Document:

exv10w2

 

Exhibit 10.2

AMENDED AND RESTATED INDEMNITY AGREEMENT

     This Amended and Restated Indemnity Agreement, dated as of                                         , 2007, is made
by and between JDA Software Group, Inc., a Delaware corporation (the “Company”), and                                                              (the
“Indemnitee”).

RECITALS

     A. The Company and Indemnitee have previously entered into an Indemnity Agreement (the
“Previous Agreement”) in connection with Indemnitee’s services with the Company.

     B. The Company and Indemnitee now desire to amend and restate the Previous Agreement in its
entirety in connection with Indemnitee’s continued service with the Company effective as of the
date hereof.

     C. The Company is aware that competent and experienced persons are increasingly reluctant to
serve as directors, officers or agents of corporations unless they are protected by comprehensive
liability insurance or indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the exposure frequently
bears no reasonable relationship to the compensation of such directors, officers and other agents.

     D. The statutes and judicial decisions regarding the duties of directors and officers are
often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors,
officers and agents with adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take.

     E. Plaintiffs often seek damages in such large amounts and the costs of litigation may be so
enormous (whether or not the case is meritorious), that the defense and/or settlement of such
litigation is often beyond the personal resources of directors, officers and other agents.

     F. The Company believes that it is unfair for its directors, officers and agents and the
directors, officers and agents of its subsidiaries to assume the risk of huge judgments and other
expenses which may occur in cases in which the director, officer or agent received no personal
profit and in cases where the director, officer or agent was not culpable.

     G. The Company recognizes that the issues in controversy in litigation against a director,
officer or agent of a corporation such as the Company or its subsidiaries are often related to the
knowledge, motives and intent of such director, officer or agent, that he is usually the only
witness with knowledge of the essential facts and exculpating circumstances regarding such matters,
and that the long period of time which usually elapses before the trial or other disposition of
such litigation often extends beyond the time that the director, officer or agent can reasonably
recall such matters and may extend beyond the normal time for retirement for such
director, officer or agent with the result that he, after retirement or in the event of his
death, his spouse, heirs, executors or administrators, may be faced with limited ability and undue
hardship

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in maintaining an adequate defense, which may discourage such a director, officer or agent
from serving in that position.

     H. Based upon their experience as business managers, the Board of Directors of the Company
(the “Board”) has concluded that, to retain and attract talented and experienced
individuals to serve as directors, officers and agents of the Company and its subsidiaries and to
encourage such individuals to take the business risks necessary for the success of the Company and
its subsidiaries, it is necessary for the Company to contractually indemnify its directors,
officers and agents and the directors, officers and agents of its subsidiaries, and to assume for
itself maximum liability for expenses and damages in connection with claims against such directors,
officers and agents in connection with their service to the Company and its subsidiaries, and has
further concluded that the failure to provide such contractual indemnification could result in
great harm to the Company and its subsidiaries and the Company’s stockholders.

     I. Section 145 of the General Corporation Law of Delaware, under which the Company is
organized (“Section 145”), empowers the Company to indemnify its directors, officers,
employees and agents by agreement and to indemnify persons who serve, at the request of the
Company, as the directors, officers, employees or agents of other corporations or enterprises, and
expressly provides that the indemnification provided by Section 145 is not exclusive.

     J. The Company desires and has requested the Indemnitee to serve or continue to serve as a
director, officer or agent of the Company and/or one or more subsidiaries of the Company free from
undue concern for claims for damages arising out of or related to such services to the Company
and/or one or more subsidiaries of the Company.

     K. Indemnitee is willing to serve, or to continue to serve, the Company and/or one or more
subsidiaries of the Company, provided that he is furnished the indemnity provided for herein.

AGREEMENT

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:

     1. Definitions.

          (a) Agent. For the purposes of this Agreement, “agent” of the Company means any
person who is or was a director, officer, employee or other agent of the Company or a subsidiary of
the Company; or is or was serving at the request of, for the convenience of, or to represent the
interests of the Company or a subsidiary of the Company as a director, officer, employee or agent
of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise;
or was a director, officer, employee or agent of a foreign or domestic corporation which was a
predecessor corporation of the Company or a subsidiary of the
Company, or was a director, officer, employee or agent of another enterprise at the request
of, for the convenience of, or to represent the interests of such predecessor corporation.

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          (b) Expenses. For purposes of this Agreement, “expenses” include all out-of-pocket
costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and
related disbursements), actually and reasonably incurred by the Indemnitee in connection with
either the investigation, defense or appeal of a proceeding or establishing or enforcing a right to
indemnification under this Agreement or Section 145 or otherwise; provided, however, that
“expenses” shall not include any judgments, fines, ERISA excise taxes or penalties, or amounts paid
in settlement of a proceeding.

          (c) Proceeding. For the purposes of this Agreement, “proceeding” means any
threatened, pending, or completed action, suit or other proceeding, whether civil, criminal,
administrative, or investigative.

          (d) Subsidiary. For purposes of this Agreement, “subsidiary” means any corporation of
which more than 50% of the outstanding voting securities is owned directly or indirectly by the
Company, by the Company and one or more other subsidiaries, or by one or more other subsidiaries.

     2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to serve as
agent of the Company, at its will (or under separate agreement, if such agreement exists), in the
capacity Indemnitee currently serves as an agent of the Company, so long as he is duly appointed or
elected and qualified in accordance with the applicable provisions of the Bylaws of the Company or
any subsidiary of the Company or until such time as he tenders his resignation in writing;
provided, however, that nothing contained in this Agreement is intended to create any right to
continued employment by Indemnitee.

     3. Liability Insurance.

          (a) Maintenance of D&O Insurance. The Company hereby covenants and agrees that, so
long as the Indemnitee shall continue to serve as an agent of the Company and thereafter so long as
the Indemnitee shall be subject to any possible proceeding by reason of the fact that the
Indemnitee was an agent of the Company, the Company, subject to Section 3(c), shall promptly obtain
and maintain in full force and effect directors’ and officers’ liability insurance (“D&O
Insurance”) in reasonable amounts from established and reputable insurers.

