Exhibit 10.1
July 19,
2009
Mr. Daniel H.
Mudd
Dear
Dan:
It is with
great pleasure that we extend to you an offer to join FIG LLC
(collectively with Fortress Investment Group LLC and its other
affiliates, “ Fortress ” or the “
Company ”), as set forth below. This letter,
together with the exhibits hereto, is referred to herein as the
“ Letter Agreement .”
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Title
and
responsibilities :
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Chief Executive
Officer (“CEO”). You will report to
the Fortress Board of Directors, and you will devote your full
working time to Fortress. You will have full responsibility for
corporate development and planning, strategy, budgeting, management
and operation of the entire public company. All
corporate division heads will report directly or indirectly to you,
subject to your discretion to reorganize such reports.
Among other
things, you will:
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Represent and act as the primary
spokesperson for Fortress on all matters relating to its status as
a public company, including with respect to earnings announcements
and interactions with analysts;
·
Be the “Chief Executive
Officer” of Fortress Investment Group LLC (NYSE: FIG) for
Sarbanes-Oxley and all other regulatory filing purposes;
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Act as the Chairman of the
Management Committee of Fortress; and
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Maintain your existing position as a
member of the Board of Directors of Fortress (as described in more
detail below).
Direct
responsibility for the operation of the investment management
portion of Fortress’ business will continue to be supervised
and operated by the Fortress principals.
You acknowledge
that as the CEO of a publicly traded company you will become
subject to applicable regulatory requirements, including but not
limited to the filing of this agreement, the reporting and
disclosure of your compensation, benefits and perquisites in the
Company’s proxy statement and the reporting of any trading by
you in the Company’s securities pursuant to Section 16 of the
Securities Exchange Act.
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Start
Date :
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August 11, 2009
(the “ Start Date ”).
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Employment
Offer Letter
Mr. Daniel
Mudd
July 19,
2009
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Location
of
Employment;
Relocation
Expenses :
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Your location
of employment will be Fortress’s principal place of business
and headquarters in New York, New York.
You agree that
you will permanently relocate with your family to the greater New
York City metropolitan area no later than August 31, 2010. In
connection with your relocation, Fortress agrees that it will
reimburse you for reasonable and documented expenses in connection
with the move, including but not limited to the costs of moving
household goods and mortgage broker expenses, provided that such
expenses are coordinated through the Fortress Human Resources
Department. Requests for expense reimbursement should be
accompanied by documentation of incurred expenses and submitted as
soon as possible, but not later than January 15 of the year
following the year in which the expense is incurred (the “
Reimbursement Request ”). The expense
reimbursement payment and a corresponding tax gross up payment
(adjusted to reflect applicable tax withholding) will be made as
soon as practicable, but not later than 45 days after the
Reimbursement Request is made. Only expenses that are
subject to taxation will be eligible for the tax gross up
payment.
In addition,
Fortress recognizes that you are being asked to sell your primary
home on short notice without the benefit of a normal marketing
period. Therefore, Fortress will provide reasonable and
customary third partly relocation services to facilitate the sale
of your primary residence in Washington, D.C. and your immediate
move to the New York area.
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Cash
Compensation :
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Your base
salary (“Base Salary”) will initially be paid at the
rate of $200,000 per annum, payable in accordance with the regular
payroll practices of Fortress. For years after 2010,
your Base Salary will be subject to adjustment on an annual basis
based on the recommendation of a committee comprised of Wesley
Edens, Peter Briger and Michael Novogratz (the “Principals
Committee”), which recommendation shall be subject to
approval by the Compensation Committee of the Fortress Board of
Directors. In each case in which the term “Principals
Committee” is used in this Agreement, it shall refer to those
individuals identified above as members of that Committee that
remain employed by Fortress at the time a particular decision or
recommendation is made by such Committee.
For calendar
year 2009, you will receive a cash bonus of $1.3 million, payable
on your Start Date (the “2009 Guaranteed Bonus”).
The 2009 Guaranteed Bonus, together with your Base Salary, is
intended to constitute the entirety of your cash compensation for
calendar year 2009.
