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
February
25, 2010
Date of
Report (Date of earliest event reported)
FORTRESS
INTERNATIONAL GROUP, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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000-51426
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20-2027651
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(State
or other jurisdiction of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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7226 Lee DeForest Drive, Suite 203
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Columbia, Maryland
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21046
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(Address of principal executive offices)
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(Zip Code)
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(410)
423-7438
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name, former address, and former fiscal year, 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:
¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
.
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Entry into a Definitive
Material Agreement.
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Item
3.02.
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Unregistered
Sales of Equity Securities.
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Item
5.02.
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
|
On
February 28, 2010, Fortress International Group, Inc. (the “Company”) entered
into the following three agreements with Mr. Gerard J. Gallagher, the President
and Chief Operating Officer of the Company: (1) a letter agreement (“Letter
Agreement”); (2) an amendment (“Note Amendment”) to that certain Convertible
Promissory Note, dated January 19, 2007 (“Note”) issued to Mr. Gallagher by the
Company as consideration in connection with the Company’s acquisition of VTC,
L.L.C. and Vortech, LLC; and (3) an amendment (“Employment Agreement Amendment”)
to that certain Executive Employment Agreement, effective January 19, 2007
(“Employment Agreement”). A copy of these agreements are filed as
exhibits to this Current Report and incorporated herein by
reference.
The
Letter Agreement provides for the conversion of $1,250,000 of the principal
balance due under the Note into 625,000 shares of the Company’s common stock
(“Shares”), representing a conversion price of $2.00 per share, on February 28,
2010. The Letter Agreement acknowledges that the Shares will be
subject to that certain Registration Rights Agreement between the Company and
Mr. Gallagher, among others, and also contains certain representations and
warranties made by Mr. Gallagher and required by the Company to confirm that
such issuance was exempt from registration under the Securities
Act. No commission or other remuneration was paid in connection with
the conversion of that portion of the amounts due under the Note and the
resulting issuance by the Company of the Shares.
The Note
Amendment amends the terms of the Note by restating the principal balance due
under the Note as $2,750,000, reducing the interest rate under the Note to 4%,
providing for the payment of certain amounts of accrued interest over time,
providing for interest-only payments under the Note until April 1, 2012,
providing for eight principal payments in the amount of $125,000 each beginning
on April 1, 2012, and providing for a final payment of all remaining amounts of
principal and interest due under the Note on April 1, 2014. The Note
Amendment also provides for the acceleration of all amounts due under the Note
upon a change of control of the Company or the death of Mr.
Gallagher.
The
Employment Agreement Amendment provides for an increase in Mr. Gallagher’s base
salary to $200,000, effective September 1, 2010.
On
February 25, 2010, the Board of Directors of the Company approved an increase to
$200,000, effective September 1, 2010, in the annual base salary of Mr. Thomas
P. Rosato, the Company’s Chief Executive Officer, and an increase to $200,000,
effective March 1, 2010, in the annual base salary of Mr. Timothy C. Dec, the
Company’s Chief Financial Officer.
Item
7.01.
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Regulation
FD Disclosure.
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On March
1, 2010, the Company issued a press release announcing the conversion of a
portion of the Company’s debt to Mr. Gallagher in exchange for the Shares, the
restructuring of the Note, and the Employment Agreement Amendment with Mr.
Gallagher. A copy of that press release is furnished as Exhibit 99.4 to
this Current Report. Exhibit 99.4 shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
except as shall be expressly set forth by specific reference in a
filing.
Item
9.01.
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Financial
Statements and Exhibits.
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99.1
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Letter
Agreement, dated as of February 28, 2010, between the Company and Gerard
J. Gallagher.
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99.2
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Amendment
to Convertible Promissory Note, effective as of February 28, 2010, between
the Company and Gerard J.
Gallagher.
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99.3
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Amendment
to Executive Employment Agreement, effective as of February 28, 2010,
between the Company and Gerard J.
Gallagher.
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SIGNATURES
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.
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FORTRESS
INTERNATIONAL GROUP, INC.
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By:
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/s/ TIMOTHY C. DEC
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Timothy
C. Dec
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Chief
Financial Officer
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Date:
March 1, 2010
[LETTERHEAD
OF FORTRESS INTERNATIONAL GROUP, INC.]
