EXHIBIT 10.1A
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective this 29th day of July 2004 by and between Natalie Schramm (hereinafter
referred to as "Employee") and Peninsula Gaming, LLC, a Delaware limited
liability company (hereinafter referred to as "Employer").
WHEREAS, the Employer and the Employee desire to enter into an
employment agreement on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the promises made in this Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged by the parties, the parties agrees as follows:
1. TERM OF AGREEMENT. The term of the Agreement shall be for a three
(3) year period commencing July 1, 2004 through June 30, 2007 (the "Initial
Term"). This Agreement shall automatically renew and continue for successive
one-year terms commencing at the end of the Initial Term and every year
thereafter, unless either party gives the other party written notice of the
party's intention not to renew this Agreement for a further one-year term at
least thirty (30) days prior to the expiration of a term, unless terminated by
agreement of the parties or pursuant to Section 2 of this Agreement (the Initial
Term, together with any subsequent renewal period, hereinafter referred to as
the "Term").
2. TERMINATION. This Agreement may be terminated at any time before any
expiration date by the agreement of the parties, and may be terminated by
Employee upon ninety (90) days advance written notice to the Chief Executive
Officer of the Employer. In the event that this Agreement is terminated by
Employee upon ninety (90) days advance written notice, Employee shall be
entitled to continue receiving her regular salary for so long as Employee is
permitted to and actually continues to render services to Employer during the
ninety (90) day period following such notice. If Employee is directed by
Employer to cease work prior to expiration of the ninety (90) day period,
Employee shall nevertheless be entitled to receive her regular salary for the
ninety (90) day period. In addition, this Agreement may be terminated by the
Employer immediately upon the occurrence of any of the following events: (a)
Employee's death, (b) Employee becoming physically or mentally disabled (a
"Disability"), which Disability renders Employee unable to perform, as certified
by a mutually agreeable competent medical physician, a substantial portion of
Employee's duties hereunder for a continuous period of sixty (60) days or a
total of ninety (90) days in any three hundred sixty-five (365) day period, (c)
Employee's commission of an act of embezzlement, fraud, misappropriation against
the Employer, (d) Employee's conviction of, or entry of a plea of guilty or nolo
contendere or its equivalent of, a felony, (e) Employee's continued neglect or
failure to discharge Employee's duties or responsibilities or the repeated
taking of any action prohibited by Employee's immediate supervisor, the managing
member or the board of managers of the Employer materially affecting the
fundamental operating results of the Employer, or Employee's engagement of
conduct injurious to the Employer or having an adverse effect on the Employer's
reputation or business operations, all of which threatens or is likely to
threaten the licensed status of the Employee or the Employer, (f) the
revocation, suspension for more than thirty (30) days, or
voluntary relinquishment of any gaming license necessary for the performance of
Employee's duties hereunder, or (g) Employee's breach or violation of any
material term or material provision of this Agreement; provided, however, that,
in the case of clauses (e), (f) and (g) of this Section 2, Employee shall be
entitled to thirty (30) days notice of termination, during which thirty (30) day
period Employee shall have the right to remedy any such breach or default, but
in no event will Employee be entitled to more than one thirty (30) day notice
for breach of violation of the same offense; subsequent commission of the same
offense shall warrant immediate termination. In the event of a termination of
this Agreement by Employer, other than for violation or breach of subparagraphs
(a), (b), (c), (d), (e), (f) or (g) or this paragraph, during any Term of the
Agreement, Employee shall be entitled to receive as severance pay the greater of
(a) the balance of base compensation due to Employee for the remainder of the
Term, or (b) twelve month's compensation, which payments shall be made as they
would otherwise have become due under the payroll schedule of Employer. Employee
shall also be entitled to receive a prorated share of the cash bonus to which
Employee otherwise would be entitled had Employee's employment continued to the
end of the Term, as provided in paragraph 4(a). In addition, the employee shall
also be entitled to receive the immediate payment for the value of all Granted
Units previously vested, as described in paragraph 4 (b) below.