          (b) Rights and Benefits. In all policies of D&O Insurance, the Indemnitee shall be
named as an insured in such a manner as to provide the Indemnitee the same rights and benefits as
are accorded to the most favorably insured of the Company’s directors, if the Indemnitee is a
director; or of the Company’s officers, if the Indemnitee is not a director of the Company but is
an officer; or of the Company’s key employees, if the Indemnitee is not a director or officer but
is a key employee.

          (c) Limitation on Required Maintenance of D&O Insurance. Notwithstanding the
foregoing, the Company shall have no obligation to obtain or maintain D&O Insurance if the Company
determines in good faith that such insurance is not reasonably available, the premium costs for
such insurance are disproportionate to the amount of coverage provided, the coverage
provided by such insurance is limited by exclusions so as to provide an insufficient benefit,
or the Indemnitee is covered by similar insurance maintained by a subsidiary of the Company.

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     4. Mandatory Indemnification. Subject to Section 10 below, the Company shall
indemnify the Indemnitee as follows:

          (a) Third Party Actions. If the Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding (other than an action by or in the right of the
Company) by reason of the fact that he is or was an agent of the Company, or by reason of anything
done or not done by him in any such capacity, the Company shall indemnify the Indemnitee against
any and all expenses and liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes and penalties, and amounts paid in settlement) actually and
reasonably incurred by him in connection with the investigation, defense, settlement or appeal of
such proceeding, provided the Indemnitee acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and its stockholders, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was
unlawful.

          (b) Derivative Actions. If the Indemnitee is a person who was or is a party or is
threatened to be made a party to any proceeding by or in the right of the Company by reason of the
fact that he is or was an agent of the Company, or by reason of anything done or not done by him in
any such capacity, the Company shall indemnify the Indemnitee against all expenses actually and
reasonably incurred by him in connection with the investigation, defense, settlement, or appeal of
such proceeding, provided the Indemnitee acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company and its stockholders; except that no
indemnification under this subsection 4(b) shall be made in respect to any claim, issue or matter
as to which such person shall have been finally adjudged to be liable to the Company by a court of
competent jurisdiction unless and only to the extent that the court in which such proceeding was
brought shall determine upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for
such amounts which the court shall deem proper.

          (c) Actions where Indemnitee is Deceased. If the Indemnitee is a person who was or is
a party or is threatened to be made a party to any proceeding by reason of the fact that he is or
was an agent of the Company, or by reason of anything done or not done by him in any such capacity,
and if prior to, during the pendency of after completion of such proceeding Indemnitee becomes
deceased, the Company shall indemnify the Indemnitee’s heirs, executors and administrators against
any and all expenses and liabilities of any type whatsoever (including, but not limited to,
judgments, fines, ERISA excise taxes and penalties, and amounts paid in settlement) actually and
reasonably incurred to the extent Indemnitee would have been entitled to indemnification pursuant
to Sections 4(a) or 4(b) above were Indemnitee still alive.

          (d) Limitations. Notwithstanding the foregoing, the Company shall not be obligated to
indemnify the Indemnitee for expenses or liabilities of any type whatsoever (including, but not
limited to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in settlement) for
which payment is actually made to or on behalf of Indemnitee under a
valid and collectible insurance policy of D&O Insurance, or under a valid and enforceable
indemnity clause, bylaw or agreement.

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     5. Partial Indemnification. If the Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of any expenses or liabilities of
any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement) incurred by him in the investigation, defense,
settlement or appeal of a proceeding, but not entitled, however, to indemnification for all of the
total amount hereof, the Company shall nevertheless indemnify the Indemnitee for such total amount
except as to the portion hereof to which the Indemnitee is not entitled.

     6. Mandatory Advancement of Expenses. Subject to Section 10(a) below, the Company
shall advance all expenses incurred by the Indemnitee in connection with the investigation,
defense, settlement or appeal of any proceeding to which the Indemnitee is a party or is threatened
to be made a party by reason of the fact that the Indemnitee is or was an agent of the Company.
Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it
shall be determined ultimately that the Indemnitee is not entitled to be indemnified by the Company
as authorized hereby. The advances to be made hereunder shall be paid by the Company to the
Indemnitee within twenty (20) days following delivery of a written request therefor by the
Indemnitee to the Company. In the event that the Company fails to pay expenses as incurred by the
Indemnitee as required by this paragraph, Indemnitee may seek mandatory injunctive relief from any
court having jurisdiction to require the Company to pay expenses as set forth in this paragraph.
If Indemnitee seeks mandatory injunctive relief pursuant to this paragraph, it shall not be a
defense to enforcement of the Company’s obligations set forth in this paragraph that Indemnitee has
an adequate remedy at law for damages.

     7. Contribution.

          (a) If the indemnification provided for in this Agreement but not excluded by Sections 4(d)
and 10 is, for any reason, held by a court of competent jurisdiction to be unavailable to
Indemnitee in respect of any expenses and liabilities of any type whatsoever, then Company shall
contribute the amount paid or payable by Indemnitee in such proportion as is appropriate to (i)
reflect the relative benefits received by Company and Indemnitee or, (ii) if the allocation
provided in the prior clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits, but also the relative fault of the Company
and Indemnitee, as well as any other relevant equitable considerations. In connection with the
registration of Company’s securities, the relative benefits received by Company and Indemnitee
shall be deemed to be in the same respective proportions that the net proceeds from the offering
(before deducting expenses) received by the Company and Indemnitee bear to the aggregate public
offering price of the securities so offered. The relative fault of the Company and Indemnitee
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by Company or Indemnitee and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.

