Exhibit 10.1
EXECUTION VERSION
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the “
Agreement ”) dated as January 25, 2011 by and
between Morton’s Restaurant Group (the “ Company
”) and Christopher J. Artinian (the “ Executive
”) (each a “ Party ” and together, the
“ Parties ”).
WHEREAS, the Executive has been
employed by the Company since 1995 and in or about February of
2010, the Executive was appointed Chief Executive Officer and
President of the Company; and
WHEREAS, the Executive and the
Company wish to establish the terms of the Executive’s
continued employment with the Company following the Effective Date
(as defined below);
Accordingly, the Parties agree as
follows:
1. Employment and Acceptance
. The Company shall continue to employ the Executive, and the
Executive shall accept such employment, subject to the terms of
this Agreement, which shall become effective on January 25,
2011 (the “ Effective Date ”).
2. Term . Subject to earlier
termination pursuant to Section 5 of this Agreement, this
Agreement and the employment relationship hereunder shall continue
from the Effective Date until December 31, 2012 (“
Initial Term ”). The employment term hereunder shall
automatically be extended for successive one-year periods beginning
on January 1, 2013 (“ Extension Terms ”
and, collectively with the Initial Term, the “ Term
”) unless either party gives notice of non-extension to the
other no later than sixty (60) days prior to the expiration of
the then-applicable Term. In the event that the Executive’s
employment with the Company terminates, the Company’s
obligation to continue to pay, after the date of termination, Base
Salary (as defined below), Bonus (as defined below) and other
benefits shall terminate except as may be provided for in
Section 5 below.
3. Duties and Title
.
3.1 Title . The Company shall
employ the Executive to render exclusive and full-time services to
the Company and its subsidiaries. The Executive shall serve in the
capacity of Chief Executive Officer and President of the
Company.
3.2 Duties . The Executive
shall have responsibilities commensurate with the Executive’s
position and shall perform the duties that the Board of Directors
of the Company (the “ Board ”) may from time to
time require of the Executive in that capacity, consistent with the
Executive’s position. The Executive shall report to the Board
of Directors. The Executive shall devote substantially all of the
Executive’s full professional time, energies, skills and
attention to the performance of the Executive’s duties and
responsibilities hereunder. The Executive shall, as necessary, also
serve, if elected or appointed, without additional compensation, as
a director and an officer of any and all restaurant businesses
wholly or partly owned by the Company.
4. Compensation and Benefits by
the Company . As compensation for all services rendered
pursuant to this Agreement, the Company shall provide the Executive
the following during the Term:
4.1 Base Salary . The Company
will pay to the Executive an annualized base salary of $370,000
(“ Base Salary ”), payable not less frequently
than monthly, less such deductions as shall be required to be
withheld by applicable law and regulations. The Executive’s
Base Salary shall be reviewed at least annually by the Board and
may be adjusted upward from time to time.
4.2 Annual Bonus . The
Executive shall be eligible to receive an annual bonus (the “
Bonus ”) targeted at sixty-five percent (65%) of
Base Salary (the “ Target Bonus ”), based upon
achievement of performance targets as determined by the Board and
the Company’s Compensation Committee. Any Bonus shall be paid
within two and one-half (2.5) months following the fiscal year
to which the Bonus relates (the “ Bonus Payment Date
”). Except as otherwise set forth in Section 5, the
Executive must be employed by the Company, and not have given
notice of resignation, as of the Bonus Payment Date, in order to
receive such Bonus.
4.3 Participation in Employee
Benefit Plans . The Executive shall be permitted during the
Term, if and to the extent eligible, to participate in any group
life, accidental death and dismemberment or disability insurance
plan, health (including an executive health benefit plan) program,
incentive or other supplemental or special compensation plans or
arrangements, and stock purchase programs, retirement plan or
similar benefit plan or perquisite program of the Company, which
may be available generally to other senior executives of the
Company and its subsidiaries on the same terms as such other
persons in accordance with the terms of such plans and
programs.
4.4 Expense Reimbursement .
The Executive shall be entitled to receive reimbursement for all
appropriate business expenses incurred by the Executive in
connection with the Executive’s duties under this Agreement
in accordance with the policies of the Company as in effect from
time to time. During the Term, the Company will continue to provide
the Executive with an automobile or reimbursement for the costs of
an automobile for business purposes, in the same capacity or amount
as the Executive receives as of the Effective Date.
