EXHIBIT 10.1B
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective this 14th day of July 2004, by and between Jonathan Swain (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 agree as follows:
1. TERM OF AGREEMENT. The term of the Agreement shall be for a 3 year
period commencing July 14, 2004 through July 14, 2007 (the "Term"). No later
than ninety (90) days prior to the expiration of the Term, Employer shall notify
the Employee whether the Agreement will be extended beyond the initial Term. In
the event the Employer requests that the Employee continue his employment after
the expiration date (the "Extended Term"), the parties agree to immediately
negotiate the provisions of the Extended Term in good faith. Provided however,
if the negotiations for the Extended Term are not completed by the expiration
date of the Term, the Employee may elect to continue his employment during the
completion of the negotiations under the same terms and conditions as contained
the Agreement. The minimum period for any Extension Term shall be one (1) year.
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 his base 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 (a
"Mutual Termination"), Employee shall nevertheless be entitled to receive his
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 negligence 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, (f) Employee's being under the influence of illegal drugs or chronic
alcohol abuse while performing his duties hereunder, (g) 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 (h) Employee's breach or
violation of any material term or material provision of this Agreement (each of
the foregoing clauses (a) through (h) are herein referred to as "For Cause");
provided, however, that, in the case of clauses (e), (f), (g) or (h) of this
Section 2, Employee shall be entitled a detailed explanation of the offense. The
Employer shall provide 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 in connection with a
Mutual Termination or For Cause, during the Term of the Agreement, Employee
shall be entitled to receive (A) as severance pay the lesser of (a) the balance
of base compensation due to Employee for the remainder of the Term, or (b)
twelve months base compensation, which payments shall be made as they would
otherwise have become due under the payroll schedule of Employer, and (B) a
prorated share of the cash bonus to which Employee otherwise would be entitled
had Employee's employment continued to the end of the then current calendar, as
provided in paragraph 4(a); provided, however, that as a condition of receiving
any severance payments under this agreement, Employee will be required to
execute a settlement and general release of claims against the Employer, its
officers, managers, members, agents, employees, successors and assigns, for
matters arising out of or relating to Employee's employment with the Employer,
in a form acceptable to the Employer.
3. DUTIES. Employee shall carry out the duties and responsibilities as
the Chief Operating Officer ("COO") of the Employer. The Employee shall have a
direct reporting relationship to the Chief Executive Officer ("CEO"). The
Employee's duties shall include the authority to hire, supervise, discipline and
terminate employees of the company, provided however, the Employee may hire and
terminate employees with annual salaries in excess of $100,000 only in
accordance with the Employer's organizational documents. Employee shall devote
Employee's full business time, attention and ability to the business and affairs
of the Employer, shall comply with all of the Employer's policies and codes of
conduct, a copy of which has been provided to the Employee. The Employee shall
use his best efforts to carry out Employee's responsibilities as COO faithfully
and efficiently in a professional manner. Employer acknowledges and agrees that
Employee, in his sole discretion, shall set the location that Employee works in
carrying out his duties as the COO under this Agreement, provided however, it is
understood that an office of the company from which the Employee shall be
entitled to work shall be located in Las Vegas, Nevada. Employee shall not
provide any paid consulting or other services to third parties without the
Employer's prior consent, which consent shall not be unreasonably withheld or
delayed; provided, that such consent may be withheld in the Employer's sole
discretion in the event that such consulting or other services would interfere
with the performance of Employee's duties as COO under this Agreement or would
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 as compensation for his
services for the twelve month period commencing on the date hereof the
base annual salary of four
hundred thousand dollars ($400,000), payable in accordance with the
payroll policy of the Employer, less such deductions or amounts to be
withheld as shall be required by applicable law and regulations or as
elected by the Employer for any employee benefit plans of the Employer.
Upon execution of this Agreement, Employee shall be paid a signing
bonus of $30,000, and, provided that the Employee's employment with the
Employer hereunder shall have not yet terminated, on October 4, 2004,
Employee shall be entitled to receive an additional bonus of $30,000.
In addition to the base salary, on January 1, 2005, if Employee shall
remain employed by the Employer as of such date, Employee shall be
entitled to receive a bonus in respect of Employee's employment during
the 2004 calendar year equal to (i) $100,000 times (ii) a fraction, (A)
the numerator of which equals the actual number of calendar days
elapsed from, and including, the date hereof through, but excluding,
January 1, 2005, and (B) the denominator of which equals 365; provided,
however, that the foregoing bonus may be increased, but not decreased,
as determined by the chief executive officer of the Employer. On
January 1 of each calendar year of the Term thereafter, commencing on
January 1, 2006, if Employee shall remain employed by the Employer as
of such date, Employee shall be entitled to receive a cash bonus of no
less than $100,000 and up to $300,000, payable by the Employer based on
Employee's performance during the previous employment year, which
performance shall be based on meeting or exceeding the approved budget
targets established by the COO and CEO. Such payments shall at least be
consistent with past practices and/or the bonus plan in place for
similarly situated executive officers of the Employer.
