) Plan shall be immediately eligible to participate in the corresponding AOUT 401(k) Plan with
respect to compensation paid after the 401(k) Plan Effective Date. 
 (c) As soon as practicable after the 401(k) Plan Effective Date, SWBI
shall cause the accounts of AOUT Employees under the SWBI 401(k) Plan, including promissory notes evidencing outstanding loans of AOUT Employees, and the value of assets attributable to such accounts of AOUT Employees to be transferred to the AOUT
401(k) Plan in a “transfer of assets or liabilities” in accordance with Section 414(l) of the Code and Section 208 of ERISA and the respective rules and regulations promulgated thereunder. The assets so transferred shall be in
the form of cash or other property, as SWBI and AOUT shall mutually agree prior to such transfer. Prior to such transfer, AOUT shall provide SWBI with such documents and other information as SWBI shall reasonably request to assure itself that the
AOUT 401(k) Plans and the related trusts established pursuant thereto (i) are qualified and tax-exempt under Sections 401(a) and 501(a) of the Code, respectively, and (ii) contain participant loan
provisions and procedures necessary to effect the orderly transfer of participant loan balances associated with the transfer of assets. Prior to the transfer, SWBI and AOUT shall (or shall cause the applicable member(s) of their Group to) notify the
IRS of the transfer by timely filing Forms 5310-A, to the extent such filings are required, and SWBI shall provide to AOUT copies of such personnel and other records of SWBI pertaining to the AOUT Employees
and such records of any agent or representative of SWBI pertaining to the AOUT Employees, in each case, pertaining to the SWBI 401(k) Plans and as AOUT may reasonably request in order to administer and manage the accounts and assets transferred to
the AOUT 401(k) Plans. Upon such transfer, AOUT and each member of the AOUT Group and the AOUT 401(k) Plans shall assume all assets, liabilities, and obligations with respect to all amounts transferred (including loans) from the SWBI 401(k) Plans to
the AOUT 401(k) Plans in respect of the AOUT Employees, including any employer contributions required to have been made on behalf of the AOUT Employees for periods prior to the Distribution Time, and SWBI and each member of the SWBI Group and the
SWBI 401(k) Plan shall be relieved of all such assets, liabilities, and obligations. 
 Section 2.9 Group Health and Welfare Plan
Continuation Coverage. 
 (a) AOUT Group Welfare Plans. As of the Distribution Time, AOUT (or a designated member of the AOUT Group)
shall take, or cause to be taken, all actions necessary and appropriate to 

  
 8 

 
establish substantially similar plans of the SWBI Group Welfare Plans in existence immediately prior to the Distribution Time (collectively, the “AOUT Group Welfare Plans”) to
provide benefits thereunder for all eligible AOUT Participants effective as of the Distribution Time. As of the Distribution Time, each member of the AOUT Group shall no longer be a participating employer in the SWBI Group Welfare Plans. With
respect to any Liabilities relating to or arising in connection with claims incurred under an AOUT Group Welfare Plan by AOUT Participants from and after the effective date of such AOUT Group Welfare Plan, including claims that are self-insured and
claims that are fully insured through third party insurance, AOUT and the applicable AOUT Group Welfare Plan shall be solely responsible for such Liabilities. For the avoidance of doubt, the SWBI Group shall remain liable for any Liabilities
relating to or arising in connection with claims by an AOUT Employee or AOUT Former Employee (or any of their dependents or beneficiaries) that occurred prior to the Distribution Time and, thus, under a SWBI Group Welfare Plan. 

(b) COBRA Continuation Coverage. From and after the Distribution Time, (A) the SWBI Group shall assume or retain and shall be solely
responsible for, or cause the SWBI Group Welfare Plans, as applicable (and applicable insurance carriers) to be responsible for, the continuation coverage requirements imposed by COBRA as they relate to any SWBI Participant or Former Employee, and
no member of the AOUT Group shall have any liability or obligation with respect thereto; and (B) the AOUT Group shall assume or retain and shall be solely responsible for, or cause the AOUT Group Welfare Plans, as applicable (and applicable
insurance carriers) to be responsible for, COBRA continuation coverage requirements as they relate to any AOUT Participant, and no member of the SWBI Group shall have any liability or obligation with respect thereto. 

Section 2.10 Disability Plans. Each SWBI Participant and AOUT Participant who became disabled, as defined under a SWBI Welfare
Plan that provides short-or long-term disability benefits prior to the Distribution Time, shall be eligible or continue to be eligible for such benefits under the applicable SWBI Welfare Plan in accordance
with the terms and conditions of such SWBI Welfare Plan; provided that AOUT shall be responsible for reimbursing SWBI for any self-insured short-term disability benefits with respect to such disabled AOUT Employee for the period after the
Distribution Time until such time as those short-term disability benefits terminate in accordance with the terms of such SWBI Welfare Plan. In the event any such disabled AOUT Employee becomes eligible to transition directly from receiving
short-term disability benefits to receiving long-term disability benefits either before or as of the Distribution Time under the applicable SWBI Welfare Plan, SWBI and the applicable SWBI Welfare Plan shall provide the long-term disability benefits
to which such disabled AOUT Employee is entitled (taking into account, if applicable, the extent to which such employee has elected such coverage and has made the required contributions therefor). As of the Distribution Time, AOUT or a member of the
AOUT Group shall take, or cause to be taken, all action necessary and appropriate to establish or designate and administer short- and long-term disability plans to provide benefits thereunder for all eligible AOUT Employees (and their eligible
dependents and beneficiaries). 
 Section 2.11 Vacation and Paid Time Off. Effective as of the Distribution Time, the AOUT Group
shall assume all Liabilities with respect to vacation, holiday, sick leave, paid time off, personal days, and other paid time off (collectively, “PTO”) with respect to AOUT Employees and AOUT Former Employees accrued on or prior to
the Distribution Time and AOUT shall credit AOUT Employees and AOUT Former Employees with such accrual; provided that if under Applicable Law, any such accrued PTO is required to be paid out as of the Distribution Time to any AOUT Employee or AOUT
Former Employee, such payment will be made by AOUT in lieu of the crediting of the accrual to such AOUT Employee or AOUT Former Employee. For the avoidance of doubt, the SWBI Group shall retain all Liabilities with respect to accrued PTO
attributable to SWBI Employees and SWBI Former Employees. 
 Section 2.12 Insurance Contracts and Third-Party Vendor Agreements.
To the extent any Plan is funded (in whole or in part) through the purchase of an insurance contract, SWBI and AOUT shall 

  
 9 

 
cooperate, and each shall use its commercially reasonable efforts to effectuate the provisions of this Agreement in relation to such contract and to obtain any necessary consents and maintain any
pricing discounts or other preferential terms for both SWBI (or the applicable member of the SWBI Group) and AOUT (or the applicable member of the AOUT Group) for a reasonable term. To the extent any Plan is administered by a third-party vendor,
SWBI and AOUT shall cooperate, and each shall use its commercially reasonable efforts to replicate any contract with such third-party vendor for SWBI (or the applicable member of the SWBI Group) or AOUT (or the applicable member of the AOUT Group),
as applicable, and to maintain any pricing discounts or other preferential terms for both SWBI (or the applicable member of the SWBI Group) and AOUT (or the applicable member of the AOUT Group) for a reasonable term. Neither SWBI nor AOUT shall be
liable for failure to obtain consents, new insurance or administrative contracts, pricing discounts, or other preferential terms for the other Party or the applicable member of its Group. Each Party shall be responsible for any new or additional
premiums, charges, or administrative fees that such Party may incur with respect to its insurance coverage or contracts pursuant to this Agreement. 

Section 2.13 Reimbursements. The Parties acknowledge that the SWBI Group, on the one hand, and the AOUT Group, on the other hand,
may incur costs and expenses, including, but not limited to, contributions to Plans and the payment of insurance premiums or vendor fees or expenses arising from or related to any of the Plans which are, as set forth in this Agreement, the
responsibility of the other Party. Accordingly, the SWBI Group and the AOUT Group shall reimburse each other, as soon as practicable, but in any event within thirty (30) days of receipt from the other Party of appropriate verification, for all
such costs, fees, and expenses. 
 Section 2.14 No Duplication of Benefits; Service and Other Credit. SWBI and AOUT shall adopt,
or cause to be adopted, all reasonable and necessary amendments and procedures to prevent AOUT Participants from receiving duplicative benefits from the SWBI Plans and the AOUT Plans. With respect to AOUT Employees, each AOUT Plan shall provide that
for purposes of determining eligibility to participate, vesting, and entitlement to benefits (but not for accrual of pension benefits under any defined benefit pension plan), service prior to the Distribution Time with a SWBI Group member shall be
treated as service with the applicable AOUT Group member. Such service also shall apply for purposes of satisfying any waiting periods, evidence of insurability requirements, or the application of any preexisting condition limitations under any AOUT
Plan. Each AOUT Plan shall, to the extent practicable, waive pre-existing condition limitations with respect to AOUT Employees. AOUT shall honor any deductible,
co-payment, and out-of-pocket maximums incurred by the AOUT Employees and their eligible dependents under the SWBI Plans in which
they participated immediately prior to the Distribution Time during the portion of the calendar year prior to the Distribution Time in satisfying any deductibles, co-payments, or
out-of-pocket maximums under the AOUT Plans in which they are eligible to participate after the Distribution Time in the same plan year in which such deductibles, co-payments, or out-of-pocket maximums were incurred. With respect to the AOUT Group Welfare Plan that is a flexible spending account
plan, SWBI shall cause the accounts of AOUT Participants who are participating in the flexible spending accounts under the SWBI Group Welfare Plans to be transferred to the flexible spending account plan under the AOUT Group Welfare Plans. SWBI and
AOUT will work together in good faith to facilitate any necessary transition. 
 Section 2.15 Workers’
Compensation. The SWBI Group shall be solely responsible for all workers’ compensation claims of (i) AOUT Employees and AOUT Former Employees with respect to Workers’ Compensation Events occurring before the Distribution Time, and
(ii) SWBI Employees and SWBI Former Employees regardless of when the Workers’ Compensation Events occur. The AOUT Group shall be solely responsible for workers’ compensation claims of AOUT Employees and AOUT Former Employees with
respect to Workers’ Compensation Events occurring on or after the Distribution Time, except for claims that are defined by individual state workers’ compensation boards as “cumulative trauma” claims. 

  
 10 

 Section 2.16 Annual Bonuses. The SWBI Group shall be solely responsible for all
annual bonuses earned by SWBI Employees and SWBI Former Employees (i.e., accrued but unpaid bonuses for SWBI Former Employees) with respect to periods ending on or after May 1, 2020. The AOUT Group shall be solely responsible for all annual
bonuses earned by AOUT Employees and AOUT Former Employees (i.e., accrued but unpaid bonuses for AOUT Former Employees) with respect to periods ending on or after May 1, 2020. 

