EXHIBIT 10.8
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered
into as of September 28, 2005 by and between QubicaAMF
Worldwide, LLC, a Virginia limited liability company (the “
Company ”), and Christopher F. Caesar (“
Executive ”). For purposes of this Agreement, “
Contribution Agreement ” means that certain
Contribution Agreement, dated as June 13, 2005, by and among
Qubica Lux, S.à.r.l., a société à
responsabilité limitée organized under the laws of
Luxembourg, AMF Holdings, Inc. and QubicaAMF Worldwide
S.à.r.l., a société à responsabilité
limitée organized under the laws of Luxembourg
(“QubicaAMF”).
WHEREAS, Executive was formerly an
employee of AMF Bowling Worldwide, Inc. (“WINC”), which
is the indirect parent company of the Company, and as of
July 11, 2005, transferred to and became an employee of the
Company to serve as the Chief Financial Officer (“CFO”)
of the Company.
WHEREAS, from and after the
Effective Date (as defined in the Contribution Agreement),
Executive will also serve as the CFO of QubicaAMF and its
subsidiaries (the “JV”).
WHEREAS, the Company operates and JV
will operate its businesses worldwide.
WHEREAS, the Company and Executive
wish to confirm the terms and conditions of the employment of
Executive are effective with the Company as of July 11, 2005
and the JV after the Effective Date as set forth herein.
NOW THEREFORE, in consideration of
the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment . The Company
shall employ Executive, and Executive hereby accepts employment
with the Company upon the terms and conditions set forth in this
Agreement for the period beginning July 11, 2005 and ending as
provided in paragraph 4 hereof (the “ Employment
Period ”). The Company agrees that for determining the
Employment Period for purposes of calculating any benefits based on
years of service, Executive’s employment with the Company
shall be recognized as commencing on September 30,
1996.
2. Position and Duties
.
(a) During the Employment Period,
Executive shall render such executive and managerial services to
the Company and its Subsidiaries and after the Effective Date to
the JV and its Subsidiaries as the Chief Executive Officer
(“CEO”) of the Company until the Effective Date and
thereafter as the Chief Executive Officer of QubicaAMF (the “
JV CEO ”) may from time to time direct without any
additional compensation or benefits other than as provided herein.
The Subsidiaries of the JV (which include the Company and its
Subsidiaries) are referred to collectively herein as the “
QubicaAMF Companies .” During the Employment Period,
Executive shall serve as the CFO of the Company and after the
Effective Date as the CFO of the QubicaAMF Companies and shall have
the normal duties, responsibilities, functions and authority of
such position.
(b) During the Employment Period,
Executive shall report to the CEO of the Company (and after the
Effective Date to the JV CEO) and shall devote his best efforts and
his full business time and attention (except for permitted vacation
periods and reasonable periods of illness or other incapacity) to
the business and affairs of the Company and the QubicaAMF
Companies, as the case may be. Executive shall perform his duties,
responsibilities and functions hereunder to the best of his
abilities in a diligent, trustworthy, businesslike and efficient
manner.
(c) For purposes of this Agreement,
“ Subsidiaries ” shall mean, with respect to any
Person, any corporation, limited liability company, partnership,
association, or business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in
the election of directors, managers, or trustees thereof is at the
time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity (other than a
corporation), a majority of partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of the Person
or a combination thereof. For purposes hereof, a Person or Persons
shall be deemed to have a majority ownership interest in a limited
liability company, partnership, association, or other business
entity (other than a corporation) if such Person or Persons shall
be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or
control any managing director or general partner of such limited
liability company, partnership, association, or other business
entity. For purposes hereof, “ Person ” shall
mean an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization, or a governmental
entity or any department, agency, or political subdivision
thereof.
3. Compensation and Benefits
.
(a) During the Employment Period,
Executive’s base salary shall be $245,000 per annum or such
higher rate as the CEO may determine from time to time (as adjusted
from time to time based on annual review by the CEO, the “
Base Salary ”), which salary shall be payable by the
Company in regular installments in accordance with the
Company’s general payroll practices. In addition, during the
Employment Period, Executive shall be entitled to participate in
the Company’s and QubicaAMF Companies’ incentive equity
program and to receive employee benefits consistent with other
senior executives and which are substantially similar to, and no
less favorable, in the aggregate than such benefits received by
Executive as of immediately prior to the Effective Date as a Tier I
Manager under the AMF Senior Manager Benefit Program, including,
but not limited to, health, dental, life, disability and paid
vacation (the “Benefit Plan”).