          (b) The Company and Indemnitee agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata or per capita allocation or by any other
method of allocation which does not take into account the equitable considerations referred to in
the immediately preceding paragraph. In connection with the registration of the

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Company’s
securities, in no event shall Indemnitee be required to contribute any amount under this Section 7
in excess of the lesser of (i) that proportion of the total expenses and liabilities indemnified
against under this Agreement but not excluded by Sections 4(d) and 10, equal to the proportion of
the total securities sold under such registration statement which is being sold by Indemnitee, or
(ii) the proceeds received by Indemnitee from its sale of securities under such registration
statement. No person found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person who is not found
guilty of such fraudulent misrepresentation.

     8. Notice and Other Indemnification Procedures.

          (a) Notice by Indemnitee. Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the Indemnitee shall, if the
Indemnitee believes that indemnification with respect thereto may be sought from the Company under
this Agreement, notify the Company of the commencement or threat of commencement thereof.

          (b) Notice by Company. If, at the time of the receipt of a notice of the commencement
of a proceeding pursuant to Section 8(a) hereof, the Company has D&O Insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee,
all amounts payable as a result of such proceeding in accordance with the terms of such policies.

          (c) Defense. In the event the Company shall be obligated to pay the expenses of any
proceeding against the Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by the Indemnitee, upon the delivery to the
Indemnitee of written notice of its election so to do. After delivery of such notice, approval of
such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will
not be liable to the Indemnitee under this Agreement for any fees of counsel subsequently incurred
by the Indemnitee with respect to the same proceeding, provided that (i) the Indemnitee shall have
the right to employ his counsel in any such proceeding at the Indemnitee’s expense; and (ii) if (A)
the employment of counsel by the Indemnitee has been previously authorized by the Company, (B) the
Indemnitee shall have reasonably concluded that there may be a conflict of interest between the
Company and the Indemnitee in the conduct of any such defense, or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such proceeding, then the fees and expenses of
Indemnitee’s counsel shall be at the expense of the Company.

     9. Determination of Right to Indemnification.

          (a) Successful Defense. To the extent the Indemnitee has been successful on the
merits or otherwise in defense of any proceeding (including, without limitation, an action by or in
the right of the Company) to which the Indemnitee was a party by reason of the fact that he is or
was an agent of the Company at any time, the Company shall indemnify the Indemnitee

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against all
expenses of any type whatsoever actually and reasonably incurred by him in connection with the
investigation, defense or appeal of such proceeding.

          (b) Other Situations. In the event that Section 9(a) is inapplicable, the Company
shall also indemnify the Indemnitee unless, and except to the extent that, the Company shall prove
by clear and convincing evidence in a forum listed in Section 9(c) below that the Indemnitee has
not met the applicable standard of conduct required to entitle the Indemnitee to such
indemnification.

          (c) Selection of Forum. The Indemnitee shall be entitled to select the forum in which
the validity of the Company’s claim under Section 9(b) hereof that the Indemnitee is not entitled
to indemnification will be heard from among the following:

               (i) A quorum of the Board consisting of directors who are not parties to the proceeding for
which indemnification is being sought;

               (ii) The stockholders of the Company;

               (iii) Legal counsel selected by the Indemnitee, and reasonably approved by the Board, which
counsel shall make such determination in a written opinion; or

               (iv) A panel of three arbitrators, one of whom is selected by the Company, another of whom is
selected by the Indemnitee and the last of whom is selected by the first two arbitrators so
selected.

          (d) Submission to Forum. As soon as practicable, and in no event later than thirty
(30) days after written notice of the Indemnitee’s choice of forum pursuant to Section 9(c) above,
the Company shall, at its own expense, submit to the selected forum in such manner as the
Indemnitee or the Indemnitee’s counsel may reasonably request, its claim that the Indemnitee is not
entitled to indemnification; and the Company shall act in the utmost good faith to assure the
Indemnitee a complete opportunity to defend against such claim.

          (e) Application to Court of Chancery. Notwithstanding a determination by any forum
listed in Section 9(c) hereof that Indemnitee is not entitled to indemnification with respect to a
specific proceeding, the Indemnitee shall have the right to apply to the Court of Chancery of
Delaware, the court in which that proceeding is or was pending or any other court of competent
jurisdiction, for the purpose of enforcing the Indemnitee’s right to indemnification pursuant to
this Agreement.

          (f) Expenses Related to this Agreement. Notwithstanding any other provision in this
Agreement to the contrary, the Company shall indemnify the Indemnitee against all expenses incurred
by the Indemnitee in connection with any hearing or proceeding under this
Section 9 involving the Indemnitee and against all expenses incurred by the Indemnitee in
connection with any other proceeding between the Company and the Indemnitee involving the
interpretation or enforcement of the rights of the Indemnitee under this Agreement unless a court
of competent jurisdiction finds that each of the claims and/or defenses of the Indemnitee in any
such proceeding was frivolous or made in bad faith.

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     10. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance expenses to the
Indemnitee with respect to proceedings or claims initiated or brought voluntarily by the Indemnitee
and not by way of defense, unless (i) such indemnification is expressly required to be made by law,
(ii) the proceeding was authorized by the Board, (iii) such indemnification is provided by the
Company, in its sole discretion, pursuant to the powers vested in the Company under the General
Corporation Law of Delaware or (iv) the proceeding is brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise as required under
Section 145;

          (b) Lack of Good Faith. To indemnify the Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by the Indemnitee to enforce or interpret this
Agreement, if a court of competent jurisdiction determines that each of the material assertions
made by the Indemnitee in such proceeding was not made in good faith or was frivolous; or

          (c) Unauthorized Settlements. To indemnify the Indemnitee under this Agreement for
any amounts paid in settlement of a proceeding unless the Company consents to such settlement,
which consent shall not be unreasonably withheld.