February
28, 2010
Gerard J.
Gallagher
5 Tydings
Road
Severna
Park, Maryland 21146
Re:
Conversion of
Debt
Dear
Jerry:
This
letter agreement addresses the conversion of a portion of the principal balance
of the indebtedness owed to you by Fortress International Group, Inc. (the
“
Company
”)
pursuant to that certain Convertible Promissory Note, dated January 19, 2007, as
amended by that certain Agreement, dated August 26, 2008, and as further amended
by that certain Amendment to Convertible Promissory Note, of even date herewith
(collectively, the “
Note
”). All
capitalized terms not otherwise defined in this letter shall have the meanings
assigned to them in the Note.
The
Company hereby agrees to issue to you, as payment for certain principal amounts
due under the Note, Six Hundred Twenty-Five Thousand (625,000) shares of the
Company’s common stock (the “
Shares
”) for a per
share price of Two Dollars ($2.00). The Company and you agree that,
upon delivery of the Shares, One Million Two Hundred Fifty Thousand Dollars
($1,250,000) of the principal balance due under the Note shall be deemed paid
and discharged in full; provided, however, that the remaining principal balance
due under the Note in the amount of Two Million Seven Hundred Fifty Thousand
Dollars ($2,750,000), and a portion of the accrued interest (which shall be
treated as principal beginning January 1, 2011), shall remain outstanding and
shall be paid by the Company pursuant to the terms and conditions of the
Note.
Upon your
acceptance of the terms and conditions set forth in this letter, and your
confirmation of the representations and warranties herein, the Company will
issue to you a certificate, duly executed by the authorized officers of the
Company, for the Shares.
You
represent and warrant to the Company that (i) you are an “Accredited Investor”
as such term is defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the “
Securities Act
”);
(ii) you are acquiring the Shares solely for investment, solely for your own
account, not for the account of any other person, and not for distribution,
assignment or resale to others, and no other person has a direct or indirect
beneficial interest in any Shares so acquired; (iii) you will not take or cause
to be taken any action that would cause you to be deemed an underwriter of the
Shares as defined in Section 2(11) of the Securities Act; and (iv) you have
made no contract, undertaking, agreement or arrangement, and you have no plan to
enter into any contract, undertaking, agreement or arrangement, to sell,
transfer or pledge the Shares to any other person or entity.
You
acknowledge that the Shares have not been registered under the Securities Act,
or under the securities laws of any state (the “
State Acts
”), and are
being issued to you pursuant to exemptions therefrom for nonpublic offerings in
reliance upon, among other things, the representations and warranties made by
you herein, and a breach of such representations and warranties could cause the
Company to not qualify for such exemptions. Any assignment, sale,
transfer, exchange, hypothecation or other disposition of the Shares (whether
for consideration or otherwise), in whole or in part, may be made by you only if
registered under the Securities Act and the State Acts, or, if in the opinion of
counsel to the Company, an exemption from such registration is
available.
The
Company acknowledges that the Shares are considered “Registrable Securities”
under and as defined in that certain Registration Rights Agreement, dated
January 19, 2007, among the Company, you, Thomas P. Rosato, and Evergreen
Capital LLC.
All
questions concerning the construction, validity, and interpretation of this
letter agreement and the performance of the obligations imposed by this letter
agreement will be governed by the laws of the State governing the Note, without
reference to any conflict of laws rules that would apply the laws of another
jurisdiction. This letter agreement may be executed in multiple
counterparts, all of which taken together shall constitute one and the same
agreement, and delivered by facsimile transmission or e-mail delivery of a .pdf
format data file.
The
parties hereby signify their assent to the terms of this letter agreement by
signing below.
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Sincerely,
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Fortress
International Group, Inc.
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By:
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Thomas
P. Rosato
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Chief
Executive
Officer
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AGREED
TO AND ACCEPTED
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THIS
28
th
DAY OF FEBRUARY, 2010:
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Gerard
J. Gallagher
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AMENDMENT
TO
CONVERTIBLE
PROMISSORY NOTE
This
AMENDMENT
TO
CONVERTIBLE PROMISSORY NOTE
(this “
Amendment
”) is
effective as of the 28
th
day of
February, 2010, by and between FORTRESS INTERNATIONAL GROUP, INC., a Delaware
corporation (f/k/a Fortress America Acquisition Corporation) (“
Maker
”), and Gerard
J. Gallagher (“
Holder
”). Each
of Maker and Holder are hereinafter individually referred to as a “
Party
,” and
collectively as the “
Parties
”.
