Exhibit 10.05 (b) +
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 1st day of March, 2001, between
XXXXXX'X RESTAURANT GROUP, INC., a Delaware corporation ("Morton's" or
"Company") and Xxxxxx X. Xxxxxxx ("Xxxxxxx"), an individual.
WHEREAS, Morton's has employed, and wishes to continue to employ, Xxxxxxx
as Chief Financial Officer and Executive Vice President of Morton's and various
of its affiliates and subsidiaries (in the aggregate, the "Morton's Subs" and
individually a "Morton's Sub").
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment.
(a) Morton's hereby continues to employ Xxxxxxx and Xxxxxxx hereby
accepts continued employment for a term beginning as of the 1st day of January,
2001 (the "Commencement Date"), and continuing thereafter such that at any day
following the Commencement Date the term of Xxxxxxx'x employment shall be three
(3) years (the "Employment Period"), unless sooner terminated as hereinafter
provided.
(b) At any time during the Employment Period, Morton's may send a
notice to Xxxxxxx, terminating his employment ("Morton's Notice"). Morton's
Notice shall set forth the date of termination, which shall in no event be
earlier than thirty-six (36) months after the date of delivery to Xxxxxxx of
Morton's Notice. Following the delivery of Morton's Notice, Morton's
compensation obligation to Xxxxxxx shall be as set forth in Section 7(f).
2. Compensation; Benefits; Expenses; and Bonus
(a) As compensation for the services to be rendered hereunder, until
December 31, 2001, Morton's shall pay to Xxxxxxx a base salary (as adjusted
thereafter pursuant to the next sentence hereof, the "Base Salary") at the rate
of $266,000 per annum, payable in equal installments at such times as shall be
agreed upon by Morton's and Xxxxxxx, but no less frequently than monthly. The
annual Base Salary for the calendar year commencing January 1, 2002 and for each
calendar year thereafter shall increase at no less
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than the rate of increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers, as compiled by the U.S. Bureau of Labor Statistics for the
preceding year (the "CPI"). The Base Salary may be increased at a faster rate
than that of the CPI, at the discretion of the Board of Directors.
(b) Xxxxxxx shall be eligible to participate in benefit programs, if
any, of Morton's which are in effect for its executive personnel from time to
time, including but not limited to profit sharing, pension, insurance, incentive
or other supplemental or special compensation plans or arrangements, and stock
purchase programs, in each case in accordance with the terms of such program.
(c) Morton's recognizes that Xxxxxxx, in rendering the services
hereunder, will be required to spend sums of money for the entertainment of
various persons and representatives of companies and organizations with whom
Morton's is having, or would like to have business relations, and otherwise in
performance of his duties hereunder. Morton's will advance and/or reimburse
reasonable traveling or other out-of-pocket expenses incurred or to be incurred
by Xxxxxxx in rendering the services hereunder on behalf of Morton's, and
Morton's will advance such funds to Xxxxxxx, or reimburse Xxxxxxx upon
presentation of vouchers or other documents reasonably necessary to verify the
expenditures and sufficient, in form and substance, to satisfy Internal Revenue
Service ("IRS") requirements for any traveling or other expenses.
(d) Morton's recognizes Xxxxxxx'x need for an automobile for
business purposes and to facilitate the performance of Xxxxxxx'x duties
hereunder. Therefore, Morton's shall pay to Xxxxxxx a monthly automobile
allowance to be used by Xxxxxxx towards the purchase or lease of an automobile,
(the make and model of which shall be selected by Xxxxxxx), and all costs
related to the operation and maintenance of such automobile.
(e) Morton's may elect to pay annual bonuses. The decision to pay
any bonuses and the actual payment of such bonuses, if any, shall be at the sole
discretion of the Company.
3. Duties.
Xxxxxxx shall have the title and perform the duties of Executive
Vice-President and Chief Financial Officer of Morton's. He shall have charge of
such books and papers as properly belong to his office. He shall report to the
Chairman of the Board of Directors. Xxxxxxx shall also serve, if elected or
appointed, to other offices of the Company and as a director of the Company
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and/or as a director and an officer of any and all Morton's Subs.
