Exhibit 10.4
AMENDED AND
RESTATED
FORTRESS INVESTMENT GROUP
LLC
2007 OMNIBUS EQUITY INCENTIVE
PLAN
Section 1. Purpose of
Plan.
The name of this plan is the
Fortress Investment Group LLC 2007 Omnibus Equity Incentive Plan.
The Plan was adopted by the Board (as hereinafter defined) on
February 1, 2007 and approved by the shareholders of the
Company (as hereinafter defined) on February 1, 2007, prior to
the initial public offering of Company Shares. The purpose of the
Plan is to provide additional incentive to selected employees,
directors and Consultants (as hereinafter defined) of the Company,
its Subsidiaries or Affiliates (as hereinafter defined) whose
contributions are essential to the growth and success of the
Company’s business, in order to strengthen the commitment of
such persons to the Company and its Subsidiaries and Affiliates,
motivate such persons to faithfully and diligently perform their
responsibilities and attract and retain competent and dedicated
persons whose efforts shall result in the long-term growth and
profitability of the Company. To accomplish such purposes, the Plan
provides that the Company may (or may cause a Participating
Subsidiary or Affiliate to) grant (a) Options, (b) Share
Appreciation Rights, (c) awards of Restricted Shares, Deferred
Shares, Performance Shares, unrestricted Shares or Other
Share-Based Awards, or (d) any combination of the foregoing.
Notwithstanding any provision of the Plan, to the extent that any
Award would be subject to Section 409A of the Code, it is our
intent that each such Award comply with the requirements set forth
in Section 409A of the Code and any regulations or guidance
promulgated thereunder.
Section 2.
Definitions.
For purposes of the Plan, the
following terms shall be defined as set forth below:
(a) “ Administrator
” means the Board, or if and to the extent the Board does not
administer the Plan, the Committee in accordance with
Section 3 hereof.
(b) “ Affiliate ”
means, with respect to any Person, any other Person that directly
or indirectly through one or more intermediaries controls, is
controlled by or is under common control with the Person in
question. As used herein, the term “ Control ”
means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or
otherwise.
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(c) “ Award ”
means individually or collectively, any Option, Share Appreciation
Right, Restricted Share, Deferred Share, Performance Share,
unrestricted Share or Other Share-Based Award granted under the
Plan.
(d) “ Award Agreement
” means any written agreement, contract or other instrument
or document evidencing an Award.
(e) A “ Beneficial
Owner ” of a security is a Person who directly or
indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares: (i) voting power,
which includes the power to vote, or to direct the voting of, such
security and/or (ii) investment power, which includes the
power to dispose, or to direct the disposition of, such security.
The term “ Beneficially Own ” shall have a
correlative meaning.
(f) “ Board ”
means the Board of Directors of the Company.
(g) “ Cause ”
means (i) the commission of an act of fraud or dishonesty by
the Participant in the course of the Participant’s
employment; (ii) the indictment or entering of a plea of nolo
contendere for a crime constituting a felony or in respect of any
act of fraud or dishonesty; (iii) the commission of an act by
the Participant which would make the Participant or the Company
(including any of its Subsidiaries or Affiliates) subject to being
enjoined, suspended, barred or otherwise disciplined for violation
of federal or state securities laws, rules or regulations,
including a statutory disqualification; (iv) gross negligence
or willful misconduct in connection with the Participant’s
performance of his or her duties in connection with the
Participant’s employment by the Company (including any
Subsidiary or Affiliate for whom the Participant may be employed on
a full-time basis at the time) or the Participant’s failure
to comply with any of the restrictive covenants set forth herein;
(v) the commission of any act that would result or which might
reasonably be a substantial factor resulting in the termination of
the Company (including any of its Subsidiaries or Affiliates) for
cause under any of the Company’s (including any of its
Subsidiaries’ or Affiliates’) management, advisory or
similar agreements; (vi) the Participant’s willful
failure to comply with any material policies or procedures of the
Company as in effect from time to time provided that the
Participant shall have been delivered a copy of such policies or
notice that they have been posted on a Company website prior to
such compliance failure, and (vii) the Participant’s
failure to perform the material duties in connection with the
Participant’s position, unless the Participant remedy such
failure no later than 10 days following delivery to the Participant
of a written notice from the Company (including any of its
Subsidiaries or Affiliates) describing such failure in reasonable
detail (provided that the Participant shall not be given more than
one opportunity in the aggregate to remedy failures described in
this clause (vii)).
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(h) “ Change in
Capitalization ” means any (i) merger,
consolidation, reclassification, recapitalization, spin-off,
spin-out, repurchase or other reorganization or corporate
transaction or event, (ii) distribution (whether in the form
of cash, Shares, or other property), share split or reverse share
split, (iii) combination or exchange of shares,
(iv) other change in structure or (v) declaration of a
distribution, which the Administrator determines, in its sole
discretion, affects the Shares such that an adjustment pursuant to
Section 5 hereof is appropriate.
