<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D/A
(Amendment No. 1)
Under the Securities Exchange Act of 1934*
Morton's Restaurant Group, Inc.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
74763T 10 8
(CUSIP Number)
Allen J. Bernstein
3333 New Hyde Park Road, Suite 210
New Hyde Park, New York 11042
(516) 627-1515
(authorized to receive notices and communications)
May 12, 1999
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ]
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be filed for purposes of Section 18 of the Securities Exchange Act of
1934 (Act) or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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13D
CUSIP No. 74763T 10 8
- -------------------------------------------------------------------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Allen J. Bernstein
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) / /
(b) / /
- -------------------------------------------------------------------------------
(3) SEC USE ONLY
- -------------------------------------------------------------------------------
(4) SOURCE OF FUNDS **
PF
- -------------------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / /
- -------------------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF (7) SOLE VOTING POWER
408,705
SHARES ----------------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
-0-
OWNED BY ----------------------------------------------------------------
EACH (9) SOLE DISPOSITIVE POWER
408,705
REPORTING ----------------------------------------------------------------
PERSON WITH (10) SHARED DISPOSITIVE POWER
-0-
- -------------------------------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
408,705
- -------------------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES ** / /
- -------------------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (11)
6.7%
- -------------------------------------------------------------------------------
(14) TYPE OF REPORTING PERSON **
IN
- -------------------------------------------------------------------------------
** SEE INSTRUCTIONS BEFORE FILLING OUT!
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The Schedule 13D, initially filed on December 12, 1992 (the "Schedule 13D"),
by Allen J. Bernstein, relating to the Common Stock, par value $0.01 per share
(the "Common Stock"), of Morton's Restaurant Group, Inc., a Delaware corporation
(the "Company"), is hereby amended and restated by this Amendment No. 1 to the
Schedule 13D.
Item 1. Security and Issuer.
The security to which this Amendment No. 1 to the Schedule 13D relates is
the Common Stock. The principal executive offices of the Company are at 3333 New
Hyde Park Road, Suite 210, New Hyde Park, New York 11042.
Item 2. Identity and Background.
Item 2 is hereby amended and restated in its entirety as follows:
(a) This statement is filed by Allen J. Bernstein.
(b)-(c) Mr. Bernstein is Chief Executive Officer, President and Chairman of
the Board of Directors of the Company, a restaurant holding company located at
the address set forth in Item 1 hereof.
(d) Mr. Bernstein has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) during the last five
years.
(e) Mr. Bernstein has not, during the last five years, been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, Federal or state securities laws or finding any violation
with respect to such laws.
(f) Mr. Bernstein is a citizen of the United States.
Item 3. Source and Amount of Funds and Other Consideration.
Item 3 is hereby amended and restated in its entirety as follows:
As of the date hereof, Mr. Bernstein owns 271,205 shares of Common Stock,
190,000 shares of which he purchased prior to August 1989 for an aggregate
purchase price of $57,000 ($.30 per share) and 81,205 shares which were acquired
upon the exercise of stock options on March 11, 1999 for an aggregate purchase
price of $5,684 ($.07 per share). All of these purchases were provided by Mr.
Bernstein's personal funds.
The Company has granted to Mr. Bernstein options to purchase 330,000 shares
of Common Stock at exercise prices ranging from $10.75 to $19.4375 per share.
Pursuant to such options, Mr. Bernstein currently has, or within 60 days of the
date of this Amendment No. 1 will have, the ability to acquire up to 137,500 at
exercise prices ranging from $10.75 to $15.125 per share.
Item 4. Purpose of the Transaction.
Item 4 is hereby restated in its entirety as follows:
Mr. Bernstein acquired the Common Stock for investment purposes only. Mr.
Bernstein will continue to evaluate his ownership and voting position in the
Company and may consider the following future courses of action: (i)
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continuing to hold the Common Stock for investment; (ii) disposing of all or a
portion of the Common Stock in open market sales or in privately-negotiated
transactions; (iii) acquiring additional shares of the Common Stock in the open
market or in privately-negotiated transactions; or (iv) hedging transactions
(other than short sales ) with respect to the Common Stock. Mr. Bernstein has
not as yet determined which of the courses of action specified in this paragraph
he may ultimately take. Mr. Bernstein's future actions with regard to this
investment are dependent on his evaluation of a variety of circumstances
affecting the Company in the future, including the market price of the Company's
Common Stock, the company's prospects and Mr. Bernstein's portfolio.
Except as set forth above, Mr. Bernstein has no present intent or proposals
that relate to or would result in: (i) the acquisition by any person of
additional securities of the Company, or the disposition of securities of the
Company; (ii) an extraordinary corporate transaction, such as merger
reorganization or liquidation, involving the Company or any of its subsidiaries;
(ii) a sale or transfer of a material amount of assets of the Company or any of
its subsidiaries; (iv) any change in the present Board of Directors or
management of the Company, including any plans or proposals to change the number
or term of Directors or to fill any vacancies on the Board; (v) any material
change in the present capitalization or dividend policy of the Company; (vi) any
other material change in the Company's business or corporate structure; (vii)
changes in the Company's charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Company by any
person; (viii) causing a class of securities of the Company to be delisted from
a national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(ix) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(x) any action similar to those enumerated above. However, such plans or
proposals may have been considered, and may from time to time hereafter be
considered, by Mr. Bernstein in his capacity as a director of the Company. In
addition, Mr. Bernstein may, in the future, acquire or transfer (by gift or
otherwise) additional securities of the Company for family financial
planning, charitable and other purposes.
Mr. Bernstein reserves the right to determine in the future whether to
change the purpose or purposes described above or whether to adopt plans or
proposals of the type specified above.
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended and restated in its entirety as follows:
(a) As of the date hereof, Mr. Bernstein owns directly 271,205 shares of
Common Stock, constituting approximately 4.4% of the shares outstanding. By
reason of the provisions of Rule 13d-3 under the Securities Exchange Act of
1934, as amended, Mr. Bernstein may be deemed to own beneficially the 137,500
shares of Common Stock which may be purchased by Mr. Bernstein under the options
referred to in Item 3 hereof, constituting approximately 2.2% of the shares
outstanding, and, together with the 271,205 shares which Mr. Bernstein owns
directly, 6.7% of the shares outstanding or 408,705 shares. The percentages used
herein are based upon 6,137,035 shares of Common Stock issued and outstanding at
the close of business on May 12, 1999, which number includes (i) the
5,999,535 shares stated to be issued and outstanding plus (ii) 137,500 shares
which may be purchased by Mr. Bernstein under the options referred to in Item
3 hereof.
(b) Mr. Bernstein has the power to vote and to dispose of the shares of
Common Stock owned by him.
(c) None.
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(d) No person other than Mr. Bernstein has the right to receive or the
power to direct the receipt of dividends from or the proceeds of sale of such
shares of Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
Item 6 is hereby restated in its entirety as follows:
The Company has issued options to Mr. Bernstein, as referred to in Item 3
hereof. Such options are evidenced by various Incentive and Non-qualified
Stock Option Agreements dated as of July 14, 1992, May 12, 1994, January 30,
1996, May 1, 1997, January 22, 1998 and October 15, 1998, each of which is
filed as an exhibit hereto and incorporated by reference.
