**Exhibit 10.52**

** **

**EMPLOYMENT AND**

**PHANTOM STOCK AGREEMENT**

 

**THIS AGREEMENT** made and entered into as of the 15th dayof May, 2002 by and between **AFFINITY GROUP, INC.**, a Delawarecorporation (“AGI”), **CAMPING WORLD, INC.**, a Kentucky corporationand a wholly-owned subsidiary of AGI (“Camping World Holding”), **CWI, INC.**,a Kentucky corporation and a wholly-owned subsidiary of Camping World Holding(the “Company”), and **MARK T. GILMAN** (the “Executive”);

 

**W I T N E S S E T H**

 

**WHEREAS**, the Company proposes to employ the Executive in theoperations of the Company and the Company is desirous of affording Executiveincentives, in the form of phantom stock of the Company, in connectiontherewith;

 

**NOW, THEREFORE**, in consideration of the mutual covenantscontained herein and other good and valuable consideration, the Company andExecutive hereby agree as follows:

 

**ARTICLE I**

 

EMPLOYMENT

 

Section l.l.   Employment.  The Company hereby employs the Executive asthe President and Chief Executive Officer of the Company to perform such dutiesand discharge such functions, consistent with the senior executive office heldby Executive, in and about the business and affairs of the Company, or one ormore of its subsidiaries, as the board of directors of the Company may fromtime to time determine.  Executiveagrees, during the term hereof, to diligently and in good faith perform anddischarge such duties and functions and Executive shall devote all of hisworking time, energy and ability exclusively to the performance of his dutieshereunder.  Executive shall not directlyor indirectly engage or participate in the operations or management of, orrender any services to, any other businesses or enterprises, provided, however,Executive may from time to time serve on the board of directors of charitableorganizations as long as such involvement does not have a materially adverseeffect on the performance by Executive of his duties hereunder.

 

Section l.2.  Basic Compensation.  The Company agrees to pay Executive a baseannual salary of $350,000.  Basiccompensation payable under this section shall be payable in accordance withsuch practices and procedures as are generally applicable to other employees ofthe Company.

 

Section l.3.  Fringe Benefits.  While Executive is in the employ of theCompany, the Company agrees to provide to Executive such benefits as may beprovided by the Company from time to time to its similarly situated employees,including, without limitation, those set forth on Exhibit A attached hereto.

 

Section 1.4.  Severance.  If the Company terminates the employment of the Executive withoutCause, the Company shall (i) make a lump sum severance payment equal to twelve(12) months of the Executive’s current base compensation paid pursuant toSection 1.2 hereof, and (ii) pay to the Executive the amount of the bonus, ifany, accrued to the date of such termination under section 1.5 hereof.  Such severance payment shall be made withinthirty (30) days after the determination of the amount of the accrued bonuscalculated pursuant to the provisions of section 1.5 hereof.  It is agreed that any termination 

 

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of employment is withoutprejudice to any other remedy to which the Company may be entitled, either bylaw, in equity or under this Agreement and without prejudice to Executive’sPhantom Stock Interest.

 

The Company has the absoluteright to terminate this Agreement, and the employment of the Executivehereunder, for Cause without any further obligation to the Executive in respectof severance payments to the Executive hereunder.  For purposes of this Agreement, Cause shall mean:

 

(i)                                     the commission of a felony or a crime involvingmoral turpitude or the commission of any other act or omission involvingdishonesty or fraud with respect to the Company;

 

(ii)                                  conduct which brings the Company into publicdisgrace or disrepute;

 

(iii)                               gross negligence or willful gross misconduct withrespect to the Company;

 

(iv)                              breach of a fiduciary duty to the Company;

 

(v)                                 a breach of Article III of this Agreement; or

 

(vi)                              Executive’s failure to cure a breach of any termof this Agreement (other than Article III) within thirty (30) days afterreceipt of written notice from the Company specifying the act or omission thatconstitutes such breach.

 

The Executive shall not be entitled to severanceunder this section 1.4 if the employment of the Executive is terminated for anyof the following reasons:

 

(i)                                     the Executive terminates this Agreement at anytime;

 

(ii)                                  death of the Executive;

 

(iii)                               the Disability of the Executive.