EXPLANATORY
STATEMENTS
Maker has issued to Holder that certain
Convertible Promissory Note, dated January 19, 2007, in the original principal
amount of Five Million Dollars ($5,000,000), as amended by that certain
Agreement, dated August 26, 2008, between the Parties (collectively, the “
Note
”). The
Parties have agreed, pursuant to that certain letter agreement of even date
herewith, to convert One Million Two Hundred Fifty Thousand Dollars ($1,250,000)
of the outstanding principal balance due under the Note to shares of common
stock of Maker, with the remaining principal balance due under the Note in the
amount of Two Million Seven Hundred Fifty Thousand Dollars ($2,750,000), and a
portion of the accrued interest as of the date hereof (which shall be treated as
principal beginning on January 1, 2011), to be paid under the Note as amended
hereby. The Parties desire to amend certain terms and conditions set
forth in the Note, all as further described and set forth in this
Amendment.
AGREEMENT
NOW, THEREFORE
, in
consideration of the foregoing and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, hereby agree as follows:
1.
Amendments
to the Note
. The terms and conditions of the Note shall be
amended as follows:
(a)
Payment
of Principal Amount and Interest
. Section A.1 of the Note is
hereby deleted in its entirety and the following is substituted in lieu
thereof:
1.
Principal Amount and
Interest
. FOR VALUE RECEIVED, the undersigned Fortress International
Group, Inc., a Delaware corporation (“
Maker
”), promises to
pay to the order of Gerard J. Gallagher, his successors and assigns (“
Holder
”), at 5
Tydings Road, Severna Park, Maryland 21146, or at such other place as
Holder may from time to time designate in writing, the principal sum of Two
Million Seven Hundred Fifty Thousand Dollars ($2,750,000), together with
interest thereon from March 1, 2010 at the rate of four percent (4%) per annum,
compounded annually (“
Base Interest
Rate
”). Upon the occurrence and during the continuance of an
“Event of Default” (as defined herein), the principal indebtedness evidenced by
this Note shall bear interest at a rate of seven percent (7%) per annum (the
“
Default Interest
Rate
”). At such time as an Event of Default is cured, the Base
Interest Rate, and not the Default Interest Rate, shall
apply.
(a)
Interest
shall be calculated on the basis of a 365 days per year factor applied to the
actual days on which there exists an unpaid principal
balance. Interest shall be payable monthly, on the first day of each
calendar month, until this Note is paid in full (with the first payment of
interest due on April 1, 2010). In addition to the monthly interest
payments set forth in this subsection (a), Maker shall pay certain amounts of
the interest accrued under this Note as of March 1, 2010 (the “
Accrued Interest
”) as
follows: (i) Two Hundred Thousand Dollars ($200,000) of the Accrued Interest
shall be paid by Maker on or before March 1, 2010; (ii) Forty Thousand Dollars
($40,000) of the Accrued Interest shall be paid by Maker on or before December
1, 2010; and (iii) Forty Thousand Dollars ($40,000) of the Accrued Interest
shall be paid by Maker on or before January 1, 2011. The remaining
amount of Accrued Interest as of January 1, 2011 in the amount of Eighty-Two
Thousand Three Hundred One Dollars ($82,301) shall be added to the principal
balance due under this Note as of such date and shall be treated as principal
for all purposes under this Note thereafter.
(b)
No
amounts of principal shall be payable under this Note until April 1, 2012 (the
“
Initial Principal
Payment Date
”). Beginning on the Initial Principal Payment
Date (with the first payment due on such date), the principal amount due under
this Note shall be payable by Maker in eight (8) equal quarterly installments of
One Hundred Twenty-Five Thousand Dollars ($125,000) each. Each
quarterly installment will be due on the first day of each quarterly period
(April 1, July 1, October 1, January 1) for the period beginning on the Initial
Principal Payment Date and ending on April 1, 2014 (the “
Maturity
Date
”). All remaining amounts of principal and interest due
under this Note shall be paid in full on or before the Maturity
Date.