Except as described above, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) between Mr. Bernstein and
any person with respect to any securities of the Company, including but not
limited to transfer or voting of any of the securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
divisions or profits or loss, or the giving or withholding of proxies.
<PAGE>
Item 7. Materials to be Filed as Exhibits.
Item 7 is hereby restated in its entirety as follows:
1. There is filed herewith as Exhibit 1 an Option Agreement dated as of
March 30, 1992, between the Company and Mr. Bernstein.
2. There is filed herewith as Exhibit 2 an Incentive Stock Option
Agreement dated as of July 14, 1992, between the Company and Mr. Bernstein.
3. There is filed herewith as Exhibit 3 a Nonqualified Stock Option
Agreement dated as of July 14, 1992, between the Company and Mr. Bernstein.
4. There is filed herewith as Exhibit 4 an Incentive Stock Option
Agreement dated as of May 12, 1994, between the Company and Mr. Bernstein.
5. There is filed herewith as Exhibit 5 an Incentive Stock Option
Agreement dated as of January 30, 1996, between the Company and Mr. Bernstein.
6. There is filed herewith as Exhibit 6 a Non-Qualified Stock Option
Agreement dated as of January 30, 1996, between the Company and Mr. Bernstein.
7. There is filed herewith as Exhibit 7 an Incentive Stock Option
Agreement dated as of May 1, 1997, between the Company and Mr. Bernstein.
8. There is filed herewith as Exhibit 8 a Non-Qualified Stock Option
Agreement dated as of May 1, 1997, between the Company and Mr. Bernstein.
9. There is filed herewith as Exhibit 9 an Incentive Stock Option
Agreement dated as of January 22, 1998, between the Company and Mr. Bernstein.
10. There is filed herewith as Exhibit 10 a Non-Qualified Stock Option
Agreement dated as of January 22, 1998, between the Company and Mr. Bernstein.
11. There is filed herewith as Exhibit 11 a Non-Qualified Stock Option
Agreement dated as of October 15, 1998, between the Company and Mr. Bernstein.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
/s/ Allen J. Bernstein
--------------------------------------------
Allen J. Bernstein
DATED: October 15, 1999
<PAGE>
Exhibit Index
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<TABLE>
<CAPTION>
Exhibit Description
Number of Document Exhibit Location
- ------ ----------- ----------------
<S> <C> <C>
1 Option Agreement dated as of March Filed with the
30, 1992, between the Company and Schedule 13D
Allen J. Bernstein on December 12, 1992
2 Incentive Stock Option Agreement Filed with the
dated as of July 14, 1992, between Schedule 13D
the Company and Allen J. Bernstein on December 12, 1992
3 Nonqualified Stock Option Agreement Filed with the
dated as of July 14, 1992, between Schedule 13D
the Company and Allen J. Bernstein on December 12, 1992
4 Incentive Stock Option Agreement Exhibit 4
dated as of May 12, 1994, between the
Company and Mr. Bernstein.
5. Incentive Stock Option Agreement Exhibit 5
dated as of January 30, 1996, between
the Company and Mr. Bernstein.
6. Non-Qualified Stock Option Agreement Exhibit 6
dated as of January 30, 1996, between
the Company and Mr. Bernstein.
7. Incentive Stock Option Agreement Exhibit 7
dated as of May 1, 1997, between the
Company and Mr. Bernstein.
8. Non-Qualified Stock Option Agreement Exhibit 8
dated as of May 1, 1997, between
the Company and Mr. Bernstein.
9. Incentive Stock Option Agreement Exhibit 9
dated as of January 22, 1998, between
the Company and Mr. Bernstein.
10. Non-Qualified Stock Option Agreement Exhibit 10
dated as of January 22, 1998, between
the Company and Mr. Bernstein.
11. Non-Qualified Stock Option Agreement Exhibit 11
dated as of October 15, 1998, between
the Company and Mr. Bernstein.
</TABLE>
<PAGE>
Exhibit 4
QUANTUM RESTAURANT GROUP, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT, made as of the 12th day of May,
1994, by and between Quantum Restaurant Group, Inc. (the "Corporation"), a
Delaware corporation, and Allen J. Bernstein (the "Participant").
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of the Quantum Restaurant Group, Inc. 1991 Amended and
Restated Stock Option Plan and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Administrator" means a committee of the Board comprised of two or
more disinterested directors, within the meaning of Securities and Exchange
Commission Rule 16b-3, duly appointed to administer the Plan.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding by the Administrator based upon reasonable
evidence presented in writing to the Participant that the Participant engaged in
a criminal act or
<PAGE>
willful misconduct inconsistent with his employment responsibilities or
contractual relationship with the Corporation or any subsidiary corporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Quantum Restaurant Group, Inc.
"Disability" means the inability, in the opinion of a physician
chosen by the Administrator, of the Participant by reason of any physical or
mental ailment to perform the duties of the position in which he was employed by
the Corporation or any subsidiary corporation when such disability commenced.
"Effective Date" means the date specified in Section 15 of the
Plan as being the effective date thereof.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities
<PAGE>
exchange nor included in the NASDAQ National Market System, the fair market
value of such stock as determined from time to time by the Board in its sole
discretion.
"Option" means the incentive stock option granted to the
Participant under this Agreement and pursuant to the Plan.
"Plan" means the Quantum Restaurant Group, Inc. 1991 Amended and
Restated Stock Option Plan, as amended from time to time.
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 50,000 shares of Common Stock at an option price of $9.875
per share, which is not less than the Fair Market Value of the Common Stock at
the time the Option is granted hereunder, subject to the terms hereof (the
"Option Price"). The Option granted hereby is intended to be an "incentive stock
option" within the meaning of section 422 of the Code and the Agreement shall be
construed and interpreted in accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years from Date
of Grant Amount Exercisable
-------- ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause,
<PAGE>
voluntary termination or otherwise, the Option, (i) to the extent it has not
theretofore become exercisable, shall terminate as of the date such Employment
terminates, and (ii) to the extent it has become exercisable but has not been
exercised, shall terminate three (3) months after the date such Employment
terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
5. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common Stock will be purchased for investment only, and that it may not
be sold or transferred in the absence of either an effective registration
statement under the Act or an opinion of experienced securities counsel,
acceptable in form and content to the Corporation in its sole discretion, which
states that registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain
from re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
<PAGE>
The Participant further understands that in the event the Common
Stock issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Quantum Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Quantum Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Quantum Restaurant Group, Inc. that such
registration is not required."
6. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
7. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation, in its discretion, may
postpone the issuance or delivery of shares upon any exercise of the Option
until completion of any stock exchange listing, or other qualification of such
shares
<PAGE>
under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require the Participant, beneficiary or legal
representative to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations.
Upon demand by the Administrator, the Participant shall deliver
to the Administrator at the time of any exercise of the Option a written
representation that the shares to be acquired upon the exercise of the Option
are being acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such representation prior
to the delivery of any shares issued upon exercise of the Option shall be a
condition precedent to the right of the Participant to purchase any shares.
8. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
9. PLAN CONTROLLING. This Agreement is irrevocable and is intended to
conform in all respects with the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved according to the terms of the Plan. The
Participant acknowledges receipt of a copy of the Plan.