 

Section 1.5.  Bonus.  Executive shall be entitled to earn a bonus based upon theCompany’s Operating Profit.  The bonusshall be an amount equal to one and one-half percent (1.5%) of the Company’sOperating Profit for each year during the term hereof.  The bonus shall be payable on a quarterlybasis in arrears for each calendar quarter during the term hereof.  The bonus for any partial quarter during theterm hereof shall be prorated based on the number of days within such quarterfalling within the term hereof.  Thebonus for the first three quarters of each calendar year shall be calculatedbased upon the annualized budget for the Company for the calendar year in whichsuch quarters fall and the bonus for each such quarter shall be paid toExecutive at the end of the first bi-weekly payroll period following the end ofsuch quarter.  The bonus for the fourthquarter of each calendar year shall be equal to (a) one and one-half percent(1.5%) of the Company’s actual Operating Profit for the calendar year thenended, less (b) the aggregate amount of the bonus paid to Executive for thefirst three quarters of the calendar year then ended.  The bonus for the fourth quarter of each calendar year shall bepaid to Executive on or before March 15 of the following year.

 

Section l.6.  Term.  The term of this Agreement shall commence on the date of thisAgreement and continue through the fifth anniversary of the date of thisAgreement provided, however, that Executive shall have the continuing option toimmediately terminate the employment provided by section l.l hereof by givingtwo (2) weeks’ notice thereof to the Company and the Company shall have thecontinuing option to immediately terminate the employment provided by sectionl.l hereof by giving written notice thereof to Executive which notice may beeffective immediately.  Upon any suchtermination, all of the rights and obligations set forth in this Article Ishall terminate provided, however, that the Company shall pay to Executive theseverance, if any, payable under section 1.4 hereof and no termination ofExecutive under 

 

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any circumstance shallprejudice Executive’s right to the Phantom Stock Interest provided underArticle II of this Agreement.

 

**ARTICLE II**

 

PHANTOM STOCK INTEREST

 

Section 2.l.  Award of Phantom Stock Interest.  The Company hereby awards the Phantom StockInterest to the Executive.

 

Section 2.2.  Payment of Phantom Stock Interest.  The Company shall pay, and Executive shallbe entitled to receive, the value of the Phantom Stock Interest, which shall bepaid as follows:

 

(a)          in the event of a Sale, at the same time and inthe same form of consideration (on the same proportionate basis) as is paid tothe seller in the Sale;

 

(b)         in the case of an Offering, (i) at the election ofthe Executive, in the form of registered stock issued in the Offering as longas, in the opinion of the underwriters in the Offering, such issuance to theExecutive would not have an adverse impact on the Offering, or (ii) if it isdetermined that such issuance to Executive would have an adverse impact on theOffering or if the Executive does not elect to receive registered securities,then in cash as described in subsection (c) below;

 

(c)          in the case of a Private Placement, an Offeringdescribed in subsection (b)(ii) above, or in the case of the occurrence of anyother Determination Date, in cash as follows:

 

(i)                                     One-third (1/3) thereof within thirty (30) days ofthe determination of such cash value in accordance with the provisions ofsection 4.3 hereof, and

 

(ii)                                  One-third (1/3) thereof on the first anniversaryof the Determination Date, and

 

(iii)                               One-third (1/3) thereof on the second anniversaryof the Determination Date.

 

Section 2.3.  Beneficiary.  Executive may designate (by filing with theCompany a written beneficiary designation form in form reasonably acceptable tothe Company) one or more primary beneficiaries or contingent beneficiaries toreceive all or a specified part of the cash value of the Phantom Stock Interestwhich, at the time of Executive’s death, may remain unpaid under this Agreementand Executive may change or revoke any such designation from time to time. Nosuch designation, change or revocation shall be effective unless executed byExecutive and accepted by the Company during Executive’s lifetime.  Each such designation, change or revocationshall be effective under this Agreement until changed or revoked in the mannerspecified herein.  No such change orrevocation shall require the consent of any beneficiary theretofore designatedby Executive.  If Executive fails todesignate a beneficiary, or designates a beneficiary and thereafter revokessuch designation without naming another beneficiary, or designates one or morebeneficiaries and all such beneficiaries so designated fail to surviveExecutive, then the beneficiary of the Phantom Stock Interest, or the partthereof as to which Executive’s designation fails, as the case may be, shall bethe representative of Executive’s estate. Unless Executive has otherwise specified in the beneficiary designation,the beneficiary or beneficiaries designated by Executive shall become fixed asof Executive’s death so that, if a beneficiary survives Executive but diesbefore the receipt of all payments due such beneficiary, such remainingpayments shall be payable to the representative of such beneficiary’s estate.

