Exhibit 10.6

 

January 31, 2004

 

Mr. George W. Vieth, Jr.

3365 Greenhill Lane

Louisville, Kentucky 40207

 

  Re: Third Amendment to Employment Agreement

 

Dear George:

 

This letter confirms that the Employment Agreement dated as of December 6, 2002,
between you and AMF Bowling Worldwide, Inc., as amended November 18, 2003 and
December 31, 2003 (the “Employment Agreement”), is amended as of January 31,
2004, as follows:

 

1. Section 2 is amended by deleting the date “January 31, 2004” and replacing it
with “June 28, 2004.”

 

2. Section 3(c) i. is amended by deleting the words “prior to January 31, 2004”
in the first line thereof and substituting in their place “prior to June 28,
2004”.

 

3. [Reserved]

 

4. A new Section 3(g) Performance Bonus is added to read as follows:

 

“(g) Performance Bonus

 

The Executive will have the opportunity to receive a Performance Bonus to be
determined and paid as follows.

 

i. If there is no Change in Control before June 28, 2004, the Performance Bonus
will be based on the Company’s performance for the final 6 accounting periods of
Fiscal Year 2004. This Performance Bonus will be computed as follows:

 

(A) $100,000.00 will be payable if actual EBITDA for the final 6 accounting
periods for Fiscal Year 2004 (“Actual 2004 EBITDA”) equals at least actual
EBITDA for the corresponding periods in Fiscal Year 2003 (“Actual 2003 EBITDA”).

 

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Mr. George W. Vieth, Jr.

January 31, 2004

Page 2

 

(B) An additional $100,000.00 will be payable if Actual 2004 EBITDA equals at
least the EBITDA target for the same periods in the fiscal year 2004 Annual
Operating Plan (the “Target”).

 

(C) If Actual 2004 EBITDA is between Actual 2003 EBITDA and the Target, then a
portion of the $100,000.00 referred to in subsection (B) above will be earned
and paid on a prorated basis to the extent Actual 2004 EBITDA is greater than
Actual 2003 EBITDA but less than the Target.

 

ii. If there is a Change in Control before June 28, 2004, the Performance Bonus
will be based on the Company’s performance for period 6 through period 8 of
Fiscal Year 2004. The Company’s performance for such periods shall be attached
to this letter as an Exhibit A when the determination of such performance is
made. This Performance Bonus will be computed as follows:

 

(A) $50,000.00 will be payable if actual EBITDA for period 6 through period 8 of
Fiscal Year 2004 (“Actual 2004 Truncated EBITDA”) equals at least actual EBITDA
for the same periods in the previous fiscal year (“Actual 2003 Truncated
EBITDA”).

 

(B) An additional $50,000.00 will be payable if Actual 2004 Truncated EBITDA
equals at least the EBITDA target for the same periods in the fiscal year 2004
Annual Operating Plan (the “Truncated Target”).

 

(C) If Actual 2004 Truncated EBITDA is between Actual 2003 Truncated EBITDA and
the Truncated Target, then a portion of the $50,000.00 referred to in subsection
(B) above will be earned and paid on a prorated basis to the extent Actual 2004
Truncated EBITDA is greater than Actual 2003 Truncated EBITDA but less than the
Truncated Target.

 

iii. Payment of the Performance Bonus, if any, computed under subsection i. or
ii. above, as applicable, is subject to the following terms and conditions:

 

(A) The Performance Bonus will be paid to the Executive in cash as soon as
feasible after the unaudited financial statements for the applicable periods are
completed and approved by the Chief Financial Officer of the Company; provided,
however, that if the Company terminates the Executive’s employment for Cause or
if the Executive voluntarily resigns under Section 6(e) before the payment of
the Performance Bonus, then no Performance Bonus will be payable to the
Executive. If the Executive dies before the Performance Bonus is paid, then
payment will be made to the Executive’s estate.

 

(B) Unless otherwise determined by the Board of Directors of the Company, the
Performance Bonus will not be taken into account in computing the Executive’s
salary or compensation for the purposes of determining any benefits or
compensation under (y) any pension, retirement, life insurance or other benefit
plan of the Company or its affiliates or (z) any agreement between the Company
or its affiliates and the Executive.

 

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Mr. George W. Vieth, Jr.

January 31, 2004

Page 3

 

(C) The Company may withhold from any amounts payable under this Section 3(g)
such federal, state or local taxes as may be required to be withheld pursuant to
any applicable law or regulation.

 

(D) Any transactional expenses related to the Change in Control and recorded in
the applicable period will be excluded in the calculation of EBITDA.”

 

5. The current Section 3(h) No Other Compensation is renumbered as Section 3(i).

 

6. A new Section 3(h) Merger Bonus is added to read as follows:

 

“(h) Merger Bonus

 

Notwithstanding the provisions of Section 3(e)(iii), if the merger contemplated
by the Agreement and Plan of Merger Dated as of November 26, 2003 among Kingpin
Holdings, LLC, Kingpin Merger Sub, Inc. and AMF Bowling Worldwide, Inc. (the
“Merger”) is consummated on or before June 27, 2004, the Executive will be
entitled to receive a Merger Bonus in the amount of $100,000.00. Payment of this
Merger Bonus is subject to the following terms and conditions:

 

i. The Merger Bonus will be paid to the Executive in cash immediately upon the
consummation of the Merger; provided, however, that if the Company terminates
the Executive’s employment for Cause before the payment of the Merger Bonus,
then no Merger Bonus will be payable to the Executive.