<PAGE>
10. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
11. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
12. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Board or the
Administrator nor for any mistake of judgment made in good faith.
13. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE
<PAGE>
CORPORATION, NOR SHALL THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE
CORPORATION TO TERMINATE THE PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR
WITHOUT CAUSE.
Executed as of the day and year first above written.
QUANTUM RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
-----------------------------
PARTICIPANT
/s/ Allen J. Bernstein
-----------------------------
Allen J. Bernstein
<PAGE>
Exhibit 5
QUANTUM RESTAURANT GROUP, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT, made as of the 30th day of
January, 1996, by and between Quantum Restaurant Group, Inc. (the
"Corporation"), a Delaware corporation, and Allen J. Bernstein (the
"Participant").
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of the Quantum Restaurant Group, Inc. Stock Option Plan
and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Administrator" means a committee of the Board comprised of two or
more disinterested directors, within the meaning of Securities and Exchange
Commission Rule 16b-3, duly appointed to administer the Plan.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such person possesses, directly or indirectly, the power to (i) vote 15% or more
of the securities having ordinary voting power for the election of directors of
such corporation, or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding by the Administrator based upon reasonable
evidence presented in writing to the Participant that the Participant engaged in
a criminal act or willful misconduct inconsistent with his employment
responsibilities or contractual relationship with the Corporation or any
subsidiary corporation.
"Change in Control" means any of the following events: (a) the
acquisition by any Person who was not an Affiliate of the Corporation as of
December 15, 1994 of beneficial ownership, directly or indirectly, of 50% or
more of the combined voting power of
<PAGE>
the then outstanding voting securities of the Corporation, except pursuant to a
public offering of securities of the Corporation; (b) the sale or other transfer
of all or substantially all of the assets of the Corporation to a Person who was
not an Affiliate of the Corporation as of December 15, 1994; (c) a merger,
consolidation or other reorganization of the Corporation with a Person who was
not an Affiliate of the Corporation as of December 15, 1994 and in which the
Corporation is not the surviving entity; or (d) individuals who, as of December
15, 1994, made up the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided that any individual who
becomes a director after December 15, 1994 whose election, or nomination for
election by the Corporation's stockholders was approved by a vote or written
consent of at least two-thirds of the directors then comprising the Incumbent
Directors shall be considered as though such individual were an Incumbent
Director, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as such
terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as
amended).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Quantum Restaurant Group, Inc.
"Disability" means the inability, in the opinion of a physician
chosen by the Administrator, of the Participant by reason of any physical or
mental ailment to perform the duties of the position in which he was employed by
the Corporation or any subsidiary corporation when such disability commenced.
"Effective Date" means the date specified in Section 15 of the
Plan as being the effective date thereof.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities exchange nor included in the
NASDAQ National Market System, the fair market value of such stock as determined
from time to time by the Board in its sole discretion.
<PAGE>
"Option" means the incentive stock option granted to the
Participant under this Agreement and pursuant to the Plan.
"Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities of the Corporation, such partnership, limited
partnership, syndicate or group shall be deemed a "Person."
"Plan" means the Quantum Restaurant Group, Inc. Stock Option Plan,
as amended from time to time.
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 33,333 shares of Common Stock at an option price of $12.00
per share, which is not less than the Fair Market Value of the Common Stock at
the time the Option is granted hereunder, subject to the terms hereof (the
"Option Price"). The Option granted hereby is intended to be an "incentive stock
option" within the meaning of section 422 of the Code and the Agreement shall be
construed and interpreted in accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years From Date of Grant Amount Exercisable
------------------------ ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause, voluntary
termination or otherwise, the Option, (i) to the extent it has not theretofore
become exercisable, shall terminate as of the date such Employment terminates,
and (ii) to the extent it has become exercisable but has not been exercised,
shall terminate three (3) months after the date such Employment terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
<PAGE>
5. EFFECT OF A CHANGE OF CONTROL. Notwithstanding the provisions of
Section 3 hereof, if there should be a Change of Control of the Corporation, the
Corporation shall give the Participant written notice of such Change of Control
as promptly as practicable (and, if possible, prior to the effective date
thereof) and the Option, to the extent not currently exercisable, shall become
immediately exercisable as of the effective date of such Change of Control.
6. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common Stock will be purchased for investment only, and that it may not
be sold or transferred in the absence of either an effective registration
statement under the Act or an opinion of experienced securities counsel,
acceptable in form and content to the Corporation in its sole discretion, which
states that registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain from
re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
The Participant further understands that in the event the Common Stock
issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Quantum Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Quantum Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Quantum Restaurant Group, Inc. that such
registration is not required."
7. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
8. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations
<PAGE>
and to such approvals by any government or regulatory agency as may be required.
The Corporation, in its discretion, may postpone the issuance or delivery of
shares upon any exercise of the Option until completion of any stock exchange
listing, or other qualification of such shares under any state or federal law,
rule or regulation as the Corporation may consider appropriate, and may require
the Participant, beneficiary or legal representative to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares in compliance with
applicable laws, rules and regulations.
Upon demand by the Administrator, the Participant shall deliver to the
Administrator at the time of any exercise of the Option a written representation
that the shares to be acquired upon the exercise of the Option are being
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the delivery
of any shares issued upon exercise of the Option shall be a condition precedent
to the right of the Participant to purchase any shares.
9. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
10. PLAN CONTROLLING. This Agreement is irrevocable and is intended to
conform in all respects with the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved according to the terms of the Plan. The
Participant acknowledges receipt of a copy of the Plan.
11. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
12. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
13. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or
<PAGE>
on his behalf in his capacity as a member of the Board or the Administrator nor
for any mistake of judgment made in good faith.
14. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION, NOR SHALL
THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE CORPORATION TO TERMINATE THE
PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.
Executed as of the day and year first above written.
QUANTUM RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
---------------------------
PARTICIPANT
/s/ Allen J. Bernstein
---------------------------
Allen J. Bernstein
<PAGE>
Exhibit 6
QUANTUM RESTAURANT GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT, made as of the 30th day of
January, 1996, by and between Quantum Restaurant Group, Inc. (the
"Corporation"), a Delaware corporation, and Allen J. Bernstein.
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of the Quantum Restaurant Group, Inc. Stock Option Plan and
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Administrator" means a committee of the Board comprised of two or
more disinterested directors, within the meaning of Securities and Exchange
Commission Rule 16b-3, duly appointed to administer the Plan.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such person possesses, directly or indirectly, the power to (i) vote 15% or more
of the securities having ordinary voting power for the election of directors of
such corporation, or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding by the Administrator based upon reasonable
evidence presented in writing to the Participant that the Participant engaged in
a criminal act or willful misconduct inconsistent with his employment
responsibilities or contractual relationship with the Corporation or any
subsidiary corporation.
