AGREEMENT BETWEEN SMITH & WESSON AND
THE DEPARTMENTS OF THE TREASURY AND HOUSING AND URBAN DEVELOPMENT,
LOCAL GOVERNMENTS AND STATES

SUMMARY OF TERMS

Preamble: The city, state, county and federal parties agree to dismiss the parties from the pending suits and refrain from filing suits against the manufacturer parties based on an equivalent cause of action.

SAFETY AND DESIGN

All handguns must meet the following safety and design standards:

• Second "hidden" serial number, to prevent criminals from obliterating serial numbers.
• External locking device sold with all guns within 60 days.
• Internal locking device on all guns within 24 months.
• Smart Guns -- Authorized User Technology.
• Manufacturers commit 2% of annual firearms revenues to the development of authorized user technology.
• Within 36 months, authorized user technology will be included in all new firearm models, with the exception of curios and collectors’ firearms.
• If top eight manufacturers agree, authorized user technology will be included in all new firearms.
• Child Safety. Within 12 months, handguns will be designed so they cannot be readily operated by a child under 6.
• Performance test. All firearms will be subject to a performance test to ensure safety and quality.
• Drop test. All firearms will be subject to a test to ensure they do not fire when dropped.

All pistols must meet the following additional requirements:

• Safety device. Positive manually operated safety device.
• Magazine disconnectors must be available on all pistols to customers who desire the feature, within 12 months.
• Chamber load indicators on all pistols, showing whether the pistol is loaded, within 12 months.
• Large capacity magazines. New firearm designs will not be able to accept large-capacity magazines that were manufactured prior to September 1994. (Manufacture of such magazines has been prohibited since that date.)

Law enforcement and military exception. If law enforcement agencies or the military certify the need, exceptions to these requirements may be made. Manufacturers will ask that these guns not be resold to the civilian market.

Warnings about safe storage and handling included with all firearms within six months.

Illegal firearms. Manufacturers will not sell firearms that can readily be converted into fully automatic weapons or that are resistant to fingerprints.

SALES AND DISTRIBUTION

Code of Conduct. The manufacturers will sell only to authorized dealers and distributors and allow their authorized distributors to sell only to authorized dealers. Authorized dealers and distributors will agree to a code of conduct. If manufacturers receive notice of a violation by an authorized dealer or distributor, they will take action against the dealer or distributor, including termination of sales to the dealer or distributor. The Oversight Commission will review such actions and have authority to require termination or suspension if warranted.

The code of conduct will require authorized dealers and distributors to:

• Gun shows: make no gun show sales unless all sales at the gun show are completed only after a background check.
• Brady checks: wait as long as necessary for a completed Brady check showing that the purchaser is not a felon or otherwise prohibited before selling a gun to the purchaser.
• Safety training for purchasers: transfer firearms only to individuals who have passed certified safety course or exam and demonstrate to purchasers how to use all safety devices and how to load, unload, and safely store the firearm before completing the sale.
• Multiple handgun sales: all purchasers of multiple handguns to take only one handgun from the store on the day of sale, at which point a multiple sales report will be filed with ATF. The remainder of the guns can only be collected after 14 days.
• Employee training: require all employees to attend ATF-approved training and to pass a exam on firearms laws, straw purchasers, illegal trafficking indicators, and gun safety.
• Insurance: carry liability insurance where available, with a minimum coverage of $1 million for each incident.
• Inventory control: maintain an electronic inventory tracking plan within 24 months
• Security: implement a security plan for securing firearms.
• Child access: require persons under 18 to be accompanied by adults in gun stores or gun sections of stores.
• Weapons attractive to criminals: not sell large capacity magazines or semiautomatic assault weapons.
• Compliance: provide law enforcement, government regulators, and the Oversight Commission established in this Agreement with access to documents necessary to determine compliance; cooperate fully in the Agreement’s Oversight mechanism.
• Crime gun traces: maintain an electronic record of all ATF trace requests and report trace requests to manufacturers.
• Indicted dealers: forgo firearms sales to licensed dealers known to be under indictment.
• Straw purchasers: not to make sales to straw purchasers.

Manufacturer commitments. Manufacturers will:

• Provide quarterly sales data to ATF.
• Not market guns in any manner designed to appeal to juveniles or criminals.
• Refrain from selling any modified/sporterized semi-automatic pistol of type that cannot be imported into U.S.
• Reaffirm policy of not placing advertisements in vicinity of schools, high crime zones, and public housing.
• Implement a security plan for securing firearms.
• Designate an officer to ensure compliance with the Agreement.

Corporate responsibility for crime gun traces. If an authorized dealer or distributor has a disproportionate number of crime guns traced to it within three years of sale, the manufacturers will take action, including possible termination or suspension, against the dealer or distributor. The Oversight Commission will review such actions and have authority to require termination or suspension if warranted.

Oversight Commission will be established and empowered to oversee implementation of the Agreement. The Commission will have five members selected as follows: one by manufacturers; two by city and county parties; one by state parties; one by ATF. The Commission’s powers will include the authority to review compliance with the design and safety requirements, review the safety and training program for dealer and distributor employees, review manufacturer actions against dealers or distributors that violate the Agreement or have a disproportionate number of crime gun traces, and require suspension or termination if warranted.

Role of ATF. To the extent consistent with law, ATF will work with manufacturers and the Oversight Commission to assist them in meeting obligations under the Agreement. ATF will notify the Oversight Commission of certain violations of the Agreement by distributors and dealers if it uncovers such violations.

Ballistics Imaging. Within six months, if technologically available, manufacturers will fire all firearms before sale and will enter the digital image of the casings in a system compatible with the National Integrated Ballistics Identification Network and accessible to ATF. This will enable law enforcement to trace crime guns when only the bullets or casings are recovered.

Access 2000. Manufacturers shall participate in ATF’s Access 2000 program, which establishes electronic links with ATF and enables high-speed tracing of crime guns.

Legislation. The parties will work together to support legislative efforts to reduce firearm misuse and the development of authorized user technology.

Education trust fund. Upon resolution of all current city, state, and county lawsuits, manufacturers will dedicate 1% of overall firearms revenues to an education trust fund.

Most favored entity. If other manufacturers enter agreements with more expansive design and distribution reforms, and those manufacturers, along with the manufacturer parties to this Agreement, account for fifty percent or more of United States handgun sales, the manufacturer parties to this Agreement will agree to abide by the same reforms.

Enforcement. The Agreement will be entered into and enforceable as a court order and as a contract.