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Exhibit 10.7
RACI HOLDING, INC.
STOCK INCENTIVE PLAN
STOCK PURCHASE RIGHT
DEFERRED SHARE AWARD AGREEMENT
Deferred Share Award, dated as of June 24, 1999 (the "Award"), made
in connection with the exercise of a Stock Purchase Right, made by RACI Holding,
Inc., a Delaware corporation ("Holding") to the Purchaser whose name appears on
the signature page hereof (the "Purchaser") under the terms of the RACI Holding,
Inc. Stock Incentive Plan (the "Plan").
1. Plan Controls. Capitalized terms used in this Award and not
otherwise defined herein shall have the meaning given such terms in the Plan. If
any provision of this Award is inconsistent with any provision of the Plan (as
either may be interpreted from time to time by the Board), the Plan shall
control.
2. Grant of Deferred Shares. Effective as of the date hereof, Holding
hereby evidences and confirms its sale to the Purchaser, on the terms and
conditions of this Award and the Plan, of the number of shares of Deferred
Shares set forth on the signature page hereof, which represent Holding's
contractual obligation to deliver shares of Holding's Common Stock ("Shares") to
the Purchaser upon the terms and conditions set forth herein and the Plan. The
Deferred Shares granted hereby shall be fully vested upon grant.
3. Purchaser's Representations, Warranties and Covenants.
(a) Investment Intention. The Purchaser represents and warrants that
the Purchaser is acquiring the Deferred Shares solely for the Purchaser's own
account for investment and not with a view to or for sale in connection with any
distribution thereof. The Purchaser further understands, acknowledges and agrees
that none of the Deferred Shares may be transferred, sold, pledged, hypothecated
or otherwise disposed of except to the extent permitted hereby.
(b) Securities Law Matters. The Purchaser acknowledges receipt of
advice from Holding that (i) the Deferred Shares and the Shares have not been
registered under the Securities Act based on an exemption provided under Rule
701 promulgated under the Securities Act or qualified under any state or foreign
securities or "blue sky" laws, (ii) it is not anticipated that there will be any
public market for the Shares, (iii) the Deferred Shares and the Shares must be
held indefinitely and the Purchaser must continue to bear the
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economic risk of the investment in the Deferred Shares and the Shares unless the
Shares are subsequently registered under the Securities Act and such state laws
or an exemption from registration is available, (iv) Rule 144 promulgated under
the Securities Act ("Rule 144") is not presently available with respect to the
sales of the Shares, and Holding has made no covenant to make Rule 144
available, (v) when and if the Shares may be disposed of without registration in
reliance upon Rule 144, such disposition can be made only in accordance with the
terms and conditions of such Rule, (vi) Holding does not plan to file reports
with the Commission or make public information concerning Holding available
unless required to do so by law or by the terms of its financing agreements,
(vii) if the exemption afforded by Rule 144 is not available, sales of the
Shares may be difficult to effect because of the absence of public information
concerning Holding, (viii) a restrictive legend in the form set forth in the
Agreement referred to in Section 7 shall be placed on the certificates
representing the Shares and (ix) a notation shall be made in the appropriate
records of Holding indicating that the Shares are subject to restrictions on
transfer set forth in the Agreement referred to in Section 7 and, if Holding
should in the future engage the services of a stock transfer agent, appropriate
stop-transfer restrictions will be issued to such transfer agent with respect to
the Shares.
(c) Ability to Bear Risk. The Purchaser represents and warrants that
(i) the financial situation of the Purchaser is such that the Purchaser can
afford to bear the economic risk of holding the Deferred Shares and Shares for
an indefinite period and (ii) the Purchaser can afford to suffer the complete
loss of the Purchaser's investment in the Deferred Shares and Shares.
(d) Access to Information. The Purchaser represents and warrants that
the Purchaser has received the Confidential Offering Memorandum dated May 14,
1999, as supplemented by the supplement to offering memorandum dated June 8,
1999 (as so supplemented, the "Offering Memorandum"), relating to the Award, the
Deferred Shares and the Shares and has carefully reviewed the Offering
Memorandum (together with the Annexes thereto) and the other materials furnished
to the Purchaser in connection with the transactions contemplated hereby and
thereby.
