-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IbvPBD6iUZKY83SHSbPQNuSfJsD7qbLwBYFyeunxsB+9hmqlVL5wPxAzPr4yGX7t h7rkQMYVUo28tYGMaWTy9w== 0000950136-01-500241.txt : 20010502 0000950136-01-500241.hdr.sgml : 20010502 ACCESSION NUMBER: 0000950136-01-500241 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20010501 GROUP MEMBERS: BARRY W. FLORESCUE GROUP MEMBERS: BFMA HOLDING CORP GROUP MEMBERS: CHARLES W. MIERSCH GROUP MEMBERS: FLORESCUE FAMILY CORPORATION GROUP MEMBERS: NED L. SIEGEL GROUP MEMBERS: RICHARD A. BLOOM SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MORTONS RESTAURANT GROUP INC CENTRAL INDEX KEY: 0000883981 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 133490149 STATE OF INCORPORATION: DE FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-42940 FILM NUMBER: 1619111 BUSINESS ADDRESS: STREET 1: 3333 NEW HYDE PK RD STE 210 CITY: NEW HYDE PARK STATE: NY ZIP: 11042 BUSINESS PHONE: 5166271515 MAIL ADDRESS: STREET 1: 3333 NEW HYDE PARK ROAD STREET 2: SUITE 210 CITY: NEW HYDE PARK STATE: NY ZIP: 11042 FORMER COMPANY: FORMER CONFORMED NAME: QUANTUM RESTAURANTS GROUP INC DATE OF NAME CHANGE: 19950315 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BFMA HOLDING CORP CENTRAL INDEX KEY: 0001128220 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 521958726 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 37 HUNTINGTON STREET CITY: CORTLAND STATE: NY ZIP: 13045 BUSINESS PHONE: 8004313023 SC 13D/A 1 file001.txt AMENDMENT TO SCHEDULE 13D ----------------------------- OMB APPROVAL ----------------------------- OMB Number: 3235-0145 ----------------------------- Expires: October 31, 2002 ----------------------------- Estimated average burden hours per response. . . 14.9 ----------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2)* Morton's Restaurant Group, Inc. (Name of Issuer) Common Stock, $.01 par value (Title of Class of Securities) 619429 10 3 (CUSIP Number) Barry W. Florescue c/o BFMA Holding Corporation 50 East Sample Road, Suite 400 Pompano Beach, Florida 33064 (800) 675- 6115 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 26, 2001 (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 that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other parties to whom copies are to be sent. * 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 disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 (the "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). SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP No. 619429 10 3 - -------------------------------------------------------------------------------- 1) Name of Reporting Persons I.R.S. Identification No. of Above Persons (entities only) BFMA Holding Corporation - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7) Sole Voting Power 298,500 Number of ----------------------------------------------------------------- Shares 8) Shared Voting Power Beneficially 0 Owned by ----------------------------------------------------------------- Each 9) Sole Dispositive Power Reporting 298,500 Person ----------------------------------------------------------------- with 10) Shared Dispositive Power 0 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 298,500 - -------------------------------------------------------------------------------- 12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 7.2% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CUSIP No. 619429 10 3 - -------------------------------------------------------------------------------- 1) Name of Reporting Persons I.R.S. Identification No. of Above Persons (entities only) Florescue Family Corporation - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Nevada - -------------------------------------------------------------------------------- 7) Sole Voting Power 29,100 Number of ----------------------------------------------------------------- Shares 8) Shared Voting Power Beneficially 0 Owned by ----------------------------------------------------------------- Each 9) Sole Dispositive Power Reporting 29,100 Person ----------------------------------------------------------------- with 10) Shared Dispositive Power 0 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 29,100 - -------------------------------------------------------------------------------- 12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 0.7% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 3 - -------------------------------------------------------------------------------- CUSIP No. 619429 10 3 - -------------------------------------------------------------------------------- 1) Name of Reporting Persons I.R.S. Identification No. of Above Persons (entities only) Barry W. Florescue - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) AF - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7) Sole Voting Power 327,600 Number of ---------------------------------------------------------------- Shares 8) Shared Voting Power Beneficially 56,300 Owned by ---------------------------------------------------------------- Each 9) Sole Dispositive Power Reporting 327,600 Person ---------------------------------------------------------------- with 10) Shared Dispositive Power 56,300 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 383,900 - -------------------------------------------------------------------------------- 12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 9.3% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- 4 - -------------------------------------------------------------------------------- CUSIP No. 619429 10 3 - -------------------------------------------------------------------------------- 1) Name of Reporting Persons I.R.S. Identification No. of Above Persons (entities only) Ned L. Siegel - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) AF - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7) Sole Voting Power 0 Number of ---------------------------------------------------------------- Shares 8) Shared Voting Power Beneficially 56,300 Owned by ---------------------------------------------------------------- Each 9) Sole Dispositive Power Reporting 0 Person ---------------------------------------------------------------- with 10) Shared Dispositive Power 56,300 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 56,300 - -------------------------------------------------------------------------------- 12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 1.4% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- 5 - -------------------------------------------------------------------------------- CUSIP No. 619429 10 3 - -------------------------------------------------------------------------------- 1) Name of Reporting Persons I.R.S. Identification No. of Above Persons (entities only) Richard A. Bloom - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) AF - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7) Sole Voting Power 5,000 Number of ----------------------------------------------------------------- Shares 8) Shared Voting Power Beneficially 0 Owned by ----------------------------------------------------------------- Each 9) Sole Dispositive Power Reporting 5,000 Person ----------------------------------------------------------------- with 10) Shared Dispositive Power 0 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 5,000 - -------------------------------------------------------------------------------- 12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 0.1% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- 6 - -------------------------------------------------------------------------------- CUSIP No. 619429 10 3 - -------------------------------------------------------------------------------- 1) Name of Reporting Persons I.R.S. Identification No. of Above Persons (entities only) Charles W. Miersch - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) AF - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization United States - -------------------------------------------------------------------------------- 7) Sole Voting Power 500 Number of ---------------------------------------------------------------- Shares 8) Shared Voting Power Beneficially 0 Owned by ---------------------------------------------------------------- Each 9) Sole Dispositive Power Reporting 500 Person ---------------------------------------------------------------- with 10) Shared Dispositive Power 0 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 500 - -------------------------------------------------------------------------------- 12) Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 0.0% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- 7 This Amendment No. 2 to the Statement on Schedule 13D amends and supplements the Statement in Schedule 13D relating to the event date of January 25, 2001, filed by BFMA Holding Corporation, Florescue Family Corporation, Barry W. Florescue and Ned L. Siegel as amended by Amendment No. 1 relating to the event date of March 21, 2001 (collectively, the "Schedule 13D"). Capitalized terms used herein and not defined herein shall have the meanings assigned thereto in the Schedule 13D. ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION Item 3 has been amended and restated in its entirety to read as follows: The funds used by BFMA to purchase the Common Stock came from the working capital of BFMA, and such funds may, at any given time, include margin loans made by brokerage firms in the ordinary course of business. The funds used by FFC to purchase the Common Stock came from the working capital of FFC, and such funds may, at any given time, include margin loans made by brokerage firms in the ordinary course of business. The funds used by each of Florescue, Siegel, Bloom and Miersch to purchase the Common Stock came from their personal funds and such funds may, at any given time, include margin loans made by brokerage firms in the ordinary course of business. By letter dated May 1, 2001, BFMA proposed to acquire all of the outstanding shares of Common Stock for $28.25 per share in cash in a fully-financed offer. In addition, BFMA has committed to provide no less than $20 million of equity to finance the offer. BFMA has received a commitment from Icahn Associates Corp., an affiliated entity to Carl C. Icahn, to provide $240 million in bridge financing in the form of $120 million of senior financing and at least $120 million of subordinated bridge notes. ITEM 4. PURPOSE OF TRANSACTION The first paragraph of Item 4 has been amended and restated in its entirety to read as follows: The Reporting Persons believe that the Common Stock is currently undervalued and have acquired the Common Stock to increase their shareholder position in the Issuer. By letter dated May 1, 2001, BFMA proposed to acquire all of the outstanding shares of Common Stock for $28.25 per share in cash in a fully-financed offer. In addition, BFMA has nominated three individuals - Richard A. Bloom, Logan D. Delany, Jr. and Charles W. Miersch - for election to the Issuer's Board of Directors at its 2001 Annual Meeting and is currently soliciting proxies to obtain such representation on Issuer's Board of Directors. BFMA believes that the election of its nominees represents the best means for the Issuer's shareholders to communicate to the Issuer's directors their desire to explore strategic alternatives, including a possible sale of Issuer to BFMA or a third party, as a way to maximize value for all of the Issuer's shareholders. Messrs. Miersch, Delany and Bloom have indicated that, subject to their fiduciary duties to Morton's shareholders, they will seek to convince other members of the Board to vote with them to form a Special Committee of the Board and hire independent financial and legal advisors to arrange a prompt sale of Morton's to the highest bidder and on the most favorable terms 8 available to Morton's. Florescue has owned and controlled restaurants and restaurant properties in the past. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item 6 has been amended and restated in its entirety to read as follows: By letter dated May 1, 2001, BFMA proposed to acquire all of the outstanding shares of Common Stock for $28.25 per share in cash in a fully-financed offer. In addition, BFMA has committed to provide no less than $20 million of equity to finance the offer. BFMA has received a commitment from Icahn Associates Corp., an affiliated entity of Carl C. Icahn, to provide $240 million in bridge financing in the form of $120 million of senior financing and at least $120 million of subordinated bridge notes. Pursuant to the terms of the commitment letter with Icahn Associates Corp. dated May 1, 2001 (the "Commitment Letter"), BFMA has agreed to pay Icahn Associates Corp. as an additional fee (the "Additional Fee"), an amount equal to 50% of the Profits, as defined in the term sheet annexed hereto as part of Exhibit C (the "Term Sheet"), in the event that within ten months after the date of the Commitment Letter, (a) any Covered Person, as defined in the Term Sheet, is a party to a Sale, as defined in the Term Sheet, or enters into a binding contract to effect a Sale, or (b) a Transaction, as defined in the Term Sheet, is publicly announced and any Covered Person is involved in a Sale subsequent to such announcement and after the ten-month date but on or prior to the withdrawal or consummation of the Transaction, all as more fully described in the Term Sheet. In addition, BFMA has nominated three individuals - Richard A. Bloom, Logan D. Delany, Jr. and Charles W. Miersch - for election to the Issuer's Board of Directors at its 2001 Annual Meeting and is currently soliciting proxies on their behalf. BFMA believes that the election of its nominees represents the best means for the Issuer's shareholders to communicate to the Issuer's directors their desire to act to maximize value for all of the Issuer's shareholders by exploring strategic alternatives, including a possible sale of Issuer to BFMA or a third party. Messrs. Miersch, Delany and Bloom have indicated that, subject to their fiduciary duties to Morton's shareholders, they will seek to convince other members of the Board to vote with them to form a Special Committee of the Board and hire independent financial and legal advisors to arrange a prompt sale of Morton's to the highest bidder and on the most favorable terms available to Morton's. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit A. Agreement of Joint Filing. (1) Exhibit B. Definitive Proxy Statement, dated April 26, 2001. 9 Exhibit C. Letter from BFMA to Morton's, dated May 1, 2001. Exhibit D. Commitment Letter from Icahn Associates Corp., dated May 1, 2001. (1) Filed as an exhibit to Amendment No. 1 to the Statement on Schedule 13D. SIGNATURES After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned hereby certifies that the information set forth in this Schedule 13D is true, complete and correct. Dated: May 1, 2001 FMA HOLDING CORPORATION By: /s/ Barry W. Florescue ------------------------------ Name: Barry W. Florescue Title: Chief Executive Officer FLORESCUE FAMILY CORPORATION By: /s/ Barry W. Florescue ------------------------------ Name: Barry W. Florescue Title: President /s/ Barry W. Florescue --------------------------------- Barry W. Florescue /s/ Ned L. Siegel --------------------------------- Ned L. Siegel /s/ Richard A. Bloom --------------------------------- Richard A. Bloom /s/ Charles W. Miersch --------------------------------- Charles W. Miersch 10 EX-99.B 2 file002.txt DEF PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the Registrant [ ] Filed by a party other than the Registrant [X] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-12 MORTON'S RESTAURANT GROUP, INC. - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) BFMA HOLDING CORPORATION - -------------------------------------------------------------------------------- (Name of Persons(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: - -------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: - -------------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: - -------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- (5) Total fee paid: - -------------------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials: --------------------------------------------------------------------------- [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount Previously Paid: - -------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: - -------------------------------------------------------------------------------- (3) Filing Party: - -------------------------------------------------------------------------------- (4) Date Filed: - -------------------------------------------------------------------------------- BFMA HOLDING CORPORATION PROXY STATEMENT IN OPPOSITION TO THE BOARD OF DIRECTORS OF MORTON'S RESTAURANT GROUP, INC. ------------------------------- 2001 ANNUAL MEETING OF STOCKHOLDERS OF MORTON'S RESTAURANT GROUP, INC. ------------------------------- PLEASE SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY CARD This proxy statement and the enclosed BLUE proxy card are being furnished to stockholders of Morton's Restaurant Group, Inc., a Delaware corporation ("Morton's" or the "Company"), by BFMA Holding Corporation, a Delaware corporation, in connection with the solicitation of proxies from stockholders of Morton's (the "Stockholders") to be used at the 2001 Annual Meeting of Stockholders, including any adjournments or postponements thereof and any special meeting which may be called in lieu thereof, to: (i) elect three (3) persons (collectively, the "BFMA Nominees") nominated by BFMA for election as Class 3 Directors to the Board of Directors of Morton's (the "Board"); and (ii) to ratify the re-appointment of KPMG LLP, certified public accountants, as Morton's independent auditors for the fiscal year ending December 30, 2001 (the "KPMG Re-Appointment"). As nominees for director, Richard A. Bloom, Logan D. Delany, Jr. and Charles W. Miersch are also deemed to be participants with BFMA in this proxy solicitation. The principal executive offices of Morton's are located at 3333 New Hyde Park Road, New Hyde Park, New York 11042. This proxy statement and the BLUE proxy card are first being furnished to the Stockholders on or about April 27, 2001. The Company has established with the New York Stock Exchange a record date of March 22, 2001 for determining Stockholders entitled to notice of and to vote at the Annual Meeting (the "Record Date") and May 10, 2001 as the date of the Annual Meeting. Stockholders of record at the close of business on the Record Date will be entitled to one vote at the Annual Meeting for each Share (as defined herein) held on the Record Date. BFMA, together with all of the participants in this solicitation, beneficially owns an aggregate of 389,400 shares of Morton's common stock, par value $.01 per share ("Share") which represents approximately 9.3% of the Shares outstanding (based on the most recent share information publicly disclosed by Morton's). BFMA and all of the participants intend to vote all of their Shares for the election of the BFMA Nominees and for the KPMG Re-Appointment. 1 THIS SOLICITATION IS BEING MADE BY BFMA AND NOT ON BEHALF OF THE BOARD OF DIRECTORS OR MANAGEMENT OF MORTON'S. BFMA is soliciting proxies because it believes that the election of the BFMA Nominees represents the best means for the Stockholders to obtain shareholder representation on the Board. If elected, the BFMA Nominees intend to encourage the other Directors to explore strategic alternatives, including a possible sale of the Company, as a way to maximize the value of the Shares. If the Board does explore a possible sale of the Company, BFMA reserves its right to make an offer to purchase the Company. If elected, the BFMA Nominees will constitute a minority of the current nine (9) members of the Board. Under Morton's Amended and Restated Bylaws, a majority of the whole Board constitutes a quorum, and action may be taken by a vote of a majority of the directors when a quorum is present. Accordingly, the BFMA Nominees would not be in a position, without the support of at least two or more of the incumbent members of the Board, to effect any action, including the exploration of strategic alternatives. There can be no assurance that the incumbent members of the Board will vote with the BFMA Nominees to explore strategic alternatives. BFMA believes, however, that Stockholder support for the BFMA Nominees set forth in this proxy statement may encourage the Board to explore strategic alternatives, including a possible sale of the Company to maximize the value of the Shares. BFMA is soliciting proxies for the election of the BFMA Nominees to the Board as Class 3 Directors and for the KPMG Re-Appointment. BFMA is not aware of any other proposals to be brought before the Annual Meeting. However, should other proposals be brought before the Annual Meeting of which BFMA is not made aware within a reasonable amount of time prior to the Annual Meeting, the persons named as proxies in the enclosed BLUE proxy card will vote on such matters in their discretion. 