"Change in Control" means any of the following events: (a) the
acquisition by any Person who was not an Affiliate of the Corporation as of
December 15, 1994 of beneficial ownership, directly or indirectly, of 50% or
more of the combined voting power of
<PAGE>
the then outstanding voting securities of the Corporation, except pursuant to a
public offering of securities of the Corporation; (b) the sale or other transfer
of all or substantially all of the assets of the Corporation to a Person who was
not an Affiliate of the Corporation as of December 15, 1994; (c) a merger,
consolidation or other reorganization of the Corporation with a Person who was
not an Affiliate of the Corporation as of December 15, 1994 and in which the
Corporation is not the surviving entity; or (d) individuals who, as of December
15, 1994, made up the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided that any individual who
becomes a director after December 15, 1994 whose election, or nomination for
election by the Corporation's stockholders was approved by a vote or written
consent of at least two-thirds of the directors then comprising the Incumbent
Directors shall be considered as though such individual were an Incumbent
Director, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as such
terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as
amended).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Quantum Restaurant Group, Inc.
"Disability" means the inability, in the opinion of a physician
chosen by the Administrator, of the Participant by reason of any physical or
mental ailment to perform the duties of the position in which he was employed by
the Corporation or any subsidiary corporation when such disability commenced.
"Effective Date" means the date specified in Section 15 of the
Plan as being the effective date thereof.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities exchange nor included in the
NASDAQ National Market System, the fair market value of such stock as determined
from time to time by the Board in its sole discretion.
<PAGE>
"Option" means the nonqualified stock option granted to the
Participant under this Agreement and pursuant to the Plan.
"Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities of the Corporation, such partnership, limited
partnership, syndicate or group shall be deemed a "Person."
"Plan" means the Quantum Restaurant Group, Inc. Stock Option Plan,
as amended from time to time.
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 16,667 shares of Common Stock at an option price of $12.00
per share, subject to the terms hereof (the "Option Price"). The Option granted
hereby is not intended to be an "incentive stock option" within the meaning of
section 422 of the Code and the Agreement shall be construed and interpreted in
accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years From Date of Grant Amount Exercisable
------------------------ ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause, voluntary
termination or otherwise, the Option, (i) to the extent it has not theretofore
become exercisable, shall terminate as of the date such Employment terminates,
and (ii) to the extent it has become exercisable but has not been exercised,
shall terminate three (3) months after the date such Employment terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
<PAGE>
5. EFFECT OF A CHANGE OF CONTROL. Notwithstanding the provisions of
Section 3 hereof, if there should be a Change of Control of the Corporation, the
Corporation shall give the Participant written notice of such Change of Control
as promptly as practicable (and, if possible, prior to the effective date
thereof) and the Option, to the extent not currently exercisable, shall become
immediately exercisable as of the effective date of such Change of Control.
6. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common Stock will be purchased for investment only, and that it may not
be sold or transferred in the absence of either an effective registration
statement under the Act or an opinion of experienced securities counsel,
acceptable in form and content to the Corporation in its sole discretion, which
states that registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain
from re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
The Participant further understands that in the event the Common
Stock issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Quantum Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Quantum Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Quantum Restaurant Group, Inc. that such
registration is not required."
7. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
8. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations
<PAGE>
and to such approvals by any government or regulatory agency as may be required.
The Corporation, in its discretion, may postpone the issuance or delivery of
shares upon any exercise of the Option until completion of any stock exchange
listing, or other qualification of such shares under any state or federal law,
rule or regulation as the Corporation may consider appropriate, and may require
the Participant, beneficiary or legal representative to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares in compliance with
applicable laws, rules and regulations.
Upon demand by the Administrator, the Participant shall deliver to the
Administrator at the time of any exercise of the Option a written representation
that the shares to be acquired upon the exercise of the Option are being
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the delivery
of any shares issued upon exercise of the Option shall be a condition precedent
to the right of the Participant to purchase any shares.
9. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
10. PLAN CONTROLLING. This Agreement is irrevocable and is intended to
conform in all respects with the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved according to the terms of the Plan. The
Participant acknowledges receipt of a copy of the Plan.
11. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
12. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
13. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or
<PAGE>
on his behalf in his capacity as a member of the Board or the Administrator nor
for any mistake of judgment made in good faith.
14. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION, NOR SHALL
THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE CORPORATION TO TERMINATE THE
PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.
Executed as of the day and year first above written.
QUANTUM RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
---------------------------
PARTICIPANT
/s/ Allen J. Bernstein
---------------------------
Allen J. Bernstein
<PAGE>
Exhibit 7
MORTON'S RESTAURANT GROUP, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT, made as of the 1st day of May,
1997, by and between Morton's Restaurant Group, Inc. (the "Corporation"), a
Delaware corporation, and Allen J. Bernstein (the "Participant").
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of the Morton's Restaurant Group, Inc. Stock Option Plan
and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Administrator" means a committee of the Board comprised of two or
more disinterested directors, within the meaning of Securities and Exchange
Commission Rule 16b-3, duly appointed to administer the Plan.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such person possesses, directly or indirectly, the power to (i) vote 15% or more
of the securities having ordinary voting power for the election of directors of
such corporation, or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding by the Administrator based upon reasonable
evidence presented in writing to the Participant that the Participant engaged in
a criminal act or willful misconduct inconsistent with his employment
responsibilities or contractual relationship with the Corporation or any
subsidiary corporation.
"Change in Control" means any of the following events: (a) the
acquisition by any Person who was not an Affiliate of the Corporation as of
December 15, 1994 of beneficial ownership, directly or indirectly, of 50% or
more of the combined voting power of the then outstanding voting securities of
the Corporation, except pursuant to a public offering of
<PAGE>
securities of the Corporation; (b) the sale or other transfer of all or
substantially all of the assets of the Corporation to a Person who was not an
Affiliate of the Corporation as of December 15, 1994; (c) a merger,
consolidation or other reorganization of the Corporation with a Person who was
not an Affiliate of the Corporation as of December 15, 1994 and in which the
Corporation is not the surviving entity; or (d) individuals who, as of December
15, 1994, made up the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided that any individual who
becomes a director after December 15, 1994 whose election, or nomination for
election by the Corporation's stockholders was approved by a vote or written
consent of at least two-thirds of the directors then comprising the Incumbent
Directors shall be considered as though such individual were an Incumbent
Director, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as such
terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as
amended).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Morton's Restaurant Group, Inc.
"Disability" means the inability, in the opinion of a physician
chosen by the Administrator, of the Participant by reason of any physical or
mental ailment to perform the duties of the position in which he was employed by
the Corporation or any subsidiary corporation when such disability commenced.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities exchange nor included in the
NASDAQ National Market System, the fair market value of such stock as determined
from time to time by the Board in its sole discretion.
"Option" means the incentive stock option granted to the
Participant under this Agreement and pursuant to the Plan.
"Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or
<PAGE>
other group for the purpose of acquiring, holding or disposing of securities of
the Corporation, such partnership, limited partnership, syndicate or group shall
be deemed a "Person."
"Plan" means the Morton's Restaurant Group, Inc. Stock Option Plan
(formerly known as the Quantum Restaurant Group, Inc. Stock Option Plan), as
amended from time to time.