(b)
Acceleration
of Payments
. The following provision is added to the end of
Section A.3 of the Note:
All
amounts due under this Note shall be immediately due and payable to the Holder
upon the occurrence of any of the following events: (i) a Change of Control (as
defined in that certain Executive Employment Agreement, effective as of January
19, 2007 and amended as of the date hereof, between Maker and Holder); or (ii)
the death of Holder.
2.
Life
Insurance Policy
. In connection with the execution and
delivery of this Amendment, Maker will use commercially reasonable efforts to
obtain an insurance policy on the life of Holder in the amount of the principal
balance due under the Note. Maker will be designated as the
beneficiary of all proceeds of such policy and shall pay when due all premiums
charged under such policy through the Maturity Date (as defined in the Note) of
the Note. Upon the death of Holder and the acceleration of the
amounts due under the Note in accordance with Section A.3 of the Note, Maker
shall use and apply all proceeds actually received by Maker under such insurance
policy toward the payment and satisfaction of the remaining amounts due under
the Note. In the event such policy is not obtained by Maker by March
31, 2010, Maker shall pay Holder the amount necessary to obtain such policy
during the period that any amounts are due and payable under the Note, but in no
event shall Maker be obligated to pay an amount in excess of Ten Thousand
Dollars ($10,000) per year under this
Section
2
.
3.
Effect of
Amendment
. Except
as otherwise expressly provided herein, all provisions of the Note shall remain
in full force and effect. This Amendment and the Note contain the
entire understanding of the Parties with respect to the subject matter hereof
and thereof, and supersede all prior oral or written communications, agreements
and understandings between the Parties with respect to the subject matter hereof
and thereof. This Amendment is intended to modify the provisions of
the Note; in the event that there is a conflict between the terms of this
Amendment and the Note, the Parties intend that the provisions of this Amendment
should govern their respective rights and obligations.
4.
Payment
of Fees
. Maker hereby agrees to reimburse Holder for certain
legal and accounting fees incurred by Holder in connection with the negotiation,
execution, and delivery of this Amendment, the Amendment to Executive Employment
Agreement of even date herewith, and that certain letter agreement of even date
herewith, up to a maximum amount of Twenty Thousand Dollars
($20,000).
5.
Miscellaneous
. The
Explanatory Statements set forth above form a material basis for this Amendment
and are expressly incorporated herein and made a part hereof. All
capitalized terms not otherwise defined in this Amendment shall have the
meanings assigned to them in the Note. All questions concerning the
construction, validity, and interpretation of this Amendment and the performance
of the obligations imposed by this Amendment will be governed by the laws of the
State governing the Note, without reference to any conflict of laws rules that
would apply the laws of another jurisdiction. This Amendment may be
executed simultaneously in multiple counterparts, each of which will be deemed
to be an original copy of this Amendment and all of which together will be
deemed to constitute one and the same agreement. The exchange of
copies of this Amendment and of signature pages by facsimile transmission or
e-mail delivery of a .pdf format data file shall constitute effective execution
and delivery of this Amendment as to the Parties and may be used in lieu of the
original Amendment and signature pages thereof for all purposes.
{Signatures
appear on the following page}
IN WITNESS WHEREOF
, the
Parties have executed this Amendment as of the day and year first written
above.
MAKER
:
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HOLDER
:
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FORTRESS
INTERNATIONAL GROUP, INC.
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By:
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Name:
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Gerard
J. Gallagher
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Title:
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Signature
page to Amendment to
Convertible
Promissory Note
AMENDMENT
TO
EXECUTIVE
EMPLOYMENT AGREEMENT
This
AMENDMENT
TO EXECUTIVE EMPLOYMENT
AGREEMENT
(this “
Amendment
”), is
effective as of the 28
th
day of
February, 2010, by and between FORTRESS INTERNATIONAL GROUP, INC., a Delaware
corporation (f/k/a Fortress America Acquisition Corporation) (the “
Company
”), and Gerard
J. Gallagher (the “
Executive
”). Each
of the Company and Executive are hereinafter individually referred to as a
“
Party
,” and
collectively as the “
Parties
”.
