Exhibit 10.3
AMF BOWLING, INC.
M E M O R A N D U M
Date: September 8, 1998
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To: John Watkins From: Doug Stanard
Company: AMF Bowling, Inc. Company: AMF Bowling, Inc.
Re: Terms of Employment Copied: Mike Bardaro
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Message: First, let me congratulate you on joining AMF. We
look forward to your making a major contribution to
our U.S. Bowling Center Operations.
Attached is a copy of the original offer letter to you dated
August 6, 1998. This memorandum is designed to augment that
letter consistent with our final agreed terms for your
employment. I am forwarding a copy of this memorandum to Mike
Bardaro who will see to the implementation of the compensation
issues. Some of the matters are outside Mike's area of
responsibility, such as the options and benefits package.
However, it will be easier if one person coordinates all these
matters.
In addition to the terms and conditions set out in the
attached August 6 letter, we agreed that your bonus from
September 8 through December 31, 1998 would be guaranteed on a
pro-rata basis equal to 50% of your $300,000 annual base
salary. Your bonus for 1999 will be based upon agreed
financial budgets which will be submitted to and approved by
the Board of Directors at its December 10, 1998 meeting. I
encourage you to involve yourself in the planning and
budgeting process as soon as you are on board. You should
review this with Suzanne Roski, Mike Bardaro and, of course,
your operating managers.
As to severance, should the Company terminate your employment
for any reason other than cause (voluntary resignation, the
intentional failure or refusal to adhere to operating budgets
or business plans approved by the Board, misconduct,
misappropriation or dishonesty in connection with the
performance of your duties, or the conviction of a crime which
in the opinion of the Board adversely impacts your ability to
perform your duties) up to December 31, 1998, you will be paid
severance of two years salary commencing January 1, 1999. If
you are terminated during 1999, you will be paid your salary
through December 31, 2000. From and after January 1, 2000, if
you are terminated you will be paid one year salary as
severance.
Finally, you will be paid a $1,000 per month car allowance
through December 31, 1999.
I trust, John, that this memorandum, in conjunction with the
August 6 letter enclosed, accurately describes our agreed upon
terms of employment. If so, I would appreciate your signing
the signature line below and returning the original to me for
Company records. You should retain a copy for your records.
DS/ml
Attachment
/s/ John Watkins
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John Watkins
September 8, 1998
AMF BOWLING, INC.
8100 AMF DRIVE
RICHMOND, VA 23111
VIA FEDERAL EXPRESS
August 6, 1998
PRIVATE AND CONFIDENTIAL Douglas J. Stanard
President
Chief Executive Officer
Mr. John Watkins
138 Keswick Drive
Advance, NC 27006
Dear John:
After your telephone conversation with Bob Damon regarding the basic structure
for our employment offer, I wanted to quickly follow up with you, in writing, to
reaffirm what was verbally discussed. Needless to say, we are extremely
enthusiastic about the possibility of your joining the senior management team at
AMF. Your title will be Executive Vice President of AMF Bowling, Inc. and
President of U.S. Bowling Centers. The other basic terms you discussed with Bob
include:
o A base salary of $300,000 per year.
o A target bonus of 50 percent. Upon joining, you and I will sit down
and develop some mutually agreed upon goals to be used as a
benchmark to determine your target bonus.
o We discussed your personal situation in that you would not relocate
your family until the first of next year. In that vein, we will make
sure to cover your temporary living expenses while you commute.
Included in this will be some form of short-term lease on an
apartment.
o 100,000 shares of AMF Bowling, Inc. stock options subject
to the same vesting schedule as AMF's senior management
team.
o Four weeks vacation, but we basically have a policy of
taking time off when we can get it.
o The standard executive AMF package for other benefits, such as life
and health insurance as well as company pension plan. On your trip
to Richmond next week, we will provide you with all of the plan
details.
o A tentative start date of September 8, 1998, but earlier if
possible. If not possible, to be available for two days the week of
August 31 to be involved in the decision-making process regarding
important change that will take place after your arrival.
Again, John, the management team at AMF, as well as our investors at Goldman,
Sachs, are extremely enthusiastic about your joining us. We look forward to a
positive response from you once you have had a chance to visit Richmond with
your wife. If you have any questions, please feel free to give me a call. In the
meantime, we look forward to seeing you next week in Richmond.
Sincerely,
/s/ Douglas J. Stanard
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Douglas J. Stanard
DJS/ml