2 IMPORTANT! YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN. BFMA URGES YOU TO SIGN, DATE AND RETURN THE ENCLOSED BLUE PROXY CARD TODAY TO VOTE FOR THE ELECTION OF THE BFMA NOMINEES. THE BFMA NOMINEES ARE COMMITTED, SUBJECT TO THEIR FIDUCIARY DUTIES TO MORTON'S STOCKHOLDERS, TO GIVING ALL MORTON'S STOCKHOLDERS THE OPPORTUNITY TO RECEIVE THE MAXIMUM VALUE FOR THEIR SHARES. A VOTE FOR THE BFMA NOMINEES WILL ENABLE YOU -- AS THE OWNERS OF MORTON'S -- TO SEND A STRONG MESSAGE TO THE BOARD THAT YOU ARE COMMITTED TO EXPLORING STRATEGIC ALTERNATIVES AS A MEANS OF MAXIMIZING THE VALUE OF YOUR SHARES. IF YOUR SHARES ARE REGISTERED IN YOUR OWN NAME, PLEASE SIGN AND DATE THE ENCLOSED BLUE PROXY CARD AND RETURN IT TO BFMA, C/O INNISFREE M&A INCORPORATED, IN THE ENCLOSED ENVELOPE TODAY. IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK NOMINEE OR OTHER INSTITUTION ON THE RECORD DATE, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO EXECUTE ON YOUR BEHALF THE BLUE PROXY CARD. If you have any questions regarding your proxy, or need assistance in voting your Shares, please call: Innisfree M&A Incorporated 501 Madison Avenue 20th Floor New York, New York 10022 Call toll-free: (888) 750-5834 Bankers and Brokers Call Collect: (212) 750-5833 3 ELECTION OF CLASS 3 DIRECTORS (PROPOSAL 1) WHY YOU SHOULD VOTE FOR THE BFMA NOMINEES BFMA believes that the election of the BFMA Nominees represents the best means for the Stockholders to obtain shareholder representation on the Board. If elected, the BFMA Nominees intend to encourage the other Directors to explore strategic alternatives, including a possible sale of the Company, as a way to maximize the value of their Shares. IF ELECTED, THE BFMA NOMINEES WILL CONSTITUTE A MINORITY OF THE CURRENT NINE (9) MEMBERS OF THE BOARD. UNDER MORTON'S AMENDED AND RESTATED BYLAWS, A MAJORITY OF THE WHOLE BOARD CONSTITUTES A QUORUM, AND ACTION MAY BE TAKEN BY A VOTE OF A MAJORITY OF THE DIRECTORS WHEN A QUORUM IS PRESENT. ACCORDINGLY, THE BFMA NOMINEES WOULD NOT BE IN A POSITION, WITHOUT THE SUPPORT OF AT LEAST TWO OTHER MEMBERS OF THE BOARD, TO EFFECT ANY ACTION, INCLUDING THE EXPLORATION OF STRATEGIC ALTERNATIVES. THERE CAN BE NO ASSURANCE THAT THE INCUMBENT MEMBERS OF THE BOARD WILL VOTE WITH THE BFMA NOMINEES TO EXPLORE STRATEGIC ALTERNATIVES TO MAXIMIZE THE VALUE OF THE SHARES. Nonetheless, if elected, the BFMA Nominees will, subject to their fiduciary duties to the Stockholders, seek to convince other members of the Board to vote with them to explore strategic alternatives, including a possible sale of the Company. If the Board does explore a possible sale of the Company, BFMA reserves its right to make an offer to purchase the Company. THE BFMA NOMINEES BFMA is proposing that the Stockholders elect the BFMA Nominees to the Board at the Annual Meeting. Richard A. Bloom will be nominated to be elected to succeed Thomas J. Baldwin, Logan D. Delany, Jr. will be nominated to be elected to succeed John K. Castle and Charles W. Miersch will be nominated to be elected to succeed Allen J. Bernstein (collectively, Messrs. Bloom, Delany and Miersch are the "BFMA Nominees"), who are the current Class 3 directors (or any director named to fill any vacancy created by the death, retirement, resignation or removal of any such director) of Morton's. Additional persons (who would be named after the solicitation of proxies) will be nominated as substitute BFMA Nominees to be elected in the event that any of the above-named BFMA Nominees are unable for any reason to serve as a director or for good cause will not serve as a director, and BFMA does not learn of this circumstance a reasonable time before the Annual Meeting. The following table sets forth the name, business address, present principal occupation, and employment and material occupations, positions, offices, or employments for the past five years of the BFMA Nominees. See also "Information About Participants". This information has been 4 furnished to BFMA by the BFMA Nominees. Each person listed below is a citizen of the United States. Principal Occupation and Business Name, Principal Business Address Experience During the Last Five Years; and Age Current Directorships - -------------------------------- -------------------------------------- Richard A. Bloom, Age 33 Senior Vice President-Strategic c/o Marietta Corporation Development of Marietta Corporation since 37 Huntington Street September 1999 - Present Cortland, New York 13045 Principal of Imperial Capital Group, LLC and its predecessor (an investment bank) until August 1999 Director of BFMA Holding Corporation 1996 -Present Director of Marietta Corporation 1996- Present Logan D. Delany, Jr., Age 52 President of Delany Capital Management 41 North Broadway Corp. (a privately held investment Irvington, New York 10533-1316 company and consulting firm) 1986- Present Chairman of the Board of EADmotors, Inc. (a privately held manufacturer of electric motors) 1986-Present Chairman of the Board of HH Smith, Inc. (a privately held manufacturer of electrical connectors and electronic hardware) 1986-Present Chairman of the Board of Elinco, Inc. (a privately held manufacturer of electric motors) 1999-Present Director of BFMA Holding Corporation 1996-Present Director of Marietta Corporation 1996-Present Director of AllVertical, Inc. (a privately held Internet portal and web hosting company) 2000-Present Charles W. Miersch, Age 54 Senior Associate Dean for Corporate 2-217 Carol Simon Hall Relations and Institutional Advancement University of Rochester at William E. Simon Graduate School of Rochester, New York 14627-0102 Business Administration at the University of Rochester 1984 - Present Chairman of the Board of Century Bank (a privately held federally chartered savings bank) 1991- Present Director of Century Financial Group (the parent of Century Bank) 1988-Present Director of BFMA Holding Corporation 1996-Present Director of Marietta Corporation 1995-Present None of the BFMA Nominees will receive any compensation from BFMA for their services as a director of Morton's. BFMA has agreed to indemnify the BFMA Nominees against any costs, expenses and other liabilities associated with his nomination and the election contest. Each of 5 Messrs. Bloom, Delany and Miersch have executed written consents agreeing to be nominees for election to the Board and to serve as a director if so elected. None of the BFMA Nominees have been convicted in any criminal proceedings (excluding traffic violations or similar misdemeanors) over the past ten years. According to Morton's Definitive Proxy Statement, filed April 4, 2001 ("Morton's Definitive Proxy"), each non-officer director of Morton's is entitled to receive directors' fees at the rate of $15,000 per year. All directors are reimbursed for actual expenses incurred in connection with attendance at meetings of the Board or committees of the Board. Neither BFMA nor any of the BFMA Nominees is adverse to Morton's or any of its subsidiaries in any material pending legal proceedings. BFMA does not expect that the BFMA Nominees will be unable to stand for election but, in the event that any such person is unable to do so or for good cause will not serve, and BFMA does not learn of this circumstance a reasonable time before the Annual Meeting, the Shares represented by the enclosed BLUE proxy card will be voted for substitute BFMA Nominees. YOU ARE URGED TO VOTE FOR THE ELECTION OF THE BFMA NOMINEES ON THE ENCLOSED BLUE PROXY CARD. VOTING AND PROXY PROCEDURES Only Stockholders of record on the Record Date will be entitled to notice of and to vote at the Annual Meeting. Based on publicly available information, BFMA believes that the only outstanding class of securities of Morton's entitled to vote at the Annual Meeting are the Shares. Each Share is entitled to one vote on each matter as may properly be brought before the Morton's meeting. According to Morton's Definitive Proxy, there are 4,167,898 Shares issued and outstanding as of the Record Date. Shares represented by properly executed BLUE proxy cards will be voted at the Annual Meeting as marked and, in the absence of specific instructions, will be voted for the election of the BFMA Nominees as Class 3 directors of Morton's, for the KPMG Re-Appointment and in the discretion of the persons named as proxies on all other matters as may properly come before the Annual Meeting of which BFMA is not made aware within a reasonable amount of time prior to the Annual Meeting. Election of the BFMA Nominees requires the affirmative vote of a plurality of the Shares represented and entitled to vote at the Annual Meeting. Directors are elected by a plurality and the nominees who receive the most votes will be elected. Stockholders of Morton's may revoke their proxies at any time prior to its exercise by attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute revocation of a proxy) or by delivering a written notice of revocation. The delivery of a subsequently dated proxy which is properly completed will constitute a revocation of any earlier proxy. The revocation may be delivered either to BFMA, in care of Innisfree M&A Incorporated, at the address set forth on the back cover of this proxy statement or to Morton's at 3333 New Hyde Park Road, New Hyde Park, New York 11042 or any other address provided by 6 Morton's. Although a revocation is effective if delivered to Morton's, BFMA requests that either the original or photostatic copies of all revocations be mailed to BFMA, in care of Innisfree M&A Incorporated, at the address set forth on the back cover of this Proxy Statement so that BFMA will be aware of all revocations and can more accurately determine if and when proxies have been received from the holders of record on the Record Date of a majority of the outstanding Shares. IF YOU WISH TO VOTE FOR THE ELECTION OF THE BFMA NOMINEES AS CLASS 3 DIRECTORS OF MORTON'S, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED BLUE PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. 