ARTICLE 3 
 INCENTIVE
COMPENSATION PLANS AND ARRANGEMENTS 
 Section 3.1 General Principles. 

(a) SWBI and AOUT shall take any and all reasonable actions as will be necessary and appropriate to further the provisions of this Article
3, including, to the extent practicable, providing written notice or similar communication to each Employee or director who holds one or more SWBI Equity Awards granted under the SWBI Equity and Incentive Plan informing such Employee or
director, as applicable, of (i) the actions contemplated by this Article 3 with respect to such SWBI Equity Awards and (ii) whether (and during what time period) any “blackout” period will be imposed upon holders of SWBI
Equity Awards granted under the SWBI Equity and Incentive Plan during which time such SWBI Equity Awards may not be exercised or settled, as the case may be. 

(b) Prior to the Distribution Time, AOUT shall establish the AOUT Equity and Incentive Plan, so that upon the Distribution, AOUT shall have in
effect an equity compensation plan containing substantially the same terms as the SWBI Equity and Incentive Plan under which any SWBI Equity Award was granted. From and after the Distribution Time, each AOUT Equity Award that was converted from an
SWBI Equity Award shall be subject to the terms of the AOUT Equity and Incentive Plan and the award agreement governing such AOUT Equity Award to which the applicable holder is a party. From and after the Distribution Time, AOUT shall retain, pay,
perform, fulfill, and discharge all Liabilities arising out of or relating to the AOUT Equity Awards. 
 (c) Following the Distribution
Time, a holder who has outstanding equity-based awards under the SWBI Equity and Incentive Plan and/or replacement equity-based awards under the AOUT Equity and Incentive Plan shall be considered to have been employed by the applicable plan sponsor
before and after the Distribution Time for purposes of vesting. For the avoidance of doubt, for purposes of the SWBI Equity Awards following the Distribution Time, an AOUT Employee’s or directors’ continued service with a member of the
AOUT Group shall be deemed continued service with a member of the SWBI Group, and for purposes of the AOUT Equity Awards following the Distribution Time, an SWBI Employee’s or director’s continued service with a member of the SWBI Group
shall be deemed continued service with a member of the AOUT Group. 
 (d) No SWBI Equity Award described in this Article 3, whether
outstanding or to be issued, adjusted, substituted, or cancelled by reason of or in connection with the Distribution, will be adjusted, settled, cancelled, or exercisable, until in the judgment of the administrator of the applicable plan or program
such action is consistent with all Applicable Laws. With respect to each outstanding SWBI Option, the period during which such SWBI Option is exercisable and the ultimate expiration date of the SWBI Option will not be extended. 

(e) From and after the Distribution Time, all SWBI Equity Awards adjusted pursuant to this Article 3 shall be subject to the terms and
conditions set forth in the applicable SWBI Equity and Incentive Plan or AOUT Equity and Incentive Plan and corresponding award agreements. Without limiting the generality of the foregoing, from and after the Distribution Time, all references to the
applicable company in such SWBI Equity and Incentive Plan or AOUT Equity and Incentive Plan, as applicable, and other administrative provisions requiring interpretation will refer to the appropriate company to reflect the Distribution. 

  
 11 

 (f) Each of SWBI and AOUT shall establish an appropriate administration system in order to
handle exercises and delivery of shares in an orderly manner and provide reasonable levels of service for equity award holders. 
 (g) The
adjustment or conversion of SWBI Equity Awards shall be effectuated in a manner that is intended to avoid the imposition of any accelerated, additional, penalty, or other Taxes on the holders thereof pursuant to Section 409A of the Code. 

Section 3.2 SWBI Options. 

(a) General Principles. The adjustments provided for in this Section 3.2 with respect to the SWBI Options and
AOUT Options (as defined in Section 3.2(b)) are intended to be effectuated in a manner compliant with Section 424(a) of the Code. 

(b) Treatment of SWBI Options. Each SWBI Option shall be converted, as of the Distribution Time, into (i) an option to purchase
shares of the common stock of SWBI, issued pursuant to the SWBI Equity and Incentive Plan (each such option, an “Adjusted SWBI Option”); and (ii) an option to purchase shares of the common stock of AOUT (each such option, an
“AOUT Option”) issued pursuant to the terms of the AOUT Equity and Incentive Plan. 
 (i) Adjusted SWBI Options.
Subject to Section 3.1, each Adjusted SWBI Option will be subject to the same terms and conditions from and after the Distribution Time as the terms and conditions applicable to the corresponding SWBI Option immediately
prior to the Distribution Time; provided, however, that (y) the per-share exercise price of each such Adjusted SWBI Option will be equal to (1) the per-share
exercise price of the corresponding SWBI Option immediately prior to the Distribution Time multiplied by (2) the SWBI Ratio, rounded up to the second decimal place and (z) from and after the Distribution Time, each such Adjusted SWBI
Option will remain exercisable until the date ninety (90) days immediately following the termination of employment or service of the holder of such Adjusted SWBI Option by either SWBI or AOUT, unless earlier terminated pursuant to the terms of
any such Adjusted SWBI Option, including, without limitation, due to any termination of employment for cause (or other similar term in any applicable SWBI Equity and Incentive Plan). 

(ii) AOUT Options. Subject to Section 3.1, each AOUT Option will be subject to the same terms and conditions
from and after the Distribution Time as the terms and conditions applicable to the corresponding SWBI Option immediately prior to the Distribution Time; provided, however, that from and after the Distribution Time; provided, however, that
(y) the per-share exercise price of each such AOUT Option will be equal to (1) the per-share exercise price of the corresponding SWBI Option immediately prior
to the Distribution Time multiplied by (2) the AOUT Ratio, rounded up to the second decimal place and (z) from and after the Distribution Time, each such AOUT Option will remain exercisable until the date ninety (90) days immediately
following the termination of employment or service of the holder of such AOUT Option by either SWBI or AOUT, unless earlier terminated pursuant to the terms of any such AOUT Option, including, without limitation, due to any termination of employment
for cause (or other similar term in any applicable AOUT Equity and Incentive Plan). 

  
 12 

 Section 3.3 SWBI RSUs. 

(a) Treatment of SWBI RSUs Held by Directors and Designated Executives. Except as set forth in Sections 3.3(b) and
(c) of this Agreement, each SWBI RSU that is held by either a member of the SWBI Board or an Employee (or Former Employee) who holds, or will hold as of the Distribution Time, the title of Chief Executive Officer, Chief Financial
Officer, Vice President of Investor Relations, or General Counsel of either SWBI or AOUT (each such individual, an “Designated Executive”) shall be converted, as of the Distribution Time, into (i) a restricted stock unit award
with respect to shares of the common stock of SWBI, issued pursuant to the SWBI Equity and Incentive Plan (each such restricted stock unit award, an “Adjusted SWBI RSU”); and (ii) a restricted stock unit award with respect to
shares of the common stock of AOUT (each such restricted stock unit award, an “AOUT RSU”) issued pursuant to the terms of the AOUT Equity and Incentive Plan, the number of shares subject to each such award to be determined in the
same manner as for stockholders of SWBI based on the Distribution Ratio. Each Adjusted SWBI RSU and each AOUT RSU shall be subject to the same vesting requirements and dates and other terms and conditions as the SWBI RSUs to which they relate. 

(b) Treatment of SWBI RSUs Held by Other Employees. Except as set forth in Sections 3.3(a) and (c) of this
Agreement, each SWBI RSUs that is held by an individual who is not an Designated Executive (each, an “Other Employee”) shall be converted, as of the Distribution Time, into a new restricted stock unit award with respect to shares of
the common stock of either SWBI or AOUT, whichever shall be the employer of record of such Other Employee immediately after the Distribution Date (the “New Employer RSU”). The New Employer RSU shall be issued pursuant to the terms
of the SWBI Equity and Incentive Plan or the AOUT Equity and Incentive Plan, as applicable, and the number of shares subject to each such New Employer RSU shall be determined based in such a manner such that the intrinsic value of the SWBI RSU
immediately prior to the Distribution Time is the same as the intrinsic value of the New Employer RSUs, immediately after the Distribution Time. Each New Employer RSU shall be subject to the same vesting requirements and dates and other terms and
conditions as the SWBI RSUs to which they relate. 
 (c) Treatment of Deferred RSUs. Each Deferred RSU shall be treated as follows:
(i) with respect to the Deferred RSUs held by I. Marie Wadecki (the “Wadecki RSU”), such Wadecki RSU shall be settled prior to that certain Record Date immediately preceding the Distribution as Ms. Wadecki shall no longer
be serving on the SWBI Board as of such Distribution Time and, therefore, the shares of common stock of SWBI subject to such Wadecki RSU shall be treated as any of share of common stock of SWBI in the Distribution; (ii) with respect to the
Deferred RSUs held by Robert L. Scott (the “Scott RSU”), such Scott RSU shall be treated as if Mr. Scott was a Designated Executive and, therefore, shall be converted in accordance with the provisions set forth in
Section 3.3(a) above; and (iii) with respect to the Deferred RSUs held by Barry M. Monehit (the “Monehit RSU”), such Monehit RSU shall be treated as if Mr. Monehit was a Designated Executive and,
therefore, shall be converted in accordance with the provisions set forth in Section 3.3(a) above. 

Section 3.4 SWBI PSUs. Each SWBI PSU shall be converted, as of the Distribution Time, into (i) a performance-based restricted
stock unit award with respect to shares of the common stock of SWBI, issued pursuant to the SWBI Equity and Incentive Plan (each such performance-based restricted stock unit award, an “Adjusted SWBI PSU”); and (ii) a
performance-based restricted stock unit award with respect to shares of the common stock of AOUT (each such performance-based restricted stock unit award, an “AOUT PSU”) issued pursuant to the terms of the AOUT Equity and Incentive
Plan, in each case, the number of target shares for each award to be determined in the same manner as for stockholders of SWBI based on the Distribution Ratio. Each Adjusted SWBI PSU and each AOUT PSU shall be subject to the substantially
similar terms and conditions as the SWBI PSUs to which they relate, except that the performance criteria applicable to such awards shall be determined in accordance with the following: (x) 

  
 13 

 
with respect to the Adjusted SWBI PSU, (1) the market cap of SWBI as compared to the Russell 2000 index (“RUT”) for the first ninety (90) days after the date of grant,
as compared to (2) the combined market cap of SWBI and AOUT as compared to the RUT for ninety (90) days immediately preceding the last day of the applicable performance period, and (y) with respect to the AOUT PSU, (1) the market
cap of AOUT as compared to the RUT for the first ninety (90) days after the date of grant, as compared to (2) the combined market cap of SWBI and AOUT as compared to the RUT for ninety (90) days immediately preceding the last day of
the applicable performance period. 
 Section 3.5 Tax Withholding, Reporting, and Deductions. 