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 26,000 shares of Common Stock at an option price of
$15.125 per share, which is not less than the Fair Market Value of the Common
Stock at the time the Option is granted hereunder, subject to the terms hereof
(the "Option Price"). The Option granted hereby is intended to be an "incentive
stock option" within the meaning of section 422 of the Code and the Agreement
shall be construed and interpreted in accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years From Date of Grant Amount Exercisable
------------------------ ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause, voluntary
termination or otherwise, the Option, (i) to the extent it has not theretofore
become exercisable, shall terminate as of the date such Employment terminates,
and (ii) to the extent it has become exercisable but has not been exercised,
shall terminate three (3) months after the date such Employment terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
5. EFFECT OF A CHANGE OF CONTROL. Notwithstanding the provisions of
Section 3 hereof, if there should be a Change of Control of the Corporation, the
Corporation shall give the Participant written notice of such Change of Control
as promptly as
<PAGE>
practicable (and, if possible, prior to the effective date thereof) and the
Option, to the extent not currently exercisable, shall become immediately
exercisable as of the effective date of such Change of Control.
6. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common Stock will be purchased for investment only, and that it may not
be sold or transferred in the absence of either an effective registration
statement under the Act or an opinion of experienced securities counsel,
acceptable in form and content to the Corporation in its sole discretion, which
states that registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain from
re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
The Participant further understands that in the event the Common Stock
issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Morton's Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Morton's Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Morton's Restaurant Group, Inc. that such
registration is not required."
7. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
8. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation, in its discretion, may
postpone the issuance or delivery of shares upon any exercise of the Option
until completion of any stock exchange listing, or other qualification of such
shares
<PAGE>
under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require the Participant, beneficiary or legal
representative to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations.
Upon demand by the Administrator, the Participant shall deliver to the
Administrator at the time of any exercise of the Option a written representation
that the shares to be acquired upon the exercise of the Option are being
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the delivery
of any shares issued upon exercise of the Option shall be a condition precedent
to the right of the Participant to purchase any shares.
9. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
10. PLAN CONTROLLING. This Agreement is irrevocable and is intended to
conform in all respects with the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved according to the terms of the Plan. The
Participant acknowledges receipt of a copy of the Plan.
11. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
12. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
13. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Board or the
Administrator nor for any mistake of judgment made in good faith.
<PAGE>
14. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION, NOR SHALL
THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE CORPORATION TO TERMINATE THE
PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.
Executed as of the day and year first above written.
MORTON'S RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
---------------------------
PARTICIPANT
/s/ Allen J. Bernstein
---------------------------
Allen J. Bernstein
<PAGE>
Exhibit 8
MORTON'S RESTAURANT GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT, made as of the 1st day of
May, 1997, by and between Morton's Restaurant Group, Inc. (the "Corporation"), a
Delaware corporation, and Allen J. Bernstein (the "Participant").
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of the Morton's Restaurant Group, Inc. Stock Option Plan
and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Administrator" means a committee of the Board comprised of two or
more disinterested directors, within the meaning of Securities and Exchange
Commission Rule 16b-3, duly appointed to administer the Plan.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such person possesses, directly or indirectly, the power to (i) vote 15% or more
of the securities having ordinary voting power for the election of directors of
such corporation, or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding by the Administrator based upon reasonable
evidence presented in writing to the Participant that the Participant engaged in
a criminal act or willful misconduct inconsistent with his employment
responsibilities or contractual relationship with the Corporation or any
subsidiary corporation.
"Change in Control" means any of the following events: (a) the
acquisition by any Person who was not an Affiliate of the Corporation as of
December 15, 1994 of beneficial ownership, directly or indirectly, of 50% or
more of the combined voting power of the then outstanding voting securities of
the Corporation, except pursuant to a public offering of
<PAGE>
securities of the Corporation; (b) the sale or other transfer of all or
substantially all of the assets of the Corporation to a Person who was not an
Affiliate of the Corporation as of December 15, 1994; (c) a merger,
consolidation or other reorganization of the Corporation with a Person who was
not an Affiliate of the Corporation as of December 15, 1994 and in which the
Corporation is not the surviving entity; or (d) individuals who, as of December
15, 1994, made up the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided that any individual who
becomes a director after December 15, 1994 whose election, or nomination for
election by the Corporation's stockholders was approved by a vote or written
consent of at least two-thirds of the directors then comprising the Incumbent
Directors shall be considered as though such individual were an Incumbent
Director, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as such
terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as
amended).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Morton's Restaurant Group, Inc.
"Disability" means the inability, in the opinion of a physician
chosen by the Administrator, of the Participant by reason of any physical or
mental ailment to perform the duties of the position in which he was employed by
the Corporation or any subsidiary corporation when such disability commenced.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities exchange nor included in the
NASDAQ National Market System, the fair market value of such stock as determined
from time to time by the Board in its sole discretion.
"Option" means the nonqualified stock option granted to the
Participant under this Agreement and pursuant to the Plan.
"Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or
<PAGE>
other group for the purpose of acquiring, holding or disposing of securities of
the Corporation, such partnership, limited partnership, syndicate or group shall
be deemed a "Person."
"Plan" means the Morton's Restaurant Group, Inc. Stock Option Plan
(formerly known as the Quantum Restaurant Group, Inc. Stock Option Plan), as
amended from time to time.
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 24,000 shares of Common Stock at an option price of
$15.125 per share, subject to the terms hereof (the "Option Price"). The Option
granted hereby is not intended to be an "incentive stock option" within the
meaning of section 422 of the Code and the Agreement shall be construed and
interpreted in accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years From Date of Grant Amount Exercisable
------------------------ ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause, voluntary
termination or otherwise, the Option, (i) to the extent it has not theretofore
become exercisable, shall terminate as of the date such Employment terminates,
and (ii) to the extent it has become exercisable but has not been exercised,
shall terminate three (3) months after the date such Employment terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
5. EFFECT OF A CHANGE OF CONTROL. Notwithstanding the provisions of
Section 3 hereof, if there should be a Change of Control of the Corporation, the
Corporation shall give the Participant written notice of such Change of Control
as promptly as
<PAGE>
practicable (and, if possible, prior to the effective date thereof) and the
Option, to the extent not currently exercisable, shall become immediately
exercisable as of the effective date of such Change of Control.
6. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common Stock will be purchased for investment only, and that it may not
be sold or transferred in the absence of either an effective registration
statement under the Act or an opinion of experienced securities counsel,
acceptable in form and content to the Corporation in its sole discretion, which
states that registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain
from re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
The Participant further understands that in the event the Common
Stock issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Morton's Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Morton's Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Morton's Restaurant Group, Inc. that such
registration is not required."
7. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
8. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation, in its discretion, may
postpone the issuance or delivery of shares upon any exercise of the Option
until completion of any stock exchange listing, or other qualification of such
shares
<PAGE>
under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require the Participant, beneficiary or legal
representative to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations.
Upon demand by the Administrator, the Participant shall deliver to the
Administrator at the time of any exercise of the Option a written representation
that the shares to be acquired upon the exercise of the Option are being
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the delivery
of any shares issued upon exercise of the Option shall be a condition precedent
to the right of the Participant to purchase any shares.
9. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
10. PLAN CONTROLLING. This Agreement is irrevocable and is intended to
conform in all respects with the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved according to the terms of the Plan. The
Participant acknowledges receipt of a copy of the Plan.
11. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
12. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
13. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Board or the
Administrator nor for any mistake of judgment made in good faith.
<PAGE>
14. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION, NOR SHALL
THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE CORPORATION TO TERMINATE THE
PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.
Executed as of the day and year first above written.
MORTON'S RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
---------------------------
PARTICIPANT
/s/ Allen J. Bernstein
---------------------------
Allen J. Bernstein
<PAGE>
Exhibit 9
MORTON'S RESTAURANT GROUP, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT, made as of the 22nd day of
January, 1998, by and between Morton's Restaurant Group, Inc. (the
"Corporation"), a Delaware corporation, and Allen J. Bernstein (the
"Participant").
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of the Morton's Restaurant Group, Inc. Stock Option Plan
and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Administrator" means a committee of the Board comprised of two or
more disinterested directors, within the meaning of Securities and Exchange
Commission Rule 16b-3, duly appointed to administer the Plan.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such person possesses, directly or indirectly, the power to (i) vote 15% or more
of the securities having ordinary voting power for the election of directors of
such corporation, or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding by the Administrator based upon reasonable
evidence presented in writing to the Participant that the Participant engaged in
a criminal act or willful misconduct inconsistent with his employment
responsibilities or contractual relationship with the Corporation or any
subsidiary corporation.
"Change in Control" means any of the following events: (a) the
acquisition by any Person who was not an Affiliate of the Corporation as of
December 15, 1994 of beneficial ownership, directly or indirectly, of 50% or
more of the combined voting power of the then outstanding voting securities of
the Corporation, except pursuant to a public offering of
<PAGE>
securities of the Corporation; (b) the sale or other transfer of all or
substantially all of the assets of the Corporation to a Person who was not an
Affiliate of the Corporation as of December 15, 1994; (c) a merger,
consolidation or other reorganization of the Corporation with a Person who was
not an Affiliate of the Corporation as of December 15, 1994 and in which the
Corporation is not the surviving entity; or (d) individuals who, as of December
15, 1994, made up the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided that any individual who
becomes a director after December 15, 1994 whose election, or nomination for
election by the Corporation's stockholders was approved by a vote or written
consent of at least two-thirds of the directors then comprising the Incumbent
Directors shall be considered as though such individual were an Incumbent
Director, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as such
terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as
amended).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Morton's Restaurant Group, Inc.
"Disability" means the inability, in the opinion of a physician
chosen by the Administrator, of the Participant by reason of any physical or
mental ailment to perform the duties of the position in which he was employed by
the Corporation or any subsidiary corporation when such disability commenced.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities exchange nor included in the
NASDAQ National Market System, the fair market value of such stock as determined
from time to time by the Board in its sole discretion.
"Option" means the incentive stock option granted to the
Participant under this Agreement and pursuant to the Plan.
"Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or
<PAGE>
other group for the purpose of acquiring, holding or disposing of securities of
the Corporation, such partnership, limited partnership, syndicate or group shall
be deemed a "Person."
"Plan" means the Morton's Restaurant Group, Inc. Stock Option Plan
(formerly known as the Quantum Restaurant Group, Inc. Stock Option Plan), as
amended from time to time.
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 20,500 shares of Common Stock at an option price of
$19.4375 per share, which is not less than the Fair Market Value of the Common
Stock at the time the Option is granted hereunder, subject to the terms hereof
(the "Option Price"). The Option granted hereby is intended to be an "incentive
stock option" within the meaning of section 422 of the Code and the Agreement
shall be construed and interpreted in accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years From Date of Grant Amount Exercisable
------------------------ ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause, voluntary
termination or otherwise, the Option, (i) to the extent it has not theretofore
become exercisable, shall terminate as of the date such Employment terminates,
and (ii) to the extent it has become exercisable but has not been exercised,
shall terminate three (3) months after the date such Employment terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
5. EFFECT OF A CHANGE OF CONTROL. Notwithstanding the provisions of
Section 3 hereof, if there should be a Change of Control of the Corporation, the
Corporation shall give the Participant written notice of such Change of Control
as promptly as
<PAGE>
practicable (and, if possible, prior to the effective date thereof) and the
Option, to the extent not currently exercisable, shall become immediately
exercisable as of the effective date of such Change of Control.
6. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common Stock will be purchased for investment only, and that it may not
be sold or transferred in the absence of either an effective registration
statement under the Act or an opinion of experienced securities counsel,
acceptable in form and content to the Corporation in its sole discretion, which
states that registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain from
re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
The Participant further understands that in the event the Common Stock
issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Morton's Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Morton's Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Morton's Restaurant Group, Inc. that such
registration is not required."
7. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
8. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation, in its discretion, may
postpone the issuance or delivery of shares upon any exercise of the Option
until completion of any stock exchange listing, or other qualification of such
shares
<PAGE>
under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require the Participant, beneficiary or legal
representative to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations.
Upon demand by the Administrator, the Participant shall deliver to the
Administrator at the time of any exercise of the Option a written representation
that the shares to be acquired upon the exercise of the Option are being
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the delivery
of any shares issued upon exercise of the Option shall be a condition precedent
to the right of the Participant to purchase any shares.
9. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
10. PLAN CONTROLLING. This Agreement is irrevocable and is intended to
conform in all respects with the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved according to the terms of the Plan. The
Participant acknowledges receipt of a copy of the Plan.
11. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
12. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
13. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Board or the
Administrator nor for any mistake of judgment made in good faith.
<PAGE>
14. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION, NOR SHALL
THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE CORPORATION TO TERMINATE THE
PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.
Executed as of the day and year first above written.
MORTON'S RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
---------------------------
PARTICIPANT
/s/ Allen J. Bernstein
---------------------------
Allen J. Bernstein
<PAGE>
Exhibit 10
MORTON'S RESTAURANT GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT, made as of the 22nd day of
January, 1998, by and between Morton's Restaurant Group, Inc. (the
"Corporation"), a Delaware corporation, and Allen J. Bernstein (the
"Participant").
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of the Morton's Restaurant Group, Inc. Stock Option Plan
and this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Administrator" means a committee of the Board comprised of two or
more disinterested directors, within the meaning of Securities and Exchange
Commission Rule 16b-3, duly appointed to administer the Plan.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such person possesses, directly or indirectly, the power to (i) vote 15% or more
of the securities having ordinary voting power for the election of directors of
such corporation, or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding by the Administrator based upon reasonable
evidence presented in writing to the Participant that the Participant engaged in
a criminal act or willful misconduct inconsistent with his employment
responsibilities or contractual relationship with the Corporation or any
subsidiary corporation.