EXPLANATORY
STATEMENTS
The Parties are all of the parties to
that certain Executive Employment Agreement, effective as of January 19, 2007
(the “
Employment
Agreement
”). The Parties desire to amend certain terms and
conditions set forth in the Employment Agreement, all as further described and
set forth in this Amendment.
AGREEMENT
NOW, THEREFORE
, in
consideration of the foregoing and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, hereby agree as follows:
1.
Amendments
to Employment Agreement
. The terms and conditions of the
Employment Agreement are hereby amended as follows:
(a)
Duties
. Section
2.2 is hereby deleted in its entirety and the following is substituted in lieu
thereof:
2.2.
Duties
. During the
Employment Period, and subject to the provisions of this Agreement, the
Executive shall devote the Executive’s full working time and attention and use
the Executive’s best efforts and skill to further the interests of the
Company. The Executive shall, to the best of his ability, execute the
strategic plan of the Company as approved by the Board, perform his duties,
adhere to the Company’s published policies and procedures, promote the Company’s
interests, reputation, business and welfare, and work actively with the Board
and other senior managers to help augment the existing business base, increase
the corporate contract backlog, and indentify and develop new business
opportunities. The Executive shall perform such services for the
Company as is consistent with the Executive’s position (subject to the power and
authority of the Board to expand or limit such services and to overrule actions
of officers of the Company) and as lawfully directed, from time to time, by the
Board. During the Employment Period, the Executive’s title shall be
President and Chief Operating Officer of the Company. During the
Employment Period, the Executive shall also serve as the President and Chief
Executive Officer of VTC, L.L.C., a Maryland limited liability company (d/b/a/
“Total Site Solutions”), a subsidiary of the Company. During the
Employment Period, the Executive shall report to the Board, and the Executive
may use such additional titles as assigned and approved by the
Board. The Executive shall not, during the Employment Period, be
employed or involved in any other business activity for gain, profit or other
pecuniary advantage. Notwithstanding the immediately foregoing
sentence, the Executive may (a) volunteer services for or on behalf of such
religious, educational, non-profit and/or charitable organizations as the
Executive may wish to serve; (b) manage his personal, financial and legal
affairs; and (c) participate as a director of, or own less than fifty
percent
(50%) of
the equity interest or voting rights in, any other business entity that does not
directly or indirectly compete with the business of the Company, so long as (1)
the Executive provides the Audit Committee of the Board prior written notice of
such activities that describes such activities in reasonable detail (provided,
however, that such notice shall not be required for any investment by the
Executive that would result in the Executive owning not more than five percent
(5%) of the outstanding stock or voting power of a business entity listed on a
national securities exchange); (2) such activities do not interfere, or could
not reasonably be expected to interfere, with his duties and responsibilities to
the Company as provided hereunder, (3) the Executive is not actively involved in
the management of such business entity, except to the extent the Executive
serves on such business entity’s board of directors or similar governing body;
(4) such activities do not violate any of the terms of this Agreement or any
other agreement entered into with the Company (including, but not limited to,
Sections 2.4 and 7 hereof), and (5) such activities would not be the types of
activities required, in the sole discretion of the Audit Committee, to be
disclosed under Item 404 of Regulation S-K promulgated by the Securities and
Exchange Commission regardless of whether the Company is subject to such
disclosure requirements. The Executive acknowledges that the
Executive may be required to travel on business in connection with the
Executive’s performance of the Executive’s duties hereunder, but that the
Executive’s base will be the location of the Company’s headquarters in Columbia,
Maryland or such other location as determined by the Board.
(b)
Base
Salary
. Section 3.1 is hereby deleted in its entirety and the
following is substituted in lieu thereof:
3.1.
Base Salary.
The
Executive’s current annual base salary is One Hundred Fifty Thousand Dollars
($150,000) (“
Base
Salary
”), paid in approximately equal installments
bi-weekly. Effective September 1, 2010, the Executive’s Base Salary
shall be adjusted to Two Hundred Thousand Dollars ($200,000) per year, paid in
approximately equal installments bi-weekly. The Company will review
the Executive’s Base Salary on December 31 of each year of the Employment Period
in order to determine, in the sole discretion of the Board or the Compensation
Committee of the Board, whether
any
adjustments to the Base
Salary need to be made based on factors approved by the Board, which may include
the Executive’s individual performance, the financial results and condition of
the Company as of and for the recent fiscal year, and the Company’s projected
financial performance and profitability. In no event shall the
Executive’s Base Salary be reduced below the amount paid in the preceding
year.