4. Extent Of Services; Vacations.
(a) Xxxxxxx shall devote substantially all his full professional
time, energies, skills and attention to the performance of his duties and
responsibilities hereunder. However, the Company acknowledges that Xxxxxxx
presently does and may hereafter serve as a director of and advisor/consultant
to other business entities and nothing contained herein shall prevent him from
so serving provided such service does not conflict or materially interfere with
his obligations to the Company hereunder.
(b) Xxxxxxx shall be entitled to take periodic vacations consistent
with past practices and with his duties hereunder.
5. Working Facilities. Xxxxxxx shall be furnished with a private office,
secretarial help and services, consistent with past practices and suitable to
his position and adequate for the performance of his duties.
6. Confidentiality, etc.
Upon the termination of the Employment Period or at such other time
as Morton's may request, Xxxxxxx agrees to return to the Company all originals
and copies, whether generated by Xxxxxxx or anyone else, of all material
documents, files, lists, forms, contracts, notebooks, rolodexes, keys, credit
cards, and any other material which, during the Employment Period, came into,
and continue to be in, Xxxxxxx'x possession and relate to Morton's, the Morton's
Subs, their respective businesses or their potential acquisitions and
investments.
7. Death Or Disability Of Xxxxxxx; Other Termination.
(a) If Xxxxxxx is unable to perform his duties by reason of illness
or incapacity (a "Disability") for a continuous period of more than six (6)
months, the compensation otherwise payable to him during the continued period of
such illness or incapacity after such six (6) month period shall be at the
annual rate of $88,666.66. Xxxxxxx'x full compensation shall be reinstated upon
his return to employment and the discharge of his full duties hereunder.
Notwithstanding anything herein to the contrary, if Xxxxxxx shall be absent from
his employment by reason of illness or incapacity for a continuous period of
more than eighteen (18) months, this Agreement shall terminate, except Xxxxxxx'x
legal representatives shall be entitled to receive the compensation herein
provided to the last day of the eighteenth month of such
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continuous period.
(b) If Xxxxxxx dies during the term of this Agreement, this
Agreement shall terminate, except that Xxxxxxx'x legal representatives shall be
entitled to receive the compensation herein provided only to the last day of the
month in which Xxxxxxx'x death occurs.
(c) In addition to Morton's rights set forth in clauses (a) and (b)
above, subject to clause (d) below, this Agreement shall terminate in the event:
(i) A licensed physician shall determine that Xxxxxxx is a
"drug dependent person" (as defined in the New York Mental Hygiene Law or any
successor statute); or
(ii) Xxxxxxx shall be declared to be incompetent pursuant to
the New York Mental Hygiene Law or any successor or similar statute, or a
conservator of his property shall have been appointed pursuant to the New York
Mental Hygiene Law or any successor or similar statute; or
(iii) Xxxxxxx is convicted in a court of law of theft,
embezzlement, fraud or other felony or of any other crime that constitutes a
felony in the jurisdiction involved; or
(iv) Xxxxxxx willfully breaches a substantial provision of
this Agreement or commits any act not approved by the Board of Directors of the
Company involving any material conflict of interest which substantially
adversely affects the Company or any Morton's Sub.
(d) In the event of a termination pursuant to Section 7(c)(iv)
above, Morton's shall deliver to Xxxxxxx a notice setting forth a reasonably
detailed description of the breached provision or unauthorized conduct
constituting the basis for termination, and this Agreement shall not terminate
unless Xxxxxxx fails to cure same within 20 days after receipt of notice, or, if
Xxxxxxx cannot reasonably be expected to effect a cure within such 20 day
period, if Xxxxxxx fails to commence such cure within such 20 day period and
diligently proceed to effect same within 90 days after the aforesaid notice. In
the event of a termination pursuant to Section 7(c)(i) - (iii) above, Morton's
shall deliver to Xxxxxxx a notice stating which of the ground(s) it alleges for
termination of this Agreement, together with a reasonably detailed description
of such ground(s).