(a) The appropriate member of the SWBI Group shall be responsible for all payroll taxes, withholding, and reporting with respect to SWBI
Equity Awards held by SWBI directors, SWBI Employees and SWBI Former Employees. The appropriate member of the AOUT Group shall be responsible for all payroll taxes, withholding, and reporting with respect to AOUT Equity Awards held by AOUT
directors, AOUT Employees and AOUT Former Employees. SWBI and AOUT hereby designate the other party as an agent for withholding pursuant to IRS Revenue Procedure 70-6 and to accept such designation to
effectuate the intent of this Section 3.5(a). 
 (b) With respect to the SWBI Equity Awards held by SWBI Employees
or SWBI Former Employees, the appropriate member of the SWBI Group shall claim any federal, state, and/or local tax deductions after the Distribution Time, and no member of the AOUT Group shall claim any such deductions. With respect to the SWBI
Equity Awards held by AOUT Employees or AOUT Former Employees, the appropriate member of the AOUT Group shall claim any federal, state, and/or local tax deductions after the Distribution Time, and no member of the SWBI Group shall claim any such
deductions. If either SWBI or AOUT determines in its reasonable judgment that there is a substantial likelihood that a tax deduction that was assigned to the SWBI Group or the AOUT Group pursuant to this Section 3.5(b) will
instead be available only to the other Party (whether as a result of a determination by the IRS or another tax authority, a change in the Code or the regulations or guidance thereunder, or otherwise), it shall notify the other Party and both Parties
will negotiate in good faith to resolve the issue in accordance with the following principle: the Party entitled to the deduction shall pay to the other Party an amount that places the other Party in a financial position equivalent to the financial
position the Party would have been in had the Party received the deduction as intended under this Section 3.5(b). Such amount shall be paid within 90 days after filing the last tax return necessary to make the determination
described in the preceding sentence. 
 (c) Upon the exercise of an SWBI Option or AOUT Option, the exercise price of such stock option
shall be remitted in cash by the option administrator to the issuer of the option (the appropriate member of the SWBI Group or the AOUT Group, as applicable) and the applicable withholding taxes shall be remitted in cash by the option administrator
to the entity (the appropriate member of the SWBI Group or the AOUT Group, as applicable) responsible for payroll taxes, withholding, and reporting with respect to the option pursuant to this Section 3.5. Upon vesting or
payment, as applicable, of SWBI or AOUT RSUs or PSUs, the applicable withholding shall be remitted in cash by the administrator to the entity (the appropriate member of the SWBI Group or the AOUT Group, as applicable) responsible for payroll taxes,
withholding, and reporting with respect to such awards pursuant to this Section 3.5. To the extent necessary to provide the withholding amount in cash to the entity responsible for payroll taxes, withholding, and reporting,
the issuer of the applicable award shall provide the withholding amount in cash. Notwithstanding the foregoing, the method of remittance of the exercise price of any stock option or any applicable withholding taxes may vary for legal or
administrative reasons. 
 (d) If SWBI or AOUT determines in its reasonable judgment that any action required under this Article 3
will not achieve the intended tax, accounting, and legal results, including, without limitation, the intended results under Code Section 409A or FASB ASC Topic 718 – Stock Compensation, then at the request of SWBI or AOUT, as applicable,
SWBI and AOUT shall mutually cooperate in taking such actions as are necessary or appropriate to achieve such results, or most nearly achieve such results if the originally intended results are not fully attainable. 

  
 14 

 (e) SWBI and AOUT each acknowledges and agrees to use commercially reasonable efforts to
cooperate with each other and with third-party providers to effect withholding and remittance of Taxes, as well as required tax reporting, in a timely, efficient, and appropriate manner to further the purposes of this Article 3 and to
administer all equity awards that are outstanding immediately following the Distribution Time (including all such equity awards that are adjusted in accordance with this Article 3) to the extent consistent with this Agreement and Applicable
Law, for as long as is reasonably necessary to further the purposes of this Article 3. 
 ARTICLE 4 

LABOR AND EMPLOYMENT MATTERS 

Section 4.1 Payroll Reporting and Tax Withholding. 

(a) Form W-2 Reporting. To the extent an Employee’s employing entity changes as a result
of the transactions contemplated by the Separation and Distribution Agreement, SWBI and AOUT shall use the “standard procedure” for preparing and filing IRS Forms W-2 (Wage and Tax Statements), as
described in Revenue Procedure 2004-53, for the calendar year in which such change occurs. Under this procedure, each employing entity shall provide (subject to any applicable provisions of the Transition
Services Agreement) all required Forms W-2 to report the wages paid and taxes withheld by it during the year in which the Distribution Time occurs. With respect to any issuances of SWBI Common Stock or AOUT
Common Stock described above, the Employee’s employing entity shall reflect such issuance and taxes withheld in connection with such issuance on the Form W-2 provided to such Employee by such employing
entity during the year in which such issuance occurs. With respect to SWBI Employees and AOUT Employees outside of the United States, the Parties shall cooperate in good faith to obtain the same or similar results, to the extent possible, under
applicable tax laws. 
 (b) Garnishments, Tax Levies, Child Support Orders, and Wage Assignments. With respect to any Employees with
garnishments, tax levies, child support orders, or wage assignments in effect immediately prior to the Distribution Time, a member of the AOUT Group (with respect to AOUT Employees) or a member of the SWBI Group (with respect to SWBI Employees)
shall, to the extent permitted by Applicable Law, honor such payroll deduction authorizations and shall continue to make payroll deductions and payments to the authorized payee, as specified by the court or governmental order which was filed prior
to the Distribution Time. 
 (c) Authorizations for Payroll Deductions. Unless otherwise prohibited by this Agreement, any other
Ancillary Agreement, a Plan document, or Applicable Law, with respect to Employees with authorizations for payroll deductions and direct deposits in effect immediately prior to the Distribution Time, a member of the AOUT Group (with respect to AOUT
Employees) or a member of the SWBI Group (with respect to SWBI Employees) shall honor such payroll deduction authorizations and shall not require that such Employee submit a new authorization to the extent that the type of deduction does not differ
from that made prior to the Distribution Time. Such deduction types include, without limitation, contributions to any Plan and direct deposit of payroll, employee relocation loans, and other types of authorized company receivables usually
collectible through payroll deductions. 
 Section 4.2 Employment Policies and Practices. Subject to the provisions of the
Transition Services Agreement, ERISA, and other Applicable Law, and unless otherwise specified in this Agreement, each member of the AOUT Group and the SWBI Group may, after the Distribution Time, adopt, continue,

  
 15 

 
modify, or terminate such employment policies, compensation practices, retirement plans, welfare benefit plans, and other employee benefit plans of any kind or description, as each may determine,
in its sole discretion, are necessary and appropriate, with respect to AOUT Employees and SWBI Employees, respectively. 
 Section 4.3
Leave of Absence Policies. Following the Distribution Time, the applicable members of the AOUT Group shall continue to apply the leave policies applicable to inactive AOUT Employees who are on an approved leave of absence as of the
Distribution Time in accordance with the terms of such policies applicable to the AOUT Employees as of the Distribution Time. For purposes of such policies, to the extent allowed under Applicable Law, leaves of absence taken by AOUT Employees prior
to the Distribution Time shall be deemed to have been taken as employees of the AOUT Group. 
 Section 4.4 Employee Records. The
SWBI Group shall provide to the AOUT Group (a) any and all employment records and information (including, but not limited to, any personnel files, Form I-9, Form
W-2, Form 1099, or other IRS forms) with respect to the AOUT Employees that are in the possession of any member of the SWBI Group that are reasonably required by the AOUT Group to enable the AOUT Group to
properly employ the AOUT Employees and to carry out its obligations under this Agreement and Applicable Law (“Employee Record”); and (b) copies of any and all employment-related agreements, including, but not limited to,
confidentiality agreements, restrictive covenants, arbitration agreements and employment-related acknowledgements to which any SWBI Employee is a party and under which the AOUT Group has any rights or obligations following the Distribution Time.

 Section 4.5 WARN Act. The Parties shall cooperate in good faith so that no terminations of employment in connection with the
transactions contemplated or undertaken by this Agreement or the Separation and Distribution Agreement have triggered or shall trigger any rights or obligations under the federal Worker Adjustment and Retraining Notification Act, or any other
federal, state, or local Applicable Law addressing employment separations (collectively, the “WARN Act”). 

Section 4.6 Access to Employee Records. Following the Distribution Time and to the extent permitted by Applicable Law, AOUT shall
permit SWBI access to Employee Records of AOUT Employees, to the extent reasonably necessary for SWBI’s legitimate business purposes or to comply with Applicable Law, and SWBI shall permit AOUT access to Employee Records of SWBI Employees, to
the extent reasonably necessary for AOUT’s legitimate business purposes or to comply with Applicable Law. 
 Section 4.7
Protection of Personal Information. The Parties shall comply with all applicable confidentiality obligations and privacy laws that govern the personal information shared or otherwise made accessible following the Distribution Time. Each Party
further agrees to use commercially reasonable efforts to protect any personal information of the other Party that it acquires or accesses following the Distribution Time. 

ARTICLE 5 
 MISCELLANEOUS

 Section 5.1 Relationship of Parties. Nothing in this Agreement shall be deemed or construed by the Parties or any third
party as creating the relationship of principal and agent, partnership, or joint venture between the Parties, it being understood and agreed that no provision contained herein, and no act of the Parties, shall be deemed to create any relationship
between the Parties other than the relationship set forth herein. 
 Section 5.2 Access to Information; Cooperation. The SWBI
Group, the AOUT Group, and their authorized agents shall be given reasonable and timely access to and may take copies of all information 

  
 16 

 
relating to the subjects of this Agreement (to the extent not prohibited by Applicable Law) in the custody of the other Party, including any agent, contractor, subcontractor, or any other Person
under the contract of such Party. The Parties shall provide one another with such information within the scope of this Agreement as is reasonably necessary to administer each Party’s Plans or take the actions required of such Party under this
Agreement. The Parties shall cooperate with each other to minimize the disruption caused by any such access and providing of information. 

Section 5.3 Complete Agreement. This Agreement and any related provisions of the Transition Services Agreement and the Separation
and Distribution Agreement shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments, and writings with respect to such subject matter. 