5. Termination of Employment
.
5.1 Termination by the Company
for Cause, by the Executive without Good Reason, Due to Death or
Disability, or Nonrenewal of the Term . If: (i) the
Company terminates the Executive’s employment with the
Company for Cause (as defined below); (ii) the Executive
terminates employment with the Company without Good Reason (as
defined below); (iii) the Company terminates the
Executive’s employment with the Company due to the
Executive’s Disability (as defined below); (iv) the
Executive’s employment terminates due to the
Executive’s death; or (v) the Executive’s
employment terminates due to nonrenewal of the Term by either Party
pursuant to Section 2 of this Agreement, the Executive or the
Executive’s legal representatives (as appropriate), shall be
entitled to receive the following payments (the “ Accrued
Benefits ”):
(a) the Executive’s accrued
but unpaid Base Salary to the date of termination; and
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(b) expenses reimbursable under
Section 4.4 above incurred but not yet reimbursed to the
Executive to the date of termination.
For the purposes of this Agreement,
“ Cause ” means as determined by the Board (or
its designee), (i) indictment for a felony or any crime
involving dishonesty or theft; (ii) conduct by the Executive
in connection with the Executive’s employment duties or
responsibilities that is fraudulent, unlawful or grossly negligent;
(iii) the Executive’s willful misconduct; (iv) the
Executive’s contravention of specific lawful directions
related to a material duty or responsibility which is directed to
be undertaken from the Board; (v) the Executive’s
material breach of the Executive’s obligations under this
Agreement, including, but not limited to breach of the
Executive’s obligations under Section 6, and the
Executive’s continued inattention to or material failure to
perform the duties reasonably assigned to the Executive by the
Board; (vi) any acts of dishonesty by the Executive resulting
or intending to result in personal gain or enrichment at the
expense of the Company, its subsidiaries or affiliates;
(vii) the Executive’s failure to comply with a material
policy of the Company, its subsidiaries or affiliates; or
(viii) the Executive’s engaging in personal conduct
(including, but not limited to, harassment or discrimination of
employees, or the use or possession at work of any illegal
controlled substance) which seriously discredits or damages, or
could seriously discredit or damage, the Company, its subsidiaries
or affiliates. A termination for “Cause” shall be
effective immediately (or on such other date set forth by the
Board). With respect to any event or deficiency constituting Cause
pursuant to clauses (v) and (vii) above (except with
respect to a breach by the Executive of the Executive’s
obligations under Section 6 of the Agreement), the Company
shall be required to provide the Executive with written notice
specifying such event or deficiency within ninety (90) days
following the Board’s verifiable knowledge of the occurrence
of such event or deficiency and the Executive shall have thirty
(30) days after receipt of such notice to cure, if curable,
such event or deficiency that would result in such Cause, as
reasonably determined by the Board.
For the purposes of this Agreement,
“ Good Reason ” means (i) the Executive is
assigned any duties or responsibilities materially inconsistent
with the Executive’s positions as Chief Executive Officer and
President of the Company; (ii) the Company fails to pay any
sum of money to the Executive when the same becomes due; or
(iii) relocation of the Company’s headquarters to a
location more than fifty (50) miles from the Company’s
current headquarters. The Executive shall be required to provide
the Company with written notice specifying such event or deficiency
constituting Good Reason within ninety (90) days following the
Executive’s knowledge of the occurrence of such event and the
Company shall have thirty (30) days after receipt of such
notice to cure the event or deficiency that would result in Good
Reason.
For the purposes of this Agreement,
“ Disability ” means, as a result of a physical
or mental injury or illness, the Executive is unable to perform the
essential functions of the Executive’s job with reasonable
accommodation as reasonably determined by the Company in good faith
for a period of (i) 90 consecutive days or (ii) 180 days
in any twelve (12) month period.
