The plaintiff is seeking an unspecified amount of compensatory damages. On November 15, 2006, Thompson/Center Arms filed an answer denying all allegations of liability. On February 2, 2009, the plaintiff filed a second amended complaint. On February 17, 2009, we filed our answer to plaintiff’s complaint. On October 9, 2009, we filed a motion for summary judgment. On October 21, 2009, plaintiff opposed our motion. A hearing on our motion for summary judgment was held on November 3, 2009. No decision has been issued to date. Expert discovery is ongoing. A case evaluation as required by the Michigan court was held on November 13, 2009, in which the panel recommended a settlement in favor of the plaintiff in the amount of $325,000. We rejected this proposed settlement award. On December 12, 2009, the court granted our motion for summary judgment on the manufacturing defect, failure to recall, and failure to test claims, and denied our motion on the design defect claims under the theories of risk-utility and failure to warn. A settlement conference is scheduled for August 5, 2010. Trial is scheduled to begin October 19, 2010
On January 19, 2010, the U.S. Department of Justice (“DOJ”) unsealed indictments of 22 individuals from the firearm industry, one of whom was our Vice President Sales, International & U.S. Law Enforcement. We were not charged in the indictment. On January 22, 2010, we were served with a Grand Jury subpoena for the production of documents. We have always taken, and continue to take seriously, our obligation as an industry leader to foster a responsible and ethical culture, which includes adherence to laws and industry regulations in the United States and abroad. Although we are cooperating fully with the DOJ in this matter, the DOJ may determine that we have violated FCPA laws. We cannot predict when this investigation will be completed or its outcome. If the DOJ determines that we violated FCPA laws, we may face sanctions, including monetary penalties and administrative relief. In addition, we are incurring legal costs for our company as well as for our employee.



















































































































































































































































































































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