Section 5.4 Counterparts. This Agreement may be executed in more than one counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party. 

Section 5.5 Survival. Except as otherwise contemplated by this Agreement or any Ancillary Agreement, all covenants and agreements
of the Parties contained in this Agreement shall survive the Distribution Time and remain in full force and effect in accordance with its applicable terms. 

Section 5.6 Notices. All notices, requests, claims, demands, and other communications under this Agreement shall be in writing and
shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, or by registered or certified mail (postage prepaid, return receipt requested) to the respective Party at
the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 5.6): 
  

			
	 To SWBI:

	
	 Smith & Wesson Brands, Inc.

	 2100 Roosevelt Avenue

	 Springfield, Massachusetts 01104

	 Email:
	  	rcicero@smith-wesson.com
	 Attn:
	  	General Counsel
	
	 with a copy to:

	
	 Greenberg Traurig, LLP

	 2375 East Camelback Road, Suite 700

	 Phoenix, Arizona 85016

	 Email:
	  	kantr@gtlaw.com
		  	beckk@gtlaw.com
	 Attn:
	  	Robert S. Kant
		  	Katherine A. Beck
	
	 To AOUT:

	
	 American Outdoor Brands, Inc.

	 1800 North Route Z

	 Columbia, Missouri 65202

	 Email:
	  	dbrown@aob.com
	 Attn:
	  	Chief Counsel

  
 17 

			
	 with a copy to:

	
	 Greenberg Traurig, LLP

	 2375 East Camelback Road, Suite 700

	 Phoenix, Arizona 85016

	 Email:
	  	kantr@gtlaw.com
		  	beckk@gtlaw.com
	 Attn:
	  	Robert S. Kant
		  	Katherine A. Beck

 Section 5.7 Waivers. The failure of any Party to require strict performance by the other Party of
any provision in this Agreement shall not waive or diminish that Party’s right to demand strict performance thereafter of that or any other provision hereof. 

Section 5.8 Amendment. This Agreement may not be modified or amended except by an agreement in writing signed by each of the
Parties. 
 Section 5.9 Assignment. Except as otherwise provided for in this Agreement, this Agreement shall not be assignable,
in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided, that a
Party may assign this Agreement in connection with a merger transaction in which such Party is not the surviving entity or the sale by such Party of all or substantially all of its assets; provided, further, that the surviving entity of such merger
or the transferee of such assets shall agree in writing, reasonably satisfactory to the other Party, to be bound by the terms of this Agreement as if named as a Party hereto. 

Section 5.10 Successors and Assigns. The provisions of this Agreement and the obligations and rights hereunder shall be binding
upon, inure to the benefit of, and be enforceable by (and against) the Parties and their respective successors and permitted transferees and assigns. 

Section 5.11 No Circumvention. The Parties agree not to directly or indirectly take any actions, act in concert with any Person
who takes an action, or cause or allow any member of any such Party’s Group to take any actions (including the failure to take a reasonable action) such that the resulting effect is to materially undermine the effectiveness of any of the
provisions of this Agreement. 
 Section 5.12 Third Party Beneficiaries. This Agreement is solely for the benefit of the Parties
and should not be deemed to confer upon third parties (including current or former employees of the Parties) any remedy, claim, liability, reimbursement, right of action, or other right in excess of those existing without reference to this
Agreement. Without limiting the generality of the foregoing, nothing contained in this Agreement (i) shall be construed to establish, amend, or modify any Plan or other benefit or compensation plan, program, agreement, or arrangement, or
(ii) create any rights or obligations in any Person not Party to this Agreement (including any SWBI Employee or AOUT Employee), including with respect to (x) any right to employment or continued employment or to a particular term or
condition of employment and (y) the ability of the SWBI Group and the AOUT Group to amend, modify, or terminate any Plan or other benefit or compensation plan, program, agreement, or arrangement at any time established, sponsored, or maintained
by any of them. 
 Section 5.13 Title and Headings. Titles and headings to sections herein are inserted for the convenience of
reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 

  
 18 

 Section 5.14 Governing Law. This Agreement shall be interpreted and construed in
accordance with the laws of the State of Delaware. Any and all claims, controversies, and causes of action arising out of or relating to this Agreement, whether sounding in contract, tort, statute, or otherwise, shall be governed by the laws of the
State of Delaware, including its statutes of limitations, without giving effect to any conflict-of-laws or other rule that would result in the application of the laws of
a different jurisdiction. 
 Section 5.15 Non-Solicitation. During the 24-month period following the Distribution Time (the “Restricted Period”), SWBI shall not solicit or induce or attempt to solicit or induce any AOUT Employee or independent contractor of AOUT to
terminate his or her relationship with AOUT. This restriction shall not prevent SWBI from placing public advertising or conducting any other form of general public solicitation that is not targeted towards AOUT Employees or independent contractors
of AOUT, or from hiring any AOUT Employee or independent contractor of AOUT who responds to such a public solicitation. During the Restricted Period, AOUT shall not solicit or induce or attempt to solicit or induce any SWBI Employee or independent
contractor of SWBI to terminate his or her relationship with SWBI. This restriction shall not prevent AOUT from placing public advertising or conducting any other form of general public solicitation that is not targeted towards SWBI Employees or
independent contractors of SWBI or from hiring any SWBI Employee or independent contractor of SWBI who responds to such a public solicitation. 

Section 5.16 Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid,
illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good-faith negotiations
to replace the invalid, illegal, or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal, or unenforceable provisions. 

Section 5.17 Interpretation. The Parties have participated jointly in the negotiation and drafting of this Agreement. This
Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the Party drafting or causing any instrument to be drafted. 

Section 5.18 No Duplication; No Double Recovery. Nothing in this Agreement is intended to confer to or impose upon any Party a
duplicative right, entitlement, obligation, or recovery with respect to any matter arising out of the same facts and circumstances. 

[Signature Page Follows] 

  
 19 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of
the day and year first above written. 
  

			
	SMITH & WESSON BRANDS, INC.
		
	By:	 	/s/ Mark P. Smith
	 Name:
	 	 Mark P. Smith

	 Title:
	 	 President and Chief Executive Officer

	
	AMERICAN OUTDOOR BRANDS, INC.
		
	By:	 	/s/ Brian D. Murphy
	 Name:
	 	 Brian D. Murphy

	 Title:
	 	 President and Chief Executive Officer

  
 Signature Page to
Employee Matters AgreementEX-10.124

 Exhibit 10.124 

TRADEMARK LICENSE AGREEMENT 

This TRADEMARK LICENSE AGREEMENT (the “Agreement”) is entered into and made effective on this 24th day of August, 2020, the (“Effective Date”) by and between Smith & Wesson Inc., a Delaware corporation having a place of business at 2100 Roosevelt
Avenue, Springfield, Massachusetts 01104 (“S&W” or “Licensor”) and AOB Products Company, a Delaware corporation having a place of business at 1800 North Route Z, Columbia, Missouri 65202
(“Licensee”). Each of S&W and Licensee may be referred to herein as a “party” and collectively they may be referred to herein as the “parties.” 

Background: 
 A. S&W owns certain
trademarks for use on and in connection with firearms, apparel, accessories and other products; 
 B. Licensee is engaged in the business of
manufacturing, selling and sourcing accessories, apparel and other products, and desires to engage in the development, design, manufacture, sourcing, marketing, advertising, promoting, merchandising, shipment, distribution and sale of certain
products as identified in Schedule A bearing one or more of S&W’s trademarks; 
 C. Subject to and conditional upon
Licensee’s compliance with the terms and conditions of this Agreement, S&W agrees to grant to Licensee a license to use certain of S&Ws trademarks solely as set forth herein. 

NOW THEREFORE, in consideration of the above premises and the mutual covenants and undertakings of the parties hereunder, S&W and Licensee
agree as follows: 
 1. Definitions; Interpretation. 

1.1 Defined Terms. As used in this Agreement, the following terms will have the following meanings: 

“Affiliate” means any entity that now or hereafter directly, or indirectly, through one or more intermediaries, Controls
(defined below), or is Controlled by, or is under common Control with, a party. 
 “Applicable Law” means all applicable
statutes, laws, regulations, ordinances, executive orders, rules, judgments, orders, decrees, directives, guidelines (to the extent mandatory), policies (to the extent mandatory) and other similar directives, whether now or hereafter in effect, of
any federal, state, or local or foreign government, any political subdivision, and any governmental, quasi-governmental, judicial, public, or statutory instrumentality, administrative agency, authority, body, or other entity having jurisdiction over
S&W, Licensee or the Licensed Products. 
 “Channels of Distribution” means only those channels of distribution
identified in Schedule A. 
 “Confidential Information” means any and all information proprietary to one of the
parties hereto, whether or not reduced to writing or other tangible medium of expression, and whether or not patented, patentable, capable of trade secret protection or protected as an unpublished or published work under the copyright laws.
Confidential Information includes the terms of this Agreement (but not the existence of this Agreement), information relating to Intellectual Property and to business plans, financial matters, products, services, manufacturers, manufacturing
processes and methods, costs, sources of supply, strategic marketing plans, customer lists, sales, profits, pricing methods, personnel and business relationships. Confidential Information shall not include any information that: (i) was already
known to the receiving party prior to its relationship with the disclosing party, as established by the receiving party’s written records; (ii) becomes 