(e) Xxxxxxx'x obligations under this Agreement shall terminate at
Xxxxxxx'x option for any one of the following events
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("Good Reason") (i) Xxxxxxx is assigned any duties or responsibilities
inconsistent with his position as Executive Vice-President and Chief Financial
Officer of Morton's (including status, offices, titles and reporting
requirements), or (ii) Morton's fails to pay any sum of money to Xxxxxxx when
the same becomes due and payable and such failure continues for thirty (30) days
after such sum of money is due. Xxxxxxx'x good faith determination of Good
Reason shall be conclusive upon the parties for all purposes of this Agreement.
(f) Subject to clause (g) below, in the event (i) this Agreement
terminates pursuant to Section 7(e) or (ii) Morton's has delivered Morton's
Notice (the date of such termination or delivery being the "Measuring Date"),
Morton's covenants and agrees to pay in a lump sum in cash within ten (10) days
after the Measuring Date as damages the product of three (3) multiplied by
$346,332. Xxxxxxx agrees to use his best efforts to seek alternative employment
as an executive earning a salary reasonably comparable with that being paid to
Xxxxxxx by Morton's, upon any such termination. Upon Xxxxxxx'x acquisition of
such alternative employment, he shall repay to Morton's an amount equal to the
product of $7,392 multiplied by "X", where X equals the difference between 36
and the number of months between the Measuring Date and the date Xxxxxxx
commences such new employment. Morton's shall also pay to Xxxxxxx all reasonable
expenses which Xxxxxxx may then or thereafter incur for legal expenses and all
other reasonable costs paid or incurred by Xxxxxxx for enforcing payment of such
amounts.
(g) Notwithstanding any provision of this Agreement to the contrary,
to the extent any amounts payable to Xxxxxxx in connection with a "Change of
Control" (as defined in the Amended and Restated Change of Control Agreement
between Morton's and Xxxxxxx dated March 1, 2001, as such Amended and Restated
Change of Control Agreement may be further amended from time to time (the
"Change of Control Agreement")), whether pursuant to this Agreement, the Change
of Control Agreement or under any other employment agreement, employment
arrangement or similar plan, contract or program of severance (collectively, the
"Total Severance Benefits"), would constitute "Parachute Payments" (as defined
in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended), the
Total Severance Benefits payable to Xxxxxxx shall be reduced to the extent
necessary such that the Total Severance Benefits no longer constitute Parachute
Payments. Xxxxxxx may elect, in his sole discretion, which of the Total
Severance Benefits shall be eliminated or reduced (as long as after such
election the Total Severance Benefits no longer constitute Parachute Payments).
For purposes of this Section 7(g), the
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determination of whether payments to Xxxxxxx would constitute Parachute Payments
shall be made by Xxxxxxx, in good faith.
8. Insurance.
(a) Morton's in its discretion at any time after the execution of
this Agreement, may apply for and procure as owner and for its own benefit,
insurance on the life of Xxxxxxx, in such amounts and in such form or forms as
Morton's may choose. Xxxxxxx shall have no interest whatsoever in any such
policy or policies, but he shall, at the request of Morton's, submit to such
medical examinations, supply such information, and execute such documents as may
be required by the insurance company or companies to whom Morton's has applied
for such insurance.
(b) Morton's shall, for so long as Xxxxxxx is employed by it, pay
for the benefit of Xxxxxxx the premium on the medical, dental, life and
disability policies presently being provided to him, or policies substantially
similar to same.
(c) Upon the termination of Xxxxxxx'x employment, Xxxxxxx shall have
the option, within thirty (30) days thereafter, to acquire Morton's interest in
the policy or policies that may be procured by Morton's pursuant to subparagraph
(a) above, to the extent permitted by such policy or policies, upon payment to
Morton's of such policy's or policies' then cash surrender value. If Xxxxxxx
exercises such option, Morton's will take whatever reasonable steps are
necessary to assign all the rights in the entire policy or policies to Xxxxxxx,
to the extent permitted by such policy or policies, and to deliver physical
possession of the policy or policies to Xxxxxxx. If Xxxxxxx shall fail to
exercise such option, Morton's may cancel the policy or policies and take down
their cash surrender value, and neither Xxxxxxx nor any person claiming through
Xxxxxxx shall have any rights whatsoever in any part of the policy or policies
or their values.
