[Aircastle Investment Limited letterhead]
February 3, 2005
Mr. David Walton
9249 NE 37th Place
Yarrow Point, WA 98004
Dear David:
It is with great pleasure that we extend to you an offer to join
Aircastle
Advisor LLC (together with its Affiliates (as defined below), the
"Company" or
"Aircastle") on the terms and conditions set forth below.
Title:
General Counsel
Start Date:
On or about February
15, 2005 (the "Start Date")
Location:
US offices of Aircastle, currently at 1251 Avenue of the
Americas, New York, NY, provided, however, that you may be
requested to relocate to offices of Aircastle or one of its
foreign Affiliates (i) in Connecticut, (ii) in Dublin or,
(iii) as you and we may agree, such other location outside of
the U.S.
Base Salary:
Your base salary is $200,000.
Initial Payment:
To help defray certain expenses associated with your
relocation, you will receive a payment of $45,000, payable
together with your first paycheck; provided, however, that
you agree to repay to the Company the full amount of such
payment (without interest) in the event that for any reason
(other than a termination of your employment by the Company
without cause (as defined below)) you are not employed by the
Company on the six month anniversary of your Start Date.
Annual
The Company may in its sole discretion decide to grant you
Discretionary
additional compensation or a bonus; however this letter
Incentive
agreement does not entitle you to such a payment (other than,
Compensation:
as provided below, the Guaranteed 2005 Bonus).
You shall receive additional compensation from the Company in
respect of 2005 equal to $200,000 (your "Guaranteed 2005
Bonus"). The Guaranteed 2005 Bonus will be paid as soon as
practicable after performance results in respect of 2005 have
been determined, but in no event later than January 31, 2006.
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 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 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. In the event that you are terminated by the
Company (other than in the case where you are offered
employment by any of Affiliate of or successor to the
Company) without cause (as defined below) (but not including
a termination in the event of your death or disability) the
Company shall pay you (i) if such termination occurs at any
time prior to December 31, 2007, an amount equal to your base
salary plus (ii) if such termination occurs at any time after
your Start Date and prior to the date on which you have been
paid your Guaranteed 2005 Bonus, an amount equal to your
Guaranteed 2005 Bonus, such amount(s) to be paid within
thirty (30) days of such date of termination, provided you
sign a separation agreement prepared by the Company which
includes a general release of claims.
The following outlines what we anticipate will be the
Company's approach to incentive compensation, subject to the
foregoing paragraphs, although the Company will be free to
change its incentive compensation methodology from time to
time: you can expect that a portion of each year's annual
bonus will be paid in cash (either at the end of the
applicable fiscal year or at the beginning of the subsequent
fiscal), and that the remaining portion of the bonus will be
paid as grant of restricted stock, with the portion of the
bonus to be paid in stock to increase with levels of
compensation. The number of such shares of restricted stock
to be granted will be calculated by dividing the amount being
paid in stock by the FMV of the stock on the date of grant.
Generally, restrictions on such shares of restricted stock
will lapse 1/3 on each of the 3rd, 4th and 5th anniversaries
of the date of grant. You would receive dividends on unvested
shares.
In connection with your joining the Company, you shall be
awarded a grant (the "Grant") of 50,000 shares of restricted
stock which shall vest one-third on each of the 3rd, 4th and
5th anniversaries of your Start Date. You would receive
dividends on unvested shares. The Grant will be made pursuant
to a restricted stock agreement in form and substance
customary under such circumstances, including provisions
which provide that (i) you shall be vested in one-third of
the Grant if your employment is terminated by the Company
without cause prior to the day on which such shares shall be
fully vested and (ii) you shall be vested in 100% of the
Grant if both (x) a change of control (to be defined in the
Company's incentive stock award plan) occurs and (ii) your
employment is terminated by the Company (or its successor)
without cause within 12 months of such change of control.
Expense
The Company will reimburse business expenses incurred in the
ordinary
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Reimbursement:
course of business, including reasonable moving expenses from
your home in the Seattle area to the New York metropolitan
area.
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 senior executives, subject to the terms of
such plans or programs. Each such benefit is subject to
modification, including elimination, from to time, at
Aircastle's sole discretion. You shall be entitled to
vacation of 20 days per year in accordance with Aircastle'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
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 for
Procedures:
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
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date of such termination with the Company, 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, 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 ackn