(b) During the Employment Period,
the Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with the
Company’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to
the Company’s requirements with respect to reporting and
documentation of such expenses.
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(c) In addition to the Base Salary,
Executive shall be eligible to receive a bonus each year based upon
annual targets set by the CEO in his discretion which targets shall
take into account the Company’s and the QubicaAMF
Companies’ EBITDA and other performance goals including
incentive compensation for the full fiscal year that began
July 4, 2005; provided that with respect to the first
year for which Executive is eligible for a bonus, such bonus shall
be for the six month fiscal year ending December 31, 2005.
Executive’s target bonus each year shall be not less than 50%
of his Base Salary then in effect (the “ Target Salary
Percentage ”), but Executive shall be eligible to earn up
to 75% of his Base Salary then in effect for results exceeding
performance targets.
Bonuses are earned as of the last
day of each calendar year (the “ Determination Date
”) and shall be paid promptly after delivery of the
Company’s audited financial statements for the year in which
the bonus is earned. Notwithstanding the foregoing, if Executive
dies, becomes Disabled (as defined below) or is terminated without
Cause or resigns for Good Reason after the end of a calendar year
but prior to Executive receiving the bonus payment earned in the
calendar year prior to such event, Executive (or Executive’s
estate) shall be entitled to any such bonus payment. In addition,
if Executive dies, becomes Disabled or is terminated without Cause
or resigns for Good Reason, then the determination of whether
Executive has earned a bonus for the calendar year in which such
event occurs shall be determined (i) as if the last day of the
month immediately preceding the month in which such event occurs is
the Determination Date (i.e., comparing the actual financial
results of the Company and the QubicaAMF Companies for such short
period to the budgeted financial results of the Company and the
QubicaAMF Companies for such short period) and (ii) applying a
pro rata portion of the Target Salary Percentage based upon the
portion of such calendar year that has elapsed prior to such deemed
Determination Date.
(d) The Company and the QubicaAMF
Companies shall be entitled to deduct or withhold from any amounts
owing from the Company or any of the QubicaAMF Companies to
Executive any federal, state, local or foreign withholding taxes,
excise taxes, or employment taxes (“ Taxes ”)
imposed with respect to Executive’s compensation or other
payments from the Company or any of the QubicaAMF Companies,
including, without limitation, wages, bonuses, dividends, the
receipt or exercise of stock options and/or the receipt or vesting
of restricted stock. In the event the Company or any QubicaAMF
Company does not make such deductions or withholdings, Executive
shall indemnify the Company and the QubicaAMF Companies for any
amounts paid with respect to any such Taxes, together with any
interest, penalties and related expenses thereto.
(e) For purposes of this Agreement,
“ EBITDA ” shall mean earnings before interest,
taxes, depreciation and amortization, determined in accordance with
United States generally accepted accounting principles consistently
applied.
4. Term .
(a) The Employment Period shall
continue until the earlier of (i) Executive’s
resignation (whether with or without Good Reason), death or
Disability, and (ii) the date upon which Executive’s
employment is terminated by the Company (whether for or without
Cause) (the “ Termination Date ”). Except as
otherwise provided herein, any termination of the
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Employment Period by the Company shall be
effective as specified in a written notice from the Company to
Executive. For the purposes of this Agreement, “
Disability ” or “ Disabled ” means
Executive’s inability to perform his duties hereunder (as
determined by the CEO) for any period of 180 consecutive days and
Executive’s return to his duties for periods of 15 days or
less shall not interrupt such 180 day period.
(b) If the Employment Period is
terminated by the Company without Cause pursuant to
Section 4(a)(ii) or by resignation of Executive for
Good Reason, Executive shall be entitled to receive (i) his
Base Salary through the date of termination; (ii) any accrued
but unused vacation; (iii) any unreimbursed expenses incurred
in accordance with the Company’s policies for business
expenses; (iv) any bonus earned by Executive through the date
of termination as determined in accordance with the provisions of
Section 3(c) ; (v) an amount equal to 100% of his
annual Base Salary at the time of termination, such amount to be
paid in substantially equal monthly installments over a period of
twelve (12) months from the date of such termination and
(vi) without duplication of such other benefits to which
Executive may be entitled upon such termation of employment under
the Benefit Plan, if and only if Executive has executed and
delivered to the Company the General Release substantially in form
and substance as set forth in Exhibit A attached hereto
and only so long as Executive has not breached the provisions of
Sections 5, 6, and 7 hereof, and Executive shall not be
entitled to any other salary, compensation or benefits after
termination of the Employment Period.