 

Section 2.4.   Benefits Not Transferable.  Neither Executive nor any beneficiaryhereunder shall have any trans­ferable interest in the payments due hereundernor any right to anticipate, alienate, dispose of, pledge or encumber the sameprior to actual receipt thereof, nor shall the same be subject to attachment, 

 

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garnishment, executionfollowing judgment or other legal process instituted by creditors of Executiveor any such beneficiary provided that the unpaid cash value of Executive’sPhantom Stock Interest and any payments due hereunder shall at all times besubject to set-off for debts owed by the Executive to the Company or itsaffiliates.

 

Section 2.5.  Nature of the Company’sObligation.  The Company shallmaintain a record of the Phantom Stock Interest but the Company shall not berequired to segregate any funds or other assets to be used for the payment ofbenefits under this Agreement and no such record shall be considered asevidence of the creation of a trust fund, an escrow or any other segregation ofassets for the benefit of Executive or any beneficiary of Executive.  The obligation of the Company to make thepayments described in this Agreement is an unsecured contractual obligation ofthe Company only, and neither Executive nor any beneficiary of Executive shallhave any beneficial or preferred interest by way of trust, escrow, lien orotherwise in and to any specific assets or funds.  Executive specifically acknowledges that the Phantom StockInterest to be awarded pursuant to the terms of this Agreement are not securitiesin the Company and do not create any right in the equity or capital of theCompany or any of its affiliates. Executive and each beneficiary of Executive shall look solely to thegeneral credit of the Company for satisfaction of any obligations due or tobecome due under this Agreement, it being expressly acknowledged by theExecutive that the obligations of the Company hereunder are junior andsubordinate in right of payment to the obligations of the Company to its orAGI’s lenders.  If the Company should,in its sole discretion, earmark or set aside any funds or other assets to paybenefits hereunder, the same shall, nevertheless, remain and be regarded aspart of the general assets of the Company subject to the claims of its generalcreditors (and shall not be considered to be held in a fiduciary capacity forthe benefit of Executive or any beneficiary hereunder), and neither Executivenor any beneficiary of Executive shall have any legal, beneficial, security orother property interest therein.  Upondelivery by the Company to Executive of the consideration as provided insection 2.2, the rights and obligations of the Company and Executive under thisArticle II shall terminate and Executive shall have no other or further rightsunder this Article or in respect hereof.

 

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**ARTICLE III**

 

COVENANT NOT TO COMPETE

 

Section 3.l.  Covenant Not to Compete.  Executive hereby covenants that, for aperiod of eighteen (18) months next following the Determination Date (or suchshorter period for which the Company continues to be owned or operated by theParent or its affiliates), Executive shall not be engaged or interested in anybusiness which competes, directly or indirectly, with the retail, publicationor membership businesses of the Company or any subsidiary of the Company(whether as a proprietor, partner with another, shareholder (other than as aless than 5% shareholder in a publicly-traded company), agent or consultant of,employee of or lender to, another) in the recreational vehicle, camping,outdoor living or other markets then served by the Company or such subsidiary,except as a proprietor, partner, shareholder, employee or consultant in or tothe Company or any entity controlled by, controlling or under common controlwith the Company, provided that if the employment of Executive is terminated bythe Company without Cause, the preceding covenant shall not apply (withoutaffecting the obligations hereinafter contained in this section 3.l in respectof disclosures or solicitations by Executive) unless the Executive shall havebeen paid severance pursuant to section 1.4 hereof.  Executive agrees that he will not at any time disclose to anyperson or other entity who or which is, or reasonably may be expected to be, incompetition with the Company or its affiliates, any confidential information ortrade secrets of the Company, any subsidiary of the Company or any of theirrespective affiliates, the contents of any customer lists of the Company, anysubsidiary of the Company or any of their respective affiliates or the generalneeds of the customers or other contracting parties with the Company, anysubsidiary of the Company or any of their respective affiliates, provided,however, the foregoing shall not prevent Executive from responding to the requestof a governmental agency or pursuant to a court order or as otherwise requiredby law.  For a period of one (1) yearfollowing the Determination Date, Executive agrees not to offer employment to,not to discuss the nature of any prospective employment opportunities with, andnot to otherwise solicit any employee of the Company or such subsidiary (or anyperson who was an employee of the Company or such subsidiary within 180 days ofthe Determination Date) on his own behalf, on behalf of any employer of theExecutive, on behalf of any entity with which the Executive is acting as aconsultant or with which the Executive is then otherwise affiliated.

