[FORTRESS INVESTMENT GROUP LLC LOGO]
1251 AVENUE OF THE AMERICAS
16TH FLOOR
NEW YORK, NY 10020
TEL 212 798-6100
July 15, 2004
Joseph Schreiner
5205 N. Marina Pacifica Drive, Suite 21
Long Beach, CA 90803
Dear Joseph:
It is with great pleasure that we extend to you an offer to join
Fortress
Investment Group LLC (including it affiliates, the "Company" or
"Fortress") on
the terms and conditions set forth below.
Title:
Executive Vice President of [precise name to be determined:
Aircastle Lease Finance Ltd.] ("Aircastle").
Base Salary:
Your base salary is as set forth in Exhibit A
(the "Annual Salary").
Start Date:
On or about July 26, 2004
Location:
1251 Avenue of the Americas
New York, NY
Aircastle:
Fortress currently expects to capitalize Aircastle as a
non-U.S. domiciled, passive tax vehicle. Fortress currently
expects that Aircastle will be externally managed by
[precise name to be determined: Aircastle Advisers LLC]
(including its successor by assignment or otherwise,
"ManageCo"), an affiliate of Fortress, pursuant to a
management agreement that will be entered into between
Aircastle and ManageCo on such terms and conditions as
Fortress in its sole discretion determines (as amended from
time to time, the "Aircastle Management Agreement").
Fortress currently expects that ManageCo will earn from
Aircastle pursuant to the Aircastle Management Agreement a
management fee of 1.5% of equity under management and an
incentive fee of approximately 25% of the return on equity
in excess of a preferred return of 8%.
Aircastle
Subject to the terms of this Letter Agreement, you will be
Incentive
paid an annual bonus in respect of each fiscal year in an
Compensation:
amount equal to the greater of (i) the percentage of the Net
Aircastle Operating Results (as defined on Exhibit B
hereto), if any, set forth on Exhibit B hereto (subject to
adjustment for fiscal years subsequent to 2005 as provided
below and to pro rata dilution in the
case of awards of interests in the Net Aircastle Operating
Results to other individuals) and (ii) the Guaranteed
Minimum Bonus. The Guaranteed Minimum Bonus is $200,000 (pro
rated in respect of the first year hereunder based on the
period beginning on your Start Date and ending at the end of
such fiscal year). You must be actively employed by and not
have given notice of your termination of your employment
with the Company (or any affiliate of Fortress for whom you
may be employed on a full-time basis at the time) at the
time such bonus compensation is to be paid; provided,
however, that you shall be paid such bonus compensation in
respect of any fiscal year in the event that your employment
is terminated by the Company without cause following the end
of such fiscal year and prior to the date such bonus
compensation would otherwise have been paid.
For fiscal years subsequent to 2005, Fortress reserves the
right, in its sole and absolute discretion, to raise or to
lower your percentage interest in the Net Aircastle
Operating Results.
Equity
In addition, Exhibit B hereto sets forth your co-investment
Incentive
rights and obligations with respect to Aircastle.
Plan:
Expense
The Company will reimburse business expenses incurred in the
Reimbursement:
ordinary course of business.
Severance:
In the event that the Company terminates your employment
without cause (as defined below) prior to the eighteen (18)
month anniversary of your Start Date, 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 such
eighteen (18) month anniversary (for purposes of this clause
(i) only, assuming that a pro rata portion of the Guaranteed
Minimum Bonus was payable on such eighteen (18) month
anniversary for the period beginning on the first day of the
fiscal year in which such termination occurs and ending on
such anniversary) 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 Fortress or any of its affiliates or a
successor to Fortress (or affiliate thereof) 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 or in
the available medical health insurance benefits, location of
employment will be New York, Chicago or Los Angeles, and
that the other material terms and conditions of the
agreement will apply).
