Securities
(Amendment No. )
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| [ ] | Preliminary Proxy Statement |
| Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||
[X] | Definitive Proxy Statement |
| [ ] | Definitive Additional Materials |
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5, 2017
500 Steamboat Road
, Greenwich, Connecticut, USA, 06830.
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| Christopher L. Beers | ||||
 | ||||
| 1. | the election of |
| 2. |
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the appointment of Ernst & Young LLP as independent registered public accounting firm for Aircastle Limited for fiscal year |
| 3. |
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| 4. | an advisory vote on executive compensation; |
| 5. | an advisory vote on the frequency of the advisory vote on executive compensation; and |
| 6. | any other business properly presented at the Annual Meeting and any adjournment(s) or postponement(s) of the Annual Meeting. |
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5, 2017
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Matters to be | ||||
Legal Proceedings | ||||
Board | ||||
| Board | ||||
| Committees of the Board |
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Director Award Limits | ||||
| OWNERSHIP OF THE COMPANY’S COMMON SHARES | ||||
Security Ownership of Certain Beneficial Owners and Management | ||||
Pay for Performance Philosophy | ||||
| What We Pay | ||||
| What We Don’t Pay | ||||
| 2016 Compensation | ||||
| Long-Term Incentive Plan | ||||
| How We Make Decisions | ||||
| Share Ownership Guidelines | ||||
| Tax Implications of Our Compensation | ||||
| Last Year’s Say on Pay Vote | ||||
| Compensation Committee Interlocks and Insider Participation | ||||
Compensation Overview | ||||
| COMPENSATION COMMITTEE REPORT | ||||
| 2016 | ||||
| 2016 | ||||
Employment Agreements with Named Executive Officers | ||||
| Restricted Share and PSU Provisions under the Incentive Plan | ||||
| Outstanding Equity Awards at Fiscal Year-End for | ||||
| 2016 | ||||
| Shareholder Agreement Amendment | ||||
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| Policies and Procedures For Review, Approval or Ratification of Transactions with Related Persons | ||||
PROPOSAL NO. 2 – | ||||
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PROPOSAL NO. | ||||
PROPOSAL NO. 4 – ADVISORY VOTE ON EXECUTIVE COMPENSATION | ||||
| PROPOSAL NO. 5 – ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION | ||||
IMPORTANT NOTICE | ||||
| APPENDIX A - RECONCILIATION OF NONGAAPMEASURES TO U.S. GAAP RESULTS | ||||
| APPENDIX B - AIRCASTLE LIMITED AMENDED AND RESTATED 2014 OMNIBUS INCENTIVE PLAN | ||||
5, 2017 5, 2017. the election of the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year any other business properly presented at the Annual Meeting and any adjournment(s) or postponement(s) of the Annual Meeting. quorum for the transaction of business. If a quorum is not present, the Annual Meeting may be adjourned by the chairman of the meeting until a quorum has been obtained. By internet at www.proxyvote.com; By email at sendmaterial@proxyvote.com. incurred in connection with the distribution of the proxy materials. We have also engaged Georgeson, Inc. to assist the Company in the solicitation of proxies for an anticipated fee of Name Position Ronald W. Allen Giovanni Bisignani Michael J. Cave Ryusuke Konto Yukihiko Matsumura Agnes Mura Charles W. Pollard Gentaro Toya Peter V. Ueberroth Ron Wainshal 100 Most Important Hispanics in Technology and Business for 2006 by Hispanic Engineer and Information Technology magazine. He holds a bachelor's degree in engineering from Purdue University. Mr. Cave is a Director of Harley-Davidson, Inc., Ball Corporation and Esterline Technologies Corporation. The Board has determined that Mr. Cave is “financially literate” as defined by NYSE rules and is a “financial expert” as defined by SEC regulations. Mr. Cave's skills, expertise and experience in engineering and financial services make him an extremely valuable member of the Board, particularly in light of his insights into the various products under development and entering production at both Boeing and its competitors and in light of the many high-level customer relationships that he developed in his time at Boeing Commercial Airplanes and at Boeing Capital Corp., its financing arm. Mr. Konto was designated to the Board by Marubeni pursuant to the Shareholder Agreement between the Company and Marubeni, dated June 6, 2013, as described in “Certain Relationships and Related Party Transactions – Shareholder Agreement for Sale of Common Shares to Marubeni Corporation.” Name Ronald W. Giovanni Bisignani Douglas A. Hacker* Ryusuke Konto Agnes Mura Charles W. Pollard Gentaro Toya Peter V. Ueberroth Ron Wainshal reviewing (i) the audit plans and findings of the independent certified public accountants and our internal audit and risk review staff and (ii) the results of regulatory examinations and monitoring management’s corrective action plans with respect to such plans, findings and results where necessary; reviewing our financial statements, including any significant financial items and/or changes in accounting policies, with our senior management and independent certified public accountants; reviewing our accounting and internal reviewing related party transactions; reviewing the process by which we assess and manage exposure to financial and legal risk. reviewing the salaries, benefits and share-based grants for executive officers; reviewing corporate goals and objectives relevant to Chief Executive Officer compensation, evaluating the Chief Executive Officer’s performance in light of those goals and objectives, and determining the Chief Executive Officer’s compensation based on that evaluation; acting as administrator of the Amended and Restated 2005 Aircastle Limited Equity Incentive Plan, or the 2005 reviewing risks relating to the Company’s employment practices and the Company’s compensation and benefits practices. reviewing the performance of the Board and incumbent advising the Board with respect to the corporate governance principles applicable to the Company; reviewing risks associated with the Company’s management and overseeing the evaluation of the Board and the Company’s management. 2016. shareholders. believes that it is appropriate for Aircastle not to have a specific policy since shareholders are always free to submit recommendations for Board candidates, simply by following the procedures set forth in our Bye-laws, as described below. Company as described above. Directors are paid an annual cash fee of US$80,000. The Chairman of the Board is paid an additional annual cash fee of US$50,000. Each of the chairs of the Audit Committee and Investment Committee is paid an annual cash fee of US$35,000 and each other such committee member is paid an annual cash fee of US$20,000. The Compensation Committee Chair is paid an annual cash fee of US$25,000 and Compensation Committee members are paid an annual cash fee of US$10,000. The Nominating and Corporate Governance Committee chair is paid an annual cash fee of US$20,000 and Nominating and Corporate Governance Committee members are paid an annual cash fee of US$10,000. Name Ronald W. Allen Giovanni Bisignani Douglas A. Hacker Ryusuke Konto(3) Ronald L. Merriman Agnes Mura(4) Charles W. Pollard Gentaro Toya(3) Peter V. Ueberroth(5) Ron Wainshal(3) The reported amounts reflect the aggregate fair value on the grant date of the restricted shares granted to our The reported amounts consist of dividend payments made by the Company on Our affiliated Position Relevant Director The table below describes common share ownership information by our Name of Beneficial Owner Executive Officers and Directors(4) Ron Wainshal(5) Michael Inglese Michael Kriedberg Joseph Schreiner David Walton Ronald W. Allen Giovanni Bisignani Douglas A. Hacker Ryusuke Konto(6) Ronald L. Merriman(7) Agnes Mura Charles W. Pollard Gentaro Toya(6) Peter V. Ueberroth(8) All directors and executive officers as a group ( 14 persons) 5% Shareholders Marubeni Corporation(9) Ontario Teachers’ Pension Plan(10) River Road Asset Management LLC(11) Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Common shares subject to options or warrants currently exercisable or exercisable within 60 days of the date hereof, are deemed outstanding for computing the percentage of the person holding such options or warrants but are not deemed outstanding for computing the percentage of any other person. Consists of common shares held, including restricted shares, shares underlying share options exercisable within 60 days and shares underlying warrants exercisable within 60 days. Percentage amount assumes the exercise by such persons of all options and warrants exercisable within 60 days to acquire common shares and no exercise of options or warrants by any other person. The address of each officer or Includes 2,400 common shares held indirectly as Custodian for Sarah Wainshal. Includes 19,757 common shares held indirectly by the Merriman Family Includes Name Title Ron Wainshal Michael Inglese Michael Kriedberg Metric Adjusted Return on Equity1 Cash Flow per Share2 New Investments3 Adjusted Return on Equity is Adjusted Net Income divided by the average shareholders’ equity, excluding the fair market value of derivatives. Adjusted Net Income, or ANI, is net income before certain expenses related to our financings and interest rate derivative accounting, share-based compensation expense and other items we have deemed unusual when viewed in the context of our Cash Flow per Share for a period is Cash Flow from Operations before changes in working capital plus principal payments from our finance leases and distributions from our joint venture investment divided by the weighted average number of shares outstanding for that period. A reconciliation between non-GAAP performance metrics and U.S. GAAP results is included as Appendix A to this proxy statement. New Investments measures the total amount invested in aviation assets. and Compensation For a discussion of deductibility of our incentive compensation awards under Section 162(m) of the Internal Revenue Code of 1986 as amended, referred to herein as the Internal Revenue Code, see the section below entitled “Tax Implications of Our Compensation.” plan award. Base Salary.Base salaries provide fixed compensation and allow us to attract and retain talented management by taking into account the current market environment and the responsibilities, experience, value to the Company and demonstrated performance of our named executive officers. In by 50%, further leveraging our compensation toward long-term performance based compensation. The primary goals of our compensation programs are to attract, motivate and retain the most talented and dedicated employees and to align incentive compensation with enhancing shareholder value. Our compensation programs are intended to: motivate our align each Performance Metric Adjusted Return on Equity1 Cash Flow per Share1 New Investments Total management’s success in executing the 2016 business plan. The Company's performance for New Investments was particularly noteworthy in light of the highly competitive environment for aircraft investments in 2016. 2016 2016. Mr. Wainshal the use of multiple corporate financial performance metrics, rather than relying on a single measure; the use of the adoption of robust share ownership Position Chief Executive Officer Chief Financial Officer Chief Commercial Officer named executive officers for 2016 were $4,027,672, only 20.6% of the maximum amount permitted under the plan. Table and is not a substitute for the information in that table. Rather, it is intended to show how Name and Principal Position Ron Wainshal Chief Executive Officer 2012 2011 600,000 600,000 510,000 510,000 1,019,988 1,002,800 112,881 115,022 2,242,869 2,227,822 Michael Inglese Chief Financial Officer 2012 2011 400,000 400,000 400,000 340,000 400,004 334,271 47,765 74,907 1,247,769 1,149,178 David Walton Chief Operating Counsel 2012 2011 400,000 400,000 400,000 400,000 400,004 393,262 52,636 72,184 1,252,640 1,265,446 Michael Kriedberg (3) Chief Commercial Officer Joseph Schreiner Executive Vice President, Technical 2012 2011 275,000 270,833 181,000 175,000 53,994 49,161 16,674 20,382 526,668 515,376 The amounts reported in the The amounts reported in “All Other Compensation” column represent dividends paid on unvested shares, 2016 Name and Principal Position Ron Wainshal Chief Executive Officer 2012 2011 600,000 600,000 510,000 510,000 1,002,800 1,317,882 112,881 2,225,681 2,542,904 Michael Kriedberg Chief Commercial Officer David Walton Chief Operating Officer, General Counsel 2012 2011 400,000 400,000 400,000 400,000 393,262 494,196 52,636 72,184 1,245,898 1,366,380 Michael Inglese Chief Financial Officer 2012 2011 400,000 400,000 400,000 340,000 334,271 439,294 47,765 74,907 1,182,036 1,254,201 Joseph Schreiner Executive Vice President, Technical 2012 2011 275,000 270,833 181,000 175,000 49,161 65,875 16,674 20,382 521,835 532,090 The amounts reported in the Annual Equity Award column for 2016, 2015 and 2014 reflect the aggregate fair value on the grant date of the restricted share awards granted to our NEOs determined in accordance with FASB ASC Topic 718. The amounts reported in the Long-Term Incentive Plan column for 2016 reflect the aggregate fair value on the grant date of the AROE PSUs and the TSR PSUs granted to our NEOs determined in accordance with FASB ASC Topic 718 based on the probable achievement of the applicable AROE and TSR performance conditions as of the grant date. The aggregate fair value on the grant date that would have been included for the AROE PSUs and TSR PSUs, assuming that the highest level of the performance conditions would be achieved, is as follows: Mr. Wainshal US$4,275,000; Mr. Inglese US$2,200,000; Mr. Kriedberg US$1,980,000; Mr. Beers US$1,460,000; and Mr. Dahlke US$320,000. For a summary of the assumptions made in the valuation of these awards, please see Note 8 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. See “Grants of Plan-Based Awards” below for additional information regarding restricted share awards and PSUs made to our NEOs in 2016. target based on actual performance against the 2016 AROE target. The Name Ron Wainshal Mike Kriedberg David Walton Michael Inglese Joseph Schreiner Mr Dahlke is party to a severance letter described in more detail below. Incentive Plan 2016 Valued at a common share price of US$ These These 69,047 restricted shares vest in increments of 34,068, 23,817 and 11,162 each January 1, commencing January 1, 2017. 2016 Name Ron Wainshal David Walton Michael Inglese Joseph Schreiner Michael Kriedberg (2) The aggregate dollar value realized is calculated based on the US$ Name/Benefit Ron Wainshal Cash Severance Pro-rata Bonus COBRA Reimbursement 25,119 25,119 25,119 Vacation Market Value of Accelerated Vesting of Restricted Shares Michael Kriedberg Cash Severance Pro-rata Bonus COBRA Reimbursement 25,119 25,119 25,119 Vacation Market Value of Accelerated Vesting of Restricted Shares(2) David Walton Cash Severance Pro-rata Bonus COBRA Reimbursement 25,119 25,119 25,119 Vacation Market Value of Accelerated Vesting of Restricted Shares Michael Inglese Cash Severance Pro-rata Bonus COBRA Reimbursement 25,119 25,119 25,119 Vacation Market Value of Accelerate Vesting of Restricted Shares Joseph Schreiner Cash Severance Pro-rata Bonus COBRA Reimbursement Vacation Market Value of Accelerated Vesting of Restricted Shares As described below, the total amount of payments for each named executive officer may be subject to reduction to the extent necessary to avoid an excise tax under Section 4999 of the Internal Revenue Code. if the employment of such named executive officer is terminated without “cause” or with “good reason” (as defined in such employment agreement), and if he signs a general release of claims and complies with the covenants described below, then he will be entitled to if any amounts to be paid to such named executive officer would constitute “excess parachute payments” subject to the excise tax imposed under Section 4999 of the Internal Revenue Code, the amount will be reduced to the extent necessary to avoid the excise such named executive officer covenants not to compete with Aircastle for six months following termination of his employment for any reason and will not solicit the employees of Aircastle or the clients or customers of Aircastle for competing business, in each case, for a period of twelve months. 537,794 common shares. 2017. Shareholder Agreement Amendment venture's total assets were approximately US$611 million. Name Position Agnes Mura Mura. Audit Fees(1) Audit-Related Fees Tax Fees(2) All Other Fees Represents fees for the audit of the Company’s consolidated financial statements and internal control over financial reporting, the reviews of interim financial statements included in the Company’s Represents fees related primarily to account for potential acquisitions. 3 $23.47 per common share. A Total Shares Granted During Fiscal Year B Basic Weighted Average Common Shares Outstanding C Burn Rate (A / B) RSUs, a share bonus, or other share-based awards for more than the number of common shares reserved under the Amended and Restated 2014 Plan during any calendar year or (B) a cash award in excess of $10,000,000 during any calendar year. Any common shares repurchased using the proceeds received by the Company from the payment of any exercise or purchase price of any award will not be added to the common shares available for future issuance under the Amended and Restated 2014 Plan. be less than 100% of the fair market value of the related common shares on the date of grant. The maximum term of all options granted under the Amended and Restated 2014 Plan will be determined by the plan administrator, but may not exceed ten years. Each option will vest and become exercisable (including in the event of the optionee’s termination of employment or service) at such time and subject to such terms and conditions as determined by the plan administrator in the applicable individual option agreement. and information technology goals, and goals relating to acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xviii) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; and (xix) any combination of, or a specified increase in, any of the foregoing. and forfeiture conditions applicable to any award will lapse and such unvested awards will be deemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved. paid on the restricted shares before the restrictions lapse will be taxable to the participant as additional compensation (and not as dividend income). Under Section 83(b) of the Internal Revenue Code, a participant may elect to recognize ordinary income at the time the restricted shares are awarded in an amount equal to their fair market value at that time, notwithstanding the fact that such restricted shares are subject to restrictions and a substantial risk of forfeiture. If such an election is made, no additional taxable income will be recognized by such participant at the time the restrictions lapse, the participant will have a tax basis in the shares equal to their fair market value on the date of their award, and the participant’s holding period for capital gains purposes will begin at that time. We generally will be entitled to a tax deduction at the time when, and to the extent that, ordinary income is recognized by such participant. Internal Revenue Code. 4 Achievement of corporate financial metrics, focused on operational and financial performance, in the form of adjusted return on equity, cash flow per share, Achievement of individualized performance goals set at the beginning of each year. 19, 2017 (Dollars in thousands) Net income Loan termination fee Ineffective portion and termination of hedges Gain on mark to market of interest rate derivative contracts Write-off of deferred financing fees Stock compensation expense Term Financing No. 1 hedge loss amortization charges Securitization No. 1 hedge loss amortization charge Adjusted net income 2013 Average Stockholders’ Equity(1) Return on Equity Adjusted Calculation excludes the fair market value of our derivatives. (Dollars in thousands) Net cash provided by operating activities Add back: Changes on certain assets and liabilities: Accounts receivable Restricted cash and cash equivalents related to operating activities Other assets Accounts payable, accrued expenses and other liabilities Lease rentals received in advance Cash flow from operations before working capital Collections on finance leases Distributions from our joint venture investment Cash Flow Cash flow per share Weighted average shares assumed in the 2013 financial plan comply with any policies or procedures of the Company as in effect from time to time, provided that the Participant shall have been delivered a copy of such policies or procedures or such policies or procedures shall have been posted on a Company intranet or website; or (vi) the Participant’s failure to perform the material duties in connection with the Participant’s position, unless the Participant remedies the failure referenced in this clause (vi) no later than ten (10) days following delivery to the Participant of a written notice from the Company (including any of its Subsidiaries or Affiliates) describing such failure in reasonable detail (provided that the Participant shall not be given more than one opportunity in the aggregate to remedy failures described in this clause (vi)). acquisitions, divestitures, joint ventures and similar transactions, and budget comparisons; (xviii) personal professional objectives, including any of the foregoing performance goals, the implementation of policies and plans, the negotiation of transactions, the development of long term business goals, formation of joint ventures, research or development collaborations, and the completion of other corporate transactions; and (xix) any combination of, or a specified increase in, any of the foregoing. Where applicable, the Performance Goals may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, and may be applied to one or more of the Company or any Affiliate thereof, or a division or strategic business unit of the Company or any Affiliate thereof, or may be applied to the performance of the Company relative to a market index, a group of other companies or a combination thereof, all as determined by the Administrator. The Performance Goals may include a threshold level of performance below which no payment shall