Exhibit 10.8
Execution Copy
THIRD AMENDED AND RESTATED
EMPLOYMENT
AGREEMENT
THIRD AMENDED AND RESTATED
EMPLOYMENT AGREEMENT, dated as of the 20th day of January, 2006,
between MORTON’S RESTAURANT GROUP, INC., a Delaware
corporation (“MRG”) and THOMAS J. BALDWIN
(“Baldwin”), an individual.
WHEREAS, MRG and Baldwin entered
into the Employment Agreement dated as of March 1, 2001, as amended
by the Amendment dated as of December 6, 2002, and the Amended and
Restated Employment Agreement dated as of January 1, 2003,
(together the “Amended and Restated Employment
Agreement”); and
WHEREAS, MRG and Baldwin have agreed
to amend and restate the Amended and Restated Employment Agreement
by this THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT.
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) MRG hereby continues to employ
Baldwin and Baldwin hereby accepts such continued employment for a
term beginning as of January 1, 2006 (the “Commencement
Date”) and continuing thereafter for a three (3) year period;
provided, that the employment term shall continue thereafter such
that at any date following the Commencement Date, the term of
Baldwin’s employment shall be three (3) years (the
“Employment Period”), unless sooner terminated as
hereinafter provided.
(b) At any time during the
Employment Period, MRG may send a notice to Baldwin, terminating
his employment (“MRG Notice”). MRG Notice shall set
forth the date of termination, which shall in no event be earlier
than thirty (30) days following the date the MRG Notice is received
by Baldwin. Following the delivery of MRG Notice, MRG’s
compensation obligation to Baldwin 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, 2006, MRG shall pay to
Baldwin a base salary (as adjusted thereafter pursuant to the next
sentence hereof, the “Base Salary”) at the rate of
$350,000 per annum, payable in equal installments at such times as
shall be agreed upon by MRG and Baldwin, but no less frequently
than monthly. The annual Base Salary for the calendar year
commencing January 1, 2007 and for each calendar year thereafter
shall increase at no less 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) Baldwin shall be eligible to
participate in all benefit programs, if any, of MRG which are in
effect for its executive personnel from time to time, including but
not limited to profit sharing, pension, medical and all other
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) MRG recognizes that Baldwin, 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 MRG is having, or would
like to have business relations, and otherwise in performance of
his duties hereunder. MRG will advance and/or reimburse reasonable
traveling or other
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out-of-pocket expenses incurred or
to be incurred by Baldwin in rendering the services hereunder on
behalf of MRG, and MRG will advance such funds to Baldwin, or
reimburse Baldwin 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) MRG recognizes Baldwin’s
need for an automobile for business purposes and to facilitate the
performance of Baldwin’s duties hereunder. Therefore, MRG
shall pay to Baldwin a monthly automobile allowance to be used by
Baldwin towards the purchase or lease of an automobile, (the make
and model of which shall be selected by Baldwin), and all costs
related to the operation and maintenance of such
automobile.
(e) In addition to the Base Salary,
during the Employment Period, Baldwin shall be eligible to receive
a target annual bonus incentive payment (“Bonus”) of
sixty-five percent (65%) of Base Salary. At the beginning of each
fiscal year, the compensation committee of the Board of Directors
(the “Compensation Committee”) shall establish a
profitability target on which the Bonus will be based (the
“Target”), including profitability targets for minimum
and maximum bonus amounts. In its discretion, the Compensation
Committee may base the Target on net income, operating income,
EBITDA or any other basis it considers most appropriate. The Bonus
shall be payable to Baldwin in the fiscal year following such
fiscal year, within thirty (30) days of receipt by MRG of the
statement of profits and losses for the preceding fiscal year, on a
fully consolidated basis, from its independent certified public
accountant then regularly auditing the books and records of
MRG.
