[Aircastle Investment Limited letterhead]
February 3, 2005
Xx. Xxxx Xxxxxxx
Dear Xxxx:
It is with great pleasure that we extend to you an offer to join Aircastle
Advisor LLC or an affiliate, (together, the "Company" or "Aircastle") on the
terms and conditions set forth below.
Title: Chief Financial Officer
Base Salary: Your base salary is as set forth in Exhibit A (the
"Annual Salary").
Start Date: On or about March 7, 2005 ("Start Date")
Location: US offices of Aircastle, currently at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX
Aircastle Incentive Subject to the terms of this Letter Agreement, you will
Compensation: be paid an annual bonus equal to the percentage of the
Net Aircastle Operating Results (as defined on Exhibit
B hereto), if any, set forth as item 1 on Exhibit B
hereto (subject to adjustment for fiscal years
subsequent to 2006 as provided below), provided, that
in respect of the calendar years 2005 and 2006, you
shall be paid an annual bonus equal to the greater of
(i) the percentage of the Net Aircastle Operating
Results, and (ii) the Guaranteed Minimum Bonus. The
Guaranteed Minimum Bonus is $550,000 (pro rated in
respect of 2005 only in the event that your first date
of work is not actually on or before March 15, 2005).
For fiscal years subsequent to 2006, Fortress reserves
the right, in its sole and absolute discretion, to
raise or to lower your percentage interest in the Net
Aircastle Operating Results. Any such change shall be
set forth in a letter to you from Aircastle and will
supercede item 1 on Exhibit B hereto.
In addition, the Company may in its sole discretion
decide to grant you additional compensation or a bonus;
however this letter agreement does not entitle you to
such a payment (other than, as provided above, any
Guaranteed Minimum Bonus). Payment of additional
compensation or a bonus in any given fiscal or calendar
year does not entitle you to additional compensation or
a bonus in any subsequent xxxx.Xxx must be actively
employed by and not have given notice of your
termination of your employment with the Company (or any
affiliate of Aircastle for whom you may be employed on
a full-time
basis at the time) at the time such bonus or additional
compensation is to be paid in order to be eligible
therefore.
Equity Incentive Plan: In addition, Exhibit B hereto sets forth your
co-investment rights and obligations with respect to
Aircastle.
Expense Reimbursement: The Company will reimburse business expenses incurred
in the ordinary course of business. The Company will
also reimburse customary and reasonable moving and
relocation expenses (packing, storage, 1 flight for
family to make the move, etc. (i.e., no house purchase
or sale related costs)) in an amount not to exceed
$40,000, based on receipts provided therefore. You will
have use of one of the Company's apartments in New York
City for a period of up to two months.
Severance: In the event that the Company terminates your
employment without cause (as defined below) prior to
December 31, 2006 you shall receive, within 30 days of
your termination, a single-sum payment equal to the
difference, if positive, between (i) the aggregate
amount that you would have been paid from the Start
Date on the basis of your base salary and Guaranteed
Minimum Bonus had your employment continued through
December 31, 2006 and (ii) the aggregate amount you
have been paid from the Start Date in salary and bonus
through the date of such termination, provided you sign
a separation agreement prepared by the Company which
includes a general release of claims and subject to
your compliance with the restrictive covenants set
forth herein. However, severance shall not be payable
(i) on account of termination by virtue of your death
or disability and (ii) if you are offered employment by
Aircastle or any of its or Fortress Investment Group
LLC's respective affiliates direct or indirect
subsidiaries or successors (or affiliate thereof
including any subsidiary of any private equity fund
managed by Fortress Investment Group LLC or any of its
investment and advisory affiliates) on terms
substantially comparable to the terms hereof (meaning
that without your consent, there will be no diminution
in the cash compensation terms of the employment
relationship).
Benefits: You (and your eligible dependents, if any) may at your
election be covered under such health insurance plan as
covers Aircastle employees, subject to applicable
exclusions and limitations. You are eligible to
participate in Aircastle's 401(k) plan, if any, subject
to the terms of the plan. You are eligible to
participate in all other perquisite and benefit
arrangements generally made available by Aircastle to
its employees in general, subject to the terms of such
plans or programs. Each such benefit is subject to
modification, including elimination, from to time, at
Xxxxxxxxx's sole discretion. You shall be entitled to
vacation of 20 days per year in accordance with
Xxxxxxxxx's vacation policies.