be made (or no vesting shall occur), levels of performance at which specified payments shall be made (or specified vesting shall occur), and a maximum level of performance above which no additional payment shall be made (or at which full vesting shall occur). Each of the foregoing Performance Goals may be determined in accordance with generally accepted accounting principles (to the extent determined by the Administrator to be desirable) and shall be subject to certification by the Administrator;provided, that, to the extent permitted by Section 162(m) of the Code to the extent applicable, the Administrator shall have the authority to make equitable adjustments to the Performance Goals in recognition of unusual or non-recurring events affecting the Company or any Affiliate thereof or the financial statements of the Company or any Affiliate thereof, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business or related to a change in accounting principles. Notwithstanding the foregoing, the Committee shall take any actions pursuant to this paragraph to the extent necessary and desirable to maintain qualification of Awards as performance-based compensation under Section 162(m) of the Code. any Award which is intended to qualify as performance-based compensation under Section 162(m) of the Code. Notwithstanding the foregoing, upon a Change in Control, the outstanding Awards shall be subject to Section 14 hereof. more Performance Goals and to certification of such achievement in writing by the Committee. The Committee may in its discretion reduce the amount of such Awards that would otherwise become exercisable and/or payable upon achievement of such Performance Goals and the certification in writing of such achievement, but may not increase such amounts. Any such Performance Goals shall be established in writing by the Committee not later than the time period prescribed under Section 162(m) of the Code and the regulations thereunder. Notwithstanding anything set forth in the Plan to contrary, all provisions of such Awards which are intended to qualify as performance-based compensation under Section 162(m) of the Code shall be construed in a manner to so Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of such Participant for purposes of applicable taxes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, an amount up to the Aircastle Limited Executive Incentive Compensation Recoupment Policy, adopted on January 27, 2016, as may be amended from time to time. 409A of the Code. 19, 2017 [ ] I PLAN TO ATTEND ANNUAL MEETING. If you check this box to the right an admission ticket will be sent to you. (Please sign, date and return this proxy card in the enclosed envelope.)8, 201420142017 Annual General Meeting of Shareholders To Be Held On20142017 Annual General Meeting of Shareholders, or the Annual Meeting, to be held at 10:00 a.m. Eastern Daylight Time, on May 22, 2014,19, 2017, at the HiltonDelamar Hotel located at First Stamford Place, Stamford,500 Steamboat Road, Greenwich, Connecticut, USA, 06830, for the purposes set forth in the accompanying Notice of 20142017 Annual Meeting of Shareholders, and at any adjournment or postponement of the Annual Meeting. We are sending this proxy statement in connection with the proxy solicitation.8, 2014,5, 2017, the Company began mailing to certain of our shareholders a Notice of Internet Availability of Proxy Materials. This Notice contains instructions on how to access the proxy statement and our annual report for the year ended December 31, 2013,2016, or the 20132016 Annual Report, and how to vote. By furnishing this Notice, we are lowering the costs and reducing the environmental impact of our Annual Meeting. Shareholders who did not receive this Notice will continue to receive paper copies of our proxy statement, proxy card and 20132016 Annual Report, which we began mailing on or about April 8, 2014.1. threefour Class II directorsDirectors to serve until the 20172020 annual general meeting of Aircastle or until their office shall otherwise be vacated pursuant to our Bye-laws;2. the approval of an amendment to the Company’s Bye-laws to increase the size of the Board;3.20142017 and the authorization of the directorsDirectors of Aircastle, acting by the Audit Committee, to determine the independent registered public accounting firm’s fees;4.3. the approval of the Aircastle Limited Amended and Restated 2014 Omnibus Incentive Plan;5.an advisory vote on executive compensation; and6. 26, 201423, 2017 as the record date, or the Record Date, for determination of the shareholders entitled to notice of and to vote at the Annual Meeting. Only shareholders of record as of the close of business on the Record Date are entitled to vote at the Annual Meeting. The presence of two or more persons at the start of the Annual Meeting and representing in person, or by proxy entitling the holder to vote at the Annual Meeting, in excess of 50% of all votes attaching to all shares of the Company in issue, shall form aElection of nominees to our Board: theThe affirmative vote of a plurality of the votes cast at the Annual Meeting is sufficient to elect the director.Amendment to the Company’s Bye-laws: the affirmative vote of 66% of votes attaching to all shareseach of the Company in issue is required for approval of the Bye-law amendment.Appointment of Ernst & Young LLP, the approval of the Aircastle Limited 2014 Omnibus Incentive Plan, the advisory vote on executive compensation and the approval of any other business properly presented at the Annual Meeting, therequired for approvalrequired:(i) to appoint Ernst & Young LLP for fiscal year 2017 and to authorize the Board, acting by the Audit Committee, to determine the independent registered public accounting firm’s fees (Proposal No. 2); (ii) to approve the Aircastle Limited Amended and Restated 2014 Omnibus Incentive Plan, including the performance goals established under the plan for purposes of compliance with Section 162(m) of the Internal Revenue Code (Proposal No. 3); (iii) to approve, on an advisory basis, executive compensation (Proposal No. 4); and (iv) to approve any other business properly presented at the Annual Meeting. matter.advisory vote on executive compensation (Proposal No. 5).directorsDirectors may withhold authority to vote for all or certain nominees. A shareholder may also abstain from voting on the other matters presented for shareholder vote. Votes withheld from the election of any nominee for directorDirector and abstentions from proposal numberProposal Nos. 2, (amendment of the Company’s Bye-laws), proposal number 3 (appointment of Ernst & Young LLP)4 and proposal number 5 (advisory vote on executive compensation) will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum, but will not be counted in the number of votes cast on athe matter. Abstentions will be counted as votes cast on proposal number 4 (Aircastle Limited 2014 Omnibus Incentive Plan)Proposal No. 3 and therefore have the same effect as votes castof a vote against the proposal.theits shares it holds in accordance with instructions received. If a shareholder does not give instructions to the holder, the holder can vote theits shares it holds with respect to “discretionary” or routine proposals under the rules of the New York Stock Exchange, or NYSE. Such a holder cannot vote shares with respect to “non-discretionary” proposals for which a shareholder has not given instruction. The approval of an amendment to the Company’s Bye-laws and the appointment of Ernst & Young&Young LLP areis considered a “discretionary” proposal and therefore may be voted upon by such a holder even in the absence of instructions from the shareholder. The election of directors,Directors, the approvaladvisory vote on executive compensation, the advisory vote on the frequency of the Aircastle Limited 2014 Omnibus Incentive Plan, the advisory vote on executive compensation and any other business properly presented at the Annual Meeting are considered “non-discretionary” items, and such a holder may not vote on these items in the absence of instructions from the shareholder.81,004,03178,717,915 common shares of the Company, par value US$0.01 per share, referred to herein as common shares, outstanding and entitled to vote. Each common share entitles the holder to one vote on each matter presented at the Annual Meeting.•By Internet or Telephoneby internet,on the Internet, go to www.proxyvote.com. You will need the 12-digit number included on your proxy card, voter instruction form or Notice of Internet Availability of Proxy Materials.21, 2014.18, 2017. The availability of telephone and Internet voting for beneficial owners will depend on the voting processes of your broker, bank or other holder of record. Therefore, we recommend that you follow the voting instructions in the materials you receive. If you submit your proxy by telephone or on the Internet, you do not have to return your proxy card, voter instruction form or Notice of Internet Availability of Proxy Materials.•By Mail1-800-690-69031-800-690-6903; or•In Person, at the Annual Meetingholder(s)holders will be suspended if you attend the Annual Meeting in person and so request, although attendance at the Annual Meeting will not by itself revoke a previously granted proxy. Any proxy not revoked will be voted as specified by the shareholder. If no choice is indicated, a proxy will be voted in accordance with the Board’s recommendations described below.directors,Directors, officers and regular employees, without additional remuneration, may solicit proxies by telephone, telecopy, e-mail and personal interviews. We will request brokers, custodians and other fiduciaries to forward proxy-soliciting materials to the beneficial owners of common shares they hold of record. We will reimburse them for their reasonable out-of-pocket expenses$4,000,$5,000, and we have agreed to reimburse Georgeson, Inc. for reasonable out-of-pocket expenses incurred in connection with the proxy solicitation and to indemnify Georgeson, Inc. against certain losses, costs and expenses.athat shareholders vote:directorDirector nominees named herein; the approval of an amendment to the Company’s Bye-laws to increase the size of the Board;FOR the appointment of Ernst & Young LLP as independent registered public accounting firm for the Company for fiscal year 20142017 and the authorization of the directorsDirectors of Aircastle, acting by the Audit Committee, to determine the independent registered public accounting firm’s fees;Plan; andFORPlan , including the proposal regardingperformance goals established under the plan for purposes of compliance with Section 162(m) of the Internal Revenue Code;directorsDirectors currently serve on our Board:Age Age7175 Class I Director 6770 Class III Director 56 Class II Director Douglas A. Hacker 5861 Class I Director 5861 Class III Director 60 Class I Director Ronald L. Merriman 6972 Class II Director 6467 Class II Director 5659 Class II Director 5557 Class III Director 7679 Class III Director 5053 Class I Director InMr. Allen served as interim President and Chief Executive Officer of Aaron’s, Inc. from November 2011 to February 2012 and then as President until April 2014 and as Chief Executive Officer until his retirement in August 2014. Mr. Allen was appointedalso served as a Director of Aaron’s, Inc. from 1997 until August 2014 and as Chairman of the Board from November 2012 until April 2014. Mr. Allen retired as the Chairman of the Board, President and CEOChief Executive Officer of Aarons,Delta Air Lines, Inc., a company specializingone of the world’s largest global airlines, in lease ownership and specialty retailing of office furniture, consumer electronics, home appliances and electronics.July 1997 after 34 years with the company. From July 1997 through July 2005, Mr. Allen was a consultant to and Advisory Director of Delta Air Lines, Inc., He previously served as a Director of Interstate Hotels & Resorts, Inc. from July 1997 through July 2005.2006 to 2010, Forward Air Corporation from 2011 to 2013 and Guided Therapeutics, Inc. from 2008 to January 2014. He had been Delta’s Chairmanwas elected a Director of Forward Air Corporation in November 2014 and serves as the Chair of the BoardCorporate Governance and Chief Executive Officer since 1987 and retired as its Chairman of the Board, President and Chief Executive Officer in July 1997. Mr. AllenNominating Committee. He is also a directorDirector of the Coca-Cola Company and Aaron’s, Inc. He previously was a director at Interstate Hotel & Resorts from August 2006 through March 2010 and at Guided Therapeutics.serves as Chair of the Audit Committee. The Board has determined that Mr. Allen is “financially literate” as defined by NYSE rules.rules and is a “financial expert” as defined by SEC regulations. Mr. Allen brings strong leadership to the Board extensive airline experience and extensive experience inaerospace market relationships around the world while also providing valuable perspectives on industry strategy, management and human resources, operations, strategic planning and financial matters relevant to the airline industry to the Board, and he provides valuable insight in these areas to the Board and to the Company’s management. Mr. Allen also maintains high-level contacts with airlines which are customers of the Company or which may in the future be customers of the Company.resources.the Pratt & Whitney Advisory Board and Chairman of Galileo International. Mr. Bisignani began his career with Citibank and then held several high-level positions at the energy company ENI and with the Italian industrial conglomerate IRI Group. Mr. Bisignani studied both in Italy (Rome)(Sapienza University, Rome) and the United States (Harvard Business School). Mr. Bisignani is a member of the Board and Strategic, Remunerations and Nominating committees of SAFRAN Group, a holding company encompassing aircraft engine manufacturing, aerospace, defense and security activities. Designated by Etihad in January 2015, he became a Board member of Alitalia - Società Aerea Italiana and the Chairman of the Nomination & Remuneration Committee; he is also a member of the Related Party Committee and the Audit Committee. Mr. Bisignani is a member of the World Economic Forum Global Agenda Council on Aviation, Travel & Tourism and is a Visiting Professor, at Cranfield University. Mr. Bisignani brings to the Board strong leadership skills, extensive experience in operations, strategic planning and financial matters relevant to the airline and travel industry and extensive, high-level contacts with airlines which are customersairlines.or which may in the future be customersas senior vice president/chief financial officer of Boeing Commercial Airplanes and as vice president, finance for Boeing Information, Space & Defense Systems from 1998Company.also serves as a director or trusteethe Chair of the Board of Trustees of the Columbia Atlantic Funds, a series of open-end investment companies that are part of the Columbia family of mutual funds andfunds. Mr. Hacker serves as a directorDirector of Spartan Nash.Travelport Worldwide Limited and SpartanNash Company as well as having served as a Director of SeaCube Container Leasing Ltd from 2010 until 2014. The Board has determined that Mr. Hacker is “financially literate” as defined by NYSE rules and is a “financial expert” as defined by SEC regulations. Mr. Hacker’s extensive experience in financial and operating management, including his prior service as an Executive Vice President, Strategy, of a major U.S. airline and his service as Chief Financial Officer of a major U.S. airline, in addition to his depth of knowledge in executive compensation, provide to the Board excellent perspectives on airline financial and operational matters and on aircraft investing, leasing and finance matters, on strategic matters relevant to the Company and on executive compensation.2013.2013 by Marubeni Corporation. In April 2013, Mr. Konto was appointed as Chairman of Marubeni Aerospace Corporation which specializes in import and supply of foreign products and parts for the aerospace and defense sectors in Japan. Mr. Konto wasserved as an Executive Officer of Marubeni Corporation from 2009 to 2011;2011 and in Dubai as Marubeni's Regional CEO for the Middle East and North Africa in 2009 and in Los Angeles as Senior Executive Vice President and COO of Marubeni America Corporation from 2010 to 2011. From 2007 to 2008, he served as Senior Operating Officer, Transportation Machinery Division and from 2003 to 2006, as Director, Aerospace & Defense Systems Unit of Marubeni Corporation. Mr. Konto brings to the Board extensive experience in international business. He has over 25 years’years experience in the aviation industry and maintains high-level contacts with major manufacturers in the aviation industry as well as Asian airlines which may in the future be customers of the Company. He is the retired Vice Chair of KPMG, a global accounting and consulting firm, where he served from 1967 to 1997 in various positions, including as a member of the Executive Management Committee and as chair of the firm’s Global Transportation Practice. He also served as Executive Vice President of Ambassador International, Inc., a publicly traded travel services business, from 1997 to 1999; Executive Vice President of Carlson Wagonlit Travel, a global travel management firm, from 1999 to 2000; and Managing Director of O’Melveny & Myers LLP, a global law firm, from 2000 to 2003. He is also a director of.Director of Pentair, Ltd., (formerly Pentair, Inc.), Realty Income Corporation, and Haemonetics Corporation. The Board has determined that Mr. Merriman is “financially literate” as defined by NYSE rules and is a “financial expert” as defined by SEC regulations. Mr. Merriman brings an extensive accounting and financial background to the Board, with a particular emphasis on accounting and financial matters relevant to the airline and travel industries and transportation companies generally and provides valuable insight on the cross-border nature of our business.(AMI)("AMI") since 1997. AMI is a leadership development firm, specializing in global executive coaching and organizational behavior for senior teams in Global 10001,000 companies. Prior to AMI, Ms. Mura was Vice President and IPB California Representative of Bankers Trust Co. from 1993 to 1996. From 1985 to 1993, she was Assistant Vice President, and then Vice President for First Interstate Bank Ltd. Ms. Mura was the Foreign Relations Manager for the Los Angeles Olympic Organizing Committee from 1983 to 1985. She holds a BA from the Edinburgh University and an MA from the University of Cologne, Germany. Ms. Mura brings to the boardBoard strong leadership and leadership development skills and extensive experience in international business and she provides valuable insight in thesethose areas to the Board and to the Company’s management. in 1997, where he served variously as Managing Director, President and CEO, and Vice Chairman until 2009. Previously he spent 10 years in senior management positions, including President and CEO, at World Airways, Inc., the oldest U.S. charter airline. Prior to joining World Airways, Inc., he practiced corporate law at Skadden, Arps, Slate, Meagher & Flom. He currently serves on the board of directorsDirectors of Allegiant Travel Company andCompany. Mr. Pollard previously served as a Director of Air Partner plc.plc until 2014 and AeroMechanical Services Ltd. until 2011. Mr. Pollard brings to the Board extensive experience in operations, strategic planning and financial matters relevant to the airline industry, and he provides valuable insight in these areas to the Board and to the Company’s management.2013.2013 by Marubeni Corporation. In August 2013, Mr. Toya was appointed as Executive Vice President of Marubeni America Corporation which is a general trading company, engaged as an intermediary, importer/exporter, facilitator or broker in various types of trade between and among business enterprises and countries. From 2010 to 2012, he served as Senior Operating Officer, Transportation Machinery Division and from 2007 to 2009, as Director, Aerospace & Defense Systems Unit of Marubeni Corporation. Mr. Toya has over 25 years’years experience in the aviation industry and brings to the Board extensive experience in operations, strategic planning and financial matters relevant to the aviation industry. He maintains high-level contacts with major manufacturers in the aviation industry as well as Asian airlines which may in the future be customers of the Company.Ron WainshalMr. Toya was appointed to our Board on May 25, 2010. Mr. Wainshal became our Chief Executive Officer in May 2005. Prior to joining Aircastle, Mr. Wainshal was in charge of the Asset Management group of General Electric Capital Aviation Services, or “GECAS,” from 2003 to 2005. After joining GECAS in 1998, he also led many of GECAS’s U.S. airline restructuring efforts and its bond market activities and played a major marketing and structured finance role for GECAS in the Americas. Before joining GECAS, he was a principal and co-owner of a financial advisory company specializing in transportation infrastructure from 1994 to 1998 and prior to that held positions at Capstar Partners and The Transportation Group in New York and Ryder System in Miami. Mr. Wainshal is a director of EveryWare Global, Inc. He received a BS in Economics from the Wharton School of the University of Pennsylvania and an MBA from the University of Chicago’s Booth Graduate School of Business. Mr. Wainshal bringsdesignated to the Board deep and varied experience in aircraft finance and leasing in particular and asset-based financing generally. He also has strong leadership skills, extensive managerial experience and a deep understanding ofby Marubeni pursuant to the Shareholder Agreement between the Company and our industry.Marubeni, dated June 6, 2013, as described in “Certain Relationships and Related Party Transactions – Shareholder Agreement for Sale of Common Shares to Marubeni Corporation.”company; he has held this positioncompany, since 1989. He is the co-chairman of Pebble Beach Company and a directorDirector of the Coca-Cola Company andBell Riddell Giro, formerly known as Easton Bell Sports. He also served as directorDirector of Adecco SA, an international, publicly traded employment services company; Ambassadors International, Inc., a publicly traded travel services business; Coca-Cola Company and Hilton Hotels Corporation during the past five years. Mr. Ueberroth brings strong leadership skills and extensive experience in the airline and travel industries to the Board. From his leadership