"Change in Control" means any of the following events: (a) the
acquisition by any Person who was not an Affiliate of the Corporation as of
December 15, 1994 of beneficial ownership, directly or indirectly, of 50% or
more of the combined voting power of the then outstanding voting securities of
the Corporation, except pursuant to a public offering of
<PAGE>
securities of the Corporation; (b) the sale or other transfer of all or
substantially all of the assets of the Corporation to a Person who was not an
Affiliate of the Corporation as of December 15, 1994; (c) a merger,
consolidation or other reorganization of the Corporation with a Person who was
not an Affiliate of the Corporation as of December 15, 1994 and in which the
Corporation is not the surviving entity; or (d) individuals who, as of December
15, 1994, made up the Board (the "Incumbent Directors") cease for any reason to
constitute at least a majority of the Board; provided that any individual who
becomes a director after December 15, 1994 whose election, or nomination for
election by the Corporation's stockholders was approved by a vote or written
consent of at least two-thirds of the directors then comprising the Incumbent
Directors shall be considered as though such individual were an Incumbent
Director, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Corporation (as such
terms are used in Rule 14a-11 under the Securities Exchange Act of 1934, as
amended).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Morton's Restaurant Group, Inc.
"Disability" means the inability, in the opinion of a physician
chosen by the Administrator, of the Participant by reason of any physical or
mental ailment to perform the duties of the position in which he was employed by
the Corporation or any subsidiary corporation when such disability commenced.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities exchange nor included in the
NASDAQ National Market System, the fair market value of such stock as determined
from time to time by the Board in its sole discretion.
"Option" means the nonqualified stock option granted to the
Participant under this Agreement and pursuant to the Plan.
"Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or
<PAGE>
other group for the purpose of acquiring, holding or disposing of securities of
the Corporation, such partnership, limited partnership, syndicate or group shall
be deemed a "Person."
"Plan" means the Morton's Restaurant Group, Inc. Stock Option Plan
(formerly known as the Quantum Restaurant Group, Inc. Stock Option Plan), as
amended from time to time.
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 44,500 shares of Common Stock at an option price of
$19.4375 per share, subject to the terms hereof (the "Option Price"). The Option
granted hereby is not intended to be an "incentive stock option" within the
meaning of section 422 of the Code and the Agreement shall be construed and
interpreted in accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years From Date of Grant Amount Exercisable
------------------------ ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause, voluntary
termination or otherwise, the Option, (i) to the extent it has not theretofore
become exercisable, shall terminate as of the date such Employment terminates,
and (ii) to the extent it has become exercisable but has not been exercised,
shall terminate three (3) months after the date such Employment terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
5. EFFECT OF A CHANGE OF CONTROL. Notwithstanding the provisions of
Section 3 hereof, if there should be a Change of Control of the Corporation, the
Corporation shall give the Participant written notice of such Change of Control
as promptly as
<PAGE>
practicable (and, if possible, prior to the effective date thereof) and the
Option, to the extent not currently exercisable, shall become immediately
exercisable as of the effective date of such Change of Control.
6. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common Stock will be purchased for investment only, and that it may not
be sold or transferred in the absence of either an effective registration
statement under the Act or an opinion of experienced securities counsel,
acceptable in form and content to the Corporation in its sole discretion, which
states that registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain
from re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
The Participant further understands that in the event the Common
Stock issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Morton's Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Morton's Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Morton's Restaurant Group, Inc. that such
registration is not required."
7. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
8. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation, in its discretion, may
postpone the issuance or delivery of shares upon any exercise of the Option
until completion of any stock exchange listing, or other qualification of such
shares
<PAGE>
under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require the Participant, beneficiary or legal
representative to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations.
Upon demand by the Administrator, the Participant shall deliver to the
Administrator at the time of any exercise of the Option a written representation
that the shares to be acquired upon the exercise of the Option are being
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to the delivery
of any shares issued upon exercise of the Option shall be a condition precedent
to the right of the Participant to purchase any shares.
9. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
10. PLAN CONTROLLING. This Agreement is irrevocable and is intended to
conform in all respects with the Plan. Inconsistencies between this Agreement
and the Plan shall be resolved according to the terms of the Plan. The
Participant acknowledges receipt of a copy of the Plan.
11. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
12. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
13. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Board or the
Administrator nor for any mistake of judgment made in good faith.
<PAGE>
14. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION, NOR SHALL
THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE CORPORATION TO TERMINATE THE
PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.
Executed as of the day and year first above written.
MORTON'S RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
---------------------------
PARTICIPANT
/s/ Allen J. Bernstein
---------------------------
Allen J. Bernstein
<PAGE>
Exhibit 11
MORTON'S RESTAURANT GROUP, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT, made as of the 15th day of
October, 1998, by and between Morton's Restaurant Group, Inc. (the
"Corporation"), a Delaware corporation, and Allen J. Bernstein (the
"Participant").
WHEREAS, the Participant owns, at the time the Option is granted
hereunder, no more than ten percent (10%) of total combined voting power of all
classes of stock of the Corporation, or its parent or subsidiary corporation.
WHEREAS, the Corporation desires to give the Participant an opportunity
to participate in the long-term growth of the Corporation by granting to the
Participant options to purchase the Corporation's Common Stock pursuant to the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the parties agree as
follows:
1. DEFINITIONS.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control a corporation if
such person possesses, directly or indirectly, the power to (i) vote 15% or more
of the securities having ordinary voting power for the election of directors of
such corporation, or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Board" means the Board of Directors of the Corporation.
"Cause" means a finding based upon reasonable evidence presented
in writing to the Participant that the Participant engaged in a criminal act or
willful misconduct inconsistent with his employment responsibilities or
contractual relationship with the Corporation or any subsidiary corporation.
"Change in Control" means any of the following events: (a) the
acquisition by any Person who was not an Affiliate of the Corporation as of
December 15, 1994 of beneficial ownership, directly or indirectly, of 50% or
more of the combined voting power of the then outstanding voting securities of
the Corporation, except pursuant to a public offering of securities of the
Corporation; (b) the sale or other transfer of all or substantially all of the
assets of the Corporation to a Person who was not an Affiliate of the
Corporation as of December 15,
<PAGE>
1994; (c) a merger, consolidation or other reorganization of the Corporation
with a Person who was not an Affiliate of the Corporation as of December 15,
1994 and in which the Corporation is not the surviving entity; or (d)
individuals who, as of December 15, 1994, made up the Board (the "Incumbent
Directors") cease for any reason to constitute at least a majority of the Board;
provided that any individual who becomes a director after December 15, 1994
whose election, or nomination for election by the Corporation's stockholders was
approved by a vote or written consent of at least two-thirds of the directors
then comprising the Incumbent Directors shall be considered as though such
individual were an Incumbent Director, but excluding, for this purpose, any such
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Corporation (as such terms are used in Rule 14a-11 under the Securities Exchange
Act of 1934, as amended).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Common Stock ($.01 par value) of the
Corporation.
"Corporation" means Morton's Restaurant Group, Inc.
"Disability" means the inability of the Participant by reason of
any physical or mental ailment to perform the duties of the position in which he
was employed by the Corporation or any subsidiary corporation when such
disability commenced.
"Employment" means the Participant's employment with the
Corporation, a parent or subsidiary corporation of the Corporation, or such
other corporation as provided in section 422 of the Code.
"Fair Market Value" means, on any day, with respect to Common
Stock which is (i) listed on a United States securities exchange, the last sales
price of such stock on such day on the largest United States securities exchange
on which such stock shall have traded on such day, or if such day is not a day
on which a United States securities exchange is open for trading, on the
immediately preceding day on which such securities exchange was so open, (ii)
not listed on a United States securities exchange but is included in the NASDAQ
National Market System, the last sales price of such stock on such day, or if
such day is not a trading day, on the immediately preceding trading day, or
(iii) neither listed on a United States securities exchange nor included in the
NASDAQ National Market System, the fair market value of such stock as determined
from time to time by the Board in its sole discretion.