For calendar
year 2010, your Base Salary will remain at $200,000, and
you
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Employment
Offer Letter
Mr. Daniel
Mudd
July 19,
2009
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will receive a
cash bonus of not less than $1.8 million, payable at such time as
other Fortress employees generally receive discretionary bonuses in
respect of calendar year 2010, which in no event will be later than
March 15, 2011 (the “2010 Guaranteed Bonus”). If
Fortress terminates your employment without Cause (as defined
below), or gives notice to you that it intends to terminate your
employment without Cause, or you resign for Good Reason (as defined
below), in each case prior to your receipt of the 2010 Guaranteed
Bonus, the Company will (subject to your
execution of a general release of claims against
the Company and its affiliates within the time period prescribed
therein, in a form satisfactory to the Company, and non-revocation
of such release) pay you the 2010 Guaranteed Bonus on the date on
which similarly situated employees are paid their bonuses in
respect of 2010, which date shall be no later than March 15, 2011,
provided that if such termination without Cause occurs in 2009,
then the 2010 Guaranteed Bonus will be paid no later than March 15,
2010. If you resign (or give notice of your resignation) or
are terminated for Cause, in each case prior to the payment of the
2010 Guaranteed Bonus, you will not receive the 2010 Guaranteed
Bonus.
For years
subsequent to calendar year 2010, you will be eligible
to receive, as additional compensation, a
discretionary annual bonus, which discretionary bonus (if any) will
be paid no later than March 15 of the immediately subsequent
calendar year . The amount of any discretionary bonus will
be determined by a recommendation of the Principals Committee and
approved (or denied) by the Compensation Committee of the Fortress
Board of Directors. You and the Principals Committee will mutually
agree on an appropriate set of performance metrics intended to
align your incentives with the maximization of value for the
Company’s shareholders, and future bonus
recommendations of the Principals Committee will be based on your
performance as measured by such metrics.
Payment of
a discretionary bonus in any given
fiscal or calendar year does not entitle you to additional
compensation or any such
bonus in any subsequent year. In order to
be eligible for any bonus while employed at Fortress (including the
2010 Guaranteed Bonus, except to the extent otherwise explicitly
specified above), you must be an active employee at, and not have
given or received notice of termination prior to, the time of the
bonus payment.
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2009
Fortress
Stock
Grant :
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In connection
with your employment hereunder, you will be granted $500,000 in
value of Class A Shares of Fortress Investment Group LLC
(the
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Employment
Offer Letter
Mr. Daniel
Mudd
July 19,
2009
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“2009
Equity Grant”). Such grant shall vest as of January 1, 2010,
subject to your continuing employment with Fortress at that time
and your not having given or received notice of termination of
employment as of such date. For purposes of clarity, Fortress
anticipates withholding an applicable portion of the vested shares
in order to fund tax withholding payments, and you will be vested
in the net number of shares. The 2009 Equity Grant will be priced
based upon the average closing price of Class A Shares of Fortess
Investment Group LLC over the 30 trading day period preceding
January 1, 2010, as determined by Fortress in good faith. The
shares constituting the 2009 Equity Grant will be non-transferable
by you for a period of 3 years from their vesting.
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Long
Term
Equity
Grant :
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In connection
with your employment hereunder, you will be granted equity
interests in Fortress Investment Group LLC in the form of
restricted stock units (“ RSUs ”) pursuant to
the Fortress Investment Group LLC 2007 Omnibus Equity Incentive
Plan. Effective upon your Start Date, you shall receive an
award (your “ Long Term Grant ”) of $25,000,000
(twenty-five million dollars) in value of RSUs (priced as described
below), which award will be subject to the terms and conditions
(including, without limitation, as to vesting and forfeiture) to be
set forth in a definitive grant agreement that will govern your
grant (the “ Grant Award Agreement ”).
Fifty percent (50%) of the RSUs in your Long Term Grant will be
dividend paying RSUs. The Grant Award Agreement generally will
provide for vesting of your Long Term Grant over an eight (8) year
period beginning on the Start Date in twelve and one-half percent
(12.5%) increments on the successive annual anniversaries of your
Start Date, subject to certain continued service conditions. The
50% of your Long Term Grant that is not dividend-paying will become
dividend-paying upon vesting. The annual vesting of FIG
equity pursuant to the Long Term Grant shall be deemed to be a
portion of your annual compensation when your compensation package
is considered by the Board of Directors when approving your
compensation each year.