 

Section 3.2.  Remedies.  Recognizing that a breach of the covenant contained in section3.1 would cause the Company irreparable injury and the damages at law would bedifficult to ascertain, Executive consents to the granting of equitable reliefby way of a restraining order or temporary or permanent injunction by any courtof competent jurisdiction to prohibit the breach or enforce the performance ofthe covenants contained in section 3.l. The invalidity or unenforceability of any provision of this Article orthe application thereof to any person or circumstance shall not affect orimpair the validity or enforceability of any other provision or the applicationof the first provision to any other person or circumstance.  Any provision of this Article that mightotherwise be invalid or unenforceable because of contravention of anyapplicable law, statute or governmental regulation shall be deemed to beamended to the extent necessary to remove the cause of such invalidation orunenforceability and such provision as so amended shall remain in full forceand effect as a part hereof.

 

**ARTICLE IV**

 

DEFINITIONS AND GENERAL PROVISIONS

 

Section 4.l.  Definitions.  As used in this Agreement, the followingterms shall have the respective meanings set forth below:

 

Accounting Period:  If theDetermination Date falls on December 15th through December 31st, inclusive, theFiscal Year of the Company in which the Determination Date falls; if theDetermination Date falls on January 1st through June 14th, inclusive, theFiscal Year of the Company endingimmediately 

 

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prior to the date on whichthe Determination Date falls; if the Determination Date falls on June 15ththrough December 14th, inclusive, the Rolling Four Fiscal Quarters endingimmediately prior to the date on which the Determination Date falls.

 

Base Cost:  TheCompany Value as of June 30, 2002, calculated as the remainder of (x) the sumof (i) the Formula Operating Asset Value and (ii) Current Assets minus (y)Liabilities.

 

Company Value:  (a) Ifthe Determination Date is occasioned by the sale of all or substantially all ofthe Operating Assets of the Company, the remainder of (x) the sum of (i) thenet pre-tax consideration received in the sale of all or substantially all ofthe Operating Assets, (ii) Current Assets and (iii) the fair market value onthe Determination Date of the assets of the Company, if any, not included inthe sale, minus (y) the sum of (i) the Base Cost, (ii) Operating Liabilitiesnot assumed by the purchaser or transferee and (iii) Liabilities other thanOperating Liabilities.  If any of suchconsideration shall have been paid in notes or other securities, the Companyshall, by resolution of its board of directors, establish a fair market valuetherefore, which value shall be conclusively binding upon the parties heretoand, in establishing the value of debt securities, in addition to such otherconsiderations as the board of directors of the Company may deem relevant, theamounts payable thereunder shall be discounted to their present value on thebasis of such discount rate as is deemed appropriate by the board of directors.

 

(b) If the Determination Dateis occasioned by a Private Placement by the Company or by Camping World Holdingor the sale of more than 51% of the equity interests in the Company or CampingWorld Holding, Company Value shall be the remainder of (x) the Full CompanyConsideration received in such Private Placement or sale of equity interestsminus (y) the sum of (i) the Base Cost and (ii) any Liabilities required to be paid or satisfied at the time of closing such PrivatePlacement or sale and any liabilities retained directly or indirectly by theshareholder of the issuer in such Private Placement or the seller after suchsale.

 

(c) If the Determination Date is occasioned by anOffering of shares of the common stock of the Company or Camping World Holding,the Company Value shall be the remainder of the market capitalization of theCompany or Camping World Holding, as the case may be, at the time of suchOffering minus (y) the sum of (i) the Base Cost and (ii) any Liabilities requiredto be paid or satisfied at the time of closing such Offering and anyliabilities retained directly or indirectly by the shareholders after theOffering.