(c)
Termination
. Section
5.2 is hereby deleted in its entirety and the following is substituted in lieu
thereof:
5.2.
Termination by the Company Other Than
for Death, Disability, or Cause or by Executive for a Good
Reason
. In addition to the payment to Executive of the
Executive’s Base Salary and reimbursement of any applicable expenses pursuant to
Section 4.2
through the Date of Termination, if (a) the Employment Period is terminated (i)
by the Company for reasons other than death, Disability, or Cause, or (ii) by
the Executive for a Good Reason, or (iii) by reason of non-renewal or
termination of employment in accordance with the terms of
Section 2.1.2
hereof
(provided the Company provides the requisite notice to the Executive to
terminate prior to any Expiration Date); and (b) the Executive executes a
general release in the form attached hereto as
Exhibit
C
(the “
Release
”) on or
before the effective Date of Termination; and (c) the Executive has not breached
the terms of the “Assignment Agreement” (as defined below);
then
the Company
shall pay the Executive an amount equal to the Executive’s Base Salary (at the
rate in effect at the Date of Termination) for a period of twelve (12) months
following the Date of Termination. Any payment under this
Section 5.2
shall be
made over time as though the Executive continued to be employed by the
Company. If the Executive elects and remains eligible for health
coverage pursuant to Section 4980B of the Internal Revenue Code of 1986, as
amended (“
COBRA
”) (and subject
to withholding pursuant to
Section 3.
4
above),
then
commencing
within fifteen (15) business days following the date on which the Release become
effective pursuant to its terms, the Company will, for a period commencing on
the Date of Termination and continuing for twelve (12) months after the Date of
Termination, pay a percentage of the premium for such COBRA health coverage
equal to the percentage of the premium for health insurance coverage paid by the
Company on the Date of Termination. The Executive shall not be
entitled to any other salary or compensation after termination of the Employment
Period (other than as set forth in this
Section 5.2
and
Section 5.3
) and no
Person shall be entitled hereunder to participate in any employee benefit plan
after the Date of Termination if the Employment Period is terminated in
connection with this
Section 5.2
, except
as otherwise specifically provided hereunder or as required by applicable law
(i.e., COBRA) and
provided
that nothing
herein shall be interpreted to limit the Executive’s conversion rights, if any,
under any of the Company’s employee benefit plans. In furtherance of
and not in limitation of the foregoing, the Executive may only be terminated by
the affirmative vote of a majority of the whole Board (excluding the Executive
if he is a member of the Board).
2.
Effect of
Amendment
. Except
as otherwise expressly provided herein, all provisions of the Employment
Agreement shall remain in full force and effect. This Amendment and
the Employment Agreement contain the entire understanding of the Parties with
respect to the subject matter hereof and thereof, and supersede all prior oral
or written communications, agreements and understandings between the Parties
with respect to the subject matter hereof and thereof. This Amendment
is intended to modify the provisions of the Employment Agreement; in the event
that there is a conflict between the terms of this Amendment and the Employment
Agreement, the Parties intend that the provisions of this Amendment should
govern their respective rights and obligations.
3.
Miscellaneous
. The
Explanatory Statements form a material basis for this Amendment and are
expressly incorporated herein and made a part hereof. All capitalized
terms not otherwise defined in this Amendment shall have the meanings assigned
to them in the Employment Agreement. All questions concerning the
construction, validity, and interpretation of this Amendment and the performance
of the obligations imposed by this Amendment will be governed by the laws of the
State governing the Employment Agreement, without reference to any conflict of
laws rules that would apply the laws of another jurisdiction. This
Amendment may be executed simultaneously in multiple counterparts, each of which
will be deemed to be an original copy of this Amendment and all of which
together will be deemed to constitute one and the same agreement. The
exchange of copies of this Amendment and of signature pages by facsimile
transmission or e-mail delivery of a .pdf format data file shall constitute
effective execution and delivery of this Amendment as to the Parties and may be
used in lieu of the original Amendment and signature pages thereof for all
purposes.