     11. Non-exclusivity. The provisions for indemnification and advancement of expenses
set forth in this Agreement shall not be deemed exclusive of any other rights which the Indemnitee
may have under any provision of law, the Company’s Certificate of Incorporation or Bylaws, the vote
of the Company’s stockholders or disinterested directors, other agreements, or otherwise, both as
to action in his official capacity and to action in another capacity while occupying his position
as an agent of the Company, and the Indemnitee’s rights hereunder shall continue after the
Indemnitee has ceased acting as an agent of the Company and shall inure to the benefit of the
heirs, executors and administrators of the Indemnitee.

     12. Enforcement. Any right to indemnification or advances granted by this Agreement
to Indemnitee shall be enforceable by or on behalf of Indemnitee in any court of competent
jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or
(ii) no disposition of such claim is made within ninety (90) days of request therefor. Indemnitee,
in such enforcement action, if successful in whole or in part, shall be entitled to be paid also
the expense of prosecuting his claim. It shall be a defense to any action for which a claim for
indemnification is made under this Agreement (other than an action brought to enforce a claim for
expenses pursuant to Section 6 hereof, provided that the required undertaking has been tendered to
the Company) that Indemnitee is not entitled to indemnification because of the limitations set
forth in Sections 4 and 10 hereof. Neither the failure of the Company (including
its Board of Directors or its stockholders) to have made a determination prior to the
commencement of such enforcement action that indemnification of Indemnitee is proper in the
circumstances, nor an actual determination by the Company (including its Board of Directors or its
stockholders) that such indemnification is improper, shall be a defense to the action or create a
presumption that Indemnitee is not entitled to indemnification under this Agreement or otherwise.

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     13. Subrogation. In the event the Company is obligated to make a payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of
recovery under an insurance policy or any other indemnity agreement covering the Indemnitee, who
shall execute all documents required and shall do all acts that may be necessary to secure such
rights and to enable the Company effectively to bring suit to enforce such rights.

     14. Survival of Rights.

          (a) All agreements and obligations of the Company contained herein shall continue during the
period Indemnitee is an agent of the Company and shall continue thereafter so long as Indemnitee
shall be subject to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal, arbitrational, administrative or investigative, by reason of
the fact that Indemnitee was serving in the capacity referred to herein.

          (b) The Company shall require any successor to the Company (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets
of the Company, expressly to assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if no such succession had taken
place.

     15. Interpretation of Agreement. It is understood that the parties hereto intend this
Agreement to be interpreted and enforced so as to provide indemnification to the Indemnitee to the
fullest extent permitted by law including those circumstances in which indemnification would
otherwise be discretionary.

     16. Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever, (i) the validity, legality and
enforceability of the remaining provisions of the Agreement (including without limitation, all
portions of any paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in
any way be affected or impaired thereby, and (ii) to the fullest extent possible, the provisions of
this Agreement (including, without limitation, all portions of any paragraph of this Agreement
containing any such provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested
by the provision held invalid, illegal or unenforceable and to give effect to Section 15 hereof.

     17. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

     18. Notice. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted
for by the party addressee or (ii) if mailed by certified or registered mail with postage prepaid,
on the third business day after the mailing date. Addresses for notice to either party are as
shown on the signature page of this Agreement, or as subsequently modified by written notice.

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     19. Governing Law. This Agreement shall be governed exclusively by and construed
according to the laws of the State of Delaware as applied to contracts between Delaware residents
entered into and to be performed entirely within Delaware.

[Signature page follows.]

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     The parties hereto have entered into this Amended and Restated Indemnity Agreement effective
as of the date first above written.

	 	 	 	 	 
	 	JDA SOFTWARE GROUP, INC.

 	 
	 	 
	 
	 	By:	
 	 
	 
	 	 	Title: 	 	 
	 
	 	 	Address: 	 	 
	 	 	 	 	 
	 
	 	INDEMNITEE:

	 
	 	 
	 	  	 	 	 
	 
	 	Address:exv10w5

 

Exhibit 10.5

EMPLOYMENT AGREEMENT

DATED NOVEMBER 12, 2007

BETWEEN

SMITH & WESSON HOLDING CORPORATION

AND

MICHAEL F. GOLDEN

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page No.
	1.

	 	Employment
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	Full Time Occupation and Other Activities
	 	 	1	 
	 
	 	 	 	 	 	 
	3.

	 	Compensation and other Benefits During Term of Employment
	 	 	1	 
	 

	 	(a) Base Salary
	 	 	1	 
	 

	 	(b) Bonus
	 	 	1	 
	 

	 	(c) Stock-Based Compensation and Awards
	 	 	2	 
	 

	 	(d) Fringe Benefits
	 	 	2	 
	 

	 	(e) Vacation
	 	 	2	 
	 

	 	(f) Reimbursement for Business Expenses
	 	 	2	 
	 

	 	(g) Reimbursement for Insurance Premiums
	 	 	2	 
	 

	 	(h) Key Person Insurance
	 	 	3	 
	 
	 	 	 	 	 	 
	4.

	 	Term of Employment
	 	 	3	 
	 

	 	(a) Employment Term
	 	 	3	 
	 

	 	(b) Termination Under Certain Circumstances
	 	 	3	 
	 

	 	(c) Result of Termination
	 	 	4	 
	 

	 	(d) Change in Control
	 	 	5	 
	 
	 	 	 	 	 	 
	5.

	 	Competition and Confidential Information
	 	 	6	 
	 

	 	(a) Interests to be Protected
	 	 	6	 
	 

	 	(b) Non-Competition
	 	 	6	 
	 

	 	(c) Non-Solicitation of Employees
	 	 	6	 
	 

	 	(d) Confidential Information
	 	 	6	 
	 

	 	(e) Return of Books, Records, Papers, and Equipment
	 	 	7	 
	 

	 	(f) Disclosure of Information
	 	 	7	 
	 

	 	(g) Assignment
	 	 	7	 
	 

	 	(h) Equitable Relief
	 	 	7	 
	 

	 	(i) Restrictions Separable
	 	 	7	 
	 
	 	 	 	 	 	 
	6.