(c) If the Employment Period is
terminated by the Company for Cause, by resignation of Executive
without Good Reason, by Executive’s death or Disability in
accordance with Section 4(a)(i) above, Executive shall
only be entitled to receive his Base Salary through the date of
termination plus any (i) accrued but unused vacation and
(ii) unreimbursed expenses incurred in accordance with the
Company’s policies for business expenses, and Executive shall
not be entitled to any other salary, compensation or benefits from
the Company thereafter.
(d) Except as otherwise expressly
provided herein, all of Executive’s rights to salary,
bonuses, fringe benefits and other compensation hereunder which
accrue or become payable after the termination or expiration of the
Employment Period shall cease upon such termination or expiration,
other than those expressly required under applicable law (such as
COBRA). The Company may offset any amounts that Executive owes to
the Company or the QubicaAMF Companies against any amounts that the
Company owes to Executive hereunder.
(e) For purposes of this Agreement,
“ Cause ” shall mean (i) the conviction of
a felony or a crime involving moral turpitude, (ii) the
commission of any other substantial act or omission involving
dishonesty, disloyalty or fraud with respect to the Company or any
of the QubicaAMF Companies or any of their customers or suppliers,
(iii) intentional conduct outside of the performance of
Executive’s normal duties having the effect of bringing any
of the Company or the QubicaAMF Companies into substantial public
disgrace or disrepute, (iv) substantial and repeated failure
to perform duties as reasonably directed by the CEO, (v) any
act or omission aiding or abetting a competitor, supplier or
customer of any of the QubicaAMF Companies to the material
disadvantage or detriment of any of the QubicaAMF Companies,
(vi) breach of fiduciary duty, gross negligence or willful
misconduct with respect to the Company or any of the QubicaAMF
Companies, (vii) a material failure to observe policies or
standards approved by the CEO regarding employment practices,
nondiscrimination and sexual harassment as the CEO may address in
writing from time to time or (vii) any other material breach
of this Agreement.
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(f) For purposes of this Agreement,
“ Good Reason ” shall have the same meaning as
such term is used in the Senior Manager Severance Plan that is a
part of the Benefit Plan.
5. Confidential Information
.
(a) Obligation to Maintain
Confidentiality . Executive acknowledges that the information,
observations and data obtained by him during the course of his
employment with the Company concerning the business and affairs of
the Company, the QubicaAMF Companies and their respective
Affiliates, in each case whether prior to or after the date hereof,
are the property of the Company, the QubicaAMF Companies and such
Affiliates, including, but not limited to, information concerning
(i) product formulas and processes, technology, data, methods,
know-how, techniques, samples, trade secrets and business, price,
finance, marketing, supplier, customer and other information; and
(ii) acquisition opportunities in or reasonably related to the
Company’s or the QubicaAMF Companies’ business or
industry of which Executive becomes aware during such employment
(collectively, “ Confidential Information ”).
Therefore, Executive agrees that he will hold the Confidential
Information in strictest confidence and will not disclose to any
person or use for his own account or for the account of any other
person or entity any of the Confidential Information without the
CEO’s written consent, unless and to the extent that the
aforementioned matters become generally known to, and available for
use by, the public other than as a result of Executive’s acts
or omissions to act. Executive agrees to deliver to the Company at
the termination or expiration of the Employment Period, or at any
other time the Company may request in writing, all memoranda,
notes, plans, records, reports and other documents (and copies
thereof) relating to the business of the Company, the QubicaAMF
Companies and their respective Affiliates (including, without
limitation, all acquisition prospects, lists and contact
information) which he may then possess or have under his control.
For purposes of this Agreement, “ Affiliate ”
shall mean with respect to any Person, any Person that controls, is
controlled by or is under common control with such Person or an
Affiliate of such Person.
(b) Third Party Information .
Executive understands that the Company, the QubicaAMF Companies and
their respective Affiliates will receive from third parties
confidential or proprietary information (“ Third Party
Information ”) subject to a duty on the part of the
Company, the QubicaAMF Companies and such Affiliates to maintain
the confidentiality of such information and to use it only for
certain limited purposes. During the Employment Period and
thereafter, and without in any way limiting the provisions of
Section 1(a) above, Executive will hold Third Party
Information in the strictest confidence and will not disclose to
anyone (other than personnel of the Company, the QubicaAMF
Companies or their respective Affiliates or agents who need to know
such information in connection with their work for the Company, the
QubicaAMF Companies or their respective Affiliates or agents) or
use, except in connection with his work for the Company, the
QubicaAMF Companies or their respective Affiliates, Third Party
Information unless expressly authorized by a member of the CEO in
writing.
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