4. Representations and Warranties of Holding. Holding represents and
warrants to the Purchaser that (a) Holding has been duly incorporated and is an
existing corporation in good standing under the laws of the State of Delaware,
(b) this Agreement has been duly authorized, executed and delivered by Holding
and constitutes a valid and legally binding obligation of Holding enforceable
against Holding in accordance with its terms and (c) the Deferred Shares, when
issued, delivered and paid for in accordance with the terms hereof, will be duly
and validly issued, fully paid and nonassessable, and free and clear of any
liens or encumbrances other than those created pursuant to this Agreement, or
otherwise in connection with the transactions contemplated hereby.
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5. Nonassignability. The Deferred Shares granted hereby are not
assignable or transferable, in whole or in part, and may not, directly or
indirectly, be offered, transferred, sold, pledged, assigned, alienated,
hypothecated or otherwise disposed of or encumbered (including without
limitation by gift, operation of law or otherwise) other than by will or by the
laws of descent and distribution to the estate of the Purchaser upon the
Purchaser's death.
6. No Rights as a Stockholder. Neither the Purchaser nor any person
or persons to whom the Purchaser's rights under this Award shall have passed by
will or by the laws of descent and distribution, as the case may be, shall have
any voting, dividend or other rights or privileges as a stockholder of Holding
with respect to any Shares corresponding to the Deferred Shares granted hereby
unless and until a certificate for Shares is issued in respect thereof.
7. Delivery Event. Unless the Purchaser shall electively defer such
distribution by written notice to Holding in accordance with the Plan and such
conditions as the Board shall impose, upon the occurrence of an event described
in Section 8.3 of the Plan, the Purchaser shall receive, without payment, one
share of Common Stock in settlement of each share of Deferred Shares that he or
she then holds. As a condition to the delivery of any Common Stock in respect of
Deferred Shares, the holder of such Deferred Shares (and anyone whose rights
derive therefrom) shall execute a Subscription Agreement (or such other
agreement having comparable terms but modified to reflect differences between
such shares and shares purchased from Holding as shall be required by Holding).
The Purchaser acknowledges and agrees that the Subscription Agreement will have
restrictions on transfer, repurchase rights on the part of Holding and The
Xxxxxxx & Dubilier Private Equity Fund IV Limited Partnership on termination of
employment, take-along rights and other legal and contractual restrictions
similar to those contained in the Management Stock Subscription Agreements
described in the Offering Memorandum.
8. Capital Adjustments. If Holding is a party to any merger,
consolidation, divestiture (including a spin-off), reorganization,
reclassification, stock split-up, combination of shares, dividend on shares
payable in stock, liquidation or other transaction, such that an adjustment is
required to preserve, or to prevent enlargement of, the benefits or potential
benefits made available under an Award, then the Board shall, in such manner as
the Board shall deem equitable, adjust any or all of (i) the number and kind of
shares to which the Deferred Shares may relate and (ii) the number and kinds of
securities deliverable pursuant to Section 7 hereof. In any adjustment of shares
of Deferred Shares subject to this Award, fractional shares shall be omitted.
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9. Tax Withholding. Whenever shares of Common Stock or other property
are to be distributed in respect to any Deferred Shares awarded hereunder,
Holding shall have the power to withhold, or require the Purchaser to remit to
Holding, an amount sufficient to satisfy Federal, state, local and foreign
withholding tax requirements, including but not limited to income and employment
taxes, relating to such issuance, and Holding may defer issuance of such Shares
or other property until such requirements are satisfied. The Board may, in its
discretion, permit the Purchaser to elect, subject to such conditions as the
Board shall impose, to satisfy his withholding obligation hereunder with Shares
or any other property issuable hereunder.
10. No Right to Continued Employment. Nothing in the Plan or this
Award shall interfere with or limit in any way the right of Holding or any of
its Subsidiaries to terminate the Purchaser's employment at any time, or confer
upon the Purchaser any right to continue in the employ of Holding or any of its
Subsidiaries.