	 	Miscellaneous
	 	 	8	 
	 

	 	(a) Notices
	 	 	8	 
	 

	 	(b) Indulgences; Waivers
	 	 	8	 
	 

	 	(c) Controlling Law
	 	 	9	 
	 

	 	(d) Binding Nature of Agreement
	 	 	9	 
	 

	 	(e) Execution in Counterpart
	 	 	9	 
	 

	 	(f) Provisions Separable
	 	 	9	 
	 

	 	(g) Entire Agreement
	 	 	9	 
	 

	 	(h) Paragraph Headings
	 	 	9	 
	 

	 	(i) Gender
	 	 	9	 
	 

	 	(j) Number of Days
	 	 	9	 
	 
	 	 	 	 	 	 
	7.

	 	Successors and Assigns
	 	 	10	 

 

 

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT dated the 12th day of November 2007, by and between SMITH & WESSON
HOLDING CORPORATION, a Nevada corporation (“Employer”), and MICHAEL F. GOLDEN (“Employee”).

     WHEREAS, Employer desires Employee to continue Employee’s services to Employer as President
and Chief Executive Officer, and Employee desires to do so, upon the terms and conditions contained
herein.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants set forth in this
Agreement, the parties hereto agree as follows:

     1. Employment.

     Employer hereby continues Employee’s employment, and Employee hereby accepts such continuation
of employment, as President and Chief Executive Officer of Employer and of such subsidiaries of
Employer as Employer shall designate and in such other capacities and for such other duties and
services as shall from time to time be mutually agreed upon by Employer and Employee. Employee
shall report to the Board of Directors of Employer.

     2. Full Time Occupation and Other Activities.

     Employee shall devote Employee’s entire business time, attention, and efforts to the
performance of Employee’s duties under this Agreement; shall serve Employer faithfully and
diligently; and shall not engage in any other employment or other business activities while
employed by Employer. The foregoing limitations shall not be construed as prohibiting Employee
from serving as a director of one or more companies provided that (a) such company does not
compete, directly or indirectly, with Employer; (b) participation on the board of such company does
not significantly interfere with the performance of Employee’s responsibilities under this
Agreement; (c) participation on the board of such company will not adversely affect the reputation
of Employer; (d) such company shall maintain a policy of directors’ and officers’ liability
insurance covering Employee on such terms and conditions and at a level of coverage that the Board
of Directors of Employer determines to be reasonable for a company of such size; and (e) such
company shall enter into an agreement to indemnify Employee, to the fullest extent permissible
under applicable law, for expenses and damages in connection with claims against Employee in
connection with service as a director of such company.

     3. Compensation and other Benefits During Term of Employment.

          (a) Base Salary. Employer shall pay to Employee a base salary of $450,000 per annum to be
paid in equal monthly installments, or in such other periodic installments upon which Employer and
Employee shall mutually agree. By action and in the sole discretion of the Board of Directors of
Employer, the base salary will be subject to annual review and may be increased based on
performance of Employer and Employee.

          (b) Bonus. Employee shall be eligible to participate in executive compensation programs
maintained by Employer for its executive personnel. Employee also

 

 

shall be eligible to receive an annual bonus in such an amount, if any, determined by the
Board of Directors of Employer or such committee of the Board of Directors as may be designated by
the Board of Directors based upon achievement of performance goals and any other such factors as
may be deemed relevant by the Board of Directors or committee thereof, which shall not be less than
100% of base at target.

          (c) Stock-Based Compensation and Awards. Employer shall grant to Employee options to acquire
216,000 shares of Employer’s common stock at an exercise price of $15.00 per share with one-third
of such options vesting on each of the first, second, and third annual anniversary of the date of
grant, provided that Employee continues to be employed by Employer. Employee also shall receive
restricted stock units for 160,000 shares of Employer’s common stock, with one-third of such shares
vesting on each of the first, second, and third annual anniversary of the date of grant, subject to
(i) Employer meeting the target for EBITDA less SFAS 123R expense as established and determined by
the Board of Directors of Employer for the fiscal year in which the applicable vesting date occurs,
and (ii) Employee being employed by Employer on the applicable annual anniversary date of the
grant. Employee may receive additional annual awards based on Employee’s performance and on the
performance of Employer in comparison to the relevant peer group, with the amount of awards granted
and the terms and conditions thereof to be determined from time to time by and in the sole
discretion of the Board of Directors of Employer or a committee thereof.

          (d) Fringe Benefits. Employee shall receive a car allowance of $1,000 per month. Employee
also shall be entitled to participate in any group insurance, pension, retirement, vacation,
expense reimbursement, and other plans, programs, and benefits approved by the Board of Directors
or a duly constituted committee of the Board of Directors and made available from time to time to
executive employees of Employer generally during the term of Employee’s employment hereunder. The
foregoing shall not obligate Employer to adopt or maintain any particular plan, program, or
benefit.

          (e) Vacation. Employee shall be entitled to a paid vacation in accordance with the applicable
policies of Employer in effect from time to time, but not less than four weeks of paid vacation per
annum.

          (f) Reimbursement for Business Expenses. Employer shall reimburse Employee for all travel,
entertainment, and other ordinary and necessary business expenses incurred by Employee in
connection with the business of Employer and Employee’s duties under this Agreement. The term
“business expenses” shall not include any item not deductible in whole or in part by Employer for
federal income tax purposes. To obtain reimbursement, Employee shall submit to Employer receipts,
bills, or sales slips for the expenses incurred. Reimbursements shall be made by Employer monthly
within 10 days of presentation by Employee of evidence of the expenses incurred.