3. DUTIES. Employee shall carry out the duties and responsibilities
generally as identified as the Chief Financial Officer of the Employer and
General Manager of the Diamond Jo, LLC, consistent with the terms of the
Position Description appended to the Agreement as Exhibit A and which may be
amended from time to time, consistent with the above-defined general
responsibilities by the Employer's Chief Executive Officer. Employer
acknowledges and agrees that Employee, in her sole discretion, shall set the
time period, number of hours and location that Employee works in carrying out
her duties under this Agreement. Employer further acknowledges and agrees that
Employee may provide consulting and other services to third parties, provided
such services do not significantly interfere with the performance of Employee's
duties under this Agreement, and further provided such services would not result
in a breach by Employee of the non-competition or non-disclosure agreements set
forth in Section 8 of this Agreement.
4. COMPENSATION AND BENEFITS.
a. Employee shall be paid by Employer (i) as compensation for
her services for the twelve month period commencing on the date hereof
the base annual salary of Two Hundred Thirty Thousand Dollars
($230,000). Employee's base annual salary shall be reviewed on an
annual basis and adjusted upward annually by not less than five percent
(5%) of the prior year's compensation. In addition to the base salary,
upon January 1st of each year of service with the Employer, Employee
shall be entitled to receive a cash bonus payable by the Employer based
on Employee's performance during the previous calendar year, which
shall be consistent with past practices and/or the bonus plan in place
for similarly situated executive officers of the Employer and, in any
event, no less than $20,000 per year. If this Agreement is terminated
prior to completion of any Term, EMPLOYEE shall be eligible for a
prorated bonus at termination.
b. Additionally, Employee shall be entitled to an initial
grant, under Peninsula Gaming Partners LLC's incentive units plan, of a
profits interest representing
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no less than 0.5% of its outstanding capital interests on a fully
diluted basis (the "Granted Units"). (i) twenty-five percent (25%) of
the Granted Units shall automatically vest on the date of execution
hereof and for so long as no termination of this Agreement or of
Employee's employment with the Employer hereunder shall have occurred,
(ii) twenty-five percent (25%) of the Granted Units shall vest on the
first anniversary of the date hereof, (iii) twenty-five percent (25%)
of the Granted Units shall vest on the second anniversary of the date
hereof and (iv) twenty-five percent (25%) of the Granted Units shall
vest on the third anniversary of the date hereof. Upon any termination
of this Agreement or of Employee's employment with the Employer
hereunder, all Granted Units that shall have not yet vested pursuant to
the preceding sentence as of such date of termination shall be
forfeited by Employee and cancelled upon such termination; Provided
however that in connection with any termination arising out of a sale
of the business (as contemplated in paragraph 5 hereof), all granted
units shall be deemed vested. All Granted Units which shall have vested
as of the date of termination or expiration of the Term, shall, upon
the request of the Employee, be redeemed by the Employer for cash at
fair market value, within 90 days of the date of said request. For
purposes of redemption, "fair market value" shall be determined by the
board in it's reasonable discretion.
c. To the extent not inconsistent with Employee's status as a
salaried employee under a continuing contract, Employee shall be
entitled to all benefits accorded executive officers of Employer in
accordance with the terms of the Employer's personnel policies.
5. SALE OF EMPLOYER'S BUSINESS. In the event the controlling interest
in the Employer or substantially all of the Employer's assets and operations are
transferred or sold to an unrelated entity or person at any time during any Term
of this Agreement, Employee shall receive at the time of such sale as severance
pay an amount equal to twelve (12) months' base salary. This paragraph shall not
be applicable so long as the transfer is to or for the benefit of Brent Stevens
or so long as Brent Stevens remains as Managing Member and/or CEO of the
Employer.
6. INDEMNIFICATION. Employer shall indemnify, defend and hold and save
Employee, her heirs, administrators or executors and each of them harmless from
any and all actions and causes of action, claims, demand, liabilities, losses,
damages or expenses, of whatsoever kind and nature, including judgments,
interest and reasonable attorney's fees and all other reasonable costs, expenses
and charges which Employee, her heirs, administrators or executors and each of
them shall or may at any time or from time to time, subsequent to the effective
date of this Agreement, sustain or incur, or become subject to by reason of any
claim or claims against Employee, her heirs, administrators or executors and
each of them while acting within the scope of her employment, except for gross
negligence, misconduct or criminal acts or omissions on the part of the
Employee, and provided that Employee, her heirs, administrators or executors or
one of them properly and promptly notifies Employer of adverse claims or
threatened or actual lawsuits. Employee, her heirs, administrators or executors
as appropriate,
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shall provide complete cooperation to Employer, its attorneys and agents in such
case to the extent possible.