(i) “ Class A Shares
” means the Class A Shares of the Company.
(j) “ Code ”
means the Internal Revenue Code of 1986, as amended and in effect
from time to time. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any
corresponding provision of any successor law.
(k) “ Committee ”
means any committee or subcommittee the Board may appoint to
administer the Plan. Subject to the discretion of the Board, the
Committee shall be composed entirely of individuals who meet the
qualifications of an “outside director” within the
meaning of Section 162(m) of the Code, a “non-employee
director” within the meaning of Rule 16b-3 under the Exchange
Act and any other qualifications required by the applicable stock
exchange on which the Shares are traded. If at any time or to any
extent the Board shall not administer the Plan, then the functions
of the Administrator specified in the Plan shall be exercised by
the Committee. Except as otherwise provided in the LLC Agreement,
as amended from time to time, any action of the Committee with
respect to the administration of the Plan shall be taken by a
majority vote at a meeting at which a quorum is duly constituted or
unanimous written consent of the Committee’s
members.
(l) “ Company ”
means Fortress Investment Group LLC, a Delaware limited liability
company, and any successors thereto.
(m) “ Consultant
” means a consultant or advisor who is a natural person,
engaged to render bona fide services to the Company or any
Subsidiary.
(n) “ Deferred Shares
” means the right to receive Shares at the end of a specified
deferral period granted pursuant to Section 9
below.
(o) “ Disability
” means that a Participant (i) as determined by the
Administrator in its sole discretion, is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, or (ii) is, by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months under
an accident and health plan covering employees of the Company or an
Affiliate of the Company.
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(p) “ Eligible
Recipient ” means an employee, director, Consultant, or
LLP member (as that term is used in the Limited Liability
Partnerships Act 2000(UK)) of, or any other individual engaged by
, the Company, any Subsidiary or Affiliate, who has been
selected as an eligible participant by the Administrator (and, in
respect of whom, any reference to “employment” shall be
interpreted as including a reference to the Eligible
Recipient’s engagement, in any capacity (including, for the
avoidance of doubt the status as a member of an LLP), as the case
may require).
(q) “ Exchange Act
” means the Securities Exchange Act of 1934, as amended,
supplemented or restated from time to time and any successor to
such statute, and the rules and regulations promulgated
thereunder.
(r) “ Exercise Price
” means the per share price at which a holder of an award
granted hereunder may purchase the Shares issuable upon exercise of
such award.
(s) “ Fair Market Value
” as of a particular date shall mean the fair market value as
determined by the Administrator in its sole discretion;
provided , however , (i) if the Share or other
security is admitted to trading on a national securities exchange,
the fair market value on any date shall be the closing sale price
reported on such date, or (ii) if the Share or other security
is then traded in an over-the-counter market, the fair market value
on any date shall be the average of the closing bid and asked
prices for such share in such over-the-counter market for the last
preceding date on which there was a sale of such share in such
market.
(t) “ FOG ” means
the Fortress Operating Group.
(u) “ FOG UNIT ”
means a unit in the Fortress Operating Group, which represents one
equity interest in each of the entities that comprise the Fortress
Operating Group.
(v) “ Fortress Operating
Group ” shall have the meaning assigned to it in the LLC
Agreement.
(w) “ Initial Public
Offering ” shall mean the initial public offering of the
Company.
(x) “ LLC Agreement
” means the Amended and Restated Limited Liability Company
Agreement of Fortress Investment Group LLC, as amended from time to
time.
(y) “ LTIP Units
” means awards issued with respect to a separate class of FOG
Units, as more fully described in Section 10.
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(z) “ Non-Employee
Director ” means a director of the Company who is
(i) not an officer or employee of the Company or of any
Subsidiary and (ii) otherwise meets the definition of a
Non-Employee Director for purposes of Rule 16b-3 of the Exchange
Act.
(aa) “ Option ”
means an option to purchase Shares granted pursuant to
Section 7 hereof.
(bb) “ Original
Partners ” means each of Peter L. Briger, Jr., Wesley R.
Edens, Robert I. Kauffman, Randal A. Nardone and Michael E.
Novogratz.
(cc) “ Other Share-Based
Awards ” means a right or other interest granted to a
Participant under the Plan that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on
or related to, Shares, including but not limited to restricted
share units, distribution equivalent rights, LTIP Units or
performance units, each of which may be subject to the attainment
of Performance Goals or a period of continued employment or other
terms or conditions as permitted under the Plan.