          (g) Reimbursement for Insurance Premiums. Employer shall reimburse Employee for the
reasonable insurance premiums (and any taxes incident thereto) for disability insurance covering up
to 75% of Employee’s base salary and for medical and hospitalization insurance for Employee,
Employee’s wife, and Employee’s children under the age of 25 for whom Employee provides a majority
of their financial support.

2

 

          (h) Key Person Insurance. Employer shall reimburse Employee for the reasonable premiums (and
taxes incident thereto) for a key person term-insurance policy of $5.0 million on the life of
Employee with such beneficiaries as Employee shall select.

     4. Term of Employment.

          (a) Employment Term. The term of this Agreement shall be for a period commencing as of the
date hereof and continuing until November 30, 2010.

          (b) Termination Under Certain Circumstances. Notwithstanding anything to the contrary herein
contained:

               (i) Death. Employee’s employment shall be automatically terminated, without notice, effective
upon the date of Employee’s death.

               (ii) Disability. If Employee shall fail, for a period of more than 60 consecutive days, or
for 90 days within any 180-day period, to perform any of Employee’s duties under this Agreement as
the result of illness or other incapacity, Employer, at its option and upon written notice to
Employee, may terminate Employee’s employment effective on the date of that notice.

               (iii) Unilateral Decision of Employer. Employer, at its option, upon written notice to
Employee, may terminate Employee’s employment effective on the date of that notice.

               (iv) Unilateral Decision by Employee. Employee, at Employee’s option and upon written notice
to Employer, may terminate Employee’s employment effective on the date of that notice.

               (v) Certain Acts. If Employee engages in an act or acts involving a crime, moral turpitude,
fraud, or dishonesty, or if Employee willfully violates in a material respect Employer’s Corporate
Governance Guidelines, Code of Conduct, or Code of Ethics for the CEO and Senior Financial
Officers, including, without limitation, the provisions thereof relating to conflicts of interest
or related party transactions, Employer, at its option and upon written notice to Employee, may
terminate Employee’s employment effective on the date of that notice.

               (vi) Change in Control. In the event of a “Change in Control” of Employer (as defined below),
Employee, at Employee’s option and upon written notice to Employer, may terminate Employee’s
employment effective on the date of the notice (which shall not constitute a unilateral decision by
Employee under Section 4(b)(iv) above) unless (A) the Change in Control shall have been approved by
the Board of Directors, (B) the provisions of this Agreement remain in full force and effect as to
Employee and (C) Employee suffers no reduction in Employee’s status, duties, authority, or
compensation following such Change in Control, provided that Employee will be considered to suffer
a reduction in Employee’s status, duties, authority, or if, after the Change in Control, (1)
Employee is not the chief executive officer of the company that succeeds to the business of
Employer, (2) such company’s common stock is not listed on a national stock exchange (such as the
New York Stock Exchange, the

3

 

Nasdaq National Market, or the American Stock Exchange), or (3) such company terminates
Employee or reduces Employee’s status, duties, authority, or compensation within one year of the
Change in Control.

          (c) Result of Termination.

               (i) In the event of the termination of Employee’s employment pursuant to Sections 4(b)(i),
4(b)(ii), 4(b)(iv), or 4(b)(v) above, Employee shall receive no further compensation under this
Agreement.

               (ii) In the event of the termination of Employee’s employment pursuant to Section 4(b)(iii)
above, Employee shall continue to receive Employee’s base salary as provided in Section 3(a) above,
an amount equal to the average of Employer’s bonus paid for each of the two fiscal years
immediately preceding Employee’s termination and any fringe benefits being received by Employee
pursuant to Section 3(d) above at the date of termination for a period equal to the greater of the
remaining employment term under this Agreement or one year after such termination.

               (iii) In the event of the termination of Employee’s employment pursuant to Section 4(b)(vi)
above, Employee shall continue to receive Employee’s base salary as provided in Section 3(a) above,
an amount equal to the average of Employer’s bonus paid for each of the two fiscal years
immediately preceding Employee’s termination, any fringe benefits being received by Employee
pursuant to Section 3(d) above at the date of termination for a period equal to the greater of the
remaining employment term of this Agreement or two years after such termination, and any options
and restricted stock units granted pursuant to Section 3(c) above or pursuant to Employee’s
previous employment agreement (as provided therein) shall immediately vest.

               (iv) In the event of the termination of Employee’s employment as a result of the non-renewal
of this Agreement at the end of the term or any yearly extension of such term, Employee shall
receive, for a period of three years following such termination, secretarial support of an employee
of Employer at the offices of Employer or, at the discretion of the Company, a cash payment in lieu
of the secretarial support in the amount of $10,000 per year.

               (v) If Employee’s employment hereunder is terminated after the first anniversary of this
Agreement for any reason other than a termination by Employer for cause, the options granted
pursuant to Section 3(c) above or pursuant to Employee’s previous employment agreement (as provided
therein) that are vested as of the date of termination will have a nine month post-termination
exercise period.

               (vi) If Employer terminates Employee’s employment hereunder for any reason other than a
termination by Employer for cause or due to non-renewal of this Agreement by Employer at the end of
the term or any yearly extension of such term or due to non-renewal of this Agreement by Employee
with six months advance notice to Employer, Employer shall continue to pay the life insurance
premiums on any then existing life insurance policy provided by Employer, up to an annual premium
of $20,000, until the third anniversary of the termination of Employee’s employment.

4

 

               (vii) If Employee’s employment hereunder is terminated for any reason other than a termination
by Employer for cause, Employee shall receive, for the fiscal year of termination, any earned
bonus, on a pro-rated basis, based on the performance goals actually achieved for the fiscal year
of termination, as determined in the sole discretion of the Board of Directors of Employer.