 
generally available to the public other than as a result of the receiving party’s breach of this Agreement; (iii) is furnished to the receiving party by a third party who is lawfully in
possession of, and who lawfully conveys, such information; (iv) is subsequently developed by the receiving party independently of the information received from the disclosing party, as established by the receiving party’s written records;
or (v) is ordered to be disclosed by a court or regulatory body of competent jurisdiction. Should either party be served with a request to disclose Confidential Information in a judicial or regulatory body proceeding, it will not do so before
notifying the other party in writing within ten (10) days as to provide such party the opportunity to object to the disclosure to the court or regulatory body. Nothing in this paragraph is intended to cause either party to disobey a court or
other lawful order or requirement. 
 “Control” means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person (defined below), whether through the ownership of voting securities, by contract or otherwise, in each case as interpreted under Rule 12b-2 of the
Securities Exchange Act of 1934, as amended. 
 “Intellectual Property” means all rights, title and interests pertaining to
or arising from patents, copyrights, trade secrets, trademarks, trade dress, rights of publicity, and all similar rights throughout the world and however denominated; all domain names; all rights and interests arising from information relating to
research and development, product design, materials, manufacturing techniques, supply and distribution arrangements, marketing and advertising plans and materials, pricing and other financial information; and all rights and interests arising from
inventions, discoveries, improvements, methods and processes, know how, algorithms, compositions, works of authorship, concepts, designs, styles, graphics, images, ideas, prototypes, writings, notes and patent applications, and all such rights and
interests without regard to whether or not patentable or capable of trade secret or copyright protection. 
 “Licensed
Products” means only those products in the product categories as defined in Schedule A.  
 “Licensed
Trademarks” mean only those trademarks, used either separately or in conjunction with each other, in the form set forth in Schedule A, and all goodwill associated with such marks existing as of the Effective Date, and all goodwill
arising thereafter whether such goodwill arises from the activities of S&W or Licensee. 
 “Net Sales” means the
aggregate amount booked as sales, billed, invoiced or received (whichever comes first) by Licensee for sales or other transfers of Licensed Products in arm’s length transactions in the Territory, less (i) promotional markdowns,
(ii) reasonable quantity discounts actually granted to the extent customarily granted to Licensee’s customers based on volume, (iii) customer returns actually credited, (iv) to the extent separately stated on purchase orders,
invoices or other documents of sale, any duties, taxes and/or other governmental fees or charges levied on the production, sale, transportation, delivery or use of the Licensed Products and paid by or on behalf of Licensee, and (v) reasonable
charges for delivery or transportation provided by third parties, if separately stated on purchase orders, invoices or other documents of sale. No deductions in Net Sales may be made for: (vi) cash or other discounts (except as stated above);
(vii) commissions; (viii) uncollectable accounts; (ix) taxes, fees, assessments, impositions, payments or expenses of any kind that may be incurred or paid by Licensee in connection with the royalty payments due to S&W hereunder or in
connection with the transfer of funds or royalties or with the conversion of any currency into United States dollars; or (x) any costs incurred in the research, design, development, manufacture, sourcing, offering for sale, sale, advertising,
promotion, shipment, distribution or exploitation of the Licensed Products. In the event that any Licensed Products are sold other than in an arm’s length transaction, then Net Sales shall be deemed to be the Net Sales which would have been
applied under this Agreement had such sale been to an independent arm’s length purchaser. For purposes of determining royalties owed under this Agreement, Net Sales (A) shall not include the sale or distribution of Licensed Products to
Licensor or to an Affiliate of Licensor (excluding the Licensee); and (B) shall not include the sale and distribution of products acquired by Licensee from third-parties which are the subject of (i.e., licensed products under) a royalty-bearing
license between a third party and Licensor. 

 “Person” means any natural person, sole proprietorship, partnership,
corporation, limited-liability company, firm or other entity. 
 “S&W Intellectual Property” means (i) the S&W
Trademarks; (ii) any marketing, advertising or promotional materials and any packaging referencing or containing any Licensed Product developed or created by S&W, including but not limited to domain names; (iii) all Intellectual
Property owned by S&W prior to the Effective Date and all Intellectual Property independently created by S&W; (iv) all Intellectual Property of or relating to the Smith & Wesson, M&P, Performance Center, Thompson/Center and
Gemtech brands and their associated products, as well as any other brand now or in the future owned by S&W; (v) all Intellectual Property created during the Term of this Agreement that is identified with S&W’s core firearm business
(including firearms, firearm parts, magazines and suppressors) with or without a S&W Trademark, including any design, graphic, image or style approved by S&W for use, or used, in connection with any Licensed Product hereunder, whether
developed or created by S&W or Licensee or both, that reflects any feature of any S&W product (including firearms, firearm parts, magazines and suppressors), such as a grip, grip texture or palm swell on an accessory or outdoor product; and
(vi) any improvements to or derivatives of any of the foregoing, by S&W or Licensee or both. 
 “S&W
Trademarks” means the Licensed Trademarks and all other Trademarks owned and/or used by S&W and all variations, derivations, stylizations, and versions thereof, as well as any image or depiction of a S&W firearm or other product,
and all goodwill associated with any of the foregoing, whether or not registered in the Territory. 
 “Territory” means
worldwide. 
 “Trademark” means any trademark, trade name, service mark, logo, word, name, symbol, design (including
trade dress) or any combination thereof used or intended to be used to identify or distinguish a Person’s goods or services. 
 2. License;
Restrictions. 
 2.1 Trademark License. Subject to, and conditional upon Licensee’s compliance with, the terms and conditions of this
Agreement, including the rights retained by S&W pursuant to Section 2.2 below, and except as otherwise set forth in this Agreement, S&W hereby grants to Licensee a limited, non-transferable,
exclusive right and license to use the Licensed Trademarks in the Territory and during the Term solely in connection with the manufacture, distribution, marketing, advertising, promotion, merchandising, shipping, and sale of the Licensed Products
within the Channels of Distribution (the “Trademark License”) as further set forth in Schedule A, provided that Licensee’s right and license to use S&W Trademarks relating to the business of the Gemtech brand shall be non-exclusive, and S&W reserves the right to use any Licensed Trademarks in connection with Licensed Products in order for S&W and its affiliates to market and sell any products purchased from AOB Products
Company under the Supply Agreement dated as of _______, 2020, between AOB Products Company and S&W (“Supply Agreement”) and for S&W and its affiliates to use or permit the use of any Licensed Trademark to otherwise exercise
S&W’s rights under such Supply Agreement or the Supply Agreement dated as of August 24, 2020, between Crimson Trace Corporation and S&W, including rights with respect to “Co-Branded
Products” and “Promotional Products” as defined in such agreements. Licensee shall not use the Licensed Trademarks except as expressly stated in this Agreement. Notwithstanding the foregoing, for any items that are normally included
in a S&W Bill of Materials, S&W may sell, ship, distribute or use any Licensed Products or similar products to manufacture, or fulfill customer orders for parts for products sold by S&W, or for any customer service purpose other than
general retail sales of Licensed Products. Notwithstanding anything in this Agreement to the contrary, S&W may manufacture, directly or through an Affiliate, or purchase from a third party, any “Promotional Products” (as herein
defined). “Promotional Products” shall mean any products that will be used by S&W or any 

 
Affiliate for promotional purposes or giveaway purposes, and not directly tied to a revenue generating transaction. Licensee’s exclusive rights hereunder, the first offer provisions of
Section 2.2 and any other restrictions in this Agreement shall not apply to Promotional Products. Except to the extent that Licensee’s rights are non-exclusive, or that S&W otherwise reserves
rights with respect to the Licensed Trademarks under this Agreement, during the term of this Agreement, S&W shall not license any third party to use the Licensed Trademarks for the manufacture or sale of any product in any product category
listed in Schedule A-1. All rights not granted to Licensee in this Agreement are reserved by and to S&W. 
 2.2
First Offer for New Licenses. From time to time, S&W may wish to license the Licensed Trademarks to third parties for the purpose of selling products that are not identified as Licensed Products in Schedule A. In such cases, except
as hereinafter provided or for those rights reserved by S&W pursuant to Section 2.1, S&W shall first notify Licensee of the license opportunity. If within fourteen (14) days after such notification, Licensee notifies S&W that
Licensee is interested in such a license opportunity, then for thirty (30) days thereafter, the parties shall negotiate in good faith a mutually acceptable license agreement. If Licensee fails to timely notify S&W of Licensee’s
interest in such a license opportunity, or the parties fail to reach agreement on a mutually acceptable license agreement for such license within the time frames designated herein, S&W shall be free to enter into a license agreement with any
third party for such a license. This Section applies only to third party licenses, and nothing in this Agreement shall prevent S&W, directly or through an Affiliate, from manufacturing or selling any products not identified as a Licensed Product
in Schedule A under any Licensed Trademark. Notwithstanding the foregoing, this Section shall not apply to, and Licensee shall have no rights under this Section with respect to, any trademark license in effect on the date of this agreement
with any third party licensee, or to any renewal, extension or modification of any such license agreement. 
 3. Use of Licensed Trademarks and Patents.

 3.1 Prohibited Uses. During the Term and at all times thereafter, Licensee shall not use any of the Licensed Trademarks for any purpose other
than as trademarks for the Licensed Products. 
 3.2 Use of Intellectual Property (Other Than S&W Intellectual Property) in Connection with the
Licensed Products. Licensee shall be solely responsible for ensuring that any Intellectual Property (other than S&W Intellectual Property) proposed for use in connection with a Licensed Product does not infringe the Intellectual Property of
any Person. 
 3.3 Marking. 
 Licensee shall comply
with S&W’s trademark usage guidelines, including all modifications and updates thereto, as are communicated in writing by S&W to Licensee by Licensor from time to time, and shall place and display the Licensed Trademarks on and in
connection with the Licensed Products only in such form and manner as comply with such trademark usage guidelines. Without limiting the foregoing, S&W specifically requires Licensee to cause the Licensed Trademarks to appear on, and in
connection with, all Licensed Products in the form set forth in Schedule A. Licensee shall also cause to appear on the Licensed Products and on (i) their containers, packaging, labels, tags, and the like, (ii) all Promotional
Materials (defined below) and (iii) all stationery, business cards, invoices and other transaction documents and business materials which display any of the Licensed Trademarks, such other legends, markings and notices as may be required by law
or regulation in the Territory or as S&W may reasonably request. 
 4. Registration and Licensing. 

Licensee shall cooperate with S&W in any effort by S&W to register or otherwise establish or perfect its ownership of any S&W Trademark or S&W
Intellectual Property applications that S&W may desire to file, and shall execute all documents and perform such acts as S&W may from time to time reasonably request in connection therewith. 

 5. Infringements. 

Licensee shall inform S&W as soon as practicable but not more than 14 days after learning of any goods or activities that infringe (or may infringe) the
Licensed Trademarks, or learns of any other infringement or misappropriation of the Licensed Trademarks now or hereafter owned by S&W. Licensee shall provide complete information, cooperation and assistance to S&W concerning each such
infringement (including reasonable cooperation and assistance in any further investigation or legal action, such as joining as a party to any lawsuit brought by S&W). Upon learning of such infringement, S&W will have the right, but not the
obligation, at its sole discretion and expense, to take such action as S&W considers necessary or appropriate to enforce S&W’s rights, including legal action to suppress or eliminate such infringement or to settle any such dispute or
action. S&W may also seek and recover all costs, expenses, and damages resulting from such infringement, including sums that might otherwise be recoverable by or due to Licensee by operation of law or otherwise, and Licensee shall have no right
to share in any amounts recovered by S&W. Licensee shall have no authority to enforce the rights of S&W by itself, nor shall Licensee have any right to demand or control action by S&W to enforce such rights. 