 

(d) If the Determination Dateis occasioned by an event other than an event described in any of the foregoingthree paragraphs, Company Value shall be the remainder of (x) the sum of (i)the Formula Operating Asset Value and (ii) Current Assets minus (y) the sum of(i) Base Cost and (ii) Liabilities other than Operating Liabilities provided,however, that if any event of the type described in any of the foregoing threeparagraphs is consummated within one hundred eighty (180) days after theDetermination Date, Company Value shall be determined as if the DeterminationDate had been occasioned by such event.

 

Current Assets:  The sumof (x) cash, investments, marketable securities, prepaid items and inventory asreflected on the books and records of the Company and its subsidiaries on aconsolidated basis; (y) the market value of notes receivable of the Company;and (z) the accounts receivable of the Company subject to such allowance forbad or doubtful accounts receivable as is reflected on the books of theCompany, all as determined in accordance with generally accepted accountingprinciples.  Current Assets andLiabilities shall be determined as of the last day of the AccountingPeriod.  Current Assets shall notinclude any assets relating to or arising from the operation of the “MVP”insurance program.

 

Determination Date:  The dateof the first of the following events to occur: (i) termination of theExecutive’s employment, whether by death or otherwise, (ii) a closing of aSale, (iii) an Offering, (iv) a Private Placement, or (v) the fifth anniversaryof the date of this Agreement.

 

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Disability:  Thephysical or mental incapacity of Executive for a period of more than sixty (60)consecutive days, the determination of which by the board of directors of theCompany shall be conclusive on the parties hereto.

 

Fiscal Quarter:  Thefiscal quarter of the Company ending on the last day of the calendar quarter.

 

Fiscal Year:  Thefiscal year of the Company as the case may be, ending on the last day of thecalendar year.

 

Formula OperatingAsset Value:  The product of eight (8) and OperatingProfit of the Company for the Accounting Period.

 

Full CompanyConsideration:  Inconnection with a Private Placement by the Company or by Camping World Holdingor the sale of more than 51% of the equity interests in the Company or CampingWorld Holding, Full Company Consideration is intended to represent the amountthat would have been paid if the Private Placement or equity sale resulted inthe purchaser acquiring 100% of the shares of common stock of the subjectentity.  Therefore, in connection with aPrivate Placement by the Company or by Camping World Holding or the sale ofequity interests in the Company or Camping World Holding, in either caseinvolving the purchaser acquiring 100% of the shares of common stock of theCompany or Camping World Holding, Full Company Consideration shall be equal tothe net pre-tax consideration received in such Private Placement or sale.  In connection with a Private Placement bythe Company or by Camping World Holding or the sale of equity interests in theCompany or Camping World Holding, in either case involving more than 51% butless than 100% of the shares of common stock of the Company or Camping WorldHolding, Full Company Consideration shall be equal to (x) the net pre-tax considerationreceived in such Private Placement or sale of equity interests divided by (y)the decimal equivalent of the percentage of equity interests in the Company orCamping World Holding issued in such Private Placement or sold in such sale.  As an example, if 75% of the shares ofcommon stock of the Company are sold for $60 million, Full CompanyConsideration shall be determined by dividing $60 million by .75, resulting inFull Company Consideration of $80 million.

 

Liabilities:  Allobligations (whether absolute, accrued or contingent, choate or inchoate) ofthe Company and/or its subsidiaries which are required to appear on financialstatements prepared in accordance with generally accepted accounting principlesconsistently applied provided that

 

(i)                                     if the Determination Date is occasioned by a Sale, the obligation of theCompany, Camping World Holding, AGI, or the Parent, as the case may be, for thepayment of federal and state income taxes, if any, arising from the Sale (netof the tax benefits, if any, arising from payments in respect of this Agreementor any similar agreement) shall be considered a liability whether or not suchliability is required to be reflected as a liability in accordance withgenerally accepted accounting principles; provided, however, that indetermining the amount, if any, to be included in Liabilities under thissubsection (i), (x) if the Determination Date is occasioned by the sale of morethan 51% of the equity interests in the Parent or in AGI, the amount to beincluded in Liabilities under this subsection (i) shall be determined as if thesale had been a sale of the equity interests in the Company and the sellingprice for such equity interests had been the Company Value as determined undersubsection (d) of the definition of Company Value, and (y) in the event theSale is of less than 100% of the equity interests in Camping World Holding orin the Company, the amount included in Liabilities under this subsection (i)shall be determined as if the Sale had been a Sale of 100% of the equityinterests of the applicable entity;

 

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(ii)                                  the liability of the Company for deferred revenues shall not beconsidered a liability whether or not such liabilities are required to bereflected as a liability in accordance with generally accepted accountingprinciples; and

 

(iii)                               the liability of the Company, Camping World Holding, AGI, the Parent, orany subsidiary of the Company (x) in respect of this Agreement or any similaragreement or (y) to purchase its equity securities (or warrants for suchsecurities), whether under a “put” agreement or otherwise, shall not beconsidered a Liability for purposes hereof.