b. Additionally, the Employee shall be issued 30,000 Common
Units of Peninsula Gaming Partners LLC, which represents 2% of its
outstanding capital interests on a fully diluted basis (the "Granted
Units"). For so long as no termination of this Agreement or of
Employee's employment with the Employer hereunder shall have occurred,
(i) twenty-five percent (25%) of the Granted Units shall vest on the
date hereof, (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 either (A) by the Employer for any reason other than
For Cause or (B) by the Employee as a result of a material reduction in
the Employee's salary or responsibilities hereunder ("For Good
Reason"), all Granted Units that shall have not yet vested pursuant to
the preceding sentence as of such date of termination shall immediately
vest as of the date of such termination. Upon any termination of this
Agreement or of Employee's employment with the Employer hereunder
either (A) by the Employer For Cause or (B) by the Employee other than
For Good Reason, 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. Upon any
termination of this Agreement or of Employee's employment with the
Employer hereunder for any reason, 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 an
independent Certified Public Accountant
(the "CPA") selected by mutual agreement of Employer and Employee. The
CPA shall consider the enterprise value of the company in the event of
a sale, without any reduction based upon the fact that the interests to
be redeemed represent a minority interest. The determination of the CPA
shall be binding upon the parties.
c. To the extent not inconsistent with Employee's status as a
salaried employee under a continuing contract, Employee shall, during
the continuation of Employee's employment by the Employer hereunder, be
entitled to all benefits accorded executive officers of Employer in
accordance with the terms of the Employer's personnel policies,
including a deferred compensation plan to be implemented by Employer.
At a minimum, benefits shall included, health insurance and a life
insurance policy from an AM Best A rated company for the face amount of
One-Million Dollars ($1,000,000).
d. The Employer shall promptly reimburse Employee for
reasonable out-of-pocket housing and lodging expenses in Louisiana
incurred in connection with the fulfillment of the Employee's
obligations to the Employer hereunder. Further, the Employee shall be
entitled to three (3) weeks of paid vacation for each year of the Term.
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 and the sale or transfer is closed at any time during the
Term of this Agreement or any Extended Term, and, within twelve (12) months
following the closing of such sale or transfer, either (a) the Employer
terminates Employee's employment hereunder for any reason other than For Cause,
or (b) the Employee shall terminate the Employee's employment hereunder For Good
Reason, Employee shall be entitled to receive (A) as severance pay the balance
of base compensation due to Employee for the remainder of the Term, which
payments shall be made as they would otherwise have become due under the payroll
schedule of Employer, and the redemption of the Granted Units as provided
paragraph 4(b) above, (B) a prorated share of the cash bonus to which Employee
otherwise would be entitled had Employee's employment continued to the end of
the then current calendar, as provided in paragraph 4(a). Employee will be
required to execute a settlement and general release of claims against the
Employer, its officers, directors, shareholders, agents, employees, successors
and assigns, for matters arising out of or relating to Employee's employment
with the Employer, in a form acceptable to the Employer. "Controlling interest"
is defined as the majority ownership of the Employer or a majority of the
members of the managing board of the Employer.
6. INDEMNIFICATION. Employer shall indemnify, defend and hold and save
Employee, his 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, his 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, his heirs, administrators or executors and
each of them while acting within the scope of his employment, except for gross
negligence, misconduct or criminal acts or omissions on the part of the
Employee, and provided that Employee, his heirs, administrators or executors or
one of them properly and promptly notifies Employer of adverse claims or
threatened or actual lawsuits. Employee, his heirs, administrators or executors
as appropriate, 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.
b. As a condition of employment and continued employment of
Employee by Employer, the parties mutually agree that confidentiality
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
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
information relative to the past, present or prospective
customers and operations as completely confidential
information entrusted to him solely for use in his 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 his 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 his employment or Employer shall
terminate Employee, it is specifically agreed and understood
that Employee, for a period commencing on the date of
termination and terminating on the earlier of (i) the normal
expiration of the then effective Term or Extended Term or (ii)
the one (1) year anniversary of 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 engage in, be interested in,
or in any manner whatsoever be connected with any casino or
racino located within the Territories. The Territories shall
not include the State of Nevada.
(3) That if for any reason Employee shall voluntarily
or involuntarily terminate his 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
individual employed as an employee of Employer at any time
during the three (3) months preceding the date of termination.
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. Any dispute arising out of the Agreement, or the interpretation
of is terms, whether monetary or otherwise, shall be decided by binding
Arbitration pursuant to the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). The Arbitration shall be heard before a single
arbitrator in Las Vegas, Nevada, under the expedited rules of the AAA. The costs
of the arbitration shall be borne equally by Employer and Employee with each
side to bear their own attorneys fees and costs.
13. NOTICES. Any notice or communication required or permitted
hereunder shall be in writing and shall be delivered by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered, as follows:
(i) If to Employer, to:
M. Brent Stevens
Peninsula Gaming, LLC
c/o Jefferies & Company
11100 Santa Monica Blvd, 10th Floor
Los Angeles, CA 90025
with a copy (which shall not constitute notice) to:
Mayer, Brown, Rowe & Maw
1675 Broadway
New York, New York 10019
Attn: Ronald S. Brody
Telecopy: 212-262-1910
(ii) If to the Employee, to:
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Any party may change its address for notices hereunder by
notice to the other party in accordance with this Section 13.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the day and year first above written.
EMPLOYER:
Peninsula Gaming, LLC
By: /s/ M. Brent Stevens
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Name: M. Brent Stevens
Title: Chief Executive Officer
EMPLOYEE:
Name: /s/ Jonathan Swain
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