7 BACKGROUND AND RECENT EVENTS BFMA has been following Morton's progress for the last few years and on January 25, 2001 increased its holdings of Morton's common stock to over five percent (5%). As one of Morton's largest stockholders, BFMA attempted to arrange a meeting between its Chairman and President, Barry Florescue, and Morton's Chairman and President, Allen Bernstein, to discuss Morton's and the restaurant industry in general. However, the parties could not arrange a meeting until March 15, 2001, at which time Mr. Florescue met with the Chief Financial Officer of Morton's, Tom Baldwin. Mr. Florescue shared BFMA's thoughts regarding Morton's and the restaurant industry in general. He also expressed BFMA's concerns regarding the lack of stockholder representation on the Board and BFMA's belief that the share repurchases made by Morton's over the last two years, buying back over thirty percent (30%) of the then outstanding Shares, have served to reduce the already limited liquidity in the Shares. Mr. Florescue informally requested that Morton's consider expanding the Board to include stockholder representatives. BFMA was informed that the Nominating Committee had already made its selections for the Board seats and they weren't going to expand the number of the Board seats. BFMA now believes that the only way to obtain Stockholder representation on the Board is to take its case directly to the Stockholders. On March 20, 2001, BFMA sent a letter to Morton's nominating the BFMA Nominees for election as Class 3 Directors at the Annual Meeting. Morton's has stated in its Definitive Proxy Statement that the Board is committed to maximizing long-term value for all of the Stockholders and that it is actively pursuing this goal. However, this commitment has not been reflected in the Board's recent actions. The Board has recently provided Morton's management with what BFMA believes to be very lucrative employment agreements and change of control agreements that serve only to entrench Morton's management further, and provided them with generous salaries, bonuses and stock option grants that serve to hurt the earning power and long-term value of the Shares. BFMA believes that the election of the BFMA Nominees will cause the Board to refocus on maximizing CURRENT Stockholder value for ALL of the Stockholders. THE BFMA NOMINEES ARE COMMITTED, SUBJECT TO THEIR FIDUCIARY DUTIES TO THE STOCKHOLDERS, TO GIVING ALL THE STOCKHOLDERS THE OPPORTUNITY TO RECEIVE THE MAXIMUM VALUE FOR THEIR SHARES. A VOTE FOR THE BFMA NOMINEES WILL ENABLE YOU -- AS THE OWNERS OF MORTON'S -- TO SEND A STRONG MESSAGE TO THE BOARD THAT YOU ARE COMMITTED TO MAXIMIZING THE VALUE OF YOUR SHARES. SOLICITATION OF PROXIES The solicitation of proxies pursuant to this proxy statement is being made by BFMA. Proxies may be solicited by mail, facsimile, telephone, telegraph, in person and by advertisements. Solicitations may be made by certain directors, officers and employees of BFMA, none of whom will receive additional compensation for such solicitation. 8 BFMA has retained Innisfree M&A Incorporated for solicitation and advisory services in connection with this solicitation, for which Innisfree M&A Incorporated will receive a fee not to exceed $100,000, together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses, including certain liabilities under the federal securities laws. Innisfree M&A Incorporated will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders. BFMA has requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the Shares they hold of record. BFMA will reimburse these record holders for their reasonable out-of-pocket expenses in so doing. It is anticipated that Innisfree M&A Incorporated will employ approximately sixty-five (65) persons to solicit Stockholders for the Annual Meeting. The entire expense of soliciting proxies is being borne by BFMA. BFMA does not currently intend to seek reimbursement of the costs of this solicitation from Morton's but may decide to do so in the future in the event that the BFMA Nominees are elected. Costs of this solicitation of proxies are currently estimated to be approximately $300,000. BFMA estimates that, through the date hereof, its expenses in connection with this solicitation are approximately $100,000. INFORMATION ABOUT PARTICIPANTS BFMA was incorporated as a Delaware corporation on August 24, 1995. BFMA has its principal executive offices located at 50 East Sample Road, Suite 400, Pompano Beach, Florida 33064. BFMA is a holding corporation that owns various investments and whose primary operating subsidiary, Marietta Corporation, is a manufacturer of guest amenities for the lodging industry and a contract packager primarily for the personal care products industry. As of the date of this proxy statement, BFMA, together with all of the participants in this solicitation, beneficially owns an aggregate of 389,400 Shares, which represents approximately 9.3% of the Shares outstanding (based on the most recent share information publicly disclosed by Morton's). Except as set forth in this proxy statement (or in Schedules I or II hereto), neither BFMA nor, to BFMA's knowledge, any BFMA Nominee or any other participant in this solicitation or any of their respective associates: o directly or indirectly beneficially owns any Shares or any other securities of Morton's; o has had any relationship with Morton's in any capacity other than as a Stockholder, patron, or has been a party to any transaction, or series of similar transactions, since the beginning of Morton's last fiscal year with respect to any shares of Morton's capital stock; o knows of any transactions since the beginning of Morton's last fiscal year, currently proposed transactions, or series of similar transactions, to which Morton's was or is 9 to be a party, in which the amount involved exceeds $60,000 and which any of them or their respective affiliates had, or will have, a direct or indirect material interest; o has any interest in the matters to be voted on at the Annual Meeting, other than an interest, if any, as a Stockholder; o has been indebted to Morton's; or o has been convicted of a criminal proceeding (excluding traffic violations or similar misdemeanors) during the past ten years. In addition, other than as set forth in this proxy statement, there are no contracts, arrangements or understandings entered into by BFMA or any other participant in this solicitation or any of their respective associates within the past year with any person with respect to any of Morton's securities, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies. In addition, except as otherwise described in the "Background & Recent Events" section above, neither BFMA nor any other participant in this solicitation or any of their respective associates has been engaged in contacts, negotiations or transactions with Morton's concerning a merger, consolidation, acquisition, tender offer or other acquisition of securities, or a sale or other transfer of a material amount of assets; or had any other transaction (other than this proxy solicitation or matters incidental thereto) with Morton's or any of its executive officers or directors that would require disclosure under the rules and regulations of the SEC. Neither BFMA nor, to BFMA's knowledge, any BFMA Nominee or any other participant in this solicitation or any of their respective associates, has entered into any agreement or understanding with any person with respect to: o any future employment by Morton's, or o any future transactions to which Morton's will or may be a party. For more detailed information regarding Messrs. Bloom, Delany and Miersch, who as nominees for directors are deemed to be participants in this proxy solicitation, see "The BFMA Nominees". For more detailed information regarding the directors and executive officers of BFMA and transactions involving Shares over the past two years by BFMA, see Schedules I and II of this proxy statement. APPOINTMENT OF AUDITORS (PROPOSAL 2) Morton's Definitive Proxy states the Board, upon recommendation of the Audit Committee, is recommending re-appointment of KPMG, LLP as independent auditors to audit the books and accounts of Morton's for the fiscal year ending December 30, 2001. BFMA is soliciting proxies for the KPMG Re-Appointment. 10 CERTAIN INFORMATION ABOUT MORTON'S Morton's Restaurant Group, Inc. is a Delaware corporation with its principal executive office located at 3333 New Hyde Park Road, New Hyde Park, New York 11042. Morton's is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith is required to file reports, proxy statements and other information with the SEC. Reports, registration statements, proxy statements and other information filed by Morton's with the SEC can be inspected and copied at the public reference facilities maintained by the SEC at Judiciary Plaza, 450 Fifth Street, N.W. Room 1024, Washington, DC 20549, and at the SEC's Regional Offices, Judiciary Plaza, 500 West Madison Street, Suite 1400, Chicago, IL 60661 and 7 World Trade Center, New York, NY 10048. Copies of such material can be obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, DC 20549, at prescribed rates. Documents filed electronically by Morton's are also available at the SEC's Web site (http://www.sec.gov). We note that Morton's Definitive Proxy Statement contains information regarding: o number of Shares outstanding as of the record date; o trading prices of Morton's stock over time; o establishment of a quorum; o vote required for approval; o treatment of abstentions and "broker non-votes;" o admission requirements for the Annual Meeting; o ownership of Shares by directors and executive officers of Morton's and by other persons who own more than five percent of the outstanding Shares; o background of Morton's nominees for election to the Board; o compensation paid and payable to Morton's directors and executive officers; o committees of the Board and their responsibilities; o meetings of the Board and certain committees thereof; and o requirements regarding the submission of Stockholder proposals to be considered for inclusion in Morton's proxy statement for the 2002 Annual Meeting of Stockholders. BFMA assumes no responsibility for the accuracy or completeness of such information. OTHER MATTERS AND ADDITIONAL INFORMATION BFMA is unaware of any other matters to be considered at the Annual Meeting. Should other proposals be brought before the Annual Meeting of which BFMA is not made aware within a 11 reasonable amount of time prior to the Annual Meeting, the persons named as proxies on the enclosed BLUE proxy card will vote on such matters in their discretion. APRIL 26, 2001 BFMA HOLDING CORPORATION Barry W. Florescue, Chief Executive Officer 12 SCHEDULE I INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF BFMA The following table sets forth the name, business address, present principal occupation, and employment and material occupations, positions, offices or employments for the past five (5) years of certain directors, officers and employees of BFMA (other than Messrs. Bloom, Delany and Miersch). Where no date is given for the commencement of the indicated office or position, such office or position was assumed prior to November 1995. Each person listed below