{Signatures
appear on the following page}
IN WITNESS WHEREOF
, the
Parties have executed this Amendment as of the day and year first written
above.
COMPANY
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EXECUTIVE
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FORTRESS
INTERNATIONAL GROUP, INC.
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By:
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Name:
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Gerard
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Title:
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Signature
page to Amendment to
Executive
Employment Agreement
Fortress
International Group Announces Restructuring of Original Seller’s
Note
Restructuring
of this long-term debt reduces cash outlay for principal and interest by $2.46
million in 2010, extends maturity to 2014
COLUMBIA,
MD, March 1, 2010 Fortress International Group, Inc. (NASDAQ: FIGI) ("Fortress,"
or the "Company"), a leading provider of consulting and engineering,
construction management and 24/7/365 site services for mission-critical
facilities, today announced it has restructured the seller’s note due
to Fortress International Group President Jerry Gallagher thus reducing the
relevant principal and interest payments in 2010 from $2.78 to $0.32 million and
extending the terms to 2014.
The terms
of the restructuring call for $1.25 million of the $4.0 million note to be
converted to 625,000 shares of common stock ($2.00 per share). The interest rate
is reduced from 6% to 4%, and $1.0 million of the remaining $2.75 million will
be paid in 8 quarterly installments of $125,000 beginning in April 2012. The
final payment of all remaining amounts of principal and interest is due April 1,
2014.
Mr. John
Morton, Fortress Chairman, said “This favorable restructuring is a continuing
strong endorsement by Jerry Gallagher about the Company’s future. Jerry had
converted $1M in 2008 at $7.50 at the same time that Tom Rosato had converted
the last $2.5M of his seller’s note at $7.50.”
Chief
Executive Officer Mr. Tom Rosato, added, “We have taken aggressive steps over
the past 12 months to preserve cash and lower the operating costs of the Company
to counter the negative impact of the weakened economy on our operations. This
restructuring by Jerry will assist the Company in improving its working capital
position as the upturn in demand we are experiencing materializes.”
Mr. Jerry
Gallagher added “We continue to see new opportunities from outstanding clients
and prospects who value our expertise from design to facility management. I am
happy to restructure the note over four years to accommodate the Company’s cash
management process.”
About
Fortress International Group, Inc.
Fortress
International Group, Inc. is leading mission-critical facilities into a new era
of maximum uptime and efficiency. Fortress provides consulting and engineering,
construction management and 24/7/365 site services for the world's most
technology dependent organizations. Serving as a trusted advisor, Fortress
delivers the strategic guidance and pre-planning that makes every stage of the
critical facility lifecycle more efficient. For those who own, lease or manage
mission-critical facilities, Fortress provides innovative end-to-end capital
management, energy, IT strategy, procurement, design, construction,
implementation and operations solutions that optimize performance and reduce
cost.
Fortress
International Group, Inc.
Setting a
new standard for the optimized critical facility.
Fortress
International Group, Inc. (NASDAQ: FIGI) is headquartered in Maryland, with
offices throughout the U.S. For more information, visit:
www.FortressInternationalGroup.com
or call 888-321-4877.
FORWARD-LOOKING
STATEMENTS
This
press release may contain "forward-looking statements"-- that is, statements
related to future -- not past -- events, plans, and prospects. In this context,
forward-looking statements may address matters such as our expected future
business and financial performance, and often contain words such as "guidance,"
"expects," "anticipates," "intends," "plans," "believes," "seeks," "should," or
"will." Forward-looking statements by their nature involve risks and
uncertainties. For a more detailed discussions of the risks and
uncertainties that may affect the Company’s operations and financial results,
please review the “Risk Factors” sections in the Company’s reports filed with
the Securities and Exchange Commission, including the Annual Report on Form 10-K
for the fiscal year ended December 31, 2008, and the subsequent Quarterly
Reports on Form 10-Q.
Company
Contacts:
Thomas P.
Rosato
Chief
Executive Officer
Fortress
International Group, Inc.
Phone:
(410) 423-7438
Investor
Relations:
Harvey L.
Weiss
Vice
Chairman
Fortress
International Group, Inc
Phone:
(410) 423-7425