3. Duties .
MRG hereby employs Baldwin on the
terms set forth in this Agreement, and Baldwin hereby accepts such
employment. Baldwin shall have the title of Chairman of the Board
of Directors, Chief Executive Officer and President of MRG, and
perform the general duties that the Board of Directors may from
time to time require of him in that capacity, consistent with his
position. He shall report to the Board of Directors. Baldwin 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
Baldwin 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. Baldwin shall, as necessary, also serve, if
elected or appointed, without additional compensation, as a
director and an officer of any and all restaurant businesses (each,
an “Operating Company”, or collectively, the
“Operating Companies”) wholly or partly owned by MRG.
Baldwin shall assist in the development of the Operating Companies,
and the determination and implementation of policy pertaining to
merchandising, production, distribution, promotion, advertising and
sales.
4. Vacations . Baldwin shall
be entitled to take periodic vacations consistent with past
practices and with his duties hereunder.
5. Working Facilities .
MRG’s headquarters is in Chicago, Illinois. The parties
acknowledge that performance of Baldwin’s duties hereunder
will require that he be present from time to time in the
metropolitan New York area to, among other things, attend Board
meetings, management meetings, investor meetings and conferences,
and that he otherwise will be required to travel within and without
the continental United States to, among other things, visit
Operating Companies, assess potential new locations and business
opportunities, and meet with investors. Taking the above into
consideration, Baldwin agrees to perform his duties at MRG’s
headquarters, as and when necessary for the proper performance of
his duties hereunder; provided, however, MRG recognizes that
Baldwin lives in Connecticut and, unless Baldwin elects to move his
primary residence more than 50 miles from his primary residence as
of the Commencement Date, MRG shall not require Baldwin to move his
primary residence to the metropolitan area in which the corporate
headquarters is located, or any other location and Baldwin shall be
allowed to perform a reasonable portion of
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his duties at or near his primary residence
without further consent of the Board of Directors. Baldwin 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
.
(a) Upon the termination of the
Employment Period or at such other times as MRG may request,
Baldwin agrees to return to MRG all originals and copies, whether
generated by Baldwin 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, Baldwin’s possession and
relate to MRG, the Operating Companies, their respective businesses
or their potential acquisitions and investments.
(b) Baldwin acknowledges that the
provisions of this Section 6 are essential to the continued
goodwill and profitability of MRG and the Operating Companies, and
have provided a substantial inducement to MRG to enter into this
Agreement. Baldwin further acknowledges that the application or
operation thereof will not involve a substantial hardship upon his
future livelihood. Should any court determine that the provisions
of this Section 6 shall he unenforceable in respect of scope,
duration or geographic area, such court shall be empowered to
substitute, to the extent enforceable, provisions similar hereto or
other provisions so as to provide to MRG, to the fullest extent
permitted by applicable law, the benefits intended by this Section
6.
(c) The parties hereto intend to and
hereby confer jurisdiction to enforce the covenants contained in
this Section 6 upon the courts of any state within the geographic
scope of such covenants. In the event that the courts of any one or
more of such states shall hold such covenants wholly unenforceable
by reason of the breadth of such scope or otherwise, it is the
intention of the parties hereto that such determination not bar or
in any way affect MRG’s right to the relief provided in this
Agreement in the courts of any other state within the geographic
scope of such covenants, as to breaches of such covenants in such
other respective jurisdictions, the above covenants as they relate
to each state being, for this purpose, severable into diverse and
independent covenants.
7. Death Or Disability Of
Baldwin; Other Termination .
(a) If Baldwin 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 $130,000.
Baldwin’s 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
Baldwin 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 Baldwin’s
legal representatives shall be entitled to receive the compensation
herein provided to the last day of the eighteenth month of such
continuous period.
(b) If Baldwin dies during the term
of this Agreement, this Agreement shall terminate, except that
Baldwin’s legal representatives shall be entitled to receive
the compensation herein provided only to the last day of the month
in which Baldwin’s death occurs.
(c) In addition to MRG 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 Baldwin is a “drug dependent person” (as
defined in the New York Mental Hygiene Law or any s