is a citizen of the United States. PRINCIPAL OCCUPATION OR NAME AND PRINCIPAL EMPLOYMENT; MATERIAL POSITIONS BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS - ------------------ ------------------------------ Barry W. Florescue President, Chief Executive c/o BFMA Holding Corporation Officer and a director of BFMA 50 East Sample Road, Suite 400 and Marietta Corporation Pompano Beach, Florida 33064 Director of Century Bank (a privately held federally chartered savings bank) Chief Executive Officer and a director of Century Financial Group (the parent of Century Bank) Trustee of the University of Rochester Philip A. Shager Senior Vice President, Chief c/o Marietta Corporation Financial Officer and Treasurer 37 Huntington Street of BFMA and Marietta Corporation Cortland, New York 13045 Ned L. Siegel Director of BFMA and Marietta c/o The Siegel Group Corporation 5000 Blue Lake Drive, Suite 150 President of The Siegel Group Boca Raton, Florida 33431 (a privately held real estate investment company) Charles I. Weissman Assistant Secretary and a c/o Swidler Berlin Shereff Friedman, LLP director of BFMA and Marietta The Chrysler Building Corporation 405 Lexington Ave. Attorney - Partner in Swidler New York, New York 10174 Berlin Shereff Friedman, LLP None of the foregoing persons have, during the past ten (10) years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). As of March 21, 2001, (i) BFMA was a beneficial owner of 298,500 Shares and record holder of 500 Shares; (ii) Barry Florescue was the beneficial owner of 383,900 Shares; (iii) Ned Siegel was the beneficial owner of 56,300 Shares; (iv) Richard A. Bloom was the beneficial owner of 5,000 Shares; and (v) Charles W. Miersch was the beneficial owner of 500 Shares. None of the foregoing persons (or their associates, other than those stated in the prior sentence) currently directly or indirectly own any securities of Morton's, either beneficially or of record, except indirectly (where applicable) through their ownership of securities of BFMA nor have any of the foregoing persons purchased or sold any securities of Morton's during the last two years, except as set forth on Schedule II. Collectively, the directors and executive officers of BFMA beneficially own approximately 91% of the outstanding shares of BFMA common stock. SCHEDULE II TRANSACTIONS IN THE SECURITIES OF MORTON'S The following table sets forth all of the transactions in Shares by BFMA, either directly or through wholly-owned subsidiaries (unless otherwise indicated, all such transactions were open-market purchases and sales (in parentheses)): Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- 10,000 16.7500 02/22/00 1,500 17.0000 02/23/00 1,000 17.5000 02/25/00 2,000 17.5625 02/28/00 500 17.5000 02/28/00 500 17.5000 03/01/00 2,000 17.0000 03/02/00 2,500 16.5000 03/06/00 1,500 16.5000 03/06/00 1,000 16.2500 03/06/00 1,000 17.0000 03/06/00 1,000 17.0000 03/06/00 500 16.7500 03/06/00 500 16.6250 03/06/00 1,000 17.6250 03/07/00 1,000 17.6250 03/07/00 500 17.2500 03/07/00 500 17.5000 03/07/00 100 17.5000 03/07/00 (2,500) 16.5000 03/08/00 1,500 16.5000 03/08/00 200 18.0000 03/08/00 2,000 18.5000 03/09/00 500 18.2500 03/09/00 4,500 18.0000 03/14/00 500 17.8750 03/15/00 5,000 18.1250 03/15/00 5,000 18.1250 03/15/00 5,000 18.1250 03/15/00 2,700 18.1250 03/15/00 2,300 18.1250 03/15/00 Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- 2,200 18.1250 03/15/00 2,000 18.1250 03/15/00 1,500 18.1250 03/15/00 500 18.5000 03/16/00 1,000 18.3750 03/17/00 2,000 18.3750 03/17/00 10,000 18.3750 03/17/00 3,000 18.6250 03/20/00 1,000 18.7500 03/20/00 3,500 18.7500 03/20/00 5,000 18.6250 03/20/00 2,000 18.5000 03/21/00 2,000 18.5000 03/21/00 2,000 18.4375 03/21/00 2,000 18.5000 03/21/00 2,000 18.5000 03/21/00 5,000 18.5000 03/21/00 2,000 18.6250 03/21/00 (2,000) 19.3750 03/22/00 (1,000) 19.5625 03/23/00 2,500 18.3750 03/22/00 2,500 18.3750 03/22/00 500 18.5000 03/22/00 500 18.5000 03/22/00 (2,000) 19.7500 03/24/00 (1,000) 19.5625 03/27/00 (2,000) 19.5000 03/28/00 (1,500) 19.5625 03/28/00 (500) 19.6250 03/28/00 (500) 19.1875 03/30/00 (500) 18.8750 04/04/00 1,500 18.0000 04/05/00 1,500 18.0000 04/05/00 900 18.0000 04/17/00 300 18.7500 05/11/00 200 18.7500 05/11/00 3,000 18.7500 05/11/00 500 18.7500 05/11/00 2,400 19.0000 05/12/00 (500) 19.0000 05/22/00 Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- (500) 18.6250 05/24/00 (500) 18.6250 05/24/00 (500) 28.5000 05/26/00 1,200 17.7500 06/07/00 (1,000) 21.2500 06/29/00 (1,500) 21.1250 06/29/00 (900) 21.2500 06/29/00 (100) 21.3750 06/29/00 (2,000) 21.2500 06/29/00 (500) 21.3750 06/29/00 (1,000) 21.6250 06/30/00 (500) 21.5000 06/30/00 (1,000) 20.8750 07/17/00 (1,500) 20.1250 07/26/00 (1,500) 20.1250 07/26/00 2,000 20.8125 08/18/00 1,000 20.8125 08/18/00 1,000 20.8750 08/24/00 1,000 21.0000 09/08/00 10,000 20.6250 09/25/00 1,000 21.0000 09/25/00 1,000 21.1250 09/25/00 (2,500) 23.5000 12/06/00 (500) 23.1250 12/07/00 (500) 22.6875 12/15/00 40,000 21.3750 01/25/01 2,000 21.6875 01/25/01 90,000 21.2500 01/26/01 2,000 21.4500 01/29/01 25,000 22.1500 01/30/01 24,000 23.1438 02/01/01 5,000 23.7500 02/05/01 The following table sets forth all of the transactions in Shares by Barry W. Florescue (unless otherwise indicated, all such transactions were open market purchases and sales (in parenthesis)): Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- 1,000 20.4400 07/28/00 2,600 20.5600 08/02/00 Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- 1,000 21.0000 08/21/00 2,500 20.9400 08/29/00 3,000 20.9400 08/30/00 3,000 21.0600 08/30/00 1,000 21.0600 08/30/00 1,000 21.0600 08/30/00 1,000 21.1900 08/31/00 1,000 21.1900 08/31/00 1,000 21.0700 09/07/00 1,000 21.0700 09/08/00 5,000 21.0600 09/08/00 2,500 21.0600 09/08/00 2,500 21.0400 09/08/00 The following table sets forth all of the transactions in Shares by Barry W. Florescue and Ned L. Siegel, jointly (unless otherwise indicated, all such transactions were open market purchases and sales (in parenthesis)): Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- 5,000 21.0600 09/08/00 5,000 21.0600 09/08/00 4,000 21.0600 09/08/00 3,000 21.0600 09/08/00 800 20.9400 09/11/00 2,500 20.5600 09/18/00 1,000 20.6900 09/20/00 35,000 20.6900 09/21/00 The following table sets forth all of the transactions in Shares by Richard A. Bloom (unless otherwise indicated, all such transactions were open market purchases and sales (in parenthesis)): Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- 5,000 20.6860 09/25/00 The following table sets forth all of the transactions in Shares by Charles W. Miersch (unless otherwise indicated, all such transactions were open market purchases and sales (in parenthesis)): Shares of Common Stock Purchase Price Per Share ($) Date of Purchase - ---------------------- ---------------------------- ---------------- 500 20.1875 09/28/00 IMPORTANT! Your vote is important. No matter how many Shares you own, please give BFMA your proxy FOR the election of BFMA Nominees by taking three steps: 1. SIGNING the enclosed BLUE proxy card, 2. DATING the enclosed BLUE proxy card, and 3. MAILING the enclosed BLUE proxy card TODAY in the envelope provided (no postage is required if mailed in the United States). If any of your Shares are held in the name of a brokerage firm, bank nominee or other institution, only it can vote such Shares and only upon receipt of your specific instructions. Accordingly, please contact the person responsible for your account and instruct that person to execute the BLUE proxy card representing your Shares. BFMA urges you to confirm in writing your instructions to BFMA in care of Innisfree M&A Incorporated at the address provided below so that BFMA will be aware of all instructions given and can attempt to ensure that such instructions are followed. PLEASE DO NOT RETURN ANY PROXY CARD SUPPLIED TO YOU BY MORTON'S, EVEN TO VOTE AGAINST THEIR NOMINEES, AS IT MAY REVOKE YOUR PREVIOUS PROXY. REMEMBER, ONLY YOUR LATEST-DATED PROXY COUNTS. If you have any questions or require any additional information concerning this Proxy Statement, please contact our proxy solicitor Innisfree M&A Incorporated at the address set forth below. INNISFREE M&A INCORPORATED 501 MADISON AVENUE 20TH FLOOR NEW YORK, NEW YORK 10022 CALL TOLL-FREE: (888) 750-5834 BANKERS AND BROKERS CALL: (212) 750-5833 (COLLECT) MORTON'S RESTAURANT GROUP, INC. 2001 ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED ON BEHALF OF BFMA HOLDING CORPORATION AND NOT ON BEHALF OF THE BOARD OF DIRECTORS OR MANAGEMENT OF MORTON'S RESTAURANT GROUP, INC. The undersigned appoints Richard A. Bloom, Charles W. Miersch and Logan D. Delany, Jr. and each of them, attorneys and agents with full power of substitution to vote, as designated below, all shares of common stock of Morton's Restaurant Group, Inc. (the "Company") which the undersigned would be entitled to vote if personally present at the 2001 Annual Meeting of Stockholders of Morton's, and including at any adjournments or postponements thereof and at any special meeting called in lieu thereof. The undersigned hereby revokes any other proxy or proxies heretofore given to vote or act with respect to the shares of common stock of Morton's held by the undersigned, and hereby ratifies and confirms all action the herein named attorneys and proxies, their substitutes, or any of them may lawfully take by virtue hereof. (Continued and to be signed on the reverse side) BFMA HOLDING CORPORATION RECOMMENDS A VOTE FOR THE ELECTION OF THE BFMA NOMINEES 1. ELECTION OF RICHARD A. BLOOM: To elect Richard A. Bloom to the Board of Directors of Morton's; FOR [ ] WITHHOLD AUTHORITY [ ] 2. ELECTION OF LOGAN D. DELANY, JR.: To elect Logan D. Delany, Jr. to the Board of Directors of Morton's; FOR [ ] WITHHOLD AUTHORITY [ ] 3. ELECTION OF CHARLES W. MIERSCH: To elect Charles W. Miersch to the Board of Directors of Morton's; FOR [ ] WITHHOLD AUTHORITY [ ] 4. RE-APPOINTMENT OF KPMG LLP: To re-appoint KPMG LLP, certified public accountants, as Morton's independent auditors for the fiscal year ending December 30, 2001; FOR [ ] WITHHOLD AUTHORITY [ ] 5. In their discretion, the herein named attorneys and proxies are authorized to vote upon such other matters as may properly come before the Annual Meeting, of which such persons are not made aware with a reasonable period of time prior to the Annual Meeting. DATED: --------------------------------------------- Please Sign Exactly As Name Appears On This Proxy. - --------------------------------------------------------- (signature) - --------------------------------------------------------- (signature, if held