 

Liabilitiesshall be determined by the chief financial officer of the Company (or theIndependent Accountant) as provided in section 4.3 hereof.  Liabilities shall include those intercompanyLiabilities that have been allocated to the Company in accordance withgenerally accepted accounting principles consistently applied.

 

Offering:  Anoffering and sale of shares of the common stock of the Company, Company WorldHolding, AGI or the Parent pursuant to a registration statement under theUnited States Securities Act of 1933, as amended

 

Operating Assets:  The realand personal properties, tangible and intangible, used in the regular ongoingoperation of the Company and its subsidiaries, as the case may be, which wouldbe acquired by a purchaser of such entities (or the assets thereof) in order tocontinue the uninterrupted operation of the business thereof in substantiallythe manner as theretofore operated but excluding therefrom cash, investments,marketable securities, accounts and notes receivable, inventories, prepaiditems and similar assets which would not normally be acquired by a purchaser inan asset acquisition (or for which special adjustment to the purchase pricewould be made).

 

Operating Liabilities:  AnyLiability or other obligation (whether absolute, accrued or contingent, choateor inchoate) which would be required to be assumed by a buyer of all orsubstantially all of the assets of the Company and its subsidiaries in order tocontinue, uninterrupted, the business operations of the Company unless, inconnection with such assumption, there would customarily be made an adjustmentto the purchase price for such liabilities. Operating Liabilities do not include (i) indebtedness for money borrowedor guarantees of any such indebtedness, (ii) refinancings of indebtedness ofthe kind referred to in clause (i) above, (iii) indebtedness in respect of anysubscription agreement, stock or warrant “put” or “call” agreement, phantomstock agreement or similar obligation in respect of an equity or other interestin the Parent measured by an increase in the equity value of the Parent, including,without limitation, the obligations under this Agreement, and (iv) currentpayables.

 

Operating Profit:  Withrespect to any Accounting Period (i) the net income of the Company derived fromthe ongoing business operations of such entity or entities for such period plus(ii) interest, federal and state income taxes (or any provision for suchtaxes), depreciation, amortization, financing costs and management fees.  Operating Profit shall be determined on theaccrual method of accounting and in accordance with generally acceptedaccounting principles consistently applied, provided that (i) in no event shalltradeout or barter transactions or extraordinary items of revenue or expense(including revenue or expense from non-operating investments, revenue orexpense from the sale or purchase of Operating Assets or entities or revenue orexpense not derived from business operations) be reflected in net income, (ii)amounts paid or received in settlement of (or payment of judgments in respectof) litigation which did not arise in the ordinary course of the businessoperations of such entity or entities or any of their respective subsidiaries,shall not be reflected in net income (it being understood that subsidiaries ofthe Company do have litigation, such as the litigation in the Company, whichshall be considered litigation in the “ordinary course” of business operations)and (iii) revenue and expenses relating to the “MVP” insurance program shallnot be reflected in net income. If there has occurred a Sale of OperatingAssets within the Accounting Period and, in such Sale, not all of the OperatingAssets have been sold, provided that the net proceeds of 

 

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such Sale have been received by the Company prior to the date on whichCurrent Assets and Liabilities of the Company are calculated as hereinprovided, the net income relating to such Operating Assets shall be deletedfrom the calculation of Operating Profit. If there has occurred a purchase of Operating Assets, the income fromwhich is reflected in the Accounting Period, and such Operating Assets were notowned by the Company for the entire Accounting Period, the Operating Profitwith respect to such Operating Assets shall be included, on a historical basis,as if the Company (or its subsidiaries) had owned such Operating Assets for theentire Accounting Period.