5.2 Termination By the Company
Without Cause, or By the Executive for Good Reason . If during
the Term, (i) the Company terminates the
Executive’s
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employment without Cause or (ii) the
Executive terminates the Executive’s employment with the
Company for Good Reason, the Executive will be entitled to the
Accrued Benefits and, subject to (x) the Executive complying
the obligations of Section 6 hereunder and (y) the
Executive’s execution (without revocation) of a valid release
agreement in a form acceptable to the Company within thirty
(30) days following the date of termination of the
Executive’s employment, then beginning on the sixtieth
(60th) day following such termination, the Executive shall
receive the following payments and benefits:
(a) Continued payment of the
Executive’s Base Salary then in effect for twenty-four
(24) months, payable in equal installments and in accordance
with the Company’s normal payroll practices;
(b) An amount equal to the Bonus
received by the Executive from the previously completed fiscal
year, if any, multiplied by two (2), payable over twenty-four
(24) months in equal installments and in accordance with the
Company’s normal payroll practice;
(c) A monthly payment equal to the
monthly cost of continuation coverage of group health coverage
pursuant to the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended, for a maximum of eighteen (18) months to the
extent Executive elects such continuation coverage and is eligible
and subject to the terms of the plan and the law; provided, that
such payment shall cease to the extent that the Executive is
eligible for comparable benefits from a new employer;
and
(d) For a period of two
(2) years, the Company shall promptly pay (or, in the
discretion of the Executive, reimburse the Executive for all
reasonable expenses incurred) for professional outplacement
services of a qualified consultant selected by the Company, but for
no longer than the date Executive first obtains full-time
employment after such termination (not to exceed $25,000 in the
aggregate).
If payments or benefits would
otherwise have been owed to the Executive prior to the sixtieth
(60th) day after termination of employment, any such delayed
payments or benefits shall be made to or on behalf of the Executive
on the 60th day after termination of employment. The Company shall
have no obligation to provide the benefits set forth above in the
event that the Executive materially breaches the provisions of
Section 6.
5.3 Removal from any Boards and
Position . If the Executive’s employment is terminated
for any reason under this Agreement, the Executive shall be deemed
to resign (i) if a member, from the Board or board of
directors of any subsidiary of the Company or any other board to
which the Executive has been appointed or nominated by or on behalf
of the Company and (ii) from any position with the Company or
any subsidiary of the Company, including, but not limited to, as an
officer of the Company and any of its subsidiaries.
5.4 Continued Employment Beyond
the Expiration of the Term . Unless the Parties otherwise agree
in writing, continuation of the Executive’s employment with
the Company beyond the expiration of the Term shall be deemed an
employment at-will and shall not be deemed to extend any of the
provisions of this Agreement and the Executive’s employment
may thereafter be terminated at-will by either the Executive or the
Company; provided that the provisions of Sections
5.3, 5.5, 6, 7, 8.5, 8.9, 8.10, 8.11 and 8.12 of this Agreement
shall survive any termination of this Agreement or the termination
of the Executive’s employment hereunder.
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5.5 Parachute Payments . If
the Company determines in good faith that any payments or benefits
(whether made or provided pursuant to this Agreement or otherwise)
provided to the Executive constitute “parachute
payments” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “ Code
”), (“ Parachute Payments ”), and may be
subject to an excise tax imposed pursuant to Section 4999 of
the Code, the Executive’s Parachute Payments will be reduced
to an amount determined by the Company in good faith to be the
maximum amount that may be provided to the Executive without
resulting in any portion of such Parachute Payments being subject
to such excise tax. The Executive shall be entitled to select which
Parachute Payments shall be reduced hereunder; provided that if the
Executive fails to so select, the Company shall select which
Parachute Payments will be reduced.
5.6 No Mitigation . The
Executive shall be under no obligation to seek other employment
after termination of employment with the Company and the
obligations of the Company to the Executive which arise upon the
termination of the Executive’s employment pursuant to this
Section 5 shall not be subject to mitigation.
6. Restrictions and Obligations
of the Executive .
6.1 Confidentiality
.
(a) During the course of the
Executive’s employment by the Company (prior to and during
the Term), the Executive has had and will have access to certain
trade secrets and confidential information relating to the Company
and its subsidiaries and affiliates (the “ Protected
Parties ”) which is not readily available from sources
outside the Company. The confidential and proprietary information
and, in any material respect, trade secrets of the Protected
Parties are among their most valuable assets, including but not
limited to, their customer, supplier and vendor lists, databases,
competitive strategies, computer programs, frameworks, or models,
their marketing programs, their sales, financial, marketing,
training and t