(dd) “ Participant
” means (i) any Eligible Recipient selected by the
Administrator, pursuant to the Administrator’s authority in
Section 3 below, to receive grants of Options, Share
Appreciation Rights, awards of Restricted Shares, awards of
unrestricted Shares, Deferred Shares, Performance Shares, Other
Share-Based Awards or any combination of the foregoing, and upon
his or her death, his or her successors, heirs, executors and
administrators, as the case may be and (ii) any Non-Employee
Director who is eligible to receive Shares pursuant to
Section 11 below.
(ee) “ Participating
Subsidiary or Affiliate ” means any Subsidiary or
Affiliate that has adopted the Plan.
(ff) “ Performance
Goals ” means performance goals based on one or more of
the following criteria: (i) earnings including operating
income, earnings before or after taxes, earnings before or after
interest, depreciation, amortization, or extraordinary or special
items or book value per share (which may exclude nonrecurring
items); (ii) pre-tax income or after-tax income;
(iii) earnings per Share (basic or diluted);
(iv) operating profit; (v) distributable earnings;
(vi) revenue, revenue growth or rate of revenue growth;
(vii) return on assets (gross or net), return on investment,
return on capital, or return on equity; (vii) returns on sales
or revenues; (ix) operating expenses; (x) share price
appreciation; (xi) cash flow, free cash flow, cash flow return
on investment (discounted or otherwise), net cash provided by
operations, or cash flow in excess of cost of capital;
(xii) implementation or completion of critical projects or
processes; (xiii) economic value created;
(xiv) cumulative earnings per share growth;
(xv) operating margin or profit margin; (xvi) Share price
or total shareholder return; (xvii) cost targets, reductions
and savings, productivity and efficiencies; (xviii) strategic
business criteria, consisting of one or more objectives based on
meeting specified market penetration, geographic business
expansion, investor satisfaction, employee satisfaction,
human
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resources management, supervision of
litigation, information technology, and goals relating to
acquisitions, divestitures, joint ventures and similar
transactions, and budget comparisons; (xix) personal
professional objectives, including any of the foregoing performance
goals, the implementation of policies and plans, the negotiation of
transactions, the development of long term business goals,
formation of joint ventures, research or development
collaborations, and the completion of other corporate transactions;
and (xx) any combination of, or a specified increase in, any
of the foregoing. Where applicable, the Performance Goals may be
expressed in terms of attaining a specified level of the particular
criteria or the attainment of a percentage increase or decrease in
the particular criteria, and may be applied to one or more of the
Company, a Subsidiary or Affiliate, or a division or strategic
business unit of the Company, or may be applied to the performance
of the Company relative to a market index, a group of other
companies or a combination thereof, all as determined by the
Committee. The Performance Goals may include a threshold level of
performance below which no payment shall be made (or no vesting
shall occur), levels of performance at which specified payments
shall be made (or specified vesting shall occur), and a maximum
level of performance above which no additional payment shall be
made (or at which full vesting shall occur). Each of the foregoing
Performance Goals shall not be required to be determined in
accordance with generally accepted accounting principles and shall
be subject to certification by the Committee; provided that the
Committee shall have the authority to make equitable adjustments to
the Performance Goals in recognition of unusual or non-recurring
events affecting the Company or any Subsidiary or Affiliate or the
financial statements of the Company or any Subsidiary or Affiliate,
in response to changes in applicable laws or regulations, or to
account for items of gain, loss or expense determined to be
extraordinary or unusual in nature or infrequent in occurrence or
related to the disposal of a segment of a business or related to a
change in accounting principles.
(gg) “ Performance
Shares ” means Shares that are subject to restrictions
based upon the attainment of specified performance objectives
granted pursuant to Section 9 below.
(hh) “ Person ”
means any individual, corporation, firm, partnership, joint
venture, limited liability company, estate, trust, business
association, organization, Governmental Entity or other
entity.
(ii) “ Plan ”
means this Fortress Investment Group LLC 2007 Omnibus Equity
Incentive Plan.
(jj) “ Restricted
Shares ” means Shares subject to certain restrictions
granted pursuant to Section 9 below.
(kk) “ Retirement
” means a termination of a Participant’s employment,
other than for Cause, on or after attainment of age 65.
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(ll) “ Shares ”
means the Company’s Class A Shares (as specified in the
applicable Award Agreement) reserved for issuance under the Plan,
as adjusted pursuant to the Plan, and any successor (pursuant to a
merger, consolidation or other reorganization) security.
(mm) “ Share Appreciation
Right ” means the right pursuant to an award granted
under Section 8 below to receive an amount equal to the
excess, if any, of (i) the aggregate Fair Market Value, as of
the date such Share Appreciation Right or portion thereof is
surrendered, of the Shares covered by such right or such portion
thereof, over (ii) the aggregate Exercise Price of such right
or such portion thereof.
(nn) “ Subsidiary
” means, with respect to any Person, as of any date of
determination, any other Person as to which such Person owns or
otherwise controls, directly or indirectly, more than 50% of the
voting shares or other similar interests or a sole general partner
interest or managing member or similar interest of such
Person.