The Grant Award
Agreement will be priced based upon the average closing price of
Class A Shares of Fortress Investment Group LLC over the 30 trading
day period preceding the date of this Agreement, as determined by
Fortress in good faith . The Grant Award Agreement shall not
entitle you in any manner to continued employment with the Company
or Fortress. In the event that your employment is terminated
by Fortress (other than for Cause or due to death or disability) or
you resign for Good Reason, then (subject to your
execution of a general release of claims against the
Company and its affiliates within ninety (90) days following
termination of employment, in a form satisfactory to the Company,
and non-revocation of such release) the continued service condition
requirement for vesting of the next two
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Employment
Offer Letter
Mr. Daniel
Mudd
July 19,
2009
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succeeding
tranches of your Long Term Grant that would have vested upon the
two succeeding Start Date anniversaries following such termination
(i.e., 25% of the total grant) shall be waived; provided that (i)
the vesting of the RSUs resulting from the waiver of
such service condition shall occur on the same schedule as if you
remained employed at Fortress and vested into such RSUs on such
anniversary dates, (ii) delivery shall occur not later than
December 31 of the calendar year in which each RSU tranche becomes
vested and non-forfeitable, and (iii) if such termination occurs
within 12 months of the occurrence of a Change in Control (as
defined in the Grant Award Agreement), then 100% of the Long Term
Grant shall immediately vest). The Grant Award Agreement
will provide that resignation by you for Good Reason will have the
same consequences as a termination by Fortress without Cause
(including following a Change in Control), and that the definition
of Cause in this Agreement will apply to your Grant Award
Agreement. For purposes of clarity, Fortress anticipates
withholding an applicable portion of the vested shares in order to
fund tax withholding payments, and you will be vested in the net
number of shares. You acknowledge and agree that this paragraph is
only a summary of your future equity grant, and that the definitive
legal terms of your equity grant will be set forth in the Grant
Award Agreement, which will supersede the description in this
paragraph for all purposes (provided that the terms of the Grant
Award Agreement shall not be inconsistent with any term set forth
in this “Equity Grant” section of the Letter
Agreement). Notwithstanding anything in this Letter
Agreement or elsewhere in the contrary, delivery of RSUs shall in
all events be subject to Section 16(f) of the Amended and Restated
Fortress Investment Group LLC 2007 Omnibus Equity Incentive Plan,
which relates to restrictions imposed under Section 409A of the
Internal Revenue Code of 1986, as amended (“ Section
409A ”), on “specified employees”
(as such term is described in Section 409A).
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Board
of
Directors :
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You will
continue as a member of the Fortress Board of Directors. You will
resign from your position as a member of the Audit Committee of the
Board (as all members are required under applicable regulations to
be independent) but you will maintain your position as a member of
the Nominating, Governance & Conflicts Committee (although you
will resign the chairmanship of that committee). Beginning upon the
Start Date, you will no longer be eligible to receive additional
compensation from the Company based on your status as a Board
member or as a member of any Board Committee.
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Representation :
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You represent
that on your first day of work, you will be free to accept
employment hereunder without any contractual restrictions, express
or
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Employment
Offer Letter
Mr. Daniel
Mudd
July 19,
2009
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implied, with
respect to any of your prior employers. You represent
that you have not taken or otherwise misappropriated and you do not
have in your possession or control any confidential and proprietary
information belonging to any of your prior employers or connected
with or derived from your services to prior
employers. You represent that you have returned to all
prior employers any and all such confidential and proprietary
information. You further acknowledge that Fortress has
informed you that you are not to use or cause the use of such
confidential or proprietary information in any manner whatsoever in
connection with your employment by Fortress. You agree
that you will not use such information. You represent
that you are not currently a party to any pending or threatened
litigation with any former employer or business associate that you
have not disclosed to Fortress. You shall indemnify and hold
harmless Fortress from any and all claims arising from any breach
of the representations and warranties in this paragraph.
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Set-off :
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You hereby
acknowledge and agree, without limiting Fortress’s rights
otherwise available at law or in equity, that, to the extent
permitted by law, any or all amounts or other consideration payable
by any affiliate of Fortress pursuant to the provisions hereof or
pursuant to any other agreement with Fortress or any of its
affiliates, may be se
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