UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 26, 2012 (December 21, 2012)
Fortress Investment Group LLC
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
001-33294 | 20-5837959 | |
(Commission File Number) |
(IRS Employer Identification No.) | |
1345 Avenue of the Americas, 46th Floor New York, New York |
10105 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (212) 798-6100
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
Purchase Agreement
On December 21, 2012, in connection with the separation described in Item 5.02 below, Fortress Operating Entity I LP, FOE II (New) LP and Principal Holdings I LP (collectively, the Purchasers), each a subsidiary of Fortress Investment Group LLC (the Company), entered into a Purchase Agreement (the Purchase Agreement) with Robert I. Kauffman, a principal, co-founder, officer and director of the Company, and Aldel LLC, an entity controlled by Mr. Kauffman (together with Mr. Kauffman, the Sellers).
The Purchase Agreement, among other things, provides for the sale by the Sellers, and the purchase by the Purchasers, of (i) 2,082,684 Class A Shares of the Company, (ii) 49,189,480 Class B Shares of the Company and (iii) 49,189,480 Class B Common Units of each of the Purchasers, for an aggregate purchase price of $179,452,584 (or $3.50 per share), of which $30,000,000 is payable in cash and $149,452,584 is payable in the form of promissory notes, each with a term of fourteen months.
The parties have made customary representations, warranties and covenants to each other in the Purchase Agreement. The transaction closed on December 24, 2012.
Credit Agreement Amendment
On December 21, 2012, in connection with the separation described in Item 5.02 below, FIG LLC, certain subsidiaries and affiliates of FIG LLC, the lenders party thereto and Wells Fargo Bank, National Association, entered into a Second Amendment, Consent and Waiver (the Amendment) to the Credit Agreement, dated as of October 7, 2010 (as amended, the Credit Agreement), among FIG LLC, as borrower, certain subsidiaries and affiliates of FIG LLC, as guarantors, Wells Fargo Bank, National Association, as administrative agent and L/C issuer and the other parties thereto, as lenders.
Pursuant to the Amendment, among other things, (i) the required lenders under the Credit Agreement consented to the consummation of certain specified transactions and (ii) the definition of Consolidated Fixed Charge Coverage Ratio under the Credit Agreement was amended to exclude payments pursuant to the Purchase Agreement and related notes.
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
On December 21, 2012, FIG LLC, a subsidiary of the Company, entered into a Separation and Release Agreement (the Separation Agreement) with Mr. Kauffman. Pursuant to the Separation Agreement, Mr. Kauffman agreed to resign from all positions he held with FIG LLC and its subsidiaries and their affiliates, including as a director of the Company, and to retire from his employment, each effective December 21, 2012. The Separation Agreement contains a mutual general release of any claims Mr. Kauffman may have against FIG LLC, its subsidiaries and their affiliates, and any claims FIG LLC, its subsidiaries and their affiliates may have against Kauffman, and a waiver of fees on certain investments that Mr. Kauffman has made in investment vehicles managed by affiliates of the Company. The Separation Agreement also incorporates certain provisions of Mr. Kauffmans employment agreement with FIG LLC, dated as of August 4, 2011, including all of the covenants and ongoing obligations that survive termination of employment thereunder.
The Company has issued a press release, dated December 24, 2012, announcing Mr. Kauffmans retirement, which is attached hereto as Exhibit 99.1 and is incorporated by reference herein in its entirety.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits |
Exhibit Number |
Description | |
99.1 | Press Release, dated December 24, 2012, issued by Fortress Investment Group LLC |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
FORTRESS INVESTMENT GROUP LLC | ||
(Registrant) | ||
By: | /s/ David N. Brooks | |
David N. Brooks | ||
General Counsel |
Date: December 26, 2012
EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 | Press Release, dated December 24, 2012, issued by Fortress Investment Group LLC |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Gordon E. Runté
212-798-6082
Fortress Announces Retirement of Co-Founder and Principal Robert Kauffman
Redemption and Buy-Back of Shares to Reduce Dividend-Paying Share Count by 10%
New York, NY. December 24, 2012 Fortress Investment Group (NYSE: FIG) today announced that Principal and Director Robert Kauffman has elected to retire from the company and its Board of Directors after a 15 year career at the firm.
With Co-Chairman and Director, Wesley Edens, and interim CEO and Director Randal Nardone, Mr. Kauffman co-founded Fortress in 1998. Mr. Kauffman has held a range of leadership roles at Fortress, including responsibility for the management of the firms European private equity investment operations and, most recently, board-level oversight of Logan Circle Partners, the companys long-only fixed-income business. Mr. Kauffmans retirement is effective immediately.
In conjunction with Mr. Kauffmans announced retirement, Fortress will redeem or purchase all of Mr. Kauffmans beneficially owned shares in the company, which totaled approximately 51.3 million class A or equivalent shares as of December 21, 2012. The company will repurchase Mr. Kauffmans ownership interests at a price equivalent to $3.50 per share. As a result of this transaction, Fortresss dividend-paying share count will be reduced by approximately 10%, with immediate effect. Fortress will fund the transaction through a combination of available cash and a 14 month note.
It has been a privilege to be able to work with such a talented and motivated group of people, said Kauffman. I am proud to have contributed to the growth of Fortress into what it is today, and I wish the best of success to the entire team.
Rob was part of the leadership team of Fortress even before the company had a name, said Nardone. As a Principal and Board member, Rob has contributed to Fortresss evolution from a start-up boutique into one of the industrys largest and most diverse investment managers. We are grateful to Rob for his years of service, and wish him the best in his future endeavors.
About Fortress
Fortress Investment Group LLC is a leading, highly diversified global investment firm with over $50 billion in assets under management as of September 30, 2012. Founded in
1998, Fortress manages assets on behalf of over 1,400 institutional clients and private investors worldwide across a range of investment strategies private equity, credit, liquid hedge funds and traditional fixed income. Fortress is publicly traded on the New York Stock Exchange (NYSE: FIG). For additional information, please visit www.fortress.com.