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Benefits:
You (and your eligible dependents, if any) may at your
election be covered under Fortress's health insurance plan,
subject to applicable exclusions and limitations. You are
eligible to participate in Fortress's 401 (k) plan, subject
to the terms of the plan. You are eligible to participate in
all other perquisite and benefit arrangements generally made
available by Fortress to its employees in general,
including, without limitation, any directors and officers
insurance and any benefits of indemnification or limitation
of liability which may be provided to Fortress employees
with respect to their service to Fortress or to another
entity at the request of or for the benefit of Fortress,
subject to the terms of such plans or programs. Each such
benefit is subject to modification, including elimination,
from to time, at Fortress sole discretion. You shall be
entitled to vacation of 20 days per year in accordance with
Fortress'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 employment; (ii) your 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) your commission of an act which would make you or
Fortress (including any of its 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)
your gross negligence or willful misconduct in connection
with your performance of your duties in connection with your
employment by Fortress (including any affiliate of Fortress
for whom you may be employed on a full-time basis at the
time) or your failure to comply with any of the restrictive
covenants set forth in this Letter Agreement; (v) your
commission of any act that would result or which might
reasonably be a substantial factor resulting in the
termination of Fortress (including any of its affiliates)
for cause under any of Fortress's or its affiliates'
management, advisory or similar agreements; (vi) your
willful failure to comply with any material policies or
procedures of 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 a Fortress
website prior to such compliance failure, and (vii) your
failure to perform the material duties in connection with
your position, unless you remedy such failure no later than
30 days following delivery to you of a written notice from
Fortress describing such failure in reasonable detail
(provided that you shall not be given more than one
opportunity in the aggregate to remedy failures described in
this clause (vii)).
Policies and
You agree to comply fully with all of the Company's policies
Procedures:
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, any of the
Company's 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
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reasonably required by the Company as may be necessary or
appropriate to enable the Company, 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 Fortress (including any of its
affiliates), 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 Fortress or any of
its 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
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 understand that this Letter Agreement
sets forth the terms and conditions of your employment
relationship with Fortress and as such, you have no express
or implied right to be treated the same as or more favorably
than any other employee of Fortress 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 Fortress 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 Fortress, except
your attorney or accountant or, upon the advice of counsel
after notice to Fortress, 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
You shall not, directly or indirectly, without prior written
Covenants:
consent of Fortress, provide consultative services to, own,
manage, operate, join, control,
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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"), Fortress or any of its affiliates, including
Aircastle, at any time during your employment, except as
contemplate by Exhibit C to this Letter Agreement through
the Closing Date (as defined on Exhibit C). 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 Fortress
or any of its affiliates. Notwithstanding anything else
herein, (i) the mere "beneficial ownership" by you, either
individually or as a member of a "group" (as such 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 and (ii) your ownership of a non-controlling
passive investment in Avsource, Inc., shall not be deemed in
violation of this Letter Agreement. These restrictions shall
not apply following the termination of your employment in
respect of Consulting Services (including where legally
permissible the provision of consulting services to the
companies listed on Exhibit D hereto) or if, (i) on or
before 18 months after your Start Date, Aircastle has not
purchased or entered into purchase agreements for the
purchase of aircraft in respect of which Aircastle earns
management fees with an aggregate purchase price of at least
$200 million and you resign because of and within ninety
(90) days of such 18th month anniversary, (ii) Fortress has
lowered your interest in the Net Aircastle Operating Results
for any calendar year below the percentage set forth on
Exhibit B as of the date hereof (or such lower percentage as
may at any time be set forth on Exhibit B from time to time
in accordance with the terms of this Letter Agreement)
(except as such percentage is reduced after the date hereof
as a result of pro rata dilution in connection with the
award to any other individuals of an interest in the Net
Aircastle Operating Results and you resign because of and
within ninety (90) days of this event; or (iii) 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) Aircastle, (ii) any other fund
managed by Fortress or any of its affiliates during or prior
to the period of your employment with the Company and (iv)
the Company's other affiliates, including, without
limitation, portfolio investments of the private equity
business of Fortress)