 

Parent:  AffinityGroup Holding, Inc., a Delaware corporation, or such other entity which holdsin excess of eighty (80%) percent of the issued and outstanding equitysecurities of AGI.

 

PhantomStock Interest:  Theequivalent value of the aggregate of (a) 12% of Company Value up to andincluding $10 million of Company Value, plus (b) 13% of Company Value in excessof $10 million up to and including $20 million of Company Value, plus (c) 14%of Company Value in excess of $20 million up to and including $30 million ofCompany Value, plus (d) 15% of Company Value in excess of $30 million up to and including $40million of Company Value, plus (e) 16% of Company Value in excess of $40million up to and including $50 million of Company Value, plus (f) 17% ofCompany Value in excess of $50 million up to and including $60 million ofCompany Value, plus (g) 18% of Company Value in excess of $60 million up to andincluding $70 million of Company Value, plus (h) 19% of Company Value in excessof $70 million up to and including $80 million of Company Value, plus (i) 20%of Company Value in excess of $80 million . Attached hereto as Exhibit B is an example of the calculation of thePhantom Stock Interest based upon the assumptions set forth therein.

 

Private Placement:  Theissuance by the Company, the Parent, AGI, or Camping World Holding, as the casemay be, of shares of common stock of the issuing entity in a private placementwhich results in the current owners of the issuing entity owning less than 51%of the issuer after the transaction

 

Rolling Four Fiscal Quarters:  Fourconsecutive Fiscal Quarters.

 

Sale:  The saleof all or substantially all of the Operating Assets of the Company, or the salein one transaction (or a series of related transactions) of more than 51% ofthe equity interests in the Parent, in AGI, in Camping World Holding or in theCompany (except, in any of the foregoing cases, to an entity controlled by,controlling or under common control with the Parent).

 

Section 4.2.  Withholding Taxes.  The Company may withhold from any payment tobe made under this Agreement (and transmit to the proper taxing authority) suchamount as it may be required to withhold under any federal, state or other law.

 

Section 4.3.  Administration.  The Company and its executive officers shallhave full power to interpret, construe and administer this Agreement, includingauthority to determine any dispute or claim with respect thereto.  The Company shall give prompt written noticeto Executive of the determination by the Company of any matter provided herein,and, unless notice objecting to such determination is given as provided herein,the determination of the Company in any matter, made in good faith, shall bebinding and conclusive upon Executive and all other persons having any right orbenefit hereunder.  Unless Executiveshall give notice to the Company objecting to the Company’s calculation ofCurrent Assets, Liabilities, Operating Liabilities or Operating Profit for anyperiod (or any other calculation to be determined for the purposes of thisAgreement) within thirty days after notice of the determination thereof by theCompany, such calculation shall conclusively be deemed to have been accepted bythe parties hereto.  The cash value ofthe Phantom Stock Interest shall be set forth in a certificate of the chieffinancial officer of the Company, the determination of which shall be madewithin one hundred fifty (150) days of the Determination Date and shall beconclusive and binding upon the Executive provided that, if the Executive shalldisagree with the amount of the Current Assets, Liabilities, OperatingLiabilities or Operating Profit as determined by the chief 

 

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financial officer of theCompany (written notice of which shall be given by the Executive within thirty(30) days of the receipt of such determination by the chief financial officer),Current Assets, Liabilities, Operating Liabilities or Operating Profit shall bedetermined by the independent certified public accountants of the Company or,if the Company has not then engaged a firm of independent certified publicaccountants, any nationally recognized firm of public accountants selected bythe Company (the “Independent Accountant”). The Independent Accountant shall determine the Current Assets,Liabilities, Operating Liabilities or Operating Profit of the Company withinthirty (30) days after its appointment and shall be instructed to deliver tothe Company and the Executive a written report of its determination of theamount of such Current Assets, Liabilities, Operating Liabilities or OperatingProfit.

 

The cost of the accountingservices performed by the Independent Accountant shall be borne by the Company(but the cost thereof shall be considered a liability of the Company forpurposes of determining Liabilities) unless the amount of the Current Assets,Liabilities, Operating Liabilities or Operating Profit as determined by theIndependent Accountant is the same as the amount determined by the Company’schief financial officer (or is an amount which results in a lower value for theExecutive of the Phantom Stock Interest or the bonus payable under section1.5), in which event the entire cost of the services of the IndependentAccountant shall be borne by the Executive and shall be deducted by the Companyfrom the  Phantom Stock payment to bemade pursuant to section 2.2 hereof or the bonus payable under section 1.5, asthe case may be.