6. License Royalties. 
 6.1 Royalties. Licensee
shall pay to S&W on a fiscal quarterly basis a 5% ongoing aggregate royalty based on Net Sales by Licensee or any Affiliate of Licensee of the Licensed Products within the Territory for Licensed Trademarks, provided that Licensee shall pay
S&W a minimum quarterly royalty of $150,000. 
 6.2 Royalty Reports. Not later than thirty (30) days after the end of each fiscal quarter,
Licensee shall deliver to S&W a report in a format to be approved in advance by S&W containing at least the following information: 
  

	 	(a)	 a detailed written accounting of Licensed Products sold or otherwise disposed of during the immediately
preceding quarter in the Territory, the Net Sales for such quarter and the amount of royalties due for such quarter (the “Accounting Statement”), including a breakout of each type of Licensed Product sold by product segment, applicable
country and customer type (e.g., Internet, Brick & Mortar, Catalog, etc.); 

  

	 	(b)	 a summary of the Licensed Products sold and royalties paid during the then-current Product Year;

  

	 	(c)	 a certified statement by Licensee that the report is complete and accurate. 

Notwithstanding the foregoing sentences, S&W reserves the right to require Licensee to provide additional financial reporting information as requested by
S&W in its reasonable discretion. 
 6.3 Payment. Together with each quarterly royalty report, Licensee shall remit full and satisfactory payment
of royalties due to S&W for the immediately preceding fiscal quarter not later than thirty (30) days after the end of such quarter. Such payments shall be made by wire transfer, corporate check (subject to collection), or other method
approved by S&W, at the election of S&W. If there is a dispute as to an amount due, Licensee shall not delay payment on undisputed amounts pending resolution of the disputed amount. When overdue, such payments shall bear interest at an
annual rate of ten percent (10%) (or such lower rate as may then be the highest rate legally available) from the time such payment is due until payment is received by S&W. 

6.4 Taxes. Licensee shall withhold from any royalty payments pursuant to this Agreement any sums required to be withheld on behalf of S&W under the
applicable tax laws of the Territory, provided, however, that Licensee 

 
shall reasonably cooperate with S&W to obtain reduction or relief from any such withholding obligation. Licensee shall pay such sums as are required to be withheld to the appropriate tax
authorities and shall furnish S&W with the official tax receipt or other appropriate evidence of payment issued by such authorities. 
 6.5 Payments
Upon Termination. If this Agreement is terminated for any reason before all payments hereunder have been made, Licensee shall within thirty (30) days thereafter submit a report and pay to S&W any remaining unpaid royalties accrued
during the period prior to such termination. 
 7. Records and Audit Rights. 

Licensee shall keep complete, true and accurate records of all operations relating to its performance hereunder, payments, marketing related expenditures and
Licensed Product quality standards and make such records available for inspection by Licensor upon Licensor’s reasonable request. 
 8. Proprietary
Rights. 
 The S&W Intellectual Property, and Licensed Trademarks (including all registrations and applications therefor and all goodwill associated
therewith), are and will remain the property of S&W, solely and exclusively, and may be used by Licensee solely for the Licensed Products subject to all of the terms and conditions of this Agreement. Licensee acknowledges and agrees that it
has not acquired, and shall not acquire (whether by operation of law, by this Agreement or otherwise), any right, title, interest or ownership in or to the S&W Intellectual Property or Licensed Trademarks or any part thereof (all of the
foregoing collectively, “Proprietary Rights”). Licensee shall not register any S&W name or other S&W Trademarks, or any confusingly similar variation, as an internet domain name. Licensee may request that S&W register a domain
name that uses the S&W name or other S&W Trademarks for use by Licensee during the term of, and in accordance with, this Agreement. Notwithstanding the foregoing, during the Term of this Agreement and any
Sell-Off Period (defined further below), solely as set forth in Section 12.6, Licensee may use the S&W name or other S&W Trademarks at the end of a domain name solely for the purpose of
identifying the location of the Licensed Products on a website. Licensee specifically acknowledges and agrees that S&W is the owner of all Proprietary Rights, including but not limited to copyright rights, in S&W Intellectual Property.
Should any Proprietary Rights become vested in Licensee, Licensee hereby assigns any such Proprietary Rights to S&W at no cost. Licensee shall provide and execute all documents necessary, in S&W’s sole discretion, to effectuate and
record each such assignment. Licensee shall not, during the Term or at any time thereafter: (i) do anything that, in S&W’s sole discretion, could in any way damage, injure or impair the validity, subsistence, or reputation of the
Licensed Trademarks; (ii) use any mark, trade name, trade dress, logo, design or style that is confusingly similar to the Licensed Trademarks; or (iii) attack, dispute or challenge the ownership, validity or enforceability of the Licensed
Trademarks, the validity of this Agreement, nor shall Licensee assist others in so doing. All use of the Licensed Trademarks and all goodwill and benefit arising from such use shall inure to the benefit of S&W, solely and exclusively. Without
limiting any of the foregoing provisions regarding S&W’s rights as to S&W Intellectual Property, during the Term of this Agreement, Licensee shall not sell, as a product not branded with an S&W Trademark, any products that are
substantially similar to any Licensed Products. 
 9. Term; Termination. 

9.1 Initial Term and Renewal Terms. This Agreement will commence on the Effective Date and, will continue in full force and effect for five
(5) years from the Effective Date (the “Initial Term”), unless earlier terminated in accordance with this Section 9. 
 9.1.1. This
Agreement shall automatically renew for a subsequent five-year term (the “First Renewal Term”), provided that if Licensee did not satisfy the performance metrics set forth on Schedule B hereto (the “Performance Metrics”)
for the Initial Term, S&W may provide written notice of nonrenewal for failure to meet 

 
the Performance Metrics within 30 days following the end of the Initial Term and, following such notice, this Agreement shall not renew for a First Renewal Term but shall instead continue for a
period of twelve (12) months from the last day of the Initial Term. After the First Renewal Term, the parties may agree in writing to one or more five-year renewal terms, provided, however, that unless the parties have so agreed to any such
additional renewal terms, this Agreement shall continue on a month-to-month basis, and may be terminated by either party at any time by giving twelve
(12) months’ written notice to the other party. 
 9.1.2. In addition to the conditions on renewal set forth in Section 9.1.1, if either
party wishes to modify the Royalty Rate, commencing on or after ten (10) years from the Effective Date, then not later than six (6) months prior to the expiration of the First Renewal Term, or of any subsequent five-year renewal term to
which the parties may agree pursuant to Section 9.1.1, the parties shall engage in good faith discussions regarding such new Royalty Rate, and if the parties are unable to agree on a new Royalty Rate, the parties will engage an independent
third party (“ITP”) to set the new Royalty Rate based off the industry average rate. 
 Upon determination of such new Royalty Rate by the ITP,
such Royalty Rate shall be the Royalty Rate under Section 6.1 of the Agreement, starting with the five-year renewal term as to which the modified rate was requested and continuing thereafter, provided, if either party does not agree with the
rate determined by the ITP, such party may elect to not extend the Agreement and this Agreement shall not renew for such five-year renewal term, but shall instead continue for a period of twelve (12) months from the last day of the preceding
renewal term at the same Royalty Rate of such preceding renewal term. 
 The cost of the ITP shall be paid by the Party that does not wish to extend the
Agreement, or split equally between the parties if the Agreement is extended. For avoidance of doubt, the parties agree that the royalty rate adjustment is not a one-time event, and may be renegotiated at the
end of each renewal after the First Renewal Term. 
 9.1.3 Notwithstanding the foregoing, S&W may terminate this Agreement and purchase the assets of
the business line selling the Products (the “Business”) at any time beginning three years from the Effective Date by paying Licensee a purchase price and termination fee equal to two (2) times the net revenues of Licensee from its
sales of Licensed Products for the 12-month period preceding such termination date with an adjustment for net working capital of the Business as of the date of the closing as compared to the target working
capital of the Business calculated using an average over the 12 month period preceding the date Licensor exercises its right to terminate and purchase the Business. 

9.2 Termination for Cause. S&W or Licensee may terminate this Agreement for cause if the other party breaches any of its obligations under this
Agreement and fails to cure such breach within thirty (30) days after receiving notice thereof from the non-breaching party, provided such 30-day period shall be
extended, upon request by the breaching party that is approved in writing by the other party, such approval not to be unreasonably withheld, if such cure cannot reasonably be completed in 30 days as long as the breaching party is diligently pursuing
such cure. 
 9.3 Termination Due to Insolvency. Unless expressly prohibited by Applicable Law, S&W may terminate this Agreement immediately for
cause by providing notice to Licensee if Licensee: (a) commences or becomes the subject of any case or proceeding under the bankruptcy, insolvency or equivalent laws of any country in the Territory; (b) has appointed for it or for any
substantial part of its property a court appointed receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official; (c) makes an assignment for the benefit of its creditors; (d) defaults on any obligation which
is secured, in whole or in part, by a security interest in the Licensed Products; (e) fails generally to pay its debts as they become due; or (f) takes corporate action in furtherance of any of the foregoing (collectively, herein referred
to as “Events of Insolvency”). Licensee shall immediately give S&W written notice of any Event of Insolvency. 

 9.4 No Rights After Term. Licensee understands and acknowledges that, with the exception of its right
to sell Remaining Inventory during the Sell-Off Period under Section 9.6, no rights under this Agreement whatsoever shall extend to Licensee beyond the expiration or termination of this Agreement.
Licensee shall not be entitled to any compensatory payment in connection with the expiration or termination of this Agreement for any reason. 
 9.5
Return of Property. Each party shall return to the other, promptly upon the expiration or termination of this Agreement, or at any other time when requested, any and all property of the other party (including, but not limited to, all
Confidential Information and copies thereof); provided, however, that S&W may retain free of charge any items bearing the Licensed Trademarks, any samples supplied to it under this Agreement and any products supplied to it by Licensee. 

9.6 Inventory Upon Termination or Expiration. 

(a) Promptly following expiration or termination of this Agreement, Licensee shall notify S&W in writing detailing any inventory of
Licensed Products remaining upon such expiration or termination (collectively, the “Remaining Inventory”). Licensee may sell-off (“Sell-Off”)
to third parties all or any portion of the Remaining Inventory. The period for such sell-off (the “Sell-Off Period”) shall be the six (6) month period
following the expiration or termination of this Agreement. Licensee’s proposed sell-off arrangements will be subject to S&W’s prior written approval, and shall be subject to Licensee’s
payment of royalties at the percentage rate and on the schedule set forth in Sections 6.1 and 6.2, and compliance with all other restrictions herein on the use of the Licensed Trademarks. 

