SEVERANCE AGREEMENT

Exhibit 10.7

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (this “Agreement”) is made and entered into as of the 31^st day of May, 2007 (the “Effective Date”), by and between REMINGTON ARMS COMPANY, INC., a Delaware corporation (the “Company”), and Donald Campbell (the “Employee”).

R E C I T A L S:

1.     The Company is engaged in the business of designing, manufacturing, marketing, and selling (a) sporting goods products, including, by way of illustration, firearms and ammunition, as well as hunting and gun care accessories and clay targets, for the global hunting and shooting sports marketplace, and (b) products with law enforcement, military and government applications, including, by way of illustration, surveillance technology products and powdered metal products (the “Business”). The Employee is experienced in, and is knowledgeable concerning, important aspects of the Business.

2.            The Employee’s employment with the Company creates a relationship of confidence and trust between the Employee and the Company with respect to the Business of the Company and its affiliates and to the business of any client or customer of the Company or its affiliates.

3.            The Employee has heretofore been employed by the Company. The Company has determined that it is essential and in the best interests of the Company and its shareholders to secure the continued services, and to ensure the continued and undivided dedication and cooperation, of the Employee. To that end, the Company has determined that it is in the best interests of the Company and its shareholders to provide a Severance Benefit (as defined below) as provided herein.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1.          Definitions. Whenever used in this Agreement, including the Recitals and this Section 1, the following terms shall have the meanings set forth below (unless otherwise indicated by the context), and such meanings shall be applicable to both the singular and plural form (except where otherwise expressly indicated):

•             “Base Salary” means the amount the Employee is entitled to receive from the Company as base wages or base salary on an annualized basis as in effect immediately prior to his Termination. Base Salary does not include bonuses, commissions, overtime pay, shift pay, premium pay, cost of living allowances or income from stock options, stock grants, phantom stock awards or other similar types of incentive compensation.

•             “Beneficiary” means the surviving spouse of the Employee or, if he leaves no surviving spouse, then the Employee’s estate.

•             “Cause” means one or more of the following, in each case as determined by the Company, in its sole discretion: (a) the Employee’s conviction of, or pleading guilty or no contest to, any crime that constitutes a felony, regardless of its demonstrable impact on the Company, or any other crime involving moral turpitude that results, or is reasonably likely to result, in material harm to the Company, (b) the failure of the Employee substantially to perform the duties of his position or any other duties reasonably assigned to him by the Company (other than any such failure due to physical or mental illness) or other material breach by the Employee of any of his obligations owed to the Company, after a demand for substantial performance or demand for cure of such breach is delivered, and a reasonable opportunity to cure is given, to the Employee by a Responsible Person, which demand identifies the manner in which the Company believes that the Employee has not substantially performed his duties or has breached his obligations, (c) the Employee’s willful misconduct or gross negligence that has caused or would reasonably be expected to result in material injury to the Company or any of its affiliates, (d) any diversion by the Employee for his personal gain of any viable and significant business opportunity from the Company (other than with the prior consent of the Board), (e) violation of any provision of the Company’s Corporate Governance Guidelines, the Company’s Code of Business Conduct and Ethics or any covenant contained in this Agreement. For purposes of this Section 1.5, “Responsible Person” shall mean the executive officer or other employee of the Company who is the direct or indirect supervisor of the Employee.

•             “Code” means the Internal Revenue Code of 1986, as amended, and all rules, regulations and other written guidance issued thereunder.

•             “Company” means Remington Arms Company, Inc., a Delaware corporation with its principal offices at Madison, North Carolina.