"Option" means the nonqualified stock option granted to the
Participant under this Agreement.
"Person" means any individual, partnership, firm, trust,
corporation or similar entity. When two or more Persons act as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of securities of the Corporation, such partnership, limited
partnership, syndicate or group shall be deemed a "Person."
<PAGE>
2. GRANT OF OPTION. The Corporation hereby grants to the Participant
an Option to purchase 65,000 shares of Common Stock at an option price of
$13.125 per share, subject to the terms hereof (the "Option Price"). The Option
granted hereby is not intended to be an "incentive stock option" within the
meaning of section 422 of the Code and the Agreement shall be construed and
interpreted in accordance with such intention.
3. OPTION TERMS. (a) The Option shall become exercisable in
accordance with the following Schedule:
<TABLE>
<CAPTION>
Years From Date of Grant Amount Exercisable
------------------------ ------------------
<S> <C>
One 0%
Two 25%
Three 50%
Four 75%
Five 100%
</TABLE>
(b) Notwithstanding the provisions of paragraph (a) of this
Section 3, the Option shall not be exercisable after the expiration of ten (10)
years from the date the Option is granted hereunder. Further, in the event the
Participant's Employment terminates for any reason whatsoever, whether because
of his death, Disability, termination with or without Cause, voluntary
termination or otherwise, the Option, (i) to the extent it has not theretofore
become exercisable, shall terminate as of the date such Employment terminates,
and (ii) to the extent it has become exercisable but has not been exercised,
shall terminate three (3) months after the date such Employment terminates.
4. NON-ASSIGNABILITY. The Option granted hereby and any right arising
thereunder shall not be transferable other than by will or by the laws of
descent and distribution. During the lifetime of the Participant, the Option
shall be exercisable only by him. Any Option or portion thereof exercisable at
the Participant's death that is transferred by will or by the laws of descent
and distribution, shall be exercisable in accordance with the terms of this
Agreement by the executor or administrator, as the case may be, of the
Participant's estate for a period of three (3) months after the date of the
Participant's death and shall then terminate. If the Option is not exercisable
at the date of the Participant's death it shall terminate as of such date.
5. EFFECT OF A CHANGE OF CONTROL. Notwithstanding the provisions of
Section 3 hereof, if there should be a Change of Control of the Corporation, the
Corporation shall give the Participant written notice of such Change of Control
as promptly as practicable (and, if possible, prior to the effective date
thereof) and the Option, to the extent not currently exercisable, shall become
immediately exercisable as of the effective date of such Change of Control.
6. TRANSFER RESTRICTIONS. The Participant understands that the Common
Stock issuable upon the exercise of this Option will not be registered under the
Securities Act of 1933, as amended (the "Act"). The Participant acknowledges
that the Common
<PAGE>
Stock will be purchased for investment only, and that it may not be sold or
transferred in the absence of either an effective registration statement under
the Act or an opinion of experienced securities counsel, acceptable in form and
content to the Corporation in its sole discretion, which states that
registration is not required under the Act.
By executing this Agreement, the Participant agrees to refrain
from re-offering, reselling, or otherwise disposing of any of the Common Stock
acquired upon the exercise of the Option in any manner which would violate the
Act or any other federal or state securities law.
The Participant further understands that in the event the Common
Stock issuable upon the exercise of the Option is not covered by an effective
registration statement under the Act, the Corporation may imprint on the
certificate representing said Common Stock the following legend or any other
legend which counsel for the Corporation considers necessary or advisable to
comply with the Act or the securities laws of any State:
"The shares of Morton's Restaurant Group, Inc. Common Stock
represented by this certificate have been acquired for investment and
have not been registered under the Securities Act of 1933, as amended.
Such shares may not be sold, transferred, pledged or hypothecated
unless the registration provisions of said act have been complied with
or unless Morton's Restaurant Group, Inc. has received an opinion of
counsel satisfactory to Morton's Restaurant Group, Inc. that such
registration is not required."
7. MODE OF EXERCISE. The Option shall be exercised by the Participant
giving to the Corporation written notice stating (i) the number of shares with
respect to which the Option is being exercised, (ii) the exercise price for such
shares, and (iii) the method of payment. At the option of the Participant, the
Option Price may be paid (i) in cash, (ii) by delivery of Common Stock already
owned by the Participant for a period of not less than six (6) months and having
a Fair Market Value on the date of such delivery equal to the Option Price, or
(iii) by delivery of a combination of cash and such Common Stock having a total
Fair Market Value on the date of such delivery equal to the Option Price.
8. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option
granted hereunder and the obligation of the Corporation to sell and deliver
shares under such Option shall be subject to all applicable federal and state
laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required. The Corporation, in its discretion, may
postpone the issuance or delivery of shares upon any exercise of the Option
until completion of any stock exchange listing, or other qualification of such
shares under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require the Participant, beneficiary or legal
representative to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations.
The Participant shall deliver at the time of any exercise of the Option
a written representation that the shares to be acquired upon the exercise of the
Option are being acquired
<PAGE>
for investment and not for resale or with a view to the distribution thereof.
The delivery of such representation prior to the delivery of any shares issued
upon exercise of the Option shall be a condition precedent to the right of the
Participant to purchase any shares.
9. ANTIDILUTION ADJUSTMENTS. In the event of any change in the Common
Stock by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares subject to the
Option and the purchase price per share thereof shall be appropriately adjusted
consistent with such change in such manner as the Board may deem equitable to
prevent substantial dilution or enlargement of the rights granted to the
Participant.
10. RIGHTS PRIOR TO EXERCISE OF OPTION. The Participant shall not have
any rights as a stockholder with respect to any shares subject to the Option
prior to the date on which he is recorded as the holder of such shares on the
records of the Corporation.
11. TAXES. The Corporation may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld with
respect to the Option including, but not limited to (i) reducing the number of
shares of Common Stock otherwise deliverable, based upon their Fair Market Value
on the date of exercise, to permit deduction of the amount of any such
withholding taxes from the amount otherwise payable under this Agreement, (ii)
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Participant, or (iii) requiring the Participant,
beneficiary or legal representative to pay to the Corporation the amount
required to be withheld or to execute such documents as the Corporation deems
necessary or desirable to enable it to satisfy its withholding obligations as a
condition of releasing the Common Stock.
12. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Board nor for any
mistake of judgment made in good faith.
13. GOVERNING LAW. This Agreement and all rights hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of New York applicable to contracts made and to be performed entirely
within such State.
<PAGE>
THE PLAN AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS GIVING THE
PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OF THE CORPORATION, NOR SHALL
THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE CORPORATION TO TERMINATE THE
PARTICIPANT'S EMPLOYMENT AT ANY TIME WITH OR WITHOUT CAUSE.
Executed as of the day and year first above written.
MORTON'S RESTAURANT GROUP, INC.
By: /s/ Thomas J. Baldwin
---------------------------
PARTICIPANT
/s/ Allen J. Bernstein
---------------------------
Allen J. Bernstein