(b) Upon expiration of the Sell-Off Period, such part of any Remaining Inventory that is not otherwise
sold, up to a maximum of six months’ supply based on the rolling 12 months’ sales through the termination date, shall be purchased by S&W at Licensee’s reasonable cost thereof, and any Remaining Inventory that is not sold must be
provided to S&W free of charge or at S&W’s sole option destroyed. Licensee shall make no claim against S&W in connection therewith. 
 9.7
Surviving Terms. The following terms shall survive termination or expiration of this Agreement: 1, 3.1, 4, 7, 8, 9.5, 9.6, 11, 12, 13, 14, 15 and any other terms, which are expressly, or by their nature are impliedly, intended to survive.
Notwithstanding the foregoing, the provisions of Section 7 (Records and Audit Rights) shall terminate one (1) year following the end of the Sell-Off Period. 

10. Marketing. 
 Licensee shall use its best efforts to
promote and expand the supply of Licensed Products throughout the Territory. Licensee shall comply with S&W’s policies and procedures, as amended from time to time, and communicated in writing to Licensee with respect to intellectual
property, marketing and promotional materials, and approvals. Licensee shall comply with S&W’s policies and procedures for marketing materials, or obtain S&W’s prior written approval, which shall not be unreasonably withheld, for
any advertising, promotional, merchandising and other marketing materials for which Licensee is responsible pertaining to the Licensed Products, including all containers, packaging, labels, tags, advertisements, brochures and the like. Licensee
shall, upon S&W’s request from time to time, provide copies of any such marketing materials to S&W. Licensee shall obtain, in writing, all necessary and applicable approvals in S&W’s chain of command as identified to Licensee
from time to time. 
 11. Quality Control; Distribution; Consumer Inquiries. 

11.1 Approval of Licensed Products. On at least an annual basis, or more frequently as necessary for the introduction of new Licensed Products during
the year, Licensee shall obtain S&W’s prior written approval, 

 
which shall not be unreasonably withheld, of all Licensed Products or any changes to Licensed Products. As requested by Licensor, Licensee will deliver to S&W at no cost for approval by
S&W samples of each Licensed Product, and any material change thereto, prior to Licensee’s production manufacturing, initial presentation, sale or other use of such Licensed Products, and shall otherwise comply with S&W product approval
policies and procedures, as amended from time to time, and communicated in writing to Licensee. Licensee shall obtain, in writing, all necessary and applicable approvals in S&W’s chain of command as identified to Licensee from time to time.

 11.2 Product Standards. Licensee shall assure at all times that the Licensed Products: (a) are of a high quality standard consistent with the
quality of S&W products and otherwise conform to specifications, performance standards and quality standards of Licensee’s other premium positioned products; (b) conform to the samples submitted for approval described above, with
modifications only as approved in writing by S&W; (c) are sourced, manufactured, labeled, distributed, marketed, advertised, promoted and sold in accordance with all Applicable Laws and any S&W codes of conduct or policies as the same
may be modified, supplemented or superseded by S&W from time to time (“S&W Policies”); and (d) meet or exceed all government standards, Applicable Laws, manufacturing codes and the like. Licensee shall have and maintain a
commercially reasonable quality assurance plan acceptable to S&W to assure that the Licensed Products conform to the foregoing requirements, which plan shall be made available for inspection by S&W upon its request. 

11.3 Approval of Third Party Manufacturers/Suppliers. In no event will Licensee permit or engage any person or entity to manufacture or supply a
Licensed Product or components thereof without first following all company policies and procedures relating to due diligence and approval of third-party manufacturers/suppliers. In any event, Licensee shall be fully responsible and liable for the
acts and omissions of any manufacturer, whether or not approved by S&W. 
 11.4 Manufacturing; Supply Chain. S&W shall have the right to
inspect and oversee components of Licensee’s manufacturing and supply chain to the extent necessary to protect the Licensed Trademarks, provided that in lieu of identifying any third party supplier, Licensee shall provide S&W with
information regarding how such supplier was selected and is measured, and such other information requested by S&W regarding the quality standards employed by such supplier, which information shall be reasonably satisfactory to S&W. 

11.5. Distribution. Licensee shall not sell or distribute, and shall not permit any Affiliate of Licensee to sell or distribute, Licensed Products to
any retailer or wholesaler outside the Channels of Distribution. 
 11.6. Consumer Inquiries. Licensee will at its sole cost and expense handle all
product warranty and guarantee/satisfaction issues, response and compliance requirements, as well as all consumer inquiries or complaints relating in any way to any Licensed Product (collectively “Consumer Inquiries”). Licensee shall
keep records of all Consumer Inquiries and shall put in place a quality assurance plan acceptable to S&W for detecting and tracking and resolving quality problems reported to it by consumers. If Licensee learns of any consumer injury or
alleged injury relating to a Licensed Product, Licensee shall promptly notify the Legal Department at S&W. Licensee shall print on all packaging or packaging inserts for any Licensed Product contact information identifying the Licensee as the
manufacturer or distributor (as the case may be) of the Licensed Product, including at least Licensee’s company name, address and email address for consumer inquiries or complaints. 

 12. Representations, Warranties and Additional Covenants. 

12.1 S&W Representations and Warranties. S&W represents and warrants to Licensee that: (a) it is authorized to enter into this Agreement;
(b) it has the right to grant the rights and licenses granted hereunder; and (c) it has not made, and will not make, any commitments to others inconsistent with, or in derogation of, such rights, provided S&W makes no representations
or warranties with respect to any Licensed Trademarks for 
 use with any product outside of any jurisdiction in which and with respect to which such
Licensed Trademark is registered. 
 12.2 Licensee General Representations and Warranties. Licensee represents and warrants to S&W that:
(a) it is authorized to enter into this Agreement; (b) it has not made, and will not make, any commitments inconsistent with, or in derogation of, the rights granted in this Agreement; (c) by entering into and performing under this
Agreement it is not, and shall not be, in conflict with any prior obligations to third parties; (d) the Licensed Products and all associated materials are, and shall be, free from any claims of infringement of any third party’s proprietary
or other intellectual property rights (including trade secret, patent, copyright and trademark rights); (e) the Licensed Products and all associated materials are, and shall be, free from defects in design, material and workmanship and are, and
shall be, safe and suitable for their intended and foreseeable uses; (f) the Licensed Products and all associated materials are, and shall be, free from any claim of product liability; (g) the Licensed Products and all associated materials
shall meet the requirements of all Applicable Laws in the Territory; and (h) Licensee will comply with all S&W Policies for which Licensee has been provided with written notification. 

12.3 Licensee Compliance with Conflict Minerals Laws. Licensee shall ensure that it is able to provide to S&W upon request, information in
sufficient detail (with certifications if requested), to enable S&W to timely comply with all of its diligence, disclosure and audit requirements under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
“Dodd-Frank Act”) and Rule 13p-1 and Form SD under the Securities Exchange Act of 1934, and any similar, applicable statutes and regulations, including due inquiry of Licensee’s suppliers (and
certifications by such suppliers) identifying conflict minerals (as defined in Section 1502(e)(4) of the Dodd-Frank Act) contained in each Licensed Product and the country of origin of such conflict minerals (or, following due inquiry, why such
country of origin cannot be determined). 
 12.4. Licensee Compliance with Anti-Corruption/Anti-Bribery and Import/Export Control Laws. Licensee
shall: (a) comply with all applicable laws and regulations prohibiting corrupt practices and/or bribery, including, but not limited to, the United States Foreign Corrupt Practices Act (“FCPA”) and the United Kingdom Anti-Bribery Act;
(b) comply with all applicable export and import laws and regulations; and (c) not directly or indirectly export, re-export, distribute or transfer any technology, Confidential Information or
materials of any value to any nation, individual or entity that is prohibited or restricted by law or regulation, including, but not limited to, the U.S. Department of State International Traffic in Arms Regulations, the U.S. Department of Commerce
Export Administration Regulations, the U.S. Treasury Office of Foreign Assets Control, and the U.S. Department of State’s State Sponsors of Terrorism designation. Licensee shall provide S&W with such information and certifications as are
from time to time reasonably requested by S&W regarding Licensee’s compliance with all applicable company policies concerning anti-corruption/anti-bribery and/or import/export laws and regulations. 

12.5 Compliance. Licensee shall comply with all Applicable Laws applicable to its sale and use of Licensed Products, and all industry practices,
guidelines or other standards requested by S&W, including any standards relating to privacy and security of personal information and payment card information. 

12.6 Website. During the term of this Agreement, (a) Licensor shall ensure that the website https://www.smith-wesson.com/ and any successor
website that serves as Licensor’s primary website during such time contains a link to Licensee’s website and (b) Licensee shall have the non-exclusive right to use the website domains
https://www.store.smith-wesson.com and https://www.accessories.tcarms.com , which Licensee acknowledges are owned by Licensor, in connection with Licensee’s sale of Licensed Products. 

 13. Indemnification by Licensee; Insurance. 

13.1 Licensee Indemnity. Licensee shall indemnify and hold S&W and its parent company, and their respective directors, officers, employees and
agents (altogether the “S&W Parties”) harmless from and against any and all claims arising out of or relating to: (a) any inaccuracy or breach of Licensee’s representations, warranties, covenants or other obligations
hereunder (including those set forth in Sections 12.2, 12.3, 12.4, and 12.5); (b) the design, development, manufacture, sourcing, marketing, advertising, promotion, merchandising, shipment, importing, exporting, distribution, sale or use of any
Licensed Products or Promotional Materials (including any (i) product liability claims, (ii) claims of personal injury, death or property damage, (iii) claims made under any guaranties made or warranties given (in each case, whether
express or implied) with respect to such Licensed Products, (iv) any claims of infringement or misappropriation of Intellectual Property of a third party except any claim arising out of the use of the Licensed Trademark or S&W’s
Intellectual Property, or (v) any similar or other claim based on strict liability, negligence or warranty (whether express or implied)); or (c) any use of the Licensed Trademarks by Licensee in a manner not authorized by this License
Agreement, provided however Licensee shall not have any indemnification obligations hereunder to the extent arising out of S&W’s breach of this agreement, gross negligence or intentional misconduct. Any settlement of any claim as a result
of Licensee’s indemnification obligations hereunder shall first require the consent of S&W, and must release S&W from all liability for any and all claims arising out of or relating to the matter that were or could have been asserted by
the claimant/plaintiff. 
 13.2 S&W Indemnity. S&W shall indemnify and hold Licensee and its parent company, and their respective directors,
officers, employees and agents harmless from and against any and all claims arising out of (a) any inaccuracy or breach of S&W’s representations, warranties, covenants or other obligations hereunder, and (b) third party claims of
infringement or misappropriation of a Licensed Trademark arising from use of a Licensed Trademark in a jurisdiction and with a Licensed Product in which and as to which such Licensed Trademark is registered, provided however S&W shall not have
any indemnification obligations hereunder to the extent arising out of Licensee’s breach of this agreement, gross negligence or intentional misconduct. 