jointly) - --------------------------------------------------------- (title) WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING. IMPORTANT: PLEASE SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE! IF YOU NEED ASSISTANCE WITH THIS PROXY CARD, PLEASE CALL INNISFREE M&A INCORPORATED TOLL FREE AT (888) 750-5834. EX-99.C 3 file003.txt LETTER FROM BFMA ================================================================================ BFMA HOLDING CORPORATION ================================================================================ 50 EAST SAMPLE ROAD, SUITE 400 POMPANO BEACH, FL 33064 May 1, 2001 VIA FACSIMILE AND FEDERAL EXPRESS - --------------------------------- Allen J. Bernstein Chief Executive Officer Morton's Restaurant Group, Inc. 3333 New Hyde Park Road New Hyde Park, New York 11042 Dear Mr. Bernstein: BFMA Holding Corporation ("BFMA") is pleased to make this fully financed offer to acquire all of the outstanding shares of Morton's Restaurant Group, Inc. ("Morton's") it does not already own for $28.25 per share in cash (the "Offer"). The Offer represents a premium of approximately 36% over the weighted average closing price of Morton's common stock over the last 20 trading days prior to our Offer. From publicly available information, our industry knowledge and conversations with other industry sources, we have identified a number of areas in which we believe that cost savings can be implemented and operating efficiencies can be achieved at Morton's. We believe that we will be able to confirm such savings through a limited due diligence process. We also believe that a transaction can be completed quickly and will devote all necessary resources to accomplish this goal. We are prepared to quickly negotiate a definitive agreement and related documentation with respect to the Offer. To finance the Offer, BFMA has committed to provide no less than $20 million of equity and has received a commitment from Icahn Associates Corp., an affiliated entity of Carl C. Icahn, to provide $240 million in bridge financing in the form of $120 million of senior financing and no less than $120 million of subordinated bridge notes. These commitments provide for aggregate capital in excess of $260 million, more than enough to consummate the purchase of Morton's at the Offer price, refinance any debt as necessary and pay the fees and expenses of the acquisition. BFMA and its officers and directors are currently the beneficial owners of 389,400 shares of Morton's common stock representing 9.3% of the issued and outstanding shares. On March 21, 2001, BFMA nominated three directors for election as Class 3 Directors of Morton's at Morton's 2001 Annual Meeting anticipated to be held on May 10, 2001. We believe that you and your board of directors should commit to begin a process of exploring a sale of Morton's to - -------------------------------------------------------------------------------- 50 East Sample Road, Suite 400 Pompano Beach, Fl 33064 Allen J. Bernstein May 1, 2001 Page 2 the highest bidder as a way of maximizing the value of Morton's shares for all of the Morton's shareholders. BFMA would consider raising its offer price if Morton's management and board of directors were able to demonstrate value not apparent in the publicly available information. Please call me if you would like to discuss the Offer further. Sincerely, BFMA HOLDING CORPORATION /s/ Barry W. Florescue Barry W. Florescue Chairman of the Board and President cc: Board of Directors of Morton's Restaurant Group, Inc. - -------------------------------------------------------------------------------- 50 East Sample Road, Suite 400 Pompano Beach, Fl 33064 EX-99.D 4 file004.txt COMMITMENT LETTER ICAHN ASSOCIATES CORP. 767 Fifth Avenue New York, New York 10153 May 1, 2001 Barry W. Florescue Chairman and CEO BFMA Holding Corporation 50 East Sample Road, Suite 400 Pompano Beach, Florida 33064 Dear Mr. Florescue: Icahn Associates Corp. (the "Lender") is pleased to provide BFMA Holding Corporation ("BFMA") with a commitment (the "Commitment") for $240,000,000 in bridge financing to be used in connection with BFMA's offer to purchase Morton's Restaurant Group, Inc. ("Morton's") pursuant to a merger of Angus Acquisition Corp. and Morton's, refinance all of the outstanding indebtedness of Morton's, pay all of the related transaction expenses and fund the ongoing capital needs of Morton's. The Commitment will be in the form of a senior loan facility in the amount of $120,000,000 (the "Senior Facility") and at least $120,000,000 of Subordinated Bridge Notes (the "Notes") subject to the preparation, execution and delivery of final documentation and legal opinions incorporating the terms and conditions contained herein and in the Term Sheet and other terms and conditions customary or otherwise not inconsistent with transactions of this type or with the terms and conditions of the Term Sheet attached to this letter. Marietta Corporation ("Marietta") and BFMA, jointly and severally, agree to reimburse, indemnify and hold harmless the Lender and its affiliates and each of their respective directors, shareholders, officers and employees (each an "indemnified person") in connection with and from any expenses, losses, claims, damages, or liabilities to which the Lender or such indemnified persons may become subject, insofar as such expenses, losses, claims, damages or liabilities (or actions or other proceedings commenced or threatened in respect thereof) arise out of or in any way relate to or result from the actions or activities of Marietta, BFMA or their respective affiliates in connection with the transaction contemplated hereby or their actions, proposals, proxy contests, acquisition offers, or stockholdings of, Morton's Restaurant Group, Inc. or its affiliates, and to reimburse the Lender and each indemnified person, upon their demand, for any reasonable out-of-pocket legal or other expenses incurred in connection with any of the foregoing or investigating, defending or participating in any such expenses, losses, claim, damage, liability, or any action or other proceeding, whether commenced or threatened (whether or not the Lender or any such indemnified person is a party to any action or proceeding out of which any such expense arises), except to the extent of such indemnified person's gross negligence or willful misconduct. After the execution and delivery of the final documents relating to the Senior Facility and the Notes, the obligation of Marietta and BFMA to indemnify the Lender and pay such costs shall be exclusively governed by the final documents. The Lender acknowledges that: (i) the terms of the Commitment may be publicly disclosed by BFMA by filing copies of this document with the appropriate governmental authorities and otherwise describing the terms of the Commitment as required by law; (ii) BFMA may identify the Lender in connection with the Commitment and the acquisition contemplated hereunder and otherwise describe the Commitment, provided that any press release or written statement identifying the Lender or describing the Commitment (other than previously approved language) will be subject to the Lender's approval (which will not be unreasonably withheld or delayed); (iii) it will cause its officers and directors to cooperate on a Barry W. Florescue May 1, 2001 Page 2 reasonable basis in connection with BFMA's efforts to consummate the acquisition contemplated hereunder; and (iv) BFMA shall not be required to close on the Senior Facility and the Notes. The Commitment shall expire at 5:00 p.m. on 90 days from the date hereof (the "Expiration Date") unless BFMA or a related entity has entered into a merger agreement with Morton's prior to the Expiration Date, in which case the Expiration Date shall be automatically extended for an additional 90 days without any further payment to the Lender. This letter will not bind the Lender unless on or prior to 5:00 p.m. on May 1, 2001 BFMA has delivered to the Lender by wire transfer the sum of $1.5 million pursuant to instructions to be provided by the Lender. In any event having signed this letter BFMA shall be obligated to pay the sum of $1.5 million to the Lender. BFMA acknowledges that, in addition to the $1.5 million payment described above, BFMA shall be obligated to pay any additional fees, if any, due and payable as set forth under the caption "Additional Fee" in the Term Sheet, the terms of which shall be effective commencing with the execution of this letter by all of the parties hereto. This commitment letter may be executed in counterparts, each of which shall be deemed an original and all of which counterparts shall constitute one and the same documents. Very truly yours, ICAHN ASSOCIATES CORP. /s/ Russell Glass ----------------------------------- Russell Glass President Accepted this 1st day of May, 2001 BFMA HOLDING CORPORATION By: /s/ Barry W. Florescue -------------------------------- Barry W. Florescue Chairman and CEO MARIETTA CORPORATION By: /s/Barry W. Florescue -------------------------------- Barry W. Florescue Chairman and CEO TERM SHEET - -------------------------------------------------------------------------------- Borrower/Issuer.............. The entity (the "Borrower") surviving the merger of Angus Acquisition Corp. (the "Acquisition Co."), an entity wholly owned by BFMA Holding Corporation ("BFMA"), and Morton's Restaurant Group, Inc. ("Morton's"). Lender....................... Icahn Associates Corp. or an affiliate designated by it (the "Lender"). Aggregate Loan Amount........ $240 million, in the form of a $120 million senior credit facility (the "Senior Facility") and at least $120 million in subordinated bridge notes (the "Notes"). Use of Proceeds.............. The proceeds of the Senior Facility and the Notes will be used to fund a portion of the necessary capital to acquire for cash all of the common stock and related securities of Morton's pursuant to a merger of the Acquisition Co. and Morton's, refinance all of the debt of Morton's and its subsidiaries, pay all of the related transaction fees and expenses reasonably acceptable to the Lender incurred in connection therewith, and fund the ongoing capital needs of the Borrower. Closing Date................. The closing of the Senior Facility and the Notes shall occur concurrently with the merger of the Acquisition Co. and Morton's (the "Acquisition"). SENIOR FACILITY Amount of Revolver and Term.. $120 million, comprised of an $80 million term loan (the "Term Loan") and a $40 million revolving credit facility (the "Revolver"). Revolver..................... The Revolver will provide for $40 million on a revolving basis (which may be borrowed, repaid and reborrowed as needed). It shall not contain any borrowing base restrictions and be available in full during the period commencing on the Closing Date and ending on the first anniversary of the Closing Date and the outstanding balance shall be due in full, with accrued and unpaid interest and otherwise in compliance with the terms hereof on the first anniversary of the Closing Date. Term Loan.................... The Term Loan shall be in the amount of $80 million and be available and drawn down in full on the Closing Date. There will be no mandatory amortization of the principal amount of the Term Loan and the outstanding balance shall be due in full, with accrued and unpaid interest and otherwise in compliance with the terms hereof on the first anniversary of the Closing Date. Interest..................... The Term Loan and the Revolver shall both bear interest at a floating rate equal to the three-month London Interbank Offered Rate ("LIBOR Rate") plus 350 basis points as Page 1 customarily calculated. The documentation will contain customary LIBOR breakage provisions and LIBOR borrowing mechanics, and LIBOR rate definitions. Interest Payment Dates ...... Interest will be compounded and payable in cash quarterly (at the expiration of each three-month LIBOR period) in arrears on the average daily balance outstanding on the Revolver and the Term Loan. Unused Revolver Fee ......... The Lender shall be paid an unused revolver fee equal to 50 basis points (calculated on the basis of a 360-day year and actual days elapsed), to be paid on the Interest Payment Dates. Collateral .................. The principal of and interest on the Senior Facility will be secured by a fully perfected first priority security interest in all of the existing and after acquired, real and personal, tangible and intangible, assets of the Borrower and its subsidiaries. The Senior Facility will also be guaranteed by BFMA and each of its subsidiaries, with BFMA paying guarantee fees to its subsidiaries as necessary to provide properly binding guarantees. If guarantees are paid by foreclosure of assets, application of the escrow proceeds or otherwise, the subrogation rights of the guarantor will be subordinate to the rights and control of the Lender in all respects. The Senior Facility will also be collateralized as contemplated in "Collateral" below. Assignments and Participations ............ The Lender may assign all or a portion of its loans and commitments under the Senior Facility or sell Participations therein, provided that assignments shall be in amounts of no less than $20 million, if assigned or participated to any entity other than affiliates of the Lender. Provision of Assistance ..... The Borrower shall provide all information and make available such management, personnel and materials as is reasonably considered necessary for assignments or participations. SUBORDINATED BRIDGE NOTES Issue........................ Subordinated bridge notes (the "Notes"). Principal Amount ............ Not less than $120 million. Maturity Date................ The Notes will be due and payable in full on the first anniversary of the Acquisition. Cash Interest................ The Borrower shall pay to the Lender cash interest of 12% per annum compounded and payable quarterly in cash in arrears on the principal amount of the Notes outstanding on a 30/360 basis. Furthermore, Marietta Corporation, an entity wholly owned by BFMA ("Marietta"), will be required to pay to BFMA the maximum dividend payments allowable under the terms of its senior credit agreement to the extent such funds are available. All amounts and property paid by Marietta to BFMA by way of dividend, distribution, reorganization or Page 2 otherwise will be placed in escrow with a third party to be mutually agreed upon which will be available to pay promptly any deficiency in cash interest or principal or other payments due on the Senior Facility or the Notes as long as the Senior Facility or the Notes are outstanding. PIK Interest................. The Borrower shall pay to the Lender PIK interest of 14% per annum, compounded and payable quarterly, on the principal amount of the Notes outstanding on a 30/360 basis. At its option, the Borrower may elect to pay the PIK interest in cash or in the form of additional Notes. Collateral................... The principal of and interest on the Notes will be secured by a second lien on all of the existing and after acquired, real and personal, tangible and intangible, assets of the Borrower and its subsidiaries. The Notes will also be guaranteed by BFMA and each of its subsidiaries, with BFMA paying guarantee fees to its subsidiaries as necessary to provide properly binding guarantees. If guarantees are paid by foreclosure of assets, application of the escrow proceeds or otherwise, the subrogation rights of the guarantor will be subordinate to the rights and control of the Lender in all respects. Each guarantee of the Senior Facility and the Notes will include separate covenants to regulate the activities of each company with respect to insider transactions. BFMA will also pledge: (i) its stock in Marietta which will constitute a first lien on 100% of the capital stock of Marietta while the Senior Facility or the Notes are outstanding; and (ii) all of its stock of the Borrower which will constitute a first lien on not less than 60% of the capital stock of the Borrower while the Senior Facility or the Notes are outstanding, in each case together with all related voting privileges to secure both the Senior Facility and the Notes. The guarantee from BFMA shall contain provisions that limit the amount of total indebtedness that may be incurred at Marietta to no more than $65 million. Transferability ............. The Notes will be freely transferable. ********************************************************************** Ranking/Terms of Subordination ............. The Notes will be subordinated to no more than $120 million of senior debt. In the event of a senior indebtedness default which entitles the holders of the senior indebtedness to accelerate the maturity thereof, no payment will be made on the Notes until the senior indebtedness has been repaid or such default is cured in writing. The foregoing shall in no way limit the rights or powers of the Lender with respect to BFMA, Marietta or any of their other subsidiaries. Board Representation ........ As long as the Senior Facility or the Notes remain outstanding, the Lender shall have the right to appoint one representative to serve on the Board of Directors of the Borrower and its subsidiaries, BFMA and Marietta and their respective subsidiaries to the extent that they have boards that meet or act by consent. Such right shall be provided in preferred stock to Page 3 be issued by each such company. Each of these companies will require a unanimous vote of the board of directors in order to file for bankruptcy or, following the occurrence of an Event of Default, on all matters unless otherwise permitted by the Lender, which requirement will be set forth in the certificates of incorporation of each such company. The by-laws and certificates of incorporation will provide in a manner satisfactory to the Lender that, in the event of an Event of Default, the Lender, through the exercise of voting rights of stock under the applicable security documents, will be entitled to elect and replace the entire board. After the closing, the by-laws and certificates of incorporation of the Borrower and each of its subsidiaries, BFMA and Marietta and their respective subsidiaries may not be amended without the unanimous approval of the board of directors of each entity. Repayment Terms.............. Upon repayment of the Senior Facility and the Notes, whether in advance, at maturity, upon acceleration or otherwise, the Lender shall be paid all outstanding principal, together with interest accrued and unpaid to the date fixed for such repayment plus an amount equal to 7% of the sum of $240 million and the principal amount of all PIK Notes (the "Repayment Premium") plus any and all other fees or payments outstanding under the Senior Facility or the Notes. The Senior Facility and the Notes may be repaid at any time, in whole or in part. Conditions Precedent ........ The Lender's obligation to provide the Senior Facility and purchase the Notes will be conditioned upon the following: (i) completion of customary due diligence, (ii) completion of final documentation which shall be negotiated in good faith, (iii) completion of the Acquisition on customary terms and (iv) an equity contribution, in the form of common stock of the Borrower, of not less than $20 million from BFMA and its affiliates, a portion of which will be in the form of cash and a portion of which will be in the form of Morton's stock valued at the acquisition price. Representation and Warranties ................ The agreements relating to the Senior Facility and the Notes, including without limitation the guarantees, will contain representations and warranties customarily found in similar financings. The agreements relating to the Senior Facility, the Notes and the guarantees will contain representations and warranties regarding corporate organization and power, absence of violation of organizational documents, other agreements and applicable laws, absence of material litigation, obtaining of government and other approvals, subsidiaries, payment of taxes, authorization and enforceability of the documents, compliance with other instruments, full disclosure, margin securities, ERISA matters, accuracy of financial statements, absence of material adverse change, governmental permits and licenses, compliance with laws, environmental matters and absence of change of control provisions with respect to liquor licenses which would interfere with the Lender's ability to foreclose and dispose of the collateral (and Page 4 the Lender shall receive a legal opinion with respect to such licenses). Covenants.................... In addition to the provisions set forth herein, the agreements relating to the Senior Facility and the Notes, including without limitation the guarantees, will contain affirmative and negative covenants customary for similar financings. The Senior Facility, the Notes and the guarantees will contain certain covenants including: (i) limitations on the incurrence of additional indebtedness with reasonable incurrence tests; (ii) prohibitions on restricted payments; (iii) limitations on the sale of assets with reasonable "carve-outs"; (iv) limitations on lines of