roles in other global businesses and from in his past role as Chairman of the United States Olympic Committee, Mr. Ueberroth provides to the Board valuable understanding and perspective of international trends and strategies, particularly with respect to China.director,Director, officer or affiliate of the Company, any owner of record or beneficial owner of more than five percent of any class of voting securities of the Company, or any associate of any such director,Director, officer, affiliate of the Company, or security holder, is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our affiliates.20142017,the Board evaluated the independence of each member of the Board in accordance with NYSE corporate governance rules and the applicable rules of the SEC.NYSE and SEC rules. The Board affirmatively determined, under these rules, that Ronald W. Allen, Giovanni Bisignani, Michael J. Cave, Douglas A. Hacker, Ronald L. Merriman, Agnes Mura, Charles W. Pollard and Peter V. Ueberroth are independent. We refer to these directorsDirectors in this proxy statement as Independent Directors. In making this determination, our Board considered all relevant facts and circumstances, as required by applicable NYSE listing standards.directors”Directors” and that the nominating/corporate governance committee,Nominating and Corporate Governance Committee, the compensation committeeCompensation Committee and the audit committeeAudit Committee of the Board consist entirely of “independent directors.Directors.” Under NYSE listing standards, whether a directorDirector is an “independent director”Director” is a subjective determination to be made by the Board, and a directorDirector of Aircastle only qualifies as “independent” if the Board affirmatively determines that the directorDirector has no material relationship with Aircastle (either directly or as a partner, shareholder or officer of an organization that has a relationship with Aircastle). While the test for independence is a subjective one, NYSE rules also contain objective criteria that preclude directorsDirectors from being considered independent in certain situations. Specifically, persons meeting the following objective criteria under the NYSE rules are deemed to not be not independent:A directorwashas been within the last three years an employee, or whose immediate family member is or has been within the last three years an executive officer, of Aircastle (including any consolidated subsidiary) may not be considered independent until three years after the end of such employment relationship;;A directora Director who has received, or whose immediate family member has received, during any twelve-month period within the last three years, more than US$120,000 in direct compensation from Aircastle (including any consolidated subsidiary), other than directorDirector and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);A directora Director who (i) is, or whose immediate family is, a current partner of a firm that is the internal or external auditor of Aircastle; (ii) is a current employee of such a firm; (iii) has an immediate family member who is a current employee of such a firm and who personally works on Aircastle’s audit; or (iv) was, or whose immediate family member was, within the last three years a partner or employee of such a firm and personally worked on Aircastle’s audit within that time;A directora Director who is or washas been within the last three years employed, or whose immediate family member is or washas been within the last three years employed as an executive officer of another company where any of Aircastle’s present executive officers at the same time serveserves or served on that Company’s compensation committee may not be considered independent until three years after the end of such service or the employment relationship;committee; andA directora Director who is a current employee, or whose immediate family member is an executive officer, of a company (or a consolidated subsidiary of such company) that has made payments to, or has received payments from, Aircastle for property or services in an amount which, in any single fiscal year within the last three years, exceeds the greater of US$1,000,000 or 2% of such other company’s consolidated gross revenues may not be considered an independent director until three years after falling below such threshold.directorDirector who will serve on the Compensation Committee, the Board considers all factors specifically relevant to determining whether that directorDirector has a relationship to Aircastle which is material to the director’sDirector’s ability to be independent from management in connection with the duties of a Compensation Committee member including, but not limited to:Thethe source of compensation of such director,Director, including anany consulting, advisory or other compensatory fee paid by Aircastle to such director;Director; andWhetherwhether such directorDirector is affiliated with Aircastle, a subsidiary of Aircastle or an affiliate of a subsidiary of Aircastle.directorDirector has a material relationship with Aircastle under NYSE rules, but instead evaluates each directorDirector or nominee for directorDirector under the tests set forth by the NYSE and through a broad consideration and evaluation of all relevant facts and circumstances. The Board, when assessing the materiality of a director’sDirector’s relationship with Aircastle, also considers the issue not merely from the standpoint of the director,Director, but also from that of persons or organizations with which the directorDirector has an affiliation.“Investors – Corporate Governance”“Investors—Governance Documents” and are available in print to any shareholder of the Company upon request.“Investors – Corporate “Investors—Governance Documents,” and a Code of Ethics for Chief Executive and Senior Financial Officers, which is available in print to any shareholder of the Company upon request. The Company intends to post on its website any material amendments to its ethics codes and the description of any waiver from a provision of the ethics codes granted by the Board to any directorDirector or executive officer of the Company within four business days after such amendment or waiver.directors,Directors, including our Chairman, who is also our lead Independent Director or Presiding Director, or the Independent Directors as a group, may do so by writing to the Board, Aircastle Limited, c/o Aircastle Advisor LLC, 300 First Stamford Place, 5th Floor, Stamford, CT 06902 Attention: General Counsel. All communications will be received, sorted and summarized by the General Counsel, as agent for the relevant directors.Directors. Communications relating to the Company’s accounting, internal accounting controls or auditing matters will be referred to the Chair of the Audit Committee. Other communications will be referred to such other directorDirector as may be appropriate. Communications may be submitted anonymously or confidentially.director.Director. During 2013,2016, Aircastle’s Board held tensix meetings. Each incumbent directorDirector attended 75% or more of the aggregate of all meetings of the Board and committees on which the directorDirector served during 2013.2016. Directors are invited and encouraged to attend the Company’s annual meeting of shareholders in person, by telephone or video conference, but the Company recognizes that such attendance may be impractical as a result of personal or business circumstances. Seven directorsEleven Directors and one Director nominee attended our annual general meeting in 2013.2016.seveneight non-management directors, two directorsDirectors, three Directors designated by Marubeni Corporation, or Marubeni, and one management director.Director. In accordance with the Company’s Corporate Governance Guidelines and rules of the NYSE, the non-management directorsDirectors are required to meet regularly in executive session and the independent directorsDirectors must meet in executive session at least once each year. As such, the Board’s meetings regularly include executive sessions in which only Independent Directors are present. Any Independent Director can request that an executive session be scheduled.For example, theThe Audit Committee has primary responsibility for addressing risks relating to financial matters, particularly financial reporting, accounting practices and policies, disclosure controls and procedures and internal control over financial reporting. The Nominating and Corporate Governance Committee oversees risks associated with the independence of the Board and succession planning. The Compensation Committee has primary responsibility for risks and exposures associated with the Company’s compensation policies, plans and practices, regarding both executive compensation and the compensation structure generally, including whether it provides appropriate incentives that do not encourage excessive risk taking. Audit Compensation Investment Allen X X Ryusuke Konto X X X X Chair Yukihiko Matsumura Ronald L. Merriman* Chair X X X Chair X X Chair X * Messrs. Allen, Cave, Hacker and Merriman serve as financial experts on our Audit Committee. “Investors – Corporate Governance”“Investors—Governance Documents” and is available in print to any shareholder of the Company upon request.controlscontrol policies and procedures, compliance programs and significant tax and legal matters;each of Mr. Merriman and Mr. Hacker’sthe work experience areof our Audit Committee members is included on pages 4 and 5, respectively.4-6 above. The Board also determined that although Mr. Merriman currently sits on the audit committees of more than three public companies, such simultaneous service would not impair his ability to serve effectively on the Company’s Audit Committee. During 2013,2016, the Audit Committee held sevensix meetings. Audit Committee meetings include, where appropriate, executive sessions in which the Audit Committeemeets meets: (i) only withpresent,present; (ii) separately with the Company’s independent registered public accountantsaccountants; (iii) separately with the Company’s internal auditorauditor; or (iv) with the Company’s Chief Executive Officer, Chief Financial Officer and General Counsel.Plan;Plan andseveneight meetings during 2013.2016. Compensation Committee meetings include, where appropriate, executive sessions, in which the Compensation Committee meets only with Committee members present, and/or sessions with the Company’s Chief Executive Officer.Committee.Committee. Our Nominating and Corporate Governance Committee’s functions include:directorsDirectors and making recommendations to our Board regarding the selection of candidates, qualification and competency requirements for service on the Board and the suitability of proposed nominees;directorDirector succession planning; and2013.directorDirector for re-election, the Nominating and Corporate Governance Committee also considers the director’sDirector’s past attendance at meetings and participation in and contributions to the activities of the Board. The Nominating and Corporate Governance Committee identifies potential nominees by asking current directorsDirectors and executive officers to notify the Nominating and Corporate Governance Committee if they become aware of suitable candidates. As described below, the Nominating and Corporate Governance Committee will also consider candidates recommended by shareholders. We have not paid any third party a fee to assist in the process of identifying or evaluating candidates; however, the Nominating and Corporate Governance Committee may elect in the future to engage firms that specialize in identifying directorDirector candidates. In 2013, consistent with the ShareholderAgreement dated June 6, 2013 between the Company and Marubeni, referred to herein as the Shareholder Agreement,As described below, the Nominating and Corporate Governance Committee determined to add two new members to the Board. Following extensive discussion and review, the Nominating and Corporate Governance Committeewill also consider candidates recommended Messrs. Konto and Toya (each of whom was designated by Marubeni) to be elected to the Board.In March 2014, the Nominating and Corporate Governance Committee recommended to the Board that Michael J. Cave be appointed to the Board. Mr. Cave’s skills, expertise and experience in engineering and financial services are expected to make him an extremely valuable member of the Board, particularly in light of his insights into the various products under development or entering production at both Boeing and its competitors and in light of the many high-level customer relationships that he developed in his time at The Boeing Company and at Boeing Capital Corp., its financing arm. If Proposal No. 2 concerning the increase in the size of the Board is approved by shareholders at the Annual Meeting, the Board intends to appoint Mr. Cave in May 2014 to serve as a Class II Director. Mr. Cave’s biographical information follows:Michael J. Cavehas served as a Senior Vice President of The Boeing Company and President of Boeing Capital Corp., a wholly owned subsidiary of The Boeing Company, since 2009. Mr. Cave served as Senior Vice President of Business Development and Strategy for Boeing from 2007 to 2009. Prior to that, Mr. Cave served as Senior Vice President and Chief Financial Officer of Boeing Commercial Airplanes and as Vice President of Finance for Boeing Information, Space & Defense Systems from 1998 through 2006. Prior to 1998, Mr. Cave held a variety of other assignments across Boeing’s defense and commercial businesses. He holds a bachelor’s degree in engineering from Purdue University. Mr. Cave is a director of Harley–Davidson, Inc. He was named one of the 100 Most Important Hispanics in Technology and Business for 2006 by Hispanic Engineer and Information Technology magazine. Mr. Cave has advised the Board that he will retire from The Boeing Company, effective May 8, 2014.directorDirector candidates, including those recommended by shareholders, are evaluated on the same basis. Candidates for directorDirector must possess the level of education, experience, sophistication and expertise required to perform the duties of a member of a board of directorsDirectors of a public company of the Company’s size and scope. At a minimum, the committee will consider whether the recommended candidate is subject to a disqualifying factor as described under Section 303A.02(b) of the NYSE listing standards and the number of other boards and committees on which the individual serves. The committee may also consider, among other qualifications, a candidate’scandidate’s: (i) ethics, integrity and values; (ii) stature, reputation and credibility; (iii) experience and capability to set policy and oversee management’s execution of the business plan; (iv) knowledge of relevant industries; (v) contacts within the global aircraft leasing, aircraft financing, airline, cargo, manufacturing or other similar businesses; (vi) current or recent senior executive experience and leadership; and (vii) ethnic, gender, professional, geographic and philosophical diversity within the overall composition of the Board. While the Nominating and Governance Committee has not adopted a formal diversity policy with regard to the selection of directorDirector nominees, diversity is one of the factors that the committee considers in identifying directorDirector candidates. As part of this process, the committee evaluates how adirectorDirector candidate to the Chairman of the Nominating and Corporate Governance Committee for its consideration should write to the Secretary, Aircastle Limited, c/o Aircastle Advisor LLC, 300 First Stamford Place, 5th Floor, Stamford, CT 06902. Recommendations must be received no less than 90 days nor more than 120 days before the anniversary of the prior year’s annual general meeting of shareholders to be considered for inclusion in the proxy statement for the 20152017 Annual General Meeting of Shareholders. All recommendations meeting the minimum requirements set forth in the Corporate Governance Guidelines will be referred to the Chairperson of the Nominating and Corporate Governance Committee. Such letters of recommendation must include the address and number of shares owned by the nominating shareholder, the recommended individual’s name and address, and a description of the recommended individual’s background and qualifications. A signed statement from the recommended individual must accompany the letter of recommendation indicating that he or she consents to being considered as a candidate and that, if nominated by the Board and elected by the shareholders, he or she will serve as a directorDirector of the Company. In addition, the notice must also include any other information relating to the shareholder or to the personrecommended individual that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directorsDirectors under Section 14 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the rules and regulations thereunder.director.Director. Such proposal or nomination must be made in accordance with the procedures and time limits set out in the Bye-laws of the Company.has re-authorizedregularly re-authorizes the Investment Committee a number of times.Committee. The Board authorized the Investment Committee to approve, within certain limitations, aircraft acquisition, lease, sale, financing and interest rate hedging transactions, and other transactions, by the Company. The Investment Committee held 12thirteen meetings during 2013.2016.DIRECTOR2013,2016, cash compensation to the Independent Directors for service on our Board was set at the following levels:90,000135,000 divided by the Fair Market Value, as defined in the 2005Incentive Plan, of our common shares as of such date, anddate. In 2015, the Board authorized a special award to Mr. Ueberroth which increased his annual award from 10,000 to 20,000 restricted common shares during his current term as Chairman of the Board receives an additional grantin recognition of 10,000 restricted common shares.his significant experience, service to the Company and guidance to the Board. Such restricted shares fully vest on January 1 of the following calendar year, pursuant to the terms and conditions of the 2005Incentive Plan and the related award agreement. In addition, in recognition of his leadership of the Board through the Company’s transition from its significant ownership by its founding shareholders, his guidance to the Board and the management team in connection with the transactions in 2013 with Marubeni Corporation and Ontario Teachers’ Pension Plan and with a view to retaining his services as Chairman for a period of time, the Chairman of the Board received a special grant of 30,000 restricted common shares, vesting on January 1, 2014, subject to the terms of the 2005 Plan and the related award agreement.directors,and management Directors, Messrs. Konto, Matsumura, Toya and Wainshal, are not separately compensated by us for their Board or committee service. All members of the Board were reimbursed for reasonable costs and expenses incurred in attending meetings of the Board or otherwise incurred in connection with carrying out their duties as directors.ThisDirectors.directors in 2013:DIRECTOR COMPENSATION Fees Earned or
Paid in Cash
(US$ ) Stock Awards
(US$)(1) All Other
Compensation
(US$)(2) Total
(US$) 100,000 90,000 4,988 194,988 73,907 90,000 4,988 168,895 145,000 90,000 4,988 239,988 — — — — 125,000 90,000 4,988 219,988 52,769 78,230 3,870 134,869 135,000 90,000 4,988 229,988 — — — — 150,000 670,500 10,988 831,488 — — — — DIRECTOR COMPENSATION FOR 2016 Fees Earned or All Other Paid in Cash Stock Awards Compensation Total Name (US$) (US$) Ronald W. Allen 100,000 134,991 6,333 241,324 Giovanni Bisignani 90,000 134,991 7,344 232,335 Michael J. Cave 120,000 134,991 6,333 261,324 Douglas A. Hacker 145,000 134,991 6,333 286,324 — — — — — — — — Ronald L. Merriman 125,000 134,991 6,333 266,324 Agnes Mura 100,000 134,991 6,333 241,324 Charles W. Pollard 135,000 134,991 6,333 276,324 — — — — Peter V. Ueberroth 150,000 552,791 25,933 728,724 — — — — (1) directorsDirectors during 20132016 determined in accordance with FASB ASC Topic 718. For a summary of the assumptions made in the valuation of these awards, please see Note 8 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.2016. The grant date fair value of each restricted share was US$12.54 for our directors other than Ms. Mura and US$14.05 for Ms. Mura.20.89. The aggregate number of restricted shares outstanding on December 31, 2013 forgranted to each directorDirector in 2016 was: Mr. Allen 7,177,6,462, Mr. Bisignani 7,177,6,462, Mr. Cave 6,462, Mr. Hacker 7,177,6,462, Mr. Merriman 7,177,6,462, Ms. Mura 5,568,6,462, Mr. Pollard 7,177,6,462 and Mr. Ueberroth 37,177.(2) unvested restricted common shares forgranted to each directorDirector in 2013.(3) directors,and management Directors, Messrs. Konto, Matsumura, Toya and Wainshal, are not separately compensated by us for their Board or committee service.(4)Ms. Mura’s compensation reflects her service for only a portion of 2013.(5)On October 29, 2013, the Board made a special grant of 30,000 restricted common shares to Mr. Ueberroth in recognition of his service as Chairman of the Board, his guidance to the Board and to management in connection with the transactions with Marubeni Corporation and Ontario Teachers’ Pension Plan in 2013, and with a view to retaining his services as Chairman for a period of time. The grant date fair value was US$19.35 per share.stockshare ownership guidelines, or Ownership Guidelines, pursuant to which each member of the Board who is paid a base annual cash fee for service on the Board is expected to attain the following levels of share ownership while providing service to the Company, based on the aggregate value of share ownership as of the date of determination: Multiple of Base Annual
Cash Board
Service Fee 3x directorDirector should satisfy the Ownership Guidelines by the later of March 14, 2017 or the fifth anniversary of his or her initial appointment to the Board. As of March 31, 2014,23, 2017, each member of the Board complied with the Ownership Guidelines.directors,Directors, named executive officers, all Directors and executive officers as a group and shareholders known to us to hold more than five percent or more of our common shares, as of March 26, 2014: Amount and Nature of