13.3 Third Party Claims. If either party seeks indemnification or damages (the “Indemnified Party”) under this Agreement from the other party
(the “Indemnifying Party”) for any claim asserted, against such Indemnified Party by a third party (a “Third Party Claim”), the Indemnified Party shall, promptly upon gaining knowledge of such Third Party Claim, deliver to the
Indemnifying Party notice (a “Claim Notice”) of such Third Party Claim with sufficient detail as to why the Indemnifying Party is responsible for such Third Party Claim; provided, that a failure by the Indemnified Party to give such Claim
Notice in the manner required pursuant to this Section 13.3 shall not limit or otherwise affect the obligations of the Indemnifying Party under this Agreement, except to the extent that such Indemnifying Party is actually prejudiced with
respect to the rights available to the Indemnifying Party with respect to such Third Party Claims, and then only to the extent of any such actual prejudice. The Indemnifying Party shall have the right, at its sole option and expense, to appoint
counsel of its choice, which must be reasonably satisfactory to the Indemnified Party, and to defend against, negotiate, settle or otherwise deal with such Third Party Claim in lieu of the Indemnified Party defending or settling such claim, provided
the Indemnifying Party shall not have the right to defend such Third Party Claim if such Third-Party Claim seeks relief other than the payment of monetary damages or seeks the imposition of a consent order, injunction or decree that would materially
restrict the future activity or conduct of the Indemnified Party, or is a criminal Legal proceeding or alleges, or seeks a finding or admission of a violation of Law or violation of the rights of any person by the Indemnified Party. 

 13.4 Insurance. 

(a) At all times during the Term of this Agreement and for a period of three years thereafter, Licensee shall procure and maintain, at its sole
cost and expense, commercial general liability insurance with limits not less than Two Million Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) in the aggregate, including bodily injury and property damage and products and
completed operations and advertising liability, which policy will include contractual liability coverage insuring the activities of Licensee under this Agreement. 

(b) All insurance policies required pursuant to Section 13.2 must: 

(i) be issued by insurance companies reasonably acceptable to Licensor; 

(ii) provide that such insurance carriers give Licensor at least 30 days’ prior written notice of cancellation or non-renewal of policy coverage; provided that, prior to such cancellation, Licensee has new insurance policies in place that meet the requirements of Section 13.2; 

(iii) waive any right of subrogation of the insurers against Licensor or any of its Affiliates; 

(iv) provide that such insurance be primary insurance and any similar insurance in the name of and/or for the benefit of Licensor is excess and
non-contributory; and 
 (v) name Licensor and its Affiliates, including, in each case, all
successors and permitted assigns, as additional insureds. 
 (c) Licensee shall provide Licensor with copies of the certificates of insurance
and policy endorsements required by this Section 13.4 upon the written request of Licensor, and shall not do anything to invalidate such insurance. 

14. Confidential Information. 
 14.1 Confidentiality
and Non-Disclosure. The parties acknowledge that during the course of their performance under this Agreement, each party may learn Confidential Information of the other party. Each party agrees to take
reasonable steps to protect such Confidential Information and further agrees that it shall not: (a) use such Confidential Information except as required in the normal and proper course of performing under this Agreement; (b) disclose such
Confidential Information to a third party; or (c) allow a third party access to such Confidential Information (except as may otherwise be required by law) without, in each case, obtaining the prior written approval of the other party, provided,
however, that such restrictions shall not apply to Confidential Information which a party has requested be subject to a confidentiality order but nonetheless is required to be revealed to an adjudicating body in the course of litigation. All
Confidential Information is, and shall remain, the property of the party which supplied it. Each party shall take reasonable steps to mark its Confidential Information which is in written form with appropriate legends, provided, however, that the
failure so to mark such Confidential Information shall not relieve the other party of its obligations hereunder. 
 14.2 Prohibited Use of S&W’s
Confidential Information. Under no circumstances shall Licensee: (a) use S&W Confidential Information in connection with products outside of the scope of Licensee’s business of manufacturing, selling and sourcing firearm
accessories, or that are not Licensed Products; or (b) disclose S&W Confidential Information to, or allow access to S&W Confidential Information by, anyone not directly associated with the design, development or manufacture of Licensed
Products. 

 15. Miscellaneous. 

15.1 Recalls. Licensee shall immediately notify S&W in the event of any product defect or recall considerations or deliberations concerning a
Licensed Product. If, at any time, S&W determines that any Licensed Product sold by Licensee is defective, unsafe or otherwise harmful or potentially harmful to consumers or S&W, S&W shall have the right (but shall not be obligated) to
require Licensee to recall such Licensed Product, provided, however, that such recall (or failure so to recall) shall not relieve Licensee of any obligations hereunder. The type and method of recall shall be subject to S&W’s approval.
Licensee shall bear any and all costs related to any recall of Licensed Products, whether such recall is voluntary or required by S&W or any governmental authority. Licensee shall have and maintain an adequate and comprehensive lot traceability
program to ensure recall effectiveness. 
 15.2 Relationship of the Parties. Neither Licensee nor S&W shall be construed to be the agent of the
other in any respect. The parties have entered into this Agreement as independent contractors only, and nothing herein shall be construed to place the parties in the relationship of partners, joint venturers, agents or legal representatives. Neither
Licensee nor S&W will have the authority to obligate or bind the other in any manner as to any third party. Nothing contained herein shall be construed to restrict Licensee’s ability to set its prices with respect to unaffiliated third
parties. 
 15.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to its subject matter and, as of
its Effective Date, supersedes all prior agreements, understandings, commitments, negotiations and discussions with respect thereto, whether oral or written. 

15.4 No Amendment. This Agreement may not be amended or modified in any respect, except upon mutual written agreement of the parties. 

15.5 Waiver. The failure of any party to insist upon strict adherence to any provision of this Agreement on any occasion shall not be considered a
waiver of such party’s right to insist upon strict adherence to such provision thereafter or to any other provision of this Agreement in any instance. Any waiver shall be in writing signed by the party against whom such waiver is sought to be
enforced. 
 15.6 Sublicensing and Assignment. This Agreement and the rights and licenses granted to Licensee are personal to Licensee. Licensee
shall not sublicense any of the Licensed Trademarks or assign or transfer any of its rights or delegate any of its obligations under this Agreement without the prior written consent of S&W. S&W shall not unreasonably withhold its consent to
a proposed sublicense or assignment by Licensee to an Affiliate of Licensee, except S&W may, in its sole discretion, withhold any consent to any such proposed sublicense or assignment following a change of Control of Licensee or of any Affiliate
of Licensee. Any attempted sublicense, assignment, transfer or delegation in violation of this Section 15.6 or by virtue of the operation of law shall be null and void and of no effect. This Agreement shall be binding upon, and shall inure to
the benefit of, the parties’ respective successors and permitted assigns. For purposes of this Section 15.6, a “transfer” shall include the following actions by Licensee (whether effected in a single transaction or in a series of
related transactions, and whether effected directly or indirectly): (a) the sale or other disposition of all or substantially all of Licensee’s business or assets (except for “ordinary course” inventory sales); (b) the transfer of
effective voting or other business Control of Licensee; or (c) any other change of Control of Licensee. 
 15.7 Severability; Reformation. The
provisions of this Agreement shall be severable. If a court of competent jurisdiction shall declare any provision of this Agreement invalid, illegally or unenforceable, the other provisions hereof shall remain in full force and effect, and such
court shall be empowered to modify, if possible, such invalid, illegal or unenforceable provision to the extent necessary to make it valid and enforceable to the maximum extent possible. 

15.8 Equitable Relief. Licensee acknowledges and agrees that: (a) its failure to perform its obligations under this Agreement and its breach of
any provision hereof, in any instance, shall result in immediate and irreparable 

 
damage to S&W; (b) no adequate remedy at law exists for such damage; and (c) in the event of such failure or breach, S&W shall be entitled to equitable relief by way of
temporary, preliminary and permanent injunctions, and such other and further relief as any court of competent jurisdiction may deem just and proper, in addition to, and without prejudice to, any other relief whether in law or in equity to which
S&W may be entitled. 
 15.9 Governing Law; Jurisdiction and Venue. This Agreement will be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts applicable to agreements made and to be performed entirely therein. Licensee hereby consents to the exclusive jurisdiction of the courts of the Commonwealth of Massachusetts and of the United States District
Court for the District of Massachusetts for resolution of all claims, differences and disputes which the parties may have regarding, or which arise under, this Agreement. Any judgment or other decision of any such court shall be enforceable, without
further proceedings, against the named party anywhere in the world where such party is located, does business or has assets. 
 15.10 Waiver of Right to
Jury Trial. EACH OF THE PARTIES HEREBY WAIVES ITS RIGHTS TO A TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT OR THE VALIDITY, INTERPRETATION OR ENFORCEMENT OF THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN. 
 15.11 Notices. Materials required to be delivered to any party hereunder shall be delivered to the
address given below for such party. Unless otherwise expressly stated in this Agreement, any notice, accounting statement, consent, approval or other communication under this Agreement shall be in writing and shall be considered given: (a) upon
personal delivery, (b) two (2) business days after being deposited with an “overnight” courier or “express mail” service, or (c) seven (7) business days after being mailed by registered or certified first class mail,
return receipt requested, in each case addressed to the notified party at its address set forth below (or at such other address as such party may specify by notice to the others delivered in accordance with this Section 15): 

 

			
	 If to S&W:
	  	
	 Smith & Wesson Inc.
	  	 If to Licensee:

	 2100 Roosevelt Ave.
	  	 AOB Products Company

	 Springfield, MA 01104
	  	 1800 North Route Z

	 Attn: President
	  	 Columbia, MO 65202

		  	 Attn: President

	 With a copy to:
	  	
	 Smith & Wesson Inc.
	  	 With a copy to:

	 2100 Roosevelt Ave.
	  	 TD Bank, N.A.

	 Springfield, MA 01104
	  	 2 West Main St., 2nd Floor

	 Attn: Legal Department
	  	 Waterbury, CT 06702

		  	 Attention: AOB Products Acct Manager

 15.12 Offer and Acceptance. This Agreement will not be effective unless and until it is fully executed by authorized
officers of each of the parties. 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers as of the Effective Date. 
  

									
	Smith & Wesson Inc.	 		 	AOB Products Company
					
	By:	 	/s/ Mark P. Smith	 		 	By:	 	/s/ Brian D. Murphy
					
	Name:	 	Mark P. Smith	 		 	Name:	 	Brian D. Murphy
					
	Title:	 	President	 		 	Title:	 	President

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