"Cause" For purposes of this Letter Agreement, "cause" means
(i) your commission of an act of fraud or dishonesty in
the course of your service; (ii) your indictment or
entering of a plea of nolo contendere for a crime
constituting a felony or in
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respect of any act of fraud or dishonesty; (iii) your
commission of an act which would make you (or Aircastle
or Fortress Investment Group LLC or any of its
affiliates (collectively, "Fortress")) 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) your gross negligence or willful
misconduct in connection with your employment by
Aircastle; (v) your commission or omission of any act
that would result in or might reasonably be a
substantial factor resulting in the termination of
Fortress or any of its affiliates, for cause under any
of Fortress's, or any of its affiliates', material
management, advisory or similar agreements; (vi) your
willful failure to comply with any material policies or
procedures of Aircastle (or, for so long as your place
of work is co-located at Fortress offices, Fortress) as
in effect from time to time provided that you shall
have been delivered a copy of such policies or notice
that they have been posted on an Aircastle (or
Fortress) website prior to such compliance failure, and
or (vii) your commission of any material breach of any
of the provisions or covenants set forth herein,
provided, however, that discharge pursuant to this
clause (vii) shall not constitute discharge for "Cause"
unless you shall have received written notice from
Aircastle stating the nature of such breach and
affording you an opportunity correct the act(s) or
omission(s) complained of within ten (10) days of your
receipt of such notice.
Policies and You agree to comply fully with all of the Company's and
Procedures: for so long as your place of work is co-located at
Fortress offices, all Fortress policies and procedures,
as amended from time to time.
Termination: If your employment with the Company terminates for any
reason, you hereby agree that you shall immediately
resign from all positions (including, without
limitation, any management, officer or director
position) that you hold on the date of such termination
with the Company or Fortress, or any of the their
respective affiliates or with any entity in which the
Company or any of its affiliates has made any
investment. You hereby agree to execute and deliver
such documentation reasonably required by the Company
as may be necessary or appropriate to enable the
Company or Fortress, any of the Company's affiliates or
any entity in which the Company or any of its
affiliates has made an investment to effectuate such
resignation, and in any case, your execution of this
Letter Agreement shall be deemed the grant by you to
the officers of the Company of a limited power of
attorney to sign in your name and on your behalf such
documentation solely for the limited purposes of
effectuating such resignation.
Set-Off; Etc: You hereby acknowledge and agree, without limiting the
rights of the Company otherwise available at law or in
equity, that, to the extent permitted by law, any or
all amounts or other consideration payable to you
hereunder or any other agreement with Aircastle or
Fortress (including any of its affiliates),
3
may be set-off against any or all amounts or other
consideration payable by you to the Company under this
Letter Agreement or to the Company or any of its
affiliates under any other agreement between you and
the Aircastle Fortress or any of their respective
affiliates, including, without limitation, any
obligation resulting from your breach of the terms
hereof.
Representation: You represent that you are free to be employed
hereunder without any contractual restrictions, express
or 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
Aircastle and Fortress have 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 Aircastle or any
affiliate. You agree that you will not use such
information.
You represent that you understand that this Letter
Agreement sets forth the terms and conditions of your
employment relationship with Aircastle or an affiliate
and as such, you have no express or implied right to be
treated the same as or more favorably than any other
employee of Aircastle or any of its affiliates with
respect to any matter set forth herein based on the
terms or conditions of such person's employment
relationship with Aircastle or any of its affiliates.
You further agree to keep the terms of this Letter
Agreement confidential and not to disclose any of the
terms or conditions hereof to any other person,
including any employee of Aircastle or Fortress, except
your attorney or accountant or, upon the advice of
counsel after notice to Aircastle, as may be required
by law or as may be required in order to enforce or
defend against the enforcement of this Letter
Agreement.