11. Interpretation. The Board shall have full power and discretion to
construe and interpret the Plan (and any rules and regulations issued
thereunder) and this Award. Any determination or interpretation by the Board
under or pursuant to this Award shall be final and binding and conclusive on all
persons affected hereby.
12. Binding Effect; Benefits. This Award shall be binding upon and
inure to the benefit of Holding and the Purchaser and their respective
successors and assigns. Nothing in this Award, express or implied, is intended
or shall be construed to give any person other than Holding or the Purchaser or
their respective successors or assigns any legal or equitable right, remedy or
claim under or in respect of any agreement or any provision contained herein.
This grant is made in full and complete satisfaction of any claim the Purchaser
may have regarding the promise by Holding to permit the Purchaser to purchase
its Common Stock as of a date prior hereto.
13. Waiver; Amendment.
(a) Waiver. Holding, the Purchaser (each of Holding and the
Purchaser, a "Party") or any beneficiary hereof may by written notice to the
other Parties (i) extend the time for the performance of any of the obligations
or other actions of the other Parties under this Award, (ii) waive compliance
with any of the conditions or covenants of the other Parties contained in this
Award and (iii) waive or modify performance of any of the obligations of the
other Parties under this Award. Except as provided in the preceding sentence, no
action taken pursuant to this Award, including, without limitation, any
investigation by or on behalf of any Party or beneficiary shall be deemed to
constitute a waiver by the Party or beneficiary taking such action of compliance
with any representations, warranties, covenants or agreements contained herein.
The waiver by any Party hereto or
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beneficiary hereof of a breach of any provision of this Award shall not operate
or be construed as a waiver of any preceding or succeeding breach and no failure
by a Party to exercise any right or privilege hereunder shall be deemed a waiver
of such Party's or beneficiary's rights or privileges hereunder or shall be
deemed a waiver of such Party's or beneficiary's rights to exercise the same at
any subsequent time or times hereunder.
(b) Amendment. This Award may not be altered, modified, or amended
except by a written instrument signed by Holding and the Purchaser.
14. Severability. In the event that any one or more of the provisions
of this Award shall be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
15. Entire Agreement. This Agreement, together with each Management
Stock Subscription Agreement, Management Stock Option Agreement, Matching
Deferred Share Award Agreement [and management deferred share award election]
entered into between the Purchaser and Holding on the date hereof, is the entire
agreement of the parties with respect to the subject matter hereof and thereof
and supersedes all other prior agreements, understandings, documents,
statements, representations and warranties, oral or written, express or implied,
between the parties hereto and their respective affiliates, representatives and
agents in respect of the subject matter hereof and thereof.
16. Notices. All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given if delivered personally or sent by certified or
express mail, return receipt requested, postage prepaid, or by any recognized
international equivalent of such delivery, to Holding or the Purchaser, as the
case may be, at the following addresses or to such other address as Holding or
the Purchaser, as the case may be, shall specify by notice to the others:
if to Holding, to it at:
RACI Holding, Inc.
c/o Remington Arms Company, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Financial Officer
if to the Purchaser, to the Purchaser at the address set forth on the
signature page hereof.
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All such notices and communications shall be deemed to have been received on the
date of delivery or on the third business day after the mailing thereof. Copies
of any notice or other communication given under this Agreement shall also be
given to:
The Xxxxxxx & Dubilier Private Equity
Fund IV Limited Partnership
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx & Dubilier Associates
IV Limited Partnership,
Xxxxxx X. Xxxx, III
with copies to:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, III
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
17. Sections and Other Headings. The section and other headings
contained in this Award are for reference purposes only and shall not affect the
meaning or interpretation of this Award.
18. Governing Law. This Award shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
principles of conflict of laws.
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IN WITNESS WHEREOF, Holding and the Purchaser have executed this
Award as of the date first above written.
RACI HOLDING, INC.
By:
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Name:
Title:
THE PURCHASER:
By:
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Name:
Attorney-in-Fact
Number of Deferred Shares:
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