9. Survival Of Obligations. Notwithstanding the expiration of the term of
this Agreement or any termination of this Agreement, any duty or obligation
which has been incurred and which has not been fully observed, performed and/or
discharged, and any right, unconditional or conditional, which has been created
and has not been fully enjoyed, enforced, and/or satisfied, shall survive such
expiration or termination until such duty or obligation has been fully observed,
performed and/or discharged and such right has been enforced, enjoyed and/or
satisfied.
10. Remedies, etc.
The parties recognize that irreparable damage may result
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in the event that the provisions of Section 6 hereof shall not be specifically
enforced. If any dispute arises concerning action in violation of any such
provision, the parties hereto agree that an injunction be issued restraining
such action pending determination of such controversy and that no bond or other
security shall be required in connection therewith. If any dispute arises
concerning the right or obligation of any party hereto, such right or obligation
shall be enforceable by a decree of specific performance. Such remedies shall,
however, not be exclusive of and shall be in addition to any other remedies
which the parties may have, including injunctive relief and actions for damages.
11. Notices. All notices hereunder shall be in writing and shall be
mailed, delivered by hand or telecopied. All such notices shall be deemed to
have been given or delivered three days after the date mailed in any general or
branch United States Post Office enclosed in a registered postpaid envelope
addressed to the address of the respective parties stated below, on the date of
the by hand delivery if so delivered, or on the date of receipt, if telecopied.
The notices shall be addressed as follows:
If to Xxxxxxx:
Xxxxxx X. Xxxxxxx
000 Xxx Xxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
with a copy to:
Salamon, Gruber, Xxxxxx & Blaymore, P.C.
00 Xxxxxxxxxx Xxxx
Xxxxxx Xxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
If to Morton's:
Xxxxxx'x Restaurant Group, Inc.
0000 Xxx Xxxx Xxxx Xxxx
Xxx Xxxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
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Attn: Xxxx Xxxxxxxxxx, Esq.
or to such other address as a party hereto may notify the other pursuant to this
Section 11.
12. Waiver. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
13. Severability. The invalidity or unenforceability of any provisions
hereof shall in no way affect the validity or enforceability of any other
provision.
14. Modification. This Agreement cannot be changed, modified or discharged
orally, but only if consented to in writing by both parties.
15. Assignment. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Xxxxxxx herein may
not be sold, transferred, assigned, pledged or hypothecated. In the event of any
attempted assignment or transfer of rights hereunder contrary to the provisions
hereof, Morton's shall have no further liability for payments hereunder.
16. Benefit. Except as otherwise herein expressly provided, this Agreement
shall inure to the benefit of and be binding upon Morton's, its successors and
assigns, including but not limited to any corporation which may acquire all or
substantially all of Morton's assets and business or with or into which Morton's
may be consolidated or merged, and Xxxxxxx, his heirs, executors, administrators
and legal representatives, provided that the obligation of Xxxxxxx hereunder may
not be delegated.
17. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
18. Indemnity. Morton's shall indemnify Xxxxxxx and hold him harmless for
any acts or decisions made by him in good faith while performing services for
Morton's as an officer of Morton's and shall include him under any insurance
policy now in force or hereinafter obtained during the term of this Agreement,
covering the other officers and directors of Morton's against lawsuits;
provided, however, Morton's shall be under no obligation to obtain
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any such coverage. To the extent permitted under the Delaware General
Corporation Law, Morton's will pay all reasonable expenses, including attorneys'
fees, actually and necessarily incurred by Xxxxxxx in connection with the
defense of such act, suit or proceeding and in connection with any appeal
thereon including the cost of court settlements.
19. Withholding of Taxes. Morton's may withhold from any amounts or
benefits payable under this Agreement all federal, state, city and other taxes
as shall be required pursuant to any law or governmental regulation or ruling.
20. Contract Headings. All headings of the Articles of this Agreement have
been inserted for convenience of reference only, are not to be considered a part
of this Agreement, and shall in no way affect the interpretation of any of the
provisions of this Agreement.
21. Entire Agreement. The foregoing contains the entire agreement of the
parties.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the day
and year first above written.
/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
Attest: XXXXXX'X RESTAURANT GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
/s/ Xxxxx Xxxxxxxx ---------------------------------
----------------------------- Name: Xxxxx X. Xxxxxxxxx
Title: Chairman of the Board
President
Chief Executive Officer
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