Any payments made by Employer pursuant to this Section 4(c) shall be paid on a monthly basis and
not in a lump sum. Employee shall receive no additional compensation following any termination
except as provided herein. In the event of any termination, Employee shall resign all positions
(including positions on the Board of Directors) with Employer and its subsidiaries. If Employee is
a “specified employee” with the meaning of Section 409A of the Internal Revenue Code of 1986, as
amended, (“Section 409A”), then payments shall not commence (or be made in the case of a lump sum
payment) until six months following Employee’s separation from service to the extent necessary to
avoid the imposition of the additional 20% tax under Section 409A (and in the case of installment
payments, the first payment shall include all installment payments required by this subsection that
otherwise would have been made during such six month period).

          (d) Change in Control. The term “Change in Control” of Employer shall mean a change in
control of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934 as in effect on the date of
this Agreement or, if Item 6(e) is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934 that serve similar
purposes; provided that, without limitation, such a Change in Control shall be deemed to have
occurred if and when (i) any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) directly or indirectly of equity securities of Employer
representing 20 percent or more of the combined voting power of Employer’s then-outstanding equity
securities, except that this provision shall not apply to any person currently owning at least five
percent or more of the combined voting power of Employer’s currently outstanding equity securities
or to an acquisition of up to 20 percent of the then-outstanding voting securities that has been
approved by at least 75 percent of the members of the Board of Directors who are not affiliates or
associates of such person; (ii) during the period of this Agreement, individuals who, at the
beginning of such period, constituted the Board of Directors of Employer (the “Original
Directors”), cease for any reason to constitute at least a majority thereof unless the election or
nomination for election of each new director was approved (an “Approved Director”) by the vote of a
Board of Directors constituted entirely of Existing Directors and/or Approved Directors; (iii) a
tender offer or exchange offer is made whereby the effect of such offer is to take over and control
Employer, and such offer is consummated for the equity securities of Employer representing 20
percent or more of the combined voting power of Employer’s then-outstanding voting securities; (iv)
Employer is merged, consolidated, or enters into a reorganization transaction with another person
and, as the result of such merger, consolidation, or reorganization, less than 75 percent of the
outstanding equity securities of the surviving or resulting person shall then be owned in the
aggregate by the former stockholders of Employer; or (v) Employer transfers substantially all of
its assets to another person or entity that is not a wholly owned subsidiary of Employer. Sales of
Employer’s Common Stock beneficially owned or controlled by Employee shall not be considered in
determining whether a Change in Control has occurred.

5

 

     5. Competition and Confidential Information.

          (a) Interests to be Protected. The parties acknowledge that Employee will perform essential
services for Employer, its employees, and its stockholders during the term of Employee’s employment
with Employer. Employee will be exposed to, have access to, and work with, a considerable amount
of Confidential Information (as defined below). The parties also expressly recognize and
acknowledge that the personnel of Employer have been trained by, and are valuable to, Employer and
that Employer will incur substantial recruiting and training expenses if Employer must hire new
personnel or retrain existing personnel to fill vacancies. The parties expressly recognize that it
could seriously impair the goodwill and diminish the value of Employer’s business should Employee
compete with Employer in any manner whatsoever. The parties acknowledge that this covenant has an
extended duration; however, they agree that this covenant is reasonable and it is necessary for the
protection of Employer, its stockholders, and employees. For these and other reasons, and the fact
that there are many other employment opportunities available to Employee if he should terminate his
employment, the parties are in full and complete agreement that the following restrictive covenants
are fair and reasonable and are entered into freely, voluntarily, and knowingly. Furthermore, each
party was given the opportunity to consult with independent legal counsel before entering into this
Agreement.

          (b) Non-Competition. During the term of Employee’s employment with Employer and for the
period equal to the longer of 12 months after the termination of Employee’s employment with
Employer, regardless of the reason therefor, the period during which Employee receives cash
severance pursuant to Section 4(c) Employee shall not (whether directly or indirectly, as owner,
principal, agent, stockholder, director, officer, manager, employee, partner, participant, or in
any other capacity) engage or become financially interested in any competitive business conducted
within the Restricted Territory (as defined below). As used herein, the term “competitive
business” shall mean any business that sells or provides or attempts to sell or provide products or
services the same as or substantially similar to the products or services sold or provided by
Employer during Employee’s employment hereunder, and the term “Restricted Territory” shall mean any
state or other geographical in which Employer sells products or provides services during Employee’s
employment hereunder.

          (c) Non-Solicitation of Employees. During the term of Employee’s employment and for a period
of 24 months after the termination of Employee’s employment with Employee, regardless of the reason
therefor, Employee shall not directly or indirectly, for Employee, or on behalf of, or in
conjunction with, any other person, company, partnership, corporation, or governmental entity,
solicit for employment, seek to hire, or hire any person or persons who is employed by or was
employed by Employer within 12 months of the termination of Employee’s employment for the purpose
of having any such employee engage in services that are the same as or similar or related to the
services that such employee provided for Employer.

          (d) Confidential Information. Employee shall maintain in strict secrecy all confidential or
trade secret information relating to the business of Employer (the “Confidential Information”)
obtained by Employee in the course of Employee’s employment, and Employee shall not, unless first
authorized in writing by Employer, disclose to, or use for Employee’s benefit or for the benefit
of, any person, firm, or entity at any time either during or subsequent to the term of Employee’s
employment, any Confidential Information, except as

6

 

required in the performance of Employee’s duties on behalf of Employer. For purposes hereof,
Confidential Information shall include without limitation any materials, trade secrets, knowledge,
or information with respect to management, operational, or investment policies and practices of
Employer; any business methods or forms; any names or addresses of customers or data on customers
or suppliers; and any business policies or other information relating to or dealing with the
management, operational, or investment policies or practices of Employer.

          (e) Return of Books, Records, Papers, and Equipment. Upon the termination of Employee’s
employment with Employer for any reason, Employee shall deliver promptly to Employer all files,
lists, books, records, manuals, memoranda, drawings, and specifications; all cost, pricing, and
other financial data; all other written or printed materials and computers, cell phones, PDAs, and
other equipment that are the property of Employer (and any copies of them); and all other materials
that may contain Confidential Information relating to the business of Employer, which Employee may
then have in Employee’s possession, whether prepared by Employee or not.