Section 3.
Administration.
(a) The Plan shall be administered
by the Administrator and shall be administered in accordance with
the requirements of Section 162(m) of the Code (but only to
the extent necessary and desirable to maintain qualification of
awards under the Plan under Section 162(m) of the Code) and,
to the extent applicable, Rule 16b-3 under the Exchange Act
(“ Rule 16b-3 ”).
(b) Pursuant to the terms of the
Plan, the Administrator, subject, in the case of any Committee, to
any restrictions on the authority delegated to it by the Board,
shall have the power and authority, without limitation:
(1) to select those Eligible
Recipients who shall be Participants;
(2) to determine whether and to what
extent Options, Share Appreciation Rights, awards of Restricted
Shares, Deferred Shares, Performance Shares, Other Share-Based
Awards or a combination of any of the foregoing, are to be granted
hereunder to Participants;
(3) to determine the number of
Shares to be covered by each award granted hereunder;
(4) to determine the terms and
conditions, not inconsistent with the terms of the Plan, which
shall govern all written instruments evidencing Options, Share
Appreciation Rights, awards of Restricted Shares, Deferred Shares,
Performance Shares, Other Share-Based Awards or any combination of
the foregoing
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granted hereunder (including, but
not limited to, (i) the restrictions applicable to Awards and
the conditions under which restrictions applicable to such awards
shall lapse, (ii) the performance goals and periods applicable
to awards of Performance Shares, (iii) the Exercise Price, if
any, of Awards, (iv) the vesting schedule applicable to
Awards, (v) the number of Shares subject to Awards and
(vi) any amendments to the terms and conditions of outstanding
Awards, including, but not limited to reducing the Exercise Price
of such Awards, extending the exercise period of such Awards and
accelerating the vesting schedule of such Awards);
(5) to determine the Fair Market
Value with respect to any Award;
(6) to determine the duration and
purpose of leaves of absence which may be granted to a Participant
without constituting a termination of the Participant’s
employment for purposes Nonqualified Share Options granted under
the Plan;
(7) to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan
as it shall from time to time deem advisable;
(8) to construe and interpret the
terms and provisions of the Plan and any award issued under the
Plan (and any Award Agreement relating thereto), and to otherwise
supervise the administration of the Plan and to exercise all powers
and authorities either specifically granted under the Plan or
necessary and advisable in the administration of the
Plan;
(9) to delegate its authority, in
whole or in part, under this Section 3 to two or more
individuals (who may or may not be members of the Board), subject
to the requirements of applicable law or any stock exchange on
which the Shares are traded; and
(10) determine at any time whether,
to what extent and under what circumstances and method or methods
Awards may be settled by the Company, or any Participating
Subsidiary or Affiliate. In the event of such determination,
references to the Company shall be deemed to be references to the
applicable Participating Subsidiary or Affiliate for purposes of
the Plan as appropriate.
(c) Notwithstanding paragraph
(b) of this Section 3, (i) the automatic,
nondiscretionary grants of Shares shall be made to Non-Employee
Directors pursuant to and in accordance with the terms of
Section 11 below and (ii) neither the Board, the
Committee nor their respective delegates shall have the authority
to reprice (or cancel and regrant) any Option or, if applicable,
other Award at a lower exercise, base or purchase price without
first obtaining the approval of the Company’s
shareholders.
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(d) All decisions made by the
Administrator pursuant to the provisions of the Plan shall be
final, conclusive and binding on all persons, including the Company
and the Participants. No member of the Board or the Committee, nor
any officer or employee of the Company or any Subsidiary or
Affiliate acting on behalf of the Board or the Committee, shall be
personally liable for any action, omission, determination, or
interpretation taken or made in good faith with respect to the
Plan, and all members of the Board or the Committee and each and
any officer or employee of the Company and of any Subsidiary or
Affiliate acting on their behalf shall, to the maximum extent
permitted by law, be fully indemnified and protected by the Company
in respect of any such action, omission, determination or
interpretation.
Section 4. Shares Reserved
for Issuance Under the Plan.
(a) Subject to Section 5
hereof, the maximum number of Shares that may be delivered pursuant
to Awards granted under the Plan (the “Share Limit”)
shall be 115,000,000 subject to adjustment as provided herein, as
increased on the first day of each fiscal year beginning in
calendar year 2008 by a number of Class A Shares equal to the
lesser of (x) the excess of (i) 15% of the number of
outstanding Class A and Class B shares of the Company on the
last day of the immediately preceding fiscal year over
(ii) the number of Shares reserved and available for issuance
under the Plan as of such date or (y) 60,000,000 Shares. From
and after such time as the Plan is subject to Code
Section 162(m), the aggregate Awards granted during any fiscal
year to any single individual who is like
