CONFIDENTIAL SEVERANCE AGREEMENT AND GENERAL RELEASE

Exhibit 10.1

CONFIDENTIAL SEVERANCE AGREEMENT AND

GENERAL RELEASE

THIS CONFIDENTIAL SEVERANCE AGREEMENT AND GENERAL RELEASE (this “Agreement”) is made and entered into on the 7th day of September, 2007, to be effective as of August 31, 2007 (the “Effective Date”), by and between REMINGTON ARMS COMPANY, INC. , a Delaware corporation (the “Company”), and PAUL CAHAN (the “Employee”).

R E C I T A L S:

The Company is engaged in the business of designing, manufacturing, marketing, and selling (i) sporting goods products for the global hunting and shooting sports marketplace under the Remington® brand name, and (ii) products with law enforcement, military, and government applications . The Employee is experienced in, and knowledgeable concerning, all aspects of the business of the Company. The Employee has heretofore been employed by the Company as the President of Ammunition Operations pursuant to the terms of that certain 2007 Executive Employment Agreement dated as of May 31, 2007 (the “Employment Agreement”).

The Employee has decided to resign from employment with the Company on August 31, 2007. The Company and the Employee mutually desire to resolve any and all issues with respect to the resignation of the Employee. The Company is willing to extend and the Employee is willing to accept the terms and conditions set forth in this Agreement. The Company and the Employee desire to settle fully, finally, and on a confidential basis all matters between them and related to the Employee’s employment with the Company, and the Employee’s termination of employment.

NOW THEREFORE, in consideration of the mutual covenants and obligations herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Employee and the Company hereby agree as follows:

Section 1.            Resignation . The Employee shall resign as an active employee of the Company effective as of the close of business of the Company on August 31, 2007 (the “Resignation Date”).

Section 2.          Special Severance Payments . During the six-month period beginning September 1, 2007 and ending February 28, 2008 (the “Severance Pay Period”), the Employee shall be entitled to receive a special severance benefit equal to $186,867 (the “Severance Benefit”), which Severance Benefit shall be paid to the Employee (or, in the event of his death before the end of the Severance Pay Period, to his surviving spouse or, if he shall leave no surviving spouse, then to his estate) in six (6) equal monthly installments of $31,144.50 in accordance with the Company’s normal payroll cycle during the Severance Pay Period. The Employee agrees and acknowledges that the Severance Benefit to be paid to him pursuant to this Section 2 is in addition to

anything of value to which he is already entitled. The Severance Benefit is intended to constitute the exclusive payments in the nature of severance or termination compensation that shall be due the Employee upon his resignation.

Section 3.         Incentive Compensation Payments . The Employee is a participant in the Company’s Annual Incentive Compensation Plan and the 2006 Long Term Incentive Plan (collectively, the “Incentive Plans”). In full settlement of all obligations and liabilities of the Company to the Employee under the Incentive Plans, the Company shall pay to the Employee an amount equal to $197,667 (the “Incentive Amount”), which Incentive Amount shall be paid to the Employee during the six month period beginning September 1, 2007 and ending February 28, 2008 (the “Incentive Pay Period”) (or, in the event of his death before the end of the Incentive Pay Period, to his surviving spouse, or if he shall leave no surviving spouse, then to his estate) in six (6) equal monthly installments of $32,944.50 in accordance with the Company’s normal payroll cycle during the Incentive Pay Period.

Section 4.           Retiree Medical; Other Welfare Benefit Programs; Accrued Vacation . The Employee will be entitled to elect retiree medical coverage under the Company’s applicable retiree medical program in accordance with its terms, as they may be amended from time to time. Except as provided in the preceding sentence, or as required by the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), as amended, the Employee will cease to participate in all employee welfare benefit arrangements maintained by the Company (including, but not limited to, the Company’s medical, dental, life insurance, disability insurance, and “AD&D” insurance arrangements) as of his Resignation Date. Within ten (10) days of his Resignation Date, the Employee shall be paid in a lump sum the dollar amount of his accrued or earned vacation pay then due him.

The Employee and his dependents have been offered and have the right to elect continued group medical coverage under the provisions of COBRA. For purposes of this Agreement, the date of the Employee’s qualifying event, as defined in Section 4980B(f)(3) of the Internal Revenue Code of 1986 (as amended) and Section 603 of the Employee Retirement Income Security Act of 1974 (as amended), shall be August 31, 2007. If the Employee elects COBRA coverage, the Employee shall be responsible for the cost of such coverage.

Section 6.           Continuation of Certain Employment Agreement Provisions . The Employee covenants and agrees that the provisions of Sections 8 through 15 of his Employment Agreement shall remain in full force and effect on and after the Effective Date and shall survive the termination of his employment. A copy of Sections 8 through 15 of the Employment Agreement is attached as Exhibit B to this Agreement.

7.1 General Release . Except as otherwise provided in Section 7.1, in consideration for the benefits provided pursuant to this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Employee, for himself and on behalf of his heirs, representatives, administrators, executors, successors and assigns, hereby irrevocably and unconditionally releases, acquits, and forever discharges the Company and its present and former subsidiaries, affiliates, predecessors, successors, and assigns, together with all present and former agents, shareholders, directors, officers, employees, owners, representatives, and attorneys of all such entities or persons and all persons acting by, through, under or in concert with any of them (hereinafter collectively referred to as the “Released Parties”) from any and all charges, complaints, claims, lawsuits, liabilities, obligations, or actions of any nature whatsoever, in law, equity or otherwise, known or unknown (hereinafter “Claim” or “Claims”), which the Employee now has, has had, or may hereafter claim to have had against each or any of the Released Parties for losses, expenses, or damages of any kind (whether arising in tort, contract, or by statute) resulting from or arising out of his employment with the Company and/or the termination of that employment. The Employee understands that by signing this Agreement he is waiving any right to pursue any Claim against any of the Released Parties in any state or federal court or before any state or federal agency for compensatory damages, punitive damages, or any other losses, or other damages to the Employee or his property resulting from any claimed violation of state or federal law, including, but not limited to, claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended, the Equal Pay Act, the Civil Rights Act of 1991, the Americans with Disabilities Act (“ADA”), the Employee Retirement Income Security Act of 1974, as amended, the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), as amended, the Family and Medical Leave Act of 1993, and claims under any other federal, state, and local statutory or common laws or claims in the nature of a breach of contract, claims for wrongful discharge, emotional distress, defamation, fraud or breach of the covenant of good faith and fair dealing and wage or benefit claims (other than the payments to which the Employee is entitled under this Agreement). The Employee further covenants and agrees never to institute, directly or indirectly, or to participate in (unless otherwise required by law) any action or proceeding of any kind against any one or more of the Released Parties based on or related to his employment relationship with the Company, including, but not limited to, an action asserting that the Company discriminated against him on the basis of age or sex or an action asserting breach of contract, it being understood that th