          (f) Disclosure of Information. Employee shall disclose promptly to Employer, or its nominee,
any and all ideas, designs, processes, and improvements of any kind relating to the business of
Employer, whether patentable or not, conceived or made by Employee, either alone or jointly with
others, during working hours or otherwise, during the entire period of Employee’s employment with
Employer or within six months thereafter.

          (g) Assignment. Employee hereby assigns to Employer or its nominee, the entire right, title,
and interest in and to all inventions, discoveries, and improvements, whether patentable or not,
that Employee may conceive or make during Employee’s employment with Employer, or within six months
thereafter, and which relate to the business of Employer.

          (h) Equitable Relief. In the event a violation of any of the restrictions contained in this
Section is established, Employer shall be entitled to preliminary and permanent injunctive relief
as well as damages and an equitable accounting of all earnings, profits, and other benefits arising
from such violation, which right shall be cumulative and in addition to any other rights or
remedies to which Employer may be entitled. In the event of a violation of any provision of
subsection (b), (c), (f), or (g) of this Section, the period for which those provisions would
remain in effect shall be extended for a period of time equal to that period beginning when such
violation commenced and ending when the activities constituting such violation shall have been
finally terminated in good faith.

          (i) Restrictions Separable. If the scope of any provision of this Agreement (whether in this
Section 5 or otherwise) is found by a Court to be too broad to permit enforcement to its full
extent, then such provision shall be enforced to the maximum extent permitted by law. The parties
agree that the scope of any provision of this Agreement may be modified by a judge in any
proceeding to enforce this Agreement, so that such provision can be enforced to the maximum extent
permitted by law. Each and every restriction set forth in this Section 5 is independent and
severable from the others, and no such restriction shall be rendered unenforceable by virtue of the
fact that, for any reason, any other or others of them may be unenforceable in whole or in part.

7

 

     6. Miscellaneous.

          (a) Notices. All notices, requests, demands, and other communications required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly given, made, and
received (i) if personally delivered, on the date of delivery, (ii) if by facsimile transmission,
upon receipt, (iii) if mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid, and addressed as provided below, or (iv) if
by a courier delivery service providing overnight or “next-day” delivery, on the next business day
after deposit with such service addressed as follows:

	 	 	 	 	 	 	 
	 

	 	 	(1)		 	If to Employer:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	2100 Roosevelt Avenue

Springfield, Massachusetts 01104

Attention: Chairman of the Board

	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	with a copy given in the manner

prescribed above, to:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Greenberg Traurig, LLP

2375 East Camelback Road

Suite 700

Phoenix, Arizona 85016

Attention: Robert S. Kant, Esq.

Phone: (602) 445-8302

Facsimile: (602) 445-8100

E-Mail: KantR@gtlaw.com
	 
	 	 	 	 	 	 
	 

	 	 	(2)		 	If to Employee:

2100 Roosevelt Avenue

Springfield, Massachusetts 01104-1606

Phone: (413) 747-3349

Facsimile: (413) 739-8528

E-Mail: Mfgolden1@aol.com

Either party may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this Section 6 for the giving
of notice.

          (b) Indulgences; Waivers. Neither any failure nor any delay on the part of either party to
exercise any right, remedy, power, or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege
preclude any other or further exercise of the same or of any other right, remedy, power, or
privilege, nor shall any waiver of any right, remedy, power, or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power, or privilege with respect to any
other occurrence. No waiver shall be binding unless executed in writing by the party making the
waiver.

8

 

          (c) Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement, shall be governed by and construed in accordance with
the laws of the state of Massachusetts, notwithstanding any Massachusetts or other
conflict-of-interest provisions to the contrary.

          (d) Binding Nature of Agreement. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal representatives, successors, and
assigns, except that no party may assign or transfer such party’s rights or obligations under this
Agreement without the prior written consent of the other party.

          (e) Execution in Counterpart. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken together, shall
bear the signatures of the parties reflected hereon as the signatories.

          (f) Provisions Separable. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.

          (g) Entire Agreement. This Agreement contains the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous
agreements and understandings, inducements, and conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing. The Employment Agreement
dated as of February 1, 2006 shall no longer be of any force or affect except as expressly
contemplated hereby.

          (h) Paragraph Headings. The paragraph headings in this Agreement are for convenience only;
they form no part of this Agreement and shall not affect its interpretation.

          (i) Gender. Words used herein, regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any other gender,
masculine, feminine, or neuter, as the context requires.

          (j) Number of Days. In computing the number of days for purposes of this Agreement, all days
shall be counted, including Saturdays, Sundays, and holidays; provided, however, that if the final
day of any time period falls on a Saturday, Sunday, or holiday, then the final day shall be deemed
to be the next day that is not a Saturday, Sunday, or holiday.

9

 

     7. Successors and Assigns.

     This Agreement shall inure to the benefit of and be binding upon the successors and assigns of
the parties hereto; provided that because the obligations of Employee hereunder involve the
performance of personal services, such obligations shall not be delegated by Employee. For
purposes of this Agreement successors and assigns shall include, but not be limited to, any
individual, corporation, trust, partnership, or other entity that acquires a majority of the stock
or assets of Employer by sale, merger, consolidation, liquidation, or other form of transfer.
Employer will require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or assets of Employer
to expressly assume and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken place. Without
limiting the foregoing, unless the context otherwise requires, the term “Employer” includes all
subsidiaries of Employer.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 
	 	SMITH & WESSON HOLDING CORPORATION

 	 
	 	By:  	/s/ John B. Furman
 	 
	 	 	 	 
	 	 	 
	 	/s/ Michael F. Golden
 	 
	 	Michael F. Golden 	 
	 	 	 
	 

10

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