7. NON-COMPETITION AGREEMENT.
a. Both parties acknowledge that the Employee's position is
one of considerable responsibility and requires considerable training,
relationships and contacts with customers, clients and potential
customers and clients, and experience that it will take a substantial
amount of Employer's time to replace an employee who has received such
training, relationships, contacts and experience as are typically
afforded by Employer; and
b. As a condition of employment and continued employment of
Employee by Employer, the parties mutually agree that confidentiality
of material matters is required in connection with the business of
Employer and in connection with the operations and the names of
Employer's customers and clients, and that accordingly, it is vital
that Employer be protected from direct or indirect competition from key
employees whose employment might be terminated by or from Employer,
said protection required during employment and for a reasonable period
of time after termination thereof.
c. It is hereby agreed by and between the parties that, as a
part of the valuable consideration of the employment and continued
employment of Employee by Employer:
(1) That Employee shall treat and keep secret all
material matters relating directly or indirectly to
the business of Employer, including but not limited
to, the content of all manuals, memoranda,
production, marketing, promotional and training
materials, financial statements, sales and operations
records, business methods, systems and forms,
production records, billing rates, cost rates,
employee salaries and work histories, customer and
client lists, mailing lists, processes, inventions,
formulas, job production and cost records, special
terms with customers and clients or any other
material information relative to the past, present or
prospective customers and operations as completely
confidential information entrusted to her solely for
use in her capacity as an employee of Employer.
Employee further agrees not to keep and/or use any
papers, records, or any information whatsoever
relative to any of the matters referred to in the
preceding sentence, nor shall Employee furnish, make
available or otherwise divulge such information to
any person during or after her employment by
Employer, unless specifically instructed to do so in
writing signed by the Chief Executive Officer of
Employer.
(2) That if for any reason Employee shall voluntarily or
involuntarily terminate her employment or Employer
shall terminate Employee, it is specifically agreed
and understood that Employee, for a period of one (1)
year from the date of termination, shall not, within
a radius of one hundred (100) miles of Dubuque, Iowa
or Opelousas, Louisiana and/or any entities within
Peninsula Gaming, LLC (the "Territories"), directly
or indirectly
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engage in, be interested in, or in any manner
whatsoever be connected with any casino located
within the Territory. (3) That if for any reason
Employee shall voluntarily or involuntarily terminate
her employment or Employer shall terminate Employee,
it is specifically agreed and understood that
Employee, for a period of one (1) year from the date
of termination, shall not, directly or indirectly, in
any capacity whatsoever, hire or solicit for
employment any employee of Employer.
8. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement contains
the entire agreement of the parties and there are no other promises or
conditions in any other agreement whether oral or written. This Agreement
supersedes any prior written or oral agreement between the parties.
9. AMENDMENTS. This Agreement may be modified or amended, if the
amendment is made in writing and is signed by both parties.
10. SEVERABILITY. If any provision of this Agreement shall be held to
be invalid or unenforceable for any reason, the remaining provisions shall
continue to be valid and enforceable. If a court finds that any provision of
this Agreement is invalid or unenforceable, but that by limiting such provision
it would become valid and enforceable, then such provision shall be deemed to be
written, construed and enforced as so limited.
11. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce
any provision of this Agreement shall not be construed as a waiver or limitation
of that party's right to subsequently enforce and compel strict compliance with
every provision of this Agreement.
12. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of Iowa.
13. REPRESENTATION. The undersigned persons executing this Agreement
for and on behalf of Employer as its sole Managing Member and as its General
Manager represent that they are fully authorized to sign this Agreement for and
on behalf of Employer, and Employee may rely upon this representation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the day and year first above written.
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EMPLOYER: EMPLOYEE:
Peninsula Gaming Company, LLC
By: /s/ M. Brent Stevens /s/ Natalie A. Schramm
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Name: M. Brent Stevens Name: Natalie Schramm
Title: Chief Executive Officer
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