 

ii. Notwithstanding any other provision of this Agreement, the Executive will be
entitled to the Merger Bonus only upon the consummation of the Merger and then
subject to the other terms of this Section 3(h).

 

iii. Unless otherwise determined by the Board of Directors of the Company, the
Merger Bonus will not be taken into account in computing the Executive’s salary
or compensation for the purposes of determining any benefits or compensation
under (A) any pension, retirement, life insurance or other benefit plan of the
Company or its affiliates or (B) any agreement between the Company or its
affiliates and the Executive.

 

iv. The Company may withhold from any amounts payable under this Section 3(h)
such federal, state or local taxes as may be required to be withheld pursuant to
any applicable law or regulation.”

 

7. Section 6(h)i. “Termination by Company Without Cause or by the Executive for
Good Reason” is amended to read in its entirety as follows:

 

“i. Termination by Company Without Cause or by the Executive for Good Reason

 

If the Executive’s employment is terminated by the Company without Cause or the
Executive terminates his employment for Good Reason, or upon the expiration of
the Term, the Company will pay or provide to him the sum of the following
amounts and benefits: (A) only unpaid Base Salary through the date of
termination and unreimbursed

 

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Mr. George W. Vieth, Jr.

January 31, 2004

Page 4

 

expenses (collectively, the “Accrued Obligations”), (B) $35,000 with respect to
unused vacation through the date of his termination (the “Accrued Vacation”),
and (C) for a period of 24 months following his termination of employment or
until such earlier date as comparable coverage is available to the Executive
from any successor employer, medical plan coverage on the same cost sharing
basis as received by the Executive during the Term; provided however, that with
respect to clause (C), the Executive may, upon thirty days notice to the
Company, elect not to participate (and subsequently elect to participate or
re-participate) in such medical plan coverage if he has available to him similar
coverage from his spouse (as opposed to any successor employer). The payments
described in clauses (B) and (C) are subject to the execution and delivery by
the Executive of a full and complete release of claims against the Company in a
form acceptable to the Company.”

 

8. Section 6(h) ii. “Termination due to Death or Disability” is amended by
inserting the words “and the Accrued Vacation” after the words “Accrued
Obligations.”

 

9. Section 6(g) Change in Control is amended by deleting the first sentence of
such section.

 

10. Sections 7 through 11 are renumbered as Sections 8 through 12.

 

11. A new Section 7 Consulting Services is added to read as follows:

 

“Section 7. Consulting Services

 

If subsequent to a Change in Control that occurs before June 28, 2004, the
Executive’s employment is terminated by the Company without Cause, the Executive
terminates his employment for Good Reason, or the Term expires, the Executive
agrees to provide consulting services to the Company for up to five hours a week
for 52 weeks following his termination of employment. In consideration for such
services, the Company agrees to pay the Executive an annual retainer of
$130,000.00 to be paid in monthly installments in arrears following his
termination of employment (subject to applicable tax withholding). The Executive
and the Company agree that the consulting services will be performed at a time
and place that are mutually agreeable to both parties and that do not interfere
with the Executive’s ability to render services to another entity as either an
independent contractor or an employee. At the Company’s request, the Executive
will enter into a mutually acceptable, written consulting services agreement
reflecting the foregoing arrangement.”

 

12. The newly renumbered Section 8(b) Non-Competition is amended by adding the
following language at the end thereof:

 

“Anything herein to the contrary notwithstanding, the parties agree that after
his termination of employment with the Company, the Executive may own or hold a
financial interest in up to two bowling centers so long as (i) no such center is
in a market in which the Company has three or more bowling centers at the time
of the Executive’s termination of employment, (ii) if any such center is in a
market in which the Company has two or fewer bowling centers at the time of the
Executive’s termination of employment, such center is at least fifteen miles
driving distance from any of the

 

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Mr. George W. Vieth, Jr.

January 31, 2004

Page 5

 

Company’s bowling centers at the time of the Executive’s termination of
employment and (iii) notwithstanding clause (ii) of this paragraph, if any such
center is in the markets of Indianapolis, Nashville or Cincinnati, such center
is at least ten miles driving distance of any of the Company’s bowling centers
at the time of the Executive’s termination of employment.”

 

Executive hereby acknowledges that except as specifically modified by this
Amendment, Executive’s obligations under Section 8(b) Non-Competition remain
unchanged and in full force in effect.

 

13. The newly renumbered Section 8(e) Fee is amended by deleting the number
“$425,000” at the end of the first sentence thereof and replacing it with the
number “$282,500”.

 

14. Section 3(e)(iii) is amended to insert the words “and except as provided in
the Third Amendment to this Employment Agreement” after the word “grants”.

 

Capitalized terms that are not defined in this third amendment have the meanings
set forth in the Employment Agreement.

 

Please acknowledge your acceptance of these amendments by signing a copy of this
letter and returning it to me.

 

Sincerely,

/s/    Christopher F. Caesar        

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Christopher F. Caesar

Chief Financial Officer

 

ACKNOWLEDGED AND AGREED:

/s/    George W. Vieth, Jr.        

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George W. Vieth, Jr.