Beneficial Ownership (1) (2) Percent (3) 708,725 * 295,341 * 195,799 * 49, 230 * 265,118 * 86,332 * 14,517 * 92,938 * 0 * 33,248 * 8,602 * 28,874 * 0 * 311,241 * 2,089,965 2.6 % 16,374,333 20.2 % 6,887,029 8.5 % 4,829,181 6.0 % Name of Beneficial Owner 809,683 1.0% Michael Inglese 279,330 * Michael Kriedberg 189,099 * Christopher Beers 68,315 * Aaron Dahlke 17,814 * Ronald W. Allen 99,105 * Giovanni Bisignani 29,172 * Michael J. Cave 16,999 * Douglas A. Hacker 102,245 * — * — * 44,984 * Agnes Mura 21,156 * 41,391 * — * 404,390 * All Directors and executive officers as a group (16 persons) 2,123,683 2.7% 5% Shareholders 21,605,347 27.4% 7,887,029 10.0% 5,452,167 6.9% 4,331,755 5.5% _______________ * Less than 1% *Less than 1%(1) (2) (3) (4) directorDirector listed in the table below is: c/o Aircastle Advisor LLC, 300 First Stamford Place, 5th Floor, Stamford, CT 06902.(5) (6) On August 2, 2013, RyusukeOur affiliated and management Directors, Messrs Konto, Chairman of Marubeni Aerospace Corporation,Matsumura, Toya and Gentaro Toya, Assistant Advisor to the President at Marubeni, joined theWainshal, are not separately compensated by us for their Board of Directors of Aircastle Limited.or committee service. Common shares of Aircastle are directly held by Marubeni Aviation Holding Cooperatief, U.A. and indirectly held by Marubeni and Marubeni Aviation Corporation.(7) Trust(8) 200,00026,973 common shares held indirectly by the Pollard Family Trust.(9) Includes 220,000 common shares held indirectly by the Ueberroth Family Trust. (9)(10) Form 4 Schedule 13Dfiled by Marubeni with the SEC on February 25, 2014,23, 2016, which indicates that Marubeni beneficially held 16,374,333an aggregate of 21,605,347 common shares. Common Shares. The address of Marubeni is 4-2 Ohtemachi 1-Chome Chiyoda-Ku, Tokyo 100-8088, M0Japan.(10)(11) Information regarding Ontario Teachers’ Pension Plan is based solely upon a Schedule 13G filed by Teachers’ with the SEC on February 13, 2014,March 4, 2016, which indicates that Teachers’ beneficially held sole voting power over 6,887,029 common shares and sole dispositive power over 6,887,029an aggregate of 7,887,029 common shares. The address of Teachers’ is 5650 Yonge Street, 3rd3rd Floor Toronto, Ontario, Canada M2M 4H5.(11)(12) Information regarding River Road Asset Management LLC (“River Road”The Vanguard Group is based solely upon a Schedule 13G filed by The Vanguard Group with the SEC on February 9, 2017, which indicates that The Vanguard Group beneficially held an aggregate of 5,452,167 common shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.(13) Information regarding Dimensional Fund Advisors L.P. ("Dimensional") is based solely upon a Schedule 13G filed by River RoadDimensional with the SEC on February 12, 2014,9, 2017, which indicates that River RoadDimensional beneficially held sole voting power over 2,652,832 common shares and sole dispositive power over 4,829,181an aggregate of 4,331,755 common shares. The address of RiverDimensional is Building One, 6300 Bee Cave Road, is 462 S. 4th Street, Suite 1600 Louisville, KY 40202.Austin,TX 78746.directors,Directors, executive officers and persons who own more than ten percent of a registered class of our equity securities to file with the SEC reports of ownership on Form 3 and changes in ownership on Forms 4 and 5. Such officers, directorsDirectors and greater-than-ten percent shareholders are also required by the SEC to furnish the Company with copies of all forms they file under this regulation. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company, all Section 16(a) filing requirements applicableno officers, Directors or greater-than-ten percent shareholders failed to all of its reporting persons were complied withsubmit such filings on a timely basis during the fiscal year ended December 31, 2013, except that, due to an inadvertent administrative error, there was a late Form 4 filing for Marubeni to report one transaction.2016.directors,Directors, officers and employees are required to comply with a policy that is designed to prevent insider trading violations. The policy includes mandatory trading black-out periods and prohibits certain transactions. Hedging or pledging of our shares by directors,Directors, officers or employees is prohibited unless an exception to the policy is specifically pre-approved by the General Counsel. No such exception has ever been requested or approved.compensation discussionCompensation Discussion and analysisAnalysis describes and analyzes our executive compensation philosophy and programs, the decisions made by the Compensation Committee under those programs and the factors considered by the Compensation Committee in making those decisions. This compensation discussionCompensation Discussion and analysisAnalysis focuses on the compensation paid to our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers, together referred to as our named executive officers.officers, or NEOs. For 2013,2016, our named executive officers are:NEOs were: Chief Executive Officer Chief Financial Officer Chief Commercial Officer David WaltonGeneral Counsel Aaron Dahlke Chief OperatingAccounting Officer and General CounselJoseph SchreinerExecutive Vice President, TechnicalThe Compensation Committee strongly believes that Philosophyfor delivering in twothree areas:Achievingonon: (i) adjusted return on equity,equity; (ii) cash flow per shareshare; and (iii) growth through new investments.investments;Achievingyear.year; and
corporate financialthese metrics to determine the incentive compensation for nearly all of the employeesmany professionals in the Company, including all of our NEOs, and we discuss the Company’s progress against these financial metrics in all-employee meetings and calls on at least a quarterly basis during the year.employee meetings. By establishing these financial performance goals, tying the Company’s incentive compensation program to the goals and communicating regularly with our employees, and with our Compensation Committee and our Board, we expectstrive to create greater alignmentbetter align the interests of interests between our employees and our shareholders and thereby improve shareholder returns.Aperformance determines each employee’s incentive compensation.performance. For more highly compensated employees, achievement of corporate financial metrics carries a greater weighting relative to individual performance, as illustrated in the table below:
Corporate Performance CEO 85% 15% Certain NEOs 80% 20% Senior Professionals 60% 40% Staff 50% 50% OurWe based corporate financial metrics cover three areas and are weighted by relative importance andperformance targets on the 2016 business plan that our board adopted in October, 2015. In addition, we establishestablished a performance range for each metric that the Compensation Committee feels is achievable.metric. Results below the low end of theeach range will not yield any contribution to the Company’s incentive compensation pool for that metric. Conversely, performance above the top end of thea range will result in an enhanced benefitcontribution to the Company’s incentive compensation pool, to encourage exceptional performance.The Compensation Committee chose the following corporate financial metrics for 2013:Adjusted Return on Equity: an important measure of our profitability and capital efficiency. This measure is based on our adjusted net income metric, which removes some book accounting effects.Cash Flow per Share: a key measure of our ability to generate cash from our investments which, in turn, funds our operations, reinvesting activities and dividends. Strong cash flow is critical to enabling the liquidity and financial metrics necessary for us to raise capital efficiently.New Investments: a direct measure of our ability to deploy capital accretively so that the Company’s earnings base and dividend paying capacity can grow.The Compensation Committee For 2016, we established the following targets, performance range and relative weighting for the three financial metrics for 2013: 2013
Target Performance Range Weighted Score 6.97% 50-150% 25% $6.41 85-115% 50% $1 Billion 60-125% 25% Metric 2016 Target Weighted Score 8.37% 50-150% 25% $6.09 85-115% 50% $1.60 billion 60-125% 25% (1) on-goingongoing business. Our presentation of ANI may not be comparable to similarly-titled measures used by other companies. A reconciliation between non-GAAP performance metrics and U.S. GAAP results is included as Appendix A to this proxy statement.(2) (3) set a target compensation leveldetermine incentive pay for each employee based on weightings forby applying the weighted corporate and individual performance. The Company’s total incentive compensation pool for each year equalsperformance scores against such employee’s targeted bonus amount. We set individual bonus targets based on an employee’s function, role and seniority within the sum of all of the individual incentive compensation targets for our employees.Individual CompensationAt the end of the year, we measure corporate performance against the established financial and growth metrics, and we measure each employee’s individual performance against his or her individualgoals. Each employee’s overall incentive compensation level is set by applying weightings to the corporate results and individual performance.organization, among other factors. For more highly compensated employees, we deliverannual incentive compensation in a split between aincludes cash award and an equity award.awards. For additional retention purposes, the equity award component of the incentive compensation vestsawards vest over three years, subject to continued service with us through such period. and WhyWe have twocompensation. We make incentive compensation determinations on the basis of a mix of performance against corporate financial metrics and achievement of individual goals; for our named executive officers, corporate performance carries the primary weighting in the incentive compensation determination.
g
Elements of NEO Pay For 2013As illustrated in these charts, 72% of total compensation awarded for 2013 for our named executive officers comprised variable incentive compensation under the pay for performance principles outlined above. Fixed base pay accounted for only 28% of total compensation for our named executive officers for 2013.In addition, restricted share grants vesting over three years made up 42% of the total compensation awarded to our named executive officers for 2013.The Compensation Committee setsWe set base salaries for our named executive officers and reviewsreview them periodically. During 2013, the Compensation CommitteeIn 2016, we increased base salaries for Mr. Inglese’s annual base salary from $400,000 to $450,000Wainshal and Mr. Walton’s annual base salary from $400,000Inglese to $500,000,$675,000 and $550,000, respectively, reflecting the Compensation Committee’sour view that an adjustment to their base salaries was appropriate to bring themreflect market conditions. In addition, we reduced Mr. Kriedberg’s base salary to $440,000 in line with the current market environment and2016 due to reflect their value to the Company and their high levels of individual performance.changes in his work schedule. We made nodid not make other changes to the base salaries of our named executive officersNEOs during 2013.2016.determinemake incentive compensation awards by measuringbased on the Company’s performance against corporate financial metrics and by measuringperformance against individual performance against the goals establishedfor each year, with payment of the incentive compensation split between cash and restricted share grants undergrants. We paid the 2005 Plan.cash portion of 2016 incentive awards in March 2017. For additional retention purposes, the restricted share grants for 20132016 will vest in one-third increments on January 1, 2015,2018, January 1, 20162019 and January 1, 2017,2020, subject to continued service with us through such period. The cash portion of 2013 awards was paid in March 2014.addition, in rare cases, the Compensation Committeelimited instances, we may also issue special restricted share grants.grants to reward exceptional performance, special situations or retention purposes. For 2013,2016, the Compensation Committee made ano special restricted share grantgrants to Mr. Wainshal, in recognitionany of our NEOs.Company’s, and his, outstanding performancelong-term incentive plan in 2013, and taking into consideration his request that any incentive compensation grant to him in excess2016, we reduced the prior target annual award of his incentive compensation target be made in restricted share grants, subject to future vesting, rather than in cash. The special restricted shares grant will vest in one-third increments on January 1, 2015, January 1, 2016 and January 1, 2017shares.shares but not on our performance shares unit awards. We also offer certain named executive officersNEOs severance payments and accelerated vesting of restricted shares in certain circumstances, as described in greater detail below in the section entitled “Potential Payments upon Termination or Change in Control”.Control.” Severance and change in control benefits provide transitional assistance for separated employees and are essential to recruiting and retaining talented executives in a competitive market. In addition, our named executive officersNEOs are also eligible to participate in our employee benefit plans, including medical, dental, life insurance andWhat We Don’t PayChangeIn advance of the final SEC rules implementing Section 954 of the Dodd-Frank Act, in control benefitsJanuary 2016, we adopted a clawback policy covering certain incentive compensation awarded to our executive officers. The policy requires reimbursement of incentive payments awarded to an executive officer based upon financial results that were subsequently the subject of a restatement due to the Company’s material noncompliance with financial reporting requirements. The amount of reimbursement would be to the extent that a lower payment would have been awarded to the executive based on the restated financial results. The policy applies to all incentive compensation awarded or paid to an executive officer in the three years prior to the restatement, even if the executive officer did not engage in conduct which contributed to the restatement. In addition, we may seek to recover any portion of incentive compensation when we determine that an executive officer engaged in a single trigger.Deferred compensation plans.Company carscertain misconduct, namely involving: (i) material acts of fraud or aircraft.Federal income tax gross-ups.Specialdishonesty in connection with employment by the Company; (ii) willfully not complying with material policies or enhanced pensionprocedures of the Company; or retirement programs.SummarySummary. named executive officersNEOs by providing the large majority of their overall compensation through an incentive compensation program that ties awards to corporate financial metrics and individual performance goals that the Compensation Committee believeswhich we believe will build shareholder value,value; andnamed executive officer’sNEO's incentives with those of shareholders by delivering a substantial portion of their incentive compensation in the form of restricted share grants.2013 CompensationversusVersus Corporate Financial Metrics.In 2013,2016, the Company’s performance against its corporate financial metrics resulted in an incentive compensation pool equal to 104%104.1% of the total target, as showshown in the table below. 2013
Target 2013
Performance Performance
Range Performance Weighted
Score 6.97% 3.74% 50-150% 54% 14% $6.41 $6.27 85-115% 98% 49% $1 Billion $1.45 Billion 60-125% 145% 41% 104% Metric 2016 Performance Performance Range Performance Weighted Score 8.37% 9.41% 50-150% 112.5% 28.2 % $6.09 $6.19 85-115% 101.7% 50.8 % New Investments $1.60 billion $1.609 billion 60-125% 100.6% 25.1 % Total 104.1 % 1(1) A reconciliation between non-GAAP performance metrics and U.S. GAAP results is included as Appendix A to this proxy statement. equityEquity was below theabove target metricprimarily due primarily to the large asset impairment recorded in the third quartergains on sale of 2013, while the Company’s new investments exceeded 2013 targets by a significant margin.aircraft assets. Cash flowFlow per share wasShare and New Investments were both in line with the target reflecting solid portfolio management and solid lease placement and transition execution.201320132016 was strong, with adjusted return on equity above target and cash flow per share and new investments exceedingat target. In addition, the targetsenior management team sought to better position the Company in light of increasing45%. Theseselling risky assets and upgrading the portfolio. The following represent some of the Company’s most important accomplishments during the 2016:have improved the overall quality of the company’sCompany’s portfolio and customerits earnings base. The senior management team also enhancedshareholder base, as evidenced byexposure to out-of-production aircraft and freighter aircraft from 11% to 9% of net book value.• saleCompany and improved the quality of 15.25% of the Company’s common shares to an affiliate of Marubeni Corporation, or Marubeni, and the formation of an aircraft leasing joint venture with Ontario Teachers’ Pension Plan, or Teachers’, our second largest shareholder. The Company’s operating performance was also very good, as demonstrated by our high level of aircraft utilization and steady rental revenue yields, success in accessing the debt financing markets on attractive terms, and by increased, profitable asset sales, including end of life aircraft dispositions. In addition,capital structure.in 2013for the year ended December 31, 2016 was approximately 60%4.5%, below the total shareholder return of the S&P MidCap 400 of 20.7%, and eachour total return for the three years ended December 31, 2016 was 23.9%, slightly below the total shareholder return of the S&P MidCap 400 of 29.6%. Over those periods, we outperformed our publicly traded direct peers (AerCap, Air Lease and Fly Leasing), which had an average total return (loss) of (1.0)% for 2016 and a three year return of 5.4%. Each of our named executive officersNEOs met or exceeded thetheir individual performance goals set for him for 2013.104%104.1%, the Compensation Committee took the following actions:NamedExecutiveOfficerIncentiveCompensation1RationaleRon Wainshal Ron Wainshal $ 600,000723,836 cash$1,400,000 and $723,827 restricted share grant$300,000 special restricted share grantdroveprovided strong overall leadership, both shaping and driving the company’s value-oriented investmentCompany’s strategy while also leading its efforts to upgrade the portfolio and itsde-risk the business. He worked closely with our key stakeholders and led the Company’s approach to the financial markets. He played a leading role in the MarubeniMichael Inglese $595,540 cash and Teachers’ transactions and took steps to enhance the Company’s senior management team.In recognition of significant achievements to build long-term value for the Company, and in line with Mr. Wainshal’s request that any incentive compensation in excess of target levels be delivered in the form of$297,762 restricted share grants subject to future vesting, the Compensation Committee awarded to Mr. Wainshal a special restricted share grant for 2013.Michael Inglese$575,000 cash$575,000 restricted share grantMr. Inglese led the Company’s financing, investor relationrelations and corporate planning efforts. He was also responsible for the IT department. His work resulted in the Company completing several important debt financing transactions, and he played a key role in negotiating both the Marubeni and Teachers’ transactions.which significantly reduced our debt costs while enhancing our financial flexibility. He also made significant contributions towards the Company’s strategic plan.David Walton Michael Kriedberg $ 550,000535,986 cash$550,000 and $267,976 restricted share grantMr. WaltonKriedberg led the Company’s operationsaircraft acquisitions, placements and itssales efforts. In this regard, he played a key role in directing the Company’s considerable investment, sales and placement activity, including completing $1.6 billion in aircraft acquisitions in a highly competitive environment, selling 30 aircraft and placing aircraft on lease throughout the year. These efforts improved the quality of our portfolio considerably.Christopher Beers $395,222 cash and $197,621 restricted share grant Mr. Beers led the Company’s legal teamorganization and was also responsible for the human resources function. His efforts were critical in completing the Company’s transaction activity in 2016. He was also instrumental in designing and implementing our long-term incentive program and improving operational and governance processes.Aaron Dahlke $242,428 cash and $47,474 restricted share grant shaping corporate strategy. His efforts were critical inseveral internal processes, including the Company’s achieving strong aircraft utilization levels, efficiently managingannual fleet review and enterprise risk analysis. He also helped improved internal processes, enabling the Company to complete its technical efforts and in executing its asset sales program. Mr. Walton also played an important role in negotiating and executing the Marubeni and Teachers’ transactions.2016 annual financial results nearly two weeks earlier than previously.NamedExecutiveOfficerIncentiveCompensation1RationaleMichael Kriedberg$530,000 cash$530,000All restricted share grantMr. Kriedberg joined the Companyawards were granted in April 2013early 2017 and took responsibility for aircraft acquisitions, placements and sales. In this regard, Mr. Kriedberg played a key role in the Company’s strong level of investments during 2013 and helped to refine our investment strategy.Joseph Schreiner$214,900 cash$76,600 restricted share grantMr. Schreiner led the Company’s technical efforts and played an important role in the Company’s success in redeploying aircraft coming off lease. He also helped develop a very cost effective engine management program and played an important role in successful end-of-life aircraft dispositions.