Restrictive Covenants: You shall not, directly or indirectly, without prior
written consent of Aircastle, provide consultative
services to, own, manage, operate, join, control,
participate in, be engaged in, be employed by or be
connected with, any business, individual, partner,
firm, corporation or other entity, including without
limitation any business, individual, partner, firm,
corporation, or other entity that directly or
indirectly competes with (any such action,
individually, and in the aggregate, to "compete with"),
Aircastle or any of its affiliates, at any time during
your employment. In the case where your employment with
the Company is terminated by you for any reason or by
your employer for cause, such restrictions shall apply
for twelve (12) months after the effective date of such
termination solely as to any aircraft leasing and/or
aircraft finance business managed by Aircastle or
Fortress or any of their affiliates. Notwithstanding
anything else herein, the mere "beneficial ownership"
by you, either individually or as a member of a "group"
(as such
4
terms are used in Rule 13(d) issued under the
Securities Exchange Act of 1934) of not more than 5% of
the voting stock of any public company shall not be
deemed in violation of this Letter Agreement. These
restrictions shall not apply following the termination
of your employment if, Fortress has lowered your
interest in the Net Aircastle Operating Results for any
calendar year below the percentage set forth as item 1
on Exhibit B as of the date hereof (or such lower
percentage as may at any time be set forth as item 1 on
Exhibit B from time to time in accordance with the
terms of this Letter Agreement) and you resign because
of and within ninety (90) days of this event; or (ii)
Fortress terminates your employment without cause.
You shall keep secret and retain in strictest
confidence, and shall not use for your benefit or the
benefit of others, except in connection with the
business and affairs of the Company (which, for
purposes of and in each instance used in this paragraph
and the next paragraph, shall include Fortress
(including (i) any fund managed by Fortress or any of
its affiliates during or prior to the period of your
employment with the Company and (ii) the Company's
other affiliates, including, without limitation,
portfolio investments of the private equity business of
Fortress)), all confidential information of and
confidential matters (whether made available in
written, electronic form or orally) relating to (x) the
Company's business and the Company (including, without
limitation, the actual investments of the Company, the
contemplated investments of the Company, the financial
performance of Aircastle or any fund managed by
Fortress or of any investment thereof, and the identity
of the equity investors in the Company or in any of the
funds or businesses Fortress or any of its affiliates
manages), (y) all corporations or other business
organizations in which the Company has or has had an
investment and (z) third parties, learned by you
heretofore or hereafter directly or indirectly in
connection with your employment or from the Company
(the "Confidential Company Information"). In
consideration of, and as a condition to, continued
access to Confidential Company Information, and without
prejudice to or limitation on any other confidentiality
obligation imposed by agreement or law, you hereby
undertake to use and protect Confidential Company
Information in accordance with restrictions placed on
its use or disclosure. Without limiting the foregoing,
you shall not disclose such Confidential Company
Information to any director, officer, partner, employee
or agent of the Company unless, in your reasonable good
faith judgment, such person has a need to know such
Confidential Company Information in furtherance of the
business of the Company and you shall not disclose
Confidential Company Information to anyone outside of
the Company except with the Company's express written
consent. The foregoing restrictions shall not apply to
Confidential Company Information which (i) is at the
time of receipt or thereafter becomes publicly known
other than a result of your having breached this Letter
Agreement or (ii) is received by you from a third party
not under an obligation to any person to keep such
information confidential, subject to your use of your
reasonable best efforts to obtain (and to cooperate
5
with the Company's efforts to obtain) judicial approval
for such information to be disclosed under seal or
subject to other confidentiality orders. All memoranda,
notes, lists, records, property and any other tangible
product and documents (and all copies and excerpts
thereof), whether visually perceptible,
machine-readable or otherwise, made, produced or
compiled by you or made available to you concerning the
business of the Company, (i) shall at all times be the
property of the Company and shall be delivered to the
Company at any time upon its request, and (ii) upon
your termination of employment, shall be immediately
returned to the Company. The foregoing shall not limit
any other confidentiality obligations imposed by
agreement or by law.
From the date hereof through the end of the one-year
period commencing with your termination of employment
with the Company, you shall not, without the Company's
prior written consent, directly or indirectly, (i)
solicit or encourage to leave the employment or other
service of the Company or any of its affiliates any
employee or independent contractor thereof or (ii) hire
(on behalf of yourself or any other person or entity)
any employee or independent contractor who has left the
employment or other service of the Company or any of
its affiliates within the one-year period which follows
the termination of such employee's or independent
contractor's employment or other service with the
Company or any such affiliate.
From the date hereof through the end of the two-year
period commencing with your termination of employment
with the Company you shall not, whether for your own
account or for the account of any other person, firm,
corporation or other business organization,
intentionally interfere with Aircastle or Fortress's
relationship with, or endeavor to entice away from
Aircastle or Fortress or any fund, business or account
managed by Fortress, any investor in Aircastle Fortress
or any fund, business or account managed by Fortress.