 

Any of the obligations of theCompany hereunder may be performed by an affiliate of the Company and suchperformance by an affiliate shall be deemed to satisfy any such obligation ofthe Company hereunder.

 

Section 4.4.  Notices.  All notices, requests and other communications from any of theparties hereto to the other shall be in writing and shall be considered to havebeen duly given or served when personally delivered to any individual party, anexecutive officer of any corporate party, or on the first day after the date ofdeposit with Federal Express for next day delivery, postage prepaid, or on thethird day after deposit in the United States mail, certified or registered,return receipt requested, postage prepaid, or on the date of telecopy, fax orsimilar telephonic transmission during normal business hours, provided that therecipient has specifically acknowledged by telephone receipt of such telecopy,fax or telephonic transmission; addressed, in all cases, to the party at his orits address set forth below, or to such other address as such party mayhereafter designate by written notice to the other party:

 

(i)  If to the Company to:

 

2575Vista Del Mar Drive

Ventura,CA  93001

Attn:  Stephen Adams

 

(ii)  If to Executive to:

 

MarkT. Gilman

1253Harlequin Court NW

Silverdale,WA 98383

 

Section 4.5.  Binding Effect.  The provisions of this Agreement shall notgive Executive any rights to continue to be employed or otherwise retained bythe Company or any affiliate thereof. Except as so provided, this Agreement shall be binding upon and inure tothe benefit of the parties hereto, the respective successors and assigns of theCompany and the beneficiaries, personal representatives and heirs of Executive.

 

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Section 4.6.  Controlling Law.  This Agreement shall be construed, and thelegal relations between the parties determined, in accordance with the laws ofthe state of Delaware.

 

Section 4.7.  Counterparts.  This Agreement may be executed in one ormore counterparts, each of which shall be deemed to be an original without theproduction of the others, but all of which together shall constitute one andthe same instrument.

 

Section 4.8.  Entire Agreement.  This Agreement, together with the letteragreement dated as of the date hereof between AGI and the Executive, containsthe entire understanding of the parties with respect to the subject matterhereof and may not be varied, modified or amended except by a writing signed bythe parties to be charged.  The making,execution and delivery of this Agreement by the parties hereto have beeninduced by no representations, statements, warranties or agreements of theother except those herein expressed.

 

Section 4.9.  Headings.  The division of this Agreement into sections and paragraphs andthe titles assigned thereto is only a matter of convenience for reference andshall not define or limit any of the terms or provisions thereof.

 

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**IN WITNESS WHEREOF**, the individual party has hereunto set his handand the corporate party has caused these presents to be executed by a properofficer thereunto duly authorized all as of the day and year first abovewritten.

 

 
|   | **AFFINITY  GROUP, INC.** |                                             |   |
|--------|---------------------------|--------------------------------------------------|--------|
|   |                      |                                             |   |
|   |                      |                                             |   |
|   | By:                       | /s/  Mark J. Boggess                             |   |   |
|   | Mark J. Boggess           |                                             |
|   |                      | Its: Vice President and  Chief Financial Officer |   |
|        |                           |                                                  |        |  |  |  |

 
|   | **CAMPING  WORLD, INC.** |                                             |   |
|--------|--------------------------|--------------------------------------------------|--------|
|   |                     |                                             |   |
|   |                     |                                             |   |
|   | By:                      | /s/  Mark J. Boggess                             |   |   |
|   | Mark J. Boggess          |                                             |
|   |                     | Its: Vice President and  Chief Financial Officer |   |
|        |                          |                                                  |        |  |  |  |

 
|   | **CWI, INC.**   |                                             |   |
|--------|-----------------|--------------------------------------------------|--------|
|   |            |                                             |   |
|   |            |                                             |   |
|   | By:             | /s/  Mark J. Boggess                             |   |   |
|   | Mark J. Boggess |                                             |
|   |            | Its: Vice President and  Chief Financial Officer |   |
|        |                 |                                                  |        |  |  |  |

 

 
|   |           | /s/  Mark T. Gilman |   |   |
|--------|----------------|---------------------|--------|--------|
|   | Mark T. Gilman |                |

 

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