(1)All restricted share grants vest in equal installments on January 1, 2015, 20162018, 2019 and 2017,2020, subject to the terms and conditions of the 2005Incentive Plan.Actual TSR Percentile Ranking Applicable Percentage 200% 100% 50% —% Actual AROE Performance Applicable Percentage Annual AROE Target plus 2% 200% Annual AROE Target 100% Annual AROE Target less 2% 50% Below Annual AROE Target less 2% —% 101,796/203,592 50,899/101,798 50,897/101,794 Mr. Inglese 52,682/105,364 26,341/52,682 26,341/52,682 47,414/94,828 23,707/47,414 23,707/47,414 Mr. Beers 34,962/69,924 17,481/34,962 17,481/34,962 Mr. Dahlke 7,663/15,326 3,832/7,664 3,831/7,662 (1) In connection with compensation actions taken during 2016, Mr. Wainshal received a supplemental PSU award on September 1, 2016 with a target of 15,589 PSUs (maximum of 31,178 PSUs) with a performance period from July 1, 2016 to December 31, 2018 and on July 1, 2016, Mr. Kriedberg’s target PSUs were adjusted to 47,414 PSUs (maximum of 94,828 PSUs). Risk. The Compensation Committee reviews the risks and rewards associated with the Company’s compensation programs. We believe that our compensation programs encourage and reward prudent business judgment and appropriate risk-taking, with the overall goal of building sustainable and profitable growth and enhancing shareholder value.The Compensation Committee believes thatFor example, baseBase salary is a fixed amount and, while it is a relatively modest part of the overall compensation for our named executive officers, itthat does not encourage risk taking. The incentive compensation program, which delivers the majority of total compensation for our named executive officers,NEOs, contains elements that mitigate risk without detracting from the incentive nature of the program, including: wide ranges for these financial performance metrics, so that the earning of the awards is not an “all or nothing” proposition;having a large portionthe use of the incentive compensation award for our named executive officers delivered in the form of restricted shares that vestperformance-based and time-based equity awards vesting over a three yearthree-year period, increasing the focus on longer-term performance and shareholder value growth;guidelines.In addition, the Compensation Committee determined thatguidelines and a claw-back policy will be adopted by the Company pursuant to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law and the listing requirements of the NYSE, promptly following the adoption of final rules by the SEC, and that incentive compensation awards will be subject to thatrecoupment policy.Consultant. The Compensation Committee setsConsultant. We set the corporate financial metrics at the beginning of the year based on discussions with and recommendations of the Company’s senior management team, and following consultations with other members ofannual business plan approved by the Board. Individual performance goals for theThe Chief Executive Officer, are determined by the Compensation Committee, and theafter consultation with us, establishes individual performance goals for the other named executive officerare established byNEOs. Regularly during the Chief Executive Officer after consultation withyear, the Compensation Committee. The senior management team presents to the Compensation Committee a summary comparison ofus the Company’s actual performance against the corporate financial metrics and discusses corporate performance in detail with the Compensation Committee regularly during the year.metrics. We also share these discussions with the full Board on a regular basis.After the end of the year, the Compensation Committee, in executive session with the Board, reviews itsbasis performance and its preliminary determination of his performance against the Company’s corporate performance metrics and his individual goals. The Compensation Committee then makes itsIn February, after consulting with the Chairman of the Board, we make our final decision about the Chief Executive Officer’s compensation after that review. Executive officersincentive compensation. Other NEOs may assist in providing data but otherwise have no role in determining the Chief Executive Officer’s compensation. The Chief Executive officerOfficer makes recommendations to the Compensation Committeeus concerning theother NEOs’ incentive compensation based on corporate performance and each other named executive officer’sNEO’s individual performance. The Compensation Committee makes a final determination of the incentive compensation for each named executive officer after consultation with the Board.The Compensation Committee has to competitive market data in evaluating the competitiveness of our overall compensation structure and levels. The Compensation Committee usesstructure. We use such data to develop a general understanding of current compensation practices, but doeswe do not rely solely on such data to provide a strict framework for making compensation decisions.The Compensation Committeeconsultant,consultant. McLagan advised us in connection with changes to adviseexecutive compensation and the Compensation Committee in 2013.design of, and granting of awards under, our long-term incentive plan. McLagan did not assist the Compensation Committeeus in making any other decisions under the Company’s compensation programs in 2013. McLagan provided advice in connection with the adoption of the Aircastle Limited 2014 Omnibus Incentive Plan, or the 2014 Plan, and is reviewing the Company’s compensation programs with the Compensation Committee and assisting the Compensation Committee in evaluating whether to make any adjustments to the Company’s compensation programs in the future.2016. The services provided by McLagan are under the direction and authority of the Compensation Committee. McLagan has no other direct or indirect business relationshipsrelationship with the Companycompany or our senior management team other than certain insurance brokerage arrangements provided by an affiliate of McLagan and other than the Company’sCompany's participation in a broad industry compensation survey directed by McLagan. Total fees paid to McLagan for advice with respect to compensation matters totaled $129,853 in 2016, and total fees paid to AON for insurance brokerage services for our aviation assets totaled $133,647$177,919 in 2013.2016. McLagan does not provide any services to management and had no relationship with management prior to the engagement.engagement and, although the decision to engage AON for insurance brokerage services was made by members of our management, the decision to engage AON for insurance brokerage services was made prior to engaging McLagan. Representatives of McLagan attended selectedselect Compensation Committee meetings and provided objective third-party advice and compensation market perspectives. The Compensation Committeeperspective. We concluded that the advice it receiveswe received from McLagan is objective and does not raise any conflictconflicts of interest.The Compensation Committee believes that significantthe Companywe have adopted Ownership Guidelines providing for the following levels of share ownership applicable to our Chief Executive Officer, Chief Commercial Officer, Chief Financial Officer and Chief Operating OfficerGeneral Counsel (based on the aggregate value of this share ownership as of anythe date of determination). Multiple of Base Salary 6x 2x 2x Chief Operating OfficerGeneral Counsel 2x later of March 14, 2017 or the fifth anniversary of his or her initial appointment or promotion. As of March 31, 2014,23, 2017, each of the above officers complied with the Ownership Guidelines.The Compensation Committee considers the Internal Revenue Code of 1986 as amended, referred to herein as the Internal Revenue Code, which limits the deductibility of certain compensation to US$1,000,000 per year for our Chief Executive Officer and for each of the other three most highly compensated named executive officers (other than our Chief Financial Officer) who are employed at year-end. Performance-based compensation may be excluded from this limitation.The Company anticipates that a portion In May of 2014, our shareholders approved the adoption of the 2014 Plan which, among other things, allows our annual incentive compensation forawards to our named executive officers with respect to 2013 will not be deductible by the Company under Section 162(m) and that the increase in U.S. corporate tax as a consequence of such non-deductibility will be approximately US$545,000. Beginning in 2014, the Compensation Committee expects to transition to an incentive compensation program that will allow new cash bonus and restricted share grants in future years to be excluded from the limitations of Section 162(m) and will therefore be deductible.providedthe we approved an incentive compensation plan for 2016. That plan limits the total amount of incentive compensation that could be awarded to our named executive officers in 2016 to 4% of Cash Flow from Operations before Working Capital, but not in excess of $20,000,000. Our Chief Executive Officer was eligible to receive up to 40% of such amount and our other named executive officers were eligible to receive an aggregate amount up to 60%. The Compensation Committee may grant awards in lesser amounts but not in excess of the 2014 Plan is approvedplan limits. In addition, any reduction in the amount of one named executive officer’s compensation would not result in an increase in any other named executive officer’s compensation. As determined and certified by the Compensation Committee for 2016, the maximum amount payable to our shareholders, asnamed executive officers based on our performance was equal to the maximum of $19,524,000. We granted incentive compensation awards for 2016 to our named executive officers in lesser amounts than the plan limits, based on the corporate financial metrics and individual performance goals described in greater detail belowabove in Proposal No. 4 in this proxy statement,the sections entitled “Pay for Performance” and certain“2016 Compensation.” The awards granted to our Chief Executive Officer and other requirements are satisfied. Say on Pay Say-on-Pay Vote20132016 Annual Meeting, our shareholders were provided withhad the opportunity to cast an advisory vote on the compensation of our named executive officersNEOs in 2012.2015. The Company’s say on payCompany's say-on-pay vote yielded an 84%a 98% approval. Notwithstanding this favorable vote, we continue to seek input from our shareholders to understand their views with respect to the Company’sCompany's approach to compensation, and in particular in connection with the Compensation Committee’sour efforts to tie compensation to performance. Dialogue with our investors provides meaningful feedback to management and to the Compensation Committee.2013,2016, the Compensation Committee of the Board was composed of Messrs. Hacker, Merriman and Pollard and Ms. Mura. None of these persons has at any time been an officer or employee of the Company or any of its subsidiaries. In addition, there are no relationships among the Company’s executive officers, members of the Compensation Committee or entities whose executives serve on our Board or on the Compensation Committee that require disclosure under applicable SEC regulations.2013, 20122016, 2015 and 20112014 compensation for each of our named executive officers,NEOs, presenting each cash bonus, equity award and stock grantperformance share award for the service year with respect to which it wasthey were earned, as opposed toeven if the year in suchannual incentive awards (cash bonus and stock grantsequity award) were actually awarded.granted in a different period. Note that the SEC-required Summary Compensation Table (shown on page 24)27) requires disclosure of equity basedequity-based grants in the year they were awarded, even if they were awarded in respect of service in a prior year.year's service. Therefore, if an incentive award was earned in respect of service in one fiscal year, but paid in the subsequent fiscal year, it would be included as compensation in the subsequent fiscal year in the Summary Compensation Table.our Compensation Committee viewswe view year-over-year changes to the compensation for our named executive officers.NEOs. It is important to recognize that the way the Compensation Committee presentswe present compensation for our named executive officesNEOs in the table below is different from the SEC-required disclosure in the Summary Compensationthe Compensation Committee reviewswe review total compensation for our named executive officersNEOs across different periods during itsour decision-making process. Fiscal
Year Salary
(US$) Cash Bonus
(US$) Equity Incentive
Awards
(US$)(1) All Other
Compensation
(US$)(2) Total
(US$) 2013 600,000 600,000 1,699,998 120,482 3,020,480 2013 435,609 575,000 575,025 51,159 1,636,793
Officer and General 2013 471,218 550,000 550,004 54,229 1,625,451 2013 346,795 530,000 529,977 106,779 1,513,551 2013 275,000 214,900 76,577 16,874 583,351 Name and Principal Position Salary (US$) Cash Bonus(US$) Annual Equity Award Long Term Incentive Plan Ron Wainshal 2016 $ 637,500 $ 723,836 $ 723,827 2,137,500 $ 177,712 $ 4,400,375 Chief Executive Officer 2015 600,000 609,150 1,218,299 — 168,872 2,596,321 2014 600,000 735,100 1,914,897 — 146,712 3,396,709 Michael Inglese 2016 $ 541,667 $ 595,540 $ 297,762 1,100,000 $ 80,179 $ 2,615,148 Chief Financial Officer 2015 500,000 516,000 516,004 — 73,812 1,605,816 2014 491,667 614,800 814,793 — 60,008 1,981,268 Michael Kriedberg 2016 $ 486,667 $ 535,986 $ 267,976 990,000 $ 149,952 $ 2,430,581 Chief Commercial Officer 2015 500,000 516,000 516,004 — 161,026 1,693,030 2014 500,000 614,800 814,793 — 153,496 2,083,089 2016 $ 400,000 $ 395,222 $ 197,621 730,000 $ 71,898 $ 1,794,741 General Counsel 2015 400,000 365,730 365,726 — 55,224 1,186,680 2014 66,667 365,000 25,001 — 10,413 467,081 Aaron Dahlke 2016 $ 300,000 $ 242,428 $ 47,474 160,000 $ 21,230 $ 771,132 Chief Accounting Officer 2015 295,833 227,020 84,678 — 19,118 626,649 2014 270,833 235,900 90,604 — 17,888 615,225 (1) “Equity Incentive“Annual Equity Awards” column of the table above for 2013, 20122016, 2015 and 20112014 reflect the aggregate fair value on the grant date of the stock awards granted to our named executive officers determined in accordance with FASB ASC Topic 718.(2) Companycompany contributions made during 20132016 to each named executive officer’s 401(k) plan account, and certain insurance premiums paid by the Company.(3) In connection with his appointmentMr. Beers was appointed as our Chief Commercial OfficerGeneral Counsel in April 2013, Mr. Kriedberg received a grant of 180,000 restricted common shares, vesting in one-fifth increments each January 1, commencing January 1,November 2014.which is comprised of four Independent Directors and operates pursuant to a written charter, which is available at http://www.aircastle.com under “Investors — Corporate Governance.“Investors—Governance Documents.”20132016 were Charles W. Pollard (Chair), Douglas A. Hacker, Ronald L. Merriman and Agnes Mura.compensation discussionCompensation Discussion and analysisAnalysis with management and, based on that review and discussion, has recommended to the Board that it be included in this proxy statement.Charles W. Pollard, ChairDouglas A. HackerRonald L. MerrimanAgnes Mura2013the SEC-required summary compensation for 2013, 2012information regarding 2016, 2015 and 20112014 compensation for each of our named executive officers. Fiscal
Year Salary
(US$) Bonus
(US$) Stock
Awards
(US$)(1) All Other
Compensation
(US$)(2) Total
(US$) 2013 600,000 600,000 1,019,988 (3)
120,482
115,022
2,340,470 2013 346,795 530,000 2,404,800 (4) 106,779 3,388,374 2013 471,218 550,000 400,004 (3) 54,229 1,475,451 2013 435,609 575,000 400,004 (3) 51,159 1,461,772 2013 275,000 214,900 53,994 (3) 16,874 560,768 Name and Principal Position Salary (US$) Non-Equity Incentive Plan Compensation (US$) Annual Equity Award Long Term Incentive Plan Total (US$) Ron Wainshal 2016 637,500 723,836 1,218,299 (3 ) 1,671,267 177,712 4,428,614 Chief Executive Officer 2015 600,000 609,150 1,914,897 — 168,872 3,292,919 2014 600,000 735,100 1,699,998 — 146,712 3,181,810 Michael Inglese 2016 541,667 595,540 516,004 (3 ) 874,074 80,179 2,607,464 Chief Financial Officer 2015 500,000 516,000 814,793 — 73,812 1,904,605 2014 491,667 614,800 575,025 — 60,008 1,741,500 Michael Kriedberg 2016 486,667 535,986 516,004 (3 ) 786,678 149,952 2,475,287 Chief Commercial Officer 2015 500,000 516,000 814,793 — 161,026 1,991,819 2014 500,000 614,800 529,977 — 153,496 1,798,273 Christopher Beers 2016 400,000 395,222 365,726 (3 ) 580,082 71,898 1,812,928 General Counsel 2015 400,000 365,730 25,001 — 55,224 845,955 2014 66,667 365,000 863,100 (4 ) — 10,413 1,305,180 Aaron Dahlke 2016 300,000 242,428 84,678 (3 ) 127,145 21,230 775,481 Chief Accounting Officer 2015 295,833 227,020 90,604 — 19,118 632,575 2014 270,833 235,900 71,976 — 17,888 596,597 (1) (2) The amounts reported in this column consist of: (i) the following dividend payments made by the Company on unvested restricted common shares for 2013, 2012each named executive officer in 2016: Mr. Wainshal US$165,472; Mr. Inglese US$67,666; Mr. Kriedberg US$137,439; Mr. Beers US$59,299; and 2011Mr. Dahlke US$9,400; and (ii) Company contributions made during 2016 to each named executive officer’s 401(k) plan account and certain insurance premiums paid by the Company.(3) Represents restricted share awards granted in 2016 in respect of performance for fiscal year 2015. Stock awards in respect of performance for fiscal year 2016 were approved by the Compensation Committee and communicated to the named executive officers in February 2017. The aggregate grant date fair value of restricted share awards in respect of performance in fiscal year 2016, which vest over three years and were communicated in February 2017 are as follows: Mr. Wainshal US$723,827; Mr. Inglese US$297,762; Mr. Kriedberg US$267,976; Mr. Beers US$197,621; and Mr. Dahlke US$47,474. (4) In connection with his appointment as our General Counsel in November 2014, Mr. Beers received a grant of 45,000 restricted common shares, vesting in one-fifth increments each January 1, commencing January 1, 2016. Name Ron Wainshal 6,000,000 2/9/2016 — 79,059 15.41 1,218,299 3/11/2016 21,552 43,104 86,208 25.20 1,086,221 3/11/2016 14,368 17,960 (4 ) 19.16 344,114 9/1/2016 3,898 7,795 15,590 22.80 177,726 9/1/2016 2,598 3,248 (4 ) 19.46 63,206 Michael Inglese 2,250,000 2/9/2016 — 33,485 15.41 516,004 3/11/2016 13,171 26,341 52,682 25.20 663,793 3/11/2016 8,780 10,975 (4 ) 19.16 210,281 Michael Kriedberg 2,250,000 2/9/2016 — 33,485 15.41 516,004 3/11/2016 11,854 23,707 47,414 25.20 597,416 3/11/2016 7,902 9,878 (4 ) 19.16 189,262 Christopher Beers 2,250,000 2/9/2016 — 23,733 15.41 365,726 3/11/2016 8,741 17,481 34,962 25.20 440,521 3/11/2016 5,827 7,284 (4 ) 19.16 139,561 Aaron Dahlke 2,250,000 2/9/2016 — 5,495 15.41 84,678 3/11/2016 1,916 3,832 7,664 25.20 96,566 3/11/2016 1,277 1,596 (4 ) 19.16 30,579 (1) Represents restricted share awards granted in 2016 in respect of performance for fiscal year 2015 and AROE PSUs and TSR PSUs granted in 2016 for performance through December 31, 2018. The amounts reflect the aggregate fair value on the grant date of the stock awards granted to our named executive officers determined in accordance with FASB ASC Topic 718. Restricted share awards in respect of performance for fiscal year 2016 were approved by the Compensation Committee and communicated to the named executive officers in February 2017. The aggregate grant date fair value of restricted share awards in respect of performance for fiscal year 2016, which vest over three years and were communicated in February 2017 are as follows: Mr. Wainshal US$723,827; Mr. Inglese US$297,762; Mr. Kriedberg US$267,976; Mr. Beers US$197,621; and Mr. Dahlke US$47,474. (2) The maximum represents the highest possible amount of cash incentive compensation that could be paid to our named executive officers under our incentive compensation program described above in the section entitled "Tax Implications of Our Compensation." The maximum amount could then be allocated as follows: up to 40% to our CEO and up to 60% among the other named executive officers. Under this program, the Compensation Committee is free to grant awards up to the maximum amount, or grant no awards at all even if performance metrics are achieved. Thus, there is no minimum amount payable. The actual amount of cash incentive compensation paid to our named executive officers with respect to performance in 2016 is reported in the "Non-Equity Incentive Compensation Plan" column of the Summary Compensation Table for 2016" and described in greater detail above in the section entitled "2016 Compensation.” (3) Represents PSUs granted in 2016 which were designed to align management with shareholders by rewarding exceptional performance over a three year period while enhancing retention for executives and certain senior professionals. All PSUs granted during 2016 vest and their performance period ends on December 31, 2018. The amounts reflect the aggregate fair value on the grant date of the PSUs granted to our named executive officers determined in accordance with FASB ASC Topic 718. For a summary of the assumptions made in the valuation of these awards, please see Note 8 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013. See “Grants2016.(4) The maximum AROE PSUs represent 125% of Plan-Based Awards” below for additional information regarding restricted share grants made to our named executive officers in 2013.(2)amounts reported in this column consistremaining 95,607 of (i) the following dividend payments made by the Company on unvested restricted common shares for each named executive officer in 2013: Mr. Wainshal-US$108,642; Mr. Kriedberg- US$95,400; Mr. Walton-US$42,201; Mr. Inglese-US$39,183; and Mr. Schreiner-US$ 5,546; and (ii) Company contributions made during 2013 to each named executive officer’s 401(k) plan account and certain insurance premiums paid by the Company.(3)Represents stock awardstarget AROE PSUs will be considered granted in 2013 in respect of service for fiscal 2012. Stock awards in respect of service for fiscal 2013 were approved byupon the Compensation Committee and communicated toCommittee’s setting the named executive officers in February 2014. The aggregate grant date fair value of stock awards in respect of service in fiscal year 2013, which vest over three years and were communicated in February 2014 are as follows: Mr. Wainshal-US$1,699,998; Mr. Kriedberg-US$529,977; and Mr. Walton-US$ 550,004; Mr. Inglese-US$ 575,025; and Mr. Schreiner US$76,577.(4)In connection with his appointment as our Chief Commercial Officer in April 2013, Mr. Kriedberg received a grant of 180,000 restricted common shares, vesting in one-fifth increments each January 1, commencing January 1, 2014.GRANTS OF PLAN-BASED AWARDS FOR 2013The following table sets forth information regarding restricted share grants made to our named executive officers under the 2005 Plan during the year ending December 31, 2013: Grant
Date(1) Date of
Comp. Comm.