Any breach by you of any of the provisions of the four
foregoing paragraphs (the "Restrictive Covenants")
shall entitle Aircastle (including each of its
affiliates) to cease making any payments to you under
any agreement, including this Letter Agreement,
pursuant to which you are entitled to monies from
Aircastle, or Fortress (or any such affiliate). In
addition, you acknowledge and agree that any breach by
you of the Restrictive Covenants would result in
irreparable injury and damage for which money damages
would not provide an adequate remedy. Therefore, if you
breach, or threaten to commit a breach of, any of the
provisions of the Restricted Covenants, the Company
shall have the right and remedy, in addition to, and
not in lieu of, any other rights and remedies available
to the Company under law or in equity (including,
without limitation, the recovery of damages), to have
the Restrictive Covenants specifically enforced
(without posting bond and without the need to prove
damages) by any court having equity jurisdiction,
6
including, without limitation, the right to an entry
against you of restraining orders and injunctions
(preliminary, mandatory, temporary and permanent)
against violations, threatened or actual, and whether
or not then continuing, of the Restrictive Covenants.
You acknowledge and agree that the Restrictive
Covenants are reasonable in geographical and temporal
scope and in all other respects. If it is determined
that any of the Restrictive Covenants, or any part
thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected
and shall be given full effect, without regard to the
invalid portions. If any court or other decision-maker
of competent jurisdiction determines that any provision
of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical
scope of such provision, then, after such determination
has become final and unappealable, the duration or
scope of such provision, as the case may be, shall be
reduced so that such provision becomes enforceable and,
in its reduced form, such provision shall then be
enforceable and shall be enforced.
Notwithstanding anything in this Letter Agreement to
the contrary, the provisions of this and the five
foregoing paragraphs shall survive any termination of
this Letter Agreement and any termination of your
employment.
Employment You are an at-will employee. This letter is not a
Relationship: contract of employment for any specific period of time,
and your employment may be terminated by you or by the
Company at any time for any reason or no reason
whatsoever. Notwithstanding the foregoing, you agree to
provide the Company with at least 30 days advance
written notice of your termination. In each case where
the term Company is used in this Letter Agreement it
shall mean, in addition to the Company, any affiliate
of Aircastle or Fortress for whom you may be employed
on a full-time basis at the applicable time.
The Company shall be entitled, in connection with its
investment structuring, tax planning, business
organization or other reasons, to terminate your
employment in connection with an invitation from
another affiliate of Aircastle or Fortress, including,
without limitation, a direct or indirect subsidiary of
any private equity fund managed by Fortress Investment
Group LLC or any of its investment advisory affiliates,
to accept employment with such affiliate in which case
the terms and conditions hereof shall apply to your
employment relationship with such entity mutatis
mutandis. For the sake of clarity, any termination of
your employment under such circumstances in which you
are not offered employment with another affiliate of
Fortress shall be a termination without Cause.
Entire Agreement: This Letter Agreement contains the entire agreement
between the parties with respect to the subject matter
hereof and supersedes all prior agreements, written or
oral, with respect thereto. Without limiting the
foregoing, any prior offer letter is hereby superceded
in its entirety. YOU REPRESENT THAT IN EXECUTING THIS
LETTER AGREEMENT YOU HAVE NOT RELIED UPON ANY
7
REPRESENTATION OR STATEMENT NOT SET FORTH HEREIN.
Without limiting the foregoing, you represent that you
understand that you shall not be entitled to any equity
interest, profits interest or other interest in the
Company (including any of its affiliates, including any
fund or other business managed by any of them) except
as set forth in a writing signed by the Company. The
Company's affiliates are intended beneficiaries under
this Letter Agreement
Governing Law; This Letter Agreement shall be governed by and
Jurisdiction: construed in accordance with the laws of the State of
New York without regard to the principles of conflicts
of law thereof.
THE PARTIES AGREE THAT EXCLUSIVE JURISDICTION WILL BE
IN A COURT OF COMPETENT JURISDICTION IN THE CITY OF NEW
YORK AND HEREBY WAIVE OBJECTION TO THE JURISDICTION OR
TO THE LAYING OF VENUE IN ANY SUCH COURT.