•             “Confidential Information” means all trade secrets and other information concerning the Business of the Company and its affiliates that is confidential, proprietary or otherwise not generally available to the public. By way of example, Confidential Information includes, without limitation, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans, any information covered by the Uniform Trade Secrets Act of Delaware or any other similar legal protections that may be applicable (or any successor thereto), management organization information (including data and other information relating to members of the Board, the Board of Directors of RACI Holding, Inc. (“Holding”) and management of the Company or Holding), operating policies or manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information relating to Holding, the Company or any of their respective subsidiaries or affiliates or that Holding, the Company or any of their respective subsidiaries or affiliates may receive belonging to suppliers, customers or others who do business with Holding, the Company or any of their respective subsidiaries or affiliates. The parties expressly agree that Confidential Information does not exist in written form only. Notwithstanding the foregoing, Confidential Information does not include information that (a) is or becomes generally available to the public other than as a result of a disclosure by the Employee in violation of the provisions of the

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Agreement, or (b) is received by the Employee from another party that did not receive such information directly or indirectly from the Company or any of its affiliates under an obligation of confidentiality.

•             “Good Reason” means, without the Employee’s express written consent, (a) the reduction by the Company in the Base Salary of the Employee; or (b) the transfer of the Employee’s primary work location to a location that is more than fifty (50) miles from the Employee’s primary work location immediately prior to the Effective Date.

•             “Person” means any individual, partnership, limited liability company, joint venture, corporation, company, firm, group or other entity.

•             “Restricted Period” means the period commencing on the Effective Date and ending on the earlier of (a) the date that immediately precedes the first anniversary of the Effective Date or (b) the Termination Date; provided, however, that in the event the Employee’s employment is terminated as a result of a Severance Event and the Employee becomes entitled to receive the Severance Benefit pursuant to Section 2, or the Company otherwise elects to pay the Severance Benefit pursuant to Section 2, the Restricted Period shall also include the 365 day period following his Termination Date.

•             “Severance Event” means the Termination of the Employee (a) by the Company other than for Cause, death or Total Disability or (b) by the Employee for Good Reason. In no event shall any one of the following events be treated as a Severance Event:

unless, and to the extent, the Company exercises its rights under Section 2.1.

•             “Termination” and any derivative of that term means the termination of the Employee’s employment with the Company or an affiliate.

•             “Total Disability” means the total disability of the Employee as determined in accordance with the terms of the insured, group long-term disability plan sponsored by the Company.

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•             Eligibility; Amount of Severance Benefit. Subject to Sections 2.2 and 2.3 and Section 3, in the event the Employee is Terminated as a result of a Severance Event and such Termination occurs prior to the first anniversary of the Effective Date, the Employee, as replacement for the compensation the Employee would have received had his employment with the Company continued, shall receive his Base Salary for nine (9) months through the Company’s regular payroll (the “Severance Benefit”). No Severance Benefit shall be paid to the Employee in the event the Employee is Terminated by the Company for Cause, on account of the death or Total Disability of the Employee, or by the Employee for any reason other than Good Reason, or as a result of a Severance Event that occurs on or after the first anniversary of the Effective Date; provided, however, that the Company shall have the right to elect to pay the Employee the Severance Benefit in the event of a termination by the Company for Cause or by the Employee without Good Reason in exchange for the Employee’s compliance with the covenants set forth in Sections 3.3 and 3.4. In the event the Employee becomes entitled to receive a Severance Benefit due the occurrence of a Severance Event but dies prior to receiving the Severance Benefit, then such amount shall be paid to his Beneficiary.

•             Release of Claims. No Severance Benefit shall be provided to the Employee unless the Employee has properly executed and delivered to the Company a release of claims substantially in the form attached to this Agreement as Exhibit A and that release of claims has become irrevocable as provided therein. Such release of claims shall not be accepted by the Company unless it is executed on or after the Employee’s Termination Date. Prior to the occurrence of a Severance Event, the release of claims may be revised by the Company. The Company may in any event modify the release of claims to conform it to the then current laws of the local jurisdiction applicable to the Employee.

•             Exclusive Payment. The Severance Benefit is intended to constitute the exclusive payment in the nature of severance or termination compensation that shall be due the Employee upon Termination due to the occurrence of a Severance Event, and shall be in lieu of any such other severance or termination compensation under any other agreement, plan, program or policy of the Com