Action(1) Number of
Shares of Stock
or Units (#)(1) Grant Date
Per Share
Fair Value
(US$)(1) Grant Date Fair
Value of Stock
Awards (US$) (1) 2/18/2013 2/18/2013 72,597 14.05 1,019,988 4/22/2013 4/12/2013 180,000 (2) 13.36 2,404,800 2/18/2013 2/18/2013 28,470 14.05 400,004 2/18/2013 2/18/2013 28,470 14.05 400,004 2/18/2013 2/18/2013 3,843 14.05 53, 994 (1)Represents stock awards granted in 2013 in respect of service for fiscal 2012. Stock awards in respect of service for fiscal 2013 were approved by the Compensation Committee and communicated to the named executive officers in February 2014. The aggregate grant date fair value of stock awards in respect of fiscal year 2013, which vest over three years and were communicated in February 2014 are as follows: Mr. Wainshal-US$ 1,699,998; Mr. Kriedberg-US$529,977; Mr. Walton-US$ 550,004; Mr. Inglese-US$ 575,025; and Mr. Schreiner US$76,577.(2)In connection with his appointment as our Chief Commercial Officer in April 2013, Mr. Kriedberg received a grant of 180,000 restricted common shares, vesting in one-fifth increments each January 1, commencing January 1, 2014.officers.officers other than Mr. Dahlke. These employment agreements or letters generally provide for payment of an annual base salary and the executives’ eligibility to receive an annual cash bonus with in the case of Messrs. Wainshal, Inglese, Kriedberg and Walton, indicated target annual cash bonus and equity incentive award levels. In addition, the employment letters provide that each executive is entitled to receive the same employee benefits as we provide to our employees generally.‘‘at will’’“at-will” and may be terminated at any time and for whatever reason by either us or him. A summary of the payments and benefits to be provided to the named executive officers upon a termination of employment, along with a description of the restrictive covenants applicable to each executive, is set forth below in the section entitled “Potential Payments upon Termination or Change in Control.”Provisions in the 2005 PlanChange in Control.Subject to applicable law, in the event of a change in control, as defined in the plan, certain other corporate transactions, changes in corporate structure, special dividends and similar corporate events, the plan administrator has discretion to cancel any outstanding restricted shares, in exchange for payment in cash or other property. Unless otherwise determined by the plan administrator and evidenced in an award agreement, if (i) a change in control transaction occurs that includes a continuation, assumption or substitution of certain awardsPSU Provisions under the plan, (ii) a plan participant’s employment is terminated by the employer other than for cause within the 12 months following the change in control, and (iii), in the case of participants who are entitled to receive severance under an employment agreement upon termination by the participant for good reason (as defined in the participant’s employment agreement), upon such a termination for good reason within the 12 months following a change in control, then restrictions will lapse with respect to any outstanding restricted shares.planIncentive Plan and applicable award agreement, the planIncentive Plan administrator has sole discretion to provide for the lapse of restrictions in installments or the acceleration or waiver of restrictions (in whole or part) under certain circumstances, including, but not limited to, the attainment of certain performance goals or a participant’s termination of employment or service. Upon a participant’s death or disability, the vesting of that participant’s unvested restricted shares will accelerate.planIncentive Plan administrator may, subject to certain limitations, make an equitable substitution or proportionate adjustment in, among other things, the kind, number and purchase price of common shares subject to outstanding awards of restricted shares or other share-based awards (including PSUs) granted under the plan.Incentive Plan. In addition, the planIncentive Plan administrator, in its discretion, may terminate all awards (other than fully vested restricted shares, deferred shares and performance shares) with the payment of cash or in-kind consideration.planIncentive Plan gives the planIncentive Plan administrator the authority to permit a participant to satisfy any federal, state or local withholding taxes due upon vesting of restricted shares by electing to have the Company repurchase a sufficient number of common shares, at Fair Market Value (as defined in the plan)Incentive Plan) on the day of vesting. During 2013,2016, our named executive officers and five directors,seven Directors, Ms. Mura and Messrs. Allen, Bisignani, Cave, Hacker, Merriman and Pollard, made such an election of a sufficient number of shares, and the planIncentive Plan administrator approved such elections.WaltonDahlke provide that if his employment with the Company is terminated by the Company without “cause””cause” (as defined in his employment agreement or award agreement) or, if applicable, by the executive with “good”good reason” (as defined in his employment agreement or award agreement), then the shares, if any, that are not vested as of the date of such termination will continue to vestbe paid out according to the original vesting schedule subject to the executive’s execution of a separation agreement which includes a general release of claims. In the event that the executive’s employment is terminated by the Company without cause or by the executive for good reason, in each case within 120 days prior to or within 12twelve months following a Change of Control, then 100% of the shares, if any, that are not vested as of the date of such termination shall immediately vest. Upon a participant’s death or disability, the vesting of that participant’s unvested restricted shares will accelerate.restricted sharePSU agreements with Mr. Schreinereach of Messrs. Wainshal, Inglese, Kriedberg, Beers and Dahlke provide that if his employment with the Company is terminated by the Company without ‘‘cause,’’ as”cause” (as defined in the plan,2014 Plan) or, if applicable, by the restricted shares which are due to vest atexecutive with ”good reason” (as defined in the next vesting date under2014 Plan), then the agreement will immediately vest, and if such a termination occurs within 12 months following a change in control, all of the restricted shares that are unvestedPerformance Period shall end as of the last day of the Company's last fiscal quarter and a number of PSUs shall immediately vest on the date based on achievement of Performance Goals. In the event that a Change of Control occurs prior to the vesting date, then the the Performance Period shall end as of the date of the Change in Control and the Performance Goals shall be deemed to be satisfied as of the date of such Change in Control at the greater of (x) the level of achievement resulting in vesting percentages of 75% of the Target PSUs and (y) the actual level of achievement as of the date of such Change in Control. The resulting number of PSUs shall vest on the original vesting date based solely on the continued employment if the successor entity assumes the awards, provided that if the executive's employment is terminated by the Company without cause or by the executive for good reason, or the executive's employment terminates due to his health or death or disability, in each case prior to the vesting date, the resulting PSUs will vest immediately on the date of such termination willof employment. If the successor entity does not assume the awards, then the resulting number of PSUs vest immediately. In the event that employment with2013grantsawards and PSUs of our named executive officers under the 2005Incentive Plan, as of December 31, 2013:2016: Stock Awards Name Ron Wainshal 168,849 3,520,502 72,107 1,503,431 Michael Inglese 69,047 1,439,630 37,316 778,039 Michael Kriedberg 140,244 2,924,087 33,585 700,247 Christopher Beers 60,509 1,261,613 24,765 516,350 Aaron Dahlke 9,592 199,993 5,428 113,174 Stock AwardsNameNumber of Sharesor Units of StockThat HaveNot Vested(#)Market Value ofShares or Units ofStock That Have NotVested(US$)(1)Ron Wainshal156,320(2)2,995,091Michael Kriedberg180,000(3)3,448,800David Walton60,721(4)1,163,414(6)Michael Inglese56,378(5)1,080,202Joseph Schreiner7,980(6)152,897(5)(1) 19.16,20.85, the reported closing price for our common shares on the NYSE on December 31, 2013,30, 2016, the last trading day of 2013.(2) 156,320168,849 restricted shares vest in increments of 82,995, 49,12686,399, 56,097 and 24,19926,353 each January 1, commencing January 1, 2014.(3) (4) These 140,244 restricted shares vest in increments of 69,265, 59,817 and 11,162 each January 1, commencing January 1, 2017. (5) In connection with his appointment as our Chief Commercial OfficerGeneral Counsel in April 2013,November 2014, Mr. KriedbergBeers received a grant of 180,00045,000 restricted common shares, vesting in one-fifth increments each January 1, commencing January 1, 2014(4)These 60,7212016. His total of 60,509 restricted shares vest in increments of 31,966, 19,26517,299, 17,299, 16,911, and 9,4909,000 each January 1, commencing January 1, 2014.(5)(6) 56,3789,592 restricted shares vest in increments of 29,089, 17,7994,522, 3,238 and 9,490 1,832each January 1, commencing January 1, 2014.2017.(6)These 7,980 restricted shares(7) Represents the TSR PSUs at target and the AROE PSUs at maximum for AROE PSUs deemed granted in 2016 determined in accordance with FASB ASC Topic 718. See “Grants of Plan-Based Awards for 2016” above for additional information regarding PSUs granted to our named executive officers in 2016. The remaining 95,607 of target AROE PSUs will be considered granted upon the Compensation Committee’s setting the target AROE for the respective period. For a summary of the assumptions made in the valuation of these awards, please see Note 8 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. All performance share unit awards granted during 2016 vest in increments of 4,196, 2,503 and 1,281 each January 1, commencing January 1, 2014.their performance period ends on December 31, 2018.20132013: Stock Awards Number of Shares
Acquired on Vesting
(#) Value Realized
on Vesting
(US$)(1) 80,897 1,014,448 34,410 431,501 30,832 386,633 4,882 61,220 0 0 Stock Awards Name Ron Wainshal 84,246 1,759,899 Michael Inglese 32,396 676,752 Michael Kriedberg 58,103 1,213,772 Christopher Beers 9,389 196,136 Aaron Dahlke 4,020 83,978 (1) 12.5420.89 per share price of our common shares on December 31, 2015, the last business day preceding the vesting date, which was January 1, 2013.(2)Mr. Kriedberg became the Chief Commercial Officer of the Company in April 2013.defineddescribed below. The Compensation Committee may in its discretion revise, amend or add to the benefits if it deems such action advisable. The table below reflects amounts payable to our named executive officers assuming termination of employment on December 31, 2013,2016, with equity-based amounts valued US$19.1620.85 per common share, the reported closing price for our common shares on the NYSE on December 31, 2013:Circumstances of Termination Voluntary
resignation
by executive
(US$) Termination
by us for
cause
(US$) Termination
by us
without
cause
(US$) Termination
by us
without
cause or by
executive
for good
reason
following
change in
control
(US$)(1) Termination
by
executive
for good
reason
(US$) Normal
retirement
(US$) Disability
(US$) Death
(US$) — — 1,200,000 2,400,000 1,200,000 — — — — — 600,000 600,000 600,000 — — — 64,615 64,615 64,615 64,615 64,615 64,615 64,615 64,615 — — 2,995,091 2,995,091 2,995,091 — 2,995,091 2,995,091 — — 1,000,000 2,000,000 1,000,000 — — — — — 500,000 500,000 500,000 — — — 53,846 53,846 53,846 53,846 53,846 53,846 53,846 53,846 — — 3,448,800 3,448,800 3,448,800 — 3,448,800 3,448,800 — — 1,000,000 2,000,000 1,000,000 — — — — — 500,000 500,000 500,000 — — — 53,846 53,846 53,846 53,846 53,846 53,846 53,846 53,846 — — 1,163,414 1,163,414 1,163,414 — 1,163,414 1,163,414 — — 900,000 1,800,000 900,000 — — — — — 450,000 450,000 450,000 — — — 48,462 48,462 48,462 48,462 48,462 48,462 48,462 48,462 — — 1,080,202 1,080,202 1,080,202 — 1,080,202 1,080,202 — — — — — — — — — — — — — — 29,615 29,615 29,615 29,615 29,615 29,615 29,615 29,615 — — 80,395 152,897 — — 152,897 152,897 Circumstances of Termination Name/Benefit Ron Wainshal Cash Severance — — 1,350,000 2,700,000 1,350,000 — — Pro-rata Bonus — — 675,000 675,000 675,000 — 675,000 COBRA Reimbursement — — 29,655 29,655 29,655 — — Vacation 72,692 72,692 72,692 72,692 72,692 72,692 72,692 Market Value of Accelerated Vesting of Restricted Shares. — — 3,520,502 3,520,502 3,520,502 — 3,520,502 Market Value of Accelerated Vesting of Performance Share Units — — 742,842 1,591,835 742,842 — 2,122,447 Michael Inglese Cash Severance — — 1,100,000 2,200,000 1,100,000 — — Pro-rata Bonus — — 550,000 550,000 550,000 — 550,000 COBRA Reimbursement — — 29,655 29,655 29,655 — — Vacation 59,231 59,231 59,231 59,231 59,231 59,231 59,231 Market Value of Accelerated Vesting of Restricted Shares — — 1,439,630 1,439,630 1,439,630 — 1,439,630 Market Value of Accelerated Vesting of Performance Share Units — — 384,447 823,815 384,447 — 1,098,420 Michael Kriedberg Cash Severance — — 880,000 1,760,000 880,000 — — Pro-rata Bonus — — 440,000 440,000 440,000 — 440,000 COBRA Reimbursement — — 29,655 29,655 29,655 — — Vacation 33,846 33,846 33,846 33,846 33,846 33,846 33,846 Market Value of Accelerated Vesting of Restricted Shares. — — 2,924,087 2,924,087 2,924,087 — 2,924,087 Market Value of Accelerated Vesting of Performance Share Units — — 346,004 741,436 346,004 — 988,582 Christopher Beers Cash Severance — — 765,000 1,530,000 765,000 — — Pro-rata Bonus — — 365,000 365,000 365,000 — 365,000 COBRA Reimbursement — — 29,655 29,655 29,655 — — Vacation 43,077 43,077 43,077 43,077 43,077 43,077 43,077 Market Value of Accelerated Vesting of Restricted Shares. — — 1,261,613 1,261,613 1,261,613 — 1,261,613 Market Value of Accelerated Vesting of Performance Share Units — — 255,135 546,718 255,135 — 728,958 Aaron Dahlke Cash Severance — — — 600,000 — — — Pro-rata Bonus — — — 300,000 — — — COBRA Reimbursement — — — 29,655 — — — Vacation 32,308 32,308 32,308 32,308 32,308 32,308 32,308 Market Value of Accelerated Vesting of Restricted Shares. — — 199,993 199,993 — — 199,993 Market Value of Accelerated Vesting of Performance Share Units — — 55,913 119,830 55,913 — 159,774 (1) (2)In connection with his appointment as our Chief Commercial Officer in April 2013, Mr. Kriedberg received a grant of 180,000 restricted common shares, vesting in one-fifth increments each January 1, commencing January 1, 2014.Walton:Beers:receivereceive: (i) an amount equal to the sum of the base salary and target annual cash bonus for the year of termination, payable over a one-year period (two times such amount and payable in a lump sum if the termination occurs within 120 days prior to or within one year following a “change ofin control” as defined in such employment agreement),; (ii) a pro-rata annual bonus for the year of termination,termination; (iii) reimbursement of COBRA premiums for up to 12 monthstwelve months; and (iv) continued vesting of all outstanding equityrestricted share awards pursuant to their original vesting schedule (immediate vesting and payment of all outstanding equity awards in the event of a termination occurring in connection with a “change in control”);tax, buttax; however, in the case of Mr. Wainshal and, in certain cases Mr. Kriedberg, only if such reduction results in a higher after-tax payment to Mr. Wainshal;him; and12twelve months following termination.Schreiner’sDahlke, if his employment letter provides thatis terminated within 120 days prior to or within one year following a “change in control” without “cause” or with “good reason” (as defined in such agreement), and if he signs a general release of claims and complies with the covenants described above, then he will not compete with us during his employment, and, throughbe entitled to receive: (i) an amount equal to the endsum of the base salary and target annual cash bonus for the year of termination, payable over a one-year period following his terminationperiod; (ii) a pro-rata annual bonus for the year of employment, he will not solicit or encourage anytermination; and (iii) reimbursement of our then current employees or independent contractorsCOBRA premiums for up to leave the employment or other service of the Company or hire any employee or independent contractor who has left the employment or other service of the Company within the one-year period following his termination of employment. In accordance with the restricted share agreement, if we terminate his employment without ‘‘cause,’’ as defined in the 2005 Plan, the restricted shares which are due to vest at the next vesting date under the agreement will immediately vest, and if such a termination occurs within 12 months following a change in control, all of the restricted shares that are unvested as of the termination will immediately vest.2013,2016, the last day of the fiscal year, for (i) all equity compensation plans previously approved by our shareholders and (ii) all equity compensation plans not previously approved by our shareholders.Plan Category (a) (b) (c) Equity compensation plans approved by security holders 537,794 (1) $ — 1,806,126 Equity compensation plans not approved by security holders — — — Total 1,806,126 Plan CategoryNumberRepresents 537,794 common shares subject to outstanding PSU awards (assuming payout at maximum, noting that the maximum payout for the 2016 AROE PSU performance was established at 125% of securitiesto be issued uponexercise of outstandingoptions, warrantsand rightsWeighted-averageexercise price ofoutstanding options,warrants and rightsNumber of securitiesremaining available forfuture issuance underequity compensationplans(excluding securitiesreflected in column (a))(a)(b)(c)Equity compensation plans approved by security holders——906,283Equity compensation plans not approved by security holders———Total906,283target). Undernumber of shares available for future issuanceapplicable awards agreements.20052014 Plan will increase annually each January 1 by 100,000covering 336,673 common shares through and including January 1, 2016; accordingly, the numberPSU awards with a maximum payout of shares available for future issuance under the 2005 Plan, automatically increased by 100,000 shares on January 1, 2014.20132016 financial statements and discussed them with Aircastle’s management addressing, among other things, the quality and the acceptability of the accounting principles, the reasonableness of significant judgments and estimates, and the clarity and completeness of disclosures. Our independent registered public accounting firm, Ernst & Young LLP, or EY, is responsible for performing an independent audit of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB, and for issuing a report on its audit of the financial statements. The Audit Committee monitors and reviews the audit. The Audit Committee also reviewed and discussed with EY the audited financial statements and the matters required by Auditing Standard No. 16,1301, “Communications with Audit Committees,” issued by the Public Company Accounting Oversight BoardPCAOB and other matters the Committee deemed appropriate.Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, as modified or supplemented, and has discussed with Ernst & YoungEY its independence. The Audit Committee also considered whether the independent auditors’ provision of other, non-audit related services, and the fees associated with such non-audit related services, to Aircastle is compatible with maintaining such auditors’ independence.2013.2016. In addition, the Audit Committee has also recommended, subject to shareholder approval, the appointment of EY as the Company’s Independent Registered Public Accounting Firm for the fiscal year endedending December 31, 2014.Ronald L. Merriman, ChairRonald W. AllenDouglas A. HackerdirectorsDirectors or 5% or greater shareholders. We believe the terms and conditions set forth in such agreements are reasonable and customary for transactions of this type.July 12, 2013,February 18, 2015, the Company, completed the issuance to Marubeni and a subsidiary of 12,320,000 common shares of Aircastle, representing 15.25% of Aircastle’s issued and outstanding common shares, after giving effect to the issuance, at a price of $17.00 per share, for gross proceeds of approximately $209,000,000. Pursuant to a Shareholder Agreement between the parties that became effective upon the completion of the issuance, Marubeni will have the right to designate two directors for appointment to Aircastle’s board of directors, with the initial appointment to be made prior to August 14, 2013. The Shareholder Agreement also contains certain provisions relating to Marubeni’s and its affiliates’ ability to transfer and acquire Aircastle’s securities.Shareholder Agreement. In connection with the sale of common shares to Marubeni, on June 6, 2013, the parties entered into an amendment and restatement of the Shareholder Agreement, which became effective upon(1) modified the completionterms of the issuance, referred to as the closing. The Shareholder Agreement provides certain rights to immediately permit acquisitions by Marubeni with respect to the designation of directors for election to our Board. The Shareholder Agreement also includes certain standstill restrictions, including restrictions on direct or indirect acquisitionsand its affiliates of voting securities of the Company in the secondary market pursuant to a Rule 10b5-1 plan that would result in Marubeni and its affiliates collectively holding (i) more than 21% of the voting power of the Company prior to the third anniversary of the closing or (ii)21.0%, but no more than 27.5% of the voting power of the Company prior toand (2) extended the tenth anniversaryterm of the closing. These standstill restrictions contain customary exceptions and will terminate upon, among other things, the acquisition by a third partyprovision of the beneficial ownership of more than 30% of the voting power of the Company. In addition, the Shareholder Agreement includes certain voting restrictions that apply ifby eighteen months to January 2025. On September 23, 2016, the Company, Marubeni and its affiliates collectively own more than 21%a subsidiary of Marubeni entered into an amendment increasing the voting powerChange of the Company. The Shareholder Agreement also contains restrictions on Marubeni’s abilityControl threshold from 30% to transfer common shares for three years following the closing of the issuance, subject to certain exceptions, and contains customary registration rights provisions relating to resales of common shares by Marubeni.Designation and Election of Directors35%. Pursuant to the Shareholder Agreement, subject to the terms and conditions expressed therein, Marubeni will have the right, for so long as it beneficially owns (i) at least 5% but less than 15% of the voting power of the Company, to designate one director for appointment to the Board; (ii) at least 15% but less than 25% of the voting power of the Company, to designate two directors for appointment to the Board; and (iii) 25% or more of the voting power of the Company, to designate three directors for appointment to the Board, with the initial appointment to be made prior to August 14, 2013. On August 2, 2013, Marubeni designated Messrs. Konto and Toya to the Board in accordance with the Shareholder Agreement. If at any time the number of our directors entitled to be designated by Marubeni pursuant to the Shareholder Agreement shall decrease, within 20 days thereafter, Marubeni shall cause a sufficient number of its designated directors to resign and any vacancies created by these resignations shall be filled by a majority vote of the Board.In December 2013, weaircraft with an affiliate of Teachers’. The joint venture’s first investment is two Airbus A330 family aircraft manufactured in 2013 that we sold to the joint venture. We will also provide marketing, asset management and administrative services to the joint venture and will be paid market-based fees for those services. Teachers’aircraft. Teachers' holds more than 5%10.0% of our outstanding common sharesshares. The assets and therefore,liabilities of this joint venture are off our balance sheet and we record our net investment under the formationequity method of accounting. As of December 31, 2016, the joint venture and the sale of theinitial Airbus A330 family aircraft are related party transactions under our Related Party Policy. Accordingly, the formation of the joint venture and the sale of these aircraft was submitted to, and approved by, our Audit Committee under our Related Party Policy.directorDirector or executive officer of the Company or a nominee to become a directorDirector of the Company; any person who is known to be the beneficial owner of more than 5% of any class of the Company’s voting securities; any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the director,Director, executive officer, nominee or more than 5% beneficial owner, and any person (other than a tenant or employee) sharing the household of such director,Director, executive officer, nominee or more than 5% beneficial owner; and any firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest.threefour Class II directorsDirectors to serve until the 20172020 annual general meeting of Aircastle or until their office shall otherwise be vacated pursuant to our Bye-laws.directorDirector for re-election, the Nominating and Corporate Governance Committee also considers the director’sDirector’s participation in and contributions to the activities of the Board. The Nominating and Corporate Governance Committee recommended to the Board, and the Board unanimously approved, the nomination of the following as Class II directors:Directors: Age Ronald L. Merriman 6956 Class II Director Agnes Mura 6472 Class II Director 67 Class II Director Charles W. Pollard 5659 Class II Director page 5.pages 4-6. The participation of these nominees in committee work is described in “Committees“Corporate Governance—Committees of the Board,” above, and their ownership of common shares is described in “Security“Corporate Governance—Security Ownership of Certain Beneficial Owners and Management,” also above.10 directors,12 Directors, the maximum permitted under the Bye-laws, and is divided into three classes of directors.Directors. The current terms of the Class I, Class II and Class III directorsDirectors will expire in 2016, 20142019, 2020 and 2015,2018, respectively. The Board unanimously proposes as nominees for election at the Annual Meeting the threefour existing Class II directors, Ms. Agnes Mura andDirectors, Messrs. Ronald L.Cave, Merriman and Charles W. Pollard.Pollard and Ms. Mura. If elected at the Annual Meeting, the Class II directorsDirectors will hold office from election until the 20172020 annual general meeting of Aircastle or until their office shall otherwise be vacated pursuant to our Bye-laws. If any of the nominees becomes unavailable or unwilling to serve, an event that the Board does not presently expect, we will vote the shares represented by proxies for the election of directorsDirectors for the election of such other person(s) as the Board may recommend.directorsDirectors until the 20172020 annual general meeting of Aircastle or until their office shall otherwise be vacated pursuant to our Bye-laws. Unless otherwise instructed, we will vote all proxies we receive FOR Mr.Messrs. Cave, Merriman and Pollard and Ms. Mura and Mr. Pollard.AMENDMENT TO THE COMPANY’S BYE-LAWSTO INCREASE THE SIZE OF THE BOARD(Item 2 on Proxy Card)Under bye-law 36.1 of our current Bye-laws, the Board shall consist of not less than three and not more than such maximum number of Directors, not exceeding 10 Directors, as the Board may from time to time determine. The number of directors currently is fixed at 10.At the Annual Meeting, shareholders will be asked to approve and adopt an amendment to the Company’s Bye-laws to increase the maximum size of the Board from 10 directors to 12 directors as described below. The Board is making this recommendation because the Board has identified a very qualified candidate for the Board, Michael J. Cave, and intends to appoint him to serve as a Class II director in May 2014 if this Proposal is approved by shareholders. Mr. Cave’s biographical information follows:Michael J. Cavehas served as a Senior Vice President of The Boeing Company and President of Boeing Capital Corp., a wholly owned subsidiary of The Boeing Company, since 2009. Mr. Cave served as Senior Vice President of Business Development and Strategy for Boeing from 2007 to 2009. Prior to that, Mr. Cave served as Senior Vice President and Chief Financial Officer of Boeing Commercial Airplanes and as Vice President of Finance for Boeing Information, Space & Defense Systems from 1998 through 2006. Prior to 1998, Mr. Cave held a variety of other assignments across Boeing’s defense and commercial businesses. He holds a bachelor’s degree in engineering from Purdue University. Mr. Cave is a director of Harley–Davidson, Inc. He was named one of the 100 Most Important Hispanics in Technology and Business for 2006 by Hispanic Engineer and Information Technology magazine. Mr. Cave has advised the Board that he will retire from The Boeing Company, effective May 8, 2014.In addition, Section 3.2 (c) of the Shareholder Agreement requires us to seek approval for increasing the maximum size of the Board because Marubeni will have the right to nominate an additional member of our Board upon the appointment of Mr. Cave.The proposed amendment would provide as follows:RESOLVED THAT, the maximum size of the Board of Directors of the Company be increased from 10 directors to 12 directors by deleting the number “10” in the second line of Bye-law 36.1 of the Bye-laws of the Company and inserting the number “12” in its place.The Board recommends that you vote FOR the amendment to Bye-law 36.1.32 on Proxy Card)EY,Ernst & Young LLP or "EY", to be the Company’s independent registered public accounting firm (which constitutes the auditor for the purpose of Bermuda law) for fiscal year 20142017 and to authorize the directorsDirectors of the Company, acting by the Audit Committee, to determine the independent registered public accounting firm’s fees. EY was also the Company’s independent registered public accounting firm for 2013.2016. Before selecting EY, the Audit Committee carefully considered EY’s reputation and qualifications as the registered public accounting firm for Aircastle. This included a review of its performance in prior years, as well as its reputation for integrity and competence in the fields of accounting and auditing. The committee has expressed its satisfaction with EY in all of these respects. The committee’s review included inquiry concerning any litigation involving EY and any proceedings by the SEC against the firm.20132016 financial statements, the Company entered into an engagement letter with EY which set forth the terms by which EY has performed audit services for the Company. The following summarizes the fees paid by us to EY for professional services rendered in 20132016 and 2012: 2013 2012 US$ 2,318,150 US$ 2,096,000 — — US$ 552,000 US$ 385,000 US$ 3,300 US$ 3,300 2,037,000 1,920,500 — 58,000 549,000 536,000 All Other Fees 3,000 — (1) FormsAnnual Report on Form 10-K, Quarterly Reports on Form 10-Q, certain Current Reports on Form 8-K, audits of subsidiaries required under the terms of certain of our debt agreements,IBJ Air joint venture, consultations concerning financial accounting and reporting standards, statutory audits and services rendered relating to the Company’s registration statements(2) (3) Represents fees related primarily to assistance with tax compliance matters, including international, federal and state tax return preparation, and consultations regarding tax matters. 20142017 and the authorization of the directorsDirectors of Aircastle Limited, acting by the Audit Committee, to determine the independent registered public accounting firm’s fees.443 on Proxy Card)Introductionwhich is the Effective Date, subject to shareholder approval. The 2014 Plan will become effective as of the Effective Date upon shareholder approval and will not become effective if such approval is not received.We currently maintain the Amended and Restated Aircastle Limited 2005 Equity and Incentive Plan, as amended from time to time, referred to as the 2005 Plan, which provides for the issuance of equity-based awards in various forms.approved by our shareholders on May 22, 2014. As of the Record Date, approximately 713,540921,748 common shares, par value U.S. $0.01 per common share, remained available for issuancefuture issuances under the 2005 Plan. If our shareholders approve theOriginal 2014 Plan no new(assuming that any unvested performance share unit awards will be granted undervest at the 2005 Plan, provided that awards that are outstanding under the 2005 Plan asmaximum level of the date of such shareholder approval will remain outstanding andperformance). These common shares will continue to vest subject to the terms and conditions of the 2005 Plan and the applicable awards agreements.If our shareholders vote to approve the 2014 Plan, approximately 2,500,000 common shares, which includes the 713,540 common shares that remain available for issuance under the 2005 Plan as of the Effective Date, will be available for grants of equity awardsfuture issuances under the Amended and Restated 2014 Plan. In addition, any shares that become available for resuse underPlan, if such plan is approved by the terms of 2005 Plan after the Effective Date will be available for issuance under the 2014 Plan.shareholders. As of the Record Date, the closing price of a common share traded on the NYSE was $18.51.restricted sharesequity and other share-basedcash-based awards to our officers, employees, directors,Directors, independent contractors and consultants are an important part of our long-term incentive compensation program, which we use in order to strengthen the commitment of such individuals to the Company, motivate them to faithfully and diligently perform their responsibilities, and attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company.713,540921,748 common shares remained available for issuancefuture issuances under the 2005 Plan. In 2013, we grantedOriginal 2014 Plan (assuming that any unvested performance share unit awards undervest at the 2005 Plan covering 457,500 common shares,maximum level of performance). If the Amended and to date, in 2014, we granted awards under the 2005 Plan covering 249,864 common shares. If theRestated 2014 Plan is not approved by shareholders, the 2005Original 2014 Plan will remain in effect and we expect to exhaust the common shares that remain available for awards under the 2005Original 2014 Plan by 2015.2018. We are therefore requesting that our shareholders vote to approve the adoption of the Amended and Restated 2014 Plan pursuant to which approximately 2,500,0004,250,000 more common shares will be available for awards. future issuances, in addition to the common shares that remain available for issuance under the Original 2014 Plan.AON/McLagan (ourMeridian Compensation Partners, LLC (an independent compensation consultant) evaluated the historic share usage and burn rate under the 2005Original 2014 Plan, the overhang under the 2005Original 2014 Plan, and the existing terms of outstanding awards under the 2005Original 2014 Plan. For additional information on our annual share usage, and burn rate and overhand, see the section entitled “- Historical“Historical Annual Share Usage”Usage” below. We anticipate that that the common shares to be reserved for issuance under the Amended and Restated 2014 Plan will allow us to continue making equityequity-based grants for more than fivefour to six years, assuming that we continue to make awards consistent with our historical practice.In addition, the adoption of the 2014 Plan is intended to permit the grant of awards that qualify as “performance-based compensation” within the meaning of Section 162(m) of the Internal Revenue Code, which generally limits the annual deduction that we may take for compensation of our coveredofficers, which consist of our Chief Executive Officer and our three other most highly compensated executive officers (other than our Chief Financial Officer) who are serving at the end of the year. Under Section 162(m) of the Internal Revenue Code, certain compensation, including compensation based on the attainment of performance goals, will not be subject to this limitation if certain requirements are met. Among these requirements is a requirement that the material terms pursuant to which the performance-based compensation is to be paid be disclosed to and approved by our shareholders. Accordingly, if the 2014 Plan is approved by our shareholders and the other conditions of Section 162(m) of the Internal Revenue Code relating to performance-based compensation are satisfied, qualified performance-based compensation paid to our covered officers pursuant to the 2014 Plan will not fail to be deductible due to the operation of Section 162(m) of the Internal Revenue Code.713,540921,748 common shares (including PSUs at maximum performance) available for future issuances and 1,206,292 common shares subject to outstanding awards or available for futurefull value awards under the Original 2014 Plan and our Amended and Restated 2005 Equity and Incentive Plan, which represented approximately 1%2.6% of our fully diluted common shares outstanding, such percentage referred to as the overhang percentage. The 1,786,4604,250,000 additional common shares proposed to be included in the Amended and Restated 2014 Plan share reserve would increase the overhang percentage by an additional 2%4.9% to approximately 3%7.5%. We have not granted any options or share appreciation rights.2005 PlanCompany’s equity plans for the last three fiscal years was as follows: Fiscal Year
2013 Fiscal Year
2012 Fiscal Year
2011 Average 457,560 240,967 311,894 336,807 73,652,996 70,716,963 74,686,150 73,018,703 .62 % .34 % .42 % .46 % Description Fiscal Year 2016 Fiscal Year 2015 Fiscal Year 2014 (2) Average A Total Shares Granted During Fiscal Year (1) 527,889 308,844 341,100 392,611 B Basic Weighted Average Common Shares Outstanding 78,161,494 80,489,391 80,389,349 79,680,078 Burn Rate (A / B) 0.68 % 0.38 % 0.42 % 0.49 % Burn Rate (A / B) Excluding Unearned PSUs 0.43 % 0.38 % 0.42 % 0.41 % (1) Includes the number of restricted shares, restricted stock units and (for the 2016 fiscal year only) performance share units granted for such fiscal year. The Company did not grant stock options or stock appreciation rights during the last three fiscal years. For the performance shares units, which were first granted in fiscal year 2016, the following table details the amounts granted and earned in fiscal year 2016 to all eligible participants: Number of AROE PSUs Unvested at December 31, 2015 0 0 Granted 143,414 47,802 Vested or Earned 0 0 Forfeited 0 0 Unvested at December 31, 2016 143,414 47,802 (2) Includes grants of restricted shares and restricted stock units granted during the first part of the 2014 fiscal year under the Amended and Restated 2005 Aircastle Limited Equity Incentive Plan, prior to the effectiveness of the Original 2014 Plan. All awards granted in the 2015 and 2016 fiscal years were made under the Original 2014 Plan. RSUs)RSUs, including performance share units), share bonuses, other share-based awards and cash awards to our officers, employees, directors,Directors, independent contractors and consultants.Available; Certain LimitationsAvailable for Issuance. The maximum number of common shares reserved and available for issuancefuture issuances under the Amended and Restated 2014 Plan will be equalincreased by 4,250,000 common shares, in addition to the sum of (i) 1,786,400 Common shares, (ii) the number of921,748 common shares reserved but unissuedthat remained available for issuance under the 2005Original 2014 Plan as of the Effective Date and (iii)Record Date. This does not include the number of1,206,292 common shares that become available for reusesubject to outstanding awards under the termsOriginal 2014 Plan as of the 2005Record Date. The foregoing common shares available and outstanding awards under the Original 2014 Plan followingassume that any unvested performance share unit awards vest at the Effective Date.maximum level of performance.2014 Plan. If an award is denominated in shares, but settled in cash, the number of common shares previously subject to the award will again be available for grants under theAmended and Restated 2014 Plan. If an award can only be settled in cash, it will not be counted against the total number of common Shares available for grant under the Amended and Restated 2014 Plan.162(m)162 (m) of the Internal Revenue Code will be based upon one or more of the following business criteria: (i) earnings, including one or more of operating income, net operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, adjusted EBITDA, economic earnings, or extraordinary or special items or book value per share (which may exclude nonrecurring items); (ii) pre-tax income or after-tax income; (iii) earnings per share (basic or diluted); (iv) operating profit; (v) revenue, revenue growth or rate of revenue growth; (vi) return on assets (gross or net), return on investment, return on capital, or return on equity; (vii) returns on sales or revenues; (viii) operating expenses; (ix) share price appreciation; (x) cash flow, cash flow per share, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (xi) implementation or completion of critical projects or processes; (xii) economic value created; (xiii) cumulative earnings per share growth; (xiv) operating margin or profit margin; (xv) share price or total shareholder return; (xvi) cost targets, reductions and savings, productivity and efficiencies; (xvii) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation, and Qualifying Termination. Unless otherwise determined by the plan administrator and evidenced in an award agreement, inIn the event that (i) a “change in control” (as defined below) occurs and (ii) a participant’s employment or service is terminated by us or any of our successors or affiliates without cause or by the participant for “good reason” (as defined in any individual employment or severance agreement with the participant) within 12 months following the change in control, then (a) any unvested or unexercisable portion of any award carrying a right to exercise will become. Definition of Change in Control. For purposes of the Amended and Restated 2014 Plan, a “change in control” will mean, in summary: (i) a person or entity becomes the beneficial owner of 50% or more of the Company’s voting power; (ii) an unapproved change in the majority membership of the Board; (iii) a merger, amalgamation or consolidation of the Company or any of its subsidiaries, other than (A) a merger, amalgamation or consolidation that results in the Company’s voting securities continuing to represent more than 50% of the combined voting power of the surviving entity or its parent and the Company’s board of directorsDirectors immediately prior to the merger or consolidation continuing to represent a majority of the board of directorsDirectors of the surviving entity or its parent or (B) a merger, amalgamation or consolidation affected to implement a recapitalization in which no person is or becomes the owner of the Company’s voting securities representing 50% or more of the Company’s combined voting power; or (iv) shareholder approval of a plan of complete liquidation or dissolution of the Company or the consummation of an agreement for the sale or disposition of substantially all of the Company’s assets, other than a sale or disposition to an entity, at least 50% of the combined voting power of which is owned by the Company’s shareholders in substantially the same proportions as their ownership of the Company immediately prior to such sale or a sale or disposition to an entity controlled by the Company’s board of directors.Directors. However, a change in control will not be deemed to have occurred as a result of any transaction or series of integrated transactions following which shareholder of the Company immediately prior thereto hold the same proportionate equity interest in the entity which owns all or substantially all of the assets of the Company immediately thereafter.minimum amount ofmaximum statutory rates in the participant’s applicable taxes required by law to be withheldjurisdictions with respect to any award granted under the Amended and Restated 2014 Plan.Plan, as determined by the Company. The Company has the right, to the extent permitted by law, to deduct any such taxes from any payment of any kind otherwise due to the participant. With the approval of the