business; (v) limitations on transactions with affiliates; (vii) restrictions on mergers, consolidations and the transfer of all or substantially all of the assets of the Borrower to another person; (viii) a minimum pro forma EBITDA to Cash Interest Expense coverage test and other reasonable and customary financial covenant tests requested by the Lender, (ix) prohibitions on payments, compensation or other transfers to Barry Florescue or other affiliates or payments or compensation to other executives outside the ordinary course so long as the Senior Facility and Notes are outstanding and (x) the agreement of Barry Florescue and Richard Bloom not to compete, directly or indirectly, either through passive investment or otherwise, with the specific businesses of Marietta and Morton's. In addition, the guaranty of BFMA will include the covenants, representations and warranties set forth in the Marietta loan documents, which will apply to Marietta, the breach of which in any material respect will constitute an Event of Default under the Senior Facility and the Notes. Equitable Rights............. The closing documents will provide for, upon the occurrence of an Event of Default, the availability of accelerated legal proceedings and equitable and injunctive relief for the benefit of the Lender, to the maximum extent permitted by law. Events of Default ........... Events of default in the Senior Facility, the Notes and the guarantees shall include, without limitation: (i) non-payment of the principal or interest due on the Senior Facility or the Notes with a one business day grace period, (ii) materially inaccurate representations and warranties, (iii) any material breach of covenant, (iv) undischarged judgments in excess of $5 million against the Borrower, (v) a default in the payment of indebtedness of the Borrower with a principal amount in excess of $5 million in the aggregate beyond any applicable grace periods thereof, (vi) defaults by Marietta under its loan documents and (vii) bankruptcy, dissolution or liquidation of the Borrower. Material breaches by guarantors will also constitute Events of Default and the documents for the Senior Facility, the Notes and the guarantees will contemplate that Events of Defaults under any such documents will constitute Events of Defaults under the Senior Facility, the Notes and the guarantees. Page 5 Remedies Upon an Event of Default................. Upon the occurrence of any Event of Default, the Warrant will be increased to include an additional 5% of the fully diluted common stock at the Borrower. The Lender may, at its option, by written notice to the Borrower, declare the Senior Facility and Notes due and payable and proceed against the collateral. Upon the occurrence of an Event of Default described in (vii), the Senior Facility and Notes shall become automatically accelerated. If an event of default has occurred and has not been cured within any applicable grace period, the cash interest rate on each of the Senior Facility and the Notes shall be increased by four percentage points until such Event of Default has been cured or until the Senior Facility and the Notes have been repaid. In addition to the rights customary in security agreements, the documents will provide that, if the Senior Facility and the Notes have not been fully repaid when due, as a result of acceleration, maturity or otherwise, then, together with any accrued and unpaid interest and any applicable Repayment Premium, BFMA will take all additional actions requested by the Lender to transfer to the Lender title to its stock in the Borrower and Marietta together with all related voting privileges and the Lender shall be required to sell the Borrower and/or Marietta in an orderly fashion. To the extent that the proceeds the Lender receives upon the sale of the stock of the Borrower and Marietta are sufficient to repay the remaining balance of the Senior Facility and the Notes together with any accrued and unpaid interest, the Repayment Premium and the expenses of the Lender related to administering its collateral or any other amounts due or owing to the Lender or expenses of the Lender, the Lender will remit such excess proceeds to Borrower or the guarantors as required by law. BFMA's subrogation rights will be subordinated to the Lender. Warrants..................... Upon issuance of the Notes, the Borrower will grant a warrant to the Lender to purchase shares of common stock (the "Warrant") representing 23% of the Borrower's fully diluted common stock (after taking into account the shares reserved for issuance under the Management Incentive Program, which shares shall not exceed 15% of the fully diluted common stock). The Warrant will be immediately exercisable in whole or in part. The Warrant will have a nominal exercise price and a 7-year term. The Warrant will contain typical anti-dilution provisions, including provisions that provide for adjustments for below fair-value issuances, stock splits and combinations, reclassifications and shares or options issued under Management Incentive Programs. The number of shares represented by the Warrant shall not be adjusted for any future issuances of equity or equity like securities at or above fair value. The Warrant shall contain senior "piggy-back" registration rights, demand registration rights after the consummation of an initial public offering, cashless exercise and tag-along rights. The Warrant shall be exchangeable, on a fair market value exchange ratio, for BFMA stock, if BFMA consummates an initial public offering in lieu of the Borrower or another entity that is the "going public" vehicle for Page 6 Morton's or a portion of Morton's business. The Borrower and the Lender will agree upon the value of the Warrant. Governing Law ............... State of New York. Miscellaneous ............... Customary provisions regarding consent to forum in New York and service of process. ********************************************************************** Commitment Fee: BFMA will pay the Lender a non-refundable commitment fee (the "Commitment Fee") of $1.5 million payable upon the acceptance by BFMA and Marietta of the Lender's executed commitment letter to provide the Senior Facility and purchase the Notes (the "Commitment") to which this Term Sheet is attached (the "Commitment Letter"). Additional Fee: In the event that, within ten months after the date of the Commitment Letter, (a) no public announcement is made regarding a Transaction (as defined below) and any Covered Person sells, conveys or otherwise disposes (collectively, a "Sale") of any shares of Morton's stock beneficially owned by such Covered Person (other than to another Covered Person) or enters into a binding contract to do so, or (b) a public announcement is made either by Morton's or a third party (other than an affiliate or associate of the Lender) involving Morton's actual or potential participation in a merger, a stock buyback, a change of control, special dividend or similar extraordinary event or business combination transaction, any tender offer, or any similar or related event that will result in the payment of consideration in exchange for Morton's stock (a "Transaction"), the Lender shall be entitled to additional compensation from BFMA in an amount equal to (x) 50% of the Profits, multiplied by the number of shares of Morton's actually sold by all Covered Persons prior to the ten-month date, in the case of clause (a), or (y) in the case of clause (b), the sum of (A) 50% of the Profits, multiplied by the number of shares of Morton's actually sold by all Covered Persons prior to the ten-month date, and (B) 50% of the Profits, multiplied by the number of shares of Morton's actually sold by all Covered Persons after the announcement of the Transaction (or a replacement Transaction which terminates the prior Transaction) and after the ten-month date but on or prior to the withdrawal or consummation of the Transaction (or replacement Transaction). For purposes of this Term Sheet, Covered Persons shall mean BFMA, those individuals and entities listed at any time in the Schedule 13D filed by BFMA with respect to Morton's, and their respective officers, directors, "affiliates" and "associates" (as defined in the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder). For purposes of this Term Sheet, Proceeds shall mean the aggregate consideration received by Covered Persons for their Morton's shares sold plus any dividends received with respect to such shares, and a pro rata portion (based on the number of shares sold by all Covered Persons to the number of shares owned by all Covered Persons) of expenses reimbursed and breakup, termination or similar fees received, divided by the number of Morton's shares sold by all Covered Persons. For purposes of this Term Sheet, Full Cost per Share shall mean the sum of (i) the aggregate cost of the shares purchased by the Covered Persons, (ii) actual interest costs paid by the Covered Persons on any borrowings utilized to purchase the Morton's shares and the implied carry costs on the remaining shares at the broker call rate of interest calculated on the holding period of each share, (iii) reasonable legal fees and expenses incurred by BFMA relating to its efforts to acquire Morton's, (iv) all fees and expenses paid to Innisfree M&A Incorporated, (v) all fees and expenses relating to the proxy solicitation, offer(s) and mailings to be made by BFMA and (vi) the Commitment Fee, divided by the maximum number of Morton's shares owned by all Covered Persons from the date hereof. For purposes of this Term Sheet, Profits shall mean Proceeds less Full Cost per Share. In the case of clause (a), the payment shall be made by BFMA on the ten-month date; in the case of clause (b), the payment with respect to the shares actually sold prior to the ten-month date shall be made by BFMA on the ten-month date and the payment with respect to the remaining shares shall be made by BFMA within five business days after proceeds are received, whether through a Transaction or otherwise. Other than the Commitment Fee, there will be no other fees required to be paid to the Lender prior to or upon the funding of the Senior Facility and the Notes. BFMA will deliver documents evidencing all of the foregoing calculations and will provide the Lender with full access to all backup necessary to audit, determine and examine all such calculations. BFMA agrees that it will take no action and will not permit Marietta to transfer Marietta or its assets prior to the payment in full of all obligations to the Lender. Page 7 -----END PRIVACY-ENHANCED MESSAGE-----