* * * *
We look forward to a successful employment relationship with you. If the
foregoing terms of employment are acceptable, please so indicate in the space
provided below.
Very truly yours,
Aircastle Investment Limited
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx
Accepted and agreed to:
/s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx
8
EXHIBIT A
This is Exhibit A to the Letter Agreement between Xxxx Xxxxxxx and
Aircastle Advisor LLC, dated as of February 3, 2005 (the "Letter Agreement").
When executed by both parties, the terms of this Exhibit A are intended to be
incorporated by reference into the Letter Agreement.
Annual Salary: $200,000 per annum
Aircastle Advisor LLC
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx
/s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx
9
EXHIBIT B
This is Exhibit B to the Letter Agreement between Xxxx Xxxxxxx and
Aircastle Advisor LLC dated as of February 3, 2005 (the "Letter Agreement").
When executed by both parties, the terms of this Exhibit B are intended to be
incorporated by reference into the Letter Agreement.
1. PERCENTAGE OF NET AIRCASTLE OPERATING RESULTS: 3.50% (subject to adjustment
for fiscal years subsequent to
2006).
Your percentage of the Net Aircastle Operating Results (as defined below) will
be paid to you as soon as practicable after results of Aircastle Investment
Limited ("Aircastle") for the applicable fiscal year have been determined, but
no later than 90 days after the end of such fiscal year (unless the audited
financials therefore have not yet then been completed, in which case at least
90% of the estimated amount shall be paid no later than such 90th day and the
remainder paid promptly upon completion of such audit). For fiscal years
subsequent to 2006, Fortress reserves the right, in its sole and absolute
discretion, to raise or to lower your percentage interest in the Net Aircastle
Operating Results.
In no event will you be entitled to receive any of the Net Aircastle Operating
Results described above if you are not actively employed by or have given notice
of your termination of your employment with the Company (or any affiliate of
Aircastle for whom you may be employed on a full-time basis at the time) at the
time such compensation is to be paid.
The "NET AIRCASTLE OPERATING RESULTS" equals (i) 1.5% of Aircastle Investment
Limited's average book equity for the current year ending December 31 of the
relevant year plus an incentive fee of approximately 25% of Aircastle's return
on equity in excess of a preferred return of 8% (net of rebates thereof with
respect to investments by Fortress affiliates or other investors entitled to
rebates) minus (ii) the sum of (x) (A) all compensation costs (including
discretionary bonuses that may be paid to employees of Aircastle and its
affiliates providing services for Aircastle), (B) rent and (C) other operating
expenses (including reserves), in each case which are incurred by or allocable
to [Aircastle Advisor LLC and applicable affiliates] and (y) any taxes payable
in respect of the amounts set forth in (i) above. Determinations of allocable
shares of each category of expense set forth in clause (ii)(x) above (which
allocations may vary by category) will be made by Fortress, in its sole and
absolute discretion.
2. AIRCASTLE OPTIONS. In connection with each Aircastle common stock equity
financing (for cash), you shall receive a number of options for shares of common
stock of Aircastle equal to (i) the aggregate number of shares of common stock
issued in such offering multiplied by (ii) (x) ten percent of (y) your
percentage at such time of the Net Aircastle Operating Results as set forth
above. Each option grant shall have a vesting schedule pursuant to which 25% of
the shares subject to such option will vest on the first, second, third and
fourth anniversaries of the date of grant, as well as such other terms and
conditions as Fortress has, as manager of other companies, imposed in respect
option grants.
3. AIRCASTLE EQUITY COMMITMENT. You agree to make an equity commitment in
Aircastle (the specific amount designated by you in accordance with the next
sentence, the "Aircastle Commitment") on terms substantially similar to other
investors in Aircastle in the amount of
10
between $100,000 and $200,000; provided, however, that the form of such
investment may be restructured on mutually acceptable terms for tax structuring
or other reasons. You shall confirm the specific Aircastle Commitment you have
elected, by executing and delivering the Aircastle subscription agreement or
such other documentation deemed by Fortress or Aircastle to be necessary and
appropriate to evidence such commitment.
Aircastle Advisor LLC
By: /s/ Xxxxxx X. Xxxxx, Xx.
-------------------------
Xxxxxx X. Xxxxx, Xx.
/s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx.
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