plan administrator, the participant may satisfy the foregoing requirement by either electing to have us withhold from delivery of Common Shares, cash or other property, as applicable, or by delivering already owned unrestricted Common Shares, in each case, having a value not exceeding the applicable taxes to be withheld and applied to the tax obligations. We may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy our withholding obligation with respect to any award.theMarch 14, 2024 (the tenth anniversary of the Effective Date (althougheffective date), although awards granted before that time will remain outstanding in accordance with their terms).terms.In early 2014, the Compensation Committee adopted an incentive compensation program pursuant to which we may grant awards to our employees in respect performance in 2014. Any incentive compensation payable pursuant to such program will be paid in early 2015 and will be split between cash and equity, to be granted in each case under the 2014 Plan, subject to the approval by our shareholders of the 2014 Plan. It is not possible to determine at this time the exact amounts to be received by ouremployees under the 2014 Plan pursuant to such incentive compensation program, because they are subject to achievement of performance criteria and to the sole discretion of the Compensation Committee to reduce the amount of these awards. If the 2014 Plan is not approved by our shareholders, this incentive compensation program will terminate and no cash or equity awards will be made to our employees pursuant to such program. In that event, the Compensation Committee will consider other methods for providing incentive compensation in order to attract, motivate and retain our employees.With respect to other awards to be granted in the future underto eligible participants in the Amended and Restated 2014 Plan it isare not possible to determine at this timecurrently determinable because the exact benefits or amounts to be received under the 2014 Plan by our employeesvalue and directors becausenumber of such awards are subject to the discretion of the plan administrator.Name and Position Award Types Granted in 2016 Number of Units (#) Dollar Value ($) (1) Ron Wainshal, Chief Executive Officer Restricted shares: 79,059 $ 1,218,299 RSUs n/a n/a PSUs 72,107 1,671,267 Michael Inglese, Chief Financial Officer Restricted shares: 33,485 $ 516,004 RSUs n/a n/a PSUs 37,316 874,074 Michael Kriedberg, Chief Commercial Officer Restricted shares: 33,485 $ 516,004 RSUs n/a n/a PSUs 33,585 786,678 Christopher Beers, General Counsel Restricted shares: 23,733 $ 365,726 RSUs n/a n/a PSUs 24,765 580,082 Aaron Dahlke, Chief Accounting Officer Restricted shares: 5,495 $ 84,678 RSUs n/a n/a PSUs 5,428 127,145 Executive Group (2) Restricted shares: 180,266 $ 2,777,895 RSUs n/a n/a PSUs 178,289 4,158,430 Non-Executive Director Group (3) Restricted shares: 71,696 $ 552,800 RSUs n/a n/a PSUs n/a n/a Non-Executive Officer Employee Group (4) Restricted shares: 65,539 $ 1,009,963 RSUs 19,172 295,446 PSUs 24,879 582,756 Common Sharescommon shares purchased over the exercise price. We generally will be entitled to a tax deduction at such time and in the same amount, if any, that the optionee recognizes as ordinary income. The optionee’s tax basis in any common shares received upon exercise of an option will be the fair market value of the common shares on the date of exercise, and if the shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the optionee) depending upon the length of time such shares were held by the optionee.adoptionAmended and Restated 2014 Plan, including the performance goals established under the plan for purposes of compliance with section 162(m) of the 2014 Plan.554 on Proxy Card)2116 in accordance with the SEC’s rules.15-30,16-34, as well as the discussion regarding the Compensation Committee on page 10. and return on equity, and sustainable growth through new investments. 2013 2016 executive compensation policies and procedures for our named executive officers. This vote is not intended to address any specific item of compensation; rather, the vote relates to the overall compensation of our named executive officers and the policies and procedures described in this proxy statement in accordance with the compensation disclosure rules of the SEC. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:20142017 Annual General Meeting of Shareholders, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.20152018 Annual General Meeting of Shareholders, the Company must receive the proposal in writing on or before December 9, 20146, 2017 unless the date of the 20152018 Annual General Meeting of Shareholders is changed by more than 30 days from the date of the last annual general meeting, in which case the proposal must be received no later than a reasonable time before the Company begins to print and send its proxy materials. All proposals must comply with SEC Rule 14a-8 and should be sent to the Secretary of Aircastle Limited, c/o Aircastle Advisor LLC, 300 First Stamford Place, 5th Floor, Stamford, CT 06902.20152018 Annual General Meeting of Shareholders outside of SEC Rule 14a-8, including with respect to shareholder nominations of directors,Directors, notice of such matter must be received by the Company, in accordance with the provisions of the Company’s Bye-laws, no earlier than January 22, 201519, 2018 and no later than February 21, 2015.18, 2018. Notice of any such proposal also must include the information specified in our Bye-laws and should be sent to the Secretary of Aircastle Limited, c/o Aircastle Advisor LLC, 300 First Stamford Place, 5th Floor, Stamford, CT 06902. In order for a proposal to be considered “timely” for purposes ofRule 14a-4(c), such proposal must be received no later than February 21, 2015.18, 2018. In addition to our Bye-laws, please see page 1011 of this proxy statement for a description of the procedures to be followed by a shareholder who wishes to recommend a directorDirector candidate to the Nominating and Corporate Governance Committee for its consideration.roomsroom in Washington, D.C. and New York, New York. Please call the SEC at (800) SEC-0330 for further information on the public reference rooms.room. Our SEC filings are also available to the public from commercial document retrieval services and on the web site maintained by the SEC at www.sec.gov.A copy of our Annual Report on Form 10-K will also be furnished without charge upon written request to Aircastle Limited, c/o Aircastle Advisor LLC, 300 First Stamford Place, 5th Floor, Stamford, CT 06902, Attention: General Counsel, and can also be accessed through our website at www.aircastle.com.Counsel.Counsel, or by oral request at (203) 504-1020. Upon receipt of such request, the Company will deliver a separate copy of the proxy material to the shareholder’s address.22, 2014By Order of the Board of Directors,David WaltonChief Operating Officer,General Counsel and Secretary Year Ended
December 31, 2013 $ 29,781 2,954 2,393 (4,754 ) 3,975 4,569 17,843 2,499 $ 59,260 1,583,560 3.74 % (Dollars in thousands) Net income $ 151,453 Gain on mark-to-market of interest rate derivative contracts (3,522 ) Loan termination payment 4,960 Write-off of deferred financing fees 2,880 Stock compensation expense 7,901 Securitization No. 1 hedge loss amortization charges 4,855 Adjusted net income $ 168,527 1,790,083 Adjusted return on equity 9.41 % (1) Year Ended
December 31, 2013 $ 424,037 (3,397 ) — (1,164 ) (3,016 ) 2,276 418,736 9,508 — $ 428,244 $ 6.27 68,270 (Dollars and weighted average shares in thousands) Net cash provided by operating activities $ 468,092 Accounts receivable (832 ) Other assets 1,089 Accounts payable, accrued expenses and other liabilities 4,014 Lease rentals received in advance (3,645 ) Cash flow from operations before working capital 468,718 Collections on finance leases 19,413 Cash flow $ 488,131 Cash flow per share $ 6.19 Weighted average shares 78,815 (Dollars in thousands) Quarter Lease Rental Revenue Cash Interest Expense Net Cash Interest Margin Average NBV of Flight Equipment Annualized Cash Interest / Average NBV of Flight Equipment Q4 2016 $196,714 $58,631 $138,083 $6,346,361 12.4 % 3.7 % 8.7 % (1) Lease rental yield is defined as operating and finance and sales-type lease rental revenue plus finance and sales-type lease collections divided by average monthly net book value (including finance and sales-type leases) for the period calculated on a quarterly basis, annualized. (2) Net cash interest margin is defined as lease rentals from operating leases, interest income and cash collections from finance and sales-type leases minus interest on borrowings, net settlements on interest rate derivatives and other liabilities adjusted for loan termination payments divided by the average net book of flight equipment (which includes net investment on finance and sales-type leases) for the period calculated on a quarterly and annualized basis. (3) Excludes loan termination payment of $3.5 million in the fourth quarter of 2016. Section 1. Purpose of Plan.Section 1. Purpose of Plan. directors,Directors, independent contractors, and consultants of the Company or its Affiliates (as hereinafter defined) whose contributions are essential to the growth and success of the business of the Company and its Affiliates, in order to strengthen the commitment of such persons to the Company and its Affiliates, motivate such persons to faithfully and diligently perform their responsibilities, and attract and retain competent and dedicated persons whose efforts will result in the long-term growth and profitability of the Company and its Affiliates. To accomplish such purposes, the Plan provides that the Company may grant Options, Share Appreciation Rights, Restricted Shares, Restricted Share Units, Share Bonuses, Other Share-Based Awards, Cash Awards or any combination of the foregoing.Section 2. Definitions.Section 2. Definitions. Shares,Share, Restricted Share Unit, Share Bonus, Other Share-Based Award or Cash Award granted under the Plan.beneficially ownedBeneficially Owned by such Person or any securities acquired directly from the Company or any Affiliate thereof) representing 50% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (I) of paragraph (3) below; ordirectorsDirectors then serving on the Board: individuals who, on the date hereof, constitute the Board and any new directorDirector (other than a directorDirector whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation, relating to the election of directorsDirectors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directorsDirectors then still in office who either were directorsDirectors on the date hereofEffective Date or whose appointment, election or nomination for election was previously so approved or recommended (“Incumbent Directors”); ordirectorsDirectors of the Company, the entity surviving such merger or amalgamation or consolidation or, if the Company or the entity surviving such merger or amalgamation or consolidation is then a Subsidiary, the ultimate parent thereof, or (II) a merger or amalgamation or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Company’s then outstanding securities; ordirectorsDirectors of the entity to which such assets are sold or disposed or, if such entity is a subsidiary, the ultimate parent thereof.director”Director” within the meaning of Section 162(m) of the Code (but only to the extent necessary and desirable to maintain qualification of Awards as “performance-based compensation” under Section 162(m) of the Code), (ii) a “non-employee director”Director” within the meaning of Rule 16b-3 and (iii) any other qualifications required by the applicable stock exchange on which the Common Shares are traded. If at any time or to any extent the Board shall not administer the Plan, then the functions of the Administrator specified in the Plan shall be exercised by the Committee. Except as otherwise provided in the Company’s memorandum of association or bye-laws, as amended from time to time, any action of the Committee with respect to the administration of the Plan shall be taken by a majority vote at a meeting at which a quorum is duly constituted or unanimous written consent of the Committee’s members.(i) as determined by the Administrator in its sole discretion (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company or an Affiliate thereof.director,Director, independent contractor or consultant of the Company or any Affiliate of the Company who has been selected as an eligible participant by the Administrator;provided,however, to the extent required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, an Eligible Recipient of an Option or a Share Appreciation Right means an employee, non-employee director,Director, independent contractor or consultant of the Company or any Affiliate of the Company with respect to whom the Company is an “eligible issuer of service recipient stock” within the meaning of Section 409A of the Code.below,hereof, to receive grants of Awards, and, upon his or her death, his or her successors, heirs, executors and administrators, as the case may be.belowhereof subject to certain restrictions that lapse at the end of a specified period or periods.below,hereof, to receive the Fair Market Value of a Common Share or, in the case of an Award denominated in cash, to receive the amount of cash per unit that is determined by the Administrator in connection with the Award.8.8 hereof.Section 3. Administration.Section 3. Administration. 162(m)162 (m) of the Code (but only to the extent necessary and desirable to maintain qualification of Awards as performance-based compensation under Section 162(m) of the Code) and, to the extent applicable, Rule 16b-3 under the Exchange Act (“Rule 16b-3”).Limitations.Limitations; Minimum Vesting Conditions.(in each case, subject to adjustment as provided by Section 5) (i) 1,786,4004,250,000 Common Shares and (ii) the number of Common Shares reserved but unissuedfor issuance under the Amended and Restated Aircastle Limited 2005 Equity and2014 Omnibus Incentive Plan as amended from time(pursuant to time (the “2005 Plan”)Sections 4(a) and 4(c) thereof) as of the Effective Date and (iii)date the numbershareholders of Common Shares becoming available for reuse following the Effective Date underCompany approve the 2005 Plan in accordance with the provisions of Section 4(b) thereof.Plan.Option or Share Appreciation RightAward under the Plan, shall not be available for subsequent Awards under the Plan, and notwithstanding that a Share Appreciation Right is settled by the delivery of a net number of Common Shares, the full number of Common Shares underlying such Share Appreciation Right shall not be available for subsequent Awards under the Plan. Upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of Shares as to which the Award is exercised and, notwithstanding the foregoing, such number of shares shall no longer be available for Awards under the Plan. In addition, (i)Common Shares, if any, that are repurchased by the Company using the proceeds received by the Company from the exercise of any Option or Share Appreciation Right or from the payment of any purchase price with respect to any other Award shall not be added to the extent an Award is denominated in Common Shares, but paid or settled in cash, theaggregate number of Common Shares with respect to which such payment or settlement is made shallagain be available for grants of Awards pursuant tounder the Plan and (ii)Plan. Common Shares underlying Awards that can only be settled in cash shall not be counted against the aggregate number of Common Shares available for Awards under the Plan.Section 7. Options.Section 7. Options. th of the calendar year following the year of vesting or within other such period as is required to avoid accelerated taxation and/or tax penalties under Section 409A of the Code.director,Director, independent contractor or consultant to the Company or any Affiliate thereof, or the Participant’s death or Disability;provided,however, that this sentence shall not apply toSection 11. Share Bonuses.Section 11. Share Bonuses. Section 12. Cash Awards.Section 12. Cash Awards. Section 13. Special Provisions Regarding Certain Awards.Section 13. Special Provisions Regarding Certain Awards. comply.Section 14. comply.Section 14. Change in Control Provisions.Unless otherwise determined by the Administrator and evidenced in an Award Agreement, in Control Provisions.If the Administrator determines in its discretion pursuant to Section 3(b)(5) hereof to accelerate the vesting of Options and/or Share Appreciation Rights in connection with a Change in Control, the Administrator shall also have discretion in connection with such action to provide that all Options and/or Share Appreciation Rights outstanding immediately prior to such Change in Control shall expire on the effective date of such Change in Control.of the Planhereof and the immediately preceding sentence, no such amendment shall impair the rights of any Participant without his or her consent.Section 16. Unfunded Status of Plan.Section 16. Unfunded Status of Plan. Section 17. Withholding Taxes. Section 17. Withholding Taxes.minimum amount of any suchmaximum statutory tax rates in the Participant’s applicable taxes required by law to be withheldjurisdiction(s) with respect to the Award.Award, as determined by the Company. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to such Participant. Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any applicable withholding tax requirements related thereto.thereto as determined by the Company. Whenever Shares or property other than cash are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any related taxes to be withheld and applied to the tax obligations;obligations as determined by the Company; provided, that, with the approval of the Administrator, a Participant may satisfy the foregoing requirement by either (i) electing to have the Company withhold from delivery of Shares or other property, as applicable, or (ii) by delivering already owned unrestricted Common Shares, in each case, having a value not exceeding the applicable taxes to be withheld and applied to the tax obligations.obligations as determined by the Company. Such already owned and unrestricted Common Shares shall be valued at their Fair Market Value on the date on which the amount of tax to be withheld is determined and any fractional share amounts resulting therefrom shall be settled in cash. Such an election may be made with respect to all or any portion of the Shares to be delivered pursuant to an award. The Company may also use any other method of obtaining the necessary payment or proceeds, as permitted by law, to satisfy its withholding obligation with respect to any Award.Award as determined by the Company.Section 18. Transfer of Awards.Section 18. Transfer of Awards. Section 19. Continued Employment or Service.Section 19. Continued Employment or Service. Section 20. Effective Date.Section 20. Effective Date. upon adoptionon March 14, 2014 (the “Effective Date”) and was amended and restated by the Board on March 14, 2014 (the “Effective Date”),21, 2017, subject to requisite approval of the shareholders of the Company.Section 21. Term of Plan.Section 21. Term of Plan. Section 22. Securities Matters and Regulations. Section 22. Securities Matters and Regulations.(a)(a) Notwithstanding anything herein to the contrary, the obligation of the Company to sell or deliver Common Shares with respect to any Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws and Bermuda law, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Administrator. The Administrator may require, as a condition of the issuance and delivery of certificates evidencing Common Shares pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Administrator, in its sole discretion, deems necessary or advisable.Section 24. No Fractional Shares.Section 24. No Fractional Shares. Section 25. Beneficiary.Section 25. Beneficiary. Section 26. Paperless Administration.Section 26. Paperless Administration. Section 27. Severability.Section 27. Severability. Section 28.Clawback.Section 28. Clawback. or stock exchange listing requirement or Company policy, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation, or stock exchange listing requirement or Company policy (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement).Section 29. Section 409A of, including, without limitation, the Code.Section 29. Section 409A of the Code. 409A.Section 30. Governing Law.Section 30. Governing Law. May 22, 2014Ron WainshalChristopher L. Beers and David Walton,Alexander Green, and each of them, proxies for the undersigned, with full power of substitution, to vote all common shares of Aircastle Limited of which the undersigned may be entitled to vote at the Annual General Meeting of Aircastle Limited in Stamford,Old Greenwich, CT, on Thursday,Friday, May 22, 201419, 2017 at 10:00 a.m., or at any adjournment thereof, upon the matters set forth on the reverse side and described in the accompanying proxy statement and upon such other business as may properly come before the meeting or any adjournment thereof.AIRCASTLE LIMITEDc/o Aircastle Advisor LLC300 First Stamford Place, 5th FloorStamford, CT 06902[THE COMPANY LOGO]22, 20141. Election of Directors: Nominees: Michael J. Cave, Ronald L. Merriman, Agnes Mura and Charles W. Pollard. FOR all nominees ¨ [ ]¨Write-In Nominee FOR all nominees,EXCEPT¨2.Amendment to the Company’s Bye-Laws to increase the size of the Board of Directors.FOR [ ] AGAINST [ ] ABSTAIN [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ] FOR [ ] AGAINST [ ] ABSTAIN [ ] FOR¨THREE YEARS [ ]TWO YEARS [ ] AGAINST¨ONE YEAR [ ]ABSTAIN ¨ [ ]Vote on Proposal No. 33.Appoint Ernst & Young, LLP as the Company’s independent registered public accounting firm (which constitutes the auditor for the purpose of Bermuda law) to audit the Company’s financial statements for fiscal year 2014 and authorize the directors of Aircastle Limited, acting by the Audit Committee, to determine the independent registered public accounting firm’s fees.FOR¨AGAINST¨ABSTAIN¨Vote on Proposal No. 44.Approval of the Aircastle Limited 2014 Omnibus Incentive PlanFOR¨AGAINST¨ABSTAIN¨Vote on Proposal No. 55.Advisory vote to approve on executive compensation.FOR¨AGAINST¨ABSTAIN¨Change of Address and/ or Comments Mark Here ¨ [ ]¨20142017 Annual General Meeting of Shareholders.Dated:, 2014SignatureSignatureVotes MUST be indicated in black or blue ink. 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